UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14C
INFORMATION
STATEMENT PURSUANT TO SECTION 14(c)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Check
the appropriate box:
[X]
Preliminary Information Statement
[ ]
Confidential, for Use of the Commission only (as permitted by Rule
14c-5(d)(2))
[ ]
Definitive Information Statement
CAN B̅ CORP.
(Name
of Registrant As Specified In Its Charter)
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of Filing Fee (Check the Appropriate Box):
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[ ]
Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11
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(1) |
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applies: |
|
(2) |
Aggregate
number of securities to which transaction applies: |
|
(3) |
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unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
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(4) |
Proposed
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[ ]
Check box if any party of the fee is offset as provided by Exchange
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offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
|
(1) |
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Previously Paid: |
|
(2) |
Form,
Schedule or Registration Statement No.: |
CAN
B̅ CORP.
960
SOUTH BROADWAY, SUITE 120, HICKSVILLE, NY 11801
IMPORTANT
NOTICE REGARDING INTERNET AVAILABILITY OF INFORMATION STATEMENT FOR
CAN B̅ CORP.
To
the Shareholders of Can B̅ Corp.:
NOTICE
IS HEREBY GIVEN to you as a stockholder of Can B̅ Corp., a Florida
corporation (the “Company,” “we,” “us” or “our”), that you are
receiving this notice regarding the internet availability of an
information statement (the “Information Statement”) relating to the
matters described below. This notice presents only an overview of
the more complete Information Statement that is available to you on
the internet or, upon request, by mail. We encourage you to access
and review all the important information contained in the
Information Statement. As described below, the Information
Statement is for informational purposes only and, as a stockholder
of the Company, you need not take any action.
By
sending you this notice, we are notifying you that we are making
the Information Statement available to you via the internet in lieu
of mailing you a paper copy. You may print and view the full
Information Statement on our website at
http://www.canbcorp.com/investors/. To view and print the
Information Statement, click on the link of the appropriate
information statement in order to open the document. You may
request a paper copy or PDF via email of the Information Statement,
free of charge, by contacting us in writing at Can B̅ Corp. c/o
Marco Alfonsi, 960 South Broadway, Suite 120, Hicksville, NY 11801
or by calling 516-595-9544. If you do not request a paper copy or
PDF via email by October 10, 2020, you will not otherwise receive a
paper or PDF copy. The Company’s most recent annual report and
quarterly reports are available upon request, without charge, by
contacting the Company at the address above. There is no charge to
you for requesting a copy.
We
are furnishing this notice and Information Statement to the holders
of our common and preferred stock in connection with the approval
by written consent of the Company’s Board of Directors and holders
of a majority of the issued and outstanding voting stock of the
Company to (i) approve the Company’s 2020 Incentive Stock Option
Plan (the “ISOP Approval”) and (ii) amend the Certificate of
Designation for the Company’s Series A Preferred Stock to reflect
the rights and privileges relating to our Series A Preferred Stock
following the Company’s recent reverse split and to add other terms
typical of designations of preferred series of stock (the “Series A
Amendment” and, collectively with the ISOP Approval, the
“Actions”). The purpose of the Information Statement is to notify
our stockholders that on July 28, 2020 pursuant to written consent
permitted by Section 7607.0704 of the Florida Business Corporations
Act (“FBCA”) the holders of a majority of the issued and
outstanding voting stock of the Company executed a written consent
approving the Actions. This notice is first being sent to our
stockholders on or about September [●], 2020.
The
written consent that we received constitutes the only stockholder
approval required for to approve the foregoing actions under the
FBCA and, as a result, no further action by any other stockholder
is required to approve the foregoing and we have not and will not
be soliciting your approval of the same. This notice and the
Information Statement shall constitute notice to you of the action
by written consent in accordance with the FBCA and Rule 14c-2
promulgated under the Exchange Act.
WE
ARE NOT ASKING FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
On
behalf of the Board of Directors,
|
/s/
Marco Alfonsi |
|
Name: |
Marco
Alfonsi |
|
Title: |
Chief
Executive Officer and Director |
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
INFORMATION
STATEMENT PURSUANT TO SECTION 14(c)
OF
THE SECURITIES EXCHANGE ACT OF 1934
AND
RULE 14C PROMULGATED THERETO
CAN
B̅ CORP.
960
South Broadway, Suite 120, Hicksville, NY 11801
INFORMATION
STATEMENT
September
[●], 2020
THIS
INFORMATION STATEMENT IS FOR INFORMATION PURPOSES ONLY AND NO VOTE
OR OTHER ACTION OF THE COMPANY’S STOCKHOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT.
A
NOTICE OF THE INTERNET AVAILABILITY OF THIS INFORMATION STATEMENT
IS BEING MAILED ON OR ABOUT SEPTEMBER [●], 2020 TO STOCKHOLDERS OF
RECORD ON JULY 15, 2020.
This
information statement (“Information Statement”) is being made
available to the shareholders of record of Can B̅ Corp., a Florida
corporation (the “Company,” “CANB,” “we,” “us,” or “our”) as of the
close of business on July 15, 2020 (“Record Date”). This
Information Statement is being sent to you for information purposes
only. No action is requested or required on your part.
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY.
GENERAL
OVERVIEW OF ACTIONS
The
Board of Directors has recommended, and, on July 28, 2020 (“Voting
Date”), the holders of a majority of the voting stock of CANB as of
the Voting Date have adopted resolutions, to effect the actions
listed in this Information Statement. This Information Statement is
being filed with the Securities and Exchange Commission (the “SEC”)
and is provided to CANB’s shareholders pursuant to Section 14(c) of
the Securities Exchange Act of 1934, as amended (“Exchange
Act”).
Through
the written consent of its Board of Directors and stockholders
holding a majority of the Company’s voting stock as of the Voting
Date, the Company has approved (i) the adoption of the Company’s
2020 Incentive Stock Option Plan (the “ISOP Approval”) and (ii) to
amend the Certificate of Designation for the Company’s Series A
Preferred Stock to reflect the rights and privileges relating to
our Series A Preferred Stock following the Company’s recent reverse
split and to add other terms typical of designations of preferred
series of stock (the “Series A Amendment” and, collectively with
the ISOP Approval, the “Actions”).
Holders
of 1,2957,477 of the 3,840,053 common shares issued and outstanding
as of the Voting Date, and 20 out of the 20 Series A Preferred
Shares outstanding as of the Voting Date (representing 1,333,340
votes), approved the Actions. Thus, from the 5,173,393 votes
eligible to be cast in this matter, 2,630,809 of the votes, or
approximately 50.85%, approved the Actions by written
consent.
Under
SEC regulations, the Actions will not become effective sooner than
40 days after we mail the Notice of Stockholder Action Taken by
Written Consent to our stockholders. This notice is first being
mailed to our stockholders on or about September [●],
2020.
In
order to obtain the approval of our stockholders for the Actions,
we could have convened a special meeting of the stockholders for
the specific purpose of voting on such matters. However, Section
607.0704 of the Florida Business Corporations Act (the “FBCA”)
provides that any action required or permitted to be taken at a
shareholders’ meeting may be taken without a meeting. In order to
eliminate the costs and management time involved in holding a
meeting and obtaining proxies and in order to effect the Actions as
early as possible in order to accomplish the purposes hereafter
described, we elected to utilize the written consent of a majority
of the holders our voting stock. Under the FBCA and our bylaws, the
affirmative vote of the holders of at least a majority of the
outstanding stock entitled to vote thereon is required to approve
the Actions.
This
Information Statement is intended to provide such notice as
required by the FBCA to provide after the taking of the corporate
action without a meeting to the holders of record of our stock who
have not consented in writing to such action.
Purpose
The
ISOP Approval is intended to attract, retain, and motivate
employees, officers, directors, consultants, agents, advisors and
independent contractors of the Company and its related companies by
providing them the opportunity to acquire a proprietary interest in
the Company and to align their interests and efforts to the
long-term interests of the Company’s stockholders. The Series A
Amendment was approved to clarify the rights and privileges of our
Series A Preferred stock following our reverse stock split, and to
add additional terms customarily included in designations of
preferred series of stock.
Effect
on Authorized and Outstanding Shares
The
rights and preferences of shares of our Common Stock subsequent to
the Actions will remain the same, except that following the Series
A Amendment holders of Series A Preferred Stock will rank senior as
to distributions of dividends compared to holders of our Common
Stock. The ISOP Approval will affect all our stockholders
uniformly. The Series A Amendment will affect all holders of Series
A Preferred Stock uniformly. We do not anticipate that the number
of our stockholders, or any aspect of our current business plan,
will materially change as a result of these changes.
Federal
Income Tax Consequences
The
following description of federal income tax consequences of the
Actions is based on the Internal Revenue Code of 1986, as amended,
the applicable Treasury Regulations promulgated thereunder,
judicial authority, and current administrative rulings and
practices as in effect on the date of this information statement
(collectively, the “Code”). We have not sought and will not seek an
opinion of counsel or a ruling from the Internal Revenue Service
regarding the federal income tax consequences of the
Actions.
The
issuance of Options under the Plan (as below defined) is not
expected to produce any immediate income subject to regular income
taxes to the Company or to the participant, so long as the exercise
price for such Options is at fair market value. For non-qualified
stock options, there is a tax consequence to the participant upon
exercise of the Options, which is the difference between the fair
market value of the Stock and the exercise price of the Options.
The Company takes a corresponding deduction. Additionally,
following the sale of shares exercised, the difference between
exercise price and the then-market price is taxed as a capital gain
to the participant. For incentive stock options, the participant is
not taxed at exercise of the options but is taxed upon sale at the
difference of the exercise price and sales price. The Company does
not take a corresponding deduction. Options that do not qualify as
incentive stock options will be treated as non-qualified stock
options. There are tax consequences, including a 20% penalty, to
the participant for non-qualified stock options with an exercise
price less than fair market value at issuance.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following tables set forth the ownership, as of the Voting Date, of
our common stock by each person known by us to be the beneficial
owner of more than 5% of our outstanding voting stock, our
directors, our executive officers, and our executive officers and
directors as a group as of the record date. To the best of our
knowledge, the persons named have sole voting and investment power
with respect to such shares, except as otherwise noted. There are
not any pending or anticipated arrangements that may cause a change
in control.
The
information presented below regarding beneficial ownership of our
voting securities has been presented in accordance with the rules
of the Securities and Exchange Commission and is not necessarily
indicative of ownership for any other purpose. Under these rules, a
person is deemed to be a “beneficial owner” of a security if that
person has or shares the power to vote or direct the voting of the
security or the power to dispose or direct the disposition of the
security. A person is deemed to own beneficially any security as to
which such person has the right to acquire sole or shared voting or
investment power within sixty (60) days through the conversion or
exercise of any convertible security, warrant, option or other
right. More than one person may be deemed to be a beneficial owner
of the same securities.
Except
as otherwise indicated and under applicable community property
laws, we believe that the beneficial owners of our common stock
listed below have sole voting and investment power with respect to
the shares shown. Unless stated otherwise, the business address for
these shareholders is 960 South Broadway, Suite 120, Hicksville, NY
11801.
