DEF 14A of Serve Robotics Inc. /DE/, Jun 7, 2024

DEF 14A of Serve Robotics Inc. /DE/

Filed Jun 7, 2024 · FY20230001213900-24-050796

Open on EDGAR

  1. cda_lti_design

    | 3. | To approve an amendment to increase the shares authorized for issuance under our 2023 Equity Incentive Plan (the “2023 Plan”); and |

  2. How is the vote counted?

    | ● | Proposal No. 3: The amendment to increase the shares issuable under our 2023 Equity Incentive Plan requires the affirmative vote of a majority of the shares of our common stock present by remote communication or represented by proxy at the Annual Meeting and entitled to vote. “Majority” means the number of shares voted “FOR” Proposal No. 3 must exceed the number of votes “AGAINST” Proposal No. 3. Abstentions and broker non-votes will have no effect on the outcome of this proposal. |

  3. Director Independence

    | ● | administering our equity incentive plans and other benefit programs; |

  4. Director Independence

    | ● | reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management; and |

  5. Directors Not Standing for Re-Election at the Annual Meeting

    Directors Not Standing for Re-Election at the Annual Meeting Ali Pourdad will not stand for re-election and will be departing our Board following the completion of his term at the Annual Meeting. Mr. Pourdad has been a valued member of the Board, and we sincerely thank him for his leadership, guidance and service to the Company. Directors With Terms Expiring at the Annual Meeting Sarfraz Maredia’s term as a Class I director expires at the Annual Meeting.

  6. Nominees

    Nominees Our nominating and governance committee has recommended, and our Board has approved, Sarfraz Maredia as nominee for re-election as a Class I director at the Annual Meeting. Mr. Maredia joined our Board in July 2023. If elected, Mr. Maredia will serve as a Class I director until our 2027 annual meeting of stockholders. Mr. Maredia is currently a director of our Company. In addition, our nominating and governance committee has recommended, and our Board has approved, David Goldberg as nominee for election as a Class I director at the Annual Meeting. If elected, Mr. Goldberg will serve as a Class I director until our 2027 annual meeting of stockholders.

  7. Nominees

    | Name | Class | Age | Position | Current Term Expires | Expiration of Term For Which Nominated | | Sarfraz Maredia | I | 41 | Director | 2024 | 2027 | | David Goldberg(1)(2) | I | 42 | Director | 2024 | 2027 |

  8. Nominees

    | (1) Member of the audit committee. |

  9. Nominees

    | (2) Member of the nominating and governance committee. |

  10. Nominees

    Sarfraz Maredia has served as a member of our Board since July 2023. Since September 2014, Mr. Maredia has been employed at Uber, most recently as Vice President for Delivery and Head of Americas, where he leads Uber Eats’ marketplace business across the United States, Canada and Latin America as well as overseeing Postmates. Prior to his service at Uber, Mr. Maredia joined IQVIA (formerly IMS Health), a global information and technology services company focused on healthcare, in September 2011, where he was promoted to and served as Vice President of Corporate Development until September 2014. He previously advised technology clients as a management consultant at Bain & Company and worked as a private equity and public markets investor at TPG and Dodge & Cox, respectively. Mr. Maredia received his Bachelor’s Degree in Finance from the University of Texas at Austin. We believe that Mr. Maredia’s unique position leading one of the world’s largest on-demand delivery platforms, and his experience in leadership, operations, finance and technology qualify him to serve on our Board. David Goldberg most recently served as a consultant to our company from September 2023 to March of 2024. Prior to that, he was the Chief Financial Officer of REE Automotive, Ltd. (Nasdaq: REE), an electric vehicle developer and manufacturer, from February 2022 to March 2023. Before joining REE Automotive, Mr. Goldberg had various roles at Magna International, including SVP – Corporate Development from January 2021 to January 2022 and VP – Finance and Corporate Development from May 2018 to December 2020. Mr. Goldberg has a degree in Business Administration from the Ivey Business School at Western University. We believe that Mr. Goldberg is qualified to serve on our board of directors due to his experience and expertise in the automotive and mobility industries. Continuing Directors

