Exhibit 10.1

 

 

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement (“Agreement”) is
effective as of the 7th day of February, 2020 (the “Effective Date”), by and
between Jeffrey G. McGonegal (“Employee”) and Riot Blockchain, Inc. (the
“Company”).

WHEREAS, Employee is currently employed as the Company’s Chief Executive Officer
under the Executive Employment Agreement dated February 6, 2019 (“Prior
Agreement”);

WHEREAS, the Company desires to continue to employ Employee as its Chief
Executive Officer and Employee desires to continue to be employed by the Company
in this role;

WHEREAS, this Agreement replaces, supersedes and overrides the Prior Agreement
as of the Effective Date and the Prior Agreement is no longer in effect;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
receipt and sufficiency of such consideration is hereby acknowledged, the
Company and Employee agree as follows:

1.                  Employment.

a.                   Employee accepts continued full-time employment as the
Company’s Chief Executive Officer (“CEO”). In this position, Employee shall
perform such duties as are assigned by the Company and/or as are otherwise
normally associated with such position. Employee will report directly to the
Company’s Board of Directors (the “Board”), or such other person as designated
by the Board.

b.                  In carrying out Employee’s duties as CEO, Employee will
exercise discretion and independent judgment. However, Employee’s conduct shall
be consistent with, and in the best interests of, the Company’s business goals
and objectives and in accordance with the authority and limitations on authority
established in the Company’s charter and bylaws and by the Board.

c.                   Employee shall prepare, in connection with services
performed, all reports, documents and correspondence necessary and/or
appropriate under the circumstances, all of which shall belong to the Company.
Employee shall store all reports, documents, correspondence and data on Company
designated storage and will not archive or otherwise retain any copies or
descriptions of said reports, documents, correspondence or data outside of such
Company storage.

d.                  Employee owes a fiduciary duty of loyalty, fidelity, and
allegiance to act at all times in the best interests of the Company and to not
engage in any act which would, directly or indirectly, knowingly and materially,
injure the Company’s business, interests, or reputation. Employee shall not
become involved in a conflict of interest with the Company, or upon discovery
thereof, allow such a conflict to continue. Moreover, Employee shall not engage
in any activity that might involve a possible conflict of interest without first
obtaining written approval from the Board. Employee may, however, with prior
written consent from the Board (which consent shall not unreasonably be
withheld), serve on one corporate board as a board member and serve on one civic
or non-profit board as a board member at any given time during Employee’s
employment with the Company.

 

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2.                  Term of Employment. The term of Employee’s employment under
this Agreement shall be for a one (1) year period dating February 7, 2020 to
February 7, 2021 (the “Term”), unless earlier terminated in accordance with
Section 6 of this Agreement. Beyond the Term, Employee’s employment with the
Company may be extended by the parties upon mutual written agreement signed by
both parties or upon executing a new employment agreement.

3.                  Extent and Place of Services. During his employment with the
Company, Employee shall devote to the Company all of Employee’s working time,
attention, knowledge and skills as are necessary to perform Employee’s services
for the Company, and Employee shall not engage in any other business,
employment, consulting or other activities, unless Employee has obtained prior
written consent of the Board. Employee’s services shall ordinarily be performed
in the Castle Rock, Colorado area and, if necessary, on a limited temporary
basis, in such other locations as the Board may designate.

4.                  Compensation. For providing continued services as CEO of the
Company and due to Employee’s long tenure with the Company, Employee shall be
compensated during the Term as follows:

a.                   Base Salary. The Company shall pay Employee an annualized
base salary in the total gross amount of Three Hundred Thousand Dollars and Zero
Cents ($300,000.00), to be prorated and paid in accordance with the Company’s
normal payroll practices, which includes being subject to appropriate deductions
and withholdings as required or permitted by law.

b.                  Bonus Eligibility. Employee shall be eligible for
consideration of a cash bonus of up to Thirty Percent (30%) of Employee’s Base
Salary (subject to appropriate deductions and withholdings) based upon
achievement of individual and Company performance goals as determined in writing
by the Board. All determinations relating to the performance goals applicable to
Employee and the Company and whether such goals have been met shall be made in
the sole discretion of the Board or such person or committee designated by the
Board. Employee shall not be guaranteed any minimum bonus payment and, if a
bonus is earned and payable, Employee must have been employed by the Company as
of December 31st, 2020 to receive such payment.

