UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☒
Preliminary Proxy
Statement
☐
Confidential, for
Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☐
Definitive Proxy
Statement
☐
Definitive
Additional Materials
☐
Soliciting Material
Pursuant under Sec.240.14a-12
New Age Beverages Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant
Payment
of Filing Fee (Check the appropriate box):
☐
Fee computed on
table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
(1)
Title of each class
of securities to which transaction applies:
(2)
Aggregate number of
securities to which transaction applies:
(3
Per unit price or
other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4)
Proposed maximum
aggregate value of transaction:
☐
Fee paid previously
with preliminary materials:
☐
Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1)
Amount previously
paid:
(2)
Form, Schedule or
Registration Statement No.:
NEW AGE BEVERAGES CORPORATION
1700 E.
68
th
Avenue, Denver, CO
80229
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held May 30, 2019
To the
Shareholders of New Age Beverages Corporation:
NOTICE
IS HEREBY GIVEN that the 2019 Annual Meeting of Shareholders (the
“Annual Meeting”) of New Age Beverages Corporation a
Washington corporation (the “Company”), will be held at
9:00 a.m local time on May 30, 2019, or such later date or dates as
such Annual Meeting date may be adjourned, at 18245 East
40
th
Avenue, Aurora, CO 80011,
for the purpose of considering and taking action on the following
proposals:
1.
Elect as directors
the nominees named in the proxy statement;
2.
To ratify the
appointment of Accell Audit & Compliance, PA. as our
independent public accountant for the fiscal year ending December
31, 2019;
3.
To approve an
increase to the total number of shares of the Company’s
authorized common stock to 200,000,000 shares from 100,000,000
shares;
4.
To approve the New
Age Beverages Corporation 2019 Equity Incentive Plan;
and
5.
To transact such
other business as may be properly brought before the Annual Meeting
and any adjournments thereof.
The
foregoing
business items are more fully described
in the following pages, which are made part of this
notice.
The
Board recommends that you vote as follows:
●
“
FOR
” for the election of the Board
nominees as directors;
●
“
FOR
”
ratification of the selection of
Accell Audit &
Compliance, PA.
as our
independent public accountant for the fiscal year ending December
31, 2019;
●
“
FOR
”
an increase in the total number of shares of authorized common
stock to 200,000,000 shares from 100,000,000 shares;
and
●
“
FOR
” approval of the New Age
Beverages Corporation 2019 Equity Incentive Plan.
You may
vote if you were the record owner of the Company’s common
stock at the close of business on April 12, 2019. The Board of
Directors of the Company has fixed the close of business on April
12, 2019 as the record date (the “Record Date”) for the
determination of shareholders entitled to notice of and to vote at
the Annual Meeting and at any adjournments thereof.
We
anticipate that as of the Record Date there will be 75,357,742
shares of common stock outstanding and entitled to vote at the
Annual Meeting. A list of shareholders of record will be available
at the Annual Meeting and, during the 10 days prior to the Annual
Meeting, at the office of the Secretary of the Company at 1700 E.
68th Avenue, Denver, CO 80229.
All
shareholders are cordially invited to attend the Annual Meeting.
Whether you plan to attend the Annual Meeting or not, you are
requested to complete, sign, date and return the enclosed proxy
card, or respond via Internet or telephone, as soon as possible in
accordance with the instructions on the proxy card. A
pre-addressed, postage prepaid return envelope is enclosed for your
convenience.
These proxy materials are also available via the internet at
https://www.cleartrustonline.com/nbev/
.
You are encouraged to read the proxy materials carefully in their
entirety and submit your proxy as soon as possible so that your
shares can be voted at the Annual Meeting in accordance with your
instructions.
Dated: April 5,
2019
|
By
Order of the Board of Directors of New Age Beverages
Corporation
|
|
|
|
Sincerely,
Brent
Willis
Chief Executive
Officer and Director
|
YOUR VOTE AT THE ANNUAL MEETING IS IMPORTANT
Your
vote is important. Please vote as promptly as possible even if you
plan to attend the Annual Meeting.
For
information on how to vote your shares, please see the instruction
from your broker or other fiduciary, as applicable, as well as
“General Information About the Annual Meeting” in the
proxy statement accompanying this notice.
We
encourage you to vote by completing, signing, and dating the proxy
card, and returning it in the enclosed envelope.
If you
have questions about voting your shares, please contact our
Corporate Secretary at New Age Beverages Corporation., at 1700 E.
68
th
Avenue, Denver, CO 80229,
telephone number (303) 289-8655.
If you
decide to change your vote, you may revoke your proxy in the manner
described in the attached proxy statement at any time before it is
voted.
We urge
you to review the accompanying materials carefully and to vote as
promptly as possible.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 30, 2019 AT
9:00 A.M MST.
The Notice of Annual Meeting of Shareholders, our Proxy Statement
and 2018 Annual Report are available at:
https://www.cleartrustonline.com/nbev/
REFERENCES TO ADDITIONAL INFORMATION
This
proxy statement incorporates important business and financial
information about New Age Beverages Corporation that is not
included in or delivered with this document. You may obtain this
information without charge through the Securities and Exchange
Commission website (www.sec.gov) or upon your written or oral
request by contacting the Corporate Secretary of New Age Beverages
Corporation 1700 E. 68
th
Avenue, Denver, CO 80229, telephone number (303)
289-8655.
Table of Contents
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Page
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GENERAL INFORMATION ABOUT THE ANNUAL MEETING
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1
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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5
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PROPOSAL NO. 1 - ELECTION OF DIRECTORS
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6
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INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES AND CORPORATE
GOVERNANCE
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9
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EXECUTIVE OFFICERS
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13
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EXECUTIVE COMPENSATION
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14
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
|
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17
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PROPOSAL NO. 2 - RATIFICATION OF THE APPOINTMENT OF ACCELL
AUDIT & COMPLIANCE PA AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2019
|
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18
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PROPOSAL NO. 3 – INCREASE THE AUTHORIZED COMMON STOCK OF THE
COMPANY TO 200,000,000 SHARES FROM 100,000,000 SHARES
|
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20
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PROPOSAL NO. 4 – APPROVAL OF NEW AGE BEVERAGES CORPORATION
2019 EQUITY INCENTIVE PLAN
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21
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APPENDIX A – FORM OF AMENDMENT TO COMPANY’S ARTICLES OF
INCORPORATION
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24
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APPENDIX B—NEW AGE BEVERAGES CORPORATION 2019 EQUITY
INCENTIVE PLAN
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26
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NEW AGE BEVERAGES CORPORATION
1700 E.
68th Avenue
Denver,
CO 80229
303-289-8655
2019 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 30,
2019
GENERAL INFORMATION
ABOUT THE ANNUAL MEETING
This
proxy statement, along with the accompanying notice of the 2019
Annual Meeting of Shareholders, contains information about the 2019
Annual Meeting of Shareholders of New Age Beverages Corporation,
including any adjournments or postponements thereof (referred to
herein as the “Annual Meeting”). We are holding the
Annual Meeting at 9:00 a.m local time on May 30, 2019, at 18245
East 40
th
Avenue, Aurora, CO 80011, or such later date or dates as such
Annual Meeting date may be adjourned. For directions to the
meeting, please call 303-289-8655.
This proxy statement has been prepared by the management of New Age
Beverages Corporation.
These proxy materials also are available via the Internet at
https://www.cleartrustonline.com/nbev/. You are encouraged to read
the proxy materials carefully and in their entirety and submit your
proxy as soon as possible so that your shares can be voted at the
Annual Meeting in accordance with your instructions. Even if you
plan to attend the Annual Meeting, you are encouraged to submit
your vote promptly. You have a choice of submitting your proxy by
Internet, by telephone or by mail, and the proxy card provides
instructions (and access number) for each
option.
In this
proxy statement, we refer to New Age Beverages Corporation as
“New Age Beverages,” the “Company,”
“we,” “us” or
“our.”
Why Did You Send Me This Proxy Statement?
The
Board of Directors of the Company (referred to herein as the
“Board of Directors” or the “Board”) is
soliciting proxies, in the accompanying form, to be used at the
Annual Meeting and any adjournments thereof. This proxy statement,
along with the accompanying Notice of Annual Meeting of
Shareholders, summarizes the purposes of the Annual Meeting and the
information you need to know to vote at the Annual
Meeting.
Important Notice Regarding the Availability of Proxy Materials for
the Shareholder Meeting to Be Held on May 30, 2019: The Notice of
Annual Meeting of Shareholders, our Proxy Statement and 2018 Annual
Report are
available
at
https://www.cleartrustonline.com/nbev/
The
following documents are being made available to all shareholders
entitled to notice of and to vote at the Annual
Meeting:
2)
The accompanying
proxy.
3)
Our 2018 Annual
Report.
The
2018 Annual Report includes our financial statements for the fiscal
year ended December 31, 2018, but is not a part of this proxy
statement. You can also find a copy of our 2018 Annual Report on
Form 10-K on the Internet through the Securities and Exchange
Commission’s electronic data system called EDGAR at
www.sec.gov
or
through the “Investors” section of our website at
https://newagebev.com/
.
Who Can Vote?
Shareholders
who owned common stock at the close of business on April 12, 2019
(the “Record Date”), are entitled to vote at the Annual
Meeting. We anticipate that on the Record Date, there will be
75,357,742 shares of common stock outstanding and entitled to
vote.
You do
not need to attend the Annual Meeting to vote your shares. Shares
represented by valid proxies, received in time for the Annual
Meeting and not revoked prior to the Annual Meeting, will be voted
at the Annual Meeting. A shareholder may revoke a proxy before the
proxy is voted by delivering to our Secretary a signed statement of
revocation or a duly executed proxy card bearing a later date. Any
shareholder who has executed a proxy card but attends the Annual
Meeting in person may revoke the proxy and vote at the Annual
Meeting.
How Many Votes Do I Have?
Each
share of common stock that you own entitles you to one
vote.
How Do I Vote?
Whether
you plan to attend the Annual Meeting or not, we urge you to vote
by proxy. All shares represented by valid proxies that we receive
through this solicitation, and that are not revoked, will be voted
in accordance with your instructions on the proxy card or as
instructed via Internet or telephone. You may specify whether your
shares should be voted for or withheld for each nominee for
director, and how your shares should be voted with respect to each
of the other proposals. Except as set forth below, if you properly
submit a proxy without giving specific voting instructions, your
shares will be voted in accordance with the Board’s
recommendations as noted below. Voting by proxy will not affect
your right to attend the Annual Meeting. If your shares are
registered directly in your name through our stock transfer agent,
ClearTrust, LLC, or you have stock certificates, you may
vote:
●
By mail.
Complete and mail the proxy card in the
enclosed postage prepaid envelope. Your proxy will be voted in
accordance with your instructions. If you sign the proxy card, but
do not specify how you want your shares voted, they will be voted
as recommended by the Board.
●
By Internet.
At
https://www.cleartrustonline.com/nbev/
●
In person at the meeting.
If you attend the meeting, you may
deliver your completed proxy card in person or you may vote by
completing a ballot, which will be available at the Annual
Meeting.
If your shares are held in “street name” (held in the
name of a bank, broker or other nominee), you must provide the
bank, broker or other nominee with instructions on how to vote your
shares and can do so as follows:
●
By Internet or by telephone.
Follow the
instructions you receive from your broker to vote by Internet or
telephone.
●
By mail.
You will receive instructions from your
broker or other nominee explaining how to vote your
shares.
●
In person at the meeting.
Contact the
broker or other nominee who holds your shares to obtain a
broker’s proxy card and bring it with you to the meeting. You
will not be able to attend the Annual Meeting unless you have a
proxy card from your broker.
How Does the Board Recommend That I Vote On the
Proposals?
The
Board recommends that you vote as follows:
●
“
FOR
” for the election of the Board
nominees as directors;
●
“
FOR
”
ratification of the selection of
Accell Audit &
Compliance, PA.
as our
independent public accountant for the fiscal year ending December
31, 2019;
●
“
FOR
”
an increase in the total number of shares of authorized common
stock to 200,000,000 shares from 100,000,000 shares;
and
●
“
FOR
” approval of the New Age
Beverages Corporation 2019 Equity Incentive Plan.
If any other matter is presented, the proxy card provides that your
shares will be voted by the proxy holder listed on
the
proxy card in accordance
with his or her best judgment. As of the date of this proxy
statement, we knew of no matters that needed to be acted on at the
Annual Meeting, other than those discussed in this proxy
statement
May I Change or Revoke My Proxy?
If you
give us your proxy, you may change or revoke it at any time before
the Annual Meeting. You may change or revoke your proxy in any one
of the following ways:
●
signing a new proxy
card and submitting it as instructed above;
●
if your shares are
held in street name, re-voting by Internet or by telephone as
instructed above – only your latest Internet or telephone
vote will be counted;
●
if your shares are
registered in your name, notifying the Company’s Secretary in
writing before the Annual Meeting that you have revoked your proxy;
or
●
attending the
Annual Meeting in person and voting in person. Attending the Annual
Meeting in person will not in and of itself revoke a previously
submitted proxy unless you specifically request it.
What If I Receive More Than One Proxy Card?
You may
receive more than one proxy card or voting instruction form if you
hold shares of our common stock in more than one account, which may
be in registered form or held in street name. Please vote in the
manner described above or under "Voting Instructions" on the proxy
card for each account to ensure that all of your shares are
voted.
Will My Shares Be Voted If I Do Not Return My Proxy
Card?
If your
shares are registered in your name or if you have stock
certificates, they will not be voted if you do not return your
proxy card by mail or vote at the Annual Meeting as described above
under “How Do I Vote?” If your broker cannot vote your
shares on a particular matter because it has not received
instructions from you and does not have discretionary voting
authority on that matter, or because your broker chooses not to
vote on a matter for which it does have discretionary voting
authority, this is referred to as a “broker non-vote.”
The New York Stock Exchange (“NYSE”) has rules that
govern brokers who have record ownership of listed company stock
(including stock such as ours that is listed on The Nasdaq Capital
Market) held in brokerage accounts for their clients who
beneficially own the shares. Under these rules, brokers who do not
receive voting instructions from their clients have the discretion
to vote uninstructed shares on certain matters (“routine
matters”), but do not have the discretion to vote
uninstructed shares as to certain other matters (“non-routine
matters”). Under NYSE interpretations, Proposal 1 (election
of directors), and
Proposal 4 (approval of
New Age Beverages Corporation 2019 Equity Incentive Plan),
are considered non-routine matters, and Proposal 2 (the
ratification of our independent public accountant) and Proposal 3
(approval of increase in authorized common stock to 200,000,000
shares from 100,000,000 shares) are considered routine matters. If
your shares are held in street name and you do not provide voting
instructions to the bank, broker or other nominee that holds your
shares as described above under “How Do I Vote?,” the
bank, broker or other nominee has the authority, even if it does
not receive instructions from you, to vote your unvoted shares for
Proposal 2 (the ratification of our independent public accountant),
and Proposal 3 (the increase in our authorized shares of common
stock) but does not have authority to vote your unvoted shares for
Proposal 1 (election of directors), and
Proposal 4 (approval of
New Age Beverages Corporation 2019 Equity Incentive Plan)
.
