Document:

ex_247114.htm

 

Exhibit 10.13

 

SALT BLOCKCHAIN INC.

2019 EQUITY INCENTIVE PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

Any capitalized terms used but not defined in this Stock Option Agreement (the “Option Agreement”) shall have the same defined meanings ascribed to such terms in the Salt Blockchain Inc. 2019 Equity Incentive Plan (the “Plan”).

 

	
			I.

				
			NOTICE OF STOCK OPTION GRANT

			

 

Name: ________________________________

 

Address: ________________________________

 

The undersigned participant (the “Participant”) has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

 

	Date of Grant:	 	 
	 	 	 
	Vesting Commencement Date:	 	 
	 	 	 
	Exercise Price per Share: 	$	 
	 	 	 
	Total Number of Shares Granted: 	 	 
	 	 	 
	Total Exercise Price: 	$	 
	 	 	 
	Term/Expiration Date: 	 	 

 

Vesting Schedule:

 

This Option shall be exercisable, in whole or in part, according to the following vesting schedule, subject to Participant’s continuous status as a Service Provider through each such date.

 

Twenty-five percent (25%) of the Shares subject to the Option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and one thirty-sixth (1/36th) of the remaining non-vested Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date (and if there is no corresponding day, on the last day of the month) with one hundred percent (100%) of the Shares subject to the Option vesting on the four (4) year anniversary of the Vesting Commencement Date.

 

To the extent this Option is, in connection with a Change in Control, to be assumed in accordance with Section 11(b)(i) of the Plan, then this Option (as adjusted in accordance with Section 11(b)(vi) of the Plan) shall continue to vest and become exercisable following the Change in Control in accordance with the provisions of the Vesting Schedule above subject to Participant’s continuous status as a Service Provider through each vesting date. However, upon Participant’s Involuntary Termination within twelve (12) months following such Change in Control, the unvested portion of the Option shall vest and become exercisable in full.

 

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Termination Period:

 

This Option shall be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability, in which case this Option shall be exercisable for twelve (12) months after Participant ceases to be a Service Provider, or as a result of termination for Cause, in which case this Option shall terminate upon the termination date of such continuous status as a Service Provider, and Participant shall be prohibited from exercising this Option from and after the time of such termination of continuous status as Service Provider. Notwithstanding the foregoing sentence, in no event may this Option be exercised after the Term/Expiration Date as provided above and this Option may be subject to earlier termination as provided in the Plan.

 

	
			II.

				
			AGREEMENT

			

 

1.    Grant of Option. The Administrator hereby grants to the Participant, a nonstatutory option (the “Option”) to purchase the number of Shares set forth in the Notice of Stock Option Grant in Part I of this Option Agreement (the “Notice of Stock Option Grant”), at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference. In the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

 

2.    Exercise of Option.

 

(a)    Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement.

 

(b)    Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form attached hereto as Exhibit A, with such modifications as the Administrator may require from time to time (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding.

 

No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares.

 

3.    Participant’s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B and any voting agreement, rights of first refusal or other stock restriction agreement as a condition to exercise.

 

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4.    Lock-Up Period. Participant hereby agrees that Participant shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Participant (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).

 

Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Participant shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day (or other) period. Participant agrees that any transferee of the Option or Shares acquired pursuant to the Option shall be bound by this Section 4.

 

5.    Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Participant:

 

(a)    cash;

 

(b)    check;

 

(c)    if approved by the Board in its sole discretion at the time of exercise, by a net exercise;

 

(d)    consideration received by the Company under a cashless exercise program adopted by the Company in connection with the Plan; or

 

(e)    should the Common Stock be registered under the Securities Act at the time this Option is exercised, surrender of other Shares which must be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company.

 

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6.    Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of any Applicable Law.

 

7.    Term of Option. This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement.

 

8.    Company’s Right of First Refusal. Before Participant or any transferee (a “Holder”, and together with Participant, an “Offerer”) may sell, assign, transfer, convey, encumber, pledge, hypothecate, grant a security interest in, or otherwise dispose of in any way, whether voluntarily or involuntarily, including by operation of law (“Transfer”) any Shares, such Shares (the “Offered Shares”) must first be offered to the Company for purchase in accordance with this Section 8 (the “Right of First Refusal”).

 

(a)    Notice of Proposed Transfer. The Offeror shall deliver to the Company a written notice stating: (i) the Offeror’s bona fide intention to Transfer the Shares; (ii) the name of each proposed transferee; (iii) the number of Shares to be Transferred to each proposed transferee; (iv) the bona fide cash price or other consideration for which the Offeror proposes to Transfer the Shares; and (v) that by delivering the notice, the Offeror offers all such Shares to the Company pursuant to this Section 8 and on the same terms described in the notice.

 

(b)    Exercise of Right of First Refusal. At any time within 30 days after receipt of the Offeror’s notice, the Company may, by giving written notice to the Offeror, elect to purchase all or any portion of the Shares proposed to be Transferred to any one or more of the proposed transferees, at the purchase price as determined below.

