Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Executive Officer and Chief Financial Officer Compensation
On January 27, 2023, the Board of Directors (the "Board") of Sunworks, Inc. (the
"Company") amended the Employment Agreements and approved the following
adjustments to the compensation of Gaylon Morris, the Company's Chief Executive
Officer and Jason Bonfigt, the Company's Chief Financial Officer.
Mr. Gaylon Morris
Mr. Morris's annual base salary was increased from four hundred thousand dollars
($400,000) to five hundred thousand dollars ($500,000) for the calendar year
2023. Mr. Morris will also be entitled to a discretionary bonus equal to up to
one hundred percent (100%) of his base salary, provided that certain performance
criteria, as established by the Compensation Committee of the Company's Board of
Directors, are met. Mr. Morris was also granted a restricted stock unit grant
equal to 265,957 shares of the Company's common stock, which shall vest over a
three-year period in equal installments on each anniversary of December 20, 2022
through December 20, 2025, provided that Mr. Morris continues to perform
services for the Company through the applicable vesting date. Further, should
the consolidated earnings of the Company and its subsidiaries before interest,
taxes, depreciation and amortization, as calculated using the audited financial
statements of the Company for the combined period from January 1 through
December 31 of the calendar year exceed $0 for two consecutive fiscal quarters:
i) Mr. Morris' annual base salary shall be increased to six hundred fifty
thousand dollars ($650,000), retroactive to the first day of the first quarter
of such two consecutive quarters; and ii) Mr. Morris will be entitled to a
one-time restricted stock grant representing the right to receive such number of
shares of common stock of the Company equal to two million dollars ($2,000,000)
divided by the closing price of the Company's common stock on the first day of
the first consecutive profitable quarter, which shall vest beginning on the
first day following the two consecutive quarters of positive EBITDA and vest
over a two year period in three equal installments; provided that Mr. Morris
continues to perform services for the Company through the applicable vesting
date. The other terms and conditions of Mr. Morris's employment agreement with
the Company remain unchanged.
Mr. Jason Bonfigt
Mr. Bonfigt's annual base salary was increased from three hundred twenty
thousand dollars ($320,000) to three hundred seventy thousand dollars ($370,000)
for the calendar year 2023. Mr. Bonfigt will be entitled to a discretionary
bonus equal to fifty percent (50%) of his base salary, provided that certain
performance criteria, as established by the Compensation Committee of the
Company's Board of Directors, are met. Mr. Bonfigt will also be granted, each
year (including 2023) a restricted stock unit grant representing the right to
receive such number of shares of common stock of the Company equal to $200,000,
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;
provided Mr. Bonfigt continues to perform services for the Company through the
applicable vesting date. Further, should the consolidated earnings of the
Company and its subsidiaries before interest, taxes, depreciation and
amortization, as calculated using the audited financial statements of the
Company for the combined period from January 1 through December 31 of the
calendar year exceed $0, Mr. Bonfigt will be entitled to a one-time restricted
stock grant representing the right to receive such number of shares of common
stock of the Company equal to $250,000.00 divided by the closing price of the
Company's common stock on the date of grant, which shall vest in full on the
date the Administrator, as defined in the Sunworks, Inc. 2016 Equity Incentive
Plan (the "Plan"), certifies receipt by the Company of an audit report from its
auditors in which the Company's EBITDA for the combined period from January 1
through December 31 of the calendar year exceeds $0. In addition, in the event
that the Company's EBITDA exceeds $0 for two consecutive quarters, as certified
by the Administrator (as defined in the Plan), then the Company shall grant
under the Plan to Mr. Bonfigt a one-time restricted stock unit grant for such
number of shares of common stock of the Company equal to $500,000 divided by the
closing price of the Company's common stock on the first day of the first
consecutive quarter with EBITDA greater than $0, which shall vest in three equal
installments, with the first equal installment vesting on the day of a
successful audit of the Company for the year the second consecutive quarter of
positive EBITDA occurs and the two additional equal installments vesting on the
second and third anniversary of such successful audit. Should Mr. Bonfigt's
employment be terminated by the Company without cause or if the Company enters
into a change of control transaction, then the Company has agreed to pay Mr.
Bonfigt an amount equal to Mr. Bonfigt's then current monthly salary multiplied
by twelve (12). The other terms and conditions of Mr. Bonfigt's employment
agreement with the Company remain unchanged.
Each restricted stock unit referenced above represents the right to receive one
share of common stock of the Company and pursuant to the terms of the Plan.
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits
Number Description
10.1 Second Amendment to January 11, 2021 Employment Agreement between
Sunworks, Inc. and Gaylon Morris
10.2 Amendment to October 5, 2021 Employment Agreement between Sunworks,
Inc. and Jason Bonfigt
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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