UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE
14C
Information
Statement Pursuant to Section 14(c)
of the
Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
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Preliminary Information Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
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Definitive Information Statement
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Kaspien
Holdings Inc.
(Name of Registrant as Specified
in its Charter)
Payment of Filing Fee (Check all
boxes that apply):
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) of
Schedule 14A (17 CFR 240.14a-101) per Item 1 of this Schedule and
Exchange Act Rules 14c-5(g) and 0-11
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KASPIEN HOLDINGS INC.
2818
N. Sullivan Road, Suite 130
Spokane Valley, WA 99216
855-300-2710
NOTICE OF ACTION BY WRITTEN CONSENT OF
HOLDERS OF A MAJORITY OF THE OUTSTANDING VOTING STOCK
WE ARE NOT
ASKING YOU FOR A PROXY
AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
Dear Shareholders:
This Notice and the accompanying Information Statement are
being furnished to the holders (“Shareholders”) of shares of the
common stock, par value $0.01 per share (the “Common Stock”), of
Kaspien Holdings Inc., a New York corporation (the “Company”). The
Board of Directors of the Company (the “Board”) is not soliciting
your proxy and you are requested not to send us a proxy. The
purpose of the Information Statement is to notify you that the
Company has received the written consent, dated August 2, 2022 (the
“Written Consent”), from holders of shares of Common Stock
representing approximately 51.8% of the total issued and
outstanding shares of voting stock of the Company on June 1, 2022
(the “Record Date”) approving the actions described in the
accompanying Information Statement.
We are furnishing this Notice and the accompanying Information
Statement solely for the purpose of informing our Shareholders of
the actions taken by the Written Consent before such actions become
effective in satisfaction of the notice requirements of Section 14C
of the Securities Exchange Act of 1934, as amended, the rules
promulgated by the U.S. Securities and Exchange Commission
thereunder, and Section 615 of the New York Business Corporation
Law.
This is not a notice of a special
meeting of Shareholders, and no such meeting will be held to
consider the matters described herein.
This Notice and the accompanying Information Statement are
first being sent to Shareholders on or
about ,
2022.
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By order of the Board of Directors,
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Edwin J. Sapienza,
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Secretary
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, 2022 |
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KASPIEN HOLDINGS INC.
2818
N. Sullivan Road, Suite 130
Spokane Valley, WA 99216
855-300-2710
INFORMATION STATEMENT
, 2022
WE ARE NOT
ASKING YOU FOR A PROXY
AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
GENERAL
INFORMATION
In this Information Statement we refer to Kaspien Holdings
Inc., a New York corporation, as the “Company,” “we,” “us,” or
“our.” This Information Statement is being furnished by the board
of directors of the Company (the “Board”), to inform the holders
(“Shareholders”) of our common stock, par value $0.01 per share
(the “Common Stock”), as of June 1, 2022, of actions (collectively,
the “Actions”) approved by resolutions of the Board dated August 2,
2022 and by the written consent dated August 2, 2022 (the “Written
Consent”) of holders (the “Consent Holders”) of shares of Common
Stock representing approximately 51.8% of the total issued and
outstanding shares of voting stock of the Company. This Information
Statement contains a brief summary of the material aspects of the
Actions approved by the Board and the Consent Holders.
May
Shareholders Act by Written Consent?
Section 615 of the New York Business Corporation Law (the
“NYBCL”) states that, if the Company’s certificate of incorporation
(the “Certificate of Incorporation”) so provides, the Company’s
Shareholders may approve an action by written consent signed by the
holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted. Our Certificate of Incorporation provides
that any action permitted to be taken by the Shareholders may be
taken without a meeting by written consent, signed by holders of
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
of the Company’s stock entitled to vote thereon were present and
voted.
What Actions
Were Taken by Written Consent?
PIPE Transaction and Registered
Direct Offering
On July 12, 2022, the Company entered into a Securities
Purchase Agreement with a single institutional investor for a
private placement offering of the Company’s common stock (the
“Common Stock”) or pre-funded warrants in lieu thereof, with each
pre-funded warrant exercisable for one share of Common Stock (the
“PIPE Pre-Funded Warrants”), and warrants exercisable for one share
of Common Stock (the “Investor Warrants”) (the “PIPE Transaction”).
Also on July 12, 2022, the Company entered into a separate
Securities Purchase Agreement with a single institutional investor,
pursuant to which the Company agreed to issue and sell 638,978
shares of its Common Stock or pre-funded warrants in lieu thereof,
with each pre-funded warrant exercisable for one share of Common
Stock (the “RD Pre-Funded Warrants”) (the “Registered Direct
Offering”).
NASDAQ Listing Rule 5635(b) provides that shareholder approval
is required prior to the issuance of securities when the issuance
will result in a change of control of the Company. NASDAQ Listing
Rule 5635(d) provides that shareholder approval is required prior
to certain transactions involving the issuance by the Company of
securities exercisable for common stock, which alone or together
with certain other sales equals 20% or more of the common stock or
20% or more of the voting power outstanding before the issuance at
a price that is the lower of: (i) the Nasdaq Official Closing Price
(as reflected on Nasdaq.com) immediately preceding the signing of
the binding agreement; or (ii) the average Nasdaq Official Closing
Price of the common stock (as reflected on Nasdaq.com) for the five
trading days immediately preceding the signing of the binding
agreement. The Company wished to seek shareholder approval in order
to satisfy the shareholder approval requirements of NASDAQ Listing
Rules 5635(b) and 5635(d), and as a result thereof and for the
avoidance of doubt, clause (i)
of the definition of “Floor Price” (currently $3.13) as defined in
the Investor Warrants shall be rendered inapplicable and after
shareholder approval the Floor Price will be $0.75 per
share.
2005 Long Term Incentive and
Share Award Plan
In order to
continue to provide employees, officers, non-employee directors and
other service providers with stock-based incentives, the Board
approved, subject to stockholder approval, the Kaspien Holdings
Inc. 2005 Long Term Incentive and Share Award Plan, as amended and
restated on August 2, 2022 (the “Plan”). The Plan, as amended
and restated, provides for the following key
changes:
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The share reserve for awards granted after
August 2, 2022 (the “Effective Date”) is increased to 500,000
Shares (from 156,346 Shares on August 2, 2022);
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The annual cap on options and stock
appreciation rights granted under the Plan to each non-employee
director is increased to 10,000 (from 1,250), and the corresponding
annual cap for awards (other than options or stock appreciation
rights) granted to each non-employee director is increased to
15,000 (from 3,750);
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Provisions designed to allow compliance with
an exception to nondeductibility of certain executive compensation
under Section 162(m) of the Code are deleted since the exception
was repealed by Congress and is no longer applicable;
and
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The term of the Plan is extended until ten
years after the Effective Date.
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As of August
2, 2022, an aggregate of 156,346
shares of Common Stock remained
available for new grants of stock-based incentives under the Plan.
The Company believes a compensation policy that includes a mix of
cash and equity is the most effective way to attract and retain
talented employees and non-employee directors whose interests are
aligned with stockholders. Without approval of the Plan, as amended
and restated, the Company would be constrained in its ability to
use equity as a component of its compensation philosophy, a result
that would put the Company at a competitive disadvantage to its
competitors.
The following summary of the Plan
is qualified in its entirety by reference to the Plan document,
which is attached as Appendix A to this Proxy Statement.
General. The Plan is
intended to provide incentives to attract, retain and motivate
employees, consultants and non-employee directors and to provide
for competitive compensation opportunities, to encourage long term
service, to recognize individual contributions and reward
achievement of performance goals, and to promote the creation of
long term value for stockholders by aligning the interests of such
persons with those of stockholders. The Plan will provide for the
grant to eligible employees, consultants and non-employee directors
of stock options, share appreciation rights (“SARs”), restricted
shares, restricted share units, performance shares, performance
units, dividend equivalents, and other share-based awards (the
“Awards”). The
total number of Shares reserved for issuance in connection with
Awards granted under the Plan on and after the Effective Date will
be 500,000, plus any Shares subject to outstanding awards under any
prior version of the Plan that on or after the Effective Date cease
for any reason to be subject to such awards (other than by reason
of exercise or settlement of the awards to the extent they are
exercised for or settled in vested and nonforfeitable
Shares). The aggregate
number of Shares that may be issued pursuant to the exercise of
incentive stock options (“ISOs”) granted under this Plan on and
after the Effective Date shall not exceed 500,000. These share amounts are subject to
anti-dilution adjustments in the event of certain changes in the
Company’s capital structure, as described below. Shares issued
pursuant to the Plan will be authorized but unissued shares or
treasury shares.
Eligibility and Administration. Officers and
other employees of, and consultants to, the Company and its
subsidiaries and affiliates and non-employee directors of the
Company will be eligible to be granted Awards under the Plan. The
Plan will be administered by the Compensation Committee or such
other Board committee (or the entire Board) as may be designated by
the Board (the “Committee”). Unless otherwise determined by the
Board, the Committee will consist of two or more members of the
Board who are “non-employee directors” within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934 (the “Exchange Act”).
The Committee will determine which eligible employees, consultants
and non-employee directors receive Awards, the types of Awards to
be received and the terms and conditions thereof. The Committee
will have authority to waive conditions relating to an Award or
accelerate vesting of Awards. Approximately 110 employees
and three non-employee
directors are currently eligible to participate in the
Plan.
