Document:

Exhibit 10.6

 

NIKOLA CORPORATION 
 2017 STOCK OPTION PLAN

 

Section 1.                                          Purpose

 

The purpose of the Plan is to promote the interests of the Company and its stockholders by aiding the Company in attracting and retaining employees, officers, consultants, advisors and non-employee Directors capable of assuring the future success of the Company, to offer such persons incentives to put forth maximum efforts for the success of the Company’s business and to compensate such persons through stock-based arrangements and provide them with opportunities for stock ownership in the Company, thereby aligning the interests of such persons with the Company’s stockholders.

 

Section 2.                                          Definitions

 

As used in the Plan, the following terms shall have the meanings set forth below:

 

(a)                                 “Administrator” shall mean the Board or a committee designated by the Board to administer the Plan.

 

(b)                                 “Affiliate” shall mean any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company.

 

(c)                                  “Award” shall mean any Option granted under the Plan.

 

(d)                                 “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing an Award granted under the Plan.  An Award Agreement may be in an electronic medium and need not be signed by a representative of the Company or the Participant.  Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Administrator.

 

(e)                                  “Board” shall mean the Board of Directors of the Company.

 

(f)                                   “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

 

(g)                                  “Company” shall mean Nikola Corporation, a Delaware corporation, and any successor corporation.

 

(h)                                 “Director” shall mean a member of the Board.

 

(i)                                     “Eligible Person” shall mean any employee, officer, non-employee Director, consultant, independent contractor or advisor providing services to the Company or any Affiliate.

 

(j)                                    “Fair Market Value” shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by

 

 

such methods or procedures as shall be established from time to time by the Administrator.  Notwithstanding the foregoing, unless otherwise determined by the Administrator, if the Shares are traded on a securities exchange, the Fair Market Value of a Share as of a given date shall be the closing price of one Share as reported on the securities exchange where the Shares are then listed on such date or, if the applicable securities exchange is not open for trading on such date, on the most recent preceding date when such exchange is open for trading.

 

(k)                                 “Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision.

 

(l)                                     “Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

 

(m)                             “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option to purchase Shares of the Company.

 

(n)                                 “Participant” shall mean an Eligible Person designated to be granted an Award under the Plan.

 

(o)                                 “Person” shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.

 

(p)                                 “Plan” shall mean the Nikola Corporation 2017 Stock Option Plan, as amended from time to time.

 

(q)                                 “Securities Act” shall mean the Securities Act of 1933, as amended.

 

(r)                                    “Share” or “Shares” shall mean shares of the Company’s common stock, par value $0.00001 per Share (or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan).

 

Section 3.                                          Administration

 

(a)                                 Power and Authority of the Administrator.  The Plan shall be administered by the Administrator.  Subject to the express provisions of the Plan and to applicable law, the Administrator shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or the method by which payments or other rights are to be calculated in connection with) each Award; (iv) determine the terms and conditions of any Award or Award Agreement, including any terms relating to the forfeiture of any Award and the forfeiture, recapture or disgorgement of any cash, Shares or other amounts payable with respect to any Award; (v) amend the terms and conditions of any Award or Award Agreement; (vi) accelerate the exercisability of any Award or the lapse of any restrictions relating to any Award, (vii) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (viii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under

 

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the Plan shall be deferred either automatically or at the election of the holder thereof or the Administrator; (ix) interpret and administer the Plan and any instrument or agreement, including an Award Agreement, relating to the Plan; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan; and (xii) adopt such modifications, rules, procedures and subplans as may be necessary or desirable to comply with provisions of the laws of non-U.S.  jurisdictions in which the Company or an Affiliate may operate, including, without limitation, establishing any special rules for Affiliates, Eligible Persons or Participants located in any particular country, in order to meet the objectives of the Plan and to ensure the viability of the intended benefits of Awards granted to Participants located in such non-United States jurisdictions.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award or Award Agreement, and any employee of the Company or any Affiliate.

 

(b)                                 Delegation.  The Administrator may delegate to one or more officers or Directors of the Company, subject to such terms, conditions and limitations as the Administrator may establish in its sole discretion, the authority to grant Awards; provided, however, that the Administrator shall not delegate such authority in such a manner as would contravene Section 157 of the Delaware General Corporation Law, as amended or any other applicable law.