  11. Nominees

    | Name | Class | Age | Position | Current Term Expires | | James Buckly Jordan(1)(2) | II | 44 | Director | 2025 | | Olivier Vincent(1)(2) | II | 60 | Director | 2025 | | Ali Kashani | III | 39 | Chief Executive Officer and Chairman of the Board | 2026 | | Touraj Parang | III | 51 | President, Chief Operating Officer and Director | 2026 |

  12. Nominees

    (1) Member of the audit committee (2) Member of the compensation committee Ali Kashani co-founded Serve in January 2021 and has served as our Chief Executive Officer and a member of our Board since the Merger in July 2023. Prior to co-founding Serve, he served as Vice President of Postmates Inc., an on-demand food delivery platform, from July 2017 to January 2021. Prior to Postmates, Dr. Kashani was the co-founder and Chief Technology Officer at Neurio Technology, Inc., a smart home technology company acquired by Generac Power Systems, Inc. (NYSE: GNRC) in 2019. Dr. Kashani is an inventor with 15 granted or pending patents. Dr. Kashani received both his Bachelor of Science in Computer Engineering and his Doctorate in Robotics from the University of British Columbia and was awarded Natural Sciences and Engineering Research Council of Canada’s Alexander Graham Bell Canada Graduate Scholarship. Dr. Kashani has served on our Board since the Company’s formation, and we believe he is qualified to remain on the Board due to the institutional knowledge he brings as Co-Founder and Chief Executive Officer of the Company and his business and robotics experience. Touraj Parang has served as our Chief Operating Officer since the Merger in July 2023. Mr. Parang has also served as Serve’s Chief Operating Officer and as a member of Serve’s board of directors since March 2021, and was appointed President of Serve in July 2022. Prior to joining Serve, Mr. Parang worked at GoDaddy Inc. (NYSE: GDDY) from May 2014 to March 2021, where he began as Senior Director of Corporate Development and most recently served as Vice President of Corporate Development. Prior to that, Mr. Parang was the founding Chief Operating Officer of UpCounsel Technologies, Inc. (acquired by Enduring Ventures, Inc. in 2020), Vice President of Strategy and Corporate Development at Webs, Inc. (acquired by Vistaprint N.V. in 2011) and co-founder and Chief Operating Office of Jaxtr, Inc. (acquired by Sabse Technologies Inc. in 2009). Mr. Parang received his Bachelor of Arts in Philosophy and Economics from Stanford University and his Juris Doctorate from Yale Law School. We believe that Mr. Parang is qualified to serve on our Board due to his extensive experience with early-stage startups and prior leadership role at a publicly traded company. James Buckly Jordan has served as a member of our Board since July 2023 and as a member of Serve’s board of directors since October 2021. Mr. Jordan founded Vebu Labs, a food robotics and automation solutions company, in October 2018 and has served as its Chief Executive Officer since then. He is also the co-founder of Miso Robotics, a food robotics company, which he co-founded in 2016 and for which he currently serves as the acting President and Chairman of the board of directors. Mr. Jordan also founded Canyon Creek Capital, a venture capital fund, in July 2018 and has served as its Managing Partner since then. He received his Bachelor of Arts in Political Science from Indiana University and his Master of Business Administration from the University of California, Los Angeles Anderson School of Management. We believe Mr. Jordan is qualified to serve on our Board due to his early-stage investment experience in technology companies. Olivier Vincent has served as a member of our Board since July 2023. Mr. Vincent co-founded and has served as Chief Executive Officer of Autozen Technology Ltd., a marketplace start-up in the automobile world since March 2020. Prior to joining Autozen, Mr. Vincent served as Chief Executive Officer of Spliqs, an AI technology company from January 2019 until March 2020. From December 2016 until January 2019, Mr. Vincent served as President of WeatherBug, a weather application. Mr. Vincent has served on the board of directors of Wishpond Technologies Ltd., a Canadian public company traded on the TSX (OTCMKTS: WPNDF), since December 2020. Mr. Vincent holds a Masters of Engineering in Computer Science from Ecole Nationale Superieure de Techniques Avancées (ENSTA) Paris and a Masters of Business, Entrepreneurship from Hautes Etudes Commerciales (HEC) Paris. We believe that Mr. Vincent is qualified to serve on our Board due to his experience growing and managing technology companies.