We encourage you to provide voting instructions. This ensures your
shares will be voted at the Annual Meeting in the manner you
desire.
What Vote is Required to Approve Each Proposal and How are Votes
Counted?
Proposal 1:
Election of Directors
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|
The
nominees for director who receive the greatest number of votes FOR
election (also known as a plurality) will be elected as directors.
You may vote either FOR all of the nominees, WITHHOLD your vote
from all of the nominees or WITHHOLD your vote from any one or more
of the nominees. Votes that are withheld will not be included in
the vote tally for the election of directors. Brokerage firms do
not have authority to vote customers’ unvoted shares held by
the firms in street name for the election of directors. As a
result, any shares not voted by a beneficial owner will be treated
as a broker non-vote. Such broker non-votes will have no effect on
the results of this vote.
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Proposal 2:
Ratification of the Appointment of Accell Audit & Compliance,
PA
as our Independent
Public Accountant for the Fiscal Year Ending December 31,
2019
|
|
The
affirmative vote of a majority of the votes cast for this proposal
is required to ratify the appointment of the Company’s
independent public accountant. Abstentions will be counted towards
the tabulation of votes cast on this proposal and will have the
same effect as a negative vote. Brokerage firms have authority to
vote customers’ unvoted shares held by the firms in street
name on this proposal. If a broker does not exercise this
authority, such broker non-votes will have no effect on the results
of this vote. We are not required to obtain the approval of our
shareholders to appoint the Company’s independent accountant.
However, if our shareholders do not ratify the appointment of
Accell Audit & Compliance, PA as the Company’s
independent public accountant for the fiscal year ending December
31, 2019, the Audit Committee of the Board may reconsider its
appointment.
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Proposal 3:
Approval to increase the number of shares of the Company’s
authorized common stock to 200,000,000 shares
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The
affirmative vote of a majority
of the
shares entitled to vote at the meeting
is required to
approve the amendment to the Company’s Articles of
Incorporation to increase the number of authorized shares of common
stock to 200,000,000 shares from 100,000,000 shares.
Brokerage firms have authority to vote
customers’ unvoted shares held by the firms in street name on
this proposal. If a broker does not exercise this authority, such
broker non-votes will have no effect on the results of this
vote.
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Proposal 4:
Approval of New Age Beverages Corporation 2019 Equity Incentive
Plan
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The
affirmative vote of a majority of the votes cast for this proposal
is required to approve the New Age Beverages Corporation 2019
Equity Incentive Plan. Abstentions will be counted towards the
tabulation of votes cast on this proposal and will have the same
effect as a negative vote. Brokerage firms will not have authority
to vote customers’ unvoted shares held by the firms in street
name on this proposal. As a result, any shares not voted by a
beneficial owner will be treated as a broker non-vote. Such broker
non-votes will have no effect on the results of this
vote.
|
What Constitutes a Quorum for the Annual Meeting?
The
presence, in person or by proxy, of the holders of a majority of
the shares entitled to vote at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. Votes of shareholders of
record who are present at the Annual Meeting in person or by proxy,
abstentions, and broker non-votes are counted for purposes of
determining whether a quorum exists.
Householding of Annual Disclosure Documents
The
Securities and Exchange Commission (the “SEC”)
previously adopted a rule concerning the delivery of annual
disclosure documents. The rule allows us or brokers holding our
shares on your behalf to send a single set of our annual report and
proxy statement to any household at which two or more of our
shareholders reside, if either we or the brokers believe that the
shareholders are members of the same family. This practice,
referred to as “householding,” benefits both
shareholders and us. It reduces the volume of duplicate information
received by you and helps to reduce our expenses. The rule applies
to our annual reports, proxy statements and information statements.
Once shareholders receive notice from their brokers or from us that
communications to their addresses will be
“householded,” the practice will continue until
shareholders are otherwise notified or until they revoke their
consent to the practice. Each shareholder will continue to receive
a separate proxy card or voting instruction card.
Those
shareholders who either (i) do not wish to participate in
“householding” and would like to receive their own sets
of our annual disclosure documents in future years or (ii) who
share an address with another one of our shareholders and who would
like to receive only a single set of our annual disclosure
documents should follow the instructions described
below:
●
Shareholders whose shares are
registered in their own name should contact our transfer
agent,
ClearTrust, LLC, 16540 Pointe Village Dr., Suite 205,
Lutz, FL 33558, telephone: (813) 235-4490
.
●
Shareholders whose shares are held by a broker or other nominee
should contact such broker or other nominee directly and inform
them of their request. Shareholders should be sure to include their
name, the name of their brokerage firm and their account
number.
Who is paying for this proxy solicitation?
In
addition to mailed proxy materials, our directors, officers and
employees may also solicit proxies in person, by telephone, or by
other means of communication. We will not pay our directors,
officers and employees any additional compensation for soliciting
proxies. We may reimburse brokerage firms, banks and other agents
for the cost of forwarding proxy materials to beneficial
owners.
When are shareholder proposals due for next year’s annual
meeting?
At our
annual meeting each year, our Board of Directors submits to
shareholders its nominees for election as directors. In addition,
the Board of Directors may submit other matters to the shareholders
for action at the annual meeting.
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
shareholders may present proper proposals for inclusion in the
Company’s proxy statement for consideration at the 2020
annual meeting of shareholders by submitting
their
proposals to the Company in
a timely manner.
These proposals must meet the shareholders
eligibility and other requirements of the SEC. To be considered for
inclusion in next year’s proxy materials, you must submit
your proposal in writing by ____, 2020 to our Corporate Secretary,
1700 E. 68th Avenue, Denver, CO 80229.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information, as of April 5,
2019, with respect to the beneficial ownership of our outstanding
common stock by (i) any holder of more than five (5%) percent; (ii)
each of the Company’s executive officers and directors; and
(iii) the Company’s directors and executive officers as a
group. Except as otherwise indicated, each of the shareholders
listed below has sole voting and investment power over the shares
beneficially owned.
|
Number of Shares
of
Common
Stock
Beneficially
|
Percentage of
Shares of Common Stock Beneficially (1)
|
Beneficial
Owner
|
|
|
|
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Executive
Officers and Directors:
|
|
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Brent D. Willis
(2)
|
2,104,639
|
2.8
%
|
Gregory A.
Gould
|
-
|
-
|
Reginald
Kapteyn
|
86,812
|
*
|
Ed
Brennan
|
1,274,074
|
1.7
%
|
Tim
Haas
|
379,074
|
*
|
Greg
Fea
|
123,574
|
*
|
Amy
Kuzdowicz
|
18,182
|
*
|
Randall N.
Smith
|
-
|
-
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Richard
Rife
|
-
|
-
|
All Officers and Directors as a Group (9 persons)
|
3,986,355
|
5.3
%
|
* Less than 1%
(1)
Based upon 75,357,742 shares issued and outstanding as of April 5,
2019.
(2)
Incudes 78,000 held by the Corrine Willis Trust of which the wife
of Mr. Willis is the trustee. Also, includes 122,272 shares
issuable upon exercise of options.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Our
Board currently consists of six members. The Nominating and
Governance Committee (the “Governance Committee”) and
Board have unanimously approved the recommended slate of six
directors.
The
following table shows the Company’s nominees for election to
the Board. Each nominee, if elected, will serve until the next
annual meeting of shareholders and until a successor is named and
qualified, or until his or her earlier resignation or removal. All
nominees are members of the present Board of Directors. We have no
reason to believe that any of the nominees is unable or will
decline to serve as a director if elected. Unless otherwise
indicated by the shareholder, the accompanying proxy will be voted
for the election of the six persons named under the heading
“Nominees for Directors.” Although the Company knows of
no reason why any nominee could not serve as a director, if any
nominee shall be unable to serve, the accompanying proxy will be
voted for a substitute nominee.
Nominees for Director
Name of
Nominee
|
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Age
|
|
Principal
Position
|
|
Director
Since
|
Brent
Willis
|
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59
|
|
Chief
Executive Officer and Director
|
|
2016
|
Tim
Haas
|
|
72
|
|
Director
|
|
2017
|
Greg
Fea
|
|
59
|
|
Director
|
|
2017
|
Ed
Brennan
|
|
62
|
|
Director
|
|
2017
|
Reginald
Kapteyn
|
|
48
|
|
Director
|
|
2017
|
Amy
Kuzdowicz,
|
|
49
|
|
Director
|
|
2019
|
The
Governance Committee and the Board seek, and the Board is comprised
of, individuals whose characteristics, skills, expertise, and
experience complement those of other Board members. We have set out
below biographical and professional information about each of the
nominees, along with a brief discussion of the experience,
qualifications, and skills that the Board considered important in
concluding that the individual should serve as a current director
and as a nominee for re-election as a member of our
Board.
Nominees Biographies
Brent Willis - Chief Executive Officer, Director
Brent Willis was appointed as Chief Executive Officer, and as a
member of the board of directors, on March 24, 2016. During the
previous five years, Mr. Willis has been a director or officer,
serving as Chairman and Chief Executive Officer of a number of
majority or minority-owned private-equity backed companies from
November 2009 until present. Prior to these companies from 1987
through 2008, Mr. Willis was a C-Level and Senior Executive for
Cott Corporation, AB InBev, The Coca-Cola Company, and Kraft Heinz.
Mr. Willis obtained a Bachelor’s of Science in Engineering
from the United States Military Academy at West Point in 1982 and
obtained a Master’s in Business Administration from the
University of Chicago in 1991.
Mr. Willis was chosen to serve as a director of the Company due to
his extensive executive experience running smaller companies,
multinational companies and his experience in the beverage
industry.
Tim Haas – Director
Tim Haas has been a Director of the Company since 2017. Mr. Haas is
the former Chief Executive Officer of Coca-Cola Foods and The
Minute Maid Company, and former Group President Latin America of
The Coca-Cola Company. Over the past five years he has not held any
formal Board of Directors or other employment positions. He is a
graduate of The University of North Dakota.
Mr. Haas was chosen to be a director because of his extensive
experience in running major multinational companies, and extensive
experience in the beverage industry with major strategic beverage
leaders.
Greg Fea – Director
Greg
Fea has been a Director of the Company since 2017. Mr. Fea is the
former President, Chief Executive Officer and Vice-Chairman of Illy
Coffee, and has over twenty plus years of beverage experience in
senior leadership roles for E&J Gallo, Cadbury Schweppes, and
Danone. From 2015 through present he has been the managing partner
of Global Solutions Consulting. From 1998 through 2014 he worked
for Illy Coffee, SPA and was President, Chief Executive Officer and
Vice Chairman of the firm based in Trieste Italy from 2013 to 2014.
He is a graduate of San Diego State University.
Mr. Fea
was chosen to be a director because of his extensive experience in
running major multinational and mid-sized global companies, and
extensive experience in the beverage industry, and experience in
the coffee, tea, and other healthy segments.
Ed Brennan – Director
Ed Brennan has been a Director of the Company since 2017. Mr.
Brennen is the current Owner and Chief Executive Officer of Beak
and Skiff Orchards, a private company, and is also the current
Chairman and Chief Executive Officer of Duty Free Stores, and the
former CMO at Macy’s. From 2013 through present he has been
the Owner and Chief Executive Officer for Beak and Skiff Orchards.
He is a graduate of Niagara University.
Mr. Brennan was chosen to be a director because of extensive
experience in running major multinational companies, and extensive
experience in the retail industry
.
Reginald Kapteyn – Director
Reggie Kapteyn has been a Director of the Company since 2017. Dr.
Kapteyn is a published physician at the NIH (National Institutes of
Health) and is currently a Board Certified Practicing Physician, a
Director of Vivitris Life Sciences, Inc., and a Director of Product
Development at HydroCision, Inc. From 2015 through present he has
been a Director of Vivitris Life Sciences, Inc. From 2014 through
present he has been a Director of Product Development at
HydroCision, Inc. From 2013 through present he has been a
Practicing Physician and Director of Pain Management at OAM in
Michigan. From 2009 to 2012 he was a Medical Director at Drake
Hospital, a University of Cincinnati Hospital. He is a graduate of
Hope College, West Virginia School of Osteopathic Medicine, with
residency at Georgetown University and fellowship at the NIH and
the University of Wisconsin.
Dr. Kapteyn was chosen to be a director because of extensive
experience in the health care field, and the importance of the
Company to develop products for the medical channel.
Amy Kuzdowicz – Director
Amy
Kuzdowicz has been a Director of the Company since February 2019.
Ms. Kuzdowicz is a CPA with over 25 years of financial leadership
experience in domestic and international companies across a range
of industries, including gaming, food & beverage,
manufacturing, mining and information services. She joined Rock
Ohio Caesars in January 2013 as the CFO of the joint venture and in
July 2016, moved to the parent company as the SVP and Chief
Accounting Officer of Jack Entertainment LLC. She is responsible
for Financial Reporting, Accounting, Purchasing, Payables, Payroll,
Debt Management, Treasury, Risk Management, Indirect Tax, Credit
and Financial Systems. Ms. Kuzdowicz began her career at Arthur
Andersen in Denver, Colorado and Tashkent, Uzbekistan, where she
specialized in the gaming industry and emerging markets. She spent
14 years at $1 billion+ public companies where she led
transformations in financial operations involving acquisitions,
joint ventures, offshoring and double-digit annual sales changes.
She has extensive experience in international operations, high
growth enterprises and turnaround operations. Ms. Kuzdowicz holds a
B.S. in Accounting from Colorado State University and is a CPA in
Ohio.
Ms.
Kuzdowicz qualifies to serve on the Board because of her ability to
help the Company understand the dynamics of growth in emerging
markets outside of the United Sates as well as her extensive
accounting experience.
Family Relationships
There
are no family relationships among the officers and directors, nor
are there any arrangements or understanding between any of the
Directors or Officers of our Company or any other person pursuant
to which any Officer or Director was or is to be selected as an
officer or director.
Involvement in Certain Legal Proceedings
During
the past ten years, none of our directors, executive officers,
promoters, control persons, or nominees has been:
●
the subject of any
bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that
time;
●
convicted in a
criminal proceeding or is subject to a pending criminal proceeding
(excluding traffic violations and other minor
offenses);
●
subject to any
order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction or any Federal or
State authority, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities;
●
found by a court of
competent jurisdiction (in a civil action), the Commission or the
Commodity Futures Trading Commission to have violated a federal or
state securities or commodities law;
●
the subject of, or
a party to, any Federal or State judicial or administrative order,
judgment, decree, or finding, not subsequently reversed, suspended
or vacated, relating to an alleged violation of (a) any Federal or
State securities or commodities law or regulation; (b) any law or
regulation respecting financial institutions or insurance companies
including, but not limited to, a temporary or permanent injunction,
order of disgorgement or restitution, civil money penalty or
temporary or permanent cease-and-desist order, or removal or
prohibition order; or (c) any law or regulation prohibiting mail or
wire fraud or fraud in connection with any business entity;
or
●
the subject of, or
a party to, any sanction or order, not subsequently reversed,
suspended or vacated, of any self-regulatory organization (as
defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.
78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with
a member.
Vote Required
The
nominees for director who receive the greatest number of votes FOR
election (also known as a plurality) will be elected as directors.
