SFT Shift Technologies Inc

 

As filed with the Securities and Exchange Commission on June 30, 2023

Registration No. 333-      

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

 

Shift Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		5500		82-5325852
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification No.)

 

Shift Technologies, Inc. Employment Inducement Grant

(Full title of the plan)

 

290 Division Street, Suite 400
San Francisco, California 94103
(855) 575-6739
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Scott Hodgdon
Shift Technologies, Inc.
290 Division Street, Suite 400
San Francisco, California 94103
(855) 575-6739
(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

with copies to:

Martin C. Glass
Jenner & Block LLP
1155 Avenue of the Americas
New York, NY 10036
(212) 891-1672

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☒		Smaller reporting company	☒
			Emerging growth company	☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

 

 

Explanatory Note 

 

This Registration Statement on Form S-8 (this “Registration Statement”) is being filed for the purpose of registering an aggregate of 1,900,000 shares of Class A common stock, par value $0.0001 per share (the “common stock”), of Shift Technologies, Inc. (the “Registrant”) that may be issuable upon the settlement of: (i) 950,000 restricted stock units that will vest based on the passage of time and (ii) 950,000 restricted stock units that will vest based on the passage of time and achievement of certain performance metrics, in each case subject to continued employment through the applicable vesting date, granted to Ayman Moussa on June 30, 2023, as an inducement to accept employment as the Chief Executive Officer of the Registrant (the “Inducement Award”).

 

The Inducement Award will be granted outside of the Registrant’s incentive compensation plans, including its 2022 Employment Inducement Plan (the “Inducement Plan”), but will be subject to certain terms and conditions generally consistent with the Inducement Plan. The Inducement Award was approved by the Leadership Development, Compensation and Governance Committee of the Registrant’s Board of Directors as an inducement material to such employee’s acceptance of employment with the Registrant in compliance with, and in reliance on, Nasdaq Listing Rule 5635(c)(4).

 

 

PART I

 

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

The information specified in Item 1 and Item 2 of Part I of Form S-8 is omitted from this Registration Statement in accordance with the provisions of Rule 428 under the Securities Act and the introductory note to Part I of Form S-8.

 

The document(s) containing the information specified in Part I will be sent or given to employees as specified by Rule 428(b)(1) of the Securities Act. Such documents are not required to be, and are not, filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities Act.

 

 

PART II

 

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3. Incorporation of Documents by Reference.

 

The following documents filed by the Registrant with the Securities and Exchange Commission (the “Commission”) are hereby incorporated by reference in this Registration Statement:

 

(a)	The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023.

 

(b)	The Registrant’s Amendment No. 1 to Annual Report on Form 10-K/A for the fiscal year ended December 31, 2022, filed with the Commission on June 29, 2023.

 

(c)	The Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the Commission on May 17, 2023.

 

(d)	The Registrant’s Amendment No. 1 to Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2023, filed with the Commission on June 29, 2023.

 

(e)

The Registrant’s Current Reports on Form 8-K (other than portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K and any exhibits accompanying such reports that are related to such items) filed with the Commission on February 10, 2023, March 7, 2023, March 8, 2023, March 20, 2023, March 28, 2023, April 24, 2023, June 14, 2023 and June 28, 2023.

 

(f)	The description of the Registrant’s Class A common stock contained in the registration statement on Form 8-A filed on March 18, 2019 and any amendment or report filed with the Commission for the purpose of updating the description.

 

In addition, all documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, (excluding any portions thereof furnished by the Registrant, including but not limited to information furnished under Item 2.02 and Item 7.01 and any exhibits relating to Item 2.02 or Item 7.01 furnished under Item 9.01 of Form 8-K and any certification required by 18 U.S.C. § 1350), on or after the date of this Registration Statement, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents.

 

Any statement contained in this Registration Statement or in a document incorporated by reference in this Registration Statement shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in this Registration Statement or in any subsequently filed document that is deemed to be incorporated by reference in this Registration Statement modifies or supersedes such statement.

 

Item 4. Description of Securities.

 

Not applicable.

 

Item 5. Interests of Named Experts and Counsel.

 

Not applicable. 

 

 

Item 6. Indemnification of Directors and Officers.

 

Section 145(a) of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

 

Section 145(b) of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made with respect to any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, he or she is fairly and reasonably entitled to indemnity for such expenses that the Court of Chancery or other adjudicating court shall deem proper.

 

Section 145(g) of the DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify the person against such liability under Section 145 of the DGCL.

 

Our Second Amended and Restated Certificate of Incorporation provides that our directors shall not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL. Our Second Amended and Restated Bylaws provide for indemnification of our directors and officers to the maximum extent permitted by applicable law.

 

The right to indemnification conferred by our Second Amended and Restated Bylaws also includes the right to be paid the expenses (including attorneys’ fees) incurred by a present or former director or officer in defending any civil, criminal, administrative, or investigative action, suit, or proceeding in advance of its final disposition; provided, however, that if the Delaware law requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer shall be made only upon the Company’s receipt of an undertaking by or on behalf of such director or officer to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified for such expenses under our Second Amended and Restated Bylaws, or otherwise.

 

The Registrant also maintains a general liability insurance policy, which will cover certain liabilities of directors and officers of the Registrant arising out of claims based on acts or omissions in their capacities as directors or officers.

 

Item 7. Exemption from Registration Claims.

 

Not applicable.

 

 

Item 8. Exhibits.

 

Exhibit No.		Description
4.1		Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on October 14, 2020).
4.2		Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed on October 14, 2020).
4.3		Certificate of Amendment to Second Amended and Restated Certificate of Incorporation of Shift Technologies, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on March 8, 2023).
5.1		Opinion of Jenner & Block LLP (filed herewith).
23.1		Consent of Deloitte & Touche LLP, independent public accounting firm of Shift Technologies, Inc. (filed herewith).
23.2		Consent of Jenner & Block LLP (included in Exhibit 5.1).
24.1		Power of Attorney (contained on the signature page hereto).
99.1		Shift Technologies, Inc. Employment Inducement Plan (incorporated by reference to Exhibit 99.1 to Shift Technologies, Inc.’s Registration Statement on Form S-8 (File No. 333-265935), filed on June 30, 2022).
99.2		Shift Technologies, Inc. Employment Inducement Grant Agreement by and between Shift Technologies, Inc. and Ayman Moussa, dated June 30, 2023 (filed herewith).
107		Filing Fee Table (filed herewith).

 

Item 9. Undertakings.

 

(a)	The undersigned Registrant hereby undertakes:

 

(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

i.	to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

ii.

to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement

  

iii.	to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;

 

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.

 

 

(2)

That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b)

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c)

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on June 30, 2023.

 

	SHIFT TECHNOLOGIES, INC.
	/s/ Oded Shein
	Oded Shein
	Chief Financial Officer

 

POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Ayman Moussa and Oded Shein, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Registration Statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully for all intents and purposes as he or she might or could do in persons, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

 

/s/ Ayman Moussa		Chief Executive Officer and Director		June 30, 2023
Ayman Moussa		(principal executive officer)
/s/ Oded Shein		Chief Financial Officer (principal financial officer and		June 30, 2023
Oded Shein		principal accounting officer)
/s/ George Arison		Director		June 30, 2023
George Arison
/s/ Toby Russell		Director		June 30, 2023
Toby Russell
/s/ Victoria McInnis		Director		June 30, 2023
Victoria McInnis
/s/ Adam Nash		Director		June 30, 2023
Adam Nash
/s/ Luis Ignacio Solorzano Aizpuru		Director		June 30, 2023
Luis Ignacio Solorzano Aizpuru
/s/ Kimberly H. Sheehy		Director		June 30, 2023
Kimberly H. Sheehy
/s/ James E. Skinner		Director		June 30, 2023
James E. Skinner

 

 

II-5

 

Exhibit 5.1

 

353 N. CLARK STREET CHICAGO, IL 60654-3456

 

June 30, 2023

 

Shift Technologies, Inc.

