Attached files
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 22, 2010
VERECLOUD,
INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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000-52882
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26-0578268
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
Number)
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6560
South Greenwood Plaza Boulevard
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Number
400
Englewood,
Colorado
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80111
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(877)
711-6492
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
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(b)
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Resignation of an
Officer
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On June
22, 2010, John F. McCawley resigned from his position as President of Verecloud,
Inc. (the "Company"). Mr. McCawley will continue to serve as the
Company's Chief Executive Officer.
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(c)
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Appointment of an
Officer
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On June
22, 2010, upon approval by the Company’s Board of Directors, William ("Billy")
E. Wood, III, age 44, was named President of the Company. Prior to
his appointment as President and for the previous seven months, Mr. Wood acted
as a consultant to the Company. Mr. Wood has extensive experience in
the software services industry. From November 2006 to November, 2009,
Mr. Wood worked as a consultant advising numerous early stage companies
regarding strategy, sales, marketing, technology, and capital raising,
including, the following real estate companies: Plus One Communities; Tuscan Sun
Communities; and Sommet Partners, and the following software companies: AeX; and
Builderadius. From June 3005 to October 2006, Mr. Wood served as
President of Newdea, an enterprise resource planning software company with
offices in Denver and Boulder, Colorado. During his tenure at Newdea,
Mr. Wood managed all operations, working capital and constituent
relationships. In addition, he coordinated all technology, marketing,
sales, operations and support protocols for Newdea. From March 2000
to May 2005, Mr. Wood served as President of TRE Financial Services, Inc., a
federal and state tax software and financial services company
("TRE"). At TRE, Mr. Wood managed all operations and successfully
raised the necessary capital to purchase TRE's sole source technology provider,
integrate the two operations and roll-out new product initiatives. In
addition to the above, Mr. Wood also sits on the Board of Directors of
OfferClick, Inc., Fundster, Inc. and American Medical ID. Mr. Wood
earned a Bachelor of Arts in Economics from the University of Texas at
Austin.
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(e)
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Compensatory
Arrangements with Executives
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Billy Wood Employment
Agreement
In
connection with Mr. Wood's appointment as President of the Company, on June 22,
2010, the Company entered into an employment agreement (the "Wood Employment
Agreement") with Mr. Wood.
Pursuant
to the Wood Employment Agreement, Mr. Wood will serve as the Company's President
and report directly to the Company's Chief Executive Officer and Board of
Directors. Mr. Wood will receive a base compensation of $225,000 per
annum, payable in accordance with the Company's normal payroll
practices. In addition, the Company will award Mr. Wood annual
incentive compensation at the discretion of the Board of
Directors. Such incentive compensation may be tied to the attainment
of certain financial or other performance targets. Furthermore,
Mr. Wood will be granted a non-qualified stock option to purchase a total
of 5,700,000 shares of the Company's common stock, par value $0.001 ("Common
Stock") at $0.02 per share strike price, pursuant to the Company's 2009 Equity
Incentive Plan (the "Equity Incentive Plan") and a written Non-Qualified Stock
Option Agreement (the "Wood Option"). The Wood Option will vest 1/12
on the last day of each calendar quarter commencing September 30, 2010, so that
if Mr. Wood remains continuously employed by the Company, the Wood Option will
fully vest on June 30, 2013.
Under the
Wood Employment Agreement, Mr. Wood is eligible to participate in the Company's
benefit plans (including, as they become available, savings, profit-sharing,
life, disability, health, accident and other programs), will accrue three weeks
paid vacation per year and be entitled to paid holidays in accordance with the
Company's vacation policy.
In the
event Mr. Wood’s employment is terminated without cause (as defined in the Wood
Employment Agreement) or Mr. Wood resigns for good reason (as defined in the
Wood Employment Agreement), upon execution of a release of claims against the
Company, Mr. Wood would be entitled to receive an amount equal to six times the
amount of his monthly base salary. However, in the event Mr. Wood’s employment
is terminated without cause (as defined in the Wood Employment Agreement) or Mr.
Wood resigns for good reason (as defined in the Wood Employment Agreement), at
anytime during the period beginning three months prior to a change in control
(as defined in the Wood Employment Agreement) and ending 12 months after a
change in control, Mr. Wood would instead be entitled to receive a lump sum
payment equal to the sum of (i) 1.0 times his base salary, plus (ii) the
bonus he earned for the prior calendar year, plus (iii) 12.0 times the monthly
premium amount for Mr. Wood’s employee benefits.
