2. AT-WILL EMPLOYMENT.
Executive’s employment relationship with the Company is, and shall at all times remain, at-will. This means that either Executive or the Company may terminate the employment relationship at any time, for any reason or for no reason, with or without Cause or advance notice.
3. COMPENSATION AND BENEFITS.
3.1 Salary. The Company shall pay Executive a base salary at the annualized rate of $350,000.00 (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices. The Base Salary may be adjusted from time to time in the Company’s discretion.
3.2 Performance Bonus. Each calendar year, Executive will be eligible to earn an additional cash bonus with a target bonus of forty percent (40%) of the Base Salary, based upon the Company’s assessment of Executive’s individual performance and the Company’s attainment of 100% of the targeted goals as set by the Board in its sole discretion. Except as otherwise provided below in Section 5.3, in order to earn and receive the bonus, Executive must remain employed by the Company through and including the bonus payout date, which will be on or before March 15 of the year following the applicable calendar year for which the performance bonus is being measured. The determination of whether Executive has earned a bonus and the amount thereof shall be determined by the Company (and/or a committee thereof) in its sole and absolute discretion. The Company reserves the right to modify the bonus criteria and targets from year to year.
(a) Initial Option Grant. On Executive’s Start Date, Executive was granted an option (the “Option Shares”) to purchase 20,000 shares of Common Stock of the Company, par value $0.0001 per share (“Common Stock”), pursuant to the Company’s 2016 Incentive Plan (the “Plan”). The option agreement relating to the Option Shares included the following terms: twenty-five percent (25%) of the Option Shares vested on the first anniversary of the Start Date and the remaining 75% shall vest in equal amounts at the end of each calendar month for the 36-month period following the first anniversary of the Start Date subject to the potential vesting acceleration benefit upon termination without Cause or resignation for Good Reason in connection with a Change in Control as described in Section 5.3 herein.
For purposes hereof, “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events with all capitalized terms in this Section 3.3(a) having the meanings set forth in Exhibit 2 hereto:
(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, (C) on account of the acquisition of securities of the Company by any individual who is, on the IPO Date, either an executive officer or a Director (either, an “IPO Investor”) and/or any entity in which an IPO Investor has a direct or indirect interest (whether in the form of voting rights or participation in profits or capital contributions) of more than 50% (collectively, the “IPO Entities”) or on account of the IPO Entities continuing to hold shares that come to represent more than 50% of the combined voting power of the Company’s then outstanding securities as a result of the conversion of any class of the Company’s securities into another class of the Company’s securities having a different number of votes per share pursuant to the conversion provisions set forth in the Company’s Amended and Restated Certificate of Incorporation; or (D) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting