Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 14, 2021, Matthew K. Szot resigned from his positions as Executive Vice President of Finance and Administration, Chief Financial Officer, Secretary and Treasurer of S&W Seed Company (the “Company”) effective as of November 15, 2021. In connection with his resignation, the Company and Mr. Szot entered into a Separation and Consulting Agreement. Pursuant to this agreement, and subject to the Company’s receipt of an effective release and waiver of claims from Mr. Szot, Mr. Szot will receive severance benefits consistent with his employment agreement with the Company, as follows: (i) continuation of 12 months of his current base salary; (ii) payment of his full target cash bonus for fiscal year 2022 in one lump sum; (iii) full acceleration of vesting of all outstanding equity awards held by him; (iv) continued exercisability of outstanding stock options until the earlier of November 14, 2022 and the expiration of such stock options; and (v) COBRA payments for up to 12 months. In addition, Mr. Szot has agreed to provide the Company with transition consulting services, at a market rate hourly consulting fee, until February 14, 2022 unless the consulting relationship is terminated earlier by either the Company or Mr. Szot.
The Company’s Board of Directors (the “Board”) appointed Elizabeth (Betsy) Horton as the Company’s Chief Financial Officer and corporate Secretary, effective November 15, 2021. Prior to joining the Company, Ms. Horton, 45, served as Chief Financial Officer of Miller Milling Company, a full-service flour milling company headquartered in Minneapolis, Minnesota, where she served as CFO since December 2018. From June 1998 to November 2018, Ms. Horton held numerous finance roles of increasing responsibility at Cargill Corporation, a global food corporation based in Minnetonka, Minnesota, including as EMEA Regional Treasurer, EMEA Head - Risk Investors Group, Cargill Trade and Structured Finance and, most recently, Financial Planning & Analysis Director from August 2016 to November 2018. She currently serves on the Board of Rahr Corporation, a 174-year old global malt and brewing supply company. Ms. Horton received a B.S. in Accounting and an MBA from the University of Minnesota, and is a licensed CPA (inactive) and a CFA® charterholder.
In connection with her appointment, the Company entered into an employment agreement with Ms. Horton. Pursuant to the employment agreement, Ms. Horton will receive an annual base salary of $400,000 and will be eligible to receive an annual performance bonus comprised of (i) a cash bonus with an initial target bonus percentage equal to 50% (up to a maximum of 75%) of her base salary; (ii) a restricted stock unit award with an initial target value of $80,000 (up to a maximum of $160,000); and (iii) a stock option award with an initial target value of $200,000 (up to a maximum of $250,000). Ms. Horton is also entitled to reimbursement of certain business and travel expenses, and is eligible to participate in the Company’s employee benefit plans, policies and arrangements that are applicable to its other executive officers.
Upon the commencement of her employment Ms. Horton received a cash signing bonus of $50,000. She was also granted (i) a fully vested restricted stock unit award with a value of $25,000, with the number of shares subject to such award calculated by dividing the cash value of such award by the closing price of the Company’s common stock on November 15, 2021, and (ii) a stock option with a value of $25,000, with the number of shares subject to such award calculated by dividing the cash value of such award by the value of an option to purchase one share of the Company’s common stock on November 15, 2021 (determined by using the same Black-Scholes-Merton option pricing model as is utilized by the Company to estimate the fair value of employee option grants for financial accounting purposes), rounded down to the nearest whole share. In connection with her relocation to the Longmont, Colorado area by no later than July 15, 2022, Ms. Horton will also be entitled to receive relocation assistance, including reimbursement of moving expenses, reimbursement of expenses incurred to travel to the Denver, Colorado area and temporary housing, among others, as well as a tax “gross-up” with respect to such assistance.