Name |
|
Title |
|
Number
of
Common
Shares |
|
|
% of
Common
Shares |
|
|
Number
of Series
A
Preferred
Shares |
|
|
% of
Series A
Preferred
Shares |
|
|
% of
Eligible
Votes |
|
|
Number
of
Warrants
currently
exercisable
or
exercisable
in the next
60 days |
|
Marco Alfonsi [1] |
|
CEO, Director |
|
|
197,998 |
|
|
|
5.16 |
% |
|
|
5 |
|
|
|
25 |
% |
|
|
10.27 |
% |
|
|
0 |
|
Stanley L. Teeple [2] |
|
CFO, Director |
|
|
13,861 |
|
|
|
0.36 |
% |
|
|
4 |
|
|
|
20 |
% |
|
|
5.42 |
% |
|
|
0 |
|
David Posel [3] |
|
COO of Pure Health Products |
|
|
0 |
|
|
|
0 |
% |
|
|
1 |
|
|
|
5 |
% |
|
|
1.29 |
% |
|
|
0 |
|
Pasquale Ferro [4] |
|
President of Pure Health
Products |
|
|
104,602 |
|
|
|
2.72 |
% |
|
|
5 |
|
|
|
25 |
% |
|
|
8.47 |
% |
|
|
0 |
|
Phil Scala [5] |
|
Interim COO |
|
|
4,484 |
|
|
|
0.12 |
% |
|
|
0 |
|
|
|
0 |
% |
|
|
0.09 |
% |
|
|
0 |
|
Frederick Alger Boyer Jr. [6] |
|
Independent Director |
|
|
10,000 |
|
|
|
0.26 |
% |
|
|
0 |
|
|
|
0.00 |
% |
|
|
0.19 |
% |
|
|
0 |
|
Senator Ron Silver [7] |
|
Independent Director |
|
|
16,668 |
|
|
|
0.43 |
% |
|
|
0 |
|
|
|
0.00 |
% |
|
|
0.32 |
% |
|
|
0 |
|
James F. Murphy [8] |
|
Independent Director |
|
|
10,000 |
|
|
|
0.26 |
% |
|
|
0 |
|
|
|
0.00 |
% |
|
|
0.19 |
% |
|
|
0 |
|
All executive officers and directors
as a group [8 persons] |
|
|
|
|
357,613 |
|
|
|
9.31 |
% |
|
|
15 |
|
|
|
75 |
% |
|
|
26.24 |
% |
|
|
0 |
|
Andrew Holtmeyer [9] |
|
VP of Business Development |
|
|
3,695 |
|
|
|
0.01 |
% |
|
|
5 |
|
|
|
25 |
% |
|
|
6.51 |
% |
|
|
0 |
|
*Numbers
have been adjusted to account for the Company’s reverse stock
split.
|
(1) |
Marco
Alfonsi owns approximately 197,998 shares of common stock and 5
shares of Series A preferred stock, which are convertible into
166,670 shares and equal 333,335 votes. Prior to October 29, 2015,
Mr. Alfonsi owned 270,000 shares of the Company’s common stock, at
which time it was agreed that he would retire 166,666 shares of
common stock for 5 shares of Series A Preferred Stock. In addition
to the listed shares, five adult members of Mr. Alfonsi’s family
hold an aggregate of 42,343 shares of common stock, which shares
have not been included in the above calculations. |
|
(2) |
Stanley
L. Teeple owns approximately 3,861 shares of common stock, options
to purchase an additional 10,000 common shares, and 4 shares of
Series A preferred stock, which are convertible into 133,336 shares
and equal 266,668 votes. |
|
|
|
|
(3) |
David
Posel owns 0 shares of common stock and 1 shares of Series A
preferred stock, which is convertible into 33,334 shares and equals
66,667 votes. |
|
|
|
|
(4) |
Pasquale
Ferro owns 69,119 common shares jointly with his wife and 35,483
common shares individually. Mr. Ferro holds 5 shares of Series A
Preferred stock individually, which are convertible into 166,670
common shares and equal 333,335 votes. Mr. Ferro is the President
of Pure Health Products, LLC, a wholly owned subsidiary of the
Company. In addition to the listed shares, a member of Mr. Ferro’s
family holds 8,335 shares of common stock, which shares have not
been included in the above calculations |
|
|
|
|
(5) |
Phil
Scala owns approximately 2,817 shares of common stock and options
to purchase 1,667 common shares. |
|
|
|
|
(6) |
Frederick
Alger Boyer Jr. holds options to purchase 10,000 common shares of
the Company. |
|
|
|
|
(7) |
Ron
Silver holds options to purchase 10,000 common shares of the
Company and 6,668 shares of common stock. |
|
|
|
|
(8) |
James
F. Murphy holds options to purchase 10,000 common shares of the
Company. |
|
|
|
|
(9) |
Andrew
Holtmeyer owns approximately 3,695 shares of common stock and 5
shares of Series A preferred stock, which are convertible into
166,670 shares and equal 333,335 votes. |
|
|
|
|
(10) |
There
were 3,840,053 shares of common stock and 20 shares of Series A
Preferred stock outstanding as of the Voting Date, for a total of
5,173,393 votes currently eligible to be cast on the Voting
Date. |
|
|
|
|
(11) |
The
Company’s preferred stock is classified as Series A Preferred
shares, Series B Preferred Shares, and Series C Preferred Shares.
Each Series A Preferred share is entitled to 66,667 votes and can
be converted into 33,334 shares of common stock. Series B Preferred
shares have no voting rights. Series B Preferred shares are
convertible into shares of common stock; however, there are no
Series B Preferred shares outstanding at this time. Each Series C
Preferred share is entitled to 25,000 votes, can be converted into
25,000 shares of common stock, and ranks senior to common stock
with respect to preferences as to distributions of dividends;
however, there are no Series C Preferred shares outstanding at this
time. |
The
above table is based upon information derived from our stock
records. Except as otherwise indicated herein and under applicable
community property laws, we believe that the beneficial owners of
our common stock listed above have sole voting and investment power
with respect to the shares shown.
The
following table sets forth the ownership of our common stock by
each person known by us to be the beneficial owner of more than 5%
of our outstanding voting stock, our directors, our executive
officers, and our executive officers and directors as a group,
assuming all preferred shares were converted to
common shares as of the Voting Date (which they were
not).
Name |
|
Title |
|
Number of Common Shares [1] |
|
|
% of Common Shares |
|
|
Number of Warrants currently exercisable or exercisable in the next
60 days |
|
Marco Alfonsi |
|
CEO, Director |
|
|
364,668 |
|
|
|
8.09 |
% |
|
|
0 |
|
Stanley L. Teeple |
|
CFO, Director |
|
|
147,197 |
|
|
|
3.26 |
% |
|
|
0 |
|
David Posel |
|
COO of Pure Health Products |
|
|
33,334 |
|
|
|
0.74 |
% |
|
|
0 |
|
Pasquale Ferro |
|
President of Pure Health
Products |
|
|
271,272 |
|
|
|
6.02 |
% |
|
|
0 |
|
Phil Scala |
|
Interim COO |
|
|
4,484 |
|
|
|
0.10 |
% |
|
|
0 |
|
Frederick Alger Boyer Jr. |
|
Independent Director |
|
|
10,000 |
|
|
|
0.22 |
% |
|
|
0 |
|
Senator Ron Silver |
|
Independent Director |
|
|
16,668 |
|
|
|
0.37 |
% |
|
|
0 |
|
James F. Murphy |
|
Independent Director |
|
|
10,000 |
|
|
|
0.22 |
% |
|
|
0 |
|
All executive officers and directors
as a group [8 persons] |
|
|
|
|
857,623 |
|
|
|
19.03 |
% |
|
|
0 |
|
Andrew Holtmeyer |
|
VP of Business Development |
|
|
170,365 |
|
|
|
3.78 |
% |
|
|
0 |
|
|
(1) |
Had
all 20 issued and outstanding Series A Preferred Shares been
converted to common shares there would have been approximately
4,506,733 shares of common stock outstanding as of the Voting
Date. |
The
above tables are based upon information derived from our stock
records. Except as otherwise indicated below and under applicable
community property laws, we believe that the beneficial owners of
our common stock listed below have sole voting and investment power
with respect to the shares shown.
DESCRIPTION
OF PLAN
The
Can B̅ Corp. 2020 Incentive Stock Option Plan (the “Plan”) will be
administered by the Compensation Committee or, in the Board’s sole
discretion, the Board. Notwithstanding the foregoing, the
Compensation Committee, or if no Compensation Committee has been
appointed, the Board, may delegate administration of the Plan to a
committee or committees of one or more members of the Board. Unless
otherwise noted or unless the context otherwise requires, the term
“Committee” refers to the applicable person or persons managing the
Plan.
The
Committee may grant awards under the Plan (“Awards”) in the form of
Options, Stock Appreciation Rights, shares of the Company’s common
stock (“Common Stock”), shares of the Company’s Series C Preferred
Stock (“Series C Stock”), cash-based awards or other incentive
payable in cash or property, or a combination of the foregoing, as
may be designated by the Committee from time to time. An Award may
be granted to any employee, officer or director of the Company or
any of its subsidiaries (each, a “Related Company”) whom the
Committee from time to time selects. An Award may also be granted
to any consultant, agent, advisor or independent contractor for
bona fide services rendered to the Company or any Related Company
that (a) are not in connection with the offer and sale of the
Company’s securities in a capital-raising transaction and (b) do
not directly or indirectly promote or maintain a market for the
Company’s securities. As of the Voting Date, there were
approximately 6 executive officers, 3 non-executive directors, 15
non-executive employees, and 10 consultants or other independent
contractors who would qualify to receive Awards under the Plan.
Securities under the Plan intended to be issued pursuant to Section
4(a)(2) of the Securities Act and Regulation D promulgated
thereunder. Each recipient of an Award under the Plan is referred
to herein as a “Participant.”
Subject
to adjustment from time to time as provided in the Plan, a maximum
of Two Thousand (2,000) shares of Series C Stock and Ten Million
(10,000,000) shares of Common Stock (Series C Stock and Common
Stock are sometimes referred to herein collectively as “Stock”)
shall be available for issuance under the Plan. Participants may,
if and to the extent the Committee so determines and sets forth in
the instrument evidencing the Award at the time of grant, be
credited with dividends paid with respect to shares of Stock
underlying an Award in a manner determined by the Committee in its
sole discretion.
The
Committee may grant options to purchase Stock (“Options”)
designated as Incentive Stock Options or Nonqualified Stock
Options. Nonqualified Stock Options may not be granted for Series C
Stock. Subject to earlier termination in accordance with the terms
of the Plan and the instrument evidencing the Option, the maximum
term of an Option shall be ten (10) years from the applicable grant
date. The exercise price for shares purchased under an Option shall
be at least 100% of the fair market value on the grant date (and
shall not be less than the minimum exercise price required by
Section 422 of the Code with respect to Incentive Stock Options).
Notwithstanding the foregoing, a Non-qualified Stock Option may be
granted with an Option exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner
satisfying the provisions of Section 409A of the Code.
