Movella Holdings Inc. appointed new CEO

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth in the section titled "Form 10 Information" under the captions "Directors and Executive Officers" and "Certain Relationships and Related Transactions, and Director Independence" in Item 2.01 of this Current Report is incorporated herein by reference. The disclosure set forth in the Proxy Statement in the section titled "Management of New Movella After the Business Combination" beginning on page 347 of the Proxy Statement is incorporated herein by reference.


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2022 Stock Incentive Plan

On October 3, 2022, Pathfinder's board of directors approved and adopted, subject to shareholder approval, the Movella Holdings Inc. 2022 Stock Incentive Plan (the "2022 Plan"). The 2022 Plan was approved by the requisite shareholders on February 8, 2023 and became effective upon the closing of the Business Combination. In connection with the 2022 Plan becoming effective, no further grants will be made under Movella's 2009 Equity Incentive Plan (the "2009 Plan") or Movella's 2019 Equity Incentive Plan (the "2019 Plan" and, collectively with the 2009 Plan, the "Predecessor Plans").

The purpose of the 2022 Plan is to enhance New Movella's ability to attract, retain, incentivize, reward, and motivate persons who make (or are expected to make) important contributions by providing such individuals with equity ownership opportunities and/or equity-linked compensatory opportunities.

The employees, consultants and directors of New Movella and its subsidiaries will be eligible to receive awards under the 2022 Plan. As of December 31, 2022, approximately 249 individuals would have been eligible to participate in the 2022 Plan if the plan were then in effect. The 2022 Plan will be administered by the compensation committee of the New Movella Board or by the New Movella Board acting as the compensation committee, each of which may delegate its duties and responsibilities to committees of New Movella's directors and/or officers (referred to collectively as the "plan administrator" below), subject to certain limitations that may be imposed under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and/or stock exchange rules, as applicable. Subject to the limitations set forth in the 2022 Plan, the compensation committee will have the authority to determine, among other things, to whom awards will be granted, the number of shares subject to awards, the term during which an option or stock appreciation right may be exercised and the rate at which the awards may vest or be earned, including any performance criteria to which they may be subject. The plan administrator also will have the authority to determine the consideration and methodology of payment for awards. To the extent permitted by applicable law, the plan administrator may also authorize one or more officers of New Movella to designate employees, other than officers under Section 16 of the Exchange Act, to receive awards and/or to determine the number of such awards to be received by such persons subject to a maximum total number of awards.

The aggregate number of shares of New Movella Common Stock that may be issued pursuant to stock awards under the 2022 Plan will not exceed the sum of (w) 6,105,301 shares (as adjusted for stock splits, stock dividends, combinations, and the like), plus (x) any shares underlying outstanding awards under the Predecessor Plans that are cancelled in exchange for an option under the 2022 Plan and that are subsequently forfeited or terminated for any reason before being exercised or becoming vested, not issued because an award is settled in cash, or withheld or reacquired to satisfy the applicable exercise, or purchase price, or a tax withholding obligation, plus (y) the number of shares which, but for the termination of the 2019 Plan immediately prior to the completion of the offering, were reserved under the 2019 Plan but not at such time issued or subject to outstanding awards under the 2019 Plan, plus (z) an annual increase on the first day of each calendar year, for a period of not more than 10 years, beginning on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to (i) 5% of outstanding shares on the last day of the immediately preceding calendar year or (ii) such lesser amount (including zero) that the compensation committee (as defined below) determines for purposes of the annual increase for that calendar year.

If restricted shares or shares issued upon the exercise of options are forfeited, then such shares will again become available for awards under the 2022 Plan. If stock units, options, or stock appreciation rights are forfeited or terminate for any reason before being exercised or settled, or an award is settled in cash without the delivery of shares to the holder, then the corresponding shares will again become available for awards under the 2022 Plan. Any shares withheld to satisfy the exercise price or tax withholding obligation pursuant to any award of options or stock appreciation rights will again become available for awards under the 2022 Plan. If stock units or stock appreciation rights are settled, then only the number of shares (if any) actually issued in settlement of such stock units or stock appreciation rights will reduce the number of shares available under the 2022 Plan, and the balance (including any shares withheld to cover taxes) will again become available for awards under the 2022 Plan.

Shares issued under the 2022 Plan will be authorized but unissued shares, treasury shares, or previously issued shares. As of the date hereof, no awards have been granted and no shares of our common stock have been issued under the 2022 Plan.

Awards granted under the 2022 Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity in connection with a corporate transaction, such as a merger, combination, consolidation, or acquisition of property or shares will not reduce the number of shares authorized for grant under the 2022 Plan. The sum of (i) the grant date fair value for financial reporting purposes of any awards granted during any calendar year under the 2022 Plan to an outside director as compensation for services as an outside director and (ii) any cash fees paid by New Movella to such outside director during such calendar year for service on the New Movella Board, may not exceed $750,000 (other than in the calendar year in which the outside director commences service).

The 2022 Plan provides for the grant of stock options, including incentive stock options ("ISOs") and non-qualified stock options, restricted share awards, stock unit awards, stock appreciation rights, other stock-based awards, cash-based awards, and performance-based


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stock awards (collectively, "stock awards"). ISOs may be granted only to New Movella's employees, including officers, and the employees of New Movella's parent or subsidiaries. All other stock awards may be granted to the employees, officers, non-employee directors, and consultants of New Movella and its parent, subsidiaries, and affiliates. Certain awards under the 2022 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), which may impose additional requirements on the terms and conditions of such awards. All awards under the 2022 Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards, other than cash-based awards, will generally be settled in New Movella Common Stock, but the plan administrator may provide for cash settlement of any award.

No award may be granted pursuant to the 2022 Plan after the tenth anniversary of October 3, 2022, the date on which the Pathfinder board of directors adopted the 2022 Plan.

Additional information regarding the terms of the 2022 Plan is set forth in the Proxy Statement in the section titled "Proposal No. 6 - Stock Incentive Plan Proposal" beginning on page 207 of the Proxy Statement, which is incorporated herein by reference. That summary and the foregoing description of the 2022 Plan do not purport to be complete and are qualified in their entirety by reference to the text of the 2022 Plan, a copy of which is attached as Exhibit 10.2 hereto, which is incorporated herein by reference.

2022 Employee Stock Purchase Plan

On October 3, 2022, Pathfinder's board of directors approved and adopted, subject to shareholder approval, the Movella Holdings Inc. 2022 Employee Stock Purchase Plan (the "ESPP"). The ESPP was approved by the requisite stockholders on February 8, 2023 and became effective upon the closing of the Business Combination. Under the ESPP, New Movella will be authorized to provide eligible employees with an opportunity to request payroll deductions to purchase a number of New Movella shares at a discount and in an amount determined in accordance with the ESPP's terms.

The purpose of the ESPP is to provide a broad-based employee benefit to attract the services of new employees, to retain the services of existing employees, and to provide incentives for such individuals to exert maximum efforts toward our success by purchasing New Movella shares from New Movella on favorable terms and to pay for such purchases through payroll deductions. New Movella believes by providing eligible employees with an opportunity to increase their proprietary interest in the success of New Movella, the ESPP will motivate recipients to offer their maximum effort to New Movella and help focus them on the creation of long-term value consistent with the interests of New Movella stockholders.

The ESPP is intended to qualify as an "employee stock purchase plan" under Code Section 423 the Code, except as explained below with respect to non-U.S. employees. During regularly scheduled "offerings" under the ESPP, participants will be able to request payroll deductions and then expend the accumulated deduction to purchase a number of shares of New Movella Common Stock at a discount and in an amount determined in accordance with the ESPP's terms.

The ESPP has authorized but unissued shares of New Movella Common Stock equal to 1,017,550 shares (as adjusted for stock splits, stock dividends, combinations, and the like) reserved for issuance upon becoming effective, plus an additional number of shares of New Movella Common Stock to be reserved annually on the first day of each calendar year for a period of not more than ten years, beginning on January 1, 2023, in an amount equal to the lesser of (i) 1% of the outstanding shares of New Movella Common Stock on such date (ii) 508,775 shares (as adjusted for stock splits, stock dividends, combinations, and the like), and (iii) an amount (including zero) that the compensation committee determines for purposes of the annual increase for that calendar year.

The ESPP will be administered by the compensation committee, or by the New Movella Board acting as the compensation committee. The compensation committee has the authority to construe, interpret, and apply the terms of the ESPP, to determine eligibility, to establish such limitations and procedures as it determines are consistent with the ESPP, and to adjudicate any disputed claims under the ESPP.