Limit on Non-employee Director Awards. The
aggregate number of shares subject to options and SARs granted
under the Plan during any calendar year to any one non-employee
director shall not exceed 10,000, and the aggregate number of
shares issued or issuable under all Awards granted under the Plan
other than Options or SARs during any calendar year to any one
non-employee director shall not exceed 15,000. However, in the
calendar year in which a non-employee director first joins the
Board or is first designated as Chairman of the Board or Lead
Director, the maximum number of shares subject to
Awards granted to the non-employee director may be up to 200% of
the number of shares set forth in the foregoing
limits.
Awards.
ISOs intended to
qualify for special tax treatment in accordance with the Code and
nonqualified stock options not intended to qualify for special tax
treatment under the Code may be granted for such number of shares
of Common Stock as the Committee determines. The Committee will be
authorized to set the terms relating to an option, including
exercise price and the time and method of exercise. However, the
exercise price of options will not be less than the fair market
value of the shares on the date of grant, and the term will not be
longer than ten years from the date of grant of the
options.
A SAR will entitle the holder thereof to receive, with respect
to each share subject thereto, an amount equal to the excess of the
fair market value of one share of Common Stock on the date of
exercise over the exercise price of the SAR set by the Committee as
of the date of grant. However, the exercise price of the SARs will
not be less than the fair market value of the shares on the date of
grant, and the term will not be longer than ten years from the date
of grant of the SARs. Payment with respect to SARs may be made in
cash or shares of Common Stock as determined by the
Committee.
Awards of restricted shares will be subject to such
restrictions on transferability and other restrictions, if any, as
the Committee may impose. Such restrictions will lapse under
circumstances as the Committee may determine, including based upon
a specified period of continued employment or upon the achievement
of performance criteria established by the Committee. Except as
otherwise determined by the Committee, participants granted
restricted shares will have all of the rights of a stockholder,
including the right to vote restricted shares and receive dividends
thereon, and unvested restricted shares will be forfeited upon
termination of service during the applicable restriction
period.
A restricted share unit will entitle the holder thereof to
receive shares of Common Stock or cash at the end of a specified
deferral period. Restricted share units will also be subject to
such restrictions as the Committee may impose. Such restrictions
will lapse under circumstances as the Committee may determine,
including based upon a specified period of continued service or
upon the achievement of performance criteria established by the
Committee. Except as otherwise determined by the Committee,
restricted share units subject to restriction will be forfeited
upon termination of service during any applicable restriction
period.
Performance shares and performance units will provide for
future issuance of shares or payment of cash to the recipient upon
the attainment of corporate performance goals established by the
Committee over specified performance periods. Except as otherwise
determined by the Committee, performance shares and performance
units will be forfeited upon termination of service during any
applicable performance period. Performance objectives may vary from
person to person and will be based upon such performance criteria
as the Committee may deem appropriate. The Committee may revise
performance objectives if significant events occur during the
performance period which the Committee expects to have a
substantial effect on such objectives.
The Committee may also grant dividend equivalent rights and it
is authorized, subject to limitations under applicable law, to
grant such other Awards that may be denominated in, valued in, or
otherwise based on, shares of Common Stock, as deemed by the
Committee to be consistent with the purposes of the Plan.
No Dividend
Equivalents on Unvested Performance Awards. Dividend equivalents will not be
paid on awards based on performance objectives prior to the time
the objectives are achieved.
No Option or
SAR Repricing Without Stockholder Approval. Except as provided in the Plan in
connection with certain antidilution adjustments, unless the
approval of stockholders of the Company is obtained, (i) options
and SARs issued under the Plan will not be amended to lower their
exercise price, and they will not be exchanged for other options or
SARs with lower exercise prices, (ii) options and SARs issued under
the Plan that have an exercise price in excess of the fair market
value of the underlying shares will not be exchanged for cash or
other property, and (iii) no other action will be taken with
respect to options or SARs that would be treated as a repricing
under the rules of the principal stock exchange or market system on
which the shares are listed.
Nontransferability.
Unless otherwise set
forth by the Committee in an award agreement, Awards (except for
vested shares) will generally not be transferable by the
participant other than by will or the laws of descent and
distribution and will be exercisable during the lifetime of the
participant only by such participant or his or her guardian or
legal representative.
Change of
Control. In
the event of a change of control (as defined in the Plan), all
Awards granted under the Plan then outstanding but not then
exercisable (or subject to restrictions) shall become immediately
exercisable, all restrictions shall lapse, and any performance
criteria shall be deemed satisfied, unless otherwise provided in
the applicable Award agreement.
Capital
Structure Changes. If the Committee determines that
any dividend in shares, recapitalization, share split,
reorganization, merger, consolidation, spin-off, repurchase, share
exchange, or other similar corporate transaction or event affects
the Common Stock such that an adjustment is appropriate in order to
prevent dilution or enlargement of the rights of eligible
participants under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate, including
adjustments to (i) the number and kind of shares which may
thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable
in respect of outstanding Awards, and (iii) the exercise price,
grant price or purchase price relating to any Award, and the
Committee may also provide for a distribution of cash or property
in respect of any Award.
Amendment and
Termination. The Plan may be amended,
suspended or terminated by the Board of Directors at any time, in
whole or in part. However, any amendment for which stockholder
approval is required under the rules of any stock exchange or
automated quotation system on which the Common Stock may then be
listed or quoted will not be effective until such stockholder
approval has been obtained. In addition, no amendment, suspension,
or termination of the Plan may materially and adversely affect the
rights of a participant under any Award theretofore granted to him
or her without the consent of the affected participant. The
Committee may waive any conditions or rights, amend any terms, or
amend, suspend or terminate, any Award granted, provided that,
without participant consent, such amendment, suspension or
termination may not materially and adversely affect the rights of
such participant under any Award previously granted to him or
her.
Effective
Date and Term. The amended and restated Plan is
effective as of August 2, 2022, subject to shareholder approval,
which has been obtained. Unless earlier terminated, the Plan will
expire on the tenth anniversary of the effective date, and no
further awards may be granted thereunder after such
date.
Market
Value. The per
share closing price of the Common Stock on July 27, 2022 was
$2.60.
Federal
Income Tax Consequences. The following is a summary of the
federal income tax consequences of the Plan, based upon current
provisions of the Code, the Treasury regulations promulgated
thereunder and administrative and judicial interpretations thereof,
and does not address the consequences under any state, local or
foreign tax laws.
Stock
Options. In
general, the grant of an option will not be a taxable event to the
recipient and it will not result in a deduction to the Company. The
tax consequences associated with the exercise of an option and the
subsequent disposition of shares of Common Stock acquired on the
exercise of such option depend on whether the option is a
nonqualified stock option or an ISO.
Upon the exercise of a nonqualified stock option, the
participant will recognize ordinary taxable income equal to the
excess of the fair market value of the shares of Common Stock
received upon exercise over the exercise price. The Company will
generally be able to claim a deduction in an equivalent amount. Any
gain or loss upon a subsequent sale or exchange of the shares of
Common Stock will be capital gain or loss, long-term or short-term,
depending on the holding period for the shares of Common
Stock.
Generally, a participant will not recognize ordinary taxable
income at the time of exercise of an ISO and no deduction will be
available to the Company, provided the option is exercised while
the participant is an employee or within three months following
termination of employment (longer, in the case of disability or
death). If an ISO granted under the Plan is exercised after these
periods, the exercise will be treated for federal income tax
purposes as the exercise of a nonqualified stock option. Also, an
ISO granted under the Plan will be treated as a nonqualified stock
option to the extent it (together with other ISOs granted to the
participant by the Company) first becomes exercisable in any
calendar year for shares of Common Stock having a fair market
value, determined as of the date of grant, in excess of
$100,000.
If shares of Common Stock acquired upon exercise of an ISO are
sold or exchanged more than one year after the date of exercise and
more than two years after the date of grant of the option, any gain
or loss will be long-term capital gain or loss. If shares of Common
Stock acquired upon exercise of an ISO are disposed of prior to the
expiration of these one-year or two-year holding periods (a
“Disqualifying Disposition”), the participant will recognize
ordinary income at the time of disposition, and the Company will
generally be entitled to a deduction, in an amount equal to the
excess of the fair market value of the shares of Common Stock at
the date of exercise over the exercise price. Any additional gain
will be treated as capital gain, long-term or short-term, depending
on how long the shares of Common Stock have been held. Where shares
of Common Stock are sold or exchanged in a Disqualifying
Disposition (other than certain related party transactions) for an
amount less than their fair market value at the date of exercise,
any ordinary income recognized in connection with the Disqualifying
Disposition will be limited to the amount of gain, if any,
recognized in the sale or exchange, and any loss will be a
long-term or short-term capital loss, depending on how long the
shares of Common Stock have been held.
If an option is exercised through the use of shares of Common
Stock previously owned by the participant, such exercise generally
will not be considered a taxable disposition of the previously
owned shares and, thus, no gain or loss will be recognized with
respect to such previously owned shares upon such exercise. The
amount of any built-in gain on the previously owned shares
generally will not be recognized until the new shares acquired on
the option exercise are disposed of in a sale or other taxable
transaction.
