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): October 3, 2016
Rapid7, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-37496
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35-2423994
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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100 Summer Street, Boston, Massachusetts
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02110
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (617) 247-1717
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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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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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
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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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Appointment of Chief Operating Officer
On
October 4, 2016, Rapid7, Inc. (the “Company”) announced that Andrew Burton, its current Senior Vice President, IT Search, has been appointed as the Chief Operating Officer of the Company, effective October 3, 2016.
Mr. Burton, 44, joined the Company in October 2015 as its Senior Vice President, IT Search in connection with the Company’s acquisition of
Logentries. Prior to that time, from July 2013 to October 2015, Mr. Burton served as President and Chief Executive Officer of Logentries. Prior to that time, Mr. Burton served as Senior Vice President, Products at LogMeIn, Inc., a provider
of cloud-based remote connectivity solutions, from October 2011 to August 2013, after joining LogMeIn as Vice President, Products in October 2007. Mr. Burton received a B.S. in American Studies from Oregon State University, a Masters in
Information Systems from University College, Dublin and an M.B.A. from Boston College.
Mr. Burton 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. Burton and any other person pursuant to which
Mr. Burton was appointed as Chief Operating Officer. There have been no transactions since the beginning of the Company’s last fiscal year, or any current proposed transaction, in which Mr. Burton has an interest that would be
required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended. In connection with his appointment, Mr. Burton entered into the Company’s standard form of indemnification
agreement, the form of which has been filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 10, 2016.
Employment Offer Letter and Terms
In connection
with Mr. Burton’s appointment as Chief Operating Officer on October 3, 2016, the Company entered into an offer letter with Mr. Burton (the “Offer Letter”), which replaces and supersedes the prior offer letter dated
October 6, 2015 between the Company and Mr. Burton covering his role as Senior Vice President, IT Search. Pursuant to the Offer Letter, Mr. Burton will serve as the Chief Operating Officer of the Company, reporting to the
Company’s Chief Executive Officer. The Offer Letter does not provide for specified term of employment and Mr. Burton’s employment will be on an at-will basis. Mr. Burton will receive an annual base salary of $330,000 and is
eligible to earn an annual cash incentive bonus, initially with a target aggregate amount of $170,000, under the Company’s standard commission and bonus plans. Mr. Burton is also eligible to participate in the Company’s 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.
Pursuant to
the terms of the Offer Letter, Mr. Burton received (collectively referred to as the “Equity Awards”): (i) a non-qualified stock option to purchase up to 90,000 shares of the Company’s common stock at an exercise price of
$17.59 per share, which was the closing price of the Company’s common stock on the NASDAQ Global Market on October 3, 2016, the date of grant of the stock option and (ii) a restricted stock unit award covering 45,000 shares of the
Company’s common stock. The Equity Awards will vest over four years in equal quarterly installments, subject to Mr. Burton’s continued service on each applicable vesting date. The Equity Awards are subject to the terms of the
Company’s 2015 Equity Incentive Plan, as amended and the applicable award agreements thereunder.
In addition, the Offer Letter provides that if Mr. Burton is terminated by the Company without
“cause” (as defined in the Company’s 2015 Equity Incentive Plan, as amended) or resigns for “good reason” (as defined in the Offer Letter), Mr. Burton will be entitled to continued payment of his base salary for nine
months and payment of premiums for continued health benefits under COBRA for up to nine months. Further, if Mr. Burton’s employment is terminated by the Company without “cause” or Mr. Burton resigns for “good
reason,” in each case, within three months prior to or twelve months following a change in control of the Company, Mr. Burton’s equity awards will vest as to 25% of the-then unvested portion of the underlying shares of common stock.
Mr. Burton’s benefits are conditioned, among other things, on his execution of the Company’s standard separation agreement and a general release of claims in the Company’s favor.
A copy of the Offer Letter is filed as Exhibit 10.1 to this Current Report on a Form 8-K. The foregoing description of the Offer Letter is a summary only and
is qualified in its entirety by the full text of the Offer Letter, which is incorporated herein by reference.
