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Related Party Transaction
9 Months Ended
Sep. 30, 2015
Restructuring and Related Activities [Abstract]  
Related Party Transactions
Related Party Transactions
Clinton Relational Opportunity Master Fund, L.P. (the "Clinton Group") nominated 3 persons for election to Imation’s Board of Directors (the “Board”) at the Company's Annual Meeting of Shareholders on May 20, 2015. Shareholders elected Clinton Group’s three nominees, Joseph A. De Perio, Robert B. Fernander and Barry L. Kasoff, replacing three incumbent directors who were standing for reelection.
Mr. De Perio currently serves as Senior Portfolio Manager of the Clinton Group. During the third quarter of 2015, the Board authorized reimbursement to the Clinton Group for its documented expenses related to proxy contest fees for 2015 for $0.6 million. The fees are recorded in restructuring and other charges for the three months ended September 30, 2015 and are accrued in other current liabilities on our Condensed Consolidated Balance Sheet as of September 30, 2015.
On August 17, 2015, Imation entered into a consulting agreement with Mr. Fernander to perform certain services including assisting the Company with a review and assessment of the Nexsan and Mobile Security businesses of the Company, for which he received consulting fees of $25,000 per week, subject to termination by the Company on a one week's notice. For the three months ended September 30, 2015, the Company paid $0.2 million to Mr. Fernander for these services, which is recorded in restructuring and other charges. 
On September 27, 2015, the Board of Directors appointed Mr. Fernander to serve as Interim Group President, Tiered Storage and Security Solutions, effective September 28, 2015, and terminated the consulting agreement with Mr. Fernander. For his service as Interim Group President, Tiered Storage and Security Solutions, Mr. Fernander received $35,000 per week in salary. Effective October 14, 2015, the Board appointed Mr. Fernander to serve as the Interim Chief Executive Officer of the Company. Pursuant to an employment agreement, Mr. Fernander will serve an initial 1-year term, receive base compensation of $600,000 and a performance-based restricted stock award of 574,000 shares and receive up to one year's base salary if his employment agreement with the Company is terminated other than for Cause (as define in the employment agreement), or by reason of his death or disability.
On August 17, 2015, the Board appointed Mr. Kasoff to serve as Interim President of the Company effective August 19, 2015. Mr. Kasoff received compensation of $35,000 per week for his services as Interim President. Effective October 14, 2015, in connection with the appointment of Mr. Fernander to the position of Interim Chief Executive Officer, the Board appointed Mr. Kasoff as Chief Restructuring Officer at the same level of compensation he received as Interim President.
Mr. Kasoff also serves as president of Realization Services, Inc. (RSI), a management consulting firm specializing in assisting companies and capital stakeholders in troubled business environments. Pursuant to a consulting agreement between the Company and RSI dated August 17, 2015 and subsequent amendment, RSI is performing consulting services for the Company for the period from August 8, 2015 up to February 29, 2016, unless terminated earlier by the Company, including assisting the Company with a review and assessment of the Company’s business and the formulation of a business plan to enhance shareholder value going forward. Prior to being appointed as Interim President of the Company, RSI received consulting fees of $85,000 per week from the Company under the terms of the Agreement plus up to an additional $225,000 for enhanced services for the period from August 26, 2015 through September 18, 2015. Effective September 19, 2015, RSI will receive consulting fees up to $125,000 per week for the remaining term of the agreement. For the three months ended September 30, 2015, the Company paid $0.8 million to RSI which is recorded in restructuring and other charges.
On August 31, 2015, Imation entered into a consulting agreement with Geoff Barrall, a member of the Board pursuant to which Mr. Barrall will perform certain services including formulating a business plan and budget for the Company which is subject to termination by the Company on a one week's notice. For the three months ended September 30, 2015, the Company paid $0.2 million to Mr. Barrall which is recorded in restructuring and other charges.    
On October 14, 2015, Imation acquired substantially all of the equity of Connected Data, Inc. (CD) for approximately $7.5 million in cash (subject to adjustment), shares of Imation common stock and repayment of debt. Mr. Barrall is the founder and Chief Executive Officer of CD. In consideration for his CD common shares and options to purchase CD common shares, Mr. Barrall received approximately $184,000 at the time of the acquisition and he will be eligible to receive up to an additional $260,000 to the extent certain CD revenue targets are achieved for the 3 consecutive six-month periods commencing January 1, 2016.  The accounting for the CD acquisition will be recorded in the fourth quarter of 2015. See Note 17 - Subsequent Events for further information on the CD acquisition. 
In connection with the CD acquisition, Imation appointed Mr. Barrall as Imation’s Chief Technology Officer on October 14, 2015 and entered into a related employment agreement on October 27, 2015. The employment agreement provides that Mr. Barrall will receive (i) a base salary of $600,000 per year, (ii) if he remains employed with the Company through December 31, 2015, a retention bonus of $116,732 in cash (which will be forfeited on a pro rata basis if he does not remain employed with the Company through December 31, 2016), and restricted stock units valued at $116,732 (which will vest pro rata on a monthly basis through December 31, 2016), (iii) subject to approval of the Board or the Compensation Committee of the Board, an option to purchase 300,000 shares of Imation common stock, which will vest in equal monthly installments over 36 months of continued employment with the Company and (iv) if his employment with the Company is terminated other than for Cause or by Mr. Barrall for Good Reason (as such terms are defined in the employment agreement), one year’s base salary and, if such termination occurs either thirty days before or one year following a change of control (as defined in the employment agreement) the retention bonus described in clause (ii) above and in the stock options described in clause (iii) above will immediately vest in full. The consulting agreement with Mr. Barrall was terminated on October 12, 2015.
TDK owned approximately 18 percent of the Company’s common stock as of September 30, 2015. On September 28, 2015, the Company entered into an agreement with TDK providing for the transfer of 6,675,764 shares of Imation common stock, subject to adjustment, from TDK to Imation, the termination of the Company's license agreement with TDK and the termination of certain rights of TDK under its Investor Rights Agreement with the Company. The TDK shares will be transferred back to the Company during the fourth quarter of 2015 and the corresponding accounting entries will be recorded at that time. See Note 17 - Subsequent Events for further information on the TDK agreement.