Document:

Document

Exhibit 10.1

PERSONAL AND CONFIDENTIAL

October 26, 2020

David Smith
c/o Charles River Laboratories, Inc.
251 Ballardvale Street
Wilmington, MA 01887

David: 

The purpose of this letter is to summarize the transfer of your employment from Wilmington, MA, U.S. (your “origin location”) to Cambridge, England, in the Charles River Discovery Research Services UK LTD entity (your “destination location”), effective as of December 1, 2020.    

As you will be employed by a UK legal entity, the specific terms of your employment will be outlined in a standard UK employment contract commensurate with an employee of your role and status within the Company.  A draft of this contract is being prepared and will be shared with you in the coming weeks.

Your position will remain as Corporate Executive Vice President & Chief Financial Officer and you will continue to report to me.  Your current remuneration and benefits will remain unchanged, except as described below: 

•Annual Salary - At the commencement of your transfer, your base salary will remain the same ($577,076 USD) with adjustment to local currency (£452,428 GBP), as of the effective date. This is based on a trailing 12 month average exchange rate.  Your regular compensation (including base salary and variable compensation) will no longer be administered and adjusted in accordance with the practices and guidelines in your origin location, but instead will be subject to the practices and guidelines in effect in your destination location.  You will continue to be eligible for merit increases, subject to annual approval by the Compensation Committee of the Charles River Board of Directors.  Please note, any salary increase is subject to annual approval and/or modification by the Compensation Committee. 

•Bonus:  Your targeted bonus (EICP) will continue as 70% of your gross annual base salary. Your actual payout will vary depending on performance against your respective bonus metrics and the rules of the EICP in force from time to time, which are subject to approval by the Compensation Committee.  Please note, bonus plan design and eligibility are subject to annual approval and/or modification by the Compensation Committee. 

•Equity: Your regular compensation package will continue to include eligibility for annual equity (stock) awards.  Beginning in 2021, any equity grant value would be planned in GBP and approved by the Compensation Committee, and then converted to $USD, using the exchange rate on the date of the grant.  The number of units you receive will continue to be based on your approved grant value and the stock price on the date of the grant.

•Benefits: With your transfer to Cambridge, England you will become eligible for their UK Health, Wellness and Leave Benefits under the Charles River Discovery Research Services UK LTD entity, and will no longer be eligible for the US Benefits after December 31, 2020.  However, we will provide you with the following additional benefit items:
◦Deferred Compensation Match – one time lump sum for 2020:  You will receive a one-time cash lump sum in the amount of $95,246 (gross) USD to compensate you for your 2020 U.S. Deferred Compensation Plan company match. The lump sum will be paid to you in US Dollars from US Payroll in January 2021.
◦Lincoln Life Insurance:  We will continue your Lincoln Life Insurance coverage of $1.6M USD, which is in addition to the standard Life Insurance you will be eligible to receive under the life insurance benefit in Cambridge, England.

◦MGH Executive Registry:  We will continue your eligibility for the Massachusetts General Hospital (MGH) Executive Registry, which assists in coordinating immediate round the clock routine and emergency access to physicians and specialists at Massachusetts General Hospital.

•Tax Service Assistance:  The Company will provide you with origin and destination location tax preparation assistance for taxes to be filed through and including the 2025 tax year/filing (i.e., you are entitled to receive tax preparation services in 2026, as needed, for your 2025 tax filing).  You are required to use Charles River Laboratories’ designated tax services provider to receive Company support for tax equalization services.  Unless otherwise noted, any origin/destination location tax liabilities are your personal responsibility.  

It is also your responsibility to provide accurate and timely information, as requested by the Company’s designated professional tax advisors and any relevant taxing authority, in order to enable tax compliance for you and the Company during the year of transfer.  Interest or penalties arising from a failure to cooperate in this process will be payable by you individually and subject to deduction from other payments and benefits you are entitled to per this letter.  After the year of your transfer, you will no longer receive support from the Company with respect to tax preparation, and all origin and destination location taxes/interest/penalties will continue to be your sole responsibility (as appropriate).

