Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
David B. BarceloOn April 30, 2020, the Board of Directors of Aware, Inc. ("Aware") appointed
David B. Barcelo to serve as Chief Financial Officer of Aware, effective May 4,
2020 (the "Effective Date"). Mr. Barcelo, age 41, served as Vice President of
Strategic Marketing of IDEMIA (OT-Morpho) from November 2017 to May 2020. Mr.
Barcelo previously served as Vice President of Business Operations for
MorphoTrust USA LLC from 2011 to 2017, as Corporate Director of Financial
Planning and Strategic Operations of L-1 Identity Solutions from 2006 to 2011,
and as Director of Operations for WorkOnCall.com from 2005 to 2006. Mr. Barcelo
received his MBA and MIS degrees from Boston University and his Bachelor of
Science degree in Computer Science from Yale University.
On May 4, 2020, Aware and Mr. Barcelo entered into an Employment Agreement (the
"Barcelo Employment Agreement"). Pursuant to the Barcelo Employment Agreement,
Mr. Barcelo will receive the following compensation: (a) an annual base salary
of $250,000; (b) annual cash incentive compensation as determined by the Board
or the Compensation Committee with an initial target annual incentive
compensation up to 40% of his base salary and tied to Company performance
targets as determined by the Compensation Committee; (c) an unrestricted stock
award of 20,000 shares of the Company's common stock, which such shares shall be
issued to the Executive in two (2) equal installments on June 30, 2020 and
December 31, 2020 provided the Executive is serving as a director, officer or
employee of the Company or any subsidiary of the Company on such date; (d) a
stock option for 12,500 shares of Aware's common stock with an exercise price
per share equal to the greater of (i) the fair market value of a share of
Aware's common stock on the date of grant or (ii) $4.50 (such exercise price
referred to as the "Base Exercise Price") and vesting over four years; (e) a
stock option for 12,500 shares of Aware's common stock with an exercise price
per share equal to the Base Exercise Price plus $1.00 and vesting over four
years; (f) a stock option for 12,500 shares of Aware's common stock with an
exercise price per share equal to the Base Exercise Price plus $2.00 and vesting
over four years; and (g) a stock option for 12,500 shares of Aware's common
stock with an exercise price per share equal to the Base Exercise Price plus
$3.00 and vesting over four years. All stock options must be exercised within 60
days of Mr. Barcelo ceasing to be an employee of, or paid consultant to, Aware.
Subject to Mr. Barcelo signing and delivering to Aware a noncompetition
agreement and a release of claims, Mr. Barcelo will also be eligible to receive
compensation upon termination of Mr. Barcelo's employment by Aware without
"Cause" or by Mr. Barcelo for "Good Reason" as follows: (a) an amount equal to
Mr. Barcelo's base salary paid during the twelve (12) months immediately
preceding the termination of Mr. Barcelo's employment with Aware, divided by the
number of days employed during the twelve (12) months immediately preceding the
termination of Mr. Barcelo's employment with Aware and multiplied by 365, (b)
all time-based stock options and other time-based stock-based awards held by Mr.
Barcelo in which such stock option or other stock-based award would have vested
if Mr. Barcelo had remained employed for an additional twelve (12) months
following the date of termination shall vest and become exercisable or
nonforfeitable as of the date of termination, and (c) Aware paying the
difference between the cost of COBRA continuation coverage, should Mr. Barcelo
elect to receive it, for Mr. Barcelo and any dependent who received health
insurance coverage prior to termination of Mr. Barcelo's employment with Aware,
and any premium contribution amount applicable to Mr. Barcelo as of such
termination, for a period of twelve (12) months following the date of
termination of Mr. Barcelo's employment with Aware.
Pursuant to the change in control provisions in the Barcelo Employment
Agreement, if Mr. Barcelo's employment is terminated during the eighteen (18)
month period following a "Change of Control" (a) by Aware without "Cause" or (b)
by Mr. Barcelo for "Good Reason", subject to Mr. Barcelo signing and delivering
to Aware a noncompetition agreement and a release of claims, Mr. Barcelo will
receive from Aware: (i) a lump-sum amount equal to (A) 1.5 times (B) Mr.
