Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 14, 2020, immediately prior to the effective time of the Merger, Mr. Peterson resigned as the chief executive officer of Terra Tech.
On February 14, 2020, effective as of the Closing, the Board appointed Mr. Morgan as chief executive officer and as a director of Terra Tech, to serve at the discretion of the Board. There are no family relationships among any of Terra Tech’s directors and executive officers. In connection with Mr. Morgan’s appointment as the chief executive officer of Terra Tech, Terra Tech assumed the employment agreement by and between Mr. Morgan and OneQor, as amended prior to the Merger (the “Morgan Employment Agreement”).
The Morgan Employment Agreement provides for a term of one year with a base salary of $300,000 per year. The Morgan Employment Agreement further provides that Mr. Morgan is eligible for an annual performance bonus with the target amount of such annual performance bonus equal to 100% of his base salary. The annual performance bonus is based on performance and achievement of Terra Tech corporate goals and objectives as defined by Terra Tech’s board of directors or compensation committee and could be greater or less than the target performance bonus. Upon a qualified termination, Mr. Morgan will be entitled to a payment equal to the greater of (i) the remaining base salary compensation during the initial term of the Morgan Employment Agreement, or (ii) one (1) times the then current annual base salary, less any taxes and withholding as may be necessary pursuant to law.
The foregoing description of the material terms of the Morgan Employment Agreement is not complete and is subject to and qualified in its entirety by reference to the full text of the Morgan Employment Agreement, a copy of which is attached hereto as Exhibit 10.1.
Matthew Morgan, 34, served as the Chief Executive Officer of OneQor Technologies, Inc. from December 2018 through the Closing. From March 2014 through November 2017, Mr. Morgan served as co-Founder and Chief Executive Officer of Tryke Companies, LLC, a vertically integrated seed-to-sale cannabis company that includes the Reef Dispensary. In 2018, Mr. Morgan was named one of the most influential people in cannabis by High Times magazine. Mr. Morgan has founded or co-founded several businesses including Bloom Dispensaries, Reef Dispensaries, and Ignite Cannabis Co.
In addition, on February 14, 2020, immediately following the Closing, Terra Tech entered into an indemnification agreement with Mr. Morgan. The indemnification agreement requires that Terra Tech, under the circumstances and to the extent provided for therein, indemnify such persons to the fullest extent permitted by applicable law against certain expenses, judgments, fines, penalties, settlements and other amounts incurred by any such person as a result of such person being made a party to or participant in certain actions, suits and proceedings by reason of the fact that such person is or was a director or officer of Terra Tech. The indemnification agreement also requires that Terra Tech, under the circumstances and to the extent provided for therein, indemnify such persons to the fullest extent permitted by applicable law against certain expenses if such person is a party to or participant in a proceeding by or in the right of Terra Tech to procure a judgment in its favor. The rights of each person who is a party to an indemnification agreement are not exclusive of any other rights to which such person may be entitled.
The foregoing description of the indemnification agreement is not complete and is subject to and qualified in its entirety by reference to the indemnification agreement, a copy of which is attached as Exhibit 10.27 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2015 and is incorporated herein by reference.
Peterson Amendment and Waiver and Forfeiture Agreements
In connection with his resignation, Mr. Peterson entered into an Amendment and Waiver Agreement (the “Peterson Amendment and Waiver”), effective as of February 14, 2020, with Terra Tech. Pursuant to the Peterson Amendment and Waiver, Mr. Peterson was appointed as the chief strategy officer and Mr. Peterson waived any right to severance payments in connection with the change in his title and the transactions contemplated by the Merger Agreement. In addition, on February 14, 2020, pursuant to the Merger, Terra Tech and each of Mr. Peterson and Mr. Nahass entered into stock option forfeiture agreements, dated as of February 14, 2020 (“Forfeiture Agreements”), pursuant to which each of Mr. Peterson and Mr. Nahass agreed to forfeit and cancel, for no consideration, an aggregate of 550,000 vested and unvested non-qualified stock options of Terra Tech.
The foregoing description of the material terms of the Peterson Amendment and Waiver and the Forfeiture Agreements are not complete and are subject to and qualified in their entirety by reference to the full text of the Peterson Amendment and Waiver and the Forfeiture Agreements, copies of which are attached hereto as Exhibits 10.2, 10.3 and 10.4, respectively.
Equity Incentive Plan Amendment
On February 14, 2020, the Board approved an amendment (the “Plan Amendment”) to the Company’s Amended and Restated 2018 Equity Incentive Plan (the “Plan”) to increase the number of shares available for issuance thereunder by 28,976,425 shares of Terra Tech common stock for a total of 43,976,425 shares of Terra Tech common stock, plus the number of shares, not to exceed 2,000,000 shares, that may become available under the Company’s 2016 Equity Incentive Plan after termination of awards thereunder, subject to adjustment in accordance with the terms of the Plan.
The foregoing description of the Plan Amendment is not complete and is subject to and qualified in its entirety by reference to the full text of the Plan Amendment, a copy of which is attached hereto as Exhibit 10.5.