c.                   Equity Compensation. Employee shall receive an equity award
in the amount of $300,000, calculated based on the closing price per share of
the Company’s common stock as reported by the Nasdaq Capital Market on February
7, 2020, of restricted stock units convertible into shares of the Company’s
common stock on a one-for-one basis (the “Award”), which Award shall be subject
to the terms of the Riot Blockchain, Inc. 2019 Equity Incentive Plan (the
“Plan”) and should any ambiguity or conflict exist between this Agreement and
the Plan, the terms of this Agreement shall control. Subject to the provisions
of this Agreement and of the Plan, the Award shall vest in four (4) equal
quarterly installments, with each quarterly installment vesting as of the end of
each quarter during the Term (i.e. May 7, 2020, August 7, 2020, November 7, 2020
and February 7, 2021) (the “Vesting Period”). Employee shall be entitled to
receive and convert to common stock each quarter the vested amount of the Award
during the Vesting Period as long as the Employee continues to remain employed
with the Company on the applicable date during the Vesting Period, otherwise,
Employee shall automatically forfeit any unvested portion of the Award during
the Term. Each quarterly vesting of the Award shall be settled in shares of the
Company’s common stock, on a one-for-one basis, according to the procedures set
forth in the Plan, subject to the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”). At Employee’s option, the
settlement of any such vested Awards shall be made on a net settlement basis
with 70% paid in common shares and 30% in cash used to remit against Employee’s
income tax liabilities.

 

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d.                  Benefits. Employee may participate in those group medical,
dental, health or disability insurance plans or pension plans, including
reimbursement for Employee’s coverages under Medicare / Social Security plans,
consistent with existing reimbursement policies which the Company has previously
offered to Employee, subject to all terms and conditions of those plans and any
amendments thereto, including without limitation any and all provisions
concerning eligibility for participation. Nothing in this Section 4(d) is
intended to require the Company to offer benefits of any type, and the Company
may choose to amend or discontinue any benefit program at any time in its sole
discretion.

e.                   Paid Time Off. Employee shall receive a total of
twenty-five days of paid time off during the Term. If Employee’s employment
continues beyond the Term of this Agreement, Employee may carry over any unused
paid time off days beyond the Term or be paid by the Company for such unused
paid time off.

f.                   Expense Reimbursement. The Company will reimburse Employee
for direct and reasonable out-of-pocket expenses incurred by Employee in
connection with the performance of Employee’s duties as CEO and in accordance
with the Company’s expense reimbursement policies in effect from time to time,
subject to Employee submitting the reimbursement request and proof of such
expense(s) within 90 days of incurring the expense(s).

5.                  Restrictive Covenants. As CEO of the Company, Employee is in
a position requiring significant trust and confidence and exposing Employee to
certain confidential and proprietary information. During his employment with the
Company, Employee may also develop information, data and processes to further
the development of the Company’s operations. The Company is willing to continue
to employ Employee and permit such exposures to and development by Employee only
if Employee continues to be bound by the covenants, restrictions, obligations
and agreements set forth in this Section 5 (the “Covenants”). Employee
acknowledges that the employment benefits, rights and compensation set forth in
this Agreement represent good, valuable, fair and sufficient consideration for
such Covenants.

a.                   Definitions. For purposes of this Agreement, the following
terms have the specified meanings:

i.                        “Affiliate” shall mean any entity in which the Company
owns, directly or indirectly, more than a twenty-five percent (25%) interest, or
any entity that owns, directly or indirectly, more than a twenty-five percent
(25%) interest in the Company, either as a partner, member, shareholder, joint
venturer, limited liability company or other equity position or interest.

