Hycroft Mining Holding Corp 10-K for FY2022

Hycroft Mining Holding Corp (HYMC)

10-K 2023-03-28 For: 2022-12-31

Added on April 12, 2026

About this 10-K

Hycroft Mining Holding Corp filed this 10-K on March 28, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $33.23M; down 70.0% from $110.73M a year earlier
Net loss: $60.83M; compared with a net loss of $88.56M a year earlier
Diluted EPS: -$0.36; compared with -$1.47 a year earlier

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Delaware		82-2657796
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
	4300 Water Canyon Road, Unit 1 Winnemucca, Nevada 89445
	(Address of principal executive offices) (Zip code)
	(775) 304-0260
	(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	HYMC	The Nasdaq Capital Market
Warrants to purchase common stock	HYMCW	The Nasdaq Capital Market
Warrants to purchase common stock	HYMCL	The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None


			Indicate by a check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
			Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
			Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
			Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
			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 the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


			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 13(a) of the Exchange Act. ☐
			Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
			If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
			Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b)). ☐
			Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

			The aggregate market value of the registrant's common stock held by non-affiliates of the registrant as of June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, was $165,448,903.
			As of March 27, 2023, there were 200,270,599 shares of the Company’s common stock and no shares of the Company’s preferred stock issued and outstanding.


			Page
		Cautionary Statement Regarding Forward-Looking Statements	3
PART	ITEM













I	1	Business	5
	1A	Risk Factors	11
	1B	Unresolved Staff Comments	28
	2	Properties	28
	3	Legal Proceedings	40
	4	Mine Safety Disclosures	40
II	5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	41
	6	[RESERVED ]	41
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	7A	Quantitative and Qualitative Disclosures about Market Risk	58
	8	Financial Statements and Supplementary Data	58
	9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	96
	9A	Controls and Procedures	96
	9B	Other Information	97
	9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	97
III	10	Directors, Executive Officers and Corporate Governance	97
	11	Executive Compensation	107
	12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	116
	13	Certain Relationships and Related Transactions, and Director Independence	118
	14	Principal Account ant Fees and Services	120
IV	15	Exhibits and Financial Statement Schedules	122
	16	Form 10-K Summary	126
		Signatures	127


			☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			HYCROFT MINING HOLDING CORPORATION
			(Exact name of registrant as specified in its charter)


	GOLD PRICES						SILVER PRICES
Year	High		Low		Average		High		Low		Average
2020	$	2,067	$	1,474	$	1,770	$	28.89	$	12.01	$	20.55
2021	$	1,943	$	1,684	$	1,799	$	29.59	$	21.53	$	25.04
2022	$	2,039	$	1,628	$	1,800	$	26.18	$	17.77	$	21.71
2023 (through Mar. 24th)	$	1,994	$	1,811	$	1,884	$	24.44	$	20.09	$	22.48


Hycroft Mine – Summary of Gold and Silver Mineral Resources as of March 27, 2023
Classification	Cutoff Grade $ Net of Process	Approximate Cutoff, AuEq oz/ton	Ktons	Au oz/ton	Ag oz/ton	Sulfide Sulfur%	Au Contained Ounces (000)	Ag Contained Ounces (000)

Heap Leach Resource
Measured	$0.01	0.002	94,162	0.008	0.17	2.14	753	15,725
Indicated	$0.01	0.002	59,751	0.007	0.13	1.78	436	7,529
Meas + Ind	$0.01	0.002	153,913	0.008	0.15	2.00	1,189	23,254
Inferred	$0.01	0.002	46,118	0.007	0.14	1.62	337	6,549

Flotation Mill + Concentrate by POX and Cyanide Leach Process
Measured	$0.01	0.010	402,735	0.013	0.50	1.78	5,236	200,965
Indicated	$0.01	0.010	346,308	0.012	0.39	1.58	4,156	136,445
Meas + Ind	$0.01	0.010	749,043	0.013	0.45	1.69	9,391	337,410
Inferred	$0.01	0.010	249,494	0.012	0.36	1.52	3,019	89,568

