FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.7
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
(“Amendment
”) is made and entered into effective as of March 4, 2019 by
and between Exactus, Inc. a Nevada corporation headquartered at
0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000
(“Company”) and Xxxxxx
Xxxxx, an individual (“Executive”).
W I T N
E S S E T H:
WHEREAS, on January
11, 2019, the Executive and the Company entered into an Employment
Agreement for the Executive’s service as Chief Financial
Officer of the Company (the “Original Agreement);
and
WHEREAS, the
Executive and the Company desire to amend certain provisions of the
Original Agreement,
NOW,
THEREFORE, in consideration of the foregoing and their respective
covenants and agreements contained in this document, the Company
and the Executive hereby agree amend the Original Agreement as
follows:
1. Severance
Compensation. Section 6 of the Original Agreement,
“Severance Compensation,” is hereby amended to read as
follows:
“Upon
termination of employment for any reason, the Executive shall be
entitled to: (A) all Base Salary earned through the date of
termination to be paid according to Section 4; (B) any and all
reasonable expenses paid or incurred by the Executive in connection
with and related to the performance of his duties and
responsibilities for the Company during the period ending on the
termination date to be paid according to Section 8; (C) any accrued
but unused vacation time through the termination date in accordance
with Company policy; and (D) any Annual Bonuses earned through the
date of termination to be paid according to Section 5(a); and (E)
all Share Awards earned and vested prior to
termination.
Additionally, if
the Executive’s employment is terminated prior to expiration
of the Employment Period (including due to his death or Disability,
as defined in Section 12(b)) unless the Executive’s
employment is terminated for Cause (as defined in Section 12(c)) or
the Executive terminates his employment without Good Reason (as
defined in Section 12(d) and other than for a Change in Control as
provided in Section 12(d) and Section 12(f)), the Executive shall
be entitled to receive a cash amount equal to the lesser of: (i) such amount as
the Executive would have been entitled to receive as an aggregate
Base Salary for the balance of the Initial Term; or (ii) 50% of the amount of
one year’s Base Salary as then in effect (the
“Separation Payment”); provided, that the Executive
executes an agreement releasing Company and its affiliates from any
liability associated with this Agreement and such release is
irrevocable at the time the Separation Payment is first payable
under this Section 6 and the Executive complies with his other
obligations under Section 13 of this Agreement. Subject to the
terms hereof, one-half (1/2) of the Separation Payment shall be
paid within thirty (30) days of the Executive’s termination
of employment (“Initial Payment”),
provided that the Executive has executed a release; and the balance
of the Separation Payment shall be paid in substantially equal
installments on the Company’s regular payroll dates beginning
with the first payroll date coincident with or immediately
following the Initial Payment and ending with the last payroll date
that occurs in the third calendar year beginning after the
Executive’s termination of employment.
The
Executive may continue coverage with respect to the Company’s
group health plans as permitted by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) for himself and
each of his “Qualified Beneficiaries”
as defined by COBRA (“COBRA Coverage”). The
Company shall reimburse the amount of any COBRA premium paid for
COBRA Coverage timely elected by and for the Executive and any
Qualified Beneficiary of the Executive, and not otherwise
reimbursed, during the period that ends on the earliest of (x) the
date the Executive or the Qualified Beneficiary, as the case may
be, ceases to be eligible for COBRA Coverage, (y) the last day of
the consecutive eighteen (18) month period following the date of
the Executive’s termination of employment and (z) the date
the Executive or the Qualified Beneficiary, as the case may be, is
covered by another group health plan. To reimburse any COBRA
premium payment under this paragraph, the Company must receive
documentation of the COBRA premium payment within ninety (90) days
of its payment. “
2. Clawback Rights. Section 7 of
the Original Agreement, “Clawback Rights,” is hereby
amended to read as follows:
“The Annual
Bonus, and any and all stock based compensation (such as options
and equity awards) (collectively, the “Clawback Benefits”) shall
be subject to “Clawback Rights” as
follows: during the period that the Executive is employed by the
Company and upon the termination of the Executive’s
employment and for a period of three (3) years thereafter, if there
is a restatement of any financial results directly attributable to
the Executive from which any Clawback Benefits to the Executive
shall have been determined, the Executive agrees to repay any
amounts which were determined by reference to any Company financial
results which were later restated (as defined below), to the extent
the Clawback Benefits amounts paid exceed the Clawback Benefits
amounts that would have been paid, based on the restatement of the
Company’s financial information. All Clawback Benefits
amounts resulting from such restated financial results shall be
retroactively adjusted by the Compensation Committee to take into
account the restated results, and any excess portion of the
Clawback Benefits resulting from such restated results shall be
immediately surrendered to the Company and if not so surrendered
within ninety (90) days of the revised calculation being provided
to the Executive by the Compensation Committee following a publicly
announced restatement, the Company shall have the right to take any
and all action to effectuate such adjustment. The calculation of
the revised Clawback Benefits amount shall be determined by the
Compensation Committee in good faith and in accordance with
applicable law, rules and regulations. All determinations by the
Compensation Committee with respect to the Clawback Rights shall be
final and binding on the Company and the Executive. The Clawback
Rights shall terminate following a Change of Control as defined in
Section 12(f), subject to applicable law, rules and regulations.
For purposes of this Section 7, a restatement of financial results
that requires a repayment of a portion of the Clawback Benefits
amounts shall mean a restatement resulting from material
non-compliance of the Company with any financial reporting
requirement under the federal securities laws and shall not include
a restatement of financial results resulting from subsequent
changes in accounting pronouncements or requirements which were not
in effect on the date the financial statements were originally
prepared (“Restatements”). The
parties acknowledge it is their intention that the foregoing
Clawback Rights as relates to Restatements conform in all respects
to the provisions of the Xxxx-Xxxxx Xxxx Street Reform and Consumer
Protection Act of 2010 (“Xxxx-Xxxxx Act”) and
require recovery of all “incentive-based” compensation,
pursuant to the provisions of the Xxxx-Xxxxx Act and any and all
rules and regulations promulgated thereunder from time to time in
effect. Accordingly, the terms and provisions of this Agreement
shall be deemed automatically amended from time to time to assure
compliance with the Xxxx-Xxxxx Act and such rules and regulations
as hereafter may be adopted and in effect.”
3. Vacation. Section 10,
“Vacation,” of the Original Agreement is hereby amended
to read as follows:
“During the
term of this Agreement, the Executive shall be entitled to accrue,
on a pro rata basis, two (2) weeks paid vacation per year. Vacation
shall be taken at such times as are mutually convenient to the
Executive and the Company and no more than seven (7) consecutive
days shall be taken at any one time without Company approval in
advance.”
4. Other Terms Unchanged. All
other terms and conditions of the Original Agreement shall remain
in full force and effect as set forth therein.
[Signature page follows immediately]
IN
WITNESS WHEREOF, the Executive and the Company have caused this
First Amendment To Executive Employment Agreement to be executed as
of the date first above written.
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By:
/s/ Xxxxxx
Xxxxx
Name:
Xxxxxx Xxxxx
Title: _____________________________
Date
Signed: ________________________
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XXXXXX XXXXX
Executive
/s/ Xxxxxx
Xxxxx
Date
Signed: _________________________
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