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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(e)
Fiscal 2021 Incentive Bonus Plans
On
May 24, 2020, the Compensation Committee (the Committee) of the Board of Directors of SeaChange International, Inc. (SeaChange) established short-term and long-term incentive bonus plans for the fiscal year ending
January 31, 2021 (the Short-Term Plan, and the Long-Term Plan, respectively, and together, the 2021 Plans) for Yossi Aloni, our President and Chief Executive Officer; Michael Prinn, our Chief Financial
Officer, Senior Vice President and Treasurer; Marek Kielczewski, our Chief Technology Officer and Senior Vice President; and Chad Hassler, our Chief Commercial Officer and Senior Vice President; each of whom is a named executive officer of
SeaChange. The 2021 Plans are designed to attract, motivate, retain and reward the Companys named executive officers, while aligning their interests with those of our stockholders.
The below-described 2021 Plans were established by the Committee after giving consideration to compensation practices of SeaChanges peer
companies, and commentary regarding executive compensation trends and practices, including that published by Institutional Shareholder Services.
Short-Term Plan
Under the Short-Term
Plan, Mr. Aloni will be eligible to receive a target bonus of $400,000, Mr. Prinn will be eligible to receive a target bonus of $260,000, and each of Messrs. Kielczewski and Hassler will be eligible to receive a target bonus of $320,000.
Up to 80% of the named executive officers respective target bonuses will be payable based upon SeaChanges achievement of two
financial metrics (total revenue and non-GAAP operating income) (the Short-Term Financial Goals) during fiscal 2021 (the Financial Goals Component), and the remaining 20% of the named
executive officers respective target bonuses will be payable if SeaChange achieves a minimum cash balance goal during fiscal 2021 (the Cash Balance Component). If SeaChange meets: (i) certain threshold Short-Term Financial
Goals, the named executive officers will receive 75% of their respective Financial Goals Component; (ii) target Short-Term Financial Goals, the named executive officers will receive 100% of their respective Financial Goals Component; and
(iii) stretch Short-Term Financial Goals, the named executive officers will receive 125% of their respective Financial Goals Component, with bonuses calculated based on linear interpolation for performance between threshold and stretch
achievement of the Short-Term Financial Goals. The named executive officers respective Cash Balance Component will be paid out at 100% if the target minimum cash balance is achieved, subject to adjustment for extraordinary, non-recurring items.
The bonuses are payable in cash and are determined upon the conclusion of
SeaChanges 2021 fiscal year.
The novel coronavirus (COVID-19) pandemic
continues to create global business disruptions, to interrupt our operations and to create potential negative impacts on our revenues and other financial results. The extent to which COVID-19 will impact our
financial condition or results of operations is currently uncertain and depends on a number of factors including the impact on our customers, our partners and vendors and on the operation of the global markets in general. The ultimate impact of the COVID-19 pandemic and the effects of operational alterations we have made in response on our business, financial condition, liquidity and financial results cannot be predicted at this time. Accordingly, the
Committee reserves the right to assess the effects of COVID-19 on the business and to adjust the Short-Term Financial Goals and target minimum cash balance during fiscal 2021, as appropriate.