 

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ii.                        “Confidential Information” shall mean all
confidential, proprietary, sensitive and/or trade secret information relating in
any way to the Company’s business, Inventions (as defined below), Works (as
defined below), the present or prospective Field of Business (as defined below)
or interests of the Company, the Company’s products or services, or Employee’s
employment with the Company, whether in oral, written, physical, electronic, or
visual form, including without limitation, all information, data, and materials
relating to business policies, procedures, models, and methods; customers,
customer accounts and customer relationships; referral sources and referral
relationships; business targets and prospects; inventions, patents, trademarks,
and copyrights, and respective applications therefor; Property (as defined
below); improvements, procedures, and know-how; trade secrets; specifications
and drawings; computer software, web and software designs, graphics, content,
programming, and source code and/or object code; business, product, and consumer
information; data, research, and development; reports, forecasting, modeling,
planning, and databases; cost and pricing data; collected information and data;
process flow diagrams; bills and invoices; vendor and supplier information;
products, processes, and ideas; sales, financial, business plans, and marketing
information; financial statements; balance sheets; and all other information
that an organization such as the Company reasonably would consider proprietary
and/or confidential.

iii.                        “Field of Business” shall mean the business of: (1)
cryptocurrency operations; (2) data center and mining operations; and/or (3) any
other field of business that represents a material portion of the business
conducted by (or planned to be conducted by) the Company (including its
subsidiaries and Affiliates) during the Term.

iv.                        “Property” shall mean any and all: (1) inventions,
ideas, articles of manufacture, machines, compositions of matter, methods,
processes, improvements, any new or useful arts, discoveries, contributions,
findings or other tangible or intangible concepts, trade secrets, designs,
formulae, software programming, and manufacturing techniques, whether
patentable, copyrightable, or otherwise, and all related know-how, which arises
out of or relates in any way to the present or prospective Field of Business or
interests of the Company, the Company’s products or services or Employee’s
employment with the Company whether created, conceived, reduced to practice, or
contributed to, in whole or in part, by Employee at any time during Employee’s
employment with the Company or at any time within one year following Employee’s
separation of employment with the Company for any reason whatsoever
(collectively, “Inventions”); (2) all works of authorship created by Employee,
in whole or in part, at any time during the period of Employee’s employment
including, without limitation, written materials, computer programs, software,
screen displays, advertising and marketing materials, and business materials
(collectively, the “Works”); and (3) all Confidential Information.

 

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v.                        “Trade Secret” means any Confidential Information
described above, without regard to form, which: (1) is not commonly known by or
available to the public; (2) derives economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means to, other persons who can obtain economic value from its disclosure or
use; and (3) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.

b.                  Covenants Against Competition and Solicitation.

i.                        During his employment with the Company, Employee shall
not accept alternative employment or engage in any independent and/or separate
business, employment, consulting or other activity in the Field of Business or
otherwise, except as may be permitted by the Board in Section 1(d) above.

ii.                        During his employment with the Company and for a
period of twelve (12) months after Employee’s employment with the Company ends,
regardless of the reason, Employee shall not:

(1)in the Field of Business, solicit business from, direct marketing activities
to, or perform work relating to, any customer or prospective customer upon whom
Employee called, or for whom Employee provided administrative or support
services, on the Company’s behalf during Employee’s employment with the Company;

(2)become engaged in or employed by, directly or indirectly, any business entity
which operates in or in any way does business in the Field of Business; or

(3)be the owner of more than one percent (1%) of the outstanding equity of any
business entity which operates in or in any way does business in the Field of
Business.

iii.                        During his employment with the Company and for a
period of twelve (12) months after Employee’s employment with the Company ends,
regardless of the reason, Employee shall not, directly or indirectly:

(1)induce any customers, including former and prospective customers, of the
Company to patronize any business entity that operates in the Field of Business
(other than the Company); or

(2)request or advise any customers of the Company, including prospective
customers, to withdraw, curtail or cancel such customer’s business with the
Company.

 

 

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c.                   Covenants Concerning Confidentiality.

i.                        Employee acknowledges that Employee will use and/or
have access to Confidential Information, including Trade Secrets, and that such
information constitutes valuable, special and unique property of the Company.

ii.                        During and after Employee’s employment with the
Company, Employee shall: (1) maintain the Confidential Information in strict
confidence; (2) not use any of the Confidential Information for any purpose
whatsoever except for uses expressly authorized by the Company in connection
with Employee’s employment with the Company; and (3) not disclose or divulge any
Confidential Information, including Trade Secrets, to any person, corporation,
or other entity for any reason or purpose whatsoever, except upon the direct
written authorization of the Board.

d.                  Ownership of Property.