290 Division Street, Suite 400

San Francisco, California 94103

 

Re:	Shift Technologies, Inc. – Registration Statement on Form S-8

 

Ladies and Gentlemen:

 

We have acted as counsel to Shift Technologies, Inc., a Delaware corporation (“Shift” or the “Company”), in connection with the Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration of up to 1,900,000 shares (the “Shares”) of Class A common stock, par value $0.0001 per share, of the Company (the “Common Stock”) issuable pursuant to the Shift Technologies, Inc. Employment Inducement Grant Agreement entered into by the Company and Ayman Moussa in connection with his commencement of employment with the Company (the “Inducement Award Agreement”).

 

This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

 

In connection with this opinion letter, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion letter, including (a) the organizational documents of the Company; (b) the Inducement Award Agreement; (c) certain minutes and records of proceedings of the Company with respect to the Inducement Award Agreement; and (d) the Registration Statement and the exhibits thereto.

 

For purposes of this opinion letter, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion letter is rendered, the authority of such persons signing on behalf of the parties thereto other than the Company, and the due authorization, execution and delivery of all documents by the parties thereto other than the Company. We have also assumed that the Registration Statement will become effective under the Securities Act prior to, and be effective under the Securities Act at all times upon, the issuance of the Shares. We have relied, to the extent we deemed appropriate and without independent verification, upon (i) statements and representations of officers and other representatives of the Company as to certain factual matters, (ii) certificates or comparable documents of public officials and (iii) factual information that we have obtained from such other sources as we have deemed reasonable.

 

Based on the foregoing examination and in reliance thereon, and subject to the qualifications, assumptions and limitations set forth in this opinion letter, we are of the opinion that the Shares, when issued, delivered and sold in accordance with the terms set forth in the Inducement Award Agreement against payment therefor in an amount not less than the par value thereof, will be validly issued, fully paid and non-assessable.

 

Our opinion expressed above is subject to the qualifications that we express no opinion as to the applicability of, compliance with, or effect of (i) any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other similar law or judicially developed doctrine in this area (such as substantive consolidation or equitable subordination) affecting the enforcement of creditors’ rights generally, (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), (iii) public policy considerations which may limit the rights of parties to obtain certain remedies and (iv) other recognized statutory and judicial constraints on enforceability.

 

Chicago   London   Los Angeles   New York   San Francisco   Washington, dc

WWW.JENNER.COM

 

 

Our opinion expressed above is based exclusively on the General Corporation Law of the State of Delaware (including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing). We express no opinion with respect to any other laws or any effect that such other laws may have on the opinion expressed herein, including any foreign or state securities (or “blue sky”) laws or regulations. This opinion letter is limited to the matters stated herein, and no opinion is implied or may be inferred beyond the matters expressly stated herein. This opinion letter is given only as of the time of its delivery, and we undertake no responsibility to update or supplement this letter after its delivery.

 

Our advice represents our opinion as to how such issue would be resolved were it to be considered by the highest court in the jurisdiction that enacted such law. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case and would also depend on how the court involved chose to exercise the wide discretionary authority generally available to it. This opinion letter is not intended to guarantee the outcome of any legal dispute which may arise in the future.

 

We hereby consent to the use of our name in the Registration Statement and to filing of this opinion with the Commission as Exhibit 5 to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.

 

	Very truly yours,
	/s/ Jenner & Block LLP
	Jenner & Block LLP

 

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated March 31, 2023 relating to the financial statements of Shift Technologies, Inc., appearing in the Annual Report on Form 10-K/A of Shift Technologies, Inc. for the year ended December 31, 2022.

 

/s/ Deloitte & Touche LLP

 

San Francisco, California

 

June 30, 2023

 

Exhibit 99.2

 

SHIFT TECHNOLOGIES, INC.

