Change of Control Severance Plan
In November 2011, the Company adopted a Change of Control Severance Plan (the Severance Plan). Under the Severance Plan, a change of
control is defined as the occurrence of any of the following events: (i) the acquisition by any person or group of more than 50% of the then outstanding securities of the Company entitled to vote generally in the election of directors;
(ii) individuals who constitute the board of directors cease for any reason to constitute at least a majority of the board, provided, however, that any individual becoming a director whose election, or nomination for election, by the
Companys shareholders, was approved by a vote of at least a majority of the incumbent directors are considered as though such individual were a member of the incumbent board; (iii) certain reorganizations, recapitalizations, mergers or
consolidations; (iv) the sale, transfer or other disposition of all or substantially all of the assets of the Company; or (v) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
In the event that a designated participant, including Stephen Holt and Sumit Sharma, is terminated on, or during the two-year period following, a change of control, for any reason other than by the Company for cause (or, in the case of a participant other than a designated participant, any termination of the participants
employment, on or during the eighteen-month period following a change of control, by the Company other than for cause or by the participant for good reason), the Company will pay the participant an amount
equal to one year of base salary at the rate in effect at the date of termination or, if higher, on the date of the change of control, plus a payment equal to the target bonus for which the participant is eligible, which amount shall be payable
within ten business days following the later of the effective date of the release of claims described below or the date it is received by the Company. If, however, the timing associated with the execution, revocation and effectiveness of the release
of claims would otherwise allow the payment described above to be made in either of two taxable years, such payment will not be made prior to the first day of the second taxable year. The Company will also pay the full cost of the participants
continued participation in the Companys group health and dental plans for one year or, if less, for so long as the participant remains entitled to continue such participation under applicable law. In addition, all options held by the
participant which are not exercisable, and which have not been exercised and have not expired or been surrendered or cancelled, will become initially exercisable upon termination and will otherwise be and remain exercisable in accordance with their
terms, and all other equity-based compensation awards granted to the participant, including, restricted stock and restricted stock units, will become vested and become free of restrictions.
Payment under the Plan is contingent upon the participant executing and delivering to the Company a release from all claims in any way resulting from, arising
out of or connected with such participants employment with the Company.
Pay Ratio
Following is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual combined total compensation of Sumit Sharma, or Chief
Executive Officer and Perry Mulligan, our former Chief Executive Officer, compared to the median of the annual total compensation of our other employees.
We determined our median employee based on base salary (annualized in the case of full- and part-time employees who joined the Company during 2020) of each of our 45 employees (excluding Messrs. Sharma and Mulligan) as of December 31, 2020.
The annual total compensation of our median employee (other than Messrs. Sharma and Mulligan) for 2020 including base salary, bonus and equity grant was
$174,728. Mr. Sharmas total compensation for 2020, including base salary, bonus and equity grant was $241,565. Mr. Mulligans total compensation through February 24, 2020, the date on which he resigned as Chief Executive
Officer, including salary, bonus and equity grant was $69,679.
Based on the foregoing, our estimate of the ratio of the annual combined total
compensation of our Chief Executive Officer and former Chief Executive Officer to the median of the annual total compensation of all other
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