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
December
5, 2008 (December 1, 2008)
Date
of
Report (Date of earliest event reported)
AFTERSOFT
GROUP, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-27083
|
84-1108035
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File No.)
|
(IRS
Employer Identification No.)
|
Regus
House, Herons Way, Chester Business Park
Chester,
UK CH4 9QR
(Address
of principal executive offices, including zip code)
Registrant's
telephone number, including area code:
011 44 124 489 3138
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions (see General Instruction A.2. below):
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 Arrangements of Certain
Officers.
Effective
as of December 1, 2008 (the “Effective Date”), upon the approval of our Board of
Directors, Aftersoft Group, Inc. (“we,” “us,” “our,” or the “Company”) entered
into employment agreements with each of Ian Warwick, our President and Chief
Executive Officer, Charles F. Trapp, our Executive Vice President and Chief
Financial Officer, and Simon Chadwick, our Executive Vice President and Chief
Operating Officer.
Ian
Warwick Employment Agreement
The
Employment Agreement with Mr. Warwick (the “Warwick Agreement”) is for an
initial term of two and one-half years from the Effective Date, and is
automatically renewable for successive one-year periods unless terminated
by Mr.
Warwick or us. Mr. Warwick will receive an annual base salary of $300,000,
payable in U.S. dollars. The annual salary is increased to $350,000 upon
our
achievement of a market capitalization goal of $50 million for at least 25 consecutive
trading days. The terms of the Warwick Agreement also entitles Mr. Warwick,
a
United Kingdom resident, to a make-whole payment that will restore him to
the
British Pound Sterling equivalent that existed on the Effective Date in the
event that the value of the U.S. Dollar relative to the British Pound Sterling
increases such that his base salary is reduced, as a result of such currency
translation, by 10% or more (the “Make-Whole Payment”).
The
Warwick Agreement also provides for an appointment to our Board of Directors,
on
which Mr. Warwick already serves.
Mr.
Warwick is eligible for a performance-based annual cash incentive bonus of
up to
150% of his base salary in any fiscal year depending on the extent to which
the
applicable performance goal(s) of the Company, which are to be established
by
our Compensation Committee of our Board of Directors (“Compensation Committee”)
or pursuant to a formal bonus plan, are achieved, subject to any operating
covenants in place with respect to outstanding bank debt. The Compensation
Committee established an EBITDA-related target for the fiscal year ended
June
30, 2009, with respect to Mr. Warwick’s potential incentive bonus for fiscal
2009.
In
addition, Mr. Warwick is entitled to participate in all of our benefit plans
and
our equity-based compensation plans, which currently consists of our 2007
Long-Term Incentive Plan (the “LTIP”). Pursuant to the Warwick Agreement, Mr.
Warwick is to be awarded two grants of 3-year performance share unit awards
under the LTIP, each for 500,000 performance share units as a base objective,
with 30% of the award vesting in the first year of the grant provided that
the
base target for that year is met, 30% of the award vesting in the second
year of
the grant provided that the base target for the second year is met, and 40%
of
the award vesting in the third and final year of the grant provided that
the
base target for the third year is met (“Performance Share Units”). The
performance measures for these awards, which have been set by the Compensation
Committee, are based on increases in our earnings per share (“EPS”) and return
on invested capital (“ROIC”). Further, with respect to both awards in each grant
year, (i) if the Company’s results amount to less than 80% of the established
target(s), none of the awards will vest; (ii) if the Company’s results are equal
to 80% of the established target(s), 50% of the award will vest; (iii) if
the
Company’s results are equal to 100% of the established target(s), 100% of the
award will vest; and (iv) if the Company’s results are equal to or better than
120% of the established target(s), 150% of the award will vest. Results between
these established parameters will be interpolated.
The
Warwick Agreement also entitles Mr. Warwick to be granted options to purchase
300,000 shares of our common stock under the LTIP. These options will vest
as to
one-third of the award on each of the first three anniversaries of the grant
date, at a strike price of $0.75, $1.00 and $1.25, respectively. The options
expire ten years from the grant date.
The
Warwick Agreement provides that in the event Mr. Warwick’s employment is
terminated for Good Reason, for any reason other than for Cause, Death or
Disability or for Good Reason during the 30-day period immediately following
the
first anniversary of the Effective Date (the “Window Period”), he is entitled
to, among other things, a severance payment equal to his 12 months base salary.
In addition, under such circumstances, all of Mr. Warwick’s stock options, stock
appreciation rights and restricted stock will immediately vest and be payable
in
shares of our common stock and all of his performance share units that would
vest in the course of any fiscal year shall vest on a pro rata basis.
The
foregoing summary of the Warwick Agreement does not purport to be complete
and
is qualified in its entirety by reference to the Warwick Agreement,
a
copy of which is attached hereto as Exhibit 10.1.
Charles
F. Trapp Employment Agreement
The
Employment Agreement with Mr. Trapp (the “Trapp Agreement”) is for an initial
term of one year from the Effective Date, and is automatically renewable
for
successive one-year periods unless terminated by Mr. Trapp or us. Mr. Trapp
will
receive an annual base salary of $220,000, payable in U.S. dollars. Mr. Trapp
is
eligible for a performance-based annual cash incentive bonus of up to 150%
of
his base salary in any fiscal year depending on the extent to which the
applicable performance goal(s) of the Company, which are to be established
by
the Compensation Committee or pursuant to a formal bonus plan, are achieved,
subject to any operating covenants in place with respect to outstanding bank
debt. The Compensation Committee established an EBITDA-related target for
the
fiscal year ended June 30, 2009, with respect to Mr. Trapp’s potential incentive
bonus for fiscal 2009.
