UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 19, 2016
SENESTECH, INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 001-37941 | 20-2079805 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3140 N. Caden Court, Suite 1
Flagstaff, AZ 86004
(928) 779-4143
(Address and Telephone Number of Registrant’s Principal Executive Offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On December 19, 2016, the board of directors (the “Board”) of SenesTech, Inc. (the “Company”), upon recommendation of the Company’s Compensation Committee, approved 2016 bonuses for Loretta P. Mayer Ph.D., the Company’s Chief Executive Officer, Cheryl A. Dyer Ph.D., the Company’s Chief Research Officer and Thomas C. Chesterman, the Company’s Chief Financial Officer. The specific amount of the bonuses were based upon the achievement of mutually agreed-upon performance objectives and other criteria determined by the Board in accordance with the Company’s respective employment agreements with each of Drs. Mayer and Dyer and Mr. Chesterman, as described in and filed as Exhibits 10.7, 10.8 and 10.9, respectively, to the Company’s Registration Statement on Form S-1 (Registration No. 333-213736) filed with the Commission on September 21, 2016.
The bonus details are as follows:
Loretta P. Mayer Ph.D., Chief Executive Officer :
| · | Annual Bonus Target: 50% of base salary ($150,000) |
| · | Bonus earned: 50% of target earned, based on the results of a mid-year performance evaluation conducted by the Compensation Committee |
| · | Bonus payment details: 40% ($30,000) in cash and 60% ($45,000) in restricted stock units (RSUs). The number of RSUs shall equal to $45,000 divided by the closing market price of the common stock on the date of grant; 100% of which RSUs will be vested on the date of grant. The form of RSU agreement is filed as Exhibit 4.1 to this Current Report on Form 8-K and incorporated into this Item 5.02 by reference. |
Cheryl A. Dyer Ph.D., Chief Research Officer :
| · | Annual Bonus Target: 35% of base salary ($87,500) |
| · | Bonus earned: 50% of target ($43,750) earned, based on the results of a mid-year performance evaluation conducted by the Compensation Committee |
| · | Bonus payment details: 40% ($17,500) in cash and 60% ($26,250) in RSUs. The number of RSUs shall equal to $26,250 divided by the closing market price of the common stock on the date of grant; 100% of which RSUs will be vested on the date of grant. The form of RSU agreement is filed as Exhibit 4.1 to this Current Report on Form 8-K and incorporated into this Item 5.02 by reference. |
Thomas C. Chesterman, Chief Financial Officer :
| · | Annual Bonus Target: 80% of base salary ($200,000) |
| · | Bonus earned: 100% of target ($200,000) earned, based on the results of a performance evaluation conducted by the Compensation Committee |
| · | 50% of bonus ($100,000) was already paid earlier in 2016 |
| · | Bonus payment details: 15% ($15,000) in cash and 85% ($85,000) in RSUs. The number of RSUs shall equal to $85,000 divided by the closing market price of the common stock on the date of grant; 100% of which RSUs will be vested on the date of grant. The form of RSU agreement is filed as Exhibit 4.1 to this Current Report on Form 8-K and incorporated into this Item 5.02 by reference. |
| Item 8.01 | Other Events. |
On December 19, 2016, the Board adopted a non-employee director compensation program (the “Program”) for providing cash and equity compensation to its non-employee directors for their service on the Board and committees of the Board. The Program will be effective for the service of non-employee directors beginning January 1, 2017. The components of the Program are as follows:
| Cash Compensation: | Amount |
| Annual general retainer for serving on the Board | $25,000 |
| Incremental annual retainer for the Vice-Chair of the Board | $30,000 |
| Incremental annual retainer for Chair of the Audit Committee | $20,000 |
| Incremental annual retainer for directors also serving on the Audit Committee | $5,000 |
| Incremental annual retainer for each Chair of the Compensation and Nominating and Corporate Governance Committees | $10,000 |
| Incremental annual retainer for directors also serving on the Compensation and Nominating and Corporate Governance Committees | $2,500 |
| Incremental fee for attendance at each meeting of the Audit, Compensation and Nominating and Corporate Governance Committees exceeding one hour | $250 |
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
|
Exhibit No. |
Description |
|
| 4.1 | Form of Restricted Stock Unit Agreement |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SENESTECH, INC. | ||
| Dated: December 21, 2016 | By: | /s/ Thomas C. Chesterman |
| Thomas C. Chesterman | ||
| Chief Financial Officer | ||
Exhibit 4.1
Restricted Stock Unit Agreement
This Restricted Stock Unit Agreement (this “ Agreement ”) is made and entered into as of [DATE] (the “ Grant Date ”) by and between SenesTech, Inc., a Delaware corporation (the “ Company ”) and [NAME] (the “ Grantee ”).
WHEREAS , the Company has adopted the 2015 Equity Incentive Plan (the “ Plan ”) pursuant to which Restricted Stock Unit Awards may be granted; and
WHEREAS , the Committee has determined that it is in the best interests of the Company and its shareholders to grant the Restricted Stock Unit Award provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Grant of Restricted Stock Units .
