Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Kaplun
Appointment as Chief Financial Officer
On
October 7, 2021, the Board of Directors of Clubhouse Media Group, Inc. (the “Company”) appointed Dmitry Kaplun as the Company’s
Chief Financial Officer.
Mr.
Kaplun, age 44, has over 20 years of financial and general management experience in media, technology and telecom sectors both domestically
and internationally. Most recently from March 2020 to August 2021, Mr. Kaplun held the position of Vice President of Finance for NBCUniversal
Telemundo Enterprises and between 2010 and 2017 he held various positions of Finance Director, Vice President Finance and Operations
and Senior Vice President Business Operations & GM for Latin America for Fox International Productions, a foreign language film production
division of 20th Century Fox. Throughout his career, Mr. Kaplun has also consulted for various media and technology companies and was
a producer/investor in film projects. He holds an undergraduate degree in Finance from the University of Florida, a joint MBA from Maastricht
Business School in the Netherlands/Audencia Nantes School of Management in France and a Masters in Finance from IE Business School in
Spain.
Kaplun
Executive Employment Agreement
In
connection with Mr. Kaplun’s appointment, the Company and Mr. Kaplun entered into an executive employment agreement dated as of
October 7, 2021 (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, the Company agreed to pay
Mr. Kaplun an annual base salary of $280,000. In addition, the Company agreed to grant to Mr. Kaplun on the effective date of the Employment
Agreement and on each anniversary thereof a number of restricted shares of common stock equal to (i) $100,000, divided by (ii) the lesser
of (A) $1.70 (as the same may be adjusted) and (B) 80% of the VWAP as of the grant date. Each restricted stock grant will vest ratably
over the calendar year following the grant date, vesting as to 25% of the number of shares of common stock in the restricted stock grant
at the end of each calendar quarter of such year, as provided in the Employment Agreement. Mr. Kaplun will also be paid discretionary
annual bonuses if and when declared by the Board.
The
Employment Agreement has an initial term ending on the earlier of (i) the first anniversary of the effective date of the Employment Agreement,
and (ii) the time of the termination of Mr. Kaplun’s employment. in accordance with the provisions herein. The initial term and
any renewal term will automatically be extended for one or more additional terms of one year each, unless either the Company or Mr. Kaplun
provides notice to the other party at least 30 days prior to the expiration of the then-current term.
The
Company may terminate Mr. Kaplun’s employment at any time, with or without Cause (as defined in the Employment Agreement), subject
to the terms and conditions of the Employment Agreement. In the event that the Company terminates Mr. Kaplun’s employment with
Cause, subject to the terms of the Employment Agreement, (i) the Company will pay to Mr. Kaplun unpaid base salary and benefits then
owed or accrued, and any unreimbursed expenses; and (ii) any unvested portion of the restricted stock grants and any other equity granted
to Mr. Kaplun will immediately be forfeited as of the termination date.
In
the event that the Company terminates Mr. Kaplun’s employment without Cause, subject to the terms and conditions of the Employment
Agreement, (i) the Company will pay to Mr. Kaplun any base salary, bonuses, and benefits then owed or accrued, and any unreimbursed expenses;
(ii) the Company will pay to Mr. Kaplun, in one lump sum, an amount equal to the base salary that would have been paid to Mr. Kaplun
for a three-month period; and (iii) any equity grant already made to Mr. Kaplun will, to the extent not already vested, be deemed automatically
vested.
Mr.
Kaplun may resign at any time, with or without Good Reason (as defined in the Employment Agreement). In the event that Mr. Kaplun resigns
with Good Reason, the Company will pay to Mr. Kaplun the amounts, and Mr. Kaplun will, subject to the terms of the Employment Agreement,
be entitled to such benefits (including without limitation any vesting of unvested shares under any equity grant), that would have been
payable to Mr. Kaplun or which Mr. Kaplun would have received had Mr. Kaplun’s employment been terminated by the Company without
Cause.
In
the event that Mr. Kaplun resigns without Good Reason, the Company will pay to Mr. Kaplun the amounts, and Mr. Kaplun will be entitled,
subject to the terms of the Employment Agreement, to such benefits (including without limitation any vesting of unvested shares under
any equity grant), that would have been payable to Mr. Kaplun or which Mr. Kaplun would have received had Mr. Kaplun’s employment
been terminated by the Company with Cause.
The
Employment Agreement contains customary representations and warranties of the parties, and customary provisions relating to confidentiality
obligations, indemnification, and miscellaneous provisions.
The
foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the
Employment Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and which is incorporated herein by
reference.
Kaplun
Restricted Stock Agreement
Pursuant
to the terms of the Employment Agreement, the Board entered into a restricted stock award agreement (the “Restricted Stock Agreement”)
dated October 7, 2021. Pursuant to the terms of the Restricted Stock Agreement, the Board granted Mr. Kaplun 58,824 shares of restricted
common stock on October 7, 2021. 25% of the shares vest on each of the three-month, six-month, nine-month and 12-month anniversaries
of the grant date.
The
foregoing description of the Restricted Stock Agreement does not purport to be complete and is qualified in its entirety by reference
to the Restricted Stock Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and which is incorporated
herein by reference.
Young
and Yu Resignations
On
October 8, 2021, each of Christian Young, President, Secretary and Director of the Company, and Simon Yu, Chief Operating Officer and
Director of the Company, resigned from all officer and director positions with the Company, effective immediately. Each of Messrs. Young
and Yu will continue to provide consulting services to the Company.
Musina
Board Appointment
On
October 12, 2021, the Board appointed Massimiliano Musina to serve as a member of the Company’s Board of Directors. In connection
with Mr. Musina’s appointment, the Company and Mr. Musina entered into an Independent Director Agreement dated October 12, 2021
(the “Director Agreement”). Pursuant to the terms of the Director Agreement, the Company agreed to issue to Mr. Musina each
quarter a number of shares of common stock having a fair market value of $25,000, in exchange for Mr. Musina’s service as a member
of the Company’s Board of Directors.
The
foregoing description of the Director Agreement does not purport to be complete and is qualified in its entirety by reference to the
Director Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and which is incorporated herein by reference.