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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): February 16, 2021
 
SharpSpring, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-36280
 
05-0502529
(State or other jurisdiction ofIncorporation or Organization)
 
(Commission File Number)
 
(I.R.S. EmployerIdentification No.)
 
5001 Celebration Pointe Avenue, Gainesville, Florida
 
32608
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: 888-428-9605 
 
(Former name or former address, if changed since last report)
 
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:
 
☐ 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))
 
Securities registered pursuant to Section 12(b) of the Act: 
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
SHSP
NASDAQ Stock Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 




 
Item 5.02 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
Richard Carlson
 
On February 16, 2021, the registrant entered into an employee agreement amendment with Richard Carlson, the registrant’s Chief Executive Officer and President. The employee agreement amendment, among other things, (i) change’s Mr. Carlson’s base salary to $360,800 per year; and (ii) sets Mr. Carlson’s annual bonus target amount at $126,250 (the Quarterly Bonus target amount is $31,563) pursuant to the 2021 Executive Bonus Plan.
 
Mr. Carlson was also granted: (i) stock options to purchase 13,506 shares of the registrant’s common stock at an exercise price of $26.50 per share; and (ii) 6,065 restricted stock units (“RSU’s”). The options vest over a 4-year period, with 25% vesting on the first anniversary of the grant date and an additional 1/48 of the original number of options vesting every month thereafter. The RSU’s vest over a 3-year period, with 33.3% vesting on the first anniversary of the grant date and an additional 1/12 of the original number of options vesting every quarter thereafter.
 
The description of Mr. Carlson’s employee agreement amendment is not complete and is qualified in its entirety by reference to the employee agreement amendment attached hereto as Exhibit 10.2, which is incorporated by reference herein.
 
Travis Whitton
 
On February 16, 2021, the registrant entered into an employee agreement amendment with Travis Whitton, the registrant’s Chief Technology Officer. The employee agreement amendment, among other things, (i) change’s Mr. Whitton’s base salary to $212,200 per year; and (ii) sets Mr. Whitton’s annual bonus target amount is set at $53,050 (the Quarterly Bonus target amount is $13,263) pursuant to the 2021 Executive Bonus Plan.
 
Mr. Whitton was also granted: (i) stock options to purchase 8,104 shares of the registrant’s common stock at an exercise price of $26.50 per share and (ii) 3,640 RSU’s. The options vest over a 4 year period, with 25% vesting on the first anniversary of the grant date and an additional 1/48 of the original number of options vesting every month thereafter. The RSU’s vest over a 3-year period, with 33.3% vesting on the first anniversary of the grant date and an additional 1/12 of the original number of options vesting every quarter thereafter.
 
The description of Mr. Whitton’s employee agreement amendment is not complete and is qualified in its entirety by reference to the employee agreement amendment attached hereto as Exhibit 10.8, which is incorporated by reference herein.
 
 
Item 9.01 Financial Statements and Exhibits
 
Exhibit No.
 
Description
 
2021 Executive Bonus Plan.*
 
Employee Agreement Amendment – Richard Carlson.*
 
Employee Agreement Amendment – Richard Carlson (incorporated by reference to the registrant’s Form 8-K/A filed 4/16/20).
 
Employee Agreement Amendment – Richard Carlson (incorporated by reference to the registrant’s Form 8-K filed 2/27/19).
 
Employee Agreement Amendment – Richard Carlson (incorporated by reference to the registrant’s Form 8-K filed 2/12/18).
 
Employee Agreement Amendment – Richard Carlson (incorporated by reference to the registrant’s Form 8-K filed 4/15/17).
 
Employee Agreement – Richard Carlson (incorporated by reference to the registrant’s Form 8-K filed 9/14/15).
 
Employee Agreement Amendment – Travis Whitton.*
 
Employee Agreement Amendment – Travis Whitton (incorporated by reference to the registrant’s Form 8-K/A filed 4/16/20).
 