Each full-time and part-time employee, including officers, employee directors, and employees of participating subsidiaries, who is employed by New Movella on the day preceding the start of any offering period will be eligible to participate in the ESPP. The ESPP requires that an employee customarily work more than 20 hours per week and more than five months per calendar year in order to be eligible to participate in the ESPP. As of December 31, 2022, approximately 221 individuals would have been eligible to participate in the ESPP if the plan were then in effect. The ESPP will permit an eligible employee to purchase New Movella Common Stock through payroll deductions, which may not be less than 1% nor more than 15% of the employee's compensation, or such lower limit as may be determined by the compensation committee from time to time. However, no employee is eligible to participate in the ESPP if, immediately after electing to participate, the employee would own common stock (including common stock such employee may purchase under this plan or other outstanding options) representing 5% or more of the total combined voting power or value of all


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classes of our common stock. No employee will be able to purchase more than 5,000 shares of common stock or such number of shares of common stock as may be determined by the compensation committee with respect to a single offering period, or purchase period, if applicable (subject to adjustment pursuant to the terms of the ESPP). In addition, under applicable tax rules, no employee is permitted to accrue, under the ESPP and all of our or our subsidiaries' similar purchase plans, a right to purchase common stock having a fair market value in excess of twenty-five thousand dollars ($25,000) (determined at the time the right is granted) for each calendar year. Employees will be able to withdraw their accumulated payroll deductions prior to the end of the offering period in accordance with the terms of the offering. Participation in the ESPP will end automatically upon termination of employment.

The ESPP will be implemented through a series of offerings of purchase rights to eligible employees. Under the ESPP, the compensation committee may specify offerings with a duration of not more than 27 months and may specify shorter purchase periods within each offering. During each purchase period, payroll deductions will accumulate, without interest. On the last day of the purchase period, accumulated payroll deductions will be used to purchase New Movella Common Stock for employees participating in the offering.

The purchase price will be specified pursuant to the offering, but cannot, under the terms of the ESPP, be less than 85% of the fair market value per of our common stock on either the offering date or on the purchase date, whichever is less. The fair market value of our common stock for this purpose will generally be the closing price on the Nasdaq Global Market (or such other exchange as our common stock may be traded at the relevant time) for the date in question, or if such date is not a trading day, for the last trading day before the date in question.

The compensation committee may specify that, if the fair market value of New Movella Common Stock on any purchase date within a particular offering period is less than or equal to the fair market value on the start date of that offering period, then the offering period will automatically terminate and the employee in that offering period will automatically be transferred and enrolled in a new offering period which will begin on the next day following such purchase date.

To provide New Movella with greater flexibility in structuring our equity compensation programs for our non-U.S. employees, the ESPP also permits us to grant employees of our non-U.S. subsidiary entities rights to purchase shares of our common stock pursuant to other offering rules or sub-plans adopted by the compensation committee in order to achieve tax, securities law, or other compliance objectives. The international sub-plans or offerings are subject to the ESPP terms limiting the overall shares available for issuance, the maximum payroll deduction rate, maximum purchase price discount, and maximum offering period length.

Additional information regarding the ESPP is set forth in the Proxy Statement in the section titled "Proposal No. 7 - ESPP Proposal" beginning on page 214 of the Proxy Statement, which is incorporated herein by reference. That summary and the foregoing description of the ESPP do not purport to be complete and are qualified in their entirety by reference to the text of the ESPP, a copy of which is attached as Exhibit 10.3 hereto, which is incorporated herein by reference.

Non-Employee Director Compensation Policy

Movella has not historically paid cash retainers or other compensation with respect to service for its board of directors. Movella has reimbursed (and will continue to reimburse) all of its non-employee directors for their reasonable expenses incurred in attending meetings of its board of directors and committees of its board of directors.

In addition, New Movella has adopted a non-employee director compensation policy ("Non-Employee Director Compensation Policy") that became effective upon the closing of the Business Combination and consists of annual retainer fees and long-term equity awards for its non-employee directors.

Under the Non-Employee Director Compensation Policy and in connection with the closing of the Business Combination, each non-employee director will receive a grant of restricted stock units (each an "Initial RSU Award") under the 2022 Plan covering New Movella Common Stock with an aggregate fair market value of $250,000 determined at the date of grant. Subject to the holder's continued service, each Initial RSU Award shall vest as to 1/3 of the total number of shares subject to the Initial RSU Award on the earlier of the first anniversary of the date of grant or the next annual meeting of stockholders, and in each of the next two calendar years following the year of the initial vesting date, 1/3 of the total number of shares shall vest on the earlier of the one-year anniversary of the prior annual meeting of stockholders or the current year annual meeting of stockholders. However, for each non-employee director who joins the New Movella Board prior to the date such Initial RSU Award may be issued under applicable U.S. securities laws, for purposes of determining the applicable vesting schedule, the date on which the non-employee director joins the New Movella Board (or if later, the effective date of the Non-Employee Director Compensation Policy), shall be treated as the date of grant of the award. Each Initial RSU Award shall become 100% vested if a change in control as defined in the 2022 Plan occurs during such director's service.


