Item 1.01 Entry into a Material Definitive Agreement.
The information set forth in Item 5.02 below regarding the Mediation Settlement
Agreement/Confidential Settlement and Release Agreement by and between Puget
Technologies, Inc. ("Registrant") and Karen Fordham, dated February 21, 2022 is
incorporated by reference into this Item 1.01.
Item 5.02 Departure of Directors or Certain O?cers; Election of Directors;
Appointment of Certain O?cers; Compensatory Arrangements of Certain
O?cers.
(a) Departure of Director
On February 21, 2022, Karen Fordham submitted her resignation as a director on
the Registrant's Board of Directors ("Board"), effective immediately.
Ms. Fordham served as Registrant's President and Chief Executive Officer ("CEO")
until she resigned on January 27, 2022, as reported in Registrant's Current
Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on
February 2, 2022 (the "February 2 Form 8-K"). In her resignation letter, which
related solely to her position as an officer of the Registrant (and not her
capacity as a member of its Board) ("Officer Resignation Letter"), Ms. Fordham
asserted she was terminating her Employment Agreement (defined below) with the
Registrant for good reason, and she listed various reasons therefor (including a
material diminution in her position, her not being allowed to function, and make
decisions, as a CEO, being denied access to certain financial information,
payment of bills, prohibitions on certain activities, scope of authority,
compensation and breaches).
As noted in the February 2 Form 8-K, the Registrant expected to engage in
discussions with Ms. Fordham regarding the terms of her departure. Pursuant to
Section 5.7 of her Employment Agreement, the Registrant and Ms. Fordham
subsequently engaged in a mediation process. As a result of the mediation, Ms.
Fordham and the Registrant entered into a Mediation Settlement
Agreement/Confidential Settlement and Release Agreement ("Fordham Agreement") on
February 21, 2022. In connection therewith, Ms. Fordham submitted her
resignation, dated February 21, 2022 ("Director Resignation Letter"), as a
member of the Board. Ms. Fordham's Director Resignation Letter did not list any
disagreement with the Registrant on any matter relating to the Registrant's
operations, policies or practices. A copy of the Employment Agreement by and
between Ms. Fordham and the Registrant ("Employment Agreement") was provided in
Registrant's Current Report on Form 8-K filed with the SEC on August 25, 2021.
The Fordham Agreement provides, among other things, that Ms. Fordham will be
entitled to receive a sum of $165,000 payable in three equal installments. It
also provides that all parties deny liability and make no admission of any
wrongdoing and entered into the Fordham Agreement solely to buy their peace. The
Fordham Agreement includes a mutual release by Ms. Fordham and the Registrant in
respect of certain claims. Ms. Fordham remains subject to the confidentiality
and other restrictive covenant obligations set forth in her Employment
Agreement, including Section 2.5 (Limitations on Services), Section 3.4
(Indemnification), Section 4.1 (Confidentiality), Section 4.3 (Competition and
Circumvention), and Section 4.7 (Covenant not to Disparage).
Separately, the Board voted to remove Ms. Fordham as CEO of Puget's subsidiary,
Now Health.
The foregoing descriptions of the Officer Resignation Letter, the Director
Resignation Letter and the Fordham Agreement do not purport to be complete and
are qualified in their entirety by reference to the full text of the Officer
Resignation Letter, the Director Resignation Letter and the Fordham Agreement
filed as Exhibits to this Current Report on Form 8-K, which are incorporated by
reference herein.
In accordance with the requirements of Item 5.02 of Form 8-K, the Registrant has
provided Ms. Fordham a copy of the disclosures it is making in this Item 5.02
report no later than the day of filing this Form 8-K with the SEC. The
Registrant will provide Ms. Fordham with the opportunity to furnish the
Registrant, as promptly as possible, with a letter addressed to the Registrant
stating whether Ms. Fordham agrees with the statements made by the Registrant in
response to this Item 5.02 and, if not, stating the respects in which she does
not agree. The Registrant will file any such letter received from Ms. Fordham
with the SEC as an exhibit by amendment to this Report on Form 8-K within two
business days after receipt by the Registrant.
(c) Appointment of Officer
On February 21, 2022, the Registrant's Board appointed Mr. Hermann Burckhardt,
the Chairman of the Board, who has been serving as the interim Chief Executive
Officer since Ms. Fordham's departure as President and Chief Executive Officer
on January 27, 2022, as reported in February 2 Form 8-K. Mr. Burckhardt's
biography and compensation were disclosed in Registrant's Annual Report on Form
10-K filed with the SEC on February 12, 2021.
Mr. Burckhardt intends to remain active in consulting for the Registrant through
his role as the president and chief executive officer of Qest Consulting Group,
Inc., a Colorado corporation ("Qest")' that serves as the Registrant's strategic
advisor and is the Registrant's largest shareholder and "parent", as that term
is defined in Rule 405 of SEC Regulation C (the relationship with Qest is most
recently described in the Registrant's Current Report on Form 8-K filed with the
SEC on November 9, 2021).
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Mediation Settlement Agreement/Confidential Settlement and
Release Agreement dated February 21, 2022 by and between the
Registrant and Karen Fordham.
Exhibit 99.1 Officer Resignation Letter of Karen Fordham, dated January 27,
2022.
Exhibit 99.2 Director Resignation Letter of Karen Fordham, dated February 21,
2022.
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