FlexShopper, Inc. (NASDAQ:FPAY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02.
With Mr. House’s appointment on September 20, 2019, we entered into an employment agreement with him. to the employment agreement, Mr. House has agreed to devote his full time, attention and efforts to our business as our Chief Executive Officer. The employment agreement extends for a term expiring on December 31, 2024, and is automatically renewable for three successive one-year terms unless written notice of non-renewal is timely provided by either party. The employment agreement provides that Mr. House will receive a base salary during the term of his employment at an annual rate of $330,000. In addition, he is entitled to receive an annual cash bonus of $70,000, commencing with the calendar year beginning January 1, 2020, based on our company meeting a minimum EBITDA (earnings before interest, taxes, depreciation and amortization) target each year.
As an inducement to enter into his employment agreement, Mr. House was awarded initial time-based stock options to purchase 350,000 shares of our common stock at an exercise price of $1.52 per share, vesting in five equal annual increments commencing December 31, 2020. We also agreed to issue future performance-based stock options to Mr. House at the beginning of 2020, 2021, 2022, 2023 and 2024 to purchase 200,000, 225,000, 250,000, 275,000 and 300,000 shares of our common stock, respectively, at an exercise price equal to the closing share price immediately preceding the respective award date, vesting only if our company meets minimum net income targets each year. If there is a Change of Control (as defined in the employment agreement) of our company during his employment term, all of the unvested initial options and all of the unvested performance options for that particular year will immediately vest.
The employment agreement provides for termination by us upon death or disability of Mr. House (defined as 90 days or more of any medically determinable physical or mental impairment during any 12-month period) or for Cause (as defined therein), which includes conviction of a felony or any crime involving moral turpitude or a willful material breach by him of his obligations to us under the employment agreement. In the event the employment agreement is terminated by us without Cause, he will be entitled to his base salary for the balance of the initial term. The employment agreement with Mr. House does not include a provision permitting his termination of the employment agreement in connection with a change of control of our company.
The employment agreement contains covenants (a) restricting Mr. House from engaging in any activities competitive with our business during the term of his employment agreement and two years thereafter, and from soliciting our company’s employees, customers and other business relationships for two years after the termination of the agreement, (b) prohibiting him from disclosure of confidential information regarding us at any time and (c) confirming that all intellectual property developed by him and relating to our business constitutes our sole and exclusive property.
| (a) | Exhibits. The exhibit listed in the following Exhibit Index is filed as part of this current report. |
| Exhibit No. | Description |
| 10.1 | Employment Agreement, dated September 20, 2019, between FlexShopper, Inc. and Richard House, Jr. |
| 99.1 | Press Release issued by FlexShopper, Inc. on September 23, 2019. |
FlexShopper, Inc. Exhibit
EX-10.1 2 f8k092019ex10-1_flexshopper.htm EMPLOYMENT AGREEMENT,…
To view the full exhibit click here
About FlexShopper, Inc. (NASDAQ:FPAY)
FlexShopper, Inc. is a holding company. The Company, through FlexShopper, LLC (FlexShopper), is engaged in the business of providing certain types of durable goods to consumers on a lease-to-own basis and providing lease-to-own (LTO) terms to consumers of third-party retailers and e-tailers. FlexShopper and its online LTO products provide consumers the ability to acquire durable goods, including electronics, computers and furniture on a payment, lease basis. Concurrently, FlexShopper’s model provides e-tailers and retailers an opportunity to upturn their sales by utilizing FlexShopper’s online channels to connect with consumers that want to acquire products on an LTO basis. FlexShopper processes LTO transactions using its LTO Engine. The LTO Engine is FlexShopper’s technology that automates the process of consumers receiving spending limits and entering into leases for durable goods within a few minutes. FlexShopper owns two subsidiaries: FlexShopper 1, LLC and FlexShopper 2, LLC.
