Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; compensatory Arrangements of Certain Officers
Philip Rice Employment Agreement
On March 4, 2020, the Registrant entered into an employment agreement with Philip M. Rice II for one year, with successive automatic renewals for one year terms, unless either party terminates the Agreement on at least sixty days’ notice prior to the expiration of the then current term of Mr. Rice’s Employment Agreement. Mr. Rice will receive an annual base salary of $280,000 (“Base Salary”), a fully-vested nonqualified stock option to purchase two million (2,000,000) shares of the Company’s common stock, exercisable at a price equal to the sixty (60) day trailing quoted price of the common stock of the Company in the over the counter markets (OTC market) and a twenty-five thousand dollar ($25,000) retention bonus.
If, prior to prior to December 31, 2020, the Company raises equity or other form of investment or debt on terms satisfactory to the Board of Directors at least $15 million ($15,000,000) (“Third Party Financing”), the Base Salary shall increase to $300,000, the Company shall pay Mr. Rice a fifty thousand dollars bonus ($50,000) and Mr. Rice shall receive a fully-vested nonqualified stock option to purchase two million (2,000,000) shares of the Company’s common stock, exercisable at a price equal to the sixty (60) day trailing quoted price of the common stock of the Company in the OTC market upon the closing.
If, prior to December 31, 2021, the Company raises equity or other form of investment or debt on terms satisfactory to the Board of Directors at least an additional $10 million ($10,000,000) of Third Party Financing, Mr. Rice will receive a fifty thousand dollars bonus ($50,000).
Mr. Rice’s Employment Agreement may be terminated with or without cause, provided that if it is terminated without cause, Mr. Rice would be entitled to certain severance payments, including a Base Salary continuation for one year or a one time payment of $250,000 if $15 million of Third Party Financing is raised. Mr. Rice’s Employment Agreement contains customary confidentiality terms, as well as non-solicitation and non-competition provisions.
Mr. Rice’s Employment Agreement also provides that if a Change of Control (as defined in the Agreement) occurs and Mr. Rice is not offered substantially equivalent employment with the successor corporation or Mr. Rice’s employment is terminated without Cause (as defined in the Agreement) during the three month period prior to the Change of Control or the 24-month period following the Change of Control, 100% of Mr. Rice’s unvested options will be fully vested and the restrictions on his restricted shares will lapse. Mr. Rice’s Employment Agreement also provides for severance payments in such event of, amongst other things, 300% of base salary and 2x the amount of the Base Salary in such event.
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