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000-20728
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41-1577970
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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510 1st Avenue North, Suite 305
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Minneapolis, MN
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55403
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(Address Of Principal Executive Offices)
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(Zip Code)
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(612) 638-9100
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Registrant’s Telephone Number, Including Area Code
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o
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Written communications pursuant to Rule 425 under the Securities Act
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
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ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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ITEM 5.02
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
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QUMU CORPORATION
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By:
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/s/ Vern Hanzlik
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Vern Hanzlik
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President and Chief Executive Officer
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Date: December 19, 2017
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(a)
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Effective as of the close of business on the date of this Agreement, the Board shall increase the authorized number of directors to nine (9) and appoint each of Kenan Lucas and Neil E. Cox (each, a “
Subject Director
” and collectively, the “
Subject Directors
”) as members of the Board to fill the vacancies created thereby. At all times while serving as a member of the Board, the Subject Directors will meet all independence standards and any similar requirements for directors of the Company and for service on any committee of the Board to which they are appointed, such standards and requirements as are established by the Company, The Nasdaq Stock Market, the Securities and Exchange Commission (the “
SEC
”), and applicable provisions of the Securities Exchange Act of 1934, as amended, or the rules or regulations promulgated thereunder (the “
Exchange Act
”) (collectively, the “
Director Independence Qualifications
”). In certain places in the Agreement, Kenan Lucas (and any future directors who may
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(b)
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Concurrently with the appointment of the Subject Directors to the Board, Mr. Lucas shall be appointed to serve on each of the Audit Committee and the Governance Committee of the Board and Mr. Cox shall be appointed to serve on each of the Compensation Committee and Governance Committee of the Board.
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(c)
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The Company agrees to nominate no more than seven directors for election at the 2018 annual meeting of shareholders of the Company (including any other meeting of shareholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof, the “
2018 Annual Meeting
”), all of whom will be nominated to serve until the next annual meeting of shareholders or until their respective successors have been elected and qualified, and to cause the authorized number of directors immediately following the 2018 Annual Meeting to be reduced to seven, and to keep the authorized number of directors at seven at all times after the 2018 Annual Meeting during the Standstill Period (as defined below). The Company agrees to include the Subject Directors as two of the Company’s nominees for election at the 2018 Annual Meeting. The Company will nominate, recommend, support and solicit proxies for the election of the Subject Directors to the Board at the 2018 Annual Meeting, and, during the Standstill Period at any special meeting, in the same manner as for the Company’s other nominees standing for election to the Board at the 2018 Annual Meeting or at such special meeting.
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(d)
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Upon the execution of this Agreement Harbert hereby agrees not to (i) nominate any person for election at the 2018 Annual Meeting, (ii) submit any proposal for consideration at, or bring any other business before, the 2018 Annual Meeting, directly or indirectly, or (iii) initiate, encourage or participate in any “withhold” or similar campaign with respect to the 2018 Annual Meeting, directly or indirectly, and shall not permit any of its Affiliates or Associates, as defined below, to do any of the items in this Section 1(d). Harbert shall not publicly or privately encourage or support any other shareholder to take any of the actions described in this Section 1(d).
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(e)
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Until the date on which Harbert takes any action that results in Harbert having beneficial ownership in the aggregate of less than 5.0% of the then outstanding Common Stock, the Company agrees that if a Subject Director resigns as a director or is removed from the Board for any reason or dies, Harbert shall have the right to replace such Subject Director with a qualified substitute director, with the qualifications and appointment of such substitute director subject to the provisions of this subsection. Each substitute director must satisfy the Director Independence Qualifications.
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(f)
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Harbert agrees to appear in person or by proxy at the 2018 Annual Meeting and vote all shares of Common Stock beneficially owned by it (i) in favor of the election of each of the Company’s nominees for election to the Board and (ii) in accordance with the Board’s recommendation on all other proposals. If requested by the Company, Harbert shall consider but shall not be required to publicly support each of the Company’s nominees for election to the Board at the 2018 Annual Meeting and each other proposal recommended by the Board at the 2018 Annual Meeting.
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(g)
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If at any time that a Subject Director is serving on the Board, Harbert takes any action that results in Harbert having beneficial ownership in the aggregate of less than 5.0% of the then outstanding Common Stock, Harbert shall cause any Harbert Director to, and will request that any Subject Director that is not a Harbert Director, submit his resignation as a Board member and as a member of any committee upon which he serves following the vote of a majority of directors other than the Subject Directors in favor of such resignation.