1.1 Pursuant to Section 6(b) of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Stock Unit Award consisting of, in the aggregate, [NUMBER] Restricted Stock Units (the “ Restricted Stock Units ”). Each Restricted Stock Unit represents the right to receive one share of Common Stock, subject to the terms and conditions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
1.2 The Restricted Stock Units shall be credited to a separate account maintained for the Grantee on the books and records of the Company (the “ Account ”). All amounts credited to the Account shall continue for all purposes to be part of the general assets of the Company.
2. Consideration . The grant of the Restricted Stock Units is made in consideration of the services to be rendered by the Grantee to the Company.
3. Vesting .
3.1 Except as otherwise provided herein, provided that the Grantee remains in Continuous Service through the applicable vesting date, the Restricted Stock Units will vest in accordance with the following schedule (the period during which restrictions apply, the “ Restricted Period ”):
| Vesting Date | Number of Restricted Stock Units That Vest |
| [DATE] | [NUMBER] |
| [DATE] | [NUMBER] |
| [DATE] | [NUMBER] |
| [DATE] | [NUMBER] |
Once vested, the Restricted Stock Units become “ Vested Units. ”
3.2 The foregoing vesting schedule notwithstanding, if the Grantee’s Continuous Service terminates for any reason other than as a result of Grantee’s death or Disability at any time before all of his or her Restricted Stock Units have vested, the Grantee’s unvested Restricted Stock Units shall be automatically forfeited upon such termination of Continuous Service and neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.
| 1 |
4. Restrictions . Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period and until such time as the Restricted Stock Units are settled in accordance with Section 6, the Restricted Stock Units or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Restricted Stock Units will be forfeited by the Grantee and all of the Grantee’s rights to such units shall immediately terminate without any payment or consideration by the Company.
5. Rights as Shareholder; Dividend Equivalents .
5.1 The Grantee shall not have any rights of a shareholder with respect to the shares of Common Stock underlying the Restricted Stock Units unless and until the Restricted Stock Units vest and are settled by the issuance of such shares of Common Stock.
5.2 Upon and following the settlement of the Restricted Stock Units, the Grantee shall be the record owner of the shares of Common Stock underlying the Restricted Stock Units unless and until such shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a shareholder of the Company (including voting rights).
5.3 The Grantee shall not be entitled to any Dividend Equivalents with respect to the Restricted Stock Units to reflect any dividends payable on shares of Common Stock.
6. Settlement of Restricted Stock Units .
6.1 Subject to Section 9 hereof, promptly following the vesting date, and in any event no later than March 15 of the calendar year following the calendar year in which such vesting occurs, the Company shall (a) issue and deliver to the Grantee the number of shares of Common Stock equal to the number of Vested Units; and (b) enter the Grantee’s name on the books of the Company as the shareholder of record with respect to the shares of Common Stock delivered to the Grantee.
6.2 If the Grantee is deemed a “specified employee” within the meaning of Section 409A of the Code, as determined by the Committee, at a time when the Grantee becomes eligible for settlement of the RSUs upon his “separation from service” within the meaning of Section 409A of the Code, then to the extent necessary to prevent any accelerated or additional tax under Section 409A of the Code, such settlement will be delayed until the earlier of: (a) the date that is six months following the Grantee’s separation from service and (b) the Grantee’s death.
7. No Right to Continued Service . Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s Continuous Service at any time, with or without Cause.
8. Adjustments . If any change is made to the outstanding Common Stock or the capital structure of the Company, if required, the Restricted Stock Units shall be adjusted or terminated in any manner as contemplated by Section 9 of the Plan.
| 2 |
9. Tax Liability and Withholding .
9.1 The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Stock Units and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Company will permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:
(a) tendering a cash payment.
(b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Stock Units; provided, however , that no shares of Common Stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.
(c) delivering to the Company previously owned and unencumbered shares of Common Stock.
9.2 Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“ Tax-Related Items ”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement of the Restricted Stock Units or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock Units to reduce or eliminate the Grantee’s liability for Tax-Related Items.
10. Compliance with Law . The issuance and transfer of shares of Common Stock shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel.
11. Notices . Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Financial Officer of the Company (or if the Grantee is also the Chief Financial Officer of the Company, the Chief Executive Officer of the Company) at the Company’s principal corporate offices. Any notice required to be delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
12. Governing Law . This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.
13. Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.
14. Restricted Stock Units Subject to Plan . This Agreement is subject to the Plan as approved by the Company’s shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
| 3 |
15. Successors and Assigns . The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock Units may be transferred by will or the laws of descent or distribution.
16. Severability . The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
17. Discretionary Nature of Plan . The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Stock Units in this Agreement does not create any contractual right or other right to receive any Restricted Stock Units or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment with the Company.
18. Amendment . The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock Units, prospectively or retroactively; provided, that , no such amendment shall adversely affect the Grantee’s material rights under this Agreement without the Grantee’s consent.
19. Section 409A . This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Grantee on account of non-compliance with Section 409A of the Code.
20. No Impact on Other Benefits . The value of the Grantee’s Restricted Stock Units is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
21. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
22. Acceptance . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Stock Units subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the vesting or settlement of the Restricted Stock Units or disposition of the underlying shares and that the Grantee has been advised to consult a tax advisor prior to such vesting, settlement or disposition.
[signature page follows]
| 4 |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| SenesTech, Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| [NAME] | ||
| By: | ||
| Name: | ||
| 5 |