Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, on January 9, 2024, Juniper Networks, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Hewlett Packard Enterprise Company, a Delaware corporation (“Parent”), and Jasmine Acquisition Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent.
Compensatory Arrangements of Certain Officers
In connection with certain consequences of the Merger, certain employees of the Company (including the named executive officers and other executive officers) may become entitled to payments and benefits that may be treated as “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Section 280G” and the “Code”, respectively). To mitigate the potential impact of Section 280G and Section 4999 of the Code on the Company and its named executive officers, among others, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) on December 16, 2024, approved the acceleration into December 2024 of the vesting and payments of certain bonus and/or equity awards, as applicable, that otherwise would have been payable to Robert Mobassaly (the “Executive”) and other employees of the Company on or after January 1, 2025, as described further below, subject to execution by the Executive of an Acceleration and Clawback Agreement (“Acceleration and Clawback Agreement”). These actions are intended to benefit the Company by preserving compensation-related corporate income tax deductions for the Company that otherwise might be disallowed through the operation of Section 280G and to mitigate or eliminate the amount of excise tax that may be payable by the Executive pursuant to Section 4999 of the Code in connection with Section 280G in certain circumstances.
In approving the accelerated vesting and payments of certain bonus and/or equity awards, the Compensation Committee considered, among other things, the projected value of the compensation-related corporate income tax deductions that otherwise might be lost as a result of the effect of Section 280G and the benefits to the Company of reducing the potential tax burden on the Executive.
The approved accelerated vesting and payments took the following forms: (a) payment in 2024 of cash incentive compensation that would otherwise be payable in the ordinary course of business in 2025 (the “Accelerated Cash Bonus”) and (b) accelerated vesting and settlement in 2024 of certain outstanding time-based restricted stock units and performance stock units held by the Executive that would have otherwise vested and settled in accordance with their terms after 2024 (collectively, the “Accelerated RSUs” and together with the Accelerated Cash Bonus, the “Accelerated Amounts”). All Accelerated Amounts will be subject to applicable tax withholdings and are subject to the terms and conditions of the Acceleration and Clawback Agreement.
Specifically, the Compensation Committee approved for the Executive the following accelerated vesting and payments: (a) an Accelerated Cash Bonus in the amount of $243,000 and (b) 80,785 Accelerated RSUs.