  13. Director Compensation

    Director Compensation Since our incorporation, no compensation has been earned or paid to Ian Jacobs or Mark Tompkins, who were our sole directors prior to the Merger. Serve became our wholly-owned subsidiary upon the closing of the Merger on July 31, 2023. In connection with the closing of the Merger, and effective July 31, 2023, Messrs. Jacobs and Tompkins resigned from our Board, and our current directors were appointed to our Board. No compensation was paid to our non-employee directors for the fiscal year ended December 31, 2023. Dr. Kashani and Mr. Parang are employed as our Chief Executive Officer and President and Chief Operating Officer, respectively, and receive no compensation for their service as directors. The compensation received by Dr. Kashani and Mr. Parang as employees is shown in “Executive Compensation⸺Summary Compensation Table” below. On February 16, 2024, we adopted our Outside Director Compensation Policy (the “Director Compensation Policy”), effective as of January 1, 2024, pursuant to which we pay each non-employee director annual cash retainers and equity awards, as further described below. Pursuant to the Director Compensation Policy, each non-employee director is entitled to receive an annual cash retainer for service on our Board and an additional annual cash retainer for service on each committee on which the non-employee director is a member. All annual cash retainers are paid quarterly in arrears. In addition, James Buckly Jordan, Ali Pourdad and Olivier Vincent will each receive an initial cash compensation payment in the amount of $11,250, payable on March 31, 2024. No compensation has previously been paid to our non-employee directors. The fees paid to our non-employee directors for service on our Board and for service on each committee of our Board of which the non-employee director is a member are as follows: Annual Board Member Service Retainer All non-employee directors: $20,000 Annual Committee Member Service Retainer Member of the audit committee: $5,000 Member of the compensation committee: $5,000 Member of the nominating and governance Committee: $5,000 The Director Compensation Policy provides that at each annual stockholder meeting following a non-employee director’s appointment to our Board and subject to such non-employee director’s service on our Board since December 31st of the calendar year prior to such annual meeting, each non-employee director will be granted an option to purchase 20,000 shares of our common stock under the 2023 Plan, which will vest in full upon the earlier of the first anniversary of the date of grant or the next annual stockholder meeting, prorated for partial quarters of service (including the initial quarter of service), subject to the applicable non-employee director’s continuous service through the applicable vesting date; provided that if we do not have an effective Form S-8 registration statement on file with the SEC with sufficient shares available to cover the applicable equity award as of the date such award is granted (an “Effective S-8”), the grant of such equity award shall be delayed until such time there is an Effective S-8. Notwithstanding the foregoing, for each non-employee director who remains in continuous service as a member of our Board until immediately prior to the consummation of a change in control, any unvested portion of an equity award granted in consideration of such non-employee director’s service as a member of our Board will vest in full immediately prior to, and contingent upon, the consummation of a change in control. The Director Compensation Policy further provides that upon consummation of our initial public offering and listing of our common stock on Nasdaq or the New York Stock Exchange, non-employee director, other than Mr. Maredia, was granted an option to purchase 20,000 shares of common stock under the 2023 Plan (each, an “Initial Equity Grant”). Each Initial Grant shall vest in full on the one-year anniversary of the date of grant, subject to the applicable the non-employee director’s continued service as a member of our Board through such date; provided that if we do not have an Effective S-8, the grant of such equity award shall be delayed until such time as there is an Effective S-8. Our Board will have discretion to grant additional equity awards to certain non-employee directors for services that exceed the expectations for a non-employee director or for other circumstances determined to be appropriate by our Board. We also reimburse our directors for their reasonable out-of-pocket expenses in connection with attending meetings of our Board and board committees. The non-employee director compensation program is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. Required Vote For the election of directors, the two nominees receiving the most “FOR” votes from the holders of shares present or represented by proxy and entitled to vote on the election of directors will be elected. Only votes “FOR” will affect the outcome. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES NAMED ABOVE. PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Our audit committee has appointed dbbmckennon, independent registered public accounting firm, to audit our consolidated financial statements for our year ending December 31, 2024. During our year ended December 31, 2023, dbbmckennon served as our independent registered public accounting firm. At the Annual Meeting, our stockholders are being asked to ratify the appointment of dbbmckennon as our independent registered public accounting firm for our fiscal year ending December 31, 2024. Our audit committee is submitting the appointment of dbbmckennon to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. If the stockholders do not ratify this appointment, the audit committee will reconsider whether to retain dbbmckennon. Notwithstanding the appointment of dbbmckennon and even if our stockholders ratify the appointment, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of the Company and our stockholders. Representatives of dbbmckennon are expected to be present at the Annual Meeting, and they will have an opportunity to make a statement if they desire, but will not be available to respond to appropriate questions from our stockholders. If our stockholders do not ratify the appointment of dbbmckennon, our Board may reconsider the appointment. Change in Independent Registered Public Accounting Firm Dismissal of Raich Ende Malter & Co and Grassi & Co and Engagement of dbbmckennon Raich Ende Malter & Co. LLP (“REM”) was the Company’s independent registered public accounting firm from November 2020 through June 2022. Effective July 2022, Grassi & Co., CPAs, P.C. (“Grassi”) was appointed as the Company’s independent registered public accounting firm. Following the Merger, (i) Grassi was dismissed as the independent registered public accounting firm of the Company, and (ii) our Board engaged dbbmckennon as the independent registered public accounting firm to audit the Company’s financial statements for the fiscal years ending December 31, 2023 and 2022. Set below under “Principal Accounting Fees and Services” are aggregate fees billed by dbbmckennon, Grassi and REM for professional services rendered for the years ended December 31, 2023 and 2022.