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(h)
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Harbert agrees that it will cause its Affiliates to comply with the terms of this Agreement. As used in this Agreement, the term “
Affiliate
” shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act and shall include all persons or entities that at any time during the term of this Agreement become Affiliates of any person or entity referred to in this Agreement; provided, however, that for purposes of this Agreement a portfolio company of any Harbert advised fund shall only be deemed to be an Affiliate if Harbert beneficially owns more than 50% of the equity securities of such portfolio company. As used in this Agreement, the term “
Associate
” shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act (changing 10% in
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(i)
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As used in this Agreement, the terms “
beneficial owner
” and “
beneficial ownership
” shall have the respective meanings as set forth in Rule 13d-3 promulgated under the Exchange Act.
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(j)
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At all times while serving as a Director, each Subject Director will receive the same benefits of directors’ and officers’ insurance and any indemnity and exculpation arrangements available generally to the other non-executive Company Board members, and the same compensation and other benefits for service as a director as the compensation and other benefits received by the other non-executive Company Board members for service as a director.
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(a)
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The term “
Standstill Period
” is defined at Section 6(a) of this Agreement.
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(b)
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Harbert agrees that during the Standstill Period neither Harbert, nor any of its Affiliates will, and Harbert will cause each of such Affiliates not to, directly or indirectly (including through Associates under Harbert’s control or direction, or through any of the Affiliates or Associates that control or direct Harbert) in any manner:
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(i)
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engage in (A) any short sale with respect to the Common Stock or other voting securities of the Company or (B) any purchase, sale or grant of any option, warrant, convertible security, stock appreciation right, or other similar right (including, without limitation, any hedging, put or call option or “swap” transaction) with respect to the Common Stock or other voting securities of the Company to the extent that it would cause Harbert to beneficially own less than 5.0% of the outstanding shares of Common Stock or other voting securities of the Company by treating any Common Stock or other voting securities of the Company subject to one or more of the foregoing arrangements not to be beneficially owned by Harbert;
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(ii)
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solicit proxies or written consents of shareholders, or otherwise conduct any nonbinding referendum or advisory vote with respect to the Common Stock, or make, or in any way participate in, any “solicitation” of any “proxy” within the meaning of Rule 14a-1 promulgated under the Exchange Act to vote, or advise, encourage or influence any person with respect to voting, any shares of Common Stock with respect to any matter, or become a
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(iii)
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form, join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a “group” that includes all or some of the persons identified on
Exhibit A
, but does not include any other entities or persons not identified on
Exhibit A
as of the date hereof other than a Subject Director appointed in accordance with Section 1(e));
provided, however
, that nothing herein shall limit the ability of an Affiliate of Harbert to join the “group” following the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions of this Agreement;
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(iv)
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deposit any Common Stock or other voting securities of the Company in any voting trust or subject any Common Stock or other voting securities of the Company to any arrangement or agreement with respect to the voting of any Common Stock or other voting securities of the Company, including, without limitation, lend any Common Stock or other voting securities of the Company to an person or entity for the purpose of allowing such person or entity to vote such Common Stock or other voting securities of the Company in connection with any shareholder vote or consent;
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(v)
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(A) other than in accordance with Section 1, submit any nomination, submit any notice of nomination, make or seek to make any nomination, or otherwise seek representation on the Board or removal of directors of the Company or take any other action with respect to the election or removal of any directors (including requesting the resignation of any director of the Company or making a request of the Company to seek the resignation of any of its directors), (B) make or seek to make any other shareholder proposal pursuant to Rule 14a-8 promulgated by the SEC under the Exchange Act or otherwise, or (C) otherwise seek to control or influence the management, Board or policies of the Company, in any capacity other than through a Harbert Director as a member of the acting majority of the Board;
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(vi)
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offer, propose, or make any public statement with respect to, or encourage, solicit or negotiate with any third party with respect to, a merger, consolidation, acquisition of control or other business combination, tender or exchange offer, purchase, sale or transfer of
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(vii)
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seek to advise, encourage, support or influence any person with respect to the voting or disposition of any securities of the Company at any annual or special meeting of shareholders, except in accordance with Section 1;
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(viii)
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initiate any litigation against the Company or any director, officer, employee or agent of the Company, except to enforce the terms of this Agreement or alleging fraud;
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(ix)
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publicly disclose, or cause or facilitate the public disclosure (including without limitation the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) of any intent, purpose, plan or proposal to obtain any waiver, or consent under, or any amendment of, any of the provisions of Section 1(f) or this Section 2, or otherwise seek (in any manner that would require public disclosure by Harbert or the Company, as the case may be, or their respective Affiliates or Associates) to obtain any waiver, consent under, or any amendment of, any provision of this Agreement; provided that this Section 2(b)(ix) shall not apply to any statement or announcement made in any document or report filed with or furnished to the SEC to the extent any such statement or announcement is included in any such document or report on the advice of counsel (which advice need not be a formal opinion of counsel) that is mutually acceptable to the Company and Harbert;
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(x)
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enter into any arrangements, understandings or agreements (whether written or oral) with, or advise, finance, assist or encourage, any other person for the purpose of engaging, or offering or proposing to engage, in any of the foregoing; or
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(xi)
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take or cause, instigate, encourage, induce, advise, support or influence any other person to take any action inconsistent with any of the foregoing.
