January 28, 2014

 

Lawrence Kom

166 East 82nd Street, Apt. 5B

New York, NY 10028

 

Re:Change in Control Letter Agreement

 

Dear Lawrence:

 

MGT Capital Investments, Inc. (the “Company”) desires, for its continued
success, to have the benefit of experienced management personnel. The Board of
Directors of the Company therefore believes that it is in the best interests of
the organization that, in the event of any prospective Change in Control (as
defined below) of the Company, you be reasonably secure in your employment and
position with the Company. In addition, in the event of a Change in Control, the
Board of Directors also wants to enable you to exercise independent judgment as
to the best interests of the Company and its stockholders without the
distraction of any personal uncertainties or risks regarding your continued
employment with the Company. In consideration of the foregoing, we are offering
you the additional benefits outlined below:

 

Change of Control Benefits.

 

If, within twelve (12) months following the consummation of the Change in
Control, you are either terminated by the Company without Cause (as defined
below) or you voluntarily terminate your employment with the Company for “Good
Reason” (as defined below), and provided you execute a general release in a form
provided by the Company at the time of termination, you will be entitled to
receive the following benefits from the Company:

 

(i)Severance. You will be entitled to receive a severance payment in an amount
equal to twelve (12) months of your then-current base salary in effect as of the
date of such termination (less applicable withholding) (the “Severance
Payment”). The Severance Payment shall be paid in a cash lump sum within ten
(10) days of the date of termination.

 

(ii)Continuation of Benefits. The Company will pay for the continuation of your
healthcare benefits in effect at the time of the termination (including medical,
dental and vision) pursuant to COBRA for a twelve-month period following the
date of termination.

 

(iii)Acceleration of Vesting. Any future grant to you of shares of restricted
common stock of the Company or options to purchase shares of Common Stock will
include the appropriate language providing that any unvested shares of
restricted stock or options outstanding at the time you are terminated by the
Company without Cause or voluntarily terminate your employment with the Company
for “Good Reason” as the result of a Change in Control will become fully vested
and, in the case of options, exercisable pursuant to the terms and conditions of
the applicable incentive grant agreement.

 

The Company shall deduct and withhold from any amounts payable to you hereunder
any amounts required to be deducted or withheld by the Company under the
provisions of any applicable federal, state or local statute, law, regulation,
ordinance or order (including, without limitation, any applicable excise tax
pursuant to Section 4999 of the Code).

 

 

 

 

Definitions:

 

(i)“Cause” means termination of your employment as a result of your: (a)
performance of any act or failure to perform any act in bad faith and to the
detriment of the Company; (b) dishonesty, intentional misconduct or material
breach of any agreement with the Company; or (c) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any person.

 

(ii)A“Change of Control” shall be deemed to have occurred if:

 

a.there shall be consummated (A) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or pursuant to
which shares of the Company’s common stock, par value $0.001 (the “Common
Stock”) would be converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company’s Common Stock
immediately prior to the merger have substantially the same proportionate
ownership of common stock of the surviving corporation immediately after the
merger, or (B) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all the assets of
the Company,

 

b.the stockholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company,

 

c.any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 (the “Exchange Act”)), other than the Company or
any executive benefit plan sponsored by the Company, or such person on the date
hereof is a 20% or more beneficial owner, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company representing 20% or more of the combined voting power of the Company’s
then outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of directors, as
a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, or

 

d.at any time during a period of two consecutive years, individuals who at the
beginning of such period, constituted the Board of Directors of the Company
shall cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company’s stockholders of each
new director during such two-year period was approved by a vote of at least
two-thirds of the directors then still in office, who were directors at the
beginning of such two-year period.

 

Notwithstanding the foregoing, a transaction shall not constitute a Change in
Control if: (i) its sole purpose is to change the state of the Company’s
incorporation; (ii) its sole purpose is to create a holding company that will be
owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction; or (iii) following the
consummation of the transaction or series of related transactions, members of
the Board of Directors of the Company prior to such transaction constitute a
majority of the members of the Board of Directors of the continuing or surviving
entity.

 

 

 

 

(iii)“Good Reason.” For purposes of this Letter Agreement, “Good Reason” shall
mean any of the following (without your prior written consent):

 

a.Any material breach by the Company of any provision of this Letter Agreement,
including any material reduction by the Company of your duties or
responsibilities (except in connection with the termination of your employment
by the Company for Cause or by you other than for Good Reason);

 

b.A reduction by the Company in your base salary;

 

c.The failure by the Company to obtain the specific assumption of this Letter
Agreement by any successor or assign of the Company;

 

d.Moving the principal offices of the Company to a location outside of the New
York Metro Area; or

 

e.Upon a Change of Control of the Company.

 

Miscellaneous.

 

The rights and obligations of the parties hereunder shall be governed by and
interpreted, construed and enforced in accordance with the laws of the State of
New York without regard to its or any other jurisdiction’s conflict of laws
principles. None of your rights or benefits, or obligations or duties of the
Company to you, may be assigned or transferred by you without the consent of the
Company. Any provision herein may be modified, terminated or waived only by a
written agreement executed by the party against whom enforcement is sought. If
any provision of this Letter Agreement shall be held invalid, the remainder of
this Letter Agreement shall not be affected thereby. Each party shall execute
and deliver all instruments and documents and take all actions as may be
reasonably required or appropriate to carry out the purposes of this Letter
Agreement. This Letter Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all together of which shall
constitute one and the same instrument. This Letter Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subject matter hereof and supersedes any outstanding agreements pertaining
to the subject matter hereof.

 

Please acknowledge your receipt of this Letter Agreement and your agreement to
its terms and conditions by signing and dating this Letter Agreement within
seven days of receipt and return an executed copy to Robert Traversa, MGT
Capital Investments, Inc., 500 Mamaroneck Avenue, Suite 204, Harrison, NY 10528.

 

 

 

 

Sincerely,

 

MGT Capital Investments, Inc.       By: /s/ Robert B. Ladd     Name: Robert B.
Ladd     Title: President and CEO       Acknowledged, agreed and accepted by:  
    /s/ Lawrence Kom   Lawrence Kom  

 

Date: 1/28/2014

 

[Signature Page to Change of Control Letter (Kom)]