AST SpaceMobile Inc

Our executive compensation program is designed to attract, motivate and retain high quality leadership and incentivize our executive officers to achieve performance goals over the short- and long-term, which also aligns the interests of our executive officers with those of our stockholders.

Our named executive officers (or “NEOs”) for 2023, who consist of each person who served as our principal executive officer during 2023 and our two other most highly compensated executive officers were:

•

Abel Avellan, Chairman of the Board and Chief Executive Officer

•

Sean Wallace, Executive Vice President, Chief Financial Officer

•

Brian Heller, Executive Vice President, General Counsel and Secretary

Summary Compensation Table

The following table summarizes the compensation of our NEOs for the years ended December 31, 2023 and 2022.

(1)

Amounts represent the aggregate grant date fair value computed in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”), for equity awards granted. For further detail regarding the assumptions used to calculate the value of all equity awards made to executive officers refer to Note 12: Stock-Based Compensation in the accompanying consolidated financial statements.

(2)

Mr. Avellan has historically asked not to be paid any base salary in excess of applicable minimum wage requirements under federal law and, as such, has received substantially below-market base salary. Effective as of the completion of the Business Combination, Mr. Avellan is not receiving any base salary from the Company.

(3)

On May 10, 2022, pursuant to the terms of his employment agreement, Mr. Wallace received an award of 700,000 restricted stock units (“RSUs”), 400,000 of which are subject to time-based vesting and 300,000 of which are subject to performance-based vesting. The grant date fair value of the 300,000 performance-based RSUs have been reported at $0 based on the probable outcome of achieving the performance conditions at the time of grant. The grant date fair value of the performance-based RSUs assuming achievement of the performance conditions was $2,088,000.

(4)

Pursuant to the terms of Mr. Wallace's employment agreement, he was reimbursed $75,000 for direct out-of-pocket costs associated with his relocation to the Miami, Florida area where our corporate office is located, and $13,575 for legal fees associated with the negotiation and execution of his employment agreement.

Narrative Disclosure to the Summary Compensation Table

This section discusses the material components of the executive compensation program for the year ended December 31, 2023 as applicable to our NEOs and reflected in the Summary Compensation Table above.

Salaries. Other than Mr. Avellan, our NEOs receive their respective base salaries to compensate them for services rendered to the Company. The base salary payable to each NEO is intended to provide a fixed component of compensation and reflects the executive's skill set, experience, role and responsibilities. As noted in the Summary Compensation Table, Mr. Avellan, our Chairman of the Board and Chief Executive Officer, historically asked not to be paid any base salary in excess of applicable minimum wage requirements under federal law and received substantially below-market base salary, and effective as of the completion of the Business Combination, Mr. Avellan has not been receiving any base salary.

Bonus. The Compensation Committee awarded a discretionary cash bonus of $150,000 to Mr. Heller on September 15, 2022 in recognition of his individual achievements and contributions as our Executive Vice President, General Counsel and Secretary. During 2023, none of our NEOs received any bonuses.

Long-Term Equity Incentive Compensation. The goal of our long-term, equity based incentive awards is to align the interests of our executives with the interests of stockholders. Because vesting is generally based on continued service, in addition to performance-based vesting in certain cases, equity-based incentives also foster the retention of our executives during the award vesting period.

Equity Compensation Plans

AST LLC 2019 Equity Incentive Plan. Prior to the Business Combination, equity-based incentive awards in the form of options were issued under the AST LLC 2019 Equity Incentive Plan (“AST LLC Incentive Plan”) as incentives to our employees, non-employees, and non-employee members of our Board of Directors. Following the Business Combination, no further grants were made under the AST LLC Incentive Plan. However, the AST LLC Incentive Plan will continue to govern the terms and conditions of the outstanding awards granted under it.

SpaceMobile 2020 Incentive Award Plan. In connection with the Business Combination, we adopted the 2020 Incentive Award Plan (the “2020 Plan”). Awards may be made under the 2020 Plan covering an aggregate number of Class A Common Stock shares equal to 10,800,000 shares of Class A Common Stock. Any shares distributed pursuant to an award may consist, in whole or in part, of authorized and unissued common stock, treasury common stock or common stock purchased on the open market. The 2020 Plan provides for the grant of stock options, restricted stock, dividend equivalents, restricted stock units, incentive unit awards, stock appreciation rights, and other stock or cash-based awards. Each incentive unit issued pursuant to an award, if any, shall count as one share for purposes of calculating the aggregate number of shares available for issuance under the 2020 Plan.

