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)
January 19, 2016
Rocket Fuel Inc.
(Exact name of registrant as specified in its charter)
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Delaware | | 001-36071 | | 30-0472319 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer
Identification No.) |
1900 Seaport Blvd.
Redwood City, CA 94063
(Address of principal executive offices, including zip code)
(650) 595-1300
(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 (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.
(b), (d)
On January 21, 2016, Rocket Fuel Inc. (the “Company”) announced changes in the composition of its Board of Directors (the “Board”). Effective January 19, 2016, John Gardner tendered, and the Board accepted, his resignation as a member of the Board and of the Audit Committee of the Board. Also effective January 19, 2016, the Board appointed John J. Lewis to the Board to fill the Class I vacancy created by Mr. Gardner's resignation. As a Class I director, Mr. Lewis' current term will expire at the annual meeting of stockholders to be held in 2017. Mr. Lewis was also appointed to the Audit Committee of the Board effective January 19, 2016.
The Board has determined that Mr. Lewis is an “independent director” as defined under the applicable rules and regulations of the Securities and Exchange Commission and the listing requirements and rules of The NASDAQ Stock Market.
In connection with his appointment to and service on the Board, Mr. Lewis is entitled to receive, or has received, the following compensation pursuant to the Company's Outside Director Compensation Policy (the "Policy"):
Cash compensation
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• | He is entitled to receive a $25,000 annual cash retainer for Board member services, payable quarterly in arrears (to be prorated for his first quarter of service) |
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• | He is entitled to receive a $7,500 annual cash retainer for service on the Audit Committee, payable quarterly in arrears (to be prorated for his first quarter of service) |
Equity compensation
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• | He was granted an initial option to purchase 18,778 shares of Common Stock of the Company at an exercise price of $3.12 per share, which was the fair market value of a share of Common Stock on the grant date (January 19, 2016). The initial option had a Black-Scholes value of approximately $31,250 on the grant date. In accordance with the Policy, this was a prorated portion of the full initial option Black-Scholes value of $75,000 under the Policy, based on the number of months remaining between Mr. Lewis' appointment to the Board until the Company's anticipated 2016 annual meeting of stockholders in June 2016. The option will vest in three approximately equal annual installments beginning on the one-year anniversary of Mr. Lewis' appointment to the Board, provided he continues to serve on the Board through each vesting date. The option was granted under, and is subject to the terms and conditions of, the Company’s 2013 Equity Incentive Plan. |
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• | He is entitled to receive annual stock option grants, each with a Black-Scholes value of $75,000, to be granted automatically on the date of each subsequent annual meeting of stockholders of the Company, provided that Mr. Lewis will remain on the Board following the applicable annual meeting. Each annual option, which will have an exercise price per share equal to the fair market value of a share of Common Stock on the grant date, will vest in full on the earlier to occur of (i) the first anniversary of the grant date, and (ii) the day prior to the annual meeting immediately following the annual meeting at which the applicable option was granted, in each case provided that Mr. Lewis has remained in continuous service as a Board member through the applicable vesting date. |
The foregoing description of the Policy is qualified in its entirety by reference to the full Outside Director Compensation Policy, which is filed as Exhibit 10.1 to this Form 8-K.
In connection with his appointment to, and service on, the Board, Mr. Lewis entered into the Company's standard form of Indemnity Agreement that the Company enters into with each of its directors and executive officers. A copy of the form of Indemnity Agreement was included as Exhibit 10.1 to the Company's S-1 registration statement filed on August 6, 2013.
Other than as disclosed above, Mr. Lewis has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, nor are any transactions currently proposed. There is no arrangement or understanding between Mr. Lewis and any other person pursuant to which Mr. Lewis was selected as a director. There are no family relationships between Mr. Lewis and any of the Company’s directors or executive officers.
Item 8.01 Other Events
On January 21, 2016, the Company issued a press release announcing the Board composition changes described in this Form 8-K. A copy of the press release is furnished herewith as Exhibit 99.1.
The information set forth under this Item 8.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
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10.1 | Rocket Fuel Inc. Outside Director Compensation Policy |
99.1 | Press release announcing Board changes dated January 21, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | ROCKET FUEL INC. |
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| | By: /s/ JOANN C. COVINGTON |
| | JoAnn C. Covington Senior Vice President and General Counsel |
Date: January 21, 2016
EXHIBIT INDEX
Exhibit No. Description
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10.1 | Rocket Fuel Inc. Outside Director Compensation Policy |
99.1 | Press release announcing Board changes dated January 21, 2016 |
ROCKET FUEL INC.
OUTSIDE DIRECTOR COMPENSATION POLICY
(Effective December 22, 2015)
Rocket Fuel Inc. (the “Company”) believes that the granting of equity and cash compensation to members of its Board of Directors (the “Board,” and members of the Board, “Directors”) represents a powerful tool to attract, retain and reward Directors who are not employees of the Company (“Outside Directors”). This Outside Director Compensation Policy (the “Policy”), which is effective as of the date indicated above (the “Effective Date”), is intended to formalize the Company’s policy regarding cash compensation and grants of equity to its Outside Directors. Unless otherwise defined herein, capitalized terms used in this Policy will have the meaning given such term in the Company’s 2013 Equity Incentive Plan (the “Plan”). Outside Directors will be solely responsible for any tax obligations they incur as a result of the equity and cash payments received under this Policy.
