Document:

EX-10.3

  EXHIBIT 10.3

  AMENDMENT TO EMPLOYMENT AGREEMENT

   

  This Amendment to Employment Agreement (the “Amendment”) is agreed to as of September 13,

  2022 (“Effective Date”), by and among CleanSpark, Inc., a Nevada corporation (“CleanSpark” or the “Company”), and Gary Vecchiarelli (“Employee”) (Employee and CleanSpark collectively referred to as the “Parties”).

   

  WHEREAS, CleanSpark and Employee are parties to the Employment Agreement effective

  December 15, 2021 (the “Agreement”);

   

  WHEREAS, CleanSpark’s Compensation Committee of the Board of Directors approved to amend certain of Employees’ compensation terms to reflect his contributions to the Company; and

   

  WHEREAS, the Parties are entering into this Amendment to alter certain of the Agreement as provided herein.

   

  NOW, THEREFORE, the Parties agree as follows:

   

  1.Exhibit 3 of the Agreement shall be fully replaced with the following language:

   

  •$400,000 annual base salary, effective October 1, 2022.  

  •120,000 – PSUs: 

  oTo be issued subject to receipt of Stockholder Approval and shall be deemed forfeited if Stockholder Approval is not obtained by March 15, 2023. 

  oVesting: 

  ▪1/7th to vest upon reaching 4.0 EH of total processing power.  

  ▪1/14th to vest every 500 PH/s of total processing power from 4.5 to 10.0 EH

  •120,000 – RSUs: 

  oTo be issued subject to receipt of Stockholder Approval and shall be deemed forfeited if Stockholder Approval is not obtained by March 15, 2023. 

  oVesting:  

  ▪40,000 vesting on September 12, 2023

  ▪40,000 vesting on September 12, 2024

  ▪40,000 vesting on September 12, 2025

  • 0.167 BTC per month – 2.0/year 

  oEffective October 1, 2022. 

  •Options – N/A 

  •All future/unvested RSU and PSU awards are hereby cancelled.  

   

  2.All RSU and PSU awards are conditioned on Employee’s continued employment through the vesting date or condition, provided however, that if the only remaining vesting condition is stockholder approval, that condition may be met after Employee’s departure from employment for any reason (including death) and still vest with Employee once stockholder approval is obtained.  

   

  3.Except as specifically modified hereby, all of the provisions of the Agreement, which are

  

  not in conflict with the terms of this Amendment, shall remain in full force and effect. To the extent that this Amendment conflicts with the terms of the Agreement, this Amendment shall control.

   

   

   

  IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

   

  						CLEANSPARK, INC.

  						A Nevada Corporation

   

   

  						By:  /s/ Larry McNeill

  							Larry McNeill, Chairman of the

  							Compensation Committee

   

   

   

  						EMPLOYEE:

   

   

   

  						/s/ Gary Vecchiarelli

  						Gary VecchiarelliEX-10.4

  Form of RSU Award Agreement		

  EXHIBIT 10.4

  CLEANSPARK, INC.

  
2017 Incentive Award Plan

   

  RESTRICTED STOCK Unit Grant Notice

  CleanSpark, Inc., a Nevada corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the CleanSpark, Inc. 2017 Incentive Plan (as amended, restated, supplemented and/or modified from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A and the Vesting Schedule attached as Exhibit B (Exhibits A and B, collectively, the “Agreement”), all of which are incorporated into this Grant Notice by reference. Except as otherwise provided herein, capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.

  		
	Participant:
	 

	Grant Date:
	[________]

	Vesting Start Date:
Number of RSUs:
Expiration:
	[the Grant Date]
[________] 
Perpetual/NA

	Vesting Schedule:
	Exhibit B

	 
	 

  By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

  				
	CLEANSPARK, INC. 
	PARTICIPANT

	By:
	 
	 

	Name: 
	 
	[________________________________________]

	Title:
	 
	 
	 

   

   

   

   

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  Exhibit A

  RESTRICTED STOCK UNIT AGREEMENT

  WHEREAS, the Company has granted the RSUs to Participant, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”); and

  WHEREAS, in connection therewith, the parties desire to enter into this Restricted Stock Unit Agreement (together with the Vesting Schedule attached as Exhibit B hereto, collectively, this “Agreement”).

  NOW, THEREFORE, the Company and Participant hereby agree as follows:

  Article I.
general

  1.1Award of RSUs; Contingent on Shareholder Approval.

  (a)Each RSU represents the right to receive one share of Common Stock (“Share”), as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.

