Exhibit 10.5

 

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September 5, 2019

 

VIA EMAIL

 

Conor_McCarthy@yahoo.com

 

Offer of Employment

 

Dear Mr. McCarthy:

 

Ideanomics, Inc. (Nasdaq:IDEX) (the “Company”) is pleased to make this offer of
employment to you as Chief Financial Officer (“CFO”). If you accept the offer
contained in this agreement (“Employment Agreement”, or “Agreement”), your
employment will be effective to a mutually agreeable start date no later than
September 23, 2019 (the “Effective Date”) and subject to the terms and
conditions set forth below.

 

1.       Job Duties

 

As CFO, you will report to the CEO and Board of Directors of the Company
(“BOD”). Your primary job duties will include providing leadership, direction
and management of the finance and accounting team, providing strategic
recommendations to the CEO and members of the company’s BOD and executive
management team, managing the processes for financial forecasting and budgets,
and overseeing the preparation of all financial reporting, advising on long-term
business and financial planning including taxation matters, establishing and
developing relations with senior management and investors and external partners
and stakeholders, reviewing all formal finance and HR activities, as well as the
IT procedures related to financial operations. In light of your anticipated job
duties, compensation, exercise of discretion, and advanced knowledge required of
your position, you will be exempt from federal and state overtime wage
requirements. The principal place of your employment will be the Company’s
offices in New York, NY. However, you will be required to travel to other
locations in connection with the performance of your job duties.

 

2.       Compensation

 

Base Salary. The Company shall pay you an initial Base Salary of two hundred and
fifty thousand dollars annually ($250,000), less all required withholdings and
deductions, payable in accordance with the Company’s regular payroll policies
(the “Base Salary”). The Base Salary shall be subject to review at the time of
each term renewal, depending upon your job performance and that of the Company.

 

Cash Performance Incentive. In addition to the Base Salary, you shall be
eligible to receive performance-related cash incentives based on the company’s
performance objectives agreed by the Compensation Committee of the Company from
time to time. The performance objectives for 2020 will be set no later than 60
days for prior to the end of the calendar year. The Company anticipates that any
annual-based performance bonuses, if issued, shall be paid within sixty (60)
days from the end of the bonus year, and in no event later than March 15 of the
year following the bonus year. All performance bonuses paid pursuant to this
paragraph shall be less all required withholdings and deductions. Any cash
performance incentives for 2019 shall be at the discretion of the company, based
on the company’s financial performance.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

Equity Compensation. You will receive initial Company stock options in our
Nasdaq listed equity for up to one million five hundred thousand shares
(1,500,000), depending on your continued functioning in the position of CFO on
the following schedule:

 

a)Stock grant shall contain a cliff through December 31, 2019 and begin vesting
as of January 1, 2020 b)Stock options on 750,000 shares, 1/12th of the that
amount vesting monthly for each of the succeeding 12 months from the date of
vesting c)Stock options on 750,000 shares 1/12th of the that amount vesting
monthly for the 12 months succeeding the previous award

 

The option price shall be based on the price set on in closing of IDEX stock as
of the date of the board’s approval for this grant, or a price of $1.97, based
on whichever is higher. Electronic Certificates for each of the components of
vested stock will be provided to you at the end of each of period indicated
above.

 

3.       Term of Employment

 

This offer of employment is through December 31, 2019, beginning from the date
mutually agreed between yourself and the Company (the “Term”), and will renew
for subsequent (1) year periods subject to the termination rights below. The
Company promises to employ you during the Term, subject to its rights to
terminate this Agreement at an earlier date as set forth herein. You, in turn,
promise to devote your full business time and efforts to the performance of your
job duties during the Term, subject to your rights to terminate this Agreement
at an earlier date as set forth herein. The Term and the terms of this Agreement
shall automatically continue unless you and the Company agree otherwise in a
written document (excluding e-mail) signed by both parties.