  14. Director Compensation

    During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through the date of Grassi’s dismissal, there were no disagreements with Grassi on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grassi, would have caused it to make reference to the subject matter thereof in connection with its report, nor did its report contain an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope, or accounting principle. During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through the date of Grassi’s dismissal, neither the Company nor anyone acting on its behalf consulted dbbmckennon regarding the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements. Principal Accounting Fees and Services The following table sets forth aggregate fees billed by dbbmckennon, Grassi and REM for professional services rendered for the years ended December 31, 2023 and 2022.

  15. Director Compensation

    | | 2023 | 2022 | | Audit fees (1) | $144,507 | $135,667 | | Audit-related fees (2) | - | - | | Tax fees (3) | - | $1,750 | | All other fees (4) | - | - | | Total Fees | $144,507 | $137,417 |

  16. Director Compensation

    | (1) Audit fees consist of fees billed for professional services rendered by our independent registered public accounting firm for the audit of our annual consolidated financial statements and review of our interim consolidated financial statements or services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements. The fees for the audit services billed and to be billed dbbmckennon for the years ended December 31, 2023 and December 31, 2022 amounted to $144,507 and $111,917, respectively. The fees for the audit services billed by Grassi and REM for the year ended December 31, 2022 amounted to $23,750. |

  17. Director Compensation

    | (2) Audit-related fees consist of assurance and related services that are reasonably related to the performance of audits or reviews of our financial statements and were not reported above under “Audit fees”. The fees for the audit-related services billed or to be billed by dbbmckennon amounted to $0 for the year ended December 31, 2023. There were no audit-related fees billed by Grassi and REM for the year ended December 31, 2022. |

  18. Director Compensation

    | (3) Tax fees consist of fees billed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice, and tax planning. The fees for the tax services billed and to be billed by dbbmckennon amounted to $0 for the year ended December 31, 2023. The fees for the tax services billed and to be billed by Grassi and REM for professional services for tax compliance, tax advice, and tax planning for the year ended December 31, 2022 amounted to $1,750. |

  19. Director Compensation

    | (4) All other fees consist of fees billed for all other services. There were no fees billed by dbbmckennon, Grassi and REM for other products and services for the years ended December 31, 2023 and 2022. |

