The Employment Agreement provides for standard benefits, such as paid time off, reimbursement of business expenses, and participation in the Company’s employee benefit plans and programs. In the event that Mr. Gowler’s employment terminates due to death or a disability, he will be entitled to accrued obligations and payment of any unpaid annual bonus earned based on achievement of the applicable performance goals and objectives so long as his employment terminates after the completion of the calendar year but prior to the date of payment of the bonus (the “Earned Bonus”). In the event that Mr. Gowler’s employment is terminated, other than during the period commencing on the earlier of (x) the signing of a definitive agreement that, if closed, would result in a “change in control” (as defined in the Plan) and (y) the date that is three (3) months prior to the closing of a change in control and ending on the date that is twelve (12) months following a change in control (the “Change in Control Period”), by the Company without “cause” or by him for “good reason” (each as defined in the Employment Agreement), and subject to the delivery to the Company of a separation agreement that includes a general release of claims and such separation agreement becoming fully effective, Mr. Gowler will receive cash severance equal to 9 months of his base salary, as well as the Earned Bonus, if applicable, and 9 months continuation of benefits. In addition, the unvested portion of any outstanding time-based equity awards held by Mr. Gowler as of the date of termination would remain outstanding for 3 months following such date of termination.
In the event that Mr. Gowler’s employment is terminated by the Company without cause or by him for good reason, in either case, during the Change in Control Period, and subject to his delivery to the Company of a separation agreement that includes a general release of claims and subject to such separation agreement becoming fully effective, Mr. Gowler will receive cash severance equal to the sum of 12 months of his base salary and his target bonus for the year of termination, payable in a lump sum, as well as the Earned Bonus, if applicable, and 12 months continuation of benefits. In such case, Mr. Gowler will also be entitled to immediate acceleration and full vesting of any time-based equity awards, as if his employment continued until the later of the date of termination (or, if later, the change in control) or the effective date of the separation agreement.
In connection with his appointment. Mr. Gowler also entered into (i) an indemnification agreement in the form previously approved by the Board, which form is filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-1/A, filed with the U.S. Securities and Exchange Commission on August 2, 2021 (the “Indemnification Agreement”), and (ii) the Company’s standard form of Employee Proprietary Information and Inventions Assignment Agreement (the “PIAA”), which, among other things, prohibits him from competing with the Company, soliciting the Company’s employees and customers and disclosing confidential information during the term of his engagement and for a specified time thereafter.
Other than with respect to the Employment Agreement, the Award Agreement, the Indemnification Agreement and the PIAA, there are no arrangements or understandings between Mr. Gowler and any other persons pursuant to which Mr. Gowler was appointed as Chief Operating Officer and Chief Commercial Officer of the Company. There are also no family relationships between Mr. Gowler and any director or executive officer of the Company and Mr. Gowler has no direct or indirect interest in any transaction or proposed transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
The description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Employment Agreement, which is filed herewith as Exhibit 10.1 and is incorporated by reference in this Item 5.02.
On December 6, 2022, the Company issued a press release announcing Mr. Gowler’s appointment as Chief Operating Officer and Chief Commercial Officer, as well as other organizational changes. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated by reference in this Item 8.01.
