Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 13, 2020, Leslie J. "Les" Rechan joined PROS Holdings, Inc. (the “Company”), through its wholly-owned subsidiary PROS Canada Operations, Ltd. (“PROS Canada”), as Chief Operating Officer. Mr. Rechan, who has served as a director of the Company since 2015, resigned as a director effective upon his appointment as an executive officer of the Company.
From September 2017 to May 2020, Mr. Rechan, 58, served as President and Chief Executive Officer and a director of Solace Corp., a cloud-based smart data movement solutions company. Prior to Solace, Mr. Rechan served as President and Chief Executive Officer and a director of Halogen Software (TSX: HGN), a cloud-based talent management software provider (2015 to 2017). Mr. Rechan previously served as General Manager, IBM Business Analytics Division (2011 to 2014), and Vice President, Sales, Solutions and Services, IBM Business Analytics Division (2008 to 2011). Mr. Rechan held several leadership positions at IBM Corp. across field sales, systems engineering, services, solutions, development, and general management in North America, Europe and Asia Pacific. Mr. Rechan has also served in executive roles at Cognos Inc., Oracle Corporation, Seibel Systems, Inc., Cadence Design Systems Inc. and Onyx Software Corp.
Mr. Rechan has no family relationships with any of the Company's directors or executive officers and is not a party to any transactions of the type listed in Item 404(a) of Regulation S-K.
On May 12, 2020, PROS Canada entered into an Offer Letter (the “Offer Letter”) with Mr. Rechan. On May 13, 2020, PROS Canada entered into an Employment Agreement (the “Employment Agreement”, and collectively with the Offer Letter, the "Agreement") with Mr. Rechan. Pursuant to the Agreement, Mr. Rechan is entitled to an annual base salary of $35,416.66 per month and is eligible to participate in the Company's employee bonus plans as authorized by the Company’s Board of Directors. The Company’s Compensation and Leadership Development Committee (the “CLD Committee”) has approved an annual incentive bonus target equal to 90% of Mr. Rechan’s base salary. Also, in connection with the commencement of Mr. Rechan’s employment, the CLD Committee approved an award of 132,406 restricted stock units to Mr. Rechan pursuant to the Company's Amended and Restated 2017 Equity Incentive Plan, which will vest in four equal installments over four years. Mr. Rechan’s base salary and annual bonus opportunity are each subject to periodic review by the CLD Committee. In the event Mr. Rechan's employment is terminated by him for good reason, by us without cause, or we decide not to renew his Agreement, he will receive (i) his full base salary each month for the following 12 months, (ii) any unpaid bonus earned prior to the termination relating to periods preceding the date of termination, (iii) the payment of a bonus at 100% of performance targets, including discretionary components, within the bonus plan in effect as if employed by us for 12 months, (iv) an amount equal to 12 times the monthly cost of Mr. Rechan's health benefits, (v) the acceleration of vesting of all equity awards with respect to such shares that would have vested following the date of termination and prior to the first anniversary of his termination date, and (vi) the acceleration of vesting of all performance restricted stock awards scheduled to vest prior to the first anniversary of his termination date, where the applicable performance period is deemed to have ended on his termination date. Alternatively, if Mr. Rechan's employment is terminated by us without cause, if he resigns for good reason, or we decide not to renew his Agreement within six months prior to, or anytime after, a change of control of the Company, he will receive (i) an amount equal to 150% of his annual salary, (ii) any unpaid bonus earned prior to the termination relating to periods preceding the date of termination, (iii) the payment of an aggregate bonus equal to 100% of performance targets, including discretionary components, within the bonus plan in effect as if employed by us for 18 months, (iv) an amount equal to 18 times the monthly cost of Mr. Rechan's health benefits, and (v) the acceleration of vesting of all equity awards with respect to such shares that would have vested following the date of termination. If Mr. Rechan's employment with us terminates due to his death or disability, his employment will automatically terminate and he will be entitled to accelerated vesting of (i) all equity awards with respect to all shares that would have vested after the termination date, and (ii) all performance stock awards at 100% of the target number granted. Mr. Rechan is subject to non-competition and non-solicitation restrictions during the term of his employment and for the 12-month period following the termination of his employment. The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Offer Letter and the Employment Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Mr. Rechan is also a party to the Company’s standard indemnification agreement for officers and directors. The foregoing description is qualified in its entirety by the full text of the form of indemnification agreement, which was filed as Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 15, 2017 and is incorporated by reference herein.