Blog: ELASTIC N.V. : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – marketscreener.com

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Transition of Chief Executive Officer to Chief Technology Officer

On January 9, 2022, Shay Banon provided Elastic N.V. (the “Company” or
“Elastic”) with notice of his intent to transition from his position as Chairman
and Chief Executive Officer (“CEO”) of the Company, to Chief Technology Officer
(“CTO”) of the Company, effective as of January 11, 2022. Mr. Banon will
continue to serve on the Company’s Board of Directors (the “Board”) and Chetan
Puttagunta, currently Lead Independent Director, has been appointed Chairman of
the Board.

In connection with his transition to CTO, Elasticsearch, Inc. and Mr. Banon
entered into an amended and restated employment agreement on January 11, 2022
(the “Banon Employment Agreement”) on substantially the same terms and
conditions as the amended and restated employment agreement between
Elasticsearch, Inc. and Mr. Banon dated February 24, 2021 (the “Prior Banon
Employment Agreement”), except that the Banon Employment Agreement provides that
Mr. Banon will resign as Chairman of the Board and will serve as CTO. Prior to
the formal appointment of Ashutosh Kulkarni as CEO as described below, Mr. Banon
will no longer exercise the responsibilities of CEO.

For a full description of the Prior Banon Employment Agreement, please see
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended January 31, 2021, filed with the Securities and Exchange
Commission on March 3, 2021.

Mr. Banon’s transition from CEO to CTO is not the result of any material
disagreement with the Company relating to the Company’s operations, policies or
practices. There are no family relationships between Mr. Banon and any director
or executive officer of the Company, and the Company has not entered into any
transactions with Mr. Banon that are reportable pursuant to Item 404(a) of
Regulation S-K. Except as described above, there are no arrangements or
understandings between Mr. Banon and any other persons pursuant to which he was
appointed CTO.

Appointment of Chief Executive Officer

On January 12, 2022, the Company announced the promotion of Ashutosh Kulkarni,
the Company’s current Chief Product Officer, to CEO, effective as of January 11,
2022. In addition, the Company announced the nomination of Mr. Kulkarni to the
Board.

Pursuant to Dutch law, Mr. Kulkarni’s appointment to the Board is subject to a
shareholder vote, expected to be held at an extraordinary general shareholder
meeting in March 2022 (the “EGM”). Upon his election to the Board, Mr. Kulkarni
will be automatically appointed as CEO, without further action by the Board.
Until such time, Mr. Kulkarni will serve as acting CEO with the full powers of
the CEO conferred upon him by the Board.

In connection with his transition to CEO, Elasticsearch, Inc. and Mr. Kulkarni
entered into an amended employment letter effective January 11, 2022 (the
“Kulkarni Employment Letter”). The Kulkarni Employment Letter does not have a
specific term and provides that Mr. Kulkarni will continue to serve as an
at-will employee. Mr. Kulkarni’s annual base salary will be $600,000, and he
will be eligible for an annual target cash incentive payment for 2022 equal to
the sum of (i) 60% of Mr. Kulkarni’s base salary for the period between the
commencement of fiscal year 2022 and January 11, 2022, and (ii) 100% of
Mr. Kulkarni’s base salary for the period between January 11, 2022 and the end
of fiscal year 2022. In addition, Mr. Kulkarni will be granted equity awards
covering ordinary shares of Elastic with an aggregate approximate value of
$12,000,000. Subject to approval of Mr. Kulkarni’s appointment as CEO at the
EGM, one third of the value of the equity awards will be in the form of a
restricted stock unit award, and two thirds of the value of the equity awards
will be in the form of a stock option award to purchase shares of Elastic. The
restricted stock unit award and stock option award will each vest over a 4-year
period ratably on designated vesting dates following the applicable vesting
commencement date in accordance with Elastic’s equity grant practices, subject
to Mr. Kulkarni’s continuous service with the Company or its affiliates through
each vesting date. The restricted stock unit award and stock option award will
be subject to such other terms as set forth in the Elastic N.V. Amended and
Restated 2012 Stock Option Plan (the “Plan”), the applicable award agreement
under the Plan, and the Company’s equity grant practices in effect from time to
time.

Mr. Kulkarni previously entered into the Company’s standard change in control
and severance agreement with the Company, which will remain in effect. The
change in control and severance agreement provides certain severance payments
and benefits if Mr. Kulkarni’s employment is terminated other than for “cause”
(as defined in the agreement) or if he resigns for “good reason” (as defined in
the agreement), subject to Mr. Kulkarni satisfying certain other terms as set
forth in the agreement. Mr. Kulkarni also previously entered into the Company’s
standard indemnification agreement with the Company, which will remain in
effect. The indemnification agreement provides indemnification for certain
liabilities that may arise by reason of his status or service. For a full
description of the Company’s standard change in control and severance agreements
and indemnification agreements, please see Exhibit 10.3 and Exhibit 10.1,
respectively, to the Company’s Annual Report on Form 10-K for the fiscal year
ended April 30, 2020, filed with the Securities and Exchange Commission on
June 26, 2020.

