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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 21, 2023
Information Services Group, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-33287 | 20-5261587 | ||
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | ||
| incorporation) | Identification No.) |
2187 Atlantic Street
Stamford, CT 06902
(Address of principal executive offices)
(203) 517-3100
(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 Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Shares of Common Stock, $0.001 par value | III | The Nasdaq Stock Market LLC |
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
On June 21, 2023, Information Services Group, Inc. (“ISG” or the “Company”) announced that Humberto “Bert” Alfonso, Executive Vice President and Chief Financial Officer, plans to retire from the Company on August 7, 2023. Mr. Alfonso has served as Chief Financial Officer of the Company since June 2021.
On June 21, 2023, the Company announced that Michael A. Sherrick, 51, will join the Company on July 24, 2023 as Executive Advisor, Finance and become Executive Vice President and Chief Financial Officer effective August 7, 2023 upon Mr. Alfonso’s retirement.
Mr. Sherrick was most recently Chief Operating Officer of Software & Platform Engineering at Cognizant Technology Solutions Corporation (“Cognizant”), a global provider of information technology, consulting and business process services. Mr. Sherrick joined Cognizant in 2016 and has held a series of roles, including Chief Operating Officer of Cognizant Americas and Chief Operating Officer of Cognizant Digital Systems and Technology, prior to his most recent position. Prior to joining Cognizant, in 2013, Mr. Sherrick co-founded Scoria Capital Partners, where, as a portfolio manager, he managed the firm’s investments in the technology, business services and consumer sectors. Earlier in his career, Mr. Sherrick held various positions, including with S.A.C. Capital, Morgan Stanley and PwC. Mr. Sherrick holds a B.A. degree in economics from Bucknell University, with a concentration in accounting, and is both a licensed certified public accountant (CPA) and a chartered financial analyst (CFA).
On June 21, 2023, Mr. Sherrick entered into an employment letter with the Company (the “Employment Letter”). Pursuant to the Employment Letter, Mr. Sherrick will receive a base salary of $500,000 annually, which will rise to $550,000 effective April 1, 2024. Mr. Sherrick has a target ISG Incentive Plan bonus opportunity of $300,000 beginning in performance year 2024. On September 1, 2023, Mr. Sherrick will be granted ISG Restricted Stock Units (“RSUs”) with a dollar value of $350,000 comprised of (i) $262,500 of time-based RSUs which will vest ratably over four years pursuant to the Company’s standard Restricted Stock Unit Award Agreement for Executives (Time-Based) and (ii) $87,500 of performance-based RSUs which will vest upon ISG’s share price meeting a specific threshold ($7.00 average closing price over 10 trading days) between the first year and fourth year of the date of grant pursuant to the Company’s standard Restricted Stock Unit Award Agreement for Executives (Performance-Based). In addition, on September 1, 2023, Mr. Sherrick will be granted 100,000 RSUs that will vest 100% on the third year anniversary of the grant date. Mr. Sherrick will also receive transition equity bonuses equal to (i) RSUs with a dollar value of $100,000, which will be granted on September 1, 2023 and will vest 100% on September 1, 2024 (provided Mr. Sherrick starts with ISG in July 2023) and (ii) RSUs with a dollar value of $100,000, which will be granted on August 1, 2024 and will vest 100% on August 1, 2025. Also, pursuant to the Employment Letter, Mr. Sherrick may elect to purchase up to $100,000 of ISG shares in the open market which will be matched 1:1 with a grant of RSUs provided his open market purchases are completed by September 3, 2024.
The RSU grants require Mr. Sherrick to execute the Company’s standard Restrictive Covenant Agreement. The Restrictive Covenant Agreement requires Mr. Sherrick to not disclose confidential information of the Company at any time, and for the period during which he is employed by the Company, and the 24-month period thereafter, not to compete with the Company, not to interfere with the Company’s business and not to solicit nor hire or engage any of the Company’s employees or customers.
