FALCONSTOR SOFTWARE, INC. (NASDAQ:FALC) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05
|
Costs Associated with Exit or Disposal Activities.
|
In June 2017, the Board of Directors (the Board) of FalconStor
Software, Inc. (the Company), approved a comprehensive plan to
increase operating performance (the Plan).
Software, Inc. (the Company), approved a comprehensive plan to
increase operating performance (the Plan).
The Plan will result in a realignment and reduction in workforce.
When substantially completed by the end of the Companys fiscal
year ending December 31, 2017, the Company expects that the Plan
when combined with previous workforce reductions in the second
quarter of Fiscal 2017 will have reduced the Companys workforce
to approximately 90 employees. These actions are anticipated to
result in an annualized cost savings of approximately $10.0
million. In connection with the Plan, the Company expects to
incur total estimated charges of up to $800,000, consisting
primarily of severance. In making these changes, the Company
prioritized customer support and development while consolidating
operations and cutting direct sales resources allowing the
company to focus on the install base and develop alternate
channels to the market.
When substantially completed by the end of the Companys fiscal
year ending December 31, 2017, the Company expects that the Plan
when combined with previous workforce reductions in the second
quarter of Fiscal 2017 will have reduced the Companys workforce
to approximately 90 employees. These actions are anticipated to
result in an annualized cost savings of approximately $10.0
million. In connection with the Plan, the Company expects to
incur total estimated charges of up to $800,000, consisting
primarily of severance. In making these changes, the Company
prioritized customer support and development while consolidating
operations and cutting direct sales resources allowing the
company to focus on the install base and develop alternate
channels to the market.
|
Item 5.02
|
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Todd Oseth as Chief Executive Officer
As of June 14, 2017, the Board appointed Todd Oseth, [53] as
Chief Executive Officer effective July 1, 2017.
Chief Executive Officer effective July 1, 2017.
Mr. Oseth served as Chief Executive Officer and President of
Intermap Technologies Corp. from December 2010 to October 2016.
During the last 30 years Mr.Oseth has held executive positions
with Sony, EMC, McData/Brocade. In addition he has been involved
for numerous startups and turn arounds. Mr. Oseth holds a B.S.
degree in Electrical Engineering and Computer Science from the
University of Minnesota and an M.B.A. degree from the University
of St. Thomas.
Intermap Technologies Corp. from December 2010 to October 2016.
During the last 30 years Mr.Oseth has held executive positions
with Sony, EMC, McData/Brocade. In addition he has been involved
for numerous startups and turn arounds. Mr. Oseth holds a B.S.
degree in Electrical Engineering and Computer Science from the
University of Minnesota and an M.B.A. degree from the University
of St. Thomas.
In connection with Mr. Oseths appointment as Chief Executive
Officer, the Board approved an offer letter to Mr. Oseth (the
Offer Letter), which was executed on June 14, 2017. The Offer
Letter provides that Mr. Oseth is entitled to receive an
annualized base salary of $350,000, payable in regular
installments in accordance with the Companys general payroll
practices. Mr. Oseth will also be eligible for an annual cash
bonus of up to $227,500, subject to attainment of performance
objectives to be mutually agreed upon and established. to the
offer letter, it is the intention of the Company to create an
equity plan for all employees subject to stockholder approval,
for up to 20% of the equity of the Company on a fully diluted
basis at the time the equity plan is adopted following
stockholder approval. Vesting of the equity issued under the plan
would occur only upon a sale of the Companys assets or capital
stock at a premium to the valuation of the Company at the time
the equity plan is adopted.
Officer, the Board approved an offer letter to Mr. Oseth (the
Offer Letter), which was executed on June 14, 2017. The Offer
Letter provides that Mr. Oseth is entitled to receive an
annualized base salary of $350,000, payable in regular
installments in accordance with the Companys general payroll
practices. Mr. Oseth will also be eligible for an annual cash
bonus of up to $227,500, subject to attainment of performance
objectives to be mutually agreed upon and established. to the
offer letter, it is the intention of the Company to create an
equity plan for all employees subject to stockholder approval,
for up to 20% of the equity of the Company on a fully diluted
basis at the time the equity plan is adopted following
stockholder approval. Vesting of the equity issued under the plan
would occur only upon a sale of the Companys assets or capital
stock at a premium to the valuation of the Company at the time
the equity plan is adopted.
Mr. Oseths employment can be terminated at will. If Mr. Oseths
employment is terminated by the Company other than for cause he
is entitled to receive severance equal to 12 months of his base
salary if (i) he has been employed by the Company for at least 12
months at the time of termination or (ii) a change of control has
occurred within six months of Mr. Oseths employment. Except as
set forth in the preceding sentence, Mr. Oseth is entitled to
receive severance equal to six months of his base salary if he
has been employed by the Company for less than six months and his
employment was terminated by the Company without cause. Mr. Oseth
is also entitled to vacation and other employee benefits in
accordance with the Companys policies as well as reimbursement
for an apartment.
employment is terminated by the Company other than for cause he
is entitled to receive severance equal to 12 months of his base
salary if (i) he has been employed by the Company for at least 12
months at the time of termination or (ii) a change of control has
occurred within six months of Mr. Oseths employment. Except as
set forth in the preceding sentence, Mr. Oseth is entitled to
receive severance equal to six months of his base salary if he
has been employed by the Company for less than six months and his
employment was terminated by the Company without cause. Mr. Oseth
is also entitled to vacation and other employee benefits in
accordance with the Companys policies as well as reimbursement
for an apartment.