i.                        All Works shall be considered a “Work Made for Hire,”
as that term is defined in the United States Copyright laws and shall be owned
by and for the express benefit of the Company and the Company shall be the
author of all Works. To the extent any Works do not qualify as a “Work Made for
Hire,” Employee hereby forever, irrevocably and unconditionally, assigns,
transfers, and conveys to the Company all rights, title, and interest in and to
all such Works. Inventions, Trade Secrets, and trademarks, including all patent
and all other intellectual property rights therein, world-wide and without
exception, shall be the property of Company and Employee will assign and does
hereby assign all rights therein to Company.

ii.                        Employee acknowledges and agrees that the Company is
the lawful, sole, and exclusive owner of all Property and that the Company owns
all rights, title, and other interests thereto. Employee hereby forever,
irrevocably and unconditionally assigns, transfers and conveys to the Company
all rights, title, and interest in and to all of the Property including, but not
limited to, all Inventions and all copyrights, patents, trademarks, trade
secrets, and all other intellectual property rights therein, world-wide and
without exception.

iii.                        No license or other rights, whether express or
implied, are granted to Employee in any of the Property and Employee hereby
disclaims the same. Both during Employee’s employment with the Company and at
any time thereafter, Employee shall, at no cost, fully cooperate with and assist
the Company in the procurement, protection, maintenance, and enforcement of any
and all rights, registrations, and perfections of all Property, including but
not limited to, the filing and prosecution of all applications for registration
of patents, copyrights, trademarks, and any other intellectual property rights
therein. This shall include executing, acknowledging, and delivering to the
Company all documents, declarations, applications, affidavits, and papers
necessary to enable the Company to procure and protect such rights.

 

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iv.                        Employee shall be required to promptly disclose all
Property to the Company. Employee shall keep accurate records relating to the
conception and reduction to practice of all Inventions and records concerning
the creation of all Works and other Property. Such records shall be the sole and
exclusive property of the Company and included within the definition of “Works”
and “Confidential Information,” and Employee shall surrender possession of such
records to the Company at any time upon the Company’s request.

e.                   Surrender of Records. Upon termination of Employee’s
employment with the Company and/or upon request from the Board, Employee will
surrender to the Company in good condition all records, files, and other
property of the Company in Employee’s custody, possession, or control including,
without limitation, all Property, including Confidential Information,
Inventions, and Works, and all records, information, and documents relating
thereto, as well any other information concerning the Company’s business that
Employee acquired during Employee’s employment with the Company, and Employee
shall not retain or possess any copies of the same. Employee will turn over all
account information, logon IDs and passwords to all physical and cloud-based
storage containing Property and any records, files, documents or information
described in the immediately preceding sentence. The parties agree and
acknowledge that the computer(s) and cell phone(s) being used by Employee are
Employee’s personal property, but that any data or files of the Company stored
on such computer(s) or cell phone(s) remain the property of the Company. If and
when the employment relationship is terminated, and upon the Company’s request,
Employee shall submit to an exit interview in Castle Rock, CO, or at a place and
time mutually agreed upon by the parties. The Company has the right to require
that Employee bring all items referenced in this Section 5(e) to the exit
interview for the purpose of ensuring Employee’s compliance with this Section
5(e). The Company shall reimburse Employee for reasonable travel costs
associated with attending the exit interview.

f.                   Interference with the Company’s Employees. During
Employee’s employment with the Company and for a period of twelve (12) months
after Employee’s employment with the Company ends, regardless of the reason,
Employee shall not, directly or indirectly:

i.                        induce or attempt to induce any current employee of
the Company (including its subsidiaries and Affiliates) to terminate his or her
employment with the Company (or the relevant subsidiary or Affiliate);

ii.                        interfere with or attempt to disrupt the relationship
existing between the Company (including its subsidiaries and Affiliates) and its
respective employees; or

iii.                        solicit, hire or assist in the solicitation or
hiring away of any current employee of the Company (including its subsidiaries
and Affiliates) to become an employee of any other business entity.

g.                  Duration of Covenants. In the event that the Company
commences an action in any court of law to enforce any of the Covenants, the
running of any time period or limitation applicable to such Covenants shall be
suspended and tolled pending final resolution of such legal action. The running
of any unexpired time period shall resume either on the date when the matter is
settled by written agreement, final judgment is rendered or when all appeals
taken therefrom are concluded, whichever shall occur later. Additionally, the
time period for Employee’s performance of any Covenants under this Agreement
shall also be extended by any period of time that Employee is in breach of such
Covenants.

