SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | August 3, 2023 |
MULLEN AUTOMOTIVE INC.
_____________________________________________________________
(Exact name of registrant as specified in its charter)
| Delaware | 001-34887 | 86-3289406 |
| (State
or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
1405 Pioneer Street, Brea, California 92821
(Address, including zip code, of principal executive offices)
| Registrant’s telephone number, including area code | (714) 613-1900 |
(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 $0.001 | MULN | The Nasdaq Stock Market, LLC (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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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. ☐
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amendment to 2022 Equity Incentive Plan
On August 3, 2023, at the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) of Mullen Automotive Inc. (the “Company”), the Company’s stockholders approved an amendment (the “Amendment”) to the Company’s 2022 Equity Incentive Plan (the “2022 Plan”). The Amendment increased the maximum aggregate number of shares of common stock and stock equivalents available for the grant of awards under the 2022 Plan by an additional 52,000,000 shares (not subject to adjustment for any decrease or increase in the number shares of common stock resulting from a stock spilt, reverse stock split, recapitalization, combination, reclassification, the payment of a stock dividend on the common stock or any other decrease in the number of such shares of common stock effected without receipt of consideration by the Company). Additional details about the Amendment is set forth in the Company’s Definitive Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on July 10, 2023 (the “Proxy Statement”), and is incorporated herein by reference.
The foregoing description is qualified in its entirety by the full text of the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
2023 CEO Performance Stock Award Agreement
On June 8, 2023, the Board of Directors (the “Board”) of the Company (1) determined that the grant of performance equity awards to the Chief Executive Officer (“CEO Performance Award”) pursuant to the 2023 Performance Stock Award Agreement (the “2023 PSA Agreement”) was advisable and in the best interests of the Company and its stockholders and (2) approved entering into the 2023 PSA Agreement and the grant of the CEO Performance Award.
On August 3, 2023, at the 2023 Annual Meeting, the Company’s stockholders approved, for purposes of complying with Nasdaq Listing Rule 5635(c), of the issuance of shares of common stock to the Company’s Chief Executive Officer, David Michery, pursuant to the 2023 PSA Agreement. The CEO Performance Award represents the right of Mr. Michery to receive shares of common stock of the Company based on the achievement of milestones, subject to the terms and conditions set forth in the 2023 PSA Agreement. Additional details about the CEO Performance Award and the 2023 PSA Agreement are set forth in the Company’s Proxy Statement and is incorporated herein by reference.
The foregoing description is qualified in its entirety by the full text of the 2023 PSA Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
| Item 5.07. | Submission of Matters to a Vote of Security Holders. |
On August 3, 2023, the Company held its 2023 Annual Meeting, at which a quorum for the transaction of business was present or represented by proxy, except with respect to Proposal 4 as described below. Proxies for the 2023 Annual Meeting were solicited by the Board pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, and there was no solicitation in opposition to the Board’s solicitation.
As of June 22, 2023, the record date for the 2023 Annual Meeting (the “Record Date”), there were 643,376,440 shares of common stock, par value $0.001 per share (“Common Stock”), 1,037 shares of series A preferred stock, par value $0.001 per share (“Series A Preferred Stock”), 1,210,056 shares of series C preferred stock, par value $0.001 per share (“Series C Preferred Stock”) and 363,097 shares of series D convertible preferred stock, par value $0.001 per share (“Series D Preferred Stock”) entitled to vote at the 2023 Annual Meeting. There are no shares of series B preferred stock outstanding. Holders of Series A Preferred Stock are entitled to one thousand (1,000) votes for each share of Series A Preferred Stock. Holders of Series C Preferred Stock are entitled to one (1) vote for each share of Common Stock into which such Series C Preferred Stock may be converted, which was 48,403 shares. Holders of Series D Preferred Stock are entitled to one (1) vote for each share of Common Stock into which Series D Preferred Stock may be converted and can only vote on Proposal 4 as described below. A total of 325,794,495 votes were present, in person or by proxy, at the 2023 Annual Meeting. The final votes on the proposals presented at the 2023 Annual Meeting were as follows:
Proposal 1: To elect two Class II directors to serve for a three-year term ending as of the annual meeting in 2026. Each of the two nominees listed below has been elected to serve as Class II director on the Board of Directors for a three-year term ending as of the annual meeting in 2026 or until their respective successors are elected and qualify. The voting results were as follows:
| Director Nominee | Votes For | Votes Withheld | Broker Non-Votes | ||||||
| Kent Puckett | 211,086,161 | 51,956,882 | 62,751,452 | ||||||
| Mark Betor | 211,358,276 | 51,684,767 | 62,751,452 |
Proposal 2: To approve amendments to the Company’s 2022 Plan to increase the number of shares of Common Stock authorized for issuance under the 2022 Plan by 52,000,000 shares. The proposal required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred Stock and Series C Preferred Stock (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. Broker non-votes had no effect on the result of the vote. The proposal was approved by a vote of stockholders as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | ||||
| 180,417,275 | 80,465,288 | 2,160,480 | 62,751,452 |
Proposal 3: To approve the amendment of the Company’s Second Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s outstanding common stock at an exchange ratio between 1-for-2 to 1-for-100, as determined by the Company’s Board.
On July 17, 2023, the Delaware governor signed into law amendments to the Delaware General Corporation Law (“DGCL”), effective as of August 1, 2023 (the “August 2023 DGCL Amendments”), providing that the required stockholder vote for an amendment to a company’s certificate of incorporation effectuating a reverse stock split would be approved if the votes cast for such amendment exceeds the votes cast against such amendment, assuming the presence of a quorum and if the shares meet the listing requirement of the national securities exchange on which they are listed relating to the minimum number of holders immediately after such amendment becomes effective (the “New Vote Requirement”). As described in the Proxy Statement, the Board reserved the right to cause Proposal 3 to be passed under the New Vote Requirement. Furthermore, the Board exercised its right and authorized the application of the New Vote Requirement to Proposal 3 such that this proposal would be approved by a vote of the stockholders at the 2023 Annual Meeting if the votes cast for such proposal exceeds the votes cast against such proposal.
Under the New Vote Requirement, abstentions had no effect on the approval of the proposal. Holders of shares of Common Stock, Series A Preferred Stock and Series C Preferred Stock (voting on an as-converted to Common Stock basis) were entitled to cast votes on this Proposal 3. The proposal was approved under the New Vote Requirement as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 221,098,224 | 103,280,513 | 1,415,758 | N/A |
Proposal 4: To approve the conversion of Mullen Automotive Inc. from a Delaware Corporation to a Maryland Corporation. This proposal required the affirmative vote of (i) a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred Stock and Series C Preferred Stock (voting on an as-converted to Common Stock basis), entitled to vote thereon, all voting together as a single class and (ii) a majority of the outstanding shares of each of the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, entitled to vote thereon, each voting as a separate class. Abstentions and broker non-votes have the effect of a vote against the proposal. In addition, because Proposal 4 required separate class votes of each of the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred stock, the presence, in person or by proxy, of the holders of a majority of the outstanding shares of each such series is required to constitute a quorum entitled to take action with respect to such votes on Proposal 4. Based on the voting results set forth below, Proposal 4 did not achieve a quorum to be considered at the 2023 Annual Meeting. The results of the voting for this proposal were as follows:
| (i) | Vote of the Common Stock, Series A Preferred Stock (each share being entitled to 1,000 votes) and Series C Preferred Stock (voting on an as-converted to Common Stock basis), all voting together as single class: |
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 190,547,570 | 69,020,824 | 3,474,647 | 62,751,452 |
| (ii) | (a) Vote of the Series A Preferred Stock (each share being entitled to 1,000 votes), voting as a separate class: |
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 467,000 | 0 | 0 | - |
(b) Vote of the Series C Preferred Stock, voting as a separate class:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 18 | 0 | 0 | - |
(c) Vote of the Series D Preferred Stock, voting as a separate class:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 0 | 0 | 0 | - |
Proposal 5: To approve, on a non-binding advisory basis, the compensation of our named executive officers. The proposal required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred Stock and Series C Preferred Stock (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. Broker non-votes had no effect on the result of the vote. The proposal was approved by a vote of stockholders as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 189,494,509 | 69,215,216 | 4,333,318 | 62,751,452 |
Proposal 6: To select, on a non-binding advisory basis, whether future advisory votes on the compensation of our named executive officers should be every one, two or three years. The proposal required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred Stock and Series C Preferred Stock (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. Broker non-votes had no effect on the result of the vote. The stockholders voted that the future advisory votes on the compensation of the Company’s named executive officers should be every three years as follows:
| 1 Year | 2 Years | 3 Years | Abstentions | Broker Non-Votes | ||||
| 42,501,090 | 8,550,717 | 192,713,670 | 19,277,566 | 62,751,452 |
Proposal 7: To approve, for purposes of complying with Nasdaq Listing Rule 5635(c), of the issuance of shares of Common Stock to our Chief Executive Officer pursuant to a Performance Stock Award Agreement. The proposal required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred Stock and Series C Preferred Stock (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. Broker non-votes had no effect on the result of the vote. The proposal was approved by a vote of stockholders as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 187,927,493 | 72,092,203 | 3,023,347 | 62,751,452 |