Employment INDUCEMENT GRANT AGREEMENT

 

THIS EMPLOYMENT INDUCEMENT GRANT AGREEMENT (this “Agreement”), dated June 30, 2023 (the “Date of Grant”) between Shift Technologies, Inc., a Delaware corporation (the “Company”), and Ayman Moussa (the “Grantee”), is a grant of restricted Stock Units (“RSUs”) subject to the terms, definitions and provisions of the Company’s Employment Inducement Plan (the “Plan”), a copy of which has been made available to the Grantee, which is incorporated herein by reference, and the terms of this Agreement, although the Grant (defined below) is issued as an inducement award pursuant to NASDAQ Listing Rule 5635(c)(4), is not issued under the Plan and the shares of Stock issued pursuant to this Grant shall not be considered as issued under the Plan. Unless otherwise defined herein, terms not defined in this Agreement shall have the meanings ascribed to them in the Plan. In the event of a conflict between the terms and conditions of the Plan and those of this Agreement, the terms and conditions of this Agreement shall prevail.

 

1. Award. Subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the Company hereby grants the Grantee 1,900,000 RSUs, subject to the vesting terms set forth in Section 2 below (the “Grant”). Subject to the provisions of this Agreement and the Plan, each vested RSU represents the right to receive one (1) share of Stock. The RSUs shall apply only with respect to a whole number of shares of Stock.

 

2. Vesting.

 

(a) Certain of the RSUs shall vest based on the passage of time (“Time RSUs”) and certain of the RSUs shall vest upon a combination of the passage of time and the achievement of specified performance metrics (“Performance RSUs” or “PSUs”). For purposes of clarity, references to RSUs include both Time RSUs and PSUs. 950,000 RSUs subject to this award are Time RSUs and 950,000 RSUs subject to this award are Performance RSUs. The Time RSUs and Performance RSUs shall vest in accordance with the vesting schedules below. Until such vesting conditions are met, unvested RSUs shall remain subject to forfeiture in accordance with the terms of Section 3 hereof. RSUs will vest in whole numbers; any fractional amounts will be rounded down and will be available to vest (in whole numbers) in the next vesting period.

 

(b) The Time RSUs shall vest, subject to the Grantee’s continuous employment with the Company or an Affiliate (“Continuous Service”) through the applicable vesting date, as follows:

 

(1)

237,500 Time RSUs are eligible to vest on June 30, 2024; and

 

(2)

712,500 Time RSUs are eligible to vest quarterly over the three (3) year period commencing on July 1, 2024, in equal installments of 59,375 per quarter, with the first quarterly vesting date occurring September 30, 2024, and the last on June 30, 2027.

 

(3)

In the event of a Change of Control, any then outstanding and unvested Time RSUs shall vest immediately prior to such Change of Control.

 

 

(c) The PSUs shall vest as follows, subject to the Grantee’s Continuous Service through the applicable vesting date:

 

(i) 2023 PSUs.190,000 PSUs shall be eligible to vest on December 31, 2023, provided that the following performance criteria is achieved (the “2023 Performance Criteria”): An EBITDA loss of no more than $12 million for the period from July 1, 2023 through December 31, 2023.

 

(ii) 2024-2027 PSUs. Subject to the Grantee’s Continuous Service through the applicable vesting date, each tranche of PSUs in Table 1 below (the “2024-2027 PSUs”) shall be eligible to vest on the last day of the calendar quarter of the calendar quarter in which the applicable Performance Requirement and Service Requirement have both been met (for the avoidance of doubt, the Performance and Service Requirements may be met in different calendar quarters and vesting shall occur at the last day of the later calendar quarter).

 

The following rules shall apply to such vesting:

 

(1)

A Performance Requirement will be considered achieved if the Company’s 20-Day Average Price of a share of Stock equals or exceeds the price set forth in Table 1 on any day beginning on the Date of Grant and prior to the 4th anniversary of the Date of Grant.

 

(2)

A Service Requirement will be considered achieved if the Grantee remains in Continuous Service through the applicable date set forth in Table 1.

 

(3)

Tranche 1 through 4 may not vest prior to January 1, 2024. Any tranche meeting the Performance and Service Requirements prior to such date shall be eligible to vest on March 31, 2024, but not sooner.

 

(4)

Tranche 5 through 8 may not vest prior to January 1, 2025. Any tranche meeting the Performance and Service Requirements prior to such date shall be eligible to vest on March 31, 2025, but not sooner.

