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Item 5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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(e)
Zachary
L. Venegas Employment Agreement
On
March 19, 2019, Helix TCS, Inc. (the “Company”) entered into an executive Employment Agreement (the “Venegas
Employment Agreement”) with Zachary L. Venegas, its Chief Executive Officer and Executive Chairman of the Company’s
board of directors (the “Board”).
The
Venegas Employment Agreement provides that Mr. Venegas’s employment is “at-will.” Under the terms of the Venegas
Employment Agreement, the Company must pay Mr. Venegas a salary at a rate of not less than $200,000 per year to continue as Chief
Executive Officer and Executive Chairman of the Board. Mr. Venegas is also eligible to receive an annual bonus targeted at 50%
of his base salary, plus stock options for the right to purchase up to 500,000 shares of our common stock, beginning with the
2018 calendar year. Mr. Venegas’s eligibility for the cash and equity bonus is based upon the achievement of pre-established
individual and Company objectives, as set forth in the Venegas Employment Agreement and as determined by the Board.
The
Venegas Employment Agreement provides that if Mr. Venegas resigns from the Company, he can choose to remain Executive Chairman
of the Board, so long as he beneficially owns a minimum of 20% of the shares he held as of the date of the Venegas Employment
Agreement. The Venegas Employment Agreement also provides that if Mr. Venegas’s employment is terminated by the Company
without Cause (as defined in the Venegas Employment Agreement) or Mr. Venegas resigns for Good Reason (as defined in the Venegas
Employment Agreement), provided that Mr. Venegas signs a release of claims, he will be entitled to the following separation benefits:
(i) continued payment of his then-current base salary for a period of 18 months; (ii) he may sell to the Company at the trailing
10 day VWAP shares of Company stock sufficient to generate proceeds equal to the difference between $800,000 and the cumulative
amounts received by him from all previous sales he has made of Company stock, and (iii) all outstanding options to purchase common
stock of the Company then held by Mr. Venegas, to the extent unvested, will vest ratably by month for 18 months and any unexercised
options will expire 21 months after termination, subject to certain limitations to the extent the options are designated as non-statutory
stock options.
The
Venegas Employment Agreement also includes certain non-competition and non-solicitation of customer and employee restrictions
during Mr. Venegas’s employment and for a period of 18 months following any termination of employment, in addition to other
customary terms, including provisions covering confidentiality and non-disclosure obligations, return of Company property, and
assignment of inventions covenants.
The
foregoing summary of the material terms of the Venegas Employment Agreement is subject to the full and complete terms of the Venegas
Employment Agreement attached hereto as Exhibit 10.34 and incorporated herein by reference.
Scott
M. Ogur Employment Agreement
On
March 19, 2019, the Company entered into an executive Employment Agreement (the “Ogur Employment Agreement”) with
Scott M. Ogur, its Chief Financial Officer and a member of the Board.
The
Ogur Employment Agreement provides that Mr. Ogur’s employment is “at-will.” Under the terms of the Ogur Employment
Agreement, the Company must pay Mr. Ogur a salary at a rate of not less than $180,000 per year, effective as of January 1, 2019,
to continue as Chief Financial Officer and a member of the Board. Mr. Ogur is also eligible to receive an annual bonus targeted
at 50% of his base salary, plus stock options for the right to purchase up to 300,000 shares of our common stock, beginning with
the 2018 calendar year. Mr. Ogur’s eligibility for the cash and equity bonus is based upon the achievement of pre-established
individual and Company objectives, as set forth in the Ogur Employment Agreement and as determined by the Board.
The
Ogur Employment Agreement provides that if Mr. Ogur resigns from the Company, he can choose to remain a member of the Board, so
long as he beneficially owns a minimum of 70% of the shares he held as of the date of the Ogur Employment Agreement. The Ogur
Employment Agreement also provides that if Mr. Ogur’s employment is terminated by the Company without Cause (as defined
in the Ogur Employment Agreement) or Mr. Ogur resigns for Good Reason (as defined in the Ogur Employment Agreement), provided
that Mr. Ogur signs a release of claims, he will be entitled to the following separation benefits: (i) continued payment of his
then-current base salary for a period of 12 months; (ii) he may sell to the Company at the trailing 10 day VWAP shares of Company
stock sufficient to generate proceeds equal to the difference between $800,000 and the cumulative amounts received by him from
all previous sales he has made of Company stock, and (iii) all outstanding options to purchase common stock of the Company then
held by Mr. Ogur, to the extent unvested, will vest ratably by month for 12 months and any unexercised options will expire 15
months after termination, subject to certain limitations to the extent the options are designated as non-statutory stock options.
The
Ogur Employment Agreement also includes certain non-competition and non-solicitation of customer and employee restrictions during
Mr. Ogur’s employment and for a period of 18 months following any termination of employment, in addition to other customary
terms, including provisions covering confidentiality and non-disclosure obligations, return of Company property, and assignment
of inventions covenants.
The
foregoing summary of the material terms of the Ogur Employment Agreement is subject to the full and complete terms of the Ogur
Employment Agreement attached hereto as Exhibit 10.35 and incorporated herein by reference.