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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Appointment of Senior Vice President,
Chief Sales & Marketing Officer
On
February 5, 2020, the Board of Directors of the Company appointed Randolph Salisbury as Senior Vice President, Chief Sales &
Marketing Officer of the Company, effective as of February 1, 2020 (the “Effective Date”).
Mr. Salisbury, age 65, served as Senior Vice President
and Chief Marketing Officer of the Company for six (6) years prior to the expansion of his role to lead the Company’s sales
efforts. From February 1, 2014 until present-day, Mr. Salisbury has been responsible for all marketing and communications
for the Company, including investor relations. His role was later expanded to include client relationship management. Mr. Salisbury
will retain those responsibilities. With the introduction of the Company’s newest solution, the eValuator™ pre-bill
coding analysis platform, Mr. Salisbury developed the initial brand positioning and sales presentations for the technology, and
participated in the sales process for certain of the Company’s most significant client contracts to date. Prior to Streamline
Health, Mr. Salisbury served as a founding partner of Mockingbird Partners Consulting Group, LLC, a marketing communications and
investor relations consulting firm. During his time with Mockingbird Partners, Mr. Salisbury performed marketing functions on behalf
of various clients and performed investor relations consulting services. Mr. Salisbury currently serves on the board of directors
of Decooda, Inc., a private, software-as-a-service start-up company. Mr. Salisbury received his bachelor’s degree from Ohio
Wesleyan University and his MBA from Goizueta Business School at Emory University.
There
are no family relationships between Mr. Salisbury and any director or executive officer of the Company and there are no related
party transactions required to be reported under Item 404(a) of Regulation S-K.
In
connection with his appointment as Senior Vice President, Chief Sales & Marketing Officer, Mr. Salisbury entered into an employment
agreement with the Company, effective as of February 1, 2020 (the “Employment Agreement”). The term of the Employment
Agreement (the “Employment Period”) is one (1) year, commencing February 1, 2020, and renews automatically for
subsequent six (6)-month periods, unless Mr. Salisbury or the Company provides written notice at least sixty (60) calendar days
prior to the end of the applicable year to the other of his or its intention to not renew the employment. Mr. Salisbury will receive
an annual base salary of $275,000 and will be eligible for an annual incentive bonus (at target equal to thirty percent (30%) of
his annual base salary), based on individual and Company performance. Mr. Salisbury also received a one-time signing bonus of $10,000
and bonus compensation for the fiscal year ended January 31, 2020 of $68,500. Mr. Salisbury is also eligible to receive the standard
employee benefits made available by the Company to its employees generally. Mr. Salisbury was also granted a restricted stock award
of 100,000 shares on February 5, 2020. The shares of restricted stock will vest quarterly, in arrears, twenty-five percent (25%)
per quarter through February 1, 2021, subject to the continued employment of Mr. Salisbury on each vesting date. The Employment
Agreement contains customary confidentiality provisions and non-competition covenants.
If the Employment Agreement
is terminated by the Company for reasons other than death, Continued Disability, or Good Cause, or if Mr. Salisbury terminates
employment for Good Reason, Mr. Salisbury will generally be entitled to receive: (1) accrued but unpaid salary through the termination
date through his termination date; (2) reimbursement of expenses incurred prior to his termination date; and (3) an amount equal
to twelve (12) months’ base salary.
The foregoing description
of the Employment Agreement is a summary only, does not purport to be complete, and is qualified in its entirety by reference to
the complete text of the Employment Agreement which is attached hereto as Exhibit 10.1 and incorporated by reference as if fully
set forth herein.