UNITED
STATES
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): January 2, 2020
COMSOVEREIGN
HOLDING CORP.
(Exact
name of registrant as specified in its charter)
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Nevada
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333-150332
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46-5538504
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification No.)
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5000
Quorum Drive, STE 400
Dallas,
TX 75254
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (904) 834-4400
11651
Central Parkway #118
Jacksonville,
FL 32224
(Registrant’s
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):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which
registered
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None
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N/A
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N/A
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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. ☐
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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Appointment
of Executive Officers
Our
board of directors has appointed Brian T. Mihelich our Chief Financial Officer and Kevin M. Sherlock our General Counsel and Secretary
effective January 2, 2020. Our former Chief Financial Officer, Kendall W. Carpenter, will remain with our company and retain
responsibility for the financial matters relating to our Drone Aviation business operations. Biographical information regarding
Messrs. Mihelich and Sherlock is set forth below:
Prior
to assuming the role of our Chief Financial Officer, Mr. Mihelich, age 52, was, since September 2019, the chief financial officer
of our ComSovereign Corp. subsidiary, which we acquired in December 2019. Prior to joining ComSovereign Corp., Mr. Mihelich
was from July 2015 to February 2019 Vice President – Managed Services at Ericsson. From 2014 to July 2015, Mr. Mihelich
was Head of Operations of the Vodafone account at Ericsson. We believe Mr. Mihelich has significant experience in
the telecom sector where he has had senior management responsibilities for numerous business relationships, including with AT&T,
Sprint, Vodafone, Napster, Google and Facebook. He has managed operations with sales of up to $750 million and up to 600
direct and indirect employee reports. Mr. Mihelich served with distinction in the U.S. Air Force, and has also worked for
the U.S. Securities and Exchange Commission. Mr. Mihelich earned a B.S. in Business Administration from Northern Michigan University,
and an MBA from the University of Texas.
Prior
to joining our company on January 2, 2020, Mr. Sherlock, age 58, was a partner in the law firm of Heurlin & Sherlock,
PC, in Tucson, Arizona, which he co-founded in 2008 and where he focused primarily on business litigation, securities arbitration,
and security clearance matters. While in the private practice of law, Mr. Sherlock also gained considerable experience in
corporate structures and mergers and acquisition work. Mr. Sherlock is licensed to practice law in Washington D.C., Florida
and Arizona. Mr. Sherlock earned a Bachelor of Science degree in Multinational Business Operations from Florida State University
and a Juris Doctorate from Georgetown University Law Center.
There
are no arrangements or understandings between Mr. Mihelich or Mr. Sherlock and any other person or persons pursuant to which Mr.
Mihelich or Mr. Sherlock was appointed as an officer of our company. With respect to Mr. Mihelich and Mr. Sherlock, there have
been no events of the type listed under Item 401(f) of Regulation S-K promulgated by the Securities Exchange Commission that occurred
during the past ten years. In addition, there are no current or proposed transactions in which Mr. Mihelich or Mr. Sherlock, or
any member of the immediate family of either of Mr. Mihelich or Mr. Sherlock, has an interest that is required to be disclosed
under Item 404(a) of Regulation S-K promulgated by the Securities Exchange Commission.
Compensatory
Arrangements of Certain Officers
On
December 2, 2019, we entered into a five-year employment agreement with Brian T. Mihelich, our Chief Financial Officer, to employ
Mr. Mihelich in such capacity commencing on January 2, 2020, and on January 2, 2020, we entered into a three-year employment
agreement with Kevin M. Sherlock, our General Counsel and Secretary. Unless earlier terminated, at the end of the initial term,
each agreement automatically renews for additional one-year terms until cancelled.
The
following is a summary of the compensation arrangements set forth in each employment agreement described above:
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Executive
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Title
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Annual Base Salary
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Annual Targeted Bonus
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Brian T. Mihelich
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Chief Financial Officer
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$
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150,000
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As determined by the Compensation Committee of the Board of Directors
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Kevin M. Sherlock
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General Counsel and Secretary
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$
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150,000
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As determined by the Compensation Committee of the Board of Directors
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As
an incentive to commence employment with us, pursuant to such agreements, we issued to each of Messrs. Mihelich and Sherlock a
restricted stock award of 200,000 shares of common stock, which shares shall vest annually in arrears in two equal installments
on the first and second anniversaries of employment. In addition, each executive is also eligible to receive an employee incentive
stock option grant each year during the initial term, as determined by the compensation committee of our board of directors, with
a strike price equal to that of the other corporate officers and directors under that current year’s approved option grants.
The executives shall have no rights to any portions of any option grant until the vesting of said grant, which shall be on vesting
terms as the as the options granted to our other officers and directors.
Under
each of these employment agreements, the executive will be entitled to severance in the event we terminates his employment without
Cause (as defined in the employment agreement), he resigns from his employment for Good Reason (as defined in the employment agreement),
or he is terminated as a result of death or a disability. The severance amount for each executive would be (i) his pro rata base
salary through the date of termination, (ii) a severance amount equal to 6 month’s salary if such termination is done within
the first year and (iii) a severance amount equal to 12 month’s salary if such termination occurs thereafter.
In
connection with the execution of his employment agreement, each executive also executed our standard employee agreements containing
customary confidentiality restrictions and work-product provisions, as well as customary non-competition covenants and non-solicitation
covenants with respect to our employees, consultants and customers.
The
foregoing summary of the employment agreements of Messrs. Mihelich and Sherlock is qualified in its entirety by the copy of such
agreements filed as Exhibit 10.1 and Exhibit 10.2 hereto and incorporated herein by reference.
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Item
7.01
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Regulation
FD Disclosure.
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On
January 8, 2020, we issued a press release announcing the appointment of Messrs. Mihelich and Sherlock as executive officers of
our company. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The
information furnished pursuant to this Item 7.01 and the accompanying Exhibit 99.1 shall not be deemed to be “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that
section. Further, the information in this Item 7.01 and Exhibit 99.1: (i) will not be deemed an admission as to the materiality
of any information herein (including Exhibit 99.1) and (ii) is not to be incorporated by reference into any of our filings.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
The
following exhibits are furnished herewith:
SIGNATURE
Pursuant
to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
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Date:
January 8, 2020
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COMSOVEREIGN
HOLDING CORP.
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By:
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/s/
Daniel L. Hodges
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Daniel
L. Hodges
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Chairman
and Chief Executive Officer
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3
Exhibit 10.1
EMPLOYMENT
AGREEMENT
This
Employment Agreement (this “Agreement”), dated as of December 2, 2019 is by and between ComSovereign Holding Corp.,
a Nevada corporation, (the “Company” or “Employer”), and; Brian T. Mihelich, a married man
and resident of Texas (the “Employee”).
WHEREAS,
the Company desires to employ the Employee and to enter into this Agreement embodying the terms of such employment; and
WHEREAS,
the Employee is willing to accept employment on the terms hereinafter set forth in this Agreement.
NOW
THEREFORE, in consideration of the foregoing premises and mutual covenants herein contained and for other good and valuable consideration,
the parties agree as follows:
1. Term
of Employment. The Employee shall be employed by the Company for a period commencing on December 2, 2019 (the “Effective
Date”), and ending on December 31, 2021 (the “Term”) or such earlier time as the Employee’s employment
may be terminated pursuant to Section 7 of this Agreement. Following completion of the Term, employment shall automatically renew
for successive one-year periods (each such renewal, a “Renewal Term”), also subject to termination of employment pursuant
to Section 7, unless either party shall give written notice to the other not less than 30 days prior to the end of the Initial
Term the full Term or any Renewal Term, as the case may be, of his or its intent not to renew.
2.
Position.
(a) Beginning
January 1, 2020, the Employee shall serve as Chief Financial Officer of the Company and shall directly report to the Chief Executive
Officer of the Company and shall have the professional duties and authority as the Chief Executive Officer of the Company or the
Board of Directors of the Company may from time to time prescribe.
(b) The
Employee agrees at all times during the term of his employment and thereafter, to hold in strictest confidence, and not to use
or to disclose to any person, firm or corporation without written authorization of the Chief Executive Officer, any Confidential
Information as defined herein and in separate agreement(s) executed between the Parties on even date herewith.
3. Base
Salary. During the Term or any Renewal Term, the Company shall pay the Employee a base salary (as increased from time to time,
the “Base Salary”) at the initial annual rate of $150,000.00 USD per year, payable in regular monthly or bi-weekly
installments in accordance with the Company’s standard payroll practices. The Base Salary may be increased by the Company
at any time after the initial period, from time to time as deemed appropriate by the Company’s Board of Directors, but shall
not be reduced.
4. Incentive
Compensation. The Employee shall receive an employee Incentive Stock Option grant from the Company (an “ISOP Grant”)
each year during the Term, as determined by the Compensation Committee of the Board of Directors, with a strike price equal to
that of the other corporate officers and directors under that current year’s approved option grants. Partial years worked
will receive the pro-rata amount of the annual ISOP bonus. Employee shall have no rights to any portions of any ISOP Grant until
the vestment of said grant. The options in each grant vest in the same fashion as the directors and other officers of the Company.
The
Employee shall also receive, upon execution of this Agreement, a Restricted Stock Award of 200,000 shares of common stock, which
shares shall vest annually in arrears at the rate of 100,000 shares on the first and second anniversaries of employment.
5. Employee
Benefits/Vacation. During the Term and any Renewal Term, the Employee shall be provided with employee benefits on the same
basis as benefits are generally made available to other employees of the Company. The Employee shall be entitled to paid vacation
in accordance with Company policy, but not less than four (4) weeks per calendar year. Vacation time must be used or forfeited
and will not accrue into the following calendar year. A health insurance premium benefit will be allowed and paid monthly to Employee
in the amount of $800.00 USD for the first six months of the Term. Thereafter, so long as Employee is employed, the health insurance
premium will be increased to an amount equal to the Employee’s actual monthly health insurance premium or $1,000 per month,
whichever is lower.
6. Business
Expenses. During the Term and any Renewal Term, reasonable and documented business expenses incurred by the Employee in the
performance of his duties hereunder shall be reimbursed by the Company in accordance with Company policies. Expenses in excess
of $2,000 individually or $5,000 in the aggregate in any given month shall have the prior written approval of the Chief Executive
Officer. These amounts are subject to periodic review and mutually agreed upon revision between Employee and the Chief Executive
Officer.
7. Termination.
Notwithstanding any other provision of the Agreement:
(a) For
Cause by the Company. The Term (or any Renewal Term) and Employee’s employment may be terminated by the Company at any
time in its sole discretion during the Term or any Renewal Term, “for Cause”. Termination “for Cause”
shall include, but not be limited to, a termination for any of the following reasons: (i) the Employee has committed a willful
serious act such as fraud, embezzlement or theft against Employer, (ii) the Employee has been convicted of a felony (or entered
a plea of nolo contendere to a felony charge), (iii) the Employee has engaged in conduct that has caused demonstrable and serious
injury, monetary and/or otherwise, to Employer, (iv) Employee in carrying out his duties hereunder has been found guilty of willful
gross neglect or willful gross misconduct, (v) the Employee has refused to carry out his duties in gross dereliction of duty,
(vi) the Employee has committed one or more acts of insubordination against Employer or its manager(s), or (vii) the Employee
has materially and/or deliberately breached this Agreement. Upon termination of the Employee’s employment for Cause, Employee
shall be entitled to receive his Base Salary through the date of termination (together hereinafter, “Accrued Amounts”).
(b) Death
or Disability. The Term or any Renewal Term, Employee’s employment hereunder shall terminate upon (i) the Employee’s
death or (ii) if the Employee becomes physically or mentally incapacitated as determined by medical conclusion and therefore has
been unable for an aggregate of 60 days in any 365-day period, consecutive or not, to perform his duties (such incapacity is hereinafter
referred to as “Disability”), upon written notice given while he remains so disabled. Upon termination of the Employee’s
employment hereunder for either death or Disability, the Employee (or their estate, as the case may be) shall be entitled to receive
any Accrued Amounts. Except for the amounts referred to in the preceding sentence, neither the Employee nor his estate shall have
any further rights to any compensation or any other benefits under this Agreement. Until the date the Employee’s employment
terminates, the Employee shall continue to receive his full compensation and benefits hereunder.
(c) Without
Cause by the Company or for Good Reason by the Employee. The Employee may terminate his employment for Good Reason and the
Company may terminate his employment without Cause. If the Employee’s employment with the Company is terminated by the Company
without Cause or by the Employee for Good Reason (as defined below), the Employee shall receive (i) the Accrued Amounts, and (ii)
a severance amount equal to 6 month’s salary if such termination is done within the first year, and; (iii) a severance amount
equal to 12 month’s salary if such termination is done thereafter. For the purposes of the Agreement, “Good Reason”
shall mean the occurrence of any of the following events or conditions without the Employee’s express written consent: (a)
a material diminution in the Employee’s status, position, scope, powers, duties, authority or job responsibilities (except
in connection with the termination of his employment for Cause or death or during an incapacity); (b) a change in the principal
location at which the Employee performs his duties for the Company to a new location that is at least 50 miles from the prior
location; or (c) any breach by the Company of a material term of this Agreement that is not cured within thirty (30) days after
the Employee delivers to the Chief Executive Officer of the Company a written notice that specifically identifies such breach.
Notwithstanding the foregoing, following Employee’s giving of notice of his determination not to renew following the Term
or any Renewal Term pursuant to Section 1, the Company may relieve Employee of his powers, duties and responsibilities, remove
his title and any Board seat, and appoint another person to the Employee’s position without any such acts constituting “Good
Reason”, provided that Employee’s compensation and benefits may not be reduced and he shall be treated for all purposes
as a full-time active employee until the termination of the then-current employment term, or 60 days whichever is less.
(d) Termination
by Employee. In the event the Employee terminates his employment with the Company other than for death or for Good Reason,
the Employee shall be entitled to receive only his Accrued Amounts and vested Options, and, except for such amounts, the Employee
shall have no further rights to any compensation or benefits hereunder.
8. Miscellaneous.
(a) Governing
Law and Venue. This Agreement and all rights thereunder, and any controversies or disputes arising with respect thereto, shall
be governed by and construed and interpreted in accordance with the laws of the State of Arizona, applicable to agreements made
and to be performed entirely within such State, without regard to conflict of laws provisions thereof that would apply the law
of any other jurisdiction. Subject to Section 8(m) hereunder, the parties expressly agree that if legal action is required to
interpret or enforce this Agreement, such action shall be filed in the state courts of Arizona.
(b) Representation.
The Company represents and warrants that it is fully authorized and empowered to enter into this Agreement and that its entering
into this Agreement and the performance of its obligations under this Agreement will not violate any agreement between the Company
and any other person, firm or organization or any law or governmental regulation. The Employee represents that he is authorized
to enter into this Agreement and that his entering into the Agreement and the performance of his obligations thereunder will not
violate any agreement between the Employee and any other person, firm or organization or any law or governmental regulation and
that any conflict be resolved by mutual agreement.
(c) Entire
Agreement. This Agreement, together with the Mutual NDA and Invention and Assignment Agreements executed of even date herewith,
contain the entire agreement between the Company and the Employee concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between them with respect thereto,
including any agreement between the Company and Employee.
(d) Amendment
or Waiver. This Agreement cannot be changed, modified or amended without the consent in writing of both the Employee and the
Company. No waiver by either the Company or the Employee at any time of any breach by the other party of any condition or provision
of this Agreement shall be deemed a waiver of a similar or dissimilar condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by the Employee or an authorized officer of the Company, as the case may be.
(e)
Severability. In the event that any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect to the full extent permitted by law.
(f) Reasonableness.
To the extent that any provision or portion of this Agreement is determined to be unenforceable by a court of law or equity, that
provision or portion of this Agreement shall nevertheless be enforceable to the extent that such court or judiciary authority
determines it is reasonable.
(g) Assignment.