 

(c)    Purchase Price. The purchase price for the Shares purchased by the Company under this Section 8 shall be the price listed in the Offeror’s notice. If the price listed in the Offeror’s notice includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board in its sole discretion.

 

(d)    Payment. Payment of the purchase price shall be made, at the option of the Company: (i) in cash, by check or wire transfer, (ii) by cancellation of all or a portion of any outstanding indebtedness of the Offeror to the Company, or (iii) by any combination thereof. Closing of the purchase shall occur within 30 days after delivery by the Company of its election to exercise its Right of First Refusal.

 

(e)    Offeror’s Right to Transfer. Subject to the restrictions set forth in Section 6, if all of the Shares proposed in the notice to be Transferred to a given proposed transferee are not purchased by the Company as provided in this Section 8, then the Offeror may Transfer such Shares to that proposed transferee; provided, that: (i) the Transfer is made only on the terms provided for in the notice; (ii) such Transfer is consummated within 90 days after the date the Transfer notice was originally delivered to the Company; (iii) the Transfer is effected in accordance with any applicable securities laws, and if requested by the Company, the Offeror shall deliver an opinion of counsel acceptable to the Company to that effect; and (iv) the proposed Transferee agrees in writing to receive and hold the Shares so transferred subject to all of the provisions of Sections 4, 8 and 9, and any stockholder or other stock restriction agreement applicable to such Shares. If any Shares described in a notice are not Transferred to the proposed transferee within the period provided above, then before any such Shares may be Transferred, a new notice shall be given to the Company, and the Company shall again be offered the Right of First Refusal described in this Section 8.

 

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(f)    Exception for Certain Family Transfers. Notwithstanding anything to the contrary contained elsewhere in this Section 8, (i) the gratuitous Transfer of any or all of the Shares to one or more of the Participant’s Family Members, or a trust established for the Participant or one or more such Family Members, provided the Participant obtains the Company’s prior written consent to such transfers (the “Family Transfers”) or (ii) a Transfer pursuant to the Participant’s will or the laws of inheritance following the Participant’s death, shall be exempt from the provisions of this Section 8. For purposes of this Agreement, “Family Member” means any of the following members of the Participant’s family: any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

 

(g)    Assignment of Right of First Refusal. The Company, in its sole discretion, may assign all or part of the Right of First Refusal to one or more employees, officers, directors or stockholders of the Company or other persons or organizations.

 

(h)    Termination of Right of First Refusal. The Right of First Refusal contained in this Section shall terminate as to all Shares hereunder upon the earlier of: (i) the closing date of the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act, or (ii) the closing date of a Change in Control in which the equity securities of the acquirer or successor entity received in exchange for such Shares are publicly traded.

 

(i)    Other Agreements. If Participant is a party to any right of first refusal and co-sale agreement with the Company or any other stockholders of the Company, or any similar agreement containing rights of first refusal in favor of the Company or the other stockholders of the Company, the rights contained in this Agreement shall be subordinate to the rights contained in such other agreement and in the event of any conflict, the rights in such other agreement shall control.

 

9.    Sales to Competitors. Notwithstanding the foregoing and until the Company Right of First Refusal has terminated under Section 8, without the Company’s express written consent, at no time will any Holder transfer by way of sale, gift, pledge, option or otherwise any Shares to any person or entity that is directly or indirectly engaging in the provision or sale of products or services of the type provided or sold by the Company (whether prior to or at the time of such transfer or contemplated at such time by the Company’s written business plan or similar documents) or otherwise engaging in any business activity competitive with the Company’s business. The foregoing prohibition shall apply to transfers to competitors or any officers, directors or employees thereof, or any affiliate (as defined under applicable securities laws) of any such competitor or related officer, director or employee thereof. The Board shall have the sole and exclusive discretion to make determinations under this paragraph as to whether any proposed transferee would be deemed competitive and prohibited under the provisions of this section and the Board’s determination shall be final and binding.

 

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10.    Code 409A Waiver and Release.

 

(a)    Participant hereby agrees and acknowledges that the Board has taken reasonable steps to value the Common Stock and to set the Exercise Price at the fair market value per share of Common Stock on the Date of Grant so that this Option will not be treated as an item of deferred compensation subject to Code Section 409A. However, because the Common Stock is not readily tradable on an established securities market, there can be no assurance that the Exercise Price is at least equal to the fair market value per share of Common Stock on the Date of Grant. Were the Internal Revenue Service to conclude that the Exercise Price is in fact less than such fair market value and that this Option is accordingly subject to Code Section 409A, then Participant would be subject to the following adverse tax consequences:

 

(i)    As this Option vests in accordance with the Vesting Schedule, Participant would immediately recognize taxable income for federal income tax purposes equal to the amount by which the fair market value of the shares which vest at that time exceeds the Exercise Price payable for those shares. The Company would also have to collect from Participant the federal income and employment taxes which must be withheld on that income. Taxation would occur in this manner even though the option remains unexercised.