•Visa Services:  The Company’s outside immigration counsel will provide support for you to obtain the appropriate documents that permit you to work in the destination location prior to your date of transfer.  It is your obligation to comply with all requirements and provide timely responses to requests for information and/or documentation.   Costs related to visa and immigration support for your transfer to the destination location will be borne by the Company.

Please note, some of the payments and benefits mentioned in this letter are taxable, and this will be your responsibility.

Please acknowledge receipt of this letter by return email.  

Sincerely,

Jim Foster
Chairman President & CEO

Acknowledge receipt of Global Transfer Letter:

 /s/David R. Smith                           26-10-2020 
 David Smith                                         Dateex_212896.htm

Exhibit 4.1

 

FIRST AMENDMENT

TO

PRE-PREFUNDED COMMON STOCK PURCHASE WARRANT

 

THIS FIRST AMENDMENT TO PRE-FUNDED COMMON STOCK PURCHASE WARRANT (this “Amendment”), dated as of August 12, 2020, by and between LiqTech International, Inc. (the “Company”) and Lytton-Kambara Foundation (together with its assigns, the “Holder”), amends that certain Pre-Funded Common Stock Purchase Warrant issued on May 27, 2020 by the Company to the Holder with respect to 515,000 shares of the Company’s Common Stock as Warrant Certificate No.: PFW-1 (the “Warrant”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Warrant.

 

RECITALS

 

WHEREAS, Section 5(1) of the Warrant provides that the Warrant may be amended by the written consent of the Company and the Holder.

 

NOW, THEREFORE, in consideration of the premises, covenants and agreements set forth herein and of other good and valuable consideration, the receipt and legal sufficiency of which they hereby acknowledge, and intending to be legally bound hereby, the parties hereby agree as follows:

 

 

 

 

Section 1.     Section 3(e) is hereby deleted and replaced in its entirety by the following, with italicized text added to the original text:

 

“(e)     Fundamental Transaction.

 

(1)     If, any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a stock split, combination or reclassification of shares of Common Stock covered by Section 3(a) above), or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternative Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, solely in the event of a Fundamental Transaction that is approved by the Board of Directors of the Company, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the older an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a five-year period, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option time equal to five years from the date of the public announcement of the applicable Fundamental Transaction. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.”

 

2

 

 

Section 2.     General

 

(a)     No Other Amendments. Except as expressly set forth in this Amendment, all of the other terms and conditions of the Warrant shall remain in full force and effect on the terms and subject to the conditions set forth therein. This Amendment does not constitute, directly or by implication, an amendment or waiver of any provision of the Warrant, or any other right, remedy, power or privilege of any party, except as expressly set forth herein.

 

(b)     References to Warrant. Each party acknowledges and agrees that all references to the Warrant refer to the Warrant as amended by this Amendment (or as the Warrant may be further amended or modified after the hereof in accordance with the terms of the Warrant).

 

(c)     Counterparts. This Amendment may be executed in any number of counterparts, including by facsimile or other electronic transmission, by the parties hereto, each of which counterparts when so executed shall be an original, but all counterparts taken together shall constitute one and the same instrument.

 

(d)     Miscellaneous. Sections 5(c), 5(e), 5(h), 5(l), 5(m) and 5(n) of the Warrant are hereby incorporated herein by reference as if fully set forth herein, and such provisions apply to this Amendment as if all references to the “Warrant” contained therein were instead references to this Amendment.

 

********************

 

(Signature Page Follows)

 

3

 

 

IN WITNESS WHEREOF, the Company and the Holder have caused this Amendment to be duly executed as of the date first above indicated.

 

 

	 	
			LIQTECH INTERNATIONAL, INC.

			 

			 

			By:        /s/ Sune Mathiesen

			Name:   Sune Mathiesen

			Title:     Chief Executive Officer

			 

			 

			 

			LYTTON-KAMBARA FOUNDATION

			 

			 

			By:        /s/ Laurence W. Lytton

			Name:   Laurence W. Lytton

			Title:     President

			

 

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