 

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h.                  Modification. No modification of the Covenants shall be
valid unless such modification is in writing and signed by Employee and a duly
authorized representative of the Company. If, however, any of the Covenants is
held by a court to be unenforceable and/or overbroad, the parties acknowledge
and agree that the defective term(s) shall be modified, but only to the extent
necessary to comply with applicable law(s).

i.                    Disclosure to Prospective Employer. Should Employee’s
employment terminate for any reason, Employee will disclose the terms of the
Covenants to any persons, corporations or other entities with whom Employee
seeks employment or an engagement as a provider of services for compensation
that operates in the Field of Business. Employee also recognizes that the
Company has the reasonable right to make these Covenants known to others.

j.                    Representations and Warranties.

i.                        Employee represents and warrants that he is under no
agreements, limitations, or restrictions of any kind whatsoever that would
interfere with him providing services in connection with his continued
employment with the Company, including without limitation, non-compete
agreements, non-solicitation agreements, invention agreements, work-for-hire
agreements, or any similar agreements or arrangements with third parties.

ii.                        Employee shall immediately notify the Company of any
issues that arise that could conflict with the representations, warranties, and
obligations set forth herein, including without limitation, any demands, claims,
notices, or requests made by third parties that could adversely impact
Employee’s ability to perform services as CEO of the Company.

iii.                        Employee agrees to indemnify, defend, and hold the
Company harmless against any claims by third parties alleging that Employee’s
employment with the Company hereunder constitutes unlawful activity or breaches
an obligation of Employee to such third parties. The provisions in this Section
shall survive termination of Employee’s employment and/or this Agreement for any
reason.

k.                  Affiliates. Employee may, from time to time at the direction
of the Company, render services to its Affiliates and thereby be exposed to
Confidential Information and Trade Secrets owned by them. The Covenants made by
Employee shall be for the benefit of the Company and its Affiliates.
Accordingly, this Section 5 may be enforced by either or all of the Company or
its Affiliates.

 

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l.                    Enforcement of Covenants.

i.                        Right to Injunction. Employee acknowledges that a
breach of any of the Covenants will cause irreparable damage to the Company with
respect to which the Company’s remedy at law for damages will be inadequate.
Therefore, in the event of breach or anticipatory breach of the Covenants, in
addition to remedies otherwise available to it at law or equity, Employee and
the Company agree that the Company shall be entitled to injunctions, both
preliminary and permanent, enjoining or restraining such breach or anticipatory
breach. Employee acknowledges and agrees that an injunction may be issued by any
court of competent jurisdiction without requiring the Company to post any bond,
in addition to remedies otherwise available to the Company at law or in equity.
No remedy herein conferred upon any party is intended to be exclusive of any
other remedy, and each and every such remedy shall be in addition to any other
remedy existing at law or in equity.

ii.                        Reimbursement following Breach. In the event that any
court enters a final, non-appealable judgment that Employee has breached any of
the Covenants, Employee shall reimburse the Company for any payments it becomes
obligated to make pursuant to this Agreement subsequent to such breach. Any such
reimbursements shall be in addition to any damages in the Company’s favor that
the court may impose upon Employee.

iii.                        Recovery of Costs. In the event that the Company
commences an action in any court to enforce any of the Covenants, the party
against whom the court finds shall pay all expenses associated with such
enforcement, including reasonable attorneys’ fees.

m.                Independent Covenants. The Covenants shall be construed as
agreements independent of any other provision in this or any other agreement by,
between, among, or affecting the Company and Employee, and the existence of any
claim or cause of action of Employee against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
of the Covenants in this Agreement.

n.                  Survival. Any obligations set forth in this Agreement that
may require Employee to take or refrain from taking certain actions after the
termination of his employment or this Agreement, including without limitation,
the Covenants, shall survive the termination of Employee’s employment and/or
this Agreement for any reason. This Section 5(n) and the representations,
covenants, warranties, indemnifications, and restrictions contained within this
Agreement shall survive termination of Employee’s employment or this Agreement
for any reason.