Although the exercise of an ISO as described above would not
produce ordinary taxable income to the participant, it would result
in an increase in the participant’s alternative minimum taxable
income and may result in an alternative minimum tax
liability.
Restricted
Shares. A
participant who receives restricted shares will generally recognize
ordinary income at the time that they “vest”, i.e., when they are
not subject to a substantial risk of forfeiture. The amount of
ordinary income so recognized will generally be the fair market
value of the Common Stock at the time the shares vest, less the
amount, if any, paid for the shares. This amount is generally
deductible for federal income tax purposes by the Company.
Dividends paid with respect to Common Stock that is nonvested will
be ordinary compensation income to the participant (and generally
deductible by the Company). Any gain or loss upon a subsequent sale
or exchange of the shares of Common Stock, measured by the
difference between the sale price and the fair market value on the
date the shares vest, will be capital gain or loss, long-term or
short-term, depending on the holding period for the shares of
Common Stock. The holding period for this purpose will begin on the
date following the date the shares vest.
In lieu of the treatment described above, a participant may
elect immediate recognition of income under Section 83(b) of the
Code. In such event, the participant will recognize as income the
fair market value of the restricted shares at the time of grant
(determined without regard to any restrictions other than
restrictions which by their terms will never lapse), and the
Company will generally be entitled to a corresponding deduction.
Dividends paid with respect to shares as to which a proper Section
83(b) election has been made will not be deductible by the Company.
If a Section 83(b) election is made and the restricted shares are
subsequently forfeited, the participant will not be entitled to any
offsetting tax deduction.
SARs and
Other Awards. With respect to SARs, restricted
share units, performance shares, performance units, dividend
equivalents and other Awards under the Plan not described above,
generally, when a participant receives payment with respect to any
such Award granted to him or her under the Plan, the amount of cash
and the fair market value of any other property received will be
ordinary income to such participant and will be allowed as a
deduction for federal income tax purposes to the
Company.
Payment of
Withholding Taxes. The Company may withhold, or
require a participant to remit to it, an amount sufficient to
satisfy any federal, state, local or foreign withholding tax
requirements associated with Awards under the Plan.
Deductibility
Limit on Compensation in Excess of $1 Million. Section 162(m) of the Code
generally limits the federal income tax deduction for compensation
paid to “covered employees” (in general, the CEO, the CFO, and the
three other most highly-compensated executive officers for the year
at issue and any person who was part of that group for any other
year beginning after December 31, 2016) to $1,000,000. Thus,
certain compensation attributable to awards may be nondeductible to
the Company due to the application of Section 162(m) of the
Code.
New Plan
Benefits. The
benefits that will be awarded or paid in the future under the Plan
are not currently determinable. Such awards are within the
discretion of the Committee, and the Committee has not determined
future awards or who might receive them.
Nasdaq Listing Rule 5635(c) provides that shareholder approval
is required prior to the issuance of securities when an equity
compensation arrangement is to be made or materially amended,
pursuant to which stock may be acquired by officers, directors,
employees, or consultants. The Company wished to seek shareholder
approval of the Plan in order to satisfy the shareholder approval
requirements of NASDAQ Listing Rules 5635(c).
Board Size
The Company also wished to increase the number of directors of
the Company to four (4) and to
provide for the filling of director vacancies.
The Actions
The Consent Holders have approved by written consent the
following action:
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the issuance of the Common Stock in the PIPE Transaction and
the Registered Direct Offering, the RD Pre-Funded Warrants, the
PIPE Pre-Funded Warrants, the Investor Warrants and the Common
Stock upon exercise of the RD Pre-Funded Warrants, the PIPE
Pre-Funded Warrants and the Investor Warrants, in whole or in part
(including any additional shares of common stock issued pursuant to
any anti-dilution or other adjustment provisions set forth in the
applicable warrant), is hereby ratified, confirmed and approved in
all respects, such that the shareholder approval requirements set
forth in NASDAQ Listing Rules 5635(b) and 5635(d) are satisfied,
and as a result thereof and for
the avoidance of doubt, clause (i) of the definition of “Floor
Price” (currently $3.13) as defined in the Investor Warrants shall
be rendered inapplicable and after shareholder approval the Floor
Price will be $0.75 per share (the “Issuance
Approval”).
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The Board has approved by resolution and the Consent Holders
have approved by written consent the following actions:
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the Plan is hereby ratified, confirmed and approved in all
respects, such that the shareholder approval requirements set forth
in NASDAQ Listing Rule 5635(c) are satisfied (the “Plan Amendment
and Restatement”);
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the amendment of the Company’s certificate of incorporation
(the “Certificate of Incorporation”) to increase the number of directors of the
Company to four (4) (the “Certificate of Incorporation
Amendment”); and
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the amendment of the Company’s bylaws (the “Bylaws”) to
increase the number of directors
of the Company to four (4) and
to provide for the filling of director vacancies (the
“Bylaws Amendment”).
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What is the
Purpose of this Information Statement?
This Information Statement and the accompanying Notice are
being furnished to our Shareholders solely for the purpose of
informing our Shareholders of the action taken by the Written
Consent of the Consent Holders in accordance with Section 14C of
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the rules promulgated by the U.S. Securities and Exchange
Commission (“SEC”) thereunder, and Section 615 of the NYBCL.
Section 14C of the Exchange Act and Regulation 14C promulgated
by the SEC thereunder require the Company to furnish to our
Shareholders an information statement describing any action taken
by written consent in lieu of a meeting of stockholders before such
action becomes effective. In connection with an action by written
consent, Section 615 of the NYBCL requires prompt notice of the
taking of such action to be given to the Shareholders who have not
consented in writing to such action.
Who is Entitled
to Notice?
Each outstanding share of Common Stock on the Record Date is
entitled to notice of the Actions to be taken pursuant to the
Written Consent. The close of business on June 1, 2022 is the
record date (the “Record Date”) for the determination of
Shareholders who are entitled to receive this Information
Statement. This Information Statement is being mailed on or about
, 2022 to
Shareholders of record as of the Record Date.
What Vote is
Required to Approve the Actions?
Each share of Common Stock entitles the holder to one vote. On
the Record Date, there were 2,501,568 shares of Common Stock issued
and outstanding. Pursuant to Section 615 of the NYBCL and our
Certificate of Incorporation, at least a majority of the voting
stock of the Company, or at least 1,250,785 shares of Common Stock,
are required to approve the Actions by written consent.
The Consent Holders are The Robert J. Higgins TWMC Trust;
RJHDC, LLC; Alimco Re Ltd.; AMIL of Ohio, LLC; Catherine C. Miller
Irrevocable Trust DTD 3/26/91; Catherine C. Miller Trust A-2;
Catherine C. Miller Trust A-3; Catherine Miller Trust C; Kimberley
S. Miller GST Trust DTD 12/17/1992; LIMFAM LLC; Lloyd I. Miller
Trust A-1; Lloyd I. Miller III Trust A-4; Lloyd I. Miller, III
Irrevocable Trust DTD 12/31/91; Lloyd I. Miller, III Revocable
Trust DTD 01/07/97; MILFAM I L.P.; MILFAM II L.P.; MILFAM III LLC;
Susan F. Miller; Kick-Start III, LLC; Kick-Start IV, LLC; Thomas C.
Simpson; and Kick-Start I, LLC. As of the Record Date, the Consent
Holders held 1,296,876
shares of Common Stock, or approximately 51.8% of the total voting
power of all outstanding voting stock. Pursuant to the Written
Consent, the Consent Holders have approved the Actions. Therefore,
no other Shareholder consents will be obtained in connection with
this Information Statement.
Do I have
Appraisal Rights?
Neither the NYBCL nor our Certificate of Incorporation or
Bylaws provide our Shareholders with appraisal rights in connection
with the Actions discussed in this Information Statement.
Manner of
Effecting the Actions
Pursuant to Rule 14c-2 under the Exchange Act, the earliest
date that the Actions can become effective is 20 calendar days
after this Information Statement is first sent to the Shareholders.
In addition, each of the
Certificate of Incorporation Amendment and the Bylaw Amendment will become
effective only upon the filing of the Certificate of Amendment of
Certificate of Incorporation reflecting the Certificate of
Incorporation Amendment with the New York Department of State.
Thus, each of the Issuance Approval, the Plan Amendment and
Restatement, the Certificate of Incorporation Amendment and the
Bylaw Amendment will become effective on
, 2022,
which is 20 calendar days following the date this Information
Statement is first sent to the Shareholders.
INTEREST OF
CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
Not applicable.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
the beneficial ownership of Common Stock as of June 1, 2022 (or as
of the dates indicated therein), by each person known to us to be
the beneficial owner of more than 5% of our issued and outstanding
shares of Common Stock, each director and named executive officer
of the Company and all directors and executive officers as a group.
The numbers set forth in the table include shares that may be
acquired within 60 days of June 1, 2022, and all shares listed in
the table are owned directly by the named individuals, in each case
unless otherwise indicated therein. The Company believes that the
beneficial owners have sole voting and investment power over their
shares, except as otherwise indicated therein or as to shares owned
by spouses. Unless otherwise indicated therein, the address for
each person listed below is c/o Kaspien Holdings Inc., 2818 N.
