01—Abstract
Summary
Summary of the 8-K filed November 24, 2021. Cited figures are marked; the original filing is the authoritative source.
This SEC 8-K filing from Nasdaq, Inc. (NDAQ) announces a new five-year employment agreement for President and CEO Adena T.
Friedman, effective January 1, 2022, through January 1, 2027. The agreement outlines her compensation structure, including a base salary of at least $1,250,000,a a target annual incentive bonus of at least $3,000,000, and equity awards. Notably, Ms. Friedman will receive a one-time, $10 million stock option grant upon commencement, with specific vesting conditions tied to performance and tenure.
The filing also details the terms for termination payments and benefits under various scenarios, including "double trigger" provisions related to a change of control. These provisions aim to provide Ms. Friedman with financial security and ensure continued leadership stability. The new agreement supersedes her previous employment contract from 2016 and includes standard restrictive covenants such as confidentiality and non-solicitation.
02—Key points
Key Highlights
- New 5-year employment agreement for CEO Adena T. Friedman, effective Jan 1, 2022 - Jan 1, 2027.
- Minimum annual base salary set at $1,250,000.
- Target annual incentive compensation (bonus) of at least $3,000,000 based on performance goals.
- Significant one-time grant of non-qualified stock options valued at $10,000,000, with vesting tied to performance and tenure.
- Termination provisions include multi-year base salary and bonus payouts for termination without cause or for good reason, especially in connection with a change of control ('double trigger').
- Post-termination benefits include extended vesting of equity awards and continued health insurance premium coverage.
- Agreement includes a two-year non-compete clause following termination.
03—Questions
Frequently Asked Questions
What is the duration of Adena Friedman's new employment agreement?
The new employment agreement for Adena T. Friedman is effective from January 1, 2022, and runs through January 1, 2027, a term of five years.
What is the guaranteed minimum compensation for Ms. Friedman under the new agreement?
The agreement guarantees a minimum annual base salary of $1,250,000 and a target annual incentive compensation of at least $3,000,000, contingent upon performance goals. She also receives equity awards and a significant one-time stock option grant.
What happens to Ms. Friedman's compensation and benefits if her employment is terminated without cause or for good reason, particularly in the event of a change of control?
In the event of termination without cause or by Ms. Friedman for good reason (outside of a change of control), she is entitled to two times her prior year's base salary and target bonus, plus a pro-rata bonus. If this occurs within two years of a change of control ('double trigger'), she receives similar cash severance, accelerated vesting of all outstanding equity awards, and continued health insurance premiums for up to 24 months.
Does the agreement include any restrictions on Ms. Friedman after her employment ends?
Yes, the agreement includes a two-year prohibition on Ms. Friedman rendering services to a competing entity following the termination of her employment. This is part of the 'Continuing Obligations Agreement' which also includes confidentiality and inventions assignment provisions.
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