Exhibit 10.21

 

SURGE HOLDINGS, INC.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”), effective as of March 1, 2020 (the
“Effective Date”), is made by and between Surge Holdings, Inc. (the “Company”),
and Anthony George Evers (the” Executive”) (collectively referred to herein as
the “Parties”).

 

WHEREAS the Company desires to assure itself of the services of the Executive by
engaging the Executive to perform services under the terms hereof’. and

 

WHEREAS the Executive wishes to be employed by the Company and provide full-time
personal services to the Company in return for the compensation and benefits
detailed herein.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, including the agreements set forth below, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

 

l. Employment.

 

(a) General. The Company shall employ the Executive as a full-time employee of
the Company effective as of the Effective Date, in the position set forth in
this Section 1, and upon the other terms and conditions herein provided.

 

(b) Position and Duties. Executive: (i) shall serve as the Chief Financial
Officer und Chief Information Officer, with responsibilities, duties and
authority customary for such position, subject to direction by the Company’s
Chief Executive Officer (the “CEO”) and the Company’s President and Chief
Operations Officer (the “COO”); (ii) shall report directly to the President;
(iii) shall devote such Executive’s working time and efforts to the business and
affairs of the Company and its subsidiaries as necessary to complete the duties
required; and (iv) agrees to observe and comply with the Company’s rules and
policies as adopted by the Company from time to time. In addition, as of the
Effective Date, the Executive shall be appointed as a member of the Board and
the Company shall lake all actions, subject to shareholder approval, required to
cause Executive to be reelected as a member of the Board while employed
hereunder.

 

(c) Place of Employment. The Company will maintain office space in Chicagoland,
from time to time may require Executive travel temporarily to locations in
Nevada, Tennessee, El Salvador and such other venues as required from time to
time on the Company’s business. Executive’s position shall require 50% or less
travel.

 

(d) Exclusivity. The Company agrees or consents that Executive shall serve on
each respective board of directors of companies which are subsidiaries of the
Company or companies which Executive has an interest as set forth on Exhibit A
attached hereto, which consent shall continue until such time as the Board
provides notice to Executive that, in its reasonable judgment, such company
competes with the Company, such service interferes with Executive’s duties as
Chief Executive Officer of the Company or places him in a compelling position,
or otherwise conflicts with, the interests of the Company, In addition, the
Company consents to the Executive providing the services set forth on Exhibit B
attached hereto, which consent shall continue for the time period specified on
Exhibit B. Notwithstanding the foregoing, Executive may devote reasonable time
to unpaid activities such as supervision of personal investments and activities
involving professional, charitable, educational, religious, civic and similar
types of activities, speaking engagements and membership on committees, provided
such activities do not individually or in the aggregate interfere with the
performance of Executive’s duties under this Agreement, violate the Company’s
standards of conduct then in effect, or raise a conflict under the Company’s
conflict of interest policies. Executive cannot serve on the board of directors
of a private or publicly traded company (other than the Company’s Board) without
the Board’s prior written consent (it being understood that the Board has
expressly consented to the service set forth on Exhibit A),

 

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2. Compensation and Related Matters.

 

(a) Annual Base Salary. Executive shall receive a base salary at the rate of
$270,000 per annum (the “Annual Base Salary”), subject to withholdings and
deductions and which shall be paid to Executive in accordance with the customary
payroll practices and procedures of the Company. Such Annual Base Salary shall
be reviewed by the Company not less often than annually and may be adjusted from
time to time, Executive is eligible at the sole discretion of the President a
yearly cash bonus of an amount up to $100,000 (one hundred thousand dollars).

