ID SYSTEMS INC (Form: 8-K, Received: 12/08/2016 16:13:15)

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): December 3, 2016

I.D. SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		001-15087		22-3270799
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

123 Tice Boulevard, Woodcliff Lake, New Jersey		07677
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (201) 996-9000

(Former name or former address, if changed since last report)

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):

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

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

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

	[ ]	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 Arrangements of Certain Officers.

On December 8, 2016, I.D. Systems, Inc. (the “Company”) announced that Chris Wolfe, the current Chief Product Officer of the Company, has been appointed the Chief Executive Officer of the Company, effective December 7, 2016. Mr. Wolfe succeeds departing Chief Executive Officer and Chairman of the Board Kenneth S. Ehrman, who has resigned, effective December 6, 2016, for family medical reasons but will serve as a special advisor to the Board of Directors of the Company (the “Board”) for a six-month period to support the executive transition. Michael Brodsky has been appointed as the new Chairman of the Board. In addition, the Company eliminated the Chief Operating Officer position, effective December 7, 2016. Norman L. Ellis, the former Chief Operating Officer of the Company, will support Mr. Wolfe through the executive transition.

Chris Wolfe, 59, has served as our Chief Product Officer since August 2016 and served as a program director for the Company from February 2016 to July 2016. From 2000 to 2005, Mr. Wolfe served as the President of Qualcomm Wireless Business Solutions, a division of Qualcomm Incorporated, a NASDAQ-listed company which provides wireless communications products and services. After leaving Qualcomm, Mr. Wolfe founded Americans for Energy Independence, a public awareness non-profit organization, which later merged into the Apollo Alliance. Mr. Wolfe is currently a business advisory council member for the Apollo Alliance. Mr. Wolfe has degrees in Data Processing, Business Management and Technical Education from the University of Akron. He has attended Stanford’s Executive Course and several MBA-level accounting and finance courses at Kent State University and Cleveland State.

In connection with Mr. Wolfe’s appointment as the Chief Executive Officer, the Company entered into an employment offer letter (the “Offer Letter”) with Mr. Wolfe on December 6, 2016. In accordance with the Offer Letter, Mr. Wolfe will receive a base salary of $290,000 per year and will be eligible to receive a bonus in an amount up to $290,000 per year based upon the achievement of certain objectives. Also, effective December 7, 2016 (the “Grant Date”), Mr. Wolfe received 50,000 restricted shares of the Company’s common stock (“Common Stock”) and 100,000 options to purchase Common Stock at an exercise price of $4.70 per share, which represents the closing price of the Common Stock on the Grant Date. Each grant vests as to 25% of such shares or options, as applicable, on each of the first, second, third and fourth anniversaries of the Grant Date, provided that Mr. Wolfe is employed by the Company on each such date. The restricted shares and options are subject to the terms and conditions of the Company’s 2015 Equity Compensation Plan.

In addition, pursuant to the Offer Letter, Mr. Wolfe is entitled to the Company’s current customary employee benefits and $23,000 in relocation benefits. In the event Mr. Wolfe’s employment is terminated without cause during the first 24 months of employment, the Company has agreed to extend the current severance agreement with Mr. Wolfe from a lump sum severance payment equivalent to six months of salary to a lump sum severance payment equivalent to nine months of salary.

The description of the Offer Letter contained herein does not purport to be complete and is qualified in its entirety by reference to the full text of the Offer Letter, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On December 3, 2016, the Board approved an amendment (the “Bylaw Amendment”) to the Restated Bylaws of the Company to remove the requirement that the Chairman of the Board be the chief executive officer of the Company. The foregoing description of the Bylaw Amendment is qualified in its entirety by reference to the full text of the Bylaw Amendment, which is filed herewith as Exhibit 3.1 and incorporated herein by reference.

Item 8.01. Other Events.

On December 8, 2016, the Company issued a press release announcing the events described in Item 5.02. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d)

Exhibits

As described above, the following exhibits are filed as part of this report:

Exhibit Number		Description

3.1		Amendment No. 1 to Restated Bylaws.

10.1		Employment Offer Letter, dated December 6, 2016, between I.D. Systems, Inc. and Chris A. Wolfe.

99.1		Press release, dated December 8, 2016.

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.

	I.D. SYSTEMS, INC.