Combined Mineral Resources Leach Plus Process Plant
Measured	$0.01	0.002 - 0.010	496,897	0.012	0.44	1.85	5,989	216,690
Indicated	$0.01	0.002 - 0.010	406,059	0.011	0.35	1.61	4,592	143,947
Meas + Ind	$0.01	0.002 - 0.010	902,956	0.012	0.40	1.74	10,581	360,664
Inferred	$0.01	0.002 - 0.010	295,612	0.011	0.33	1.54	3,356	96,117
Total material in the Pit (tons) =								3.631 billion


		Year Ended December 31,
		2022		2021












Ounces recovered – gold	(oz)	14,032		57,668
Ounces recovered – silver	(oz)	37,281		355,967

Ounces sold – gold	(oz)	17,728		56,045
Ounces sold – silver	(oz)	44,084		397,546

Average realized sales price – gold	($/oz)	$	1,819	$	1,794
Average realized sales price – silver	($/oz)	$	22.23	$	25.66


	December 31, 2022		December 31, 2021
Cash	$	141,984	$	12,342
Accounts receivable	2,771		—
Income tax receivable	1,530		1,530
Metal inventories(1)	—		6,693
Ore on leach pads(1)	—		10,106
Assets held-for-sale, net of payments received of $1.1 million (2)	6,098		11,558
Total projected sources of future liquidity	$	152,383	$	42,229


	Payments Due by Period
	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
Operating activities:
Net smelter royalty(1)	$	240,506	$	6	$	—	$	—	$	240,500
Remediation and reclamation expenditures(2)	76,795		—		4,717		4,890		67,188
Interest payments(3)	18,925		4,288		12,865		1,772		—
Crofoot Royalty(4)	4,495		151		—		—		4,344
Financing activities:
Repayments of debt principal(3)	153,479		127		205		153,147		—
Additional interest payments(5)	5,499		2,200		3,299		—		—
Total	$	499,699	$	6,772	$	21,086	$	159,809	$	312,032


			Page
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm, PCAOB ID 659			59
Report of Independent Registered Public Accounting Firm, PCAOB ID 166			60
Consolidated Balance Sheets			61
Consolidated Statements of Operations			62
Consolidated Statements of Cash Flows			63
Consolidated Statements of Stockholders’ Equity (Deficit)			64
Notes to Consolidated Financial Statements			65


	December 31, 2022		December 31, 2021

Assets:
Cash and cash equivalents	$	141,984	$	12,342
Accounts receivable	2,771		—
Income tax receivable	1,530		1,530
Interest receivable	459		—
Inventories – Note 3	2,808		11,069
Ore on leach pads – Note 3	—		10,106
Prepaids and deposits, net – Note 4	2,840		2,342
Current assets	152,392		37,389
Plant and equipment, net – Note 5	54,832		58,484
Restricted cash – Note 6	33,982		34,293
Other assets – Note 4	600		600
Assets held for sale – Note 7	7,148		11,558
Total assets	$	248,954	$	142,324
Liabilities:
Accounts payable and accrued expenses	$	5,644	$	9,430
Contract liabilities – Note 8	1,050		—
Debt, net – Note 10	2,328		16,666
Deferred gain on sale of royalty – Note 11	—		125
Other liabilities – Note 9	3,011		5,044
Current liabilities	12,033		31,265
Debt, net – Notes 10 and 20	132,690		143,638
Deferred gain on sale of royalty – Note 11	29,837		29,714
Warrant liabilities – Notes 12 and 20	786		669
Asset retirement obligation – Note 13	10,302		5,193
Other liabilities – Note 9	—		339
Total liabilities	$	185,648	$	210,818
Commitments and contingencies – Note 23
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 1,400,000,000 shares authorized; 200,270,599 issued and outstanding at December 31, 2022, and 60,433,395 issued and outstanding at December 31, 2021 – Note 14	$	20	$	6
Additional paid-in capital – Note 14	733,437		540,823
Accumulated deficit	(670,151)		(609,323)
Total stockholders’ equity (deficit)	63,306		(68,494)
Total liabilities and stockholders’ equity (deficit)	$	248,954	$	142,324


			FORM 10-K


			(Mark One)


	Year Ended December 31,
		2022		2021
Production costs		$	30,756	$	102,750
Depreciation and amortization		3,361		8,544
Mine site period costs		13,720		38,166
Asset retirement obligation adjustments		4,701		—
Write-down of materials and supplies inventories		1,051		7,990
Write-down of ore on leach pads		—		5,888
Total cost of sales		$	53,589	$	163,338


	Year Ended December 31,
	2022		2021

Net loss	$	(60,828)	$	(88,564)
Net non-cash adjustments	16,304		30,829
Net change in operating assets and liabilities	9,669		20,697
Net cash used in operating activities	(34,855)		(37,038)
Net cash provided by (used in) investing activities	8,337		(6,873)
Net cash provided by (used in) financing activities	155,849		(5,494)
Net increase (decrease) in cash	129,331		(49,405)
Cash, cash equivalents and restricted cash, beginning of period	46,635		96,040
Cash, cash equivalents and restricted cash, end of period	$	175,966	$	46,635


	Year Ended December 31,
	2022		2021
Revenues – Note 15	$	33,229	$	110,734
Cost of sales:
Production costs	30,756		102,750
Depreciation and amortization	3,361		8,544
Mine site period costs – Note 2	13,720		38,166
Asset retirement obligation adjustments – Note 13	4,701		—
Write-down of non-current ore on leach pads – Note 3	—		5,888
Write-down of materials and supplies inventories – Note 3	1,051		7,990
Total cost of sales	53,589		163,338
Operating expenses:
General and administrative	14,367		14,619
Projects, exploration, and development	18,355		13,587
Write-off of deposit – Note 4	—		916
Accretion – Note 13	408		408
Impairment loss on assets held for sale – Note 7	—		1,777
Loss from operations	(53,490)		(83,911)
Other (expense) income:
Interest expense, net of capitalized interest – Note 10	(18,481)		(20,593)
Interest income	2,313		—
Gain on extinguishment of debt – Note 10	5,041		—
Fair value adjustment to warrants – Notes 12 and 20	(159)		14,426


Gain (loss) on sale of equipment and supplies inventories, net of commissions	3,948		(16)
Loss before income taxes	(60,828)		(90,094)
Income tax benefit – Note 17	—		1,530
Net loss	$	(60,828)	$	(88,564)

Loss per share:
Basic – Note 18	$	(0.36)	$	(1.47)
Diluted – Note 18	$	(0.36)	$	(1.47)
Weighted average shares outstanding:
Basic – Note 18	169,773,055		60,101,499
Diluted – Note 18	169,773,055		60,101,499


	Common Stock			Additional Paid-in Capital	Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount
Balance at January 1, 2021	59,901,306	$	6		$	537,370	$	(520,759)	$	16,617













Stock-based compensation costs	—	—			2,185		—		2,185
Vesting of restricted stock units	394,589	—			765		—		765
Stock issuance – other	137,500	—			209		—		209
5-Year Private Warrants transferred to 5-Year Public Warrants - Notes 12 and 14	—	—			294		—		294
Net loss	—	—			—		(88,564)		(88,564)
Balance at December 31, 2021	60,433,395	$	6		$	540,823	$	(609,323)	$	(68,494)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ (Deficit) Equity
	Shares	Amount
Balance at January 1, 2022	60,433,395	$	6	$	540,823	$	(609,323)	$	(68,494)


















Issuance of common stock and warrants – Note 14	136,870,064	14		187,482		—		187,496
Vesting of restricted stock units - Note 16	1,114,962	—		727		—		727
5-Year Private Warrants transferred to 5-Year Public Warrants – Notes 12 and 14	—	—		42		—		42
Stock issuance – other – Note 14	1,852,178	—		1,907		—		1,907
Stock-based compensation costs	—	—		2,456		—		2,456
Net loss	—	—		—		(60,828)		(60,828)
Balance at December 31, 2022	200,270,599	$	20	$	733,437	$	(670,151)	$	63,306


