Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Transition Agreement with Stephen M. Smith
On August 11, 2020, Inseego Corp. (the "Company") entered into a transition and
release agreement (the "Transition Agreement") with Stephen M. Smith, the
Company's Chief Financial Officer. The Transition Agreement provides for (i) the
termination of Mr. Smith's employment with the Company as of August 14, 2020;
(ii) the release of any claims by Mr. Smith in favor of the Company; (iii) a
payment to Mr. Smith of $175,000; (iv) Mr. Smith to be available to provide
consulting services to the Company to assist with the transition through
December 31, 2020, during which time his outstanding equity awards will continue
to vest; and (v) Mr. Smith to be entitled to a pro rata portion of the bonus, if
any, that he would otherwise have been entitled to in connection with the
Company's financial performance for fiscal 2020.
Pursuant to the Transition Agreement, on August 14, 2020, Mr. Smith's employment
with the Company was terminated.
Appointment of Chief Executive Officer
On August 14, 2020, the board of directors of the Company appointed Craig L.
Foster, age 49, as Chief Financial Officer of the Company, effective August 17,
2020.
Before joining the Company, Mr. Foster served as the Chief Financial Officer of
Bright Machines, a provider of electronics factory automation hardware and
software, from September 2018 to July 2020. Mr. Foster previously served as the
Executive Vice President and Chief Financial Officer of Financial Engines, Inc.,
a publicly-traded software company, from September 2017 to September 2018.
Before that, Mr. Foster served as the Chief Financial Officer and Chief
Accounting Officer of Amobee, Inc., a digital advertising platform, from April
2015 to May 2017. From February 2013 to April 2015, Mr. Foster served as Chief
Financial Officer and Chief Accounting Officer of Ubiquiti Networks, Inc., a
publicly-traded networking and communications company. From June 2012 to
February 2013, Mr. Foster served as Director in the technology infrastructure
and software group of Credit Suisse Securities (USA) LLC, an investment bank.
From August 2007 to June 2012, Mr. Foster served as an Executive Director and
co-head of the software group of UBS Securities LLC, an investment bank. Mr.
Foster has also held various management positions at RBC Capital Markets, an
investment bank, Loudcloud, a software and services platform,
PricewaterhouseCoopers, a public accounting firm and Deloitte, a public
accounting firm. Mr. Foster serves on the board of directors of LiveXLive Media,
Inc., a global digital media company. Mr. Foster holds an M.B.A. in Finance from
the Wharton School of Business and a B.A. in Economics from the University of
California, San Diego.
There are no arrangements or understandings between Mr. Foster and any other
persons pursuant to which he was selected as an officer of the Company. There
are also no family relationships between Mr. Foster and any director or
executive officer of the Company, and he has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
Offer Letter with Craig Foster
The Company entered into an offer letter with Mr. Foster (the "Offer Letter")
setting forth the terms of his employment as the Company's Chief Financial
Officer.
Salary and Bonus. The Offer Letter provides for an annual base salary of
$375,000. Mr. Foster will be eligible to participate in the Company's annual
cash bonus program with an annual target bonus equal to 50% of his base salary.
Mr. Foster will be eligible to participate in other benefit programs that the
Company establishes and makes available to its employees from time to time, to
the same extent available to similarly situated employees of the Company.
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Term and Termination. The Offer Letter has no specific term and is subject to
termination by either the Company or Mr. Foster at any time with or without
cause.
Relocation Expenses. The Offer Letter provides Mr. Foster with reasonable
temporary housing expenses as needed for a period of up to 60 days and a
relocation expense reimbursement benefit of up to $25,000, contingent on Mr.
Foster relocating to San Diego County, California within 12 months of employment
commencement. Mr. Foster is obligated to return any reimbursed relocation
expenses in full if he has not relocated within the 12-month period described
above, or if he terminates his employment with the Company for any reason within
such period.
Restricted Stock Unit Award. Pursuant to the Offer Letter, as an inducement to
accepting the appointment as the Company's new Chief Financial Officer, Mr.
Foster received a one-time award of 27,510 restricted stock units (the
"Inducement RSUs"). The shares subject to the Inducement RSUs vest according to
the following schedule: one-fourth of the Inducement RSUs shall vest on August
17, 2021 and the remaining Inducement RSUs vest ratably each month thereafter
for a period of 36 months. The Inducement RSUs were issued as an employment
inducement award in accordance with NASDAQ Listing Rule 5635(c)(4).
Stock Options. Pursuant to the Offer Letter, as an inducement to accepting the
appointment as the Company's new Chief Financial Officer, Mr. Foster received a
one-time stock option award to purchase 200,000 shares of common stock, with an
exercise price of $14.54 (the "Inducement Options"). The Inducement Options vest
according to the following schedule: one-fourth of the Inducement Options shall
vest on August 17, 2020 and the remaining Inducement Options vest ratably each
month thereafter for a period of 36 months. The Inducement Options were issued
as an employment inducement award in accordance with NASDAQ Listing Rule
5635(c)(4).
Change in Control Agreement.
The Company will enter into a Change in Control and Severance Agreement (the
"Severance Agreement") with Mr. Foster which provides that in the event of a
Covered Termination during a Change in Control Period or in Contemplation of a
Change in Control that actually occurs (each as defined in the Severance
Agreement), Mr. Foster will, subject to certain conditions including the
execution of a general release, be entitled to receive severance in an amount
equal to the sum of 18 months of his then-current annual base salary, plus an
amount equal to 12 months of his then-current annual target bonus opportunity.
In addition, all of Mr. Foster's outstanding equity awards will automatically
become vested and, if applicable, exercisable, and Mr. Foster and his covered
dependents will be entitled to certain healthcare benefits for a period of up to
18 months.
In the event of a Covered Termination other than during a Change in Control
Period, Mr. Foster will, subject to certain conditions including the execution
of a general release, be entitled to receive severance in an amount equal to the
sum of 6 months of his then-current annual base salary, plus a lump-sum bonus
payment equal to the pro-rated portion of the target bonus in the year of
termination based on actual achievement of corporate performance goals and
assumed full achievement of any individual performance goals. In addition, Mr.
Foster's outstanding equity awards will become vested and, if applicable,
exercisable with respect to that number of shares of Company common stock that
would have next vested had Mr. Foster continued employment with the Company
through that next vesting date, and Mr. Foster and his covered dependents will
be entitled to certain healthcare benefits for a period of up to 9 months.
Indemnification Agreement
The Company and Mr. Foster will enter into the Company's standard form of
indemnification agreement. The agreement requires the Company, among other
things, to indemnify Mr. Foster against liabilities that may arise by reason of
his service to the Company.
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