Blue Calypso Inc. (fka BCYP)

[DFYSW]

Interesting movements (and results) with BCYP from Merriman recently. Wonder what's up?

First this...

On September 9, 2014, the Reporting Person sent the following e-mail to Bill Ogle, Chief Executive Officer of the Company:

"I have been apprised today of an $85,000 cash bonus that you were paid in addition to your salary which is wildly disproportionate for the circumstances at BCYP [the Company]. All of this in addition to an approximately 10 million share option grant.

You and the board have failed in your responsibilities to your shareholders. I want you to submit your resignation to the board of directors immediately given your failure to appropriately exercise fiduciary responsibility on behalf of the shareholders.

We will pursue whatever legal action is necessary with respect to your conduct and the conduct of the directors. This letter is being sent to legal counsel.

Ronald Chez"

The Reporting Person continues to believe in the value of the Company’s intellectual property portfolio and its potential ability to monetize that portfolio and obtain customers for its products. However, the Reporting Person believes that the current CEO and board have failed to monetize what appears to be a very undervalued asset, and that the compensation decisions that have been made regarding the CEO of the Company by board members designated by him have been egregious and at the CEO’s personal interest at the expense of the Company.

The Reporting Person intends to further pursue the matters described in the e-mail above (including the immediate removal of the CEO and the directors that he designated). He has recently discussed these matters and the future operating plans of the Company with significant shareholders of the Company, and intends to continue to have such discussions.

http://www.sec.gov/Archives/edgar/data/942801/000119312514337824/d787510dsc13da.htm

Then this...

Exhibit A
SETTLEMENT AND STANDSTILL AGREEMENT

This SETTLEMENT AND STANDSTILL AGREEMENT, dated as of September 26, 2014 (this “Agreement”), is entered into by and between Blue Calypso, Inc., a Delaware corporation (the “Company”), on the one hand, and Ronald L. Chez and Individual Retirement Accounts for the benefit of Ronald L. Chez. (together, the “Chez Parties”), on the other hand. The Company and the Chez Parties, are collectively referred to as the “Parties” and each a “Party”.

WHEREAS, the Chez Parties beneficially own an aggregate of 17,586,361 shares of Common Stock, par value of $0.0001, of the Company, constituting approximately 7.8% of the Company’s outstanding shares (the “Chez Held Shares”); and

WHEREAS, the Chez Parties filed Amendment No. 3 to Schedule 13D on September 10, 2014 with the Securities and Exchange Commission (the “SEC”) wherein the Chez Parties expressed their displeasure with a bonus that was paid to the Company’s Chief Executive Officer; and

WHEREAS, the Parties have determined that the best interests of the Parties and the stockholders of the Company would be served by avoiding further expense and disruption that could result from a prolonged dispute with the Chez Parties; and

WHEREAS, the Parties intend to provide hereby, for among other matters, the full support from the Chez Parties for the executive officers and directors of the Company; and

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as follows:

SECTION 1. REPRESENTATIONS.

(a) Representations and Warranties of the Company. The Company hereby represents and warrants to the Chez Parties that this Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

(b) Representations and Warranties of the Chez Parties. Each of the Chez Parties hereby represents and warrants to the Company that:

(1) this Agreement has been duly authorized, executed and delivered by each of the Chez Parties, and is a valid and binding obligation of each of the Chez Parties, enforceable against each of the Chez Parties in accordance with its terms; and

(2) except for the Chez Held Shares, which are beneficially owned solely by the Chez Parties as indicated in their Schedule 13D filed with the SEC, as amended, no Affiliate or Associate (as such terms are hereinafter defined) of any of the Chez Parties (other than the Chez Family Foundation, which currently holds 526,000 shares) may be deemed the “beneficial owner” (as such term is hereinafter defined) of any shares of the Common Stock, par value $0.0001, of the Company (including any direct or indirect rights, options or agreements to acquire Common Stock of the Company) or has any rights, options or agreements to acquire or vote, any other Common Stock of the Company; and

(3) in entering into this Agreement with the Company, the Chez Parties are acting solely on behalf of the Chez Parties and not in concert with any others, as a 13D Group (as defined below).

SECTION 2. ACTIONS BY THE COMPANY.

(a) Temporary Reduction in Compensation of Chief Executive Officer.