 

4.       Termination of this Agreement

 

Either you or the Company may terminate this Agreement at any time. In the event
that the Company terminates this Agreement without “Cause,” it shall pay to you
(i) your then-Base Salary through the remainder of the Term, or renewal Term, as
the case may be, plus the sum of your prior year’s performance bonuses divided
by twelve (12) and multiplied by the months completed on the Term; (ii) the
estimated cost of you continuing your health insurance benefits pursuant to
COBRA, if eligible, for a period of twelve (12) months following your
termination of employment. Whether and to the extent you are granted any
deferred compensation or unvested equity that would vest during the initial Term
but-for your termination without “Cause,” all such awards shall immediately
accelerate and vest and be payable to you upon your termination without “Cause.”
Any Base Salary payments owed to you because of a termination of employment
without “Cause” shall be paid to you in accordance with the Company’s regular
payroll practices. In the event that you terminate this Agreement before the end
of the Term or the Company terminates this Agreement with “Cause,” the only
monetary compensation to which you shall be entitled from the Company shall be
the Base Salary for your work performed through the date of termination of this
Agreement.

 

For purposes of this Agreement, the Company shall have “Cause” to terminate this
Agreement if, in the Company’s reasonable discretion: (a) you willfully fail to
comply with a reasonable directive of the BOD and fail to cure such willful
non-compliance within thirty (30) days of the Company’s notice of your willful
non-compliance, provided such willful non-compliance is curable; (b) you are
convicted of, or plead guilty or nolo contendre to, a felony or any crime
involving fraud or dishonesty or which has an adverse effect upon the Company’s
reputation or business; (c) you engage in any act of fraud, dishonesty, or
embezzlement; or (d) the Company determines in its reasonable discretion that
you violated a securities law or related regulation; or (e) you materially
breach this Agreement and fail to cure such material breach within thirty (30)
days of the Company’s notice of such breach, provided such breach is curable.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

In the event you terminate this Agreement before the end of the Term, you
promise to give the Company at least sixty (60) days’ notice of your decision.
In exchange, the Company shall continue to pay you your Base Salary during the
sixty (60) day notice period. However, you understand and agree that the Company
shall have the right to unilaterally reduce or waive any portion of the sixty
(60) day notice period and accelerate your final date of employment following
notice of your decision to terminate this Agreement. You have the right to
terminate this Agreement for good cause which includes if the company materially
diminishes your title, duties, responsibilities, or authority, if the company
materially breaches this Agreement. You further acknowledge and agree that your
failure to comply with the sixty (60) day notice period shall constitute a
material breach of this Agreement in light of your substantial responsibilities
for the Company.

 

5.       Benefits

 

You shall be eligible for such employee benefits that the Company provides to
its senior executives, subject to any waiting time periods or other limitations
set forth in the policy or plan document governing each benefit. You will
receive additional information regarding some of these employee benefits in the
mail. These employee benefits include:

 

  · Paid national holidays   · 15 days paid vacation   · Paid sick leave
according to state requirements   · Group health insurance   · Paid family leave
according to state requirements

 

Per Company policy, advance authorization is required for all employees’ use of
paid vacation time. Accordingly, you must notify the Company in advance of your
intent to use paid vacation time. Generally, the Company will not approve any
employee request for more than two (2) consecutive weeks of paid vacation. There
will be no payment for unused paid vacation upon the end of your employment with
the Company, and paid vacation may not be carried over into a new calendar year
without the approval of the BOD.

 

6.       Confidential Information

 

Except as authorized or directed by the Company in connection with the
performance of your duties and obligations, or as provided below, you will not,
at any time either during your employment or after your employment ends for any
reason, directly or indirectly, disclose, use, or make available to any other
person or entity any Confidential Information that has come into your
possession, custody, or control in the course of your employment with the
Company, and you will not use any such Confidential Information for your own
personal use or advantage or the use or advantage of any person or entity other
than the Company, or make any such Confidential Information available to others.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

For purposes of this confidentiality obligation, “Confidential Information”
means all confidential information, proprietary information, trade secrets, or
other information (whether oral or written) regarding the business or affairs of
the Company, the Company’s affiliates, or any of the Company’s clients or
business partners, including, without limitation, information as to any of the
Company’s products; services; systems; designs; inventions; finances (including
prices, costs, and revenues); marketing plans; sales; sales strategies;
prospects; pricing; pricing strategies; investments; investment strategies and
methodologies; portfolio management strategies; programs; methods of operation;
prospective and existing contracts; customer lists and other business
arrangements, business plans, procedures, and strategies; costs; profits;
databases; personnel (including but not limited to personal information about
employees, members, partners, and agents of the Company and its affiliates);
operational methods; financial models; potential transactions; pending
negotiations; computer programs; algorithms; pending patent applications;
systems; contractual negotiations; terms of agreements; client lists; customer
lists; investor lists; lists of potential clients, customers, and/or investors;
financial results; business developments; internal controls; and security
procedures. Confidential Information also includes the performance track record
of all investments and other transactions in which the Company participates
during your employment, which is the sole and exclusive property of the Company.
Confidential Information does not include: (a) information that has been
lawfully and without breach of obligation made available to the general public
without restriction; (b) information that, by way of documentary evidence, you
can demonstrate was previously known to you prior to your affiliation with the
Company; or (c) information for which you receive express written authorization
from the Company to possess after your employment with the Company ends. The
foregoing is not an exhaustive list, and Confidential Information also may
include, without limitation, any other information, documents or materials that
may be identified as confidential or proprietary, or which would otherwise
appear to a reasonable person, in the context in which the information,
documents or materials are received, provided or learned, to be confidential.
This letter will also be treated as Confidential Information; provided you may
keep a personal copy of this letter, and may disclose the contents of this
letter to a personal attorney, financial advisor or tax accountant, or, solely
with respect to restrictive covenants, a prospective employer.

