Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Amendment of Employment Agreements
On January 9, 2023 (the "McConnell Effective Date"), the Company entered into an
amended and restated employment agreement (the "Amended Employment Agreement")
with Michael McConnell, the Company's Chief Executive Officer. The Employment
Agreement supersedes and replaces all previous agreements and understandings.
Pursuant to the Employment Agreement, Mr. McConnell will continue serve as the
Company's Chief Executive Officer. The Amended Employment Agreement terminates
on April 19, 2024, unless sooner terminated pursuant to the terms of the Amended
Employment Agreement. On April 19, 2024, Mr. McConnell's employment will be
renewed automatically for additional one-year terms, unless the Company provides
Mr. McConnell with a notice of non-renewal at least 30 days prior to the end of
the term.
Pursuant to the Amended Employment Agreement, as compensation for his service as
Chief Executive Officer of the Company, Mr. McConnell will receive: a $100,000
base salary per annum as well as stock issuances at the end of each fiscal
quarter in the form of options ("Quarterly Options") to purchase the Company's
common stock. The Quarterly Options together with the Base Salary shall be
referred to as the Base Salary. The value of the Quarterly Options shall be
$50,000. The number of Quarterly Options shall be calculated in accordance with
the Company's option valuation practices. The exercise price of the Quarterly
Options shall be the price of the closing price of the Company's common stock on
the grant date. The Quarterly Options will be vested as of the grant date and
exercisable for a period of five years thereafter. The Company may, in its sole
discretion, determine to pay Mr. McConnell cash in lieu of the quarterly stock
issuance. Mr. McConnell will also be eligible to receive an annual performance
bonus if he meets certain pre-determined periodic key performance indicators
which bonus may be up to 40% of the Base Salary. and the Quarterly Options. Mr.
McConnell will also be entitled to receive equity incentive awards under the
Company's incentive plan. The aggregate annual incentive award value that Mr.
McConnell would be entitled to receive would be up to 50% of the Base Salary,
which will be in the form of restricted stock and options as set forth in the
Amended Employment Agreement.
Should Mr. McConnell's employment with the Company be terminated for Good Reason
(as defined in the Amended Employment agreement) or Without Cause (as defined in
the Amended Employment Agreement), the Company will (i) continue payment of Mr.
McConnell's Base Salary and the Quarterly Options for 3 months (which shall not
be adjusted for any remaining employment term) and (ii) Mr. McConnell will be
eligible for COBRA benefits until the earlier of 3 months from the end of the
month in which he is terminated or eligibility for benefits with another
employer.
The Amended Employment Agreement also provides for certain restrictive covenants
and non-compete restrictions throughout Mr. McConnell's employment.
Additionally, on January 12, 2023, the Company entered into an amended and
restated employment agreement (the "Amended Employment Agreement") with Arthur
Levine, the Company's Chief Financial Officer. The Employment Agreement
supersedes and replaces all previous agreements and understandings. Pursuant to
the Employment Agreement, Mr. Levine will continue serve as the Company's Chief
Financial Executive Officer. The Amended Employment Agreement terminates on
April 19, 2024, unless sooner terminated pursuant to the terms of the Amended
Employment Agreement. On April 19, 2024, Mr. Levine's employment will be renewed
automatically for additional one-year terms, unless the Company provides Mr.
Levine with a notice of non-renewal at least 30 days prior to the end of the
term.
Pursuant to the Amended Employment Agreement, as compensation for his service as
Chief Financial Officer of the Company, Mr. Levine will receive: a $150,000 base
salary per annum (the "Base Salary") as well as stock issuances at the end of
each fiscal quarter. The value of the quarterly issuance shall be $37,500. The
Quarterly Stock Issuance shall be: (i) 50% in the form of options to purchase
the Company's common stock and (ii) 50% in the form of shares of the Company's
restricted common stock. The number of options shall be calculated in accordance
with the Company's option valuation practices and the number of shares shall be
calculated based on the price per share at the close on the grant date. The
exercise price of the options shall be the price of the closing price of the
Company's common stock on the grant date. The shares and options issued as part
of the Quarterly Stock Issuance will be vested as of the grant date and the
options shall be exercisable for a period of five years thereafter. The Company
in its sole discretion may determine to pay Mr. Levine cash in lieu of the
Quarterly Stock Issuance, if paid in cash he will receive a cash payment of
$31,250. If the Agreement is terminated prior to the end of the fiscal quarter,
Mr. Levine will receive the pro-rata portion of the Quarterly Stock Issuance.
Mr. Levine will also be eligible to receive an annual performance bonus if he
meets certain pre-determined periodic key performance indicators which bonus may
be up to 40% of the sum of the Base Salary and the Quarterly Stock Issuance. Mr.
Levine will also be entitled to receive equity incentive awards under the
Company's incentive plan. The aggregate annual incentive award value that Mr.
Levine would be entitled to receive would be up to 50% of the sum of the Base
Salary and the Quarterly Stock Issuance, which will be in the form of restricted
stock and options as set forth in the Amended Employment Agreement. The vesting
of any awards is set forth in the Amended Employment Agreement between the
Company and Mr. Levine.
Should Mr. Levine's employment with the Company be terminated for Good Reason
(as defined in the Amended Employment agreement) or Without Cause (as defined in
the Amended Employment Agreement), the Company will (i) continue payment of the
sum of Mr. Levine's Base Salary and Quarterly Stock Issuance for 9 months (which
shall not be adjusted for any remaining employment term) and (ii) Mr. Levine
will be eligible for COBRA until the earlier of 9 months from the end of the
month in which he is terminated or eligible for benefits with another employer.
The Amended Employment Agreement also provides for certain restrictive covenants
and non-compete restrictions throughout Levine's employment.
The foregoing description of the Amended Employment Agreements is qualified in
their entirety by the text of the Employment Agreements, copies of which are
attached as Exhibits 10.1 and 10.2 hereto.
Director Compensation
On January 6, 2022 (the "Effective Date"), EzFill Holdings, Inc. (the "Company")
entered into an Amendment to the Board Member Agreement (the "Amendment") with
Allen Weiss, a member of the Company's board of directors. Pursuant to the
Amendment, Mr. Weiss' annual compensation for serving as Chairman of the Board
of the Company will be $230,000, which will be paid in the form of the Company's
restricted common stock. Mr. Weiss will also be entitled to cash compensation
for service on the committees of the board according to the Company's board
compensation structure.
The foregoing description of the Amendment is qualified in its entirety by the
text of the Amendment to Board Member Letter of Agreement between EzFill
Holdings, Inc. and Allen Weiss, a copy of which is attached as Exhibit 10.3
hereto.
The Company's board of directors has also determined that in lieu of their
annual cash payment of $40,000 per year and an equivalent stock issuance of
$60,000 per year, the board members other than Mr. Weiss will receive an
equivalent stock issuance of $130,000 per year with no annual cash payment. The
board members will also be entitled to cash compensation for service on the
committees of the board according to the Company's board compensation structure.
Board stock compensation will be granted annually at the Company's annual
shareholder meeting and will fully vest in 12 months or one day before the
following year's annual meeting whichever is sooner. The number of shares
granted will be based on the closing price of the Company share on the effective
date of the grant, or the Company's annual shareholder meeting date. Should a
Board member leave the Board prior to vesting, that Board member will be awarded
a grant on a pro rata basis.
There will no longer be any gross-up payments for executive or board of director
stock issuances.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Amended and Restated Employment Agreement between EzFill
Holdings, Inc. and Michael McConnell, dated January 9, 2023.
10.2 Amended and Restated Employment Agreement between EzFill
Holdings, Inc. and Arthur Levine, dated January 12, 2023.
10.3 Amendment to Board Member Letter of Agreement between EzFill
Holdings, Inc. and Allen Weiss, dated January 6, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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