Sullivan Road, Suite 130, Spokane Valley, WA 99216.
|
Name
|
|
Amount and
Nature of
Beneficial Ownership
|
|
|
Percent of
Class
|
|
|
The Robert J. Higgins
TWMC Trust 38 Corporate Circle
Albany, NY 12203
|
|
|
713,986
|
(1)
|
|
|
25.3
|
%
|
|
Neil S. Subin
3300 South Dixie Highway, Suite 1-365
West Palm Beach, FL 33405
|
|
|
769,938
|
(2)
|
|
|
27.2
|
%
|
|
Jonathan Marcus
|
|
|
6,313
|
(3)
|
|
|
0.2
|
%
|
|
W. Michael Reickert
|
|
|
10,763
|
(4)
|
|
|
0.4
|
%
|
|
Tom Simpson
|
|
|
63,313
|
(5)
|
|
|
2.2
|
%
|
|
Brock Kowalchuk
|
|
|
4,248
|
(6)
|
|
|
0.2
|
%
|
|
Edwin Sapienza
|
|
|
10,249
|
(7)
|
|
|
0.4
|
%
|
|
All Directors and Executive Officers as a Group (5
persons)
|
|
|
94,886
|
|
|
|
3.4
|
%
|
|
(1) |
Based on Form 5, filed February
21, 2017, by The Robert J Higgins TWMC Trust. This excludes shares
beneficially owned by RJHDC, LLC, an affiliate of The Robert J
Higgins TWMC Trust, because The Robert J Higgins TWMC Trust
disclaims the existence of, and membership in, a “group” under
Section 13(d)(3) that may arise as a result of the Higgins Family’s
interest in both entities. The Robert J Higgins TWMC Trust
disclaims beneficial ownership of any shares owned by RJHDC, LLC
other than to the extent the Higgins Family may have a pecuniary
interest therein.
|
|
(2) |
Based on Schedule 13D, filed
March 9, 2022, on behalf of (i) Neil S. Subin (“Mr. Subin”); (ii)
MILFAM LLC; (iii) Alimco Financial Corporation (“Alimco”); (iv)
Alimco Re Ltd., a wholly-owned subsidiary of Alimco (“Alimco Re”);
(v) Jonathan Marcus (“Mr. Marcus”); (vi) AMIL Of Ohio, LLC; (vii)
Catherine C. Miller Irrevocable Trust dtd 3/26/91; (viii) Catherine
C Miller Trust A-2; (ix) Catherine C Miller Trust A-3; (x)
Catherine Miller Trust C; (xi) Kimberly S. Miller GST Trust dtd
12/17/1992; (xii) LIMFAM LLC; (xiii) Lloyd I. Miller Trust A-1;
(xiv) Lloyd I. Miller, III Trust A-4; (xv) Lloyd I. Miller, III
Irrevocable Trust dtd 12/31/91; (xvi) Lloyd I. Miller, III
Revocable Trust dtd 01/07/97; (xvii) MILFAM I L.P.; (xviii) MILFAM
II L.P.; (xix) MILFAM III LLC; and (xx) Susan F. Miller (such
persons, trusts and entities named in items (i) through (xx),
collectively, the “Reporting Persons”).
|
Some of the
positions were previously reported on a Schedule 13G filed by Mr.
Subin on December 31, 2018 with respect to securities held by
certain entities owned by or trusts for the benefit of the family
of the late Mr. Lloyd I. Miller, III (the “Miller Family”) and
other entities (such entities and trusts, the “Miller Entities”)
and a Schedule 13G filed by Alimco on February 13, 2019. Certain of
the Miller Entities hold approximately 85% of the outstanding
shares of common stock of Alimco. The Reporting Persons
respectively disclaim the existence of, and membership in, a
“group” under Section 13(d)(3) that may arise as a result of the
Miller Entities’ interests in Alimco. The Reporting Persons
disclaim beneficial ownership of any shares other than to the
extent he, she or it may have a pecuniary interest therein.
The amount set
forth represents (i) 1,750 shares of common stock owned by AMIL Of
Ohio, LLC; (ii) 300 shares of common stock owned by Catherine C.
Miller Irrevocable Trust DTD 3/26/91; (iii) 200 shares of common
stock owned by Catherine C. Miller Trust A-2; (iv) 5,639 shares of
common stock owned by Catherine C. Miller Trust A-3; (v) 22,448
shares of common stock owned by Catherine Miller Trust C; (vi) 300
shares of common stock owned by Kimberley S. Miller GST Trust DTD
12/17/1992; (vii) 26,105 shares of common stock owned by LIMFAM
LLC; (viii) 1,359 shares of common stock owned by Lloyd I. Miller
Trust A-1; (ix) 25,686 shares of common stock owned by Susan F.
Miller Spousal Trust A-4; (x) 25,685 of common stock owned by
Miller Family Education and Medical Trust (xi) 300 shares of common
stock owned by Lloyd I. Miller, III Irrevocable Trust DTD 12/31/91;
(xii) 59,490 shares of common stock owned by Lloyd I. Miller, III
Revocable Trust DTD 01/07/97; (xiii) 3,128 shares of common stock
owned by MILFAM I L.P.; (xiv) 123,619 shares of common stock owned
by MILFAM II L.P.; (xv) 2,274 shares of common stock owned by
MILFAM III LLC; (xvi) 1,801 shares of common stock owned by Susan
F. Miller, (xvii) 149,854 shares of common stock owned by Alimco
and (xviii) 320,000 shares that may be acquired within 60 days of
March 1, 2022 pursuant to exercise of the Warrant. Mr. Subin is the
President and Manager of MILFAM LLC, which serves as manager,
general partner, or investment advisor of a number of the foregoing
entities formerly managed or advised by the late Lloyd I. Miller,
III, and he also serves as trustee of a number of a number of the
foregoing trusts for the benefit of the family of the late Mr.
Lloyd I. Miller, III, consequently, he may be deemed the beneficial
owner of the shares specified in clauses (i) through (xvi) of the
preceding sentence. Mr. Subin disclaims beneficial ownership of any
shares other than to the extent he may have a pecuniary interest
therein.
| (3) |
Includes 313 shares that may be acquired within 60 days of
June 1, 2022.
|
| (4) |
Excludes 713,986 shares held in
the Robert J Higgins TWMC Trust of which Mr. Reickert is a Trustee.
Includes 1,063 shares that may be acquired within 60 days of
June 1, 2022.
|
| (5) |
Excludes 25
shares held by the wife of Tom Simpson. Also excludes 9,737 shares
held by Kick Start, LLC, 14,041 shares held by Kick Start III, LLC,
9,360 shares held by Kick Start IV, LLC and 23,879 shares held by
WIN Partners. Mr. Simpson holds an interest, manages and has
voting control of Kick Start, LLC, Kick Start III, LLC Kick
Start IV, LLC and WIN Partners. Includes 313 shares that may be
acquired within 60 days of June
1, 2022.
|
| (6) |
Includes 4,248 shares that may be acquired within 60 days of
June 1, 2022.
|
| (7) |
Includes 8,749 shares that may be acquired within 60 days of
June 1, 2022.
|
INFORMATION
STATEMENT COSTS
The Company will bear the cost of delivering this Information
Statement, including the preparation, assembly and mailing of the
Information Statement, as well as the cost of forwarding this
Information Statement to the beneficial owners of our Common Stock.
We will reimburse brokerage firms and other custodians, nominees,
and fiduciaries for their ordinary and necessary expenses in
forwarding this Information Statement to the beneficial owners of
our Common Stock.
ADDITIONAL
INFORMATION
The Company is subject to the information and reporting
requirements of the Exchange Act and, in accordance with the
Exchange Act, the Company files periodic reports, documents and
other information with the SEC relating to its business, financial
statements and other matters. The Company’s filings with the SEC
are available to the public on the SEC’s website, www.sec.gov, and
on the Company’s website, www.kaspien.com. Our reports filed by the
Company under the Exchange Act are also available to any
Shareholder at no cost upon request by writing to: Kaspien Holdings Inc.,
Attention: Treasurer, 2818 N. Sullivan Road, Suite 130, Spokane
Valley, WA 99216, and a copy will be sent to you free of
charge.
HOUSEHOLDING OF
INFORMATION STATEMENT
The SEC has adopted rules that
allow a company to deliver a single information statement to an
address shared by two or more of its shareholders. This method of
delivery, known as “householding,” permits us to realize
significant cost savings, reduces the amount of duplicate
information shareholders receive, and reduces the environmental
impact of printing and mailing documents to our shareholders. Under
this process, certain Shareholders will receive only one copy of
our Information Statement until such time as one or more of these
Shareholders notifies us that they want to receive separate copies.
Any Shareholders who object to or wish to begin householding may
notify us by sending a written request to Edwin J. Sapienza,
Secretary, Kaspien Holdings Inc., 2818 N. Sullivan Road, Suite 130,
Spokane Valley, WA 99216, or by telephone at 855-300-2710.
| |
By order of the Board of Directors,
|
| |
|
|
|
|
|
| |
Edwin J. Sapienza,
|
| |
Secretary
|
|
|
|
|
, 2022 |
|
Appendix
A
KASPIEN HOLDINGS INC. 2005 LONG TERM INCENTIVE AND SHARE AWARD
PLAN
(AS AMENDED AND RESTATED ON AUGUST 2, 2022)
SECTION 1. Purposes.
