Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Agreements of Certain
Officers
On May 22, 2020, Phillip L. Kumnick, Deputy Chairman of Ipsidy Inc. (the
"Company"), was appointed as Chief Executive Officer of the Company. Philip R.
Broenniman, a director of the Company, was appointed as Chief Operating Officer
and President of the Company. On December 31, 2020 effective May 22, 2020, Mr.
Kumnick and Mr. Broenniman each entered into Offer Letters with the Company
providing that each of the executives will devote their full time and attention
to the business of the Company on an "at will" basis.
Pursuant to the Offer Letter entered with Mr. Kumnick, Mr. Kumnick base salary
since his engagement was $125,000 per year and was increased to $187,500 per
annum as of November 1, 2020. Subject to the Company achieving a revenue target
of not less than $8,000,000 in a fiscal year (the "Revenue Target"), the base
salary is to be increased to $250,000 per annum and to be again further reviewed
by the Compensation Committee based on prevailing market conditions. Further,
upon achieving the Revenue Target or a portion thereof or in the event of a
change of control or involuntary termination, Mr. Kumnick will receive a bonus
of up to $64,980. Mr. Kumnick is also eligible to receive the usual benefits
available to the executives of the Company.
Pursuant to the Offer Letter entered with Mr. Broenniman, Mr. Broenniman base
salary since his engagement was $87,500 per year and was increased to $131,250
per annum as of November 1, 2020. Subject to the Company achieving the Revenue
Targets, the base salary is to be increased to $175,000 per annum and to be
again further reviewed by the Compensation Committee based on prevailing market
conditions. Further, upon achieving the Revenue Target or a portion thereof or
in the event of a change of control or involuntary termination, Mr. Broenniman
will receive a bonus of up to $45,833. Mr. Broenniman is also eligible to
receive the usual benefits available to the executives of the Company.
In May 2020, Mr. Kumnick was granted options to acquire 33,333,334 shares of
common stock and Mr. Broenniman was granted options to acquire 16,666,666 shares
of common stock. 20% of the options vest at grant and the balance vest subject
to performance conditions.
The foregoing information is a summary of each of the agreements involved in the
transactions described above, is not complete, and is qualified in its entirety
by reference to the full text of those agreements, each of which will be
attached an exhibit to the Company's Annual Report on Form 10-K. Readers should
review those agreements for a complete understanding of the terms and conditions
associated with this transaction.
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