 

(c)                                  Power and Authority of the Board.  Notwithstanding anything to the contrary contained herein, (i) the Board may, at any time and from time to time, without any further action of the Administrator, exercise the powers and duties of the Administrator under the Plan, unless the exercise of such powers and duties by the Board would cause the Plan not to comply with any applicable law or applicable securities exchange rules; and (ii) to the extent required by applicable law or applicable securities exchange rules, only the Administrator (or another committee of the Board comprised of directors who qualify as independent directors, to the extent required by applicable law or independence rules of any applicable securities exchange where the Shares are then listed) may grant Awards to Directors who are not also employees of the Company or an Affiliate.

 

(d)                                 Indemnification.  To the fullest extent permitted by law, (i) no member of the Board, the Administrator or any person to whom the Administrator delegates authority under the Plan shall be liable for any action or determination taken or made in good faith with respect to the Plan or any Award made under the Plan, and (ii) the members of the Board, the Administrator and each person to whom the Administrator delegates authority under the Plan shall be entitled to indemnification by the Company with regard to such actions and determinations.  The provisions of this section shall be in addition to such other rights of indemnification as a member of the Board, the Administrator or any other person may have by virtue of such person’s position with the Company.

 

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Section 4.                                          Shares Available for Awards

 

(a)                                 Shares Available.  Subject to adjustment under Section 4(c) below, the aggregate number of Shares that may be issued under all Awards under the Plan (including under Incentive Stock Options) shall be equal to 15,000,000.

 

(b)                                 Counting Shares.  For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan.

 

(i)                                     Shares Added Back to Reserve.  If any Shares covered by an Award or to which an Award relates are not purchased or are forfeited or are reacquired by the Company (including any Shares withheld by the Company or Shares tendered to satisfy any tax withholding obligation on Awards or Shares covered by an Award that are settled in cash), or if an Award otherwise terminates or is cancelled without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture, reacquisition by the Company, termination or cancellation, shall again be available for granting Awards under the Plan.

 

(ii)                                  Cash-Only Awards.  Awards that do not entitle the holder thereof to receive or purchase Shares shall not be counted against the aggregate number of Shares available for Awards under the Plan.

 

(iii)                               Substitute Awards Relating to Acquired Entities.  Shares issued under Awards granted in substitution for awards previously granted by an entity that is acquired by or merged with the Company or an Affiliate shall not be counted against the aggregate number of Shares available for Awards under the Plan.

 

(c)                                  Adjustments.  In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or other property) that thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards, (iii) the purchase price or exercise price with respect to any Award and (iv) the limitations contained in Section 4(d) below; provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number.  Such adjustment shall be made by the Administrator or the Board, whose determination in that respect shall be final, binding and conclusive.

 

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(d)                                 Limitation on Awards Granted to Non-Employee Directors.  No Director who is not also an employee of the Company or an Affiliate may be granted any Award or Awards denominated in Shares that exceed in the aggregate $25,000 (such value computed as of the date of grant in accordance with applicable financial accounting rules) in any calendar year.  The foregoing limit shall not apply to any Award made pursuant to any election by the Director to receive an Award in lieu of all or a portion of annual and committee retainers and annual meeting fees.

 

Section 5.                                          Eligibility

 

Any Eligible Person shall be eligible to be designated as a Participant.  In determining which Eligible Persons shall receive an Award and the terms of any Award, the Administrator may take into account the nature of the services rendered by the respective Eligible Persons, their present and potential contributions to the success of the Company or such other factors as the Administrator, in its discretion, shall deem relevant.  Notwithstanding the foregoing, an Incentive Stock Option may only be granted to full-time or part-time employees (which term as used herein includes, without limitation, officers and Directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code or any successor provision.

 

Section 6.                                          Awards

 

(a)                                 Options.  The Administrator is hereby authorized to grant Options to Eligible Persons with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Administrator shall determine:

 

(i)                                     Exercise Price.  The purchase price per Share purchasable under an Option shall be determined by the Administrator and shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option; provided, however, that the Administrator may designate a purchase price below Fair Market Value on the date of grant if the Option is granted in substitution for a stock option previously granted by an entity that is acquired by or merged with the Company or an Affiliate.

 

(ii)                                  Option Term.  The term of each Option shall be fixed by the Administrator at the date of grant, but shall not be longer than 10 years from the date of grant.

 

(iii)                               Time and Method of Exercise.  The Administrator shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms, including, but not limited to, cash, Shares (actually or by attestation), other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable exercise price,

 

in which, payment of the exercise price with respect thereto may be made or deemed to have been made.