  20. Director Compensation

    Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm The audit committee charter requires our audit committee to pre-approve all audit and permissible non-audit services and related engagement fees and terms for services provided to the Company by the independent auditors (or subsequently approving non-audit services in those circumstances where a subsequent approval is necessary and permissible). We did not have an audit committee prior to the closing of the Merger. Since the closing of the Merger, the audit committee pre-approved all of the audit and audit-related fees billed by dbbmckennon in accordance with SEC requirements. Required Vote The ratification of the appointment of dbbmckennon as our independent registered public accounting firm requires the affirmative vote of a majority of the shares of our common stock present or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal and broker non-votes will have no effect. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF dbbmckennon. PROPOSAL NO. 3 APPROVAL OF THE COMPANY’S AMENDMENT TO 2023 EQUITY INCENTIVE PLAN We are seeking approval of the amendment to the Company’s 2023 Plan (the “2023 Plan Amendment”) to increase the shares issuable under the 2023 Plan by 3,703,549 shares at the Annual meeting. Stockholders are encouraged to read the actual text of the 2023 Plan Amendment, which is appended to this Proxy Statement as filed with the SEC as Annex A and may be accessed from the SEC’s website at www.sec.gov. If stockholders approve the 2023 Plan Amendment, the 2023 Plan Amendment will become effective upon the date of the Annual Meeting.

  21. Summary of the 2023 Plan

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Ali Kashani | 2023 | 105,738 | — | — | 36,984 | — | — | 142,722 | | Chief Executive Officer | 2022 | 192,992 | — | — | — | — | — | 192,992 | | Touraj Parang | 2023 | 238,500 | — | — | 11,655 | — | — | 250,155 | | President & Chief Operating Officer | 2022 | 260,583 | — | — | — | — | — | 260,583 | | Euan Abraham | 2023 | 270,000 | — | — | 10,393 | — | — | 279,890 | | Senior Vice President of Hardware Engineering | 2022 | 295,000 | — | — | — | — | — | 295,000 |