 

(ii)    Participant may also be subject to additional income taxation and withholding taxes on any subsequent increases to the fair market value of the shares purchasable under the vested portion of this Option until this Option is exercised or cancelled as to those shares.

 

(iii)    In addition to normal income taxes payable as this Option vests, Participant would also be subject to an additional tax penalty equal to 20% of the amount of income Participant recognizes under Code Section 409A when this Option vests and may also be subject to such penalty as the underlying shares subsequently increase in fair market value over the period this Option continues to remain outstanding.

 

(iv)    There will also be interest penalties if the resulting taxes are not paid on a timely basis.

 

(b)    Participant hereby further agrees and acknowledges that Participant may incur the same or similar tax consequences, including (without limitation) a second penalty tax, under state income tax laws.

 

(c)    Participant hereby agrees to bear the entire risk of such adverse federal and state tax consequences in the event this Option is deemed to be subject to Code Section 409A and hereby knowingly and voluntarily, in consideration for the grant of this Option, waives and releases any and all claims or causes of action that Participant might otherwise have against the Company and/or its Board, officers, employees or stockholders arising from or relating to the tax treatment of this Option under Code Section 409A and the corresponding provisions of any applicable state income tax laws and shall not seek any indemnification or other recovery of damages against the Company and/or its Board, officers, employees or stockholders with respect to any adverse federal and state tax consequences or other related costs and expenses Participant may in fact incur under Code Section 409A (or the corresponding provisions of state income tax laws) as a result of this Option.

 

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11.    Restrictive Legends and Stop-Transfer Orders.

 

(a)    Legends. Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S), AND A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING AS SET FORTH IN THE STOCK OPTION AGREEMENT WITH THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND LOCK-UP PERIOD ARE BINDING ON TRANSFEREES OF THESE SHARES.

 

(b)    Stop-Transfer Notices. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop-transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

(c)    Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Option Agreement and any stockholder or other stock restriction agreement applicable to such Shares or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

 

12.    No Guarantee of Continued Service. Participant acknowledges and agrees that the vesting of Shares pursuant to the vesting schedule hereof is earned only by continuing as a Service Provider at the will of the Company (or the Parent or Subsidiary employing or retaining Participant) and not through the act of being hired, being granted this Option or acquiring Shares hereunder. Participant further acknowledges and agrees that this Option Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as a Service Provider for the vesting period, for any period, or at all, and shall not interfere in any way with Participant’s right or the right of the Company (or the Parent or Subsidiary employing or retaining Participant) to terminate Participant’s relationship as a Service Provider at any time, with or without Cause.

 

13.    Choice of Law. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of Colorado.

 

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14.    Integration. This Agreement, subject to the terms and conditions of the Plan and the Notice of Stock Option Grant, represents the entire agreement between the parties with respect to the Option and supersedes and replaces any and all prior written or oral agreements regarding the subject matter of this Agreement including any representations made during any interviews, relocation discussions or negotiations whether written or oral. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.

 

15.    Notices. All notices required or permitted in connection with this Agreement shall be in writing and shall be deemed delivered and received: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile to the specified address or number, if sent during normal business hours of the recipient; if not, then on the next business day, (c) five days after having been sent by registered or certified mail to the specified address, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier directed to the specified address for next day delivery, with written notification of receipt. All communications shall be sent to the address of Participant set forth on the applicable signature page hereto and, if to the Company, at the Company’s principal place of business, or at such other address or electronic mail address as any party hereto may designate by 10 days advance written notice pursuant to the terms of this Section 15 to the other party hereto.

 

16.    Successors. This Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement, this Agreement shall be binding upon Participant and Participant’s heirs, executors, administrators, successors and assigns.

 

17.    Assignment. The Company may assign this Agreement or any of its rights under this Agreement to single or multiple assignees. This Option shall be neither transferable nor assignable by Participant other than by will or the laws of inheritance following Participant’s death and may be exercised, during Participant’s lifetime, only by Participant.

 

18.    Waiver. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any other provision of this Agreement. The rights granted to both parties hereunder are cumulative and shall not constitute a waiver of either party’s right to assert any other legal remedy available to it.

 

19.    Further Documents. Upon request of the Company, Participant shall to execute any further documents or instruments which the Company deems necessary or reasonably desirable to carry out the purposes or intent of this Agreement.

 

20.    Severability. Should any provision of this Agreement be found to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable to the greatest extent permitted by law.