Employee Agreement Amendment – Travis Whitton (incorporated by reference to the registrant’s Form 8-K filed 2/27/19).
 
Employee Agreement Amendment – Travis Whitton (incorporated by reference to the registrant’s Form 8-K filed 2/12/18).
 
Employee Agreement Amendment – Travis Whitton (incorporated by reference to the registrant’s Form 8-K filed 8/1/17).
 
Employee Agreement Amendment – Travis Whitton (incorporated by reference to the registrant’s Form 8-K filed 7/8/16).
 
Employee Agreement – Travis Whitton (incorporated by reference to the registrant’s Form 8-K filed 7/8/16).
*    Included herewith.
 
 
 
 
 
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.
 
SHARPSPRING, INC.
 
 
 
 
By:
/s/ Aaron Jackson
 
 
Aaron Jackson,
 
 
Chief Financial Officer
 
 
Dated: February 18, 2021
 
  Exhibit 10.1
 
Appendix D
 
2021 Executive Bonus Plan
 
1.
Bonus plan for executive officers:
a.
Designed to incent performance
b.
Paid quarterly
1.
Quarterly payment is limited to a maximum of 100% of the quarterly amount and is trued up at year end including clawback, as needed
2.
True up - if over of 100% annually, payment for over achievement is at year-end
c.
Bonus payment is capped at 150% maximum
d.
Breakout for financial performance components
1.
Purpose is to drive performance on targeted goals
2.
Components
a.
80% based on Net Revenue
b.
20% based on EBITDA
c.
Goal is based on approved board budget after adjusting for salary, bonus, and any related expense resulting from the approval of other items during this meeting
d.
Payout percentages shall be based on the following formula:
i.
Calculate actual Net Revenue attainment vs. goal as a percentage (item i);
ii.
Calculate actual EBITDA attainment vs. goal as a percentage (item ii);
iii.
If the result of either item (i) or (ii) is less than 85%, that discrete item shall pay 0%, and the remaining item shall be paid discretely based the formula starting in step (v) below;
iv.
If both items (i) and (ii) are over 85%, then weighted average the result of items (i) and (ii) above (result is item iii);
v.
If the result of item (iii) is less than 90%, payout shall be 0%;
vi.
At 90%, participants will earn 90% of the eligible bonus; and for each percentage over 90% but less than 100%, the payout will increase by 1.00%;
vii.
For each percentage over 100% but less than 120%, the payout will increase by 2.50%
 
 
  Exhibit 10.2
 
EMPLOYEE AGREEMENT AMENDMENT
 
THIS AGREEMENT (the “Agreement”) is made and entered into on February 16, 2021 by and between SharpSpring, Inc., a Delaware corporation (the “Company”); and Richard Carlson (“Employee”).
 
1.
This Agreement amends that certain Employee Agreement dated September 13, 2015 made and entered into by the parties hereto, as amended from time to time (the “Employee Agreement”). Capitalized terms herein have the same meaning as used in the Employee Agreement, unless otherwise noted.
 
2.
Paragraph 4.1 of Article Four – Compensation of Employee is deleted and replaced with the following:
 
4.1. Base Compensation. For all services rendered by Employee under this Employee Agreement, the Company agrees to pay Employee the rate of $360,800 per year (the “base salary”), which shall be payable to Employee not less frequently than bi-monthly, or as is consistent with the Company’s practice for its other employees.
 
3.
The following paragraph that reads:
 
The annual bonus target amount is $122,570,000 (the Quarterly Bonus target amount is $30,643) and will be based on the Company achieving specified revenue and EBITDA performance targets as set by the Board of Directors.
 
is deleted in its entirety and replaced with:
 
The annual bonus target amount is $126,250 (the Quarterly Bonus target amount is $31,563) and will be based on the Company achieving specified revenue and EBITDA performance targets as set by the Board of Directors.
 
