Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Effective
July 20, 2020, the Board of Directors (the “Board”) of Guardion Health Sciences, Inc. (the “Company”)
appointed Andrew C. Schmidt as Vice President and Chief Financial Officer of the Company.
Prior
to his appointment as Vice President and Chief Financial Officer of the Company, Mr. Schmidt, age 58, served as Vice President
of Finance, Chief Financial Officer and Secretary of Iteris, Inc. (NASD: “ITI”), a publicly traded technology company
from March 2015 through December 2019. Prior to joining Iteris, Mr. Schmidt served as the Chief Financial Officer and Corporate
Secretary of Smith Micro Software, Inc., a publicly-held provider of wireless and mobility software solutions from 2005 to May
2014. Prior to joining Smith Micro, Mr. Schmidt held CFO roles for several other public companies, including Genius Products,
an entertainment company, and Mad Catz Interactive, a provider of console video game accessories. He also served as Vice President
(Finance) of Peregrine Systems, a publicly-held provider of enterprise level software. Mr. Schmidt holds a B.B.A. degree in Finance
from the University of Texas and an M.S. degree in Accountancy from San Diego State University.
The
Company and Mr. Schmidt entered into an employment agreement (the “Employment Agreement”), dated July 20, 2020 (the
“Effective Date”), pursuant to which Mr. Schmidt’s annual base salary is $250,000. The Employment Agreement provides
that Mr. Schmidt shall have an annual target cash bonus opportunity of no less than $175,000 (the “Bonus”) based on
the achievement of Company and individual performance objectives to be determined in good faith by the Board in advance and in
consultation with Mr. Schmidt (the “Performance Objectives”), provided, however, that the parties acknowledged and
agreed that up to an aggregate of $100,000 of the Bonus shall be payable upon the closing(s) of one or more mergers and acquisition
transactions as determined at the discretion of the Board, and $75,000 shall be based upon the satisfactory completion of the
Performance Objectives. The initial term of the Employment Agreement is through July 20, 2021, with automatic one-year renewals,
unless either party provides written notice of a non-renewal in accordance with the terms of the Employment Agreement (the “Term”).
Mr.
Schmidt will also be entitled to certain other benefits consistent with those provided to other senior executives of the Company.
In addition, effective as of the Effective Date, Mr. Schmidt shall be granted an award of one million (1,000,000) stock options
(the “Stock Options”) under the Company’s 2018 Equity Incentive Plan (the “Incentive Plan”), at
an exercise price of one dollar ($1.00) per share. The Stock Options shall vest and become exercisable in twelve (12) equal installments
on the last day of each of the subsequent twelve (12) calendar quarter-end dates following the Effective Date (the first of such
dates to be September 30, 2020), subject to continued service, and shall vest in full upon a Change in Control (as defined in
the Incentive Plan). The Sock Options granted shall be subject, to the extent necessary, to the approval of the Company’s
stockholders of a proposal to increase the authorized number of shares available under the Incentive Plan.
If
Mr. Schmidt’s employment is terminated by the Company without cause (as defined in the Employment Agreement), if the Term
expires after a notice of non-renewal is delivered by the Company or if Mr. Schmidt’s employment is terminated following
a change of control (as defined in the Incentive Plan), Mr. Schmidt will be entitled to (a) six months’ base salary, (b)
the prorated portion of the Bonus for the year in which the termination occurs, based on actual performance and (c) base salary
and benefits accrued through the date of termination.
There
are no family relationships between Mr. Schmidt and any director or officer of the Company, and he has no direct or indirect material
interest in any transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K.
The
foregoing description of the Employment Agreement is not complete and is qualified in its entirety by reference to the full text
of the Employment Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by
reference herein.