Vislink Technologies, Inc 8-K/A, filed Jan 24, 2020
Vislink Technologies, Inc. (VISL)
About this 8-K/A
Vislink Technologies, Inc filed this 8-K/A on January 24, 2020, reporting on events of January 17, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No.1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 17, 2020 (January 15, 2020)
Vislink Technologies, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35988 | 20-585-6795 | ||
| (State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification No.) |
| 1515 Ringling Blvd., Suite 310, Sarasota, FL | 34236 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (941) 953-9035
n/a
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.00001 per share | VISL | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 13(a) of the Exchange Act. [ ]
EXPLANATORY NOTE
This Amendment No. 1 on Form 8-K/A (this “Amendment”) is being filed to provide revised disclosure concerning the finalized employment agreement and related compensation matters between Carleton M. Miller and Vislink Technologies, Inc., as disclosed on the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 17, 2020 (the “Original 8-K”). This Amendment should be read in conjunction with the Original 8-K.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 22, 2020, the Company entered into an employment agreement with Carleton M. Miller in connection with his appointment as Chief Executive Officer of the Company, as previously announced on January 16, 2020 (the “Miller Employment Agreement”). Pursuant to the Miller Employment Agreement, Mr. Miller will receive an annual base salary of $330,000 per year, and an annual cash bonus in accordance with the terms of any annual cash bonus incentive plan maintained for the Company’s key executive officers.
As Mr. Miller’s employment is on an “at-will” basis, the Company or Mr. Miller may terminate the employment relationship at any time, with or without Cause (as defined in the Miller Employment Agreement). Upon Mr. Miller’s termination of employment for any reason, Mr. Miller will be entitled to receive a lump sum payment equal to the sum of his earned but unpaid base salary through his termination date plus his accrued but unused vacation days through his termination date, and any other benefits or rights Mr. Miller has accrued or earned through his termination date in accordance with the terms of the applicable fringe or employee benefit plans and programs of the Company (the “Accrued Obligations”).
In addition, if Mr. Miller’s employment with the Company is terminated by the Company without Cause (as defined in the Miller Employment Agreement), or by Mr. Miller for Good Reason (as defined in the Miller Employment Agreement), then in addition to the Accrued Obligations, Mr. Miller will receive the following, subject to his execution of a release of the Company: (i) the annual bonus, if any, Mr. Miller earned (based on actual performance) for the fiscal year ended prior to his termination date; (ii) the annual bonus, if any, that Mr. Miller would have earned (based on actual performance) for the fiscal year that includes his termination date, pro-rated to reflect services performed for the portion of the fiscal year that precedes his termination date; (iii) base salary continuation (determined without regard to any reduction in base salary that constitutes Good Reason) in accordance with the Company’s payroll practices for a period of 18 months following Mr. Miller’s termination date, provided that if Mr. Miller’s employment is terminated by the Company without Cause or he resigns for Good Reason within 13 months after a Change in Control of the Company (as defined in the Miller Employment Agreement) Mr. Miller will receive 1.5 times the sum of his base salary and target annual bonus, payable in installments over 18 months in accordance with the Company’s payment practices; and (iv) reimbursement for COBRA premiums, if any, paid by Mr. Miller for such continuation coverage for himself, his spouse and dependents under the Company’s group health, dental and vision plans for 18 months or until such COBRA continuation coverage otherwise expires.
The foregoing description of the Miller Employment Agreement is not complete and is qualified in its entirety by reference to the full text of the Miller Employment Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
The Miller Employment Agreement also provides that Mr. Miller will receive an inducement award of a time-based option to purchase 2,155,481 shares of the Company’s common stock under NASDAQ Listing Rule 5653(c)(4) outside of the Company’s existing equity compensation plans (the “Time-Based Option”), 25% of which will vest on January 22, 2021 and the remaining 75% of which will vest in substantially equal monthly installments over the 36-month period following such date, subject to Mr. Miller’s continued employment by the Company on the applicable vesting date. Pursuant to the Miller Employment Agreement, Mr. Miller will also receive an inducement award of a performance-based option to purchase 1,500,000 shares of the Company’s common stock under NASDAQ Listing Rule 5653(c)(4) outside of the Company’s existing equity compensation plans (the “Performance-Based Option”). The Performance-Based Option will vest in three equal tranches of 500,000 shares upon the Company’s attainment, on or before the fifth anniversary of January 22, 2020, of specified cumulative EBITDA performance conditions, subject in each case to Mr. Miller’s continued employment by the Company on the applicable vesting date.
The foregoing descriptions of the Time-Based Option and Performance-Based Option are not complete and are qualified in their entirety by reference to the full text of the Form of Notice of Grant of Stock Option for Time-Vested Options and Stock Option Agreement by and between the Company and Carleton Miller, dated as of January 22, 2020, and the Form of Notice of Grant of Stock Option for Performance-Vested Options and Stock Option Agreement by and between the Company and Carleton Miller, dated as of January 22, 2020, which are attached hereto as Exhibits 10.2 and 10.3 and are incorporated herein by reference.
Mr. Miller’s Time-Based Option and Performance-Based Option have an exercise price per share equal to $0.285, the closing price of the Company’s common stock on the Nasdaq Stock Market on the date on which the Board approved the Time-Based Option and Performance-Based Option. The issuance of the Time-Based Option and the Performance-Based Option to Mr. Miller will be exempt pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder.
| Item 9.01 | Exhibits |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 24, 2020 | VISLINK TECHNOLOGIES, INC. | |
| By: | /s/ Carleton M. Miller | |
| Name: | Carleton M. Miller | |
| Title: | Chief Executive Officer | |
Exhibit 10.1
EMPLOYMENT AGREEMENT
BY AND BETWEEN
VISLINK
TECHNOLOGIES, INC.
AND
CARLETON MILLER
This Employment Agreement (the “Agreement”) is entered into as of January 22, 2020 (the “Effective Date”), by and between Vislink Technologies, Inc., a Delaware corporation (the “Company”), and Carleton Miller (the “Executive”).
WHEREAS, the Company desires to employ the Executive as the Company’s Chief Executive Officer on the terms and conditions set forth in this Agreement; and
WHEREAS, the Executive is willing to accept such employment on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other valuable consideration, the Company and the Executive hereby agree as follows:
1. Certain Definitions. Capitalized terms shall have the meanings set forth on Exhibit A attached hereto.
2. Term of Employment. This Agreement shall become effective and the Executive’s employment with the Company shall commence as of January 15, 2020 and this Agreement shall remain in effect until Executive’s employment with the Company is terminated pursuant to Section 6 hereof (the “Term of Employment”).
3. Executive’s Duties and Obligations.
A. Duties. The Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The Executive shall be responsible for all powers and duties customarily associated with that office or position in a publicly-traded company. The Executive shall report directly to the Company’s Board and shall be subject to reasonable policies established by the Board. During the Term of Employment the Executive will also serve as a member of the Company’s Board to the extent so elected by the stockholders of the Company.
B. Location of Employment. The Executive’s principal place of business shall be at the Company’s office in Hackettstown, New Jersey. In addition, the Executive acknowledges and agrees that the performance by the Executive of the Executive’s duties shall require frequent travel from time to time.
C. Confidentiality, Non-Solicitation and Non-Competition Agreement. In consideration of the covenants contained herein, the Executive shall execute concurrently with the execution of this Agreement, and agrees to be bound by, the Confidentiality, Non-Solicitation and Non-Competition Agreement (the “Confidentiality Agreement”) attached to this Agreement as Exhibit B and incorporated into this Agreement by reference. The Executive shall comply at all times with the covenants (including, without limitation, covenants not to compete and not to solicit employees and independent contractors) and other terms and conditions of the Confidentiality Agreement and all other reasonable policies of the Company governing the confidential and assignment of the Company’s proprietary information. The Executive’s obligations under the Confidentiality Agreement shall survive the Term of Employment.
| -1- |
D. No Conflicting Obligations. The Executive represents and warrants to the Company that the Executive is under no obligations or commitments, whether contractual or otherwise, including any obligations with respect to proprietary or confidential information of any prior employer or other person or entity, that are inconsistent with the Executive’s obligations under this Agreement or that would prohibit the Executive, contractually or otherwise, from performing the Executive’s duties as under this Agreement.
4. Devotion of Time to the Company’s Business.
A. Full-Time Efforts. During the Term of Employment, the Executive shall devote substantially all of his business time, attention and effort to the affairs of the Company, excluding any periods of disability, vacation, or sick leave to which Executive is entitled, and shall use his reasonable best efforts to perform the duties properly assigned to him hereunder and to promote the interests of the Company.
B. Other Activities. Executive may serve on corporate, civic or charitable boards or committees with the prior approval of the Board, deliver lectures, fulfill speaking engagements and may manage personal investments that do not give rise to a conflict of interest through the Executive’s investment in direct competitors of the Company; provided that such activities do not individually or in the aggregate significantly interfere with the performance of his duties under this Agreement. The Executive’s passive investment in securities of a publicly-held company will not be considered to give rise to a conflict of interest if the Executive owns not more than 5% of the outstanding securities of such publicly-held company.