 

(b) Bonus Commencing in the third quarter of fiscal year 2020 and for each
fiscal year thereafter during Executive’s employment with the Company, Executive
will be eligible to receive a discretionary annual performance bonus, with a
target achievement of up to 100% of Annual Base Salary (the “Annual Bonus”). The
amount of the Annual Bonus that shall be payable shall be based on the
achievement of performance goals to be determined by the Board, in its sole
discretion. The amount of any Annual Bonus for which Executive is eligible shall
be reviewed by the Board from time to time, provided that that target
achievement for the Annual Bonus shall not be less than 25% of Annual Base
Salary. Any Annual Bonus earned by Executive pursuant to this section shall be
paid to Executive in accordance with Company policies, less authorized
deductions and required withholding obligations, within two and a half months
following the end of the fiscal year to which the bonus relates.

 

(c) Additional Bonus. In consideration for Executive entering into this
Agreement and providing services to the Company, Executive shall be entitled to
receive a one-time bonus payment equal to 1,000,000 shares of Company Common
Stock (the “Additional Bonus”). The Additional Bonus shall be paid to Executive,
less authorized deductions and required withholding obligations, within thirty
days of the Company’s Common Stock trading at a Value Weighted Average Price (“V
W AP”) of $2.00 or above for any ninety (90) day Trading period, subject to
Executive continuing to provide services to the Company through the applicable
Additional Bonus payment date. These shares will be eligible for conversion upon
the dale six (6) months following Surge Holdings lift to Nasdaq.

 

(d) Benefits. Executive shall receive full executive family medical package.
Executive shall also participate in such full-time employee and executive
benefit plans and programs as the Company may from time to time offer to senior
executives of the Company, subject to the terms and conditions of such plans,
including, without limitation. The Company shall make annual contributions to
Executive’s 401 (k) plan account as authorized by the Compensation Committee of’
the Board, in its sole discretion, in accordance with the terms of the 401 (k)
plan.

 

(e) Life Insurance. The Company shall directly pay or reimburse Executive for
the premiums of a term life insurance policy, up to a maximum of S3,000
annually. If Executive’s employment terminates for any or no reason, the Company
shall have no obligation to continue to bear the costs of the life insurance
policy for Executive, but Executive may choose to assume responsibility for
payments required to continue the policy.

 

(f) Travel. Until the date of Executive’s termination of employment with the
Company, the Company shall provide Executive with first or business class plane
seating when available. This allowance shall be payable to Executive, less
authorized deductions and withholding obligations, each month on the regular
payroll dates of the Company and shall be produced tor any partial months.

 

(g) Vacation. Executive shall be entitled to a total or 5 weeks Paid Time off
plus any other Company holidays provided by the Company which are applicable to
the Company’s executive officers in accordance with Company policy. The
opportunity to take paid time off is contingent upon Executive’s workload and
ability to manage his schedule.

 

(h) Business Expenses. ‘l’he Company shall reimburse Executive for all
reasonable, documented, out of pocket travel and other business expenses
incurred by Executive in the performance of’ Executive’s duties to the Company
in accordance with the Company’s applicable expense reimbursement policies and
procedures as in effect from time to time.

 

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3. Equity Awards.

 

(a) Stock Option, Subject to approval by the Board, on the date determined in
accordance with the Company’s established policy Executive shall be granted an
option (the “Option”) to purchase the number of shares of Company common stock
determined by dividing (i) $270,000 by (ii) the VWAP for the ten days preceding
the date of grant and such other variables as determined by the Company that are
consistent with the Company’s financial reporting. ‘l’he per share exercise
price of the Option shall be equal to the VWAP of the Company’s Common Stock on
the date of grant. The Option shall vest and become exercisable with respect to
twenty percent (20%) of the total number of shares of Company common stock
subject to the Option on the first (l s) and second (2nd) anniversary of the
Effective Date and thirty percent (30%) of the total number of shares of Company
common stock subject to the Option on the third (3rd) and fourth (4th)
anniversary of the Effective Date, such that the Option shall be fully vested
and exercisable on the fourth (4th’) anniversary of the Effective Date, in each
case, subject to Executive’s continuous service to the Company through the
applicable vesting dale. Unless extended by the Company, the Option shall
terminate on the seventh (7rh) anniversary of its grant. The Option shall
otherwise be subject to the terms of the plan pursuant to which it is granted
and/or an option agreement to be entered into between the Executive and the
Company.

 

(b) Restricted Stock Units. Subject to approval by the Board, on the date
determined in accordance with the Company’s established policy Executive shall
be granted an award of that number of restricted stock units (the “RSUs”)
determined by dividing (i) $270,000 by (ii) the V WAP for the ten days preceding
the date of grant. The RSUs shall vest with respect to fifty percent (50%) of
the total number of RSUs on each anniversary of the Effective Dale, such that
the RSUs shall be fully vested on the second (2nd) anniversary of the Date,
subject to Executive’s continuous service to the Company through the applicable
vesting date. The RSUs shall otherwise be subject to the terms of the plan
pursuant to which they are granted and/or an award agreement to be entered into
between Executive and the Company.

 

(c) Performance Restricted Stock Units. Subject to approval by the Board, on the
date determined in accordance with the Company’s established policy Executive
shall be granted an award of that number of restricted stock units (the ‘
determined by dividing (i) $270,000 by (ii) the V WAP for the ten days the dale
of grant. The Performance RSUs shall vest in accordance with the achievement, if
any, of certain performance goals established by the Board and set forth in the
agreement evidencing the Performance RSUs over a two (2) year period from the
Effective Date, subject to Executive’s continuous service to the Company through
the applicable vesting date. The Performance RSUs shall otherwise be subject to
the terms of the plan pursuant to which they are granted and/or an award
agreement to be entered into between Executive and the Company.

 

(d) Additional Equity Awards. Executive shall be eligible to be granted
additional equity awards in accordance with the Company’s policies as in effect
from time to time.

 

(e) Leak-Out. Employee will not, for the eighteen (18) calendar months 161
lowing the Effective Date, for the purpose of open market trades, pledge, sell,
contract to sell, grant, lend, or otherwise transfer or dispose of shares of
Common Stock, directly or indirectly, in an amount greater than seven and
one-half percent (7.5%) of the trading volume of the Common Stock during the
previous month on the OTCQX, (YI’CQB, or the OTC Pink marketplace, Nasdaq, NYSE,
or other trading market on which the Common Stock is then trading. Other than
via open market trades, Employee may not offer, pledge, sell, contract to sell,
grant, lend, or otherwise transfer or dispose of the Conversion Shares without
the prior written consent of the Company. Company’s consent to a transfer or
disposal of the Conversion Shares by Employee shall be specifically conditioned
on the transfi2t•ee or the Conversion Shares signing a Leak-Out Agreement with
the Company with substantially the same terms as expressly outlined in this
Section. For the avoidance of doubt, open market trades by the Employee do not
require Company’s consent. Any subsequent grant of stock to the Employee aner
the Effective Date shall have a six (6) calendar month leak out restriction
period with substantially the same terms as expressly outlined in this Section.

 

4.Termination.

 

(a) Change in Control and Severance Agreement. In connection with Executive’s
employment hereunder, Executive shall be entitled to enter into a Change in
Control and Severance Agreement with the Company providing severance protection
in the event of’ certain terminations of employment with the Company (the
“Change in Control and Severance Agreement”).

 

(b) At-will Employment. Subject to any obligation of the Company to provide
severance in accordance with the Change in Control and Severance Agreement, the
Company and Executive acknowledge that Executive’s employment is und shall
continue to be at-will, as defined under applicable law. This means that it is
not for any specified period of time and can be terminated by Executive or by
the Company at any time, with or without advance notice, and for any or no
particular reason or cause. It also means that Executive’s job duties, title and
responsibility and reporting level, work schedule, compensation and benefits, as
well as the Company’s personnel policies and procedures, may be changed with
prospective effect, with or without notice, at any time in the sole discretion
of the Company. This “at-will” nature or Executive’s employment shall remain
unchanged during Executive’s tenure as an employee and may not be changed,
except in an express writing signed by Executive and a duly authorized member of
the Board. If Executive’s employment terminates for any reason, Executive shall
not be entitled to any payments, benefits, damages, award or compensation other
than as provided in the Change in Control and Severance Agreement,

 

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(c) “Evergreen” Failure. Notwithstanding anything to the contrary herein, for
purposes of’ compensation and benefits payable to the Executive pursuant to this
Agreement only, the term of this Agreement shall extend to a date which is one
(l) year following the date of termination of Executive’s employment with the
Company.