This Agreement shall not be assignable by the Employee. This Agreement may be assigned by the Company to a company which is a
successor in interest to all of the business operations of the Company provided that such successor assumes the obligations hereunder
in a writing promptly delivered to the Employee. Any assignment in accordance with the foregoing shall not be deemed to be a termination
of employment with the Company for purposes of this Agreement.
(h) Successors;
Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company’s and the Employee’s
personal and/or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted
assigns.
(i) Notice.
For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or sent by United States certified or registered mail, return
receipt requested, postage prepaid, to the following addresses.
To
Employee:
Brian
T. Mihelich
3028
Avondale
The
Colony, TX 75056
To
Company:
General
Counsel
ComSovereign
Holding Corp.
6600
N Eagle Ridge Drive
Tucson,
Arizona 85750
These
addresses may be changed by either party at any time upon providing written notice of such change to the other party in accordance
with this Section.
(j) Withholding
Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
(k)
Counterparts. This Agreement may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
(l) Headings.
The headings of the paragraphs contained in this Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provisions of this Agreement.
(m) Dispute
Resolution. In the event of any dispute, controversy or claim arising out of or relating to this Employment Agreement or Employee’s
employment or termination thereof, the parties may agree to attempt to settle such dispute, controversy or claim through mediation,
which shall be conducted at a mutually agreed upon location in Pima County, Arizona. All reasonable fees and expenses related
to any such mediation (including reasonable attorneys’ fees and related disbursements) shall be divided equally between
the Employee and the Company.
(n) Non-Solicitation.
During Employee’s employment with Employer and for a period of two (2) years after the later of (1) the expiration of this
Agreement, or (2) the termination of Employee’s employment with Employer for any or no reason and by either party hereto,
Employee shall not directly or indirectly engage in any of the following activities other than on behalf of and for the benefit
of Employer:
(i) Solicit
the employment of any person who is employed with Employer on a full or part-time basis either as an employee or independent contractor,
specifically excluding those parties with whom Employee had a direct, preexisting relationship of any kind prior to execution
of this Agreement; or
(ii)
Solicit, directly or indirectly, business from any clients, customers or any other person
or entity with whom Employer has had direct business dealings during Employee’s employment with Employer in a manner which
directly competes with the business of Employer.
Employer
and Employee agree and stipulate that the requirements and obligations of Employee set forth in this Section 8(n) are fair and
reasonably necessary for the protection of the Company, its goodwill, and other protectable interests of Employer. Because of
the difficulty of measuring economic losses to Employer as a result of the breach of any of the foregoing obligations of Employee
and because of the immediate and irreparable damage which would be caused to Employer for which it would have no adequate remedy,
Employer and Employee agree that in the event of a breach by Employee of any of the obligations or requirements of Employee as
set forth in this Section 8(n), said obligations or requirements may be enforced by Employer by injunction and restraining orders.
Notwithstanding the foregoing, the obligations or requirements set forth in this Section 8(n) shall not apply to Employee with
regard to any person or entity with whom Employee had a direct, preexisting relationship of any kind prior to execution of this
Agreement.
(o)
Covenant Not to Compete.
(i) During
the period of employment, Employee shall not directly or indirectly work for, consult with, manage, operate or have an ownership
interest in a business or operation which directly competes with the business of Employer and which operates in the areas of the
Company’s targeted or actual interests.
(ii) The
restrictions and covenants contained in this Agreement shall be effective and enforceable from the date hereof until the date
that is two (2) years after the later of (i) the expiration of the term hereof or (ii) the termination of Employee’s employment
with Employer for any or no reason and by either party hereto, subject to the provisions of Section 7 above. Employee’s
employment with Employer pursuant to the terms hereof constitutes at least a portion of the consideration for the restrictions
upon Employee as set forth herein.
(iii) If
the foregoing provisions of this Section 8(o) relating to the duration of the restrictive nature of this covenant not to compete
or the geographic areas restricted by this covenant not to compete are found to be unenforceable by a court of competent jurisdiction
because such provisions are found to be overbroad or exceed the parameters and limitations for the Employer’s reasonable
protection, then the restrictions contained in this Section 8(o) upon the activities of Employee shall be limited to the following:
(1) That
geographic area which a court of competent jurisdiction may deem to be equitable and to be adequate to reasonably protect the
Employer; and
(2) That
period of time which a court of competent jurisdiction may deem to be equitable and to be adequate to reasonably protect the Employer.
(p) Non
– Disclosure of Confidential Information.
(i) Confidential
Information. As used herein the term “Confidential Information” shall mean and include, without limitation, any
and all business and/or operating plans or models, client or customer lists (including but not limited to any and all databases
of customers, clients, contacts and/or vendors), trade secrets, the prices it obtains or has obtained from the sale of its products
or services, employee and benefit plans, including compensation packages, training procedures, computer programs, computer software
and any other proprietary information of Employer disclosed to Employee, which includes, but is not limited to, any Company proprietary
information, technical data or know-how, including but not limited to, research, products, customer lists and customers, developments,
inventions, processes, technology, designs, drawings, engineering, marketing, finances or other business information disclosed
to the Employee by the Company either directly or indirectly in writing, orally or by observation, or otherwise obtained by the
Employee during or immediately prior to his service as an employee of the Company, but only to the extent not generally otherwise
known in the industry.
(ii)
Non-Disclosure of Confidential Information. (Covered by separate agreement).
(iii) Survival.