5. Compensation and Benefits.
A. Base Salary. The Company shall pay to the Executive in accordance with its normal payroll practices (but not less frequently than monthly) an annual salary at a rate of not less than $330,000 per annum (“Base Salary”). The Executive’s Base Salary shall be reviewed at least annually for the purposes of determining increases, if any, based on the Executive’s performance, the performance of the Company, the then prevailing salary scales for comparable positions, inflation and other relevant factors. Effective as of the date of any increase in the Executive’s Base Salary, Base Salary as so increased shall be considered the new Base Salary for all purposes of this Agreement. The Company may not reduce the Executive’s Base Salary (after taking into account any increase in Base Salary) without the Executive’s consent unless the Company reduces the annual base salary of all members of the Company’s senior management team on a substantially equivalent basis.
| -2- |
B. Cash Bonuses. The Company shall pay the Executive an annual cash bonus (“Annual Bonus”) in accordance with the terms hereof and the terms of any annual cash bonus incentive plan maintained for the Company’s key executive officers, as amended from time to time (the “Cash Bonus Plan”) during the Term of Employment. Except as provided in Section 7 herein, the Executive will not be eligible to receive an Annual Bonus for a Fiscal Year unless the Executive remains in continuous employment with the Company through the date on which such Annual Bonus is paid. During the first quarter or each Fiscal Year, the Compensation Committee, in consultation with the Executive, shall establish threshold and target performance goals for such Fiscal Year in accordance with the terms of Cash Bonus Plan. If the target performance goals for a Fiscal Year are attained, the Annual Bonus for such Fiscal Year shall be not less than 100% of the Executive’s Base Salary, it being understood that the parties may agree to such other metrics if the maximum performance goals for a Fiscal Year are attained, which in no event shall exceed 200% of the Executive’s Base Salary. At the conclusion of the Fiscal Year the Compensation Committee will review performance relative to the performance goals and if the Compensation Committee determines that the Executive has earned an Annual Bonus for a Fiscal Year, the Company will pay the Annual Bonus to the Executive on or before the next regularly scheduled payroll payment date following the release of the Company’s annual earnings report for such Fiscal Year but in no event later than the 15th day of the third calendar month following the end of such Fiscal Year.
C. Equity Awards.
| (i) | Initial Inducement Stock Options Awards. Subject to the approval of the Board, the Executive will receive an award of stock options to purchase 2,155,481 shares of the Company’s common stock (“Time-Vested Options”). Such Time-Vested Options will be made substantially concurrently with the execution of this Agreement or within a reasonable time after the execution of this Agreement. The per share exercise price of the Time-Vested Options will be the closing price for the Company’s common stock on the date the Time-Vested Options are granted. 25% of the Time-Vested Options will vest and become exercisable on the first anniversary of the Effective Date and the remaining 75% of the Time-Vested Options will vest in substantially equal monthly installments over the thirty-six (36) month period following the first anniversary of the Effective Date; provided that the Executive remain in continuous employment with the Company through the respective vesting date. |
Subject to the approval of the Board, the Executive will receive an award of stock options to purchase 1,500,000 shares of the Company’s common stock (“Performance-Vested Options”). Such Performance-Vested Options will be made substantially concurrently with the execution of this Agreement or within a reasonable time after the execution of this Agreement. The Performance-Vested Options will vest in three (3) separate tranches upon attainment of the following applicable performance conditions for each tranche; provided that the Executive remains in continuous employment with the Company through the date on which:
(1) Tranche 1: Tranche 1 will vest and become exercisable for 500,000 shares of the Company’s common stock upon the Company’s attainment, on or before the fifth (5th) anniversary of the Effective Date, of Cumulative EBITDA of more than $6,000,000 accumulated over four consecutive fiscal quarters.
| -3- |
(2) Tranche 2: Tranche 2 will vest and become exercisable for 500,000 shares of the Company’s common stock upon the Company’s attainment, on or before the fifth (5th) anniversary of the Effective Date, of Cumulative EBITDA of more than $15,000,000 accumulated over four consecutive fiscal quarters.
(3) Tranche 3: Tranche 3 will vest and become exercisable for 500,000 shares of the Company’s common stock upon the Company’s attainment, on or before the fifth (5th) anniversary of the Effective Date, of Cumulative EBITDA of more than $23,000,000 accumulated over four consecutive fiscal quarters.
To the extent that performance conditions are not achieved with respect to one or more tranches prior to the fifth (5th) anniversary of the Effective Date, each tranche of the Performance-Vested Options that fails to satisfy the performance conditions will be forfeited.
The per share exercise price for each tranche of the Performance-Vested Options will be the closing price of the Company’s common stock on the date the Performance-Vested Options are granted.
The Time-Vested Options and Performance-Vested Options will be issued as a non-plan employment inducement Award in accordance with NASDAQ Listing Rule 5653(c)(4). The Time-Vested Options and Performance-Vested Options will have a 10 year term and such options will become fully vested and exercisable if, during the 13 month period commencing on a Change in Control of the Company, the Company terminates the Executive’s employment without Cause or the Executive terminates his employment for Good Reason. The Time-Vested Options and Performance-Vested Options will be subject to such additional terms and conditions that are not inconsistent with the foregoing as set forth in a written award agreement between the Company and the Executive.
| (ii) | Additional Equity Awards. In addition to the employment inducement stock options granted pursuant to Section 5.C(i) hereof, the Compensation Committee may grant additional Equity Awards to the Executive at such times and subject to such terms and conditions are the Compensation Committee may decide in its sole discretion. |
D. Benefits. During the Term of Employment, the Executive shall be entitled to participate in all fringe benefit and employee benefit plans, programs and arrangements made available generally to members of the Company’s senior management team or to other full-time employees on substantially the same basis that such benefits are provided to other members of the senior management team; provided, however, that during the Term of Employment, the Executive shall not be eligible to participate in any generally available severance benefit plan, program or arrangement sponsored or maintained by the Company. Nothing in this Section 5.D of the Agreement shall be construed to require the Company to establish or maintain any such fringe or employee benefit plans, programs or arrangements.
| -4- |
E. Vacations. During the Term of Employment, the Executive shall be entitled to paid time off (PTO) in accordance with the Company’s standard PTO policy.
F. Reimbursement of Expenses. During the Term of Employment, the Executive shall be entitled to receive prompt reimbursement for all reasonable business- or employment-related expenses incurred by the Executive upon the receipt by the Company of reasonable documentation in accordance with standard practices, policies and procedures applicable to other senior executives of the Company.
G. Travel Expenses. Until the earlier of (i) the date on which the Executive and his family move their residence to a location in or near Hackettstown, New Jersey or (ii) August 31, 2021, the Company will reimburse the Executive for reasonable expenses incurred by the Executive for travel to and from his home in Dallas, Texas and lodging near the Company’s offices in Hackettstown, New Jersey upon the receipt by the Company of reasonable documentation of such expenses.
6. Termination of Employment. The Term of Employment shall be terminated upon the first to occur of the following:
A. Death. The Executive’s employment shall terminate immediately upon the Executive’s death.
B. Disability. If the Executive is Disabled, either party may terminate the Executive’s employment due to such Disability upon delivery of written notice to the other party. The effective date of such termination of employment will be the Date of Termination set forth in such written notice or immediately upon delivery of such written notice if no effective date is specified in the written notice. For avoidance of doubt, if the Executive’s employment is terminated pursuant to this Section 6.B, his employment will not constitute a termination of employment by the Company without Cause or by the Executive for Good Reason.
C. Termination by the Executive Without Good Reason. The Executive may terminate his employment for any reason other than Good Reason upon his delivery of written notice to the Company at least thirty (30) days prior to his Date of Termination.
D. Termination by the Executive for Good Reason. The Executive may terminate his employment for Good Reason if (i) not later than sixty (60) days after the occurrence of any act or omission that constitutes Good Reason, the Executive provides the Company with a written notice setting forth in reasonable detail the acts or omissions that constitute Good Reason, (ii) the Company fails to correct or cure the acts or omissions within thirty (30) days after it receives such written notice, and (iii) Executive terminates his employment with the Company during the sixty (60) day period commencing upon the expiration of such cure period.
E. Termination by the Company Without Cause. The Company may terminate the Executive’s employment without Cause upon written notice to the Executive.
| -5- |
F. Termination by the Company for Cause. Upon the occurrence of any act or omission that constitutes Cause, the Company may terminate the Executive’s employment upon written notice to the Executive.
7. Compensation and Benefits Payable Upon of Termination of Employment.
A. Payment of Accrued But Unpaid Compensation and Benefits. Upon the Executive’s termination of employment for any reason, the Executive (or his estate following the Executive’s death) shall receive (i) a lump sum payment on the Date of Termination in an amount equal to the sum of the Executive’s earned but unpaid Base Salary through his Date of Termination plus his accrued but unused vacation days at the Executive’s Base Salary in effect as of his Date of Termination; plus (ii) any other benefits or rights the Executive has accrued or earned through his Date of Termination in accordance with the terms of the applicable fringe or employee benefit plans and programs of the Company. Except as provided in Section 7.B or C below or as expressly provided pursuant to the terms of any employee benefit plan, the Executive will not be entitled to earn or accrue any additional compensation or benefits for any period following his Date of Termination.
B. Termination of Employment Due to Death or Disability. In addition to the compensation and benefits payable under Section 7.A above, if the Executive’s employment is terminated due to his death or Disability, the Executive (or his estate following the Executive’s death) will receive the Annual Bonus, if any, that Executive earned (based on actual performance) for the Fiscal Year ended prior to his Date of Termination to the extent not previously paid, which shall be payable to the Executive at the same time such annual bonuses for such Fiscal Year are paid to other members of the senior management team pursuant to the terms of the Cash Bonus Plan.
