Pursuant to the Gibson Employment Agreement, Mr. Gibson will earn an annual base salary of $500,000 and will be granted (i) 570,000 restricted stock units (the “RSUs”), (ii) an option to purchase up to 1,000,000 shares of the Company’s common stock, par value $.0001 (“Common Stock”), subject to time vesting requirements (the “Time-Based Option”), (iii) an option to purchase up to 2,000,000 shares of Common Stock, subject to meeting certain performance metrics (the “Performance-Based Option”), and (iv) the right to purchase up to the lesser of: (a) 0.99% of the number of shares of Common Stock outstanding immediately before such issuance, and (b) $500,000 of Common Stock, in the case at the then-current market price of the Common Stock on the date or dates of purchase. In addition to the foregoing, Mr. Gibson will be entitled to certain other compensation and perquisites, including awards under the Company’s management incentive plan and performance unit plan and reimbursement for certain expenses. The description of the Gibson Employment Agreement is qualified in its entirety by reference to the full text of the Gibson Employment Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The terms of the RSUs, the Time-Based Option and the Performance-Based Option are described more fully below.
In connection with the Gibson Employment Agreement, on December 21, 2019, Mr. Gibson and the Company entered into a Confidentiality, Intellectual Property Assignment, and Restrictive Covenants Agreement (the “Confidentiality Agreement”). Pursuant to the Confidentiality Agreement, among other things, Mr. Gibson agreed (i) not to disclose or use the Company’s Confidential Information (as defined in the Confidentiality Agreement) for any purpose other than the performance of his duties or as otherwise provided in the Confidentiality Agreement or compelled by law, which restriction shall generally apply during Mr. Gibson’s employment and for so long thereafter as the information qualifies as Confidential Information; (ii) to assign to the Company all of his right, title and interest in and to all Company Proprietary Works (as defined in the Confidentiality Agreement); (iii) for a period of twelve (12) months following the end of Mr. Gibson’s employment relationship with the Company (the “Restricted Period”), not to compete against the Company; (iv) for the Restricted Period, not to solicit customers of the Company; and (v) for the Restricted Period, not to solicit or hire Company employees.
Restricted Stock Unit Award Agreement
Pursuant to the Stand-Alone Restricted Stock Unit Award Agreement to be entered into in connection with the Gibson Employment Agreement (the “Gibson RSU Award Agreement”), the 570,000 RSUs granted thereunder will vest annually in five equal installments, withone-fifth vesting on December 22, 2020 (the “Initial Vesting Date”),two-fifths vesting on the first anniversary of the Initial Vesting Date, three-fifths vesting on the second anniversary of the Initial Vesting Date, four-fifths vesting on the third anniversary of the Initial Vesting Date and the remaining RSUs vesting on the fourth anniversary of the Initial Vesting Date.
Any unvested RSU’s will be immediately and automatically forfeited on the date on which Mr. Gibson fails to provide Continuous Services (as defined in the Gibson RSU Award Agreement) to the Company. Any vested and unvested RSU’s will be immediately and automatically forfeited upon Mr. Gibson’s termination for Cause by the Company.
The foregoing description of the Gibson RSU Award Agreement is qualified in its entirety by reference to the full text of the Gibson RSU Award Agreement, which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Time-Based Option Award Agreement
Pursuant to the Stand-Alone Time-Based Stock Option Award Agreement to be entered into in connection with the Gibson Employment Agreement (the “Gibson Time-Based Option Award Agreement”), the rights to purchase up to 1,000,000 shares of Common Stock for an exercise price of $1.93 per share will vest annually in five equal installments, withone-fifth vesting on the Initial Vesting Date,two-fifths vesting on the first anniversary of the Initial Vesting Date, three-fifths vesting on the second anniversary of the Initial Vesting Date, four-fifths vesting on the third anniversary of the Initial Vesting Date and the remaining Time-Based Options vesting on the fourth anniversary of the Initial Vesting Date. The Time-Based Option will expire on December 21, 2029.
Any unvested portion of the Time-Based Option will be immediately and automatically forfeited on the date on which Mr. Gibson fails to provide Continuous Services (as defined in the Gibson Time-Based Option Award Agreement) to the Company. Any vested and unvested portion of the Time-Based Option will be immediately and automatically forfeited upon Mr. Gibson’s termination for Cause by the Company.