On August 7, 2023, Mr. Sherrick is expected to enter into the Company’s standard Change in Control Agreement for officers, which has a term of two years from the effective date, but will automatically extend for successive one-year terms unless a notice of non-renewal is given at least one year before the then-scheduled expiration of the term. This Change in Control Agreement provides for a lump sum severance payment as a result of a termination of employment by the Company without “Cause” or by the executive for “Good Reason” (each as defined in the Change in Control Agreement) during the two-year period following a Change in Control (as defined in the Change in Control Agreement), the material terms of which are the same as the Change in Control Agreements the Company’s executives have previously entered into, as described on pages 23 and 24 of the Company’s Definitive Proxy Statement previously filed with the SEC on March 15, 2023 and incorporated herein by reference.
The foregoing summaries of the Employment Letter, the Restricted Stock Unit Award Agreement for Executives (Time-Based), the Restricted Stock Unit Award Agreement for Executives (Performance-Based), the Restrictive Covenant Agreement and the Change in Control Agreement do not purport to be complete and are qualified in their entirety by the full text of such agreements, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Form 8-K and incorporated herein by reference.
ITEM 7.01 REGULATION FD DISCLOSURE
On June 21, 2023, the Company issued a press release announcing that Mr. Alfonso, Executive Vice President and Chief Financial Officer, plans to retire from the Company on August 7, 2023 and that Mr. Sherrick will join the Company on July 24, 2023 as Executive Advisor, Finance and become Executive Vice President and Chief Financial Officer effective August 7, 2023 upon Mr. Alfonso’s retirement. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated into this Item 7.01 by reference.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
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.
| Dated: June 23, 2023 | INFORMATION SERVICES GROUP, INC. | |
| By: | /s/ Michael P. Connors | |
| Michael P. Connors | ||
| Chairman and Chief Executive Officer | ||
Exhibit 10.1
| Thomas S. Kucinski | |
| Executive Vice President Chief Human Resources Officer |
Personal & Confidential
June 21, 2023
Mr. Michael Sherrick
Dear Michael,
I am pleased to confirm the terms under which you will join Information Services Group, Inc. (ISG) as Executive Vice President and Chief Financial Officer, based in our Stamford CT headquarters. You will also become a member of our ISG Executive Board (IEB) comprised of the top leaders of our firm. Your start date would be Monday, July 24.
As discussed, to assist in our planned retirement succession process, you will initially join as Executive Advisor, Finance on your start date and assume the role of Executive Vice President and CFO effective August 7.
Your base salary will be $500,000 annually. It will subsequently rise to $550,000 effective April 1, 2024. Executives at ISG have their base salary reviewed periodically, but not annually.
Your annual target opportunity under our ISG Incentive Plan (IIP) will be $300,000, beginning in performance year 2024. Awards under the IIP are typically made in March/April of the following year.
You would also be part of our Executive Equity Program and as such we would grant you $350,000 face value of RSUs on September 1, 2023 comprised of two components:
| · | $262,500 of time based RSUs which would vest ratably over 4 years. |
| · | $87,500 of performance based RSUs which would vest upon ISG’s share price meeting a specific threshold ($7.00 average closing price over 10 trading days) between year 1 and year 4 of the grant. |
You would be eligible with other executives approximately annually for a similar sized equity grant at the discretion of our board of directors.
To assist with your transition to ISG, we will provide you with three awards:
| · | A one-time Mega-Grant consisting of 100,000 restricted stock units (RSUs) which would be granted on September 1, 2023. These RSUs would vest 100% on September 1, 2026. |
| · | A transition equity bonus consisting of $100,000 face value of RSUs. These would be granted on September 1, 2023 and would vest 100% on September 1, 2024 provided you start with ISG in July 2023. |
| · | A second transition equity bonus consisting of $100,000 face value of RSUs. These would be granted on August 1, 2024 and would vest 100% on August 1, 2025. |
Information Services Group, Inc.
2187 Atlantic Street
8th Floor
Stamford, CT 06902
203-517-3108
| Thomas S. Kucinski | |
| Executive Vice President Chief Human Resources Officer |
These grants require you to execute our standard restrictive covenant agreement. And as discussed, were you ever to voluntarily leave ISG, you are required to provide at least 90 working days’ notice. If not, you will be required to pay back the transition equity bonus value above ($100,000) at the time of leaving.