 

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(A)                               Promissory Notes.  Notwithstanding the foregoing, the Administrator may not accept a promissory note as consideration.

 

(B)                               Net Exercises.  The Administrator may, in its discretion, permit an Option to be exercised by delivering to the Participant a number of Shares having an aggregate Fair Market Value (determined as of the date of exercise) equal to the excess, if positive, of the Fair Market Value of the Shares underlying the Option being exercised on the date of exercise, over the exercise price of the Option for such Shares.

 

(iv)                              Incentive Stock Options.  Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant of stock options which are intended to qualify as Incentive Stock Options:

 

(A)                               The Administrator will not grant Incentive Stock Options in which the aggregate Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under this Plan and all other plans of the Company and its Affiliates) shall exceed $100,000.

 

(B)                               All Incentive Stock Options must be granted within ten years from the earlier of the date on which this Plan was adopted by the Board or the date this Plan was approved by the stockholders of the Company.

 

(C)                               Unless sooner exercised, all Incentive Stock Options shall expire and no longer be exercisable no later than 10 years after the date of grant; provided, however, that in the case of a grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its Affiliates, such Incentive Stock Option shall expire and no longer be exercisable no later than five years from the date of grant.

 

(D)                               The purchase price per Share for an Incentive Stock Option shall be not less than 100% of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option; provided, however, that, in the case of the grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its Affiliates, the purchase price per Share purchasable under an Incentive Stock Option shall be not less than 110% of the Fair

 

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Market Value of a Share on the date of grant of the Incentive Stock Option.

 

(E)                                Any Incentive Stock Option authorized under the Plan shall contain such other provisions as the Administrator shall deem advisable, but shall in all events be consistent with and contain all provisions required in order to qualify the Option as an Incentive Stock Option.

 

(F)                                 This Section 6(a)(iv) shall be subject to approval by the stockholders of the Company within twelve months of adoption by the Board as provided in Section 11, and this Section 6(a)(iv) shall be effective as of the date of such stockholder approval.

 

(v)                                 Vesting.  Unless otherwise set forth in an Award Agreement, all Options shall vest and become exercisable as follows: 25% of the Options granted in an Award Agreement shall vest and become exercisable on the one-year anniversary of such Award Agreement, provided the Participant has provided continuous service to the Company from the date of the Award Agreement; the remaining 75% of the Options granted in an Award Agreement shall vest and become exercisable in equal monthly installments on the last day of each of the 36 full calendar months thereafter for which Participant provides continuous service to the Company, beginning on the last day of the first full calendar month following the anniversary of the Award Agreement.

 

(b)                                 General.

 

(i)                                     Limits on Transfer of Awards.  No Award shall be assignable or transferable other than by will or by the laws of descent and distribution following the Eligible Person’s death; provided, however, that subject to the Administrator’s consent in its sole discretion, a Non-Qualified Stock Option may be assigned in whole or in part during the Eligible Person’s lifetime to one or more of the Eligible Person’s family members (as defined in Rule 701 promulgated by the Securities and Exchange Commission under the Securities Act) through a gift or as otherwise permitted by Rule 701 promulgated by the Securities and Exchange Commission under the Securities Act.  The Administrator, in its sole discretion, may also permit assignments of Awards to comply with domestic relations or other court orders.  The terms applicable to the assigned portion shall be the same as those in effect for the Award Agreement immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Administrator may deem appropriate (including, without limitation, the requirement that the transferee execute such Agreements as the Administrator may deem appropriate).

 

(ii)                                  Restrictions; Securities Exchange Listing.  All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall

 

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be subject to such restrictions as the Administrator may deem advisable under the Plan, applicable federal or state securities laws and regulatory requirements, and the Administrator may cause appropriate entries to be made with respect to, or legends to be placed on the certificates for, such Shares or other securities to reflect such restrictions.  The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until the requirements of any federal or state securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

 

(iii)                               Public Offering.  In the event that the Company files a registration statement under the Securities Act with respect to an underwritten public offering of any Stock (a “Public Offering”), each Eligible Person or holder or beneficiary thereof shall be prohibited from effecting any public sale or distribution of any Shares(other than as part of such underwritten public offering), including, but not limited to, pursuant to Rule 144 or Rule 144A under the Securities Act, during the “lock-up” period established by the Administrator, which lock-up period shall be no shorter than that required by the underwriters of such public offering.  If requested by the underwriters managing any Public Offering, each Eligible Person shall execute a separate agreement to the foregoing effect.  Without limiting the foregoing clause (a), if (1) during the last 17 days of the “lock up” period the Company issues an earnings release or material news or a material event relating to the Company occurs; or (2) prior to the expiration of the “lock up” period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the “lock up” period, the restrictions imposed by this paragraph shall continue to apply until no earlier than the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event (or no earlier than the 16th day, if the Company does not issue the earnings release).