  (b)This award of RSUs is referred to herein as the “Award”.  This Award is contingent upon approval by the shareholders of the Company of the reservation of an amount of Shares under the Plan that is sufficient to cover the number of RSUs listed in the Grant Notice. 

  1.2Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control. For clarity, (i) any terms of the Agreement that supplement, rather than create any inconsistency with, the terms of the Plan, and (ii) any terms of the Agreement that expressly supersede any terms of the Plan, in each case, shall constitute valid and enforceable terms of this Agreement and shall not be superseded by the Plan.

  1.3Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.

  1.4Definitions. Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice, the Plan [or the Employment Agreement] (as specified). In addition, the following defined terms shall apply:

  (a)“Administrator” means the Compensation Committee of the Board.

  (b)“Applicable Laws” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted.

  (c)[“Employment Agreement” means that certain Employment Agreement by and between Participant and the Company, dated [_________].]

  (d)“Service” means Participant’s continued service [as an employee or officer, as applicable] OR [an employee, officer or director, as applicable] of the Company or any of its subsidiaries.

   

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  Article II.
VESTING; forfeiture; SETTLEMENT

  2.1General Vesting. Subject to Participant’s Service on the applicable vesting date (each, a “Vesting Date”) [and any applicable performance-based criteria (“Performance Criteria”)], the RSUs shall vest as set forth in Exhibit B, [except as otherwise provided in the Employment Agreement].

  2.2Forfeiture.

  (a)Except as may be otherwise provided in a written agreement between the Participant and the Company (and subject to the terms and conditions of any such agreement), if the Participant’s Service is terminated for any reason, any unvested RSUs shall automatically, without further action on the part of any person, be forfeited by the Participant.

  (b)In consideration of the grant of the RSUs hereunder, and further as a material inducement for the Company to enter into this Agreement with Participant and to grant Participant the RSUs, Participant hereby acknowledges and agrees that Participant shall continue to be bound by the Restrictive Covenants. [In addition, and without limiting anything set forth herein, the grant of the RSUs provided herein and Participant’s agreement to be bound by the Restrictive Covenants are intended to be mutually dependent promises, and in the event Participant materially breaches the Restrictive Covenants and fails to cure such breach within fifteen (15) days of written notice of such breach, then to the greatest extent permitted by Applicable Law (and except as otherwise determined by the Administrator): (i) RSUs that have not yet been settled (whether vested or unvested) automatically will be forfeited and terminated as of such breach without consideration therefor; (ii) any Shares issued upon settlement of the RSUs during the time period that is twelve (12) months prior to and twelve (12) months following Participant’s termination of Service that have not yet been sold or otherwise transferred or disposed of by Participant shall be forfeited back to the Company for no consideration; and (iii) if Participant received any Shares upon settlement of the RSUs during the time period that is twelve (12) months prior to and twelve (12) months following Participant’s termination of Service and subsequently sold or otherwise transferred or disposed of the received Share(s), any gain represented by the Fair Market Value of the Shares issued upon settlement of the RSUs on the settlement date multiplied by the number of Shares issued to Participant upon settlement of the RSUs shall be paid by Participant to the Company, in cash, without regard to any market price decrease or increase subsequent to the settlement of the RSUs.] The Participant hereby agrees that upon written request of the Administrator, and no later than [fifteen (15)] calendar days following the date of such request, Participant shall provide the Administrator with written, accurate information relating to Shares that have been sold, transferred or otherwise disposed of by the Participant within twelve (12) months prior to and twelve (12) months following Participants termination of Service, and with such other information requested by the Administrator relating to such sale, transfer or other disposition as the Administrator determines is necessary or appropriate for the Administrator to determine the extent to which the foregoing provisions of this Section 2.2 apply to the Participant or any Shares.

  (c)For purposes of this Agreement, “Restrictive Covenants” means the restrictions set forth in the Confidentiality, Non-Solicitation Non-Compete and Assignment of Inventions Agreement, as well as any other restrictive covenants to which Participant is bound pursuant to any written agreement with the Company or any of its subsidiaries.

  2.3Settlement.

  (a)The RSUs will be paid in Shares within thirty (30) days of vesting and in any event no later than the 15th day of the third month following the year in which the vesting date of the applicable 

   

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  RSU occurs (or, if earlier, the year in which the “substantial risk of forfeiture” (within the meaning of Section 409A) of the applicable RSU lapses), as determined pursuant to Section 2.1 or Exhibit B.

  (b)Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.

  Article III.
TAXATION AND TAX WITHHOLDING

  3.1Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.

  3.2Tax Withholding.