 

(d) Deemed Resignation. Upon termination of Executive’s employment for any
reason, Executive shall be deemed to have resigned from all offices and
directorships, if any, and then held with the Company or any of its affiliates,
and, at the Company’s request, Executive shall execute such documents as are
necessary or desirable to such resignations.

 

(e) Return of Company Propery. Executive hereby acknowledges and agrees that all
Company Property and equipment furnished to, or prepared by, Executive in the
course of, or incident to, Executive’s employment» belongs to the Company and
shall be promptly returned to the Company upon termination of Executive’s
employment (and will not be kept in Executive’s possession or delivered to
anyone else). For purposes or this Agreement, “Company-Property” includes,
without limitation, all books, manuals, records, reports, notes, contracts,
lists, blueprints, and other documents, or materials, or copies thereof
(including computer files), keys. building card keys, company credit cards,
telephone calling cards, computer hardware and software, cellular and portable
telephone equipment, personal digital assistant (PDA) devices, and all other
proprietary information relating to the business of the Company or its
subsidiaries or affiliates. Following termination, Executive shall not retain
any written or other tangible material containing any proprietary information of
(he Company or its subsidiaries or affiliates.

 

5. Assignment and Successors.

 

The Company may assign its rights and obligations under this Agreement to any
successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise), and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its
affiliates. This Agreement shall be binding upon and inure to the benefit of the
Company, executives and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributes, devisees,
and legatees, as applicable. None of Executive’s rights or obligations may be
assigned or transferred by Executive, other than Executive’s rights to payments
hereunder, which may be transferred only by will or operation of law.

 

6.Miscellaneous Provisions.

 

a Work Eligibility Confidentiality Agreement, As a condition or Executive’s
employment with the Company, Executive will be required to provide evidence of
Executive’s identity and eligibility for employment in the United States. It is
required that Executive bring the appropriate documentation with Executive at
the time of employment. As a further condition of Executive’s employment with
the Company, Executive shall enter into and abide by the Company’s standard
Proprietary Information and Inventions Assignment Agreement (the “Confidential
Information Agreement”).

 

b Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which Shull remain in full force and effect. All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by the laws of the State of Tennessee without regard
to the conflicts of law provisions thereof,

 

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c Notices. Any notice, request, claim, demand, document and other communication
hereunder to any Party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by email and certified
or registered mail, postage prepaid (or if it is sent through any other method
agreed upon by the parties), as follows:

 

i If to the Company:

 

  Company: Surge Holdings Inc.     Address: 3124 Brother Blvd, Suite 104      
Bartlett, TN 38103             Attn: Board of Directors     e-mail:  

 

ii If to Executive, at the address set forth on the signature page hereto.

 

iii Or at any other address as any Party shall have specified by notice in
writing to the other Party.

 

d Counterparty. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement. Signatures delivered by facsimile shall
be deemed for all purposes.

 

e Entire Agreement. The terms of this Agreement, collectively with the Change in
Control and Severance Agreement and the Confidential Information Agreement, is
intended by the Parties to be the final expression of their agreement with
respect to the employment of Executive by the Company und supersede all prior
understandings and agreements, whether mitten or oral. The Parties further
intend that this Agreement, collectively with the Change in Control und
Severance Agreement and the Confidential Information Agreement, shall constitute
the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other
legal proceeding to vary the terms of this Agreement.

