Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 22, 2021, SOC Telemed, Inc. (the "Company") entered into employment
agreements and, severance and change of control severance agreements with
Christopher M. Gallagher, M.D. and David Mikula to provide for the terms of
their employment with and separation from the Company. As reported in a Current
Report on Form 8-K filed by the Company with the Securities and Exchange
Commission on September 1, 2021, Dr. Gallagher and Mr. Mikula began serving as
the Company's Chief Executive Officer and Chief Operating Officer, respectively,
on September 1, 2021.
Christopher M. Gallagher, M.D.
The Employment Agreement, dated December 20, 2021, between the Company and Dr.
Gallagher provides for at-will employment during an initial three-year term
commencing on November 1, 2021, which may be automatically renewed for one-year
terms thereafter. The agreement establishes Dr. Gallagher's initial annual base
salary of $450,000, and provides that it will be increased to $500,000 effective
January 1, 2022. The agreement also provides for eligibility for an annual
target cash incentive bonus of up to 50% of his annual base salary for 2021
(100% for periods after 2022) upon the achievement of certain performance goals
determined by the Board of Directors (the "Board") or the Compensation Committee
of the Board (the "Compensation Committee"), and to participate in the employee
benefit plans maintained by the Company. Pursuant to the agreement, Dr.
Gallagher was granted under the Company's 2020 Equity Incentive Plan (the
"Equity Incentive Plan") time-based restricted stock units for 1,080,000 shares
of Class A common stock, with a four-year vesting schedule subject to his
continuous service, and performance-based restricted stock units for 720,000
shares of Class A common stock to vest in three equal installments on December 5
of each of 2022, 2023 and 2024, provided that the applicable stock-price
performance goal has been achieved by such date (and, if not, on the date the
applicable performance goal is subsequently achieved), subject to his continued
employment on each applicable vesting date and the achievement of the applicable
performance criteria. The agreement also entitles Dr. Gallagher to receive in
2023 a mix of time- and performance-based restricted stock units pursuant to the
Equity Incentive Plan with a target value based on the product of (x) 50%
multiplied by (y) the appropriate grant date fair value of such award as
determined in the Compensation Committee of the Board's sole discretion, subject
to Dr. Gallagher's continued employment at the date of the grant on each
applicable vesting date and the achievement of the applicable performance
criteria.
The Company also entered into a severance and change in control agreement with
Dr. Gallagher, dated December 22, 2021, and effective November 1, 2021. Pursuant
to the severance and change in control agreement, if Dr. Gallagher's employment
is terminated by the Company without "Cause" or Dr. Gallagher resigns for "Good
Reason" in each case not in connection with the a "Change in Control" of the
Company (each term as defined in the severance and change in control agreement),
Dr. Gallagher will be entitled to receive (i) twelve-months' continuation of his
annual base salary, (ii) any cash incentive compensation bonus earned with
respect to the immediately preceding fiscal year, which remains unpaid on the
termination date, (iii) a lump sum severance payment equal to the cash incentive
compensation bonus he would have received in respect of the fiscal year in which
his termination occurs, determined based on actual performance levels and
prorated, and (iv) up to twelve months of COBRA coverage at the Company's sole
expense. If Dr. Gallagher's employment is terminated by the Company without
Cause or if Dr. Gallagher resigns for Good Reason in each case during the one
month period prior to (and in connection with) or the one year period following
a Change in Control of the Company, Dr. Gallagher will be entitled to receive
(i) a lump sum severance payment equal to one times his annual base salary, (ii)
any cash incentive compensation bonus earned with respect to the immediately
preceding fiscal year, which remains unpaid on the termination date, (iii) up to
one year of COBRA coverage at the Company's sole expense, (iv) a lump sum
severance payment equal to the cash incentive compensation bonus he would have
received in respect of the fiscal year in which his termination occurs,
determined based on target performance levels and not prorated, and (v) full
acceleration of vesting of all time-based equity awards. If Dr. Gallagher's
employment terminates due to his death or disability, then in lieu of the above
he or his estate will receive (i) any cash incentive compensation bonus earned
with respect to the immediately preceding fiscal year, which remains unpaid,
(ii) a lump sum severance payment equal to the cash incentive compensation bonus
he would have been entitled to receive in respect of the fiscal year in which
his termination occurs, determined based on target performance levels and
prorated, and (iii) an extended exercise period of up to one year with respect
to any vested stock options held as of his separation date. The severance
payments and benefits described above are each contingent upon Dr. Gallagher's
delivery of a general release of claims in favor of the Company, compliance with
non-solicitation and non-competition restrictions each lasting for one year
following a separation for any reason, and compliance with indefinite
confidentiality and non-disparagement obligations following a separation for any
reason.
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The foregoing description of the principal terms of Dr. Gallagher's employment
is not complete and is qualified in its entirety by reference to his employment
agreement and his severance and change of control agreement, copies of which are
attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated
herein by reference.
David Mikula
The Employment Agreement, dated December 20, 2021, between the Company and Mr.