Shares
issued under the Plan shall be drawn from authorized and unissued
shares or shares now held or subsequently acquired by the Company
as treasury shares. Shares of stock covered by an Award shall not
be counted as used unless and until they are actually issued and
delivered to a Participant. If any Award lapses, expires,
terminates or is canceled prior to the issuance of shares
thereunder or if shares of stock are issued under the Plan to a
Participant and thereafter are forfeited to or otherwise reacquired
by the Company, the shares subject to such Awards and the forfeited
or reacquired shares shall again be available for issuance under
the Plan.
The
exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the
product of the Option exercise price and the number of shares
purchased. Such consideration may be paid in the form of (a) cash;
(b) certified or bank check; (c) having the Company withhold shares
of Stock that would otherwise be issued on exercise of the Option
that have an aggregate fair market value equal to the aggregate
exercise price of the shares being purchased under the Option (d)
tendering (either actually or, so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) shares of Common Stock owned by the Participant that
have an aggregate fair market value equal to the aggregate exercise
price of the shares being purchased under the Option; (e) so long
as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, and to the extent permitted by law, delivery of a
properly executed exercise notice, together with irrevocable
instructions to a brokerage firm designated or approved by the
Company to deliver promptly to the Company the aggregate amount of
proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in connection with the exercise, all in
accordance with the regulations of the Federal Reserve Board; or
(f) such other consideration as the Committee may permit. We are
working with an accounting firm to determine the fair market values
of our Common Stock and Series C Stock. As of August 19, 2020, the
market value of our Common Stock was $1.01 per share and the market
value of the common shares into which each Series C share is
convertible was $25,250; however, market value may not equal fair
market value, which will be determined by certified public
accountants engaged by the Company.
To
the extent the aggregate fair market value of Stock with respect to
which a Participant’s Incentive Stock Options become exercisable
for the first time during any calendar year (under the Plan and all
other stock option plans of the Company and its parent and
subsidiary corporations) exceeds $100,000, such portion in excess
of $100,000 shall be treated as a Nonqualified Stock Option. In the
event the Participant holds two (2) or more such Options that
become exercisable for the first time in the same calendar year,
such limitation shall be applied on the basis of the order in which
such Options are granted.
Any
portion of an Option that is not vested and exercisable on the date
of a Participant’s Termination of Service shall expire on such
date. Any portion of an Option that is vested and exercisable on
the date of a Participant’s Termination of Service shall expire on
the earliest to occur of: (i) if the Participant’s termination of
service occurs for reasons other than cause, retirement, disability
or death, the date that is three (3) months after such termination
of service; (ii) if the Participant’s termination of service occurs
by reason of retirement, disability or death, the one (1)-year
anniversary of such termination of service; and (iii) the Option
expiration date. Notwithstanding the foregoing, if a Participant
dies after his or her termination of service but while an Option is
otherwise exercisable, the portion of the Option that is vested and
exercisable on the date of such termination of service shall expire
upon the earlier to occur of (a) the Option expiration date and (b)
the one (1)-year anniversary of the date of death, unless the
Committee determines otherwise. Also notwithstanding the foregoing,
in case a Participant’s termination of service occurs for cause,
all Options granted to the Participant (vested or unvested) shall
automatically expire upon first notification to the Participant of
such termination, unless the Committee determines otherwise. If a
Participant’s employment or service relationship with the Company
is suspended pending an investigation of whether the Participant
shall be terminated for cause, all the Participant’s rights under
any Option shall likewise be suspended during the period of
investigation. If any facts that would constitute termination for
cause are discovered after a Participant’s termination of service,
any Option then held by the Participant may be immediately
terminated by the Committee, in its sole discretion.
Individuals
who are not employees of the Company or one of its Related
Companies may not be granted Incentive Stock Options. The exercise
price of an Incentive Stock Option shall be at least 100% of the
fair market value of the Stock on the applicable grant date, and in
the case of an Incentive Stock Option granted to a Participant who
owns more than 10% of the total combined voting power of all
classes of the stock of the Company or of its parent or subsidiary
corporations (a “Ten Percent Stockholder”), shall not be less than
110% of the fair market value of the Stock on the grant date.
Subject to earlier termination in accordance with the terms of the
Plan and the instrument evidencing the Option, the maximum term of
an Incentive Stock Option shall not exceed ten years, and in the
case of an Incentive Stock Option granted to a Ten Percent
Stockholder, shall not exceed five (5) years.
The
Committee may grant Stock Appreciation Rights (each, an “SAR”) to
Participants at any time on such terms and conditions as the
Committee shall determine in its sole discretion. An SAR may be
granted in tandem with an Option or alone. An SAR may be exercised
upon such terms and conditions and for the term as the Committee
determines in its sole discretion; provided, however, that, subject
to earlier termination in accordance with the terms of the Plan and
the instrument evidencing the SAR, the maximum term of a
freestanding SAR shall be ten years, and in the case of a tandem
SAR, (a) the term shall not exceed the term of the related Option
and (b) the tandem SAR may be exercised for all or part of the
shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option,
except that the tandem SAR may be exercised only with respect to
the shares for which its related Option is then exercisable. Upon
the exercise of an SAR, a Participant shall be entitled to receive
payment in an amount determined by multiplying: (a) the difference
between the fair market value of the Stock on the date of exercise
over the grant price of the SAR by (b) the number of shares with
respect to which the SAR is exercised. At the discretion of the
Committee as set forth in the instrument evidencing the Award, the
payment upon exercise of an SAR may be in cash, in shares, in some
combination thereof or in any other manner approved by the
Committee in its sole discretion.
In
the event, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to
stockholders other than a normal cash dividend, or other change in
the Company’s corporate or capital structure results in (a) the
outstanding shares of Stock, or any securities exchanged therefor
or received in their place, being exchanged for a different number
or kind of securities of the Company or (b) new, different or
additional securities of the Company or any other company being
received by the holders of shares of Stock, then the Committee
shall make proportional adjustments in (i) the maximum number and
kind of securities available for issuance under the Plan; (ii) the
maximum number and kind of securities issuable as Incentive Stock
Options; and (iii) the number and kind of securities that are
subject to any outstanding Award and the per share price of such
securities, without any change in the aggregate price to be paid
therefor. The determination by the Committee, as to the terms of
any of the foregoing adjustments shall be conclusive and
binding.
To
the extent not previously exercised or settled, and unless
otherwise determined by the Committee in its sole discretion,
Awards shall terminate immediately prior to the dissolution or
liquidation of the Company. The Committee shall have the
discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation, dissolution or change
in control of the Company, to take such further action as it
determines to be necessary or advisable with respect to
Awards.
In
the event of an underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement
filed under the Securities Act, no person may sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose of or transfer for value or
otherwise agree to engage in any of the foregoing transactions with
respect to any shares issued pursuant to an Award granted under the
Plan without the prior written consent of the Company or its
underwriters.
The
Committee may amend, suspend or terminate the Plan or any portion
of the Plan at any time and in such respects as it shall deem
advisable; provided, however, that, to the extent required by
applicable law, regulation or stock exchange rule, stockholder
approval shall be required for any amendment to the Plan; and
provided, further, that any amendment that requires stockholder
approval may be made only by the Board and not by the Compensation
Committee. The Committee may amend the terms of any outstanding
Award, prospectively or retroactively. Notwithstanding the
foregoing, the amendment, suspension or termination of the Plan or
a portion thereof or the amendment of an outstanding Award shall
not, without the Participant’s consent, materially adversely affect
any rights under any Award theretofore granted to the Participant
under the Plan. Any change or adjustment to an outstanding
Incentive Stock Option shall not, without the consent of the
Participant, be made in a manner so as to constitute a
“modification” that would cause such Incentive Stock Option to fail
to continue to qualify as an Incentive Stock Option.
Unless
sooner terminated as provided herein, the Plan shall terminate ten
years from the Effective Date. After the Plan is terminated, no
future Awards may be granted, but Awards previously granted shall
remain outstanding in accordance with their applicable terms and
conditions and the Plan’s terms and conditions. Notwithstanding the
foregoing, no Incentive Stock Options may be granted more than ten
years after the later of: (a) the adoption of the Plan by the Board
and (b) the adoption by the Board of any amendment to the Plan that
constitutes the adoption of a new plan for purposes of Section 422
of the Code.
Each
person who is or shall have been a member of the Board, or a
committee appointed by the Board, or an officer of the Company to
whom authority was delegated, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability
or expense that may be imposed upon or reasonably incurred by such
person in connection with or resulting from any claim, action, suit
or proceeding to which such person may be a party or in which such
person may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by
such person in settlement thereof, with the Company’s approval, or
paid by such person in satisfaction of any judgment in any such
claim, action, suit or proceeding against such person; provided,
however, that such person shall give the Company an opportunity, at
its own expense, to handle and defend the same before such person
undertakes to handle and defend it on such person’s own behalf.
This duty to indemnify shall not apply to the extent that (i) such
loss, cost, liability or expense is a result of such person’s own
willful misconduct or (ii) such indemnification is expressly
prohibited by statute.
NEW
PLAN BENEFITS
The
following table sets for the benefits or amounts that are
anticipated be received by, or allocated to, our executive
officers, key employees, non-executive directors, and non-executive
employees pursuant to the Plan:
Can
B̅ Corp. 2020 Incentive Stock Option Plan
Name and position |
|
Dollar value
($)* |
|
|
Number of
Series C Shares |
|
|
Number of
Common Shares Convertible |
|
Marco Alfonsi, CEO |
|
$ |
5,050,000 |
|
|
|
200 |
|
|
|
5,000,000 |
|
Stanley L. Teeple, CFO |
|
$ |
5,050,000 |
|
|
|
200 |
|
|
|
5,000,000 |
|
Phil Scala, Interim COO |
|
$ |
202,000 |
|
|
|
8 |
|
|
|
200,000 |
|
Pasquale Ferro, President of Pure
Health Products |
|
$ |
5,050,000 |
|
|
|
200 |
|
|
|
5,000,000 |
|
Steven Apolant, President of Green
Grow Farms, Inc. |
|
$ |
5,050,000 |
|
|
|
200 |
|
|
|
5,000,000 |
|
Executive Group |
|
$ |
20,402,000 |
|
|
|
808 |
|
|
|
20,200,000 |
|
Non-Executive Director Group |
|
$ |
75,750 |
|
|
|
3 |
|
|
|
75,000 |
|
Non-Executive Officer Employee
Group |
|
$ |
555,500 |
|
|
|
22 |
|
|
|
550,000 |
|
*Based
on market value of common stock, which may not equal fair market
value.
MODIFICATIONS
TO SERIES A PREFERRED SHARES
The
Series A Amendment will update the language in the Certificate of
Designation for our Series A Preferred Stock so that it reflect the
voting and conversion rights of Series A Preferred shares following
the Company’s recent 300-to-1 reverse stock split. The Series A
Amendment will also add terms customarily included in designations
of preferred series of stock. For clarity, and without in any way
limiting the foregoing, following completion of the Series A
Amendment, the Certificate of Designation for our Series A
Preferred Stock will include that each share of Series A Preferred
Stock shall be entitled to 66,667 votes and is convertible into
33,334 shares of Common Stock. Furthermore, in the event of the
liquidation, dissolution, or winding up of the Company, holders of
our Series A Preferred Stock may elect (i) to receive, in
preference to the holders of Common Stock, a one-time liquidation
preference on a per-share amount equal to the per-share value of
Series A Preferred shares on their respective issuance dates, as
recorded in the Company’s financial records, or (ii) to participate
pari passu with the Common Stock on an as-converted basis.
The Series A Amendment will affect all of our Series A Preferred
shares uniformly, of which there are currently 20 issued and
outstanding. There shall be no payment of dividends in arrears or
interest with respect to the Series A Preferred Stock as a result
of the Series A Amendment.
DISSENTERS’
RIGHTS
Under
FBCA and our Articles of Incorporation and bylaws, no stockholder
has any right to dissent to the Actions, nor is any stockholder
entitled to appraisal of or payment for their shares of
stock.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No
specific awards have been issued under the Plan. It is intended
that awards under the Plan will be issued to officers and directors
and other service providers, as determined in the discretion of the
Committee. None of our officers or directors, and no person
associated with any of them, have any interest in the Series A
Amendment that is different from every other Series A
stockholder.
WHERE
YOU CAN FIND MORE INFORMATION
Information
is available by request or can be accessed on the internet.
Reports, proxy statements and other information filed with the SEC
by the Company can be accessed electronically by means of the
Securities and Exchange Commission’s home page on the Internet at
http://www.sec.gov or at other Internet sites such as
http://www.freeedgar.com or http://www.otcmarkets.com.
You
may read and copy any materials that we file with the Securities
and Exchange Commission at the commission’s Public Reference Room
at 100 F Street, N.E., Washington D.C. 20549. A copy of any public
filing is also available to any shareholder at no charge upon
written request to the Company by providing an e-mail or facsimile
number.
PROPOSALS BY SECURITY HOLDERS
No security holder has asked the Company to include any proposal in
this Information Statement.
MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS
Only
one information statement to security holders will be delivered to
multiple security holders sharing an address unless the Company has
received contrary instructions from one or more of the security
holders. Upon written or oral request, a separate copy of an
information statement can be provided to security holders at a
shared address. For an oral request, please contact the Company at
516-595-9544. For a written request, mail request to 960 South
Broadway, Suite 120, Hicksville, NY 11801.
EXPENSE
OF THIS INFORMATION STATEMENT
The
expenses of this Information Statement will be borne by us,
including expenses in connection with the preparation and sending
of this Information Statement and all related materials. It is
contemplated that brokerage houses, custodians, nominees, and
fiduciaries will be requested to forward this Information Statement
to the beneficial owners of our Common Stock held of record by such
person and that we will reimburse them for their reasonable
expenses incurred in connection therewith.
DOCUMENTS
INCORPORATED BY REFERENCE
The
Section titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the Company’s Financial
Statements are incorporated herein by reference from the following
filings:
|
● |
The
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, filed with the SEC on April 2, 2020; |
|
● |
The
Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2020, filed with the SEC on May 20, 2020;
and |
|
● |
The
Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2020, filed with the SEC on August 19,
2020. |
FORWARD-LOOKING
STATEMENTS
This
Information Statement contains forward-looking statements regarding
our intentions to effectuate the Actions. Forward-looking
statements are not guarantees, and they involve risks,
uncertainties and assumptions. Although we make such statements
based on assumptions that we believe to be reasonable, there can be
no assurance that actual results will not differ materially from
those expressed in the forward-looking statements. We caution
investors not to rely unduly on any forward-looking statements. We
expressly disclaim any obligation to update any forward-looking
statement in the event it later turns out to be inaccurate, whether
as a result of new information, future events or
otherwise.
FULL
TEXT OF THE PLAN
The
full text of the Plan is attached hereto as Appendix I.
By
the Order of the Board of Directors.
Dated:
September 4, 2020
|
CAN B̅
CORP. |
|
|
|
|
By: |
/s/
Marco Alfonsi |
|
Name: |
Marco
Alfonsi |
|
Title: |
Chief
Executive Officer |
|
|
|
|
DIRECTORS: |
|
|
|
|
By: |
/s/
Marco Alfonsi |
|
Name: |
Marco
Alfonsi |
|
Title: |
Director |
|
|
|
|
By: |
/s/
Stanley Teeple |
|
Name: |
Stanley
Teeple |
|
Title: |
Director |
|
|
|
|
By: |
/s/
Frederick Alger Boyer Jr. |
|
Name: |
Frederick
Alger Boyer Jr. |
|
Title: |
Independent
Director |
|
|
|
|
By: |
/s/
Ron A. Silver |
|
Name: |
Ron
A. Silver |
|
Title: |
Independent
Director |
|
|
|
|
By: |
/s/
James F. Murphy |
|
Name: |
James
F. Murphy |
|
Title: |
Independent
Director |
APPENDIX
I
The Can B̅ Corp. 2020 Incentive Stock Option Plan
CAN
B CORP.
2020
INCENTIVE STOCK OPTION PLAN
SECTION
1. PURPOSE
The
purpose of this Can B Corp. 2020 Incentive Stock Option Plan (the
“Plan”) is to attract, retain, and motivate employees, officers,
directors, consultants, agents, advisors and independent
contractors of the Company and its Related Companies by providing
them the opportunity to acquire a proprietary interest in the
Company and to align their interests and efforts to the long-term
interests of the Company’s stockholders.
SECTION
2. DEFINITIONS
Certain
capitalized terms used in the Plan have the meanings set forth in
Appendix A
SECTION
3. ADMINISTRATION
3.1
Administration of the Plan.
The
Plan shall be administered by the Compensation Committee or, in the
Board’s sole discretion, the Board. The Compensation Committee
shall be composed of two or more directors, each of whom is a
“non-employee director” within the meaning of Rule 16b-3(b)(3)
promulgated under the Exchange Act, or any successor definition
adopted by the Securities and Exchange Commission. As used in this
Plan, the term “Compensation Committee” shall be construed as if
followed by the words “(if any);” and nothing in this Plan requires
the Board to have a Compensation Committee.
3.2
Delegation.
Notwithstanding
the foregoing, the Compensation Committee, or if no Compensation
Committee has been appointed, the Board, may delegate
administration of the Plan to a committee or committees of one or
more members of the Board. The Committee shall have the power to
delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as
may be adopted from time to time by the Board. Members of any
Committee shall serve for such term as the Board may determine,
subject to removal by the Board at any time. The Board may abolish
the Committee at any time and revest in the Board the
administration of the Plan. The members of the Committee shall be
appointed by and serve at the pleasure of the Board. From time to
time, the Board may increase or decrease the size of the Committee,
add additional members to, remove members (with or without cause)
from, appoint new members in substitution therefor, and fill
vacancies, however caused, in the Committee. The Committee shall
act pursuant to a vote of the majority of its members or, in the
case of a Committee comprised of only two members, the unanimous
consent of its members, whether present or not, or by the written
consent of the majority of its members and minutes shall be kept of
all of its meetings and copies thereof shall be provided to the
Board. Subject to the limitations prescribed by the Plan and the
Board, the Committee may establish and follow such rules and
regulations for the conduct of its business as it may determine to
be advisable. To the extent consistent with applicable law, the
Board or the Committee may authorize one or more officers of the
Company to grant Awards to designated classes of Eligible Persons,
within limits specifically prescribed by the Board or the
Compensation Committee; provided, however, that no such officer
shall have or obtain authority to grant Awards to himself or
herself or to any person then subject to Section 16 of the Exchange
Act. All references in the Plan to the “Committee” shall be, as
applicable, to the Board, the Compensation Committee or any other
committee or any officer to whom the Board or the Compensation
Committee has delegated authority to administer the
Plan.
3.3
Administration and Interpretation by Committee.
(a)
Except for the terms and conditions explicitly set forth in the
Plan and to the extent permitted by applicable law, the Committee
shall have full power and exclusive authority, subject to such
orders or resolutions not inconsistent with the provisions of the
Plan as may from time to time be adopted by the Board or a
Committee composed of members of the Board, to (i) select the
Eligible Persons to whom Awards may from time to time be granted
under the Plan; (ii) determine the type or types of Award to be
granted to each Participant under the Plan; (iii) determine the
number of shares of Preferred Stock and/or Common Stock
(collectively, “Stock”) to be covered by each Award granted under
the Plan; (iv) determine the terms and conditions of any Award
granted under the Plan; (v) approve the forms of notice or
agreement for use under the Plan; (vi) determine whether, to what
extent and under what circumstances Awards may be settled in cash,
shares of Preferred Stock and/or Common Stock or other property or
canceled or suspended; (vii) determine whether, to what extent and
under what circumstances cash, shares of Stock, other property and
other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the Participant; (viii)
interpret and administer the Plan and any instrument evidencing an
Award, notice or agreement executed or entered into under the Plan;
(ix) establish such rules and regulations as it shall deem
appropriate for the proper administration of the Plan; (x) delegate
ministerial duties to such of the Company’s employees as it so
determines; and (xi) make any other determination and take any
other action that the Committee deems necessary or desirable for
administration of the Plan.
(b)
The Committee shall have the right, without stockholder approval,
to cancel or amend outstanding Options or SARs for the purpose of
repricing, replacing or regranting such Options or SARs with
Options or SARs that have a purchase or grant price that is less
than the purchase or grant price for the original Options or SARs
except in connection with adjustments provided in Section
15.
(c)
The effect on the vesting of an Award of a Company-approved leave
of absence or a Participant’s working less than full-time shall be
determined by the Company’s chief human resources officer or other
person performing that function or, with respect to directors or
executive officers, by the Committee, whose determination shall be
final.
(d)
Decisions of the Committee shall be final, conclusive and binding
on all persons, including the Company, any Participant, any
stockholder and any Eligible Person. A majority of the members of
the Committee may determine its actions.
SECTION
4. SHARES SUBJECT TO THE PLAN
4.1
Authorized Number of Shares.
Subject
to adjustment from time to time as provided in Section 15.1, a
maximum of Two Thousand (2,000) shares of Preferred Stock and Ten
Million (10,000,000) shares of Common Stock shall be available for
issuance under the Plan. Shares issued under the Plan shall be
drawn from authorized and unissued shares or shares now held or
subsequently acquired by the Company as treasury shares.
4.2
Share Usage.
(a)
Shares of Stock covered by an Award shall not be counted as used
unless and until they are actually issued and delivered to a
Participant. If any Award lapses, expires, terminates or is
canceled prior to the issuance of shares thereunder or if shares of
Stock are issued under the Plan to a Participant and thereafter are
forfeited to or otherwise reacquired by the Company, the shares
subject to such Awards and the forfeited or reacquired shares shall
again be available for issuance under the Plan. Any shares of Stock
(i) tendered by a Participant or retained by the Company as full or
partial payment to the Company for the purchase price of an Award
or to satisfy tax withholding obligations in connection with an
Award, or (ii) covered by an Award that is settled in cash, or in a
manner such that some or all of the shares of Stock covered by the
Award are not issued, shall be available for Awards under the Plan.
The number of shares of Stock available for issuance under the Plan
shall not be reduced to reflect any dividends or dividend
equivalents that are reinvested into additional shares of Common
Stock or credited as additional shares of Stock subject or paid
with respect to an Award.