You may vote either FOR all of the nominees, WITHHOLD your vote
from all of the nominees or WITHHOLD your vote from any one or more
of the nominees. Votes that are withheld will not be included in
the vote tally for the election of directors. Brokerage firms do
not have authority to vote customers’ unvoted shares held by
the firms in street name for the election of directors. As a
result, any shares not voted by a beneficial owner will be treated
as a broker non-vote. Such broker non-votes will have no effect on
the results of this vote.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED ABOVE AS DIRECTORS
INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES AND CORPORATE
GOVERNANCE
Independence of Directors
Our
Board is currently comprised of six members. Our Board has
affirmatively determined that five directors, Messrs. Brennan,
Haas, Fea, and Dr. Kapteyn, and Ms. Kuzdowicz, are
“independent” directors as such term is defined under
The NASDAQ Capital Market rules and the related rules of the
SEC.
The
Board, upon recommendation of the Governance Committee, unanimously
determined that each of our five non-employee directors is
“independent,” as such term is defined in the Nasdaq
Stock Market Rules (“Stock Market Rules”).
The
definition of “independent director” included in the
Stock Market Rules includes a series of objective tests, such as
that the director is not an employee of the Company, has not
engaged in various types of specified business dealings with the
Company, and does not have an affiliation with an organization that
has had specified business dealings with the Company. Consistent
with the Company’s corporate governance principles, the
Board’s determination of independence is made in accordance
with the Stock Market Rules, as the Board has not adopted
supplemental independence standards. As required by the Stock
Market Rules, the Board also has made a subjective determination
with respect to each director that such director has no material
relationship with the Company (either directly or as a partner,
shareholder or officer of an organization that has a relationship
with the Company), even if the director otherwise satisfies the
objective independence tests included in the definition of an
“independent director” included in the Stock Market
Rules.
In
determining that each individual who served as a member of the
Board is independent, the Board considered that, in the ordinary
course of business, transactions may occur between the Company and
entities with which some of our directors are affiliated. The Board
unanimously determined that the relationships discussed below were
not material. No unusual discounts or terms were
extended.
Board Leadership Structure
The
Board has no set policy with respect to the separation of the
offices of Chairman and Chief Executive Officer. Currently, Greg
Fea serves Chairman and Brent Willis serves as Chief Executive
Officer. Our board of directors does not have a lead independent
director. Our board of directors has determined that its leadership
structure is appropriate and effective for us at this time, given
our stage of development.
Director Attendance at Board, Committee, and Other
Meetings
During
the year ended December 31, 2018, the Board of Directors held four
in-person meetings, and each of the Audit Committee, Compensation
Committee, and The Nominating and Governance Committee met four
times. The Board held five other meetings by telephone. No director
attended fewer than 75% of the board or of any committee such
director served on. We do not have a formal policy in place with
respect to director attendance at the Company’s annual
meeting of shareholders.
Board Role in Risk Oversight
The
Board is responsible for overseeing our management and operations,
including overseeing our risk assessment and risk management
functions. We believe that our directors provide effective
oversight of risk management functions. On a regular basis we
perform a risk review wherein the management team evaluates the
risks we expect to face in the upcoming year and over a longer term
horizon. From this risk assessment we develop plans to deal with
the risks identified. The results of this risk assessment are
provided to the Board for their consideration and review. In
addition, members of our management periodically present to the
Board the strategies, issues and plans for the areas of our
business for which they are responsible. While the Board oversees
risk management, our management is responsible for day-to-day risk
management processes. Additionally, the Board requires that
management raise exceptional issues to the Board. We believe this
division of responsibilities is the most effective approach for
addressing the risks we face and that the Board leadership
structure supports this approach.
Committees of the Board
Our
Board has three standing committees: Audit, Compensation, and
Governance. Each of the committees is solely comprised of and
chaired by independent directors, each of whom the Board has
affirmatively determined is independent pursuant to the Stock
Market Rules. Each of the committees operates pursuant to its
charter. The committee charters are reviewed annually by the
Governance Committee. If appropriate, and in consultation with the
chairs of the other committees, the Governance Committee proposes
revisions to the charters. The responsibilities of each committee
are described in more detail below. The charters for the three
committees are available on the Company’s website at
www.newagebev.com.
Audit Committee
We have an Audit Committee comprised of directors who are
“independent” within the meaning of Nasdaq Rule
5605(b)(1). The Audit Committee assists our Board in overseeing the
financial reporting process and maintaining the integrity of our
financial statements, and of our financial reporting processes and
systems of internal audit controls, and our compliance with legal
and regulatory requirements. The Audit Committee is responsible for
reviewing the qualifications, independence and performance of our
independent registered public accounting firm and review our
internal controls, financial management practices and investment
functions and compliance with financial legal and regulatory
requirements. The Audit Committee is also responsible for
performing risk and risk management assessments as well as
preparing any report of the Audit Committee that may be required by
the proxy rules of the SEC to be included in the
Corporation’s annual proxy statement. Our Board has
identified and appointed Ms. Amy Kuzdowicz as its “audit
committee financial expert,” as defined by the SEC in
Item 407 of Regulation S-K. Ms. Kuzdowicz serves as the Chair
of the Audit Committee, and is joined on the committee by Mr. Haas,
Mr. Fea and Dr. Kapteyn.
Audit Committee Report
Review of our Audited Financial Statements
In fulfilling its oversight responsibilities, the Audit Committee
reviewed the audited financial statements in our Annual Report on
Form 10-K with management and discussed the quality and
acceptability of our accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in our
financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting
principles, their judgments as to the quality and acceptability of
our accounting principles and such other matters as are required to
be discussed with the committee under the standards of the Public
Company Accounting Oversight Board (PCAOB), including Auditing
Standard 1301 (Communications with Audit Committees). In addition,
the Audit Committee has discussed with the independent auditors the
auditors’ independence from management and us, including the
matters in the written disclosures required by Independence
Standards Board Standard No. 1 (Independent Discussions with Audit
Committees), which were submitted to us, and considered the
compatibility of non-audit services with the auditors’
independence.
The Audit Committee discussed with our independent auditors the
overall scope and plans for their audit. The Audit Committee met
with the independent auditors, with and without management present,
to discuss the results of their examination, their evaluation of
our internal controls, and the overall quality of our financial
reporting.
In reliance on these reviews and discussions, the Audit Committee
recommended to our Board of Directors (and our Board has approved)
that our audited financial statements for the year ended December
31, 2018 be included in the Annual Report on Form 10-K for the year
ended December 31, 2018 for filing with the Securities and Exchange
Commission.
The Audit Committee selects the Company’s independent
registered public accounting firm annually and has submitted such
selection for the year ending December 31, 2019 for ratification by
shareholders at the Company’s annual meeting.
The Audit Committee currently consists of Ms. Kuzdowicz, Mr. Haas,
Mr. Fea, and Dr. Kapteyn.
The material in this report is not deemed to be “soliciting
material,” or to be “filed” with the Securities
and Exchange Commission and is not to be incorporated by reference
in any of our filings under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, whether made
before or after the date hereof and irrespective of any general
incorporation language in any such filings.
Compensation Committee
We have a Compensation Committee comprised of members who are
“Non-Employee Directors” within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). They are also
“independent” directors within the meaning of Nasdaq
Rule 5605(b)(1). The Compensation Committee is responsible for
overseeing the establishment and maintenance of our overall
compensation and incentive programs to discharge the Board’s
responsibilities relating to compensation of our executive officers
and directors, including establishing criteria for evaluating
performance and setting
appropriate
levels of compensation, and to produce an annual
report on executive compensation for inclusion in our proxy
statement in accordance with the rules and regulations of the SEC.
The Compensation Committee advises and makes recommendations to our
Board on all matters concerning director compensation. Mr. Brennan
serves as Chair of the Compensation Committee and is joined by Mr.
Fea, Ms. Kuzdowicz, and Dr. Kapteyn.
Nominating and Governance Committee
Our Board has a Governance Committee that (1) reviews and
recommends improvements to our governance guidelines and corporate
policies; (2) monitors compliance with our Code of Conduct; (3)
trains new members of the Board of Directors; (4) reviews the
performance of the Board of Directors and its various committees
and makes recommendations intended to improve that performance; (5)
evaluates and makes recommendations concerning changes in the
charters of the various Committees of the Board of Directors; (6)
evaluates the performance of the Chief Executive Officer of the
Company; (7) oversees the development and implementation of
succession planning for Company senior management positions; (8)
identifies and recommends candidates for nomination as members of
the Board of Directors and its committees; and (9) such other
matters as may be required to ensure compliance with
applicable
federal and state laws or
the requirements of any exchange on which the Company maintains a
listing for its securities. The committee is required to be
comprised of entirely “independent” directors within
the meaning of Nasdaq Rule 5605(b)(1). Mr. Haas currently
serves as the Chair of the Nominating and Governance Committee and
is joined on the committee by Mr. Fea and Mr.
Brennan.
Committee participation by the Chair and other Directors is
summarized as follows:
Name
|
Audit
Committee
|
Compensation
Committee
|
Nominating and
Governance Committee
|
Tim
Haas
|
Member
|
|
Chair
|
Greg
Fea
|
Member
|
Member
|
Member
|
Ed
Brennan
|
|
Chair
|
Member
|
Reginald
Kapteyn
|
Member
|
Member
|
|
Amy
Kuzdowicz
|
Chair
|
Member
|
|
Consideration of Director Nominees
We seek
directors with the highest standards of ethics and integrity, sound
business judgment, and the willingness to make a strong commitment
to the Company and its success. The Nominating and Governance
Committee works with the Board on an annual basis to determine the
appropriate and desirable mix of characteristics, skills,
expertise, and experience for the full Board and each committee,
taking into account both existing directors and all nominees for
election as directors, as well as any diversity considerations and
the membership criteria applied by the Nominating and Governance
Committee. The Nominating and Governance Committee and the Board,
which do not have a formal diversity policy, consider diversity in
a broad sense when evaluating board composition and nominations;
and they seek to include directors with a diversity of experience,
professions, viewpoints, skills, and backgrounds that will enable
them to make significant contributions to the Board and the
Company, both as individuals and as part of a group of directors.
The Board evaluates each individual in the context of the full
Board, with the objective of recommending a group that can best
contribute to the success of the business and represent shareholder
interests through the exercise of sound judgment. In determining
whether to recommend a director for re-election, the Nominating and
Governance Committee also considers the director’s attendance
at meetings and participation in and contributions to the
activities of the Board and its committees.
The
Nominating and Governance Committee will consider director
candidates recommended by shareholders, and its process for
considering such recommendations is no different than its process
for screening and evaluating candidates suggested by directors,
management of the Company, or third parties.
Corporate Governance Matters
We are
committed to maintaining strong corporate governance practices that
benefit the long-term interests of our shareholders by providing
for effective oversight and management of the Company. Our
governance policies, including our Code of Conduct and Committee
Charters, can be found on our website at
www.newagebev.com
by
following the link to “Investors” and then to
“Corporate Governance.”
The
Nominating and Governance Committee regularly reviews our Code of
Conduct and Committee Charters to ensure that they take into
account developments at the Company, changes in regulations and
listing requirements, and the continuing evolution of best
practices in the area of corporate governance.
The
Board conducts an annual self-evaluation in order to assess whether
the directors, the committees, and the Board are functioning
effectively.
Code of Conduct
We have adopted a Code of Business Conduct and Ethics that applies
to our principal executive, financial, and accounting officers (or
persons performing similar functions), a copy of which is
available on our website at www.newagebev.com.
Communications with the Board of Directors
Shareholders
and other parties may communicate directly with the Board of
Directors or the relevant board member by addressing communications
to:
New Age
Beverages Corporation
c/o
Corporate Secretary
1700 E.
68th Avenue
Denver,
CO 80229
All
shareholder correspondence will be compiled by our corporate
secretary. Communications will be distributed to the Board of
Directors, or to any individual director or directors as
appropriate, depending on the facts and circumstances outlined in
the communications. Items that are unrelated to the duties and
responsibilities of the Board of Directors may be excluded, such
as:
●
junk mail and mass
mailings;
●
resumes and other
forms of job inquiries;
●
solicitations and
advertisements.
In
addition, any material that is unduly hostile, threatening, or
illegal in nature may be excluded, provided that any communication
that is filtered out will be made available to any independent
director upon request.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Exchange Act requires the Company’s directors,
executive officers, and shareholders who own more than 10% of the
Company’s stock to file forms with the SEC to report their
ownership of the Company’s stock and any changes in
ownership. The Company assists its directors and executives by
identifying reportable transactions of which it is aware and
preparing and filing the forms on their behalf. All persons
required to file forms with the SEC must also send copies of the
forms to the Company. We have reviewed all forms provided to us.
Based on that review and on written information given to us by our
executive officers and directors, we believe that all Section 16(a)
filings during the past fiscal year were filed on a timely basis
and that all directors, executive officers and 10% beneficial
owners have fully complied with such requirements during the past
fiscal year, except as follows:
A Form
4 was filed late by Tim Haas, resulting in one transaction not
being reported on a timely basis.
EXECUTIVE OFFICERS
The
following persons are our executive officers and hold the offices
set forth opposite their names.
Name
|
|
Age
|
|
Principal
Occupation
|
|
Officer
Since
|
Brent
David Willis
|
|
59
|
|
Chief
Executive Officer, Director
|
|
2016
|
Gregory
Gould
|
|
53
|
|
Chief Financial Officer
|
|
2018
|
Randall
N. Smith
|
|
64
|
|
President,
Morinda Holdings, Inc.
|
|
2018
|
Richard
Rife
|
|
65
|
|
Chief
Legal & Administrative Officer and Secretary
|
|
2018
|
Brent David Willis, Chief Executive Officer and Member of the
Board
The
biography
for
Brent David Willis is contained in the information disclosures
relating to the Company’s nominees for
director.
Gregory Gould, Chief Financial Officer
Mr. Gould
has served as our Chief Financial Officer since
October 2018. Prior to joining the Company, Mr. Gould served as
Chief Financial Officer of Therapure—Products (Evolve
Biologics), a subsidiary of Therapure BioPharma, Inc., from
November 2017 until October 2018. Mr. Gould also served as Chief
Financial Officer, Treasurer and Secretary of Aytu BioScience,
Inc., or Aytu (NASDAQ: AYTU), from April 2015 until November 2017,
and he was the Chief Financial Officer, Secretary and Treasurer of
Ampio Pharmaceuticals, Inc., or Ampio (NASDAQ: AMPE), from June
2014 until June 2017.
He has held CFO
and Principal Accounting Officer roles at several publicly traded
corporations and has served as an independent board member and
accounting expert. He is a highly accomplished financial executive
with expertise in the life sciences industry. Mr. Gould is a CPA in
the state of Colorado. He holds a Bachelor of Science in Business
Administration from the University of Colorado,
Boulder.
Randall N. Smith, President, Morinda Holdings, Inc.
Randy
Smith has served as President of Morinda since December 2018. Prior
to serving as president, he was Morinda’s CFO, treasurer, and
vice president of finance for 14 years. He was a principal in a
major international accounting firm, where he specialized in
international operations and expansion and had over 20 years of
experience consulting with large public and private companies in
Chicago, Detroit, and Salt Lake City. Mr. Smith received a Bachelor
of Science degree in Accounting and Business Administration from
Southern Utah University and his Juris Doctor degree from the
University of Utah.