ANNUAL RETAINER
Each Outside Director will receive an annual cash retainer of $25,000.
There are no per meeting attendance fees for attending Board meetings or meetings of any committee of the Board.
In addition, Outside Directors will receive cash compensation for any service on Committees and for any Lead Independent Director service, as set forth in this Policy.
LEAD INDEPENDENT DIRECTOR SERVICE
Any Outside Director who serves as Lead Independent Director of the Board will receive an annual cash retainer of $15,000.
AUDIT COMMITTEE
Annual cash compensation for the Audit Committee is as follows:
Chairman of Committee: $ 15,000 Annual Cash Retainer
Committee Members: $ 7,500 Annual Cash Retainer
COMPENSATION COMMITTEE
Annual cash compensation for the Compensation Committee is as follows:
Chairman of Committee: $ 10,000 Annual Cash Retainer
Committee Members: $ 5,000 Annual Cash Retainer
NOMINATING AND GOVERNANCE COMMITTEE
Annual cash compensation for the Nominating and Governance Committee is as follows:
Chairman of Committee: $ 6,000 Annual Cash Retainer
Committee Members: $ 3,000 Annual Cash Retainer
PAYMENT
Each annual retainer will be paid ratably on a fiscal quarterly basis to each Outside Director who has served in the relevant capacity for the immediately preceding fiscal quarter no later than thirty (30) days following the end of such preceding fiscal quarter. For purposes of clarification, an Outside Director who has served as an Outside Director, as Lead Independent Director or as a member of a committee (or chairman thereof), as applicable, during only a portion of the relevant Company fiscal quarter will receive a pro-rated payment of the quarterly payment of the applicable annual retainer(s), calculated based on the number of days such Outside Director has served in the relevant capacities.
REVISIONS
The Board in its discretion may change and otherwise revise the terms of the cash compensation granted under this Policy, including, without limitation, the amount of cash and timing of any unearned compensation to be paid on or after the date the Board determines to make any such change or revision.
EQUITY COMPENSATION
Outside Directors will be entitled to receive all types of awards under the Plan, including discretionary awards not covered under this Policy. Any award granted pursuant to this Policy will be subject to the other terms and conditions of the Plan and form of award agreement approved for use under the Plan. All grants of awards to Outside Directors pursuant to this Policy will, except as otherwise provided herein, be made in accordance with the following provisions:
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(a) | Initial Option. Each person who first becomes an Outside Director following the Effective Date will be granted a Nonstatutory Stock Option (an “Initial Option”) with a Value of $75,000 (subject to pro-ration as described in the following paragraph) on the date of the first Board or Compensation Committee meeting occurring on or after the date on which such person first becomes an Outside Director following the Effective Date, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that a Director who is an Employee (an “Inside Director”) who ceases to be an Inside Director, but who remains a Director, will not receive an Initial Option. The number of Shares covered by each such Initial Option shall be rounded down to the nearest whole Share. |
The size of the Initial Option shall be pro-rated monthly, based on the number of months remaining between the Outside Director’s appointment or election to the Board and the anticipated time of the Company’s next annual meeting of stockholders. For example, if an Outside Director is appointed in January and the next annual meeting is anticipated to be in June of the same year, the Initial Option for that Outside Director would have a Value equal to five-twelfths of $75,000.
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(b) | Annual Option. Each Outside Director will be automatically granted a Nonstatutory Stock Option (an “Annual Option”) with a Value of $75,000 on the date of each annual meeting of stockholders (each, an “Annual Meeting”) beginning with the first Annual Meeting following the Effective Date; provided that any Outside Director who is not continuing as a Director following the applicable Annual Meeting will not receive an Annual Option with respect to such Annual Meeting. The number of Shares covered by each such Annual Option shall be rounded down to the nearest whole Share. |
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(c) | Value. For purposes of this Policy, “Value” means with respect to any Initial Option or Annual Option, the value calculated in accordance with the Black-Scholes option valuation methodology, or such other methodology the Board or Compensation Committee may determine prior to the grant of the applicable Initial Option or Annual Option becoming effective, on the grant date of such Annual Option or Initial Option, as applicable. |
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(d) | No Discretion. No person will have any discretion to select which Outside Directors will be granted an Initial Option or Annual Option under this Policy or to determine the number of Shares to be covered by such Initial Option or Annual Option, as applicable (except as provided in subsection (f) below and pursuant to the Amendment and Termination provisions of this Policy). |
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(e) | Terms. The terms of the Options granted pursuant to this Policy will be as follows: |
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• | The term of each Initial Option and Annual Option will be ten (10) years subject to earlier termination as provided in the Plan. |
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• | Each Initial Option and Annual Option will have an exercise price per Share equal to one hundred percent (100%) of the Fair Market Value per Share on the grant date. |
