Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Departure
of Directors
On
November 12, 2019, Director Shawn Willard resigned from the Board of Eastside effective on that date. Mr. Willard indicated that
his resignation was not the result of any disagreement with management or the Board. Prior to his resignation, Mr. Willard served
as chair of Eastside’s Nominating & Corporate Governance Committee and also served on the Audit Committee and the Compensation
Committee. As disclosed in Item 3.01 of this Current Report on Form 8-K, the resignation, together with the appointment of Lawrence
Firestone as Chief Executive Officer, resulted in Eastside’s non-compliance with the Nasdaq Listing Rules. The Board intends
to conduct a prompt director search process to come into compliance with the Nasdaq Listing Rules.
Appointment
of Officers
The
Board approved the appointment of Lawrence Firestone as Chief Executive Officer of Eastside, effective November 12, 2019. Eastside’s
press release announcing Mr. Firestone’s appointment as Chief Executive Officer is attached hereto as Exhibit 99.1.
Prior
to his appointment as Chief Executive Officer, Mr. Firestone, age 61, served as the Executive Vice President and Chief Financial
Officer of Akonni Biosystems since April of 2018. Mr. Firestone draws on over 35 years of executive management experience in both
public and private technology companies as a C-level executive. Most recently, since February 2014, Mr. Firestone was the Chief
Executive Officer and President, and is now the Chairman of FirePower Technology, Inc. a provider of power supplies to the high-performance
computing market. Prior to such position, Mr. Firestone held a variety of roles including as Chief Executive Officer, Chief Financial
Officer and Director at a number of public and private companies. Mr. Firestone’s public company board experience includes
CVD Equipment (Symbol: CVV), Qualstar Corporation (Symbol: QBAK), Amtech Systems, Inc. (Symbol: ASYS) and Hyperspace Communications,
Inc. (Symbol: HCO). Mr. Firestone received a B.S. in Business Administration with a concentration in Accounting from Slippery
Rock University.
Compensatory
Arrangements of Certain Officers
In
connection with Mr. Firestone’s appointment as Chief Executive Officer, Mr. Firestone entered into an Executive Employment
Agreement with Eastside dated November 12, 2019 (the “Employment Agreement”). Under the Employment Agreement, Mr.
Firestone will initially receive an annual base salary of $250,000 in cash. Eastside will also grant Mr. Firestone the equivalent
of $100,000 of restricted stock units (“RSUs”), based on the Eastside’s customary determination of the applicable
stock price at the time of grant. Twenty-five percent (25%) of the award will vest on each of March 31, June 30 and September
30, 2020 and the first anniversary of the effective date of the Employment Agreement. Mr. Firestone will also be eligible to receive
a target incentive payment of 100% of his annual base salary beginning in 2020, paid 50% in RSUs and 50% in cash. Actual payments
will be determined based on a combination of Eastside’s results and individual performance against the applicable performance
goals established by the Compensation Committee of the Board. Mr. Firestone will also receive (i) a signing bonus of $50,000,
which he may elect to receive up to 50% in cash and 50% in fully vested stock of the Eastside, and (ii) other benefits that are
generally available to other executive officers of the Eastside. Mr. Firestone will be entitled to certain severance benefits
if he is terminated without cause, or resigns for good reason (in each case, as defined in the Employment Agreement), including,
among other things, one year of annual base salary, one year of continued health benefits coverage and one year of continued vesting
of RSUs.
The
foregoing is a summary only and does not purport to be a complete description of all of the terms, provisions, covenants and agreements
contained in the Employment Agreement, and is subject to and qualified in its entirety by reference to the complete text of the
Employment Agreement. A copy of the Employment Agreement will be filed as an exhibit to the Eastside’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2019.