		Year Ended December 31,
	Depreciation Life or Method	2022		2021
Production leach pads	Units-of-production	$	11,190	$	11,190
Test leach pads	18 months	6,241		6,241
Process equipment	5 - 15 years	17,302		17,735
Buildings and leasehold improvements	10 years	9,280		9,280
Mine equipment	5 - 7 years	4,872		6,224
Vehicles	3 - 5 years	1,578		1,454
Furniture and office equipment	7 years	370		330
Construction in progress and other		35,721		35,794
		$	86,554	$	88,248
Less, accumulated depreciation and amortization		(31,722)		(29,764)
Total		$	54,832	$	58,484



2023	$	2,328
2024	2,329
2025	1,154
2026	22
2027	141,770
Total	147,603
Less, original issue discount, net of accumulated amortization ($9.8 million)	(10,487)
Less, debt issuance costs, net of accumulated amortization ($2.8 million)	(2,098)
Total debt, net	$	135,018


							Transfers to an Unrelated Third Party(2)
	Balance at December 31, 2021			Fair Value Adjustments(1)						Expiration			Balance at December 31, 2022
	Warrants	Amount		Warrants	Amount		Warrants	Amount		Warrants	Amount		Warrants	Amount
5-Year Private Warrants	9,478,830	$	664	—	$	164	(352,315)	$	(42)	—	$	—	9,126,515	$	786
Seller Warrants	12,721,901	5		—	(5)		—	—		(12,721,901)	—		—	—
Total	22,200,731	$	669	—	$	159	(352,315)	$	(42)	(12,721,901)	$	—	9,126,515	$	786


	Balance at December 31, 2020			Fair Value Adjustments(1)			Transfers to an Unrelated Third Party (2)			Balance at December 31, 2021

	Warrants	Amount		Warrants	Amount		Warrants	Amount		Warrants	Amount
5-Year Private Warrants	9,888,415	$	15,326	—	$	(14,368)	(409,585)	$	(294)	9,478,830	$	664
Seller Warrants	12,721,901	63		—	(58)		—	—		12,721,901	5
Total	22,610,316	$	15,389	—	$	(14,426)	(409,585)	$	(294)	22,200,731	$	669


	Balance at December 31, 2021			Warrant Issuances			Transfers to an Unrelated Third Party(1)			Balance at December 31, 2022

	Warrants	Amount		Warrants	Amount		Warrants	Amount		Warrants	Amount
5-Year Public Warrants	24,811,068	$	28,912	—	$	—	352,315	$	42	25,163,383	$	28,954
Public Offering Warrants	9,583,334	12,938		—	—		—	—		9,583,334	12,938
Private Placement Offering Warrants	—	—		46,816,480	25,604		—	—		46,816,480	25,604
Total	34,394,402	$	41,850	46,816,480	$	25,604	352,315	$	42	81,563,197	$	67,496


	As of March 15, 2022
Expected term (years)	5
Risk-free interest rate	2.1	%
Expected volatility	118.4	%
Expected dividend yield	—


	Exercise price		Exercise period	Expiration date	Warrants outstanding

5-Year Public Warrants	$	11.50	5 years	May 29, 2025	25,163,383
Public Offering Warrants	$	10.50	5 years	October 6, 2025	9,583,334
Private Placement Offering Warrants	$	1.068	5 years	March 15, 2027	46,816,480


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested at December 31, 2021(1)	2,210,911	$	2.82
Granted	3,307,072	1.30
Impact of fluctuations in share price(2)	(515,198)	0.60
Canceled/forfeited	(282,500)	3.10
Vested(3)	(1,173,132)	2.96
Unvested at December 31, 2022	3,547,153	$	1.99


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested at December 31, 2020(1)	545,696	$	8.12
Granted	1,171,869	5.08
Impact of fluctuations in share price(2)	1,632,136	0.61
Canceled/forfeited(1)	(762,822)	3.42
Vested	(375,968)	4.06
Unvested at December 31, 2021(1)	2,210,911	$	2.82


