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): November 25, 2014
AUTHENTIDATE HOLDING CORP.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER:0-20190
| DELAWARE | 14-1673067 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Connell Corporate Center
300 Connell Drive, 5th Floor
Berkeley Heights, New Jersey 07922
(Address and zip code of principal executive offices)
(908) 787-1700
(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 (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 3.02 | Unregistered Sales of Equity Securities. |
To the extent required by Item 3.02 of the Current Report on Form 8-K, the information required to be disclosed in this Item 3.02 concerning the grant of stock options to O’Connell Benjamin is incorporated herein by reference from Item 5.02.
| Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On November 25, 2014, Authentidate Holding Corp. (the “Company”) entered into a new employment agreement with O’Connell Benjamin, its Chief Executive Officer and President. The following is a summary description of the terms of employment agreed upon by the Company and Mr. Benjamin:
The employment agreement commenced as of the date it was entered into and expires September 30, 2015, unless sooner terminated as provided therein. Under the employment agreement, Mr. Benjamin’s base salary is $290,000 per annum; provided, however, from the commencement date of this employment agreement until the first to occur of (i) January 15, 2015 or (ii) such time as the Company achieves cashflow breakeven for two consecutive fiscal quarters, 30% of such base salary shall be paid in equity-based awards granted pursuant to that certain Compensation Modification Agreement dated as of January 15, 2014 (the “Modification Agreement”). Further, in the event that the Company and Mr. Benjamin do not enter into an amendment or extension of the Modification Agreement (or a new, superseding agreement) prior to the expiration of such Modification Agreement, then the reduction in base salary pursuant to the Modification Agreement shall continue through the first to occur of either (i) such time as the Company achieves cashflow breakeven for two consecutive fiscal quarters or (ii) the termination date under the new employment agreement; provided, however, that the amount of the continuing salary reduction shall be adjusted to be 15% of base salary.
The employment agreement provides for cash-based bonus awards to be granted if the Company achieves certain performance goals. Mr. Benjamin will receive a bonus of up to $75,000 in cash if the Company achieves cashflow breakeven. If the Company achieves cashflow breakeven by the end of the fiscal year ending June 30, 2015, the bonus amount is $75,000. However, if the Company does not achieve cashflow breakeven until the end of the fiscal quarter ending September 30, 2015, then the bonus potential is $50,000. In addition, Mr. Benjamin shall receive a one-time bonus of $150,000 if the Company’s common stock has a closing price at or above $3.00 per share for 15 consecutive trading days during the Company’s fiscal year ending June 30, 2015. In addition, Mr. Benjamin shall be eligible for additional bonuses in the discretion of the Management Resources and Compensation Committee.
Under the agreement, Mr. Benjamin was also granted options to purchase a maximum of 300,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the common stock on the date of execution of the employment agreement, as determined in accordance with the Company’s 2011 Omnibus Equity Incentive Plan. Of the options awarded, options to purchase 100,000 shares are immediately vested and 200,000 are subject to performance-based vesting requirements. The options containing performance-based vesting targets are subject to the following vesting conditions: (i) 100,000 of the performance options will only vest in the event that the Company enters into a strategic alliance transaction (as such term is defined in the employment agreement) prior to the termination date of such employment agreement and (ii) a maximum of 100,000 of the performance options will vest in the event that the Company achieves cashflow breakeven prior to the close of the fiscal year ending June 30, 2015 (provided, that if the Company does not achieve cashflow breakeven by the end of the 2015 fiscal year, the vesting potential of such options is reduced to 75,000 options in the event that the Company achieves cashflow breakeven by the close of the fiscal quarter ending September 30, 2015). The options, to the extent they are vested, are exercisable for a term of ten years.
In the event of the termination of employment by the Company without “cause” or by Mr. Benjamin for “good reason,” as those terms are defined in the employment agreement, or in the event Mr. Benjamin’s employment is terminated due to his disability, he would be entitled to: (a) a severance payment of 12 months of base salary; (b) continued participation in the Company’s health and welfare plans until the later of the expiration date of the agreement or the end of the month of the one-year anniversary of the termination of his employment; and (c) all compensation accrued but not paid as of the termination date. In addition, in the event the Company decides not to
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renew the agreement or if the Company and Mr. Benjamin are unable to reach agreement on the terms of a new agreement prior to the expiration date, Mr. Benjamin will be entitled to the severance payment and other benefits described above. In addition, in the event of a “Change in Control” of the Company, as defined in the employment agreement, Mr. Benjamin would have the right to terminate his employment for any reason within a limited period of time following the change of control and such termination would be deemed for “good reason”.
In the event of the termination of Mr. Benjamin’s employment by the Company without “cause”, or by him for “good reason”, or if upon the expiration of the employment agreement Mr. Benjamin’s employment is not renewed, then subject to certain limitations concerning the performance options, the conditions to the vesting of any outstanding equity incentive awards granted to him shall be deemed void and all such awards shall be immediately and fully vested and exercisable. If Mr. Benjamin’s employment is terminated by the Company for “cause” or by him without “good reason,” then he is not entitled to any additional compensation or benefits other than his accrued and unpaid compensation. The employment agreement contains confidentiality obligations that survive termination and non-solicitation and non-competition obligations that end on the first anniversary of the date of cessation of Mr. Benjamin’s employment.
The foregoing summary of the employment agreement is qualified in its entirety by reference to the full text of such agreement, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
Exhibit | Description | |
| 10.1 | Employment Agreement between Authentidate Holding Corp. and O’Connell Benjamin | |
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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.
| AUTHENTIDATE HOLDING CORP. | ||||||
| By: | /s/ O’Connell Benjamin | |||||
| Name: | O’Connell Benjamin | |||||
| Title: | Chief Executive Officer and President | |||||
Date: November 28, 2014
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EXHIBIT INDEX
Exhibit | Description | |
| 10.1 | Employment Agreement between Authentidate Holding Corp. and O’Connell Benjamin | |
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