Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 11, 2021, Sunworks, Inc. (the "Company") announced that Gaylon
Morris, age 48, has been appointed by the Board of Directors of the Company (the
"Board") as the Company's Chief Executive Officer and a member of the Board,
effective immediately.
Mr. Morris joins the Company after two decades leading large-scale engineering
and construction companies through transition and growth. Prior to joining the
Company, Mr. Morris served as Business Strategist at Rosendin Electric, one of
the largest electrical contractors, where he was responsible for identifying,
researching, and developing go-to-market strategies to target new market
opportunities. Before Rosendin Electric, he was Senior Vice President of
Operations for Strategic Growth and Market Development at Cupertino Electric,
Inc. ("CEI"), a large, national electrical contractor. At CEI, Mr. Morris was
responsible for developing and successfully implementing strategies for CEI's
growth divisions, specifically in Modular Manufacturing, Renewable Energy
(photovoltaics and storage), and Utility Electrical (transmission, distribution,
and substation). Other previous experience includes senior executive roles at
NTS Corporation, Methode Electronics and MET Laboratories, along with serving in
the United States Navy, where he was a Submarine Service Reactor Plant Operator.
Pursuant to an Employment Agreement, effective as of January 11, 2021, Mr.
Morris will receive a base salary of $350,000 per year and a discretionary
bonus, provided, however, that for the fiscal year ending December 31, 2021, Mr.
Morris will be entitled to a bonus equal to (i) 100% of base salary if the
Company's GAAP consolidated operating income for the combined period from April
1, 2021 through December 31, 2021 exceeds $0, and (ii) 50% of base salary if the
Company's GAAP consolidated operating income (adjusted to exclude expenses for
equity compensation) for the combined period from April 1, 2021 through December
31, 2021 is less than $0, provided that certain additional objectives are met,
as set and determined by the Compensation Committee of the Board. In addition,
for the fiscal year ending December 31, 2022, Mr. Morris will be entitled to a
bonus equal to (i)75% of base salary if the Company's GAAP consolidated
operating income for the combined period from January 1, 2022 through December
31, 2022 exceeds $0, and (ii) 50% of base salary if the Company's GAAP
consolidated operating income (adjusted to exclude expenses for equity
compensation) for the combined period from January 1, 2022 through December 31,
2022 is less than $0, provided that certain additional objectives are met, as
set and determined by the Compensation Committee of the Board. Mr. Morris will
receive a restricted stock grant of 210,000 shares, one third of which will vest
on the one year anniversary of the grant, and the balance of which will vest in
twenty-four equal monthly installments commencing on the one year anniversary of
the grant.
If Mr. Morris's employment is terminated by the Company without cause or if the
Company enters into a change of control transaction (each, a "Payment Trigger
Event"), then the Company has agreed to pay Mr. Morris an amount equal to Mr.
Morris' then current monthly salary multiplied by (i) six, if the Payment
Trigger Event occurs on or prior to July 11, 2021, or (ii) 12, if the Payment
Trigger Event occurs after July 11, 2021.
The foregoing description of the Employment Agreement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
full and complete text of the Employment Agreement, which is filed hereto as
Exhibit 10.1.
There are no arrangements or understandings between Mr. Morris and any other
persons pursuant to which he was selected as a director, and there are no
transactions between the Company and Mr. Morris that would require disclosure
under Item 404(a) of Regulation S-K. There are no family relationships between
Mr. Morris with any director or executive officer of the Company.
On January 11, 2021, the Company released a press release to disclose Mr.
Morris' appointment as Chief Executive Officer and director, a copy of which is
attached hereto as Exhibit 99.1.
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits
Number Description
10.1 Employment Agreement effective as of January 11, 2021 between Sunworks,
Inc. and Gaylon Morris
99.1 Press Release dated January 11, 2021
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SUNWORKS, INC. 