C. Termination of Employment by the Company without Cause or by the Executive for Good Reason. In addition to the compensation and benefits payable under Section 7.A above, if (x) the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason and (y) the Executive returns an executed Release to the Company, which becomes final, binding and irrevocable within sixty (60) days following the Executive’s Date of Termination in accordance with Section 8, the Executive (or his estate following the Executive’s death) shall receive:
| (i) | The Company will pay the Executive the Annual Bonus, if any, that Executive earned (based on actual performance) for the Fiscal Year ended prior to his Date of Termination payable at the same time such annual bonuses for such Fiscal Year are paid to other members of the senior management team pursuant to the terms of the Cash Bonus Plan; |
| (ii) | the Company will pay the Executive the Annual Bonus, if any, that Executive would have earned (based on actual performance) for the Fiscal Year that includes the Date of Termination pro-rated to reflect services performed for the portion of the Fiscal Year that precedes the Date of Termination payable at the same time annual bonuses for such Fiscal Year are paid to other members of the senior management team pursuant to the terms of the Cash Bonus Plan; |
| -6- |
| (iii) | the Company will pay the Executive severance pay in the form of Base Salary continuation (determined without regard to any reduction in Base Salary that constitutes Good Reason) in accordance with the Company’s payroll practices for a period of eighteen (18) months following the Executive’s Date of Termination; provided, however, that if such Termination of Employment occurs during the thirteen (13) months following a Change in Control the Executive will receive 1.5 times the sum of the Base Salary (determined without regard to any reduction in Base Salary that constitutes Good Reason) and target Bonus payable in equal installments over eighteen (18) months following the Executive’s Date of Termination in accordance with the Company’s standard payroll practices. |
| (iv) | if the Executive timely elects to receive continuation coverage under the Company’s group health, dental and/or vision plans for himself, his spouse and/or his eligible dependents pursuant to COBRA, the Company will reimburse the Executive for the COBRA premiums, if any, paid by the Executive for such continuation coverage for the Executive, his spouse and dependents under the Company’s group health, dental and vision plans for eighteen (18) months or until such COBRA continuation coverage otherwise expires. |
Notwithstanding the foregoing, no payment that is otherwise required to be paid to the Executive pursuant to this Section 7.C before the Release becomes final, binding and irrevocable, shall be paid to the Executive until his Release becomes final, binding and irrevocable. Any payments that are suspended pursuant to the preceding sentence will be paid to the Executive no later than the next payroll payment date following the date on which the Release becomes final, binding and irrevocable but in no event later than the 15th day of the third month following the end of the Fiscal Year that includes the Date of Termination. In addition, if the Executive materially breaches this Agreement or the Executive’s Confidential Agreement, then the Company’s continuing obligations under this Section 7.C shall cease as of the date of the breach and the Executive shall be entitled to no further payments hereunder.
8. Release. As a condition of receiving the compensation and benefits described in Section 7.C, Executive must execute a general waiver and release of any and all claims arising out of Executive’s employment with the Company or Executive’s separation from such employment (including, without limitation, claims relating to age, disability, sex, sexual orientation or race discrimination to the extent permitted by law), excepting (i) claims based on breach of the Company’s obligations to pay the compensation and benefits payable pursuant to Section 7 of this Employment Agreement, (ii) claims arising under the Age Discrimination in Employment Act after the date Executive signs such release, and (iii) any right to indemnification by the Company or to coverage under directors and officers liability insurance to which Executive is otherwise entitled in accordance with this Agreement and the Company’s articles of incorporation or by laws or other agreement between Executive and the Company (the “Release”). Such Release shall be in a form tendered to the Executive by the Company within five (5) business days following the termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason, which shall comply with any applicable legislation or judicial requirements, including, but not limited to, the Older Workers Benefit Protection Act. The compensation and benefits described in Section 7,C will not be paid to the Executive if the Executive does not timely sign the Release, the Executive revokes the Release or the Release does not become final, binding and irrevocable prior to the end of the sixty (60) day period commencing on the Date of Termination.
| -7- |
9. Mitigation of Damages. The Executive will not be required to mitigate damages or the amount of any payment or benefit provided pursuant to Section 7 of this Agreement by seeking other employment or otherwise. The amount of any payment or benefit provided for under this Agreement will not be reduced by any compensation or benefits earned by the Executive as the result of self-employment or employment by another employer or otherwise.
10. Resignation from Other Offices and Positions. Upon the Executive’s Termination of Employment for any reason, the Executive shall be deemed to have automatically resigned as an officer, manager, member and director of the Company and all of its subsidiaries and the Executive shall execute and deliver to the Company documentation evidencing such resignations; provided, however, that the failure to execute and deliver such documentation shall not affect such deemed resignations. The resignations effected by this Section 10 shall not constitute a resignation for Good Reason hereunder.
11. Excess Parachute Excise Tax. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (including any acceleration) by the Company or any entity which effectuates a transaction described in Section 280G(b)(2)(A)(i) of the Code to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise, but determined before application of any reductions required pursuant to this Section 11) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred with respect to such excise tax by the Executive (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company will automatically reduce such Payments to the extent, but only to the extent, necessary so that no portion of the remaining Payments will be subject to the Excise Tax, unless the amount of such Payments that the Executive would retain after payment of the Excise Tax and all applicable Federal, state and local income taxes without such reduction would exceed the amount of such Payments that the Executive would retain after payment of all applicable Federal, state and local taxes after applying such reduction. Unless otherwise elected by the Executive, to the extent permitted under Code Section 409A, such reduction shall first be applied to any severance payments payable to the Executive under this Agreement, then to the accelerated vesting on any Equity Awards, starting with stock options and stock appreciation rights reversing accelerated vesting of those options and stock appreciation rights with the smallest spread between fair market value and exercise price first and after reversing the accelerated vesting of all stock options and stock appreciation rights, thereafter reversing accelerated vesting of restricted stock, restricted stock units and performance shares, performance units or other similar Equity Awards on a pro rata basis.
All determinations required to be made under this Section 11, including the assumptions to be utilized in arriving at such determination, shall be made by the Company’s independent auditors or such other certified public accounting firm of national standing reasonably acceptable to the Executive as may be designated by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by either the Company or the Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion to such effect. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.
| -8- |
12. Withholding. The Company shall be entitled to withhold from payments due hereunder any required federal, state or local withholding or other taxes.
13. Recoupment. Any incentive-based compensation received by the Executive including Annual Bonus and Equity Awards, whether pursuant to this Agreement or otherwise, that is granted, earned or vested based in any part on attainment of a financial reporting measure, shall be subject to the terms and conditions of the Company’s Claw Back Compensation Policy, if any (the “Recoupment Policy”), and any other policy of recoupment of compensation as shall be adopted from time to time by the Board or its Compensation Committee as it deems necessary or appropriate to comply with the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Section 304 of the Sarbanes-Oxley Act of 2002, and any implementing rules and regulations of the U.S. Securities and Exchange Commission and applicable listing standards of a national securities exchange adopted in accordance with any of the foregoing. The terms and conditions of the Recoupment Policy, including any changes to the Recoupment Policy adopted from time to time by the Company, are hereby incorporated by reference into this Agreement.
14. Miscellaneous.
A. Governing Law. This Agreement shall be interpreted, construed, governed and enforced according to the laws of the State of New Jersey without regard to the application of choice of law rules.
B. Entire Agreement. This Agreement, together with the Exhibits attached hereto, contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all other prior agreements, promises, understandings and representations regarding the Executive’s employment, compensation, severance or other payments contingent upon the Executive’s termination of employment, whether written or otherwise.
C. Amendments. No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by the parties hereto.
D. Severability. If one or more provisions of this Agreement are held to be invalid or unenforceable under applicable law, such provisions shall be construed, if possible, so as to be enforceable under applicable law, or such provisions shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
E. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the beneficiaries, heirs and representatives of the Executive and the successors and assigns of the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) to all or substantially all of its assets, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform this Agreement if no such succession had taken place. Regardless whether such agreement is executed, this Agreement shall be binding upon any successor of the Company in accordance with the operation of law and such successor shall be deemed the Company for purposes of this Agreement.
| -9- |
F. Successors and Assigns; Nonalienation of Benefits. Except as provided in Section 14.E in the case of the Company, or to the Executive’s estate and heirs in the case of the death of the Executive, this Agreement is not assignable by any party. Compensation and benefits payable to the Executive under this Agreement shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, prior to actually being received by the Executive or his estate, as applicable, and any such attempt to dispose of any right to benefits payable hereunder shall be void, and no payment to be made hereunder shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or other charge.
G. Remedies Cumulative; No Waiver. No remedy conferred upon either party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by either party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in such party’s sole discretion.
H. Survivorship. Notwithstanding anything in this Agreement to the contrary, all terms and provisions of this Agreement that by their nature extend beyond the Date of Termination shall survive termination of this Agreement.
I. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one document.
15. No Contract of Employment. Nothing contained in this Agreement will be construed as a right of the Executive to be continued in the employment of the Company, or as a limitation of the right of the Company to discharge the Executive with or without Cause.
16. Section 409A of the Code. The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Section 409A of the Code and, accordingly, to the maximum extent permitted, this Agreement shall be construed and interpreted in accordance with such intent. The Executive’s termination of employment (or words to similar effect) shall not be deemed to have occurred for purposes of this Agreement unless such termination of employment constitutes a “separation from service” within the meaning of Code Section 409A and the regulations and other guidance promulgated thereunder.
Notwithstanding any provision in this Agreement to the contrary, if the Executive is deemed on the date of the Executive’s separation from service to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B) and using the identification methodology selected by the Company from time to time, or if none, the default methodology set forth in Code Section 409A, then with regard to any payment or any benefit that constitutes “non-qualified deferred compensation” pursuant to Code Section 409A and the regulations issued thereunder that is payable due to the Executive’s separation from service, to the extent required to be delayed in compliance with Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided to the Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of the Executive’s separation from service, and (ii) the date of the Executive’s death (the “Delay Period”). On the first day of the seventh month following the date of the Executive’s separation from service or, if earlier, on the date of the Executive’s death, all payments delayed pursuant to this Section 16 shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due to the Executive under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
| -10- |
To the extent any reimbursement of costs and expenses (including reimbursement of expenses pursuant to Section 3.F or 3.G and COBRA premiums pursuant to Section 7.C) provided for under this Agreement constitutes taxable income to the Executive for Federal income tax purposes, such reimbursements shall be made as soon as practicable after the Executive provides proper documentation supporting reimbursement but in no event later than December 31 of the calendar year next following the calendar year in which the expenses to be reimbursed are incurred. With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
If under this Agreement, any amount is to be paid in two or more installments, each such installment shall be treated as a separate payment for purposes of Section 409A.