In
addition, Mr. Trapp is entitled to participate in all of our benefit plans
and
equity-based compensation plans, which currently consists of the LTIP. Mr.
Trapp
will be awarded two grants of 3-year Performance Share Unit awards under
the
LTIP, each for 300,000 performance share units as a base objective, with
the
same terms, performance targets and metrics as Mr. Warwick’s Performance Share
Unit awards described above. Mr. Trapp also will be granted options to
purchase 100,000 shares of our common stock under the LTIP. These options
will
vest as to one-third of the award on each of the first three anniversaries
of
the grant date, at a strike price of $0.75, $1.00 and $1.25, respectively.
The
options expire ten years from the grant date.
The
Trapp
Agreement provides that in the event Mr. Trapp’s employment is terminated for
Good Reason, for any reason other than for Cause, Death or Disability or
for
Good Reason during the Window Period, Mr. Trapp is entitled to, among other
things, a severance payment equal to his 12 months base salary, all of Mr.
Trapp’s stock options, stock appreciation rights and restricted stock shall
immediately vest and be payable in shares of our common stock and all of
his
performance share units that would vest in the course of any fiscal year
shall
vest on a pro rata basis.
The
foregoing summary of the Trapp Agreement does not purport to be complete
and is
qualified in its entirety by reference to the Trapp Agreement,
a
copy of which is attached hereto as Exhibit 10.2.
Simon
Chadwick Employment Agreement
The
Employment Agreement with Mr. Chadwick (the “Chadwick Agreement”) is for an
initial term of two years from the Effective Date, and is automatically
renewable for successive one-year periods unless terminated by Mr. Chadwick
or
us. Mr. Chadwick will receive an annual base salary of $225,000, payable
in U.S.
dollars. The terms of the Chadwick Agreement also entitles Mr. Chadwick,
a
United Kingdom resident, to a Make-Whole Payment consistent with the one
awarded
to Mr. Warwick.
The
Chadwick Agreement also provides for an appointment to our Board of Directors,
on which he already serves.
Mr.
Chadwick is eligible for a performance-based annual cash incentive bonus
of up
to 150% of his base salary in any fiscal year depending on the extent to
which
the applicable performance goal(s) of the Company, which are to be established
by the Compensation Committee or pursuant to a formal bonus plan, are achieved,
subject to any operating covenants in place with respect to outstanding bank
debt. The Compensation Committee established an EBITDA-related target for
the
fiscal year ended June 30, 2009, with respect to Mr. Chadwick’s potential
incentive bonus for fiscal 2009.
In
addition, Mr. Chadwick is entitled to participate in all of our benefit plans
and our equity-based compensation plans, which currently consists of the
LTIP.
Mr. Chadwick will be awarded two grants of 3-year Performance Share Unit
awards
under the LTIP, each for 400,000 performance share units as a base objective,
with the same terms, performance targets and metrics as Mr. Warwick’s and Mr.
Trapp’s Performance Share Unit awards described above. The Chadwick Agreement
also grants Mr. Chadwick options to purchase 200,000 shares of our common
stock
under the LTIP. These options will vest as to one-third of the award on each
of
the first three anniversaries of the grant date, at a strike price of $0.75,
$1.00 and $1.25, respectively. The options expire ten years from the grant
date.
In
the
event Mr. Chadwick’s employment is terminated for Good Reason, for any reason
other than for Cause, Death or Disability or for Good Reason during the Window
Period, Mr. Chadwick is entitled to, among other things, a severance payment
equal to his 12 months base salary, all of Mr. Chadwick’s stock options, stock
appreciation rights and restricted stock shall immediately vest and be payable
in shares of our common stock and all of his performance share units that
would
vest in the course of any fiscal year shall vest on a pro rata basis.
The
foregoing summary of the Chadwick Agreement does not purport to be complete
and
is qualified in its entirety by reference to the Chadwick Agreement,
a
copy of which is attached hereto as Exhibit 10.3.
Item
9.01 Financial Statements and Exhibits.
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Exhibit
No.
|
Description
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| |
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10.1
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Employment
Agreement dated as of December 1, 2008 between the Company and
Ian
Warwick.
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|
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10.2
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Employment
Agreement dated as of December 1, 2008 between the Company and
Charles F.
Trapp.
|
| |
|
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10.3
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Employment
Agreement dated as of December 1, 2008 between the Company and
Simon
Chadwick.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this Current Report on Form 8-K to be signed on
its
behalf by the undersigned thereunto duly authorized.
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Dated:
December 5, 2008
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AFTERSOFT
GROUP, INC.
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/s/
Ian Warwick
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By:
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Name:
Ian Warwick
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Title:
Chief Executive Officer
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EXHIBIT
LIST
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Exhibit
No.
|
Description
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| |
|
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10.1
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Employment
Agreement dated as of December 1, 2008 between the Company and
Ian
Warwick.
|
| |
|
|
10.2
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Employment
Agreement dated as of December 1, 2008 between the Company and
Charles F.
Trapp.
|
| |
|
|
10.3
|
Employment
Agreement dated as of December 1, 2008 between the Company and
Simon
Chadwick.
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