Two types of equity awards have been granted under the 2020 Plan: (1) service-based options and (2) service-based and performance-based restricted stock units. Service-based options typically vest over a four year service period with 25% of the award vesting on the first anniversary of the employee’s commencement date, and the balance thereafter in 36 equal monthly installments. Service-based restricted stock units typically vest over a four year service period with 25% of the award vesting on each anniversary of the employee’s vesting commencement date. Performance-based restricted stock units typically vest when the specified performance conditions are met. Options typically expire no later than 10 years from the date of grant.

NEO Long-Term Equity Incentive Compensation in 2023. In May 2022, pursuant to the terms of Mr. Wallace’s employment agreement, the Company's Board of Directors approved an award of 700,000 RSUs to Mr. Wallace, with 400,000 of the RSUs subject to service-based vesting and 300,000 RSUs subject to performance-based vesting. The service-based RSUs vest over a four year service period with 25% of the awards vesting on each anniversary of Mr. Wallace's vesting commencement date. The performance-based RSUs will vest upon satisfaction of two specified capital raising performance conditions. During 2023, none of our NEOs received any long-term incentive awards under our 2020 Plan.

Other Elements of Compensation

In 2022, pursuant to the terms of Mr. Wallace's employment agreement he received $75,000 as reimbursement of direct out-of-pocket costs relating to his relocation to the Miami, Florida area where our corporate office is situated, and received $13,575 as reimbursement of legal fees associated with the negotiation and execution of his employment agreement. Mr. Wallace's employment agreement also provided for reimbursement of certain temporary housing expenses, although no such expenses were incurred or reimbursed.

401(k) Plan. We currently maintain a 401(k) retirement savings plan for our United States based employees, including our NEOs, who satisfy certain eligibility requirements. Our NEOs are eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Plan allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Currently, we do not match contributions made by participants in the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including NEOs, in accordance with our compensation policies.

Health/Welfare Plans. All of our full-time employees, including NEOs, are eligible to participate in our health and welfare plans, including medical, dental and vision benefits, medical and dependent flexible spending account, short-term and long-term disability insurance, and life insurance.

Named Executive Officer Employment Related Arrangements

Abel Avellan

On July 18, 2018, our subsidiary, AST LLC, entered into an offer letter with Mr. Avellan, our Chairman and Chief Executive Officer, setting forth his initial base salary and eligibility to participate in our customary health, welfare and fringe benefit plans. In addition, on December 15, 2017, Mr. Avellan entered into AST LLC's form Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement containing certain restrictive covenants, including non-compete and non-solicitation restrictions for a period of one year following a termination or cessation of employment for any reason. Mr. Avellan has historically asked not to be paid any base salary in excess of applicable minimum wage requirements under federal law and, as such, has received substantially below-market base salary. Mr. Avellan has not received any base salary from the Company since the consummation of the Business Combination in April 2021.

Sean Wallace

On April 25, 2022, our subsidiary, AST LLC, entered into an employment agreement with Mr. Wallace, our Executive Vice President and Chief Financial Officer. Pursuant to the employment agreement, Mr. Wallace receives an annual base salary of $250,000 and is eligible to participate in our customary health, welfare and fringe benefit plans. The employment agreement provided that we would reimburse Mr. Wallace for certain temporary housing expenses, direct out-of-pocket relocation expenses up to $75,000, and reasonable legal fees, up to a limit of $15,000, in connection with the negotiation and execution of the employment agreement and all ancillary agreements. In the event of a Qualifying Termination, Mr. Wallace is entitled to a severance payment equal to 75% of his base salary, continued coverage for up to nine months under our group health plans at the same levels and the same cost to Mr. Wallace as would have applied if his employment had not terminated, and acceleration of any unvested portion of the time-based vesting restricted stock units equal to (A) in the event a Qualifying Termination occurs on or prior to the one-year anniversary of his start date, 100,000 restricted stock units, and (B) in the event a Qualifying Termination occurs after the one-year anniversary of the start date, (x) (1) the number of days during the period commencing on the last vesting date prior to the date of termination and ending on the nine-month anniversary of the date of termination, (2) divided by 365, and multiplied by (y) 100,000. A “Qualifying Termination” means a termination of Mr. Wallace’s employment by the Company without cause (other than by reason of his death or disability), by Mr. Wallace with Good Reason or by reason of a non-renewal of the employment period by the Company under the employment agreement. The employment agreement defines “Good Reason” as including a material diminution of Mr. Wallace’s base salary, position, authority, duties or responsibilities, a change in his work location and a material breach by the Company of his initial equity award of RSUs, and includes a notice requirement and cure period. Payment of severance is subject to a release of claims in favor of the Company. In addition, any portion of the Performance-Based Portion of the Equity Award as to which the specified performance target has been satisfied as of, or within 120 days following, the date of termination, will vest on the later of the effective date of the release or the attainment of the applicable performance target within such 120 day period. Also, on April 25, 2022, Mr. Wallace entered into our form Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement containing certain restrictive covenants, including non-compete and non-solicitation restrictions for a period of one year following a termination or cessation of employment for any reason.

