Qumu Corp (Form: 8-K, Received: 04/04/2022 16:54:39)

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): March 30, 2022

Qumu Corporation

(Exact name of Registrant as Specified in its Charter)

Minnesota

(State Or Other Jurisdiction Of Incorporation)

000-20728		41-1577970
(Commission File Number)		(I.R.S. Employer Identification No.)

400 S. 4th Street, Suite 401-412
Minneapolis, MN		55415
(Address Of Principal Executive Offices)		(Zip Code)

(612) 638-9100

Registrant’s Telephone Number, Including Area Code

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:

☐	Written communications pursuant to Rule 425 under the Securities Act

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common stock, par value $0.01		QUMU		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934. ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Items under Sections 1 through 4 and 6 through 8 are not applicable and therefore omitted.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2022 Compensation Determinations

2022 Annual Base Salaries

On March 30, 2022, the Compensation Committee of Qumu Corporation (the “Company”) set annual base salaries of the executive officers as follows: TJ Kennedy, Chief Executive Officer, $375,000; Thomas A. Krueger, Chief Financial Officer, $300,000; and Rose Bentley, Chief Operating Officer $325,000.

2022 Company Bonus Plan

Also on March 30, 2022, the Compensation Committee adopted an annual company bonus plan for 2022 (the “2022 Company Bonus Plan”) and set the cash incentive pay opportunities under the 2022 Company Bonus Plan for the Company’s eligible employees, which include Messrs. Kennedy and Krueger and Ms. Bentley.

Under the 2022 Company Bonus Plan, the Compensation Committee determined target amounts of two performance goals for 2022, weighted equally: (1) SaaS ARR growth as compared to 2021 and (2) quarterly operating cash flow, weighted equally by quarter except that if the full year 2022 operating cash flow target is met, this performance goal will be acehived at the 100% level. The Compensation Committee retains the discretion to include or exclude items from each of the performance goals and to determine the achievement of the performance goals for the purposes of calculating incentive pay under the 2022 Company Bonus Plan.

Under the 2022 Company Bonus Plan, the target level of achievement is also the minimum and maximum level of achievement such that achievement of a performance goal at less than target level will result in no incentive pay with respect to that performance goal and achievement of a performance goal at greater than target level will not result in any increasing incentive pay relating to that performance goal.

On March 30, 2022, the Compensation Committee also approved the cash incentive pay that the executive officers may earn at the target level of achievement as a percentage of their respective salaries as follows: Messrs. Kennedy and Krueger and Ms. Bentley, 110%, 60% and 80%, respectively.

All incentive pay earned under the 2022 Company Bonus Plan will be determined in the first quarter of 2022 based upon the Company’s financial results for 2023. A participant in the 2022 Company Bonus Plan, including an executive officer, must be employed by the Company as of December 31, 2022 and as of the payment date in order to receive any incentive pay under the 2022 Company Bonus Plan unless otherwise provided in the Company’s letter agreement with the executive officer relating to severance and change in control benefits. Additionally, all incentive payments are subject to “clawback” to the extent required by federal law and the 2007 Plan.

2022 ELT PSUs

Additionally, on March 30, 2022, the Compensation Committee approved the award of performance stock units (the “ELT PSUs”) to the Company’s executive officers and members of management under the 2007 Plan. The Compensation Committee approved an award of 60,000 ELT PSUs to each of Messrs. Kennedy and Krueger and Ms. Bentley.

The ELT PSUs represent a contractual right to receive shares of the Company’s common stock upon the achievement of performance goals for a two year performance period. Half of each award of ELT PSUs will vest based upon achievement of 2022 performance goals and half of each award of ELT PSUs will vest based upon achievement of 2023 performance goals. On March 30, 2022, the Compensation Committee set the target amounts of two performance goals for 2022, which are weighted equally: (1) net new logos or net new logo bookings and (2) partner revenue as a percent of total revenue. For the 2023 performance period, the Compensation Committee will determine the performance goals and target amounts of each in 2023, typically at the time the Company’s Board of Directors approves the Company’s annual operating plan for 2023 in the first quarter of 2023.

In settlement of the portion of the ELT PSUs tied to 2022 performance period, the Company will issue a number of shares as is equal to the number of ELT PSUs for that performance period multiplied by the total percentage achievement of the performance goals for that performance period. The ELT PSU award and the restricted shares are subject to forfeiture for termination of employment for any reason.

The Compensation Committee will determine achievement of the performance goals following the end of the performance period and retains the discretion to include or exclude items from any of the performance goals for any performance period. Upon a change of control, the performance period will be truncated, and the ELT PSUs will vest and settle based on performance through such date, as determined by the Compensation Committee and otherwise in accordance with the Plan and the ELT PSU Agreement.. Additionally, the awards are subject to “clawback” to the extent required by federal law and the 2007 Plan.

The form of ELT PSU award agreement approved on March 30, 2022 is attached hereto as Exhibit 10.1 and incorporated by reference herein.