 

21.    Specific Performance. Any breach of this Agreement or the terms hereof shall result in irreparable damage to the Company and Participant which would be difficult or impossible to measure. Accordingly, the parties hereto agree and acknowledge that this Agreement shall be specifically enforceable and either party hereto may petition a court for injunctive relief as permitted by the applicable rules. If either party hereto institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought waives the claim or defense therein that such person has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

 

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22.    Electronic Delivery. The Company may, in its sole discretion, decide to deliver by email or other electronic means any documents related to Participant’s current or future participation in the Plan, this Option, the Shares, any other securities of the Company or any other Company-related documents, including notices to stockholders required by applicable law, the Company’s Certificate of Incorporation and/or Bylaws. Participant hereby (i) consents to receive such documents by email or other electronic means, (ii) consents to the use of electronic signatures, and (iii) if applicable, agrees to participate in the Plan and/or receive any such documents related to the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Company may deliver the above-described documents to Participant by sending a communication to Participant’s email address set forth under Participant’s signature below or, if no email address is set forth below, to the last email address for Participant the Company has on file.

 

23.    Representation. Participant acknowledges that he or she has had the opportunity to review this Option Agreement, including all attachments hereto, and the transactions contemplated by this Option Agreement with his or her own legal counsel, tax advisors and other advisors. Participant is relying solely on his or her own counsel and advisors and not on any statements or representations of the Company or its agents for legal or other advice with respect to this investment or the transactions contemplated by this Option Agreement.

 

Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Participant further agrees to notify the Company upon any change in the residence address indicated below.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties have executed this 2019 Equity Incentive Plan Stock Option Agreement effective _________ [__], 20__.

 

 

	PARTICIPANT	 	SALT BLOCKCHAIN INC.
	 	 	 
	 	 	 
	Signature 	 	By
	 	 	 
	 	 	 
	Print Name 	 	Print Name 
	 	 	 
	 	 	 
	 	 	
			Title

			
	 	 	 
	
			Residence Address

				 	 
	 	 	 
	 	 	 
	E-mail Address	 	 

                  

-10-ex_247115.htm

Exhibit 10.14

 

AMENDED AND RESTATED RELEASE AGREEMENT

 

This AMENDED AND RESTATED RELEASE AGREEMENT (the “Release”) is made and entered into by and between Salt Lending Holdings, Inc. (“Holdings” or the “Company”), and Shawn Owen and Owen Enterprise, LLC (each, a “Holder” and collectively “Owen”), as of the date on which the parties execute it.

 

WHEREAS, the Company and the Holders previously entered into that certain Release Agreement (the “Prior Agreement”), dated as of April 3, 2019 (the “Effective Date”), and hereby agree that the Prior Agreement shall be amended and restated as follows.

 

NOW THEREFORE, in consideration of the mutual promises and covenants contained in this Release, it is hereby agreed by and between the parties hereto as follows:

 

1.    Acknowledgement of Full Receipt of Consideration. In exchange for $150,000 to be paid by the Company to Owen on April 11, 2019, with appropriate federal and state tax withholdings, Owen agrees to fully dismiss any pending claims. Additionally, as of the date of this Release, and upon payment of funds provided herein, Owen has been paid all sums that he had earned, or to which he otherwise was entitled, in connection with his employment with Holdings and membership on the Board of Directors. Holdings acknowledges that Owen’s cessation of employment as Chief Executive Officer was without cause.

 

2.    Reserved.

 

3.    Indemnification. For the consideration set forth in this Release and the mutual covenants of Holdings and Owen under this Release, Holdings does hereby release, indemnify and agree to defend Owen and his successors, assigns, members, managers, subsidiaries, affiliates, parents, partners, officers, directors, employees, agents, attorneys, licensors, licensees and representatives from any and all debts and obligations, causes of action, actions, suits, judgments, liens, indebtedness, damages, losses, claims, attorney’s fees, liabilities and demands of any nature and kind whatsoever in law or equity, whether direct or indirect, absolute or contingent, now or hereafter existing, due or to become due, known or unknown, related to, and arising out of, or in connection with any regulatory matter initiated by the United States Government, including by the Securities and Exchange Commission, in the matter styled Lechner v. Salt Holdings, Inc., Case Number 2018CV34191, currently pending in the Colorado District Court, Denver County, and/or any other matter that involves Owen’s role as an employee or as a Director for Holdings. This includes reasonable attorney’s fees, costs, and assessed damages and/or penalties so long as no criminal wrongdoing is found.

 

4.    Denial of Liability. The parties acknowledge that any payment by Holdings and any release by Owen pursuant to this Release are made in compromise of disputed claims; that in making any such payment or release, neither Holdings nor Owen admit in any way any wrongdoing or liability to each other or to any other affiliated party; and that the parties expressly deny any such liability.

 

5.    Nondisparagement and Non-Waiver. Owen and Holdings agree that neither Owen nor any officer or director of Holdings will at any time disparage the other to third parties in any manner likely to be harmful to the other party, a party’s business reputation, or the personal or business reputation of its directors, shareholders and/or employees. Notwithstanding the prohibition in the preceding sentence, each party shall respond accurately and fully to any question, inquiry, or request for information when required by law to do so. Nothing in this Release shall limit either Party’s right to file a charge with, communicate with, or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”), Securities Exchange Commission (“SEC”), or any other federal or state agency. This Release does not limit either Party’s right to receive an award for information provided to the SEC about potential securities law violations.