17. Executive Acknowledgement. The Executive hereby acknowledges that the Executive has read and understands the provisions of this Agreement, that the Executive has been given the opportunity for the Executive’s legal counsel to review this Agreement, that the provisions of this Agreement are reasonable and that the Executive has received a copy of this Agreement.
[SIGNATURE PAGE FOLLOWS]
| -11- |
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed on January 22, 2020.
| VISLINK TECHNOLOGIES, INC. | ||
| By: | /s/ Roger Branton | |
| Name: | Roger Branton | |
| Title: | CFO | |
| EXECUTIVE | |
| /s/ Carleton Miller | |
| Carleton Miller |
| -12- |
EXHIBIT A
| (a) | “Annual Bonus” shall have the meaning set forth in Section 5.B of the Employment Agreement. |
| (b) | “Base Salary” shall have the meaning set forth in Section 5.A of the Employment Agreement. |
| (c) | “Board” means the Board of Directors of the Company. |
| (d) | “Cash Bonus Plan” shall have the meaning set forth in Section 5.B of the Employment Agreement. |
| (e) | “Cause” means one or more of the following: |
| (i) | The Executive’s willful and continuous failure to perform his essential duties hereunder or the lawful directives of the Board (other than as a result of illness or injury); | |
| (ii) | The Executive’s willful misconduct or gross negligence in the performance of his duties hereunder that directly, the could reasonably be expected to materially and demonstrably impair or damage the property, goodwill, reputation, business or finances of the Company; | |
| (iii) | The commission of, or plea of nolo contendere by, the Executive to, a felony or a crime involving moral turpitude that could reasonably be expected to materially and demonstrably impair or damage the property, goodwill, reputation, business or finances of the Company; | |
| (iv) | The Executive’s material breach of his obligations under the Confidentiality Agreement; | |
| (v) | The Executive’s willful material violation of the Company policies involving employee conduct or business ethics that could reasonably be expected to materially and demonstrably impair or damage the property, goodwill, reputation, business or finances of the Company; or | |
| (vi) | The Executive’s commission of any willful acts of personal dishonesty in connection with his responsibilities as an employee of the Company that could reasonably be expected to materially and demonstrably impair or damage the property, goodwill, reputation, business or finances of the Company. |
Notwithstanding the foregoing, in the event the Executive engages in any act or course of conduct that is described in clause (i), (ii), (iv) or (v) above, the Company shall give the Executive written notice prior to terminating the Executive’s employment based upon an such act or course of conduct described in clauses (i), (ii), (iv) or (v), setting forth the nature of any alleged act or course of conduct that allegedly constitutes Cause hereunder and to the extent that such act or course of conduct can be cured, the Executive shall be given fifteen (15) days (or such longer period of time as may be set forth in the notice, to cure or remedy such act or course of conduct. If the act or course of conduct cannot be cured or remedied, the Board may terminate the Executive’s employment for Cause immediately upon providing notice to the Executive. If the acts or omissions can be cured or remedied but the Executive fails to do so within the period of time provided by the Board in written notice to the Executive, the Board may terminate the Executive’s employment for Cause upon delivering written notice to the Executive upon expiration of such cure period.
| A-1 |
| (f) | “Change in Control” means the occurrence of any one of the following events: |
| (i) | any person (or two or more persons acting in concert) directly or indirectly, acquires “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act) of equity securities of the Company that, together with equity securities of the Company previously owned by such person or persons, represent more than 50% of the combined voting power of the Company’s then outstanding securities; | |
| (ii) | the consummation of a reorganization, merger, statutory share exchange, consolidation or similar corporate transaction (each, a “Business Combination”) other than a Business Combination in which all or substantially all of the individuals and entities who were the beneficial owners of the Company’s voting securities immediately prior to such Business Combination beneficially own, directly or indirectly, 50% or more of the combined voting power of the voting securities of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of the Business Combination owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership of the Company’s voting securities immediately prior to such Business Combination; or | |
| (iii) | any person (or two or more persons acting in concert) acquires all or substantially all of the assets of the Company within any twelve (12) consecutive month period. |
Notwithstanding the forgoing, none of the foregoing events shall constitute a Change in Control of the Company unless such event also constitutes a change in ownership of the Company within the meaning of Treasury Regulation Section 1.409A- 3(i)(5)(v) or a change in ownership of a substantial portion of the assets of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vii).
| (g) | “Code” means the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder. |
| (h) | “Compensation Committee” means the compensation committee of the Board or such other committee of the Board that exercises the duties and responsibilities typically assigned to a compensation committee and if no such committee has been established, the Compensation Committee shall mean the full Board. |
| (i) | “Confidentiality Agreement” means the Proprietary Information and Invention Agreement between the Company and the Executive, a copy of which is attached to this Agreement as Exhibit B, pursuant to which the Executive has agreed to abide by certain covenants (including covenants to maintain not to disclose confidential information, compete with the Company or solicit employees, consultants or independent contractors of the Company, main). |
| A-2 |
| (j) | “Cumulative EBITDA” means earnings before interest, taxes, depreciation and amortization accumulated over four consecutive fiscal quarters as determined in accordance with generally accepted accounting principles, but adjusted to reflect the effect of mergers and acquisitions. |
| (k) | “Date of Termination” means the date specified in a written notice of termination delivered pursuant to Section 6 hereof, or the Executive’s last date as an active employee of the Company before a termination of employment due to his death but is if such termination does not constitute a “separation from service” within the meaning of regulations under Section 409A of the Code, the Date of Termination will occur upon the date on which the Executive incurs a separation from service with the Company and its affiliates. |
| (l) | “Disabled” or “Disability” means a mental or physical condition that renders the Executive substantially incapable of performing his duties and obligations under this Agreement, after taking into account provisions for reasonable accommodation, as determined by a medical doctor (such doctor to be mutually determined in good faith by the parties) for 180 day days (whether or not consecutive) within any twelve (12) consecutive month period. |
| (m) | “Equity Awards” means stock options, stock appreciation rights, restricted shares, restricted stock units, deferred stock, performance shares or performance units or any other stock-based awards granted by the Company to the Executive whether pursuant to the terms of an equity incentive plan or otherwise. |
| (n) | “Fiscal Year” means the fiscal year of the Company, which is the calendar year. |
| (o) | “Good Reason” means, unless the Executive has consented in writing thereto, the occurrence of any of the following: |
| (i) | the assignment to the Executive of any duties materially inconsistent with the Executive’s position, including any change in status, title, authority, duties or responsibilities or any other action which results in a material diminution in such status, title, authority, duties or responsibilities; provided, however, that the Executive’s assignment following a Change in Control of the Company to a subsidiary or operating division of the Company (or its successor in interest) will not constitute a Good Reason if the Executive’s duties and responsibilities following such Change in Control are commensurate with the duties and responsibilities of the Executive immediately prior to the Change in Control; | |
| (ii) | a material reduction in the Executive’s Base Salary without the Executive’s consent by the Company other than a reduction in Base Salary authorized pursuant to Section 5.A of the Employment Agreement; | |
| (iii) | a material reduction in the Executive’s target Annual Bonus opportunity; | |
| (iv) | the relocation of the Executive’s principal office without his written consent to a location that increases the Executive’s one-way commute from his residence at the time such relocation becomes effective by more than 30 minutes; provided, however, that the relocation of the Company principal office from Hackettstown, New Jersey at any time before the Executive has relocated his principal residence to a location in or near Hackettstown, New Jersey, shall not constitute Good Reason; |
| A-3 |
| (v) | the failure of the Company to obtain the assumption in writing of the Company’s obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company within 15 days after a Business Combination or a sale or other disposition of all or substantially all of the assets of the Company; | |
| (vi) | any material reduction in the Company’s willingness or obligation to indemnify the Executive against liability for actions (or inaction, as the case may be) in his capacity as an officer, director or employee of the Company; | |
| (vii) | a material breach of this Agreement by the Company; or | |
| (viii) | the failure to nominate or elect the Executive to the Board. |
| (p) | “Release” shall have the meaning set forth in Section 8 of the Employment Agreement. |
| (q) | “Term of Employment” shall have the meaning set forth in Section 2 of the Employment Agreement. |
| A-4 |
EXHIBIT B
CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT
| B-1 |
Exhibit 10.2
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER ANY APPLICABLE SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF ANY REQUIRED REGISTRATION AND QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
VISLINK TECHNOLOGIES, INC.
NOTICE OF GRANT OF STOCK OPTION
TIME-VESTED OPTIONS
Notice is hereby given of the following option grant (the “Option”) made to purchase shares of Vislink Technologies, Inc. (the “Company”) common stock (the “Common Stock”):
| Awardee: | Carleton Miller | |
| Grant Date: | January 22, 2020 | |
| Vesting Commencement Date: | January 22, 2020 | |
| Vesting Schedule: | 25% of the Option Shares shall vest on the first anniversary of the Vesting Commencement Date and the remaining 75% will vest in substantially equal monthly installments over the thrity-six (36) month period following the first anniversary of the Vesting Commencement Date. | |
| Option Price Per Share: | $0.285 | |
| Number of Option Shares: | 2,155,481 | |
| Expiration Date: | January 22, 2030 | |
| Type of Option: | Non-Statutory |
Exercise Schedule: Provided Awardee remains in Service as defined in the Stock Option Agreement through the relevant vesting date, the Option will be exercisable during the Option Term with respect to any Option Shares that have vested pursuant to the Vesting Schedule as of the date of exercise. Notwithstanding any provision herein to the contrary 100% of the Option Shares shall vest and become exercisable upon the Awardee’s termination of employment by the Company without “Cause” or by the Awardee for “Good Reason” if such termination of employment occurs during the thirteen (13) month period following a “Change in Control” of the Company. The terms “Cause,” “Good Reason,” and “Change in Control” shall have the meaning asigned to those terms in the Awardee’s employment agreement dated January 15, 2020, as amended from time to time.
| 1 |
Awardee understands and agrees that the Option granted herein are are subject to the terms and conditions set forth in the Stock Option Agreement attached hereto as Exhibit A and incorporated herein by reference. Awardee hereby acknowledges receipt of a copy of the Stock Option Agreement in the form attached hereto as Exhibit A.