In addition, we have provided our top executives, upon joining the firm, with the opportunity to purchase ISG shares that we will then match 1:1. Should you decide to do so, you may purchase up to $100,000 face value of ISG shares in the open market and we will then match those shares 1:1 with an RSU grant on the first day of the month following the completion of your purchases, provided your purchases are completed by September 3, 2024. As an insider at ISG, you will be able to purchase shares only during open trading windows. If you choose to purchase ISG shares prior to your start date, we will honor those purchases for purposes of the match. The matched RSU’s would vest fully on the first anniversary of the grant.
You will be subject to our ISG Share Ownership guidelines which, for the CFO requires that within 5 years of starting, you will hold ISG shares (which includes unvested RSUs) with a value equal to three times your base salary.
In addition to the above compensation, you are eligible for a number of employee benefits, which may from time-to-time be changed, added to, or reduced. Also included is our Profit-Sharing (401k) plan and the opportunity to participate in our Employee Stock Purchase Plan (ESPP) whereby you may purchase ISG shares at a 10% discount. We expect our senior executives to participate in the ESPP. A complete benefit explanation will follow shortly.
Additionally, you will be provided a Change in Control agreement, that provides for certain payments in the event of a termination in connection with a change-in-control.
As is our standard operating procedure, you will be required to sign a confidentiality and non-solicitation agreement.
All offers of employment are contingent upon receipt of information satisfactory to ISG in response to a background and verification check of your employment background. We will send you the necessary information to initiate this process.
Our leadership team has enjoyed meeting with you. I am confident that with your business and leadership experience, you will make significant contributions to the success of ISG.
We look forward to you joining the ISG Team!
Information Services Group, Inc.
2187 Atlantic Street
8th Floor
Stamford, CT 06902
203-517-3108
| Thomas S. Kucinski | |
| Executive Vice President Chief Human Resources Officer |
Sincerely,
Tom Kucinski
cc: Michael Connors
Acknowledged and Agreed:
| /s/ Michael Sherrick | |
| Michael Sherrick |
Information Services Group, Inc.
2187 Atlantic Street
8th Floor
Stamford, CT 06902
203-517-3108
Exhibit 99.1
 |
Press Contacts:
Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com
Julianna Sheridan, Matter Communications for ISG +1 978-518-4520 isg@matternow.com |
ISG CFO Bert Alfonso to Retire in August; Michael Sherrick Named His Successor as Executive Vice President and CFO
Sherrick brings significant tech industry, operational and financial expertise to role
STAMFORD, Conn., June 21, 2023 — Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, today announced that Humberto “Bert” Alfonso, executive vice president and chief financial officer, will retire in August to devote more time to family matters and that Michael A. Sherrick has been named to succeed him, effective August 7.
“I want to express my deepest gratitude to Bert for his valued service to ISG,” said Michael P. Connors, chairman and CEO. “I have known Bert for many years and will miss his wise counsel and contributions to the firm. Everyone here at ISG extends our best wishes to Bert and his family.”
Sherrick joins ISG from Cognizant Technology Solutions Corporation, a $19 billion global provider of information technology, consulting and business process services. He currently serves as senior vice president and chief operating officer of Cognizant Software & Platform Engineering.
At ISG, Sherrick will have global responsibility for finance, investor relations, legal, and mergers and acquisitions. He will report to Connors and join the internal ISG Executive Board.
“I am delighted Michael is joining ISG,” said Connors. “With his unique combination of technology industry knowledge, experience in operations, strategy and finance, and background in investment banking and financial services, Michael will quickly become a key contributor in advancing our ISG NEXT operating model and helping us drive growth and value in the years ahead.”
Sherrick brings more than 25 years of financial and operating experience to ISG. He joined Cognizant in 2016 where he was appointed to a series of roles, including COO of Cognizant Digital Systems and Technology and COO of Cognizant Americas, before assuming his current position.
Prior to joining Cognizant, in 2013 Sherrick co-founded Scoria Capital Partners, where, as a portfolio manager, he managed the firm’s investments in the technology, business services and consumer sectors. Earlier in his career, he held positions with S.A.C. Capital, Morgan Stanley and PwC, among others. Sherrick holds a B.A. degree in economics from Bucknell University and is both a licensed certified public accountant (CPA) and a chartered financial analyst (CFA).
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
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