8-KLeadership ChangesExhibits & Filings

Fortinet, Inc. 8-K Report, Executive Changes (Sep 28, 2015)

Filed September 28, 2015For Securities:FTNT

Summary

Fortinet, Inc. (FTNT) announced a significant addition to its Board of Directors on September 22, 2015, with the appointment of Gary Locke. Mr. Locke, a former Governor of Washington State and U.S. Secretary of Commerce, brings considerable public sector and leadership experience to the cybersecurity firm. His appointment as a Class III director, with a term expiring at the 2018 annual meeting, is intended to bolster the board's expertise and governance. In connection with his appointment, Mr. Locke will receive a standard annual cash retainer of $40,000, paid quarterly, and is expected to be granted restricted stock units (RSUs). Notably, a change of control agreement ensures all his unvested equity awards will vest immediately prior to a change of control event. This appointment suggests a continued focus by Fortinet on strengthening its strategic oversight and corporate governance as it navigates the evolving cybersecurity landscape.

Key Highlights

  • 1Appointment of Gary Locke to the Board of Directors, effective September 22, 2015.
  • 2Mr. Locke will serve as a Class III director with his term expiring at the 2018 annual meeting.
  • 3No existing arrangements or understandings preceded Mr. Locke's selection as director.
  • 4Mr. Locke will receive an annual cash retainer of $40,000, paid quarterly, as per company policy.
  • 5Restricted Stock Units (RSUs) are expected to be granted to Mr. Locke.
  • 6A change of control agreement is in place, whereby all unvested equity awards will vest immediately prior to a change of control.
  • 7Mr. Locke will enter into the company's standard indemnification agreement for non-executive directors.

Frequently Asked Questions

Gary Locke is a former Governor of Washington State and U.S. Secretary of Commerce. His appointment to Fortinet's Board of Directors is significant as it brings considerable public sector experience, high-level executive leadership, and potentially expanded networks and strategic insight to the company's governance and strategic direction.

Mr. Locke will receive an annual cash retainer of $40,000, which will be paid on a quarterly basis. Additionally, it is expected that the Board will approve a grant of restricted stock units (RSUs) to him, aligning his interests with those of the company's shareholders.

The change of control agreement ensures that if Fortinet undergoes a change of control, all of Mr. Locke's unvested equity awards, including the expected RSUs, will vest immediately prior to the consummation of such change of control event. This provides him with security and potentially incentivizes him to act in the best interest of shareholders during potential acquisition scenarios.

As of the filing date, Mr. Locke had not yet been appointed to any standing committees of the Board. Fortinet stated it would file an amendment to this Form 8-K to disclose any such appointments once they are made.