Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
(b)
The information set forth below under Item 5.02(c) is hereby incorporated by reference into this Item 5.02(b).
(c)
Appointment of Chief Financial Officer
On March 27, 2017, Silver Spring Networks, Inc. (the “
Company
”) announced the appointment of Catriona M. Fallon,
46, as its Chief Financial Officer. Ms. Fallon’s appointment is effective as of March 27, 2016.
From July 2015 until March
2017, Ms. Fallon served as Executive Vice President and Chief Financial Officer at Marin Software Incorporated, an enterprise marketing software company. From December 2013 until July 2015, Ms. Fallon served as Vice President and Chief of
Staff for the Chief Financial Officer of Cognizant Technology Solutions Corporation, a business and technology services company. Prior to Cognizant, Ms. Fallon served in multiple leadership positions at Hewlett-Packard Company, including as the
Vice President of Strategy & Financial Planning from September 2012 to September 2013, as Director of Finance & Investors Relations from July 2010 to September 2012 and as Director of Strategy & Corporate Development from
February 2009 to July 2010. Previously, Ms. Fallon was an equity analyst covering media and technology companies at Citigroup Investment Research. Ms. Fallon’s professional experience also includes roles with Piper Jaffray &
Company, McKinsey & Company and Oracle Corporation. Ms. Fallon holds a B.A. in Economics from University of California, Los Angeles and an M.B.A. from Harvard Business School.
Concurrently with Ms. Fallon’s appointment as the Company’s new Chief Financial Officer, Kenneth P. Gianella will assume the
role of Senior Vice President, Finance and Treasurer, effective March 27, 2017.
In connection with her employment, Ms. Fallon
and the Company entered into an offer letter (the “
Offer Letter
”). Under the terms of the Offer Letter, Ms. Fallon:
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will receive an annual base salary of $400,000;
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will be eligible to participate in the Company’s regular employee benefit plans available to all employees;
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has a target cash bonus equal to 50% of her base salary for the applicable bonus period under the Company’s bonus plan;
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will receive an inducement award of an option to purchase 65,000 shares of the Company’s common stock, with an exercise price equal to the closing fair market value of such common stock on the date of grant, that
will become vested and exercisable, subject to her continued employment, with respect to 25% of the shares on the
one-year
anniversary of the date of grant, and with respect to an additional 1/48
th
of the shares each month thereafter, until such time as the option is vested and exercisable with respect to all of the shares;
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will receive an inducement award of 36,000 restricted stock units (“
RSUs
”) that will become vested, subject to her continued employment, with respect to 25% of the RSUs on the
one-year
anniversary of the date of grant, and with respect to an additional 1/16th of the RSUs on each three-month anniversary thereafter, until such time as all the RSUs are vested; and
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will receive an inducement award of 26,000 performance share units (“
PSUs
”) that will be eligible to vest, subject to her continued employment, on the
one-year
anniversary of the grant date and subject to the attainment of certain performance metrics (to be determined by the Compensation Committee of the Board of Directors).
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The Company expects to grant the equity awards on a schedule in accordance with the Company’s standard equity grant policy and all such
awards will be granted pursuant to NYSE Rule 303A.08, which allows equity awards to be granted outside of the Company’s equity incentive plan without stockholder approval as a material inducement to a person’s employment.
In addition, if Ms. Fallon’s employment is terminated involuntarily without Cause (as defined in the Offer Letter) or if she
terminates employment for Constructive Termination (as defined in the Offer Letter), she will be entitled to the following benefits under the terms of the Offer Letter:
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salary continuance payments equal to 12 months of Ms. Fallon’s then-current base salary and a
pro-rated
bonus (if any), provided, that, should such termination occur
within a period beginning two months prior to and ending 12 months following a Change of Control (as defined in the Offer Letter), Ms. Fallon may be required by the successor entity (as its sole discretion) to continue her employment for up to
three months from the date of the Change of Control in order to receive such payments;
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the vesting applicable to any equity awards granted to Ms. Fallon shall accelerate as to: (i) that number of shares underlying Ms. Fallon’s outstanding equity grants that would have become vested on
the first anniversary of the date that Ms. Fallon’s employment terminates; or (ii) in the event of a Change of Control, 100% of the unvested shares underlying Ms. Fallon’s outstanding equity grants should such termination
occur within a period beginning two months prior to and ending 12 months following a Change of Control, provided, in either case, that, Ms. Fallon has continued her employment for up to three months from the date of the Change of Control (if
requested by the successor entity in its sole discretion) in order to receive such acceleration, and provided further that, notwithstanding the foregoing, acceleration of vesting of any performance-based equity grants shall be subject to and
qualified by the terms of any performance-based equity grant that provides for satisfaction of applicable performance vesting requirements (as set forth in the agreement(s) governing such performance-based equity grant(s)), as determined on the date
of Ms. Fallon’s termination, and the acceleration of vesting shall only occur if the above-referenced performance vesting requirements have been satisfied; and
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reimbursement for medical insurance benefits provided under the Company’s benefit plans over the period beginning on the date Ms. Fallon’s employment terminated and ending on the earlier of: (i) 12 months
following such date; or (ii) the date Ms. Fallon commences employment with another entity; provided, that, in each case, should such termination occur within a period beginning two months prior to and ending 12 months following a Change of
Control, Ms. Fallon may be required by the successor entity (in its sole discretion) to continue her employment for up to three months from the date of the Change of Control in order to receive such benefits.
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All benefits available under the Offer Letter are conditioned upon Ms. Fallon’s
execution of a general release of claims in favor of the Company. The complete terms of the Offer Letter can be found in the Offer Letter itself, which will be filed as an exhibit to the Company’s Quarterly Report on Form
10-Q
for the period ending March 31, 2017.
It is expected that Ms. Fallon will execute the
Company’s standard form of indemnification agreement, which was filed as Exhibit 10.1 to the Company’s Registration Statement on Form
S-1
filed on July 7, 2011 and incorporated by reference
herein. This agreement provides for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by Ms. Fallon in any action or proceeding to the fullest extent
permitted by applicable law.
There is no arrangement or understanding with any person pursuant to which Ms. Fallon was appointed as
the Company’s Chief Financial Officer, and there are no family relationships between Ms. Fallon and any director or executive officer of the Company. Additionally, there are no transactions between Ms. Fallon and the Company that
would be required to be reported under Item 404(a) of Regulation
S-K.
On March 27, 2016, the
Company issued a press release announcing the appointment of Ms. Fallon, and a press release announcing that the inducement awards to Ms. Fallon will be granted pursuant to NYSE Rule 303A.08. Copies of the press release are attached as
Exhibit 99.1 and Exhibit 99.2 to this report, respectively.
(e)
The information set forth above under Item 5.02(c) is hereby incorporated by reference into this Item 5.02(e).