Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers
Korenko
Employment Agreement
On
October 24, 2018, Vivos Inc. (the “
Company
”) entered into a new employment agreement with Michael K. Korenko
(“
Korenko Employment Agreement
”), the Company’s Chief Executive Officer, pursuant to which Mr. Korenko
shall be entitled to receive (i) past due accrued compensation in the aggregate amount of $206,306, less tax withholding of $65,320,
which was paid through the issuance by the Company to Mr. Korenko of 28,197,136 shares of the Company’s common stock, par
value $0.001 per share (“
Common Stock
”), and warrants to purchase 14,098,568 shares of Common Stock, which
were issued in connection with a private placement transaction consummated by the Company on October 10, 2018; (ii) an annual
base salary of $180,000, $120,000 of which shall be paid annually in equal monthly installments, and the remaining $60,000 of
which shall be deferred and accrued until such time as the Company’s cash balance exceeds $2.0 million; (iii) a bonus consisting
of restricted stock units pursuant to the Company’s 2015 Omnibus Securities and Incentive Plan (the “
2015 Plan
”)
in an amount equal to 4.5% of the Company’s issued and outstanding shares of Common Stock as of the issuance date, which
shall occur in January 2019; (iv) a bonus consisting of options to purchase 64,961,214 shares of Common Stock, which stock options
shall have a seven-year term and shall be exercisable at a price of $0.014 per share; and (v) a cash bonus of $200,000 for past
services rendered over the last twelve months, the payment of which shall be deferred until such time as the Company’s cash
balance exceeds $2.0 million.
The
Korenko Employment Agreement shall terminate on December 31, 2019, unless terminated early or further extended by the parties.
The Company may terminate the Korenko Employment Agreement at any time, with or without Cause, as such term is defined in the
Korenko Employment Agreement. If the Company terminates the Korenko Employment Agreement without Cause, as such term is defined
in the Korenko Employment Agreement, Mr. Korenko will be entitled to (i) all salary owed through the date of termination, and
(ii) severance in the form of continued payment of his base salary for six months following the termination date.
Jolliff
Employment Agreement
On
October 24, 2018, the Company entered into a new employment agreement with Leonard Bruce Jolliff (“
Jolliff Employment
Agreement
”), the Company’s Chief Financial Officer, pursuant to which Mr. Jolliff shall be entitled to receive
(i) past due accrued compensation in the aggregate amount of $90,459, less tax withholding of $38,132, which was paid through
the issuance by the Company to Mr. Jolliff of 10,465,426 share of Common Stock and warrants to purchase 5,232,713 shares of Common
Stock; (ii) an annual base salary of $150,000, $120,000 of which shall be paid annually in equal monthly installments, and the
remaining $30,000 of which shall be deferred and accrued until such time as the Company’s cash balance exceeds $2.0 million;
(iii) a bonus consisting of restricted stock units pursuant to the 2015 Plan in an amount equal to 1.5% of the Company’s
issued and outstanding shares of Common Stock as of the issuance date, which shall occur in January 2019; (iv) a bonus consisting
of options to purchase 24,360,455 shares of Common Stock, which stock options shall have a seven-year term and shall be exercisable
at a price of $0.014 per share; and (v) a cash bonus of $50,000 for past services rendered over the last twelve months, the payment
of which shall be deferred until such time as the Company’s cash balance exceeds $2.0 million.
The
Jolliff Employment Agreement shall terminate on December 31, 2019, unless terminated early or further extended by the parties.
The Company may terminate the Jolliff Employment Agreement at any time, with or without Cause, as such term is defined in the
Jolliff Employment Agreement. If the Company terminates the Jolliff Employment Agreement without Cause, as such term is defined
in the Jolliff Employment Agreement, Mr. Jolliff will be entitled to (i) all salary owed through the date of termination, (ii)
severance in the form of continued payment of his base salary for six months following the termination date; and (iii) a pro-rated
share of his incentive bonus payments, if any.
The
shares of Common Stock and the warrants (the “
Warrants
”) issued to Messrs. Korenko and Jolliff as payment for
past due accrued compensation were issued in connection with a private placement transaction that the Company previously disclosed
in its Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 16, 2018 (the “
8-K
”).
The Warrants, in substantially the form attached as Exhibit 4.1 to the 8-K, have a two-year term and are exercisable for shares
of Common Stock at a price of $0.01 per share. Such shares of Common Stock and Warrants were issued without registration and are
subject to restrictions under the Securities Act of 1933, as amended, and the securities laws of certain states, in reliance on
the private offering exemptions contained in Section 3(a)(9) and/or Section 4(a)(2) of the Securities Act of 1933, as amended,
and on Regulation D promulgated thereunder, and in reliance on similar exemptions under applicable state laws as a transaction
not involving a public offering.
The
foregoing descriptions of the Korenko Employment Agreement and the Jolliff Employment Agreement do not purport to be complete,
and are qualified in their entirety by reference to the same, copies of which are attached to this Current Report on Form 8-K
as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference herein.