The restrictions and terms contained in this Section 8(p) shall be effective and enforceable from the date hereof and shall remain
effective and enforceable at all times after the termination or expiration of the term hereof.
(q) Legal
Representation. By signing this Agreement, Employee expressly waives any claims that he did not understand or have representation
regarding any terms or conditions contained in this Agreement, and has had opportunity to consult with legal counsel regards the
terms and conditions herein.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
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EMPLOYEE:
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EMPLOYER:
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BRIAN T. MIHELICH
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COMSOVEREIGN HOLDING CORP.
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(A Nevada Corporation)
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By:
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/s/
Brian T. Mihelich
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By:
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/s/ Daniel L. Hodges
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Brian T. Mihelich
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Daniel L. Hodges
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Chief Executive Officer
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8
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement
(this “Agreement”), dated as of January 2, 2020 is by and between ComSovereign Holding Corp., a Nevada corporation,
(the “Company” or “Employer”), and; Kevin M. Sherlock, a single man and resident of Arizona (the
“Employee”).
WHEREAS, the Company
desires to employ the Employee and to enter into this Agreement embodying the terms of such employment, and;
WHEREAS, the Employee
understands this agreement supersedes and replaces all other employment or engagement agreements between the Employee and the Company
and/or its subsidiaries, and;
WHEREAS, the Employee
is willing to accept employment on the terms hereinafter set forth in this Agreement.
NOW THEREFORE, in consideration
of the foregoing premises and mutual covenants herein contained and for other good and valuable consideration, the parties agree
as follows:
1. Term of
Employment. The Employee shall be employed by the Company for a period commencing on January 2, 2020, (the “Effective
Date”), and ending on December 31, 2023 (the “Term”) or such earlier time as the Employee’s employment
may be terminated pursuant to Section 7 of this Agreement. Following completion of the Term, employment shall automatically renew
for successive one-year periods (each such renewal, a “Renewal Term”), also subject to termination of employment pursuant
to Section 7, unless either party shall give written notice to the other not less than 30 days prior to the end of the Initial
Term the full Term or any Renewal Term, as the case may be, of his or its intent not to renew.
2. Position.
(a) Beginning January
2, 2020, the Employee shall serve as General Counsel and Secretary of the Company and shall directly report to the Chief Executive
Officer of the Company and shall have the professional duties and authority as the Chief Executive Officer of the Company or the
Board of Directors of the Company may from time to time prescribe.
(b) The Employee
agrees at all times during the term of his employment and thereafter, to hold in strictest confidence, and not to use or to disclose
to any person, firm or corporation without written authorization of the Chief Executive Officer, any Confidential Information as
defined herein and in separate agreement(s) executed between the Parties on even date herewith.
3. Base Salary.
During the Term or any Renewal Term, the Company shall pay the Employee a base salary (as increased from time to time, the “Base
Salary”) at the initial annual rate of $150,000.00 USD per year, payable in regular monthly or bi-weekly installments in
accordance with the Company’s standard payroll practices. The Base Salary may be increased by the Company at any time after
the initial period, from time to time as deemed appropriate by the Company’s Board of Directors, but shall not be reduced.
4. Incentive
Compensation. The Employee shall receive an employee Incentive Stock Option grant from the Company (an “ISOP Grant”)
each year during the Term, as determined by the Compensation Committee of the Board of Directors, with a strike price equal to
that of the other corporate officers and directors under that current year’s approved option grants. Partial years worked
will receive the pro-rata amount of the annual ISOP bonus. Employee shall have no rights to any portions of any ISOP Grant until
the vestment of said grant. The options in each grant vest in the same fashion as the directors and other officers of the Company.
The Employee shall also receive,
upon execution of this Agreement, a Restricted Stock Award of 200,000 shares of common stock, which shares shall vest annually
in arrears at the rate of 100,000 shares on the first and second anniversaries of employment.
5. Employee
Benefits/Vacation. During the Term and any Renewal Term, the Employee shall be provided with employee benefits on the same
basis as benefits are generally made available to other employees of the Company. The Employee shall be entitled to paid vacation
in accordance with Company policy, but not less than four (4) weeks per calendar year. Vacation time must be used or forfeited
and will not accrue into the following calendar year. A health insurance premium benefit will be allowed and paid monthly to Employee
in the amount of $1,000.00 USD for the first six months of the Term. Thereafter, so long as Employee is employed, the health insurance
premium will be increased to an amount equal to the Employee’s actual monthly health insurance premium or $1,500 per month,
whichever is less.
6. Business
Expenses. During the Term and any Renewal Term, reasonable and documented business expenses incurred by the Employee in the
performance of his duties hereunder shall be reimbursed by the Company in accordance with Company policies. Expenses in excess
of $2,000 individually or $5,000 in the aggregate in any given month shall have the prior written approval of the Chief Executive
Officer. These amounts are subject to periodic review and mutually agreed upon revision between Employee and the Chief Executive
Officer
7. Termination.
Notwithstanding any other provision of the Agreement:
(a) For
Cause by the Company. The Term (or any Renewal Term) and Employee’s employment may be terminated by the Company at any
time in its sole discretion during the Term or any Renewal Term, “for Cause”. Termination “for Cause” shall
include, but not be limited to, a termination for any of the following reasons: (i) the Employee has committed a willful serious
act such as fraud, embezzlement or theft against Employer, (ii) the Employee has been convicted of a felony (or entered a plea
of nolo contendere to a felony charge), (iii) the Employee has engaged in conduct that has caused demonstrable and serious injury,
monetary and/or otherwise, to Employer, (iv) Employee in carrying out his duties hereunder has been found guilty of willful gross
neglect or willful gross misconduct, (v) the Employee has refused to carry out his duties in gross dereliction of duty, (vi) the
Employee has committed one or more acts of insubordination against Employer or its manager(s), or (vii) the Employee has materially
and/or deliberately breached this Agreement. Upon termination of the Employee’s employment for Cause, Employee shall be entitled
to receive his Base Salary through the date of termination (together hereinafter, “Accrued Amounts”).