(b)
The Committee shall also, without limitation, have the authority to
grant Awards as an alternative to or as the form of payment for
grants or rights earned or due under other compensation plans or
arrangements of the Company.
(c)
Notwithstanding anything in the Plan to the contrary, the Committee
may grant Substitute Awards under the Plan. Substitute Awards shall
not reduce the number of shares authorized for issuance under the
Plan. In the event that an Acquired Entity has shares available for
awards or grants under one or more preexisting plans not adopted in
contemplation of such acquisition or combination, then, to the
extent determined by the Committee, the shares available for grant
pursuant to the terms of such preexisting plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or
valuation ratio or formula used in such acquisition or combination
to determine the consideration payable to holders of common stock
of the entities that are parties to such acquisition or
combination) may be used for Awards under the Plan and shall not
reduce the number of shares of Stock authorized for issuance under
the Plan; provided, however, that Awards using such available
shares shall not be made after the date awards or grants could have
been made under the terms of such preexisting plans, absent the
acquisition or combination, and shall only be made to individuals
who were not employees or directors of the Company or a Related
Company prior to such acquisition or combination. In the event that
a written agreement between the Company and an Acquired Entity
pursuant to which a merger or consolidation is completed is
approved by the Board and that agreement sets forth the terms and
conditions of the substitution for or assumption of outstanding
awards of the Acquired Entity, those terms and conditions shall be
deemed to be the action of the Committee without any further action
by the Committee, except as may be required for compliance with
Rule 16b-3 under the Exchange Act, and the persons holding such
awards shall be deemed to be Participants.
(d)
Notwithstanding the other provisions in this Section 4.2, the
maximum number of shares that may be issued upon the exercise of
Incentive Stock Options shall equal the aggregate share number
stated in Section 4.1, subject to adjustment as provided in Section
15.1.
SECTION
5. ELIGIBILITY
An
Award may be granted to any employee, officer or director of the
Company or a Related Company whom the Committee from time to time
selects. An Award may also be granted to any consultant, agent,
advisor or independent contractor for bona fide services rendered
to the Company or any Related Company that (a) are not in
connection with the offer and sale of the Company’s securities in a
capital-raising transaction and (b) do not directly or indirectly
promote or maintain a market for the Company’s
securities.
SECTION
6. AWARDS
6.1
Form, Grant and Settlement of Awards.
The
Committee shall have the authority, in its sole discretion, to
determine the type or types of Awards to be granted under the Plan.
Such Awards may be granted either alone or in addition to or in
tandem with any other type of Award. Any Award settlement may be
subject to such conditions, restrictions and contingencies as the
Committee shall determine.
6.2
Evidence of Awards.
Awards
granted under the Plan shall be evidenced by a written document,
including an electronic, notice or agreement that shall contain
such terms, conditions, limitations and restrictions as the
Committee shall deem advisable and that are not inconsistent with
the Plan.
6.3
Deferrals.
The
Committee may permit or require a Participant to defer receipt of
the payment of any Award if and to the extent set forth in the
instrument evidencing the Award at the time of grant. If any such
deferral election is permitted or required, the Committee, in its
sole discretion, shall establish rules and procedures for such
payment deferrals, which may include the grant of additional Awards
or provisions for the payment or crediting of interest or dividend
equivalents, including converting such credits to deferred stock
unit equivalents; provided, however, that the terms of any
deferrals under this Section 6.3 shall comply with all applicable
law, rules and regulations, including, without limitation, Section
409A of the Code.
6.4
Dividends and Distributions.
Participants
may, if and to the extent the Committee so determines and sets
forth in the instrument evidencing the Award at the time of grant,
be credited with dividends paid with respect to shares of Stock
underlying an Award in a manner determined by the Committee in its
sole discretion. The Committee may apply any restrictions to the
dividends or dividend equivalents that the Committee deems
appropriate. The Committee, in its sole discretion, may determine
the form of payment of dividends or dividend equivalents, including
cash, shares of Stock, Restricted Stock or Stock Units.
SECTION
7. OPTIONS
7.1
Grant of Options.
The
Committee may grant Options designated as Incentive Stock Options
or Nonqualified Stock Options. Nonqualified Stock Options may not
be granted for Preferred Stock.
7.2
Option Exercise Price.
The
exercise price for shares purchased under an Option shall be at
least 100% of the Fair Market Value on the Grant Date (and shall
not be less than the minimum exercise price required by Section 422
of the Code with respect to Incentive Stock Options), except in the
case of Substitute Awards. Notwithstanding the foregoing, a
Non-qualified Stock Option may be granted with an Option Exercise
Price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section
409A of the Code.
7.3
Term of Options.
Subject
to earlier termination in accordance with the terms of the Plan and
the instrument evidencing the Option, the maximum term of an Option
shall be ten years from the Grant Date.
7.4
Exercise of Options.
The
Committee shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in
which, the Option shall vest and become exercisable, any of which
provisions may be waived or modified by the Committee at any
time.
To
the extent an Option has vested and become exercisable, the Option
may be exercised in whole or from time to time in part by delivery
to or as directed or approved by the Company of a properly executed
Notice of Exercise in accordance with procedures established by the
Board or Committee, setting forth the number of shares with respect
to which the Option is being exercised, the restrictions imposed on
the shares purchased under such exercise agreement, if any, and
such representations and agreements as may be required by the Board
or Committee, accompanied by payment in full as described in
Sections 7.5 and 13. An Option may be exercised only for whole
shares and may not be exercised for less than a reasonable number
of shares at any one time, as determined by the
Committee.
7.5
Payment of Exercise Price.
The
exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the
product of the Option exercise price and the number of shares
purchased. Such consideration must be paid before the Company will
issue the shares being purchased and must be in a form or a
combination of forms acceptable to the Committee for that purchase,
which forms may include:
(a)
cash;
(b)
by certified or bank check;
(c)
having the Company withhold shares of Stock that would otherwise be
issued on exercise of the Option that have an aggregate Fair Market
Value equal to the aggregate exercise price of the shares being
purchased under the Option;
(d)
tendering (either actually or, so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) shares of Common Stock owned by the Participant that
have an aggregate Fair Market Value equal to the aggregate exercise
price of the shares being purchased under the Option;
(e)
so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, and to the extent permitted by law,
delivery of a properly executed exercise notice, together with
irrevocable instructions to a brokerage firm designated or approved
by the Company to deliver promptly to the Company the aggregate
amount of proceeds to pay the Option exercise price and any
withholding tax obligations that may arise in connection with the
exercise, all in accordance with the regulations of the Federal
Reserve Board; or
(f)
such other consideration as the Committee may permit.
7.6
Effect of Termination of Service.
In
the event a Participant’s service with this Company is terminated,
the Option shall be exercisable according to the following terms
and conditions, which may be waived or modified by the Board or
Committee at any time:
(a)
Any portion of an Option that is not vested and exercisable on the
date of a Participant’s Termination of Service shall expire on such
date.
(b)
Any portion of an Option that is vested and exercisable on the date
of a Participant’s Termination of Service shall expire on the
earliest to occur of:
(i)
if the Participant’s Termination of Service occurs for reasons
other than Cause, Retirement, Disability or death, the date that is
three months after such Termination of Service;
(ii)
if the Participant’s Termination of Service occurs by reason of
Retirement, Disability or death, the one-year anniversary of such
Termination of Service; and
(iii)
the Option Expiration Date.
Notwithstanding
the foregoing, if a Participant dies after his or her Termination
of Service but while an Option is otherwise exercisable, the
portion of the Option that is vested and exercisable on the date of
such Termination of Service shall expire upon the earlier to occur
of (a) the Option Expiration Date and (b) the one-year anniversary
of the date of death, unless the Committee determines
otherwise.
Also
notwithstanding the foregoing, in case a Participant’s Termination
of Service occurs for Cause, all Options granted to the Participant
(vested or unvested) shall automatically expire upon first
notification to the Participant of such termination, unless the
Committee determines otherwise. If a Participant’s employment or
service relationship with the Company is suspended pending an
investigation of whether the Participant shall be terminated for
Cause, all the Participant’s rights under any Option shall likewise
be suspended during the period of investigation. If any facts that
would constitute termination for Cause are discovered after a
Participant’s Termination of Service, any Option then held by the
Participant may be immediately terminated by the Committee, in its
sole discretion.
(c)
If the exercise of the Option following a Participant’s Termination
of Service, but while the Option is otherwise exercisable, would be
prohibited solely because the issuance of Stock would violate
either the registration requirements under the Securities Act or
the Company’s insider trading policy, then the Option shall remain
exercisable until the earlier of (i) the Option Expiration Date and
(ii) the expiration of a period of three months (or such longer
period of time as determined by the Committee in its sole
discretion) after the Participant’s Termination of Service during
which the exercise of the Option would not be in violation of such
Securities Act or insider trading policy requirements.
Notwithstanding
the foregoing, if a Participant does not exercise his or her vested
Option on or before the date (i) ninety (90) days following the
Termination of Service or (ii) twelve (12) months following
Termination of Service due to Disability or death (in case of
death, exercise may be by Participant’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance
or by a person designated to exercise the Option upon Participant’s
death), Participant’s Option will not qualify as an Incentive Stock
Option and will be treated and taxed as a Nonqualified Stock
Option.
7.7
Repurchase and Forfeiture Restrictions.
Options
(and any compensation paid or shares issued under the Options) are
subject to recoupment in accordance with The Dodd–Frank Wall Street
Reform and Consumer Protection Act and any implementing regulations
thereunder, any clawback policy adopted by the Company, and any
compensation recovery policy otherwise required by applicable law.
Notwithstanding anything to the contrary contained herein, the
Committee may, in its sole discretion, provide in an Award
Agreement or otherwise that the Committee may cancel such Award if
the Participant has engaged in or engages in any Detrimental
Activity. The Committee may, in its sole discretion, also provide
in an Award Agreement or otherwise that (i) if the Participant has
engaged in or engages in Detrimental Activity, the Participant will
forfeit any gain realized on the vesting, exercise or settlement of
any Award, and must repay the gain to the Company and (ii) if the
Participant receives any amount in excess of what the Participant
should have received under the terms of the Award for any reason
(including, without limitation, by reason of a financial
restatement, mistake in calculations or other administrative
error), then the Participant shall be required to repay any such
excess amount to the Company. Without limiting the foregoing, all
Awards shall be subject to reduction, cancellation, forfeiture or
recoupment to the extent necessary to comply with applicable
laws.
SECTION
8. INCENTIVE STOCK OPTION LIMITATIONS
Notwithstanding
any other provisions of the Plan, the terms and conditions of any
Incentive Stock Options shall in addition comply in all respects
with Section 422 of the Code, or any successor provision, and any
applicable regulations thereunder, including, to the extent
required thereunder, the following:
8.1
Dollar Limitation.
To
the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Stock with respect to which a Participant’s
Incentive Stock Options become exercisable for the first time
during any calendar year (under the Plan and all other stock option
plans of the Company and its parent and subsidiary corporations)
exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. In the event the
Participant holds two or more such Options that become exercisable
for the first time in the same calendar year, such limitation shall
be applied on the basis of the order in which such Options are
granted.