——————————————————————————–

There are no family relationships between Mr. Kulkarni and any director or
executive officer of the Company, and the Company has not entered into any
transactions with Mr. Kulkarni that are reportable pursuant to Item 404(a) of
Regulation S-K. Except as described above, there are no arrangements or
understandings between Mr. Kulkarni and any other persons pursuant to which he
was appointed CEO and nominated to serve on the Board.

Departure of President, Worldwide Field Operations

On January 12, 2022, the Company also announced that Paul Appleby stepped down
from his position as President, Worldwide Field Operations of the Company,
effective as of January 12, 2022, and will be leaving the Company on a date to
be mutually agreed (“Separation Date”). The change in Mr. Appleby’s position and
his anticipated departure from the Company are not the result of any material
disagreement with the Company relating to the Company’s operations, policies or
practices. As a result of the change in Mr. Appleby’s position, he will no
longer be classified as an “executive officer” of the Company, as defined in
Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or as an “officer” of the Company for purposes of Section 16 of the
Exchange Act, effective as of January 12, 2022.

In connection with his anticipated departure from the Company, Elasticsearch,
Inc. and Mr. Appleby intend to enter into a separation and transition agreement
(the “Separation Agreement”), pursuant to which Mr. Appleby is expected to
remain employed with Elasticsearch, Inc. until the Separation Date to assist
with certain transition activities. The Company intends to file an amendment to
this Form 8-K following determination of any material compensation changes in
connection with entry into the Separation Agreement.

Item 7.01. Regulation FD Disclosure.

On January 12, 2022, the Company issued a press release announcing the Company
leadership changes described herein. In addition, the Company announced that it
expects to exceed its guidance for revenue, non-GAAP operating margin and
non-GAAP net loss per share provided for the third quarter of fiscal year 2022.
The Company expects to announce its results for the third quarter in March 2022.
A copy of the press release is furnished herewith as Exhibit 99.1 and
incorporated herein by reference.

The information contained herein and in the accompanying exhibit are “furnished”
and shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to
the liabilities of that section, and shall not be incorporated by reference in
any filing under the Securities Act of 1933, as amended, or the Exchange Act
regardless of any general incorporation language in such filing, unless
expressly incorporated by specific reference in such filing.

Forward-Looking Statements

Certain statements included in this report and exhibit are forward-looking
statements that are subject to risks and uncertainties, which include but are
not limited to, statements regarding the nomination and appointment of
Mr. Kulkarni, our expectations regarding the success of our leadership
transitions, the expected performance or benefits of our offerings, our
expectations regarding the growth and adoption of our Elastic Cloud offering,
our expectations regarding our market opportunity and anticipated demand for our
products and solutions, our ability to successfully execute on our sales
strategy, statements regarding our future financial results and guidance for
revenue, non-GAAP operating margin and non-GAAP net loss per share for the third
quarter of fiscal year 2022, assessments of the strength of our solutions and
products and our future growth. These forward-looking statements are subject to
the safe harbor provisions under the Private Securities Litigation Reform Act of
1995. Our expectations and beliefs regarding these matters may not materialize.
Actual outcomes and results may differ materially from those contemplated by
these forward-looking statements as a result of uncertainties, risks, and
changes in circumstances, including but not limited to risks and uncertainties
related to the future conduct and growth of Elastic’s business and the markets
in which Elastic operates, and our ability to successfully manage recent
leadership transitions. Additional risks and uncertainties that could cause
actual outcomes and results to differ materially from those contemplated by the
forward-looking statements are included under the caption “Risk Factors” and
elsewhere in our most recent filings with the SEC, including our Annual Report
on Form 10-K for the fiscal year ended April 30, 2021 and any subsequent reports
filed with the SEC. SEC filings are available on the Investor Relations section
of Elastic’s website at ir.elastic.co and the SEC’s website at http://www.sec.gov.
Elastic assumes no obligation to, and does not currently intend to, update any
such forward-looking statements after the date of this release, except as
required by law.

--------------------------------------------------------------------------------

Item 9.01. Financial Statements and Exhibits.


(d) Exhibits



Exhibit   Description

99.1        Press Release dated January 12, 2022

104       Cover Page Interactive Data File (formatted as Inline XBRL)

——————————————————————————–

© Edgar Online, source Glimpses

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s