Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 10, 2023, AiAdvertising, Inc. (the "Company") entered into an
employment agreement (the "Employment Agreement") with Gerard Hug, the Company's
Chief Executive Officer. The Employment Agreement supersedes the employment
offer letter with Mr. Hug dated July 21, 2022. The Employment Agreement has an
initial term beginning on January 1, 2023 through December 31, 2023 and
thereafter shall renew automatically for successive one-year extension terms
until either party gives notice of nonrenewal at least 90 days before the end of
the applicable extension term. Pursuant to the Employment Agreement, Mr. Hug
will receive an annual base salary of $375,000 and a one-time bonus of $50,000
payable on or before May 15, 2023. Mr. Hug will also be eligible for an annual
incentive bonus, with a target payout of a minimum of fifty percent (50%) of his
base salary (the "Target Bonus"), upon the achievement of Company performance
goals established by the Company's compensation committee of the board of
directors. The Employment Agreement further provides that upon the successful
up-listing of the Company's common stock to a national securities exchange such
as Nasdaq or the New York Stock Exchange, Mr. Hug will receive a one-time
up-listing bonus in the amount of $100,000.
In the event Mr. Hug's employment is terminated by the Company without cause or
by Mr. Hug for good reason, Mr. Hug will be entitled to a lump sum payment equal
to the sum of (A) two times Mr. Hug's base salary for the year in which the date
of the termination occurs, reduced for actual service performed from the
effective date down to a minimum period of twelve full months or one times Mr.
Hug's base salary, (B) a payment equal to the product of (i) the Target Bonus
and (ii) a fraction, the numerator of which is the number of days Mr. Hug was
employed by the Company during the year of termination and the denominator of
which is the number of days in such year, and (C) 12 months of COBRA premium
payments based on the coverages in effect as of the date of Mr. Hug's
termination of employment. The treatment of any outstanding equity award shall
be determined in accordance with the terms of the 2021 Equity Incentive Plan and
the applicable award agreements. All of Mr. Hug's severance benefits are subject
to his execution of a release of claims and his continued compliance with his
restrictive covenant agreement.
The foregoing description of the Employment Agreement is qualified by reference
to the full text of the Employment Agreement, which is attached hereto as
Exhibit 10.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Exhibit
10.1 Employment Agreement, dated April 10, 2023, by and between
AiAdvertising, Inc. and Gerard Hug
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