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): June 6, 2013
Rally Software Development Corp.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-35868 |
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84-1597294 |
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(State or other jurisdiction |
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(Commission |
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(IRS Employer |
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3333 Walnut Street |
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80301 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (303) 565-2800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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)
Effective June 6, 2013, Rally Software Development Corp., a Delaware corporation (the “Company”), appointed Dan Patton its Executive Vice President, Global Sales. Mr. Patton will lead the Company’s sales organization. A copy of the press release relating to Mr. Patton’s appointment is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Also effective June 6, 2013, Don F. Hazell, formerly Executive Vice President, Worldwide Sales & Field Operations and head of the Company’s sales organization, was reassigned within the Company and appointed Executive Vice President, Strategic Accounts.
(e)
On June 6, 2013, the Company and Mr. Hazell entered into a sales compensation plan for Mr. Hazell for the second quarter of the Company’s 2014 fiscal year. Under the sales compensation plan, Mr. Hazell is eligible to receive incentive payments for the second quarter of fiscal 2014 based on satisfaction of specified sales team objectives. The sales team objectives include product and service sales objectives. Product objectives include annualized subscriptions (new and renewal) and perpetual licenses. Under the sales compensation plan, for the second quarter of fiscal 2014 Mr. Hazell will be eligible to receive commissions at a base rate on products sold up to specified objectives. The base rate is determined as a percentage of an individual quarterly product variable divided by a quarterly team product objective. Above the specified objectives, Mr. Hazell is eligible to receive commissions at a higher fixed rate for specified product sales. Mr. Hazell is also eligible to receive additional commissions for qualified multi-year subscription sales. For the second quarter of fiscal 2014 Mr. Hazell is eligible to receive commissions at a fixed base rate on services sold up to specified objectives. Mr. Hazell is also eligible to receive commissions at a higher rate for services sold above the specified objectives, up to 300% of the specified objectives. Above 300% of the specified objectives, Mr. Hazell is entitled to receive commissions at the base rate for service sales.
The foregoing summary is qualified in its entirety by reference to the sales compensation plan, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 8.01 Other Events.
The information provided above under Item 5.02 above regarding Mr. Patton is incorporated into this Item 8.01 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
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Description |
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10.1 |
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Sales Compensation Plan between Rally Software Development Corp. and Don F. Hazell for the second quarter of fiscal 2014. |
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99.1 |
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Press Release titled “Rally Software Names Dan Patton as Executive Vice President of Global Sales,” dated June 6, 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.
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Rally Software Development Corp. | |
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Dated: June 6, 2013 |
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By: |
/s/ James M. Lejeal |
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James M. Lejeal |
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Chief Financial Officer and Treasurer |
Exhibit 10.1
Executive Vice President of Sales (EVP)
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Q2 FY14 Sales Compensation Plan |
Effective: 5/1/2013 |
Notes To Plans:
· Full on Target Earnings (OTE) will be paid when 100% of the sales targets are met. If paid monthly you will be paid incrementally matching the achievement percent of the team you are compensated against. OTE is split between the major components noted below.
· Commissions can be paid monthly, at the end of the month following the closed month (usually on the 30th/31st of each month, Ex. paid June 30 for May work).
· Management reserves the right to change the compensation plan at any time at their sole discretion and delay commission payment on any transaction.
· Variable compensation payments will be held until you accept your compensation plan. If you find an error in your plan, please notify your manager immediately.
PRODUCT COMMISSIONS
Info
· Quota is based on an ARR number (Annual Recurring Revenue) equal to the amount of subscription revenue Rally would receive in a 12-month period.
· Quota is assigned on an individual basis and is rolled up to a Team (Territory/Region/Total). Individuals are paid based on the Team quota attainment (not individual attainment).
· Rates — You will either have
· (1) A single “Combined” (new and renewal combined into one number) quota and rate. For individuals whose comp plan is tied to INTL, RAM, a new territory, a regional quota, or a company number.
· Base Rate is used to 100% of quota - Quarter Product Variable (90% of quarterly variable OTE) divided by your Quarter Team Total Product Quota
· Quarterly Accelerator Rate - Over 100% = Quarterly Accelerator Rate (Found in Commission Statement)
· No annual quota, base rate, or accelerator rate
· (2) “Independent” New and Renewal quotas and rates. For individuals that are in established North American GEO or EA territories.
· New
· Base Rate is used to 100% quota - Quarter New Product Variable (60% of quarterly variable OTE) divided by your Quarter Team New Quota.
· Quarterly Accelerator Rate - Over 100% = Quarterly Accelerator Rate (Found in Commission Statement)
· Annual Accelerator Rate - Over 100% of Annual quota = Annual Accelerator Rate (Found in Commission Statement. This payment will occur at the end of the Fiscal Year)
· Renewal
· Base Rate = Quarter Renewal Product (30% of quarterly variable OTE) Variable divided by your Quarter Team Renewal Product Quota. Used on every renewal dollar sold.
· Quarterly Accelerator Rate = None. Any achievement over renewal quota is paid at base rate.
· No annual quota, base rate, or accelerator rate
· Commissions will be clawed back to the Team at the rate originally paid if the customer does not fulfill 12 months of subscription obligation or ceases to pay.