The
purposes of the 2005 Long Term Incentive and Share Award Plan, as
amended and restated, are to advance the interests of Kaspien
Holdings Inc. and its shareholders by providing a means to attract,
retain, and motivate employees, consultants and directors of the
Company, its subsidiaries and affiliates, to provide for
competitive compensation opportunities, to encourage long term
service, to recognize individual contributions and reward
achievement of performance goals, and to promote the creation of
long term value for stockholders by aligning the interests of such
persons with those of stockholders.
SECTION 2. Definitions.
For
purposes of the Plan, the following terms shall be defined as set
forth below:
2.1. “Affiliate” means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan; provided, however, that the Company directly or
indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership
interests in such entity.
2.2. “Award” means any Option, SAR, Restricted Share, Restricted
Share Unit, Performance Share, Performance Unit, Dividend
Equivalent, or Other Share-Based Award granted to an Eligible
Person under the Plan.
2.3. “Award Agreement” means any written agreement, contract, or
other instrument or document evidencing an Award.
2.4. “Beneficiary” means the person, persons, trust or trusts which
have been designated by an Eligible Person in his or her most
recent written beneficiary designation filed with the Company to
receive the benefits specified under this Plan upon the death of
the Eligible Person, or, if there is no designated Beneficiary or
surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and distribution
to receive such benefits.
2.5. “Board” means the Board of Directors of the Company.
2.6. “Code” means the Internal Revenue Code of 1986, as amended
from time to time. References to any provision of the Code shall be
deemed to include successor provisions thereto and regulations
thereunder.
2.7. “Committee” means the Compensation Committee of the Board, or
such other Board committee or subcommittee (which may include the
entire Board) as may be designated by the Board to administer the
Plan; provided,
however, that, unless
otherwise determined by the Board, the Committee shall consist of
two or more directors of the Company, each of whom is a
“non-employee director” within the meaning of Rule 16b-3 under the
Exchange Act, to the extent applicable; provided, further, that the mere fact that the
Committee shall fail to qualify under the foregoing requirements
shall not invalidate any Award made by the Committee which Award is
otherwise validly made under the Plan.
2.8. “Company” means Kaspien Holdings Inc., a corporation organized
under the laws of New York, or any successor corporation.
2.9. “Director” means a member of the Board who is not an employee
of the Company, a Subsidiary or an Affiliate.
2.10. “Dividend Equivalent” means a right, granted under Section
5.7, to receive cash, Shares, or other property equal in value to
dividends paid with respect to a specified number of Shares.
Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award, and may be paid currently or on a
deferred basis.
2.11. “Eligible Person” means (i) an employee or consultant of the
Company, a Subsidiary or an Affiliate, including any Director who
is an employee, or (ii) a Director. Notwithstanding any provisions
of this Plan to the contrary, an Award may be granted to an
employee, consultant or Director, in connection with his or her
hiring or retention prior to the date the employee, consultant or
Director first performs services for the Company, a Subsidiary or
an Affiliate; provided,
however, that any such
Award shall not become vested or exercisable prior to the date the
employee, consultant or Director first performs such
services.
2.12. “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the
Exchange Act shall be deemed to include successor provisions
thereto and regulations thereunder.
2.13. “Fair Market Value” means, with respect to Shares or other
property, the fair market value of such Shares or other property
determined by such methods or procedures as shall be established
from time to time by the Committee. If the Shares are listed on any
established stock exchange or a national market system, unless
otherwise determined by the Committee in good faith, the Fair
Market Value of Shares shall mean the closing price per Share on
the date (or, if the Shares were not traded on that day, the next
preceding day that the Shares were traded) on the principal
exchange or market system on which the Shares are traded, as such
prices are officially quoted on such exchange.
2.14. “ISO” means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the
Code.
2.15. “NQSO” means any Option that is not an ISO.
2.16. “Option” means a right, granted under Section 5.2, to
purchase Shares.
2.17. “Other Share-Based Award” means a right, granted under
Section 5.8, that relates to or is valued by reference to
Shares.
2.18. “Participant” means an Eligible Person who has been granted
an Award under the Plan.
2.19. “Performance Share” means a performance share granted under
Section 5.6.
2.20. “Performance Unit” means a performance unit granted under
Section 5.6.
2.21. “Plan” means this 2005 Long Term Incentive and Share Award
Plan, as amended and restated.
2.22. “Restricted Shares” means an Award of Shares under Section
5.4 that may be subject to certain restrictions and to a risk of
forfeiture.
2.23. “Restricted Share Unit” means a right, granted under Section
5.5, to receive Shares or cash at the end of a specified deferral
period.
2.24. “Rule 16b-3” means Rule 16b-3, as from time to time in effect
and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange
Act.
2.25. “SAR” or “Share Appreciation Right” means the right, granted
under Section 5.3, to be paid an amount measured by the difference
between the exercise price of the right and the Fair Market Value
of Shares on the date of exercise of the right, with payment to be
made in cash, Shares, or property as specified in the Award or
determined by the Committee.
2.26. “Shares” means common stock, $.01 par value per share, of the
Company, and such other securities as may be substituted for Shares
pursuant to Section 4.2 hereof.
2.27. “Subsidiary” means any
corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns shares
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the
chain.
2.28. “Termination of Service” means the termination of the
Participant’s employment, consulting services or directorship with
the Company, its Subsidiaries and its Affiliates, as the case may
be. A Participant employed by a Subsidiary of the Company or one of
its Affiliates shall also be deemed to incur a Termination of
Service if the Subsidiary of the Company or Affiliate ceases to be
such a Subsidiary or an Affiliate, as the case may be, and the
Participant does not immediately thereafter become an employee or
director of, or a consultant to, the Company, another Subsidiary of
the Company or an Affiliate. Temporary absences from employment
because of illness, vacation or leave of absence and transfers
among the Company and its Subsidiaries and Affiliates shall not be
considered a Termination of Service.
SECTION 3. Administration.
3.1. Authority of the
Committee. The Plan shall be administered by the Committee,
and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the
provisions of the Plan:
| |
|
|
| |
(A)
|
to select Eligible Persons to whom Awards may be
granted;
|
| |
|
|
| |
(B)
|
to designate Affiliates;
|
| |
|
|
| |
(C)
|
to determine the type or types of Awards to be granted to each
Eligible Person;
|
| |
|
|
| |
(D)
|
to determine the type and number of Awards to be granted, the
number of Shares to which an Award may relate, the terms and
conditions of any Award granted under the Plan (including, but not
limited to, any exercise price, grant price, or purchase price, any
restriction or condition, any schedule for lapse of restrictions or
conditions relating to transferability or forfeiture,
exercisability, or settlement of an Award, and waiver or
accelerations thereof, and waivers of performance conditions
relating to an Award, based in each case on such considerations as
the Committee shall determine), and all other matters to be
determined in connection with an Award;
|
| |
|
|
| |
(E)
|
to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an
Award may be paid, in cash, Shares, other Awards, or other
property, or an Award may be canceled, forfeited, exchanged, or
surrendered;
|
| |
|
|
| |
(F)
|
to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable
with respect to an Award will be deferred either automatically, at
the election of the Committee, or at the election of the Eligible
Person; provided that such
deferral shall be structured to be in compliance with Section 409A
of the Code;
|
| |
|
|
| |
(G)
|
to prescribe the form of each Award Agreement, which need not
be identical for each Eligible Person;
|
| |
|
|
| |
(H)
|
to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem
necessary or advisable to administer the Plan;
|
| |
|
|
| |
(I)
|
to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan
and any Award, rules and regulations, Award Agreement, or other
instrument hereunder;
|
| |
|
|
| |
(J)
|
to accelerate the exercisability or vesting of all or any
portion of any Award or to extend the period during which an Award
is exercisable;
|
| |
|
|
| |
(K)
|
to determine whether uncertificated Shares may be used in
satisfying Awards and otherwise in connection with the Plan;
and
|
| |
|
|
| |
(L)
|
to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.
|
3.2. Manner of Exercise of
Committee Authority. The Committee shall have sole
discretion in exercising its authority under the Plan. Any action
of the Committee with respect to the Plan shall be final,
conclusive, and binding on all persons, including the Company,
Subsidiaries, Affiliates, Eligible Persons, any person claiming any
rights under the Plan from or through any Eligible Person, and
shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not
be construed as limiting any power or authority of the Committee.
The Committee may delegate to other members of the Board or
officers or managers of the Company or any Subsidiary or Affiliate
the authority, subject to such terms as the Committee shall
determine, to perform administrative functions and, with respect to
Awards granted to persons not subject to Section 16 of the Exchange
Act, to perform such other functions as the Committee may
determine, to the extent permitted under Rule 16b-3 (if applicable)
and applicable law.
3.3. Limitation of
Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or other employee of the
Company or any Subsidiary or Affiliate, the Company’s independent
certified public accountants, or other professional retained by the
Company to assist in the administration of the Plan. No member of
the Committee, and no officer or employee of the Company acting on
behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by
the Company with respect to any such action, determination, or
interpretation.
