Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Dr. Stanton Sloane as President and Chief Executive Officer
On April 30, 2018, the Frequency Electronics, Inc. (the “Company”) Board of Directors (the “Board”) appointed Dr. Stanton Sloane to serve as the Company’s President and Chief Executive Officer.
The Company has not yet entered into an employment agreement with Dr. Sloane, but Dr. Sloane’s title, compensation and benefits were outlined in a memorandum of understanding (the “MOU”), dated as of April 30, 2018, executed both by Joel Girsky, in his capacity as Chairman of the Board, and Dr. Sloane. The MOU provides that Dr. Sloane will receive an annual base salary of $325,000, with a target bonus of 100% of this base salary. The actual annual bonus will be based on performance and achievement of specific goals and objectives to be established by the Board. . In addition to the Company’s standard officer benefits, Dr. Sloane will receive reimbursement of certain excess medical expenses, a leased vehicle and an initial grant of 55,000 units of Company stock appreciation rights. The MOU provides that the employment agreement between Dr. Sloane and the Company will include standard non-solicit and non-compete protections for the Company and will be structured as an annual contract that will renew automatically unless terminated by either party. The MOU further provides that this employment agreement will contain provisions providing that Dr. Sloane will be entitled to payments equal to one year of his base salary and target bonus in the event of a change of control, a change of authority or a termination of his employment without cause. In addition, all outstanding equity grants of Dr. Sloane will be subject to accelerated vesting following any termination of his employment without cause.
Dr. Sloane’s biographical information as required by Item 401(b) of Regulation S-K and his business experience as required by Item 401(e) of Regulation S-K are disclosed in the Company’s definitive proxy statement on Schedule 14A for the 2017 Annual Meeting of Stockholders, filed with the SEC on November 7, 2017 (the “Proxy Statement”), and are incorporated by reference herein. There are no family relationships between Dr. Sloane and any other director or executive officer. There are no arrangements or understandings between Dr. Sloane and any other person pursuant to which he was appointed as President and Chief Executive Officer. Except for his employment relationship with the Company, his service as a director of the Company and the compensation he receives for his employment, Dr. Sloane is not a party to any transaction to which the Company is a participant and that is required to be disclosed under Item 404(a) of Regulation S-K.
Appointment of Executive Chairman of the Board of Directors, Audit Committee Chairman and Lead Independent Director
Effective as of May 1, 2018, Martin Bloch, the Company’s founder, resigned as the Company’s President and Chief Executive Officer, but will continue in his role as the Company’s Chief Scientist. Also effective as of May 1, 2018, Joel Girsky resigned as the Chairman of the Company’s Board, and the Company’s Board of Directors elected Mr. Bloch as its Executive Chairman, Mr. Girsky as Chairman of the Audit Committee and Jonathan Brolin as lead independent director. Mr. Bloch’s employment agreement, dated March 17, 2008 is attached as Exhibit 10.1 and incorporated by reference herein. Mr. Bloch’s employment agreement remains in effect, and there has been no change to his compensation or to any other provision of his employment agreement, except that Mr. Bloch has executed a waiver permitting Dr. Sloane to assume the role of President and Chief Executive Officer.
A copy of the press release announcing these elections and appointments is attached as Exhibit 99.1.