 

Section 7.                                          Amendment and Termination; Corrections

 

(a)                                 Amendments to the Plan and Awards.  The Board may from time to time amend, suspend or terminate this Plan, and the Administrator may amend the terms of any previously granted Award, provided that no amendment to the terms of any previously granted Award may, except as expressly provided in the Plan, or with the written consent of the Participant or holder thereof, adversely alter or impair the terms or conditions of the Award previously granted to a Participant under this Plan.  Any amendment to this Plan, or to the terms of any Award previously granted, is subject to compliance with all applicable laws, rules, regulations and policies of any applicable governmental entity or securities exchange, including receipt of any required approval from the governmental entity or stock exchange.  For greater certainty and without limiting the foregoing, prior approval of the stockholders of the Company shall only be required for any amendment to the Plan or an Award that would require stockholder approval under applicable law or the rules or regulations of any securities exchange that is applicable to the Company.

 

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(b)                                 Corporate Transactions.  In the event of any reorganization, merger, consolidation, split-up, spin-off, combination, plan of arrangement, take-over bid or tender offer, repurchase or exchange of Shares or other securities of the Company or any other similar corporate transaction or event involving the Company (or the Company shall enter into a written agreement to undergo such a transaction or event), the Administrator or the Board may, in its sole discretion, provide for any of the following to be effective upon the consummation of the event (or effective immediately prior to the consummation of the event, provided that the consummation of the event subsequently occurs), and no action taken under this Section 7(b) shall be deemed to impair or otherwise adversely alter or impair the rights of any holder of an Award or beneficiary thereof:

 

(i)                                     either (A) termination of any such Award, whether or not vested, in exchange for an amount of cash and/or other property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s vested rights (and, for the avoidance of doubt, if, as of the date of the occurrence of the transaction or event described in this Section 7(b)(i)(A), the Administrator or the Board determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s vested rights, then such Award may be terminated by the Company without any payment) or (B) the replacement of such Award with other rights or property selected by the Administrator or the Board, in its sole discretion;

 

(ii)                                  that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; or

 

(iii)                               that such Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby, notwithstanding anything to the contrary in the applicable Award Agreement.

 

(c)                                  Correction of Defects, Omissions and Inconsistencies.  The Administrator may, without prior approval of the stockholders of the Company, correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Plan.

 

Section 8.                                          Income Tax Withholding

 

In order to comply with all applicable federal, state, local or foreign income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, state, local or foreign payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant.  In order to assist a Participant in paying all or a portion of the applicable taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Administrator, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the

 

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Participant to satisfy such tax obligation by (a) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes (subject to the requirements of ASC Topic 718 to avoid adverse accounting treatment) or (b) delivering to the Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes.  The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.

 

Section 9.                                          General Provisions

 

(a)                                 No Rights to Awards.  No Eligible Person, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the Plan.  The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.

 

(b)                                 Award Agreements.  No Participant shall have rights under an Award granted to such Participant unless and until an Award Agreement shall have been signed by the Participant (if requested by the Company), or until such Award Agreement is delivered and accepted through an electronic medium in accordance with procedures established by the Company.  An Award Agreement need not be signed by a representative of the Company unless required by the Administrator.  Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Administrator.

 

(c)                                  Plan Provisions Control.  In the event that any provision of an Award Agreement conflicts with or is inconsistent in any respect with the terms of the Plan as set forth herein or subsequently amended, the terms of the Plan shall control.

 

(d)                                 No Rights of Stockholders.  Neither a Participant nor the Participant’s legal representative shall be, or have any of the rights and privileges of, a stockholder of the Company with respect to any Shares issuable upon the exercise of any Award, in whole or in part, unless and until such Shares have been issued.

 

(e)                                  No Limit on Other Compensation Arrangements.  Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation plans or arrangements, and such plans or arrangements may be either generally applicable or applicable only in specific cases.