 

 

 

 

 

6.    Holdings’ Property. Holdings acknowledges that Owen has returned any and all Holdings tangible and physical property which was in his possession upon the cessation of his employment.

 

7.    Option to Purchase. The Holders represent and warrant that Shawn Owen and Owen Enterprise, LLC are respectively the beneficial owners of 1.25 million shares (the “Shares”). The Company hereby agrees to pay Shawn Owen / Owen Enterprise, LLC a lump sum payment of $600,000.00 USD on April 11, 2019, and each Holder agrees that such Holder’s Shares shall be subject to the Purchase Option as set forth below. Until the earliest of: (i) the Company’s entry into a definitive agreement to consummate a Change in Control, (ii) an IPO, or (iii) the two-year anniversary of the date hereof (the “Exercise Period”), the Company shall have the right and option (the “Purchase Option”) to purchase from each Holder, for a price equal to the greater of (i) $4.10 per share or (ii) the per share price as determined by an independent valuation firm based upon the valuation of the Company at the time of the exercise (a copy of which report shall be provided to each Holder at the time of the exercise) (the “Option Price”), 1,250,000 (One Million Two Hundred and Fifty Thousand) of such Holder’s Shares. The Company may exercise the Purchase Option by delivering or mailing to a Holder a written notice of exercise of the Purchase Option, specifying the number of Shares to be purchased. If the Company fails to exercise the Purchase Option and purchase such Holder’s Shares within Exercise Period at the Option Price, the Holder shall have the option to require the Company to redeem its Shares for the Option Price. Within five (5) days after delivery to the Holder of the Company’s notice of the exercise of the Purchase Option, the Holder shall tender to the Company at its principal offices the certificates representing the Shares that the Company has elected to purchase, duly endorsed in blank or with duly endorsed stock powers attached thereto, all in form acceptable to the Company. Promptly following its receipt of such certificates, the Company shall pay to the Holder the aggregate Option Price for such Shares (provided that any delay in making such payment shall not invalidate the Company’s exercise of the Purchase Option with respect to such Shares). If the Shares are uncertificated, or the Holder fails to deliver the foregoing certificates and stock power, the Company may at its option, in addition to other remedies it may have, send to such Holder the purchase price for such Shares and transfer to the name of the Company on the Company’s books any certificates or book entry representing such Shares. From the date hereof, the Holders shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively “transfer”) any Shares, or any interest therein, without the prior written consent of the Company, and any transfer entered into without such consent shall be null and void. For purposes of this agreement:

 

(a)    “Change in Control” means (i) any sale, license, lease, exchange, transfer or other disposition of the assets of the Company or any subsidiary of the Company constituting more than 50% of the consolidated assets of the Company or accounting for more than 50% of the consolidated revenues of the Company in any one transaction or in a series of related transactions; or (ii) any merger, consolidation, business combination, share purchase, share exchange, reorganization or similar transaction or series of related transactions involving the Company or any subsidiary of the Company whereby the holders of voting capital stock of the Company immediately prior to any such transaction hold less than 50% of the voting capital stock of the Company or the surviving corporation (or its parent company) immediately after the consummation of any such transaction.

 

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(b)    “IPO” means the consummation of the Company’s first public offering of its Common Stock under the Securities Act of 1933, as amended.

 

8.    Acceleration of the Purchase Option. In the event that any of the holders of the Common Stock of the Company notifies the Company of their intention to sell their shares of Common Stock of the Company pursuant to the Company’s right of first of refusal under each holders respective Restricted Common Stock Purchase Agreement prior to the expiration of the Exercise Period of the Option, the Company shall notify Owen of the terms of such sale and agrees to give Owen the option to require the Company to purchase all of Owens Shares at the same price offered to the other holder who is selling the Common Stock of the Company.

 

9.    Voting. Each Holder hereby appoints the Company, as represented by a majority vote of the Company’s Board of Directors, (the “Proxyholder”), for a period of one year commencing from the Effective Date of this Release (the “Proxy Period”), as such Holder’s limited proxy with full power of substitution, grants a limited power of attorney to the Proxyholder, and authorizes the Proxyholder to represent and vote all voting securities of the Company that are now owned or subsequently acquired by such Holder (the “Voting Securities”) on any votes concerning the re-election to the Company’s Board of Directors of any individual that was, but is not currently, a member of the Company’s Board of Directors. Each of the proxy and power of attorney granted herein is given in consideration of the agreements and covenants of the Company and, as such, each is coupled with an interest and shall be irrevocable unless and until this agreement terminates or expires. Each Holder hereby revokes any and all previous proxies or powers of attorney with respect to the Voting Securities and shall not hereafter, unless and until this agreement terminates or expires, purport to grant any other proxy or power of attorney with respect to any of the Voting Securities, deposit any of the Voting Securities into a voting trust or enter into any agreement (other than this agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of the Voting Securities. During the Proxy Period, prior to voting or executing any written consent of stockholders concerning the Board of Directors of the Company, the Holder shall first give written notice to the Company at least 5 days in advance (the “Prior Notice”), and specify incomplete detail the action proposed to be approved by such vote or written consent of the stockholders. During the Proxy Period, the Holder shall not attempt to vote or execute any written consent of stockholders in a manner that is inconsistent with the terms herein, and the Holder agrees that any such attempted vote or written consent in a manner that is inconsistent with the terms herein (including the failure to provide the Company with the Prior Notice) shall be null and void.

