Splunk Inc. (NASDAQ:SPLK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 9.01 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Changes to the Board of Directors
On March21, 2019, Godfrey Sullivan, Chairman of the Board of Directors (the “Board”) of Splunk Inc. (the “Company”) and Thomas Neustaetter, a member of the Board, tendered their resignations from the Board, effective immediately following the Company’s 2019 Annual Meeting of Stockholders. In connection with Mr.Sullivan’s resignation, the Board appointed Graham Smith to succeed Mr.Sullivan as Chairman, effective immediately.
In addition, on March21, 2019, the Board increased the authorized number of directors on the Board to 11 and appointed Sri Viswanath to serve as a member of the Board. The Board also appointed Mr.Viswanath to the Nominating and Corporate Governance Committee of the Board. All such appointments were effective immediately. Mr.Viswanath will serve in the class of directors whose term expires at the 2019 Annual Meeting of Stockholders.
There are no arrangements or understandings between Mr.Viswanath and any other persons to which he was elected as a director. We have a customer and a vendor relationship with Atlassian Corporation Plc (“Atlassian”), where Mr.Viswanath serves as Chief Technology Officer, that we consider arms-length on terms that are consistent with similar transactions with our other similarly situated customers and vendors. In fiscal 2019, we recognized approximately $4.3 million in revenue from Atlassian.The Board has determined that Mr.Viswanath did not and does not have any direct or indirect material interest in such transactions.
Mr.Viswanth will receive compensation for his service to the Company’s non-employee director compensation program substantially as disclosed in the Company’s proxy statement with respect to the Company’s 2018 Annual Meeting of Stockholders, as filed with the Securities and Exchange Commission on April26, 2018, provided, that, the non-employee director compensation program was amended in March2019 to provide for increases in the annual cash retainer for the Board Chair to $50,000 (from $40,000), the Audit Committee Chair to $25,000 (from $20,000) and the Nominating and Corporate Governance Committee Chair to $12,500 (from $10,000). The Company’s non-employee director compensation program, as amended, will be described in the Company’s proxy statement for the 2019 Annual Meeting of Stockholders.
A copy of the press release announcing the changes to the Board is filed as Exhibit99.1 to this Current Report on Form8-K.
Compensatory Arrangement of Certain Officers
On March20, 2019, the Compensation Committee of the Board approved amendments to the employment offer letters with Douglas Merritt, the Company’s President and Chief Executive Officer, and certain other officers, including named executive officers Susan St. Ledger and Leonard Stein.
The amendment for Mr.Merritt updates his existing severance rights under his offer letter to provide that, in the event that Mr.Merritt’s employment is terminated without “cause” or if he resigns his position for “good reason” within the period commencing three months before a “change in control” and ending 18 months (an increase from 12 months under his offer letter) after a “change in control” (each as defined in his offer letter), he will be entitled to receive: (i)a lump sum payment equal to (a)24 months (an increase from 18 months under his offer letter) of his annual base salary, (b)24 months (an increase from 18 months under his offer letter) of his annual target bonus and (c)a pro-rated portion of his annual target bonus based on the number of months employed during the year of termination; (ii)continued health coverage for 18 months or lump sum payment of $36,000 in lieu of such continued health coverage; and (iii)50% accelerated vesting of the unvested portion of outstanding equity awards that have only time-based vesting (including earned but unvested performance-based awards). If, at any time other than in connection with a “change in control” as described above, Mr.Merritt’s employment is terminated without “cause,” he will be entitled to receive: (i)a lump sum payment equal to 18 months (an increase from 12 months under his offer letter) of his annual base salary plus a pro-rated portion of his annual target bonus based on the number of months employed during the year of termination; (ii)continued health coverage for 12 months or lump sum payment of $24,000 in lieu of such continued health coverage; and (iii)12 months accelerated vesting of the unvested portion of outstanding equity awards that have only time-based vesting (including earned but unvested performance-based awards). In addition, to Mr.Merritt’s PSU agreements, additional corporate performance units may be deemed earned upon a termination without cause. The foregoing severance payments and benefits under the Offer Letter are subject to the execution of a separation
and release agreement by Mr.Merritt.Mr.Merritt’s amendment also adds a Section280G Best Results Provision (as defined below).
The amendment for the other officers (1) provides that any severance payments and benefits payable upon an involuntary termination in connection with change in control will be triggered in the event that the named executive officer’s employment is terminated without “cause” or if the named executive officer resigns his or her position for “good reason” within the period commencing three months before a “change in control” and ending 18 months (an increase from 12 months under the named executive officer’s offer letter) after a “change in control” (each as defined in the applicable offer letter) (the “CIC Qualifying Termination”), (2)increases the bonus severance amount that otherwise is payable on the named executive officer’s CIC Qualifying Termination from a pro-rated portion of the annual target bonus for the time he or she is actively employed in the fiscal year of termination to 50% of the annual target bonus for the fiscal of termination and (3)adds the 280G Best Results” Provision.
The “280G Best Results Provision” states that in the event any amount payable under the named executive officer’s amended employment offer letter or otherwise payable to the named executive officer constitute “parachute payments” within the meaning of Section280G of the Internal Revenue Code of 1986, as amended and could be subject to the related excise tax, the named executive officer would be entitled to receive either full payment of benefits or such lesser amount that would result in no portion of the benefits being subject to an excise tax, whichever results in the greater amount of after-tax benefits to the named executive officer.
Each of these named executive officers is expected to enter into an amendment to his or her employment offer letter memorializing these changes.
The foregoing summary is qualified in its entirety by reference to the full text of amendments to be signed by each of these named executive officers, the forms of which will be filed with the Company’s Quarterly Report on Form10-Q for the first quarter of fiscal 2020.
Item 9.01 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On March21, 2019, the Board approved amendments to the Amended and Restated Bylaws (the “Bylaws”) of the Company primarily to update the titles, duties and responsibilities of the Company’s officers and to reflect updates in Delaware law, as well as to clarify certain procedural matters.
The foregoing summary is qualified in its entirety by reference to the full text of the Bylaws, a copy of which is included as Exhibit3.1 to this report and incorporated by reference.
Item 9.01 Financial Statements and Exhibits
(d)Exhibits.
SPLUNK INC Exhibit
EX-3.1 2 a19-7130_1ex3d1.htm EX-3.1 Exhibit 3.1 AMENDED AND RESTATED BYLAWS OF SPLUNK INC. (As of March 21,…
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About Splunk Inc. (NASDAQ:SPLK)
Splunk Inc. is a provider of software solutions. The Company’s offerings enable users to collect, index, search, explore, monitor and analyze data. It operates through the development and marketing of software solutions segment, which enables its customers to gain real-time operational intelligence by harnessing the value of their data. The Company’s offerings address diverse data sets that are referred to as big data and are specifically used for machine-generated data. Machine data is produced by various software application and electronic device in an organization and contains a definitive, time-stamped record of various activities, such as transactions, customer and user activities and security threats. The Company’s products help users in various roles, including information technology (IT), security and business professionals, to analyze their machine data and achieve real-time visibility into and intelligence about their organization’s operations.