Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Resignation
of Paul McDonnel as Interim Chief Financial Officer
On
October 4, 2021, Paul McDonnel notified Sunworks, Inc. (the “Company”) that he will resign from his position as Interim Chief
Financial Officer of the Company, effective October 4, 2021. The Company expects Mr. McDonnel to remain a full-time employee through
November of 2021. Thereafter, the Company anticipates Mr. McDonnel to continue part-time for a certain period of time to assist in the
transition to the Company’s new Chief Financial Officer.
Appointment
of Jason Bonfigt as Chief Financial Officer
Effective
October 5, 2021, the Company appointed Jason Bonfigt as its Chief Financial Officer. Mr. Bonfigt, age 43, joins the Company from Broadwind,
Inc. (NASDAQ: BWEN), a manufacturer of structures, equipment, and components for clean tech and other specialized applications, where
he served as Chief Financial Officer from August 2017 to October 2021. Prior to his role as Chief Financial Officer at Broadwind, he
served as Vice President, Corporate Controller from August 2016 until his appointment as Chief Financial Officer. During his tenure at
Broadwind, he performed various financial, accounting and operational functions. Prior to joining Broadwind, Mr. Bonfigt held a series
of positions in finance at Schneider National, a provider of truckload, intermodal and logistics services. He is a Certified Public Accountant
and holds a Bachelor’s degree in Accounting and Finance from the University of Wisconsin – Green Bay, as well as Master of
Business Administration degree – Finance and Economics from the Kellogg School of Business at Northwestern University.
Mr.
Bonfigt entered into an employment agreement with the Company on October 5, 2021. Pursuant to the terms of the employment agreement,
Mr. Bonfigt will serve as Chief Financial Officer of the Company. Mr. Bonfigt’s employment agreement shall continue until terminated
by either party. Pursuant to the employment agreement, Mr. Bonfigt will receive an annual base salary of $320,000, paid bi-weekly in
26-equal amounts. Additionally, Mr. Bonfigt will be eligible to receive (i) an annual cash bonus equal to fifty percent (50%) of his
base salary, provided that certain financial performance objectives are met, as set and determined by the Compensation Committee of the
Company’s Board of Directors, and (ii) an annual equity bonus of restricted stock units of common stock shares, valued at $200,000
under the Company’s 2016 Equity Incentive Plan (the “Plan”), payable at the discretion of the Compensation Committee
of the Company’s Board of Directors, one third of which shall vest on the one-year anniversary of the grant and the balance shall
vest in twenty four equal monthly installments thereafter.
In
consideration for Mr. Bonfigt entering into the employment agreement, on October 5, 2021, the Company granted Mr. Bonfigt restricted
stock units of 104,529 shares of common stock under the Plan (the “Initial RSU Grant”).
One third of the Initial RSU Grant shall vest on the one-year anniversary of the grant and the balance shall vest in twenty four equal
monthly installments thereafter.
If
Mr. Bonfigt’s employment is terminated by the Company without Cause (as defined in the employment agreement) or if the Company
enters into a Change of Control transaction (as defined in the employment agreement), Mr. Bonfigt will receive a lump sum severance payment
equal to an amount equal to Mr. Bonfigt’s then current monthly base salary (the “Ending Monthly Salary”) multiplied
by the number of months he has been employed pursuant to the employment agreement, provided that such lump sum payment shall not exceed
the Ending Monthly Salary multiplied by six (6).
The
foregoing description of the employment agreement does not purport to be complete and is subject to and qualified in its entirety by
reference to the full and complete text of the employment agreement, which is filed hereto as Exhibit 10.1.
Other
than the foregoing, there are no transactions between the Company and Mr. Bonfigt that would require disclosure under Item 404(a) of
Regulation S-K. There are no family relationships between Mr. Bonfigt with any director or executive officer of the Company.
On
October 7, 2021, the Company released a press release to disclose Mr. Bonfigt’s appointment as Chief Financial Officer, a copy
of which is attached hereto as Exhibit 99.1.