8.2
Eligible Employees.
Individuals
who are not employees of the Company or one of its parent or
subsidiary corporations may not be granted Incentive Stock
Options.
8.3
Exercise Price.
The
exercise price of an Incentive Stock Option shall be at least 100%
of the Fair Market Value of the Stock on the Grant Date, and in the
case of an Incentive Stock Option granted to a Participant who owns
more than 10% of the total combined voting power of all classes of
the stock of the Company or of its parent or subsidiary
corporations (a “Ten Percent Stockholder”), shall not be less than
110% of the Fair Market Value of the Stock on the Grant Date. The
determination of more than 10% ownership shall be made in
accordance with Section 422 of the Code.
8.4
Option Term.
Subject
to earlier termination in accordance with the terms of the Plan and
the instrument evidencing the Option, the maximum term of an
Incentive Stock Option shall not exceed ten years, and in the case
of an Incentive Stock Option granted to a Ten Percent Stockholder,
shall not exceed five years.
8.5
Exercisability.
An
Option designated as an Incentive Stock Option shall cease to
qualify for favorable tax treatment as an Incentive Stock Option to
the extent it is exercised (if permitted by the terms of the
Option) (a) more than three months after the date of a
Participant’s Termination of Service if termination was for reasons
other than death or disability, (b) more than one year after the
date of a Participant’s Termination of Service if termination was
by reason of disability, or (c) after the Participant has been on
leave of absence for more than 90 days, unless the Participant’s
reemployment rights are guaranteed by statute or
contract.
8.6
Taxation of Incentive Stock Options.
In
order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold
the shares acquired upon the exercise of an Incentive Stock Option
for two years after the Grant Date and one year after the date of
exercise.
A
Participant may be subject to the alternative minimum tax at the
time of exercise of an Incentive Stock Option. The Participant
shall give the Company prompt notice of any disposition of shares
acquired on the exercise of an Incentive Stock Option prior to the
expiration of such holding periods.
8.7
Code Definitions.
For
the purposes of this Section 8 “disability,” “parent corporation”
and “subsidiary corporation” shall have the meanings attributed to
those terms for purposes of Section 422 of the Code.
SECTION
9. STOCK APPRECIATION RIGHTS
9.1
Grant of Stock Appreciation Rights.
The
Committee may grant Stock Appreciation Rights to Participants at
any time on such terms and conditions as the Committee shall
determine in its sole discretion. An SAR may be granted in tandem
with an Option or alone (“freestanding”). The grant price of a
tandem SAR shall be equal to the exercise price of the related
Option. The grant price of a freestanding SAR shall be established
in accordance with procedures for Options set forth in Section 7.2.
An SAR may be exercised upon such terms and conditions and for the
term as the Committee determines in its sole discretion; provided,
however, that, subject to earlier termination in accordance with
the terms of the Plan and the instrument evidencing the SAR, the
maximum term of a freestanding SAR shall be ten years, and in the
case of a tandem SAR, (a) the term shall not exceed the term of the
related Option and (b) the tandem SAR may be exercised for all or
part of the shares subject to the related Option upon the surrender
of the right to exercise the equivalent portion of the related
Option, except that the tandem SAR may be exercised only with
respect to the shares for which its related Option is then
exercisable.
9.2
Payment of SAR Amount.
Upon
the exercise of an SAR, a Participant shall be entitled to receive
payment in an amount determined by multiplying: (a) the difference
between the Fair Market Value of the Preferred Stock and/or Common
Stock on the date of exercise over the grant price of the SAR by
(b) the number of shares with respect to which the SAR is
exercised. At the discretion of the Committee as set forth in the
instrument evidencing the Award, the payment upon exercise of an
SAR may be in cash, in shares, in some combination thereof or in
any other manner approved by the Committee in its sole
discretion.
9.3
Waiver of Restrictions.
Subject
to Section 18.5, the Committee, in its sole discretion, may waive
any other terms, conditions or restrictions on any SAR under such
circumstances and subject to such terms and conditions as the
Committee shall deem appropriate.
SECTION
10. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS
10.1
Grant of Stock Awards, Restricted Stock and Stock
Units.
The
Committee may grant Stock Awards, Restricted Stock, and Stock Units
on such terms and conditions and subject to such repurchase or
forfeiture restrictions, if any, which may be based on continuous
service with the Company or a Related Company or the achievement of
any performance goals, as the Committee shall determine in its sole
discretion, which terms, conditions and restrictions shall be set
forth in the instrument evidencing the Award.
10.2
Vesting of Restricted Stock and Stock Units.
Upon
the satisfaction of any terms, conditions and restrictions
prescribed with respect to Restricted Stock or Stock Units, or upon
a Participant’s release from any terms, conditions and restrictions
of Restricted Stock or Stock Units, as determined by the Committee,
and subject to the provisions of Section 13, (a) the shares of
Restricted Stock covered by each Award of Restricted Stock shall
become freely transferable by the Participant, and (b) Stock Units
shall be paid in shares of Stock or, if set forth in the instrument
evidencing the Awards, in cash or a combination of cash and shares
of Stock. Any fractional shares subject to such Awards shall be
paid to the Participant in cash.
10.3
Waiver of Restrictions.
Subject
to Section 18.5, the Committee, in its sole discretion, may waive
the repurchase or forfeiture period and any other terms, conditions
or restrictions on any Restricted Stock or Stock Unit under such
circumstances and subject to such terms and conditions as the
Committee shall deem appropriate.
SECTION
11. PERFORMANCE AWARDS
11.1
Performance Shares.
The
Committee may grant Awards of Performance Shares, designate the
Participants to whom Performance Shares are to be awarded and
determine the number of Performance Shares and the terms and
conditions of each such Award. Performance Shares shall consist of
a unit valued by reference to a designated number of shares of
Stock, the value of which may be paid to the Participant by
delivery of shares of Stock or, if set forth in the instrument
evidencing the Award, of such property as the Committee shall
determine, including, without limitation, cash, shares of Stock,
other property, or any combination thereof, upon the attainment of
performance goals, as established by the Committee, and other terms
and conditions specified by the Committee. Subject to Section 18.5,
the amount to be paid under an Award of Performance Shares may be
adjusted on the basis of such further consideration as the
Committee shall determine in its sole discretion.
11.2
Performance Units.
The
Committee may grant Awards of Performance Units, designate the
Participants to whom Performance Units are to be awarded and
determine the number of Performance Units and the terms and
conditions of each such Award. Performance Units shall consist of a
unit valued by reference to a designated amount of property other
than shares of Preferred Stock and/or Common Stock, which value may
be paid to the Participant by delivery of such property as the
Committee shall determine, including, without limitation, cash,
shares of Preferred Stock and/or Common Stock, other property, or
any combination thereof, upon the attainment of performance goals,
as established by the Committee, and other terms and conditions
specified by the Committee. Subject to Section 18.5, the amount to
be paid under an Award of Performance Units may be adjusted on the
basis of such further consideration as the Committee shall
determine in its sole discretion.
SECTION
12. OTHER STOCK OR CASH-BASED AWARDS
Subject
to the terms of the Plan and such other terms and conditions as the
Committee deems appropriate, the Committee may grant other
incentives payable in cash or in shares of Stock under the
Plan.
SECTION
13. WITHHOLDING
The
Company may require the Participant to pay to the Company the
amount of (a) any taxes that the Company is required by applicable
federal, state, local or foreign law to withhold with respect to
the grant, vesting or exercise of an Award (“tax withholding
obligations”) and (b) any amounts due from the Participant to the
Company or to any Related Company (“other obligations”). The
Company shall not be required to issue any shares of Stock or
otherwise settle an Award under the Plan until such tax withholding
obligations and other obligations are satisfied.
The
Committee may permit or require a Participant to satisfy all or
part of the Participant’s tax withholding obligations and other
obligations by (a) paying cash to the Company, (b) having the
Company withhold an amount from any cash amounts otherwise due or
to become due from the Company to the Participant, (c) having the
Company withhold a number of shares of Stock that would otherwise
be issued to the Participant (or become vested, in the case of
Restricted Stock) having a Fair Market Value equal to the tax
withholding obligations and other obligations, or (d) surrendering
a number of shares of Stock the Participant already owns having a
value equal to the tax withholding obligations and other
obligations. The value of the shares so withheld or tendered may
not exceed the employer’s minimum required tax withholding
rate.
SECTION
14. ASSIGNABILITY
No
Award or interest in an Award may be sold, assigned, pledged (as
collateral for a loan or as security for the performance of an
obligation or for any other purpose) or transferred by a
Participant or made subject to attachment or similar proceedings
otherwise than by will or by the applicable laws of descent and
distribution, except to the extent the Participant designates one
or more beneficiaries on a Company-approved form who may exercise
the Award or receive payment under the Award after the
Participant’s death. During a Participant’s lifetime, an Award may
be exercised only by the Participant. Notwithstanding the foregoing
and to the extent permitted by Section 422 of the Code, the
Committee, in its sole discretion, may permit a Participant to
assign or transfer an Award subject to such terms and conditions as
the Committee shall specify.
SECTION
15. ADJUSTMENTS
15.1
Adjustment of Shares.
In
the event, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to
stockholders other than a normal cash dividend, or other change in
the Company’s corporate or capital structure results in (a) the
outstanding shares of Stock, or any securities exchanged therefor
or received in their place, being exchanged for a different number
or kind of securities of the Company or (b) new, different or
additional securities of the Company or any other company being
received by the holders of shares of Stock, then the Committee
shall make proportional adjustments in (i) the maximum number and
kind of securities available for issuance under the Plan; (ii) the
maximum number and kind of securities issuable as Incentive Stock
Options as set forth in Section 4.2; and (iii) the number and kind
of securities that are subject to any outstanding Award and the per
share price of such securities, without any change in the aggregate
price to be paid therefor. The determination by the Committee, as
to the terms of any of the foregoing adjustments shall be
conclusive and binding.
Notwithstanding
the foregoing, the issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any
class, for cash or property, or for labor or services rendered,
either upon direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made
with respect to, outstanding Awards. Also notwithstanding the
foregoing, a dissolution or liquidation of the Company or a Company
Transaction shall not be governed by this Section 15.1 but shall be
governed by Sections 15.2 and 15.3, respectively.
15.2
Dissolution or Liquidation.
To
the extent not previously exercised or settled, and unless
otherwise determined by the Committee in its sole discretion,
Awards shall terminate immediately prior to the dissolution or
liquidation of the Company. To the extent a vesting condition,
forfeiture provision or repurchase right applicable to an Award has
not been waived by the Committee, the Award shall be forfeited
immediately prior to the consummation of the dissolution or
liquidation.
15.3
Change in Control.
Notwithstanding
any other provision of the Plan to the contrary, unless the
Committee shall determine otherwise in the instrument evidencing
the Award or in a written employment, services or other agreement
between the Participant and the Company or a Related Company, in
the event of a Change in Control:
(a)
All outstanding Awards, other than Performance Shares and
Performance Units, shall become fully and immediately exercisable,
and all applicable deferral and restriction limitations or
forfeiture provisions shall lapse, immediately prior to the Change
in Control and shall terminate at the effective time of the Change
in Control; provided, however, that with respect to a Change in
Control that is a Company Transaction, such Awards shall become
fully and immediately exercisable, and all applicable deferral and
restriction limitations or forfeiture provisions shall lapse, only
if and to the extent such Awards are not converted, assumed or
replaced by the Successor Company.
