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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Employment Agreement with Dr. Pardeep Nijhawan
On June 14, 2019 but effective as of June
7, 2019, the Company entered into an employment agreement with Dr. Pardeep Nijhawan. Pursuant to the employment agreement, Dr.
Nijhawan will serve as the Company’s Chief Executive Officer for an indefinite term until Dr. Nijhawan’s employment
is terminated in accordance with the agreement. As compensation for his services to the Company, Dr. Nijhawan will receive a base
salary of $300,000 per year and be eligible to receive a
target annual bonus of 40% of his base salary,
subject to achieving corporate and personal targets to be determined by the Company.
Dr. Nijhawan
will
also receive an automobile allowance of $2,700 per month and be eligible to participate in the Company’s group insured benefits
program, as may be in effect from time-to time for the Company’s employees generally, and executive employees specifically.
Dr. Nijhawan is also eligible for future share and/or option grants, as determined by the Company’s Compensation Committee,
commensurate with
Dr. Nijhawan
’s position and any business
milestones which may be established by the Compensation Committee and
subject to availability of shares and/or options for
grant under the Company’s Incentive Compensation Plan.
If Dr. Nijhawan’s employment with
the Company is terminated for “Cause” (as such term is defined in the employment agreement), subject to applicable
law, the Company’s only obligation shall be to provide Dr. Nijhawan with his base salary and vacation pay earned through
the date of termination and all of Dr. Nijhawan’s vested or non-vested stock options which have not been exercised by Dr.
Nijhawan as of the date of termination will be automatically extinguished. If Dr. Nijhawan is terminated by the Company without
“Cause”, the Company’s only obligation shall be to provide Dr. Nijhawan with (i) a lump sum payment equal to
Dr. Nijhawan’s then current base salary for twenty-four months (the “Severance Period”), (ii) a lump sum payment
of the annual bonus to which Dr. Nijhawan is entitled for the fiscal year immediately preceding the date of termination, if such
bonus has not already been paid, (iii) a lump sum payment equal to Dr. Nijhawan’s annual bonus entitlement, prorated over
Dr. Nijhawan’s length of service in the fiscal year in which his employment is terminated, calculated in accordance with
the terms of the employment agreement; (iv) payment of Dr. Nijhawan’s annual bonus entitlement during the full Severance
Period, calculated in accordance with the terms of the employment agreement, (v) continuation of Dr. Nijhawan’s benefits
and car allowance and any other benefit required to be maintained by law in accordance with the terms of the employment agreement
and (vi) subject to applicable law, all stock options granted to Dr. Nijhawan shall be exercisable in accordance with the terms
of the applicable stock option plan. Dr. Nijhawan may resign from his employment at any time by providing the Company with a minimum
of sixty days advance notice, in writing. Dr. Nijhawan’s notice may be waived by the Company, subject only to providing Dr.
Nijhawan with payment of his base salary and continuation of benefits until the end of the notice period. If Dr. Nijhawan resigns
from his employment, subject to applicable law, (i) all non-vested stock options and all vested stock options held by Dr. Nijhawan
which have not been exercised by Dr. Nijhawan as of the date of termination shall be automatically extinguished and (ii) Dr. Nijhawan
shall not be entitled to any bonus or pro rata bonus payment not already paid on or before the date of termination.
During the term of Dr. Nijhawan’s
employment with the Company and for twelve months following the cessation of Dr. Nijhawan’s employment with the Company,
Dr. Nijhawan is prohibited from competing with the Company’s business in North America. In addition, for twenty-four months
following the cessation of Dr. Nijhawan’s employment with the Company, Dr. Nijhawan is prohibited from soliciting customers
or prospective customers for any purpose competitive with the Company’s business, encouraging any customer to cease doing
business with the Company and soliciting the employment or engagement of certain employees of the Company.
The foregoing description of Dr. Nijhawan’s
employment agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the employment
agreement, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.
Employment Agreement with Michael Brooks
On June 14, 2019 but effective as of June
7, 2019, the Company entered into an employment agreement with Michael Brooks. Pursuant to the employment agreement, Mr. Brooks
will serve as the Company’s President for an indefinite term until Mr. Brooks’ employment is terminated in accordance
with the agreement. As compensation for his services to the Company, Mr. Brooks will receive a base salary of $275,000 per year
and be eligible to receive a
target annual bonus of 40% of his base salary, subject to achieving corporate
and personal targets to be determined by the Company. Mr. Brooks will also receive an automobile allowance of $2,000 per month
and be eligible to participate in the Company’s group insured benefits program, as may be in effect from time-to time for
the Company’s employees generally, and executive employees specifically.