3.4. No Option or SAR Repricing
Without Shareholder Approval. Except as provided in the
first sentence of Section 4.2 hereof relating to certain
anti-dilution adjustments, unless the approval of shareholders of
the Company is obtained, (i) Options and SARs issued under the Plan
shall not be amended to lower their exercise price, (ii) Options
and SARs issued under the Plan will not be exchanged for other
Options or SARs with lower exercise prices, (iii) Options and SARs
issued under the Plan with an exercise price in excess of the Fair
Market Value of the underlying Shares will not be exchanged for
cash or other property, and (iv) no other action shall be taken
with respect to Options or SARs that would be treated as a
repricing under the rules of the principal stock exchange or market
system on which the Shares are listed.
3.5. Limitation on Committee’s
Authority Under 409A. Anything in this Plan to the contrary
notwithstanding, the Committee’s authority to modify outstanding
Awards shall be limited to the extent necessary so that the
existence of such authority does not (i) cause an Award that is not
otherwise deferred compensation subject to Section 409A of the Code
to become deferred compensation subject to Section 409A of the Code
or (ii) cause an Award that is otherwise deferred compensation
subject to Section 409A of the Code to fail to meet the
requirements prescribed by Section 409A of the Code.
3.6. Director Awards. The
aggregate number of Shares subject to Options and SARs granted
under this Plan during any calendar year to any one Director shall
not exceed 10,000, and the aggregate number of Shares issued or
issuable under all Awards granted under this Plan other than
Options or SARs during any calendar year to any one Director shall
not exceed 15,000; provided,
however, that in the calendar year in which a Director first
joins the Board or is first designated as Chairman of the Board or
Lead Director, the maximum number of Shares subject to Awards
granted to the Director may be up to 200% of the number of Shares
set forth in the foregoing limits.
SECTION 4. Shares Subject
to the Plan.
4.1. Subject to adjustment as provided in Section 4.2 hereof, the
total number of Shares reserved for issuance in connection with
Awards granted under the Plan on and after August 2, 2022 shall be
500,000, plus any Shares subject to outstanding awards under any
prior version of the Plan that on or after August 2, 2022 cease for
any reason to be subject to such awards (other than by reason of
exercise or settlement of the awards to the extent they are
exercised for or settled in vested and nonforfeitable Shares). No
Award may be granted if the number of Shares to which such Award
relates, when added to the number of Shares previously issued under
the Plan, exceeds the number of Shares reserved under the preceding
sentence. If any Awards are forfeited, canceled, terminated,
exchanged or surrendered or such Award is settled in cash or
otherwise terminates without a distribution of Shares to the
Participant, any Shares counted against the number of Shares
reserved and available under the Plan with respect to such Award
shall, to the extent of any such forfeiture, settlement,
termination, cancellation, exchange or surrender, again be
available for Awards under the Plan. Upon the exercise of any Award
granted in tandem with any other Awards, such related Awards shall
be canceled to the extent of the number of Shares as to which the
Award is exercised. The aggregate number of Shares that may
be issued pursuant to the exercise of ISOs granted under this Plan
on and after August 2, 2022 shall not exceed 500,000.
4.2. In the event that the Committee shall determine that any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, extraordinary distribution or other
similar corporate transaction or event, affects the Shares such
that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Eligible Persons under the Plan, then
the Committee shall make such equitable changes or adjustments as
it deems appropriate and, in such manner as it may deem equitable,
(i) adjust any or all of (x) the number and kind of shares which
may thereafter be issued under the Plan, (y) the number and kind of
shares, other securities or other consideration issued or issuable
in respect of outstanding Awards, and (z) the exercise price, grant
price, or purchase price relating to any Award, or (ii) provide for
a distribution of cash or property in respect of any Award;
provided, however, in each case that, with
respect to ISOs, such adjustment shall be made in accordance with
Section 424(a) of the Code, unless the Committee determines
otherwise; provided
further, however,
that no adjustment shall be made pursuant to this Section 4.2 that
causes any Award that is not otherwise deferred compensation
subject to Section 409A of the Code to be treated as deferred
compensation pursuant to Section 409A of the Code. In addition, the
Committee is authorized to make adjustments in the terms and
conditions of, and the criteria and performance objectives, if any,
included in, Awards in recognition of unusual or non-recurring
events (including, without limitation, events described in the
preceding sentence) affecting the Company or any Subsidiary or
Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, or in response to changes in applicable
laws, regulations, or accounting principles.
4.3. In the event that the Company
is a party to a merger or consolidation or a Change of Control
shall occur, outstanding Awards shall be subject to the agreement
of merger or consolidation or other applicable transaction
agreement. Such agreement, without the Participants’ consent, may
provide for: (i) continuation or assumption of such outstanding
Award under the Plan by the Company (if it is the surviving
corporation) or by the surviving corporation or its parent; (ii)
substitution by the surviving corporation or its parent of awards
with substantially the same terms for such outstanding Awards (and,
if the Company is not a publicly traded entity, substitution of
shares with equity of the surviving corporation or its parent with
substantially the same terms as the outstanding shares); (iii)
acceleration of the vesting of or right to exercise such
outstanding Awards immediately prior to or as of the date of the
merger or consolidation or Change of Control, and, in the case of
Options or SARs, the expiration of such outstanding Options or SARs
to the extent not timely
exercised by the date of the merger, consolidation, Change of
Control or other date thereafter designated by the Board; or (iv)
in the case of Options or SARs, cancellation of all or any portion
of such outstanding Options or SARs by a cash payment of the
excess, if any, of the Fair Market Value of the shares subject to
such outstanding Options or SARs or portion thereof being canceled
over the aggregate purchase price with respect to such Options or
SARs or portion thereof being canceled.
4.4. Any Shares distributed pursuant
to an Award may consist, in whole or in part, of authorized and
unissued Shares or treasury Shares including Shares acquired by
purchase in the open market or in private
transactions.
SECTION 5. Specific Terms
of Awards.
5.1. General. Awards may
be granted on the terms and conditions set forth in this Section 5.
In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to Section
8.4), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine,
including terms regarding forfeiture of Awards or continued
exercisability of Awards in the event of Termination of Service by
the Eligible Person.
5.2. Options. The
Committee is authorized to grant Options, which may be NQSOs or
ISOs, to Eligible Persons on the following terms and
conditions:
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(A)
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Exercise Price. The
exercise price per Share purchasable under an Option shall be
determined by the Committee; provided, however, that the exercise
price per Share of an Option shall not be less than the Fair Market
Value of a Share on the date of grant of the Option. The Committee
may, without limitation, set an exercise price that is based upon
achievement of performance criteria if deemed appropriate by the
Committee.
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(B)
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Option Term. The term
of each Option shall be determined by the Committee; provided, however, that such term shall not be
longer than ten years from the date of grant of the Option.
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(C)
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Time and Method of
Exercise. The Committee shall determine at the date of grant
or thereafter the time or times at which an Option may be exercised
in whole or in part (including, without limitation, upon
achievement of performance criteria if deemed appropriate by the
Committee), the methods by which such exercise price may be paid or
deemed to be paid (including, without limitation, broker-assisted
exercise arrangements), the form of such payment (including,
without limitation, cash, Shares, notes or other property), and the
methods by which Shares will be delivered or deemed to be delivered
to Eligible Persons. Unless otherwise set forth by the Committee in
an applicable Award Agreement, Options granted hereunder shall
become exercisable in full upon a Termination of Service due to the
death or Disability of the Participant. Unless otherwise set forth
by the Committee in an applicable Award Agreement, a Termination of
Service shall be due to the Disability of the Participant if, upon
such Termination of Service, the Participant qualifies for
long-term disability benefits under the Company’s applicable
long-term disability plan.
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(D)
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ISOs. The terms of
any ISO granted under the Plan shall comply in all respects with
the provisions of Section 422 of the Code, including but not
limited to the requirement that the ISO shall be granted within ten
years from the earlier of the date of adoption or shareholder
approval of the Plan. ISOs may only be granted to employees of the
Company or a Subsidiary.
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5.3. SARs. The Committee
is authorized to grant SARs (Share Appreciation Rights) to Eligible
Persons on the following terms and conditions:
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(A)
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Right to Payment. A
SAR shall confer on the Eligible Person to whom it is granted a
right to receive with respect to each Share subject thereto, upon
exercise thereof, the excess of (1) the Fair Market Value of one
Share on the date of exercise over (2) the exercise price per Share
of the SAR as determined by the Committee as of the date of grant
of the SAR (which shall not be less than the Fair Market Value per
Share on the date of grant of the SAR and, in the case of a SAR
granted in tandem with an Option, shall be equal to the exercise
price of the underlying Option).
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(B)
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Other Terms. The
Committee shall determine, at the time of grant or thereafter, the
time or times at which a SAR may be exercised in whole or in part
(which shall not be more than ten years after the date of grant of
the SAR), the method of exercise, method of settlement, form of
consideration payable in settlement, method by which Shares will be
delivered or deemed to be delivered to Eligible Persons, whether or
not a SAR shall be in tandem with any other Award, and any other
terms and conditions of any SAR. Unless the Committee determines
otherwise, a SAR (1) granted in tandem with an NQSO may be granted
at the time of grant of the related NQSO or at any time thereafter
or (2) granted in tandem with an ISO may only be granted at the
time of grant of the related ISO.
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5.4. Restricted Shares.
