Agreement superseded and replaced the Company’s prior employment agreement with Mr. Macaluso entered into on December 14, 2019. The Macaluso Employment Agreement provided for an annual base salary of $550,000 and an annual discretionary bonus of up to 50% of Mr. Macaluso’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives established by the Compensation Committee. In connection with the Macaluso Employment Agreement, Mr. Macaluso was awarded 950,000 shares of restricted stock, with 150,000 shares vesting effective on the date of the Macaluso Employment Agreement, 200,000 shares vesting on January 1, 2022 and 200,000 additional shares vesting annually each year thereafter, such that all shares of restricted stock will be fully vested on January 1, 2025.
If Mr. Macaluso’s employment is terminated by the Company without Cause (as defined in the Macaluso Employment Agreement) or by Mr. Macaluso for Good Reason (as defined in Macaluso Employment Agreement), he would be entitled to a lump sum severance payment equal to six months of his base salary in effect at the date of termination, less applicable withholding. In addition, the vesting and exercisability of all then outstanding options and restricted stock awards held by Mr. Macaluso will accelerate in full. Upon the occurrence of a Change in Control (as defined in the Macaluso Employment Agreement), all then outstanding stock options, restricted stock and other stock-based grants held by Mr. Macaluso would immediately and irrevocably vest and become exercisable and any restrictions thereon shall lapse.
Mr. Macaluso requested, and received Board approval, for a one-year medical leave of absence from his role as Chairman and CEO, during which time Mr. Macaluso would provide advisory services to the current CEO and would continue to receive his base salary and other benefits subject to offsets related to disability insurance coverage, effective November 2021. As noted previously, Mr. Macaluso’s employment with the Company terminated effective May 31, 2022. He also resigned from the Board of Directors as of May 31, 2022. Due to Mr. Macaluso’s termination of employment, any outstanding stock options, restricted stock or other equity compensation ceased to vest and whether or not vested as of the termination date, became no longer exercisable and was cancelled.
On October 11, 2021, the Company entered into a new three-year employment agreement (the “Stokely Employment Agreement”) with Daniel G. Stokely, the Company’s Chief Financial Officer and principal financial officer. The Stokely Employment Agreement superseded and replaced the Company’s prior employment agreement with Mr. Stokely entered into on July 9, 2019. The Stokely Employment Agreement provides for an annual base salary of $335,000 and an annual discretionary bonus of up to fifty percent (50%) of Mr. Stokely’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives established by the Compensation Committee. In connection with the Stokely Employment Agreement, Mr. Stokely was awarded 335,000 shares of restricted stock, with 67,000 shares vesting upon the effective date of the Stokely Employment Agreement, 67,000 shares vesting on January 1, 2022 and 67,000 additional shares vesting annually each year thereafter, such that all shares of restricted stock will be fully vested on January 1, 2025. In addition, the Company agreed to reimburse Mr. Stokely for certain commuting and housing expenses up to a maximum of $6,000 per month for up to twelve months and up to $43,000 for taxes related to the commuting and housing expenses. During the twelve-month period starting July 2019 and ending July 2020, a total of $66,000 was reimbursed for commuting and housing expenses and $42,000 was reimbursed related to taxes as a result of the commuting and relocation expense payments. Therefore, a total of $108,000 was reimbursed for commuting/relocation expense and taxes as of December 31, 2020, in respect of the twelve-month period starting July 2019 and ending July 2020. Of the $66,000 that was reimbursed for commuting and housing expense, $43,000 related to corporate housing, $20,000 related to traveling expense and $3,000 related to other expenses. Of the $108,000 that was reimbursed, $77,830 was reimbursed in 2021 and $30,505 was reimbursed in 2019. These reimbursed expenses are included in “all other compensation” in the Summary Compensation Table.
If Mr. Stokely’s employment is terminated by the Company without Cause (as defined in the Stokely Employment Agreement) or by Mr. Stokely for Good Reason (as defined in the Stokely Employment Agreement), he would be entitled to a lump sum severance payment equal to six months of his base salary in effect at the date of termination, less applicable withholding. In addition, the vesting and exercisability of all then outstanding options held by Mr. Stokely would accelerate in full. Upon the occurrence of a Change in Control (as defined in the Stokely Employment Agreement), all then outstanding stock options, restricted stock and other stock-based grants held by Mr. Stokely would immediately and irrevocably vest and become exercisable and any restrictions thereon shall lapse.
On October 11, 2021, the Company and Ms. Cherevka entered into the Cherevka Employment Agreement. The Cherevka Employment Agreement supersedes and replaces the Company’s prior employment agreement with Ms. Cherevka entered into on September 16, 2019. The Cherevka Employment Agreement provides that Ms. Cherevka will serve as the Company’s President and COO for an annual base salary of $375,000 and an annual discretionary bonus of up to 50% of Ms. Cherevka’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives established by the Compensation Committee. In connection with the Cherevka Employment Agreement, Ms. Cherevka was awarded 500,000 shares of restricted stock, with 100,000 shares vesting upon the effective date of the Cherevka Employment Agreement, 100,000 shares vesting on January 1, 2022 and 100,000 additional shares vesting annually each year thereafter, such that all shares of restricted stock will be fully vested on January 1, 2025.