Unassociated Document
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): April 4, 2007
Insignia
Solutions plc
(Exact
name of Registrant as specified in its charter)
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England
and Wales
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0-27012
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Not
Applicable
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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51
East Campbell Avenue, Suite 130
Campbell,
California 95008
United
States of America
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(Address
of principal executive offices) (Zip code)
(408)
874-2600
(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):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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ITEM
1.01.
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT.
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Amendment
to Asset Purchase Agreement.
On
April 4, 2007, Insignia Solutions plc (the “Company”) and its subsidiaries
Insignia Solutions Inc., Insignia Solutions AB and Insignia Asia Corporation
(collectively “Insignia”) , Smith Micro Software, Inc. (“SMSI”), and IS
Acquisition Sub, Inc. (“Acquisition Sub”) entered into an Amendment (the
“Amendment”) to the Asset Purchase Agreement dated February 11, 2007 by and
among Insignia, SMSI and Acquisition Sub (the “Asset Purchase Agreement”).
Pursuant to the Amendment, Insignia, SMSI and Acquisition Sub agreed that,
among other things, the aggregate consideration to be paid by the Company under
the Asset Purchase Agreement would be $18.575 million (the “Purchase
Price”), consisting of:
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$12.5 million
in cash;
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forgiveness
of all indebtedness payable by Insignia under the Promissory Note
initially delivered to the Company on December 22, 2006 (the
principal amount of the note was $2.0 million at the closing of the
Acquisition (as defined below)), and
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a
cash sum equal to the product of $2.575 million less
the dollar amount of the Employee Liabilities (as defined in the
Amendment) assumed by the Company at closing; provided that the Company
shall be entitled to withhold $500,000 of this amount until Insignia
delivers to the Company Insignia’s audited financial statements (including
the opinion of Insignia’s independent registered public accounting firm)
as of and for the year ended December 31,
2006.
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In
addition, the Company will hold back $1.5 million in cash (the “Holdback
Amount”) from the consideration for twelve months as security for satisfaction
of Insignia’s indemnification obligations under the Asset Purchase Agreement, as
amended.
The
foregoing description of the Amendment does not purport to be complete and
is
qualified in its entirety by the Amendment attached as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated herein by reference.
ITEM 2.01
COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On
April 4, 2007, Insignia, SMSI and Acquisition Sub and Insignia consummated
the acquisition by SMSI and Acquisition Sub of substantially all of the assets
of Insignia (the “Acquisition”), including Insignia’s Device Management Suite,
pursuant to the terms of the Asset Purchase Agreement, as amended.
Under
the
terms of the Asset Purchase Agreement, as amended, the aggregate consideration
for the Acquisition was as set forth above under “Item 1.01 — Entry into
Material Definitive Agreement.”
The
foregoing description of the Asset Purchase Agreement does not purport to be
complete and is qualified in its entirety by the Asset Purchase Agreement
attached as Exhibit 10.1 to the Current Report on Form 8-K filed by the
Company on February 15, 2007 and incorporated herein by reference.
ITEM
5.02. DEPARTURE
OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
(b)
Departure of Officer.
In
connection with the consummation of the Acquisition, on April 4, 2007, Mark
McMillan resigned as chief executive officer of the Company, as he became an
employee of SMSI as contemplated by the Asset Purchase Agreement. Mr. McMillan
continues to serve on the board of directors of the Company.
(e)
Compensatory Arrangements
Amended
Restated Bonus and Change of Control Letter Agreement.
On
April
2, 2007, the Company entered into an Amended Restated Letter Agreement (the
“Restated Letter Agreement”) with Mark McMillan, the Company’s chief executive
officer, addressing the application of bonus and change in control terms
previously agreed in a letter agreement executed on December 12, 2006 to the
transactions provided for in the Asset Purchase Agreement (and superseding
the
December 12, 2006 letter in its entirety). Under the Restated Letter Agreement,
Mark McMillan will be entitled to bonuses as follows:
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within
14 business days following the closing of the asset sale pursuant
to the
Asset Purchase Agreement, a lump-sum cash payment equal to $180,000.