Barcelo's base annual salary paid during the twelve (12) months immediately
preceding the termination of Mr. Barcelo's employment with Aware, divided by the
number of days employed during the twelve (12) months immediately preceding the
termination of Mr. Barcelo's employment with Aware and multiplied by 365, (ii)
all time-based stock options and other time-based stock-based awards held by Mr.
Barcelo as of the occurrence of such Change of Control shall immediately
accelerate and become fully exercisable or nonforfeitable as of the date of
termination and (iii) the difference between the cost of COBRA continuation
coverage, should Mr. Barcelo elect to receive it, for Mr. Barcelo and any
dependent who received health insurance coverage prior to termination of Mr.
Barcelo's employment with Aware, and any premium contribution amount applicable
to Mr. Barcelo as of such termination, for a period of eighteen (18) months
following the date of termination of Mr. Barcelo's employment with Aware.
A copy of the Barcelo Employment Agreement is attached as Exhibit 10.1 to this
Report. The foregoing summary of the Barcelo Employment Agreement is qualified
in its entirety by reference to the Barcelo Employment Agreement.
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Kevin Russell and David Martin
In connection with Aware's previous announcement that Kevin Russell would be
leaving Aware, Mr. Russell ended his employment with Aware effective May 1,
2020. Mr. Russell also resigned as a member of the Board of Directors of Aware
effective May 1, 2020.
In connection with Aware's previous announcement that David Martin would be
leaving Aware, Mr. Barcelo replaced Mr. Martin as Aware's Chief Financial
Officer effective May 4, 2020. It is expected that Mr. Martin will remain
employed by Aware through May 15, 2020 to assist Mr. Barcelo in his transition
as Aware's new Chief Financial Officer.
Aware, Inc. 2020 Executive Bonus Plan
On April 30, 2020, the Compensation Committee of Aware, Inc. (the "Company")
approved the Aware, Inc. 2020 Executive Bonus Plan (the "Plan") and established
performance criteria and target bonuses thereunder.
Pursuant to the Plan, each of Robert A. Eckel, the Company's Chief Executive
Officer and President, Robert M. Mungovan, the Company's Chief Commercial
Officer, Mohamed Lazzouni, the Company's Chief Technical Officer, and David B.
Barcelo, the Company's Chief Financial Officer (the "Participants"), will be
eligible to receive a bonus, based on the Company's achievement in 2020 of
certain Company 2020 booking, revenue, operating cash flow targets ("2020
Financial Goals") and the achievement of certain operational goals by each
Participant, in each case as determined by the Compensation Committee of the
Company's Board of Directors (the "Compensation Committee").
70% of the bonus will be paid for achieving certain Company financial goals and
30% of the bonus will be paid for achieving certain operational goals.
The amount of the potential bonus that could be earned by the Participants is as
follows: Robert Eckel up to $150,000; Robert Mungovan up to $137,500; Mohamed
Lazzouni up to $137,500; and David Barcelo up to $100,000.
