Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 30, 2023, the Compensation Committee of Qumu Corporation (the
"Company") made determinations relating to the achievement of performance goals
under the annual company bonus plan for 2022 (the "2022 Company Bonus Plan") and
in respect of outstanding performance stock units ("PSUs") with a performance
period ending December 31, 2022. For the fourth quarter 2022 and full year 2022,
the financial results were prepared by the Company's management for the purposes
of compensation determinations by the Compensation Committee and have not been
audited or reviewed by the Company's independent registered public accounting
firm.
2022 Company Bonus Plan
As previously reported, on March 30, 2022, the Compensation Committee adopted
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
Rose Bentley, Chief Executive Officer, and Thomas A. Krueger, Chief Financial
Officer.
Under the 2022 Company Bonus Plan, the Compensation Committee determined target
amounts of two performance goals for 2022, weighted equally: (1)
software-as-a-service annual recurring revenue (referred to as 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 achieved at the 100% level. The Compensation
Committee retained 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.
The following table shows the 2022 quarterly and 2022 full year operating cash
flow targets established by the Compensation Committee and the Company's actual
performance for these periods (in thousands):
Operating Cash Flow Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY2022
Target $ (4,523 ) $ (3,581 ) $ (79 ) $ (431 ) $ (8,614 )
Actual $ (4,863 ) $ (3,678 ) $ (1,427 ) $ (1,363 ) $ (11,331 )
For 2022 SaaS ARR, the target amount under the 2022 Company Bonus Plan was $19.4
million representing growth of 51% over 2021 and the Company's actual 2022 SaaS
ARR was $14.3 million, or a 12% increase from 2021. Accordingly, on January 30,
2023, the Compensation Committee determined that no bonus was earned by any
participant in the 2022 Company Bonus Plan.
PSUs With 2022 Performance Period
As previously reported, on February 18, 2021, the Compensation Committee
approved the award of PSUs to the Company's executive officers and members of
management, including Ms. Bentley. Because Mr. Kruger was not a Company employee
at the time of grant, he did not receive a PSU award in 2021. Instead, 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 in 2021.
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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. On January 30, 2023, the Compensation Committee
determined that the Company met two of the five performance goals for full year
2022, resulting in a percentage achievement of 66 2/3% for these PSUs. The
following table shows the 2022 targets established by the Compensation Committee
for these PSUs and the Company's actual performance for 2022:
Performance Goal 2022 Target 2022 Actual
Net New Customers (New Logos) 40 21
Partner Generated Revenue 31% 31%
(as a % of Total Revenue)
Total ARR $25.2 million $19.4 million
Total Gross Retention Rate (GRR) 87% 90%
Bookings $23.9 million $15.5 million
Accordingly, with a percentage achievement of 66 2/3% for the 2022 performance
period, the Qumu compensation committee determined on January 30, 2023 that Ms.
Bentley will earn 5,936 of the 8,904 PSUs granted to her in 2021 and Mr. Krueger
will earn 10,500 of the 15,750 PSUs.
Additionally, on March 30, 2022, the Compensation Committee approved the award
of 60,000 PSUs to each of Ms. Bentley and Mr. Krueger, with 30,000 of these PSUs
vesting based upon achievement of 2022 performance goals. On March 30, 2022, the
Compensation Committee set the target amounts of two performance goals for 2022,
which were weighted equally: (1) net new logos or net new logo bookings and (2)
partner revenue as a percent of total revenue. On January 30, 2023, the
Compensation Committee determined that the Company met one of the two
performance goals for full year 2022, resulting in a percentage achievement of
50% of these PSUs. The following table shows the 2022 targets established by the
Compensation Committee for these PSUs and the Company's actual performance for
2022:
Performance Goal 2022 Target 2022 Actual
Net New Customers (New Logos) or New Logo Bookings 40 or $9.2 million 23 or $1.6 million
Partner Generated Revenue
31% 31%
(as a % of Total Revenue)
Accordingly, with a percentage achievement of 50% for the 2022 performance
period, the Qumu compensation committee determined on January 30, 2023 that Ms.
Bentley and Mr. Krueger will earn 15,000 of the 30,000 PSUs with a 2022
performance period.
As provided in the Agreement and Plan of Merger, dated as of December 17, 2022
(as such agreement may be amended from time to time, the "Merger Agreement") by
and among the Company, Cosmos Merger Sub Inc., and Enghouse Interactive, Inc.,
any PSUs that are not earned for 2022 and any PSUs with a performance period
ending December 31, 2023 that will be forfeited without any consideration at the
effective time of the merger as provided in the Merger Agreement.
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