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In addition, under the Non-Employee Director Compensation Policy, following the conclusion of each regular annual meeting of stockholders, commencing with the 2024 annual meeting, each non-employee director who has served as a director for at least six months and who will continue serving as a member of the New Movella Board thereafter shall receive a grant of restricted stock units (each an "Annual RSU Award") under the 2022 Plan covering New Movella Common Stock with an aggregate grant date fair market value of $100,000. Each Annual RSU Award shall become fully vested, subject to the applicable non-employee director's continued service as a director, on the earliest of the one-year anniversary of the date of grant, the next annual meeting of stockholders following the date of grant or the consummation of a change in control as defined in the 2022 Plan.

The Non-Employee Director Compensation Policy also consists of the following cash components, to be paid in quarterly installments in arrears following the end of each quarter in which the service occurred, and pro-rated for any partial months of service:


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Annual Retainer for all non-employee directors: $40,000


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Non-Executive Chair or Lead Independent Director Retainer: $20,000


- 
Annual Committee Chair Retainer:


- 
Audit: $15,000


- 
Compensation: $10,000


- 
Nominating and Corporate Governance $8,000


- 
Annual Committee Member (Non-Chair) Retainer:


- 
Audit: $7,000


- 
Compensation: $5,000


- 
Nominating and Corporate Governance: $4,000


Additional information regarding the terms of the non-employee director compensation policy is set forth in the Proxy Statement in the section titled "Movella's Executive Compensation-Director Compensation" beginning on page 340 of the Proxy Statement, which is incorporated herein by reference. That summary and the foregoing description of Non-Employee Director Compensation Policy do not purport to be complete and are qualified in their entirety by reference to the text of the Non-Employee Director Compensation Policy, a copy of which is attached as Exhibit 10.17 hereto, which is incorporated herein by reference.

(b) Effective as of the Effective Time, each of Rich Lawson, Lindsay Sharma, Steve Young, Hans Swildens, Steven Walske, Omar Johnson and Paul Weiskopf resigned from the Pathfinder board of directors.

(c) Effective upon the Closing, the New Movella Board appointed Ben A. Lee as its Chief Executive Officer, Principal Executive Officer, and President; Stephen Smith as its Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer; and Boele de Bie as its Chief Operating Officer. The disclosure set forth in the Proxy Statement in the section titled "Management of New Movella After the Business Combination" beginning on page 347 of the Proxy Statement, and the captions "Non-Employee Director Compensation Policy" and "Indemnification Agreements" and in the section titled "Form 10 Information" under the captions "Directors and Executive Officers," "- Director Independence and Board Committees," "Executive Compensation," "Security Ownership of Certain Beneficial Owners and Management," and "Certain Relationships and Related Transactions, and Director Independence" in Item 2.01 of this Current Report, any information required by Item 404(a) of Regulation S-K, and any material plan, contract or arrangement to which the director is a party or in which such director participates, is incorporated herein by reference.

(d)

Effective upon the Closing, the following individuals were appointed to the New Movella Board:

Ben A. Lee

Wen Hsieh

Stuart Huizinga

Brent Lang

Patricia Ross

David Chung

Eric Salzman


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Except for Mr. Ben A. Lee, the directors listed above are eligible to receive compensation for their services as non-employee directors under the Company's Non-Employee Director Compensation Policy. The disclosure set forth under the captions "Non-Employee Director Compensation Policy" and "Indemnification Agreements" and in the section titled "Form 10 Information" under the captions "Directors and Executive Officers," "- Director Independence and Board Committees," "Executive Compensation," "Security Ownership of Certain Beneficial Owners and Management," and "Certain Relationships and Related Transactions, and Director Independence" in Item 2.01 of this Current Report regarding the committees to which each such director has been appointed, any information required by Item 404(a) of Regulation S-K, and any material plan, contract or arrangement to which the director is a party or in which such director participates, is incorporated herein by reference.