 

(f)                                   No Right to Employment.  The grant of an Award shall not be construed as giving a Participant the right to be retained as an employee of the Company or any Affiliate, nor will it affect in any way the right of the Company or an Affiliate to terminate a Participant’s employment at any time, with or without cause, in accordance with applicable law.  In addition, the Company or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan or in any Award Agreement.  Nothing in this Plan shall confer on any person any legal or equitable right against the Company or any Affiliate, directly or indirectly, or give rise to any cause of action at

 

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law or in equity against the Company or an Affiliate.  Under no circumstances shall any person ceasing to be an employee of the Company or any Affiliate be entitled to any compensation for any loss of any right or benefit under the Plan which such employee might otherwise have enjoyed but for termination of employment, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise.  By participating in the Plan, each Participant shall be deemed to have accepted all the conditions of the Plan and the terms and conditions of any rules and regulations adopted by the Administrator and shall be fully bound thereby.

 

(g)                                  Governing Law.  The internal law, and not the law of conflicts, of the State of Delaware shall govern all questions concerning the validity, construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award.

 

(h)                                 Severability.  If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.

 

(i)                                     No Trust or Fund Created.  Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

 

(j)                                    Other Benefits.  No compensation or benefit awarded to or realized by any Participant under the Plan shall be included for the purpose of computing such Participant’s compensation or benefits under any pension, retirement, savings, profit sharing, group insurance, disability, severance, termination pay, welfare or other benefit plan of the Company, unless required by law or otherwise provided by such other plan.

 

(k)                                 No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash shall be paid in lieu of any fractional Share or whether such fractional Share or any rights thereto shall be canceled, terminated or otherwise eliminated.

 

(l)                                     Headings.  Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

Section 10.                                   Clawback or Recoupment

 

All Awards under this Plan shall be subject to forfeiture or other penalties pursuant to any Company clawback policy, as amended from time to time, and such forfeiture and/or penalty

 

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conditions or provisions as determined by the Administrator and set forth in the applicable Award Agreement.

 

Section 11.                                   Effective Date of the Plan

 

The Plan was adopted by the Board on and effective July 10, 2017.

 

Section 12.                                   Term of the Plan

 

No Award shall be granted under the Plan on or after, and the Plan shall terminate on, July 10, 2027 or any earlier date of discontinuation or termination established pursuant to Section 7(a) of the Plan.  Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such dates, and the authority of the Administrator provided for hereunder with respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend beyond the termination of the Plan.

 

12Exhibit 10.7

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of July 13, 2016, between BLUEGENTECH, LLC an Ohio limited liability company (“Employer” or “Company”), with its principle place of business at 1130 South 3800 West, Suite 200, Salt Lake City, Utah 84104, and Trevor Milton (“Employee”).

 

1.                                      Employment.  The Company hereby employs Employee with the duties and responsibilities of Chief Executive Officer and President at the Company.  Employee accepts such employment and agrees to devote all of Employee’s business time and attention exclusively to the business of the Company and to perform assigned duties to the best of Employee’s ability.  For purposes of this Agreement, Employee’s “Date of Hire” is defined as January 1, 2012.  Employee shall not be entitled to back pay that has not been paid as of the date of this Agreement.

 

2.                                      Term of Employment.  This Agreement shall become effective immediately and shall remain in full force and effect until terminated by Employee or 7 years after the execution of Agreement, provided however that the provisions and covenants set forth in paragraphs 8, 9, 10, 11 and 12 shall survive the termination of this Agreement.

 

3.                                      Compensation.  During the term hereof, the Company agrees to pay Employee pursuant to Exhibit A attached hereto.  Employee agrees and acknowledges that compensation is of a confidential nature and disclosure to other employees is subject to disciplinary action, up to and including termination.

 

4.                                      Business Expenses.  During the term hereof, the Company shall reimburse Employee for reasonable, ordinary, and necessary out of pocket expenses for business travel or other relevant business expenses incurred by Employee in discharge of Employee’s duties after submittal of itemized receipts.

 

5.                                      Unlawful Conduct.  In performing duties hereunder, Employee shall not engage in any unlawful conduct or activity.  Furthermore, Employee shall at all times comply fully with all applicable laws, ordinances, statutes and governmental rules and regulations.

 

6.                                      No Misrepresentations.  Employee shall make no misrepresentations or misstatements of fact intentionally or negligently to any current, future or prospective customer, client or other party, and/or to any agent or representative thereof or therefor.  No agreements shall be made by Employee with any other persons not associated with the Company, without the prior written consent of the Board of Managers.