The amount of the bonus earned by a Participant will depend upon the Company's
actual 2020 bookings, revenue and operating cash flow, as compared to the 2020
Financial Goals. The following tables will be used to determine the applicable
bonuses for the achievement of financial goals:
Robert Eckel
Actual 2020 bookings, revenue Bonus Amount-2020 Bonus Amount-2020 Bonus Amount-2020
and operating
Bookings Revenue Operating Cash Flow
cash flow as a % of 2020
Financial Goals
Less than 85% of 2020 Financial $0 $0 $0
Goals
85% of 2020 Financial Goals $13,125.00 $26,250.00 $13,125.00
95% of 2020 Financial Goals $22,312.50 $44,625.00 $22,312.50
100% of 2020 Financial Goals $26,250.00 $52,500.00 $26,250.00
Robert Mungovan
Actual 2020 bookings, revenue Bonus Amount-2020 Bonus Amount-2020 Bonus Amount-2020
and operating Bookings Revenue Operating Cash Flow
cash flow as a % of 2020
Financial Goals
Less than 85% of 2020 Financial $0 $0 $0
Goals
85% of 2020 Financial Goals $24,062.50 $16,843.75 $7,218.75
95% of 2020 Financial Goals $40,906.25 $28,634.38 $12,271.88
100% of 2020 Financial Goals $48,125.00 $33,687.50 $14,437.50
Mohamed Lazzouni
Actual 2020 bookings, revenue Bonus Amount-2020 Bonus Amount-2020 Bonus Amount-2020
and operating Bookings Revenue Operating Cash Flow
cash flow as a % of 2020
Financial Goals
Less than 85% of 2020 Financial $0 $0 $0
Goals
85% of 2020 Financial Goals $12,031.25 $24,062.50 $12,031.25
95% of 2020 Financial Goals $20,453.13 $40,906.25 $20,453.13
100% of 2020 Financial Goals $24,062.50 $48,125.00 $24,062.50
David Barcelo
Actual 2020 bookings, revenue Bonus Amount- 2020 Bonus Amount-2020 Bonus Amount-2020
and operating Bookings Revenue Operating Cash Flow
cash flow as a % of 2020
Financial Goals
Less than 85% of 2020 Financial $0 $0 $0
Goals
85% of 2020 Financial Goals $8,750.00 $17,500.00 $8,750.00
95% of 2020 Financial Goals $14,875.00 $29,750.00 $14,875.00
100% of 2020 Financial Goals $17,500.00 $35,000.00 $17,500.00
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The amount of bonus payable with respect to the bonus for achievement of the
financial goals will be subject to linear interpolation to reflect actual 2020
bookings, revenue and operating cash flow between the 2020 Financial Goals and
85% of 2020 Financial Goals or between 95% of 2020 Financial Goals and 100% of
2020 Financial Goals.
Mr. Eckel, Mr. Mungovan , Mr. Lazzouni and Mr. Barcelo may earn up to $45,000,
$41,250, $41,250 and $30,000, respectively, upon full achievement, as determined
by the Compensation Committee, of their respective Operational Goals under the
Plan, which are specific to each Participant.
In the event that Mr. Eckel's, Mr. Mungovan's, Mr. Lazzouni's or Mr. Barcelo's
employment by the Company terminates during 2020 by reason of total and
permanent disability, or death, the terminated person will receive a pro-rated
bonus. If Mr. Eckel's, Mr. Mungovan's, Mr. Lazzouni's or Mr. Barcelo's
employment by the Company is terminated by the Company without cause, the
Compensation Committee may, in its discretion, award the terminated person a
pro-rata bonus. In the event that Mr. Eckel's, Mr. Mungovan's, Mr. Lazzouni's or
Mr. Barcelo's employment terminates for any other reason, including resignation
and discharge for cause prior to the bonus payout date, all rights to a bonus
will be forfeited. All payouts from this bonus plan are subject to final
approval by the Compensation Committee, which shall have the authority to change
any amounts payable under the Plan.
A copy of the Plan is attached as Exhibit 10.2 to this Report. The foregoing
summary of the Plan is qualified in its entirety by reference to the Plan.
Press Release
On May 4, 2020, Aware issued a press release, attached to this Form 8-K as
Exhibit 99.1, announcing that Mr. Barcelo had become Chief Financial Officer of
Aware.
Item 9.01. Financial Statements and Exhibits.
No financial statements are required to be filed as part of this Report. The
following exhibit is filed as part of this Report:
10.1* Employment Agreement between Aware, Inc. and David B. Barcelo dated
May 4, 2020
10.2*^ Aware, Inc. 2020 Executive Bonus Plan
99.1 Press Release issued by Aware, Inc. on May 4, 2020
* Management contract or compensatory plan
^ Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of
Regulation S-K promulgated under the Securities Act of 1933.
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