Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 4, 2022, Aspen Aerogels, Inc. (the "Company") entered into an
executive employment agreement effective as of January 1, 2022, for a three-year
term with its Chief Executive Officer, Donald R. Young (the "CEO Employment
Agreement"), to succeed Mr. Young's previous employment agreement with the
Company that expired on December 31, 2021. Pursuant to the CEO Employment
Agreement, Mr. Young continues to serve as our Chief Executive Officer,
Mr. Young's annual base salary remains at $515,000 per year, and Mr. Young is
eligible to receive an annual performance-based cash bonus (the "CEO Performance
Bonus") as determined by the Company's board of directors with a target of not
less than 110.0% of his base salary (the "CEO Performance Bonus Target").
Mr. Young's base salary may be increased, but not decreased, at the discretion
of the Company's board of directors.
Mr. Young is entitled to the following compensation in connection with a
termination of his employment. Upon termination by the Company without cause or
by Mr. Young for good reason (a "Qualifying Termination") prior to a change of
control, Mr. Young is entitled to receive, following execution of a release, an
amount equal to two times the sum of his annual base salary and the CEO
Performance Bonus Target, each as then in effect. He is also entitled to a pro
rata portion of the CEO Performance Bonus based on the number of months worked
in the year of termination, any accrued but unpaid CEO Performance Bonus for the
prior fiscal year, payment of the cost of health care insurance benefits for the
lesser of the duration of such coverage under COBRA or 24 months, six months of
outplacement services, and accelerated vesting by three months of his
stock-based awards and option grants then outstanding, which options shall
remain exercisable for at least one year following such Qualifying Termination.
Upon a Qualifying Termination that occurs within 24 months after the occurrence
of a change of control (the "CIC Qualifying Termination"), following execution
of a release, Mr. Young will be entitled to severance in an amount equal to two
times the sum of his annual base salary and the CEO Performance Bonus Target,
each as then in effect. Furthermore, Mr. Young will be entitled to a pro
rata portion of the CEO Performance Bonus based on the number of months worked
in the year of termination, any accrued but unpaid CEO Performance Bonus for the
prior fiscal year, payment of the cost of health care insurance benefits for the
lesser of the duration of such coverage under COBRA or 24 months, six months of
outplacement services, and complete accelerated vesting of substantially all of
Mr. Young's stock-based awards and option grants then outstanding, which stock
options shall be exercisable for at least one year following such CIC Qualifying
Termination. To the extent any outstanding options or stock-based awards are not
assumed by the Company's successor in a change of control, all stock options and
stock-based awards shall become fully vested and exercisable as of the change of
control.
On January 4, 2022, the Company entered into executive agreements effective as
of January 1, 2022 for a one-year term, to succeed the executive agreements that
expired on December 31, 2021, with John F. Fairbanks, Vice President, Chief
Financial Officer and Treasurer, and Corby Whitaker, Senior Vice President,
Sales and Marketing, each of whom is a named executive officer of the Company
(the "NEO Executive Agreements").
The material terms of the NEO Executive Agreements are as follows:
The annual base salary for Messrs. Fairbanks and Whitaker is set at $300,005 and
$400,000, respectively, and they are each eligible to receive a
performance-based cash bonus (the "NEO Performance Bonus") as determined by the
Company's board of directors with a performance bonus target set at not less
than 55.0%.
• Upon termination by the Company not for cause or termination by the
executive for good reason prior to a change of control, the executive is
entitled to receive, following execution of a release, severance in an
amount equal to the sum of his annual base salary then in effect plus his
performance bonus target; a pro rata portion of the NEO Performance Bonus
based on the number of months worked in the year of termination; any accrued
but unpaid NEO Performance Bonus for the prior fiscal year; continued health
insurance coverage for the lesser of the duration of such coverage under
COBRA or 12 months; and 6 months of outplacement service. For any such
termination within 24 months from a change of control, the executive is
entitled to receive, following execution of a release, severance in an
amount equal to twice the sum of his annual base salary and performance
bonus target in effect at the time of termination; a pro rata portion of the
NEO Performance Bonus based on the number of months worked in the year of
termination; any accrued but unpaid NEO Performance Bonus for the prior
fiscal year; continued health insurance coverage for the lesser of the
duration of such coverage under COBRA or 24 months; and 6 months of
outplacement services.
• Upon termination by the Company not for cause or termination by the
executive for good reason prior to a change of control, vesting of any
options or stock-based awards outstanding will be accelerated by three
months and any vested stock options will be exercisable for one year from
the date of termination. For any such termination within 24 months after a
change of control, any options or stock-based award outstanding will become
fully vested and exercisable as of the date of termination and, subject to
any permitted action by the Company's board of directors upon a change of
control under the Company's applicable equity plan to terminate the stock
options or other stock-based awards upon a change of control, any such
vested stock option shall be exercisable for not less than one year from the
date of termination.
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The foregoing description of the CEO Employment Agreement and the NEO Executive
Agreements is not complete and is qualified in its entirety by reference to the
full text of the CEO Employment Agreement and the NEO Executive Agreements,
respectively, copies of which will be filed as exhibits to the Company's annual
report on Form 10-K for the fiscal year ending December 31, 2021.
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ASPEN AEROGELS, INC. 