Richard Rife, Chief Legal & Administrative Officer and
Secretary
Richard
Rife has served as Chief Legal & Administrative Officer and
corporate secretary of the Company since December 21, 2018. He also
served as chief legal officer for Morinda from 2005. Prior to that,
Mr. Rife was vice president & deputy general counsel for
Novell, Inc. He has a 35-year background in international corporate
law and also served as chief privacy officer for an organization
with operations in 170 countries. He received his Bachelor of Arts
degree in English and Juris Doctor degree from Brigham Young
University.
EXECUTIVE COMPENSATION
Summary Compensation Table
The
following table sets forth information concerning the compensation
of our named executive officers during 2018 and 2017.
Name and
Position(s)
|
|
|
|
|
|
|
|
Brent
Willis
|
2018
|
312,500
|
50,000
|
-
|
-
|
-
|
362,500
|
Chief Executive
Officer
(1)
|
2017
|
300,000
|
225,000
|
-
|
-
|
-
|
525,000
|
Gregory
Gould,
|
2018
|
67,708
|
-
|
-
|
-
|
-
|
67,708
|
Chief Financial
Officer
(2)
|
2017
|
-
|
-
|
-
|
-
|
-
|
-
|
Randy
Smith,
|
2018
|
17,220
|
-
|
881,280
(3)
|
176,041
(6)
|
1,579
|
1,076,120
|
President, Morinda
Holdings, Inc.
(3)
|
2017
|
-
|
-
|
-
|
-
|
-
|
-
|
Chuck
Ence,
|
2018
|
228,334
|
-
|
-
|
40,500
(6)
|
-
|
268,834
|
Former
CFO
|
2017
|
200,000
|
-
|
-
|
129,019
(6)
|
-
|
329,019
|
Neil
Fallon,
|
2018
|
94,991
|
-
|
-
|
-
|
-
|
94,991
|
former Executive
Chairman
(4)
|
2017
|
114,340
|
-
|
-
|
-
|
-
|
114,340
|
(1)
Effective January 1, 2019, Mr. Willis’ base salary was
increased to $650,000
(2) Mr.
Gould was appointed chief financial officer in October
2018.
(3) Mr.
Smith became President of Morinda Holdings, Inc., and Morinda
became a wholly owned subsidiary of New Age Beverages Corporation
on December 21, 2018.
(4) Mr.
Fallon served as executive chairman until the 2018 annual meeting
held on October 23, 2018.
(5) On
December 21, 2018, Mr. Smith received a restricted stock grant for
54,000 shares of the Company’s common stock that vests if
Morinda achieves EBITDA of $20.0 million for the year ending
December 31, 2019. In addition, Mr. Smith received a restricted
stock grant for 108,000 shares of the Company’s Common Stock
that vests for 100% of the shares if he continues to be employed
through December 31, 2019. These awards were valued based on the
closing price of the Company’s Common Stock of $5.44 per
share on December 21, 2018.
(6)
Stock option awards were valued at the grant date fair value using
the Black-Scholes-Merton-option-pricing model.
Employment Agreements
Our
board of directors signed a board resolution on March 24, 2016,
which provides that Brent Willis, the interim Chief Executive
Officer as of the date of the resolution, would receive a base
salary of $7,500 per month, benefits and expense reimbursement, and
a sign-on incentive bonus of 5% of the outstanding shares of the
Company as of the date of the resolution. The 5% of the outstanding
shares sign-on bonus was equal to 771,783 shares of common stock
valued at $200,663.46, or $0.26 per share based on the market price
of the shares on the date of issuance.
We
executed an employment agreement on June 1, 2016, which provides
that Mr. Willis receive a bonus of 5% of the outstanding shares of
the Company upon completion of a first acquisition involving more
than 25% of our then current market capitalization. The transaction
with Xing met that criteria, and the Company paid the share bonus
at the time of closing of the Xing transaction which equaled
1,078,763 shares of common stock valued at $1,736,808.43, or $1.61
per share based on the market price of the shares on the date of
issuance. Effective January 1, 2019, Mr. Willis’ base salary
was increased to $650,000.
In
connection with the appointment of Mr. Gould as our chief financial
officer in October 2018, we entered into an offer letter of
employment agreement with Mr. Gould. The agreement provides for an
initial base salary of $325,000 per year, with an annual target
cash bonus equal to a range from 35% to 140% of the base salary.
The agreement further provides for equity and other incentives to
be awarded pursuant to achievement of certain performance metrics.
Effective January 1, 2019, Mr. Gould’s base salary was
increased to $500,000.
Outstanding Equity Awards at Fiscal Year End
The
following table sets forth our outstanding equity awards to our
executive officers as of December 31, 2018.
|
|
|
Name
|
|
Number of
Securities Underlying Unexercised Options
Exercisable
|
Number of
Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity Incentive
Plan Awards: Number of Securities Underlying Unexercised Unearned
Options (#)
|
Option Exercise
Price ($)
|
|
Number of Shares or
Units of Stock that Have not Vested (#)
|
Market Value of
Shares or Units of Stock That Have Not Vested
(#)
|
Equity Incentive
Plan Awards: Number of Unearned Shares, Units or Other Rights That
Have Not Vested (#)
|
Equity Incentive
Plan Awards: Market or Payout Value of Unearned Shares, Units, or
Other Rights That Have Not Vested ($)
|
Brent
Willis
|
|
|
|
|
|
|
|
|
|
|
|
8/5/2016
|
73,743
|
37,989
|
-
|
1.79
|
|
-
|
-
|
-
|
-
|
|
12/21/2017
|
48,529
|
98,529
|
-
|
2.04
|
|
-
|
-
|
-
|
-
|
|
3/29/2016
|
-
|
-
|
-
|
-
|
-
|
362,407
|
1,364,516
|
-
|
-
|
|
4/29/2016
|
-
|
-
|
-
|
-
|
-
|
366,780
|
1,907,256
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Chuck
Ence
|
|
|
|
|
|
|
|
|
|
|
|
8/5/2016
|
121,670
|
62,678
|
-
|
1.79
|
|
-
|
-
|
-
|
-
|
|
12/21/2017
|
32,353
|
65,686
|
-
|
2.04
|
|
-
|
-
|
-
|
-
|
|
12/3/2018
|
0
|
10,000
|
-
|
4.63
|
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Randy
Smith
|
|
|
|
|
|
|
|
|
|
|
|
12/21/2018
|
0
|
43,467
|
-
|
4.63
|
|
-
|
-
|
-
|
-
|
|
12/21/2018
|
-
|
-
|
-
|
-
|
-
|
54,000
|
280,000
|
-
|
-
|
|
12/21/2018
|
-
|
-
|
-
|
-
|
-
|
108,000
|
561,680
|
-
|
-
|
Equity Compensation Plans Information
On
August 3, 2016, the Company’s approved and implemented the
New Age Beverages Corporation 2016--2017 Long- Term Incentive Plan
(the “2016-2017 Plan”).
In
March 2019, the board of directors approved the New Age Beverages
2019 Equity Incentive Plan (the “2019 Plan”). The 2019
Plan will be submitted for approval at the Annual Meeting. See
“Proposal 4” below.
The
following table sets forth information about our equity
compensation plans as of December 31, 2018.
Plan
Category
|
Number of
securities to be issued upon exercise of outstanding options,
warrants and rights
(a)
|
Weighted-average
exercise price of outstanding options, warrants and
rights
(b)
|
Number of
securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a)
|
Equity compensation
plans approved by security holders
|
2,786,371
|
$
2.84
|
168,587
|
Equity compensation
plans not approved by security holders
|
-
|
--
|
--
|
Total
|
2,786,371
|
$
2.84
|
168,586
|
Director Compensation
The Board of Directors has the authority to fix the compensation of
directors. During 2018, the Board approved board compensation of
(i) $65,000 worth of restricted common stock to our directors, (ii)
cash compensation at an annual rate of $10,000 for the first six
months, and (iii) for the last six months an additional fee at an
annual rate of $5,000 paid to each director who serves as Chairman
of a Board committee.
The following table provides the total compensation for each person
who served as a non-employee member of our Board of Directors
during fiscal year 2018, including all compensation awarded to,
earned by or paid to each person who served as a non-employee
director for some portion or all of fiscal year
2018
:
Name
|
Fees earned or
paid in cash ($)
|
|
|
Non-equity
incentive plan compensation ($)
|
Change in
pension value and nonqualified deferred compensation
earnings
|
All other
compensation ($)
|
|
David Vautrin
(1)
|
2,500
|
65,000
|
-
|
-
|
-
|
-
|
67,500
|
Reginald
Kapteyn
|
17,500
|
65,000
|
-
|
-
|
-
|
-
|
82,500
|
Ed
Brennan
|
17,500
|
65,000
|
-
|
-
|
-
|
-
|
82,500
|
Robert Evans
(2)
|
2,500
|
65,000
|
-
|
-
|
-
|
-
|
67,500
|
Tim
Haas
|
17,500
|
65,000
|
-
|
-
|
-
|
-
|
82,500
|
Greg
Fea
|
42,500
|
65,000
|
-
|
-
|
-
|
-
|
107,500
|
(1) Mr.
Vautrin served as a director until the 2018 annual meeting held on
October 23, 2018.
(2) Mr.
Evans resigned as a director on October 19, 2018.
Effective
April 1, 2019, the Board approved board compensation as
follows:
●
$65,000 annually
for Chairman of the Board, and $50,000 annually for other
non-employee Board members
●
$20,000—Chair
of the Audit Committee and $10,000 for member of the Audit
Committee
●
$15,000 for Chair
of the Compensation Committee and $7,500 for member of the
Compensation Committee
●
$10,000 for Chair
of the Governance Committee and $5,000 for member of the Governance
Committee
●
$100,000 of
restricted stock shares annually for each member of the Board of
Directors
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
The
Audit Committee has responsibility for reviewing and, if
appropriate, for approving any related party transactions that
would be required to be disclosed pursuant to applicable SEC
rules.
In addition to the executive officer and director compensation
arrangements discussed above, the following is a description of
each transaction since January 1, 2017
and any currently
proposed transaction in which (i) we have been or are to be a
participant, (ii) the amount involved exceeded or will exceed
the lesser of $120,000 or one percent of the average of our total
assets at year-end for the last two completed fiscal years, and
(iii) any of our directors, executive officers, holders of
more than five percent of our capital stock, or
any immediate family member of, or person
sharing the household with, any of these individuals, had or will
have a direct or indirect material interest.
Effective September 21, 2018, the Company entered into an Exchange
Agreement with its Chief Executive Officer, Brent Willis, and its
then-Chairman, Neil Fallon, pursuant to which the officers
exchanged an aggregate of 6,900,000 shares of common stock which
they owned for an aggregate of 6,900 shares of the Company’s
newly designated Series C Convertible Preferred Stock. The shares
of Series C Preferred Stock automatically converted to 6,900,000
shares of common stock upon the filing of the Company’s
amendment to its articles of incorporation with the Secretary of
State of Washington on October 23, 2018.
Review, Approval, or Ratification of Transactions with Related
Parties
The Charter of our Governance Committee requires that any
transaction with a related person that must be reported under
applicable rules of the SEC must be reviewed and either approved,
disapproved or ratified by our Governance Committee.
Director Independence
Dr. Kapteyn, Mr. Brennan, Mr. Haas, Mr. Fea and Ms. Kuzdowicz are
each “independent” within the meaning of Nasdaq Rule
5605(b)(1).
PROPOSAL NO. 2 - RATIFICATION OF THE APPOINTMENT OF ACCELL AUDIT
& COMPLIANCE, PA AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2019
The
Audit Committee has appointed Accell Audit & Compliance, PA
(“Accell Audit & Compliance” or
“Accell”), independent public accountant, to serve as
the Company’s independent registered public accounting firm
for the fiscal year ending December 31, 2019.
A representative of
Accell
is expected to be present
telephonically at the 2019 Annual Meeting and will have an
opportunity to make a statement if he desires to do so. We also
expect that such representative will be available to respond to
appropriate questions.
Accell has served as our principal
auditor since August 2016.
The
Audit Committee has considered whether the provision of services,
other than services rendered in connection with the audit of our
annual financial statements, is compatible with maintaining
Accell’s independence.
Aggregate
fees billed or incurred related to the following years for
professional services rendered by our principal accountant for 2018
and 2017 are set forth below.
|
|
|
|
Audit
fees
|
$
136,720
|
Audit related
fees
|
90,800
|
Total
fees
|
227,520
|
|
|
|
|
Audit
fees
|
$
203,422
|
Audit related
fees
|
36,125
|
Total
fees
|
$
239,547
|
Audit fees consist of fees related to professional services
rendered in connection with the audit of our annual financial
statements and review of our quarterly financial statements. Amount
includes $15,572 for travel expenses.
Audit Related Fees
Audit relates fees consist of fees related for offerings and
acquisitions.
Tax Fees
None.
Our policy is to pre-approve all audit and permissible non-audit
services performed by the independent accountants. These services
may include audit services, audit-related services, tax services
and other services. Under our Audit Committee’s policy,
pre-approval is generally provided for particular services or
categories of services, including planned services, project based
services and routine consultations. In addition, the Audit
Committee may also pre-approve particular services on a
case-by-case basis. Our Audit Committee approved all services that
our independent accountants provided to us in the past two fiscal
years.
Vote Required
The
affirmative vote of a majority of the votes cast for this proposal
is required to ratify the appointment of the Company’s
independent public accountant. Abstentions will be counted towards
the tabulation of votes cast on this proposal and will have the
same effect as a negative vote. Brokerage firms have authority to
vote customers’ unvoted shares held by the firms in street
name on this proposal. If a broker does not exercise this
authority, such broker non-votes will have no effect on the results
of this vote. We are not required to obtain the approval of our
shareholders to appoint the Company’s independent accountant.
However, if our shareholders do not ratify the appointment of
Accell as the Company’s independent public accountant for the
fiscal year ending December 31, 2019, the Audit Committee may
reconsider its appointment.
THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF
THE APPOINTMENT OF ACCELL AUDIT & COMPLIANCE PA AS OUR
INDEPENDENT PUBLIC ACCOUNTANT
PROPOSAL NO. 3 – AMENDMENT TO THE COMPANY’S ARTICLES OF
INCORPORATION TO INCREASE THE TOTAL NUMBER OF SHARES OF AUTHORIZED
COMMON STOCK TO 200,000,000 SHARES FROM 100,000,000.
Our
board of directors has approved, subject to shareholder approval,
an amendment to our Articles of Incorporation increasing our
authorized shares of common stock from 100,000,000 shares to
20,000,000 shares. The increase in our authorized shares of common
stock will become effective upon the filing of the amendment with
the Secretary of State of Washington.
The
form of amendment to be filed with the Secretary of State of
Washington is set forth as
Appendix A
to this proxy
statement.