· Clawbacks will apply to unpaid subscription fees only.
Subscriptions
· Quota attainment is applied for the first 12 months on New Orders and Renewal Orders assuming renewal orders are 12, 24, or 36 months long.
Perpetual Licenses
· Quota attainment is applied for perpetual deals “as if it were a subscription deal.”
· Recalculate ARR by taking: (seat count TIMES monthly subscription list price TIMES (100% MINUS discount % given) TIMES 12).
Multi-Year Subscriptions — New and Renewal
· Quota attainment and commissionable amount is applied based on the ARR + the ARR MultiYear Discount amount (negates the multiyear discount).
SERVICES COMMISSIONS — Services Contracts/ SOWs Fully Executed
· Quota is applied based on dollar value of a Statement of Work (SOW).
· Quota is assigned on an individual basis and is rolled up to a Team (Territory/Region/Total).
· Individuals are paid based on the Team quota attainment (not individual attainment).
· Base Services Rate is calculated as 10% of your quarterly variable OTE divided by your Quarter Team Service Quota.
· 300% Rule
· Accelerator rates apply for attainment between 100% of services quota and 300% of quota at an accelerator rate found in the commission statement. Anything above 300% is paid at the Base Services Rate.
· For any SOW over $100,000.
· 50% of commissionable amount will be booked during the month the SOW was closed.
· Remaining 50% of commissionable amount will be booked at end of quarter up to 300% of quota.
· Anything over 300% of quota will be paid in following quarters at their base rate upon deliver.
· Accelerator rates are only paid once the individual has reached at least X% (found in commission statement) of their Team Subscription Quota. Once X% of Team Subscription Quota percent attainment has been reached, the accelerators are paid retroactively for the quarter on all attainment over 100%.
· Management reserves the right to claw back amounts that do not eventually get delivered.
MANAGEMENT BY OBJECTIVE (MBO)
· MBO’s are based on a Plan provided separately by management.
· MBO’s are paid either monthly or quarterly as defined in the plan.
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/s/ Don Hazell |
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05-June-2013 |
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/s/ Tim Miller |
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06-June-2013 |
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Employee Signature |
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Date |
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Manager Signature |
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Date |
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Don Hazell |
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Tim Miller |
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Printed Name |
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Printed Name |
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Exhibit 99.1
Rally Software Names Dan Patton as Executive Vice President of Global Sales
Leading Agile Provider Strengthens Executive Team with the Addition of Former Savvis and Amazon Web Services Sales Leader
Boulder, Colo., June 6, 2013 — Rally® (NYSE: RALY), a leading global provider of cloud-based solutions for managing Agile software development, today named Dan Patton its Executive Vice President of Global Sales. In this role, Dan will lead Rally’s global sales organization, including expansion into Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC).
“Dan has a unique background that combines deep experience scaling a global sales organization, a wealth of successful expansions into new international markets, and hands-on software development beginning very early in his career. We’re thrilled to have him join the team and we’re highly confident he’ll help us achieve our long-term growth goals selling to our worldwide customer base,” said Tim Miller, CEO of Rally. “As our Rally team knows, ensuring that we respect Rally’s award-winning culture is always one of my top priorities, and I believe Dan will be a true servant leader that lives up to Rally’s core values.”
Dan brings to Rally more than 20 years of sales leadership experience in the technology space. Most recently, he served as Vice President and General Manager of Cloud Services at Savvis, a provider of industry-leading IT infrastructure solutions, where he held P&L responsibility for their cloud business unit and led Savvis’ international expansion into EMEA and APAC. Prior to Savvis, Dan was Americas Sales Leader for Amazon Web Services. In that role, he designed and implemented a global sales model and developed go-to-market strategies for various market segments, industries and geographies, including South America and Japan. Prior to that, Dan was a senior sales leader at IBM and Rational Software, where he managed hundreds of sales reps across the US, Canada, Ireland, Australia, Japan, China, and Malaysia. He also held a variety of sales, business development and engineering positions at Network Commerce and Boeing. Dan holds a master of science in engineering from the University of Washington, and a bachelor of science in engineering from Walla Walla College.
Dan replaces Don Hazell, who has led Rally’s sales team for the last 34 quarters. Don will shift to a new position as Rally’s Executive Vice President of Strategic Accounts, reporting to Dan.
“Don has been with Rally for 10 years, first as an advisor and angel investor and then as our EVP of Worldwide Sales,” said Tim. “We’re excited that Don will continue at Rally, and help us effect a smooth transition of leadership as Dan takes the helm.”
About Rally
Rally Software is a leading global provider of cloud-based solutions for managing Agile software development. The Rally Agile application lifecycle management (ALM) platform transforms the way organizations manage the software development lifecycle by closely aligning software development and strategic business objectives, facilitating collaboration, increasing transparency and automating manual
processes. Companies use Rally to accelerate the pace of innovation, improve productivity and more effectively adapt to rapidly changing customer needs and competitive dynamics.
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Rally, the Rally logo, and Rally Software Development are trademarks of Rally Software Development Corp. Third-party trademarks are the property of their respective owners.
Media Contact:
Lindsay Hyman
Allison+Partners
202-223-9260
rally@allisonpr.com