Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Appointment of President and Chief Operating Officer
On January 10, 2017, the Board of Directors of Hortonworks, Inc. (the “Company”) appointed Raj Verma president and chief
operating officer of the Company, effective upon Mr. Verma’s commencement of employment. Mr. Verma is expected to commence employment with the Company on January 16, 2017.
Mr. Verma, age 46, served as chief operating officer of TIBCO Software Inc. (“TIBCO”) from September 2016 to January 2017, as
executive vice president of worldwide sales at TIBCO from June 2014 to September 2016, as senior vice president of americas sales at TIBCO from December 2012 to May 2014 and as senior vice president and chief marketing officer at TIBCO from April
2011 to November 2012.
In connection with Mr. Verma’s appointment as president and chief operating officer, the Company entered
into an employment agreement with Mr. Verma (the “Employment Agreement”), effective as of January 16, 2017. The Employment Agreement provides that Mr. Verma will be employed as president and chief operating officer of the
Company on an “at will” basis at an initial base salary of $540,000 per year. Mr. Verma will also participate in the Hortonworks, Inc. Senior Executive Cash Incentive Bonus Plan (the “Bonus Plan”), which is incorporated
herein by reference, and will have an annual target bonus under the Bonus Plan of $360,000 per year. Mr. Verma will also be entitled to participate in the benefit programs available to executives of the Company, including the Company’s
401(k) plan, health insurance and life and disability insurance. There are no arrangements or understandings between Mr. Verma and any other persons pursuant to which he was selected as president and chief operating officer of the Company.
There are also no family relationships between Mr. Verma and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
Pursuant to the Employment Agreement, if Mr. Verma’s employment is terminated by the Company without
“Cause” or if Mr. Verma terminates his employment in connection with a “Constructive Termination” (each as defined in the Employment Agreement), then in exchange for Mr. Verma’s execution and delivery of a
separation agreement and release of claims substantially in the form attached to the Employment Agreement (the “Separation Agreement”), the Company shall pay Mr. Verma the following: (i) an amount equal to twelve months of his
base salary, (ii) an amount equal to his target incentive compensation for the relevant quarter, prorated for the number of days of employment during such quarter and (iii) if Mr. Verma was participating in the Company’s group
health plan immediately prior to the date of his termination and elects COBRA health continuation, a monthly cash payment for twelve months or Mr. Verma’s COBRA health continuation period, whichever ends earlier. In addition, any
outstanding and unvested equity awards held by Mr. Verma on the date of his termination that would have vested over the succeeding twelve-month period will immediately vest and, to the extent applicable, become exercisable. The Separation
Agreement also requires Mr. Verma to comply with non-solicitation and non-competition provisions in favor of the Company, and, subject to such limitations, does not otherwise preclude Mr. Verma from accepting and holding full-time
employment elsewhere.
If, after a “Change in Control,” Mr. Verma’s employment is terminated without
“Cause” or if Mr. Verma terminates his employment in connection with a “Constructive Termination” (each as defined in the Employment Agreement), then, in exchange for Mr. Verma’s execution and delivery of the
Separation Agreement, the Company shall pay Mr. Verma the payments in clauses (i), (ii) and (iii) of the paragraph above, and in addition, all outstanding and unvested equity awards held by Mr. Verma will immediately vest in full
and, to the extent applicable, become exercisable.
The foregoing description of the Employment Agreement is qualified in its entirety by
reference to the full text of the Employment Agreement, which the Company will file with its Annual Report on Form 10-K for the year ending December 31, 2016.
In addition, in connection with his appointment, Mr. Verma will receive an award of 1,300,000 restricted stock units under the
Company’s Amended and Restated 2014 Stock Option and Incentive Plan, which is incorporated herein by reference, each of which correlates to one share of the Company’s common stock, with a vesting commencement date of January 16, 2017
(the “RSU Award”). The RSU Award will be granted pursuant to the Company’s form of restricted stock unit award agreement and will vest as follows: one-third of the restricted stock units will vest and become releasable on the first
anniversary of the vesting commencement date, and thereafter, the balance of the restricted stock units will vest and become releasable in a series of four equal successive six-month installments over the following twenty-four months, all subject to
Mr. Verma’s continued status as a Company service provider.
The Company has also agreed to indemnify Mr. Verma pursuant to
the Company’s standard form of indemnification agreement, which is incorporated herein by reference.