 

(5)

Any PSUs not vested by the fourth (4th) anniversary of the Date of Grant shall immediately terminate thereafter and become null and void.

 

(6)

In the event of a Change of Control whereby shares of Stock are valued at or in excess of a Performance Requirement price, the tranche underlying such price (and all lesser tranches) shall vest as of such Change of Control without regard to satisfaction of any Service Requirement or 20-Day Average Price requirement and, notwithstanding the Plan, or any other plan, arrangement or agreement of the Company applicable to the Grantee, any outstanding and unvested tranches not vested by the Change of Control shall immediately terminate thereafter and become null and void as of such Change of Control.

 

Table 1

 

Tranche		PSUs Eligible for Vesting				Performance Requirement (20-Day Average Price)				Service Requirement
1			95,000			$	2.00			9-month anniversary of the Date of Grant
2			95,000			$	2.77			12-month anniversary of the Date of Grant
3			95,000			$	3.95			15-month anniversary of the Date of Grant
4			95,000			$	5.13			18-month anniversary of the Date of Grant
5			95,000			$	6.31			21-month anniversary of the Date of Grant
6			95,000			$	7.49			24-month anniversary of the Date of Grant
7			95,000			$	8.67			27-month anniversary of the Date of Grant
8			95,000			$	9.25			30-month anniversary of the Date of Grant
TOTAL POSSIBLE			760,000

 

 

3. Termination of Service. Except as set forth in any separate written agreement between Grantee and the Company, when the Grantee’s Continuous Service terminates, any applicable outstanding and unvested Time RSUs and PSUs shall immediately terminate and become null and void.

 

4. Definitions.

 

(a) “20-Day Average Price” means, with respect to a specified date, the average closing price of a share of Stock for the twenty (20) business days ending on and including such reference date.

 

(b) “EBITDA” means, for a given period, earnings before income taxes, depreciation, and amortization, as such terms are used in the Company’s financial statements.

 

(c) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(d) “Performance Requirement” means the 20-Day Average Prices set forth in Table 1.

 

5. Settlement. During the first open trading window of the Company following the end of each calendar quarter (i.e., March 31, June 30, September 30, December 31), the Company shall deliver to the Grantee one (1) share of Stock in settlement of each RSU that became vested during such calendar quarter, but in any event, within the period ending on the later to occur of the date that is 2 ½ months after the end of (i) the Grantee’s tax year that includes the date that the RSU became vested, or (ii) the Company’s tax year that includes the date that the RSU became vested. Notwithstanding the above, the delivery of the Stock shall be delayed if the immediate sale of such Stock would cause the Grantee to be in violation of Section 16 of the Exchange Act or Rule 10b-5 under the Exchange Act until the first business day upon which the Grantee would be able to sell such Stock in compliance with Section 16 and Rule 10b-5 of the Exchange Act; provided, however, that in no event will the delivery of such Stock be delayed subsequent to the deadline in the immediately preceding sentence. In no case will the Grantee be permitted, directly or indirectly, to specify the taxable year of delivery of any RSU subject to this Agreement. Notwithstanding the forgoing, in the event of a Change of Control, vested RSUs shall be settled within 10 days of such Change of Control.

 

6. Delivery of Stock. Certificates or evidence of book-entry shares representing the Stock issued upon settlement of RSUs pursuant to Section 5 of this Agreement will be delivered to or otherwise made available to the Grantee (or, at the discretion of the Grantee, joint in the names of the Grantee and the Grantee’s spouse) or to the Grantee’s nominee at such person’s request. Delivery of shares of Stock under this Agreement will comply with all applicable laws (including, the requirements of the Exchange Act), and the applicable requirements of any securities exchange or similar entity.

 

7. Shareholder Rights. An RSU is not a share of Stock, and thus, the Grantee will have no rights as a stockholder with respect to the RSUs.  Dividend Equivalents shall accrue on shares underlying the RSUs awarded hereunder and such dividends will be paid to Grantee upon the vesting of such RSUs.