(b) Death or
Disability. The Term or any Renewal Term, Employee’s employment hereunder shall terminate upon (i) the Employee’s
death or (ii) if the Employee becomes physically or mentally incapacitated as determined by medical conclusion and therefore has
been unable for an aggregate of 60 days in any 365-day period, consecutive or not, to perform his duties (such incapacity is hereinafter
referred to as “Disability”), upon written notice given while he remains so disabled. Upon termination of the Employee’s
employment hereunder for either death or Disability, the Employee (or their estate, as the case may be) shall be entitled to receive
any Accrued Amounts. Except for the amounts referred to in the preceding sentence, neither the Employee nor his estate shall have
any further rights to any compensation or any other benefits under this Agreement. Until the date the Employee’s employment
terminates, the Employee shall continue to receive his full compensation and benefits hereunder.
(c) Without Cause
by the Company or for Good Reason by the Employee. The Employee may terminate his employment for Good Reason and the Company
may terminate his employment without Cause. If the Employee’s employment with the Company is terminated by the Company without
Cause or by the Employee for Good Reason (as defined below), the Employee shall receive (i) the Accrued Amounts, and (ii) a severance
amount equal to 6 month’s salary if such termination is done within the first year, and; (iii) a severance amount equal to
12 month’s salary if such termination is done thereafter. For the purposes of the Agreement, “Good Reason” shall
mean the occurrence of any of the following events or conditions without the Employee’s express written consent: (a) a material
diminution in the Employee’s status, position, scope, powers, duties, authority or job responsibilities (except in connection
with the termination of his employment for Cause or death or during an incapacity); (b) a change in the principal location at which
the Employee performs his duties for the Company to a new location that is at least 50 miles from the prior location; (c) a change
in person who currently holds the position of Chief Executive Officer of the Company; (d) a Change in Control of the Company or
(e) any breach by the Company of a material term of this Agreement that is not cured within thirty (30) days after the Employee
delivers to the Chief Executive Officer of the Company a written notice that specifically identifies such breach. Notwithstanding
the foregoing, following Employee’s giving of notice of his determination not to renew following the Term or any Renewal
Term pursuant to Section 1, the Company may relieve Employee of his powers, duties and responsibilities, remove his title and any
Board seat, and appoint another person to the Employee’s position without any such acts constituting “Good Reason”,
provided that Employee’s compensation and benefits may not be reduced and he shall be treated for all purposes as a full-time
active employee until the termination of the then-current employment term, or 60 days whichever is less.
(d) Termination
by Employee. In the event the Employee terminates his employment with the Company other than for death or for Good Reason,
the Employee shall be entitled to receive only his Accrued Amounts and vested Options, and, except for such amounts, the Employee
shall have no further rights to any compensation or benefits hereunder.
8. Miscellaneous.
(a) Governing
Law and Venue. This Agreement and all rights thereunder, and any controversies or disputes arising with respect thereto, shall
be governed by and construed and interpreted in accordance with the laws of the State of Arizona, applicable to agreements made
and to be performed entirely within such State, without regard to conflict of laws provisions thereof that would apply the law
of any other jurisdiction. Subject to Section 8(m) hereunder, the parties expressly agree that if legal action is required to interpret
or enforce this Agreement, such action shall be filed in the state courts of Arizona.
(b) Representation.
The Company represents and warrants that it is fully authorized and empowered to enter into this Agreement and that its entering
into this Agreement and the performance of its obligations under this Agreement will not violate any agreement between the Company
and any other person, firm or organization or any law or governmental regulation. The Employee represents that he is authorized
to enter into this Agreement and that his entering into the Agreement and the performance of his obligations thereunder will not
violate any agreement between the Employee and any other person, firm or organization or any law or governmental regulation and
that any conflict be resolved by mutual agreement.
(c) Entire Agreement.
This Agreement, together with the Mutual NDA and Invention and Assignment Agreements executed of even date herewith, contain the
entire agreement between the Company and the Employee concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or oral, between them with respect thereto, including
any agreement between the Company and Employee.
(d) Amendment
or Waiver. This Agreement cannot be changed, modified or amended without the consent in writing of both the Employee and the
Company. No waiver by either the Company or the Employee at any time of any breach by the other party of any condition or provision
of this Agreement shall be deemed a waiver of a similar or dissimilar condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by the Employee or an authorized officer of the Company, as the case may be.
(e) Severability.
In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason,
in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and
effect to the full extent permitted by law.
(f) Reasonableness.
To the extent that any provision or portion of this Agreement is determined to be unenforceable by a court of law or equity, that
provision or portion of this Agreement shall nevertheless be enforceable to the extent that such court or judiciary authority determines
it is reasonable.
(g) Assignment.
This Agreement shall not be assignable by the Employee. This Agreement may be assigned by the Company to a company which is a successor
in interest to all of the business operations of the Company provided that such successor assumes the obligations hereunder in
a writing promptly delivered to the Employee. Any assignment in accordance with the foregoing shall not be deemed to be a termination
of employment with the Company for purposes of this Agreement.
(h) Successors;
Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company’s and the Employee’s
personal and/or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted
assigns.
(i) Notice.
For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or sent by United States certified or registered mail, return
receipt requested, postage prepaid, to the following addresses.
To Employee:
Kevin M.
Sherlock
4605 N. Paseo
Aquimuri
Tucson, AZ
85750
To Company:
Chairman
ComSovereign
Holding Corp.
6600 N Eagle
Ridge Drive
Tucson, Arizona 85750
These addresses may
be changed by either party at any time upon providing written notice of such change to the other party in accordance with this
Section.
(j) Withholding
Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
(k) Counterparts.
This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
(l) Headings.
The headings of the paragraphs contained in this Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provisions of this Agreement.
(m) Dispute Resolution.
In the event of any dispute, controversy or claim arising out of or relating to this Employment Agreement or Employee’s employment
or termination thereof, the parties may agree to attempt to settle such dispute, controversy or claim through mediation, which
shall be conducted at a mutually agreed upon location in Pima County, Arizona. All reasonable fees and expenses related to any
such mediation (including reasonable attorneys’ fees and related disbursements) shall be divided equally between the Employee
and the Company.
(n) Non-Solicitation.
During Employee’s employment with Employer and for a period of two (2) years after the later of (1) the expiration of this
Agreement, or (2) the termination of Employee’s employment with Employer for any or no reason and by either party hereto,
Employee shall not directly or indirectly engage in any of the following activities other than on behalf of and for the benefit
of Employer:
(i) Solicit
the employment of any person who is employed with Employer on a full or part-time basis either as an employee or independent contractor,
specifically excluding those parties with whom Employee had a direct, preexisting relationship of any kind prior to execution of
this Agreement; or
(ii) Solicit,
directly or indirectly, business from any clients, customers or any other person or entity with whom Employer has had direct business
dealings during Employee’s employment with Employer in a manner which directly competes with the business of Employer.
Employer and Employee
agree and stipulate that the requirements and obligations of Employee set forth in this Section 8(n) are fair and reasonably necessary
for the protection of the Company, its goodwill, and other protectable interests of Employer. Because of the difficulty of measuring
economic losses to Employer as a result of the breach of any of the foregoing obligations of Employee and because of the immediate
and irreparable damage which would be caused to Employer for which it would have no adequate remedy, Employer and Employee agree
that in the event of a breach by Employee of any of the obligations or requirements of Employee as set forth in this Section 8(n),
said obligations or requirements may be enforced by Employer by injunction and restraining orders. Notwithstanding the foregoing,
the obligations or requirements set forth in this Section 8(n) shall not apply to Employee with regard to any person or entity
with whom Employee had a direct, preexisting relationship of any kind prior to execution of this Agreement.
(o) Covenant Not
to Compete.
(i) During
the period of employment, Employee shall not directly or indirectly work for, consult with, manage, operate or have an ownership
interest in a business or operation which directly competes with the business of Employer and which operates in the areas of the
Company’s targeted or actual interests.
(ii) The
restrictions and covenants contained in this Agreement shall be effective and enforceable from the date hereof until the date that
is two (2) years after the later of (i) the expiration of the term hereof or (ii) the termination of Employee’s employment
with Employer for any or no reason and by either party hereto, subject to the provisions of Section 7 above. Employee’s employment
with Employer pursuant to the terms hereof constitutes at least a portion of the consideration for the restrictions upon Employee
as set forth herein.
(iii) if
the foregoing provisions of this Section 8(o) relating to the duration of the restrictive nature of this covenant not to compete
or the geographic areas restricted by this covenant not to compete are found to be unenforceable by a court of competent jurisdiction
because such provisions are found to be overbroad or exceed the parameters and limitations for the Employer’s reasonable
protection, then the restrictions contained in this Section 8(o) upon the activities of Employee shall be limited to the following:
(1) That
geographic area which a court of competent jurisdiction may deem to be equitable and to be adequate to reasonably protect the Employer;
and
(2) That
period of time which a court of competent jurisdiction may deem to be equitable and to be adequate to reasonably protect the Employer.
(p) Non –
Disclosure of Confidential Information.
(i) Confidential
Information. As used herein the term “Confidential Information” shall mean and include, without limitation, any
and all business and/or operating plans or models, client or customer lists (including but not limited to any and all databases
of customers, clients, contacts and/or vendors), trade secrets, the prices it obtains or has obtained from the sale of its products
or services, employee and benefit plans, including compensation packages, training procedures, computer programs, computer software
and any other proprietary information of Employer disclosed to Employee, which includes, but is not limited to, any Company proprietary
information, technical data or know-how, including but not limited to, research, products, customer lists and customers, developments,
inventions, processes, technology, designs, drawings, engineering, marketing, finances or other business information disclosed
to the Employee by the Company either directly or indirectly in writing, orally or by observation, or otherwise obtained by the
Employee during or immediately prior to his service as an employee of the Company, but only to the extent not generally otherwise
known in the industry.
(ii) Non-Disclosure
of Confidential Information. (Covered by separate agreement).
(iii) Survival.
The restrictions and terms contained in this Section 8(p) shall be effective and enforceable from the date hereof and shall remain
effective and enforceable at all times after the termination or expiration of the term hereof.
(q) Legal Representation.