No Employment or Service Contract. Nothing in this Notice of Grant of Stock Options or the Stock Option Agreement shall confer upon the Awardee any right to continue in the Service of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or the Awardee, which rights are hereby expressly reserved by each, to terminate Awardee’s Service at any time for any reason whatsoever, with or without cause.
IN WITNESS WEREOF, the parties hereto have caused this Grant of Stock Options and the Stock Option Agreement attached hereto as Exhibit A and incorporated herein by reference, to be executed as of January 22, 2020.
| VISLINK TECHNOLOGIES, INC. | ||
| By: | /s/ Roger Branton | |
| Its: | CFO | |
| /s/ Carleton Miller | ||
| Awardee | ||
| 2 |
Exhibit A
STOCK OPTION AGREEMENT
BY AND BETWEEN
VISLINK
TECHNOLOGIES, INC.
AND
CARLETON MILLER
Whereas, the Option granted by Vislink Technologies, Inc. (the “Company”) to Carleton Miller (the “Awardee”) pursuant to the Notice of Grant of Options (the “Grant Notice”) and the terms of this Stock Option Agreement (together with the Grant Notice, the “Agreement”) to purchase the number of shares of the Company’s common stock (“Common Stock”) set forth in the Grant Notice is being granted as an “inducement” award under NASDAQ Listing Rule 5653(c)(4) and thus such Options have been granted outside of the Company’s existing equity compensation plans;
Whereas, the Awardee is an newly hired Employee who will render valuable Services to the Company;
Whereas, although the Options granted herein have been granted outside of the Company’s existing equity compensation plans, this Agreement is intended to carry out the purposes of, the Company’s 2017 Incentive Compensation Plan (the “Plan”) in connection with the Company’s grant of the Options to the Awardee and the terms of the Plan are hereby incorporated into this Agreement by reference and all capitalized terms in this Agreement shall have the meaning assigned to them in the Plan.
For convenience, relevant portions of certain of the Plan definitions and certain additional definitions relating to this Award Agreement are included in the Appendix. This Award Agreement, including the Notice of Grant, is subject to the terms of the Plan, which are incorporated in this Award Agreement by reference. If there is a conflict between the terms of the Plan and this Award Agreement or the Notice of Grant, the terms of the Plan shall prevail.
NOW, THEREFORE, it is hereby agreed as follows:
1. Provisions of Plan Binding. This Agreement and the Option evidenced hereby are made and granted in accordance with the terms of the Plan, which is incorporated into this Agreement by reference; provided, however, that the Option Shares subject to Option shall not count towards the limit on the number of shares of Common Stock that may be issued pursuant to the Plan. The Option will be governed in all respects as if issued under the terms of the Plan, as currently in effect and as may be amended hereafter from time to time. Unless the context clearly indicates otherwise, capitalized terms used in this Agreement shall have the meanings assigned to such terms in the Plan.
2. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement and the Plan, the Company hereby grants to Awardee, as of the Grant Date, a stock option to purchase up to that number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term and at the Option Price per share specified in the Grant Notice.
| 3 |
3. Option Term. This Option shall expire at the close of business on the Expiration Date specified in the Grant Notice, unless sooner terminated in accordance with Section 6 or 18 hereof or any applicable provision of the Plan; provided, in no event shall this option have a maximum term in excess of ten (10) years measured from the Grant Date.
4. Nontransferability. This Option shall be neither transferable nor assignable by Awardee other than by will or by the laws of descent and distribution following the Awardee’s death and may be exercised, during Awardee’s lifetime, only by Awardee.
5. Dates of Exercise. This Option shall thereupon become exercisable for the Option Shares as specified in the Grant Notice. If the Option becomes exercisable in installments, such installments shall accumulate and the Option shall remain exercisable for such installments until the Expiration Date or the sooner termination of the Option term under Section 6 of this Agreement or any applicable provision of the Plan.
6. Accelerated Termination of Option Term. The Option term specified in Section 3 above shall terminate (and this Option shall cease to be exercisable) prior to the Expiration Date should any of the following provisions become applicable:
(a) Except as otherwise provided in subsection (b) or (c) below, should Awardee cease to remain in Service while this Option is outstanding, then the period for exercising this Option shall be reduced to a three (3)-month period commencing with the date of such cessation of Service, but in no event shall this Option be exercisable at any time after the Expiration Date. Upon the expiration of such three (3)-month period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.
(b) Should Awardee die while this Option is outstanding, then the personal representative of the Awardee’s estate or the person or persons to whom the option is transferred pursuant to the Awardee’s will or in accordance with the law of descent and distribution shall have the right to exercise this Option. Such right shall lapse, and this Option shall cease to be exercisable, upon the earlier of (i) the expiration of the twelve (12) month period measured from the date of Awardee’s death or (ii) the Expiration Date. Upon the expiration of such twelve (12) month period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.
(c) Should Awardee become Permanently Disabled and cease by reason thereof to remain in Service while this Option is outstanding, then the Awardee shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which to exercise this Option, but in no event shall this Option be exercisable at any time after the Expiration Date. Upon the expiration of such limited period of exercisability or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.
(d) During the limited period of exercisability applicable under subsections (a), (b) or (c) above, this option may be exercised for any or all of the Option Shares in which the Awardee, at the time of cessation of Service, is vested in accordance with the exercise/vesting provisions specified in the Grant Notice after taking into account any special acceleration provisions in the Grant Notice.
(e) Notwithstanding any provision of this Section 6 or any other provision of this Agreement or the Plan to the contrary, any Options granted under the Plan shall terminate as of the date Awardee ceases to be in the Service of the Company if Awardee was terminated for “Cause” or could have been terminated for “Cause.” The term “Cause” shall have the meaning given that term in the Awardee’s Employment Agreement.
| 4 |
7. Adjustment in Option Shares.
(a) In the event any change is made to the Company’s outstanding Common Stock by reason of any stock split, stock dividend, combination of shares, exchange of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration, then appropriate adjustments shall be made to the total number of Option Shares subject to this option and the Option Price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.
(b) If this Option is to be assumed or is otherwise to remain outstanding after a Corporate Transaction (as defined in Section 20), then this option shall be appropriately adjusted to apply and pertain to the number and class of securities that would have been issuable to the Awardee in the consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Option Price payable per share, provided the aggregate Option Price payable hereunder shall remain the same.
8. Privilege of Stock Ownership. The holder of this Option shall not have any of the rights of a shareholder with respect to the Option Shares until such individual shall have exercised the Option and paid the Option Price.
9. Manner of Exercising Option.
(a) The Options will be exercisable by notice (an “Exercise Notice”) and payment to the Company in accordance with the procedure prescribed herein; provided, that the aggregate Option Price with respect to any one such exercise will not be less than $500, unless the exercise represents an exercise of all Options that are vested and exercisable as of the date of the exercise. If the Employee fails to accept delivery of and pay for all or any part of the number of shares specified in the Exercise Notice upon tender or delivery thereof, the Employee’s right to exercise the Options with respect to the undelivered shares may be terminated in the sole discretion of the Company’s Compensation Committee.
(b) Each Exercise Notice will (1) state the number of shares in respect of which Options are being exercised, (2) be accompanied by payment as provided in paragraph (c) below and (3) be signed by the person or persons entitled to exercise the Options. If Options are being exercised by any person or persons other than the Employee, the Exercise Notice will be accompanied by proof, satisfactory to the Company and its counsel, of the right of the person or persons to exercise the Options.
(c) Payment of the Option Price will be made by delivering to the Company any one or a combination of (1) a certified or bank cashier’s check payable to the Company or its order or a wire transfer directly to an account specified by the Company, (2) one or more certificates evidencing shares of Common Stock owned by the Employee immediately prior to the exercise, together with a duly executed stock power, having an aggregate Fair Market Value (defined below) on the date on which the Exercise Notice is given equal to the aggregate Option Price or (3) if and to the extent the shares of Common Stock issuable upon exercise of the Option are tradable on a established securities exchange or on the over-the-counter market as of the date of exercise and are not otherwise subject to trading restrictions, including without limitation restrictions under Rule 144 of the Securities Act of 1933, as amended, a copy of irrevocable instructions to a registered broker/dealer to deliver promptly to the Company an amount of proceeds from the sale of shares of Common Stock to be issued pursuant to the Options being exercised to pay the Option Price and/or any applicable Federal, state and local income and employment taxes required to be witheld by the Company with respect to the portion of the Option being exercised.
| 5 |
(d) The certificate or certificates representing shares of Common Stock to be issued upon exercise of the Options will be registered in the name of the person or persons exercising the Options, or, if the Options are exercised by the Awardee and the Awardee so requests in the applicable Exercise Notice, in the name of the Awardee and the Awardee’s spouse, jointly, with right of survivorship. The certificate or certificates will be delivered within 10 days after receipt of payment and compliance by the Awardee; provided, that in the case of clause (3) of the first sentence of Section 9(c), the Company will not make delivery of the certificate or certificates until payment is actually received from the broker/dealer.
(e) The Option shall be exercisable only for whole shares of Common Stock.
10. Certain Securities Law Matters; Registration.
(a) The Awardee understands that the offering, issuance, sale and transfer of the Options and the Option Shares is being made without registration under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or of any other jurisdiction.
