Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Employment Agreement with Paul R. Gudonis
On April 22, 2021, the Company entered into a renewed employment agreement with Paul Gudonis, the President, Chief Executive Officer, and Chairman of the Board of Directors of the Company (the “Board”) (the “Gudonis Agreement”). Pursuant to the Gudonis Agreement, Mr. Gudonis shall continue to serve as the Chief Executive Officer of the Company. In consideration thereof, Mr. Gudonis shall receive (i) a base salary of $240,000, which shall be increased to $247,200, effective July 1, 2021 and (ii) the opportunity to receive an annual bonus of up to 75% of his base salary, with the actual amount to be determined by the Board and the Compensation Committee upon meeting certain reasonable strategic, sales, operational, and financial goals and targets established by the Board.
As set forth in the Gudonis Agreement, Mr. Gudonis’ employment is at-will, for a three-year term expiring on December 31, 2023, unless renewed upon the consent of the parties. If the parties decide not to renew the Gudonis Agreement, but to continue to work together in an employment relationship, Mr. Gudonis’ employment shall continue on an at-will basis pursuant to the terms and conditions then in effect, unless otherwise modified in writing.
In the event of termination without cause, the Company shall provide to Mr. Gudonis (i) his base salary for twelve months plus his Board-approved annual incentive bonus for the year, (ii) a monthly cash payment for twelve months or Mr. Gudonis’ Consolidated Omnibus Budget Reconciliation Act (“COBRA”) health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. Gudonis if he had remained employed by the Company, subject to Mr. Gudonis participating in the Company’s group health plan immediately prior to the date of termination and electing COBRA health continuation, and (iii) the vesting of all stock options and other stock-based awards held by Mr. Gudonis that would have vested if employment had continued for twelve additional months. Additionally, if such termination without cause occurs within 12 months after the occurrence of a change in control, then notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all stock options and other stock-based awards held by Mr. Gudonis shall immediately accelerate and become fully exercisable or non-forfeitable as of the date of termination.
Executive Employment Agreement with David A. Henry
On April 22, 2021, the Company entered into a renewed employment agreement with David A. Henry, the Chief Financial Officer of the Company (the “Henry Agreement”) pursuant to which Mr. Henry shall continue to serve in such position. Pursuant to the Henry Agreement, Mr. Henry shall receive (i) a base salary of $215,000, which shall be increased to $221,500, effective July 1, 2021 and (ii) the opportunity to receive target cash incentive compensation of up to 75% of his base salary, with the actual amount to be determined annually by the Chief Executive Officer and the Compensation Committee, during the initial two-year term, with an automatic one-year renewal.
As set forth in the Henry Agreement, Mr. Henry’s employment is at-will, with no specified termination date. In the event of termination without cause, the Company shall provide to Mr. Henry (i) an amount equal to 75% of the sum of the base salary plus his Board-approved annual incentive bonus for the year (excluding any signing bonuses), (ii) the vesting of all stock options and other stock-based awards held by Mr. Henry that would have vested if employment had continued for six additional months, (iii) a monthly cash payment for nine months or Mr. Henry’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. Henry if he had remained employed by the Company, subject to Mr. Henry participating in the Company’s group health plan immediately prior to the date of termination and electing COBRA health continuation.
