MIDWEST HOLDING INC. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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The following is a summary of the material features of the Employment Agreement and is qualified in its entirety by reference to the full text of it, a copy of which is filed as Exhibit 10.1 to this Report.
Base Salary. The Executive's initial annual base salary is
Bonus. The Executive will be eligible for an annual bonus of 0-100% of his
current Base Salary, which will be determined based upon achievement of
performance goals set by the Chief Executive Officer of the Company annually at
or near the beginning of each calendar year; with a target bonus of 50% of the
Base Salary (the "Target Bonus"). For the 2022 performance year, the Executive
will be paid a minimum annual bonus of
Equity Compensation. Upon his employment, the Executive was granted a stock
option for 20,000 shares of the Company's voting common stock with an exercise
price of
Benefits. The Company will provide the Executive retirement and other benefits as are customarily provided to similarly situated executives of the Company, including paid vacation, coverage under the Company's medical, life, disability and other insurance plans, and reimbursement for all reasonable business expenses in accordance with the Company's expense reimbursement policy.
Termination. The Company or the Executive may terminate the Agreement prior to
the expiration of its initial term (
Effect of Termination; Severance.
In the event of voluntary resignation of employment by the Executive without Good Reason (as defined below) or in connection with his retirement, the Executive shall be entitled to payment of his Base Salary for a period of 12 months following his resignation and shall be paid any earned but unpaid Target Bonus for the prior year; provided, that the Executive is in compliance with the non-compete provisions of the Employment Agreement.
In the event of a termination of employment due to (i) death, (ii) permanent disability, (iii) by the Company for Good Cause (as defined below), or (iv) by the Executive with Good Reason (as defined below), the Executive will be entitled to payment of any earned but unpaid Base Salary, Target Bonus and other benefits and unreimbursed business expenses.
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In addition to the foregoing, if (i) the Company terminates the Executive's employment except for death, permanent disability or for Good Cause, or (ii) the Executive terminates his employment for Good Reason (a "Qualifying Termination"), then:
(a) Other than in connection with a Change of Control (as defined below) and
provided that the Executive executes and does not revoke the release attached
as an exhibit to the Employment Agreement (the "Release"), the Company will
(i) pay the Executive, on a quarterly basis, his Base Salary and Target Bonus
for 12 months following his termination, (ii) fully vest all of his
outstanding stock options and equity awards and (iii) to the extent the
Executive elects to continue health coverage under our health plan under
COBRA, reimburse him for premiums he pays to extend the coverage for up to 18
months following his termination; provided, however, that the reimbursement
will cease if he obtains other employment that offers group health benefits;
and
(b) With respect to a Qualifying Termination that occurs within 12 months
following a Change of Control Event and provided the Executive executes and
does not revoke the Release, the Company will (i) pay the Executive in a lump
sum an amount equal to two times his Base Salary and Target Bonus, (ii) fully
vest all of his outstanding stock options and equity awards and (iii) to the
extent the Executive elects to continue health coverage under our health plan
under COBRA, reimburse him for the premiums he pays to extend such coverage
for up to 18 months following his termination; provided, however, that such
reimbursement shall cease if he obtains other employment that offers group
health benefits.
Non-Competition. During his employment with the Company and for a period of 12
months thereafter, the Executive may not directly or indirectly compete with the
Company within
Clawbacks. The Executive's incentive compensation will be subject to clawback regulations in effect under applicable law or applicable stock exchange listing standards.
"Good Cause" generally includes (subject to certain cure provisions):
(i) the Executive willfully engaged in acts or omissions determined to constitute fraud, breach of fiduciary duty or intentional wrongdoing;
(ii) the Executive is convicted of, or enters a plea of guilty or nolo contendere to charges of, any criminal violation involving fraud, theft or dishonesty;
(iii) the Executive is convicted of, or enters a plea of guilty or nolo contendere to charges of, any non-vehicular felony which has or is substantially likely to have a material adverse effect on the Executive's ability to carry out his duties under the Employment Agreement or on the reputation or activities of the Company;
(iv) the Executive habitually abuses alcohol, illegal drugs or controlled substances or non-prescribed prescription medicine, and such abuse materially and adversely interferes with the performance of the Executive's duties and responsibilities to the Company;
(v) the Executive materially breaches the terms of any agreement between the Executive and the Company relating to the Executive's employment;
(vi) the Executive engages in acts or omissions constituting gross negligence by Executive in the performance (or non-performance) of his duties; or
(vii) the Executive fails to comply with any material directive of the Chief Executive Officer of the Company consistent with the position of Chief Financial Officer and such failure remains uncured for more than 30 days following receipt by the Executive of written notice from the Company specifying the nature of the failure and demanding cure thereof.
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"Good Reason" generally means (subject to certain cure provisions):
(i) the diminution of any duties, responsibilities, and authorities inconsistent in any respect with the Executive's position as a Chief Financial Officer;
(ii) any failure by the Company to comply with any of the compensation provisions of the Employment Agreement (except for isolated, insubstantial and inadvertent failure not occurring in bad faith and which are remedied by the Company);
(iii) the Company materially breaches the terms of any agreement between the Executive and the Employer relating to the Executive's employment, or materially fails to satisfy the conditions and requirements of the Employment Agreement; or
(iv) a resignation by the Executive for any reason within ninety (90) days after a Change in Control Event. A "Change in Control Event" means:
(a) Any transaction in which shares of voting securities of the Company represent more than 50% of the total combined voting power of all outstanding voting securities of the Company are issued by the Company, or sold or transferred by the stockholders of the Company;
(b) The merger or consolidation of the Company with or into another entity resulting in those persons and entities who beneficially owned voting securities of the Company representing more than 50% of the total combined voting power of all outstanding voting securities of the Company immediately prior to such transaction ceasing to beneficially own voting securities of the Company representing more than 50% of the total combined voting power of all outstanding voting securities of the surviving corporation or resulting entity immediately after such merger or consolidation; or
(c) The sale of all or substantially all of the Company's assets unless those persons or entities who beneficially owned voting securities of the . . .
Item 8.01 Other Events
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The press release filed herewith as Exhibit 99.1 is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to liability under that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statements and Exhibits.
(c) The following exhibits are filed as a part of this Report:
Exhibit No. Description 10.1 Executive Employment Agreement BetweenEric N. Berg andMidwest Holding Inc. datedJanuary 26, 2022 . 99.1 Press Release datedMarch 25, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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