Palladyne AI Corp. (NASDAQ:PDYN), a technology company with a market capitalization of $358 million that has seen its stock surge over 900% year-to-date according to InvestingPro data, has finalized a new employment agreement with President and CEO Benjamin G. Wolff, according to a recent 8-K filing with the SEC.
The updated contract, effective from January 1, 2025, will continue through December 31, 2027, and includes significant compensation and benefits changes.
The agreement states that Wolff will receive an annual base salary of approximately $1 for 2025 after deductions and withholdings. From January 1, 2026, his salary will increase to $250,000 per year. Bonus eligibility is also outlined, with Wolff excluded from the 2025 annual bonus plan but potentially eligible for discretionary bonuses.
For the remaining contract period, he will have a target annual bonus opportunity of 150% of his base salary. This compensation structure comes as InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 5.02, though it reported negative earnings in the last twelve months.
A key component of the agreement is a cash payment due upon the earliest of several conditions, including continuous employment until October 31, 2027, termination without cause or for good reason, a change in control, or termination due to death or disability.
The cash payment is calculated based on 1,800,000 times the volume-weighted average closing price of Palladyne AI's common stock, with adjustments if restricted stock awards are granted to Wolff after January 1, 2026.
Wolff is also entitled to participate in company benefit plans, reimbursement for work-related expenses, and severance benefits including base salary continuation, lump-sum payments equivalent to target bonuses, and COBRA premium payments for up to twelve months in case of termination without cause or for good reason.
Additionally, if Wolff incurs excise tax liability for golden parachute payments within a year after the employment term ends, he will receive a gross-up payment to cover the tax on an after-tax basis.
This new agreement supersedes the preliminary terms agreed upon on October 30, 2024, and reflects Palladyne AI's commitment to retaining its leadership. The information is based on a press release statement filed with the SEC.
In other recent news, Palladyne AI Corp. has announced significant developments in its business operations.
The company has expanded its partnership with Red Cat Holdings and its subsidiary Teal Drones, aiming to advance the deployment of Palladyne AI's artificial intelligence software on Teal's drone systems.
Additionally, Red Cat's Teal Drones was awarded a production contract by the U.S. Army for its Short Range Reconnaissance Program, with deliveries expected to start in 2025.
Simultaneously, Palladyne AI has entered into a securities purchase agreement with an institutional investor and company insiders. This deal involves the sale of approximately 2.8 million shares and issuance of equivalent warrants, with anticipated gross proceeds reaching around $7 million.
Palladyne AI has also recently completed Phase I of its contract with the Warner Robins Air Logistics Complex at the Warner Robins Air Force Base in Georgia. This marks a crucial step in the company's $13.8 million project, which involves integrating its AI software into robotic platforms for aircraft component maintenance.
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