 

8. Transferability. The RSUs subject to this Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered before they vest in accordance with Section 2. After such RSUs vest and are settled in accordance with Sections 2 and 5, no sale or disposition of such shares shall be made in the absence of an effective registration statement under the Exchange Act with respect to such shares unless an opinion of counsel satisfactory to the Company that such sale or disposition will not constitute a violation of the Exchange Act or any other applicable securities laws is first obtained.

 

 

9. Change in Capital Structure. The terms of this Agreement, including the number of shares of Stock subject to this RSU and the applicable performance objectives shall be adjusted as the Administrator determines in good faith is equitably required in the event the Company effects one or more stock dividends, spinoffs, recapitalizations, stock splits, combinations, exchanges or consolidations of shares or other similar changes in capitalization.

 

10. Withholding.

 

(a) The Grantee understands that when the RSUs are settled, the Grantee will be obligated to recognize income, for Federal, state and local income tax purposes, as applicable, in an amount equal to the Fair Market Value of the share of Stock as of such date, and the Grantee is responsible for all tax obligations that arise in connection with the RSUs.

 

(b) Whenever shares of Stock are to be issued upon settlement of the RSUs, the Grantee shall assume sole responsibility for discharging all tax and other obligations associated therewith. The Company has no duty or obligation to minimize the tax consequences to the Grantee and will not be liable to the Grantee for any adverse tax consequences arising in connection with this Award.

 

(c) In its sole discretion, the Administrator may permit the Grantee to satisfy the Company’s tax withholding obligation with respect to RSUs settled in Stock by having shares withheld in accordance with Section 16(b) of the Plan (or in accordance with such other process determined by the Administrator). The elections described in this subsection (c) must be in a form and manner prescribed by the Administrator and may be subject to the prior approval of the Administrator.

 

11. Compliance with Section 409A of the Code. It is the intention of the Company that the Award and Plan are intended either to provide compensation that is exempt from Section 409A of the Code and the rules, regulations and other authorities promulgated thereunder (including the transition rules thereof) (collectively, “Section 409A”), (by reason of being a short-term deferral) or that is nonqualified deferred compensation that is compliant in all regards with the requirements of Section 409A, and all provisions of this Agreement will be construed and interpreted in a manner consistent with this intent. If the Grantee is a “specified employee” (within the meaning set forth in Section 409A(a)(2)(B)(i) of the Code) as of the date of the Grantee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h) and without regard to any alternative definition thereunder), then the issuance of any shares of Stock that would otherwise be made upon the date of the separation from service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the earlier of: (i) the fifth business day following the Grantee’s death, or (ii) the date that is six (6) months and one day after the date of the separation from service, with the balance of the shares of Stock issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares of Stock is necessary to avoid the imposition of adverse taxation on the Grantee in respect of the shares of Stock under Section 409A. Each installment of shares of Stock that vests is intended to constitute a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2). In no event shall the Company be liable for any additional tax, interest, income inclusion or other penalty that may be imposed on the Grantee by Section 409A or for damages for failing to comply with Section 409A.

 

12. Amendment. The Administrator may at any time amend, modify or terminate the Plan and this Agreement; provided, however, that, (i) except as otherwise specifically permitted under the Plan, no such action of the Administrator shall adversely affect the Grantee’s rights under this Agreement without the consent of the Grantee, and (ii) a “material” amendment to this Agreement (“materiality” to be assessed in accordance with Nasdaq Listing Rule 5635(c)) shall require Company shareholder approval. The Administrator, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement so that the award qualifies for exemption from or complies with Section 409A.

 

 

13. Interpretation. This Agreement and the rights of the Grantee hereunder are subject to all of the terms and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Administrator may adopt for administration of the Plan. It is expressly understood that the Administrator is authorized to administer, construe and make all determinations necessary or appropriate for the administration of the Plan and this Agreement, all of which shall be binding upon the Grantee.

 

14. No Right to Continued Employment. This Agreement shall not confer upon the Grantee any right to continue to provide services, nor shall this Agreement interfere in any way with the Company’s right to terminate the Grantee’s employment at any time.

