Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Executive Officer and President
On January 4, 2023, the Board of Directors (the "Board") of Appgate, Inc., a
Delaware corporation (the "Company"), appointed Leo Taddeo, the Company's
current Chief Information Security Officer, as the Company's Chief Executive
Officer (principal executive officer) and President and as a Director, in each
case effective on January 4, 2023. The Board appointed Mr. Taddeo as a Class II
Director to fill the vacancy created by Mr. Barry Field's resignation, as
described below, and Mr. Taddeo will serve as a Director until the next election
of the Class II Directors and until his successor shall be elected and
qualified, or until his earlier death, resignation, retirement, disqualification
or removal. In addition, upon his appointment as Chief Executive Officer and
President, Mr. Taddeo no longer serves as the Company's Chief Information
Security Officer.
Mr. Taddeo, 57 years old, prior to his appointment as Chief Executive Officer
and President, served as Chief Information Security Officer of the Company and
President of Appgate Federal, positions he had held since February 2022.
Previously, Mr. Taddeo was Chief Information Security Officer and President of
Cyxtera Federal Group from January 2019 to February 2022 and Chief Information
Security Officer of Cyxtera Technologies, Inc. from May 2017 to January 2019.
From 1995 to 2015, Mr. Taddeo served as a Special Agent with the Federal Bureau
of Investigation, including most recently as the Special Agent in Charge of the
Cyber/Special Operations Division, the top FBI executive in New York City in
charge of investigating cyber-attacks against private and government networks.
Mr. Taddeo received his B.S. in Applied Physics from Rensselaer Polytechnic
Institute and J.D. from St. John's University. Mr. Taddeo's qualifications to
serve on the Board include his familiarity with the Company's business and
operations, as well as his leadership, management and technology experience,
particularly in the Company's industry.
In his capacity as the Company's Chief Executive Officer and President, Mr.
Taddeo is entitled to an annual base salary of $300,000 and is eligible to
receive an annual bonus in an amount equal to 50% of his annual base salary. Mr.
Taddeo will not receive any additional compensation in consideration for serving
as a Director of the Company.
There are no family relationships between Mr. Taddeo and any director or
executive officer of the Company, and Mr. Taddeo does not have any other direct
or indirect material interest in any transaction or proposed transaction
required to be reported under Item 404(a) of Regulation S-K. There are no
arrangements or understandings between Mr. Taddeo and any other persons pursuant
to which he was selected as Chief Executive Officer and President and a Director
of the Company.
Separation of Barry Field
On January 4, 2023, Barry Field tendered his resignation as both a director and
as the Company's Chief Executive Officer, with such resignation becoming
effective on such date (the "Field Separation Date"). Mr. Field's resignation
from the Board was not due to any disagreement with the Company on any matter
relating to the Company's operations, policies or practices. In connection with
Mr. Field's resignation, on the Field Separation Date, the Company entered into
a Separation Agreement and Release with Mr. Field (the "Field Separation
Agreement"), pursuant to which Mr. Field will be entitled to the following
benefits:
•a cash severance payment equal to Mr. Field's annual base salary and
corresponding one-year target bonus, paid ratably over a twelve month period
following the Field Separation Date (the "Field Separation Period"), for a total
gross amount equal to $738,000;
•payment of Mr. Field's premiums for continued health benefits provided under
COBRA for the Field Separation Period; and
•payment of Mr. Field's annual bonus, if any, for the fiscal year 2022 and his
employment period during the fiscal year 2023 (collectively, the "Bonus
Payments"). As of the Field Separation Date, the Board had not determined the
amount of the Bonus Payments, but the Company will pay Mr. Field the Bonus
Payments, if any, at the same time the applicable bonus payments are paid in the
ordinary course to actively employed senior executives in accordance with the
terms of the Field Separation Agreement.
The Field Separation Agreement additionally includes a customary general release
of claims by Mr. Field in favor of the Company and certain related persons and
parties.
Separation of Jawahar Sivasankaran
On January 4, 2023, Jawahar Sivasankaran tendered his resignation as the
Company's President and Chief Operating Officer, with such resignation becoming
effective on such date (the "Sivasankaran Separation Date"). In
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connection with Mr. Sivasankaran's resignation, on the Sivasankaran Separation
Date, the Company entered into a Separation Agreement and Release with Mr.
Sivasankaran (the "Sivasankaran Separation Agreement"), pursuant to which Mr.
Sivasankaran will be entitled to the following benefits:
•a cash severance payment equal to Mr. Sivasankaran's annual base salary, paid
ratably over a twelve month period following the Sivasankaran Separation Date
(the "Sivasankaran Separation Period"), for a total gross amount equal to
$385,000; and
•payment of Mr. Sivasankaran's premiums for continued health benefits provided
under COBRA for the Sivasankaran Separation Period.
The Sivasankaran Separation Agreement additionally includes a customary general
release of claims by Mr. Sivasankaran in favor of the Company and certain
related persons and parties.
The foregoing descriptions of the Field Separation Agreement and the
Sivasankaran Separation Agreement are only summaries and are qualified in their
entireties by reference to the full text of the Field Separation Agreement and
the Sivasankaran Separation Agreement, which are filed as Exhibit 10.1 and
Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference in
this Item 5.02.
Item 7.01 Regulation FD Disclosure.
On January 9, 2023, the Company issued a press release relating to the matters
described in Item 5.02 of this Current Report on Form 8-K. A copy of the press
release is attached to this Current Report on Form 8-K as Exhibit 99.1 and
incorporated by reference in this Item 7.01.
The information contained in this Item 7.01, including Exhibit 99.1, is
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, nor shall it be deemed incorporated
by reference into any registration statement or other filing under the
Securities Act of 1933, as amended, or the Exchange Act, regardless of any
general incorporation language in such filing, except as shall be expressly
incorporated by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
Separation Agreement and Release, dated January 4, 2023, by and between
10.1** Appgate, Inc. and Barry Field
Separation Agreement and Release, dated January 4, 2023, by and between
10.2** Appgate, Inc. and Jawahar Sivasankaran
99.1 Press Release dated January 9, 2023
104 Cover Page Interactive Data File
** Management contract or compensation plan or arrangement.
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