Item 5.02 Departure of Directors or Certain Officers;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On February 12, 2018, the Registrant and Mr. Chalmers entered
into an Employment Agreement (the “Agreement”), effective February 1, 2018,
which has a term of two years and will automatically renew for additional one
year terms unless either party provides a notice not to renew at least 90 days
prior to the end of the initial two-year term or any subsequent one-year term.
Pursuant to the Agreement, Mr. Chalmers will be paid an annual salary of
US$350,000 (the “Base Salary”), subject to review and increase at the discretion
of the Registrant.
Mr. Chalmers is also entitled to receive benefits such as
health insurance, vacation and other benefits consistent with the Registrant’s
benefit plans extended to other employees of the Registrant with similar
position or level. In addition, Mr. Chalmers has a cash bonus opportunity during
each calendar year with a target equal to 50% (the “Target Cash Bonus
Percentage”) of his Base Salary (the “Target Cash Bonus”), in accordance with
the Registrant’s Short Term Incentive Plan, and an equity award opportunity
during each calendar year with a target value equal to 100% (the “Target Equity
Award Percentage”) of his Base Salary (the “Target Equity Award”), in accordance
with the Registrant’s Long Term Incentive Plan.
The Registrant may terminate the Agreement for just cause,
without just cause or in the event of a disability. Mr. Chalmers may terminate
his employment for “good reason” upon occurrence of any of the following: (i) a
material reduction or diminution in his level of responsibility or office; (ii)
a reduction in his Base Salary, Target Cash Bonus Percentage or Target Equity
Award Percentage; or (iii) a proposed forced relocation to another geographic
location greater than 50 miles from his current location at the time a move is
requested after a change of control.
In the event Mr. Chalmers’ employment is terminated by the
Registrant without just cause or upon a disability or by the Registrant giving a
notice not to renew, or Mr. Chalmers elects to resign for good reason, or upon
his death, he or his estate will be entitled to severance pay (the “Severance
Amount”) equal to two and one-half (2½) times the sum of his Base Salary, Target
Cash Bonus and Target Equity Award for the full year in which the date of
termination occurs.
Further, in the event that upon a change of control, Mr.
Chalmers’ employment is terminated and/or the successor entity does not assume
and agree to perform all of the Registrant’s obligations under Mr. Chalmers’
employment agreement with the Registrant, then Mr. Chalmers’ employment will be
deemed to have been terminated without just cause and Mr. Chalmers will be
entitled to receive the same Severance Amount as described above for a
termination without just cause under the normal course. In addition, if Mr.
Chalmers’ employment is terminated without just cause or for a disability, or
Mr. Chalmers elects to resign for good reason, within 12 months after a change
in control, then, in addition to the payment of the Severance Amount described
above, all of Mr. Chalmers’ unvested stock options and restricted stock units
will automatically vest.
If Mr. Chalmers voluntarily retires from the Registrant at any
time after the fifth anniversary of the effective date of the Agreement, all of
Mr. Chalmers’ unvested stock options and restricted stock units will
automatically vest.
Mr. Chalmers is subject to non-solicitation provisions during
the term of his employment agreement and for a period of 12-months after
termination, under which Mr. Chalmers may not solicit any business from any
customer, client or business relation of the Registrant, or hire or offer to
hire or entice any officer, employee consultant or business relation away from
the Registrant.
This description of the material terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement which will be filed as an exhibit to the
Registrant’s Form 10-K for the year ended December 31,
2017.