2021-2022 PSUs – 2022 Performance Period

As previously reported, on February 18, 2021, the Compensation Committee of the Company approved the award of performance stock units (the “PSUs”) to the Company’s executive officers and members of management under the Second Amended and Restated 2007 Stock Incentive Plan, as amended (the “2007 Plan”), including PSU awards to TJ Kennedy, the Company’s Chief Exeucitve Officer, and Rose Bentley, the Company’s Chief Operating Officer. Because Thomas A. Kruger, the Company’s Chief Financial Officer, was not serving at the time of grant, he did not receive a PSU award at that time.

The PSUs represent a contractual right to receive shares of the Company’s common stock upon the achievement of performance goals for a two year performance period of 2021 and 2022. Half of each award of the PSUs will vest based upon achievement of 2021 performance goals and half of each award of the PSUs will vest based upon achievement of 2022 performance goals.

On March 30, 2022, the Compensation Committee set the target amounts of five performance goals selected for 2022: net new customers, partner generated revenue as a percent of total revenue, annual recurring revenue, total gross retention rate and bookings. As was the case with respect to the 2021 performance period, if the Company achieves three of the five performance goals for 2022, 100% of the PSU award relating to such period will vest and be settled. If the Company achieves two of the five performance goals for 2022, 66 2/3% of the PSU award relating to such period will vest and be settled. If the Company achieves one of the five performance goals for 2022, 33 1/3% of the PSU award relating to such period will vest and be settled. In settlement of the PSUs, the Company will issue a number of shares as is equal to the number of PSUs for 2022 multiplied by the total percentage achievement of the performance goals for 2022. The shares issued will be restricted from transfer for a period of 364 days following issuance. The PSU award and the restricted shares are subject to forfeiture for termination of employment for any reason.

The Compensation Committee will determine achievement of the 2022 performance goals following the end of 2022 and retains the discretion to include or exclude items from any of the 2022 performance goals. Upon a change of control, the PSUs and the restricted shares will vest in full and any restrictions will lapse. Additionally, the awards are subject to “clawback” to the extent required by federal law and the 2007 Plan.

Also on March 30, 2022, the Compensation Committee granted Mr. Kruger an award of 15,750 PSUs solely for the 2022 performance period, which represents approximately one-half of the PSU award that Mr. Krueger would have otherwise received as Chief Financial Officer.

Item 9.01

Entry Into a Material Definitive Agreement.

Exhibit No.		Description

10.1		Form of ELT Performance Stock Unit Award Agreement granted March 30, 2022.

104		Cover Page Interactive Data File (formatted as inline XBRL).

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, thereunto duly authorized.

	QUMU CORPORATION

	By:	/s/ TJ Kennedy
		TJ Kennedy
		Chief Executive Officer

Date: April 4, 2022

EXHIBIT 10.1

QUMU corporation

Performance Stock Unit award agreement

ELT Participant:	Grant:	Performance Stock Units

	Grant Date:	March 30, 2022

THIS PERFORMANCE STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made as of the Grant Date set forth above, by and between Qumu Corporation, a Minnesota corporation (the “Company”), and the ELT Participant named above (“Participant”) setting forth the terms and conditions of an award of Performance Stock Units granted to Participant pursuant to the Qumu Corporation Second Amended and Restated 2007 Stock Incentive Plan, as amended and as may be further amended from time to time (the “Plan”).

1. Grant. Effective on the Grant Date, Participant has been granted the number of Performance Stock Units indicated above, which entitles Participant to receive up to the same number of shares of common stock of the Company (the “Shares”) in accordance with the provisions of this Agreement and the provisions of the Plan. Capitalized terms used herein and not defined shall have the meaning given such terms in the Plan.

2. Performance Vesting; Forfeiture.

As used in this Agreement, the following terms shall have the respective meanings:

	i.	“Determination Date” means the date of determination and certification by the Committee of achievement of the Percentage Achievement of the Performance Goals for Performance Period 1 or Performance Period 2.

	ii.	“Percentage Achievement” means the respective percentage achievement (which shall not be more than 100%) of the Performance Goals for Performance Period 1 and Performance Period 2, as determined by the Committee.

	iii.	“Performance Goals” mean those performance goals set forth on Exhibit A.

	iv.	“Performance Period 1” shall mean the period from January 1, 2022 to and including December 31, 2022.

	v.	“Performance Period 2” shall mean the period from January 1, 2023 to and including December 31, 2023.