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Item 7.01
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Regulation FD Disclosure.
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On October 4, 2016, the Company issued a press release announcing the
appointment of Mr. Burton as Chief Operating 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 pursuant to Item 7.01 of this Form 8-K. Consequently, it is
not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit
No.
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Description
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10.1
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Offer Letter between the Registrant and Andrew Burton, dated October 3, 2016
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99.1
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Press release dated October 4, 2016
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SIGNATURES
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.
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Rapid7, Inc.
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Dated: October 4, 2016
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By:
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/s/ Corey Thomas
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Corey Thomas
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Chief Executive Officer
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EXHIBIT INDEX
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Exhibit
No.
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Description
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10.1
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Offer Letter between the Registrant and Andrew Burton, dated October 3, 2016
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99.1
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Press release dated October 4, 2016
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Exhibit 10.1
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100 SUMMER STREET
13
TH
FLOOR, RAPID7
BOSTON, MA 02110-2100
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October 3, 2016
Andrew Burton
VIA EMAIL
Dear Andrew:
On behalf of Rapid7, we are pleased to confirm
the essentials of your promotion offer to Chief Operating Officer at Rapid7, reporting to Corey Thomas, with a start date of October 3, 2016. Your starting annual salary will be $330,000 payable semi-monthly less any applicable withholdings or
taxes. This is an exempt position based on the requirements of the Fair Labor Standards Act. For purposes of this letter, any reference to “Rapid7” will be understood to include Rapid7 LLC, its parent entity and any direct or indirect
subsidiary. Capitalized terms not otherwise defined herein shall be as defined in Rapid7, Inc. 2015 Equity Incentive Plan, as amended (the “Equity Incentive Plan”).
You will be eligible for an annual bonus opportunity with a target of $170,000. Such bonus will be payable annually, measured based on objectives mutually
agreed upon between you and your manager from time to time, and subject to Rapid7’s standard commission and bonus plans. Any earned bonus will be paid not later than March 15 of the year following the year of performance.
In addition to the foregoing, you will be eligible to receive (collectively referred to as the “Equity Awards”): (i) a non-qualified stock
option to purchase up to 90,000 shares of Rapid7’s common stock at an exercise price equal to the fair market value of Rapid7’s common stock on the date of grant and (ii) a restricted stock unit award covering 45,000 shares of
Rapid7’s common stock. The Equity Awards will vest over four years in equal quarterly installments, subject to your continued service through such vesting dates. The Awards are subject to the terms of the Equity Incentive Plan and the
applicable award agreements thereunder.
If either (x) Rapid7 terminates your employment without Cause or (y) if you terminate your employment
with Rapid7 with Good Reason (as defined below), then, subject to your execution of Rapid7’s standard separation agreement and release and the separation agreement and release becoming effective within 60 days following the date your employment
terminates, then you will be entitled to receive the following severance payments and benefits (the “Severance Benefits”):
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(i)
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continued payment of your then current annual base salary for nine months, on Rapid7’s regular payroll schedule, subject to the delay described below;
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(ii)
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if you timely elect continued coverage under COBRA for yourself and your covered dependents under Rapid7’s
group health plans following such termination, then Rapid7 will pay the COBRA premiums necessary to continue your health insurance coverage then in effect for yourself and your eligible dependents, as and when due to the insurance carrier or COBRA
administrator (as applicable), until the earliest of (1) the close of the nine-month period following your termination of employment, (2) the expiration of your eligibility for the continuation coverage under COBRA, or (3) the date
when you become eligible for group health insurance coverage in connection with new employment or self employment or otherwise cease to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from the
termination date through the earliest of (1) through (3), the “COBRA Payment Period”). However, if at any time Rapid7 determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the
nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care
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1
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100 SUMMER STREET
13
TH
FLOOR, RAPID7
BOSTON, MA 02110-2100
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and Education Reconciliation Act), and that payment of similar amounts on a taxable basis would not, then in lieu of providing the COBRA premiums, Rapid7 will instead pay you on the last day of
each remaining month of the COBRA Payment Period, subject to the delay described below, a cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment”), for
the remainder of the COBRA Payment Period; and
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(iii)
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if Rapid7 terminates your employment without Cause or if you terminate your employment with Rapid7 with Good Reason within 90 days prior to or 12 months following a Change in Control, then provided you timely comply
with the conditions described in this letter, you will vest with respect to twenty-five percent (25%) of any then unvested portion of the outstanding Equity Awards and any other compensatory equity awards that Rapid7 may grant to you in the
future.