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(c)
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Nothing in Section 2(b) shall be deemed to limit the exercise in good faith by the Subject Directors of their fiduciary duties solely in their capacities as directors of the Company and in a manner consistent with their and Harbert’s obligations under this Agreement.
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(a)
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Harbert agrees that during the Standstill Period, Harbert Discovery will not transfer or dispose of any shares of Common Stock in an open market transaction if, to the actual knowledge of Harbert (without any obligation to inquire or conduct any investigation), the person making such acquisition will beneficially own, together with its affiliates and any member of a “group” (within the meaning of the Exchange Act) in which such acquirer is a party, immediately following such acquisition 5% or more of the Common Stock then outstanding.
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(b)
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Harbert agrees that during the Standstill Period, Harbert Discovery will not transfer or dispose of any shares of Common Stock in a private transaction if, to the actual knowledge of Harbert (after reasonable inquiry or investigation), the person making such acquisition will beneficially own, together with its affiliates and any member of a “group” (within the meaning of the Exchange Act) in which such acquirer is a party, immediately following such acquisition 5% or more of the Common Stock then outstanding. For these purposes, a representation from the person making such acquisition that it will not beneficially own, together with its affiliates and any member of a “group” in which such acquirer is a party, immediately following such acquisition, 5% or more of the Common Stock then outstanding, shall be deemed a reasonable inquiry or investigation.
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(c)
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The restrictions set forth in Section 5(a) and 5(b) above shall not apply to any dispositions made in connection with any merger, consolidation, business combination, tender or exchange offer, sale or purchase of assets, sale or purchase of securities, dissolution, liquidation, restructuring, recapitalization or similar transactions of or involving the Company that is approved or supported by a majority of the Board.
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(a)
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The term “
Standstill Period
” shall mean from the date of this Agreement until the date that is the earlier of (a) thirty (30) days prior to the deadline for the submission of shareholder nominations for the 2019 Annual Meeting of the Shareholders of the Company; and (b) the date that is one-hundred and fifty (150) days prior to the first anniversary of the date of Company’s proxy statement for the 2018 Annual Meeting;
provided that
if the Governance Committee at least ten (10) days prior to the end of the Standstill Period takes written action to approve and recommend the Subject Directors as nominees for election at the 2019 Annual Meeting of Shareholders (which it may do in its sole discretion) and the Harbert Director accepts such nomination on or prior to the end of the Standstill Period, then Harbert and the Company will negotiate in good faith to amend the Agreement to extend the Standstill Period and change any other terms as mutually agreed.
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(b)
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This Agreement shall terminate upon the earliest to occur of (a) the last day of the Standstill Period; or (b) following the vote of a majority of Directors other than the Subject Directors in favor of such termination and the resignation of the Harbert Director (and upon such vote the Harbert Director will tender the Harbert Director’s resignations from the Board), upon any person becoming the beneficial owner of more than 50% of the Common Stock or the aggregate voting securities of the Company, including any merger, acquisition or other type of business combination.
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13.
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Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries
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