 

7.                                      Restrictive Covenants.  The parties recognize that the services to be rendered under this Agreement by Employee are special, unique, and of an extraordinary character.  Employee, in consideration of employment of Employee by the Company, the compensation to be paid to Employee, and any other benefits that may be received by Employee pursuant to this Agreement, expressly covenants and agrees, during the term of Employee’s employment, starting from the Date of Hire defined in Paragraph 1, and for a period of one (1) year after termination of employment to not, either directly or indirectly:

 

 

(a)                                 either as principal, agent, employee, employer, stockholder (except as a stockholder in any publicly-held companies whose shares are traded on a national stock exchange), co-partner, or in any other individual or representative capacity whatsoever, engage, directly or indirectly own, manage, operate, control, aid, or assist another in the operation, organization, or promotion of, be employed by, participate in, advise, or engage in any manner with the ownership, management, operation, or control of any business that directly competes with the Company;

 

(b)                                 induce or attempt to influence any Customer of the Company to terminate, withdraw, or curtail its business relationship with the Company;

 

(c)                                  induce or attempt to influence any employee of the Company to terminate his or her employment with the Company;

 

(d)                                 request or advise any present or future actual or prospective supply resource or service resource of the Company to refrain from, withdraw, curtail, or cancel the furnishing or sale of merchandise, supplies, or services to the Company; and

 

(e)                                  use any corporate fictitious or trade name now being or hereafter used by the Company or use any confusingly similar name.

 

For purposes of this Agreement, “Customer of the Company” shall mean any person or entity for which the Company has provided a service or sold a product or might reasonably be expected to do so in the future as a result, for example and not by way of limitation, of a written solicitation to such person or entity, the entry of negotiations with such person or entity or the Company’s participation at trade shows and other similar events. “Competitor of the Company” shall mean any person or entity that engages in the same business as the Company.

 

The parties acknowledge that Employee holds an interest in other companies that do not directly compete with the Company, namely dHybrid Systems, LLC, dHybrid, Inc. and Lexon, Inc.  For sake of clarity, the parties agree that Employee’s ownership interest in these companies does not constitute a violation of this paragraph 7 or a breach of this Agreement.

 

The parties hereto acknowledge that there are no geographic restrictions placed on Employee hereunder and Employee may, after leaving the Company’s employment hereunder, work in any location Employee wishes, provided Employee complies with, and adheres to, all of the covenants set forth in this paragraph 7.

 

8.                                      Definitions.  In this Agreement, when used with initial capital letters, the following terms shall have the following definitions:

 

8.1                               Technology.  “Technology” means any invention, creation, discovery, technology, product, device, equipment, design, process, method, idea, know-how, research, work product quality control, computer program, source code, object code, algorithm, software, article of manufacture, improvement, work of authorship, data or database, and the like, but specifically excludes Employee’s prior general knowledge, experience, education and skills of a non-proprietary nature.

 

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8.2                               Intellectual Property.  “Intellectual Property” means any and all Employer patents, trade secrets, know-how, proprietary information, suppliers, vendors, Technology, Confidential Information, ideas, copyrights, trademarks, and service marks, and any and all rights, applications and registrations relating to the same.

 

8.3                               Employee Invention.  “Employee Invention” means any Technology, or part thereof, that was conceived, developed, reduced to practice, or created by the Employee:

 

(a)                                 within the scope of his/her employment with the Company from the Date of Hire or while an employee of Worthington Industries doing work for the benefit of Bluegentech, LLC; or

 

(b)                                 with the aid, assistance or use of any of Employer’s property, equipment, facilities, supplies, resources, Confidential Information, or Intellectual Property;

 

(c)                                  the result of any work, services or duties performed by Employee for Employer.

 

8.4                               Exclusions to Employee Invention.  No right or Intellectual Property in or to an invention of Employee shall be deemed an Employee Invention if it was:

 

(a)                                 created by Employee entirely without using any Employer resources or Employer Confidential Information;

 

(b)                                 comprised of or based upon information that is publicly known or available; or

 

(c)                                  was created by the Employee prior to his employment with the Employee and was disclosed to the Employer and, if any, is listed on Schedule B, attached hereto.