6.                  Termination.

a.                   By the Company for Cause. Employee’s employment under this
Agreement may be terminated by the Company at any time and in its sole
discretion without notice upon the occurrence of one or more of the following
events (each of which shall be a termination event for “Cause”):

i.                        Employee fails to comply with the policies, standards,
and regulations that the Company, in its sole and reasonable discretion,
establishes and/or implements before and during Employee’s employment;

 

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ii.                        Employee commits any act of fraud, dishonesty or
other acts of misconduct in the rendering of services on behalf of the Company;

iii.                        Employee fails to faithfully, diligently or properly
comply with the provisions of this Agreement and the reasonable requests of the
person(s) to whom Employee reports;

iv.                        Employee fails to adequately perform (other than due
to death or disability pursuant to Section 6(e)) to Company’s reasonable
satisfaction the usual and customary duties of Employee’s employment, those
duties reasonably requested of Employee and typically associated with Employee’s
position, and/or those duties or expectations assigned by Company;

v.                        Employee breaches any term of this Agreement; and/or

vi.                        Employee is convicted of a felony or commits any act
which damages the reputation of the Company, as determined in the sole and
reasonable discretion of the Board.

Notwithstanding the foregoing, the Company may not terminate Employee’s
employment under this Agreement for Cause under Sections 6(a)(i)-(vi) without
first providing Employee written notice of the event or condition(s)
constituting Cause, which notice must be given no later than thirty (30) days
after the date on which the event or condition(s) constituting Cause is first
reasonably discovered by the Board. Upon the giving of such notice, and only if
the event or condition is reasonably capable of being remedied by Employee,
Employee shall have a period of thirty (30) days during which he may try to
remedy the event or condition(s) and, if so remedied, the Company may not
terminate Employee’s employment under this Agreement for Cause for the event or
condition that was remedied.

b.                  By the Company without Cause. The Company may terminate
Employee’s employment under this Agreement without Cause by providing written
notice of termination to Employee thirty (30) days in advance. For purposes of
this Agreement “without Cause” shall mean any termination by the Company that is
not a termination for Cause as described and in accordance with Section 6(a)
above.

c.                   By Employee with Good Reason. Employee may terminate his
employment under this Agreement following written notice to the Company upon the
occurrence of any of the following events or conditions (each of which shall be
a termination event for “Good Reason”):

i.                        A material diminution in Employee’s base salary or
employment benefits;

ii.                        A material breach of this Agreement by the Company;

 

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iii.                        A material diminution in Employee’s title,
authorities, responsibilities, or duties;

iv.                        A relocation of Employee’s primary work location
outside of Castle Rock, Colorado or to a location not mutually agreed upon by
the parties;

v.                        The Company ceases its business operations; and/or

vi.                        A Change of Control (as defined below) of the
Company.

Notwithstanding the foregoing, Employee may not terminate his employment under
this Agreement for Good Reason under Sections 6(c)(i)-(v) without first
providing the Company written notice of the event or condition(s) constituting
Good Reason, which notice must be given no later than thirty (30) days after the
date on which the event or condition(s) constituting Good Reason is first
reasonably discovered by Employee. Upon the giving of such notice, the Company
shall have a period of thirty (30) days during which it may remedy the event or
condition(s) and, if so remedied, Employee may not terminate his employment
under this Agreement for Good Reason for the event or condition that was
remedied. If Employee fails to so comply with the immediately preceding two
sentences of this Section 6(c), such termination shall not be considered a
termination for Good Reason. For purposes of this Section 6(c)(vi), a “Change of
Control” means either: (1) the acquisition of the Company by another entity by
means of any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation or unit transfer, but
excluding any such transaction effected primarily for the purpose of changing
the domicile of the Company), unless the Company’s owners of record immediately
prior to such transaction or series of related transactions hold, immediately
after such transaction or series of related transactions, more than fifty
percent (50%) of the voting power of the surviving or acquiring entity; or (2) a
sale of all or substantially all of the assets of the Company.

d.                  By Employee without Good Reason. Employee may terminate his
employment under this Agreement without Good Reason by providing written notice
of termination to the Company with advance notice of at least six (6) months.
For purposes of this Agreement “without Good Reason” shall mean any termination
by Employee that is not a termination for Good Reason as set forth and in
accordance with Section 6(c) above.

e.                   Termination due to Death or Disability. Employee’s
employment with the Company shall be terminated immediately in the event of
death or Disability of Employee. The term “Disability” means Employee’s
inability to substantially perform his duties as CEO by reason of any medically
determinable physical or mental impairment that can be expected to either result
in death or last for a continuous period of at least three (3) months, as
determined by a physician chosen by the Company and reasonably acceptable to
Employee.

