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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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Incoming Chief Financial Officer
On August 10, 2021, the Company and Sophia Wu, Chief Financial Officer of the Company, agreed that she will transition into a new role as the Company’s Chief Accounting Officer effective August 23, 2021.
Effective August 23, 2021, Mr. Caci will succeed Ms. Wu as the Company’s Chief Financial Officer, pursuant to an employment agreement (the “Employment Agreement”) with the Company executed on August 10, 2021. Mr. Caci will report to the Company’s Chief Executive Officer, Dr. Tianyi Jiang. As compensation for his services, Mr. Caci will receive an annualized base salary of $315,000, a target bonus of $285,000, and long term equity incentives equal to $1,000,000 for the 2021 fiscal year, comprised of restricted stock units (RSUs) at the Company's next company-wide grant cycle. Mr. Caci’s base salary and bonus shall be prorated according to the portion of the year employed. In connection with his appointment, Mr. Caci will serve as the Company’s principal financial officer and principal accounting officer.
Mr. Caci brings more than 25 years of experience leading the strategic finance operations at both public and privately held SaaS and IT service companies. Recently, Mr. Caci held the position of Chief Financial Officer at Brand Value Accelerator, LLC, an industry leading digital commerce services firm, where he aligned the company to capitalize on the meteoric rise of Shopify. Mr. Caci also previously served as Chief Financial Officer of the Company from 2010 – 2013.
Mr. Caci will start his employment with the Company on August 23, 2021. Mr. Caci will be subject to an initial probationary period of employment of three months from his start date, during which time the Company may terminate his Employment Agreement. During and following Mr. Caci’s probationary period, the following termination provisions shall apply:
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(a)
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Resignation without Good Reason.
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Mr. Caci may resign and terminate his Employment Agreement upon written notice to the Company as without Good Reason. “Good Reason” is defined in the Employment Agreement .and generally means a material reduction in authority or responsibility; a reduction of base salary; the failure of the Company to provide substantially the same fringe benefits that are provided to him at the inception of his Employment Agreement; or the Company’s failure to comply with any material term of the Employment Agreement. In the event Mr. Caci resigns without Good Reason, Mr. Caci shall not be entitled to receive compensation or other benefits.
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(b)
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Termination by the Company for Cause.
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The Company has the right to terminate Mr. Caci’s employment under the Employment Agreement at any time for Cause as defined in the Employment Agreement, which termination shall be effective immediately. “For Cause” is generally defined to include termination for any uncured material breach of the Employment Agreement by Mr. Caci or any gross negligence, intentional nonperformance or misperformance in the performance of material duties; or willful dishonesty, fraud or misconduct with respect to the business or affairs of the Company. In the event of termination by the Company for Cause, Mr. Caci would not be entitled to any compensation.
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(c)
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Termination by Company without Cause or by Mr. Caci for Good Reason.
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The Company may terminate Mr. Caci’s employment other than for Cause as described above at any time upon written notice to Mr Caci and Mr. Caci may resign for “Good Reason” as described above. If such termination occurs before three completed years of service as measured from August 1, 2021, Mr. Caci shall receive the sum of four months base salary. Subsequently, in Mr. Caci’s fourth year and so on, Mr. Caci will receive one month for every completed year of service.
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Mr. Caci shall be eligible to participate in all benefit programs of the Company including but not limited to the Company’s 401(k) program; health, life and disability insurance, 2021 Equity Incentive Plan and the 2021 Employee Stock Purchase Program.
A copy of the Employment Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The above description of the Employment Agreement (and any defined terms contained therein) are qualified in their entirety by the full text of such exhibit.
Other than the Employment Agreement, there are no arrangements or understandings between Mr. Caci and any other person pursuant to which Mr. Caci was appointed to serve as Chief Financial Officer, nor are there related party transactions requiring disclosure pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended, or Form 8-K.
Incoming Chief Operating Officer
On August 10, 2021, the Company and Mr. Brian Brown agreed that he will transition out of his role as Chief Operating Officer on August 23, 2021 and will focus on his role as the Company's General Counsel, in connection with which he will continue to serve dual functions as Chief Legal Officer and Chief Compliance Officer. In addition, he will continue to serve as a Director and Secretary on the Board of Directors of the Company.
Effective August 23, 2021, Mr. Thomas Lin will succeed Mr. Brown as the Company’s Chief Operating Officer, having been promoted from his previous role as Chief Customer Officer. Mr. Lin will continue to report to the Executive Chairman of the Company, Mr. Xunkai Gong. As compensation for his services, Mr. Lin will receive an annualized base salary of $315,000, a target bonus of $315,000, and long term equity incentives for the 2021 fiscal year in the amount of $1,000,000 in the form of sixty percent options and forty percent restricted stock units.
Mr. Lin was the Company’s first sales executive and has been instrumental in growing the multi-million-dollar business over the last two decades. With a specific focus on international expansion, he has held numerous operational leadership positions with the Company, including in Japan and EMEA, and most recently, as Chief Customer Officer.
There are no arrangements or understandings between Mr. Lin and any other person pursuant to which Mr. Lin was appointed to serve as Chief Operating Officer, nor are there related party transactions requiring disclosure pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended, or Form 8-K.