For Performance Period 1, one-half (1/2) of the Performance Stock Units will vest on the Determination Date as to such number of Performance Stock Units multiplied by the Percentage Achievement, rounded down to the nearest whole Share.

	c.	For Performance Period 2, one-half (1/2) of the Performance Stock Units will vest on the Determination Date as to such number of Performance Stock Units multiplied by the Percentage Achievement, rounded down to the nearest whole Share.

	d.	If Participant’s employment with the Company and/or a subsidiary of the Company terminates for any reason, including, but not limited to death, Disability or Retirement, all Performance Stock Units at that time not vested shall be forfeited to the Company without payment of any consideration therefor as of the date of such termination unless the Committee determines that all or any part of the Performance Stock Units shall vest as of the date of such termination.

	e.	Notwithstanding any other provision of this Agreement, if there is a Change in Control prior to the Determination Date for a Performance Period and Participant’s employment continues to the date of the Change in Control, then such Performance Period will be truncated and will end as of the end of the Company’s most recently completed fiscal quarter prior to the date of the Change in Control. Participant will be entitled to have vest and be issued Shares in settlement of the Performance Stock Unit as of the date of, but immediately prior to, the Change in Control, the number of Performance Stock Units that the Committee determined have been earned based on actual performance against the Performance Goals in the truncated Performance Period. In no event will more than 100% of the Performance Stock Units for a Performance Period vest.

3. Issuance of Shares. The Company shall on the Determination Date or, in the event of a Change in Control, immediately prior to the Change in Control, issue and deliver to Participant one Share in settlement of each vested Performance Stock Unit.

4. No Rights As Shareholder in Performance Stock Units. Until Shares are issued in settlement of the Performance Stock Units as provided herein, Participant will not be deemed for any purpose to be, or have rights as, a Company shareholder, including the right to vote or to receive dividends with respect to Shares issuable with respect to the Performance Stock Units, except as provided below.

5. Dividend Equivalents. During the period from the Grant Date to the Determination Date, the Company shall accumulate a cash amount equal to dividends in cash or property paid from time to time on issued and outstanding Shares in an amount that is equivalent to the dividends which Participant would have received had Participant been the owner of the number of Shares equal to the number of Performance Stock Units granted hereunder. The cash shall accumulate as a book entry on the books of the Company and shall accrue interest until the Maturity Date computed using the one-year Treasury Bill rate as of January 1 of the calendar year for which interest is credited. A cash amount plus interest (collectively, “Dividends”) shall be paid to Participant on the Maturity Date in respect of the number of Performance Stock Units vested on the Maturity Date. The payment of Dividends and interest hereunder shall be treated as additional compensation to Participant.

6. No Transferability. Neither the Performance Stock Units nor any interest or right therein or part thereof shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.

7. Administration and Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code or be exempt from Section 409A of the Code and shall be construed and interpreted in accordance with such intent. Any provision of this Agreement that would fail to satisfy Section 409A of the Code shall be amended to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A of the Code. This Agreement may be terminated by mutual agreement between Participant and the Company prior to the date all amounts have been distributed to Participant only if the termination complies with Section 409A of the Code.

8. Successors and Heirs. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. In the event of Participant’s death, any Shares to which Participant may become entitled pursuant to this Agreement or the Plan will be delivered to his or her heirs or personal representative in accordance with the terms of the Plan.

9. Governing Law. This Agreement and any matter relating to the Performance Stock Units will be construed, administered and governed in all respects under and by the applicable laws of the State of Minnesota, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement, the Plan, the award of Performance Stock Units, the issuance of the Shares to the substantive law of another jurisdiction.

10. Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require Participant to remit to the Company, as a condition precedent for the delivery by the Company of the Shares in settlement of the Performance Stock Units, an amount sufficient to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the grant, vesting or settlement of the Performance Stock Units. Such tax withholding amount may be satisfied by Participant if a U.S. employee in cash or in Shares, either by delivery of Shares already owned by Participant or by authorizing the Company to retain the number of Shares from the Shares issuable to Participant as the Company determines to be sufficient to satisfy such tax withholding obligation. Notwithstanding the foregoing, in no event shall payment of withholding taxes be made by retention of Shares by the Company unless the Company retains only Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld. The Company may also deduct from any award under the Plan payment of any other amounts due by Participant to the Company.

11. Plan Controls. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan. In accordance with the Plan, all decisions of the Committee shall be final and binding upon Participant and the Company.

IN WITNESS WHEREOF, the Company and Participant have each executed and delivered this Agreement as of the Grant Date.

		QUMU CORPORATION

		By:
		Its:

PARTICIPANT:


[NAME OF ELT PARTICIPANT]

EXHIBIT A

Performance Goals – Performance Period 1

The Company’s performance for Performance Period 1 shall equal or exceed the following respective thresholds:

Performance Goal 1: _____ net new logos or $________ new logo bookings.

Performance Goal 2: ___% partner revenue as a percentage of total revenue.

Each of Performance Goal 1 and Performance Goal 2 will be weighted equally such that Percentage Achievement will be 50% if either Performance Goal 1 or Performance Goal 2 is achieved and 100% if both Performance Goal 1 and Performance Goal 2 are achieved.

In each case, determination of the Percentage Achievement for the Performance Periods and achievement of each Performance Goal for any Performance Period will be made by the Committee and shall be subject to such adjustments as the Committee shall determine in its sole discretion.

Performance Goals – Performance Period 2

To be determined by the Committee.