	By:	/s/ Ned Mavrommatis
		Name: Ned Mavrommatis
		Title: Chief Financial Officer

Date: December 8, 2016

EXHIBIT INDEX

Exhibit Number		Description

3.1		Amendment No. 1 to Restated Bylaws.

10.1		Employment Offer Letter, dated December 6, 2016, between I.D. Systems, Inc. and Chris A. Wolfe.

99.1		Press release, dated December 8, 2016.

AMENDMENT NO. 1

THE RESTATED Bylaws

I.D. SYSTEMS, INC.

( a Delaware corporation)

December 3, 2016

The Restated Bylaws (the “ Bylaws ”) of I.D. Systems, Inc. are hereby amended by deleting the second, third and fourth sentences of Article III, Section 1 of the Bylaws in their entirety such that the section reads as follows:

“1. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be a member of the Board and shall preside at its meetings and at all meetings of stockholders. He shall see that the acts of the executive officers conform to the policies of the corporation as determined by the Board and shall have such powers and perform such other duties as may from time to time be assigned to him by the Board.”

IDSY_ LOGO_COLOR.EPS

December 6, 2016

Chris Wolfe

5045 Ashberry Road

Carlsbad, CA 92008

Dear Chris:

On behalf of I.D. Systems, I am pleased to confirm our offer for full-time employment as Chief Executive Officer. Your start date in this new role will be December 7, 2016.

You will receive a semi-monthly salary of $12,083.34, which is equivalent to $290,000 on an annualized basis. In addition to your base salary, you will be eligible for the executive bonus plan. The annual bonus potential will be $290,000 and will be based on the achievement of predetermined company objectives. The detailed plan will be provided to you within 30 days of your start date in your new role. You will also receive 50,000 shares of restricted stock and 100,000 stock options. 25% of the restricted shares and stock options shall become vested, and the restrictions applicable to the restricted shares shall lapse, each year from the date of the grant (date of appointment as CEO), provided that you are an employee of the Company on such anniversary date. The terms of Long Term Incentive awards are outlined in the Company’s 2015 Equity Compensation Plan. In order to assist with your upcoming relocation expenses, the Company will pay you a lump sum of $23,000. This will be in lieu of the Relocation Agreement that we currently have in place.

Due to your expanded role, in the event your employment is terminated without cause during the first 24 months, I.D. Systems agrees to extend your current severance agreement from a lump sum severance payment equivalent to 6 months of salary to a lump sum severance payment equivalent to 9 months of salary.

During your employment with the Company you will be entitled to all of the Company’s current customary employee benefits, subject to plan eligibility requirements. A highlight of our benefits includes:

	1.	Health Insurance: Commencing on the first day of employment, you will be eligible to enroll in the Company’s Health Plan. Commencing on the first of the month after your start date, you will be eligible to enroll in the Company’s dental plan.

	2.	Vision Insurance: Commencing on the first day of your employment, you will be eligible to enroll in the Company’s Vision Care Plan.

	3.	Section 125 Flexible Spending: Commencing on the first of the month following your start date, you will be eligible to enroll in the Company’s Flexible Spending Plan.

	4.	Company Savings Plan: Within the first month of your employment, you will be automatically enrolled in the Company’s 401(k) plan with the ability to cease participation or change your contribution at any time. The Company does not currently match contributions to the plan.

	5.	Vacation/Paid time-off: Over the course of a full year, you may accrue 15 vacation days, 3 floating holidays, 3 personal days, and 4 sick days.

	6.	Voluntary short-term disability, long-term disability, and voluntary life insurance.

Your employment is contingent upon receipt of proof of eligibility to work in the United States. This offer is additionally contingent upon successful completion of our reference checking processes and background investigation (which may include: criminal, consumer credit, driving and check of educational credentials), and your execution and delivery of the Company’s Confidentiality and Non-Competition Agreement.

Congratulations, Chris! Please sign and date one copy of this letter and return it to me along with a signed and dated copy of your Employee General Covenants Agreement.

