Item 5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Appointment of President and Chief Executive Officer
On August 10, 2020, the Board of Directors (the
“Board”) of Support.com, Inc. (the
“Company”) appointed Lance Rosenzweig, age 58, to serve
as President and Chief Executive Officer of the Company, effective
August 10, 2020. Effective on August 10, 2020, Mr. Rosenzweig was
also appointed to serve as a director on the Company’s Board
of Directors.
Mr.
Rosenzweig currently serves as the chairman of the board of Boingo
Wireless, a wireless networks company, and serves as a director of
Nextgen Healthcare, Inc., a software and services company in the
healthcare industry. From 2018 to 2020, Mr. Rosenzweig served as
CEO of Startek, a global business processing company with over
45,000 employees. From January 2015 through December
2016, Mr. Rosenzweig served as Operating Executive of Marlin
Operations Group, which works with Marlin Equity Partners, a global
investment firm focused on providing corporate parents,
shareholders and other stakeholders with tailored solutions that
meet their business and liquidity needs. Previously, Mr. Rosenzweig
served as Chief Executive Officer and President, Global Markets for
Aegis USA, Inc., a leading business process outsourcing company
with over 18,000 employees that services major corporations in the
healthcare, financial services and other industries, from 2013
through the company’s sale to Teleperformance for $610
million in 2014. Mr. Rosenzweig co-founded and served as Chairman
of the Board of PeopleSupport, Inc., a business process outsourcing
company with over 8,000 employees and operations in the U.S., the
Philippines and Costa Rica, since its inception in 1998, and was
PeopleSupport’s Chief Executive Officer from 2002 through the
company’s sale in 2008 for $250 million. Under Mr.
Rosenzweig’s leadership as CEO, PeopleSupport went public in
an IPO, was ranked by Fortune as the 9th fastest growing small
public company in the U.S. and was named employer of the year in
the Philippines. Mr. Rosenzweig held a variety of management and
entrepreneurial roles from 1985 to 2002. Mr. Rosenzweig has a B.S.
in Industrial Engineering and an M.B.A. with honors every term,
both from Northwestern University.
There are no arrangements or understandings between Mr. Rosenzweig
and any other persons pursuant to which he was selected as an
officer, and he has no direct or indirect material interest in any
transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
Employment Offer Letter
The Company entered into an employment offer letter dated August
10, 2020 (the “Agreement”) with Mr. Rosenzweig. The
Agreement has no specified term, and Mr. Rosenzweig’s
employment with the Company will be on an at-will basis. The
material terms of the Agreement are summarized below.
Base Salary and Bonus. Mr.
Rosenzweig will receive an annual base salary of $480,000.00,
subject to annual review. He will also be eligible for a bonus for
2020 in the form of a stock grant of 100,000 shares of common stock
of the Company payable in January 2021 subject to applicable
withholding taxes and his continued employment with the Company
through the payment date. Beginning in fiscal year 2021, Mr.
Rosenzweig will also be eligible to receive a bonus under the
Company’s Executive Incentive Compensation Plan with a target
amount of seventy-five percent (75%) of base salary. The actual
amount of the annual bonus (“Actual Bonus”) will be
determined by the Compensation Committee of the Board (the
“Compensation Committee”) based upon performance
objectives set by the Compensation Committee in good faith
consultation with Mr. Rosenzweig.
New Hire Equity Grants.
(i) Subject to the terms of a stock option agreement and the
Company’s 2014 Inducement Award Plan (“Inducement
Plan”), the Compensation Committee approved a grant,
effective on Mr. Rosenzweig’s employment start date of August
10, 2020 (the “Grant Date”) consisting of a time-vested
stock option (“Time Vest Option”) in the amount of four
hundred thousand (400,000) shares of Company common stock
vesting monthly over a three (3) year
period beginning on his start date, with an exercise price of $1.61
per share, the closing price of the Company’s common stock on
the Grant Date. Subject to his delivery of an effective release of
claims, vesting will accelerate: (a) with respect to the number of
shares that would vest within an additional three (3) months upon
Mr. Rosenzweig’s involuntary termination as defined in the
Agreement (“Involuntary Termination”) within two years
following his employment start date, or six (6) months if his
Involuntary Termination is more than two years after his start
date, and (b) as to one hundred percent (100%) of the then-unvested
shares upon his Involuntary Termination on or within twelve months
following a change of control (as defined in the Inducement
Plan).
(ii) Subject to the terms of a stock option agreement and the
Company’s Third Amended and Restated 2010 Equity and
Performance Incentive Plan (“Stock Plan”), the
Compensation Committee approved a grant effective on the Grant Date
consisting of a performance-based stock option (“Performance
Option”) to purchase six hundred thousand (600,000) shares of
the Company’s common stock with an exercise price of $1.61
per share, the closing price of the Company’s common stock on
the Grant Date.