(b) The Awardee represents and warrants that he has the requisite capacity to purchase the Shares and to enter into this Agreement. The Awardee understands and accepts that the Options and the Option Shares involve various risks, including the risks disclosed in the Company’s filings and reports with the U.S. Securities and Exchange Commission (the “Commission”).
(c) The Awardee confirms that he is not relying on any communication (written or oral) of the Company or any of its affiliates, as investment advice or as a recommendation to purchase the Shares. As incoming Chief Executive Officer of the Company, the Awardee has made himself familiar with the business and financial condition and operations of the Company, and has had access to such information concerning the Company and the Options and the Option Shares as he deems necessary to enable him to make an informed investment decision concerning the foregoing.
(d) The Awardee represents and warrants that he has such knowledge, skill and experience in business, financial and investment matters that the Awardee is capable of evaluating the merits and risks of the Options and the Option Shares.
(e) The Awardee represents and warrants that he is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The Awardee agrees to furnish any additional information requested by the Company to assure compliance with applicable U.S. federal and state securities laws in connection with the issuance of the Options and the Option Shares.
(f) The Awardee understands that the Options and the Option Shares have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the Awardee and of the other representations made by the Awardee herein. The Awardee understands that the Company is relying upon the representations and agreements contained in this Agreement (and any supplemental information) for the purpose of determining whether this transaction meets the requirements for such exemptions.
(g) The Awardee understands that the Option and the Option Shares are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the the Commission provide in substance that the Awardee may dispose of the Option Shares only pursuant to an effective registration statement under the Securities Act or an exemption therefrom.
| 6 |
(h) On or prior to the first anniversary of the Vesting Commencement Date, the Company shall file with the Commission a registration statement on Form S-8 (or such other appropriate form) for the purposes of registering for issuance and resale under the Securities Act the shares of Common Stock that may be issued to the Executive pursuant to the Options.
(i). The Awardee will not sell, assign, pledge, give, transfer or otherwise dispose of the Options or the Option Shares or any interest therein, or make any offer or attempt to do any of the foregoing, except with respect to the Option Shares pursuant to a registration of the Option Shares under the Securities Act and all applicable state securities laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable state securities laws and otherwise in accordance with the terms of this Agreement.
(k). The Awardee acknowledges that neither the Company nor any other person offered to sell the Shares to him by means of any form of general solicitation or advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.
11. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of Option Shares upon such exercise shall be subject to compliance by the Company and the Awardee with all applicable requirements of federal and state law relating thereto (and with all applicable regulations of any stock exchange or market on which shares of the Company’s Common Stock may be listed at the time of such exercise and issuance).
(b) In connection with the exercise of this Option, Awardee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.
12. Successors and Assigns. Except to the extent otherwise provided in Section 4 above, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Awardee and the successors and assigns of the Company.
13. Liability of Company. The inability of the Company to obtain approval from any regulatory body having authority the Company deems necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Company of any liability with respect to the nonissuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company shall use its best efforts to obtain all such approvals.
14. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company in care of the corporate secretary at its principal corporate offices. Any notice required to be given or delivered to Awardee shall be in writing and addressed to Awardee at the address indicated below Awardee’s signature line on the Grant Notice, or at such other address as the Awardee shall have furnished the Company in writing at least ten (10) days in advance of its effective date. All notices shall be deemed to have been given or delivered upon personal delivery or forty-eight hours after deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
| 7 |
15. Reserved.
16. Authority of Plan Administrator. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.
17. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to its choice of law rules.
18. Reserved.
19. Tax Withholding. Awardee hereby agrees to make appropriate arrangements with the Company for the satisfaction of all federal, state or local income and employment tax withholding requirements applicable to the exercise of this Option.
20. Definitions. The following definitions shall apply to the respective capitalized terms used herein:
Awardee means the individual identified in the Grant Notice as the person to whom this option has been granted under the Plan.
Board means the Board of Directors of Vislink Technologies, Inc.
Code means the Internal Revenue Code of 1986, as amended.
Common Stock means the Common Stock of Vislink Technologies, Inc.
Company means Vislink Technologies, Inc., a Delaware corporation.
Corporate Transaction means one or more of the following transactions: (i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state of the Company’s incorporation, (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company, (iii) any reverse merger in which the Company is the surviving entity but in which fifty percent (50%) or more of the Company’s outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger, or (iv) the acquisition of fifty percent (50%) or more of the Company’s outstanding voting stock by a person or group of related persons other than the Company, a person that directly or indirectly controls, is controlled by or is under common control with the Company, or any existing shareholder of the Company as of the date of the adoption of the Plan by such shareholders.
Exercise Date shall be date on which the executed Purchase Agreement for one or more Option Shares is delivered to the Company in accordance with Section 9 of this Agreement.
Expiration Date means the date specified in the Grant Notice as the date on which the option shall terminate (unless sooner terminated under the Plan or pursuant hereto).
Fair Market Value of a share of Common Stock on any relevant date shall be determined in accordance with the following provisions:
| 8 |
(a) If the Common Stock is at the time neither listed nor admitted to trading on any stock exchange nor traded in the over-the-counter market, or if the Plan Administrator otherwise determines that the valuation provisions of subsections (b) and (c) below will not result in a true and accurate valuation of the Common Stock, then the Fair Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate under the circumstances.
(b) If the Common Stock is not at the time listed or admitted to trading on any stock exchange but is traded in the over-the-counter market, the Fair Market Value shall be the mean between the highest bid and the lowest asked prices (or if such information is available the closing selling price) per share of Common Stock on the date in question in the over-the-counter market, as such prices are reported by the National Association of Securities Dealers through its NASDAQ National Market System or any successor system. If there are no reported bid and asked prices (or closing selling price) for the Common Stock on the date in question, then the mean between the highest bid and lowest asked prices (or closing selling price) on the last preceding date for which such quotations exist shall be determinative of Fair Market Value.
(c) If the Common Stock is at the time listed or admitted to trading on any stock exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock. If there is no reported sale of Common Stock on such exchange on the date in question, then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists.
Grant Date means the date specified in the Grant Notice as the date on which the option was granted to the Awardee under the Plan.
Grant Notice means the Notice of Grant of Stock Option which accompanies this Agreement.
Non-Statutory Stock Option means an option that is not intended to meet the statutory requirements prescribed for an incentive stock option under Section 422 of the Code.
Option Shares means the total number of shares of Common Stock indicated in the Grant Notice as purchasable under this option.
Option Price means the price indicated in the Grant Notice as the Option Price per share to be paid by the Awardee for the exercise of this option.
Parent corporation means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each such corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Permanently Disabled or Permanent Disability means the inability of an individual to engage in any substantial gainful activity by reason of any medically-determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months.
Plan means the 2017 Incentive Compensation Plan.
| 9 |
Plan Administrator means either the Board or a committee of one or more Board members, to the extent such committee may at the time be responsible for plan administration.
Purchase Agreement means the stock purchase agreement, in substantially the form of the exhibit to the Grant Notice, which is to be executed in connection with the exercise of this option for one or more Option Shares.
Service means the performance of services for the Company or any Parent or Subsidiary corporation by an individual in the capacity of an employee, a non-employee member of the board of directors or an independent consultant or advisor. Accordingly, the Awardee shall be deemed to remain in Service for so long as such individual renders services to the Company or any Parent or Subsidiary corporation on a periodic basis in the capacity of an employee, a non-employee member of the board of directors or an independent consultant or advisor.
Subsidiary corporation means each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each such corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain.
| 10 |
Exhibit B
VISLINK TECHNOLOGIES, INC.
OPTION EXERCISE FORM
Pursuant to the terms of the stock option agreement between Carleton Miller and Vislink Technologies, Inc. (the “Company”) dated __________ (the “Agreement”) I, [Insert Name] _____________________, hereby [Circle One] partially/fully exercise such Stock Option by including herein payment in the amount of $______ representing the Option Price for [Fill in number of Underlying Shares] _______ Option Shares. I have chosen the following form(s) of payment:
| [ ] | 1. | Cash |
| [ ] | 2. | Certified or bank check payable to Vislink Technologies, Inc. |
| [ ] | 3. | Other (as described in the Plan (please describe)) - |
________________________________________________________________________________________
Concurrently upon the delivery of this Agreement to the Company, I am delivering or making arrangements to deliver the Option Price and the amount required to satisfy applicable tax withholdings to the Company in accordance with and in the manner set forth in the Stock Option Agreement and I shall deliver whatever additional documents may be required by the Option Agreement as a condition for exercise.
| Dated: __________________ | |
| SIGNATURE OF OPTIONEE | |
| Carleton Miller |
ACKNOWLEDGED BY:
Vislink Technologies, Inc., a Delaware corporation
| By: | ||
| Name; | ||
| Title: |
| 11 |
Exhibit 10.3
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER ANY APPLICABLE SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF ANY REQUIRED REGISTRATION AND QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
VISLINK TECHNOLOGIES, INC.
NOTICE OF GRANT OF STOCK OPTION
PERFORMANCE-VESTED OPTIONS
Notice is hereby given of the following option grant (the “Option”) made to purchase shares of Vislink Technologies, Inc. (the “Company”) common stock (the “Common Stock”):
| Awardee: | Carleton Miller | |
| Grant Date: | January 22, 2020 | |
| Vesting Commencement Date: | January 22, 2020 | |
| Vesting Schedule: | The Option Shares will vest in three (3) equal tranches upon attainment of the following applicable performance conditions for each tranche; provided that the Executive remain in continuous employment with the Company through the date on which:
Tranche 1: 500,000 Option Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $6,000,000 accumulated over four consecutive fiscal quarters.
Tranche 2: 500,000 Option Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $15,000,000 accumulated over four consecutive fiscal quarters.