By signing this Agreement, Employee expressly waives any claims that he did not understand or have representation regarding any
terms or conditions contained in this Agreement, and has had opportunity to consult with legal counsel regards the terms and conditions
herein.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the day and year first above written.
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EMPLOYEE:
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EMPLOYER:
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KEVIN M. SHERLOCK
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COMSOVEREIGN HOLDING CORP.
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(A Nevada Corporation)
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By:
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/s/
Kevin M. Sherlock
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By:
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/s/ Daniel L. Hodges
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Kevin M. Sherlock
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Daniel L. Hodges
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Chief Executive Officer
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8
Exhibit 99.1
COMSovereign Holding Corp. Appoints Brian
T. Mihelich as Chief Financial Officer
and Kevin M. Sherlock as General Counsel and Secretary
Additions Add Extensive Telecommunications,
Finance and Legal Experience to Growing Executive Team
DALLAS, TX – January 8, 2020 –
COMSovereign Holding Corp. (OTCQB: DRNE) (formerly Drone Aviation Holding Corp.) (“COMSovereign” or the “Company”),
a US-based pure-play enabler of 5G connectivity and data transmission systems, announced today that its board of directors has
appointed Brian T. Mihelich as Chief Financial Officer and Kevin M. Sherlock as General Counsel and Secretary effective January
2, 2020. Kendall W. Carpenter, the Company’s prior Chief Financial Officer, will remain with the Company and retain responsibility
for the financial matters relating to its Drone Aviation business operations.
Chairman and CEO of the Company, Dan Hodges,
stated, “On behalf of the Board and management, we welcome Brian and Kevin to COMSovereign, further bolstering our dedicated,
talented and highly-experienced executive team. We look forward to valuable contributions from both Brian and Kevin as we further
build-out our operations and expand our portfolio of advanced 5G-NR communications and data network-enabling technologies, allowing
us to better serve our current and future global customer base.”
Mr. Mihelich brings significant senior management
and financial telecom experience to the Company having most recently served as Vice President, Managed Services, and as Head of
Operations of the Vodafone account at Ericsson. His experience in the telecom sector includes senior management responsibilities
for numerous business relationships including AT&T, Sprint, Vodafone, Napster, Google and Facebook. Mr. Mihelich has managed
operations for organizations with sales of $750 million and up to 600 direct and indirect employee reports. In addition, he has
served with distinction in the U.S. Air Force and has also worked for the U.S. Securities and Exchange Commission. Mr. Mihelich
earned a B.S. in Business Administration from Northern Michigan University and an MBA from the University of Texas.
Prior to joining COMSovereign, Mr. Sherlock
was a partner in the law firm of Heurlin & Sherlock, PC, in Tucson, Arizona, which he co-founded in 2008 and where he focused
primarily on business litigation, securities arbitration, and security clearance matters. While in the private practice, Mr. Sherlock
also gained considerable experience in corporate structures and mergers and acquisitions. He is licensed to practice law in Washington
D.C., Florida and Arizona. Mr. Sherlock earned a Bachelor of Science degree in Multinational Business Operations from Florida State
University and a Juris Doctorate from Georgetown University Law Center.
For more information
about COMSovereign, please visit www.COMSovereign.com.
About ComSovereign Holding Corp.
COMSovereign Holding Corp. (OTCQB: DRNE) has
assembled a portfolio of communications technology companies with combined capabilities that enable connectivity across the entire
data transmission spectrum. Through strategic acquisitions and organic research and development efforts, COMSovereign has become
a US-based pure-play communications provider, able to provide LTE Advanced and 5G-NR telecom solutions to network operators and
enterprises world-wide. For more information about COMSovereign, please visit www.COMSovereign.com or view documents that it files
with or furnishes to the Securities and Exchange Commission at www.sec.gov, including the Risk Factors included in its Annual Report
on Form 10-K for the fiscal year ended December 31, 2018, as well as information in its Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
Forward-Looking Statements
Certain statements in this press release that
are not historical facts are forward-looking statements that reflect management’s current expectations, assumptions, and
estimates of future performance and economic conditions, and involve risks and uncertainties that could cause actual results to
differ materially from those anticipated by the statements made herein. Forward-looking statements are generally identifiable by
the use of forward-looking terminology such as “believe,” “expects,” “may,” “looks to,”
“will,” “should,” “plan,” “intend,” “on condition,” “target,”
“see,” “potential,” “estimates,” “preliminary,” or “anticipates” or
the negative thereof or comparable terminology, or by discussion of strategy or goals or other future events, circumstances, or
effects. Moreover, forward-looking statements in this release include, but are not limited to, those relating to the Company’s
ability to develop and deliver advanced voice and data communications systems. The Company’s financial results and the forward-looking
statements could be affected by many factors, including, but not limited to, demand for the Company’s products and services,
economic conditions in the U.S. and worldwide, and the Company’s ability to recruit and retain management, technical, and
sales personnel. Further information relating to factors that may impact the Company’s results and forward-looking statements
are disclosed in the Company’s filings with the SEC. The forward-looking statements contained in this press release are made
as of the date of this press release, and the Company disclaims any intention or obligation, other than imposed by law, to update
or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Contacts:
Investor Relations for COMSovereign Holding Corp.:
Steve Gersten
813-334-9745
investors@comsovereign.com
and
Media Relations for COMSovereign Holding Corp.:
Michael Glickman
MWGCO, Inc.
917-397-2272
mike@mwgco.net