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The amounts payable under (i), above, and, to the extent applicable the Special Severance Payment, above shall be paid out in
substantially equal installments in accordance with Rapid7’s payroll practice over such nine-month period commencing on the first regular payroll date of Rapid7 that occurs 60 days after date your employment terminate; provided, that the
initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the date your employment terminates. Each payment pursuant to this letter is intended to constitute a separate payment for purposes of
Treasury Regulation
Section 1.409A-2(b)(2).
The Severance Benefits are also conditional upon your continuing to comply with your obligations under your Confidentiality, Assignment, Non-Competition and
Non-Solicitation Agreement (or any successor agreement).
For purposes of this letter, the term “Good Reason” means any of the following that
occurs after the date hereof, in each case without your written consent provided that you must (i) give written notice to Rapid7 within 30 days after the first occurrence of the event purporting to giving rise to Good Reason setting forth the
basis for your resignation (which shall be specified in reasonable detail), (ii) allow Rapid7 at least 30 days from receipt of such written notice to cure such event, and (iii) if such event is not reasonably cured within such period, you
must resign from all positions you then hold with Rapid7, effective not later than 90 days after the expiration of the cure period: (A) a material decrease in your base salary (other than across-the-board reductions similarly affecting all or
substantially all similarly situated employees of Rapid7 or your business unit), (B) a material reduction in your job duties, authorities or responsibilities, provided, however, that (x) a change in job position (including a change in
title) shall not be deemed a “material reduction” in and of itself unless your new duties are materially reduced from the prior duties and (y) that a reduction in duties, authorities or responsibilities solely by virtue of Rapid7
being acquired and made part of a larger entity will not constitute a “Good Reason” event hereunder, and (C) a relocation of your regular place of work to any location that increases your one-way commute by more than 50 miles of your
then-current principal place of employment immediately prior to such relocation (other than a relocation to Rapid7’s corporate headquarters in Boston, MA).
Rapid7 has an excellent benefits program including health, dental and vision plans, a 401(k) plan, life and accidental death insurance, and both long term
disability and short term disability plans. You will be eligible to participate in our employee benefits program subject to the terms of all applicable plan documents and all Rapid7 policies regarding such benefits.
Rapid7 is an “at-will” employer. That means that both employees and Rapid7 have the right to terminate employment at any time, with or without
advance notice, and with or without cause. Employees also may be demoted or disciplined and the terms of their employment may be altered at any time, with or without cause, at the discretion of Rapid7. No one other than an officer of Rapid7 has the
authority to alter this arrangement, to enter into an agreement for employment for a specified period of time, or to make any agreement contrary to this policy, and any such agreement must be in writing and must be signed by an officer of Rapid7 and
by the affected employee.
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2
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100 SUMMER STREET
13
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FLOOR, RAPID7
BOSTON, MA 02110-2100
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This letter sets forth our entire agreement and understanding regarding the terms of your employment with
Rapid7 and supersedes any prior representations or agreements, whether written or oral, including, without limitation, that certain Offer Letter with Rapid7, dated as of October 6, 2015, with the exception of any equity awards previously
granted and delivered to you. This letter may not be modified in any way except in a writing signed by Christina Luconi and you. Please let us know of your decision to join Rapid7 by signing a copy of this offer letter and returning it to us not
later than close of business on October 3, 2016.
Rapid7 is an exciting organization that is building an outstanding reputation for exciting,
innovative and quality products. Credit for this goes to every one of our employees.