  22. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Time-Based Awards and Milestone-Based Awards The Time-Based Awards and Milestone-Based Awards granted to Dr. Kashani and Mr. Parang will fully vest upon a termination of service by the Company without “cause” or upon the executive’s resignation for “good reason” (each, an “involuntary termination”). The acceleration of the Kashani Time-Based Award and the Kashani Milestone-Based Award is subject to Dr. Kashani’s return of all Company property in his possession within 10 business days following the date of involuntary termination and his execution of a general release of all claims that becomes effective no later than the 30th day after the date of involuntary termination. In the event the applicable executive’s service with the Company terminates for any reason, any unvested shares subject to the Time-Based Awards and Milestone-Based Awards granted to Dr. Kashani and Mr. Parang may be repurchased by the Company within 3 months following the date of termination at the original purchase price paid for the shares. In addition, in the event the applicable executive’s service with the Company terminates for any reason on or prior to February 18, 2025, any vested shares subject to the Milestone-Based Awards granted to Dr. Kashani and Mr. Parang may be repurchased by the Company within 3 months following the date of termination at the lesser of (x) a purchase price per share of the Company’s common stock equal to $500 million divided by the then fully diluted capitalization of the Company or (y) the then current fair market value per share of the Company’s common stock (the “Award Call Option”). For purposes of the Time-Based Awards and the Milestone-Based Awards granted to Dr. Kashani and Mr. Parang, “cause” means: (i) any material breach by the executive of any material written agreement between the executive and the Company and the executive’s failure to cure such breach within 30 days after receiving written notice thereof; (ii) any failure by the executive to comply with the Company’s material written policies or rules as they may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance of the executive’s duties and the executive’s failure to cure such condition within 30 days after receiving written notice thereof; (iv) the executive’s repeated failure to follow reasonable and lawful instructions from the Board and the executive’s failure to cure such condition within 30 days after receiving written notice thereof; (v) the executive’s conviction of, or plea of guilty or nolo contendere to, any crime that results in, or is reasonably expected to result in, material harm to the business or reputation of the Company; (vi) the executive’s commission of or participation in an act of fraud against the Company; (vii) the executive’s intentional material damage to the Company’s business, property or reputation; or (viii) the executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the executive owes an obligation of nondisclosure as a result of the executive’s relationship with the Company. For purposes of the Kashani Time-Based Award and the Kashani Milestone-Based Award, “good reason” means the executive’s resignation due to the occurrence of any of the following conditions which occurs without the executive’s written consent, provided that the requirements regarding advance notice and an opportunity to cure set forth below are satisfied: (i) the executive’s then-current base salary is reduced by more than 10% (other than as part of an across-the-board salary reduction applicable to all similarly situated employees); (ii) a material reduction of the executive’s duties, authority, responsibilities or reporting relationship, relative to the executive’s duties, authority, responsibilities or reporting relationship as in effect immediately prior to such reduction; or (iii) the Company (or its successor) conditions the executive’s continued service on the executive being transferred to a site of employment that would increase the executive’s one-way commute by more than 50 miles from the executive’s then-principal residence. In order for the executive to resign for good reason, the executive must provide written notice to the Company of the existence of the good reason condition within 30 days of the initial existence of such condition. Upon receipt of such notice, the Company will have 30 days during which it may remedy the condition and not be required to provide for the acceleration described herein as a result of such proposed resignation. If the condition is not remedied within such 30-day period, the executive may resign based on the condition specified in the notice effective no later than 60 days following the expiration of the Company’s 30-day cure period. For purposes of the Parang Time-Based Award and the Parang Milestone-Based Award, “good reason” means the executive’s resignation due to the occurrence of any of the following conditions which occurs without the executive’s written consent, provided that the requirements regarding advance notice and an opportunity to cure set forth below are satisfied: (i) a reduction of the executive’s then current base salary by 10% or more unless such reduction is part of a generalized salary reduction affecting similarly situated employees; (ii) a change in the executive’s position with the Company that materially reduces the executive’s duties, level of authority or responsibility; or (iii) the Company conditions the executive’s continued service with the Company on the executive’s being transferred to a site of employment that would increase the executive’s one-way commute by more than 35 miles from Purchaser’s then principal residence. Parang Termination Payment Letter On June 23, 2021, Serve entered into a termination payment letter agreement with Mr. Parang (the “Parang Termination Payment Letter”), which provides that if (i) the Company terminates Mr. Parang’s service with the Company without cause on or prior to February 18, 2025 and (ii) the Company exercises its Award Call Option with respect to all or a portion of the Parang Milestone-Based Award, then the Company will pay Mr. Parang a termination payment equal to the product of (i) the shares repurchased by the Company pursuant to the Award Call Option, multiplied by (ii) the excess, if any, of (x) the purchase price per share of the Company’s common stock equal to $500 million divided by the Company’s then fully diluted capitalization as of the date of termination over (y) the per share fair market value of the Company’s common stock as of the date of termination. The termination payment will be paid in a lump sum on the first regularly scheduled payroll date after the 30th day following the date of termination. The termination payment is subject to Mr. Parang’s return of all Company property in his possession within 10 business days following the date of involuntary termination and his execution of a general release of all claims that becomes effective no later than the 30th day after the date of termination. Kashani Termination Payment Letter

  23. Potential Payments Upon Termination or Change in Control

    On September 27, 2021, Serve entered into a termination payment letter agreement with Dr. Kashani (the “Kashani Termination Payment Letter”), which provides that if (i) the Company terminates Dr. Kashani’s service with the Company without cause on or prior to February 18, 2025 and (ii) the Company exercises its Award Call Option with respect to all or a portion of the Kashani Milestone-Based Award, then the Company will pay Dr. Kashani a termination payment equal to the product of (i) the shares repurchased by the Company pursuant to the Award Call Option, multiplied by (ii) the excess, if any, of (x) the purchase price per share of the Company’s common stock equal to $500 million divided by the Company’s then fully diluted capitalization as of the date of termination over (y) the per share fair market value of the Company’s common stock as of the date of termination. The termination payment will be paid in a lump sum on the first regularly scheduled payroll date after the 30th day following the date of termination. The termination payment is subject to Dr. Kashani’s return of all Company property in his possession within 10 business days following the date of involuntary termination and his execution of a general release of all claims that becomes effective no later than the 30th day after the date of termination.