 

Notwithstanding anything herein to the contrary, nothing in this letter, or any
other agreement or policy of the Company will prevent you from sharing any
Confidential Information or other information with regulators or appropriate
governmental agencies, including but not limited to governing taxing
authorities, whether in response to a subpoena or otherwise, without notice to
the Company, or responding to any other lawful subpoena or legal process,
provided in such case, unless otherwise prohibited by law or court order or
decree, you provide the Company with reasonable notice of such subpoena or legal
process. You hereby are notified that the immunity provisions in Section 1833 of
title 18 of the United States Code provide that an individual cannot be held
criminally or civilly liable under any federal or state trade secret law for any
disclosure of a trade secret that is made (a) in confidence to federal, state or
local government officials, either directly or indirectly, or to an attorney,
and is solely for the purpose of reporting or investigating a suspected
violation of the law, (b) under seal in a complaint or other document filed in a
lawsuit or other proceeding, or (c) to your attorney in connection with a
lawsuit for retaliation for reporting a suspected violation of law (and the
trade secret may be used in the court proceedings for such lawsuit) as long as
any document containing the trade secret is filed under seal and the trade
secret is not disclosed except pursuant to court order.

 

Upon termination of your employment with the Company for any reason, you promise
to deliver to the Company all property, proprietary materials, Confidential
Information, documents, and computer media in any form (and all copies thereof)
relating or belonging to the Company or any Company affiliate, including the
Company’s clients or business partners, that is in your possession.

 

7.       Non-Competition Promise

 

In consideration for the offer of employment described within this letter, you
promise not to, directly or indirectly, on behalf of yourself or any other
person or entity, engage in “Competitive Activities” during the “Restricted
Period.” For purposes of this non-competition obligation, “Competitive
Activities” means any activity (whether or not for compensation and whether as
an owner, employee, contractor, agent, or in any other capacity) engaged in or
related to blockchain-based global financial technology and financial asset
digitization services in any State within the United States, Hong Kong, or other
geographic region in which the Company conducted business at any time during
your employment. For purposes of this non-competition obligation, “Restricted
Period” means any period for which you receive the Base Salary pursuant to this
Agreement and two (2) months after your employment at the Company ends for any
reason.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

The Company may elect to waive or shorten this non-competition obligation, but
you acknowledge that such waiver or shortening of this non-competition
obligation must be set forth in a signed writing (excluding e-mail) executed by
a duly authorized Company officer. Notwithstanding anything to the contrary, (a)
your ownership or investment of any entity that is engaged in Competitive
Activities shall not constitute a breach of this non-competition obligation,
provided such ownership or investment is limited to five percent (5%) or less of
such entity’s outstanding shares, and (b) you shall not be precluded from
devoting reasonable periods of time to charitable and community activities,
managing your personal investments and serving on boards of businesses not in
competition with the Company.

 

8.       Non-Solicitation Promises

 

In further consideration for the offer of employment described within this
letter, you promise not to, directly or indirectly, on behalf of yourself or any
other person or entity, during your employment and for a period of six (6)
consecutive months immediately following the termination of your employment for
any reason, solicit any actual or potential client, investor, or business
partner of the Company for the purpose of performing any services that the
Company also performed during your employment with the Company. For purposes of
the non-solicitation obligation described within this paragraph, a potential
client, investor, or business partner of the Company shall mean any person or
entity that the Company solicited for business during your final two (2) years
of employment with the Company, unless you had a preexisting business
relationship prior to joining the Company.