Tranche 3: 500,000 Option Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $23,000,000 accumulated over four consecutive fiscal quarters. | |
| Option Price Per Share: | $0.285 | |
| Number of Option Shares: | 1,500,000 | |
| Expiration Date: | January 22, 2030 | |
| Type of Option: | Non-Statutory |
| 1 |
Exercise Schedule: Provided Awardee remains in Service as defined in the Stock Option Agreement through the date on which the relevant performance condition has been satisfied, the Option will be exercisable during the Option Term with respect to any Option Shares that have vested pursuant to the Vesting Schedule as of the date of exercise; provided, however, to the extent that performance conditions are not achieved with respect to one or more tranches of the Option on or before the fifth (5th) anniversary of the Vesting Commencement Date, each tranche of the Option that fails to satisfy the performance conditions shall terminate. Notwithstanding any provision herein to the contrary 100% of the Option Shares then outstanding shall vest and become exercisable upon the Awardee’s termination of employment by the Company without “Cause” or by the Awardee for “Good Reason” if such termination of employment occurs during the thirteen (13) month period following a “Change in Control” of the Company. The terms “Cause,” “Good Reason,” and “Change in Control” shall have the meaning asigned to those terms in the Awardee’s employment agreement dated January 15, 2020, as amended from time to time.
Awardee understands and agrees that the Option granted herein are are subject to the terms and conditions set forth in the Stock Option Agreement attached hereto as Exhibit A and incorporated herein by reference. Awardee hereby acknowledges receipt of a copy of the Stock Option Agreement in the form attached hereto as Exhibit A.
No Employment or Service Contract. Nothing in this Notice of Grant of Stock Options or the Stock Option Agreement shall confer upon the Awardee any right to continue in the Service of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or the Awardee, which rights are hereby expressly reserved by each, to terminate Awardee’s Service at any time for any reason whatsoever, with or without cause.
[SIGNATURES ON THE FOLLOWING PAGE]
| 2 |
IN WITNESS WEREOF, the parties hereto have caused this Grant of Stock Options and the Stock Option Agreement attached hereto as Exhibit A and incorporated herein by reference, to be executed as of January 22, 2020.
| VISLINK TECHNOLOGIES, INC. | ||
| By: | /s/ Roger Branton | |
| Its: | CFO | |
| /s/ Carleton Miller | ||
| Awardee | ||
| 3 |
Exhibit A
STOCK OPTION AGREEMENT
BY AND BETWEEN
VISLINK TECHNOLOGIES, INC.
AND
CARLETON MILLER
Whereas, the Option granted by Vislink Technologies, Inc. (the “Company”) to Carleton Miller (the “Awardee”) pursuant to the Notice of Grant of Options (the “Grant Notice”) and the terms of this Stock Option Agreement (together with the Grant Notice, the “Agreement”) to purchase the number of shares of the Company’s common stock (“Common Stock”) set forth in the Grant Notice is being granted as an “inducement” award under NASDAQ Listing Rule 5653(c)(4) and thus such Options have been granted outside of the Company’s existing equity compensation plans;
Whereas, the Awardee is an newly hired Employee who will render valuable Services to the Company;
Whereas, although the Options granted herein have been granted outside of the Company’s existing equity compensation plans, this Agreement is intended to carry out the purposes of, the Company’s 2017 Incentive Compensation Plan (the “Plan”) in connection with the Company’s grant of the Options to the Awardee and the terms of the Plan are hereby incorporated into this Agreement by reference and all capitalized terms in this Agreement shall have the meaning assigned to them in the Plan.
For convenience, relevant portions of certain of the Plan definitions and certain additional definitions relating to this Award Agreement are included in the Appendix. This Award Agreement, including the Notice of Grant, is subject to the terms of the Plan, which are incorporated in this Award Agreement by reference. If there is a conflict between the terms of the Plan and this Award Agreement or the Notice of Grant, the terms of the Plan shall prevail.
NOW, THEREFORE, it is hereby agreed as follows:
1. Provisions of Plan Binding. This Agreement and the Option evidenced hereby are made and granted in accordance with the terms of the Plan, which is incorporated into this Agreement by reference; provided, however, that the Option Shares subject to Option shall not count towards the limit on the number of shares of Common Stock that may be issued pursuant to the Plan. The Option will be governed in all respects as if issued under the terms of the Plan, as currently in effect and as may be amended hereafter from time to time. Unless the context clearly indicates otherwise, capitalized terms used in this Agreement shall have the meanings assigned to such terms in the Plan.
2. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement and the Plan, the Company hereby grants to Awardee, as of the Grant Date, a stock option to purchase up to that number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term and at the Option Price per share specified in the Grant Notice.
| 4 |
3. Option Term. This Option shall expire at the close of business on the Expiration Date specified in the Grant Notice, unless sooner terminated in accordance with Section 6 or 18 hereof or any applicable provision of the Plan; provided, in no event shall this option have a maximum term in excess of ten (10) years measured from the Grant Date.
4. Nontransferability. This Option shall be neither transferable nor assignable by Awardee other than by will or by the laws of descent and distribution following the Awardee’s death and may be exercised, during Awardee’s lifetime, only by Awardee.
5. Dates of Exercise. This Option shall thereupon become exercisable for the Option Shares as specified in the Grant Notice. If the Option becomes exercisable in installments, such installments shall accumulate and the Option shall remain exercisable for such installments until the Expiration Date or the sooner termination of the Option term under Section 6 of this Agreement or any applicable provision of the Plan.
6. Accelerated Termination of Option Term. The Option term specified in Section 3 above shall terminate (and this Option shall cease to be exercisable) prior to the Expiration Date should any of the following provisions become applicable:
(a) Except as otherwise provided in subsection (b) or (c) below, should Awardee cease to remain in Service while this Option is outstanding, then the period for exercising this Option shall be reduced to a three (3)-month period commencing with the date of such cessation of Service, but in no event shall this Option be exercisable at any time after the Expiration Date. Upon the expiration of such three (3)-month period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.
(b) Should Awardee die while this Option is outstanding, then the personal representative of the Awardee’s estate or the person or persons to whom the option is transferred pursuant to the Awardee’s will or in accordance with the law of descent and distribution shall have the right to exercise this Option. Such right shall lapse, and this Option shall cease to be exercisable, upon the earlier of (i) the expiration of the twelve (12) month period measured from the date of Awardee’s death or (ii) the Expiration Date. Upon the expiration of such twelve (12) month period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.
(c) Should Awardee become Permanently Disabled and cease by reason thereof to remain in Service while this Option is outstanding, then the Awardee shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which to exercise this Option, but in no event shall this Option be exercisable at any time after the Expiration Date. Upon the expiration of such limited period of exercisability or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.
(d) During the limited period of exercisability applicable under subsections (a), (b) or (c) above, this option may be exercised for any or all of the Option Shares in which the Awardee, at the time of cessation of Service, is vested in accordance with the exercise/vesting provisions specified in the Grant Notice after taking into account any special acceleration provisions in the Grant Notice.
(e) Notwithstanding any provision of this Section 6 or any other provision of this Agreement or the Plan to the contrary, any Options granted under the Plan shall terminate as of the date Awardee ceases to be in the Service of the Company if Awardee was terminated for “Cause” or could have been terminated for “Cause.” The term “Cause” shall have the meaning given that term in the Awardee’s Employment Agreement.
| 5 |
7. Adjustment in Option Shares.
(a) In the event any change is made to the Company’s outstanding Common Stock by reason of any stock split, stock dividend, combination of shares, exchange of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration, then appropriate adjustments shall be made to the total number of Option Shares subject to this option and the Option Price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.
(b) If this Option is to be assumed or is otherwise to remain outstanding after a Corporate Transaction (as defined in Section 20), then this option shall be appropriately adjusted to apply and pertain to the number and class of securities that would have been issuable to the Awardee in the consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Option Price payable per share, provided the aggregate Option Price payable hereunder shall remain the same.
8. Privilege of Stock Ownership. The holder of this Option shall not have any of the rights of a shareholder with respect to the Option Shares until such individual shall have exercised the Option and paid the Option Price.
9. Manner of Exercising Option.
(a) The Options will be exercisable by notice (an “Exercise Notice”) and payment to the Company in accordance with the procedure prescribed herein; provided, that the aggregate Option Price with respect to any one such exercise will not be less than $500, unless the exercise represents an exercise of all Options that are vested and exercisable as of the date of the exercise. If the Employee fails to accept delivery of and pay for all or any part of the number of shares specified in the Exercise Notice upon tender or delivery thereof, the Employee’s right to exercise the Options with respect to the undelivered shares may be terminated in the sole discretion of the Company’s Compensation Committee.
(b) Each Exercise Notice will (1) state the number of shares in respect of which Options are being exercised, (2) be accompanied by payment as provided in paragraph (c) below and (3) be signed by the person or persons entitled to exercise the Options. If Options are being exercised by any person or persons other than the Employee, the Exercise Notice will be accompanied by proof, satisfactory to the Company and its counsel, of the right of the person or persons to exercise the Options.
(c) Payment of the Option Price will be made by delivering to the Company any one or a combination of (1) a certified or bank cashier’s check payable to the Company or its order or a wire transfer directly to an account specified by the Company, (2) one or more certificates evidencing shares of Common Stock owned by the Employee immediately prior to the exercise, together with a duly executed stock power, having an aggregate Fair Market Value (defined below) on the date on which the Exercise Notice is given equal to the aggregate Option Price or (3) if and to the extent the shares of Common Stock issuable upon exercise of the Option are tradable on a established securities exchange or on the over-the-counter market as of the date of exercise and are not otherwise subject to trading restrictions, including without limitation restrictions under Rule 144 of the Securities Act of 1933, as amended, a copy of irrevocable instructions to a registered broker/dealer to deliver promptly to the Company an amount of proceeds from the sale of shares of Common Stock to be issued pursuant to the Options being exercised to pay the Option Price and/or any applicable Federal, state and local income and employment taxes required to be witheld by the Company with respect to the portion of the Option being exercised.
| 6 |
(d) The certificate or certificates representing shares of Common Stock to be issued upon exercise of the Options will be registered in the name of the person or persons exercising the Options, or, if the Options are exercised by the Awardee and the Awardee so requests in the applicable Exercise Notice, in the name of the Awardee and the Awardee’s spouse, jointly, with right of survivorship. The certificate or certificates will be delivered within 10 days after receipt of payment and compliance by the Awardee; provided, that in the case of clause (3) of the first sentence of Section 9(c), the Company will not make delivery of the certificate or certificates until payment is actually received from the broker/dealer.
