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Item 5.02
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Departure of Directors of Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Employment Agreement with our Interim
Chief Executive Officer
On October 11, 2019, we entered into an
employment agreement with Amy Trombly, our Interim Chief Executive Officer. The agreement is effective as of September 25, 2019,
the date of her appointment and has a term of three months, subject to mutual extension by one-month increments. We agreed to pay
Ms. Trombly a base salary of $25,000 per month, which will include legal services Ms. Trombly has traditionally provided to the
Company, and to provide standard medical, dental and vacation benefits. Certain legal services not provided by Ms. Trombly will
continue to be billed by Trombly Business Law, PC. The Board also agreed that during her time as Interim Chief Executive Officer,
Ms. Trombly may continue to represent other clients in her role as attorney. The employment agreement may be terminated by us upon
ten days’ written notice or by Ms. Trombly upon thirty days’ written notice at any time and for any reason. Upon termination
of employment, Ms. Trombly will be entitled to the accrued amounts and shall have no further rights to any compensation or any
other benefits from Sonoma.
The Board has initiated a search for a CEO
with deep industry experience and expects to transition to a new CEO in the upcoming months.
Employment Agreement with our Chief
Financial Officer
On October 11, 2019, we entered into an
employment agreement with John Dal Poggetto, our Chief Financial Officer. The agreement is effective as of September 25, 2019,
the date of his appointment. The terms of the employment agreement provide for an annual salary of $230,000 and an annual bonus
amount not to exceed 40% of his base salary to be determined by the Compensation Committee in its sole discretion. He will also
receive an equity award in the amount of $100,000 as a signing bonus. The further details of such signing bonus award shall be
determined by the Compensation Committee at a later date. Mr. Dal Poggetto also receives certain benefits, such as participation
in our health and welfare plans, vacation, and reimbursement of expenses.
The employment agreement provides certain
separation benefits in the event of termination without cause or resignation by Mr. Dal Poggetto for good reason, as such terms
are defined in the employment agreement. In the event Mr. Dal Poggetto is terminated without cause or resigns for good reason,
he is entitled to:
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a lump sum severance payment equal to one time his base salary;
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a bonus, as determined by the Compensation Committee, however the Compensation Committee may decide to grant no bonus;
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automatic vesting of all unvested time-based options and equity awards and exercisability of awards for up to 12 months;
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vesting of performance-based equity compensation awards in accordance with the terms of the awards, if the performance goals
are satisfied, such determination to be in the sole discretion of the Compensation Committee; and
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reimbursement for health care premiums under COBRA until the earliest of: (i) three months following the date of termination;
(ii) the date he is no longer eligible to receive COBRA continuation coverage; or (iii) until he becomes eligible for medical insurance
coverage provided by another employer.
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Mr. Dal Poggetto may terminate his employment
for any reason upon at least 30 days prior written notice. Receipt of the termination benefits described above is contingent on
executing a general release of claims against our Company, resignation from any and all directorships and every other position
held by the executive with our Company or any of our subsidiaries, and the executive’s return to our Company of all Company
property received from or on account of our Company or any of our affiliates by him. In addition, Mr. Dal Poggetto will not entitled
to such benefits if he does not comply with the non-competition, non-disparagement and invention assignment provisions of his
employment agreement during the term of employment or the confidentiality provisions of the employment agreement, whether during
or after the term of his employment. These provisions apply during the term of employment and for two years following termination.
Departure of Director
On October 8, 2019, Mr. Frederick Sandford
notified our Board of Directors of his intention to resign as a director, effective immediately. We thank him for his service,
and we wish him the best in his future endeavors.
The foregoing descriptions of the employment
agreements are not complete and are qualified in their entirety by reference to the full text of the employment agreements, copies
of which are filed herewith as Exhibit 10.1 through 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.