 

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10.    Alignment of Interests. Holders shall receive a single one-time lump sum payment of $5,000,000.00 (Five-Million USD) in the event the company reaches a valuation in excess of $100,000,000.00 (One Hundred Million USD). Said valuation shall be conducted in accordance with industry standards and best practices by an independent qualified valuation expert of the companies choosing.

 

11.    Covenant Not to Compete. Holdings hereby waives any and all non-compete and restrictive covenants between Holdings and Owen and release Owen from all such obligation, up to and including any restrictive covenants contained in Section 6 of the Salt Lending Holdings, Inc. Stockholders Agreement and Article 4 of that certain employment Agreement entered into between Holdings and Shawn Owen, individually, on October 17, 2016.

 

12.    Confidentiality of Agreement. Unless otherwise provided in this Release, Owen and Holdings acknowledge that confidentiality and nondisclosure are material considerations for the parties entering into this Release. As such, the provisions of this Release shall be held in strictest confidence by Owen and Holdings and shall not be publicized or disclosed in any manner whatsoever, including but not limited to, the print or broadcast media, any public network such as the Internet, any other outbound data program such as computer generated mail, reports, faxes, or any source likely to result in publication or computerized access. Notwithstanding the prohibition in the preceding sentence: (a) the parties may disclose this Release in confidence to their respective attorneys, accountants, auditors, tax preparers, and financial advisors; (b) Holdings may disclose this Release as necessary to fulfill standard or legally required corporate reporting or disclosure requirements; (c) the parties may disclose this Release upon request from any government entity or court of law; and (d) the parties may disclose this Release insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law.

 

13.    Confidentiality and Proprietary Information. Owen agrees that he shall take all reasonable steps to maintain and hold confidential all Confidential Information as defined in Annex A only for the benefit of the Company. Owen understands that all documents and materials which contain Confidential Information are the property of the Company. Owen understands that the Company’s competitive position is highly dependent on its Confidential Information. Accordingly, Owen recognizes that any disclosure of Confidential Information will cause immediate, irreparable harm to the Company. Any breach or threatened breach of this Release, therefore, may be presented without notice to a court for enforcement by both injunction and damages. All obligations of this Release shall remain in effect for the longer of a four year period following any termination of employment with the Company and so long thereafter as each particular item of Confidential Information remains not rightfully and publicly available as assembled information from one library source. In the event litigation is instituted seeking the enforcement of this Release, the prevailing party shall be entitled to recover reasonable attorney fees and costs incurred in such litigation; however, such attorney fees and costs shall not be assessed against Owen in the event that Owen consents, prior to a preliminary hearing, to a permanent injunction as requested by the Company.

 

14.    Release of Claims by Owen. Unless otherwise provided for in this Release, for the consideration set forth in this Release and the mutual covenants of Holdings and Owen, Owen hereby releases, acquits and forever discharges Holdings, its affiliated corporations and entities, its and their officers, directors, agents, representatives, servants, attorneys, employees, shareholders, successors, assigns and employee benefit plans of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known or unknown, suspected and unsuspected, disclosed and undisclosed, liquidated or contingent, arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the Effective Date, including but not limited to: any and all such claims and demands directly or indirectly arising out of or in any way connected with Owen’s employment with Holdings or the termination of that employment; claims or demands related to salary, commissions, vacation pay, personal time off, fringe benefits, expense reimbursements, sabbatical benefits, severance benefits, or any other form of compensation; claims pursuant to any federal, any state or any local law, statute, common law or cause of action including, but not limited to, the Civil Rights Act of 1964, as amended; attorney’s fees, costs, or any other expenses under Title VII of the Civil Rights Act of 1964, as amended; the Employment Retirement Income Security Act; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act; the Age Discrimination in Employment Act; the Equal Pay Act; the Colorado Discrimination and Unfair Employment Act, tort law; wrongful discharge; discrimination; harassment; fraud; defamation; libel; emotional distress; and breach of the implied covenant of good faith and fair dealing.

