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): September 27, 2013
Saba Software, Inc.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-34372 | 94-3267638 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 2400 Bridge Parkway, Redwood Shores, California |
94065-1166 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (650) 581-2500
(Former Name or Former Address, if Changed Since Last Report.)
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 1.01. Entry into a Material Definitive Agreement.
Saba Software, Inc. (the “Company”) entered into a letter agreement with Wells Fargo Bank, National Association (“Wells Fargo”) and certain wholly-owned subsidiaries of the Company dated as of September 27, 2013 pursuant to which Wells Fargo extended to October 31, 2013 the time for the Company to deliver to Wells Fargo under the terms of the Credit Agreement with Wells Fargo dated as of June 27, 2011, as amended, the following: (i) the Company’s Form 10-K for its fiscal year ended May 31, 2012 and related financial statements, (ii) the Company’s consolidated financial statements for fiscal 2012, and (iii) a Compliance Certificate executed by a senior financial officer of the Company for fiscal 2012.
The Company has previously reported its delay in filing its periodic reports with the Securities and Exchange Commission and the Company’s pending restatement of prior financial results. A copy of the letter agreement with Wells Fargo is attached hereto as Exhibit 10.1 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.
On September 27, 2013, the Board of Directors of the Company, upon the recommendation of the Compensation Committee of the Board, approved of the allocations, methodologies, and metrics for the payment of bonuses for fiscal 2014, if any, to the Company’s named executive officers under the Company’s Executive Bonus Plan.
The Company’s named executive officers are eligible to receive bonuses following the end of the fiscal year based upon the attainment of corporate objectives and personal goals. Corporate objectives for fiscal 2014 consist of cloud revenue, cloud gross margin and EBITDA targets established by the Board. The target bonus for fiscal 2014 is based on a weighting ranging from 70% to 85% for corporate objectives and from 15% to 30% for personal goals. The actual amount of any bonus paid to each named executive officer will be based on the level of achievement by the Company of the corporate objectives as well as by the named executives of their respective personal goals.
At 100% attainment of the corporate objectives and personal goals, the amount of the cash bonuses payable to the named executive officers at the target level range from 70% to 100% of their respective base salaries. Each named executive officer is eligible to receive a bonus payment in excess of the target bonus amount if the corporate objectives are exceeded, up to a maximum of 150% of their respective target bonus amount attributed to the corporate objectives.
The Compensation Committee determines the actual bonus payment amounts for all of the named executive officers under the Company’s Executive Bonus Plan and makes a recommendation of the final payment levels to the Board for approval.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
Description | |
| 10.1 | Letter Agreement, between the Company, Hal Acquisition Sub, Inc., HumanConcepts, LLC, and Wells Fargo Bank, National Association dated as of September 27, 2013. | |
SIGNATURES
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.
| Saba Software, Inc. (Registrant) | ||||||
| Date: October 3, 2013 | /s/ Peter E. Williams III | |||||
| (Signature) | ||||||
| Peter E. Williams III | ||||||
| Executive Vice President and Secretary | ||||||
Exhibit 10.1
WELLS FARGO BANK, NATIONAL ASSOCIATION
c/o Wells Fargo Capital Finance, LLC
2450 Colorado Avenue, Suite 3000 West
Santa Monica, CA 90404
Dated as of September 27, 2013
SABA SOFTWARE, INC.
