Item 5.02 Departure of Directors or Certain Officers:
Election of Directors; Appointment of Certain Officer; Compensatory Arrangements of Certain Officers.
| Item 5.02 (b) | Departure of Chief Financial Officer. |
Effective December 11, 2022, Michael Gilbreth resigned
from his position as Chief Financial Officer of the Company. Mr. Gilbreth’s resignation did not result from any disagreement or
difference of opinion with the Company with respect to its operations, policies, practices, internal controls, financial statements, audit
scope limitations, audit reports, or management representations, nor was it otherwise connected in any way with the Company’s financial
controls or audit procedures.
In connection with Mr. Gilbreth’s resignation as CFO, the Company
and Mr. Gilbreth into a Separation Agreement and Release of Claims effective December 11, 2022 (the “Separation Agreement”).
The terms of the Separation Agreement are summarized below.
| Item 5.02 (c) | Appointment of New Chief Financial Officer. |
Effective December 12, 2022, the Company’s board of directors appointed
Paul Warley as the Company’s new Chief Financial Officer. Mr. Warley will not serve as a member of the Company’s board of
directors.
Paul Warley, age 61, has significant experience in corporate turnarounds,
restructuring, cross-border trade and capital advisory work. From 2015 to 2022, Mr. Warley was president of Warley & Company LLC,
a strategic advisory firm providing executive management, capital advisory and M&A services to middle-market companies in the service,
construction, technology, oil & gas, clean energy, food, retail and green-building sectors. While at Warley & Company, from 2018
to 2019 Mr Warley was engaged as Chief Executive Officer and CFO of 360Imaging, a provider of products and services for implant surgery
and digital dentistry. From 2011 to 2015, Mr. Warley served clients in the alternative energy industry as a managing director and additionally
was Chief Compliance Officer with Deloitte Corporate Finance. From 1997 to 2011, Mr Warley was Managing Director and Region Manager for
GE Capital. From 1984 to 1997, Mr. Warley was with Bank of America and Bankers Trust as a Senior Vice President.
Mr. Warley holds the Financial Industry Regulatory Authority Series 7,
24 and 63 licenses. He earned his B.S. degree in Business Administration from The Citadel (The Military College of South Carolina) and
served in the U.S. Army, attaining the rank of Captain.
While at Warley & Company LLC, Mr. Warley provided corporate finance
consulting services to BD1 Investment Holding LLC, the Company’s largest stockholder.
The Company entered into an Employment Agreement, dated December 12, 2022
(the “Employment Agreement”), with Mr. Warley. The terms of the Employment Agreement are summarized below.
| Item 5.02(e) | Compensatory Arrangements of Certain Officers. |
Gilbreth Separation Agreement
Under the Separation Agreement Mr. Gilbreth will be
entitled, subject to his non-revocation of a general release of claims in favor of the Company, to the following separation benefits:
(a) payment of ten (10) weeks’ salary equal to $35,576.92, fifty percent (50%) of which ($17,788.46) shall be payable on the first
payroll period after effective date of the Separation Agreement, and the remaining fifty percent (50%) of which shall be payable on the
next payroll period; and (b) payment of a bonus, which equals 60% of Mr. Gilbreth’s current salary, or $111,000, one-third (1/3)
of which ($37,000) shall be payable with the December 28, 2022 payroll date, another one-third (1/3) of which ($37,000) shall be payable
beginning the first payroll period after January 31, 2023, and the remaining one-third (1/3) of which ($37,000) shall be payable on the
first payroll period after the filing by the Company of its Annual Report on Form 10-K for the year ending December 31, 2022.
Mr. Gilbreth has agreed to continue to assist the
Company with transition matters in a consulting capacity during the next several months.
Warley Employment Agreement
The Employment Agreement provides for a term through December 31, 2025,
subject to earlier termination by the Company and Mr. Warley as provided in the Employment Agreement.
The Employment Agreement provides that Mr. Warley will receive an annual
base salary (“Base Salary”) of $305,000. Once the Company raises a minimum $10 million of new capital, then the Base Salary
will increase to $350,000.
Mr. Warley will also be eligible for an annual incentive bonus of up to
75% of his Base Salary if the agreed bonus targets are achieved.
The Employment Agreement provides that Mr. Warley is eligible to participate
in the Company’s standard benefit plans and programs. Mr. Warley will receive a moving allowance of up to $30,000 if he relocates
his primary residence to Colorado.
As provided in the Employment Agreement, the Company has granted Mr. Warley
an inducement grant of restricted stock units (“RSUs”) for an aggregate of 700,000 shares of Ascent’s common stock.
This RSU grant was agreed to as an inducement material to Mr. Warley entering into employment with Ascent. The RSUs were agreed to and
granted in accordance with Nasdaq Listing Rule 5635(c)(4).
20% of the RSUs are fully vested upon grant. The remaining 80% of the RSUs
shall vest in equal monthly increments over the next thirty-six months. Any outstanding and unvested RSUs will accelerate and fully vest
upon the earlier of (i) a change of control and (ii) the termination of Mr. Warley’s employment for any reason other than (x) by
the Company for cause or (y) by Mr. Warley without good reason.
The RSUs shall be settled in eight equal increments on the last business
day of each calendar quarter beginning with the initial settlement date of December 31, 2024. Notwithstanding the foregoing, any RSUs
that are then outstanding and vested will be settled upon the earlier of (i) a change of control and (ii) the termination of Mr. Warley’s
employment for any reason other than (x) by the Company for cause or (y) by Mr. Warley without good reason. At the election of the Company
or Mr. Warley prior to each settlement date, the RSUs shall be “net settled” and the Company shall retain such number of shares
for sale on behalf of Mr. Warley at a price equal to the fair market value of the shares on the settlement date as will be sufficient
for the payment of withholding tax liability to satisfy obligation of Mr. Warley upon settlement of any RSUs.
Under the Employment Agreement, if the Company terminates Mr. Warley without
cause or Mr. Warley terminates his employment for good reason or a change in control, Mr. Warley will be entitled to receive half of his
Base Salary amount then in effect during the period from (i) the termination date through (ii) the end of the term of the Employment Agreement.
In addition, all RSUs and other equity awards will be immediately vested and settled.
The Employment Agreement requires Mr. Warley to maintain the confidentiality
of the Company’s proprietary information. The Employment Agreement also includes customary non-competition and non-solicitation
provisions that Mr. Warley must comply with for a period of 12 months after termination of his employment with the Company.
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The above summary does not purport to be a complete summary of the Separation
Agreement and is qualified in its entirety by reference to the full text of the Separation Agreement, a copy of which is filed herewith
as Exhibit 10.1 and is incorporated by reference.
The above summary does not purport to be a complete summary of the Employment
Agreement and is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is filed herewith
as Exhibit 10.2 and is incorporated by reference.