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 5, 2014

 

FTE Networks, Inc.
(Exact Name of Registrant as Specified in Charter)

 

Nevada
(State of incorporation) 		000-31355
(Commission File No.) 		81-0438093
(IRS Employee Identification No.)

 

5495 Bryson Drive, Suite 423

Naples, FL 34109

(Address of principal executive offices, including zip code)

 

877-878-8136

(Registrant's telephone number, including area code)

 

Copies to:

Richard A. Friedman, Esq.

Henry Nisser, Esq.

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, New York 10006

Phone: (212) 930-9700

Fax: (212) 930-9725

 

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:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

 

 

(d)    On June 2, 2014, the Board of Directors unanimously voted to elect Mr. John Klumpp to serve as a director of the Company effective immediately. The Company has issued a press release announcing the appointment of Mr. Klumpp, which is attached hereto as Exhibit 99.1.

 

Mr. Klumpp is not presently slated to serve on a committee of the Board. There also are no arrangements or understandings between Mr. Klumpp and any other persons pursuant to which he was selected as a director. Furthermore, there are no related party transactions to report under Item 5.02 of Form 8-K and Item 404(a) of Regulation S-K.

 

Mr. Klumpp is entitled to receive the following compensation under the Company's standard compensation for non-employee directors:

 

· An annual payment of $20,000 for service on the Board (pro-rated for 2014)
· Eligibility to receive grants of stock options, restricted stock units, and other awards under the Company’s Long-Term Incentive Plan
· Reimbursement of actual expenses related to meeting attendance

 

Mr. Klumpp will enter into the Company's standard agreement for Directors, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

 

Exhibit No.   Description
10.1   Form Appointment of Director Agreement between Company and Director dated June 2, 2014
99.1   Press Release of FTE Networks, Inc. dated June 5, 2014

 

  

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

    FTE Networks, Inc.  
Date:  June 5, 2014 By: /s/ Michael Palleschi  
       
    Michael Palleschi  
    Chief Executive Officer  

 

 

 

 

June 2, 2014

 

 

John Klumpp

1456 Palma Blanca Ct.

Naples, Florida 34119

 

 

Appointment Letter Agreement – FTE Networks, Inc. Board of Directors

 

 

Dear Mr. Klumpp:

 

We are pleased to tell you that the Board of Directors (the "Board") of FTE Networks, Inc. (the "Company") has elected you to serve as a member of the Board commencing from June 2, 2014.

 

 

1.             Your Duties:

 

a)           You will be expected to attend (either in person or by teleconference) all regular meetings of the Board, of which we expect to hold approximately four to six per annum,  as well as to attend (either in person or by teleconference), if feasible, any special meetings of the Board and to sign all written consents if you deem appropriate.  In addition, you will be expected to perform such other duties as are reasonably contemplated by your holding office as a director of the Company or which may reasonably be assigned to you by the Board from time to time, including Committee(s) membership.

 

b)           As a director you will at all times act as a fiduciary in the service of the best interests of the Company.  In addition, you agree to (i) provide all information regarding yourself as the Company requires to satisfy its disclosure obligations under applicable securities laws; and (ii) timely file with the Securities and Exchange Commission all reports and schedules required of you in your personal capacity by virtue of your relationship with the Company (e.g., Forms 3, 4 and 5 as contemplated by Section 16(a) of the Securities Exchange Act of 1934). The Company will provide the necessary forms to you and will assist you to file the required reports and schedules.

 

c)           As you will appreciate, your time commitment will ultimately be a function of the matters confronting the Company from time to time and matters properly requiring your attention as a director of the Company.

 

d)           You shall comply with all the fiduciary-duty obligations of a director as imposed by Florida law.  Without limitation, you specifically agree not to, during the time of your service on the Company's Board, serve as a director of or a consultant to any of the companies listed on Exhibit A hereto.  Subject to your fiduciary-duty obligations as a director as imposed by Florida law, this Letter does not otherwise restrict you from accepting appointment as a director of any other company, providing consulting services, becoming employed by or engaging in any other business or other activity whatsoever.

