Management Change/Compensation - Form 8-K

As previously reported in its Current Report on Form 8-K filed on November 6, 2023 (the "Previous Report"), Brian Regli gave written notice of his resignation (the "Resignation Letter") from the board of directors (the "Board") of the Company, and from the Audit Committee and Compensation Committee of the Board, effective May 16, 2024.

On May 13, 2024, the Board elected David Reynolds as a director of the Company, effective as of May 16, 2024. Mr. Reynolds will not serve on any committees of the Board at this time. Mr. Reynolds will serve as a director until his successor has been duly elected and qualified or his earlier death, resignation, disqualification, or removal.

There is no arrangement or understanding between Mr. Reynolds and any person pursuant to which he was selected as director. There are and have been no transactions in which Mr. Reynolds has an interest requiring disclosure under Item 404(a) of Regulation S-K.

Under an independent director agreement between the Company and Mr. Reynolds, dated as of May 16, 2024 (the "Independent Director Agreement"), Mr. Reynolds will be entitled to an annual fee of $40,000, plus $9,000 per year in cash for as long as Mr. Reynolds serves as a chairman of a committee of the Board, to be paid to Mr. Reynolds in four equal installments in a mutually agreed manner. In addition, the Company will grant of 9,000 shares of restricted Class B Common Stock, par value $0.0001 per share, of the Company (the "Class B Common Stock") under the Asset Entities Inc. 2022 Equity Incentive Plan (the "Plan"), to Mr. Reynolds, subject to the approval of the Board or the Compensation Committee, as applicable. The Company will also reimburse Mr. Reynolds for pre-approved reasonable business expenses incurred in good faith in connection with the performance of his duties for the Company.

Under an indemnification agreement between the Company and Mr. Reynolds in the Company's standard form for officers or directors of the Company, dated as of May 16, 2024 (the "Indemnification Agreement"), the Company will indemnify Mr. Reynolds to the fullest extent permitted by law. The Company will also advance all expenses relating to any proceeding, other than proceedings by or in the right of the Company or any claim, issue or matter therein, within 30 days after the receipt by the Company of a statement requesting such advance and a written undertaking to repay any expenses advanced if it shall ultimately be determined that indemnification against such expenses is not permitted. Any advances and undertakings to repay shall be unsecured and interest-free. The Indemnification Agreement also provides for payments by the Company for the entire amount of any judgment or settlement of any action, suit or proceeding in which it is liable or would be liable if joined in such action, subject to the other terms and provisions of the indemnification agreements, and certain other indemnification and payment obligations. The Indemnification Agreement also provides that if the Company maintains a directors' and officers' liability insurance policy, that the indemnitee will be covered by the policy to the maximum extent of the coverage available for any of the Company's directors or executive officers.

The foregoing summary of the terms and conditions of the Independent Director Agreement and the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Independent Director Agreement and the form of Indemnification Agreement filed as Exhibit 10.1 and Exhibit 10.2 to this report, respectively, which are incorporated herein by reference.