reasonably incurred in connection with an annual physical with a provider of Ms. Spoffords choice, and up to $25,000 of professional fees incurred in connection with income tax
planning and return preparation per year; and (vi) reimbursement of up to $30,000 in legal and consulting fees related to the negotiation of her employment agreement and related arrangements. In addition, the Company also agreed to grant a sign-on equity award to Ms. Spofford on her start date consisting of 1,500,000 restricted stock units (subject to applicable adjustment for any stock split). The sign-on
equity award will vest in equal installments on each of the first four anniversaries of the date of grant. The sign-on bonus is subject to repayment of the after-tax
portion in the event Ms. Spoffords employment is terminated by the Company for cause or Ms. Spofford resigns without good reason (as such terms are defined in the employment agreement) during the first year of
employment. The sign-on equity award may be cancelled if Ms. Spofford engages in activity that would give the Company grounds to terminate her employment for cause and, to the extent required by
applicable law, the rules of any securities exchange on which the Companys stock is listed or a written policy adopted by the Company, is subject to clawback, forfeiture or similar requirements.
Offer Letter Agreement with James Scully, Our Former Interim President and Chief Executive Officer
We entered into an offer letter, which became effective on December 4, 2019, as amended March 4, 2020, June 2, 2020,
September 3, 2020 and December 4, 2020 with Mr. Scully, which provided that he would serve as Interim President and Chief Executive Officer effective on December 5, 2019 until the earlier of the date that a permanent Chief
Executive Officer commences employment and February 15, 2021 (the Initial Term), and thereafter could be extended on a month-to-month basis.
Pursuant to his offer letter agreement, Mr. Scully was entitled to the following compensation: (i) monthly cash compensation of $100,000; (ii) a sign-on bonus of $100,0000; (iii) up to $20,000 per
month in travel and other agreed-upon expenses, (iv) an annual bonus for fiscal year 2020 with a target bonus of $1.2 million (prorated for any partial year of service beginning on March 4, 2020); provided, that the actual amount of
Mr. Scullys annual bonus in respect of the Companys 2020 fiscal year could not be less than $900,000) and(v) reimbursement of up to $7,500 in legal fees related to the negotiation of the offer letter amendment and related
arrangements. In addition, the Company also granted a sign-on equity award of 180,000 restricted stock units to Mr. Scully on December 5, 2019 which vested on March 4, 2020. In addition, on
December 18, 2020, Mr. Scully received a transition bonus of $600,000.
On February 15, 2021, Mr. Scullys
service terminated pursuant to the terms of his offer letter. Mr. Scully continues to serve as a member of the Board of Directors.
Offer Letter Agreement with Mark Webb, Our Chief Financial Officer
We are party to an offer letter, which became effective on April 12, 2019, with Mr. Webb, to serve as Executive Vice President, Chief
Financial Officer. Pursuant to the terms of the offer letter Mr Webb is entitled to the following compensation (i) an annual base salary of $600,000; (ii) a one-time
sign-on bonus of $100,000; and (iii) eligibility to receive an annual bonus with a target of 70% of Mr. Webbs base salary and up to 200% of his target bonus for exceptional performance. In
addition, the Company also agreed to grant a sign-on equity award in the form of restricted stock units to Mr. Webb on his start date with a grant date fair market value of $700,000, which vest in equal
installments on each of the first four anniversaries of the date of grant. Mr. Webb also received in a guaranteed Annual Incentive Plan payment of $319,846, which represented his prorated bonus for fiscal 2019 at the target of 70%.
Mr. Webbs offer letter includes customary terms and conditions, including confidentiality and assignment of intellectual property
provisions, a 12-month post-employment prohibition on competition, a 12-month post-employment prohibition on solicitation of customers, and a 12-month post-employment prohibition on solicitation of employees, agents, or contract workers with whom Mr. Webb had material business contact during the course of his employment.
Mr. Webb is also entitled to severance upon certain terminations of employment, as described below under Potential Payments Upon
Termination of Employment or Change in Control.
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