Item 1.01. Entry into a Material Definitive Agreement.
The information in Item 5.02 below with respect to the Employment Agreement (as
defined below) is incorporated herein by reference. A copy of the Employment
Agreement is filed herewith as Exhibit 10.1 and is incorporated herein by
reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensation Arrangements of Certain Officers.
On February 12, 2020, PASSUR Aerospace, Inc. (the "Company") announced the
appointment of Brian G. Cook as Chief Executive Officer ("CEO") of the Company,
effective February 12, 2020. Concurrently with Mr. Cook's appointment as CEO of
the Company, James T. Barry stepped down from his role as CEO of the Company,
effective February 12, 2020. Mr. Barry will continue to serve as President and
a director of the Company.
Mr. Cook, age 55, has served as a director of the Company since December 3,
2018. Mr. Cook previously served as Chief Executive Officer and a member of the
board of directors of CyFIR from September 2018 until January 2020. Mr. Cook
currently serves as a director of PTG Technologies. Mr. Cook has held the
position of Vice President and General Manager Travel and Transportation at DXC
Technology, where he led the integration of CSC's and Hewlett Packard Enterprise
Services transportation division into a single business unit at DXC, creating
one of the world's largest transportation technology services businesses serving
airlines, airports, rail and logistics providers. During his 29 years of
executive leadership, Mr. Cook has held a number of positions in the travel
industry, including Vice President and General Manager Travel and Transportation
at Hewlett Packard, President SITA Airline Solutions North America, Vice
President SITA passenger solutions, and Director Information Technology at Star
Alliance.
In connection with Mr. Cook's appointment as CEO of the Company, the Company and
Mr. Cook have entered into an employment agreement, dated as of February 12,
2020 (the "Employment Agreement"), pursuant to which the Company has agreed to
employ Mr. Cook, and Mr. Cook has agreed to be employed by the Company, as CEO
for a period commencing on February 12, 2020 and continuing until February 12,
2022 (the "Term"), unless Mr. Cook's employment is earlier terminated in
accordance with the Employment Agreement. In addition to his position as CEO,
Mr. Cook will continue to serve as a director of the Company during the period
of his employment with the Company.
Pursuant to the Employment Agreement, during the Term, Mr. Cook will be entitled
to the following compensation and benefits:
• an annual base salary of $325,000, subject to potential annual increases
(but not decreases), as determined by the Board of Directors of the Company
(the "Board");
• a one-time sign-on cash bonus of $10,000;
• an annual cash bonus opportunity, the level of which (if any) shall be
determined based upon performance criteria established by the Board from
time to time; and
• a grant of options to purchase up to 500,000 shares of common stock of the
Company (the "Options") pursuant to the PASSUR Aerospace, Inc. 2019 Stock
Incentive Plan (the "Plan"), which will have the exercise prices, vesting
schedule and other terms and conditions set forth in the Plan and the
Option Agreement (as defined below), as described in more detail below.
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In addition, during the Term, Mr. Cook is entitled to customary employee
benefits under the Company's benefit plans, including any health insurance
benefits generally available to executives of the Company. The Company will
also provide Mr. Cook with a life insurance policy providing coverage in the
amount of $650,000 and a long-term disability insurance policy providing for
aggregate benefits in an amount equal to 100% of Mr. Cook's annual base salary.
Pursuant to the Employment Agreement, in the event of a termination of Mr.
Cook's employment during the Term for any reason (including due to death or
disability), or after the expiration of the Term, Mr. Cook (or his estate) will
be entitled to all accrued and unpaid base salary through the date of
termination, any earned but unpaid annual bonus in respect to any fiscal year
completed prior to the date of termination, any accrued but unpaid benefits
under the Company's employee benefit plans through the date of termination, and
any unpaid expense reimbursement through the date of termination (collectively,
the "Accrued Obligations").
In the event of a termination of Mr. Cook's employment before the expiration of
the Term other than for "Cause" (as defined in the Employment Agreement) or due
to disability, subject to Mr. Cook signing a release in customary form, he will
be entitled to the Accrued Obligations, plus a cash severance benefit equal to
the total of Mr. Cook's then current annual base salary that would have been
payable, but for such termination, during the 12-month period following the date
of termination (the "Severance Period"), payable in substantially equal
proportionate installments during the Severance Period. Mr. Cook will also be
entitled to continued participation during the Severance Period in all welfare
benefit plans that cover Mr. Cook (and his eligible dependents), to the extent
available to former employees of the Company. In addition, if less than 200,000
Options have vested prior to the date of termination, then a number of Mr.
Cook's then outstanding unvested Options will immediately become fully vested
and exercisable, so that a total of 200,000 Options shall have become vested,
effective as of the date of termination. The balance of Mr. Cook's unvested
options will be cancelled.
In the event of a termination of Mr. Cook's employment other than for "Cause" or
due to disability within six months following a "Change in Control" (as defined
in the Employment Agreement), subject to Mr. Cook signing a release in customary
form, he will be entitled to the same payments and benefits as in the event of a
termination before the expiration of the Term other than for "Cause" or due to
death or disability, except that all of Mr. Cook's then outstanding unvested
Options will be accelerated and will immediately become fully vested and
exercisable, effective as of the date of termination.
Pursuant to the Employment Agreement, Mr. Cook will be subject to certain
restrictive covenants, including non-competition and non-solicitation covenants
during the period of his employment with the Company and for 12 months following
termination of his employment for any reason. The Employment Agreement includes
customary provisions relating to confidentiality and return of Company
documents, and certain other matters.
Pursuant to the Employment Agreement, the Company and Mr. Cook have also entered
into an Incentive Stock Option Agreement, dated as of February 12, 2020 (the
"Option Agreement"), which provides for the grant of the Options to Mr. Cook
under the Plan. Pursuant to the Option Agreement, the Options will vest in
equal installments of 100,000 Options each on each of the first, second, third,
fourth and fifth anniversaries of the date of grant, subject to Mr. Cook's
continued employment with the Company and satisfaction of certain other vesting
conditions specified in the Option Agreement, and will have the following
exercise prices per share:
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(i) 100,000 Options have an exercise price equal to $1.05 per share, the
closing price per share of the common stock of the Company on the date of
grant, as reported on the OTC Markets;
(ii) 100,000 Options have an exercise price equal to $2.00 per share;
(iii) 100,000 Options have an exercise price equal to $2.50 per share;
(iv) 100,000 Options have an exercise price equal to $3.00 per share; and
(v) the remaining 100,000 Options have an exercise price equal to $3.50 per
share.
The foregoing description of the Employment Agreement and the Option Agreement
is qualified in its entirety by reference to the full text of the Employment
Agreement and the Option Agreement, as applicable, copies of which are filed
herewith as Exhibit 10.1 and Exhibit 10.2 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
10.1 Employment Agreement, dated February 12, 2020, between PASSUR
Aerospace, Inc. and Brian Cook.
10.2 Incentive Stock Option Agreement, dated February 12, 2020,
between PASSUR Aerospace, Inc. and Brian Cook.
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