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Item 5.02
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Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Compensation of Chief
Financial Officer
On
December 21, 2021, pursuant to approval of the Compensation Committee of the Board of Directors of Pro-Dex, Inc. (“Pro-Dex”
or the “Company”), Alisha K. Charlton, the Company’s Chief Financial Officer, had an increase in base salary from $225,000
to $240,000 per year effective with the Company’s next bi-weekly pay period. Other than the increase in base salary, Ms. Charlton’s
employment with the Company continues on an at-will basis on the terms previously disclosed.
Grant
of Stock Options & Stock Performance Awards to Chief Financial Officer
As
previously disclosed in the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission (“SEC”)
on December 8, 2017 and December 11, 2020, respectively, the Compensation Committee previously approved the issuance of performance awards
and non-qualified stock options under the Company’s 2016 Equity Incentive Plan to select employees, including awards issued to Ms.
Charlton.
On
December 21, 2021, the Compensation Committee approved the re-allocation of forfeited performance awards from a former employee totaling
5,000 shares of the Company’s common stock to Ms. Charlton, beginning with the fourth performance target, which has a first testing
date of July 1, 2024. The Compensation Committee also approved the re-allocation of forfeited non-qualified stock options to Ms. Charlton
to purchase 5,000 shares of the Company’s common stock. All other terms of the performance awards and non-qualified stock options
remain unchanged from the terms applicable to the forfeited awards.
The
market conditions related to the performance awards have already been satisfied as of the date of grant to Ms. Charlton, such that 2,500
shares will be issued to Ms. Charlton on each of July 1, 2024 and July 1, 2026, respectively, assuming that applicable vesting criteria
have been met, which is generally conditioned on continued active employment. The performance awards were granted pursuant to the Company’s
form of Performance Award Agreement, a copy of which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed
with the SEC on December 8, 2017. The foregoing description of the Performance Award Agreement is qualified in its entirety by reference
to the complete text of the form of Performance Award Agreement.
The
terms of the non-qualified stock options are summarized below:
First
Vesting Target
The number of options
to purchase shares of the Company’s common stock to be awarded based upon the volume-weighted average price (“VWAP”)
of the common stock reaching or exceeding $39.00 per share over the 60-trading day period immediately preceding the measurement period
end date set forth in the table below (“First Vesting Target”) is:
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Measurement Period End Date
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Name
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First Testing Date
07/01/2022
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Second Testing Date
01/01/2023 (1)
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Third Testing Date
07/01/2023(1)(2)
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Alisha Charlton
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1,000
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500
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250
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(1)
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If the First Vesting Target is met on or before the First Testing Date, no additional options are awarded
on the Second Testing Date or Third Testing Date.
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(2)
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If the First Vesting Target is met on or before the Second Testing Date, no additional options are awarded
on the Third Testing Date.
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Second Vesting Target
The number of options
to purchase shares of common stock to be awarded based upon the VWAP of the common stock reaching or exceeding $42.00 per share over the
60-trading day period immediately preceding the measurement period end date set forth in the table below (“Second Vesting Target”)
is:
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Measurement Period End Date
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Name
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First Testing Date
07/01/2024
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Second Testing Date
01/01/2025 (1)
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Third Testing Date
07/01/2025(1)(2)
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Alisha Charlton
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1,000
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500
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250
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(1)
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If the Second Vesting Target is met on or before the First Testing Date, no additional options are awarded
on the Second Testing Date or Third Testing Date.
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(2)
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If the Second Vesting Target is met on or before the Second Testing Date, no additional options are awarded
on the Third Testing Date.
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Third Vesting Target
The number of options
to purchase shares of common stock to be awarded based upon the VWAP of the common stock reaching or exceeding $45.00 per share over the
60-trading day period immediately preceding the measurement period end date set forth in the table below (“Third Vesting Target”)
is:
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Measurement Period End Date
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Name
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First Testing Date
07/01/2026
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Second Testing Date
01/01/2027 (1)
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Third Testing Date
07/01/2027(1)(2)
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Alisha Charlton
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1,000
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500
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250
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(1)
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If the Third Vesting Target is met on or before the First Testing Date, no additional options are awarded
on the Second Testing Date or Third Testing Date.
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(2)
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If the Third Vesting Target is met on or before the Second Testing Date, no additional options are awarded
on the Third Testing Date.
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Fourth
Vesting Target
The number of options
to purchase shares of common stock to be awarded based upon the VWAP of the common stock reaching or exceeding $47.50 per share over the
60-trading day period immediately preceding the measurement period end date set forth in the table below (“Fourth Vesting Target”):
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Measurement Period End Date
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Name
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First Testing Date
07/01/2028
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Second Testing Date
01/01/2029 (1)
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Third Testing Date
07/01/2029(1)(2)
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Alisha Charlton
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1,000
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500
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250
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(1)
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If the Fourth Vesting Target is met on or before the First Testing Date, no additional shares are awarded
on the Second Testing Date or Third Testing Date.
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(2)
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If the Fourth Vesting Target is met on or before the Second Testing Date, no additional shares are awarded
on the Third Testing Date.
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Fifth Vesting Target
The number of options
to purchase shares of common stock to be awarded based upon the VWAP of the common stock reaching or exceeding $50.00 per share over the
60-trading day period immediately preceding the measurement period end date set forth in the table below (“Fifth Vesting Target”)
is:
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Measurement Period End Date
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Name
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First Testing Date
07/01/2030
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Second Testing Date
01/01/2031 (1)
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Third Testing Date
07/01/2031(1)(2)
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Alisha Charlton
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1,000
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500
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250
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(1)
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If the Fifth Vesting Target is met on or before the First Testing Date, no additional shares are awarded
on the Second Testing Date or Third Testing Date.
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(2)
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If the Fifth Vesting Target is met on or before the Second Testing Date, no additional shares are awarded
on the Third Testing Date.
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The
non-qualified stock options were granted pursuant to the Company’s form of Stock Option Agreement, a copy of which is filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 11, 2020. The Stock Option Agreement
contains terms and provisions customary for awards of this type, including that, in most instances, the employee must continue to be
employed by the Company at the time the relevant vesting target is achieved and that the awarded options expire 10 years from the first
testing date of each vesting target. The foregoing description of the Stock Option Agreement is qualified in its entirety by reference
to the complete text of the form of Stock Option Agreement.