In
addition, the Wood Employment Agreement includes a "modified 280G cutback" which
provides that, in the event of a change in control (as defined in the Wood
Employment Agreement), if Mr. Wood would receive payments in excess of the
Internal Revenue Code Section 280G statutory safe harbor amount, he will receive
the amount of payments that results in the greatest after-tax
proceeds.
The
foregoing description of the Wood Employment Agreement and the Wood Option are
qualified in their entirety by reference to the complete text of the Wood
Employment Agreement and the Wood Option, which are attached hereto as Exhibits
10.1 and 10.2, respectively, and incorporated by reference herein.
Jim Buckley Employment
Agreement
On June
22, 2010, the Company and its Chief Financial Officer, James R. Buckley, entered
into an employment agreement (the "Buckley Employment Agreement").
Pursuant
to the Buckley Employment Agreement, Mr. Buckley will serve as the Company's
Chief Financial Officer and Chief Compliance Officer and report directly to the
Company's Chief Executive Officer, President and Board of
Directors. Mr. Buckley will receive a base compensation of $180,000
per annum, payable in accordance with the Company's normal payroll
practices. In addition, the Company will award Mr. Buckley annual
incentive compensation at the discretion of the Board of
Directors. Such incentive compensation may be tied to the attainment
of certain financial or other performance targets. Furthermore, Mr.
Buckley will be granted a non-qualified stock option to purchase a total of
1,900,000 shares of the Company's Common Stock at $0.02 per share strike price,
pursuant to the Equity Incentive Plan, and a written Nonqualified Stock Option
Agreement (the "Buckley Option"). The Buckley Option will vest 1/12
on the last day of each calendar quarter commencing September 30, 2010, so that
if Mr. Buckley remains continuously employed by the Company, the Buckley Option
will fully vest on June 30, 2013.
The
Buckley Employment Agreement contains identical provisions to the Wood
Employment Agreement regarding benefits, severance, and change in control
payments.
The
foregoing description of the Buckley Employment Agreement and the Buckley Option
are qualified in their entirety by reference to the complete text of the Buckley
Employment Agreement and the Buckley Option, which are attached hereto as
Exhibits 10.3 and 10.4, respectively, and incorporated by reference
herein.
Michael P. Cookson
Employment Agreement
On June
22, 2010, the Company and its Chief Operating Officer, Michael P. Cookson,
entered into an employment agreement (the "Cookson Employment
Agreement").
Pursuant
to the Cookson Employment Agreement, Mr. Cookson will serve as the Company's
Chief Operating Officer and report directly to the Company's Chief Executive
Officer, President and Board of Directors. Mr. Cookson will
receive a base compensation of $180,000 per annum, payable in accordance with
the Company's normal payroll practices. In addition, the Company will
award Mr. Cookson annual incentive compensation at the discretion of the Board
of Directors. Such incentive compensation may be tied to the
attainment of certain financial or other performance
targets. Furthermore, Mr. Cookson will be granted a non-qualified
stock option to purchase a total of 500,000 shares of the Company's Common Stock
at $0.02 per share strike price, pursuant to the Equity Incentive Plan, and a
written Nonqualified Stock Option Agreement (the "Cookson
Option"). The Cookson Option will vest 1/12 on the last day of each
calendar quarter commencing September 30, 2010, so that if Mr. Cookson remains
continuously employed by the Company, the Cookson Option will fully vest on June
30, 2013.
The
Cookson Employment Agreement contains identical provisions to the Wood
Employment Agreement regarding benefits, severance, and change in control
payments.
The
foregoing description of the Cookson Employment Agreement and the Cookson Option
are qualified in their entirety by reference to the complete text of the Cookson
Employment Agreement and the Cookson Option, which are attached hereto as
Exhibits 10.5 and 10.6, respectively, and incorporated by reference
herein.
William M. Perkins
Employment Agreement
On June
22, 2010, the Company and its Chief Technology Officer, William M. Perkins,
entered into an employment agreement (the "Perkins Employment
Agreement").