 

15. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Date of Grant and the provisions of this Agreement, the provisions of this Agreement shall govern. All references herein to the Plan mean the Plan as in effect on the date hereof.

 

16. Grantee Bound by Plan. The Grantee hereby acknowledges that a copy of the Plan has been made available to him or her and agrees to be bound by all the terms and provisions thereof.

 

17. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the successors of the Grantee and any transferee of the Grantee in accordance with Section 8 and the successors of the Company.

 

18. Governing Law. This Agreement shall be governed by the laws of the State of Delaware.

 

19. Counterparts. This Agreement may be executed in counterparts, which shall be deemed originals with the same effect as if both parties had signed the same document. Any counterpart shall be construed together with any other counterpart and both shall constitute one Agreement. For the purposes of this Agreement, a facsimile or PDF copy of a signature shall be construed to be an original.

 

20. Clawback Policy. Grantee acknowledges and agrees to the applicable of Section 21(h) of the Plan.

 

Signatures appear on following page

 

 

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Agreement, and the Grantee has placed his or her signature hereon, effective as of the Date of Grant.

 

SHIFT TECHNOLOGIES, INC.

 

By:	/s/ Oded Shein
	Signature
Name:	Oded Shein
Title:	Chief Financial Officer
Date:	June 30, 2023

 

 

I hereby accept this Grant and I agree to be bound by the terms of the Plan and this Grant. I further agree that all of the decisions and interpretations of the Company with respect thereto shall be final and binding.

 

GRANTEE:			IF GRANTEE’S SPOUSE MUST SIGN:*
By:	/s/ Ayman Moussa		By:
	Signature			Signature
Name:	Ayman Moussa		Name:
	Print Name			Print Name

 

* If the Grantee is married and holds RSUs jointly with the Grantee’s spouse or resides in a community property state, both the Grantee and Grantee’s spouse must sign this RSU Agreement.  The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington.

 

 

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

Form S-8

(Form Type)

 

Shift Technologies, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Table 1—Newly Registered Securities

 

		Security Type		Security Class Title		Fee Calculation Rule		Amount to be Registered (1)				Proposed Maximum Offering Price Per Unit				Maximum Aggregate Offering Price				Fee Rate			Amount of Registration Fee
Fees to Be Paid		Equity		Class A common stock, par value $0.0001 per share		Rule 457(c) and Rule 457(h)			1,900,000	(2)		$	2.10	(3)		$	3,990,000			$110.20 per $1,000,000			$	439.70
Fees Previously Paid		—		—		—			—				—				—			—				—
		Total Offering Amounts														$	3,990,000						$	439.70
		Total Fees Previously Paid																						—
		Total Fee Offsets (4)																						—
		Net Fee Due																					$	439.70

 

(1)

Pursuant to Rule 416(a) under the Securities Act of 1933 (the “Securities Act”), this Registration Statement also covers an indeterminate number of additional shares of Class A common stock, par value $0.0001 per share (the “common stock”) that may be issued to adjust the number of shares described herein in the event of a stock dividend, stock split, reverse stock split, extraordinary dividend, extraordinary distribution, recapitalization, reorganization, merger, combination, consolidation, split-up, spin-off, combination, exchange of shares, rights offering, separation, reorganization, liquidation or similar event.

(2)

Represents shares of common stock issuable upon the settlement of (i) 950,000 restricted stock units that will vest based on the passage of time and (ii) 950,000 restricted stock units that will vest based on the passage of time and achievement of certain performance metrics, in each case subject to continued employment through the applicable vesting date, granted to Ayman Moussa on June 30, 2023 (the “Inducement Award”) as an inducement material to entry into employment with the Registrant in accordance with Nasdaq Listing Rule 5635(c)(4).

(3)	Computed solely for purposes of calculating the registration fee in accordance with Rules 457(c) and 457(h) under the Securities Act based on the average of the high and low prices of the common stock as reported on The Nasdaq Capital Market on June 27, 2023.

(4)	The Registrant does not have any fee offsets.

 

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