4.
The section titled “Other Compensation - Bonus” of Appendix B of the Employee Agreement is amended by adding the following:
 
In the event Employee separates from the Company for any reason, any unvested options, restricted stock units or any other equity plan awards issued to Employee scheduled to vest at the Employee’s next quarterly, monthly or other interim vesting period shall automatically vest for each full month of continuous employment completed between the last vesting date and the date of termination. No additional unvested options, restricted stock units or other equity plan awards shall vest to Employee. This provision shall automatically be incorporated into all equity plan awards issued to Employee.
 
5.
All other provisions of the Employee Agreement remain in full force and effect, other than any provision that conflicts with the terms and spirit of this Agreement.
 
Signature Page Attached
 
 
 
 
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.
 
 
   
 
 
SHARPSPRING, INC.
 
   
 
 
   
 
   
 
 
   
 
/s/ Alana Christou
 
 
/s/ Aaron Jackson
 
(Witness signature)
 
 
Aaron Jackson, CFO
 
 
 
 
   
 
 
EMPLOYEE
 
   
 
 
   
 
   
 
 
   
 
/s/ Jennifer Stankevich
 
 
/s/ Richard Carlson
 
(Witness signature)
 
 
Richard Carlson
 
 
 
 
  Exhibit 10.8
 
EMPLOYEE AGREEMENT AMENDMENT
 
THIS AGREEMENT (the “Agreement”) is made and entered into on February 16, 2021 by and between SharpSpring, Inc., a Delaware corporation (the “Company”); and Travis Whitton (“Employee”).
 
1.
This Agreement amends that certain Employee Agreement dated August 15, 2014 made and entered into by the parties hereto, as amended from time to time (the “Employee Agreement”). Capitalized terms herein have the same meaning as used in the Employee Agreement, unless otherwise noted.
 
2.
Paragraph 4.1 of Article Four – Compensation of Employee is deleted and replaced with the following:
 
4.1. Base Compensation. For all services rendered by Employee under this Employee Agreement, the Company agrees to pay Employee the rate of $212,200 per year (the “base salary”), which shall be payable to Employee not less frequently than bi-monthly, or as is consistent with the Company’s practice for its other employees.
 
3.
The following paragraph that reads:
 
The annual bonus target amount is $51,500 (the Quarterly Bonus target amount is $12,875) and will be based on the Company achieving specified revenue and EBITDA performance targets as set by the Board of Directors.
 
is deleted in its entirety and replaced with:
 
The annual bonus target amount is $53,050 (the Quarterly Bonus target amount is $13,263) and will be based on the Company achieving specified revenue and EBITDA performance targets as set by the Board of Directors.
 
4.
The section titled “Other Compensation - Bonus” of Appendix B of the Employee Agreement is amended by adding the following:
 
In the event Employee separates from the Company for any reason, any unvested options, restricted stock units or any other equity plan awards issued to Employee scheduled to vest at the Employee’s next quarterly, monthly or other interim vesting period shall automatically vest for each full month of continuous employment completed between the last vesting date and the date of termination. No additional unvested options, restricted stock units or other equity plan awards shall vest to Employee. This provision shall automatically be incorporated into all equity plan awards issued to Employee.
 
5.
All other provisions of the Employee Agreement remain in full force and effect, other than any provision that conflicts with the terms and spirit of this Agreement.
 
Signature Page Attached
 
 
 
 
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.
 
   
 
 
SHARPSPRING, INC.
 
   
 
 
   
 
   
 
 
   
 
/s/ Alana Christou
 
 
/s/ Aaron Jackson
 
(Witness signature)
 
 
Aaron Jackson, CFO
 
 
 
 
   
 
 
EMPLOYEE
 
   
 
 
   
 
   
 
 
   
 
/s/ Jennifer Stankevich
 
 
/s/ Travis Whitton
 
(Witness signature)
 
 
Travis Whitton