Pursuant
to the Perkins Employment Agreement, Mr. Perkins will serve as the Company's
Chief Technology Officer and report directly to the Company's Chief Executive
Officer, President and Board of Directors. Mr. Perkins will
receive a base compensation of $180,000 per annum, payable in accordance with
the Company's normal payroll practices. In addition, the Company will
award Mr. Perkins annual incentive compensation at the discretion of the Board
of Directors. Such incentive compensation may be tied to the
attainment of certain financial or other performance
targets. Furthermore, Mr. Perkins will be granted a non-qualified
stock option to purchase a total of 390,000 shares of the Company's Common Stock
at $0.02 per share strike price, pursuant to the Equity Incentive Plan, and a
written Nonqualified Stock Option Agreement (the "Perkins
Option"). The Perkins Option will vest 1/12 on the last day of each
calendar quarter commencing September 30, 2010, so that if Mr. Perkins remains
continuously employed by the Company, the Option will fully vest on June 30,
2013.
The
Perkins Employment Agreement contains identical provisions to the Wood
Employment Agreement regarding benefits, severance, and change in control
payments.
The
foregoing description of the Perkins Employment Agreement and the Perkins Option
are qualified in their entirety by reference to the complete text of the Perkins
Employment Agreement and the Perkins Option, which is attached hereto as
Exhibits 10.7 and 10.8, respectively, and incorporated by reference
herein.
Non-Disclosure
Agreements
In
connection with the execution of the employment agreements above, the Company
entered into a Non-Disclosure, Proprietary Information and Inventions Agreement
(the "Non-Disclosure Agreements") with each of the following executives:
Billy Wood, James R. Buckley, Michael P. Cookson and William M. Perkins. Under
the identical Non-Disclosure Agreements, each executive agrees to maintain
confidential information and to assign to the Company any inventions developed
during his employment. In addition, each executive agreed to specified
non-solicitation and non-compete provisions during the term of his employment
and for a period of one year following his termination of
employment.
The
foregoing description of the Non-Disclosure Agreements are qualified in their
entirety by reference to the complete text of the Non-Disclosure Agreements,
which are attached hereto as Exhibits 10.9, 10.10, 10.11, and 10.12,
respectively.
Indemnity
Agreements
The
Company entered into an Indemnity Agreement (the "Indemnity Agreements") with
each of the following executives and directors: John McCawley, Billy
Wood, James R. Buckley, Michael P. Cookson, William M. Perkins and Mark
Faris. Pursuant to the identical Indemnity Agreement with each
executive, in exchange for each of the officer's and director's service to the
Company, the Company agreed to indemnify each of the officers and directors to
the fullest extent provided under Nevada law.
The
foregoing description of the Indemnity Agreements are qualified in their
entirety by reference to the complete text of the Indemnity Agreements, which
are attached hereto as Exhibits 10.13, 10.14, 10.15, 10.16, 10.17 and 10.18,
respectively, and incorporated by reference herein.
Incentive Compensation
Plan
On June
22, 2010, the Company's Board of Directors approved the Verecloud, Inc. 2010
Incentive Compensation Plan (the "Incentive Compensation Plan"). The
purpose of the Incentive Compensation Plan is to motivate the Company's
employees to achieve performance-based financial results by rewarding employees
for their contributions to the Company's performance. The Incentive
Compensation Plan is only in effect for the Company's 2011 Fiscal Year (July 1,
2010 through June 30, 2011). All individuals employed by the Company
in a full-time capacity before June 1, 2010 are eligible to participate in the
Incentive Compensation Plan. The Incentive Compensation Plan has two
components: first, there is a corporate performance factor, which is
measured by the Company’s EBITDA; and second, an individual performance factor,
which is based on each employee's individual performance review. The corporate
performance factor is weighted at 75 percent and the individual performance
factor is weighted at 25 percent. Percentage achievement of these weighted
factors is multiplied by each participant’s target incentive to determine the
amount payable under the Incentive Compensation Plan to that participant.
Amounts payable under the Plan are calculated semi-annually and are targeted to
be paid on or about January 15, 2011 and August 15, 2011. Each participant’s
semi-annual payment under the Incentive Compensation Plan is subject to his
continuous employment through the date his lump sum payment is distributed by
the Company.
The
foregoing description of the Incentive Compensation Plan is qualified in its
entirety by reference to the complete text of the Incentive Compensation Plan,
which is attached hereto as Exhibit 10.19 and incorporated by reference
herein.
Item
9.01. Financial Statements and Exhibits
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(d)
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Exhibits
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Exhibit
#
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Description
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Reference
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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VERECLOUD,
INC.
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Date:
June 28, 2010
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By:
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/s/
John McCawley
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John
McCawley
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Chief
Executive Officer
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Exhibit
Index