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Following
determination or estimation of the amount of any liabilities retained
by
Insignia in the asset sale, but in no event greater than eight weeks
following the closing, a second lump-sum cash payment equal to four
percent of the product of (a) the
Purchase Price less (b) the sum of (i) the Holdback Amount, (ii)
$180,000
and (iii) the dollar amount of such retained liabilities,
but in no event shall this second bonus payment exceed $27,000. Mr.
McMillan is required to repay any portion of the second bonus payment
to
the Company in the event that the Company is required to make any
indemnification or other payments to SMSI or any of its
affiliates.
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An
additional lump-sum cash payment equal to four percent of such portion
of
the Holdback Amount that is paid to the Company, to be paid following
the
payment to the Company of such portion of the Holdback
Amount.
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In
addition, the
Restated Letter Agreement provides that in
connection with the asset sale, Mr. McMillan is entitled to receive a lump-sum
change in control payment equal to $345,000 (which represents the sum of his
base salary for one year plus 100% of his target bonus for 2007), and to payment
by the Company of premiums under COBRA for his current coverage for the period
of 12 months
to the
extent that he does not participate in an SMSI health insurance plan.
Since
Mr. McMillan is no longer serving as chief executive officer of the Company,
these change in control and COBRA payments were required under the terms of
his
December 12, 2006 revised employment agreement.
Finally,
the Restated Letter Agreement provides that in the event that, following the
closing of the asset sale, a third party shall acquire all of the capital stock
of the Company, or shall merge with or into the Company and at the closing
date
with respect to such subsequent transaction, Mr. McMillan continues to be a
member of the board of directors of the Company, then he shall be entitled
to an
additional bonus equal to four percent of the amount of the aggregate increase
in value returned to the Insignia shareholders.
In
the
event that any bonus or change of control payments under the the Restated Letter
Agreement would subject Mr. McMillan to excise tax under Section 280G of the
U.S. Internal Revenue Code, then the amount of such payment may, at his
election, be reduced to a lesser amount that can be paid that would result
on an
after-tax basis in the greatest net amount of payments. Mr. McMillan has so
elected to forego a portion of his bonus payment pursuant to this
provision.
Bonus
for 2005, 2006 and the first quarter of 2007.
On
April
4, 2007, the Company paid Mr. McMillan the amount of his target bonuses for
2005
and 2006 and for the first quarter of 2007, which bonuses had not previously
been paid to Mr. McMillan for such periods, and which had been accrued by the
Company. The total amount of such bonuses was $151,748.
In
addition, on April 4, 2007, the Company paid George Monk (the Company’s chief
financial officer) a bonus for 2006 and the first quarter of 2007 of $72,000,
which was the amount of his target bonus for the period of his
employment.
(d)
Exhibits.
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10.1
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Amendment
to Asset Purchase Agreement, dated April 4, 2007, by and among Smith
Micro Software, Inc., IS Acquisition Sub, Inc., Insignia Solutions
plc,
Insignia Solutions Inc., Insignia Solutions AB and Insignia Asia
Corporation.
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10.2
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Amended
Restated Letter Agreement between Insignia Solutions Inc. and Mark
McMillan dated April 2, 2007
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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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Insignia
Solutions plc
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Date:
April 9, 2007 |
By: |
/s/
George
Monk
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George Monk |
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Chief
Financial Officer |
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Exhibit
Number
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Description
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10.1
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Amendment
to Asset Purchase Agreement, dated April 4, 2007, by and among Smith
Micro Software, Inc., IS Acquisition Sub, Inc., Insignia Solutions
plc,
Insignia Solutions Inc., Insignia Solutions AB and Insignia Asia
Corporation.
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10.2
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Amended
Restated Letter Agreement between Insignia Solutions Inc. and Mark
McMillan dated April 2, 2007
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