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• | Subject to Section 14 of the Plan, each Initial Option will be scheduled to vest and become exercisable as to one-third (1/3rd) of the Shares subject to such Option on each annual anniversary of the commencement of the Outside Director’s service as an Outside Director, if on such dates the Outside Director has remained in continuous service as a Director. |
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• | Subject to Section 14 of the Plan, each Annual Option will be scheduled to vest and become exercisable as to one-hundred percent (100%) of the Shares subject to such Option on the earlier to occur of (i) the first anniversary of the date of grant of such Annual Option, and (ii) the day prior to the Annual Meeting immediately following the Annual Meeting at which the applicable Annual Option was granted, in each case provided that the Outside Director has remained in continuous service as a Director through such date. |
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(f) | Revisions. The Board in its discretion may change and otherwise revise the terms of Initial Options and/or Annual Options granted under this Policy, including, without limitation, the number of Shares subject thereto, to provide for Initial awards and/or Annual wards of the same or different type (e.g., options, restricted stock units, or other types of awards) granted on or after the date the Board determines to make any such change or revision. |
SECTION 409A
In no event will cash compensation under this Policy be paid after the later of (i) the fifteenth (15th) day of the third (3rd) month following the end of the Company’s fiscal year in which the compensation is earned, or (ii) the the fifteenth (15th) day of the third (3rd) month following the end of the calendar year in which the compensation is earned, in compliance with the “short-term deferral” exception under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and guidance thereunder, as such may be amended from time to time (together, “Section 409A”). It is the intent of this Policy that this Policy and all payments hereunder be exempt from or otherwise comply with the requirements of Section 409A so that none of the compensation to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be so exempt or comply.
AMENDMENT AND TERMINATION
The Board may at any time amend, alter, suspend or terminate the Policy.
Nielsen Global President John Lewis Joins Rocket Fuel Board of Directors
Lewis Chosen for Experience Creating Value for Marketers Through Consumer Insights
REDWOOD CITY, Calif., Jan. 21, 2016 - Rocket Fuel (NASDAQ: FUEL), a leading Programmatic Marketing Platform provider, today announced that John Lewis, global president of Nielsen, has joined its board of directors, effective January 19, 2016.
“As Nielsen’s leader, John has extremely valuable experience with strengthening brands through a deep understanding of consumers. I’m thrilled to have this incredibly relevant expertise on our Board as we fulfill Rocket Fuel’s mission to score every moment of influence for our customers,” said Randy Wootton, CEO of Rocket Fuel. “John’s experience is especially valuable to Rocket Fuel as we continue extending our Moment Scoring™ technology to TV so that marketers can understand and predict the value of each moment to a consumer and create a meaningful experience with their brand.”
As global president at Nielsen, Lewis has been responsible for running the Nielsen Buy business and overseeing all global regions. In prior roles, Lewis was responsible for Nielsen’s Watch and Buy growth strategy in Latin America, as well as managing the business performance and strategic direction of Nielsen Buy in North America. In the North America role, he transformed the company’s go-to-market approach, contributing to greater growth and client success.
“I am honored and excited to join the Rocket Fuel Board,” said Lewis. “This company is one of the leading global enterprises with a unique ability to ‘score the moment’ by using big data in real-time, predictive ways to drive better connections between brands and consumers.”
In addition to his Nielsen tenure, Lewis was president and CEO of Knowledge Networks, a venture-backed marketing information company, and he was president and CEO of SMS Technology, an innovative venture-backed provider of packaging to the consumer packaged goods industry. Lewis holds a masters of business administration degree from Northwestern University's Kellogg School of Management and an undergraduate degree in political science from Princeton University.
Lewis succeeds John Gardner, managing partner of Nokia Growth Partners, who departed the Rocket Fuel board, effective January 19, 2016, having served on the board since July 2011.
“We thank John Gardner for his many contributions in helping us build Rocket Fuel,” said Monte Zweben, executive chairman of Rocket Fuel’s board. “We appreciate the early investment of Nokia Growth Partners and John’s keen insight that our ability to continuously learn would yield superior campaign performance and ultimately revolutionize marketing. We wish him continued success.”
About Rocket Fuel
A leading Programmatic Marketing Platform provider, Rocket Fuel (NASDAQ: FUEL) offers brands, agencies, and platform partners managed services, as well as a SaaS-based Data Management Platform (DMP) and Demand Side Platform (DSP), to optimize performance, awareness, and lift across marketing objectives, channels and devices. By applying artificial intelligence at big data scale, Rocket Fuel’s Moment Scoring™ technology performs a real-time calculation of each ad opportunity based on a marketer’s goal to determine the likelihood a
consumer will engage in a desired action. Moment Scoring goes beyond 1:1 marketing by learning to predict what marketing actions to take with a campaign at a precise moment in time, which results in a much more efficient use of marketing dollars. Rocket Fuel serves 96 of the Ad Age 100, three of the top five agency holding company trading desks, and partners with some of the world’s leading CRM platforms, marketing platforms and systems integrators. Headquartered in Redwood City, California, Rocket Fuel has more than 20 offices worldwide.
Media Contact:
Kristin Holloway
pr @ rocketfuel.com
650-481-6178
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