For
the purposes of this Section 15.3(a), an Award shall be considered
converted, assumed or replaced by the Successor Company if
following the Company Transaction the option or right confers the
right to purchase or receive, for each share of Preferred Stock
and/or Common Stock subject to the Award immediately prior to the
Company Transaction, the consideration (whether stock, cash or
other securities or property) received in the Company Transaction
by holders of Preferred Stock and/or Common Stock for each share
held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the Company
Transaction is not solely common stock of the Successor Company,
the Committee may, with the consent of the Successor Company,
provide for the consideration to be received upon the exercise of
the Option, for each share of Stock subject thereto, to be solely
common stock of the Successor Company substantially equal in fair
market value to the per share consideration received by holders of
Stock in the Company Transaction. The determination of such
substantial equality of value of consideration shall be made by the
Committee, and its determination shall be conclusive and
binding.
(b)
All Performance Shares or Performance Units earned and outstanding
as of the date the Change in Control is determined to have occurred
shall be payable in full at the target level in accordance with the
payout schedule pursuant to the instrument evidencing the Award.
Any remaining Performance Shares or Performance Units (including
any applicable performance period) for which the payout level has
not been determined shall be prorated at the target payout level up
to and including the date of such Change in Control and shall be
payable in full at the target level in accordance with the payout
schedule pursuant to the instrument evidencing the Award. Any
existing deferrals or other restrictions not waived by the
Committee in its sole discretion shall remain in effect.
(c)
Notwithstanding Sections 15.3(a) and 15.3(b), the Committee, in its
sole discretion, may (unless otherwise provided in the instrument
evidencing the Award or in a written employment, services or other
agreement between the Participant and the Company or a Related
Company) instead provide in the event of a Change in Control that
is a Company Transaction (i) for adjustments to the Plan and
outstanding Awards as contemplated by Section 15.1 or (ii) that a
Participant’s outstanding Awards shall terminate upon or
immediately prior to such Company Transaction and that such
Participant shall receive, in exchange therefor, a cash payment
equal to the amount (if any) by which (x) the value of the per
share consideration received by holders Stock in the Company
Transaction, or, if the Company Transaction is a sale of assets or
otherwise does not result in direct receipt of consideration by
holders of Stock, the value of the deemed per share consideration
received, in each case as determined by the Committee in its sole
discretion, multiplied by the number of shares of Stock subject to
such outstanding Awards (to the extent then vested and exercisable
or whether or not then vested and exercisable, as determined by the
Committee in its sole discretion) exceeds (y) if applicable, the
respective aggregate exercise price or grant price for such
Awards.
15.4
Further Adjustment of Awards.
Subject
to Sections 15.2 and 15.3, the Committee shall have the discretion,
exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation, dissolution or change in control of
the Company, as defined by the Committee, to take such further
action as it determines to be necessary or advisable with respect
to Awards. Such authorized action may include (but shall not be
limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for
exercise, lifting restrictions and other modifications, and the
Committee may take such actions with respect to all Participants,
to certain categories of Participants or only to individual
Participants. The Committee may take such action before or after
granting Awards to which the action relates and before or after any
public announcement with respect to such sale, merger,
consolidation, reorganization, liquidation, dissolution or change
in control that is the reason for such action.
15.5
No Limitations.
The
grant of Awards shall in no way affect the Company’s right to
adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or
assets.
15.6
Fractional Shares.
In
the event of any adjustment in the number of shares covered by any
Award, each such Award shall cover only the number of full shares
resulting from such adjustment.
15.7
Section 409A of the Code.
Notwithstanding
anything in this Plan to the contrary, (a) any adjustments made
pursuant to this Section 15 or any other amendments to Awards that
are considered “deferred compensation” within the meaning of
Section 409A of the Code shall be made in compliance with the
requirements of Section 409A of the Code and (b) any adjustments
made pursuant to this Section 15 or any other amendments to Awards
that are not considered “deferred compensation” subject to Section
409A of the Code shall be made in such a manner as to ensure that
after such adjustment or amendment the Awards either (i) continue
not to be subject to Section 409A of the Code or (ii) comply with
the requirements of Section 409A of the Code.
SECTION
16. MARKET STANDOFF
In
the event of an underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement
filed under the Securities Act, no person may sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose of or transfer for value or
otherwise agree to engage in any of the foregoing transactions with
respect to any shares issued pursuant to an Award granted under the
Plan without the prior written consent of the Company or its
underwriters. Such limitations shall be in effect for such period
of time as may be requested by the Company or such underwriters;
provided, however, that in no event shall such period exceed (a)
180 days after the effective date of the registration statement for
such public offering or (b) such longer period requested by the
underwriter as is necessary to comply with regulatory restrictions
on the publication of research reports (including, but not limited
to, NYSE Rule 472 or NASD Conduct Rule 2711).
In
the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting
the Company’s outstanding Preferred Stock and/or Common Stock
effected as a class without the Company’s receipt of consideration,
any new, substituted or additional securities distributed with
respect to any shares issued as or pursuant to an Award under the
Plan shall be immediately subject to the provisions of this Section
16, to the same extent such shares are at such time covered by such
provisions.
In
order to enforce the limitations of this Section 16, the Company
may impose stop-transfer instructions with respect to the purchased
shares until the end of the applicable standoff period.
SECTION
17. AMENDMENT AND TERMINATION
17.1
Amendment, Suspension or Termination.
The
Board or the Compensation Committee may amend, suspend or terminate
the Plan or any portion of the Plan at any time and in such
respects as it shall deem advisable; provided, however, that, to
the extent required by applicable law, regulation or stock exchange
rule, stockholder approval shall be required for any amendment to
the Plan; and provided, further, that any amendment that requires
stockholder approval may be made only by the Board and not by the
Compensation Committee. Subject to Section 17.3, the Committee may
amend the terms of any outstanding Award, prospectively or
retroactively.
17.2
Term of the Plan.
Unless
sooner terminated as provided herein, the Plan shall terminate ten
years from the Effective Date. After the Plan is terminated, no
future Awards may be granted, but Awards previously granted shall
remain outstanding in accordance with their applicable terms and
conditions and the Plan’s terms and conditions. Notwithstanding the
foregoing, no Incentive Stock Options may be granted more than ten
years after the later of: (a) the adoption of the Plan by the Board
and (b) the adoption by the Board of any amendment to the Plan that
constitutes the adoption of a new plan for purposes of Section 422
of the Code.
17.3
Consent of Participant.
The
amendment, suspension or termination of the Plan or a portion
thereof or the amendment of an outstanding Award shall not, without
the Participant’s consent, materially adversely affect any rights
under any Award theretofore granted to the Participant under the
Plan. Any change or adjustment to an outstanding Incentive Stock
Option shall not, without the consent of the Participant, be made
in a manner so as to constitute a “modification” that would cause
such Incentive Stock Option to fail to continue to qualify as an
Incentive Stock Option. Notwithstanding the foregoing, any
adjustments made pursuant to Section 15 shall not be subject to
these restrictions.
SECTION
18. GENERAL
18.1
No Individual Rights.
No
individual or Participant shall have any claim to be granted any
Award under the Plan, and the Company has no obligation for
uniformity of treatment of Participants under the Plan.
Furthermore,
nothing in the Plan or any Award granted under the Plan shall be
deemed to constitute an employment contract or confer or be deemed
to confer on any Participant any right to continue in the employ
of, or to continue any other relationship with, the Company or any
Related Company or limit in any way the right of the Company or any
Related Company to terminate a Participant’s employment or other
relationship at any time, with or without cause.
18.2
Issuance of Shares.
Notwithstanding
any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Stock under the Plan
or make any other distribution of benefits under the Plan unless,
in the opinion of the Company’s counsel, such issuance, delivery or
distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act or the
laws of any state or foreign jurisdiction) and the applicable
requirements of any securities exchange or similar
entity.
The
Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the
Securities Act, or to register or qualify under the laws of any
state or foreign jurisdiction, any shares of Stock, security or
interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or
qualifications if made.
As a
condition to the exercise of an Option or any other receipt of
Stock pursuant to an Award under the Plan, the Company may require
(a) the Participant to represent and warrant at the time of any
such exercise or receipt that such shares are being purchased or
received only for the Participant’s own account and without any
present intention to sell or distribute such shares and (b) such
other action or agreement by the Participant as may from time to
time be necessary to comply with the federal, state and foreign
securities laws. At the option of the Company, a stop-transfer
order against any such shares may be placed on the official stock
books and records of the Company, and a legend indicating that such
shares may not be pledged, sold or otherwise transferred, unless an
opinion of counsel (satisfactory to the Company, in its sole
discretion) is provided stating that such transfer is not in
violation of any applicable law or regulation, may be stamped on
stock certificates to ensure exemption from registration. The
Committee may also require the Participant to execute and deliver
to the Company a purchase agreement or such other agreement as may
be in use by the Company at such time that describes certain terms
and conditions applicable to the shares.
To
the extent the Plan or any instrument evidencing an Award provides
for issuance of stock certificates to reflect the issuance of
shares of Preferred Stock and/or Common Stock, the issuance may be
effected on a noncertificated basis, to the extent not prohibited
by applicable law or the applicable rules of any stock
exchange.
18.3
Indemnification.
Each
person who is or shall have been a member of the Board, or a
committee appointed by the Board, or an officer of the Company to
whom authority was delegated in accordance with Section 3, shall be
indemnified and held harmless by the Company against and from any
loss, cost, liability or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting
from any claim, action, suit or proceeding to which such person may
be a party or in which such person may be involved by reason of any
action taken or failure to act under the Plan and against and from
any and all amounts paid by such person in settlement thereof, with
the Company’s approval, or paid by such person in satisfaction of
any judgment in any such claim, action, suit or proceeding against
such person; provided, however, that such person shall give the
Company an opportunity, at its own expense, to handle and defend
the same before such person undertakes to handle and defend it on
such person’s own behalf. This duty to indemnify shall not apply to
the extent that (i) such loss, cost, liability or expense is a
result of such person’s own willful misconduct or (ii) such
indemnification is expressly prohibited by statute.
The
foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such person may be
entitled under the Company’s certificate of incorporation or
bylaws, as a matter of law, or otherwise, or of any power that the
Company may have to indemnify or hold harmless.
18.4
No Rights as a Stockholder.
Unless
otherwise provided by the Committee or in the instrument evidencing
the Award or in a written employment, services or other agreement,
no Award, other than a Stock Award, shall entitle the Participant
to any cash dividend, voting or other right of a stockholder unless
and until the date of issuance under the Plan of the shares that
are the subject of such Award.
18.5
Compliance with Laws and Regulations.
In
interpreting and applying the provisions of the Plan, any Option
granted as an Incentive Stock Option pursuant to the Plan shall, to
the extent permitted by law, be construed as an “incentive stock
option” within the meaning of Section 422 of the Code.