 

 

 

5495 Bryson Dr. Suite 423, Naples, FL 34109

Phone: (877) 878-8136 Fax: (877) 781-2583

www.ftenet.com

  

1
 

 

 

 

2.             Remuneration:

 

a)           Annual Options: The Company expects to provide you and other outside directors, for service on the Board, stock in the form of (i) 50,000 shares of Series D Preferred Stock and (ii) an annual grant of 100,000 five-year stock options under the Company's 2014 Stock Plan with an exercise price equal to the mean average of the closing sale prices of Company common stock for the 10 trading days immediately before the date of grant (or, the date-of-grant closing sale price of Company common stock on any national securities exchange on which Company common stock is listed, if it has become so listed), which annual options would vest in one lump amount immediately upon grant, subject to continuation of service.  Such stock options shall remain exercisable until the earlier of the scheduled expiration date or 18 months after the cessation of service, whichever is sooner.

 

b)           Cash:  You shall receive an annual cash stipend at a rate of $20,000, payable $5,000 quarterly on the first day of each calendar quarter, for your service on the Board.

 

c)           Expenses:  Subject to you providing the Company with receipts or other evidence of payment, the Company will pay for or reimburse you for all travelling, hotel and other expenses reasonably incurred by you in connection with attending and returning from Board or Committee meetings or otherwise in connection with the Company's business.  "Reasonable" air travel expenses assume economy class for flights under 4 hours and business class for flights over 4 hours.

 

 

3.             Termination of Director Status:

 

a)           Your status as a Director may be terminated at any time by the vote of the stockholders of the Company (including any failure to elect you for an ensuing term at any annual meeting of stockholders) in accordance with the certificate of incorporation and bylaws of the Company. Any such termination will not affect your rights under options that have become vested, subject to the post-service exercisability period.

 

b)           You acknowledge and agree that if the stockholders of the Company terminate your status as a Director (including any failure to elect you for an ensuing term at any annual meeting of stockholders), you will have no claim of any kind against, other than indemnity claims, against the Company by reason of the termination.

 

c)           You are at liberty to resign from the Board at any time by notice in writing to the Company.

 

 

 

5495 Bryson Dr. Suite 423, Naples, FL 34109

Phone: (877) 878-8136 Fax: (877) 781-2583

www.ftenet.com

 

2
 

 

 

 

4.             What happens after termination of Director Status?

 

If your Director status is terminated for any reason or you resign for any reason:

 

a)           The Company may set off any amounts you owe the Company against any amounts the Company owes to you as a Director at the date of termination except for amounts the Company is not entitled by law to set off;

 

b)           You must return all the Company’s property (including property leased by the Company) to the Company on termination including all written or machine readable material, software, computers, credit cards, keys and vehicles; and

 

c)           You shall return to the Company all confidential information and documentation (including any copies thereof) regarding the Company and its affiliates (including confidential information of third parties entrusted to the Company) within 5 days following the Company’s request to delete or destroy any electronic or written information relating to the Company, as shall be requested by the Company.

 

 

5.             Confidential Information:

 

a)           You acknowledge and agree that during your service with the Company, you will receive confidential information regarding the Company and its affiliates (including confidential information of third parties entrusted to the Company) and that you will not disclose any such information to any other party nor use for your own benefit or for the benefit or for the benefit of any third person any of the confidential information so obtained at any time during or after the term of your service with the Company without the Company’s prior written consent.

 

b)           You recognize and affirm that in the event of your breach of any provision of this Section 5, money damages would be inadequate and the Company and its subsidiaries would have no adequate remedy at law. Accordingly, you agree that in the event of a breach or threatened breach by you of the provisions of this Section 5, the Company, in addition and supplementary to any other rights and remedies existing in its favor, may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive r other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security).

 

 

6.             Protection:

 

a)           During the term of your engagement hereunder, the Company will procure and maintain directors’ and officers’ liability insurance policies with a minimum of $2,000,000 Aggregate Limit, and to ensure you are included as an insured thereunder.

 

 

 

5495 Bryson Dr. Suite 423, Naples, FL 34109

Phone: (877) 878-8136 Fax: (877) 781-2583

www.ftenet.com

 

3
 

 

 

 

b)           The Company will enter into a standard and customary Indemnification Agreement with you on terms reasonably acceptable to you which will provide for (i) your indemnification by the Company to the fullest extent permitted by law for all acts and/or omissions directly and/or indirectly related to any services provided by you to the Company and (ii) a continuing obligation for the payment of your expenses in the event any action and/or investigation in commenced regarding any acts/or omissions directly and/or indirectly related to any services provided to you by the Company, including any action and/or investigation that begins after your service as a Director has ended.

 

 

7.             Miscellaneous:

 

a)           Alterations: This Letter cannot be amended except in writing signed by each party.

