Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective June 18, 2020, Dasan Zhone Solutions, Inc. (the "Company") and Philip
John Yim, Chief Operating Officer of the Company, entered into an employment
agreement (the "Employment Agreement") pursuant to which Mr. Yim will continue
his employment as the Chief Operating Officer of the Company.
The Employment Agreement provides that Mr. Yim's employment is at-will. During
the term of his employment, Mr. Yim will serve in the above-mentioned capacity
reporting to the Chief Executive Officer, with such duties and responsibilities
as are commensurate with the position.
Mr. Yim's annual base salary will be $300,000, to be reviewed on an annual basis
by the Board of Directors (the "Board") or its Compensation Committee. Mr. Yim
will be eligible to participate in a performance-based annual bonus program
approved by the Board, pursuant to which bonuses will be earned and paid, if at
all, in equal quarterly installments. Mr. Yim's initial target quarterly bonus
is $22,500. For a period of up to one year, Mr. Yim will be eligible for
reimbursement for certain relocation expenses incurred in connection with his
relocation to the Plano, Texas area in connection with the Company's planned
relocation of its headquarters. This may include up to six months of temporary
housing and automobile allowance beginning on the commencement of Mr. Yim's
relocation. Mr. Yim is also eligible to participate in all health benefits,
insurance programs, pension and retirement plans and other employee benefit and
compensation arrangements generally available to the Company's other officers,
including a cell phone allowance.
Under the Employment Agreement, Mr. Yim will receive certain compensation in the
event that he resigns for Good Reason or his employment is terminated by the
Company for any reason other than by reason of death, Disability or Cause (each,
a "Qualifying Termination"). In the event Mr. Yim's employment is terminated by
reason of a Qualifying Termination, Mr. Yim will be entitled to receive (i) his
base salary through the date of termination, reimbursable business expenses in
accordance with company policies, and any accrued, vested benefits, in each case
to the extent not previously paid and (ii) a lump-sum payment equal to the sum
of (x) the greater of (A) six months' of Mr. Yim's salary as in effect
immediately prior to the date of termination or (B) $150,000 plus (y) Mr. Yim's
bonus for the quarter in which the termination occurs based on actual Company
performance. Additionally, if Mr. Yim elects COBRA continuation coverage of
medical and/or dental benefits, he would receive payments for six (6) months of
the employee election of the COBRA premiums for such medical and/or dental
continuation coverage.
For purposes of the Employment Agreement, "cause" is generally defined to
include: (i) Mr. Yim's willful or continued failure to substantially perform his
duties with the Company, or any failure to carry out, or comply with, in any
material respect any lawful and reasonable directive of the Chief Executive
Officer or the Board consistent with the terms of his Employment Agreement,
which failure continues for 15 days following Mr. Yim's receipt of written
notice, (ii) Mr. Yim's conviction of, guilty plea to, or entry of a nolo
contendere plea to a felony or a crime of moral turpitude or commission of an
act of fraud, embezzlement or misappropriation against the Company, (iii) Mr.
Yim's willful or reckless misconduct that has caused or is reasonably likely to
cause demonstrable and material financial injury to the Company, or (iv) Mr.
Yim's willful and material breach of his Employment Agreement, which breach
remains uncured for 15 days following his receipt of written notice. For
purposes of the Employment Agreement, "good reason" is generally defined to
include the occurrence of any of the following events without his consent: (i) a
material diminution in Mr. Yim's base compensation, (ii) a material diminution
in Mr. Yim's authority, duties or responsibilities, (iii) a material change in
the geographic location at which Mr. Yim must perform his duties (other than in
connection with the Company's planned relocation to Texas), or (iv) any other
action or inaction that constitutes a material breach by the Company of its
obligations under the Employment Agreement.
The foregoing description of the Employment Agreement is a summary, does not
purport to be complete and is qualified in its entirety by the complete text of
the Employment Agreement itself, a copy of which is attached as Exhibit 10.1 to
this Current Report on Form 8-K and incorporated in this Item 5.02 by reference.
Capitalized terms used but not defined in this Current Report on Form 8-K shall
have the meanings ascribed to such terms in the Employment Agreement attached
hereto as Exhibit 10.1.
4815-4306-0668.2
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Item 9.01Financial Statements and Exhibits.
(d)Exhibits
The following exhibits are filed with this report:
Exhibit Number Description
10.1 Employment Agreement, dated as of June 18, 2020, by and
between Dasan Zhone Solutions, Inc. and Philip John Yim.
4815-4306-0668.2
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