 

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15.    Release of Claims by Holdings. Unless otherwise provided for in this Release, for the consideration set forth in this Release and the mutual covenants of Holdings and Owen Holdings hereby releases, acquits and forever discharges Owen his affiliated corporations and entities, its and their officers, directors, managers, agents, representatives, servants, attorneys, employees, shareholders, members, successors, assigns and employee benefit plans of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known or unknown, suspected and unsuspected, disclosed and undisclosed, liquidated or contingent, arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the Effective Date, including but not limited to: any and all such claims and demands directly or indirectly arising out of or in any way connected with Owen’s employment with Holdings or the termination of that employment; claims or demands related to Owen s’ position as a Director of Holdings; claims pursuant to any federal, any state or any local law, statute, common law or cause of action including, but not limited to, the Civil Rights Act of 1964, as amended; attorney’s fees, costs, or any other expenses under Title VII of the Civil Rights Act of 1964, as amended; the Employment Retirement Income Security Act; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act; the Age Discrimination in Employment Act; the Equal Pay Act; the Colorado Discrimination and Unfair Employment Act; the Colorado Uniform Trade Secret Act; the Defend Trade Secret Act; Delaware trade secrets law; tort law; breach of fiduciary duty; breach of the duty of loyalty; discrimination; harassment; fraud; defamation; libel; emotional distress; and breach of the implied covenant of good faith and fair dealing.

 

16.    Tax Consequences. The parties make no representations in regard to the tax consequences of this Release, except for the obligations set forth in Paragraph 17 of this Release. Holdings agrees to fully indemnify and hold Owen harmless from, and for any IRS or any other taxing authority investigation or audit of Holding’s treatment of Owen related to the 2017 and 2018 tax years, including, but not limited to, any penalties, interest, or additional tax associated with same; provided, however, that Holder shall not be indemnified with respect to any income and employment taxes (and penalties, interest and additional tax thereon) payable with respect to those years. The parties agree that the rights or remedies related to the 2017 and 2018 tax consequences related to Owen’s compensation and issuance of stock are carved out of this Release and there are no waiver of these rights or remedies.

 

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17.    Tax Amendments. Holdings agrees to reimburse Owen for any and all income and employment taxes, penalties and interest incurred by Owen related to the vesting of 750,000 shares of restricted stock to Holder in 2017; in order to receive such reimbursement, Owen must submit to Holdings proof of payment to the United States Internal Revenue Service and any state taxing authority along with documents supporting the required payment and Holdings will pay the reimbursement amounts, net of applicable withholding taxes, within 5 business days thereafter. Holdings agrees to issue to Owen an amended Wage and Tax Statement (Form W-2) for the 2018 tax year to reflect Owen’s receipt of a bitcoin bonus with a value of $1,958,877 (the “Bitcoin Bonus”). Holdings agrees to pay, on behalf of Owen, to the United States Internal Revenue Service and any state taxing authority all income and employment taxes that Holdings would be required to withhold in connection with the payment of the Bitcoin Bonus (the “Bonus Tax Amount”) and Holdings will withhold from the amounts payable to Owen (or Owen Enterprise, LLC) under Section 1 and Section 7 of the Agreement all income and employment taxes required to be withheld by Holdings in connection with the payment of the Bonus Tax Amount by Holdings. Owen agrees to pay any additional income and employment taxes due to the United States Internal Revenue Service and any taxing authority on the Bitcoin Bonus and Bonus Tax Amount.

 

18.    Authorization of Transaction. Holdings, and the party signing on behalf of Holdings below, represent that they have full corporate power and authority to execute and deliver this Release and to perform Holdings’ obligations hereunder. This Release constitutes the valid and legally binding obligation of Holdings, enforceable in accordance with its terms and conditions. Holdings need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency, or other third party, in order to consummate the transactions contemplated by this Release. The execution, delivery, and performance of this Release and all other agreements contemplated hereby have been duly authorized by Holdings.

 

19.    Covenant of Cooperation. The parties acknowledge that because of their previous business relationship, the parties may possess information that may be relevant to or discoverable in litigation and/or regulatory matters in which either or both parties are involved or may in the future be involved. The parties agree that as the responding party (“Responding Party”), they shall testify truthfully in connection with any such matters, shall cooperate with one another in connection with such matters, and that their respective duties of cooperation shall include an obligation to meet with the other party’s (“Other Party”) representatives and/or counsel concerning such litigation and/or regulatory matters for such purposes, and at such times and places, as the Other Party deems necessary, in its sole discretion, and to appear for deposition upon the Other Party’s request and without a subpoena. Each party agrees that under those circumstances, the Responding Party shall not be entitled to any compensation in connection with their duty of cooperation, except that the Other Party may reimburse the Responding Party for reasonable out-of-pocket expenses that it incurs in honoring its obligation of cooperation.

 

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20.    Compliance With Laws. The parties shall comply with the requirements of all applicable laws and acknowledge that such compliance may, individually or in the aggregate, materially and adversely affect the ability of the parties to perform their obligations under the Agreement; provided that the parties are acting in good faith to perform such obligations.