 

b)           Entire Agreement: This Letter constitutes the entire agreement between the parties in connection with its subject matter and supersedes all previous agreements or understandings between the parties in connection with its subject matter.

 

c)           Further Action: Each party must do, at its own expense, everything reasonably necessary(including executing documents) to give full effect to the performance of his/its obligations under this Letter and the transactions contemplated by it.

 

d)           Waiver: A party does not waive a right, power or remedy (or any other right, power or remedy) if it fails to exercise or delays in exercising the right, power or remedy. A single or partial exercise of a right, power or remedy does not prevent another of further exercise of that or another right, power or remedy. A waiver of a right, power or remedy must be in writing and signed by the party giving the waiver.

 

e)           Relationship: This Letter does not create a relationship of employment, agency or partnership between parties. Unless the Board adopts a specific resolution so providing, you do not have authority to bind the Company to any contract or commitment; and you agree not to purport to do so.

 

f)           Governing Law: This Letter shall be governed by and construed in accordance with the laws of Florida (without giving effect to choice of law principles or rules thereof that would cause the application to the laws of any jurisdiction other than Florida).

 

g)           Severability: Any provision of this Letter which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdictions.

 

 

 

5495 Bryson Dr. Suite 423, Naples, FL 34109

Phone: (877) 878-8136 Fax: (877) 781-2583

www.ftenet.com

 

4
 

 

 

 

h)           Counterparts: This Letter may be executed in counterparts. All executed counterparts constitute one document.

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date set forth below.

 

 

 

DIRECTOR FTE NETWORKS, INC.
   
   
By: /s/ John Klumpp By: /s/ Michael Palleschi
   
John Klumpp Michael Palleschi, CEO
1456 Palma Blanca Ct 5495 Bryson Drive, Suite 423
Naples, Florida 34119 Naples, Florida  34109
   
Date: June 2, 2014 Date: June 2, 2014

 

 

 

5495 Bryson Dr. Suite 423, Naples, FL 34109

Phone: (877) 878-8136 Fax: (877) 781-2583

www.ftenet.com

 

5

 

 

 

 

FTE Networks Announces Appointment of Director

 

 

 

NAPLES, FL – June 5, 2014 - FTE Networks, Inc. (PINKSHEETS: FTNW), a premier provider of fiber and wireless infrastructure services in the telecommunications vertical, is pleased to announce the appointment of Mr. John Klumpp to its Board of Directors.

 

Mr. Klumpp currently serves as a Senior Vice President and Chief Information Officer of First Southern Bank in Boca Raton, Florida where he oversees the day-to-day operations of the bank’s corporate technology architecture and systems.

 

Klumpp most recently served as Senior Vice President and IT Director of Florida Community Bank in Naples, Florida where he oversaw the complete build out of the bank’s IT department from start-up to $3.5 billion in 44 locations in just 18 months. He previously held the positions of SVP and CIO at the Bank of Florida from August 2008 to March 2012 and First National Bank of Florida from October 2001 to March 2005, both in Naples. In between, from March 2005 to August 2008, he ran his own small business consulting firm.

 

Klumpp received his BSA in Finance from the University of Alabama, Birmingham, in 1984 and continued his education at LSU Graduate School of Banking. He was a past board member of the American Diabetes Association and a Loaned Executive with the United Way. He currently resides in Naples.

 

"I am pleased to welcome John to FTE Networks’ Board of Directors," stated Mr. Michael Palleschi, FTE’s Chief Executive Officer. "John's knowledge of and background in the banking and technology industry is very complimentary to FTE's growth strategy and we look forward to his contributions to our development plans."

 

About FTE Networks, Inc.
FTE Networks is a vertically integrated company with an international footprint. Since its inception, FTE Networks has steadily advanced its management, operational and technical capabilities to become a leading provider of services to the telecommunications and wireless sector with a focus on turnkey solutions. FTE Networks provides a comprehensive array of services centered on quality, efficiency and customer service.

 

Forward Looking Statements
This release may contain forward-looking statements relating to the business of FTNW. All statements other than historical facts are forward-looking statements, which can be identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. These statements involve risks and uncertainties that may cause actual results to differ materially from those anticipated, believed, estimated or expected. These risks and uncertainties are described in detail in our filings with the Securities and Exchange Commission. Forward-looking statements are based on FTNW's current expectations and beliefs concerning future developments and their potential effects on FTNW. There is no assurance that future developments affecting FTNW will be those anticipated by FTNW. FTNW undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.