Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Kaplan
Employment Agreement
On
July 29, 2020, the Company entered into a new employment agreement (the “Kaplan 2020 Agreement”) with Jed Kaplan,
the Company’s Chief Executive Officer, interim Chief Financial Officer, a Class II Director and significant stockholder.
The Kaplan 2020 Agreement replaced Mr. Kaplan’s prior employment agreement. As a result, Mr. Kaplan’s prior employment
agreement was terminated and is of no further force or effect.
Pursuant
to the terms of the Kaplan 2020 Agreement, the Company agreed to pay Mr. Kaplan a monthly base salary of $5,000; provided,
however, that the parties agreed that such base salary will be deferred and will accumulate until the Company has sufficient cash
available to make such payments, to be reasonably determined by the Board of Directors and Mr. Kaplan, at which time all accrued
and unpaid base salary will be paid. In addition, Mr. Kaplan will receive an equity grant of 15,000 shares of common stock per
month, which shares will be fully vested upon grant. Mr. Kaplan will also be eligible to receive a quarterly bonus in the form
of cash or equity shares, and will be entitled to participate in the Company’s employee benefit plans. In addition, if,
during the term of the Kaplan 2020 Agreement, the Company’s shares are approved for listing on a U.S. national securities
exchange, the Company will pay Mr. Kaplan a $50,000 cash bonus, to be paid upon such listing being effective.
The
term of the Kaplan 2020 Agreement is for an initial one-year term, which shall automatically renew for successive one-year terms
unless either party provides 60 days’ advance written notice of its intention not to renew the Kaplan 2020 Agreement at
the conclusion of the then applicable term. The term of the Kaplan 2020 Agreement may be terminated by the Company with or without
cause or by Mr. Kaplan with or without good reason, as such terms are defined therein.
The
Kaplan 2020 Agreement contains customary non-competition and non-solicitation covenants for a period of one year after the termination
of Mr. Kaplan’s employment.
Franklin
Employment Agreement
Also
on July 29, 2020, the Company entered into a new employment agreement (the “Franklin 2020 Agreement”) with Roman Franklin,
the Company’s President and a Class I Director. The Franklin 2020 Agreement replaced Mr. Franklin’s prior employment
agreement. As a result, Mr. Franklin’s prior employment agreement was terminated and is of no further force or effect.
Pursuant
to the terms of the Franklin 2020 Agreement, the Company agreed to pay Mr. Franklin a monthly base salary of $12,500; provided,
however, that the parties agreed that such base salary will be deferred and will accumulate until the Company has sufficient cash
available to make such payments, to be reasonably determined by the Board of Directors and Mr. Franklin, at which time all accrued
and unpaid base salary will be paid. In addition, Mr. Franklin will receive an equity grant of 6,250 shares of common stock per
month, which shares will be fully vested upon grant. Mr. Franklin will also be eligible to receive a quarterly bonus in the form
of cash or equity shares, and will be entitled to participate in the Company’s employee benefit plans. In addition, if,
during the term of the Franklin 2020 Agreement, the Company’s shares are approved for listing on a U.S. national securities
exchange, the Company will pay Mr. Franklin a $50,000 cash bonus, to be paid upon such listing being effective.
The
term of the Kaplan 2020 Agreement is for an initial one-year term, which shall automatically renew for successive one-year terms
unless either party provides 60 days’ advance written notice of its intention not to renew the Kaplan 2020 Agreement at
the conclusion of the then applicable term. The term of the Kaplan 2020 Agreement may be terminated by the Company with or without
cause or by Mr. Kaplan with or without good reason, as such terms are defined therein.
The
Franklin 2020 Agreement contains customary non-competition and non-solicitation covenants for a period of one year after the termination
of Mr. Franklin’s employment.
The
foregoing descriptions of the Kaplan 2020 Agreement and the Franklin 2020 Agreement do not purport to be complete and are qualified
in their entirety by reference to the full text of the Kaplan 2020 Agreement and the Franklin 2020 Agreement, copies of which
are filed hereto as Exhibits 10.3 and 10.4, respectively, and are incorporated herein by reference.