	Year Ended December 31, 2022
		Hycroft Mine		Corporate and Other		Total

Revenues – Note 15		$	33,229	$	—	$	33,229
Cost of sales		53,589		—		53,589
Other operating costs		18,763		14,367		33,130
Loss from operations		(39,123)		(14,367)		(53,490)
Interest expense, net of capitalized interest – Note 10		(10)		(18,471)		(18,481)
Interest income		439		1,874		2,313
Gain on extinguishment of debt		—		5,041		5,041
Fair value adjustment to warrants – Notes 12 and 20		—		(159)		(159)




Gain on sale of equipment		3,948		—		3,948
Net loss		$	(34,746)	$	(26,082)	$	(60,828)

Total Assets		$	102,057	$	146,897	$	248,954

		Year Ended December 31, 2021
		Hycroft Mine		Corporate and Other		Total

Revenues – Note 15		$	110,734	$	—	$	110,734
Cost of sales		163,338		—		163,338
Other operating costs		16,688		14,619		31,307
Loss from operations		(69,292)		(14,619)		(83,911)
Interest expense, net of capitalized interest – Note 10		—		(20,593)		(20,593)
Fair value adjustment to warrants – Notes 12 and 20		—		14,426		14,426
Gain on sale of equipment		(16)		—		(16)
Loss before income taxes		(69,308)		(20,786)		(90,094)
Income tax benefit		—		1,530		1,530
Net income (loss)		$	(69,308)	$	(19,256)	$	(88,564)

Total Assets		$	138,971	$	3,353	$	142,324


	Hierarchy Level	Year Ended December 31,
		2022		2021
Warrant liabilities
5-Year Private Warrants	2	$	786	$	664
Seller Warrants	2	—		5
Total		$	786	$	669


Name and Principal Position	Year	Salary		Bonus (1)		Stock Awards (2)		All Other Compensation (3)		Total
Diane R. Garrett, Ph.D. (4)	2022	$	587,500	$	537,195	$	1,200,000	$	26,190	$	2,350,885
President and Chief Executive Officer	2021	$	550,000	$	462,000	$	1,100,000	$	21,060	$	2,133,060

Stanton K. Rideout (5)	2022	$	412,500	$	328,556	$	637,500	$	16,556	$	1,395,112
Executive Vice President and Chief Financial Officer	2021	$	375,000	$	270,000	$	562,500	$	12,498	$	1,219,998


Name	Year	401(k) Matching Contributions		Life Insurance Premiums		Total
Diane R. Garrett, Ph.D.	2022	$	20,500	$	5,690	$	26,190
	2021	$	19,500	$	1,560	$	21,060
Stanton K. Rideout	2022	$	10,866	$	5,690	$	16,556
	2021	$	11.25	$	1,248	$	12,498


	Stock Awards
Name	Number of Shares or Units of Stock that Have Not Yet Vested (#)(1)	Market Value of Shares or Units of Stock that Have Not Vested ($)(2)		Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)
Diane R. Garrett, Ph.D.	96,154	$	51,154	-	-
	11,888	$	6,324
	103,512	$	55,068
	839,161	$	446,434

Stanton K. Rideout	32,982	$	17,546	-	-
	6,497	$	3,456
	52,932	$	28,160
	445,804	$	237,168


			(a)			Subject to the continued employment with the Company, the RSUs vest 33% for the first and second installment and 34% for the third installment with the first tranche vested on May 28, 2021; the second tranche vested on May 27, 2022; and the remaining tranche vesting on May 29, 2023. Vested RSUs will convert into shares of Common Stock on each applicable vesting date, provided that, if on the conversion date, the holder is prohibited from trading under the Company’s policies or pursuant to applicable securities laws, the conversion date will be, in the Compensation Committee’s determination, the 2nd trading day after the date such prohibitions no longer apply.
			(b)			Subject to the continued employment with the Company, the RSUs vest 33% for the first and second installment and 34% for the third installment with the first tranche vested on March 15, 2022; and the remaining tranches vesting on March 15, 2023, and March 15, 2024. Vested RSUs will convert into shares of Common Stock on each applicable vesting date; provided, however, that if, on that conversion date, the holder is prohibited from trading under the Company’s policies or pursuant to applicable securities laws, the conversion date shall be, in the determination of the Board’s Compensation Committee, the 2nd trading day after the date the reporting person is no longer prohibited from such trading.
			(c)			Subject to the continued employment with the Company, the RSUs vest 33% for the first and second installment and 34% for the third installment with the first tranche vesting on June 2, 2023, the second trance vesting on June 2, 2024, and the third tranche vesting on June 2, 2025. Vested RSUs will convert into shares of Common Stock on each applicable vesting date; provided, however, that if, on that conversion date, the holder is prohibited from trading under the Company’s policies or pursuant to applicable securities laws, the conversion date shall be, in the determination of the Board’s Compensation Committee, the 2nd trading day after the date the reporting person is no longer prohibited from such trading.