Sincerely,

/s/ Lindsay Estelle
Lindsay Estelle
Director, Human Resources

/s/ Chris Wolfe		12/06/2016
Chris Wolfe		Date

FOR IMMEDIATE RELEASE

CONTACTS:	I.D. Systems	Investor Relations
	Ned Mavrommatis	Liolios Group
	Chief Financial Officer	Matt Glover or Michael Koehler
	Phone: 201-996-9000	Phone: 949-574-3860
	ned@id-systems.com	IDSY@liolios.com

I.D. Systems Appoints Chris Wolfe as New Chief Executive Officer

WOODCLIFF LAKE, N.J., December 8, 2016 (GLOBE NEWSWIRE) — I.D. Systems, Inc. (NASDAQ:IDSY), a leading provider of wireless solutions for the Industrial Internet of Things, has announced that current Chief Product Officer Chris Wolfe has been appointed the new CEO of the company, effective immediately. He succeeds departing CEO and Chairman of the Board Kenneth Ehrman, who has resigned for family medical reasons but will serve as a special advisor to the Board of Directors for a 6-month period to support the executive transition. Current Director Michael Brodsky has been appointed as the new Chairman of the Board, effective immediately.

“We would like to thank Ken for his hard work and dedication to I.D. Systems over the years,” said Chairman of the Board, Michael Brodsky. “Since co-founding the company in 1993, Ken has made countless contributions to help the company become a leader in the Internet of Things field, and we wish him the best of luck in his future endeavors.”

The company also performed an internal review to further increase its operational efficiency, and as a result, eliminated the COO position, thereby streamlining management’s roles and responsibilities. Former COO Norm Ellis will support Wolfe throughout the executive transition.

Brodsky added: “We also would like to thank Norm for his many contributions to the company. Norm has been instrumental in helping focus I.D. systems on operational excellence and product improvement. We wish him abundant success in his life after I.D. Systems, and look ahead to this next stage of growth in the company’s history under the leadership of our new CEO.”

Chris Wolfe brings more than 20 years of experience in building, implementing, and selling paradigm-changing technology solutions. In his most recent role at Qualcomm, a world leader in 3G, 4G and next-generation wireless technologies, Wolfe served as president of the Wireless Business Solutions division, where he oversaw and helped successfully launch the company’s TrailerTRACS product, Qualcomm’s first major wireless product launch since the roll-out of its flagship product, OmniTRACS. During his tenure as president, Qualcomm’s Wireless Business Solutions division experienced a 63% increase in revenues from $270 million to $440 million.

Wolfe first served as a Strategy Consultant for I.D. Systems. Most recently, he served as the company’s Chief Product Officer, and was responsible for the management of the product and engineering teams. Wolfe was also responsible for all product-related initiatives, including product development, assessment, and management.

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“Over the past year, I’ve gained incredible insight into I.D. Systems’ customers, products, processes, and organization, and I look forward to working with our team to improve our business performance, while growing our core businesses and pursuing targeted growth opportunities,” Wolfe said. “Now, as Chief Executive Officer, my priority is to meld together our organization’s creativity, market presence and customer intimacy to help us become the premier provider of asset intelligence solutions in the markets we serve.

Wolfe has received degrees in business, computer technology and education from the University of Akron. In addition, he completed an executive management course with Stanford Executive Institute and successfully completed preliminary MBA finance and accounting courses at Cleveland State University.

About I.D. Systems

Headquartered in Woodcliff Lake, New Jersey, with subsidiaries in Texas, Germany, and the United Kingdom, I.D. Systems is a leading global provider of wireless solutions for securing, controlling, tracking, and managing high-value enterprise assets, including industrial vehicles, rental cars, trailers, containers, and cargo. The company’s patented technologies address the needs of organizations to monitor and analyze their assets to increase efficiency and productivity, reduce costs, and improve profitability. For more information, visit www.id-systems.com .

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward looking statements within the meaning of the federal securities laws. Forward-looking statements include statements with respect to I.D. Systems’ beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond I.D. Systems’ control, and which may cause its actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. For example, forward-looking statements include statements regarding: prospects for additional customers; potential contract values; market forecasts; projections of earnings, revenues, synergies, accretion or other financial information; emerging new products; and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, increasing production volumes, and expanding business with core customers. The risks and uncertainties referred to above include, but are not limited to, future economic and business conditions, the loss of key customers or reduction in the purchase of products by any such customers, the failure of the market for I.D. Systems’ products to continue to develop, the possibility that I.D. Systems may not be able to integrate successfully the business, operations and employees of acquired businesses, the inability to protect I.D. Systems’ intellectual property, the inability to manage growth, the effects of competition from a variety of local, regional, national and other providers of wireless solutions, and other risks detailed from time to time in I.D. Systems’ filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2015. These risks could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, I.D. Systems. Unless otherwise required by applicable law, I.D. Systems assumes no obligation to update the information contained in this press release, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise.

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