As a condition of the Performance Option, the following performance
targets (“Performance Targets”) and service vesting
conditions apply, both of which must be satisfied during the term
of the Performance Option:
(a) The performance requirement
will be satisfied either: (i) on the date as of which the average
daily closing price of the Company’s common stock on the
Nasdaq Stock Market for the ten (10) consecutive business days
through and including such date equals or exceeds one hundred and
fifty percent (150%) of the exercise price of the Performance-Based
Option, or $2.415 per share (the “Premium Price”), or
(ii) the closing date of a change of control (as defined in the
Stock Plan) in which the price paid per share of common stock in
the transaction equals or exceeds the Premium Price. If the
performance requirement is not satisfied on or before the closing
of a change of control, the Performance Option will be forfeited in
full. If the performance requirement is not satisfied on or before
Mr. Rosenzweig’s termination of employment, or within three
(3) months following his Involuntary Termination subject to his
delivery of an effective release of claims, the Performance Option
will be forfeited in full.
(b) The service vesting
requirement will be satisfied monthly over a three (3) year period
beginning on August 10, 2020 subject to Mr. Rosenzweig’s
continued employment through each service vesting date.
Subject to his delivery of an
effective release of claims, service vesting will accelerate: (i)
with respect to the number of shares that would vest within an
additional three (3) months upon his Involuntary Termination within
two years following his employment start date, or six (6) months if
his Involuntary Termination is more than two years after his start
date, and (ii) as to one hundred percent (100%) of the
then-unvested shares upon his Involuntary Termination on or within
twelve months following a change of control.
The Time Vest Option and the Performance Option will also provide
for one hundred percent (100%) acceleration of service vesting upon
a change of control (as defined in the applicable plan) to the
extent such options will not be continued, assumed or substituted
and would otherwise be terminated without consideration upon the
closing of the change of control; provided, however, that if the
performance requirement is not satisfied on or before the closing
of the change of control, the Performance Option will be forfeited
in full.
Severance Terms. If Mr.
Rosenzweig’s employment with the Company terminates due to
Involuntary Termination, the Company will offer him, in exchange
for a full release, severance benefits equal to: (a)
a lump-sum payment equal to the sum of
(a) 50% of Mr. Rosenzweig’s then current annual Base Salary
(or 100% of Mr. Rosenzweig’s then current annual Base Salary
if the termination occurs more than two years after his start
date); and (b) an amount equal to twelve (12) months of the COBRA
continuation coverage premium under the Company’s group
medical plans as in effect at the time such termination occurs less
the amount of Mr. Rosenzweig’s portion of the premium as an
active employee. Further, the Company shall pay Mr. Rosenzweig a
pro-rata portion of his Actual Bonus for the fiscal year in which
the such termination occurs as determined by the Board based on
actual performance for such year as further detailed in the
Agreement.
Other Benefits. Mr.
Rosenzweig will be eligible to participate in the benefit programs
generally available to employees of the Company. He will be
entitled to a minimum of four (4) weeks of paid time off
(“PTO”) per year subject to increase in accordance with
the vacation policy applicable to other senior executives of the
Company, in addition to normal company
holidays.
The
foregoing description of the Agreement is qualified in its entirety
by reference to the full text of the Agreement, which is
incorporated herein and attached hereto as Exhibit
10.1.
The
Company issued a press release to announce the hiring of Mr.
Rosenzweig, a copy of which is attached hereto as Exhibit
99.1.
Transition of Current President and Chief Executive
Officer
Effective on August 10, 2020, Rick Bloom stepped down as the
Company’s President and Chief Executive Officer. Mr. Bloom
has agreed to remain the Company’s Principal Accounting
Officer for a transition period of sixty (60) days from August 10,
2020 (the “Transition Period”). Mr. Bloom will also
continue to serve on the Company’s Board of Directors. On
August 10, 2020, the Company and Mr. Bloom executed a Separation
and Release Agreement (the “Separation
Agreement”).
During the Transition Period, Mr. Bloom’s base salary will
remain at the same rate as it was on the August 10, 2020, and Mr.
Bloom will continue to be eligible for the Company’s standard
employee benefits (other than equity awards). Pursuant to the
Separation Agreement, the Company will pay Mr. Bloom $200,000
subject to required tax withholdings on August 18, 2020. In
addition, provided Mr. Bloom delivers a supplemental release upon
completion of the Transition Period, the Company will reimburse Mr.
Bloom for the COBRA continuation coverage premiums paid by him for
himself and his family less the amount of Mr. Bloom’s portion
of the premium as if he were an active employee following his
separation from service until the six (6) month anniversary of
August 10, 2020.
The
foregoing description of the Separation Agreement is qualified in
its entirety by reference to the full text of the Separation
Agreement, which is incorporated herein and attached hereto as
Exhibit 10.2.