(1) The Company shall cause the annual base salary of the Company’s Chief Executive Officer to be reduced to $200,000 for a period of twelve (12) months following the date hereof. Following the twelve (12) month anniversary of the date hereof, the compensation committee of the board of directors of the Company shall review the compensation of the Company’s Chief Executive Officer to determine if any adjustment in compensation is then warranted based on the Company’s performance at that time as determined in the sole discretion of the Compensation Committee of the Company’s Board of Directors.

(2) The Company’s Chief Executive Officer shall forfeit options to purchase 750,000 shares of the Company’s Common Stock, which were granted to him in March 2014 (the “March 14 Option Grant”). The Company and its Chief Executive Officer hereby agree to enter into revised documentation with respect to the March 14 Option Grant within thirty (30) days of the date of this Agreement.

(3) The Company’s Chief Executive Officer shall, purchase $85,000 worth of Common Stock of the Company at prices not to exceed $0.175 per share within twelve (12) months following the date hereof, provided that he shall make at least $15,000 of those purchases in the period commencing on the first day after the date of this Agreement that the Company’s Chief Executive Officer is permitted under applicable law, and under applicable Company policies, including but not limited to the Company’s Insider Trading and Public Communications Policy, to make open market purchases of the Company’s Common Stock and ending on December 15, 2014.

(b) Temporary Reduction in Compensation of Chief Technology Officer.

(1) The Company shall cause the annual base salary of the Company’s Chief Technology Officer to be reduced to $137,500 for a period of twelve (12) months following the date hereof. Following the twelve (12) month anniversary of the date hereof, the compensation committee of the board of directors of the Company shall review the compensation of the Company’s Chief Technology Officer to determine if any adjustment in compensation is then warranted based on the Company’s performance at that time as determined in the sole discretion of the Compensation Committee of the Company’s Board of Directors.

SECTION 3. STANDSTILL.

(a) The Chez Parties agree that, for a period of twelve (12) months following the date hereof, the Chez Parties will not join a 13D Group (other than a group consisting solely of the Chez Parties and their Affiliates and Associates) or other group, or otherwise act in concert with any third Person for the purpose of acquiring, holding, voting or disposing of Voting Securities.

(b) The Chez Parties agree that, for a period of twelve (12) months following the date hereof, the Chez Parties, individually or in concert with others acting as a 13D Group will not (1) make or in any way participate in the “solicitation” of “proxies” (as such terms are used in the rules and regulations of the SEC) with respect to any Voting Securities, (2) propose any stockholder resolutions under Rule 14a-8 of the Securities Exchange Act of 1934, as amended, (3) seek to call a meeting of stockholders of the Company, (4) seek to take any action by the written consent of the stockholders of the Company, or (5) seek to advise or influence any other Person with respect to the voting of the Voting Securities.

(c) The Chez Parties agree that, for a period of twelve (12) months following the date hereof, the Chez Parties, individually or in concert with others acting as a 13D Group will not deposit any Voting Securities in a voting trust or, except as otherwise provided or contemplated herein, subject any Voting Securities to any arrangement or agreement with any Person with respect to the voting of such Voting Securities.

(d) The Chez Parties agree that, for a period of twelve (12) months following the date hereof, the Chez Parties, individually or in concert with others acting as a 13D Group will not otherwise act, alone or in concert with others, without the prior written consent of the Company, to effect to seek offer or propose (whether publicly or otherwise) to effect control of the management, board of directors (including the removal of any director) or policies of the Company.

(e) The Chez Parties agree that, for a period of twelve (12) months following the date hereof, they will not issue any communication or make any written statement, including but not limited to in a Schedule 13D or press release or otherwise that disparages or criticizes the Company. This includes making any disparaging communications or statements about the Company or any of the Release Group Members (as defined herein).

(f) The Chez Parties and the Company agree that the foregoing paragraphs (a) through (e) shall not prohibit the Chez Parties, individually or in concert with others acting as a “group” as defined under Section 13(d) of the Exchange Act, or any of the Chez Parties’ principals, directors, stockholders, members, general partners and affiliates, from (i) taking any other action with respect to the Company or any Voting Securities of the Company held by the Chez Parties or (ii) from taking any action (including, without limitation, those described in the foregoing paragraphs (a) through (e)) should the Company not comply with Section 2 of this Agreement, or if the Chez Parties reasonably believe that it is acting in the best interests of the Company’s shareholders.

http://www.sec.gov/Archives/edgar/data/942801/000119312514355974/d797550dsc13da.htm