Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On
June 15, 2020, we appointed Kenneth M. Greenwood as our Chief Technology Officer. In connection with his appointment, Mr. Greenwood
entered into a three-year employment agreement with us.
Mr. Greenwood, 62,
has over 30-years of experience with large-scale systems programming and implementations. He has provided instruction and consulting,
primarily for SAP products, in the areas of architecture, design and implementation of ABAP, big-data warehousing, business intelligence
analytics, object-orientation, cloud and systems integration, interfaces, HANA in-memory databases, data security, workflow, and
archiving to variety of companies including Intel, World Bank, HP, Amtrak, IBM, Accenture, Wal-Mart, Home Depot, Nike and Kimberly-Clark.
While at Random House implementing a Rights Management module following two previous failed attempts by other contractors, Mr.
Greenwood led the 30-developer team to design, code and implement rights management for Random House in an SAP system using a
novel approach of OO design, which became the world’s largest SAP module at that time. At LORD Corporation, following a
helicopter crash and the subsequent investigation revealing duplicate serial numbers on the rotor mounts, he led the technical
team at LORD to successfully completely redesign and re-implement an entirely new custom serialization module, which enabled LORD
to maintain their Department of Defense contract. Mr. Greenwood also authored the best-selling Sams Teach Yourself ABAP in
21 Days, published by Macmillan.
As
compensation, we agreed to pay him an annual salary of $257,000 and he is entitled to discretionary bonuses as may be awarded
from time to time by our Board of Directors. As additional compensation we granted him stock options to purchase 2,000,000 shares
of our common stock at an exercise price of $0.30 per share, the closing price of common stock as reported on the OTC Markets
on the date immediately preceding the date of the Agreement, and vesting in equal annual installments commencing on the grant
date. The vesting date of any unvested options accelerates in the event of a Change in Control (as defined in the Employment Agreement).
Mr. Greenwood is also entitled to paid vacation and sick leave and other programs we may offer. The initial term of the Employment
Agreement will automatically renew for an additional one-year term unless either party provides notice of non-renewal.
The
Employment Agreement terminates upon the death or disability of Mr. Greenwood, and may be terminated by us for cause, or by Mr.
Greenwood for any reason. If the Employment Agreement is terminated for by us for cause, upon his death or disability, at non-renewal
or by Mr. Greenwood, he is only entitled to receive base salary accrued but not paid through the date of termination, and in the
case of termination due to death or disability, a pro rata payment of the annual incentive earned for the year of termination.
If the Employment Agreement is terminated by us without cause or by Mr. Greenwood for good reason, we are obligated to pay him
severance equal to one year’s base salary and any unpaid incentive compensation. In addition, if at any time during the
term of the Employment Agreement Mr. Greenwood’s employment is terminated by us without cause within two years after a Change
in Control of our company, or in the 90 days prior the Change in Control at the request of the acquiror, we are obligated to pay
him an amount equal to 2.99 times his annualize compensation. “Change in Control” is defined in the Employment Agreement
to mean the acquisition by any person of beneficial ownership of our securities representing greater than 50% of the combined
voting power of our then outstanding voting securities.
The
Employment Agreement contains customary invention assignment, non-compete and non-solicitation provisions. The descriptions of
the terms and conditions of the Employment Agreement with Mr. Greenwood and the stock option granted to him therein are qualified
in its entirety by reference to agreements which are filed as Exhibits 10.1 and 10.2, respectively, to this report.