Proposal 8: To approve, for purposes of complying with Nasdaq Listing Rule 5635(d), amendments to a securities purchase agreement to provide for the issuance of $7 million in additional shares of Common Stock and warrants exercisable into shares of Common Stock, and any future adjustments of the exercise price of the warrants. The proposal required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred and Series C Preferred (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. Broker non-votes had no effect on the result of the vote. The proposal was approved by a vote of stockholders as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 192,220,171 | 67,679,509 | 3,143,363 | 62,751,452 |
Proposal 9: To ratify the appointment of RBSM LLP as the independent registered public accounting firm of the Company for the fiscal year ending September 30, 2023. The ratification required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred and Series C Preferred (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. The ratification was approved by a vote of stockholders as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 276,115,903 | 40,155,737 | 9,522,855 | N/A |
Proposal 10: To approve the adjournment of the 2023 Annual Meeting from time to time, to a later date or dates, if necessary or appropriate, under certain circumstances, including for the purpose of soliciting additional proxies in favor one or more of the foregoing proposals, in the event the Company does not receive the requisite stockholder vote to approve such proposal(s) or establish a quorum. The proposal required the affirmative vote of a majority of the voting power of the outstanding shares of Common Stock, Series A Preferred and Series C Preferred (voting on an as-converted to Common Stock basis), present in person or represented by proxy and entitled to vote thereon. Abstentions had the same effect as votes against the proposal. Broker non-votes had no effect on the result of the vote. The proposal was approved by a vote of stockholders as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 239,443,787 | 79,032,072 | 7,318,636 | N/A |
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
|
Exhibit No. |
Description | |
| 10.1 | Amendment to 2022 Equity Incentive Plan dated August 3, 2023 | |
| 10.2 | CEO Performance Stock Award Agreement dated June 8, 2023 between Mullen Automotive Inc. and David Michery | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.
| MULLEN AUTOMOTIVE INC. | ||
| Date: August 4, 2023 | By: | /s/ David Michery |
| David Michery | ||
| Chief Executive Officer | ||
Exhibit 10.1
AMENDMENT TO THE MULLEN AUTOMOTIVE INC.
2022 EQUITY INCENTIVE PLAN
THIS AMENDMENT to the Mullen Automotive Inc. 2022 Equity Incentive Plan (this “Amendment”) is entered into as of August 3, 2023, by Mullen Automotive Inc., a Delaware corporation (the “Company”).
RECITALS
| A. | The Company adopted the Mullen Automotive Inc. 2022 Equity Incentive Plan effective as of July 26, 2022 (the “Plan”). |
| B. | Section 10 of the Plan provides that the Board may at any time amend the Plan. |
| C. | On June 8, 2023, the Board of Directors of the Company approved an amendment to the Plan increasing the maximum number of shares of the Company’s common stock issuable under the Plan by an additional 52,000,000 shares. |
| D. | Pursuant to the authority contained in Section 10 of the Plan, the Company now desires to amend the Plan as set forth herein. |
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth in the Plan, the Company agrees as follows:
| 1. | Section 4.1 of the Plan is deleted in its entirety and the following is substituted in lieu thereof: |
“As provided in Section 4.3, the total number of Shares available for grant under the Plan shall be Fifty Nine Million (59,000,000) shares, not subject to adjustment for any decrease or increase in the number shares of common stock resulting from a stock spilt, reverse stock split, recapitalization, combination, reclassification, the payment of a stock dividend on the Common Stock or any other decrease in the number of such shares of Common Stock effected without receipt of consideration by the Company. Shares granted under the Plan may be authorized but unissued Shares or reacquired Shares bought on the market or otherwise.”
| 2. | Except to the extent expressly amended or modified in this Amendment, the Plan shall remain in full force and effect as originally executed. |
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the day and year first above written.
| MULLEN AUTOMOTIVE INC. | ||
| By: | /s/ David Michery | |
| David Michery | ||
| Chief Executive Officer |
Exhibit 10.2
PERFORMANCE STOCK AWARD AGREEMENT
Part I. NOTICE OF STOCK GRANT
| Participant Name: | David Michery |
The Participant has been granted rights to the common stock, par value $0.001 per share (the "Common Stock") of Mullen Automotive, Inc. (the "Company") pursuant to the terms and conditions of this Performance Stock Award Agreement (the "Agreement"), as follows. Any capitalized term that is not defined in this Part I of the Agreement titled "Notice of Stock Grant" has the meaning assigned to such term in Part II of the Agreement titled "Terms and Conditions of Stock Grant," attached hereto as Exhibit A (the "Terms and Conditions").
| I. | Vesting Requirements. |
This is a performance-based stock award and, subject to Participant continuing as the Chief Executive Officer of the Company (the "Chief Company Executive") through each vesting event, shall vest upon the satisfaction of the Milestones as described in more detail below.