f.                   Payments Upon Separation. Notwithstanding anything to the
contrary in this Agreement, upon termination of Employee’s employment with the
Company, Employee shall be entitled to receive from the Company only the
following compensation and benefits, and Employee shall not be entitled to any
further compensation or benefits from the Company (including its subsidiaries
and Affiliates):

 

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i.                        If the Company terminates Employee’s employment for
Cause or Employee terminates his employment without Good Reason and fails to
provide advance notice required by Section 6(d), then, within thirty (30) days
of such termination, the Company shall provide to Employee: (1) all base salary
through the date of termination; and (2) any outstanding expense reimbursement
payments then due to Employee as of the date of termination.

ii.                        If the Company terminates Employee’s employment
hereunder without Cause, Employee terminates his employment hereunder for Good
Reason (except for a Change of Control), Employee’s employment terminates by
expiration because Employee and/or the Company elect not to execute a new
employment agreement, Employee terminates his employment hereunder without Good
Reason by providing advance notice required by Section 6(d), or Employee’s
employment hereunder terminates due to Employee’s death or disability, then,
within thirty (30) days of such termination or expiration, the Company shall
provide to Employee: (1) all base salary through the date of termination or
expiration; (2) any outstanding expense reimbursement payments then due to
Employee as of the date of termination or expiration; and (3) in exchange for
Employee (or his estate) executing (and not revoking) a waiver and release
drafted by the Company’s counsel: (a) the pro-rata portion of any bonus to which
Employee would have been entitled under Section 4(b) had he remained employed
with the Company through December 31, 2020; (b) the equity compensation to which
Employee would have been entitled under Section 4(c) had he remained employed
with the Company through the entire Term (until February 7, 2021); and (c) six
months of severance paid in accordance with the Company’s normal payroll
practices, which includes being subject to appropriate deductions and
withholdings as required or permitted by law.

iii.                        If Employee terminates his employment under this
Agreement for a Change of Control, then, within thirty (30) days of termination,
the Company shall provide to Employee: (1) all base salary through the date of
termination; (2) any outstanding expense reimbursement payments then due to
Employee as of the date of termination; and (3) only in the event the Change of
Control results in the Company terminating Employee’s employment without Cause
and in exchange for Employee signing (and not revoking) a waiver and release
drafted by the Company’s counsel: (a) the remainder of Employee’s base
compensation had he continued employment with the Company through the end of the
Term; (b) the pro-rata portion of any bonus to which Employee would have been
entitled under Section 4(b) had he remained employed with the Company through
December 31, 2020; (c) all equity compensation to which Employee would have been
entitled under Section 4(c) had he remained employed with the Company through
the entire Term (until February 7, 2021); and (d) six months of severance paid
in accordance with the Company’s normal payroll practices, which includes being
subject to appropriate deductions and withholdings as required or permitted by
law.

iv.                        Regardless of the reason for separation, any Equity
Awards granted to Employee shall remain governed by the Equity Plan and/or any
applicable Equity Award Agreement governing such Equity Awards and nothing in
the foregoing entitles or purports to entitle Employee any additional rights
with respect to any such Equity Awards beyond the specific provisions of the
Equity Plan or applicable Equity Award Agreement.

 

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7.                  Miscellaneous.

a.                   The section headings in this Agreement are for convenience
only and are not intended to govern, limit or affect the meanings of the
sections. Singular and plural nouns and pronouns shall mean the singular or
plural and the masculine, feminine, or neuter genders as permitted by the
context in which the words are used.

b.                  The Company may withhold from any compensation or benefits
payable to Employee all applicable federal, state, local or other taxes and make
any other deductions and withholdings as required or permitted by law.

c.                   This Agreement constitutes the entire understanding between
Employee and the Company with respect to the subject matter hereof and
supersedes any and all prior understandings and agreements, written or oral,
with respect to the subject matter hereof. The parties are not relying upon any
representations or promises not set forth in this Agreement. Except as provided
in Section 5(h), this Agreement may not be amended or modified except in a
writing signed by both parties.