The foregoing description of the Offer Letter does not purport to
be complete and is qualified in its entirety by reference to the
Offer Letter, which is attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
be complete and is qualified in its entirety by reference to the
Offer Letter, which is attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Resignation of Gary Quinn as Chief Executive Officer, President
and a Director
and a Director
On June 14, 2017, the Company accepted the resignation of Gary
Quinn from his position as Chief Executive Officer and President
and as a Director of the Company effective July 1, 2017. Mr.
Quinn will assist in the transition of the Chief Executive
Officer role until his departure from the Company. Mr. Quinns
resignation was not the result of any disagreement related to any
matter involving the Companys operations, policies or practices.
Quinn from his position as Chief Executive Officer and President
and as a Director of the Company effective July 1, 2017. Mr.
Quinn will assist in the transition of the Chief Executive
Officer role until his departure from the Company. Mr. Quinns
resignation was not the result of any disagreement related to any
matter involving the Companys operations, policies or practices.
In connection with Mr. Quinns departure, on June 14, 2017 the
Company and Mr. Quinn entered into a Separation Agreement and
General Release (the Separation Agreement) attached hereto as
Exhibit 10.1. Under the terms of the Separation Agreement, the
Company will, among other things, pay Mr. Quinn his current
salary through July 24, 2017 and any COBRA expenses through
January 31, 2019 to the extent that Mr. Quinns health insurance
is not covered by the health insurance plan of another entity.
Company and Mr. Quinn entered into a Separation Agreement and
General Release (the Separation Agreement) attached hereto as
Exhibit 10.1. Under the terms of the Separation Agreement, the
Company will, among other things, pay Mr. Quinn his current
salary through July 24, 2017 and any COBRA expenses through
January 31, 2019 to the extent that Mr. Quinns health insurance
is not covered by the health insurance plan of another entity.
The foregoing description of the Separation Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Separation Agreement, which is attached as
Exhibit 10.2 to this Current Report on Form 8-K and incorporated
herein by reference.
purport to be complete and is qualified in its entirety by
reference to the Separation Agreement, which is attached as
Exhibit 10.2 to this Current Report on Form 8-K and incorporated
herein by reference.
|
Item 7.01
|
Regulation FD Disclosure.
|
On June 19, 2017, the Company announced the appointment of Mr.
Oseth in a press release. A copy of the press release is attached
to this report as Exhibit 99.1.
Oseth in a press release. A copy of the press release is attached
to this report as Exhibit 99.1.
The information contained in this Item 7.01 to this Current
Report on Form 8-K and the exhibit attached hereto pertaining to
this item shall not be deemed to be 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 such information or such exhibits be deemed
incorporated by reference in any filing under the Securities Act
of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing. The
information set forth in the exhibits to this Form 8-K relating
to this item 7.01 shall not be deemed an admission as to the
materiality of any information in this report that is required to
be disclosed solely to satisfy the requirements of Regulation FD.
Report on Form 8-K and the exhibit attached hereto pertaining to
this item shall not be deemed to be 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 such information or such exhibits be deemed
incorporated by reference in any filing under the Securities Act
of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing. The
information set forth in the exhibits to this Form 8-K relating
to this item 7.01 shall not be deemed an admission as to the
materiality of any information in this report that is required to
be disclosed solely to satisfy the requirements of Regulation FD.
|
Item 9.01.
|
Financial Statements and Exhibits
|
|
(d)
|
Exhibits
|
|||
|
Exhibit Number
|
Description
|
|||
|
10.1
|
Offer Letter between FalconStor Software, Inc., and
Todd Oseth, dated June 14, 2017 |
|||
|
10.2
|
Separation Agreement and General Release between
FalconStor Software, Inc., and Gary Quinn, dated June 14, 2017 |
|||
|
99.1
|
Press release of the Company dated June 20, 2017,
announcing the appointment of Todd Oseth as President Chief Executive Officer of FalconStor Software, Inc. |
FALCONSTOR SOFTWARE INC ExhibitEX-10.1 2 ex101_6-20×2017.htm EXHIBIT 10.1 Exhibit 1Exhibit 10.1June 15,…To view the full exhibit click here About FALCONSTOR SOFTWARE, INC. (NASDAQ:FALC)
FalconStor Software, Inc. is a Software-Defined Storage (SDS) company offering a converged data services software platform. The Company’s platform FreeStor, allows information technology (IT) organizations minimize and eliminate that complexity with the delivery of migration, continuity, protection, recovery and optimization for any storage environment through a management interface for a price based on managed capacity across arrays, servers, hypervisors, data centers, and the cloud. The Company’s Intelligent Abstraction core provides a scalable storage hypervisor, coupled with a data services engine and automation. The Company’s Business Continuity and Disaster Recovery products include network storage server (NSS) and continuous data protector (CDP). Its Optimized Backup and Deduplication (OBD) products merge its virtual tape library (VTL) and file-interface deduplication system (FDS) solutions.