Brian Heller

On February 4, 2021, our subsidiary, AST LLC, entered into an employment agreement with Mr. Heller, our Executive Vice President, General Counsel and Secretary. Under the employment agreement, Mr. Heller receives an annual base salary of $250,000 and is eligible to participate in our customary health, welfare and fringe benefit plans. In the event of Qualifying Termination, Mr. Heller is entitled to a severance payment equal to 50% of his base salary, an annual bonus earned through the date of termination for the applicable calendar year based on the achievement of individual and/or Company performance goals as determined by the Board in its sole discretion, and acceleration of any unvested portion of the time-based vesting RSUs equal to (A) (x) the number of days during the period commencing on the last vesting date prior to the date of termination and ending on the six-month anniversary of the date of termination, (y) divided by 365, and multiplied by (B) 51,250. A “Qualifying Termination” means a termination of Mr. Heller’s employment by the Company without cause (other than by reason of his death or disability), by Mr. Heller with Good Reason or by reason of a non-renewal of the employment period by the Company under the employment agreement. The employment agreement defines “Good Reason” as including a material diminution of Mr. Heller’s base salary, position, authority, duties or responsibilities and a change in his work location, and includes a notice requirement and cure period. Payment of severance is subject to a release of claims in favor of the Company. Also, on February 4, 2021, Mr. Heller entered into our form Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement containing certain restrictive covenants, including non-compete and non-solicitation restrictions for a period of one year following a termination or cessation of employment for any reason.

Outstanding Equity Awards at 2023 Fiscal Year-End

The following table sets forth certain information regarding our equity-based awards held by the Named Executive Officers as of December 31, 2023.

(1)

Mr. Wallace's 400,000 RSUs vest over a four year service period with 25% of the awards vesting on each anniversary of the May 10, 2022 vesting commencement date. Mr. Heller's 205,000 RSUs vest over a four year service period with 25% of the awards vesting on each anniversary of the February 8, 2021 vesting commencement date.

(2)

Fair market value of awards was $6.03 per share as of December 31, 2023.

(3)

Mr. Wallace’s 300,000 RSUs vest upon satisfaction of two specified capital raising performance conditions. Half of each portion of these RSUs will vest upon the attainment of the specified performance targets and the remaining half of each portion of these RSUs will vest on the first anniversaries of the attainment of the specified performance targets. Mr. Wallace’s 75,000 RSUs vested on March 15, 2024, upon the certification of the Compensation Committee of the satisfaction of one of the performance conditions. The remaining 75,000 RSUs will vest on March 15, 2025, subject to Mr. Wallace’s continued service through the vesting date. Mr. Heller’s 145,000 RSUs vest upon satisfaction of certain specified performance conditions. Mr. Heller’s 72,500 RSUs vested on March 15, 2024, upon the certification of the Compensation Committee of the satisfaction of the performance conditions. The remaining 72,500 RSUs will vest on March 15, 2025, subject to Mr. Heller’s continued service through the vesting date.

Pay Versus Performance

Pursuant to Section 953(a) of the Dodd-Frank Act and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” (or “CAP”), as defined by SEC rules, to the Company’s principal executive officer (“PEO”) and non-PEO named executive officers (the “Non-PEO NEOs”) and certain aspects of the financial performance of the Company. The Compensation Committee does not utilize CAP as the basis for making compensation decisions.

The following table sets forth certain information regarding pay versus performance as of December 31, 2023.

(1)

Abel Avellan served as the PEO for the entirety of 2023, 2022, and 2021. Our Non-PEO NEOs for the applicable years were as follows:

• 2023: Sean Wallace and Brian Heller

• 2022: Sean Wallace and Brian Heller

• 2021: Brian Heller and Thomas Severson

(2)

Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table (“SCT”) for the applicable year in the case of our PEO, Mr. Avellan, and (ii) the average of the total compensation reported in the SCT for the applicable year for our Non-PEO NEOs reported for the applicable year.

(3)

Amounts reported in these columns represent compensation actually paid; adjustments were made to the amounts reported in the SCT for the applicable year.

