Rapid7, Inc. (NASDAQ:RPD) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Chief Financial Officer
On November24, 2016, the Board of Directors (the Board) of
Rapid7, Inc. (the Company) appointed Jeffrey A. Kalowski as the
Chief Financial Officer of the Company, effective upon the
commencement of Mr.Kalowskis employment with the Company, which
is expected to be on or about January9, 2017. In this role,
Mr.Kalowski will also serve as the Companys principal financial
officer and principal accounting officer, both appointments to be
effective on or about January9, 2017.
Mr.Kalowski, age 60, has served as the Chief Financial Officer of
Imprivata, Inc., an IT security company since January 2007. Prior
to Imprivata, Mr.Kalowski has also served as the Chief Financial
Officer of ProfitLogic, Inc. and Torrent Systems. Mr.Kalowski
holds a B.S. from Northeastern University.
Mr.Kalowski does not have a family relationship with any director
or executive officer of the Company or person nominated or chosen
by the Company to become a director or executive officer, and
there are no arrangements or understandings between Mr.Kalowski
and any other person to which Mr.Kalowski was selected to serve
as Chief Financial Officer of the Company. There have been no
transactions involving Mr.Kalowski that would require disclosure
under Item 404(a) of Regulation S-K under the Securities Exchange
Act of 1934, as amended, or the Exchange Act. In connection with
his appointment, it is expected that Mr.Kalowski will enter into
the Companys standard form of indemnification agreement, the form
of which has been filed as Exhibit 10.5 to the Companys Annual
Report on Form 10-K for the year ended
December31, 2015, filed with the Securities and Exchange
Commission on March10, 2016.
Employment
Agreement and Other Compensatory
Arrangements
The Company
entered into an employment agreement with Mr.Kalowski (the
Employment Agreement). to the Employment Agreement, Mr.Kalowski
will report to the Companys Chief Executive Officer. The
Employment Agreement does not provide for a specified term of
employment and Mr.Kalowskis employment will be on an at-will
basis. Mr.Kalowski will receive an annual base salary of $350,000
and is eligible to earn an annual cash incentive bonus, which is
initially set at a target aggregate bonus amount of $200,000,
under the Companys standard bonus plan then in effect.
Mr.Kalowski is also eligible to participate in the Companys
employee benefit plans, as may be maintained by the Company from
time to time, on the same terms as other similarly situated
employees of the Company.
As a material
inducement to Mr.Kalowski to enter into employment with the
Company, the Compensation Committee has also approved the grant
to Mr.Kalowski of the following inducement equity awards
(collectively referred to as the Inducement Awards) which will be
granted from an inducement pool previously established under the
Companys 2015 Equity Incentive Plan, as amended (the 2015 Plan),
on or as soon as practicable following the date of commencement
of Mr.Kalowskis employment: (1)a non-qualified stock option
having an aggregate grant date fair value of $2,250,000
(determined based upon a Black-Scholes option pricing model in
accordance with FASB ASC Topic 718) and having an exercise price
per share
equal to the fair
market value of the Companys common stock on the NASDAQ Global
Market on the date of grant of such stock option and (2)a number
of restricted stock units having an aggregate grant date fair
value of $2,250,000. The Inducement Awards will vest over four
years, with 25% of the original number of shares underlying such
award vesting on January15, 2018 and 6.25% of the original number
of shares underlying each such award vesting on each quarterly
anniversary thereafter, subject, in each case, to Mr.Kalowskis
continued service with the Company on each applicable vesting
date. The Inducement Awards will be subject to the terms of the
2015 Plan and the applicable award agreements thereunder and are
intended to be granted to and in accordance with Rule 5635(c)(4)
of the NASDAQ Listing Rules.