 

21.    No Third-Party Rights. The parties agree that by making this Release they do not intend to confer any benefits, privileges, or rights to others. The Release is strictly between the parties hereto, and it shall not be construed to vest in any other third-party beneficiary.

 

22.    Voluntary and Knowingly. The parties acknowledges that in executing this Release, each has reviewed it and understands its terms and has had an opportunity and was advised to seek guidance from counsel of his own choosing, and was fully advised of their rights under law, and acted knowingly and voluntarily.

 

23.    Duty to Effectuate. The parties agree to perform any lawful additional acts, including the execution of additional agreements, as are reasonably necessary to effectuate the purpose of this Release.

 

24.    Entire Agreement. This Release constitutes the complete, final and exclusive embodiment of the entire agreement between Owen and Holdings with regard to the provisions of this Release, including but not necessarily limited to Salt’s termination without cause of Owen’s employment, the severance benefits paid to Owen Owen’s obligations concerning competition against the Company, and Owen’s obligations concerning company confidential and proprietary information. This Release is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein.

 

25.    Successors and Assigns. This Release shall bind the heirs, personal representatives, successors, assigns, executors and administrators of each party, and inure to the benefit of each party, its heirs, successors and any assign of the Company.

 

26.    Applicable Law. The parties agree and intend that this Release be construed and enforced in accordance with the laws of the State of Colorado, to the fullest extent permitted by law.

 

27.    Forum. Unless otherwise provided for in this Release, any controversy arising out of or relating to this Release or the breach thereof, or any claim or action to enforce this Release or portion thereof, or any controversy or claim requiring interpretation of this Release must be brought in a forum located within the State of Colorado. No such action may be brought in any forum outside the State of Colorado. Any action brought in contravention of this paragraph by one party is subject to dismissal at any time and at any stage of the proceedings by the other, and no action taken by the other in defending, counterclaiming, or appealing shall be construed as a waiver of this right to immediate dismissal. A party bringing an action in contravention of this paragraph shall be liable to the other party for the costs, expenses and attorney’s fees incurred in successfully dismissing the action or successfully transferring the action to a forum located within the State of Colorado.

 

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28.    Severable. If any provision of this Release is determined to be invalid, void or unenforceable, in whole or in part, this determination will not affect any other provision of this Release, and the provision in question shall be modified so as to be rendered enforceable.

 

29.    Enforce According To Terms. The parties intend this Release to be enforced according to its terms.

 

30.    Attorney's Fees. The prevailing party in an action to enforce the terms of this Release shall be entitled to its reasonable costs, expenses, and attorney's fees.

 

31.    Liquidated Damages. The parties intend to include a liquidated damages clause in this Release. In the event of a breach or threatened breach of this Release by Holdings, Holdings agrees to pay Owen an amount equal to $2,000,000 in addition to interest in the amount of eight percent (8%) per annum, compounded annually. The parties agree that this is a reasonable estimate of the presumed actual damages that the breach would or has caused. The Parties acknowledge that in the event of the breach of this Release by Salt, liquidated damages are an available remedy to Owen and the inclusion of this amount does not preclude Owen's recovery of damages or other amounts under the terms of his Release and the applicable law.

 

32.    Section Headings. The section and paragraph headings contained in this Release are for reference purposes only and shall not affect in any way the meaning or interpretation of this Release.

 

IN WITNESS WHEREOF, the parties have duly authorized and caused this Release to be executed as follows:

 

	
			Shawn Owen

			 

			           

				
			Salt Lending Holdings, Inc.

			 

			By         

			
	 	 
	 	Its:           President          
	 	 
	
			Date:   April 11         , 2019

				
			Date:    April 11         , 2019

			
	
			 

			Owen Enterprise, LLC

			 

			By:         

			 

			Its:           Manager          

			 

			Date:    April 11         , 2019

				 

 

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ANNEX A

 

DEFINITIONS

 

(a)         “Confidential Information” means all information considered by the Company to provide it a competitive advantage, except to the extent it can be clearly established by Owen that such information either was known by Owen prior to Owen’s employment by the Company or is publicly available as assembled information from one library source. As used in this Release, “Confidential Information” shall include by example, but not as a limitation, (1) all development or design information relating to existing products of the Company or relating to products under development or planned by the Company or on its behalf, such as the information contained in schematics, circuitry descriptions and drawings, parts, descriptions of product problems or limitations, technical and scientific information, information relating to key research and development areas, consulting source’s documents, notes and correspondence, descriptions of development efforts, whether successful or not, flow charts or source code listings; (2) all manufacturing information of existing products of and products under development or planned by the Company or on its behalf such as materials sources, vendors, costs, manufacturing methods, purchasing sources; and (3) all business, marketing and financial information of the Company including but not limited to research and development strategies, employee responsibilities other than generic titles, development schedules, business forecasts, client and customer lists, past, present and future financial information about the Company, consultant identities and capabilities, materials and component supplies, or Company opportunity lists or items.

 

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