Cyngn Inc

The following table provides information regarding the compensation earned by or paid to our named executive officers with respect to the years ended December 31, 2023 and 2022.

Summary Compensation Table

Executive Employment Agreements

Lior Tal

On January 1, 2022, we entered into an employment agreement (the “Employment Agreement”) with our Chief Executive Officer, Lior Tal, which agreement superseded and replaced the offer letter entered into by and between the Company and Mr. Tal on April 17, 2016.

Pursuant to the Employment Agreement, as compensation for his services as Chief Executive Officer of the Company, Mr. Tal will receive: (1) a salary of $500,000 per annum (the “Base Salary”) and commensurate benefits; (2) eligibility, subject to Mr. Tal’s continued employment with the Company, to earn an annual performance based bonus in the target of 60% of his Base Salary; (3) eligibility, also subject to Mr. Tal’s continued employment with the Company, to participate in the Company’s 2013 Equity Incentive Plan, the Company 2021 Incentive Plan, or any successor plan, subject to the terms of such plan; and (4) entitlement, also subject to Mr. Tal’s continued employment with the Company, to reimbursement for all reasonable and necessary out-of-pocket business, entertainment, and travel expenses incurred by Mr. Tal in connection with the performance of Mr. Tal’s duties as the Company’s Chief Executive Officer and the Company’s expense reimbursement policies and procedures.

In the event the Company terminates Mr. Tal’s employment without Cause (as defined in the Employment Agreement) or if Mr. Tal resigns for Good Reason (as defined in the Employment Agreement) other than during the Protection Period (as defined below), and provided Mr. Tal complies with certain other conditions outlined in the Employment Agreement, the Company will pay Mr. Tal severance, as outlined in the Employment Agreement, comprising of: (a) the continued payment of his base salary for the first twelve months following the termination date, payable in accordance with the Company’s standard payroll procedures; (b) a lump sum payment equal to the pro-rated amount of Mr. Tal’s target annual bonus for the year of termination; (c) reimbursement of Mr. Tal for medical, vision and dental coverage under Consolidated Omnibus Budget Reconciliation Act of 1985, as amended or comparable state law (“COBRA”) for the first twelve months after the termination date; and (d) acceleration of the vesting of each of the Mr. Tal’s then-outstanding time-based equity awards as to 25% of the then-unvested shares subject to each such award, effective as of the termination date.

In addition, pursuant to the Employment Agreement, if immediately prior to, on or within 12 months after a Change of Control (the “Protection Period”), the Company terminates Mr. Tal’s employment without Cause (as defined in the Employment Agreement), or if Mr. Tal resigns for Good Reason (as defined in the Employment Agreement) during the Protection Period, the Company will pay Mr. Tal severance, as outlined in the Employment Agreement, comprising of: (a) a lump sum payment equal to eighteen months of Mr. Tal’s base salary as in effect on the date of his termination; (b) a lump sum payment equal to 150% of Mr. Tal’s target annual bonus as in effect on the date of his termination, payable on the 60th day following the termination date; (c) reimbursement to Mr. Tal for medical, vision and dental coverage under COBRA for the first eighteen months after the termination date; and (d) acceleration of the vesting of each of the Mr. Tal’s then-outstanding time-based equity awards in full, effective as of the termination date.

Mr. Tal’s receipt of any severance payments or benefits will be subject to Mr. Tal’s continuing to comply with the terms of that certain Confidential Information Agreement and the provisions of the Employment Agreement.

Ben Landen

On September 19, 2019, we entered into an immediately effective offer letter with Mr. Ben Landen. Pursuant to Mr. Landen’s offer letter, he will serve as our Senior Director of Business and Corporate Development. Mr. Landen’s offer letter shall continue until terminated by either the Company or Mr. Landen. Pursuant to Mr. Landen’s offer letter, he will receive (i) an annual base salary of $220,000, and (ii) an option to purchase 150,000 shares of the Company’s common stock at an exercise price of $0.23 per share, which is based on the Board of Directors-approved fair market valuation as of March 31, 2019, as determined by an independent financial consultant. The option shall vest and become exercisable over a four-year period with 25% vesting on the one-year anniversary of Mr. Landen’s employment start date and the balance vesting equally after each additional one-month period for continuous service completed over the following 36 months, subject to and in accordance with the terms of the Company’s 2013 Stock Incentive Plan. Mr. Landen’s options expire in November, 2029. The offer letter contains customary provisions relating to vacation, benefits, and non-compete. Subsequent to Mr. Landen’s offer letter on December 24, 2021, his annual base salary was increased to $250,000.

