NORTECH SYSTEMS INCORPORATED (NASDAQ:NSYS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

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NORTECH SYSTEMS INCORPORATED (NASDAQ:NSYS) 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 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Richard Wasielewski Amended and Restated Employment Agreement

On May 15, 2017, Nortech Systems Incorporated (the “Company”) entered into an Amended and Restated Employment Agreement with Richard Wasielewski, the Company’s Chief Executive Officer (the “CEO Agreement”). The CEO Agreement supersedes Mr. Wasielewski’s previous employment agreement and change of control agreement. The term of the CEO Agreement continues until December 31, 2018 but may be extended for an additional one year period by mutual consent of the parties. Under the CEO Agreement, Mr. Wasielewski is entitled to receive an annual salary of $300,000, subject to increase by the Board of Directors. Mr. Wasielewski is eligible for bonus compensation (the “Wasielewski Bonus Payment”), based upon his satisfaction of specific criteria to be determined for each calendar year by the Company’s Compensation Committee, with a stated payout percentage of up to 50% of base salary under the bonus plan. He may participate in the Company’s benefit plans that are currently and hereafter maintained by the Company and for which he is eligible, and he also receives certain perquisites.

Upon entering into the CEO Agreement, and thereto, the Company granted Mr. Wasielewski a 75,000 share non-qualified stock option under the Company’s 2017 Stock Incentive Plan that will vest annually in three equal installments. The stock option has an exercise price of $3.43 per share, equal to the fair market value of the Company’s common stock on the grant date and expires on May 15, 2027.

The CEO Agreement has customary non-competition, non-solicitation and confidentiality provisions.

Under the CEO Agreement, if Mr. Wasielewski’s employment is terminated by the Company without Cause (as defined in the CEO Agreement) or by Mr. Wasielewski for Good Reason (as defined in the CEO Agreement), so long as he has signed and has not revoked a release agreement, he will be entitled to receive severance comprised of (i) his base salary in effect at time of termination for the longer of (a) the remainder of the term of the CEO Agreement or (b) twelve months, (ii) the earned Wasielewski Bonus Payment for the full year in which he is terminated, (iii) the vesting of his stock options and equity appreciation rights units, and (iv) certain retirement benefits set forth in the CEO Agreement.

If Mr. Wasielewski’s employment is terminated within 12 months after a Change of Control (as defined in the CEO Agreement) by the Company without Cause or by Mr. Wasielewski for Good Reason, so long as he has signed and has not revoked a release agreement, he will be entitled to receive severance comprised of (i) his base salary in effect at time of termination for the longer of (a) the remainder of the term of the CEO Agreement or (b) eighteen months, (ii) the maximum payable Wasielewski Bonus Payment for the year in which he is terminated, for the portion of such fiscal year through the date of termination, (iii) the vesting of his stock options and equity appreciation rights units, and (iv) certain retirement benefits set forth in the CEO Agreement.

In the event of Mr. Wasielewski’s Retirement (as defined in the CEO Agreement), he will be entitled to the vesting of his stock options and equity appreciation rights units, and certain retirement benefits set forth in the CEO Agreement.

The foregoing summary of the CEO Agreement is qualified in all respects by the CEO Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by this reference.

Matthew Mahmood Employment Agreement

On May 15, 2017, the Company entered into an Employment Agreement with Matthew Mahmood, the Company’s Chief Operating Officer (the “COO Agreement”). The initial term of the COO Agreement is two years but it may be extended for an additional one year period by mutual consent of the parties. Under the COO Agreement, Mr. Mahmood is entitled to receive an annual salary of $250,000 during the first year of the COO Agreement’s term and $275,000 thereafter. Mr. Mahmood is eligible for bonus compensation (the “Mahmood Bonus Payment”) based upon his satisfaction of specific criteria to be determined for each calendar year by the Company’s Compensation Committee, with a stated payout percentage of up to 50% of base salary under the bonus plan. Mr. Mahmood may participate in the Company’s benefit plans that are currently and hereafter maintained by the Company and for which he is eligible, including, without limitation, 401(k), life insurance and other benefit plans.

Upon entering into the COO Agreement, and
About NORTECH SYSTEMS INCORPORATED (NASDAQ:NSYS)

Nortech Systems Incorporated is an electronic manufacturing services (EMS) company. The Company offers a range of value-added engineering, technical and manufacturing services and support, including project management, design, testing, prototyping, manufacturing, supply chain management and post-market services. The Company’s segment is Contract Manufacturing. The Company’s manufacturing and engineering services include medical devices, printed circuit board assemblies, wire and cable assemblies, and electromechanical assemblies. The Company’s manufacturing facilities are located at Bemidji, Blue Earth, Merrifield, Eden Prairie, Milaca and Mankato in Minnesota; Augusta in Wisconsin; Monterrey in Mexico, and Suzhou in China. The Company serves approximately three markets within the EMS industry, such as Aerospace and Defense, Medical/Life Sciences and the Industrial market, which includes industrial equipment, transportation, vision, agriculture, oil and gas.

NORTECH SYSTEMS INCORPORATED (NASDAQ:NSYS) Recent Trading Information

NORTECH SYSTEMS INCORPORATED (NASDAQ:NSYS) closed its last trading session down -0.03 at 3.23 with 1,453 shares trading hands.