Mikula provides for at-will employment during an initial three-year term
commencing on November 1, 2021, which may be automatically renewed for one-year
terms thereafter. The agreement establishes Mr. Mikula's initial annual base
salary of $390,000 retroactive to September 1, 2021 and eligibility for annual
target cash incentive bonus of up to 60% of his annual base salary, retroactive
to September 1, 2021, upon the achievement of certain performance goals
determined by the Board or the Compensation Committee, and to participate in the
employee benefit plans maintained by the Company. Pursuant to the agreement, Mr.
Mikula was granted under the Equity Incentive Plan time-based restricted stock
units for 450,000 shares of Class A common stock, with a four-year vesting
schedule subject to his continuous service, and performance-based restricted
stock units for 300,000 shares of Class A common stock to vest in three equal
installments on December 5 of each of 2022, 2023 and 2024, provided that the
applicable stock-price performance goal has been achieved by such date (and, if
not, on the date the applicable performance goal is subsequently achieved), ,
subject to his continued service on each applicable vesting date and the
achievement of the applicable performance criteria.
The Company also entered into a severance and change in control agreement with
Mr. Mikula, dated December 22, 2021, and effective November 1, 2021,
substantially in the form of the Company's standard form of severance and change
of control agreement. Pursuant to the severance and change in control agreement,
if Mr. Mikula's employment is terminated by the Company without "Cause" or Mr.
Mikula resigns for "Good Reason" in each case not in connection with a "Change
in Control" of the Company (each term as defined in the severance and change in
control agreement), Mr. Mikula will be entitled to receive (i) six-months'
continuation of his annual base salary if separation occurs before May 1 2023 or
twelve-months' continuation of his annual base salary if separation occurs after
May 1, 2023, (ii) any cash incentive compensation bonus earned with respect to
the immediately preceding fiscal year, which remains unpaid on the termination
date, (iii) a lump sum severance payment equal to the cash incentive
compensation bonus he would have received in respect of the fiscal year in which
his termination occurs, determined based on actual performance levels and
prorated, and (iv) up to six months of COBRA coverage at the Company's sole
expense if separation occurs before May 1, 2023 (up to twelve months of COBRA
coverage if separation occurs thereafter). If Mr. Mikula's employment is
terminated by the Company without Cause or if Mr. Mikula resigns for Good Reason
in each case during the one month period prior to (and in connection with) or
the one year period following a Change in Control of the Company, Mr. Mikula
will be entitled to receive (i) a lump sum severance payment equal to one times
his annual base salary, (ii) any cash incentive compensation bonus earned with
respect to the immediately preceding fiscal year, which remains unpaid on the
termination date, (iii) up to one year of COBRA coverage at the Company's sole
expense, (iv) a lump sum severance payment equal to the cash incentive
compensation bonus he would have received in respect of the fiscal year in which
his termination occurs, determined based on target performance levels and not
prorated, and (v) full acceleration of vesting of all time-based equity awards.
If Mr. Mikula's employment terminates due to his death or disability, then in
lieu of the above he or his estate will receive (i) any cash incentive
compensation bonus earned with respect to the immediately preceding fiscal year,
which remains unpaid on the termination date, (ii) a lump sum severance payment
equal to the cash incentive compensation bonus he would have been entitled to
receive in respect of the fiscal year in which his termination occurs,
determined based on target performance levels and prorated, and (iii) an
extended exercise period of up to one year with respect to any vested stock
options held as of his separation date. The severance payments and benefits
described above are each contingent upon Mr. Mikula's delivery of a general
release of claims in favor of the Company, compliance with non-solicitation and
non-competition restrictions each lasting for one year following a separation
for any reason, and compliance with indefinite confidentiality and
non-disparagement obligations following a separation for any reason.
The foregoing description of the principal terms of Mr. Mikula's employment is
not complete and is qualified in its entirety by reference to his employment
agreement and his severance and change of control agreement, copies of which are
attached hereto as Exhibit 10.3 and Exhibit 10.4, respectively, and incorporated
herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1+ Employment Agreement between SOC Telemed, Inc. and Christopher M.
Gallagher, dated as of December 20, 2021 (previously filed as Exhibit
10.1 to the Current Report on Form 8-K filed by SOC Telemed, Inc. on
December 27, 2021).
10.2+ Severance and Change in Control Agreement between SOC Telemed, Inc.
and Christopher M. Gallagher, dated as of December 22, 2021 (previously
filed as Exhibit 10.2 to the Current Report on Form 8-K filed by SOC
Telemed, Inc. on December 27, 2021).
10.3+ Employment Agreement between SOC Telemed, Inc. and David Mikula,
dated as of December 20, 2021 (previously filed as Exhibit 10.3 to the
Current Report on Form 8-K filed by SOC Telemed, Inc. on December 27,
2021).
10.4+ Severance and Change in Control Agreement between SOC Telemed, Inc.
and David Mikula, dated as of December 22, 2021 (previously filed as
Exhibit 10.4 to the Current Report on Form 8-K filed by SOC Telemed,
Inc. on December 27, 2021).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
+ Certain exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Company hereby agrees to
furnish supplementally a copy of any omitted exhibit or schedule to the SEC
upon its request.
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