SIGMA ADDITIVE SOLUTIONS, INC. appointed William Kerby as new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Resignation of Director and Appointment of Successor


Effective concurrently with the completion of the Acquisition, Mark Ruport, the Chairman of the Board of Sigma, resigned as Chairman and as a director, and Donald P. Monaco was appointed by our Board of Directors as a director and Chairman of the Board to fill the vacancy created by Mr. Ruport's resignation. On behalf of our Board of directors, we wish to thank Mr. Ruport's for his able guidance in completing the Acquisition and many years of dedicated service to Sigma.


Mr. Ruport's resignation was contemplated by the terms of the Exchange Agreement, as described in Item 2.01, and not as the result of any disagreements with the Company relating to the Company's operations, policies or practices. Mr. Ruport received no severance in connection with his resignation.


Biographical information regarding Mr. Monaco is set forth in the section entitled "The Acquisition - Executive Officers and Directors Following the Closing of the Acquisition" beginning on page 33 of the Definitive Proxy Statement, which information is hereby incorporated herein by reference. It is currently expected that Mr. Monaco will be compensated for his service as a director in the same manner as our other non-employee directors and that we will enter into our standard-form indemnity agreement with Mr. Monaco. For information regarding the compensation of our non-employee directors, see the discussion in the section entitled "Executive Compensation - Director Compensation" beginning on page 107 of the Definitive Proxy Statement, which information is hereby incorporated herein by reference.


Resignation of Executive Officer and Appointment of Successor


Also effective concurrently with the completion of the Acquisition, Jacob Brunsberg resigned as our President and Chief Executive Officer and William Kerby, Chief Executive Officer of NextTrip, was appointed by our Board of Directors as Chief Executive Officer of the Company. Mr. Brunsberg's resignation was contemplated by the terms of the Exchange Agreement, as described in Item 2.01, and not as the result of any disagreements with the Company relating to the Company's operations, policies or practices. Mr. Brunsberg continues to serve as a member of our Board of Directors.


Biographical information regarding Mr. Kerby is set forth in the section entitled "The Acquisition - Executive Officers and Directors Following the Closing of the Acquisition" beginning on page 33 of the Definitive Proxy Statement, which information is hereby incorporated herein by reference.


Kerby Employment Letter Agreement


In connection with this appointment as Chief Executive Officer of Company, the Company and Mr. Kerby entered into an employment letter agreement, dated as of December 29, 2023. Under the employment agreement, Mr. Kerby will be entitled to receive an annual base salary of $400,000, which is subject to increase (but not decrease) in the discretion of the Compensation Committee of our Board of Directors based on an annual or special case assessments of his performance and other factors. At the discretion of our Board of Directors, Mr. Kerby will also be eligible to earn a discretionary, annual fiscal end-of-year incentive bonus in an amount of up to 100% of his base annual salary. The exact amount of the incentive bonus will be dependent on the achievement of Company milestones and profitability, and such other milestones as the Board deems appropriate. Mr. Kerby will have the option of receiving some or all of his base annual salary and any incentive bonus in cash or in shares of our common stock valued for this purpose as set forth in his employment agreement and will be eligible to receive equity compensation at the discretion and in an amount to be determined by our Board of Directors.


During his employment, Mr. Kerby will be entitled to an automobile allowance of $1,500 per month and to receive all benefits under any and all deferred compensation plans, retirement plans, life, disability, health, accident and other insurance programs, and similar employee benefit plans and programs, sick leave and vacation time that the Company elects, in its sole discretion, to provide from time to time to its executive officers, and to earn four weeks of paid time off in accordance with the Company's PTO policy.


Mr. Kerby has entered into various personal guarantees with the Airline Reporting Commission, sellers of travel, merchant providers, financial institutions, associations and service providers for the benefit of NextTrip, in consideration of which the Company agrees in his employment agreement to pay him a $2,000 per month guarantee fee for so long as the employment agreement and the guarantees remain in place. In the event Mr. Kerby resigns for "Good Reason" (as defined in the employment agreement), or his employment is terminated by the Company for any reason, the Company will immediately eliminate any and all guarantees failing which, for each month the guarantees remain in place, the monthly guarantee fee will rise to $10,000 per month after 30 days in the event the Company is unable to assume the guarantees during such 30-day period.


The term of Mr. Kerby's employment under his employment agreement will continue from month-to-month until terminated by either party with 30 days' prior written notice, unless sooner terminated in accordance with the terms thereof. Should the Company notice the termination of Mr. Kerby's employment agreement (other than as a result of death, "Disability" or "Cause," as defined therein), he will be entitled to payment of an amount equal to 12 months of his base annual salary in a lump sum payment upon termination and the continuation of his health care coverage, at the Company's expense, for up to 12 months following the termination (collectively, the "Kerby Severance Payments"). In addition, in the event that Mr. Kerby's agreement is terminated by the Company for any reason within 12 months from the date of closing of the Acquisition, Mr. Kerby will be entitled to receive the Kerby Severance Payments and the Contingent Shares will automatically accelerate and be issuable in full if not yet earned or issued.


We also expect to enter into our standard-form indemnity agreement with Mr. Kerby.


The foregoing description of Mr. Kerby's employment agreement is a summary only of certain material terms of Mr. Kerby's employment agreement, does not purport to be complete, and is qualified in its entirety by reference to the full text of his employment agreement, a copy of which is filed as Exhibit 10.1 to this Current Report and incorporated herein by reference.


Brunsberg Separation Payments


In accordance with the previously disclosed Separation Agreement, dated as of November 22, 2023, between the Company and Mr. Brunsberg, in connection with his resignation, we have agreed to pay Mr. Brunsberg a cash a retention bonus of $204,511 and a separation payment of $62,500, or the equivalent of three months' salary, and to award Mr. Brunsberg the equivalent of 31,250 shares of common stock in the form of restricted stock or restricted stock units under the Company's 2023 Equity Incentive Plan, if and when adopted by the Company. As a condition to payment of the separation payment, Mr. Brunsberg will be required to execute a general release of employment-related claims against the Company and related indemnitees.


The foregoing description of the amounts payable to Mr. Brunsberg in connection with his resignation is a summary only of certain material terms of Mr. Brunsberg's Separation agreement, does not purport to be complete, and is qualified in its entirety by reference to the full text of his Retention Bonus and Separation Agreement, a copy of which was filed as Exhibit 10.1 to that Current Report on Form 8-K filed by the Company with the SEC on November 24, 2023 and is incorporated herein by reference.