  (a)Subject to the provisions of this Section 3.2 and any Company insider trading policy (including blackout periods), payment of the withholding tax obligations with respect to the Award may be by any of the following, or a combination thereof, as determined by the Participant, unless otherwise prohibited by the Administrator at its sole discretion:

  (i)Cash or check; 

  (ii)In whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery; or

  (iii)Delivery (including electronically or telephonically to the extent permitted by the Company) by Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company that Participant has placed a market sell order with such broker with respect to Shares then-issuable upon settlement of the Award, and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the applicable tax withholding obligations; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Administrator.

  (b)Unless the Administrator otherwise determines, the Company shall withhold, or cause to be withheld, Shares otherwise vesting or issuable under this Award in satisfaction of any applicable withholding tax obligations. The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding no greater than the aggregate amount of such liabilities based on the maximum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income. [Notwithstanding the foregoing, if Participant is subject to Section 16 of the Exchange Act, payment of any withholding tax obligations with respect to the Award shall be satisfied by the Company withholding that number of shares of Common Stock that have otherwise become vested, having a Fair Market Value equal to Applicable Withholding Rate.]

   

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  (c)The applicable tax withholding obligation will be determined based on Participant’s Applicable Withholding Rate. Notwithstanding the provisions of the Plan, Participant’s “Applicable Withholding Rate” shall mean (i) if Participant is subject to Section 16 of the Exchange Act, the greater of (A) the minimum applicable statutory tax withholding rate or (B) the maximum individual tax withholding rate permitted under the rules of the applicable taxing authority for tax withholding attributable to the underlying transaction; or (ii) if Participant is not subject to Section 16 of the Exchange Act, the minimum applicable statutory tax withholding rate or such other higher rate approved by the Company; provided, however, that (x) in no event shall Participant’s Applicable Withholding Rate exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable award under generally accepted accounting principles in the United States of America); and (y) the number of Shares tendered or withheld, if applicable, shall be rounded up to the nearest whole Share sufficient to cover the applicable tax withholding obligation, to the extent rounding up to the nearest whole Share does not result in the liability classification of the RSUs under generally accepted accounting principles.]

  (d)Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. The Company and its subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

  Article IV.
other provisions

  4.1Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and/or termination in certain events as provided in this Agreement and the Plan.

  4.2Clawback. The Award and the Shares issuable hereunder shall be subject to any Company clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder. The Company and Participant acknowledge that this Section 4.2 is not intended to limit any clawback and/or disgorgement of the Award and/or the Shares issuable hereunder pursuant to Section 304 of the Sarbanes-Oxley Act of 2002.

  4.3Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed as follows: 

  CleanSpark, Inc.

  Attn: General Counsel

  2370 Corporate Circle, Suite 160 

  Henderson, Nevada 89074

   

  Notice to the Company may also be made to the General Counsel’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to his or her beneficiary or beneficiaries) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices 

   

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  to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

  4.4Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

  4.5Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

  4.6Successors and Assigns. The Company may assign any of its rights under this Agreement to a single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

  4.7Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

  4.8Entire Agreement; Amendment. The Plan, the Grant Notice, this Agreement (including any exhibit hereto) [and the Employment Agreement] constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the RSUs without the prior written consent of Participant.

  4.9Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

  4.10Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.

  4.11Not a Contract of Service. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any subsidiary or interferes with or restricts in any way the rights of the Company and its subsidiaries, which rights are hereby 

   

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  expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a subsidiary and Participant.

  4.12Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

  * * * * *

   

   

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  Exhibit B

   

  VESTING SCHEDULE

  [RSUs Subject to Time-Based Vesting]

  [Subject to Participant’s continued Service [OR subject to any additional applicable performance metrics set forth in the Agreement on the relevant Vesting Date set forth below, the Award shall vest with respect to the number of RSUs listed in Column “A” on the corresponding Vesting Date listed in Column “B.”]

  		
	Column A
Number of RSUs 
	Column B
Vesting Date

	[________]
	[________]

	[________]
	[________]

	[________]
	[________]

	[________]
	[________]

   

  [RSUs Subject to Performance-Based Vesting]

  [Subject to Participant’s continued Service and Participant’s achievement and satisfaction of the Performance Criteria set forth in the Agreement, the Award shall vest with respect to the number of RSUs listed in Column “A” subject to achievement and satisfaction of the applicable Performance Criteria set forth in Column “B” and on the corresponding Vesting Date listed in Column “C.”]

  			
	Column A
Number of RSUs
	Column B
Performance 
Criteria
	Column C
Vesting Date 

	[________]
	[________]
	[________]

	[________]
	[________]
	[________]

	[________]
	[________]
	[________]

	[________]
	[________]
	[________]

   

   

   

   

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