On August 7, 2018, Jack Peurach, the Company’s Chief Executive Officer, entered into an employment agreement with the Company (the “Employment Agreement”).

 

Pursuant to his Employment Agreement, Mr. Peurach’s annual base salary is $275, effective as of March 9, 2018 (the “Determination Date”), the date that he was appointed as the Company’s President and Chief Executive Officer, and is subject to increase as determined by the Board. Mr. Peurach is eligible to receive an annual bonus with a target bonus amount of 75% of his annual base salary, all or a portion of which may, at the discretion of the Board, be based on the achievement of certain operational, financial or other milestones established by the Board. In connection with entering into the Employment Agreement, the Company granted Mr. Peurach an option to purchase 750 shares of its common stock at the closing price of the Company’s common stock on Nasdaq Capital Market on the date the Compensation Committee approved the grant. The option will become exercisable over a 4-year period, with 1/4 of the shares becoming exercisable on March 9, 2019, the first anniversary of the Determination Date, and with 1/48 of the shares becoming exercisable at the end of each month thereafter.

 

Mr. Peurach will be entitled to receive perquisites and other fringe benefits that may be provided to, and will be eligible to participate in any other bonus or incentive program established by us, for the Company’s executives. Mr. Peurach and his dependents will also be entitled to participate in any of the Company’s employee benefit plans subject to the same terms and conditions applicable to other employees. Mr. Peurach will be entitled to be reimbursed for all reasonable travel, entertainment and other expenses incurred by him for the purpose of conducting the Company’s business, in accordance with Company policy.

 

In the event that Mr. Peurach is terminated by the Company without cause prior to the first anniversary of the Determination Date, he will receive continued payment of his base salary for 6 months as severance. If Mr. Peurach is terminated by the Company without cause on or after the first anniversary of the Determination Date, Mr. Peurach will receive continued payment of his base salary for 9 months as severance. The Company will also pay Mr. Peurach’s COBRA premiums equivalent to the employer contribution cost of his continued participation in the Company’s group health, dental, and vision insurance plan for the duration of the applicable severance period based on the service year in which he was terminated.

 

If there is a change of control during Mr. Peurach’s employment, and if he is terminated without cause within twelve months following that change of control, the Company will provide Mr. Peurach with (a) continued payment of base salary for 9 months; (b) the target bonus amount prorated for the 9 month severance period; (c) continuation of or reimbursement for coverage under the Company’s medical, dental, and vision plans; and (d) acceleration of all unvested equity.