 

In further consideration for the offer of employment described within this
letter, you promise not to, directly or indirectly, on behalf of yourself or any
other person or entity, during your employment and for a period of twelve (12)
months following the termination of your employment for any reason, solicit any
employee, officer, contractor, or other agent of the Company to terminate his or
her business relationship with the Company; provided that this non-solicitation
obligation shall not apply to any employee, officer, contractor, or other agent
of the Company who did not have a business relationship with the Company at any
time during your final six (6) months of employment with the Company, unless you
had a preexisting business relationship with such person or introduced such
person for hire by the Company.

 

9.       Non-Disparagement

 

You agree not to disparage the Company, its officers and owners, or its clients
and business partners in any way during or after your employment with the
Company. This non-disparagement obligation prohibits you from making any
statement that would or is reasonably likely to defame, criticize, malign, or in
any way be materially and financially harmful to the business reputation of the
foregoing entities or individuals. Notwithstanding the foregoing, nothing herein
shall prohibit you from testifying or responding in good faith to any subpoena
or other legal process, provided that you provide reasonable advance notice to
the Company of your receipt of such subpoena or other legal process.

 

10.     Reasonableness of Promises; Injunctive Relief

 

You acknowledge and agree that the promises set forth in Sections 6, 7, 8, and 9
of this letter are reasonable and narrowly tailored to protect the Company’s
legitimate business interests, including the Company’s interests in protecting
the competitive advantage it derives from its Confidential Information and
customer good will. Accordingly, in the event you breach or threaten to breach
one or more of the promises in Sections 6, 7, 8, or 9 of this Agreement, you
acknowledge and agree that the Company shall be entitled to injunctive relief
from a court of competent jurisdiction enjoining such actual or threatened
breach, in addition to any other remedy available at law or equity. You further
acknowledge that the promises in Sections 6, 7, 8, and 9 of this letter shall
survive termination of your employment relationship. You further agree that in
the event of a legal action to enforce this Agreement, the prevailing party
shall be entitled to reimbursement by the non-prevailing party for its costs
associated with such legal action, including the prevailing party’s reasonable
attorneys’ fees.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

11.     Inventions

 

You agree that any and all improvements, inventions, discoveries, developments,
creations, processes, methods, designs, and works of authorship, and any
documents, things, or information relating thereto, whether patentable or not,
within the scope of or pertinent to your primary job duties (as described in
Section 1 above) or your other performance of work for the Company, which you
may conceive, make, author, create, invent, develop, or reduce to practice, or
which you previously have conceived, made, authored, created, invented,
developed, or reduced to practice, in whole or in part, during your employment
with the Company, whether alone or with others, whether during or outside of
normal working hours, whether inside or outside of the Company’s offices, and
whether with or without the use of the Company’s computers, systems, materials,
equipment, or other property, will be and remain the sole and exclusive property
of the Company (the foregoing, individually and collectively, “Work Product”).
To the maximum extent allowable by law, any Work Product subject to copyright
protection will be considered “works made for hire” for the Company under U.S.
copyright law. To the extent that any Work Product that is subject to copyright
protection is not considered a work made for hire, or to the extent that you
otherwise have or retain any ownership or other rights in any Work Product (or
any intellectual property rights therein), you hereby assign and transfer to the
Company all such rights in the Work Product, including but not limited to the
intellectual property rights therein, effective automatically as and when such
Work Product is conceived, made, authored, created, invented, developed, or
reduced to practice. The Company will have the full right to use, assign,
license, and/or transfer all rights in, with, to, or relating to Work Product
(and all intellectual property rights therein). You will, whenever requested to
do so by the Company (whether during your employment or thereafter), at the
Company’s expense, execute any and all applications, assignments, and/or other
instruments, and do all other things (including giving testimony in any legal
proceeding) which the Company may deem necessary or appropriate in order to (a)
apply for, obtain, maintain, enforce, or defend patent, trademark, copyright, or
similar registrations of the United States or any other country for any Work
Product, (b) assign, transfer, convey, or otherwise make available to the
Company any right, title, or interest which you might otherwise have in any Work
Product, and/or (c) confirm the Company’s right, title, and interest in any Work
Product. You will promptly communicate, disclose, and, upon request, report upon
and deliver all Work Product to the Company, and will not use or permit any Work
Product to be used for any purpose other than on behalf of the Company, whether
during your employment or thereafter.