Outstanding Shares and Purpose of the Amendment
Our
Articles of Incorporation currently authorize us to issue a maximum
of 100,000,000 shares of common stock, par value $0.001 per share
and 1,000,000 shares of preferred stock, par value $0.001. The
board of directors has designated 250,000 shares as Series A
Preferred Stock, 300,000 shares as Series B Preferred stock, 7,000
shares of Series C Convertible Preferred stock, and 44,000 shares
of Series D Convertible Preferred Stock. As of April 5, 2019, we
had 75,357,742 shares of common stock issued and outstanding, no
shares of Series A, Series B and Series C and 43,804 shares of
Series D Preferred Stock, issued and outstanding.
The
Board believes that the increase in our authorized common stock
will provide us with greater flexibility with respect to our
capital structure for business purposes, including additional
equity financings and stock-based acquisitions. There will be no
change to our authorized preferred stock.
Effects of the Increase in Authorized Common Stock
The
additional shares of common stock will have the same rights as the
presently authorized shares of common stock, including the right to
cast one vote per share of common stock. Although the authorization
of additional shares will not, in itself, have any effect on the
rights of any holder of our common stock, the future issuance of
additional shares of common stock (other than by way of a stock
split or dividend) would have the effect of diluting the voting
rights and could have the effect of diluting earnings per share and
book value per share of existing shareholders.
At
present, the board of directors has no plans to issue the
additional shares of common stock that would be authorized by the
proposed amendment. However, it is possible that some of these
additional shares could be used in the future for various other
purposes without further stockholder approval, except as such
approval may be required in particular cases by our charter
documents, applicable law or the rules of any stock exchange or
other quotation system on which our securities may then be listed.
These purposes may include: raising capital, settlement of debt,
providing equity incentives to employees, officers or directors,
establishing strategic relationships with other companies, and
expanding our business or product lines through the acquisition of
other businesses or products.
We
could also use the additional shares of common stock that will
become available pursuant to the amendment to oppose a hostile
takeover attempt or to delay or prevent changes in control or
management of our company. Although the board’s approval of
the amendment was not prompted by the threat of any hostile
takeover attempt (nor is the board currently aware of any such
attempts directed at us), nevertheless, shareholders should be
aware that the amendment could facilitate future efforts by us to
deter or prevent changes in control of our company, including
transactions in which our shareholders might otherwise receive a
premium for their shares over then current market
prices.
Vote Required
The
affirmative vote of a majority of the shares entitled to vote at
the meeting is required to approve the filing of the amendment to
our Articles of Incorporation to increase our authorized shares of
common stock from 100,000,000 shares to 200,000,000 shares.
Abstentions will be counted towards the tabulation of votes cast on
this proposal and will have the same effect as a negative vote.
Brokerage firms have authority to vote customers’ unvoted
shares held by the firms in street name on this proposal. If a
broker does not exercise this authority, such broker non-votes will
have no effect on the results of this vote. If our shareholders do
not approve the amendment, we will not be able to increase our
authorized common stock to 200,000,000 shares.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE
PROPOSAL TO AMEND THE COMPANY’S ARTICLES OF INCORPORATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK TO
200,000,000 FROM 100,000,000.
PROPOSAL NO. 4 – APPROVAL OF NEW AGE BEVERAGES CORPORATION
2019 EQUITY COMPENSATION PLAN
Our
board of directors has approved the New Age Beverages Corporation
2019 Equity Incentive Plan (the “2019 Plan”), subject
to shareholder approval.
A copy of the
2019 Plan is attached as Appendix B to this proxy statement. The
following summary of the 2019 Plan is qualified by reference to the
full text of the 2019 Plan.
Summary of the 2019 Plan
The
2019 Plan was approved by the Board in March 2019. The 2019 Plan
will terminate on the tenth anniversary of the date of approval by
the board, unless earlier terminated by the Board, provided that,
if the Company does not obtain the stockholder approval within one
year from the date the 2019 Plan was approved by the Board, the
2019 Plan will be immediately unwound and any outstanding options
granted thereunder prior to obtaining the requisite stockholder
approval will be immediately cancelled.
The
purposes of the 2019 Plan are to (a) enable the Company to attract
and retain the types of employees, consultants and directors who
will contribute to the Company's long range success; (b) provide
incentives that align the interests of employees, consultants and
directors with those of the shareholders of the Company; and (c)
promote the success of the Company's business.
The
maximum number of shares of common stock that may be issued under
the 2019 Plan will be 10,000,000. In the event of a stock dividend,
stock split or other change in our capital structure, the
Administrator will make appropriate adjustments to the limits
described above and will also make appropriate adjustments to the
number and kind of shares of stock or securities subject to awards,
any exercise prices relating to awards and any other provisions of
awards affected by the change. The Administrator may also make
similar adjustments to take into account other distributions to
stockholders or any other event, if the Administrator determines
that adjustments are appropriate to avoid distortion in the
operation of the 2019 Plan and to preserve the value of
awards.
Administration
.
The
Board of Directors (or a board committee appointed by the Board)
administers the 2019 Plan. The term “Administrator” is
used in this proxy statement to refer to the person (the Board and
its delegates) charged with administering the 2019 Plan. The
Administrator has full authority to determine who will receive
awards and to determine the types of awards to be granted as well
as the amounts, terms, and conditions of any awards. Awards may be
in the form of options, restricted stock, or restricted stock
units. The Administrator has the right to determine any questions
that may arise regarding the interpretation and application of the
provisions of the 2019 Plan and to make, administer, and interpret
such rules and regulations as it deems necessary or advisable.
Determinations of the Administrator made under the 2019 Plan are
conclusive and bind all parties, unless such decisions are
determined by a court having jurisdiction to be arbitrary and
capricious.
Eligibility
.
Participation
is limited to employees, non-employee directors, as well as
consultants who are selected by the Administrator to receive an
award.
Stock
Options.
The Administrator
may, from time to time, award options to any participant subject to
the limitations described above. Stock options give the holder the
right to purchase shares of common stock of the Company within a
specified period of time at a specified price. Two types of stock
options may be granted under the 2019 Plan: incentive stock
options, or “ISOs”, which are subject to special tax
treatment as described below, and nonstatutory options, or
“NSOs.” Eligibility for ISOs is limited to employees of
the Company and its subsidiaries.
The exercise price of an ISO cannot be less than
the fair market value of the common stock at the time of grant. In
addition, the expiration date of an ISO cannot be more than ten
years after the date of the original grant. In the case of NSOs,
the exercise price and the expiration date are determined in the
discretion of the Administrator. The Administrator also determines
all other terms and conditions related to the exercise of an
option, including the consideration to be paid, if any, for the
grant of the option, the time at which options may be exercised and
conditions related to the exercise of options.
Stock
Awards; Restricted Stock
.
The 2019 Plan provides for awards of shares of
restricted common stock. Awards of restricted stock may be made in
exchange for past services or other lawful consideration.
Generally, awards of restricted stock are subject to the
requirement that the shares be forfeited or resold to the Company
unless specified conditions are met. Subject to these restrictions,
conditions and forfeiture provisions, any recipient of an award of
restricted stock will have all the rights of a stockholder of the
Company, including the right to vote the shares and to receive
dividends. The 2019 Plan also provides for deferred grants
(“deferred stock”) entitling the recipient to receive
shares of common stock in the future on such conditions as the
Administrator may specify. Any stock award or award of deferred
stock resulting in a deferral of compensation subject to
Section 409A of the Code will be construed to the maximum
extent possible consistent with the requirements of
Section 409A of the Code.
General
Provisions Applicable to All Awards
.
ISOs will not be transferable except by
will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the optionholder only by the
optionholder. NSOs may, in the sole discretion of the Committee, be
transferable to a Permitted Transferee (as defined under the 2019
Plan), upon written approval by the Committee to the extent
provided in the award agreement. Shares delivered under the 2019
Plan may consist of either authorized but unissued or treasury
shares, or shares reaquired by the Company in any
manner.
Change in
Control
.
In the event of a Change in Control (as
defined under the 2019 Plan), unless otherwise provided in an award
agreement, all outstanding options will become immediately
exercisable with respect to 100% of the shares subject to such
options, and/or the restricted period will expire immediately with
respect to 100% of the outstanding shares of restricted stock or
restricted stock units.
Amendment
.
The
Administrator may at any time or times amend the 2019 Plan or any
outstanding award for any purpose which may at the time be
permitted by law, and may at any time terminate the 2019 Plan as to
any future grants of awards, provided that, no amendment will be
effective unless approved by the shareholders of the Company to the
extent shareholder approval is necessary to satisfy any applicable
laws. The Administrator may not, however, alter the terms of an
award so as to affect adversely any holder’s rights under any
award without the holder’s consent.
Federal Income Tax Consequences
The
following discussion summarizes certain federal income tax
consequences of the grant and exercise of stock options under the
2019 Plan under the law as in effect on the date of this proxy
statement. The summary does not purport to cover federal employment
tax or other federal tax consequences that may be associated with
stock options or federal tax consequences associated with other
awards under the 2019 Plan, nor does it cover state, local or
non-U.S. taxes.
ISOs
.
In
general, an optionee realizes no taxable income for regular income
tax purposes upon the grant or exercise of an ISO. However, the
exercise of an ISO may result in an alternative minimum tax
liability to the optionee. With certain exceptions, a disposition
of shares purchased under an ISO within two years from the date of
grant or within one year after exercise (a “disqualifying
disposition”) produces ordinary income to the optionee equal
to the value of the shares at the time of exercise less the
exercise price. A corresponding deduction is available to the
Company. Any additional gain recognized in the disqualifying
disposition is treated as a capital gain for which the Company is
not entitled to a deduction. In general, if the disqualifying
disposition is an arm’s length sale at less than the fair
market value of the shares at time of exercise, the
optionee’s ordinary income, and the Company’s
corresponding deduction, are limited to the excess, if any, of the
amount realized on the sale over the amount paid by the optionee
for the stock. If the optionee does not dispose of the shares
until
after the expiration of these one- and two-year
holding periods, any gain or loss recognized upon a subsequent sale
is treated as a long-term capital gain or loss for which the
Company is not entitled to a deduction.
NSOs
.
In
general, in the case of a NSO, the optionee has no taxable income
at the time of grant but realizes income in connection with
exercise of the option in an amount equal to the excess (at the
time of exercise) of the fair market value of the shares acquired
upon exercise over the exercise price; a corresponding deduction is
available to the Company; and upon a subsequent sale or exchange of
the shares, any recognized gain or loss after the date of exercise
is treated as a capital gain or loss for which the Company is not
entitled to a deduction.
In
general, an ISO that is exercised by the optionee more than three
months after termination of employment is treated as an NSO. ISOs
are also treated as NSOs to the extent they first become
exercisable by an individual in any calendar year for shares having
a fair market value (determined as of the date of grant) in excess
of $100,000.
Under
the so-called “golden parachute” provisions of the
Code, the accelerated vesting of awards in connection with a change
in control of the Company may be required to be valued and taken
into account in determining whether a participant has received
compensatory payments, contingent on the change in control, in
excess of certain limits. If these limits are exceeded, a
substantial portion of amounts payable to the participant,
including the payment consisting of accelerated vesting of awards,
may be subject to an additional 20% federal tax and may be
nondeductible to the Company.
Stock
options awarded under the 2019 Plan are intended to be exempt from
the rules of Section 409A of the Code and guidance issued
thereunder and will be administered accordingly. However, neither
the Company nor the Administrator, nor any person affiliated with
or acting on behalf of the Company or the Administrator, will be
liable to any participant or to the estate or beneficiary of any
participant by reason of any acceleration of income, or any
additional tax or interest penalties, resulting from the failure of
an award to satisfy the requirements of Section 409A of the
Code.
Vote Required
The
affirmative vote of a majority of the votes cast for this proposal
is required to approve the New Age Beverages Corporation 2019
Equity Incentive Plan. Abstentions will be counted towards the
tabulation of votes cast on this proposal and will have the same
effect as a negative vote.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF
THE NEW AGE BEVERAGES CORPORATION 2019 EQUITY INCENTIVE
PLAN
OTHER MATTERS
As of
the date of this proxy statement, the Board knows of no other
business that will be presented at the Annual
Meeting
. If any other business is properly
brought before the Annual Meeting, it is intended that proxies in
the enclosed form will be voted in respect thereof in accordance
with the best judgment and in the discretion of the persons voting
the proxies.
APPENDIX A – FORM OF AMENDMENT TO THE COMPANY’S
ARTICLES OF INCORPORATION
FORM OF CERTIFICATE OF AMENDMENT
TO
THE ARTICLES OF INCORPORATION
OF
NEW AGE BEVERAGES CORPORATION
Articles
of Amendment
Profit
Corporation
Please
provide UBI#
NAME OF
BUSINESS CORPORATION:
New Age
Beverages Corporation
BUSINESS
TYPE:
Are you
changing your business type: □ Yes X No (if no, continue to
next section)
If yes,
select the change being made:
☐
WA PROFESSIONAL SERVICE CORPORATION □ WA PUBLIC UTILITY
CORPORATION
☐
WA SOCIAL PURPOSE CORPORTION
ENTITY
NAME CHANGE Are you changing your business name? □ Yes X No
If no, continue to Jurisdiction
If yes,
do you already have an entity name reserved? ☐ Yes ☐
No
If Yes,
provide the Name Reservation Number and Name If No, provide only
the name
Reservation
Number: _________________
Name:
____________________________________
CORPORATE
SHARES: Are you changing your business’s authorized shares?
☒ Yes ☐ No If no, continue to next section
New
number of authorized shares: 200,000,000 Class of shares: ☒
Common Stock ☐ Preferred Stock
Did
your share information change? (check one) ☐ Yes ☒ No
If No, continue to next section
If Yes,
implementation plan for change: (attach additional pages if
needed)
Has
your registered agent changed? ☐ YES ☒ NO If Yes,
please be sure to complete page 2
ADOPTION
OF ARTICLES OF AMENDMENT: This Amendment was duly adopted by the
following method
☒
By a sufficient vote of shareholders
☒
By the board of directors
☐
By the incorporators prior to the issuance of shares
EFFECTIVE
DATE:
☒
Date of filing ☐ Specify a Date __________________ cannot be
more than 90 days following received date
DATE OF
ADOPTION When was this Amendment adopted?
☐
Date of filing ☐ Specify a date:
__________________________
AUTHORIZED
PERSON:
This
record is hereby executed under penalties of perjury, and is, to
the best of my knowledge, true and correct.
_______________________________________
________________________________ ____________________
Signature
of Authorized Person Printed Name/Title Date
APPENDIX B—NEW AGE BEVERAGES CORPORATION 2019 EQUITY
INCENTIVE PLAN
New Age Beverages Corporation 2019 Equity Incentive
Plan
1.
Purpose;
Eligibility
.
1.1
General
Purpose
. The name of this plan
is the New Age Beverages Corporation 2019 Equity Incentive Plan
(the "
Plan
"). The purposes of the Plan are to (a) enable New
Age Beverages Corporation, a Washington corporation (the
"
Company
"), to attract and retain the types of Employees,
Consultants and Directors who will contribute to the Company's long
range success; (b) provide incentives that align the interests of
Employees, Consultants and Directors with those of the shareholders
of the Company; and (c) promote the success of the Company's
business.
1.2
Eligible
Award Recipients
. The persons
eligible to receive Awards are the Employees, Consultants and
Directors of the Company.
1.3
Available
Awards
. Awards that may be
granted under the Plan include: (a) Incentive Stock Options, (b)
Non-qualified Stock Options, (c) Restricted Stock and (d)
Restricted Stock Units.
2.
Definitions
.
"
Affiliate
" means a corporation or other entity that,
directly or through one or more intermediaries, controls, is
controlled by or is under common control with, the
Company.
"
Applicable
Laws
" means the requirements
related to or implicated by the administration of the Plan under
applicable state corporate law, United States federal and state
securities laws, the Code, any stock exchange or quotation system
on which the shares of Common Stock are listed or quoted, and the
applicable laws of any foreign country or jurisdiction where Awards
are granted under the Plan.
"
Award
" means any right granted under the Plan,
including an Incentive Stock Option, a Non-qualified Stock Option,
a Restricted Stock Award or a Restricted Stock Unit
Award.
"
Award
Agreement
" means a written
agreement, contract, certificate or other instrument or document
evidencing the terms and conditions of an individual Award granted
under the Plan which may, in the discretion of the Company, be
transmitted electronically to any Participant. Each Award Agreement
shall be subject to the terms and conditions of the
Plan.
"
Board
" means the Board of Directors of the Company, as
constituted at any time.
"
Cause
" means:
With
respect to any Employee or Consultant, unless the applicable Award
Agreement states otherwise:
(a)
If the Employee or Consultant is a party to an employment or
service agreement with the Company or its Affiliates and such
agreement provides for a definition of Cause, the definition
contained therein; or
(b)
If no such agreement exists, or if such agreement does not define
Cause: (i) the commission of, or plea of guilty or no contest to, a
felony or a crime involving moral turpitude or the commission of
any other act involving willful malfeasance or material fiduciary
breach with respect to the Company or an Affiliate; (ii) conduct
that results in or is reasonably likely to result in harm to the
reputation or business of the Company or any of its Affiliates;
(iii) gross negligence or willful misconduct with respect to the
Company or an Affiliate; or (iv) material violation of state or
federal securities laws.
With
respect to any Director, unless the applicable Award Agreement
states otherwise, a determination by a majority of the
disinterested Board members that the Director has engaged in any of
the following:
(a)
malfeasance in office;
(b)
gross misconduct or neglect;
(c)
false or fraudulent misrepresentation inducing the director's
appointment;
(d)
willful conversion of corporate funds; or
(e)
repeated failure to participate in Board meetings on a regular
basis despite having received proper notice of the meetings in
advance.
The Committee, in its absolute discretion, shall determine the
effect of all matters and questions relating to whether a
Participant has been discharged for Cause.
"
Change in
Control
"
means:
(a)
One
Person (or more than one Person acting as a group) acquires
ownership of stock of the Company that, together with the stock
held by such Person or group, constitutes more than 50% of the
total fair market value or total voting power of the stock of the
Company; provided, that, a Change in Control shall not occur if any
Person (or more than one Person acting as a group) owns more than
50% of the total fair market value or total voting power of the
Company's stock and acquires additional stock;
(b)
One
Person (or more than one Person acting as a group) acquires (or has
acquired during the twelve-month period ending on the date of the
most recent acquisition) ownership of the Company's stock
possessing 50% or more of the total voting power of the stock of
such corporation;
(c)
A
majority of the members of the Board is replaced during any
twelve-month period by directors whose appointment or election is
not endorsed by a majority of the Board before the date of
appointment or election; or
(d)
One
Person (or more than one Person acting as a group), acquires (or
has acquired during the twelve-month period ending on the date of
the most recent acquisition) assets from the Company that have a
total gross fair market value equal to or more than 50% of the
total gross fair market value of all of the assets of the Company
immediately before such acquisition(s).
"
Code
" means the Internal Revenue Code of 1986, as it
may be amended from time to time. Any reference to a section of the
Code shall be deemed to include a reference to any regulations
promulgated thereunder.
"
Committee
" means a committee of one or more members of the
Board appointed by the Board to administer the Plan in accordance
with Section
3.4
and
Section
3.5
.
"
Common Stock
" means the voting common stock, $0.001 par value
per share, of the Company.
"
Company
" means New Age Beverages Corporation, a
Washington corporation, and any successor
thereto.
"
Consultant
" means any individual or entity which performs
bona fide services to the Company or an Affiliate, other than as an
Employee or Director, and who may be offered securities
registerable pursuant to a registration statement on Form S-8 under
the Securities Act.
"
Continuous
Service
" means that the
Participant's service with the Company or an Affiliate, whether as
an Employee, Consultant or Director, is not interrupted or
terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the
capacity in which the Participant renders service to the Company or
an Affiliate as an Employee, Consultant or Director or a change in
the entity for which the Participant renders such service,
provided
that
there is no interruption
or termination of the Participant's Continuous Service;
provided further
that
if any Award is subject to
Section 409A of the Code, this sentence shall only be given effect
to the extent consistent with Section 409A of the Code. For
example, a change in status from an Employee of the Company to a
Director of an Affiliate will not constitute an interruption of
Continuous Service.
"
Deferred Stock Units
(DSUs)
" has the meaning set
forth in Section 7.2 hereof.
"
Director
" means a member of the Board.
"
Disability
" means, unless the applicable Award Agreement
says otherwise, that the Participant is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment;
provided, however,
for purposes of determining the term
of an Incentive Stock Option pursuant to Section
6.9
hereof, the term Disability shall have the meaning
ascribed to it under Section 22(e)(3) of the Code. The
determination of whether an individual has a Disability shall be
determined under procedures established by the Committee. Except in
situations where the Committee is determining Disability for
purposes of the term of an Incentive Stock Option pursuant to
Section
6.9
hereof
within the meaning of Section 22(e)(3) of the Code, the Committee
may rely on any determination that a Participant is disabled for
purposes of benefits under any long-term disability plan maintained
by the Company or any Affiliate in which a Participant
participates.
"
Disqualifying
Disposition
" has the meaning
set forth in Section
14.10
.
"
Effective
Date
" shall mean the date as of
which this Plan is adopted by the Board.
"
Employee
" means any person, including an Officer or
Director, employed by the Company or an Affiliate;
provided,
that,
for purposes of
determining eligibility to receive Incentive Stock Options, an
Employee shall mean an employee of the Company or a parent or
subsidiary corporation within the meaning of Section 424 of the
Code. Mere service as a Director or payment of a director's fee by
the Company or an Affiliate shall not be sufficient to constitute
"employment" by the Company or an Affiliate.
"
Exchange Act
" means the Securities Exchange Act of 1934, as
amended.
"
Fair Market
Value
" means, as of any date,
the value of the Common Stock as determined below. If the Common
Stock is listed on any established stock exchange or a national
market system, including without limitation, the New York Stock
Exchange or the NASDAQ Stock Market, the Fair Market Value shall be
the closing price of a share of Common Stock (or if no sales were
reported the closing price on the date immediately preceding such
date) as quoted on such exchange or system on the day of
determination, as reported in the Wall Street Journal. In the
absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Committee and
such determination shall be conclusive and binding on all
persons.
"
Grant Date
" means the date on which the Committee adopts a
resolution, or takes other appropriate action, expressly granting
an Award to a Participant that specifies the key terms and
conditions of the Award or, if a later date is set forth in such
resolution, then such date as is set forth in such
resolution.
"
Incentive Stock
Option
" means an Option that is
designated by the Committee as an incentive stock option within the
meaning of Section 422 of the Code and that meets the requirements
set out in the Plan.
"
Non-Employee
Director
" means a Director who
is a "non-employee director" within the meaning of Rule
16b-3.
"
Non-qualified Stock
Option
" means an Option that by
its terms does not qualify or is not intended to qualify as an
Incentive Stock Option.
"
Officer"
means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.
"
Option
" means an Incentive Stock Option or a
Non-qualified Stock Option granted pursuant to the
Plan.
"
Optionholder
" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds
an outstanding Option.
"
Option Exercise
Price
" means the price at which
a share of Common Stock may be purchased upon the exercise of an
Option.
"
Participant
" means an eligible person to whom an Award is
granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Award.
"
Permitted
Transferee
" means: (a) a member
of the Optionholder's immediate family (child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships), any person sharing the Optionholder's
household (other than a tenant or employee), a trust in which these
persons have more than 50% of the beneficial interest, a foundation
in which these persons (or the Optionholder) control the management
of assets, and any other entity in which these persons (or the
Optionholder) own more than 50% of the voting interests; (b) third
parties designated by the Committee in connection with a program
established and approved by the Committee pursuant to which
Participants may receive a cash payment or other consideration in
consideration for the transfer of a Non-qualified Stock Option; and
(c) such other transferees as may be permitted by the Committee in
its sole discretion.
"
Person
" means a person as defined in Section 13(d)(3) of
the Exchange Act.
"
Plan
" means this New Age Beverages Corporation 2019
Equity Incentive Plan, as amended and/or amended and restated from
time to time.
"
Restricted
Period
" has the meaning set
forth in Section
7
.
"
Restricted
Stock
" means Common Stock,
subject to certain specified restrictions (including, without
limitation, a requirement that the Participant provide Continuous
Service for a specified period of time) granted under
Section
7
of the
Plan.
"
Restricted Stock
Unit
" means an unfunded and
unsecured promise to deliver shares of Common Stock, cash, other
securities or other property, subject to certain restrictions
(including, without limitation, a requirement that the Participant
provide Continuous Service for a specified period of time) granted
under Section
7
of the
Plan.
"
Rule 16b-3
" means Rule 16b-3 promulgated under the Exchange
Act or any successor to Rule 16b-3, as in effect from time to
time.
"
Securities
Act
" means the Securities Act
of 1933, as amended.
"
Stock for Stock
Exchange
" has the meaning set
forth in Section 6.4.
"
Substitute
Award
" has the meaning set
forth in Section 4.5.
"
Ten Percent
Shareholder
" means a person who
owns (or is deemed to own pursuant to Section 424(d) of the Code)
stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any of its
Affiliates.
"
Total Share
Reserve
" has the meaning set
forth in Section 4.1.
3.
Administration
.
3.1
Authority
of Committee
. The Plan shall be
administered by the Committee or, in the Board's sole discretion,
by the Board. Subject to the terms of the Plan, the Committee's
charter and Applicable Laws, and in addition to other express
powers and authorization conferred by the Plan, the Committee shall
have the authority:
(a)
to
construe and interpret the Plan and apply its
provisions;
(b)
to
promulgate, amend, and rescind rules and regulations relating to
the administration of the Plan;
(c)
to
authorize any person to execute, on behalf of the Company, any
instrument required to carry out the purposes of the
Plan;
(d)
to
delegate its authority to one or more Officers of the Company with
respect to Awards that do not involve "insiders" within the meaning
of Section 16 of the Exchange Act;
(e)
to
determine when Awards are to be granted under the Plan and the
applicable Grant Date;
(f)
from
time to time to select, subject to the limitations set forth in
this Plan, those eligible Award recipients to whom Awards shall be
granted;
(g)
to
determine the number of shares of Common Stock to be made subject
to each Award;
(h)
to
determine whether each Option is to be an Incentive Stock Option or
a Non-qualified Stock Option;
(i)
to
prescribe the terms and conditions of each Award, including,
without limitation, the exercise price and medium of payment and
vesting provisions, and to specify the provisions of the Award
Agreement relating to such grant;
(j)
to
amend any outstanding Awards, including for the purpose of
modifying the time or manner of vesting, or the term of any
outstanding Award;
provided,
however
, that if any such
amendment impairs a Participant's rights or increases a
Participant's obligations under his or her Award or creates or
increases a Participant's federal income tax liability with respect
to an Award, such amendment shall also be subject to the
Participant's consent;
(k)
to
determine the duration and purpose of leaves of absences which may
be granted to a Participant without constituting termination of
their employment for purposes of the Plan, which periods shall be
no shorter than the periods generally applicable to Employees under
the Company's employment policies;
(l)
to
make decisions with respect to outstanding Awards that may become
necessary upon a change in corporate control or an event that
triggers anti-dilution adjustments;
(m)
to
interpret, administer, reconcile any inconsistency in, correct any
defect in and/or supply any omission in the Plan and any instrument
or agreement relating to, or Award granted under, the Plan;
and
(n)
to
exercise discretion to make any and all other determinations which
it determines to be necessary or advisable for the administration
of the Plan.
The
Committee also may modify the purchase price or the exercise price
of any outstanding Award, provided that if the modification effects
a repricing, shareholder approval shall be required before the
repricing is effective.
3.2
Committee
Decisions Final
. All decisions
made by the Committee pursuant to the provisions of the Plan shall
be final and binding on the Company and the Participants, unless
such decisions are determined by a court having jurisdiction to be
arbitrary and capricious.
3.3
Delegation
.
The Committee, or if no Committee has been appointed, the Board,
may delegate administration of the Plan to a committee or
committees of one or more members of the Board, and the term
"
Committee
" shall apply to any person or persons to whom
such authority has been delegated. The Committee shall have the
power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in
this Plan to the Board or the Committee shall thereafter be to the
committee or subcommittee), subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may abolish the Committee
at any time and revest in the Board the administration of the Plan.
The members of the Committee shall be appointed by and serve at the
pleasure of the Board. From time to time, the Board may increase or
decrease the size of the Committee, add additional members to,
remove members (with or without cause) from, appoint new members in
substitution therefor, and fill vacancies, however caused, in the
Committee. The Committee shall act pursuant to a vote of the
majority of its members or, in the case of a Committee comprised of
only two members, the unanimous consent of its members, whether
present or not, or by the written consent of the majority of its
members and minutes shall be kept of all of its meetings and copies
thereof shall be provided to the Board. Subject to the limitations
prescribed by the Plan and the Board, the Committee may establish
and follow such rules and regulations for the conduct of its
business as it may determine to be advisable.
3.4
Committee
Composition
. Except as
otherwise determined by the Board, the Committee shall consist
solely of two or more Non-Employee Directors. The Board shall have
discretion to determine whether or not it intends to comply with
the exemption requirements of Rule 16b-3. However, if the Board
intends to satisfy such exemption requirements, with respect to any
insider subject to Section 16 of the Exchange Act, the Committee
shall be a compensation committee of the Board that at all times
consists solely of two or more Non-Employee Directors. Within the
scope of such authority, the Board or the Committee may delegate to
a committee of one or more members of the Board who are not
Non-Employee Directors the authority to grant Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act.
Nothing herein shall create an inference that an Award is not
validly granted under the Plan in the event Awards are granted
under the Plan by a compensation committee of the Board that does
not at all times consist solely of two or more Non-Employee
Directors.
3.5
Indemnification
.
In addition to such other rights of indemnification as they may
have as Directors or members of the Committee, and to the extent
allowed by Applicable Laws, the Committee shall be indemnified by
the Company against the reasonable expenses, including attorney's
fees, actually incurred in connection with any action, suit or
proceeding or in connection with any appeal therein, to which the
Committee may be party by reason of any action taken or failure to
act under or in connection with the Plan or any Award granted under
the Plan, and against all amounts paid by the Committee in
settlement thereof (
provided,
however
, that the settlement
has been approved by the Company, which approval shall not be
unreasonably withheld) or paid by the Committee in satisfaction of
a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such Committee did not act in good
faith and in a manner which such person reasonably believed to be
in the best interests of the Company, or in the case of a criminal
proceeding, had no reason to believe that the conduct complained of
was unlawful;
provided,
however
, that within 60 days
after the institution of any such action, suit or proceeding, such
Committee shall, in writing, offer the Company the opportunity at
its own expense to handle and defend such action, suit or
proceeding.
4.
Shares
Subject to the Plan
.
4.1
Subject
to adjustment in accordance with Section
11
, no more than 10,000,000 shares of Common Stock
shall be available for the grant of Awards under the Plan (the
"
Total Share
Reserve
"). During the terms of
the Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such
Awards.
4.2
Shares
of Common Stock available for distribution under the Plan may
consist, in whole or in part, of authorized and unissued shares,
treasury shares or shares reacquired by the Company in any
manner.
4.3
Subject
to adjustment in accordance with Section 11, no more than
10,000,000 shares of Common Stock may be issued in the aggregate
pursuant to the exercise of Incentive Stock Options (the
"
ISO
Limit
").
4.4
Any
shares of Common Stock subject to an Award that expires or is
canceled, forfeited, or terminated without issuance of the full
number of shares of Common Stock to which the Award related will
again be available for issuance under the Plan. Notwithstanding
anything to the contrary contained herein: shares subject to an
Award under the Plan shall not again be made available for issuance
or delivery under the Plan if such shares are (a) shares tendered
in payment of an Option, (b) shares delivered or withheld by the
Company to satisfy any tax withholding obligation, or (c) shares
covered by Awards that were not issued upon the settlement of the
Award
4.5
Awards
may, in the sole discretion of the Committee, be granted under the
Plan in assumption of, or in substitution for, outstanding awards
previously granted by an entity acquired by the Company or with
which the Company combines ("
Substitute
Awards
"). Substitute Awards
shall not be counted against the Total Share Reserve; provided,
that, Substitute Awards issued in connection with the assumption
of, or in substitution for, outstanding options intended to qualify
as Incentive Stock Options shall be counted against the ISO limit.
Subject to applicable stock exchange requirements, available shares
under a shareholder-approved plan of an entity directly or
indirectly acquired by the Company or with which the Company
combines (as appropriately adjusted to reflect such acquisition or
transaction) may be used for Awards under the Plan and shall not
count toward the Total Share Limit.
5.
Eligibility
.
5.1
Eligibility
for Specific Awards
. Incentive
Stock Options may be granted only to Employees only. Awards other
than Incentive Stock Options may be granted to Employees,
Consultants and Directors.
5.2
Ten
Percent Shareholders
. A Ten
Percent Shareholder shall not be granted an Incentive Stock Option
unless the Option Exercise Price is at least 110% of the Fair
Market Value of the Common Stock on the Grant Date and the Option
is not exercisable after the expiration of five years from the
Grant Date.
6.
Option
Provisions
. Each Option granted
under the Plan shall be evidenced by an Award Agreement. Each
Option so granted shall be subject to the conditions set forth in
this Section 6, and to such other conditions not inconsistent with
the Plan as may be reflected in the applicable Award Agreement. All
Options shall be separately designated Incentive Stock Options or
Non-qualified Stock Options at the time of grant, and, if
certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of
each type of Option. Notwithstanding the foregoing, the Company
shall have no liability to any Participant or any other person if
an Option designated as an Incentive Stock Option fails to qualify
as such at any time or if an Option is determined to constitute
"nonqualified deferred compensation" within the meaning of Section
409A of the Code and the terms of such Option do not satisfy the
requirements of Section 409A of the Code. The provisions of
separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following
provisions:
6.1
Term
.
Subject to the provisions of Section
5.2
regarding Ten Percent Shareholders, no Incentive
Stock Option shall be exercisable after the expiration of 10 years
from the Grant Date. The term of a Non-qualified Stock Option
granted under the Plan shall be determined by the Committee;
provided,
however
, no Non-qualified Stock
Option shall be exercisable after the expiration of 10 years from
the Grant Date.
6.2
Exercise
Price of an Incentive Stock Option
. Subject to the provisions of Section
5.2
regarding Ten Percent Shareholders,
the Option Exercise Price of each Incentive Stock Option shall be
not less than 100% of the Fair Market Value of the Common Stock
subject to the Option on the Grant Date. Notwithstanding the
foregoing, an Incentive Stock Option may be granted with an Option
Exercise Price lower than that set forth in the preceding sentence
if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section
424(a) of the Code.
6.3
Exercise
Price of a Non-qualified Stock Option
. The Option Exercise Price of each Non-qualified
Stock Option shall be not less than 100% of the Fair Market Value
of the Common Stock subject to the Option on the Grant Date.
Notwithstanding the foregoing, a Non-qualified Stock Option may be
granted with an Option Exercise Price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner
satisfying the provisions of Section 409A of the
Code.
6.4
Consideration
.
The Option Exercise Price of Common Stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (a) in cash or by certified or
bank check at the time the Option is exercised or (b) in the
discretion of the Committee, upon such terms as the Committee shall
approve, the Option Exercise Price may be paid: (i) by delivery to
the Company of other Common Stock, duly endorsed for transfer to
the Company, with a Fair Market Value on the date of delivery equal
to the Option Exercise Price (or portion thereof) due for the
number of shares being acquired, or by means of attestation whereby
the Participant identifies for delivery specific shares of Common
Stock that have an aggregate Fair Market Value on the date of
attestation equal to the Option Exercise Price (or portion thereof)
and receives a number of shares of Common Stock equal to the
difference between the number of shares thereby purchased and the
number of identified attestation shares of Common Stock (a
"
Stock for
Stock Exchange
"); (ii) a
"cashless" exercise program established with a broker; (iii) by
reduction in the number of shares of Common Stock otherwise
deliverable upon exercise of such Option with a Fair Market Value
equal to the aggregate Option Exercise Price at the time of
exercise; (iv) by any combination of the foregoing methods; or (v)
in any other form of legal consideration that may be acceptable to
the Committee. Unless otherwise specifically provided in the
Option, the exercise price of Common Stock acquired pursuant to an
Option that is paid by delivery (or attestation) to the Company of
other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six months (or such
longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes). Notwithstanding the
foregoing, during any period for which the Common Stock is publicly
traded (i.e., the Common Stock is listed on any established stock
exchange or a national market system) an exercise by a Director or
Officer that involves or may involve a direct or indirect extension
of credit or arrangement of an extension of credit by the Company,
directly or indirectly, in violation of Section 402(a) of the
Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any
Award under this Plan.
6.5
Transferability
of an Incentive Stock Option
.
An Incentive Stock Option shall not be transferable except by will
or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of
the Optionholder, shall thereafter be entitled to exercise the
Option.
6.6
Transferability
of a Non-qualified Stock Option
. A Non-qualified Stock Option may, in the sole
discretion of the Committee, be transferable to a Permitted
Transferee, upon written approval by the Committee to the extent
provided in the Award Agreement. If the Non-qualified Stock Option
does not provide for transferability, then the Non-qualified Stock
Option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of
the Optionholder, shall thereafter be entitled to exercise the
Option.
6.7
Vesting
of Options
. Each Option may,
but need not, vest and therefore become exercisable in periodic
installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or
other criteria) as the Committee may deem appropriate. The vesting
provisions of individual Options may vary. No Option may be
exercised for a fraction of a share of Common Stock. The Committee
may, but shall not be required to, provide for an acceleration of
vesting and exercisability in the terms of any Award Agreement upon
the occurrence of a specified event.
6.8
Termination
of Continuous Service
. Unless
otherwise provided in an Award Agreement or in an employment
agreement the terms of which have been approved by the Committee,
in the event an Optionholder's Continuous Service terminates (other
than upon the Optionholder's death or Disability), the Optionholder
may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination)
but only within such period of time ending on the earlier of (a)
the date three months following the termination of the
Optionholder's Continuous Service or (b) the expiration of the term
of the Option as set forth in the Award Agreement;
provided
that
, if the termination of
Continuous Service is by the Company for Cause, all outstanding
Options (whether or not vested) shall immediately terminate and
cease to be exercisable. If, after termination, the Optionholder
does not exercise his or her Option within the time specified in
the Award Agreement, the Option shall
terminate.
6.9
Disability
of Optionholder
. Unless
otherwise provided in an Award Agreement, in the event that an
Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (a) the date 12
months following such termination or (b) the expiration of the term
of the Option as set forth in the Award Agreement. If, after
termination, the Optionholder does not exercise his or her Option
within the time specified herein or in the Award Agreement, the
Option shall terminate.
6.10
Death
of Optionholder
. Unless
otherwise provided in an Award Agreement, in the event an
Optionholder's Continuous Service terminates as a result of the
Optionholder's death, then the Option may be exercised (to the
extent the Optionholder was entitled to exercise such Option as of
the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance
or by a person designated to exercise the Option upon the
Optionholder's death, but only within the period ending on the
earlier of (a) the date 12 months following the date of death or
(b) the expiration of the term of such Option as set forth in the
Award Agreement. If, after the Optionholder's death, the Option is
not exercised within the time specified herein or in the Award
Agreement, the Option shall terminate.
6.11
Incentive
Stock Option $100,000 Limitation
. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with
respect to which Incentive Stock Options are exercisable for the
first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds $100,000, the
Options or portions thereof which exceed such limit (according to
the order in which they were granted) shall be treated as
Non-qualified Stock Options.
(a)
General
A Restricted Award is an Award of actual shares of
Common Stock ("
Restricted
Stock
") or hypothetical Common
Stock units ("
Restricted Stock
Units
") having a value equal to
the Fair Market Value of an identical number of shares of Common
Stock, which may, but need not, provide that such Restricted Award
may not be sold, assigned, transferred or otherwise disposed of,
pledged or hypothecated as collateral for a loan or as security for
the performance of any obligation or for any other purpose for such
period (the "
Restricted
Period
") as the Committee shall
determine. Each Restricted Award granted under the Plan shall be
evidenced by an Award Agreement. Each Restricted Award so granted
shall be subject to the conditions set forth in this Section 7, and
to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement.
(b)
Restricted
Stock and Restricted Stock Units
(i)
Each
Participant granted Restricted Stock shall execute and deliver to
the Company an Award Agreement with respect to the Restricted Stock
setting forth the restrictions and other terms and conditions
applicable to such Restricted Stock. If the Committee determines
that the Restricted Stock shall be held by the Company or in escrow
rather than delivered to the Participant pending the release of the
applicable restrictions, the Committee may require the Participant
to additionally execute and deliver to the Company (A) an escrow
agreement satisfactory to the Committee, if applicable and (B) the
appropriate blank stock power with respect to the Restricted Stock
covered by such agreement. If a Participant fails to execute an
agreement evidencing an Award of Restricted Stock and, if
applicable, an escrow agreement and stock power, the Award shall be
null and void. Subject to the restrictions set forth in the Award,
the Participant generally shall have the rights and privileges of a
shareholder as to such Restricted Stock, including the right to
vote such Restricted Stock and the right to receive
dividends
.
(ii)
The
terms and conditions of a grant of Restricted Stock Units shall be
reflected in an Award Agreement. No shares of Common Stock shall be
issued at the time a Restricted Stock Unit is granted, and the
Company will not be required to set aside funds for the payment of
any such Award. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder. The
Committee may also grant Restricted Stock Units with a deferral
feature, whereby settlement is deferred beyond the vesting date
until the occurrence of a future payment date or event set forth in
an Award Agreement ("
Deferred Stock
Units
"). At the discretion of
the Committee, each Restricted Stock Unit or Deferred Stock Unit
(representing one share of Common Stock) may be credited with an
amount equal to the cash and stock dividends paid by the Company in
respect of one share of Common Stock ("
Dividend
Equivalents
").
(c)
Restrictions
(i)
Restricted
Stock awarded to a Participant shall be subject to the following
restrictions until the expiration of the Restricted Period, and to
such other terms and conditions as may be set forth in the
applicable Award Agreement: (A) if an escrow arrangement is used,
the Participant shall not be entitled to delivery of the stock
certificate; (B) the shares shall be subject to the restrictions on
transferability set forth in the Award Agreement; (C) the shares
shall be subject to forfeiture to the extent provided in the
applicable Award Agreement; and (D) to the extent such shares are
forfeited, the stock certificates shall be returned to the Company,
and all rights of the Participant to such shares and as a
shareholder with respect to such shares shall terminate without
further obligation on the part of the Company.
(ii)
Restricted
Stock Units and Deferred Stock Units awarded to any Participant
shall be subject to (A) forfeiture until the expiration of the
Restricted Period, and satisfaction of any applicable Performance
Goals during such period, to the extent provided in the applicable
Award Agreement, and to the extent such Restricted Stock Units or
Deferred Stock Units are forfeited, all rights of the Participant
to such Restricted Stock Units or Deferred Stock Units shall
terminate without further obligation on the part of the Company and
(B) such other terms and conditions as may be set forth in the
applicable Award Agreement.
(iii)
The
Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock, Restricted Stock Units and
Deferred Stock Units whenever it may determine that, by reason of
changes in Applicable Laws or other changes in circumstances
arising after the date the Restricted Stock or Restricted Stock
Units or Deferred Stock Units are granted, such action is
appropriate.
(d)
Restricted
Period
With
respect to Restricted Awards, the Restricted Period shall commence
on the Grant Date and end at the time or times set forth on a
schedule established by the Committee in the applicable Award
Agreement.
No
Restricted Award may be granted or settled for a fraction of a
share of Common Stock. The Committee may, but shall not be required
to, provide for an acceleration of vesting in the terms of any
Award Agreement upon the occurrence of a specified
event.
(e)
Delivery
of Restricted Stock and Settlement of Restricted Stock
Units
Upon the expiration of the Restricted Period with
respect to any shares of Restricted Stock, the restrictions set
forth in Section 7 and the applicable Award Agreement shall be of
no further force or effect with respect to such shares, except as
set forth in the applicable Award Agreement. If an escrow
arrangement is used, upon such expiration, the Company shall
deliver to the Participant, or his or her beneficiary, without
charge, the stock certificate evidencing the shares of Restricted
Stock which have not then been forfeited and with respect to which
the Restricted Period has expired (to the nearest full share). Upon
the expiration of the Restricted Period with respect to any
outstanding Restricted Stock Units, or at the expiration of the
deferral period with respect to any outstanding Deferred Stock
Units, the Company shall deliver to the Participant, or his or her
beneficiary, without charge, one share of Common Stock for each
such outstanding vested Restricted Stock Unit or Deferred Stock
Unit ("
Vested Unit
");
provided,
however
, that, if explicitly
provided in the applicable Award Agreement, the Committee may, in
its sole discretion, elect to pay cash or part cash and part Common
Stock in lieu of delivering only shares of Common Stock for Vested
Units. If a cash payment is made in lieu of delivering shares of
Common Stock, the amount of such payment shall be equal to the Fair
Market Value of the Common Stock as of the date on which the
Restricted Period lapsed in the case of Restricted Stock Units, or
the delivery date in the case of Deferred Stock Units, with respect
to each Vested Unit.