The Committee is authorized to grant Restricted Shares to Eligible
Persons on the following terms and conditions:
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(A)
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Issuance and
Restrictions. Restricted Shares shall be subject to such
restrictions on transferability and other restrictions, if any, as
the Committee may impose at the date of grant or thereafter, which
restrictions, if any, may lapse separately or in combination at
such times, under such circumstances (including, without
limitation, upon achievement of performance criteria if deemed
appropriate by the Committee), in such installments, or otherwise,
as the Committee may determine. Except to the extent restricted
under the Award Agreement relating to the Restricted Shares, an
Eligible Person granted Restricted Shares shall have all of the
rights of a shareholder including, without limitation, the right to
vote Restricted Shares and the right to receive dividends
thereon.
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(B)
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Forfeiture. Except as
otherwise determined by the Committee, at the date of grant or
thereafter, upon Termination of Service during any applicable
restriction period, Restricted Shares and any accrued but unpaid
dividends or Dividend Equivalents that are at that time subject to
restrictions shall be forfeited; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Shares will be waived in whole or
in part in the event of Termination of Service resulting from
specified causes, and the Committee may in other cases waive in
whole or in part the forfeiture of Restricted Shares.
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(C)
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Certificates for
Shares. Restricted Shares granted under the Plan may be
evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Shares are registered in the
name of the Eligible Person, such certificates shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Shares, and, unless
otherwise determined by the Committee, the Company shall retain
physical possession of the certificate and the Participant shall
deliver a stock power to the Company, endorsed in blank, relating
to the Restricted Shares.
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(D)
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Dividends. Dividends
paid on Restricted Shares shall be either paid at the dividend
payment date, or deferred for payment to such date, and subject to
such conditions, as determined by the Committee, in cash or in
restricted or unrestricted Shares having a Fair Market Value equal
to the amount of such dividends. Unless otherwise determined by the
Committee, Shares distributed in connection with a Share split or
dividend in Shares, and other property distributed as a dividend,
shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Shares with respect to which such
Shares or other property has been distributed.
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5.5. Restricted Share
Units. The Committee is authorized to grant Restricted Share
Units to Eligible Persons, subject to the following terms and
conditions:
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(A)
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Award and Restrictions.
Delivery of Shares or cash, as the case may be, will occur upon
expiration of the deferral period specified for Restricted Share
Units by the Committee (or, if permitted by the Committee, as
elected by the Eligible Person). In addition, Restricted Share
Units shall be subject to such restrictions as the Committee may
impose, if any (including, without limitation, the achievement of
performance criteria if deemed appropriate by the Committee), at
the date of grant or thereafter, which restrictions may lapse at
the expiration of the deferral period or at earlier or later
specified times, separately or in combination, in installments or
otherwise, as the Committee may determine. |
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(B)
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Forfeiture. Except as
otherwise determined by the Committee at date of grant or
thereafter, upon Termination of Service during the applicable
deferral period or portion thereof to which forfeiture conditions
apply (as provided in the Award Agreement evidencing the Restricted
Share Units), or upon failure to satisfy any other conditions
precedent to the delivery of Shares or cash to which such
Restricted Share Units relate, all Restricted Share Units that are
at that time subject to deferral or restriction shall be forfeited;
provided, however, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions
relating to Restricted Share Units will be waived in whole or in
part in the event of Termination of Service resulting from
specified causes, and the Committee may in other cases waive in
whole or in part the forfeiture of Restricted Share
Units. |
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(C)
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Dividend Equivalents.
Unless otherwise determined by the Committee at the date of grant,
Dividend Equivalents on the specified number of Shares covered by a
Restricted Share Unit shall be either (A) paid with respect to such
Restricted Share Unit at the dividend payment date in cash or in
restricted or unrestricted Shares having a Fair Market Value equal
to the amount of such dividends, or (B) deferred with respect to
such Restricted Share Unit and the amount or value thereof
automatically deemed reinvested in additional Restricted Share
Units or other Awards, as the Committee shall
determine. |
5.6. Performance Shares and
Performance Units. The Committee is authorized to grant
Performance Shares or Performance Units or both to Eligible Persons
on the following terms and conditions:
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(A)
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Performance Period.
The Committee shall determine a performance period (the
“Performance Period”) of one or more years or other periods and
shall determine the performance objectives for grants of
Performance Shares and Performance Units. Performance objectives
may vary from Eligible Person to Eligible Person and shall be based
upon the performance criteria as the Committee may deem
appropriate. The performance objectives may be determined by
reference to the performance of the Company, or of a Subsidiary or
Affiliate, or of a division or unit of any of the foregoing.
Performance Periods may overlap and Eligible Persons may
participate simultaneously with respect to Awards for which
different Performance Periods are prescribed.
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(B)
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Award Value. For each
Performance Period, the Committee shall determine for each Eligible
Person or group of Eligible Persons with respect to that
Performance Period the range of number of Shares, if any, in the
case of Performance Shares, and the range of dollar values, if any,
in the case of Performance Units, which may be fixed or may vary in
accordance with such performance or other criteria specified by the
Committee, which shall be paid to an Eligible Person as an Award if
the relevant measure of Company performance for the Performance
Period is met.
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(C)
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Significant Events.
If during the course of a Performance Period there shall occur
significant events as determined by the Committee which the
Committee expects to have a substantial effect on a performance
objective during such period, the Committee may revise such
objective.
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(D)
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Forfeiture. Except as
otherwise determined by the Committee, at the date of grant or
thereafter, upon Termination of Service during the applicable
Performance Period, Performance Shares and Performance Units for
which the Performance Period was prescribed shall be forfeited;
provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may
determine in an individual case, that restrictions or forfeiture
conditions relating to Performance Shares and Performance Units
will be waived in whole or in part in the event of Terminations of
Service resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Performance
Shares and Performance Units.
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(E)
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Payment. Each
Performance Share or Performance Unit may be paid in whole Shares,
or cash, or a combination of Shares and cash either as a lump sum
payment or in installments, all as the Committee shall determine,
at the time of grant of the Performance Share or Performance Unit
or otherwise, commencing at the time determined by the
Committee.
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5.7. Dividend Equivalents.
The Committee is authorized to grant Dividend Equivalents to
Eligible Persons. The Committee may provide, at the date of grant
or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested
in additional Shares, or other investment vehicles as the Committee
may specify; provided,
however, that, unless
otherwise determined by the Committee, Dividend Equivalents (other
than freestanding Dividend Equivalents) shall be subject to all
conditions and restrictions of any underlying Awards to which they
relate.
5.8. Other Share-Based
Awards. The Committee is authorized, subject to limitations
under applicable law, to grant to Eligible Persons such other
Awards that may be denominated or payable in, valued in whole or in
part by reference to, or otherwise based on, or related to, Shares,
as deemed by the Committee to be consistent with the purposes of
the Plan, including, without limitation, unrestricted shares
awarded purely as a “bonus” and not subject to any restrictions or
conditions, other rights convertible or exchangeable into Shares,
purchase rights for Shares, Awards with value and payment
contingent upon performance of the Company or any other factors
designated by the Committee, and Awards valued by reference to the
performance of specified Subsidiaries or Affiliates. The Committee
shall determine the terms and conditions of such Awards at date of
grant or thereafter. Shares delivered pursuant to an Award in the
nature of a purchase right granted under this Section 5.8 shall be
purchased for such consideration, paid for at such times, by such
methods, and in such forms, including, without limitation, cash,
Shares, notes or other property, as the Committee shall determine.
Cash awards, as an element of or supplement to any other Award
under the Plan, shall also be authorized pursuant to this Section
5.8.
SECTION 6. Certain
Provisions Applicable to Awards.
6.1. Stand-Alone, Additional,
Tandem and Substitute Awards. Awards granted under the Plan
may, in the discretion of the Committee, be granted to Eligible
Persons either alone or in addition to, in tandem with, or in
exchange or substitution for, any other Award granted under the
Plan or any award granted under any other plan or agreement of the
Company, any Subsidiary or Affiliate, or any business entity to be
acquired by the Company or a Subsidiary or Affiliate, or any other
right of an Eligible Person to receive payment from the Company or
any Subsidiary or Affiliate. Awards may be granted in addition to
or in tandem with such other Awards or awards, and may be granted
either as of the same time as or a different time from the grant of
such other Awards or awards. Subject to the provisions of Section
3.5 hereof prohibiting Option and SAR repricing without shareholder
approval, the per Share exercise price of any Option, or grant
price of any SAR, which is granted, in connection with the
substitution of awards granted under any other plan or agreement of
the Company or any Subsidiary or Affiliate or any business entity
to be acquired by the Company or any Subsidiary or Affiliate, shall
be determined by the Committee, in its discretion.
6.2. Term of Awards.
The term of each Award granted to an
Eligible Person shall be for such period as may be determined by
the Committee; provided, however, that in no event shall the
term of any Option or
SAR exceed a period of ten years from the date of its grant (or
such shorter period as may be applicable under Section 422 of the
Code).
6.3. Form of Payment Under
Awards. Subject to the terms of the Plan and any applicable
Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate upon the grant, maturation, or exercise of an Award
may be made in such forms as the Committee shall determine at the
date of grant or thereafter, including, without limitation, cash,
Shares, notes or other property, and may be made in a single
payment or transfer, in installments, or on a deferred basis;
provided that any such
deferral shall be structured in a manner intended to be in
compliance with Section 409A of the Code. The Committee may make
rules relating to installment or deferred payments with respect to
Awards, including the rate of interest to be credited with respect
to such payments, and the Committee may require deferral of payment
under an Award if, in the sole judgment of the Committee, it may be
necessary in order to avoid nondeductibility of the payment under
Section 162(m) of the Code.