 

8.5                               Confidential Information.  “Confidential Information” means any and all Employer Technology, Employee Inventions, Employer Intellectual Property, daily work logs, data, formulas, formulations, information, technology, systems, know-how, process, process parameters, methods, practices, designs, fabrication technique, technical plans, compilations, creations, concepts, ideas, techniques, intellectual properties, specification, documentation, customer and supplier lists, manuals, contracts, business plans, marketing plans, financial information, business procedures, business operations and data, financial plans and data, marketing plans and data, research and development plans and data, forecasts, and the like, whether disclosed in writing, orally, or in any other form, tangible or intangible, whether or not designated or marked “CONFIDENTIAL.”

 

9.                                      Assignment.  Employee agrees to assign, and does hereby assign, convey and transfer to Employer all of his rights, title and interests in and to all Employer Inventions, together with all Intellectual Property relating thereto, free of any restriction, limitation or encumbrance of any kind, which assignment and transfer shall be broadly and liberally construed in favor of Employer.  Without limiting the generality of the foregoing assignment, Employer shall have the absolute and exclusive rights to use Employee Inventions and related Intellectual Property to expand, improve, modify and further develop the same, to sell, license, sub-license, and otherwise

 

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exploit, commercialize, sell and market the same, to authorize others to do so, and to exercise all other rights in and to Employee Inventions and related Intellectual Property.  The assignments) made under this paragraph are not in any way limited by time, geography or otherwise.  In undertaking any or all of the foregoing activities, the Employer shall have no obligation to credit or otherwise acknowledge Employee or Employee’s contributions, except as required by law.  Employee shall, on a continuing basis, promptly and fully disclose to Employer (in writing) any and all Technology in which Employee has any right, title or interest or which is otherwise subject to assignment this paragraph 9, and which is necessary for, embedded in or otherwise used in the projects or related products or services.  Employee shall render all reasonable or necessary assistance requested by Employer to designate, protect, enforce and/or enhance all rights in such Technology for Employer’s benefit.  Such assistance shall include, without limitation, the completion of any assignment, application, oath, affidavit, declaration, petition or other instrument requested by Employer to effectuate the intent of this Agreement.  Employee shall fully cooperate with and assist all members of Employee’s projects team towards the successful and timely completion of the projects and the research, development and assembly of the pertinent products, services and Technology.  To the extent that any such assistance by Employee (specifically excluding the review and examination of documents) is rendered after termination of Employee’s employment with Employer and requires an amount of Employee’s time, Employer shall reasonably compensate Employee for any such additional work; provided, however, that Employee shall have no duty to assist Employer with any research and/or development work needed to finish the projects after his termination.

 

10.                               Proprietary Rights.  Employer’s Intellectual Property is proprietary to Employer, and title to all of it remains in Employer.  All related rights in the Technology and updates thereof, including but not limited to the Intellectual Property, shall be and will remain the property of Employer.  As a work for hire, Employee shall have no right, title, or interest in such Intellectual Property.

 

11.                               Intellectual Property.  Employee covenants that Employer is the exclusive owner or exclusive licensee of the Confidential Information.  In addition, any Intellectual Property, modifications, adoptions, utilization, designs, or inventions based upon or arising from the Confidential Information which is made by Employee shall remain Employer’s sole property.  Employee shall acknowledge, and deliver any and all documents, and shall perform any and all acts which shall be reasonably required in order for Employer to establish ownership of the Confidential Information.

 

12.                               Non-Disclosure of Confidential Information.  Employee agrees that disclosure by Employer of any Confidential Information whether written, oral or in machine readable form, is made in the strictest confidence and that:

 

(a)                                 Employee shall at all times use all necessary efforts to maintain the Confidential Information as confidential and secret;

 

(b)                                 Employee shall take all appropriate action with respect to use, copying protection and integrity of Confidential Information to preserve confidentiality of the Confidential Information.  Employee shall not at any time print or copy, in whole or in part, any documents or

 

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magnetic media containing any Confidential Information without the prior written consent of Employer;

 

(c)                                  Employee shall not without the prior written consent of Employer, disclose any Confidential Information to any third party;

 

(d)                                 Employee shall not use, sell, or otherwise exploit any Confidential Information directly or indirectly or allow any other party to interfere with any patent or copyright application which Employer has filed or may filed with respect to the Confidential Information, and shall not use any Confidential Information to amend any claim, any pending patent or copyright application to expand the claim to read on, cover, or dominate any intellectual property, whether or not patentable or copyrightable, disclosed in the Confidential Information; and

 

(e)                                  The Confidential Information shall remain the property of Employer.  Nothing contained herein shall grant any party other than Employer any rights in the Confidential Information.

