vesting conditions vested in full upon Mr. Lester’s termination of employment, and (B) upon the end of the consulting period or if the Company terminates Alert5’s services for any reason other than for cause, the performance-based restricted shares will remain outstanding and eligible to vest based on performance for six months following the End Date. In addition, pursuant to the Stock Transfer Amendment, Mr. Lester has agreed that, until the two-year anniversary of the Company’s initial public offering, Company equity owned by Mr. Lester will remain subject to certain transfer restrictions.
Under the Separation Documents, Mr. Lester and Alert5 agreed to a release of claims in favor of the Company and its affiliates, and the Company and its affiliates agreed to a release of claims in favor of Mr. Lester and Alert5. The foregoing payments and benefits are conditioned on Mr. Lester’s continued compliance with the restrictive covenants by which he is bound.
The foregoing descriptions of the Separation Documents do not purport to be complete and are qualified in their entirety by the full text of the agreements, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.
In connection with his appointment as Chief Executive Officer, the Company and Mr. Burdick entered into an employment agreement (the “Employment Agreement”) that provides for an entitlement to an annual base salary of $700,000 and an annual bonus opportunity, pro-rated for 2022, with a target equal to 100% of his base salary and with the actual amount of such bonus based upon achievement of performance objectives determined by our Board of Directors or the compensation committee thereof. Mr. Burdick will be entitled to participate in the employee benefit plans maintained by the Company and to reimbursement for business expenses (including annual access to a maximum of 50 flight hours of private aircraft service for business travel) in accordance with the Company’s reimbursement policies.
Under the terms of the Employment Agreement, if Mr. Burdick’s employment is terminated by the Company without cause or if Mr. Burdick resigns for good reason (as such terms are defined in the Employment Agreement), subject to his execution of a release of claims in favor of the Company, he will be entitled to receive the following severance payments and benefits: (i) continued payment of his base salary for a period of 18 months following termination, (ii) an amount equal to his annual bonus for the year of termination, based on actual performance and pro-rated to reflect the portion of the calendar year during which he was employed (“Pro-Rata Bonus”), (iii) payment of his full COBRA premiums for 18 months following his termination, subject to his eligibility for, and timely election of, COBRA coverage, and (iv) if Mr. Burdick elects to continue his participation in our insurance plans, other than the health and dental insurance plans, payment of his full premium cost for 18 months following his termination, subject to his eligibility for such continued participation. If his employment is terminated due to his death or disability, he will receive a Pro-Rata Bonus and, upon a termination due to his disability, six months of base salary continuation (reduced by any wage continuation payments received under any of our health and disability insurance plans). Mr. Burdick will also be eligible to receive severance payments and benefits under the Change in Control Policy upon a termination of his employment in certain circumstances within the Change in Control Period (as defined in the Change in Control Policy and without duplication with respect to any severance benefits he is entitled to under the Employment Agreement), which payments and benefits shall be no less favorable than those in effect under the Change in Control Policy on the Effective Date.
The Employment Agreement also contains certain restrictive covenant obligations, including covenants relating to confidentiality and assignment of inventions, as well as covenants not to compete or solicit certain of our service providers, customers, and suppliers during Mr. Burdick’s employment and for 18 months after termination of employment.
In connection with his appointment, on the Effective Date Mr. Burdick was granted an option to purchase 9,404,539 shares of our common stock, with one-third (1/3) of the underlying shares subject to time-based vesting over four years and two-thirds (2/3) of the underlying shares subject to time- and performance-based vesting based on our average trading stock price on specified measurement dates, in each case, generally subject to Mr. Burdick’s continued employment with us through the applicable vesting date. Upon a change in control, the performance-based options will vest based on actual performance through such change in control. If Mr. Burdick’s employment is terminated by us without cause or by him for good reason, in either case, within six months prior to or within 12 months following a change in control, the time-based options will vest in full upon the later of the change in control or such termination of employment. If Mr. Burdick’s employment is terminated by us without cause or by him for good reason, in either case, within six months prior to a change in control, the performance-based options will remain outstanding and eligible to vest in connection with such change in control. The option was granted under, and subject to the terms and conditions of, the Company’s 2021 Equity Incentive Plan.
The foregoing descriptions of the Employment Agreement and option award for Mr. Burdick do not purport to be complete and are qualified in their entirety by the full text of the agreements, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.
In connection with his appointment as President on the Effective Date, the Company and Mr. Qureshi entered into a letter agreement (the “Letter Agreement”) that provides for a target annual bonus equal to 75% of his annual base salary commencing for 2022. In addition, on the Effective Date, Mr. Qureshi was granted an option to purchase 2,821,362 shares of our common stock, with one-third (1/3) of the underlying shares subject to time and performance-based vesting over four years and two-thirds (2/3) of the underlying shares subject to time- and performance-based vesting based on our average trading stock price on specified measurement dates, in each case, generally subject to Mr. Qureshi’s continued employment with us through the applicable vesting date. Upon a
