Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)
Executive Officer Option and RSU Awards
On July 13, 2021, the Board of Directors (the “Board”) of Lightning eMotors, Inc. (the “Company”) approved an award of 178,827 restricted stock units (“RSUs”) and options to purchase 447,067 shares of common stock (“Options”) of the Company to Timothy Reeser, the Company’s Chief Executive Officer. The RSUs will vest over four years, with 25% vesting on each of May 6, 2022, May 6, 2023, May 6, 2024 and May 6, 2025. The Company may withhold shares of stock subject to the RSUs at the time of vesting for the purposes of satisfying any tax withholding obligations which arise in connection with the vesting of such RSUs issued to Mr. Reeser. The Options, which have an exercise price of $6.99 per share, will also vest over four years, with 25% vesting on each of May 6, 2022, May 6, 2023, May 6, 2024 and May 6, 2025. The RSU award is being made using the form of RSU Agreement previously filed by the Company as Exhibit 10.8 to the Current Report on Form 8-K as filed with the SEC on May 12, 2021, and the above summary of the terms of these RSUs is qualified in its entirety by reference to such form. The Options award is being made using the form of Stock Option Agreement previously filed by the Company as Exhibit 10.9 to the Current Report on Form 8-K as filed with the SEC on May 12, 2021, and the above summary of the terms of the Options is qualified in its entirety by reference to such form.
On July 13, 2021, the Board also approved an award of 85,837 RSUs to Teresa Covington, the Company’s Chief Financial Officer, with such award to vest over three years, with one-third vesting on May 20, 2022 and the remaining two-thirds vesting in eight quarterly installments thereafter, beginning on August 20, 2022 and ending on May 20, 2024. The Company may withhold shares of stock subject to the RSUs at the time of vesting for the purposes of satisfying any tax withholding obligations which arise in connection with the vesting of such RSUs issued to Ms. Covington. The RSU award is being made using the form of RSU Agreement previously filed by the Company as Exhibit 10.8 to the Current Report on Form 8-K as filed with the SEC on May 12, 2021, and the above summary of the terms of these RSUs is qualified in its entirety by reference to such form.
On July 13, 2021, the Board also approved an award of 57,225 RSUs to Kash Sethi, the Company’s Chief Revenue Officer, with such award to vest over three years, with one-third vesting on May 20, 2022 and the remaining two-thirds vesting in eight quarterly installments thereafter, beginning on August 20, 2022 and ending on May 20, 2024. The Company may withhold shares of stock subject to the RSUs at the time of vesting for the purposes of satisfying any tax withholding obligations which arise in connection with the vesting of such RSUs issued to Mr. Sethi. The RSU award is being made using the form of RSU Agreement previously filed by the Company as Exhibit 10.8 to the Current Report on Form 8-K as filed with the SEC on May 12, 2021, and the above summary of the terms of these RSUs is qualified in its entirety by reference to such form.
Management Bonus Plan
On July 13, 2021, the Board also established the terms by which the Company will determine annual bonuses for the Company’s 2021 fiscal year. The Company’s senior executives, including Messrs. Reeser and Sethi and Ms. Covington, are eligible to receive bonuses in accordance with what the Board approved. Mr. Reeser’s target bonus for 2021 is $400,000, which equals 80% of Mr. Reeser’s annual base salary. Mr. Sethi’s and Ms. Covington’s target bonuses for 2021 are $104,000 and $140,000, respectively, which equal 40% of each of their annual base salaries. The maximum bonus amounts that could be payable to each of them for the 2021 fiscal year are equal to 150% of the target bonus amounts if the Company’s performance targets (as discussed below) are exceeded. Receipt of the bonuses will be dependent upon the Company achieving targets in four separate metric categories — net revenue, gross profit, adjusted EBITA and year-ending backlog. If the Company achieves the target in any category, that will result in 25% of the total target bonus amount being earned. Achievement of the target for any one metric is independent from achievement of the targets for the other metrics. Furthermore, a portion of the 25% of the target bonus that can be earned for each metric can still be earned if the Company achieves a portion of the target for such metric, with partial bonuses being earned if the Company achieves more than 90% of its net revenue target, 80% of its gross profit target, 120% of its negative adjusted EBITDA target, and 90% of its year-ending backlog target.
