Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 18, 2020, the Compensation Committee of the Board of Directors of the
Company ("Compensation Committee") approved changes to the compensation plan as
shown below.
2021 Compensation and Incentive Plan - On February 14, 2020, the Compensation
Committee approved a Compensation and Incentive Plan for fiscal year 2021
(ending June 30, 2021) (the "2021 CIP") which included a cash bonus and stock
options pool. Under the 2021 CIP, the covered participants will be eligible for
an incentive, weighted by target, if the Company achieves the following CIP
performance targets:
• Achievement of a pre-established amount of annual revenue for the
period - weighted 50%
• Achievement of a pre-established amount of annual net income - weighted 25%
• Discretionary portion - weighted 25% - approved by the Compensation
Committee based on positioning the Company for future growth
As revised by the Compensation Committee, if the financial and discretionary
targets are achieved under the 2021 CIP, a total cash bonus pool of $284,500
will be paid to specific Company executives based on a percentage of their base
compensation, including a payout to the Chief Executive Officer ("CEO") at 30%
of his base salary, the Chief Financial Officer ("CFO") at 25% of her base
salary and the remainder to other specific Company executives at 20% of their
respective base salaries. The equity portion of the 2021 CIP, which was not
changed, includes a stock option pool of 320,000 stock options to be awarded if
the targets are achieved, of which 102,400 stock options are applicable to the
CEO, 51,200 stock options are applicable to the CFO, 64,000 stock options are
applicable to non-executive employees and the remainder are allocable to other
specific Company executives.
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