Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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James E. Cashman Transition Agreement
In connection with its previously announced leadership transition, on December 22, 2016, ANSYS, Inc. (the Company) entered into a
Transition Agreement (the Transition Agreement) with Mr. James E. Cashman III, its current Chief Executive Officer and a member of the Board of Directors (the Board) of the Company, pursuant to which
Mr. Cashman will become the Chairman of the Board, effective as of January 1, 2017. Pursuant to the terms of the Transition Agreement, Mr. Cashman will be employed through April 30, 2019 (or such earlier date as his employment is
terminated pursuant to the terms of the Transition Agreement). From the period from January 1, 2017 through February 28, 2018, Mr. Cashmans will be paid $250,000 in the aggregate, in bi-monthly installments. From the period from
March 1, 2018 through April 30, 2019, Mr. Cashmans will be paid $250,000 in the aggregate, in bi-monthly installments. Mr. Cashman will not be entitled to bonus payments during his employment pursuant to the Transition
Agreement. Mr. Cashman will continue to be eligible to participate in all of the Companys benefit plans subject to the terms of such plans.
In the event that Mr. Cashmans employment with the Company is terminated by the Company without cause prior to
April 30, 2019 and subject to entering into an agreed upon release of claims, Mr. Cashman will be entitled to receive an amount equal to three million dollars ($3,000,000) less (i) any salary he has received pursuant to the Transition
Agreement and (ii) the aggregate fair market value (determined at the highest of the Companys stock price on the date such amounts vested or on the date of Executives termination of employment or on the date the shares received
pursuant to such awards were sold (based on actual sale price)) of any time or performance-based restricted stock units that vested during Mr. Cashmans employment pursuant to the Transition Agreement (whether granted in connection with
the Transition Agreement or otherwise). Such amounts would be payable in equal monthly installments over the 24 month-period following the effective date of the release. In addition, if such termination without cause occurs prior to
Mr. Cashman reaching age 65, the Company will continue to provide Mr. Cashman with life and health insurance coverage through Company-paid COBRA premiums equal to the Companys current contributions for Mr. Cashman until the date
Mr. Cashman reaches age 65. Mr. Cashman will not be entitled to any severance if his employment with the Company ends for any other reason, including as a result of reaching the end of the term of the Transition Agreement.
Mr. Cashman has agreed to remain subject to the existing
non-competition,
non-solicitation
and
non-hire
restrictions included in his current employment agreement. Other than those obligations, the terms of the Transition Agreement supersede the
terms of Mr. Cashmans employment agreement.
In connection with the Transition Agreement, the Company will issue
Mr. Cashman Restricted Stock Units in an amount equal to $1,800,000 US Dollars calculated on the date of grant as determined under the Companys equity grant policy (the RSUs), subject to the Companys Fifth Amended and
Restated 1996 Stock Option and Grant Plan, as amended, and a Restricted Stock Unit Agreement. The RSUs vest in two installments, with a number of RSUs equal to $800,000 divided by the closing price of the Companys common stock on the business
day prior to the grant date vesting on February 28, 2018, and the remainder of the RSUs vesting on April 30, 2019, subject to Mr. Cashmans continued employment pursuant to the Transition Agreement through the applicable date.
The foregoing descriptions are qualified in their entirety by reference to the full text of the Transition Agreement attached hereto as
Exhibit 10.1, which is incorporated herein by reference.