6.4. Nontransferability.
Unless otherwise set forth by the Committee in an Award Agreement,
Awards shall not be transferable by an Eligible Person except by
will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the
lifetime of an Eligible Person only by such Eligible Person or his
guardian or legal representative. An Eligible Person’s rights under
the Plan may not be pledged, mortgaged, hypothecated, or otherwise
encumbered, and shall not be subject to claims of the Eligible
Person’s creditors.
6.5. Noncompetition. The
Committee may, by way of the Award Agreements or otherwise,
establish such other terms, conditions, restrictions and/or
limitations, if any, of any Award, provided they are not
inconsistent with the Plan, including, without limitation, the
requirement that the Participant not engage in competition with,
solicit customers or employees of, or disclose or use confidential
information of, the Company or its Affiliates.
6.6. No Dividend Equivalents on
Unvested Performance Awards. Notwithstanding any provision
of this Plan to the contrary, Dividend Equivalents shall not be
paid with respect to Performance Shares, Performance Units or other
Awards that vest based on achievement of performance objectives
prior to the time the applicable performance objectives have been
achieved.
SECTION 7. Change of
Control Provisions.
7.1. Acceleration of
Exercisability and Lapse of Restrictions. Unless otherwise
provided by the Committee at the time of the Award grant, in the
event of a Change of Control, (i) all outstanding Awards pursuant
to which the Participant may have rights the exercise of which is
restricted or limited, shall become fully exercisable at the time
of the Change of Control, and (ii) unless the right to lapse of
restrictions or limitations is waived or deferred by a Participant
prior to such lapse, all restrictions or limitations (including
risks of forfeiture and deferrals) on outstanding Awards subject to
restrictions or limitations under the Plan shall lapse, and all
performance criteria and other conditions to payment of Awards
under which payments of cash, Shares or other property are subject
to conditions shall be deemed to be achieved or fulfilled and shall
be waived by the Company at the time of the Change of
Control.
7.2. Definition of Change of
Control. For purposes of this Plan, “Change of Control”
shall mean:
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(A)
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the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a “Person”), of 30% or more of either (1) the then
outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company
Voting Securities”); provided, however, that the following shall not
constitute a Change of Control: (i) such beneficial ownership by a
Subsidiary of the Company; (ii) such beneficial ownership by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any or its Subsidiaries; (iii) such beneficial
ownership by any corporation with respect to which, immediately
following the acquisition of such beneficial ownership, more than
50% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, and no Person (other than Persons
described in clause (iv) below) beneficially owns 30% or more of
the voting securities of such corporation; (iv) such beneficial
ownership by members of the immediate family of Robert J. Higgins
or one or more trusts established for the benefit of such family
members; or (v) beneficial ownership by a Person of a percentage of
Outstanding Company Common Stock or Outstanding Company Voting
Securities which is less than the percentage of Outstanding Company
Common Stock or Outstanding Company Voting Securities, as the case
may be, held by members of the immediate family of Robert J.
Higgins and one or more trusts established for the benefit of such
family members; or
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(B)
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during any period of two consecutive years, individuals who,
as of the beginning of such period, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the beginning of such period whose
election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or
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(C)
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consummation of a reorganization, merger or consolidation, in
each case, with respect to which all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company
Voting Securities immediately prior to such reorganization,
merger or consolidation, do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such reorganization, merger or consolidation in substantially the
same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities as the case
may be; or
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(D)
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consummation of a sale or disposition of all or substantially
all of the assets of the Company, other than to a corporation with
respect to which, following such sale or other disposition, more
than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of such corporation is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
sale or other disposition, in substantially the same proportions as
their ownership of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be; or
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(E)
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approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
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SECTION 8. General
Provisions.
8.1. Compliance with Legal and
Trading Requirements. The Plan, the granting and exercising
of Awards thereunder, and the other obligations of the Company
under the Plan and any Award Agreement, shall be subject to all
applicable federal, state and foreign laws, rules and regulations,
and to such approvals by any stock exchange, regulatory or
governmental agency as may be required. The Company, in its
discretion, may postpone the issuance or delivery of Shares under
any Award until completion of such stock exchange or market system
listing or registration or qualification of such Shares or other
required action under any state, federal or foreign law, rule or
regulation as the Company may consider appropriate, and may require
any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the
issuance or delivery of Shares in compliance with applicable laws,
rules and regulations. No provisions of the Plan shall be
interpreted or construed to obligate the Company to register any
Shares under federal, state or foreign law. The Shares issued under
the Plan may be subject to such other restrictions on transfer as
determined by the Committee.
8.2. No Right to Continued
Employment or Service. Neither the Plan nor any action taken
thereunder shall be construed as giving any employee, consultant or
director the right to be retained in the employ or service of the
Company or any of its Subsidiaries or Affiliates, nor shall it
interfere in any way with the right of the Company or any of its
Subsidiaries or Affiliates to terminate any employee’s,
consultant’s or director’s employment or service at any time.
8.3. Taxes. The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating
to an Award under the Plan, including from a distribution of
Shares, or any payroll or other payment to an Eligible Person,
amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other action as
the Committee may deem advisable to enable the Company and Eligible
Persons to satisfy obligations for the payment of withholding taxes
and other tax obligations relating to any Award. This authority
shall include authority to withhold or receive Shares or other
property and to make cash payments in respect thereof in
satisfaction of an Eligible Person’s tax obligations;
provided, however, that the amount of tax withholding to be
satisfied by withholding Shares shall be limited to the minimum
amount of taxes, including employment taxes, required to be
withheld under applicable Federal, state and local
law.
8.4. Changes to the Plan and
Awards. The Board may amend, alter, suspend, discontinue, or
terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders of the Company
or Participants, except that any such amendment, alteration,
suspension, discontinuation, or termination shall be subject to the
approval of the Company’s shareholders (i) to the extent such
shareholder approval is required under the rules of any stock
exchange or automated quotation system on which the Shares may then
be listed or quoted, or (ii) as it applies to ISOs, to the extent
such shareholder approval is required under Section 422 of the
Code; provided,
however, that, without the
consent of an affected Participant, no amendment, alteration,
suspension, discontinuation, or termination of the Plan may
materially and adversely affect the rights of such Participant
under any Award theretofore granted to him or her. The Committee
may waive any conditions or rights under, amend any terms of, or
amend, alter, suspend, discontinue or terminate, any Award
theretofore granted, prospectively or retrospectively; provided, however, that, without the consent of
a Participant, no amendment, alteration, suspension,
discontinuation or termination of any Award may materially and
adversely affect the rights of such Participant under any Award
theretofore granted to him or her.
8.5. No Rights to Awards; No
Shareholder Rights. No Eligible Person or employee shall
have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Eligible Persons and
employees. No Award shall confer on any Eligible Person any of the
rights of a shareholder of the Company unless and until Shares are
duly issued or transferred to the Eligible Person in accordance
with the terms of the Award.
8.6. Unfunded Status of
Awards. The Plan is intended to constitute an “unfunded”
plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights
that are greater than those of a general creditor of the Company;
provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet
the Company’s obligations under the Plan to deliver cash, Shares,
other Awards, or other property pursuant to any Award, which trusts
or other arrangements shall be consistent with the “unfunded”
status of the Plan unless the Committee otherwise determines with
the consent of each affected Participant.
8.7. Nonexclusivity of the
Plan. Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be
construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options and other
awards otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.
8.8. Not Compensation for Benefit
Plans. No Award payable under this Plan shall be deemed
salary or compensation for the purpose of computing benefits under
any benefit plan or other arrangement of the Company for the
benefit of its employees, consultants or directors unless the
Company shall determine otherwise.
8.9. No Fractional Shares.
No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award. The Committee shall determine whether cash,
other Awards, or other property shall be issued or paid in lieu of
such fractional Shares or whether such fractional Shares or any
rights thereto shall be forfeited or otherwise eliminated.
8.10. Governing Law. The
validity, construction, and effect of the Plan, any rules and
regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of New York, without giving
effect to principles of conflict of laws thereof.
8.11. Effective Date; Plan
Termination. The Plan shall become effective as of August 2,
2022 (the “Effective Date”), subject to approval by the
shareholders of the Company. The Plan shall terminate as to future
awards on the date which is ten (10) years after the Effective
Date.
8.12. Section 409A.
It is intended that the Plan and
Awards issued thereunder will comply with, or be exempt from,
Section 409A of the Code (and any regulations and guidelines issued
thereunder), and the Plan and such Awards shall be interpreted on a
basis consistent with such intent. The Plan and any Award
Agreements issued thereunder may be amended in any respect deemed
by the Board or the Committee to be necessary in order to preserve
compliance with Section
409A of the Code. In no event whatsoever shall the Company be
liable for any additional tax, interest or penalties that may be
imposed on a Participant by Section 409A of the Code or any damages
for failing to comply with Section 409A of the Code.
8.13. Titles and Headings.
The titles and headings of the sections in the Plan are for
convenience of reference only. In the event of any conflict, the
text of the Plan, rather than such titles or headings, shall
control.