Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
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On
October 4, 2018, Zoom Telephonics, Inc. (the “Company”)
entered into an Employment Agreement (the “Employment
Agreement”) with Joseph Wytanis effective as of October 29,
2018 (the “Effective Date”), pursuant to which Mr.
Wytanis shall serve as the President and Chief Operating Officer of
the Company as of the Effective Date.
Mr.
Wytanis has served as Senior Practice Engagement Partner at Infosys
Limited since March 2018, where he provides engineering services
consulting to cable, mobile and satellite service operators and has
also served as a Principal at High Tech Associates, LLC since
August 2011, where he provides consulting services relating to
vision, strategy, business development and marketing. Mr. Wytanis
served as Executive Vice President and Chief Operating Officer at
SMC Networks, Inc. from January 2012 through August 2014,
where he successfully led the
introduction of a complete line of cable home networking products
and smart home IoT products
prior to its sale to HUMAX Co.,
Ltd. He previously served as a Vice President and General Manager
at Scientific-Atlanta/Cisco System, Inc. from 2000 through 2011,
where he helped to grow the Cable Home Networking Business Unit
froma start-up to a profitable business, and prior to that held
marketing, business and strategy positions with Technology
Solutions Group, Panasonic, BellSouth, NCR/AT&T, Northern
Telecom and the Associated Press. Mr. Wytanis received his Masters
of Business Administration from the University of Georgia and his
Bachelor of Science in Business Administration/Marketing from Rowan
University.
Pursuant
to the Employment Agreement, Mr. Wytanis will receive an annual
base salary of $200,000 per year, which amount will increase
annually at a rate equal to at least the prior year’s U.S.
inflation rate plus 2%. Mr. Wytanis will also be eligible to
receive performance bonuses of up to 25% of his base salary
semi-annually based on mutually agreed-upon performance objectives.
Additionally, Mr. Wytanis will receive a signing bonus of $30,000
within 30 days of the Effective Date. The Company agreed to
reimburse Mr. Wytanis for lease expenses of up to $8,500 per month
during his employment with the Company and for certain family
travel expenses.
Mr.
Wytanis will also receive on or about the Effective Date an option
to purchase 100,000 shares of the Company’s common stock
issued under the Company’s 2009 Stock Option Plan, which will
become exercisable with respect to 25% of the shares on each of the
six month, twelve month, eighteen month and twenty-four month
anniversaries of the grant date, subject, in each case, to Mr.
Wytanis’ continued employment with the Company. Additionally,
Mr. Wytanis will be entitled to receive an additional option grant
within twenty-four months of the Effective Date for a number of
shares with a Black-Scholes value of $100,000. All such options
will expire after a term of three years from the grant
date.
If the
Company undergoes as Change of Control (as defined in the
Employment Agreement) and either (i) is terminated without Cause
(as defined in the Employment Agreement) within six months after
such Change in Control or (ii) has his job responsibilities,
reporting status or compensation materially diminished and Mr.
Wytanis terminates his employment within six months after such
Change in Control, then in each case Mr. Wytanis will be entitled
to six months of base salary and accelerated vesting for all
unvested options as of such termination date.
If the
Company terminates Mr. Wytanis other than for Cause or in
connection with a Change of Control (in each case as defined in the
Employment Agreement), Mr. Wytanis will be entitled to payment of
three months of base salary and a pro-rated annual bonus with
respect to the year of termination, as well as accelerated vesting
for any options that would vest within six months of the
termination date.
The
foregoing description of the Employment Agreement is a summary and
does not purport to be complete. Such description is qualified in
its entirety by reference to the text of the Employment Agreement
which is filed as Exhibit 10.1 to this Current Report on Form 8-K,
and is incorporated herein by reference.
There
are no related party transactions between the Company and Mr.
Wytanis, and Mr. Wytanis is neither related to, nor does he have
any relationship with, any existing member of the Board or any
executive officer of the Company.