Mr. Brooks is also eligible for future share
and/or option grants, as determined by the Company’s Compensation Committee,
commensurate with
Mr. Brooks’ position and any business milestones which may be established by the Compensation Committee and
subject
to availability of shares and/or options for grant under the Company’s Incentive Compensation Plan.
If Mr. Brooks’ employment with the
Company is terminated for “Cause” (as such term is defined in the employment agreement), subject to applicable law,
the Company’s only obligation shall be to provide Mr. Brooks with his base salary and vacation pay earned through the date
of termination and all of Mr. Brooks’ vested or non-vested stock options which have not been exercised by Mr. Brooks as of
the date of termination will be automatically extinguished. If Mr. Brooks is terminated by the Company without “Cause”,
the Company’s only obligation shall be to provide Mr. Brooks with (i) a lump sum payment equal to Mr. Brooks’ then
current base salary for twelve months plus one additional month for every completed year of service since September 2015, not to
exceed an aggregate of twenty-four months (the “Severance Period”), (ii) a lump sum payment of the annual bonus to
which Mr. Brooks is entitled for the fiscal year immediately preceding the date of termination, if such bonus has not already been
paid, (iii) a lump sum payment equal to Mr. Brooks’ annual bonus entitlement, prorated over Mr. Brooks’ length of service
in the fiscal year in which his employment is terminated, calculated in accordance with the terms of the employment agreement;
(iv) payment of Mr. Brooks’ annual bonus entitlement during the full Severance Period, calculated in accordance with the
terms of the employment agreement, (v) continuation of Mr. Brooks’ benefits and car allowance and any other benefit required
to be maintained by law in accordance with the terms of the employment agreement and (vi) subject to applicable law, all stock
options granted to Mr. Brooks shall be exercisable in accordance with the terms of the applicable stock option plan. If Mr. Brooks’
employment is terminated or “constructively terminated” (as such term is defined in the employment agreement) by the
Company without “Cause” upon or within a twelve month period following a Change of Control (as such term is defined
in the employment agreement), Mr. Brooks shall be entitled to the payments and benefits provided as described in clauses (ii) to
(vi) above, plus a change of control payment equal to twenty-four months of the his then current base salary. Mr. Brooks may resign
from his employment at any time by providing the Company with a minimum of sixty days advance notice, in writing. Mr. Brooks’
notice may be waived by the Company, subject only to providing Mr. Brooks with payment of his base salary and continuation of benefits
until the end of the notice period. If Mr. Brooks resigns from his employment, subject to applicable law, (i) all non-vested stock
options and all vested stock options held by Mr. Brooks which have not been exercised by Mr. Brooks as of the date of termination
shall be automatically extinguished and (ii) Mr. Brooks shall not be entitled to any bonus or pro rata bonus payment not already
paid on or before the date of termination.
During the term of Mr. Brooks’ employment
with the Company and for twelve months following the cessation of Mr. Brooks' employment with the Company, Mr. Brooks is prohibited
from competing with the Company’s business in North America. In addition, for twenty-four months following the cessation
of Mr. Brooks' employment with the Company, Mr. Brooks is prohibited from soliciting customers or prospective customers for any
purpose competitive with the Company’s business, encouraging any customer to cease doing business with the Company and soliciting
the employment or engagement of certain employees of the Company.
The foregoing description of Mr. Brooks’
employment agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the employment
agreement, which is attached hereto as Exhibit 10.3 and incorporated herein by reference.
Indemnification Agreements
On June 14, 2019, the Company entered into
indemnification agreements with each of the Company’s executive officers and directors. Pursuant to the indemnification agreements,
the Company has agreed to indemnify and hold harmless its directors and officers to the fullest extent permitted by the laws of
the Province of British Columbia, subject to certain exceptions. The agreements generally cover expenses that a director or officer
incurs or amounts that a director or officer becomes obligated to pay in connection with any proceeding in any way connected with,
resulting from or relating to his or her service as a current or former director or officer of the Company or another entity at
the request of the Company. The agreements also provide for the advancement of expenses to the directors and officers subject to
specified conditions.
The foregoing description of the indemnification
agreements is not complete and is subject to and qualified in its entirety by reference to the form of indemnification agreement,
which is attached as Exhibit 10.4 hereto and incorporated herein by reference.