d.                  Failure to insist upon strict compliance with any of the
terms, covenants, or conditions set forth in this Agreement shall not be deemed
a waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other times. No
waiver by the Company of a breach by Employee of any provision of this Agreement
shall be binding upon the Company unless the same is in writing, signed by a
duly authorized representative of the Company, and any such waiver shall not
operate or be construed as a waiver of any subsequent breach.

e.                   If it is determined that any of the provisions of this
Agreement is invalid or unenforceable, the remaining provisions shall survive
and be given full force and effect.

f.                   The Company may assign this Agreement and, if assigned, the
assignee has the right to seek enforcement of the Agreement. Since this
Agreement is personal to Employee, Employee cannot assign this Agreement to any
other.

g.                  All notices required to be given under this Agreement shall
be in writing, shall be effective upon receipt, and shall be delivered to the
addressee in person, via e-mail, or by a recognized business courier (such as
FedEx or UPS), with confirmation of delivery obtained.

h.                  Notwithstanding anything in this Agreement to the contrary,
the termination of Employee’s employment under this Agreement for any reason
shall not terminate Sections 5-7 of this Agreement or any of Employee’s
obligations thereunder, each of which shall survive such termination.

 

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i.                    This Agreement shall be governed by the laws of the State
of Colorado. Any claim arising under this Agreement shall be brought in a state
or federal court of competent jurisdiction located in Denver, Colorado. However,
to the extent the Company seeks injunctive relief to enforce any of the
Covenants, the Company shall have the right, in its sole discretion, to elect to
pursue equitable relief in any jurisdiction in which a breach of the Covenants
occurred. Should any litigation arise from an alleged breach of this Agreement,
the prevailing party shall be entitled to recover from the non-prevailing party,
in addition to all other legal and/or equitable remedies, the costs of
litigation, including reasonable attorneys’ fees.

j.                    To the extent permitted by law, the parties agree to, and
do hereby, waive trial by jury in any action, proceeding, or counterclaim
brought by either of the parties against the other on any matter whatsoever
arising out of or in any way connected with Employee’s employment with the
Company, this Agreement, and/or any alleged act or omission of either party to
this Agreement.

k.                  The essential terms and conditions contained in this
Agreement have been mutually negotiated between the parties. No ambiguity in
this instrument shall be construed or interpreted against the drafter of this
Agreement.

l.                    This Agreement and any payment, distribution or other
benefit hereunder shall comply with the requirements of Section 409A, or an
exemption or exclusion therefrom, as well as any related regulations or other
guidance promulgated by the U.S. Department of the Treasury or the Internal
Revenue Service, to the extent applicable, and shall in all respects be
administered in accordance with Section 409A. To the extent any provision or
term of this Agreement is ambiguous as to its compliance with Section 409A, the
provision or term will be interpreted in such a manner so that such provision or
term and all payments hereunder comply with Section 409A. Any provision that
would cause this Agreement or a payment, distribution or other benefit hereunder
to fail to satisfy the requirements of Section 409A shall have no force or
effect and, to the extent an amendment would be effective for purposes of
Section 409A, the parties agree that this Agreement shall be amended to comply
with Section 409A. Such amendment shall be retroactive to the extent permitted
by Section 409A. For purposes of this Agreement, Employee shall not be deemed to
have terminated employment unless and until a separation from service (within
the meaning of Treasury Regulation Section 1.409A-1(h)) has occurred. Each
payment under Section 6(f) of this Agreement shall be treated as a separate
payment for purposes of Section 409A.

m.                Employee acknowledges that Employee has thoroughly read the
terms of this Agreement and was aware of Employee’s right to seek advice of
counsel before signing. Employee further acknowledges that, by signing this
Agreement, Employee knowingly and voluntarily consents to the terms contained
herein.

n.                  This Agreement may be executed in one or more counterparts,
each of which when executed shall be deemed to be an original and such
counterparts together shall constitute one and the same Agreement. Signing of
this Agreement and transmission of the signed Agreement by facsimile or
electronic document transfer will be acceptable and binding upon the parties as
of the Effective Date.

 

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The undersigned have executed this Amended and Restated Executive Employment
Agreement, which shall be effective as of the Effective Date.

 

 

JEFFREY G. MCGONEGAL   RIOT BLOCKCHAIN, INC.         /s/ Jeffrey G. McGonegal  
By: /s/ Remo Mancini Signature   Name: Remo Mancini     Title: Chairman of the
Board of Directors