Donald Alvarez

On May 28, 2021, we entered into an offer letter with Mr. Donald Alvarez, effective June 1, 2021. Pursuant to Mr. Alvarez’s offer letter, he serves as our Chief Financial Officer. Mr. Alvarez’s offer letter shall continue until terminated by either the Company or Mr. Alvarez. Pursuant to Mr. Alvarez’s offer letter, he will receive (i) an annual base salary of $250,000 for his first year of employment, which annual base salary will increase to $300,000 upon the completion by the Company of an initial public offering, and (ii) a stock option to purchase 400,000 shares of the Company’s common stock at an exercise price of $2.88 per share, which option shall vest and become exercisable over a four-year period with 25% vesting on the one-year anniversary of Mr. Alvarez’s employment start date and the balance vesting equally after each additional one-month period for continuous service completed over the following 36 months, subject to and in accordance with the terms of the Company’s 2013 Stock Incentive Plan. Mr. Alvarez’s options will expire in June 2031. The offer letter contains customary provisions relating to vacation, benefits, and non-compete.

Severance and Change of Control Agreements

We have entered into a Severance and Change of Control Agreements (the “Severance Agreement”) with Ben Landen, our Vice-President of Business Development. The Severance Agreement provides for a lump sum payment to the officer if the Company terminates the officer’s employment without Cause (as defined in the Severance Agreement), or if the officer terminates its employment for Good Reason (as defined in the Severance Agreement) or in the case of a Change of Control (as defined in the Severance Agreement) of the Company. The term, Change of Control, includes the acquisition of Common Stock of the Company resulting in one person or company owning more than 50% of the outstanding shares, a merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent (50%) of the Company’s outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company's assets.

In the event that, other than during a Change of Control Period (as defined below), the Company terminates the officer’s employment without Cause (as defined in the Severance Agreement), or if the officer terminates his employment for Good Reason (as defined in the Severance Agreement), or in the event of a qualifying termination within sixty days before or six months following the consummation of a Change of Control (as such events are defined in the Severance Agreement) (the “Change of Control Period”), then the Company shall pay the officer a lump sum amount equal to (i) six months of the officer’s then current base salary, plus (ii) the annual bonus the officer is eligible to receive for the calendar year in which the officer’s termination occurs assuming Company performance is achieved at target (100% for both Company and personal performance) and pro-rated based on the officer’s termination date, which will be payable within the period of time set forth in the Severance Agreement following the termination of employment, and (iii) 6 months of COBRA premium payments based on the coverages in effect as of the date of the officer’s termination of employment. All of the officer’s severance benefits are subject to his execution of a release in a form reasonably acceptable to the Company.

Outstanding Equity Awards at Fiscal Year-End

The following table discloses information regarding outstanding equity awards granted or accrued as of December 31, 2023, for our named executive officers.

Compensation of Directors

Each of our independent directors receives annual cash compensation of $35,000. In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee receives an annual compensation of $20,000, $15,000 and $10,000, respectively; and the lead independent director receives an annual cash compensation of $15,000. Each independent director receives (i) an initial award of $270,000 in restricted stock units of the Company to which shall be awarded on May 1 st of each fiscal year and which will vest monthly over three (3) years, and (ii) an annual award of $180,000 in restricted stock units of the Company, which shall be granted on May 1 st of each fiscal year and which will vest in its entirety one (1) year from the grant date.

The following table sets forth the summary compensation information (described above) for each of our non-employee directors for the fiscal year ended December 31, 2023: