UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under Rule 14a-12
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Zedge, Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rule 14a-6(i)(1), and 0-11.
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Title of each class of securities to which
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Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
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Set
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the amount on which the filing fee is calculated and
state how it was determined):
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Proposed maximum aggregate value of
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Fee paid previously with preliminary
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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.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement
No.:
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Date Filed:
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ZEDGE, INC.
22 Cortlandt Street, 14
th
Floor
New York, NY 10007
(330) 577-3424
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TIME AND DATE:
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11:00 a.m., local time, on Wednesday, January 17, 2018
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PLACE:
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Offices of Zedge, Inc., 22 Cortlandt Street, 14
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Floor, New York, New York 10007
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ITEMS OF BUSINESS:
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1. To elect five directors, each for a term of one year.
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2. To approve an amendment to the Zedge, Inc. 2016 Stock Option and Incentive Plan (the “2016 Plan”) that will, among other things, (a) increase the number of shares of the Company’s Class B Common Stock available for the grant of awards thereunder by 350,000, and (b) modify the terms of the annual automatic grants to independent, non-employee directors to provide that the Compensation Committee may elect to pay any or all of the $50,000 in cash or fully vested shares of the Company’s restricted Class B common stock.
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3. To conduct an advisory vote on executive compensation.
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4. To ratify the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the Fiscal Year ending July 31, 2018.
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5. To transact other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
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RECORD DATE:
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You can vote if you were a stockholder of record as of the close of business on November 22, 2017.
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PROXY VOTING:
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You can vote either in person at the Annual Meeting or by proxy without attending the meeting.
See
details under the heading “How do I Vote?”
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ANNUAL MEETING ADMISSION:
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If you are a stockholder of record, a form of personal photo identification must be presented in order to be admitted to the Annual Meeting. If your shares are held in the name of a bank, broker or other holder of record, you must bring a brokerage statement or other written proof of ownership as of November 22, 2017 with you to the Annual Meeting, as well as a form of personal photo identification.
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ANNUAL MEETING DIRECTIONS:
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You may request directions to the annual meeting via email at
ir@zedge.net
or by calling Zedge Investor Relations at (330) 577-3424.
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IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ZEDGE, INC. STOCKHOLDERS MEETING TO BE HELD ON JANUARY 17, 2018
:
The Notice of Annual Meeting and Proxy Statement and the 2017 Annual Report
are available at:
http://investor.zedge.net/
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BY ORDER OF THE BOARD OF DIRECTORS
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Joyce Mason
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Corporate Secretary
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New York, New York
November 28, 2017
ZEDGE, INC.
22 Cortlandt Street, 14
th
Floor
New York, NY 10007
(330) 577-3424
____________________
PROXY STATEMENT
____________________
GENERAL INFORMATION
Introduction
This Proxy Statement is furnished to the stockholders of record of
Zedge, Inc., a Delaware corporation (the “Company” or
“Zedge”), as of the close of business on November 22,
2017, in connection with the solicitation by the Company’s
Board of Directors (the “Board of Directors”) of
proxies for use in voting at the Company’s Annual Meeting of
Stockholders (the “Annual Meeting”). The Annual Meeting
will be held on Wednesday, January 17, 2018 at 11:00 a.m., local
time, at the Offices of Zedge, Inc., 22 Cortlandt Street,
14
th
Floor, New York, New York 10007. The shares of the Company’s
Class A common stock, par value $0.01 per share (“Class A
Common Stock”), and Class B common stock, par value $0.01 per
share (“Class B Common Stock”), present at the Annual
Meeting or represented by the proxies received by Internet or mail
(properly marked, dated and executed) and not revoked, will be
voted at the Annual Meeting. This Proxy Statement is being mailed
to the Company’s stockholders starting on approximately
December 8, 2017.
Solicitation and Voting Procedures
This solicitation of proxies is being made by the Company. The
solicitation is being conducted by mail and by e-mail, and the
Company will bear all attendant costs. These costs will include the
expense of preparing and mailing proxy materials for the Annual
Meeting and any reimbursements paid to brokerage firms and others
for their expenses incurred in forwarding the solicitation
materials regarding the Annual Meeting to the beneficial owners of
Class A Common Stock and Class B Common Stock. The Company may
conduct further solicitations personally, by telephone or by
facsimile through its officers, directors and employees, none of
whom will receive additional compensation for assisting with the
solicitation.
The close of business on November 22, 2017 has been fixed as the
record date (the “Record Date”) for determining the
holders of shares of Class A Common Stock and Class B Common Stock
entitled to notice of, and to vote at, the Annual Meeting. As of
the close of business on the Record Date, the Company had 9,966,513
shares outstanding and entitled to vote at the Annual Meeting,
consisting of 524,775 shares of Class A Common Stock and 9,441,738
shares of Class B Common Stock.
Stockholders are entitled to three votes for each share of Class A
Common Stock held by them and one-tenth of one vote for each share
of Class B Common Stock held by them. The holders of Class A Common
Stock and Class B Common Stock will vote as a single body on all
matters presented to the stockholders. There are no
dissenters’ rights of appraisal in connection with any
proposal.
How do I Vote?
You can vote either in person at the Annual Meeting or by proxy
without attending the meeting.
Beneficial holders of Class A Common Stock and Class B Common Stock
as of the close of business on the Record Date whose stock is held
of record by another party should receive voting instructions from
their bank, broker or other holder of record. If a
stockholder’s shares are held through a nominee and the
stockholder wants to vote at the meeting, such stockholder must
obtain a proxy from the nominee record holder authorizing such
stockholder to vote at the Annual Meeting.
Stockholders of record should receive a paper copy of our proxy
materials and may vote by following the instructions on the proxy
card that is included with the proxy materials. As set forth on the
proxy card, there are two convenient methods for holders of record
to direct their vote by proxy without attending the Annual Meeting:
on the
1
Internet or by mail. To vote by Internet, visit
www.voteproxy.com
.
To vote by mail, mark, date and sign the enclosed proxy card and
return it in the postage-paid envelope provided. Holders of record
may also vote by attending the Annual Meeting and voting by
ballot.
All shares for which a proxy has been duly executed and delivered
(by Internet or mail) and not properly revoked prior to the meeting
will be voted at the Annual Meeting. If a stockholder of record
signs and returns a proxy card but does not give voting
instructions, the shares represented by that proxy will be voted as
recommended by the Board of Directors. If any other matters are
properly presented at the Annual Meeting for consideration and if
you have voted your shares by Internet or mail, the persons named
as proxies will have the discretion to vote on those matters for
you. On the date of filing this Proxy Statement with the Securities
and Exchange Commission (the “SEC”), the Board of
Directors did not know of any other matter to be raised at the
Annual Meeting.
How Can I Change My Vote?
A stockholder of record can revoke his, her or its proxy at any
time before it is voted at the Annual Meeting by delivering to the
Company (to the attention of Joyce J. Mason, Esq., Corporate
Secretary) a written notice of revocation or by executing a
later-dated proxy by Internet or mail, or by attending the Annual
Meeting and voting in person.
If your shares are held in the name of a bank, broker, or other
nominee, you must obtain a proxy executed in your favor from the
holder of record (that is, your bank, broker, or nominee) to be
able to vote at the Annual Meeting.
Quorum and Vote Required
The presence at the Annual Meeting of a majority of the voting
power of outstanding Class A Common Stock and Class B Common Stock
(voting together as a single class), either in person or by proxy,
will constitute a quorum for the transaction of business at the
Annual Meeting. Abstention votes and any broker non-votes (i.e.,
votes withheld by brokers on non-routine proposals in the absence
of instructions from beneficial owners) will be counted as present
or represented at the Annual Meeting for purposes of determining
whether a quorum exists.
The affirmative vote of a majority of the voting power present (in
person or by proxy) at the Annual Meeting and casting a vote on the
relevant Proposal will be required for the approval of the election
of any director (Proposal No. 1), the amendment to the
Company’s 2016 Stock Option and Incentive Plan, as amended
and restated (the “2016 Plan”) (Proposal No. 2), the
approval, on an advisory basis, of the compensation of our Named
Executive Officers (Proposal No. 3), and the ratification of the
appointment of the Company’s independent registered public
accounting firm (Proposal No. 4). This means that the number of
votes cast “for” a director nominee or Proposal Nos. 2,
3 and 4 must exceed the number of votes cast “against”
that nominee or Proposals Nos. 2, 3 and 4. Abstentions are not
counted as votes “for” or “against” a
nominee or any of these proposals.
If you are a beneficial owner whose shares are held of record by a
broker, you must instruct the broker how to vote your shares. If
you do not provide voting instructions, your shares will not be
voted on any proposal on which the broker does not have
discretionary authority to vote. This is called a “broker
non-vote.” In these cases, the broker can register your
shares as being present at the Annual Meeting for purposes of
determining the presence of a quorum but will not be able to vote
on those matters for which specific authorization is required under
the rules of the NYSE American. In the event of a broker non-vote
or an abstention with respect to any proposal coming before the
Annual Meeting, the shares represented by the relevant proxy will
not be deemed to be present and entitled to vote on those proposals
for the purpose of determining the total number of shares of which
a majority is required for adoption, having the practical effect of
reducing the number of affirmative votes required to achieve a
majority vote for such matters by reducing the total number of
shares from which a majority is calculated.
If you are a beneficial owner whose shares are held of record by a
broker, your broker has discretionary voting authority under NYSE
American rules to vote your shares on the ratification of the
Company’s independent registered public accounting firm
(Proposal No. 4), even if the broker does not receive voting
instructions from you. However, your broker does not have
discretionary authority to vote on the election of directors
(Proposal No. 1), the adoption of an amendment to the 2016 Plan
(Proposal No. 2), the approval, on an advisory basis, of the
compensation of our Named Executive Officers (Proposal No. 3), or
on any stockholder proposal or other matter raised at the Annual
Meeting without instructions from you, in which case a broker
non-vote will occur and your shares will not be voted on these
matters.
2
How Many Votes Are Required to Approve Other Matters?
Unless otherwise required by law or the Company’s Bylaws, the
affirmative vote of a majority of the voting power represented at
the Annual Meeting and entitled to vote will be required for other
matters that may properly come before the meeting.
Stockholders Sharing the Same Address
We are sending only one copy of the Annual Report and Proxy
Statement to stockholders of record who share the same last name
and address, unless they have notified the Company that they want
to continue to receive multiple copies. This practice, known as
“householding,” is designed to reduce duplicate
mailings and printings and postage costs. However, if any
stockholder residing at such address wishes to receive a separate
Annual Report or Proxy Statement in the future, he or she may
contact Joyce J. Mason, Esq., Corporate Secretary, Zedge, Inc., 22
Cortlandt Street, 14
th
Floor, New York, New York 10007, or by phone at (330) 577-3424, and
we will promptly forward to such stockholder a separate Annual
Report and/or Proxy Statement. The contact information above may
also be used by members of the same household currently receiving
multiple copies of the Annual Report and Proxy Statement in order
to request that only one set of materials be sent in the
future.
References to Fiscal Years
The Company’s fiscal year ends on July 31 of each calendar
year. Each reference to a fiscal year refers to the fiscal year
ending in the calendar year indicated (e.g., Fiscal 2017 refers to
the fiscal year ended July 31, 2017).
3
CORPORATE GOVERNANCE
Introduction
The Company has in place a comprehensive corporate governance
framework that reflects the corporate governance requirements and
the rules and regulations promulgated under the Securities Exchange
Act of 1934, as amended, and the corporate governance-related
listing requirements of the NYSE American. Consistent with the
Company’s commitment to strong corporate governance, the
Company does not rely on the exceptions from the NYSE
American’s corporate governance listing requirements
available to it because it is a “controlled company,”
except as described below with regard to (i) the composition of the
Nominating Committee and (ii) the Company not having a single
Nominating/Corporate Governance Committee.
In accordance with applicable sections of the NYSE American Company
Guide, the Company has adopted a set of Corporate Governance
Guidelines and a Code of Business Conduct and Ethics, the full
texts of which are available for your review in the Corporate
Governance section of our website at
http://investor.zedge.net/corporate-governance/governance-documents
and which also are available in print to any stockholder upon
written request to the Corporate Secretary.
The Company qualifies as a “controlled company” as
defined by the NYSE American Company Guide, because, since October
25, 2016, more than 50% of the voting power of the outstanding
capital stock of the Company is controlled by one individual,
Michael Jonas, who serves as our Executive Chairman and Chairman of
our Board of Directors. Upon our spin-off (the
“Spin-Off”) from IDT Corporation (“IDT”)
which was effected on June 1, 2016 until October 25, 2016, the
Company was a “controlled company” because Howard S.
Jonas, who currently serves as Vice-Chairman of our Board of
Directors and is the father of Michael Jonas, controlled more than
50% of the voting power of the outstanding capital stock of the
Company. Notwithstanding that being a “controlled
company” entitles the Company to exempt itself from the
requirement that a majority of its directors be independent
directors and that the Compensation Committee and Corporate
Governance Committee be comprised entirely of independent
directors, the Board of Directors has determined affirmatively that
a majority of the members of the Board of Directors and the
director nominees are independent in accordance with the NYSE
American Company Guide and that the Compensation Committee and the
Corporate Governance Committee are in fact comprised entirely of
independent directors. As a “controlled company,” the
Company may, and has chosen to, exempt itself from the NYSE
American Company Guide requirement that it have a single
Nominating/Corporate Governance Committee composed entirely of
independent directors. As noted above, and discussed in greater
detail below, the Board of Directors maintains a separate Corporate
Governance Committee comprised entirely of independent directors,
and a Nominating Committee comprised of the Chairman of the Board
of Directors and one
independent directo
r.
Director Independence
The Corporate Governance Guidelines adopted by the Board of
Directors provide that a majority of the members of the Board of
Directors, and each member of the Audit, Compensation and Corporate
Governance Committees, must meet the independence requirements set
forth therein. The full text of the Corporate Governance
Guidelines, including the independence requirements, is available
for your review in the Corporate Governance section of our website
at
http://investor.zedge.net/corporate-governance/governance-documents
.
For a director to be considered independent, the Board of Directors
must determine that a director meets the Independent Director
Qualification Standards set forth in the Corporate Governance
Guidelines, which comply with the NYSE American Company Guide
definitions of independent, and is free from any material
relationship with the Company and its executive officers. The Board
of Directors considers all relevant facts and circumstances known
to it in making an independence determination, and not merely from
the standpoint of the director, but also from that of persons or
organizations with which the director has an affiliation or
significant financial interest. In addition to considering all
relevant information available to it, the Board of Directors uses
the following categorical Independent Director Qualification
Standards in determining the “independence” of its
directors:
1.
During the past three years, the Company shall not have employed
the director, or, except in a non-officer capacity, any of the
director’s immediate family members;
2.
During the past three years, the director shall not have received,
and shall not have an immediate family member who has received,
during any twelve-month period within the last three years, more
than
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$120,000 in direct compensation from the Company, other than
director and committee fees and pension or other forms of deferred
compensation for prior service (provided such compensation is not
contingent in any way on continued service);
3.
(a)
The director shall not be a current partner or employee of a firm
that is the Company’s internal or external auditor, (b) the
director shall not have an immediate family member who is a current
partner of such firm, (c) the director shall not have an immediate
family member who is a current employee of such firm and personally
works on the Company’s audit, and (d) neither the director
nor any of his or her immediate family members shall have been,
within the last three years, a partner or employee of such firm and
personally worked on the Company’s audit within that
time;
4.
Neither the director, nor any of his or her immediate family
members, shall be, or shall have been within the last three years,
employed as an executive officer of another company where any of
the Company’s present executive officers at the same time
serves or served on that company’s compensation
(or equivale
nt)
committee; and
5.
The
director shall not be a current employee and shall not have an
immediate family member who is a current executive officer of a
company (excluding tax-exempt organizations) that has made payments
to, or received payments from, the Company for property or services
in an amount which, in any of the last three Fiscal Years, exceeds
the greater of (a) $200,000 or (b) five percent of the consolidated
gross revenues of such other company. The Corporate Governance
Committee will review the materiality of such relationship to
tax-exempt organizations to determine if such director qualifies as
independent.
In addition, all members of the Company’s Audit Committee
must meet the independence requirements of Section 2014.10A-3 of
the Securities Exchange Act of 1934, which are set forth in the
Audit Committee Charter.
Based on the review and recommendation of the Corporate Governance
Committee, the Board of Directors has determined that each of Todd
Feldman, Mark Ghermezian, Elliot Gibber and Stephen Greenberg is
independent in accordance with the Corporate Governance Guidelines
and the Audit Committee Charter and, thus, that a majority of the
current Board of Directors, a majority of the director nominees,
and each member or nominee intended to become a member of the
Audit, Compensation and Corporate Governance Committees is
independent. As used herein, the term “non-employee
director” shall mean any director who is not an employee or
consultant of the Company, and who is deemed to be independent by
the Board of Directors. Therefore, neither Howard S. Jonas nor
Michael Jonas is a non-employee director. With the exception of
$135,350 that the Company paid in Fiscal 2017 to Appboy, Inc., of
which Mark Ghermezian serves as the Executive Chairman, co-founder,
and one of six members of the board of directors, for use of its
customer relationship management and lifecycle marketing platform,
none of the non-employee directors had any relationships with the
Company that the Corporate Governance Committee was required to
consider when reviewing independence. The Corporate Governance
Committee considered that Appboy is a venture-backed company in
which Mr. Ghermezian beneficially owns only a partial interest, and
that Mr. Ghermezian does not receive any compensation for payments
made by Zedge to Appboy. Based on the foregoing, the Corporate
Governance Committee and the Board of Directors determined that the
Zedge/Appboy relationship does not preclude a finding of
independence for Mr. Ghermezian. The Corporate Governance Committee
considered that a company owned by Elliot Gibber, a director
nominee, leases office space from IDT Corporation, a company
controlled by Howard S. Jonas, the Company’s Vice-Chairman of
the Board. Howard S. Jonas does not receive any compensation for
payments made by Mr. Gibber’s company to IDT Corporation.
Based on the foregoing, the Corporate Governance Committee and the
Board of Directors determined that the Elliot Gibber/Howard Jonas
relationship does not preclude a finding of independence for Mr.
Gibber.
Director Selection Process
The Nominating Committee will consider director candidates
recommended by the Company’s stockholders. Stockholders may
recommend director candidates by contacting the Chairman of the
Board, whose contact information is provided below under the
heading “Director Communications.” The Nominating
Committee considers candidates suggested by its members, other
directors, senior management and stockholders in anticipation of
upcoming elections and actual or expected board vacancies. All
candidates, including those recommended by stockholders, are
evaluated on the same basis in light of the entirety of their
credentials and the needs of the Board of Directors and the
Company. Of particular importance is the candidate’s wisdom,
integrity, ability to make independent analytical inquiries,
understanding of the business environment in which the Company
operates, as well
5
as his or her potential contribution to the diversity of the Board
of Directors and his or her willingness to devote adequate time to
fulfill duties as a director. Under “Proposal No. 1 —
Election of Directors” below, we provide an overview of each
nominee’s experience, qualifications, attributes and skills
that led the Nominating Committee and the Board of Directors to
determine that each nominee should serve as a Director.
Director Communications
Stockholders and other interested parties may communicate with (i)
the non-management directors by contacting the Lead Independent
Director, and (ii) the Audit, Compensation or Corporate Governance
Committees of the Board of Directors by contacting the Chairs of
such committees. All communications should be in writing, should
indicate in the address whether it is intended for the Lead
Independent Director, or a Committee Chair, and should be directed
care of Zedge, Inc.’s Corporate Secretary, Stockholder
Communications, Zedge, Inc., 22 Cortlandt Street, 14
th
Floor, New York, NY 10007.
The Corporate Secretary will relay correspondence (i) intended for
the non-management directors to the Lead Independent Director, and
(ii) intended for the Audit, Compensation, and Corporate Governance
Committees to the Chairs of such committees.
The Corporate Secretary may filter out and disregard (without
providing a copy to the directors or advising them of the
communication), or may otherwise handle at his or her discretion,
any director communication that is described by one of the
following categories:
•
Obscene materials
•
Unsolicited marketing or advertising material or mass mailings
•
Unsolicited newsletters, newspapers, magazines, books and
publications
•
Surveys and questionnaires
•
Resumes and other forms of job inquiries
•
Requests for business contacts or referrals
•
Material that is threatening or illegal
•
Any communications or materials that are not in writing
In addition, the Corporate Secretary may handle in his or her
discretion any director communication that can be described as an
“ordinary business matter.” Such matters include the
following:
•
Routine questions, service and product complaints and comments that
can be appropriately addressed by management; and
•
Routine invoices, bills, account statements and related
communications that can be appropriately addressed by
management
6
BOARD OF DIRECTORS AND COMMITTEES
Board of Directors
On May 23, 2016, each of Michael Jonas, Howard S. Jonas, Stephen
Greenberg and Mark Ghermezian were elected as directors and
continue to serve as directors. Todd Feldman, who was elected on
March 15, 2017, also serves as a director. Marie T. Carney served
as a director during Fiscal 2017 until her resignation as a
director on March 15, 2017. The Company’s Amended and
Restated By-Laws enable the Chairman of the Board to appoint an
ex-officio
(non-voting) director to serve on the Board. Howard S. Jonas, then
Chairman of the Board, appointed Tom Arnoy to serve in this
capacity on June 2, 2016, and Michael Jonas affirmed this
appointment on November 14, 2016 when he became the Chairman of the
Board.
The Board nominated each of Michael Jonas, Howard S. Jonas, Todd
Feldman and Mark Ghermezian for re-election, but has determined not
to nominate Stephen Greenberg for re-election. The Board has
determined to also nominate Elliot Gibber for election as a
director.
The Board of Directors held five meetings in Fiscal 2017. In Fiscal
2017, each of the Company’s directors attended or
participated in 75% or more of the aggregate of (i) the total
number of regularly scheduled meetings of the Board of Directors
held during the period in which each such director served as a
director and (ii) the total number of regularly scheduled meetings
held by all committees of the Board of Directors during the period
in which each such director served on such committees.
Directors are encouraged to attend the Company’s annual
meeting of stockholders, and the Company has scheduled a meeting of
the Board of Directors on the same date and at the same place as
the 2018 Annual Meeting of Stockholders to encourage director
attendance.
Board of Directors Leadership Structure and Risk Oversight Role
Our Chairman of the Board,
Michael Jonas, provides overall leadership to the Board of
Directors. The Board recognizes that one of its key
responsibilities is to evaluate and determine its optimal
leadership structure so as to provide independent oversight of
management. The Board understands that there is no single,
generally accepted approach to providing Board leadership, and that
given the dynamic and competitive environment in which we operate,
the right Board leadership structure may vary as circumstances
warrant. The Board has determined that, given Michael Jonas’
leadership skills, relationships with the members of management and
other members of the Board, and prior positions where he acted as
leader and provided oversight over different bodies, he is well
suited to be the Chairman of the Board at the present time. Michael
Jonas has been Chairman of the Board since November 14, 2016 and
Executive Chairman since October 18, 2017. Howard S. Jonas, the
father of Michael Jonas and current Vice-Chairman of the Board,
served as Chairman of the Board from June 2, 2016 until November
14, 2016.
The Board of Directors as a whole, and through its committees, has
responsibility for the oversight of risk management, including the
review of the policies with respect to risk management and risk
assessment. The risk management oversight roles of the Audit,
Compensation and Corporate Governance Committees (each of which is
comprised solely of independent directors), discussed below,
provide an appropriate and effective balance to the role of the
Chairman of the Board. With the oversight of the full Board of
Directors, the Company’s management is responsible for the
day-to-day management of the material risks the Company faces. The
Board of Directors is required to satisfy itself that the risk
management process implemented by management is adequate and
functioning as designed.
The NYSE American Company Guide requires that the non-employee
directors of the Company meet at least annually in executive
session without the presence of non-independent directors and
management. These executive sessions are held at every regularly
scheduled meeting of the Board of Directors.
Mr. Ghermezian, an independent director, has served as the
“Lead Independent Director” since June 2, 2016.
As stated above, each of the Audit, Compensation and Corporate
Governance Committees oversees certain aspects of risk management
and reports its respective findings to the full Board of Directors
on a quarterly basis, and as is otherwise needed. The Audit
Committee is responsible for overseeing risk management of
financial
7
matters, financial reporting, the adequacy of the risk-related
internal controls, internal investigations, and security risks. The
Compensation Committee oversees risks related to compensation
policies and practices. The Corporate Governance Committee oversees
our Corporate Governance Guidelines and governance-related risks,
such as board independence, as well as senior management and
director succession planning.
Board Committees
The Board of Directors has established an Audit Committee, a
Compensation Committee, a Corporate Governance Committee and a
Nominating Committee.
The Audit Committee
The Audit Committee currently consists of Messrs. Greenberg
(Chairman), Feldman and Ghermezian. The Audit Committee operates
under a written Audit Committee charter adopted by the Board of
Directors, which can be found in the Corporate Governance section
of our web site,
http://investor.zedge.net/corporate-governance/governance-documents
,
and is also available in print to any stockholder upon request to
the Corporate Secretary. The principal duties of the Audit
Committee under its written charter include: (i) responsibilities
associated with our external and internal audit staffing and
planning; (ii) accounting and financial reporting issues associated
with our financial statements and filings with the SEC; (iii)
financial and accounting organization and internal controls; (iv)
auditor independence and approval of non-audit services; and (v)
“whistle-blower” procedures for reporting questionable
accounting and audit practices. The Audit Committee held five
meetings during Fiscal 2017.
The Board of Directors has determined that (i) all of the members
of the Audit Committee are independent within the meaning of the
applicable NYSE American listing standards and the Sarbanes-Oxley
Act of 2002, and (ii) Mr. Greenberg qualifies as an “audit
committee financial expert,” as determined by the Board of
Directors in accordance with SEC rules.
The Compensation Committee
The Compensation Committee currently consists of Messrs. Ghermezian
(Chairman), Feldman and Greenberg. The Compensation Committee
operates under a written charter adopted by the Board of Directors,
which can be found in the Corporate Governance section of our web
site,
http://investor.zedge.net/corporate-governance/governance-documents
,
and which is also available in print to any stockholder upon
request to the Corporate Secretary. The Compensation Committee is
responsible for, among other things, reviewing, evaluating and
approving all compensation arrangements for the executive officers
of the Company, evaluating the performance of executive officers,
administering the 2016 Plan and its predecessor, the
Company’s 2008 Stock Option and Incentive Plan, as amended
and restated, and recommending to the Board of Directors the nature
and amount of the compensation for Board members, such as
retainers, committee and other fees, stock option, restricted stock
and other stock awards, and other similar compensation as deemed
appropriate. The Compensation Committee confers with the
Company’s executive officers when making the above
determinations. The Compensation Committee held five meetings
during Fiscal 2017. The Board of Directors has determined that all
of the members of the Compensation Committee are independent within
the applicable NYSE American listing standards.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee have (1) served
as an officer or employee of the Company or (2) any relationship
with the Company that is required to be disclosed under the heading
“Related Person Transactions” with the exception of
$135,350 that the Company paid in Fiscal 2017 to Appboy, Inc., of
which Mark Ghermezian serves as the Executive Chairman, co-founder,
and one of six members of the board of directors, for use of its
customer relationship management and lifecycle marketing platform.
No executive officer of the Company served or serves on the
compensation committee or board of any company that employed or
employs any member of the Company’s Compensation Committee or
Board of Directors.
8
The Corporate Governance Committee
The Corporate Governance Committee currently consists of Messrs.
Feldman (Chairman), Ghermezian and Greenberg. The Corporate
Governance Committee operates under a written charter adopted by
the Board of Directors, which can be found in the Corporate
Governance section of our web site,
http://investor.zedge.net/corporate-governance/governance-documents
,
and which is also available in print to any stockholder upon
request to the Corporate Secretary. The Corporate Governance
Committee is responsible for, among other things, reviewing and
reporting to the Board of Directors on matters involving
relationships among the Board of Directors, the stockholders and
senior management. The Corporate Governance Committee reviews (i)
the Corporate Governance Guidelines and other policies and
governing documents of the Company and recommends revisions as
appropriate, (ii) any potential conflicts of interest of
independent directors, (iii) related person transactions, and
(
iv)
and
determines director independence, and makes
recommendations to the Board of Directors regarding director
independence. The Corporate Governance Committee held four meetings
in Fiscal 2017. The Board of Directors has determined that all of
the members of the Corporate Governance Committee are independent
within the applicable NYSE American listing standards.
The Nominating Committee
The Nominating Committee currently consists of Mr. Michael Jonas
and Mr. Greenberg. The Nominating Committee operates under a
written charter adopted by the Board of Directors, which can be
found in the Corporate Governance section of our web site,
http://investor.zedge.net/corporate-governance/governance-documents
,
and which is also available in print to any stockholder upon
request to the Corporate Secretary. The Nominating Committee is
responsible for overseeing nominations to the Board of Directors,
including: (i) developing the criteria and qualifications for
membership on the Board of Directors; (ii) recommending candidates
to fill new or vacant positions on the Board of Directors; and
(iii) conducting appropriate inquiries into the backgrounds of
potential candidates. A summary of new director qualifications can
be found above under the heading “Director Selection
Process.” The Board of Directors has determined that Mr.
Greenberg is independent within the applicable NYSE American
listing standards. Howard S. Jonas is not independent. The Company,
as a “controlled company,” is exempt from the
requirement to maintain an independent nominating committee
pursuant to the NYSE American Company Guide. The Nominating
Committee held one meeting in Fiscal 2017.
9
FISCAL 2017 COMPENSATION FOR NON-EMPLOYEE DIRECTORS
Annual compensation for non-employee directors for Fiscal 2017 was
comprised of equity compensation, consisting of awards of shares of
fully vested restricted Class B Common Stock, and cash
compensation.
Pursuant to the 2016 Plan, each non-employee director of the
Company who is determined to be independent, will receive, on each
January 5
th
(or the following business day if January 5
th
is not a business day), total compensation of $50,000 if such
person served as a non-employee director during the entire prior
calendar year. A non-employee director who became a non-employee
director during the prior calendar year and who is determined to be
independent will instead receive a pro-rata amount (based on the
number of quarter(s) of service since the date the non-employee
director was appointed as a non-employee director) of the total
compensation amount on their first January 5
th
as a non-employee director. If the market value of our capital
stock is $40 million or higher based on a thirty-day average ending
on the relevant measurement period, all compensation will be in the
form of shares of fully vested restricted Class B Common Stock. If
our market capitalization is less than $40 million using the same
formulation, a pro-rata portion of the compensation will be paid in
cash. The cash portion shall be pro-rated based on the difference
between $40 million and our market capitalization. For example, if
our market capitalization is $30 million, each independent,
non-employee director who served as such during the entire prior
year would receive $12,500 in cash and the remaining in shares of
fully vested restricted Class B Common Stock. The measurement
period for determining the Company’s market capitalization is
the average of the closing prices during December of the year
preceding the applicable January 5
th
.
Payments of independent, non-employee directors’ fees are
made in January following attendance of at least 75% of the
regularly scheduled Board of Directors meetings during the
preceding calendar year, and, when applicable for independent,
non-employee directors who joined the Board of Directors in such
prior calendar year, are pro-rated based on the calendar quarter
since such director joined the Board of Directors if such director
attended at least 75% of the applicable board meetings for such
partial calendar year. For any non-employee director who departed
from the Board of Directors during the prior calendar year,
directors’ fees are made in January and are pro-rated based
on the number of full calendar quarters that such director was a
member of the Board of Directors, if such director attended 75% of
the applicable board meetings for such partial calendar year.
The Company’s Chairman of the Board of Directors may, in his
or her discretion, waive the requirement of 75% attendance by a
director to receive the annual retainer in the case of mitigating
circumstances. Directors are not entitled to additional
compensation for serving on committees of the Board of Directors
and are not entitled to per-meeting fees.
During Fiscal 2017, pursuant to the 2016 Plan, each of the
non-employee directors who was a director on January 5, 2017 (Ms.
Carney and Messrs. Ghermezian and Greenberg) received a cash
payment of $6,813 and a grant of 5,783 shares of fully vested
restricted Class B Common Stock for service provided in calendar
2016. Such compensation was pro-rated based on the number of
quarters that each such non-employee director was a non-employee
director during calendar 2016.
Director Board
Retainers
Other than as provided pursuant to the 2016 Plan as described
above, a retainer is not paid for serving as an independent,
non-employee director.
Committee
Fees
Independent, non-employee directors do not receive fees for
committee service, serving as chairs of committees or serving as
the audit committee financial expert (currently Mr. Greenberg).
Lead Independent
Director
The Lead Independent Director (currently Mr. Ghermezian) does not
receive an additional fee for serving in such position.
10
2017 Director
Compensation Table
The following table lists Fiscal 2017 compensation for any person
who served as an independent, non-employee director during Fiscal
2017. This table does not include compensation to Howard S. Jonas,
Michael Jonas or Tom Arnoy, as they are not independent,
non-employee directors and do not receive any compensation for
their service as directors.
|
|
Dates of Board Service During Fiscal
2017
|
|
Fees Earned or Paid in Cash
($)
|
|
|
|
All Other Compensation
($)
|
|
|
Marie T.
Carney
|
|
08/01/2016 –
03/15/2017
|
|
6,813
|
(1)
|
|
18,187
|
(2)
|
|
0
|
|
25,000
|
|
Todd
Feldman
|
|
03/15/2017 –
07/31/2017
|
|
0
|
|
|
0
|
|
|
0
|
|
0
|
(3)
|
Stephen
Greenberg
|
|
08/01/2016 –
07/31/2017
|
|
6,813
|
(1)
|
|
18,187
|
(4)
|
|
0
|
|
25,000
|
(3)
|
Mark
Ghermezian
|
|
08/01/2016 –
07/31/2017
|
|
6,813
|
(1)
|
|
18,187
|
(5)
|
|
0
|
|
25,000
|
(3)
|
See
Proposal
No. 2, below, for proposed changes to the compensation for
independent, non-employee directors.
11
RELATED PERSON TRANSACTIONS
Review of Related Person Transactions
The Board of Directors has adopted a Statement of Policy with
respect to Related Person Transactions, which is administered by
the Corporate Governance Committee. This policy covers any
transaction or series of transactions in which the Company or a
subsidiary is a participant, the amount involved exceeds $120,000
and a Related Person has a direct or indirect material interest.
Related Persons include directors, director nominees, executive
officers, any beneficial holder of more than 5% of any class of the
Company’s voting securities, and any immediate family member
of any of the foregoing persons. The policy also covers
transactions which, despite not meeting all of the criteria set
forth above, would otherwise be considered material to investors
based on qualitative factors, as determined by the Corporate
Governance Committee with input from the Company’s management
and advisors. Transactions that fall within the definition are
considered by the Corporate Governance Committee for approval,
ratification or other action. Based on its consideration of all of
the relevant facts and circumstances, the Corporate Governance
Committee will decide whether or not to approve such transactions
and will approve only those transactions that are in the best
interests of the Company and its stockholders. If the Company
becomes aware of an existing Related Person Transaction that has
not been approved under this policy, the matter will be referred to
the Corporate Governance Committee at its next regularly scheduled
meeting or by the Chairman of the Board prior to such meeting. The
Corporate Governance Committee will evaluate all options available,
including ratification, revision or termination of such
transaction.
Transactions with Related Persons, Promoters and Certain Control
Persons
The Company paid Appboy, Inc. $135,350 during Fiscal 2017 for
software and services. Mark Ghermezian is the Executive
Chairman, co-founder and one of six members of the board of
directors of Appboy, Inc. Appboy provides a customer relationship
management and lifecycle marketing platform for Zedge. Mark
Ghermezian has been a member of our Board of Directors since May
23, 2016.
The Company and IDT Corporation entered a Transition Services
Agreement (the “TSA”), effective June 1, 2016. IDT is
controlled by Howard S. Jonas, and, until October 25, 2016, the
Company was controlled by Howard S. Jonas. Since October 25, 2016,
the Company has been controlled by Michael Jonas, the son of Howard
S. Jonas. Howard S. Jonas has been a member of our Board of
Directors since May 23, 2016, was Chairman of the Board from June
2, 2016 until November 14, 2016 and has been Vice-Chairman of the
Board since November 14, 2016. Michael Jonas has been a member of
our Board of Directors since May 23, 2016, was Vice-Chairman of the
Board from June 2, 2016 until November 14, 2016, has been Chairman
of the Board since November 14, 2016 and Executive Chairman since
October 18, 2017. Pursuant to the TSA, IDT provides certain
services to the Company, including, but are not limited to,
services relating to human resources, administrative, finance,
accounting, tax, investor relations, regulatory, consulting and
legal. The Company paid IDT a total of $1,200,445 for services
provided by IDT pursuant to the TSA during Fiscal 2017. As of July
31, 2017, the Company owed IDT $35,627 for services provided by IDT
pursuant to the TSA.
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Class A Common Stock and Class B Common
Stock by (i) each person known by the Company to be the beneficial
owner of more than 5% of the outstanding shares of Class A Common
Stock or Class B Common Stock, (ii) each of the Company’s
directors, director nominees, and the Named Executive Officers (who
are listed under Executive Compensation below), and (iii) all
directors, Named Executive Officers and executive officers of the
Company as a group. Unless otherwise noted in the footnotes to the
table, to the best of the Company’s knowledge, the persons
named in the table have sole voting and investing power with
respect to all shares indicated as being beneficially owned by
them.
Unless otherwise noted, the security ownership information provided
below is given as of the close of business on November 22, 2017 and
all shares are owned directly. Percentage ownership information is
based on the following amount of outstanding shares: 524,775 shares
of Class A Common Stock and 9,441,738 shares of Class B Common
Stock. The ownership numbers reported for Michael Jonas assume the
conversion of all 524,775 currently outstanding shares of Class A
Common Stock (all of which are owned by Mr. Michael Jonas) into an
equal number of shares of Class B Common Stock.
|
|
Number of Shares of Class B Common
Stock
|
|
Percentage of Ownership of
Class B Common Stock
|
|
Percentage of Aggregate Voting
Power
d
|
Michael Jonas
|
|
|
|
|
|
|
|
|
|
22 Cortlandt Street, 14
th
Floor New York, NY 10007
|
|
1,803,205
|
(1)
|
|
18.1
|
%
|
|
67.6
|
%
|
Tom Arnoy
|
|
524,016
|
(2)
|
|
5.4
|
%
|
|
*
|
|
Jonathan Reich
|
|
210,690
|
(3)
|
|
2.2
|
%
|
|
*
|
|
Howard S. Jonas
|
|
441,528
|
(4)
|
|
4.7
|
%
|
|
1.8
|
%
|
Todd Feldman
|
|
0
|
|
|
—
|
|
|
—
|
|
Mark Ghermezian
|
|
5,783
|
|
|
*
|
|
|
*
|
|
Elliot Gibber
|
|
57,500
|
|
|
*
|
|
|
*
|
|
Stephen Greenberg
|
|
0
|
|
|
—
|
|
|
—
|
|
All directors, Named Executive Officers and
other executive officers as a group – 7 persons)
|
|
2,985,222
|
(5)
|
|
28.5
|
%
|
|
70.3
|
%
|
13
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company’s
directors, executive officers, and any persons holding more than
ten percent or more of a registered class of the Company’s
equity securities are required to file reports of ownership and
changes in ownership, on a timely basis, with the SEC. Based on
material provided to the Company, the Company believes that all
such required reports were filed on a timely basis in Fiscal
2017.
14
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes the total compensation paid or awarded
to both of our executive officers (the “Named Executive
Officers”) by the Company during Fiscal 2017 and by IDT
Corporation or the Company during Fiscal 2016. Prior to the
Spin-Off on June 1, 2016, both of the Named Executive Officers were
employees of IDT and all compensation for periods prior to the
Spin-Off disclosed in the table below was paid by IDT for services
provided by the Named Executive Officers to our business segments
and, in the case of Mr. Reich, certain other business units of
IDT.
Name and Principal Position
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Compensation
($)
|
|
|
Tom Arnoy
|
|
2017
|
|
304,504
|
|
—
|
|
—
|
|
318,240
|
(3)
|
|
7,680
|
(4)
|
|
630,424
|
Chief Executive Officer
(2)
|
|
2016
|
|
270,333
|
|
325,000
|
|
—
|
|
—
|
(5)
|
|
876
|
(6)
|
|
596,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan
Reich
|
|
2017
|
|
348,558
|
|
—
|
|
—
|
|
190,943
|
(8)
|
|
3,758
|
(9)
|
|
543,258
|
Chief Financial Officer and Chief Operating
Officer
(7)
|
|
2016
|
|
342,500
|
|
50,000
|
|
—
|
|
—
|
|
|
2,000
|
(10)
|
|
394,500
|
15
Grants of Plan-Based
Awards
The following table sets forth information concerning the number of
shares of Class B Common Stock underlying stock options granted to
the Named Executive Officers in Fiscal 2017 as plan-based awards.
All of the following were issued pursuant to the 2016 Plan. There
are no estimated future payouts in connection with such awards.
There were no shares of restricted stock awarded to Named Executive
Officers in Fiscal 2017.
|
|
Compensation Committee Approval
|
|
|
|
All Other Awards: Number of Securities in
Restricted Stock Grant
(#)
|
|
All Other Awards: Number of Securities
underlying Options
(#)
|
|
Exercise of
Base Price
of Option Awards
($/Sh)
|
|
Grant Date
Fair Value of Option
Awards
($)
(1)
|
Tom Arnoy
|
|
09/29/2016
|
|
09/29/2016
|
|
|
|
108,164
|
(2)
|
|
3.87
|
|
318,240
|
Jonathan Reich
|
|
09/29/2016
|
|
09/29/2016
|
|
|
|
64,898
|
(3)
|
|
3.87
|
|
190,943
|
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth all equity awards made to each of
the Named Executive Officers that were outstanding at the end of
Fiscal 2017.
|
|
|
|
|
|
|
Number of Securities Underlying Unexercised
Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised
Options (#) Unexercisable
|
|
Option Exercise
Price
($)
|
|
|
|
Number of Shares or
Units of
Stock That
Have
Not Vested
(#)
|
|
Market Value
of Shares or
Units of
Stock That Have Not
Vested
($)
(1)
|
Tom Arnoy
|
|
7,605
|
|
—
|
|
0.16
|
|
05/31/2026
|
|
|
|
|
|
|
162,755
|
|
—
|
|
0.13
|
|
05/31/2026
|
|
|
|
|
|
|
82,929
|
|
—
|
|
1.73
|
|
05/31/2026
|
|
|
|
|
|
|
—
|
|
108,164
|
|
3.87
|
|
09/28/2026
|
|
|
|
|
Jonathan Reich
|
|
181,616
|
|
—
|
|
1.73
|
|
10/31/2021
|
|
|
|
|
|
|
—
|
|
64,898
|
|
3.87
|
|
09/28/2026
|
|
|
|
|
Option Exercises and Stock Vested
There were no restricted shares of Class B Common Stock that vested
for Named Executive Officers in Fiscal 2017. There were no stock
options exercised by Named Executive Officers in Fiscal 2017.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
There are no payments due to either of the Named Executive Officers
upon their termination of employment with the Company or the change
of control of the Company, assuming such event occurred at the end
of Fiscal 2017.
16
PROPOSALS REQUIRING YOUR
VOTE
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to the Company’s Certificate of Incorporation, the
authorized number of members of the Board of Directors will be set
by the Board of Directors from time to time. The Board of Directors
has set the number of directors on the Board of Directors at five.
There are currently five directors on the Board of Directors:
Michael Jonas, Howard S. Jonas, Todd Feldman, Mark Ghermezian and
Stephen Greenberg. The current terms of all of the serving
directors expire at the Annual Meeting. All of the current
directors except Stephen Greenberg are standing for re-election at
the Annual Meeting.
The nominees to the Board of Directors are Michael Jonas, Howard S.
Jonas, Todd Feldman, Mark Ghermezian and Elliot Gibber, each of
whom has consented to be named in this Proxy Statement and to serve
if elected. Each of the nominees except Elliot Gibber is currently
serving as a director of the Company. Brief biographical
information about the nominees for directors is furnished below.
The Company’s Amended and Restated By-Laws enable the
Chairman of the Board to appoint an
ex-officio
(non-voting) director to serve on the Board. Howard S. Jonas, then
Chairman of the Board, appointed Tom Arnoy to serve in this
capacity on June 2, 2016, and Michael Jonas affirmed this
appointment on November 14, 2016 when he became the Chairman of the
Board. The stockholders are not being asked to vote on Mr.
Arnoy’s appointment as an
ex-officio
(non-voting) director.
Each of these director nominees is standing for election for a term
of one year until the 2019 Annual Meeting, or until his successor
is duly elected and qualified or until his earlier resignation or
removal. A majority of the votes cast at the Annual Meeting shall
elect each director. Stockholders may not vote for more than five
persons, which is the number of nominees identified herein. The
following pages contain biographical information and other
information about the nominees. Following each nominee’s
biographical information, we have provided information concerning
particular experience, qualifications, attributes and/or skills
that the Nominating Committee and the Board of Directors considered
when determining that each nominee should serve as a director.
Todd E.
Feldman
has served as a director since March 15, 2017.
Mr. Feldman has been a Managing Director of Mooreland Partners LLC,
a leading independent investment bank providing M&A and private
capital advisory services to the global technology industry, since
2011. He is a senior member of Mooreland’s Communications,
Technology, and Digital Media teams and advises companies in these
market segments on strategic initiatives and transactions.
Additionally, Mr. Feldman regularly presents about the current and
future trends in technology, including investment and M&A
activity throughout the market. Mr. Feldman holds a BSE degree in
Finance from the Wharton School of the University of
Pennsylvania.
Key Attributes,
Experience and Skills:
Mr. Feldman brings extensive investment banking expertise in
markets that are relevant to Zedge, which will benefit Zedge as it
continues as a publicly traded company and considers and evaluates
strategic initiatives, acquisitions and joint ventures.
Mark
Ghermezian
has served as a director since May 23, 2016.
Mr. Ghermezian is the Co-Founder of Appboy, Inc., an intelligent
CRM for mobile marketers, founded in 2011. He has served as
Executive Chairman since 2016 and served as the Chief Executive
Officer from 2011 to 2016. Mr. Ghermezian has also been the
Managing Partner of T5 Capital Partners, an investment firm focused
on early stage technologies across verticals, since January 2011.
Additionally, Mr. Ghermezian regularly speaks, writes, and presents
about the future of mobile, investment strategy, and the startup
landscape.
Key Attributes,
Experience and Skills:
Mr. Ghermezian, a serial entrepreneur, is a well-recognized leader
in the world of marketing automation and he brings to the Board
extensive knowledge of the mobile apps eco-system. Besides his
industry-specific experience, his work on the investment side, both
as a fund manager and writer and speaker, will benefit Zedge.
17
Elliot
Gibber
has been nominated to begin serving as a director
at the Annual Meeting. Mr. Gibber is the President and Chief
Executive Officer of Deb El Food Products, a significant company in
the egg products business in the United States and worldwide, with
its corporate headquarters in Elizabeth, New Jersey and other
facilities throughout the country. Mr. Gibber is also an active
investor in real estate, high tech and medical technologies
companies, and helps entrepreneurs with growing and accelerating
their businesses from seed to late-stage ventures.
Key Attributes,
Experience and Skills:
Mr. Gibber’s has led his company to significant growth, and
has assisted many other companies grow and accelerate their growth.
This experience will enable Mr. Gibber to assist Zedge continue its
growth.
Michael
Jonas
has served as our Executive Chairman since October
2017, the Chairman of our Board of Directors since November 2016
and a member of our Board of Directors since May 2016. He has also
served as Executive Vice President of Genie Energy since May 2014,
and Director of Global Exploration and Business Development since
August 2014, Chief Executive Officer of Genie Oil Development since
May 2015. From November 2005 through December 2011, Michael Jonas
served IDT Corporation in various positions such as analyst, vice
president and manager of international business. Michael Jonas is a
founding member of Mongolian Oil Shale Association. Michael Jonas
is the son of Howard S. Jonas, Vice-Chairman of our Board of
Directors. Michael Jonas is also our controlling stockholder.
Key Attributes,
Experience and Skills:
Michael Jonas has served as an executive officer of growing
businesses and has managed development efforts for larger
organizations. His experience in overseeing operations in growth
mode will bring hands-on experience to the Board and guidance to
management in executing our growth plan.
Howard S.
Jonas
has been the Vice-Chairman of our Board of
Directors since November 14, 2016. He was our Chairman of the Board
from June 2, 2016 until November 14, 2016 and has been a member of
our Board of Directors since May 23, 2016. Mr. Jonas founded IDT
Corporation in August 1990, and has served as its Chairman of the
Board of Directors since its inception. Mr. Jonas served as Chief
Executive Officer of IDT from October 2009 through December 2013
and from December 1991 until July 2001. Mr. Jonas is also the
founder and has been President of Jonas Media Group (formerly Jonas
Publishing) since its inception in 1979. From January 2014
until November 2017, Mr. Jonas served as the Chief Executive
Officer of Genie Energy Ltd, a former subsidiary of IDT that was
spun off to stockholders in October 2011, and has served as
Chairman of the Board of Directors of Genie Energy since the
spin-off. Mr. Jonas also serves as the Chairman of the Board
of IDW Media Holdings, Inc., a former subsidiary of IDT that was
spun off to stockholders in September 2009. Mr. Jonas has
been a director of Rafael Pharmaceutical, Inc. (f/k/a Cornerstone
Pharmaceuticals) since April 2013 and was appointed Chairman of the
Board in April 2016. Mr. Jonas received a B.A. in Economics
from Harvard University. Howard S. Jonas is the father of Michael
Jonas, our Executive Chairman and Chairman of the Board.
Key Attributes,
Experience and Skills:
As Chairman of the Boards of IDT, Genie and IDW Media Holdings,
Howard S. Jonas brings to the Board extensive and detailed
knowledge of all aspects of our Company. He has extensive knowledge
of the industry in which the Company operates. In addition, having
Mr. Jonas on the Board and as Vice-Chairman provides our Company
with effective leadership.
The Board of Directors has no reason to believe that any of the
persons named above will be unable or unwilling to serve as a
director, if elected.
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE.
18
Executive Officers, Directors, Director Nominees and Named
Executive Officers
The executive officers, directors, director nominees and Named
Executive Officers of the Company are as follows:
|
|
|
|
|
Tom Arnoy
|
|
42
|
|
Chief Executive Officer, Named Executive Officer
and
Ex-Officio
(Non-Voting) Director
|
Jonathan Reich
|
|
51
|
|
Chief Financial Officer, Chief Operating Officer
and Named Executive Officer
|
Michael Jonas
|
|
34
|
|
Executive Chairman, Chairman of the Board,
Director and Director Nominee
|
Howard S. Jonas
|
|
61
|
|
Vice-Chairman of the Board, Director and
Director Nominee
|
Todd Feldman
|
|
41
|
|
Director and Director Nominee
|
Mark Ghermezian
|
|
35
|
|
Director and Director Nominee
|
Elliot Gibber
|
|
66
|
|
Director Nominee
|
Stephen Greenberg
|
|
73
|
|
Director
|
Set forth below is biographical information with respect to the
Company’s current executive officers and Named Executive
Officers:
Tom
Arnoy
is one of our founders, has served as our Chief
Executive Officer since 2011, and has served as an
ex-officio
(non-voting) member of our Board of Directors since June 2, 2016.
From 2008 to 2011, Mr. Arnoy served as our President. Prior to
joining Zedge, Mr. Arnoy was involved in several different mobile
internet businesses including Webway AS, a Norwegian based venture;
IMC Labs, which Mr. Arnoy founded in 2000 and which ultimately
became a part of Mobile Forza AS, a Norwegian mobile incubator and
consulting company. At Mobile Forza AS, Mr. Arnoy managed the
product and technology teams in Trondheim, Norway. In addition to
these roles, Mr. Arnoy was a project leader for MobileZone AS, a
joint venture between Siemens Mobile and Mobile Forza AS. Mr. Arnoy
has served as a director of Patchbox, AS, a private investment
company, since 2015.
Jonathan
Reich
has served as our Chief Financial Officer since
March 2016 and our Chief Operating Officer since 2011. From 2007 to
2014, Mr. Reich served as President of Fabrix Systems, Inc. and,
from 1999 to 2007, he served in various positions at Net2Phone,
Inc., culminating with him serving as Chief Executive Officer of
Net2Phone Global Services. Mr. Reich has been a director at the
non-profit organization, Hand-in-Hand, since 2005. Mr. Reich
received a B.S. and M.S. in Operations Research from Columbia
University’s School of Engineering and Applied Science in
1989 and 1993 respectively.
Relationships among Directors or Executive Officers
Howard S. Jonas and Michael Jonas are father and son. There are no
other familial relationships among any of the directors or
executive officers of the Company.
19
PROPOSAL NO. 2
APPROVAL OF AN AMENDMENT TO THE COMPANY’S
2016 STOCK OPTION AND INCENTIVE PLAN
The Company’s stockholders are being asked to approve an
amendment to the Company’s 2016 Stock Option and Incentive
Plan (the “2016 Plan”) that will, among other things,
(a) increase the number of shares of Class B Common Stock available
for the grant of awards thereunder by 350,000, and (b) modify the
independent, non-employee directors’ annual automatic grant
of $50,000 to provide that the Compensation Committee may elect to
pay any or all of such $50,000 in cash instead of shares of fully
vested restricted Class B Common Stock. The Board of Directors
adopted the proposed amendment to the 2016 Plan on November 9,
2017, subject to stockholder approval at the Annual Meeting.
Currently, the 2016 Plan provides that the each independent,
non-employee director with be awarded on each January 5
th
an award of $50,000 of shares of fully vested restricted Class B
Common Stock if such person served as an independent, non-employee
director for all of the prior calendar year; provided, however, if
the Company’s market capitalization is less than $40 million,
as calculated in the 2016 Plan, a pro rata portion of the $50,000
would be paid in cash and the remainder would be paid with shares
of fully vested restricted Class B Common Stock.
The Board of Directors believes that the proposed amendment to
increase the number of shares of Class B Common Stock available for
the grant of awards thereunder by 350,000 is necessary in order to
provide the Company with a sufficient reserve of shares of Class B
Common Stock for future grants needed to attract and retain the
services of key employees, directors and consultants of the Company
essential to the Company’s long-term success. The Board of
Directors believes that the proposed amendments to modify the
non-employee directors’ annual automatic grant are necessary
to attract and retain the services of non-employee directors of the
Company essential to the Company’s long-term success.
The proposed amendment has been approved by the Compensation
Committee and the Board of Directors, and is being submitted for a
stockholder vote in order to enable the Company to grant, among
other equity grants permitted pursuant to the 2016 Plan, options
which are incentive stock options (“ISOs”) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”); and because such approval may be
required or advisable in connection with (i) the provisions set
forth in Section 162(m) of the Code relating to the deductibility
of certain compensation (ii) the provisions set forth in Rule 16b-3
promulgated under the Exchange Act and (iii) the rules and
regulations applicable to NYSE American-listed companies.
The following description of the 2016 Plan,
as proposed to
be amended by this Proposal
, is a summary, does not purport
to be complete and is qualified in its entirety by the full text of
the 2016 Plan, as proposed to be amended. A copy of the 2016 Plan,
as proposed to be amended, is attached hereto as Exhibit A and has
been filed with the SEC with this Proxy Statement.
DESCRIPTION OF THE 2016 PLAN
Pursuant to the 2016 Plan, officers, employees, directors and
consultants of the Company and its subsidiaries are eligible to
receive awards of stock options and restricted stock. There are
approximately 60 employees and directors eligible for grants under
the 2016 Plan. Options granted under the 2016 Plan may be ISOs or
non-qualified stock options (“NQSOs”). Restricted stock
may be granted in addition to or in lieu of any other award made
under the 2016 Plan.
The maximum number of shares reserved for the grant of awards under
the 2016 Plan is 1,041,000 shares of Class B Common Stock
(including the 350,000 shares of Class B Common Stock reserved
subject to approval of the stockholders). Such share reserves are
subject to further adjustment in the event of specified changes to
the capital structure of the Company. The shares may be made
available either from the Company’s authorized but unissued
capital stock or from capital stock reacquired by the Company.
The Compensation Committee administers the 2016 Plan. Subject to
the provisions of the 2016 Plan, the Compensation Committee
determines the type of awards, when and to whom awards will be
granted, the number and class of shares covered by each award and
the terms, provisions and kind of consideration payable (if any),
with respect to awards. The Compensation Committee may interpret
the 2016 Plan and may at any time adopt such
20
rules and regulations for the 2016 Plan as it deems advisable,
including the delegation of certain of its authority. In
determining the persons to whom awards shall be granted and the
number of shares covered by each award, the Compensation Committee
takes into account the duties of the respective persons, their
present and potential contributions to the success of the Company
and such other factors as the Compensation Committee deems
relevant.
An option may be granted on such terms and conditions as the
Compensation Committee may approve, and generally may be exercised
for a period of up to ten years from the date of grant. Generally,
ISOs will be granted with an exercise price equal to the
“Fair Market Value” (as defined in the 2016 Plan) on
the date of grant. In the case of ISOs, certain limitations will
apply with respect to the aggregate value of option shares which
can become exercisable for the first time during any one calendar
year, and certain additional limitations will apply to ISOs granted
to “Ten Percent Stockholders” of the Company (as
defined in the 2016 Plan). The Compensation Committee may provide
for the payment of the option price in cash, by delivery of Class B
Common Stock having a Fair Market Value equal to such option price,
by a combination thereof or by any other method. Options granted
under the 2016 Plan will become exercisable at such times and under
such conditions as the Compensation Committee shall determine,
subject to acceleration of the exercisability of options in the
event of, among other things, a “Change in Control,” a
“Corporate Transaction” or a “Related Entity
Disposition” (in each case, as defined in the 2016 Plan).
On each January 5
th
(or the next business day if January 5
th
is not a business day) each of the Company’s non-employee
directors (as defined in the 2016 Plan) who is determined to be
independent shall automatically be awarded shares of restricted
Class B Common Stock worth $50,000 based on the average closing
prices of the Class B Common Stock on the NYSE American for the
December preceding the date of grant; provided, however, that the
Compensation Committee may elect to pay any or all of such $50,000
in cash instead of shares of restricted Class B Common Stock. New
non-employee directors who are determined to be independent will
receive a pro-rata amount (based on the number of quarters of
service for such calendar year since their election to the Board)
of such annual grant on their first January 5
th
as an independent, non-employee director. Such awards of shares of
restricted Class B Common Stock shall vest in full immediately upon
grant.
The 2016 Plan provides for the granting of restricted stock awards,
which are awards of shares of Class B Common Stock that may not be
disposed of, except by will or the laws of descent and
distribution, for such period as the Compensation Committee
determines (the “restricted period”). The Compensation
Committee may also impose such other conditions and restrictions,
if any, on the shares as it deems appropriate, including the
satisfaction of performance criteria. All restrictions affecting
the awarded shares lapse in the event of a Change in Control, a
Corporate Transaction or a Related Entity Disposition.
During the restricted period for a restricted stock award, the
grantee will be entitled to receive dividends with respect to, and
to vote, the shares of restricted stock awarded to him or her. If,
during the restricted period, the grantee’s service with the
Company terminates, any shares remaining subject to restrictions
will be forfeited. The Compensation Committee has the authority to
cancel any or all outstanding restrictions prior to the end of the
restricted period, including cancellation of restrictions in
connection with certain types of termination of service.
The Board of Directors may at any time and from time to time
suspend, amend, modify or terminate the 2016 Plan; provided,
however, that, to the extent required by any other law, regulation
or stock exchange rule, no such change shall be effective without
the requisite approval of the Company’s stockholders. In
addition, no such change may adversely affect an award previously
granted, except with the written consent of the grantee.
No awards may be granted under the 2016 Plan after May 23, 2026,
ten years from the Board’s adoption of the 2016 Plan.
ISOs are not assignable or transferable except by the laws of
descent and distribution. NQSOs may be transferred to the extent
permitted by the Compensation Committee. Holders of NQSOs are
permitted to transfer such NQSOs for no consideration to such
holder’s “family members” (as defined in Form
S-8) with the prior approval of the Compensation Committee.
The Company cannot now determine the number of options or other
awards to be granted in the future under the 2016 Plan to executive
officers, directors, employees and consultants.
21
Federal Income Tax Consequences of Awards Granted under the 2016
Plan
The Company believes that, under present law, the following are the
U.S. federal income tax consequences generally arising with respect
to awards under the 2016 Plan:
Incentive Stock
Options.
ISOs granted under the 2016 Plan are intended
to meet the definitional requirements of Section 422(b) of the Code
for “incentive stock options.” A participant who
receives an ISO does not recognize any taxable income upon the
grant of such ISO. Similarly, the exercise of an ISO generally does
not give rise to federal taxable income to the participant,
provided that (i) the federal “alternative minimum
tax,” which depends on the participant’s particular tax
situation, does not apply and (ii) the participant is employed by
the Company from the date of grant of the option until three months
prior to the exercise thereof, except where such employment or
service terminates by reason of disability or death (where the
three month period is extended to one year).
Further, if after exercising an ISO, a participant disposes of
Class B Common Stock so acquired more than two years from the date
of grant and more than one year from the date of transfer of Class
B Common Stock pursuant to the exercise of such ISO (the
“applicable holding period”), the participant will
normally recognize a long-term capital gain or loss equal to the
difference, if any, between the amount received for the shares and
the exercise price. If, however, the participant does not hold the
shares so acquired for the applicable holding period —
thereby making a “disqualifying disposition” —
the participant would realize ordinary income on the excess of the
fair market value of the shares at the time the ISO was exercised
over the exercise price, and the balance of income, if any, would
be long-term capital gain (provided the holding period for the
shares exceeded one year and the participant held such shares as a
capital asset at such time).
A participant who exercises an ISO by delivering shares of Class B
Common Stock previously acquired pursuant to the exercise of
another ISO is treated as making a “disqualifying
disposition” of such Class B Common Stock if such shares are
delivered before the expiration of their applicable holding period.
Upon the exercise of an ISO with previously acquired shares as to
which no disqualifying disposition occurs, the participant would
not recognize gain or loss with respect to such previously acquired
shares. The Company will not be allowed a federal income tax
deduction upon the grant or exercise of an ISO or the disposition,
after the applicable holding period, of the Class B Common Stock
acquired upon exercise of an ISO. In the event of a disqualifying
disposition, the Company generally will be entitled to a deduction
in an amount equal to the ordinary income recognized by the
participant, provided that such amount constitutes an ordinary and
necessary business expense to the Company and is reasonable and the
limitations of Sections 280G and 162(m) of the Code (discussed
below) do not apply.
Non-Qualified Stock
Options.
Non-qualified stock options granted under the
2016 Plan are options that do not qualify as ISOs. A participant
who receives an NQSO will not recognize any taxable income upon the
grant of such NQSO. However, the participant generally will
recognize ordinary income upon exercise of an NQSO in an amount
equal to the excess of (i) the fair market value of the shares of
Class B Common Stock at the time of exercise over (ii) the exercise
price.
The ordinary income recognized with respect to the receipt of
shares or cash upon exercise of a NQSO will be subject to both wage
withholding and other employment taxes. In addition to the
customary methods of satisfying the withholding tax liabilities
that arise upon the exercise of a NQSO, the Company may satisfy the
liability in whole or in part by withholding shares of Class B
Common Stock from those that otherwise would be issuable to the
participant or by the participant tendering other shares owned by
him or her, valued at their fair market value as of the date that
the tax withholding obligation arises.
A federal income tax deduction generally will be allowed to the
Company in an amount equal to the ordinary income recognized by the
individual with respect to his or her NQSO, provided that such
amount constitutes an ordinary and necessary business expense to
the Company and is reasonable and the limitations of Sections 280G
and 162(m) of the Code do not apply.
If a participant exercises an NQSO by delivering shares of Class B
Common Stock to the Company, other than shares previously acquired
pursuant to the exercise of an ISO which is treated as a
“disqualifying disposition” as described above, the
participant will not recognize gain or loss with respect to the
exchange of such shares, even if their then fair market value is
different from the participant’s tax basis. The participant,
however, will be taxed as described above with respect to the
exercise of the NQSO as if he or she had paid the exercise price in
cash, and the Company likewise generally will be entitled to an
equivalent tax deduction.
22
Other
Awards.
With respect to other awards under the 2016
Plan that are settled either in cash or in shares of Class B Common
Stock that are either transferable or not subject to a substantial
risk of forfeiture (as defined in the Code and the regulations
thereunder), participants generally will recognize ordinary income
equal to the amount of cash or the fair market value of Class B
Common Stock received.
With respect to restricted stock awards under the 2016 Plan that
are restricted to transferability and subject to a substantial risk
of forfeiture — absent a written election pursuant to Section
83(b) of the Code filed with the Internal Revenue Service within 30
days after the date of transfer of such shares pursuant to the
award (a “Section 83(b) election”) — a
participant will recognize ordinary income at the earlier of the
time at which (i) the shares become transferable or (ii) the
restrictions that impose a substantial risk of forfeiture of such
shares lapse, in an amount equal to the excess of the fair market
value (on such date) of such shares over the price paid for the
award, if any. If a Section 83(b) election is made, the participant
will recognize ordinary income, as of the transfer date, in an
amount equal to the excess of the fair market value of Class B
Common Stock as of that date over the price paid for such award, if
any.
The ordinary income recognized with respect to the receipt of cash,
shares of Class B Common Stock or other property under the 2016
Plan will be subject to both wage withholding and other employment
taxes. In addition to the customary methods of satisfying
withholding tax liabilities that arise with respect to the delivery
of cash or property (or vesting thereof), the Company may satisfy
the liability in whole or in part by withholding shares of Class B
Common Stock from those that would otherwise be issuable to the
participant or by the participant tendering other shares owned by
him or her, valued at their fair market value as of the date that
the tax withholding obligation arises.
The Company generally will be allowed a deduction for federal
income tax purposes in an amount equal to the ordinary income
recognized by the participant, provided that such amount
constitutes an ordinary and necessary business expense and is
reasonable and the limitations of Sections 280G and 162(m) of the
Code do not apply.
Change in
Control.
In general, if the total amount of payments to
a participant that are contingent upon a “change in
control” of the Company (as defined in Section 280G of the
Code), including awards under the 2016 Plan that vest upon a
“change in control,” equals or exceeds three times the
individual’s “base amount” (generally, such
participant’s average annual compensation for the five
calendar years preceding the change in control), then, subject to
certain exceptions, the payments may be treated as “parachute
payments” under the Code, in which case a portion of such
payments would be non-deductible to the Company and the participant
would be subject to a 20% excise tax on such portion of the
payments.
Certain Limitations
on Deductibility of Executive Compensation.
With
certain exceptions, Section 162(m) of the Code denies a deduction
to publicly held corporations for compensation paid to certain
executive officers in excess of $1 million per executive per
taxable year (including any deduction with respect to the exercise
of an NQSO or the disqualifying disposition of stock purchased
pursuant to an ISO). One such exception applies to certain
performance-based compensation provided, that such compensation has
been approved by stockholders in a separate vote and certain other
requirements are met. The Company believes that stock options
granted under the 2016 Plan should qualify for the
performance-based compensation exception to Section 162(m).
For purposes of qualifying grants of Restricted Stock as
“performance-based compensation” under Section 162(m)
of the Code, the Committee, in its discretion, may condition the
lapse of restrictions based upon the achievement of performance
goals, which shall be set by the Committee on or before the
applicable grant of Restricted Stock. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the
Committee will follow any procedures determined by it from time to
time to be necessary or appropriate to ensure qualification of the
grant of Restricted Stock under Section 162(m) of the Code (e.g.,
in determining such performance goals).On November 22, 2017, the
last reported sale price of Class B Common Stock on the NYSE
American was $2.73 per share.
23
EQUITY COMPENSATION PLAN INFORMATION
Employee Stock Incentive Program
The Company adopted the 2016 Plan, pursuant to which options to
purchase shares of Class B Common Stock and restricted shares of
Class B Common Stock may be awarded. As fully described in Proposal
No. 2, the Company is asking the stockholders to vote on an
amendment to the 2016 Plan that will (a) increase the number of
shares of Class B Common Stock available for the grant of awards
thereunder by 350,000, and (b) modify the non-employee
directors’ annual automatic grant of $50,000 to provide that
the Compensation Committee may elect to pay any or all of such
$50,000 in cash instead of fully vested shares of restricted Class
B Common Stock. The Company anticipates awarding options to
purchase shares of Class B Common Stock and restricted shares of
Class B Common Stock to employees, officers, directors and
consultants under the 2016 Plan.
Equity Compensation Plans and Individual Compensation
Arrangements
The following chart provides aggregate information regarding grants
under all equity compensation plans of the Company through July 31,
2017.
|
|
Number of Securities to be Issued upon Exercise
of Outstanding Options
(1)
|
|
Weighted-Average Exercise
Price of Outstanding Options
|
|
Number of Securities Remaining Available for
Future Issuance under Equity Compensation Plans
|
Equity compensation plans approved by security
holders
|
|
1,438,157
|
|
$
|
1.59
|
|
256,999
|
Equity compensation plans not approved by
security holders
|
|
—
|
|
|
—
|
|
—
|
Total
|
|
1,438,157
|
|
$
|
1.59
|
|
256,999
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
APPROVAL OF AMENDMENTS TO THE 2016 PLAN AS DESCRIBED ABOVE.
24
PROPOSAL NO. 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required by Section 14A of the Securities Exchange Act of 1934,
as amended, we are asking our stockholders to cast an advisory vote
on the compensation of the “Named Executive Officers”
identified in the Summary Compensation Table in the
“Executive Compensation” section of this Proxy
Statement. This vote is advisory and not binding on the Company;
however, it will provide feedback concerning our executive
compensation program.
Our Compensation Committee believes that our executive compensation
program implements and achieves the goals of our executive
compensation philosophy. That philosophy, which is set by the
Compensation Committee, is designed to attract and retain qualified
and motivated personnel and align their interests with the
short-term and long-term goals of the Company and with the best
interests of our stockholders. Our compensation philosophy is to
provide compensation to attract the individuals necessary for our
current needs and growth initiatives, and provide them with the
proper incentives to motivate those individuals to achieve our
long-term plans.
The three broad components of our executive officer compensation
are base salary, annual cash incentive bonuses, and long-term,
equity-based incentive awards. The Compensation Committee
periodically reviews total compensation levels and the allocation
of compensation among these three components for each of the
executive officers in the context of our overall compensation
policy. The Compensation Committee believes that our current
compensation plans are competitive and reasonable.
Prior to the Company’s Spin-Off from IDT Corporation on June
1, 2016, all of the Named Executive Officers were employees of IDT
and all compensation for Fiscal 2016 prior to the Spin-Off that is
included in the summary compensation table that was paid by IDT was
for services provided by the Named Executive Officers to our
business segments and other units of IDT.
The pre-Spin-Off compensation of Messrs. Arnoy and Reich was set by
the management of IDT. Following the Spin-Off, compensation of
Messrs. Arnoy and Reich was set by our Compensation Committee.
Stockholders are urged to read the information in the
“Executive Compensation” section of this Proxy
Statement. The Compensation Committee and the Board of Directors
believe that the information provided in that section demonstrates
that our executive compensation program aligns our
executives’ compensation with the Company’s short-term
and long-term performance and provides the compensation and
incentives needed to attract, motivate and retain key executives
who are crucial to the Company’s long-term success.
Accordingly, the following resolution will be submitted for a
stockholder vote at the Annual Meeting:
“RESOLVED, that the stockholders of Zedge, Inc. (the
“Company”) approve, on an advisory basis, the
compensation of the Company’s Named Executive Officers, as
disclosed pursuant to Item 402 of Securities and Exchange
Commission Regulation S-K, including the compensation tables and
narrative disclosures.”
Although the advisory vote is non-binding, the Compensation
Committee and the Board of Directors will review the results of the
vote. The Compensation Committee will consider stockholders’
concerns and take them into account in future determinations
concerning our executive compensation program.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE APPROVAL,
ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE
COMPANY’S
NAMED EXECUTIVE OFFICERS, AS STATED IN THE ABOVE RESOLUTION.
25
PROPOSAL NO. 4
RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE
COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company’s stockholders are being asked to ratify the
Board of Directors’ appointment of BDO USA, LLP
(“BDO”) for the Fiscal Year ending July 31, 2018.
BDO was the Company’s independent registered public
accounting firm for Fiscal 2017. The Audit Committee has approved
the engagement of BDO to serve as the Company’s independent
registered public accounting firm for Fiscal 2018. Neither the
Company’s governing documents nor applicable law require
stockholder ratification of our independent registered public
accounting firm. However, the Audit Committee will consider the
results of the stockholder vote for this proposal and, in the event
of a negative vote, will review any future selection of BDO. Even
if BDO’s appointment is ratified by the stockholders, the
Audit Committee may, in its discretion, appoint a new independent
registered public accounting firm at any time if it determines that
such a change would be in the best interests of the Company and its
stockholders.
We expect that representatives for BDO will be present in person or
telephonically at the Annual Meeting, will be available to respond
to appropriate questions via telephone and will have the
opportunity to make such statements as they may desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
RATIFICATION OF THE
APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JULY 31,
2018.
26
Audit and Non-Audit Fees
The following table presents fees billed for professional services
rendered by BDO for the fiscal years ended July 31, 2017 and July
31, 2016:
Fiscal Year Ended July 31
|
|
|
|
|
Audit Fees
(1)
|
|
$
|
133,414
|
|
$
|
169,814
|
Audit Related Fees
|
|
|
—
|
|
|
—
|
Tax Fees
|
|
$
|
—
|
|
$
|
3,617
|
All Other Fees
|
|
|
—
|
|
|
—
|
Total
|
|
$
|
133,414
|
|
$
|
173,431
|
Policy on Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services of the Independent Registered Public Accounting
Firm
The Audit Committee is responsible for appointing, setting
compensation for, and overseeing the work of the Company’s
independent registered public accounting firm. The Audit Committee
has established a policy regarding pre-approval of all audit and
permissible non-audit services provided by the independent
registered public accounting firm, and all such services were
approved by the Audit Committee for the interim period following
the Spin-Off.
The Audit Committee assesses requests for services by the
independent registered public accounting firm using several
factors. The Audit Committee will consider whether such services
are consistent with the PCAOB’s and SEC’s rules on
auditor independence. In addition, the Audit Committee will
determine whether the independent registered public accounting firm
is best positioned to provide the most effective and efficient
service based upon the members’ familiarity with the
Company’s business, people, culture, accounting systems, risk
profile and whether the service might enhance the Company’s
ability to manage or control risk or improve audit quality.
Report of the Audit Committee
The primary purpose of the Audit Committee is to assist the Board
of Directors in its general oversight of the Company’s
financial reporting process, internal controls, and audit
functions. The Audit Committee’s function is more fully
described in its charter, which can be found at the Corporate
Governance section of the Company’s web site,
http://investor.zedge.net/corporate-governance/governance-documents
.
The Committee reviews the charter on an annual basis. The Board of
Directors annually reviews the NYSE American listing
standards’ definition of independence for Audit Committee
members and has determined that each member of the Audit Committee
meets that standard. The Board of Directors has also determined
that Stephen Greenberg qualifies as an “audit committee
financial expert” within the meaning of Item 407(d)(5) of
Regulation S-K.
The Company’s management is responsible for the preparation,
presentation, and integrity of the Company’s financial
statements, accounting and financial reporting principles, internal
controls, and procedures designed to assure compliance with
accounting standards, applicable laws, and regulations.
The Company’s independent registered public accounting firm
for Fiscal 2017, BDO USA, LLP, is responsible for performing
independent audits of the consolidated financial statements and
expressing an opinion on the conformity of those financial
statements with U.S. generally accepted accounting principles. In
accordance with law, the Audit Committee has ultimate authority and
responsibility for selecting, compensating, evaluating, and, when
appropriate, replacing the Company’s independent audit firm,
and evaluates its independence. The Audit Committee has the
authority to engage its own outside advisors, including experts in
particular areas of accounting, as it determines appropriate, apart
from counsel or advisors hired by the Company’s
management.
Audit Committee members are not professional accountants or
auditors, and their functions are not intended to duplicate or to
certify the activities of the Company’s management and the
independent audit firm; nor can the Audit Committee certify that
the independent audit firm is “independent” under
applicable rules. The Audit Committee
27
serves a Board-level oversight role in which it provides advice,
counsel, and direction to the C
ompany’s management
and to
the auditors on the basis of the information it receives,
discussions with the Company’s management and the auditors,
and the experience of the Audit Committee’s members in
business, financial, and accounting matters.
The Audit Committee’s agenda for the year includes reviewing
the Company’s financial statements, internal control over
financial reporting, and audit and other matters. The Audit
Committee meets each quarter with BDO USA, LLP and the
Company’s management to review the Company’s interim
financial results before the publication of the Company’s
quarterly earnings news releases and/or filings. The
Company’s management’s and the independent audit
firm’s presentations to, and discussions with, the Audit
Committee cover various topics and events that may have significant
financial impact or are the subject of discussions between the
Company’s management and the independent audit firm. The
Audit Committee reviews and discusses with the Company’s
management the Company’s major financial risk exposures and
the steps that the Company’s management has taken to monitor
and control such exposures. The Audit Committee is responsible for
establishing procedures for the receipt, retention, and treatment
of complaints received by the Company regarding accounting,
internal accounting controls, or auditing matters, including
confidential, anonymous submission by the Company’s
employees, received through established procedures, of any concerns
regarding questionable accounting or auditing matters.
Among other matters, the Audit Committee monitors the activities
and performance of the Company’s independent registered
public accounting firm, including the audit scope, external audit
fees, auditor independence matters, and the extent to which the
independent audit firm can be retained to perform non-audit
services. In accordance with Audit Committee policy and the
requirements of law, the Audit Committee pre-approves all services
to be provided by BDO USA, LLP. Pre-approval includes audit
services, audit-related services, tax services, and other
services.
The Committee has reviewed and discussed with the Company’s
management the audited financial statements of the Company for the
fiscal year ended July 31, 2017, as well as the effectiveness of
the Company’s internal controls over financial reporting as
of July 31, 2017. BDO USA, LLP has provided the Audit Committee
with the written disclosures and the letter required by the PCAOB
regarding the independent accountant’s communications with
the Audit Committee concerning independence, and the Audit
Committee has discussed with BDO USA, LLP and management that
firm’s independence. The Committee has also reviewed and
discussed with BDO USA, LLP the matters required to be discussed
with the independent registered public accounting firm by
applicable PCAOB rules regarding “Communication with Audit
Committees.”
Based on these reviews and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial
statements be included in the Company’s Annual Report on Form
10-K for the fiscal year ended July 31, 2017, for filing with the
Securities and Exchange Commission.
|
|
THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
|
|
|
|
|
|
Stephen Greenberg, Chairman
|
|
|
Todd Feldman
|
|
|
Mark Ghermezian
|
Notwithstanding
anything to the contrary set forth in any of the Company’s
previous filings under the Act, as amended, or the Exchange Act, as
amended, that might incorporate future filings, including this
Proxy Statement, in whole or in part, the foregoing report, as well
as any charters op policies referenced within this Proxy Statement,
shall not be incorporated by reference into any such filings, nor
shall they be deemed to be soliciting material or deemed filed with
the SEC under the Act or under the Exchange Act.
28
OTHER INFORMATION
Submission of Proposals for the 2019 Annual Meeting of
Stockholders
Stockholders who wish to present proposals for inclusion in the
Company’s proxy materials in connection with the 2019 Annual
Meeting of Stockholders must submit such proposals in writing to
the Corporate Secretary of the Company at 22 Cortlandt Street,
14
th
Floor, New York, New York 10007, which proposals must be received
at such address no later than August 5, 2018. In addition, any
stockholder proposal submitted with respect to the Company’s
2019 Annual Meeting of Stockholders, which proposal is submitted
outside the requirements of Rule 14a-8 under the Exchange Act and,
therefore, will not be included in the relevant proxy materials,
will be considered untimely for purposes of Rule 14a-4 and 14a-5 if
written notice thereof is received by the Company’s Corporate
Secretary after October 22, 2018.
Availability of Annual Report on Form 10-K
Additional copies of the Company’s Annual Report on Form 10-K
may be obtained by contacting Zedge Investor Relations, by phone at
(330) 577-3424, or by mail addressed to Zedge Investor Relations at
22 Cortlandt Street, 14
th
Floor, New York, New York 10007.
Other Matters
The Board of Directors 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
granted will be voted in respect thereof in accordance with the
judgments of the persons voting the proxies.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to fill in, sign and
promptly return the accompanying form in the enclosed envelope.
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
November 28, 2017
|
|
|
|
|
|
|
|
Joyce Mason
|
|
|
Corporate Secretary
|
29
EXHIBIT
A
ZEDGE, INC.
2016 STOCK OPTION AND INCENTIVE PLAN
Adopted as of May 23, 2016
(Amended and Restated on October 18, 2017)
1.
Purpose; Types of
Awards; Construction.
The purpose of the Zedge, Inc. 2016 Stock Option and Incentive Plan
(the “Plan”) is to provide incentives to executive
officers, employees, directors and consultants of Zedge, Inc. (the
“Company”), or any subsidiary of the Company which now
exists or hereafter is organized or acquired by the Company, to
acquire a proprietary interest in the Company, to continue as
executive officers, employees, directors or consultants, to
increase their efforts on behalf of the Company and to promote the
success of the Company’s business. The provisions of the Plan
are intended to satisfy the requirements of Section 16(b) of the
Securities Exchange Act of 1934, as amended, and of Section 162(m)
of the Internal Revenue Code of 1986, as amended, and shall be
interpreted in a manner consistent with the requirements
thereof.
2.
Definitions.
As used in this Plan, the following words and phrases shall have
the meanings indicated:
(a)
“Agreement” shall mean a written agreement entered into
between the Company and a Grantee in connection with an award under
the Plan.
(b)
“Board” shall mean the Board of Directors of the
Company.
(c)
“Change in Control” means a change in ownership or
control of the Company effected through either of the
following:
(i)
any
“person,” as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than (A) the Company, (B) any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, (C) any corporation or other entity
owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of Class B
Common Stock, or (D) any person who, immediately following the
spin-off of the Company by way of a pro rata distribution of the
Company’s Class B Common Stock to the stockholders of IDT
Corporation, owned more than 25% of the combined voting power of
the Company’s then outstanding voting securities), is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly
from the Company or any of its affiliates other than in connection
with the acquisition by the Company or its affiliates of a
business) representing 25% or more of the combined voting power of
the Company’s then outstanding voting securities; or
(ii)
during
any period of not more than two consecutive years, not including
any period prior to the initial adoption of this Plan by the Board,
individuals who at the beginning of such period constitute the
Board, and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest, including, but not limited to a consent
solicitation, relating to the election of directors of the Company)
whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof.
(d)
“Class B Common Stock” shall mean shares of Class B
Common Stock, par value $.01 per share, of the Company.
(e)
“Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time.
A-1
(f)
“Committee” shall mean the Compensation Committee of
the Board or such other committee as the Board may designate from
time to time to administer the Plan. The Board will cause the
Committee to satisfy the applicable requirements of any stock
exchange on which the Common Stock may then be listed. For purposes
of awards intended to constitute performance awards, to the extent
required by Code Section 162(m), Committee means all of the members
of the Committee who are “outside directors” within the
meaning of Section 162(m) of the Code. For purposes of awards to
Grantees who are subject to Section 16 of the Exchange Act,
Committee means all of the members of the Committee who are
“non-employee directors” within the meaning of Rule
16b-3 adopted under the Exchange Act.
(g)
“Company” shall mean Zedge, Inc., a corporation
incorporated under the laws of the State of Delaware, or any
successor corporation.
(h)
“Continuous Service” means that the provision of
services to the Company or a Related Entity in any capacity of
officer, employee, director or consultant is not interrupted or
terminated. Continuous Service shall not be considered interrupted
in the case of (i) any approved leave of absence, (ii) transfers
between locations of the Company or among the Company, any Related
Entity or any successor in any capacity of officer, employee,
director or consultant, or (iii) any change in status as long as
the individual remains in the service of the Company or a Related
Entity in any capacity of officer, employee, director or consultant
(except as otherwise provided in the applicable Agreement). An
approved leave of absence shall include sick leave, short-term
disability, maternity leave, military leave (including without
limitation service in the National Guard or the Army Reserves) and
any other personal leave approved by the Company or the Committee.
For purposes of Incentive Stock Options, no such leave may exceed
ninety (90) days unless reemployment upon expiration of such leave
is guaranteed by statute or contract.
(i)
“Corporate Transaction” means any of the following
transactions:
(i)
a
merger or consolidation of the Company with any other corporation
or other entity, other than (A) a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving or parent entity) 80% or more of the combined
voting power of the voting securities of the Company or such
surviving or parent entity outstanding immediately after such
merger or consolidation or (B) a merger or consolidation effected
to implement a recapitalization of the Company (or similar
transaction) in which no “person” (as defined in the
Exchange Act) acquired 25% or more of the combined voting power of
the Company’s then outstanding securities; or
(ii) a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially
all of its assets (or any transaction having a similar effect).
(j)
“Disability” shall mean cause for termination of a
Grantee’s employment or service due to a determination that
the Grantee is disabled in accordance with a long-term disability
insurance program maintained by the Company or a total and
permanent disability as defined in Code Section 22(e)(3).
(k)
“Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended from time to time.
(l)
“Fair Market Value” per share as of a particular date
shall mean (i) the closing sale price per share of Class B Common
Stock on the national securities exchange on which the Class B
Common Stock is principally traded for the last preceding date on
which there was a sale of Class B Common Stock on such exchange, or
(ii) if the shares of Class B Common Stock are then traded in an
over-the-counter market, the average of the closing bid and asked
prices for the shares of Class B Common Stock in such
over-the-counter market for the last preceding date on which there
was a sale of Class B Common Stock in such market, or (iii) if the
shares of Class B Common Stock are not then readily tradable on an
established securities market, such value as the Committee, in its
sole discretion, shall determine, provided however that such
determination (A) with respect to Nonqualified Stock Options, shall
be in good faith using a “reasonable application of a
reasonable valuation method” within the meaning of Treasury
Regulation Section 1.409A-1(b)(5)(iv)(B), and (B) with respect to
Incentive Stock Options, shall be in a manner that satisfies the
applicable requirements of Code Section 422.
A-2
(m)
“Grantee” shall mean a person who receives a grant of
Options or Restricted Stock under the Plan.
(n)
“Incentive Stock Option” shall mean any option intended
to be, and designated as, an incentive stock option within the
meaning of Section 422 of the Code.
(o)
“Insider” shall mean a Grantee who is subject to the
reporting requirements of Section 16(a) of the Exchange Act.
(p)
“Insider Trading Policy” shall mean the Insider Trading
Policy of the Company, as may be amended from time to time.
(q)
“Non-Employee Director” means an independent member of
the Board, as determined by the Board, who is not an employee of
the Company or any Subsidiary.
(r)
“Non-Employee Director Annual Grant” shall mean an
award of a number of shares of Restricted Stock as shall be equal
to $50,000 based on the average closing prices of the Class B
common stock on the NYSE American for the December preceding the
date of grant less any portion of $50,000 that the Committee elects
to pay in cash and not in shares of Restricted Stock.
(s)
“Non-Employee Director Grant Date” shall mean January 5
of the applicable year (or the following business day if January 5
is not a business day).
(t)
“Nonqualified Stock Option” shall mean any option not
designated as an Incentive
Stock Optio
n.
(u)
“Option” or “Options” shall mean a grant to
a Grantee of an option or options to purchase shares of Class B
Common Stock.
(v)
“Option Agreement” shall have the meaning set forth in
Section 6 of the Plan.
(w)
“Option Price” shall mean the exercise price of the
shares of Class B Common Stock covered by an Option.
(x)
“Parent” shall mean any company (other than the
Company) in an unbroken chain of companies ending with the Company
if, at the time of granting an award under the Plan, each of the
companies other than the Company owns stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other companies in such chain.
(y)
“Related Entity” means any Parent, Subsidiary or any
business, corporation, partnership, limited liability company or
other entity in which the Company, a Parent or a Subsidiary holds a
substantial ownership interest, directly or indirectly. The term
“substantial ownership interest” means the possession,
directly or indirectly, of the power to direct the management and
policies of such person or entity, whether through the ownership of
voting or other securities, by contract or otherwise.
(z)
“Restricted Period” shall have the meaning set forth in
Section 9(b) of the Plan.
(aa)
“Restricted Stock” means shares of Class B Common Stock
issued under the Plan to a Grantee for such consideration, if any,
and subject to such restrictions on transfer, rights of refusal,
repurchase provisions, forfeiture provisions and other terms and
conditions as shall be determined by the Committee.
(bb)
“Related Entity Disposition” means the sale,
distribution or other disposition by the Company of all or
substantially all of the Company’s interest in any Related
Entity effected by a sale, merger or consolidation or other
transaction involving such Related Entity or the sale of all or
substantially all of the assets of such Related Entity.
(cc)
“Retirement”
shall mean a Grantee’s retirement in accordance with the
terms of any tax-qualified retirement plan maintained by the
Company or any of its affiliates in which the Grantee
participates.
A-3
(dd)
“Rule 16b-3” shall mean Rule 16b-3, as from time to
time in effect, promulgated under the Exchange Act, including any
successor to such Rule.
(ee)
“Subsidiary” shall mean any company (other than the
Company) in an unbroken chain of companies beginning with the
Company if each of the companies other than the last company in the
unbroken chain owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other companies in such chain.
(ff)
“Tax Event” shall have the meaning set forth in Section
15 of the Plan.
(gg)
“Ten Percent Stockholder” shall mean a Grantee who at
the time an Incentive Stock Option is granted, owns stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or
Subsidiary.
3.
Administration.
(a)
The Plan shall be administered by the Committee.
(b)
The Committee shall have the authority in its discretion, subject
to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities
either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including, without
limitation, the authority to grant Options and Restricted Stock; to
determine which options shall constitute Incentive Stock Options
and which Options shall constitute Nonqualified Stock Options; to
determine the purchase price of the shares of Class B Common Stock
covered by each Option; to determine the persons to whom, and the
time or times at which awards shall be granted; to determine the
number of shares to be covered by each award; to interpret the Plan
and any award under the Plan; to reconcile any inconsistent terms
in the Plan or any award under the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine
the terms and provisions of the Agreements (which need not be
identical) and to cancel or suspend awards, as necessary; and to
make all other determinations deemed necessary or advisable for the
administration of the Plan.
(c)
All decisions, determination and interpretations of the Committee
shall be final and binding on all Grantees of any awards under this
Plan. No member of the Board or Committee shall be liable for any
action taken or determination made in good faith with respect to
the Plan or any award granted hereunder.
(d)
The Committee may delegate to one or more executive officers of the
Company the authority to (i) grant awards under the Plan to
employees of the Company and its Subsidiaries who are not officers
or directors of the Company, (ii) execute and deliver documents or
take such other ministerial actions on behalf of the Committee with
respect to awards and (iii) to make interpretations of the Plan.
The grant of authority in this Section 3(d) shall be subject to
such conditions and limitations as may be determined by the
Committee. If the Committee delegates authority to any such
executive officer or executive officers of the Company pursuant to
this Section 3(d), and such executive officer or executive officers
grant awards pursuant to such delegated authority, references in
this Plan to the “Committee” as they relate to such
awards shall be deemed to refer to such executive officer or
executive officers, as applicable.
(e)
For purposes of qualifying grants of Restricted Stock as
“performance-based compensation” under Section 162(m)
of the Code, the Committee, in its discretion, may condition the
lapse of restrictions based upon the achievement of performance
goals, which shall be set by the Committee on or before the
applicable grant of Restricted Stock. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the
Committee will follow any procedures determined by it from time to
time to be necessary or appropriate to ensure qualification of the
grant of Restricted Stock under Section 162(m) of the Code (e.g.,
in determining such performance goals).
4.
Eligibility.
Awards may be granted to executive officers, employees, directors
and consultants of the Company or of any Subsidiary. In addition to
any other awards granted to Non-Employee Directors hereunder,
awards shall be granted to Non-Employee Directors pursuant to
Section 10 of the Plan. In determining the persons to whom awards
shall be
A-4
granted and the number of shares to be covered by each award, the
Committee shall take into account the duties of the respective
persons, their present and potential contributions to the success
of the Company and such other factors as the Committee shall deem
relevant in connection with accomplishing the purposes of the
Plan.
5.
Stock.
(a)
The maximum number of shares of Class B Common Stock reserved for
the grant of awards under the Plan shall be 1,041,000 (after giving
effect to the stock split of the Company’s shares of common
stock to be effective prior to the Company’s spinoff from IDT
Corporation), subject to adjustment as provided in Section 11 of
the Plan. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be reacquired
by the Company.
(b)
If any outstanding award under
the Plan should, for any reason expire, be canceled or be forfeited
without having been exercised in full, the shares of Class B Common
Stock allocable to the unexercised, canceled or terminated portion
of such award shall (unless the Plan shall have been terminated)
become available for subsequent grants of awards under the Plan,
unless otherwise determined by the Committee.
(c)
In no event may a Grantee be granted during any calendar year
Options to acquire more than an aggregate of 60,000 shares of Class
B Common Stock subject to adjustment as provided in Section 11 of
the Plan.
6.
Terms and Conditions
of Options.
(a)
OPTION AGREEMENT. Each
Option granted pursuant to the Plan shall be evidenced by a written
agreement between the Company and the Grantee (the “Option
Agreement”), in such form and containing such terms and
conditions as the Committee shall from time to time approve, which
Option Agreement shall comply with and be subject to the following
terms and conditions, unless otherwise specifically provided in
such Option Agreement. For purposes of interpreting this Section 6,
a director’s service as a member of the Board or a
consultant’s service shall be deemed to be employment with
the Company.
(b)
NUMBER OF SHARES. Each Option Agreement shall state the number
of shares of Class B Common Stock to which the Option relates.
(c)
TYPE OF OPTION. Each Option Agreement shall specifically
state that the Option constitutes an Incentive Stock Option or a
Nonqualified Stock Option. In the absence of such designation, the
Option will be deemed to be a Nonqualified Stock Option.
(d)
OPTION PRICE. Each Option Agreement shall state the Option
Price, which, in the case of an Incentive Stock Option, shall not
be less than one hundred percent (100%) of the Fair Market Value of
the shares of Class B Common Stock covered by the Option on the
date of grant. The Option Price shall be subject to adjustment as
provided in Section 9 of the Plan.
(e)
MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in
full, at the time of exercise, in cash or in shares of Class B
Common Stock having a Fair Market Value equal to such Option Price
or in a combination of cash and Class B Common Stock including a
cashless exercise procedure through a broker-dealer or otherwise;
provided, however, that in the case of an Incentive Stock Option,
the medium of payment shall be determined at the time of grant and
set forth in the applicable Option Agreement.
(f)
TERM AND EXERCISABILITY OF OPTIONS. Each Option Agreement
shall provide the exercise schedule for the Option as determined by
the Committee, provided, that, the Committee shall have the
authority to accelerate the exercisability of any outstanding
option at such time and under such circumstances as it, in its sole
discretion, deems appropriate. The exercise period will be ten (10)
years from the date of the grant of the option unless otherwise
determined by the Committee; provided, however, that in the case of
an Incentive Stock Option, such exercise period shall not exceed
ten (10) years from the date of grant of such Option. The exercise
period shall be subject to earlier termination as provided in
Sections 6(g) and 6(h) of the Plan. An Option may be exercised, as
to any or all full shares of Class B Common Stock as to which the
Option has become exercisable, by written notice delivered in
person or by mail to the administrator designated by the Company,
specifying the number of shares of Class B Common Stock with
respect to which the Option is being exercised.
A-5
(g)
TERMINATION OF CONTINUOUS SERVICE. Except as expressly
provided for in an applicable Option Agreement or as provided in
this Section 6(g) and in Section 6(h) of the Plan, an Option may
not be exercised unless the Grantee is then in the employ of, or
maintaining a director or consultant relationship with, or
otherwise a service provider to, the Company or a Subsidiary
thereof (or a company or a Parent or Subsidiary of such company
issuing or assuming the Option in a transaction to which Section
424(a) of the Code applies), and unless the Grantee has remained in
Continuous Service with the Company or any Subsidiary since the
date of grant of the Option. In the event that the Continuous
Service of a Grantee shall terminate (other than by reason of
death, Disability or Retirement), all Options of such Grantee that
are exercisable at the time of Grantee’s termination may,
unless earlier terminated in accordance with their terms, be
exercised within one hundred eighty (180) days after the date of
termination (or such different period as the Committee or the
applicable Option Agreement shall prescribe).
(h)
DEATH, DISABILITY OR RETIREMENT OF GRANTEE. Unless otherwise
expressly provided for in an Option Agreement, if a Grantee shall
die while providing Continuous Service or if the Grantee’s
Continuous Service shall terminate by reason of Disability, all
Options theretofore granted to such Grantee (to the extent
otherwise exercisable) may, unless earlier terminated in accordance
with their terms, be exercised by the Grantee or by the
Grantee’s estate or by a person who acquired the right to
exercise such Options by bequest or inheritance or otherwise by
result of death or Disability of the Grantee, at any time within
three hundred sixty five (365) days after the death or Disability
of the Grantee (or such different period as the applicable Option
Agreement or the Committee shall prescribe). In the event that an
Option granted hereunder shall be exercised by the legal
representatives of a deceased or former Grantee, written notice of
such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal
representative to exercise such Option. In the event that the
Continuous Service of a Grantee shall terminate on account of such
Grantee’s Retirement, all Options of such Grantee that are
exercisable at the time of such Retirement may, unless earlier
terminated in accordance with their terms, be exercised at any time
within one hundred eighty (180) days after the date of such
Retirement (or such different period as the applicable Option
Agreement or the Committee shall prescribe).
(i)
OTHER PROVISIONS. The Option Agreements evidencing awards
under the Plan shall contain such other terms and conditions not
inconsistent with the Plan as the Committee may determine.
7.
Nonqualified Stock
Options.
Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to
the general terms and conditions specified in Section 6 of the
Plan.
8.
Incentive Stock
Options.
Options granted pursuant to this Section 8 are intended to
constitute Incentive Stock Options and shall be subject to the
following special terms and conditions, in addition to the general
terms and conditions specified in Section 6 of the Plan:
(a)
LIMITATION ON VALUE OF SHARES. To the extent that the
aggregate Fair Market Value of shares of Class B Common Stock
subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any
calendar year (under all plans of the Company or any Subsidiary)
exceeds $100,000, such excess Options, to the extent of the shares
covered thereby in excess of the foregoing limitation, shall be
treated as Nonqualified Stock Options. For this purpose, Incentive
Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the shares of Class
B Common Stock shall be determined as of the date that the Option
with respect to such shares was granted.
(b)
TEN PERCENT
STOCKHOLDER. In the case of an Incentive Stock Option granted
to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value
of the shares of Class B Common Stock on the date of grant of such
Incentive Stock Option, and (ii) the exercise period shall not
exceed five (5) years from the date of grant of such Incentive
Stock Option.
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9.
Restricted
Stock.
The Committee may award shares of Restricted Stock to any eligible
executive officer, employee, director or consultant of the Company
or of any Subsidiary. Each award of Restricted Stock under the Plan
shall be evidenced by a written Agreement between the Company and
the Grantee, in such form as the Committee shall from time to time
approve, which Agreement shall comply with and be subject to the
following terms and conditions, unless otherwise specifically
provided in such Agreement:
(a)
NUMBER OF
SHARES
. Each Agreement shall state the number of shares
of Restricted Stock to be subject to an award.
(b)
RESTRICTIONS
. Shares
of Restricted Stock may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, for such period as the
Committee shall determine from the date on which the award is
granted (the “Restricted Period”). The Committee may
also impose such additional or alternative restrictions and
conditions on the shares as it deems appropriate including, but not
limited to, the satisfaction of performance criteria. Such
performance criteria may include sales, earnings before interest
and taxes, return on investment, earnings per share, any
combination of the foregoing or rate of growth of any of the
foregoing, as determined by the Committee. The Company may, at its
option, maintain issued shares in book entry form. Certificates, if
any, for shares of stock issued pursuant to Restricted Stock awards
shall bear an appropriate legend referring to such restrictions,
and any attempt to dispose of any such shares of stock in
contravention of such restrictions shall be null and void and
without effect. During the Restricted Period, any such certificates
shall be held in escrow by an escrow agent appointed by the
Committee. In determining the Restricted Period of an award, the
Committee may provide that the foregoing restrictions shall lapse
with respect to specified percentages of the awarded shares on
successive anniversaries of the date of such award.
(c)
FORFEITURE
. Subject
to such exceptions as may be determined by the Committee, if the
Grantee’s Continuous Service with the Company or any
Subsidiary shall terminate for any reason prior to the expiration
of the Restricted Period of an award, any shares remaining subject
to restrictions (after taking into account the provisions of
Subsection (e) of this Section 9) shall thereupon be forfeited by
the Grantee and transferred to, and retired by, the Company without
cost to the Company or such Subsidiary, and such shares shall
become available for subsequent grants of awards under the Plan,
unless otherwise determined by the Committee.
(d)
OWNERSHIP
. During
the Restricted Period, the Grantee shall possess all incidents of
ownership of such shares, subject to Subsection (b) of this Section
9, including the right to receive dividends with respect to such
shares and to vote such shares.
(e)
ACCELERATED LAPSE OF
RESTRICTIONS
. Upon the occurrence of any of the events
specified in Section 12 of the Plan (and subject to the conditions
set forth therein), all restrictions then outstanding on any shares
of Restricted Stock awarded under the Plan shall lapse as of the
applicable date set forth in Section 12. The Committee shall have
the authority (and the Agreement may so provide) to cancel all or
any portion of any outstanding restrictions prior to the expiration
of the Restricted Period with respect to any or all of the shares
of Restricted Stock awarded on such terms and conditions as the
Committee shall deem appropriate.
10.
Non-Employee Director
Restricted Stock.
The provisions of this Section 10 shall apply only to certain
grants of Restricted Stock to Non-Employee Directors, as provided
below. Except as set forth in this Section 10, the other provisions
of the Plan shall apply to grants of Restricted Stock to
Non-Employee Directors to the extent not inconsistent with this
Section. For purposes of interpreting Section 6 of the Plan and
this Section 10, a Non-Employee Director’s service as a
member of the Board or the board of directors of any Subsidiary
shall be deemed to be employment with the Company.
(a)
GENERAL
. Non-Employee Directors shall
receive Restricted Stock in accordance with this Section 10.
Restricted Stock granted pursuant to this Section 10 shall be
subject to the terms of such section and shall not be subject to
discretionary acceleration of vesting by the Committee. Unless
determined otherwise by the Committee, Non-Employee Directors shall
not receive separate and additional grants hereunder for being a
Non-Employee Director of (i) the Company and a Subsidiary or (ii)
more than one Subsidiary.
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(b)
INITIAL GRANTS OF
RESTRICTED STOCK
. A Non-Employee Director who first
becomes a Non-Employee Director shall receive a pro-rata amount
(based on quarter(s) of service following the date the Non-Employee
Director was appointed as a Non-Employee Director on the next
Non-Employee Director Annual Grant.
(c)
ANNUAL GRANTS OF
RESTRICTED STOCK
. On each Non-Employee Director Grant
Date, each Non-Employee Director who attended at least 75% of the
regularly scheduled meetings of the Board of Directors during a
calendar year shall receive a Non-Employee Director Annual Grant;
provided, however that a Non-Employee Director first appointed
during the previous calendar year shall receive only the initial
grant of restricted stock as set forth in Section 10(b).
(d)
VESTING OF RESTRICTED
STOCK
. Restricted Stock granted under this Section 10
shall be fully vested upon grant.
11.
Effect of Certain
Changes.
(a)
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of
any extraordinary dividend, stock dividend, recapitalization,
merger, consolidation, stock split, warrant or rights issuance, or
combination or exchange of such shares, or other similar
transactions, the Committee shall equitably adjust (i) the maximum
number of Options or shares of Restricted Stock that may be awarded
to a Grantee in any calendar year (as provided in Section 5
hereof), (ii) the number of shares of Class B Common Stock
available for awards under the Plan, (iii) the number and/or kind
of shares covered by outstanding awards and (iv) the price per
share of Options so as to reflect such event and preserve the value
of such awards; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(b)
CHANGE IN CLASS B COMMON STOCK. In the event of a change in
the Class B Common Stock as presently constituted that is limited
to a change of all of its authorized shares of Class B Common
Stock, into the same number of shares with a different par value or
without par value, the shares resulting from any such change shall
be deemed to be the Class B Common Stock within the meaning of the
Plan.
12.
Corporate
Transaction; Change in Control; Related Entity
Disposition.
(a)
CORPORATE TRANSACTION. In the event of a Corporate
Transaction, each award which is at the time outstanding under the
Plan shall automatically become fully vested and exercisable and,
in the case of an award of Restricted Stock, shall be released from
any restrictions on transfer (except with regard to the Insider
Trading Policy and such other agreements between the Grantee and
the Company) and repurchase or forfeiture rights, immediately prior
to the specified effective date of such Corporate Transaction.
Effective upon the consummation of the Corporate Transaction, all
outstanding awards of Options under the Plan shall terminate,
unless otherwise determined by the Committee. However, all such
awards shall not terminate if the awards are, in connection with
the Corporate Transaction, assumed by the successor corporation or
Parent thereof.
(b)
CHANGE IN CONTROL. In the event of a Change in Control (other
than a Change in Control which is also a Corporate Transaction),
each award which is at the time outstanding under the Plan
automatically shall become fully vested and exercisable and, in the
case of an award of Restricted Stock, shall be released from any
restrictions on transfer and repurchase or forfeiture rights,
immediately prior to the specified effective date of such Change in
Control.
(c)
RELATED ENTITY DISPOSITION. The Continuous Service of each
Grantee (who is primarily engaged in service to a Related Entity at
the time it is involved in a Related Entity Disposition) shall
terminate effective upon the consummation of such Related Entity
Disposition, and each outstanding award of such Grantee under the
Plan shall become fully vested and exercisable and, in the case of
an award of Restricted Stock, shall be released from any
restrictions on transfer (except with regard to the Insider Trading
Policy and such other agreements between the Grantee and the
Company). Unless otherwise determined by the Committee, the
Continuous Service of a Grantee shall not be deemed to terminate
(and each outstanding award of such Grantee under the Plan shall
not become fully vested and exercisable and, in the case of an
award of Restricted Stock, shall not be released from any
restrictions on transfer) if (i) a Related Entity Disposition
involves the spin-off of a Related Entity, for so long as such
Grantee continues to remain in the service of
A-8
such entity that constituted the Related Entity immediately prior
to the consummation of such Related Entity Disposition
(“SpinCo”) in any capacity of officer, employee,
director or consultant or (ii) an outstanding award is assumed by
the surviving corporation (whether SpinCo or otherwise) or its
parent entity in connection with a Related Entity Disposition.
(d)
SUBSTITUTE AWARDS. The Committee may grant awards under the
Plan in substitution of stock-based incentive awards held by
employees, consultants or directors of another entity who become
employees, consultants or directors of the Company or any
Subsidiary by reason of a merger or consolidation of such entity
with the Company or any Subsidiary, or the acquisition by the
Company or a Subsidiary of property or equity of such entity, upon
such terms and conditions as the Committee may determine, and such
awards shall not count against the share limitation set forth in
Section 5 of the Plan.
13.
Period During which
Awards May Be Granted.
Awards may be granted pursuant to the Plan from time to time within
a period of ten (10) years from May 23, 2016, the date the Board
adopted the Plan.
14.
Transferability of
Awards.
(a)
Incentive Stock Options may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than
by the laws of descent and distribution and may be exercised,
during the lifetime of the Grantee, only by the Grantee or his or
her guardian or legal representative.
(b)
Nonqualified Stock Options shall be transferable in the manner and
to the extent acceptable to the Committee, as evidenced by a
writing signed by the Company and the Grantee. Nonqualified Stock
Options shall be transferable by a Grantee as a gift to the
Grantee’s “family members” (as defined in Form
S-8) under such terms and conditions as may be established by the
Committee; provided that the Grantee receives no consideration for
the transfer. Notwithstanding the transfer by a Grantee of a
Nonqualified Stock Option, the transferred Nonqualified Stock
Option shall continue to be subject to the same terms and
conditions as were applicable to the Nonqualified Stock Option
immediately before the transfer (including, without limitation, the
Insider Trading Policy) and the Grantee will continue to remain
subject to the withholding tax requirements set forth in Section 15
hereof.
(c)
The terms of any award granted under the Plan, including the
transferability of any such award, shall be binding upon the
executors, administrators, heirs and successors of the Grantee.
(d)
Each Grantee who receives an award shall comply with any policy
adopted by the Company from time to time covering transactions in
the Company’s securities. By way of example, and not
limitation, Restricted Stock shall remain subject to the Insider
Trading Policy after the Restricted Period.
15.
Agreement by Grantee
regarding Withholding Taxes.
If the Committee shall so require, as a condition of exercise of an
Option or the expiration of a Restricted Period (each a “Tax
Event”), each Grantee shall agree that no later than the date
of the Tax Event, the Grantee will pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any
federal, state or local taxes of any kind required by law to be
withheld upon the Tax Event. Unless determined otherwise by the
Committee, a Grantee shall permit, to the extent permitted or
required by law, the Company to withhold federal, state and local
taxes of any kind required by law to be withheld upon the Tax Event
from any payment of any kind due to the Grantee. Unless otherwise
determined by the Committee, any such above-described withholding
obligation may, in the discretion of the Company, be satisfied by
the withholding by the Company or delivery to the Company of Class
B Common Stock.
16.
Rights as a
Stockholder.
Except as provided in Section 9(d) of the Plan, a Grantee or a
transferee of an award shall have no rights as a stockholder with
respect to any shares covered by the award until the date of the
issuance of such shares to him or her. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distribution of other rights for
which the record date is prior to the date such shares are issued,
except as provided in Section 11(a) of the Plan.
A-9
17.
No Rights to
Employment; Forfeiture of Gains.
Nothing in the Plan or in any award granted or Agreement entered
into pursuant hereto shall confer upon any Grantee the right to
continue as a director of, in the employ of, or in a consultant
relationship with, the Company or any Subsidiary or to be entitled
to any remuneration or benefits not set forth in the Plan or such
Agreement or to interfere with or limit in any way the right of the
Company or any such Subsidiary to terminate such Grantee’s
employment or consulting relationship. Awards granted under the
Plan shall not be affected by any change in duties or position of a
Grantee as long as such Grantee continues to be employed by, or in
a consultant relationship with, or a director of the Company or any
Subsidiary. The Agreement for any award under the Plan may require
the Grantee to pay to the Company any financial gain realized from
the prior exercise, vesting or payment of the award in the event
that the Grantee engages in conduct that violates any non-compete,
non-solicitation or non-disclosure obligation of the Grantee under
any agreement with the Company or any Subsidiary, including,
without limitation, any such obligations provided in the
Agreement.
18.
Beneficiary.
A Grantee may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and
may, from time to time, amend or revoke such designation. If no
designated beneficiary survives the Grantee, the executor or
administrator of the Grantee’s estate shall be deemed to be
the Grantee’s beneficiary.
19.
Approval; Amendment
and Termination of the Plan.
(a)
APPROVAL. The Plan initially became effective when adopted by
the Board on May 23, 2016 and shall terminate on the tenth
anniversary of such date (except as to awards outstanding on that
date). The Plan was ratified by the Company’s stockholder on
May 24, 2016. The Board amended the Plan on September 29, 2016 to,
among other things, (i) increase the amount of authorized shares
under the Plan to 691,000 shares of Class B Common Stock and (ii)
change the vesting of the Non-Employee Director Annual Grant to
immediate. The Company’s stockholders ratified such amendment
to the Plan on January 17, 2017.
(b)
AMENDMENT AND TERMINATION OF THE PLAN. The Board, or the
Committee if so delegated by the Board, at any time and from time
to time may suspend, terminate, modify or amend the Plan; however,
unless otherwise determined by the Board, or the Committee if
applicable, an amendment that requires stockholder approval in
order for the Plan to continue to comply with any law, regulation
or stock exchange requirement shall not be effective unless
approved by the requisite vote of stockholders. Except as provided
in Section 11(a) of the Plan, no suspension, termination,
modification or amendment of the Plan may adversely affect any
award previously granted, unless the written consent of the Grantee
is obtained.
20.
Governing
Law.
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware.
21.
Section 409A of the
Code.
It is the intention of the Company that no award shall be
“deferred compensation” subject to Section 409A of the
Code, unless and to the extent that the Committee specifically
determines otherwise as provided in this Section 21, and the Plan
and the terms and conditions of all awards shall be interpreted
accordingly. The terms and conditions governing any awards that the
Committee determines will be subject to Section 409A of the Code
shall be set forth in the applicable award Agreement and shall
comply in all respects with Section 409A of the Code.
Notwithstanding any provision of this Plan to the contrary, if one
or more of the payments or benefits received or to be received by a
Grantee pursuant to an award would cause the Grantee to incur any
additional tax or interest under Section 409A of the Code, the
Committee may reform such provision to maintain to the maximum
extent practicable the original intent of the applicable provision
without violating the provisions of Section 409A of the Code.
Although the Company intends to administer the Plan so that Awards
will be exempt from, or will comply with, the requirements of
Section 409A of the Code, the Company does not warrant that any
Award under the Plan will qualify for favorable tax treatment under
Section 409A of the Code or any other provision of federal, state,
local or foreign law. The Company shall not be liable to any
Grantee for any tax, interest, or penalties that Grantee might owe
as a result of the grant, holding, vesting, exercise, or payment of
any award under the Plan.
A-10
ANNUAL
MEETING OF STOCKHOLDERS OF
ZEDGE, INC.
January 17, 2018
Important
Notice Regarding the Availability of Proxy Materials for the Zedge,
Inc.
Stockholders Meeting to be
Held on January 17, 2018:
The Notice of
Annual Meeting and Proxy Statement and the 2017 Annual Report are
available at:
http://investor.zedge.net/
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope
provided.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK
YOUR VOTES IN BLUE OR BLACK INK AS SHOWN HERE
x
THE
BOARD OF DIRECTORS RECOMMENDS VOTES “FOR” THE LISTED NOMINEES
AND “FOR” PROPOSALS 2, 3 AND 4.
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1. Election of Directors:
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2. To approve an amendment to the Zedge, Inc. 2016 Stock Option and Incentive Plan that will, among other things, (a) increase the number of shares of the Company’s Class B Common Stock available for the grant of awards thereunder by 350,000, and (b) modify the independent, non-employee directors’ annual automatic grant of $50,000 to provide that the Compensation Committee may elect to pay any or all of such $50,000 in cash instead of restricted stock.
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NOMINEES:
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Todd Feldman
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Mark Ghermezian
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Elliot Gibber
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Howard S. Jonas
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Michael Jonas
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3. To conduct an advisory vote on executive compensation.
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4. To ratify the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the Fiscal Year ending July 31, 2018.
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To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.
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Signature of
Stockholder __________________
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Date: ________
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Signature of
Stockholder _______________
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Date: ________
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Note:
Please
sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign
full corporate name by a duly authorized officer, giving full title
as such. If signer is a partnership, please sign in partnership
name by an authorized person.
Electronic Distribution
If you would like to receive future ZEDGE, INC. proxy statements
and annual reports electronically, please visit
www.amstock.com
.
Click on Shareholder Account Access to enroll. Please enter your
account number and tax identification number to log in, then select
Receive Company Mailings via e-Mail and provide your e-mail
address.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
ZEDGE, INC.
22
Cortlandt Street, 14
th
Floor, New York, New
York 10007
(330) 577-3424
PROXY FOR ANNUAL MEETING OF
STOCKHOLDERS
To Be Held January 17, 2018
The undersigned appoints Michael Jonas and Joyce J. Mason, or
either one of them, as the proxy of the undersigned with full power
of substitution to attend and vote at the Annual Meeting of
Stockholders (the “Annual Meeting”) of Zedge, Inc. to
be held at the Offices of Zedge, Inc., 22 Cortlandt Street,
14
th
Floor, New York, New York 10007 on January 17, 2018 at 11:00 a.m.,
and any adjournment or postponement of the Annual Meeting,
according to the number of votes the undersigned would be entitled
to cast if personally present, for or against any proposal,
including the election of members of the Board of Directors, and
any and all other business that may come before the Annual Meeting,
except as otherwise indicated on the reverse side of this card.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO SUCH DIRECTIONS ARE MADE, THIS
PROXY WILL BE VOTED “FOR” THE ELECTION OF THE LISTED
NOMINEES FOR THE BOARD OF DIRECTORS AND “FOR” PROPOSALS
2, 3 AND 4, LISTED ON THE REVERSE SIDE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
ANNUAL MEETING OF
STOCKHOLDERS OF
ZEDGE, INC.
JANUARY 17,
2018
PROXY VOTING
INSTRUCTIONS
INTERNET
– Access
“
www.voteproxy.com
”
and follow the on-screen instructions or scan the QR code with your
smartphone. Have your proxy card available when you access the web
page.
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Vote online until 11:59 PM EST the day before
the meeting.
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MAIL
– Date, sign
and mail your proxy card in the envelope provided as soon as
possible.
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IN
PERSON
– You may vote your
shares in person by attending the Annual Meeting.
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GO
GREEN
– e-Consent makes it
easy to go paperless. With e-Consent, you can quickly access your
proxy material, statements and other eligible documents online,
while reducing costs, clutter and paper waste. Enroll today via
www.amstock.com
to enjoy online access.
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COMPANY NUMBER
______________
ACCOUNT NUMBER
______________
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Please
detach along perforated line and mail in the envelope provided
IF
you
are not voting via the Internet.
↓
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK
YOUR VOTES IN BLUE OR BLACK INK AS SHOWN HERE
x
THE
BOARD OF DIRECTORS RECOMMENDS VOTES “FOR” THE LISTED NOMINEES
AND “FOR” PROPOSALS 2, 3 AND 4.
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FOR
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AGAINST
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ABSTAIN
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1.Election of Directors:
NOMINEES:
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2. To
approve an amendment to the Zedge, Inc. 2016 Stock Option and Incentive Plan that will, among other things, (a) increase the number
of shares of the Company’s Class B Common Stock available for the grant of awards thereunder by 350,000, (b) modify the
independent, non-employee directors’ annual automatic grant of $50,000 to provide that the Compensation Committee may elect
to pay any or all of such $50,000 in cash instead of restricted stock.
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Todd Feldman
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Mark Ghermezian
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Elliot Gibber
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Howard S. Jonas
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Michael Jonas
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3. To conduct an advisory vote on executive compensation.
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4. To ratify the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the Fiscal Year ending July 31, 2018.
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To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.
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Signature of
Stockholder _________________
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Date: ________
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Signature of
Stockholder _________________
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Date: ________
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Note:
Please sign exactly as your name or names appear on this
Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation,
please sign full corporate name by a duly authorized officer,
giving full title as such. If signer is a partnership, please sign
in partnership name by an authorized person.