Narrative disclosure to summary compensation table and grants of plan-based awards table
Employment agreements with named executive officers
Summarized below are the material terms of our employment agreements with our named executive officers.
Balkrishan Kalra. We entered into an amended and restated employment agreement with Mr. Kalra on November 8, 2023, which was effective as of February 9, 2024, in connection with his promotion to President and Chief Executive Officer and which superseded his previous employment agreement dated November 30, 2021. The employment agreement has an indefinite term and may be terminated by us or Mr. Kalra, subject to the severance provisions described below. The employment agreement provides for an annual base salary of $875,000 and a target bonus of $1,100,000 for 2024. In addition, Mr. Kalra is entitled to benefits and perquisites generally available to our other employees and paid vacation in accordance with Company policy.
For purposes of Mr. Kalra’s employment agreement, the term “good reason” means a material reduction in the nature of Mr. Kalra’s authorities or duties or a material reduction in base salary, which has not been cured by us within 30 days following notice to us of such event by Mr. Kalra.
In the event of Mr. Kalra’s termination for good reason or by the Company without cause, Mr. Kalra will receive severance benefits that consist of a cash payment equal to the sum of (a) (i) two times Mr. Kalra’s base salary and (ii) the target bonus for the fiscal year in which the termination occurs, (b) a lump-sum payment in an amount equal to Mr. Kalra’s pro-rated target bonus for the year of termination based on the period of employment in the year of termination and (c) a lump sum payment equal to the cost of acquiring health benefits for himself, his spouse and his eligible dependents for 18 months following termination.
In addition, in the event such termination occurs prior to or more than 24 months following a change of control of the Company (as defined in our 2017 Omnibus Incentive Compensation Plan), Mr. Kalra’s then outstanding time-based options, time-based RSUs and PSUs will vest, in the case of options and RSUs, on the termination date and, in the case of PSUs, as of the end of the service period for such PSUs, with respect to the number of shares that would have vested had Mr. Kalra continued in service for a period of 12 months following the termination date (the “Additional Shares”). All time-based options may be exercised for any Additional Shares vesting under the time-based option and any previously-vested shares for six months following the termination date (or if earlier, upon the expiration of the term of the time-based option).
In the event such termination occurs within 24 months following a change of control, Mr. Kalra’s outstanding time-based options, time-based RSUs and PSUs will vest in full on the termination date (with respect to the number of shares then subject to the awards). All time-based options (including with respect to any previously-vested shares) will remain exercisable for a period of 6 months following the termination date (or if earlier, upon the expiration of the term of the time-based option).
Mr. Kalra’s payments upon termination of employment described above are subject to his execution of a release of all claims against us and our affiliates. In addition, Mr. Kalra will be subject to certain non-competition and non-solicitation covenants for one year after the termination of his employment.
N.V. Tyagarajan. We entered into an employment agreement with Mr. Tyagarajan on June 15, 2011, which superseded his previous employment agreement, dated February 7, 2005. The employment agreement was amended on November 17, 2020 in connection with Mr. Tyagarajan’s relocation to the United Kingdom to address the payment of his cash compensation in local currency and the continued application of the covenants and certain other provisions under his employment agreement. The employment agreement had an indefinite term and was terminable by us or Mr. Tyagarajan, subject to the severance provisions described below. Mr. Tyagarajan stepped down as our President and Chief Executive Officer, effective as of February 9, 2024, and accordingly the employment agreement is no longer in effect as of such date.
Mr. Tyagarajan’s employment agreement provided for an annual base salary of not less than $600,000 and a target bonus of 125% of annual base salary. For 2023, the compensation committee set Mr. Tyagarajan’s base salary at $900,000, increased from $824,000 in 2022, and left his target bonus unchanged at $1,300,000, or approximately 144% of base salary. There was no change in Mr. Tyagarajan’s base salary or target bonus for 2024 given his planned departure. Mr. Tyagarajan was entitled to benefits and perquisites generally available to our other senior executives, reimbursement of automobile costs and $60,000 for personal costs. Mr. Tyagarajan was also entitled to four weeks of paid vacation per year.
For purposes of Mr. Tyagarajan’s employment agreement, the term “good reason” means a material reduction in the nature of Mr. Tyagarajan’s authorities or duties, a material reduction in base compensation, requiring Mr. Tyagarajan to report to any person
