Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On December 27, 2017, SolarWindow Technologies, Inc. (the “
Company
”) entered into an employment agreement with John Conklin (the “
Conklin Employment Agreement
”) pursuant to which Mr. Conklin will continue to serve as the Company’s President, Chief Executive Officer, Chief Financial Officer and a member of the Company’s Board of Directors. The Conklin Employment Agreement has an effective date of January 1, 2018, and terminates on December 31, 2021. The Conklin Employment Agreement may be terminated with or without cause, by the Company or by Mr. Conklin, subject to the rights and obligations contained therein. Mr. Conklin’s prior employment agreement terminated December 31, 2017.
During the term of the Conklin Employment Agreement, Mr. Conklin will receive an annual base salary of $275,000, payable bi-monthly, reimbursement of his medical insurance premiums in an amount up to $2,166 per month and reimbursement of his business expenses incurred on behalf of the Company. Mr. Conklin is eligible for an annual incentive bonus, payable in cash and/or equity, in such amounts as the Company’s Board of Directors, in its sole discretion, deems appropriate. In addition, Mr. Conklin will receive up to a total of $5,000 per semester toward graduate school tuition and related tuition expenses (up to a maximum amount of $15,000 in any calendar year) for the University and educational program into which the Executive is accepted.
Additionally, Mr. Conklin was issued an option (the “
Retention Option
”) to purchase up to 1,008,000 shares of the Company’s common stock (the “
Option Shares
”), as described below.
In the event the Conklin Employment Agreement is terminated by the Company for Cause, or by Mr. Conklin without Good Reason, each as defined in the Conklin Employment Agreement, Mr. Conklin is eligible to receive his (i) Monthly Salary, prorated through the Effective Termination Date; (ii) Business Expense Reimbursements through the Effective Termination Date; (iii) Medical Insurance Reimbursement and any other benefits due to the Executive, prorated through the Effective Termination Date, as defined in the Conklin Employment Agreement.
In the event the Conklin Employment Agreement is terminated by the Company other than for Cause, or by Mr. Conklin for Good Reason, Mr. Conklin is eligible to receive a severance payment equal to:
(1) six (6) Monthly Payments as in effect on the date of termination if this Agreement is terminated after the Effective Date and prior to December 31, 2018;
(2) four (4) Monthly Payments as in effect on the date of termination if this Agreement is terminated after December 31, 2018 and prior to December 31, 2019;
(3) three (3) Monthly Payments as in effect on the date of termination if this Agreement is terminated after December 31, 2019 and prior to December 31, 2021; and
(4) in addition to the delivery of the applicable Severance Payment by the Company, 50 % of the then unvested Retention Options shall vest as of the Termination Date of the Conklin Employment Agreement.
The description of the Conklin Employment Agreement set forth herein is qualified in its entirety by reference to the full text of the Conklin Employment Agreement, a copy of which is attached hereto as
Exhibit 10.1
.
Pursuant to the terms of the Conklin Employment Agreement the Company entered into a retention stock option agreement (the “
Retention Option Agreement
”) with Mr. Conklin setting forth the terms and conditions for the vesting and exercise of the Retention Option and the purchase of the Option Shares. The Option Agreement sets the exercise price for the Option Shares at $5.35 and allows Mr. Conklin to exercise the Option Shares on a “cashless basis” using the formula set forth therein until such time as the Company’s shares of common stock are listed on a national securities exchange. Thereafter, Retention Option may be exercised only on a “for cash” basis. Additionally, the Retention Option vests as to the Option Shares as follows: 21,000 Option Shares vest in arrears for each calendar month of service in which the Conklin Employment Agreement has not been terminated for the next four (4) years (1,008,000 shares in the aggregate).
The description of the Retention Option Agreement set forth herein is qualified in its entirety by reference to the full text of the Retention Option Agreement, a copy of which is attached as
Exhibit A
to
Exhibit 10.1 hereto
.