Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On February 5, 2019, SITO
Mobile, Ltd. (the “
Company
”) announced that the board of directors of the Company (the “
Board
”)
has appointed Terrance S. (Terry) Lynn as the Chief Financial Officer of the Company, effective as of February 19, 2019 (the “
Start
Date
”). In connection with Mr. Lynn’s appointment, William Seagrave, the Company’s Chief Operating Officer
and Interim Chief Financial Officer, will step down as Interim Chief Financial Officer effective as of the Start Date, and will
continue his service with the Company as Chief Operating Officer.
Mr. Lynn, age 45, is the
principal consultant and founder of StandardFlow, a CFO consulting and advisory firm, where he worked from November 2014 until
joining the Company. While at StandardFlow, Mr. Lynn served as a contract CFO and financial advisor to several Silicon Valley startups
and emerging companies, including Dropbox, Weather Underground, Birdeye, iMeem and others. Prior to founding StandardFlow, Mr.
Lynn served as Chief Financial Officer at MedHelp, a consumer healthcare company, since January 2011, and helped to lead MedHelp’s
acquisition by Merck & Co., Inc. in 2014. Mr. Lynn’s experience includes serving as an advisor for clients in a variety
of industries, including online media, consumer healthcare and software as a service, or SaaS. Mr. Lynn received a Bachelor of
Science, with a major in Mathematics, and an MBA, from Vanderbilt University.
The Company and Mr. Lynn
have entered into an offer letter (the “
Offer Letter
”), pursuant to which Mr. Lynn will receive an annual base
salary of $275,000. Mr. Lynn is also eligible to earn a cash bonus (the “
Bonus
”) if the Company achieves certain
specified revenues during the one-year period commencing on the Start Date (the “
Measurement Period
”), subject
to his continued employment with the Company at the time the bonus is to be paid, as follows:
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A Bonus of $150,000 if the Company’s revenues during the Measurement Period
exceed $50 million;
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An additional Bonus of $150,000 if the Company’s revenues during the Measurement
Period exceed $60 million; and
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An additional Bonus of $150,000 if the Company’s revenues during the Measurement
Period exceed $70 million.
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Pursuant to the Offer Letter,
Mr. Lynn will also be granted a stock option under the Company’s 2017 Equity Incentive Plan to purchase an aggregate of 250,000
shares (the “
Option Shares
”) of the Company’s common stock, at an exercise price of $1.16 per share (the
“
Stock Option
”), representing the closing price of the Company’s common stock on the date the Board approved
the Offer Letter. The Stock Option will vest and may be exercised with respect to ¼ of the Option Shares, or 62,500 Option
Shares, on the first anniversary of the Start Date, and with respect to an additional 1/48
th
of the Option Shares, or
5,208.43 shares, each month thereafter, subject to Mr. Lynn’s continued employment with the Company, upon the terms and subject
to the conditions set forth in the Company’s 2017 Equity Incentive Plan. Mr. Lynn will also be entitled to participate in
the Company’s 401(k) plan and group health insurance plan, including coverage for medical, vision, dental, long-term disability
and term life insurance. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to
the complete copy of the Offer Letter, which is attached to this Current Report on Form 8-K as Exhibit 10.1.
There is no arrangement
or understanding between Mr. Lynn and any other person pursuant to which Mr. Lynn was selected as an officer of the Company. There
are no family relationships between Mr. Lynn and any director or executive officer of the Company, and Mr. Lynn is not a party
to any related party transaction within the meaning of Item 404(a) of Regulation S-K.