Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Mark Basile
Effective September 29, 2016, Mark Basile resigned as the Company’s
Chief Strategy Officer and the Company’s board of directors appointed him to act as General Counsel.
A description of Mr. Basile’s employment history is set forth
in the Company’s annual report on Form 10-K for the year ended December 31, 2015.
Aside from the following, Mr. Basile has not had any material direct
or indirect interest in any of the Company’s transactions or proposed transactions over the last two years.
Effective September 29 2016, the Company entered into an Amended
and Restated Employment Agreement (the “Agreement”) with Mr. Basile. The Agreement supersedes Mr. Basile’s employment
agreement as Chief Strategy Officer in connection with his new appointment as General Counsel.
Mr. Basile may be terminated on the earlier of (i) his death or
mental or physical disability or incapacity, (ii) his resignation or (iii) termination by the Company at any time. Under the agreement,
the Company agreed to compensate Mr. Basile up to $175,000 annually and, subject to meeting certain assigned goals, the Company
agreed to pay him a bonus of 25% of his salary per year. The Company previously granted Mr. Basile an option under the Company’s
2015 Equity Incentive Plan to purchase 50,000 shares of the Company's Common Stock with vesting and strike prices set forth in
his original employment agreement. Those vesting periods continue under the Agreement.
Mr. Basile is entitled to participate in any existing employee health
and welfare benefit plans.
Upon termination of employment, Mr. Basile may be entitled to receive
certain post-termination severance benefits depending upon whether such termination is by the Company without Cause, in relation
to a Change of Control, a resignation by Mr. Basile for Good Reason, or by reason of Mr. Basile’s death or disability (as
such terms are defined in the agreement). In the event the Company terminates Mr. Basile’s employment without Cause or he
elects a resignation for Good Reason, he shall be entitled to receive as severance his Base Salary for a period equal to the number
of complete months he has worked for the Company, up to a maximum of twelve (12) months.
A copy of the Agreement is attached hereto as Exhibit 10.1, and
is incorporated herein by reference. The foregoing description of the Agreement is qualified in its entirety by reference to the
full text thereto.
Glenn McGinnis
Effective September 1, 2016, the Company’s board of directors
appointed Glenn M. McGinnis to act as its Vice President of Product Development.
The description of Mr. McGinnis’ employment history is set
forth below.
Mr. McGinnis has had a long career with IBM and, after which, he
acted as a consultant in product development and manufacturing for the twenty years. For the last eleven years, he was CEO of McGinnis
Management Inc. For the past two years, he has been the President of My TOUCH-ID LLC.
There are no family relationships between Mr. McGinnis and any of
the Company’s directors or executive officers.
Aside from the following, Mr. McGinnis has not had any material
direct or indirect interest in any of the Company’s transactions or proposed transactions over the last two years.
Effective September 1, 2016, the Company entered into an employment
agreement with Mr. McGinnis. The agreement may be terminated on the earlier of (i) his death or mental or physical disability or
incapacity, (ii) his resignation or (iii) termination by the Company at any time. Under the agreement, the Company agreed to compensate
Mr. McGinnis up to $150,000 annually and, subject to meeting certain assigned goals, the Company agreed to pay him a bonus of 10%
of his salary per year. The Company will immediately grant to Mr. McGillis an option under the Company’s 2015 Equity Incentive
Plan to purchase 25,000 shares of the Company's Common Stock with vesting and strike prices set forth in the agreement.
Mr. McGinnis is entitled to participate in any existing employee
health and welfare benefit plans.
Upon termination of employment, Mr. McGinnis may be entitled to
receive certain post-termination severance benefits depending upon whether such termination is by the Company without Cause, in
relation to a Change of Control, a resignation by him for Good Reason, or by reason of his death or disability (as such terms are
defined in the agreement). In the event the Company terminates Mr. McGinnis’ employment without Cause or he elects a resignation
for Good Reason, Mr. McGinnis shall be entitled to receive as severance his Base Salary for a period equal to the number of complete
months he has worked for the Company, up to a maximum of twelve (12) months.
A copy of the employment agreement is attached hereto as Exhibit
10.2, and is incorporated herein by reference. The foregoing description of the employment agreement is qualified in its entirety
by reference to the full text thereto.
Item 5.03 Amendments to Articles of Incorporation or Bylaws
On October 4, 2016, we amended the Certificate of Designation (the
“Amended Certificate of Designation”) for our Series B Convertible Preferred Stock (the “Series B Stock”).
The features of our Series B Stock before the Amended Certificate of Designation are set forth in the original Certificate of Designation
as contained in Exhibit 3.1 to our Current Report on Form 8-K that we filed with the Securities and Exchange Commission on September
25, 2015. We also amended the original Certificate of Designation as contained in Exhibit 3.1 to our Current Report on Form 8-K
that we filed with the Securities and Exchange Commission on March 7, 2016.
Under the Amended Certificate of Designation, we increased the number
of designated shares of Series B Preferred Stock from 2,000 to 2,550 shares. No other changes were made in the Amended Certificate
of Designation.
The complete rights of the holders of Series B Stock are now defined
in the Amended Certificate of Designation filed with the Nevada Secretary of State on October 4, 2016, attached hereto as Exhibit
3.1, and incorporated by reference herein.