 

12.     Business Related Expense Reimbursements

 

You may occasionally incur business related expenses in the course of your job
duties. Your permitted business expenses include: (a) your travel expenses
related to the performance of your job duties; and (b) reasonable expenses
related to the entertainment of clients or other potential business partners of
the Company. However, you understand that all business expenses are subject to
review, and the Company reserves the right to deny a business expense
reimbursement request in the event it reasonably determines that the expense was
not related to your job duties. The Company will reimburse you for an
appropriate business-related expense, provided you submit proof of payment and
details concerning the expense in a timely manner, and in no event later than
sixty (60) days after the expense was incurred. Violation of this policy may
result in the denial of an expense reimbursement request. In the event you
intentionally submit a false expense reimbursement request, you shall be subject
to disciplinary action, up to and including immediate termination of employment
for “Cause.” Duly submitted reimbursement requests are typically processed
within thirty (30) days of submission.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

13.     No Conflicts

 

By signing below, you represent to the Company that you are not presently
subject to any obligation that would otherwise prohibit you from performing the
above-referenced job duties for the Company, such as a non-competition promise
or other restrictive covenant. You further represent to the Company that you are
not in possession of any confidential or proprietary information belonging to
any entity or person that directly or indirectly competes with the Company.

 

14.     Dispute Resolution

 

Should any dispute arise between you and the Company or any Company affiliate
regarding any aspect of your employment relationship, you and the Company or the
Company affiliate will confer in good faith to promptly resolve such dispute. In
the event that you and the Company or the Company affiliate are unable to
resolve the dispute, and should either party to the dispute desire to pursue a
claim against the other party, both you and the Company or the Company affiliate
agree to have the dispute resolved by final and binding Arbitration held in New
York County, New York. The Arbitration shall be conducted by JAMS or the
American Arbitration Association and provided by an impartial third-party
Arbitration provider in accordance with the employment dispute rules then in
effect. All previously unasserted claims arising under federal, state, or local
statutory or common law and all disputes relating to the validity of this
contract, as well as this Arbitration provision, shall be decided by binding and
final arbitration. Any award of the Arbitrator(s), is final and binding, and may
be entered as a judgment in any court of competent jurisdiction. The prevailing
party shall be entitled to reimbursement of his/its related costs, including
reasonable attorneys’ fees, from the non-prevailing party. Notwithstanding the
foregoing, nothing in this letter shall prohibit either party from applying to a
court of competent jurisdiction (instead of an arbitrator) for injunctive relief
to enjoin an actual or threatened breach of each other’s obligations set forth
in this letter.

 

15.     Severability

 

You acknowledge and agree that in the event any court or arbitrator of competent
jurisdiction determines that one or more of the provisions of this letter is
unenforceable, such court or arbitrator shall be entitled to equitably reform
such unenforceable provision so that the provision is given its maximum affect
permitted under applicable law. Each provision of this letter is severable from
other provisions hereof, and if one or more provisions are declared invalid, the
remaining provisions shall nevertheless remain in full force and effect.

 

16.     Prior Agreements

 

You acknowledge and agree that this document replaces and supersedes any
previous offer of employment to you by the Company (whether oral or in writing),
and sets forth the parties’ entire understanding regarding the subject matter
described herein. By signing below, you are not relying upon any representation
or promise that is not explicitly set forth within this letter.

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq

 

 

 

 

17.     Governing Law

 

You agree that this letter and your employment with the Company shall be
governed by the laws of the State of New York. Any legal proceeding arising from
dispute related to your employment with the Company must be commenced within New
York County, New York.

 

18.     Miscellaneous

 

You acknowledge that this letter is the product of arms-length negotiations
between you and the Company and, therefore, neither you nor the Company will be
considered the drafter of this letter. This letter may be executed in one or
more counterparts, each of which shall constitute an original. Original
signatures shall not be required.

 

If these terms are agreeable to you, please sign and date this letter and return
it to Alfred Poor, Chief Executive Officer of Ideanomics.

 

Sincerely,       /s/ Alfred P. Poor       Alfred P. Poor   Chief Executive
Officer  

 

 

I understand that this offer of employment is contingent upon proof of my
employment eligibility in the United States.

 

Accepted and Agreed:       [tm1919510d1_ex10-5img2.jpg]   [Insert Name]      
9-9-2019   Date  

 

55 Broadway, 19th Floor New York, NY 10006 | www.ideanomics.com | @ideanomicshq