 

13.                               Notices.  Either party shall be entitled to give any notice(s) called for hereunder to the other party at the last address made known by the parties to each other by sending such notice in writing by United States mail, postage prepaid.  Until notice to the contrary is received, the addresses of the parties as shown herein below shall be deemed to be the correct addresses for notice.

 

The addresses to which notices shall be delivered are as follows:

 

	
If delivered to   Employer:
    	
 
    	
If delivered to Employee:
    
	
Bluegentech, LLC
    	
 
    	
 
    
	
1130 South 3800 West
    	
 
    	
 
    
	
Suite 200
    	
 
    	
 
    
	
Salt Lake City, UT 84104
    	
 
    	
 
    

 

14.                               Binding Nature of Agreement; Assignment and Nominee.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.  Employee acknowledges that the services to be rendered by Employee pursuant to this Agreement are unique and personal.  Accordingly, Employee may not assign or transfer (whether voluntary or by operation of law) any of Employee’s rights or obligations under this Agreement without the prior written consent of the Company.  Nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement or to any persons other than the parties to it and their successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third person or any party to this Agreement except as previously provided herein, nor shall any provision give any third persons any right of subrogation or action over or against any party to this Agreement.

 

15.                               Termination.  Upon termination of its relationship with Employer or upon request by Employer, Employee shall promptly return to Employer all materials containing Confidential Information (specifically any and all Employee Inventions and Employer Intellectual Property and

 

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Technology), including, without limitation any extracts, computer files, hardware, software, data links, keys, dongles, analysis, derivatives of the Confidential Information, if any, given to or in the possession of Employee, on Employee’s laptop or otherwise.  Furthermore, upon termination of Employee’s employment with the Employer, Employee shall not retain copies, electronic or otherwise of any Confidential Information.  Subject to the terms of this Agreement, Employee’s Assignment of Invention, covenants of Non-Disclosure of Confidential Information, Not-to-Compete, Non-Solicitation of Employees, and Disparagement shall survive the termination of this Agreement.

 

16.                               Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Utah.

 

17.                               Entire Agreement.  This Agreement together with any attachment hereto contains the entire Agreement between the parties and may not be modified except by an Agreement in writing signed by the parties hereto.  This Agreement supersedes any other employment agreement that may exist between Employee and the Company.

 

18.                               Remedies.  Employer and Employee agree that should Employee violate the Agreement, that Employer will suffer irreparable harm, which in addition to other remedies at law, would entitle Employer to seek injunctive relief and other equitable remedies against Employee.

 

19.                               Severability and Effectiveness.  If any provision herein is declared invalid by a court of competent jurisdiction, the portion of this Agreement not declared invalid shall remain in full force and effect.

 

20.                               Time Periods of Restrictions.  It is agreed by the parties that the time periods of the restrictions set forth in the Agreement shall be extended by any time period during which it has been judicially determined that Employee has violated the terms and conditions of any provision of the Agreement.

 

21.                               Attorneys’ Fees.  If either party brings an action to enforce or construe the terms of this Agreement, the prevailing party shall be entitled to its attorneys’ fees and other costs incurred in connection with such proceeding.

 

22.                               Other Existing Employment Contracts.  The obligations of the Company under this Agreement are contingent on there being in effect no other agreements which prohibit or restrict Employee from working with or for the Company, and Employee represents and warrants that no such agreements are in force or effect.

 

23.                               Titles Not to Affect Interpretation.  The titles of paragraphs contained in this Agreement are for convenience of reference only, and they neither form a part of this Agreement nor are they to be used in construction or interpretation hereof.

 

24.                               Indulgences Not Waivers.  Neither the failure nor any delay on the part of any party to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise of the same or of any other right, remedy, power, or privilege with respect to

 

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any occurrence be construed as a waiver of such rights, remedy, power, or privilege with respect to any other occurrence.

 

25.                               Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

	
EMPLOYER:
    	
 
    	
EMPLOYEE:
    
	
 
    	
 
    	
 
    
	
Bluegentech, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Britton Worthen
    	
 
    	
/s/ Trevor Milton
    
	
 
    	
 
    	
TREVOR MILTON
    
	
By: Britton Worthen
    	
 
    	
 
    
	
Its: General Counsel
    	
 
    	
 
    

 

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