			(i)			the NEO is convicted of a felony or pleads guilty or nolo contendere to a felony (whether or not with respect to the Company or any of its affiliates);

			(ii)			a failure of the NEO to substantially perform his or her responsibilities and duties to the Company which, to the extent curable, is not remedied within 10 days after the NEO’s receipt of written notice given by the appropriate senior officer or any member of the Board, as applicable, identifying the failure in reasonable detail and granting the NEO an opportunity to cure such failure within such 10-day period;

			(iii)			the failure of the NEO to carry out or comply with any lawful and reasonable directive of the Board (or any committee of the Board), which, to the extent curable, is not remedied within 10 days after the NEO’s receipt of written notice given by or on behalf of the Company identifying the failure in reasonable detail and granting the NEO an opportunity to cure such failure within such 10-day period;

			(iv)			the NEO engages in illegal conduct, any breach of fiduciary duty (if any), any act of material dishonesty or other misconduct, in each case in this clause (iv), against the Company or any of its affiliates;

			(v)			a material violation or willful breach by the NEO of any of the policies or procedures of the Company, including, without any limitation, any employee manual, handbook or code of conduct of the Company which, to the extent curable, is not remedied within 10 days after the NEO’s receipt of written notice given by or on behalf of the Company identifying the violation or breach in reasonable detail and granting the Executive an opportunity to cure such violation or breach within such 10 day period;

			(vi)			the NEO fails to meet any material obligation the NEO may have under any agreement entered into with the Company which, to the extent curable, is not remedied within 10 days after the NEO’s receipt of written notice given by any member of the Company identifying the failure in reasonable detail and granting the NEO an opportunity to cure such failure within such 10-day period;

			(vii)			the NEO’s failure to maintain any applicable license, permit or card required by the federal or state authorities or a political subdivision or agency thereof (or the suspension, revocation, or denial of such license, permit or card); or

			(viii)			the NEO’s breach of any non-compete, non-solicit, confidentiality or other restrictive covenant to which the NEO may be subject, pursuant to an employment agreement or otherwise.


			(i)			The “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act) of securities representing more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (“Company Voting Securities”), is accumulated, held or acquired by a “Person” (as defined in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, holders of capital stock of the Company as of the date hereof or a subsidiary thereof, any corporation owned, directly or indirectly, by the Company’s stockholders in substantially the same proportions as their ownership of stock of the Company); provided, however, that any acquisition from the Company or any acquisition pursuant to a transaction that complies with clauses (A), (B) and (C) of clause (iii) below will not be a Change in Control; provided further, that immediately prior to such accumulation, holding or acquisition, such Person was not a direct or indirect beneficial owner of 15% or more of Company Voting Securities as of the date of the applicable employment agreement; or

			(ii)			Individuals who, as of the date of the Agreement, constitute the Board, or “Incumbent Board”, cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board; or

			(iii)			Consummation by the Company of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets or stock of another entity, or “Business Combination”, in each case, unless immediately following such Business Combination: (A) more than 50% of the combined voting power of then outstanding voting securities entitled to vote generally in the election of directors of (x) the corporation resulting from such Business Combination, or “Surviving Corporation”, or (y) if applicable, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries, or “Parent Corporation”, is represented, directly or indirectly by Company Voting Securities outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Company Voting Securities; (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) except to the extent that (x) such ownership of the Company existed prior to the Business Combination or (y) that immediately prior to such Business Combination, such Person was a direct or indirect beneficial owner of 15% or more of the Company Voting Securities as of the date of the respective employment agreement, and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.