Sincerely,
/s/ Christina
Luconi
Christina Luconi, Chief People Officer
ACCEPTED AND AGREED:
/s/ Andrew
Burton
Andrew Burton
10/3/2016
Date
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3
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Exhibit 99.1
Rapid7 Promotes Andrew Burton to Newly-Created Role of Chief Operating Officer as Company Continues
Scaling Global Operations
Boston, MA – October 4, 2016
–
Rapid7, Inc.
(NASDAQ: RPD), a leading provider of security data
and analytics solutions, today announced that Andrew Burton, its current senior vice president of IT Search, has been promoted to chief operating officer as the company continues to drive customer adoption and disrupt the cybersecurity and IT
markets with its security data and analytics platform. In this newly created role, Burton will report directly to the company’s president and chief executive officer Corey Thomas and will focus on Rapid7’s global sales, sales engineering,
customer engagement and IT functions.
“We are pleased that Andrew has taken on this newly-created role at Rapid7,” said Corey Thomas, president
and chief executive officer of Rapid7. “Andrew is a proven technology executive and I am confident that his leadership and operational expertise will be instrumental in continuing to drive scale, growth, and improving leverage in our business.
As head of our IT search and log management business, Andrew has demonstrated strategic vision and executional excellence by integrating Logentries into Rapid7 and helping to bring game-changing products to market through the launch of InsightIDR
and our Insight Platform. We look to further leverage Andrew’s considerable range of professional experience to help deliver profitable growth and achieve the highest levels of customer success with our industry leading cloud-based data and
analytics solutions.”
“I am incredibly energized to help lead Rapid7’s continued growth with an intense focus on customer acquisition,
penetrating our expanding target markets, scaling our business and driving operational excellence,” said Andrew Burton, chief operating officer. “Rapid7 is truly shaping the power of data and analytics to more effectively solve complex
challenges in the security and IT markets. Our innovative technology platform and service offerings are allowing us to widen our competitive advantage and deliver an enhanced customer experience. I am excited about the opportunities that lie ahead
for the company.”
About Andrew Burton
In
October 2015, Burton joined Rapid7 as senior vice president of IT Search. Previously, he was the president and chief executive officer of Logentries, a leading provider of scalable, real-time machine data search and analytics technology, that was
acquired by Rapid7. Prior to Logentries, Burton was senior vice president of products and engineering at LogMeIn, Inc., where he played an instrumental role in leading the company from venture-backed startup through a successful IPO and on to a
high-growth public company. Burton has also held senior product and go-to-market roles at Symantec Corporation, IMLogic, and Groove Networks. Burton earned a BS from Oregon State University, a MS Information Systems from University College Dublin,
and a MBA from Boston College.
About Rapid7
Rapid7
is a leading provider of security data and analytics solutions that enable organizations to implement an active, analytics-driven approach to cyber security. We combine our extensive experience in security data and analytics and deep insight into
attacker behaviors and techniques to
make sense of the wealth of data available to organizations about their IT environments and users. Our solutions empower organizations to prevent attacks by providing visibility into
vulnerabilities and to rapidly detect compromises, respond to breaches, and correct the underlying causes of attacks. Rapid7 is trusted by more than 5,600 organizations across over 100 countries, including 37% of the Fortune 1000. To learn more
about Rapid7 or get involved in our threat research, visit
www.rapid7.com
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Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including,
without limitation, statements regarding our growth strategy, future market opportunities and plans and objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,”
“estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current
expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs.
These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate, the ability of our products and professional
services to correctly detect vulnerabilities, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to integrate acquired operations, our ability to operate in compliance with
applicable laws as well as other risks and uncertainties set forth in the “Risk Factors” section of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission for the quarterly period ended June 30, 2016, and
subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of
these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of
these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as
representing our views as of any date subsequent to the date of this press release.
Contact:
Mark Donohue
Vice President, Treasury and Investor Relations
857-415-4419 or
investors@rapid7.com