Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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On April 21, 2017, Gogo Inc. (the Company) announced that it has appointed Barry Rowan as Executive Vice President, Finance,
effective April 24, 2017. In addition, effective immediately following the filing of the Companys quarterly report on
Form 10-Q
for the first quarter ended March 31, 2017 (the
Effective Date), which is scheduled to occur on May 4, 2017, Mr. Rowan will become Executive Vice President and Chief Financial Officer of the Company. Mr. Rowan, 60, previously served as Executive Vice President and Chief
Financial Officer of Cool Planet Energy Systems from March 2013 to April 2017, as Executive Vice President, Chief Financial Officer and Chief Administrative Officer for Vonage Corporation from 2010 to 2013, and as Executive Vice President, Chief
Financial Officer and Treasurer for Nextel Partners from 2003 to 2006. Mr. Rowan has no family relationships with any of our directors or executive officers. There are no relationships between the Company or its subsidiaries, on one hand, and
Mr. Rowan, on the other hand, that would require disclosure pursuant to Item 404(a) of Regulation
S-K.
In connection with his appointment, the Company has entered into an employment agreement with Mr. Rowan. The employment agreement sets
Mr. Rowans annual base salary at $450,000, which salary shall be reviewed at least annually. The employment agreement specifies that Mr. Rowan is eligible for an annual bonus with a target of 75% of base salary, with the amount of
such bonus to be determined by the Compensation Committee of the Board of Directors of the Company (the Compensation Committee). Mr. Rowans employment agreement also provides that he is eligible to participate in all normal
Company benefits, including the Companys 401(k), retirement, medical, dental and life and disability insurance plans and programs in accordance with the terms of such arrangements.
Mr. Rowans employment is for no specific term and either the Company or Mr. Rowan may terminate Mr. Rowans
employment at any time, with or without cause. If Mr. Rowans employment is terminated by the Company without cause or if Mr. Rowan resigns for good reason, Mr. Rowan will be entitled to (i) continuation of his base salary
for 12 months following his termination, (ii) reimbursement for COBRA premiums due to maintain substantially equivalent health insurance coverage for 12 months following his termination, (iii) payment of any earned but unpaid salary,
(iv) payment of any business expenses incurred but not reimbursed and (v) payment of any approved but unpaid bonus award. The payment of (i) above shall be contingent on Mr. Rowan executing a general release of all claims against
the Company. Mr. Rowan is subject to
non-competition
and
non-solicitation
covenants for one year after leaving the employment of the Company.
Mr. Rowan will receive a starting bonus of $100,000, which is subject to repayment if Mr. Rowans employment terminates prior
to April 24, 2018. The Company will also provide Mr. Rowan with relocation benefits and a temporary housing allowance. Subject to the approval of the Compensation Committee, Mr. Rowan will receive an equity award consisting of (i)
200,000 options to purchase Company common stock and 40,000 restricted stock awards, each vesting in four equal annual installments beginning on the first anniversary of the grant date, and (ii) 20,000 performance stock units and 100,000 options to
purchase Company common stock,
each vesting in four equal annual installments beginning on the first anniversary of the grant date but subject to the additional vesting condition that the closing price of Company common stock
equal or exceed $25 per share for 30 consecutive trading days at some time during the four years following the date of grant. Subject to the approval of the Compensation Committee of the Board of Directors of the Company, Mr. Rowan will also be
eligible to participate in the Companys annual equity award program.
The Company has also entered entered into a change in control
agreement with Mr. Rowan to assure him that he will be protected in the event of a change in control of the Company. Under the agreement, Mr. Rowan is entitled to receive severance benefits of 18 months of base salary and target bonus, as
well as reimbursement of COBRA premiums payable to maintain substantially equivalent health insurance coverage during the severance period, in each case, if he is terminated by the Company without cause or the executive resigns with good
reason within two years following a change in control. Additionally, upon such termination, any unvested stock options and service-based equity awards would immediately become vested and exercisable, and any unvested performance-based equity
awards would vest or be forfeited based on the satisfaction of the applicable performance goals to the same extent as if Mr. Rowans services to the Company had not ended.
On the Effective Date and as previously announced, Norman Smagley will step down from his positions as Executive Vice President and Chief
Financial Officer of the Company and will continue to serve as Senior Finance Advisor through December 31, 2017.
A copy of the
Companys press release regarding these events is attached hereto as Exhibit 99.1.