If Mr.Kalowkis
employment is terminated by the Company without cause (as defined
in the Employment Agreement) or Mr.Kalowski resigns for good
reason (as defined in the Employment Agreement), then, subject to
Mr.Kalowski signing a release and such release becoming effective
within sixty days of such termination or resignation, as
applicable, Mr.Kalowski will be entitled to receive the
following:
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an amount equal to one times the sum of: (1)his then-current annual base salary, (2)any earned but unpaid pro-rata bonus as of the date of termination and (3)his target bonus amount for the fiscal year in which the employment termination occurs; |
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if Mr.Kalowski was participating in the Companys group health plan immediately prior to the date of termination and elects COBRA continuation, monthly cash payments in an amount equal to the monthly employer contribution until the earlier of twelve months following the date of termination or the end of Mr.Kalowskis COBRA health continuation period; and |
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accelerated vesting of his equity awards then outstanding that would otherwise vest within six months of such date of termination. |
Further, in the
event of a change in control of the Company and Mr.Kalowskis
employment is terminated by the Company without cause or
Mr.Kalowski resigns for good reason, in each case, within ninety
days prior to or twelve months following a change in control of
the Company, then, subject to Mr.Kalowski signing a release and
such release becoming effective within sixty days of such
termination or resignation, as applicable, Mr.Kalowski will be
entitled to receive the following:
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an amount equal to 1.5 times the sum of: (1)his then-current annual base salary and (2)his target bonus amount for the fiscal year in which the change in control occurs; |
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any earned but unpaid pro-rata bonus as of the date of termination; |
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if Mr.Kalowski was participating in the Companys group health plan immediately prior to the date of termination and elects COBRA continuation, monthly cash payments in an amount equal to the monthly employer contribution until the earlier of eighteen months following the date of termination or the end of Mr.Kalowskis COBRA health continuation period; and |
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accelerated vesting of all of his equity awards then outstanding on such date of termination. |
A copy of the
Employment Agreement is filed as Exhibit 10.1 to this Current
Report on a Form 8-K. The foregoing description of the Employment
Agreement is a summary only and is qualified in its entirety by
the full text of the Employment Agreement, which is incorporated
herein by reference.
In connection with
the foregoing appointment of Mr. Kalowski to the position of the
Companys Chief Financial Officer and the previously announced
promotion of Andrew Burton to the position of the Companys Chief
Operating Officer in October 2016, Richard Moseley, the Companys
Senior Vice President, Global Sales will assume the position of
Senior Vice President, International Sales as of January 9, 2017.
As a result, the Board has concluded that, effective as of
January 9, 2017, Mr. Moseley will no longer be designated as an
executive officer of the Company.
| Item7.01 | Regulation FD Disclosure. |
On November28,
2016, the Company issued a press release announcing the
appointment of Mr.Kalowski as its Chief Financial Officer, a copy
of which is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
The information in
this Item 7.01 and Exhibit 99.1 attached hereto is furnished
solely to Item 7.01 of this Current Report on Form 8-K.
Consequently, it is not deemed filed for the purposes of
Section18 of the Exchange Act, or otherwise subject to the
liabilities of that section.
| Item9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
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ExhibitNo. |
Description |
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| 10.1 |
Employment Agreement between the Registrant and Jeffrey Kalowski, dated November28, 2016 |
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| 99.1 | Press release dated November28, 2016 |
About Rapid7, Inc. (NASDAQ:RPD)
Rapid7, Inc. is a provider of security data and analytics solutions that enable organizations to implement an active approach to cyber security. The Company’s Rapid7 Insight Platform is a security data and analytics platform that provides solutions to cyber security that enables organizations to find and eliminate critical weaknesses and detect attacks in their information technology (IT) environments. Its threat exposure management offerings include its management, Web application security testing and attack simulation products, which the Company enhances with security analytics capabilities to deliver contextual risk prioritization, threat awareness and remediation guidance. It provides InsightIDR, a cloud-based offering that provides comprehensive incident detection. The Insight Platform collects information from various sources to provide a holistic view across an organization’s ecosystem from network and endpoint data, to enterprise cloud data, to user information. Rapid7, Inc. (NASDAQ:RPD) Recent Trading Information
Rapid7, Inc. (NASDAQ:RPD) closed its last trading session down -0.04 at 11.98 with 214,556 shares trading hands.