2400 Bridge Parkway
Redwood Shores, CA 94065
Attn: Mark Robinson
Fax No.: (650) 581-2545
| Re: | Extension under Credit Agreement |
Ladies and Gentlemen:
Reference is made to that certain AMENDED AND RESTATED CREDIT AGREEMENT (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) dated as of June 27, 2011 by and among WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”), each of the Domestic Subsidiaries (as defined in therein) of Borrower party thereto as Subsidiary Guarantors, and SABA SOFTWARE, INC., a Delaware corporation (“Borrower”). All initially capitalized terms used herein without definition shall have the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 5.03(i) of the Credit Agreement, in the case of Borrower’s fiscal year ending May 31, 2012, Borrower is required to deliver to Lender on or before September 30, 2013 (the “2012 Annual Deadline”), (a) a copy of its Annual Report on Form 10-K for Borrower’s fiscal year ended May 31, 2012 filed by Borrower with the United States Securities and Exchange Commission (with the requisite financial statements contained therein) as more fully set forth in Section 5.03(i)(a) of the Credit Agreement, (b) consolidating financial statements of Borrower, prepared by Borrower (to include balance sheets, profit and loss statements, statements of cash flows, and reconciliations of net worth) for Borrower’s fiscal year ended May 31, 2012, and (c) a duly completed Compliance Certificate executed by a senior financial officer of Borrower for Borrower’s fiscal year ended May 31, 2012 (collectively, the “Audited Financial Statements Requirements”).
Borrower has requested that Lender extend the 2012 Annual Deadline from September 30, 2013 to October 31, 2013. The Lender is willing to grant the extension requested by Borrower. Accordingly, the Lender hereby extends the 2012 Annual Deadline to October 31, 2013 (the “Extended Annual Financial Statements Deadline”). Failure of Borrower to deliver or cause to be delivered to Lender the Audited Financial Statements Requirements by the Extended Annual Financial Statements Deadline shall constitute an immediate Event of Default, unless otherwise waived in writing in accordance with the Credit Agreement prior to such time.
This letter shall not, except as expressly provided herein, by implication or otherwise, limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of Lender under the Credit Agreement or the other Loan Documents, and shall not, except as expressly provided herein, alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or the other Loan Documents. Nothing herein shall be deemed to entitle Borrower or any Guarantor to a consent to, or a waiver, amendment, modification or other change
of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or the other Loan Documents in similar or different circumstances. This letter shall be subject to the provisions regarding choice of law and venue and jury trial waiver applicable to the Credit Agreement.
Each of the undersigned Guarantors consents to the extensions contained herein. Although the undersigned Guarantors have been informed of the matters set forth herein and have consented to same, each Guarantor understands that the Lender has no obligation to inform it of such matters in the future or to seek its acknowledgement or agreement to future consents, amendments, or waivers, and nothing herein shall create such a duty.
Each of Borrower and each Guarantor hereby reaffirms its obligations under each Loan Document to which it is a party. All of such obligations owing by Borrower and such Guarantor are unconditionally owing by Borrower and such Guarantor to Lender without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever. Each of Borrower and each Guarantor hereby further ratifies and reaffirms the validity and enforceability of all of the Loan Documents to which it is a party, including any amendments or modifications or substitutions thereto, and ratifies and reaffirms the validity and enforceability of all of Liens and security interests heretofore granted by it pursuant to or in connection with any Loan Document to Lender, as security for its obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain in full force and effect on and after the date hereof except as expressly set forth herein.
This letter shall constitute a Loan Document.
[Signature pages to follow.]
| Very Truly Yours, | ||
| WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender | ||
| By: | /s/ Daniel Morihoro | |
| Name: | Daniel Morihiro | |
| Title: | Director | |
[SIGNATURE PAGE TO EXTENSION LETTER]
Acknowledged, agreed and accepted this 27th day of September 2013:
| SABA SOFTWARE, INC., a Delaware corporation, as Borrower | ||
| By: | /s/ Peter Williams | |
| Name: | Peter Williams | |
| Title: | Executive Vice President | |
| HAL ACQUISITION SUB INC., a Delaware corporation, as a Guarantor | ||
| By: | /s/ Peter Williams | |
| Name: | Peter Williams | |
| Title: | Executive Vice President | |
| HUMANCONCEPTS, LLC, a California limited liability company, as a Guarantor | ||
| By: | /s/ Peter Williams | |
| Name: | Peter Williams | |
| Title: | Executive Vice President | |
[SIGNATURE PAGE TO EXTENSION LETTER]