Item 1.01 Entry into a Material Definitive Agreement.
On January 7, 2020, IKONICS Corporation (the "Company") entered into a
Transition Agreement with William C. Ulland (the "Transition Agreement") and
separately entered into an Employment Agreement (the "Employment Agreement")
with Glenn Sandgren as more particularly described in Item 5.02 to this Current
Report on Form 8-K (this "Report").
The descriptions of the Transition Agreement and Employment Agreement contained
in Item 5.02 of this Report are qualified in their entirety by reference to the
full text of the Transition Agreement and Employment Agreement filed herewith as
Exhibits 10.1 and 10.2, respectively.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Retirement of William C. Ulland
As previously announced, William C. Ulland notified the Board of Directors (the
"Board") of the Company of his intention to retire from his positions as
President and Chief Executive Officer of the Company, provided a successor had
been identified by the Board. On January 7, 2020, Mr. Ulland formally announced
his retirement as President and Chief Executive Officer of the Company,
effective February 10, 2020. Mr. Ulland will continue to serve as Chairman of
the Board. In connection with his retirement, Mr. Ulland entered into the
Transition Agreement with the Company, whereby the Company will pay Mr. Ulland a
one-time cash fee of $225,000, and certain other benefits as described in the
Transition Agreement.
Hiring of Glenn Sandgren
On January 7, 2020, the Company announced that Glenn Sandgren has been appointed
to the position of Chief Executive Officer effective February 10, 2020. Mr.
Sandgren has also been appointed to the Board of Directors of the Company, also
effective February 10, 2020. Prior to joining the Company, Mr. Sandgren, 59,
served as President and Chief Executive Officer of Pallidus, Inc. since December
2015.
In connection with this appointment, Mr. Sandgren will receive an annual base
salary of $275,000 and an initial signing bonus of $30,000, will be eligible for
an annual cash incentive under the Company's cash incentive plan for fiscal 2020
with a target incentive opportunity of 50% of his base salary, will receive
annual grants of 10,000 stock options under the Company's 2019 Equity Incentive
Plan (the Equity Plan") for the first five years of his employment and other
such compensation as described in the Employment Agreement. The stock options
underlying each annual grant will vest pro rata over three years and remain
exercisable for ten years from the grant date, subject to Mr. Sandgren meeting
the conditions for exercise set forth in the Equity Plan.
Item 7.01. Regulation FD Disclosure.
On January 7, 2020, the Company issued a press release announcing the events
discussed in Item 5.02 above, the text of which is furnished as Exhibit 99
hereto and incorporated herein by reference. The information contained in this
Item 7.01 and Exhibit 99 is being furnished, and shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities under Section 18.
Furthermore, the information contained in this Item 7.01 and Exhibit 99 shall
not be deemed to be incorporated by reference into the Company's filings under
the Securities Act of 1933, as amended, or the Exchange Act.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibit.
Exhibit Description
Number
10.1 Transition Agreement, dated January 7, 2020, between the Company
and William C. Ulland.
10.2 Employment Agreement, dated January 7, 2020, between the Company
and Glenn Sandgren.
99 Press Release dated January 7, 2020
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IKONICS CORP 