As detailed in Table 1 below, there are five (5) vesting tranches (each a "Tranche"), with each Tranche representing a portion of the stock grant covering that number of Shares specified next to the applicable Tranche number in Table 1 below. Each Tranche shall vest upon the achievement of one of the milestones specified in Table 1 below (each, a "Milestone"), all subject to Participant continuing as the Chief Company Executive as of the date of vesting through the date the Compensation Committee determines, approves and certifies that the requisite vesting conditions for the applicable Tranche have been satisfied (a "Certification"). Separate Certifications may occur on separate dates with respect to the achievement of each Milestone that are required for the vesting of any Tranche, provided that the vesting date of such Tranche will be the date on which the latter Certification necessary in order for the Tranche to vest is completed.
| II. | Table 1. Award and Milestone Performance Requirements. |
(a) VEHICLE COMPLETION MILESTONES. For each vehicle completion milestone set forth below that is satisfied within the performance period specified, the Company will issue to Participant a number of shares of Common Stock equal to 3% of Mullen’s then-current total issued and outstanding shares of Common Stock :
(i) Procuring full USA certification and homologation of its Class Three Van by end of December 2023;
(ii) Full USA certification and homologation of the Bollinger B1 sports car by end of June 2025; and
(iii) Full USA certification and homologation of the Bollinger B2 sports car by end of June 2025.
(b) REVENUE BENCHMARK MILESTONES. For each $25 Million of revenue recognized by the Company (each a "Revenue Tranche"), and subject to an aggregate maximum of recognized revenue of $250 Million between the Date of Grant and the end of December 2025, the Company will issue to Participant a number of shares of Common Stock equal to 1% of Mullen’s then-current total issued and outstanding shares of Common Stock as of the date a Revenue Tranche is achieved.
Performance Stock Award Agreement
Participant David Michery
June 8, 2023
(c) BATTERY DEVELOPMENT MILESTONES. For each Battery Development milestone set forth below that is satisfied within the performance period specified, the Company will issue to Participant a number of shares of Common Stock equal to 2% of Mullen’s then-current total issued and outstanding shares of Common Stock:
(i) The Company either directly or in collaboration with a joint venture partner developing or producing new and more advanced battery cells by the end of December 2024;
(ii) The Company either directly or in collaboration with a joint venture partner scaling its battery cells in the USA to the vehicle pack level for the Mullen Class 1 vehicle by the end of December 2024;
(iii) The Company either directly or in collaboration with a joint venture partner scaling its battery cells in the USA to the vehicle pack level for the Mullen Class 3 vehicle by the end of December 2024;
(d) JV-ACQUISITION MILESTONES. If Mullen enters into a partnership, joint venture, purchase and sale or similar transaction by the end of 2025 where the Company acquires a majority interest in a enterprise that manufacturers or provides vehicles, vehicle equipment, battery cells, accessories or other products beneficial to the Company, the Company will issue to Participant a number of shares of Common Stock equal to 3% of Mullen’s then-current total issued and outstanding shares of Common Stock as of date the JV-Acquisition milestone is achieved.
(e) ACCELERATED DEVELOPMENT MILESTONE. If Mullen acquires a facility with existing equipment that allows the Company to expedite scaling of battery pack production in the USA, the Company will issue to Participant a number of shares of Common Stock equal to 2% of Mullen’s then-current total issued and outstanding shares of Common Stock as of date the Accelerated Development milestone is achieved.
[Signature page follows.]
Performance Stock Award Agreement
Participant David Michery
June 8, 2023
IN WITNESS WHEREOF, the Company and Participant have executed this Agreement as of the dates below.
| MULLEN AUTOMOTIVE INC. | ||
| By: | /s/ Jonathan New | |
| Name: Jonathan New | ||
| Title: Chief Financial Officer | ||
| Date: June 8, 2023 | ||
AGREED AND ACCEPTED
Participant
| /s/ David Michery | |
| David Michery | |
| Date: June 8, 2023 |
Performance Stock Award Agreement
Participant David Michery
June 8, 2023
EXHIBIT A
Part II. TERMS AND CONDITIONS OF STOCK GRANT
1. Definitions. As used herein, the following definitions shall apply to the following capitalized terms:
1.1. "Acquisition" means any merger of a corporation or other entity with or into the Company by the Company of a corporation or other entity, or purchase by the Company of all or substantially all assets of a corporation or other entity.