(4)

Total Shareholder Return (“TSR”) is cumulative for the measurement periods beginning on December 31, 2020 and ending on December 31 of each of 2023, 2022 and 2021, respectively, calculated in accordance with Item 201(e) of Regulation S-K.

(5)

The dollar amounts reported represent the amount of net income (loss) attributable to common stockholders reflected in the accompanying consolidated financial statements.

A reconciliation of the adjustments for Mr. Avellan and for the average of the Non-PEO NEOs is set forth in the following table, which describes the adjustments, each of which is prescribed by the SEC rules, to calculate the CAP from SCT amounts. Equity values are calculated in accordance with ASC 718.

(1)

Unvested equity values are computed in accordance with the methodology used for financial reporting purposes, and for unvested awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the year.

Pursuant to Item 402(v) of SEC Regulation S-K, we are providing the following graphic descriptions of the relationships between information presented in the pay versus performance table provided above.

Relationship Between CAP and Total Shareholder Return ("TSR")

The graph below reflects the relationship between the PEO and Average Non-PEO NEOs CAP and our TSR.

Relationship Between CAP and Net Income (Loss) Attributable to Stockholders

The graph below reflects the relationship between the PEO and Average Non-PEO NEOs CAP and our net income (loss) attributable to stockholders.

(1)

Represents the amount of net loss attributable to common stockholders reflected in our financial statements for the applicable year.

Compensation of Directors

The following table sets forth information for the fiscal year ended December 31, 2023 regarding the compensation awarded to, earned by or paid to our non-employee directors.

(1)

Mr. Avellan, Chairman of the Company’s board of directors and Chief Executive Officer, is not included in this table as he was our employee in 2023 and did not receive compensation for services as a director. All compensation paid to Mr. Avellan for his services provided to us in 2023 is reflected in the Summary Compensation Table above.

(2)

On August 17, 2023, the listed non-employee directors were granted 38,462 RSUs. Amounts represent the aggregate grant date fair value of RSUs computed in accordance with ASC 718. We provide information regarding the assumptions used to calculate the value of equity awards in Note 12 of the accompanying consolidated financial statements.

(3)

Mr. Amin was a member of the board until August 8, 2023.

Director Compensation Program

In connection with the completion of the Business Combination, we approved and implemented a compensation program that consists of annual cash retainer fees and long-term equity awards for the non-employee directors of our Board of Directors who are not affiliated with Antares Technologies LLC (“Antares”), Vodafone, ATC TRS II LLC, a Delaware limited liability company (“American Tower”) and Rakuten Mobile Singapore PTE, LTD, a Singapore private limited company (“Rakuten”), or any of their affiliates (the “Director Compensation Program”). Messrs. Coleman, Rubin, Sarnoff and Torres are eligible to participate in the Director Compensation Program. The material terms of the Director Compensation Program are summarized below.

Cash Compensation

•

Annual Retainer: $50,000

•

Annual Committee Chair Retainer:

o

Audit: $20,000

o

Compensation: $15,000

o

Nominating and Corporate Governance: $10,000

•

Annual Committee Member (Non-Chair Retainer):

o

Audit: $10,000

o

Compensation: $7,500

o

Nominating and Corporate Governance: $5,000

Annual cash retainers are paid in quarterly installments in arrears and are pro-rated for any partial calendar quarter of service.

Equity Compensation

•

Initial Grant: Each eligible director who was initially elected or appointed to serve on our Board of Directors after the completion of the Business Combination was automatically granted 11,755 RSUs with grant fair value of $110,967 on August 24, 2021. The initial grant was to vest in full on the earlier to occur of (i) the one-year anniversary of the grant date and (ii) the date of the annual meeting of the stockholders following the grant date, subject to the director’s continued service through the vesting date; provided, however, that the earliest vesting date was the 2022 annual meeting of stockholders.

•

Annual Grant: Further, an eligible director who is serving on our Board of Directors as of the date of the annual meeting of the stockholders each calendar year beginning with calendar year 2022 will be automatically granted, on such annual meeting date, a restricted stock unit award with a value of approximately $150,000, which will vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to the director’s continued service through the applicable vesting date.

In addition, each such award will vest in full upon a change in control of the Company (as defined in the 2020 Plan).

Our 2023 annual shareholders meeting was held on August 17, 2023. On this date, the 2022 annual grant vested in full and the 2023 annual grant of 38,462 RSUs with grant fair value of $150,000 was given to eligible directors. Refer to the directors’ compensation table above for further detail.

Compensation under the Director Compensation Program is subject to the annual limits on non-employee director compensation set forth in the 2020 Plan.