(f)
Stock
Restrictions
Each
certificate representing Restricted Stock awarded under the Plan
shall bear a legend in such form as the Company deems
appropriate.
8.
Securities
Law Compliance
. Each Award
Agreement shall provide that no shares of Common Stock shall be
purchased or sold thereunder unless and until (a) any then
applicable requirements of state or federal laws and regulatory
agencies have been fully complied with to the satisfaction of the
Company and its counsel and (b) if required to do so by the
Company, the Participant has executed and delivered to the Company
a letter of investment intent in such form and containing such
provisions as the Committee may require. The Company shall use
reasonable efforts to seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such
authority as may be required to grant Awards and to issue and sell
shares of Common Stock upon exercise of the Awards; provided,
however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Award or any Common
Stock issued or issuable pursuant to any such Award. If, after
reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of Common
Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise
of such Awards unless and until such authority is
obtained.
9.
Use
of Proceeds from Stock
.
Proceeds from the sale of Common Stock pursuant to Awards, or upon
exercise thereof, shall constitute general funds of the
Company.
10.
Miscellaneous
.
10.1
Acceleration
of Exercisability and Vesting
.
The Committee shall have the power to accelerate the time at which
an Award may first be exercised or the time during which an Award
or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at
which it may first be exercised or the time during which it will
vest.
10.2
Shareholder
Rights
. Except as provided in
the Plan or an Award Agreement, no Participant shall be deemed to
be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to such Award unless
and until such Participant has satisfied all requirements for
exercise of the Award pursuant to its terms and no adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions of other rights for
which the record date is prior to the date such Common Stock
certificate is issued, except as provided in Section
11
hereof.
10.3
No
Employment or Other Service Rights
. Nothing in the Plan or any instrument executed
or Award granted pursuant thereto shall confer upon any Participant
any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall
affect the right of the Company or an Affiliate to terminate (a)
the employment of an Employee with or without notice and with or
without Cause or (b) the service of a Director pursuant to the
By-laws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company
or the Affiliate is incorporated, as the case may
be.
10.4
Transfer;
Approved Leave of Absence
. For
purposes of the Plan, no termination of employment by an Employee
shall be deemed to result from either (a) a transfer of employment
to the Company from an Affiliate or from the Company to an
Affiliate, or from one Affiliate to another, or (b) an approved
leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the Employee's right to
reemployment is guaranteed either by a statute or by contract or
under the policy pursuant to which the leave of absence was granted
or if the Committee otherwise so provides in writing, in either
case, except to the extent inconsistent with Section 409A of the
Code if the applicable Award is subject
thereto.
10.5
Withholding
Obligations
. To the extent
provided by the terms of an Award Agreement and subject to the
discretion of the Committee, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under an Award by any of
the following means (in addition to the Company's right to withhold
from any compensation paid to the Participant by the Company) or by
a combination of such means: (a) tendering a cash payment; (b)
authorizing the Company to withhold shares of Common Stock from the
shares of Common Stock otherwise issuable to the Participant as a
result of the exercise or acquisition of Common Stock under the
Award,
provided,
however
, that no shares of
Common Stock are withheld with a value exceeding the minimum amount
of tax required to be withheld by law; or (c) delivering to the
Company previously owned and unencumbered shares of Common Stock of
the Company.
11.
Adjustments
Upon Changes in Stock
. In the
event of changes in the outstanding Common Stock or in the capital
structure of the Company by reason of any stock or extraordinary
cash dividend, stock split, reverse stock split, an extraordinary
corporate transaction such as any recapitalization, reorganization,
merger, consolidation, combination, exchange, or other relevant
change in capitalization occurring after the Grant Date of any
Award, Awards granted under the Plan and any Award Agreements, the
exercise price of Options and the maximum number of shares of
Common Stock subject to all Awards stated in Section
4
will be equitably adjusted or
substituted, as to the number, price or kind of a share of Common
Stock or other consideration subject to such Awards to the extent
necessary to preserve the economic intent of such Award. In the
case of adjustments made pursuant to this Section 11, unless the
Committee specifically determines that such adjustment is in the
best interests of the Company or its Affiliates, the Committee
shall, in the case of Incentive Stock Options, ensure that any
adjustments under this Section 11 will not constitute a
modification, extension or renewal of the Incentive Stock Options
within the meaning of Section 424(h)(3) of the Code and in the case
of Non-qualified Stock Options, ensure that any adjustments under
this Section 11 will not constitute a modification of such
Non-qualified Stock Options within the meaning of Section 409A of
the Code. Any adjustments made under this Section 11 shall be made
in a manner which does not adversely affect the exemption provided
pursuant to Rule 16b-3 under the Exchange Act.
12.
Effect
of Change in Control
.
12.1
Unless
otherwise provided in an Award Agreement,
notwithstanding any provision of the Plan to the
contrary:
(a)
In
the event of a Change in Control, all outstanding Options shall
become immediately exercisable with respect to 100% of the shares
subject to such Options, and/or the Restricted Period shall expire
immediately with respect to 100% of the outstanding shares of
Restricted Stock or Restricted Stock Units.
To
the extent practicable, any actions taken by the Committee under
the immediately preceding clause (a) shall occur in a manner and at
a time which allows affected Participants the ability to
participate in the Change in Control with respect to the shares of
Common Stock subject to their Awards.
12.2
In
addition, in the event of a Change in Control, the Committee may in
its discretion and upon at least 10 days' advance notice to the
affected persons, cancel any outstanding Awards and pay to the
holders thereof, in cash or stock, or any combination thereof, the
value of such Awards based upon the price per share of Common Stock
received or to be received by other shareholders of the Company in
the event. In the case of any Option with an exercise price that
equals or exceeds the price paid for a share of Common Stock in
connection with the Change in Control, the Committee may cancel the
Option without the payment of consideration
therefor.
12.3
The
obligations of the Company under the Plan shall be binding upon any
successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any
successor corporation or organization succeeding to all or
substantially all of the assets and business of the Company and its
Affiliates, taken as a whole.
13.
Amendment
of the Plan and Awards
.
13.1
Amendment
of Plan
. The Board at any time,
and from time to time, may amend or terminate the Plan. However,
except as provided in Section
11
relating to adjustments upon changes in Common
Stock and Section
13.3
, no
amendment shall be effective unless approved by the shareholders of
the Company to the extent shareholder approval is necessary to
satisfy any Applicable Laws. At the time of such amendment, the
Board shall determine, upon advice from counsel, whether such
amendment will be contingent on shareholder
approval.
13.2
Shareholder
Approval
. The Board may, in its
sole discretion, submit any other amendment to the Plan for
shareholder approval.
13.3
Contemplated
Amendments
. It is expressly
contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible Employees,
Consultants and Directors with the maximum benefits provided or to
be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options or to
the nonqualified deferred compensation provisions of Section 409A
of the Code and/or to bring the Plan and/or Awards granted under it
into compliance therewith.
13.4
No
Impairment of Rights
. Rights
under any Award granted before amendment of the Plan shall not be
impaired by any amendment of the Plan unless (a) the Company
requests the consent of the Participant and (b) the Participant
consents in writing.
13.5
Amendment
of Awards
. The Committee at any
time, and from time to time, may amend the terms of any one or more
Awards;
provided,
however
, that the Committee may
not affect any amendment which would otherwise constitute an
impairment of the rights under any Award unless (a) the Company
requests the consent of the Participant and (b) the Participant
consents in writing.
14.
General
Provisions
.
14.1
Forfeiture
Events
. The Committee may
specify in an Award Agreement that the Participant's rights,
payments and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain events, in addition to applicable vesting
conditions of an Award. Such events may include, without
limitation, breach of non-competition, non-solicitation,
confidentiality, or other restrictive covenants that are contained
in the Award Agreement or otherwise applicable to the Participant,
a termination of the Participant's Continuous Service for Cause, or
other conduct by the Participant that is detrimental to the
business or reputation of the Company and/or its
Affiliates.
14.2
Clawback
.
Notwithstanding any other provisions in this Plan, the Company may
cancel any Award, require reimbursement of any Award by a
Participant, and effect any other right of recoupment of equity or
other compensation provided under the Plan in accordance with any
Company policies that may be adopted and/or modified from time to
time ("
Clawback
Policy
"). In addition, a
Participant may be required to repay to the Company previously paid
compensation, whether provided pursuant to the Plan or an Award
Agreement, in accordance with the Clawback Policy. By accepting an
Award, the Participant is agreeing to be bound by the Clawback
Policy, as in effect or as may be adopted and/or modified from time
to time by the Company in its discretion (including, without
limitation, to comply with applicable law or stock exchange listing
requirements).
14.3
Other
Compensation Arrangements.
Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable
only in specific cases.
14.4
Sub
Plans
. The Committee may from
time to time establish sub-plans under the Plan for purposes of
satisfying securities, tax or other laws of various jurisdictions
in which the Company intends to grant Awards. Any sub-plans shall
contain such limitations and other terms and conditions as the
Committee determines are necessary or desirable. All sub-plans
shall be deemed a part of the Plan, but each sub-plan shall apply
only to the Participants in the jurisdiction for which the sub-plan
was designed.
14.5
Unfunded
Plan
. The Plan shall be
unfunded. Neither the Company, the Board nor the Committee shall be
required to establish any special or separate fund or to segregate
any assets to assure the performance of its obligations under the
Plan.
14.6
Recapitalizations
.
Each Award Agreement shall contain provisions required to reflect
the provisions of Section
11
.
14.7
Delivery
.
Upon exercise of a right granted under this Plan, the Company shall
issue Common Stock or pay any amounts due within a reasonable
period of time thereafter. Subject to any statutory or regulatory
obligations the Company may otherwise have, for purposes of this
Plan, 30 days shall be considered a reasonable period of
time.
14.8
No
Fractional Shares
. No
fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan. The Committee shall determine whether cash,
additional Awards or other securities or property shall be issued
or paid in lieu of fractional shares of Common Stock or whether any
fractional shares should be rounded, forfeited or otherwise
eliminated.
14.9
Other
Provisions
. The Award
Agreements authorized under the Plan may contain such other
provisions not inconsistent with this Plan, including, without
limitation, restrictions upon the exercise of Awards, as the
Committee may deem advisable.
14.10
Section
409A
. The Plan is intended to
comply with Section 409A of the Code to the extent subject thereto,
and, accordingly, to the maximum extent permitted, the Plan shall
be interpreted and administered to be in compliance therewith. Any
payments described in the Plan that are due within the "short-term
deferral period" as defined in Section 409A of the Code shall not
be treated as deferred compensation unless Applicable Laws require
otherwise. Notwithstanding anything to the contrary in the Plan, to
the extent required to avoid accelerated taxation and tax penalties
under Section 409A of the Code, amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to
the Plan during the six (6) month period immediately following the
Participant's termination of Continuous Service shall instead be
paid on the first payroll date after the six-month anniversary of
the Participant's separation from service (or the Participant's
death, if earlier). Notwithstanding the foregoing, neither the
Company nor the Committee shall have any obligation to take any
action to prevent the assessment of any additional tax or penalty
on any Participant under Section 409A of the Code and neither the
Company nor the Committee will have any liability to any
Participant for such tax or penalty.
14.11
Disqualifying
Dispositions
. Any Participant
who shall make a "disposition" (as defined in Section 424 of the
Code) of all or any portion of shares of Common Stock acquired upon
exercise of an Incentive Stock Option within two years from the
Grant Date of such Incentive Stock Option or within one year after
the issuance of the shares of Common Stock acquired upon exercise
of such Incentive Stock Option (a "
Disqualifying
Disposition
") shall be required
to immediately advise the Company in writing as to the occurrence
of the sale and the price realized upon the sale of such shares of
Common Stock.
14.12
Section
16.
It is the intent of the
Company that the Plan satisfy, and be interpreted in a manner that
satisfies, the applicable requirements of Rule 16b-3 as promulgated
under Section 16 of the Exchange Act so that Participants will be
entitled to the benefit of Rule 16b-3, or any other rule
promulgated under Section 16 of the Exchange Act, and will not be
subject to short-swing liability under Section 16 of the Exchange
Act. Accordingly, if the operation of any provision of the Plan
would conflict with the intent expressed in this Section 14.12,
such provision to the extent possible shall be interpreted and/or
deemed amended so as to avoid such conflict.
14.13
Beneficiary
Designation
. Each Participant
under the Plan may from time to time name any beneficiary or
beneficiaries by whom any right under the Plan is to be exercised
in case of such Participant's death. Each designation will revoke
all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Committee and shall be effective only
when filed by the Participant in writing with the Company during
the Participant's lifetime.
14.14
Expenses
.
The costs of administering the Plan shall be paid by the
Company.
14.15
Severability
.
If any of the provisions of the Plan or any Award Agreement is held
to be invalid, illegal or unenforceable, whether in whole or in
part, such provision shall be deemed modified to the extent, but
only to the extent, of such invalidity, illegality or
unenforceability and the remaining provisions shall not be affected
thereby.
14.16
Plan
Headings
. The headings in the
Plan are for purposes of convenience only and are not intended to
define or limit the construction of the provisions
hereof.
14.17
Non-Uniform
Treatment
. The Committee's
determinations under the Plan need not be uniform and may be made
by it selectively among persons who are eligible to receive, or
actually receive, Awards. Without limiting the generality of the
foregoing, the Committee shall be entitled to make non-uniform and
selective determinations, amendments and adjustments, and to enter
into non-uniform and selective Award
Agreements.
15.
Effective
Date and Termination of Plan.
This Plan was approved by the Board and became
effective on April 5, 2019 (the “Effective Date”).
Unless earlier terminated by the Board, this Plan shall terminate
at the close of business on April 5, 2029. After the termination of
this Plan either upon such stated expiration date or its earlier
termination by the Board, no additional awards may be granted under
this Plan, but previously granted awards (and the authority of the
Administrator with respect thereto, including the authority to
amend such awards) shall remain outstanding in accordance with
their applicable terms and conditions and the terms and conditions
of this Plan.
Notwithstanding
any provisions herein to the contrary, until such time that the
Plan has been approved by the holders of not less than a majority
of each class of outstanding capital stock of the Company entitled
to vote thereon, the Company (i) may not grant any shares of stock
to any Person pursuant to thePlan; and (ii) any options granted by
the Company to any Person pursuant to the Plan may not be exercised
prior to the Company obtaining the requisite stockholder approval.
If the Company does not obtain the requisite stockholder approval
within one year from the Effective Date, the Plan shall be
immediately unwound and any outstanding options granted hereunder
prior to obtaining the requisite stockholder approval shall be
immediately cancelled.
16.
Termination
or Suspension of the Plan
. No
Award shall be granted pursuant to the Plan after the termination
of the Plan in accordance with Section 15, but Awards theretofore
granted may extend beyond that date, subject to Section 15. The
Board may suspend or terminate the Plan at any earlier date
pursuant to Section
13.1
or 15
hereof. No Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
17.
Choice
of Law
. The law of the State of
Washington shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such
state's conflict of law rules.
As
adopted by the Board of Directors of New Age Beverages Corporation
on April 5, 2019.
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