1.2. "Administrator" means the Compensation Committee of the Board; provided that while Participant is a Director, Participant shall recuse himself from any Board approvals relating to the administration of the Agreement or this Award.
1.3. "Agreement" means this Performance Stock Grant Agreement between the Company and Participant evidencing the terms and conditions of the Award.
1.4. 1.4 "Award" means the Stock granted pursuant to this Agreement.
1.5. "Applicable Laws" means the legal and regulatory requirements relating to the administration of equity-based awards and the related issuance of shares of common stock, including but not limited to U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the laws of any non-U.S. country or jurisdiction applicable to the Award.
1.5. "Board" means the Board of Directors of the Company.
1.6. "Code" means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section, any valid regulation or other guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
1.7. "Common Stock" or "Shares" means the common stock of the Company.
1.8. "Company" means Mullen Automotive, Inc., a Delaware corporation, or any successor thereto.
1.9. "Director" means a member of the Board.
1.10. "Date of Grant" means the latest date this Agreement is signed by the Company and the Participant.
1.11. "Participant" means the person named as the "Participant" in the Notice of Grant.
2. Grant of Award. The Company hereby grants to Participant named in the Notice of Grant the Award for the number of Shares, as set forth in the Notice of Grant.
3. Vesting Requirements. The Award awarded by this Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Shares scheduled to vest upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Agreement, unless Participant will have been continuously the Chief Company Executive from the Date of Grant set forth in the Notice of Grant ("Date of Grant") until the date such vesting occurs.
Performance Stock Award Agreement
Participant David Michery
June 8, 2023
4. Exercise of Award.
4.1. Right to Exercise. This Award may be exercised only upon achievement of the milestone terms set out in the Notice of Grant.
4.2. Method of Exercise. This Award is exercisable by delivery of an exercise notice, in a form approved by the Administrator (the "Exercise Notice"), or in a manner and pursuant to such procedures as the Administrator may determine, which will state the election to exercise the Award, the number of Shares in respect of which the Award is being exercised (the "Exercised Shares"). The Exercise Notice will be completed by Participant and delivered to the Company.
4.3. Term of Award. In the event that the Company’s stockholders do not approve this Agreement within twelve (12) months following the Date of Grant, the Award automatically will be forfeited as of such date and Participant shall have no further rights to the Award or any Shares underlying the Award. In no event may the Award or any portion thereof be exercised before the Company’s stockholders approve the Award, notwithstanding any vesting of all or a portion of the Award prior to such stockholder approval.
5. Adjustments; Dissolution of Liquidation; Merger or Change in Control.
5.1. Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Agreement (and in a manner that will not provide Participant with any greater benefit or potential benefits than intended to be made available under the Agreement, other than as may be necessary solely to reflect changes resulting from any such aforementioned event), will adjust the number, class, and exercise price of shares covered by the Award.
5.2. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, the Award will terminate immediately prior to the consummation of such proposed action.
6. Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.
7. Non-Transferability of Award. This Award may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.
Performance Stock Award Agreement
Participant David Michery
June 8, 2023
8. Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Participant and Participant’s heirs, legatees, legal representatives, executors, administrators, successors and assigns. The rights and obligations of Participant under this Agreement may be assigned only with the prior written consent of the Company.
9. Administrator Authority. The Administrator will have the power and authority to construe and interpret this Agreement and to adopt such rules for the administration, interpretation and application of the Agreement as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the Award have vested and whether any Change in Control has occurred). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to this Agreement.
10. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Awards awarded under this Agreement or future Awards that may be awarded by the Company by electronic means or request Participant’s consent to participate in any equity-based compensation plan or program maintained by the Company by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in such plan or program through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.
11. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
12. Agreement Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
13. Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement can be made only in an express written contract executed by a duly authorized officer of the Company.
14. No Waiver. Either party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party from thereafter enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.
15. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding this Agreement, or Participant’s acquisition or sale of the Shares. Participant is hereby advised to consult with Participant’s own tax, legal and financial advisors regarding this Agreement before taking any action related to this Agreement.
16. Governing Law and Venue. This Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Award or this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation will be conducted in the courts of Orange County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Award is made and/or to be performed.
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