Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)
Effective immediately prior to the appointment of Mr. Peter D. Aquino as the President and Chief Executive Officer of SeaChange International, Inc. (“SeaChange” or the “Company”), Mr. Robert Pons resigned as the Company’s Executive Chairman and principal executive officer. Mr. Pons remains the Company’s Chairman of the Board of Directors (“Board”).
(c)
Effective September 27, 2021, Mr. Peter D. Aquino was appointed as the Company’s President and Chief Executive Officer. Mr. Aquino, 60, has more than 30 years of experience in the technology, media, and telecommunication (TMT) industry. Mr. Aquino joins the Company following a successful tenure at Spartacus Acquisition Corporation (“Spartacus”) (NASDAQ: TMTS), a special purpose acquisition company, where he currently serves as Chairman and Chief Executive Officer since August 2020. Spartacus has announced a business combination with NextNav, a leader in next generation GPS, which is expected to close in the fourth quarter of 2021. Mr. Aquino is expected to continue to serve as Spartacus’ Chairman and Chief Executive Officer until its business combination with NextNav closes, and he expects to join the board of NextNav upon the close of the business combination. Prior to Spartacus, Mr. Aquino held executive positions at a range of leading technology companies, including: Chairman and Chief Executive Officer of Internap Corporation from 2016 until 2020, Chairman and Chief Executive Officer of Primus Telecommunications Group from 2010 until 2013, and President and Chief Executive Officer of RCN Corporation (“RCN”) from 2004 until 2010. At RCN, Mr. Aquino led RCN’s transformation into an all-digital HDTV cable multiple system operator (MSO) and was one of the first cable operators to incorporate TiVo DVRs as a premium set top box including streaming. Mr. Aquino also created an advanced metro-fiber network throughout RCN’s footprint, both organically and through mergers and acquisitions during his tenure. Mr. Aquino began his career at Bell Atlantic (now Verizon) in 1983. Mr. Aquino is currently on the board of Spartacus Acquisition Corporation since August 2020. Mr. Aquino has previously served on numerous public company boards, including: Lumos Networks, FairPoint Communications, Alaska Communications, and TiVo Corporation (prior to its sale to Rovi in 2016). Mr. Aquino holds a bachelor’s degree from Montclair State University in New Jersey, and an M.B.A. from George Washington University in Washington, D.C.
The selection of Mr. Aquino to serve as the Company’s President and Chief Executive Officer was not pursuant to any arrangement or understanding with respect to any other person. In addition, there are no family relationships between Mr. Aquino and any other director or executive officer of the Company, and there are no related person transactions between the Company and Mr. Aquino reportable under Item 404(a) of Regulation S-K.
In connection with the appointment of Mr. Aquino as the Company’s President and Chief Executive Officer, the Compensation Committee of the Board agreed to pay Mr. Aquino an annual base salary of $350,000 per year and to make one-time equity awards of (i) 300,000 restricted stock units (“RSUs”) with 100,000 RSUs to vest on the first, second and third anniversary of September 27, 2021 and (ii) 300,000 performance-based RSUs with up to 25,000 RSUs to vest in each of the 12 quarters following September 27, 2021, subject to the Company’s attainment of certain quarterly financial goals. Mr. Aquino will also be eligible to receive a discretionary cash bonus for the remainder of fiscal 2022 at the Board’s sole discretion. Beginning in fiscal 2023, Mr. Aquino will be eligible to receive a cash bonus of up to 60% of his annual base salary if the Company attains its fiscal 2023 financial goals, and up to an additional 40% of his annual base salary (for a combined total of 100% of base salary) if the Company attains its stretch financial goals.
Pursuant to Mr. Aquino’s offer letter, in the event of termination of Mr. Aquino’s employment without cause after six months of employment, subject to Mr. Aquino executing a general release and satisfaction agreement that includes a one year noncompete, Mr. Aquino will be entitled to a one-time payment of 12 months’ base salary, payable over 12 months. Attached as Exhibit 10.1, and incorporated herein by reference, is a copy of Mr. Aquino’s offer letter.
Mr. Aquino will be offered a Change in Control Severance Agreement (“CIC Agreement”) and an Indemnification Agreement with the Company. The CIC Agreement will provide for enhanced severance benefits if there should be a change in control of the Company and a reduction in duties or termination of Mr. Aquino’s employment with the Company within two years of the change in control of the Company. The enhanced severance benefits shall include a payment of two times base annual salary, two times target annual bonus and accelerated vesting of Mr. Aquino’s equity awards.
(d)
Upon the recommendation of the Board’s Corporate Governance and Nominating Committee, on September 27, 2021 and in conjunction with Mr. Aquino’s appointment as President and Chief Executive Officer of the Company, the Board of the Company appointed Mr. Peter D. Aquino to serve as a Class III director of SeaChange, effective immediately, with a term to expire at the 2023 Annual Meeting of Stockholders.