(e) The Option shall be exercisable only for whole shares of Common Stock.
10. Certain Securities Law Matters; Registration.
(a) The Awardee understands that the offering, issuance, sale and transfer of the Options and the Option Shares is being made without registration under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or of any other jurisdiction.
(b) The Awardee represents and warrants that he has the requisite capacity to purchase the Shares and to enter into this Agreement. The Awardee understands and accepts that the Options and the Option Shares involve various risks, including the risks disclosed in the Company’s filings and reports with the U.S. Securities and Exchange Commission (the “Commission”).
(c) The Awardee confirms that he is not relying on any communication (written or oral) of the Company or any of its affiliates, as investment advice or as a recommendation to purchase the Shares. As incoming Chief Executive Officer of the Company, the Awardee has made himself familiar with the business and financial condition and operations of the Company, and has had access to such information concerning the Company and the Options and the Option Shares as he deems necessary to enable him to make an informed investment decision concerning the foregoing.
(d) The Awardee represents and warrants that he has such knowledge, skill and experience in business, financial and investment matters that the Awardee is capable of evaluating the merits and risks of the Options and the Option Shares.
(e) The Awardee represents and warrants that he is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The Awardee agrees to furnish any additional information requested by the Company to assure compliance with applicable U.S. federal and state securities laws in connection with the issuance of the Options and the Option Shares.
(f) The Awardee understands that the Options and the Option Shares have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the Awardee and of the other representations made by the Awardee herein. The Awardee understands that the Company is relying upon the representations and agreements contained in this Agreement (and any supplemental information) for the purpose of determining whether this transaction meets the requirements for such exemptions.
| 7 |
(g) The Awardee understands that the Option and the Option Shares are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the the Commission provide in substance that the Awardee may dispose of the Option Shares only pursuant to an effective registration statement under the Securities Act or an exemption therefrom.
(h) On or prior to the first anniversary of the Vesting Commencement Date, the Company shall file with the Commission a registration statement on Form S-8 (or such other appropriate form) for the purposes of registering for issuance and resale under the Securities Act the shares of Common Stock that may be issued to the Executive pursuant to the Options.
(i). The Awardee will not sell, assign, pledge, give, transfer or otherwise dispose of the Options or the Option Shares or any interest therein, or make any offer or attempt to do any of the foregoing, except with respect to the Option Shares pursuant to a registration of the Option Shares under the Securities Act and all applicable state securities laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable state securities laws and otherwise in accordance with the terms of this Agreement.
(k). The Awardee acknowledges that neither the Company nor any other person offered to sell the Shares to him by means of any form of general solicitation or advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.
11. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of Option Shares upon such exercise shall be subject to compliance by the Company and the Awardee with all applicable requirements of federal and state law relating thereto (and with all applicable regulations of any stock exchange or market on which shares of the Company’s Common Stock may be listed at the time of such exercise and issuance).
(b) In connection with the exercise of this Option, Awardee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.
12. Successors and Assigns. Except to the extent otherwise provided in Section 4 above, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Awardee and the successors and assigns of the Company.
13. Liability of Company. The inability of the Company to obtain approval from any regulatory body having authority the Company deems necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Company of any liability with respect to the nonissuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company shall use its best efforts to obtain all such approvals.
14. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company in care of the corporate secretary at its principal corporate offices. Any notice required to be given or delivered to Awardee shall be in writing and addressed to Awardee at the address indicated below Awardee’s signature line on the Grant Notice, or at such other address as the Awardee shall have furnished the Company in writing at least ten (10) days in advance of its effective date. All notices shall be deemed to have been given or delivered upon personal delivery or forty-eight hours after deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
| 8 |
15. Reserved.
16. Authority of Plan Administrator. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.
17. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to its choice of law rules.
18. Reserved.
19. Tax Withholding. Awardee hereby agrees to make appropriate arrangements with the Company for the satisfaction of all federal, state or local income and employment tax withholding requirements applicable to the exercise of this Option.
20. Definitions. The following definitions shall apply to the respective capitalized terms used herein:
Awardee means the individual identified in the Grant Notice as the person to whom this option has been granted under the Plan.
Board means the Board of Directors of Vislink Technologies, Inc.
Code means the Internal Revenue Code of 1986, as amended.
Common Stock means the Common Stock of Vislink Technologies, Inc.
Company means Vislink Technologies, Inc., a Delaware corporation.
Corporate Transaction means one or more of the following transactions: (i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state of the Company’s incorporation, (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company, (iii) any reverse merger in which the Company is the surviving entity but in which fifty percent (50%) or more of the Company’s outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger, or (iv) the acquisition of fifty percent (50%) or more of the Company’s outstanding voting stock by a person or group of related persons other than the Company, a person that directly or indirectly controls, is controlled by or is under common control with the Company, or any existing shareholder of the Company as of the date of the adoption of the Plan by such shareholders.
Cumulative EBITDA shall mean earnings before interest, taxes, depreciation and amortization accumulated over four consecutive fiscal quarters as determined in accordance with generally accepted accounting principles, but adjusted to reflect the effect of mergers and acquisitions.
Exercise Date shall be date on which the executed Purchase Agreement for one or more Option Shares is delivered to the Company in accordance with Section 9 of this Agreement.
Expiration Date means the date specified in the Grant Notice as the date on which the option shall terminate (unless sooner terminated under the Plan or pursuant hereto).
| 9 |
Fair Market Value of a share of Common Stock on any relevant date shall be determined in accordance with the following provisions:
(a) If the Common Stock is at the time neither listed nor admitted to trading on any stock exchange nor traded in the over-the-counter market, or if the Plan Administrator otherwise determines that the valuation provisions of subsections (b) and (c) below will not result in a true and accurate valuation of the Common Stock, then the Fair Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate under the circumstances.
(b) If the Common Stock is not at the time listed or admitted to trading on any stock exchange but is traded in the over-the-counter market, the Fair Market Value shall be the mean between the highest bid and the lowest asked prices (or if such information is available the closing selling price) per share of Common Stock on the date in question in the over-the-counter market, as such prices are reported by the National Association of Securities Dealers through its NASDAQ National Market System or any successor system. If there are no reported bid and asked prices (or closing selling price) for the Common Stock on the date in question, then the mean between the highest bid and lowest asked prices (or closing selling price) on the last preceding date for which such quotations exist shall be determinative of Fair Market Value.
(c) If the Common Stock is at the time listed or admitted to trading on any stock exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock. If there is no reported sale of Common Stock on such exchange on the date in question, then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists.
Grant Date means the date specified in the Grant Notice as the date on which the option was granted to the Awardee under the Plan.
Grant Notice means the Notice of Grant of Stock Option which accompanies this Agreement.
Non-Statutory Stock Option means an option that is not intended to meet the statutory requirements prescribed for an incentive stock option under Section 422 of the Code.
Option Shares means the total number of shares of Common Stock indicated in the Grant Notice as purchasable under this option.
Option Price means the price indicated in the Grant Notice as the Option Price per share to be paid by the Awardee for the exercise of this option.
Parent corporation means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each such corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Permanently Disabled or Permanent Disability means the inability of an individual to engage in any substantial gainful activity by reason of any medically-determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months.
| 10 |
Plan means the 2017 Incentive Compensation Plan.
Plan Administrator means either the Board or a committee of one or more Board members, to the extent such committee may at the time be responsible for plan administration.
Purchase Agreement means the stock purchase agreement, in substantially the form of the exhibit to the Grant Notice, which is to be executed in connection with the exercise of this option for one or more Option Shares.
Service means the performance of services for the Company or any Parent or Subsidiary corporation by an individual in the capacity of an employee, a non-employee member of the board of directors or an independent consultant or advisor. Accordingly, the Awardee shall be deemed to remain in Service for so long as such individual renders services to the Company or any Parent or Subsidiary corporation on a periodic basis in the capacity of an employee, a non-employee member of the board of directors or an independent consultant or advisor.
Subsidiary corporation means each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each such corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain.
| 11 |
Exhibit B
VISLINK TECHNOLOGIES, INC.
OPTION EXERCISE FORM
Pursuant to the terms of the stock option agreement between Carleton Miller and Vislink Technologies, Inc. (the “Company”) dated __________ (the “Agreement”) I, [Insert Name] _____________________, hereby [Circle One] partially/fully exercise such Stock Option by including herein payment in the amount of $______ representing the Option Price for [Fill in number of Underlying Shares] _______ Option Shares. I have chosen the following form(s) of payment:
| [ ] | 1. | Cash |
| [ ] | 2. | Certified or bank check payable to Vislink Technologies, Inc. |
| [ ] | 3. | Other (as described in the Plan (please describe)) - |
________________________________________________________________________.
Concurrently upon the delivery of this Agreement to the Company, I am delivering or making arrangements to deliver the Option Price and the amount required to satisfy applicable tax withholdings to the Company in accordance with and in the manner set forth in the Stock Option Agreement and I shall deliver whatever additional documents may be required by the Option Agreement as a condition for exercise.
| Dated: __________________ | |
| SIGNATURE OF AWARDEE | |
| Carleton Miller |
| ACKNOWLEDGED BY: | ||
| Vislink Technologies, Inc., a Delaware corporation | ||
| By: | ||
| Name; | ||
| Title: | ||
| 12 |