If the Executive’s employment is terminated by the Company Group without “cause” (as defined in each Employment Agreement), or the Executive terminates his or her employment for “good reason” (as defined in each Employment Agreement, and which includes the Company Group’s non-renewal of the Employment Agreement), the Executive will be entitled to receive the Accrued Amounts (as defined below), the Pro Rata Bonus (as defined below) and severance payments equal to (i) 12 months (the “Severance Period”) of base salary in effect at the time of the Executive’s termination of employment, plus (ii) 100% of the Performance Bonus based on actual performance for the year of termination. However, in the event that the employment is terminated by the Company without cause, or by Executive terminates his or her employment for good reason within 12 months following a “change in control” (as defined in each Employment Agreement), he or she will instead be entitled to receive the Accrued Amounts, the Pro Rata Bonus and change in control severance payments equal to (i) 18 months (the “CIC Severance Period”) of base salary in effect at the time of the Executive’s termination of employment, plus (ii) 150% of the Performance Bonus calculated at the target bonus opportunity level in effect at the time of the Executive’s termination of employment. In connection with any termination by the Company Group without cause, or if the Executive terminates his or her employment for good reason, the Executive will also be entitled to reimbursement of the monthly premium for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) that is in excess of active employee rates for such coverage during the Severance Period or the CIC Severance Period, as applicable, or until the Executive becomes eligible for health benefits through a subsequent employer, if earlier. The payment of severance and the COBRA benefit is subject to the Executive’s execution of a release of claims in favor of the Company Group and the Executive’s continued compliance with the restrictive covenants contained in the Employment Agreement.
Each Employment Agreement provides that, if the applicable Executive’s employment is terminated due to death or “disability” (as defined in each Employment Agreement), he or she (or his or her estate) will be entitled to receive (i) any accrued and unpaid base salary through the date of termination, (ii) any amounts payable to the Executive for previously completed years in respect of the Executive’s Performance Bonus that have not been paid as of the date of termination, (iii) reimbursement for any reimbursable business expenses, (iv) payment for any accrued but unused vacation time and (v) such other benefits as may be provided under the terms of the Company Group’s benefits plans (collectively, the “Accrued Amounts”). In addition, the Executive (or his or her estate) will be entitled to receive an amount equal to the amount payable to the Executive in respect of the Executive’s Performance Bonus for service in the year in which the Executive’s termination occurs, based on actual performance through to the end of the year of termination, and pro-rated for the portion of such year occurring through the date of the Executive’s termination (the “Pro Rata Bonus”). If the Executive’s employment is terminated by the Company Group for cause, or the Executive terminates his or her employment without good reason, the Executive will only be entitled to receive the Accrued Amounts.
Each Employment Agreement also subjects the applicable Executive to certain covenants, including confidentiality obligations and certain non-competition restrictions for a period of 12 months following the Executive’s termination.
The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of each Employment Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.
Award Grants to Named Executive Officers
In connection with execution of each Employment Agreement, the Board of Directors of the Company, following a recommendation from the Committee, approved the following grants to the Executives of options to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), under the Sharecare, Inc. 2021 Omnibus Incentive Plan (the “Incentive Plan”):
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8,148,490 stock options to Jeff Arnold;
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4,074,245 stock options to Justin Ferrero; and
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4,074,245 stock options to Dawn Whaley.
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The Executives are not eligible to receive additional equity awards under the Incentive Plan until the later of the achievement of all stock price performance hurdles (which is up to five years) (as described below) or three years.
The effective date of each grant will be August 13, 2021. The exercise price per share for each stock option will be the greater of $10.00 and the “fair market value” (as defined in the Incentive Plan) of one share of the Common Stock of the Company on the grant date.
In connection with the grant of stock options, the Company is entering into a stock option grant notice (including an option agreement and related attachments) (the “NEO Option Notice”) with each Executive, which sets forth the terms and conditions of the grants. The stock options are also subject to the terms and conditions of the Incentive Plan.
The terms and conditions of the stock options are the same for all three the Executives. Thirty-five percent of the stock options are subject to time- vesting and will vest and become exercisable as to one third of the shares of Common Stock underlying the stock option on each of the first three anniversaries of the grant date. Sixty-five percent of the stock options are subject to performance-vesting.
The performance-vesting stock options will vest and become exercisable in 11 equal tranches, subject to satisfaction of both a stock price performance hurdle and a service requirement.
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