Executive
Agreements
Halden
S. Shane
On
September 22, 2020, we entered into a
three year employment agreement with Dr. Shane, effective October 1, 2020. The agreement provides for a base annual salary
of $500,000. The agreement also provides for a signing bonus of 375,000 warrants. Dr. Shane is also entitled to a cash performance
bonus and an annual issuance of an option to purchase 31,250 shares of common stock from the 2016 Plan at the discretion of the
Board. The agreement also provides that we will reimburse Dr. Shane for the expenses associated with the use of an automobile
up to $750 a month. The term of the agreement is three years.
In
the event Dr. Shane is terminated as CEO as a result of a change in control, Dr. Shane will be entitled to a lump sum payment
of two years’ salary at the time of such termination.
The
Board may terminate Dr. Shane for cause by written notification to Dr. Shane; provided, however, that no termination for cause
will be effective unless Dr. Shane has been provided with prior written notice and opportunity for remedial action and fails to
remedy within 30 days thereof, in the event of a termination by the Company (i) by reason of willful dishonesty towards, fraud
upon, or deliberate injury or attempted injury to, the Company, (ii) by reason of material breach of his employment agreement
and (iii) by reason of gross negligence or intentional misconduct with respect to the performance of duties under the agreement.
Upon termination for cause, Dr. Shane will be immediately paid an amount equal to his gross salary. The Board may terminate Dr.
Shane other than for cause at any time upon giving notice to Dr. Shane. Upon such termination, Dr. Shane will be immediately paid
an amount equal to his gross salary.
Elissa
J. Shane
On
October 1, 2020, we entered into an employment agreement with Elissa J. Shane, effective October 1, 2020. Pursuant to her
employment agreement, Ms. Shane will receive an annual base salary of at least $270,000, subject to annual review and discretionary
increase by the Compensation Committee of the Board. Ms. Shane is eligible to receive an annual cash bonus and other annual incentive
compensation. The agreement originally provided for a grant of 93,750 warrants. Additionally, in connection with the execution
of her employment agreement, on October 1, 2020, we issued Ms. Shane a warrant to purchase 93,750 shares of Common Stock
at an exercise price of $6.17 per share. These provisions were subsequently amended to provide for the issuance to Ms. Shane of
31,250 options from the 2016 Equity Plan at the closing price of $7.06 on the date of grant in lieu of the warrant grant and the
93,750 warrants were cancelled. Ms. Shane acknowledged that the 31,250 options were in full consideration of the amount she was
entitled to under the agreement. Her employment agreement also provides that we will reimburse Ms. Shane for reasonable and
necessary business and entertainment expenses that she incurs in performing her duties. During the term of her employment, Ms.
Shane will also be entitled to up to four weeks of paid vacation time annually, which will accrue up to six weeks, and to participate
in our benefit plans and programs, including but not limited to all group health, life, disability and retirement plans.
Ms. Shane is also entitled to the sum of $1,000 per month as a vehicle allowance. The initial term of her employment agreement
is three years, which may be automatically extended for successive one-year terms, unless either party provides the other with
120 days’ prior written notice of its intent to terminate the agreement.
In
the event Ms. Shane is terminated as COO as a result of a change in control, Ms. Shane will be entitled to a lump sum payment
of one and a half years’ salary at the time of such termination.
Agreements
with Directors
In
December 2017, we increased the annual fee to the members of our Board to $40,000, to be paid in cash on a quarterly basis, with
the exception of the audit committee chairperson, whose annual fee we increased to $45,000, also to be paid in cash on a quarterly
basis. Director compensation also includes the annual issuance of our common stock.
For
the three months ended March 31, 2020, we issued an aggregate of 50,000 shares of common stock that were valued at $48,000 to
members of our Board.
For
the three months ended March 31, 2021, we issued an aggregate of 50,000 shares of common stock that were valued at $228,000 to
members of our Board.
Manufacturing
Agreement
In
June 2020 we entered into a manufacturing agreement with Planet Innovation Products, Pty Ltd (“PI”). The agreement
does not provide for any minimum purchase commitments and is for a term of three years. The agreement also provides for a warranty
against product defects.
Cloud
Computing Service Contract
In
May 2020 we entered into an agreement for a cloud computing service contract. The contract provides for annual payments in the
amount of $30,409 and has a term of 5 years. Approximate
minimum payments under the contract are as follows:
|
Year Ended |
|
Amount |
|
| April
1 – December 31, 2021 |
|
$ |
18,000 |
|
| December
31, 2022 |
|
|
30,000 |
|
| December
31, 2023 |
|
|
30,000 |
|
| December
31, 2024 |
|
|
30,000 |
|
| December
31, 2025 |
|
|
15,000 |
|
| |
|
$ |
123,000 |
|
Other
Agreements
TOMI
Service Network (“TSN”) is a national service network composed of existing full-service restoration industry specialists
that have entered initially into licensing agreements with us to become Primary Service Providers (“PSPs”). The licensing
agreements originally granted protected territories to PSPs to perform services using our SteraMist® platform of products
and also provide for potential job referrals to PSPs whereby we are entitled to referral fees. Additionally, the agreement provides
for commissions due to PSPs for equipment and solution sales they facilitate to other service providers in their respective territories.
As part of these agreements, we are obligated to provide to the PSPs various training, ongoing support and facilitate a referral
network call center. As of March 31, 2021, we have 199 network companies in TSN. The nature and terms of our TSN agreements may
represent multiple deliverable arrangements. Each of the deliverables in these arrangements typically represent a separate unit
of accounting. There is no exclusivity in our TSN network.
|