 

(i) Amendments• Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by Executive and a duly
authorized officer of Company. By an instrument in writing similarly executed,
Executive or a duly authorized officer of’ the Company, as applicable, may waive
compliance by the other Party with any specifically identified provision or this
Agreement that such other Party was or is obligated to comply with or perform;
provided, however, that such waiver shall not operate as a waiver of, or stopple
with respect to, any other or subsequent failure. No failure to exercise and no
delay in exercising any right, remedy, or power hereunder preclude any other or
further exercise of’ any other right, remedy, or power provided herein or by law
or in equity.

 

(g) Dispute Resolution & Arbitration. Executive and the Company agree that if’
any dispute, controversy or claim should arise between Executive and the Company
(including claims against its employees, officers, directors, shareholders,
agents, successors and assigns) relating or pertaining to or arising out of
Executive’s employment with the Company or this Agreement, the dispute will be
submitted exclusively to binding arbitration before a neutral arbitrator
conducted in the state of Nevada, in accordance with the law of’ the state of
Nevada without regard for conflicts of law as well as the commercial rules and
procedures of the American Arbitration Association then in force. This means
that disputes will be decided by an arbitrator rather than a court or jury, and
that both Executive and the Company waive their respective rights to a court or
jury trial. Executive understands that the arbitrator’s decision will be final
and exclusive and cannot be appealed. Notwithstanding the foregoing, each of
Executive and the Company agrees to, prior to submitting a dispute under this
Agreement to arbitration, submit, for a period of sixty (60) days, to voluntary
mediation before a jointly selected neutral third party mediator under the
auspices of JAMS, Las Vegas, NV, resolutions center (or any successor location),
pursuant to the procedures of JAMS international mediation rules conducted in
the state oc Nevada (however, such mediation or obligation to mediate shall not
suspend or otherwise delay any termination or other action of the Cofpany or
affect the Company’s other rights). Nothing in this Agreement is intended 10
prevent either Executive or the Company from obtaining injunctive relief in
court to prevent irreparable harm pending the conclusion of any such
arbitration. Notwithstanding anything herein to the contrary, Executive and the
Company each have the right to resolve any issue or dispute over intellectual
property rights by court action instead of arbitration. In such case the
exclusive jurisdiction and venue for any and all disputes arising hereunder
necessitating such action shall be in the state and federal courts of Clark
County, Nevada.

 

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(h) Withholding. The Company shall be entitled to withhold from any amounts
payable under this Agreement (including, without limitation, any allowances and
reimbursements) any state, local or foreign withholding or other taxes or
charges which the Company is required to withhold. The Company shall be entitled
to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.

 

7. Section 409A.

 

The intent of the Parties is that the payments and benefits under this Agreement
be exempt from Section 409A of the Internal Revenue Code of 1986, as amended
(collectively with the Department of Treasury regulations and other interpretive
guidance issued hereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date, “Section 409A”),
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be exempt therefrom. If Executive notifies the Company that
Executive has received advice of tax counsel of a national reputation with
expertise in Section 409A that any provision of this Agreement would cause
Executive to incur any additional tax or interest under Section 409A (with
specificity as to the reason therefore) or the Company independently makes such
determination, the Company and Executive shall take commercially reasonable
efforts to reform such provision to try to comply with or be exempt from Section
409A through good faith modifications to the minimum extent reasonably
appropriate to conform with Section 409A, provided that any such modifications
shall not increase the cost or liability to the Company. To the extent that any
provision hereof is modified in order to comply with or be exempt from Section
40.9A, such modification shall be made in good faith and shall, to the maximum
extent reasonably possible, maintain the original intent and economic benefit to
Executive and the Company of the applicable provision without violating the
provisions of Section 409A.

 

[Signature Page Follows]

 

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IN WITNESS WIIEREOF, the Parties have duly executed this Agreement as of the
date and year first above written.

 

  Surge Holdings, Inc.     By       Name Anthony Nuzzo     Title President and
COO             The Executive     By       Name Anthony George Evers            
Address:                    

 

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Exhibit A

 

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Exhibit B

 

Additional Outside Service

 

(to be provided under separate cover)

 

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