Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the continued employment of each of Michael Toporek as Chief
Executive Officer of Soluna Holdings, Inc. (the "Company" or "our"), and Moshe
Binyamin as President of MTI Instruments, Inc. ("MTI"), our wholly owned
subsidiary, effective as of January 14, 2022, the Company entered into an
employment agreement with Michael Toporek, our current Chief Executive Officer
(the "Toporek Employment Agreement"), and, effective January 20, 2022, the
Company entered into an employment agreement with Moshe Binyamin, current
President of MTI (the "Binyamin Employment Agreement"). The Toporek Employment
Agreement and the Binyamin Employment Agreement were each approved by the
compensation committee (the "Compensation Committee") of the board of directors
(the "Board") of the Company.
In connection with the Binyamin Employment Agreement also effective as of
January 20, 2022, the Board elected Mr. Binyamin, MTI's then current President,
to the offices of President and Chief Executive Officer of MTI. Mr. Binyamin
does not have any family relationships with any of the Company's Directors or
executive officers, is not a party to any transactions of the type listed in
Item 404(a) of Regulation S-K, and was not appointed pursuant to any arrangement
or understanding with any other person. Mr. Binyamin's biography is contained in
the Company's proxy statement for the Company's annual meeting of stockholders
held on June 9, 2021, which was filed with the Securities and Exchange
Commission on May 18, 2021, and is incorporated herein by reference.
Pursuant to the Toporek Employment Agreement, Mr. Toporek agreed to continue to
serve as our Chief Executive Officer for an initial term of three years, to be
extended automatically for successive one-year periods, in consideration for an
annual cash salary of $300,000, which will be subject to annual review by the
Board or its Compensation Committee and may be increased from time to time by
the Board or the Compensation Committee ("Toporek Base Salary"). The Toporek
Employment Agreement provides for (i) annual performance bonuses based on
attainment of one or more individual or business performance goals proposed by
Mr. Toporek and approved by the Compensation Committee in its sole discretion
(the "Annual Performance Bonus" and such target Annual Performance Bonus for a
given calendar year, the "Target Performance Bonus"); (ii) a one-time option
previously granted by the Compensation Committee on May 13, 2021, to purchase
500,000 shares (the "Shares") of the Company's common stock, par value $0.001
per share ("Common Stock") at a per -share exercise price equal to $6.84 per
share, subject to vesting over a three-year period after the grant date and all
of the other terms and conditions of the Company's 2021 Stock Incentive Plan and
an individual award agreement entered into between the Company and Mr.
Toporek(the "LTI Award"); (iii) future outperformance awards upon attainment of
each Market Capitalization Growth Target (as defined in the Toporek Employment
Agreement) which will be fully vested upon grant and delivered subject to
certain conditions as set forth in the Toporek Employment Agreement (the
"Outperformance Awards"); and (iv) eligibility for employee benefit plans in
effect until Mr. Toporek's employment with the Company is terminated.
Pursuant to the Toporek Employment Agreement, if Mr. Toporek is terminated for
any reason other than termination without cause or resignation for good reason,
he is entitled to receive (i) a lump sum payment in the amount equal to the sum
of Mr. Toporek's earned but unpaid Toporek Base Salary through the date of
termination, (ii) his earned but unpaid Annual Performance Bonus for the
calendar year preceding the date of termination, (iii) his accrued but unused
vacation days as of the date of termination, (iii) reimbursement for any
unreimbursed business expenses incurred through the date of termination, and
(iv) any other benefits or rights Mr. Toporek will have accrued or earned
through his date of termination under the terms of any employee benefit plan.
Additionally, if Mr. Toporek is terminated without cause or he resigns for good
reason, subject to satisfaction of certain release conditions, he will also be
entitled to coverage under any health insurance plan covering Mr. Toporek for 12
months after the termination of his employment, one year of his then-current
Toporek Base Salary and the Target Performance Bonus for the calendar year
containing the date of termination, both paid in a single lump sum in cash on
the first regular Company payroll date next following the 60th calendar day
following the date of termination.
Pursuant the Binyamin Employment Agreement, Mr. Binyamin agreed to serve as
President and Chief Executive Officer of MTI for an initial term of 24 calendar
months, to be extended automatically for successive 12-month periods, in
consideration for an annual cash salary of $180,350, which will be subject to
annual review by the Board or its Compensation Committee and may be increased
from time to time at the Board or the Compensation Committee's sole discretion
("Binyamin Base Salary"). The Binyamin Employment Agreement provides for:
performance bonuses as determined by the Compensation Committee (each a
"Binyamin Performance Bonus"); a cash incentive payment in the event of a Change
in Control (as defined in the Binyamin Employment Agreement) occurring while Mr.
Binyamin is in active employment or within three months following its
termination by death, disability, without cause or his resignation for good
reason, based on the consideration received by MTI following a Change in
Control; and employee benefits in accordance with our policies, and remain in
effect until Mr. Binyamin's employment with MTI is terminated.
Pursuant to the Binyamin Employment Agreement, if Mr. Binyamin is terminated for
any reason other than termination without cause or resignation for good reason,
he is entitled to receive (i) a lump sum payment in an amount equal to the sum
of Mr. Binyamin's earned but unpaid Binyamin Base Salary through the date of
termination, (ii) his earned but unpaid Annual Performance Bonus for the
calendar year preceding the date of termination, (iii) his accrued but unused
vacation days as of the date of termination, (iii) reimbursement for any
approved and unreimbursed business expenses incurred through the date of
termination, and (iv) any other benefits or rights Mr. Binyamin will have
accrued or earned through his date of termination under the terms of any
employee benefit plan (collectively, the "Binyamin Accrued Benefits").
Additionally, if Mr. Binyamin is terminated without cause or if he resigns for
good reason, subject to satisfaction of certain release conditions, he will also
be entitled to coverage under any health insurance plan covering Mr. Binyamin,
for 12 months after the termination of his employment, 12 months of his
then-current Binyamin Base Salary payable in 12 equal monthly installments, and
any Performance Bonus earned but unpaid for the most recently completed bonus
year preceding the date of termination, paid in a single lump sum in cash on the
first regular Company payroll date next following the 60th calendar day
following the date of termination.
The foregoing description of the Toporek Employment Agreement and the Binyamin
Employment Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Toporek Employment Agreement and
the Binyamin Employment Agreement, copies of which are filed as Exhibits 10.1
and 10.2 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
10.1+ Employment Agreement, by and between Soluna Holdings, Inc. and
Michael Toporek, dated as of January 14, 2022
10.2+ Employment Agreement, by and between MTI Instruments, Inc. and
Moshe Binyamin, dated as of January 20, 2022
+ Represents management contract or compensation plan or arrangement.
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