Any
Award granted pursuant to the Plan is intended to comply with the
requirements of Section 409A of the Code, including any applicable
regulations and guidance issued thereunder, and including
transition guidance, to the extent Section 409A of the Code is
applicable thereto, and the terms of the Plan and any Award granted
under the Plan shall be interpreted, operated and administered in a
manner consistent with this intention to the extent the Committee
deems necessary or advisable to comply with Section 409A of the
Code and any official guidance issued thereunder. Any payment or
distribution that is to be made under the Plan (or pursuant to an
Award under the Plan) to a Participant who is a “specified
employee” of the Company within the meaning of that term under
Section 409A of the Code and as determined by the Committee, on
account of a “separation from service” within the meaning of that
term under Section 409A of the Code, may not be made before the
date which is six months after the date of such “separation from
service,” unless the payment or distribution is exempt from the
application of Section 409A of the Code by reason of the short-term
deferral exemption or otherwise. Notwithstanding any other
provision in the Plan, the Committee, to the extent it deems
necessary or advisable in its sole discretion, reserves the right,
but shall not be required, to unilaterally amend or modify the Plan
and any Award granted under the Plan so that the Award qualifies
for exemption from or complies with Section 409A of the Code;
provided, however, that the Committee makes no representations that
Awards granted under the Plan shall be exempt from or comply with
Section 409A of the Code and makes no undertaking to preclude
Section 409A of the Code from applying to Awards granted under the
Plan.
18.6
Participants in Other Countries or Jurisdictions.
Without
amending the Plan, the Committee may grant Awards to Eligible
Persons who are foreign nationals on such terms and conditions
different from those specified in the Plan as may, in the judgment
of the Committee, be necessary or desirable to foster and promote
achievement of the purposes of the Plan and shall have the
authority to adopt such modifications, procedures, subplans and the
like as may be necessary or desirable to comply with provisions of
the laws or regulations of other countries or jurisdictions in
which the Company or any Related Company may operate or have
employees to ensure the viability of the benefits from Awards
granted to Participants employed in such countries or
jurisdictions, meet the requirements that permit the Plan to
operate in a qualified or tax-efficient manner, comply with
applicable foreign laws or regulations and meet the objectives of
the Plan.
18.7
No Trust or Fund.
The
Plan is intended to constitute an “unfunded” plan. Nothing
contained herein shall require the Company to segregate any monies
or other property, or shares of Preferred Stock and/or Common
Stock, or to create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any Participant, and
no Participant shall have any rights that are greater than those of
a general unsecured creditor of the Company.
18.8
Successors.
All
obligations of the Company under the Plan with respect to Awards
shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or
substantially all the business and/or assets of the
Company.
18.9
Severability.
If
any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person,
or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or, if it cannot be
so construed or deemed amended without, in the Committee’s
determination, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.
18.10
Choice of Law and Venue.
The
Plan, all Awards granted thereunder and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed
by the laws of the United States, shall be governed by the laws of
the State of Florida without giving effect to principles of
conflicts of law. Participants irrevocably consent to the
nonexclusive jurisdiction and venue of the state and federal courts
located in the State of Florida.
18.11
Legal Requirements.
The
granting of Awards and the issuance of shares of Stock under the
Plan are subject to all applicable laws, rules and regulations and
to such approvals by any governmental agencies or national
securities exchanges as may be required.
SECTION
19. EFFECTIVE DATE
The
effective date (the “Effective Date”) is the date on which the Plan
is adopted by the Board. If the stockholders of the Company do not
approve the Plan within 12 months after the Board’s adoption of the
Plan, any Incentive Stock Options granted under the Plan will be
treated as Nonqualified Stock Options.
APPENDIX
A
DEFINITIONS
As
used in the Plan,
“Acquired
Entity” means any entity acquired by the Company or a Related
Company or with which the Company or a Related Company merges or
combines.
“Award”
means any Option, Stock Appreciation Right, Stock Award, Restricted
Stock, Stock Unit, Performance Share, Performance Unit, cash-based
award or other incentive payable in cash or in shares of Preferred
Stock and/or Common Stock as may be designated by the Committee
from time to time.
“Award
Agreement” means the agreement accompanying each Can B Corp.
Stock Option Grant Notice which provides the terms, conditions, and
restrictions for each Award granted under this Plan.
“Board”
means the Board of Directors of the Company.
“Cause,”
unless otherwise defined in the instrument evidencing an Award or
in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means dishonesty,
fraud, serious or willful misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conduct
prohibited by law (except minor violations), in each case as
determined by the Company’s chief human resources officer or other
person performing that function or, in the case of directors and
executive officers, the Committee, whose determination shall be
conclusive and binding.
“Change
in Control,” unless the Committee determines otherwise with
respect to an Award at the time the Award is granted or unless
otherwise defined for purposes of an Award in a written employment,
services or other agreement between the Participant and the Company
or a Related Company, means the occurrence of any of the following
events:
(i)
An acquisition 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 beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent
(50%) of either (1) the then outstanding shares of Common Stock of
the Company (the “Outstanding 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 Voting Securities”); excluding, however, the
following: (1) any acquisition directly from the Company, other
than an acquisition by virtue of the exercise, exchange or
conversion of any Convertible Securities unless such securities
were themselves acquired directly from the Company, (2) any
acquisition by the Company; (3) any acquisition by John Hwang or
any Entity that he controls, or (4) any acquisition by any Person
pursuant to a transaction which complies with clauses (1), (2) and
(3) of subsection (iii) of the definition of “Company Transaction”;
or
(ii)
Within any period of 24 consecutive months, a change in the
composition of the Board such that the individuals who, immediately
prior to such period, constituted the Board (such Board shall be
hereinafter referred to as the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board; provided,
however, for purposes hereof, that any individual who becomes a
member of the Board during such period, whose election, or
nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of those individuals who are
members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent
Board; but, provided further, that 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
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board shall not be so
considered as a member of the Incumbent Board; or
(iii)
A Company Transaction; or
(iv)
The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, other than to an entity
pursuant to a transaction which would comply with clauses (1), (2)
and (3) of the definition of “Company Transaction”, assuming for
this purpose that such transaction were a Company
Transaction.
For
purposes of the definition of “Change of Control” and “Company
Transaction”, a series of transactions undertaken with a common
purpose shall be treated as a single transaction that begins at the
consummation of the first transaction in the series and ends at the
consummation of the last transaction in the series.
“Company”
means Can B. Corp., a Florida corporation.
“Company
Transaction” means the consummation of (i) a reorganization,
merger or consolidation of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the
Company and its direct and indirect subsidiaries taken as a whole,
except in each case a transaction pursuant to which (1) all or
substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Common Stock
and Outstanding Voting Securities immediately prior to such
transaction will beneficially own, directly or indirectly, more
than sixty percent (60%) of, respectively, the outstanding shares
of common stock, and the combined voting power of the outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such
transaction (including, without limitation, an entity which as a
result of such transaction owns the Company or all or substantially
all of the Company’s assets, either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such transaction, of the
Outstanding Common Stock and Outstanding Voting Securities, as the
case may be, (2) no Person (other than the Company) will
beneficially own, directly or indirectly, more than twenty-five
percent (25%) of, respectively, the outstanding shares of common
stock of the Company resulting from such transaction or the
combined voting power of the outstanding voting securities of such
Company entitled to vote generally in the election of directors,
except to the extent that such ownership existed with respect to
the Company prior to the transaction, and (3) individuals who were
members of the Board immediately prior to the approval by the
stockholders of the Company of such transaction will constitute at
least a majority of the members of the board of directors of the
Company resulting from such transaction.
“Convertible
Security” means any security convertible into or exchangeable
for shares of Preferred Stock and/or Common Stock of the Company,
or any option, warrant or other right to acquire shares of
Preferred Stock and/or Common Stock of the Company.
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
“Committee”
has the meaning set forth in Section 3.2.
“Common
Stock” means the common stock of the Company.
“Compensation
Committee” means the Compensation Committee (if any) of the
Board.
“Detrimental
Activity” means any of the following: (i) unauthorized
disclosure of any confidential or proprietary information of the
Company or any of its Affiliates; (ii) any activity that would be
grounds to terminate the Participant’s employment or service with
the Company or any of its subsidiaries for Cause; (iii) the breach
of any non-competition, non-solicitation, non-disparagement or
other agreement containing restrictive covenants, with the Company
or its Affiliates; (iv) fraud or conduct contributing to any
financial restatements or irregularities, as determined by the
Committee in its sole discretion; or (v) any other conduct or act
determined to be materially injurious, detrimental or prejudicial
to any interest of the Company or any of its Affiliates, as
determined by the Committee in its sole discretion.
“Disability,”
unless otherwise defined by the Committee for purposes of the Plan
or in the instrument evidencing an Award or in a written
employment, services or other agreement between the Participant and
the Company or a Related Company, means a mental or physical
impairment of the Participant that is expected to result in death
or that has lasted or is expected to last for a continuous period
of 12 months or more and that causes the Participant to be unable
to perform his or her material duties for the Company or a Related
Company and to be engaged in any substantial gainful activity, in
each case as determined by the Company’s chief human resources
officer or other person performing that function or, in the case of
directors and executive officers, the Committee, whose
determination shall be conclusive and binding.
“Effective
Date” has the meaning set forth in Section 19.
“Eligible
Person” means any person eligible to receive an Award as set
forth in Section 5.
“Entity”
means any individual, entity or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time to time.
“Fair
Market Value” means the closing price for the Preferred Stock
and/or Common Stock on any given date during regular trading, or if
not trading on that date, such price on the last preceding date on
which the Preferred Stock and/or Common Stock was traded, unless
determined otherwise by the Committee using such methods or
procedures as it may establish.
“Grant
Date” means the later of (a) the date on which the Committee
completes the corporate action authorizing the grant of an Award or
such later date specified by the Committee and (b) the date on
which all conditions precedent to an Award have been satisfied,
provided that conditions to the exercisability or vesting of Awards
shall not defer the Grant Date.
“Incentive
Stock Option” means an Option granted with the intention that
it qualify as an “incentive stock option” as that term is defined
for purposes of Section 422 of the Code or any successor
provision.
“including”,
“include”, “includes” and words of similar import
shall be construed broadly as if followed by the phrase “without
limitation”.
“Nonqualified
Stock Option” means an Option other than an Incentive Stock
Option.
“Option”
means a right to purchase Preferred Stock and/or Common Stock
granted under Section 7.
“Option
Expiration Date” means the last day of the maximum term of an
Option.
“Outstanding
Company Common Stock” has the meaning set forth in the
definition of “Change in Control.”
“Outstanding
Company Voting Securities” has the meaning set forth in the
definition of “Change in Control.”
“Parent
Company” means a company or other entity which as a result of a
Company Transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more
subsidiaries.
“Participant”
means any Eligible Person to whom an Award is granted.
“Performance
Award” means an Award of Performance Shares or Performance
Units granted under Section 11.
“Performance
Share” means an Award of units denominated in shares of
Preferred Stock and/or Common Stock granted under Section
11.1.
“Performance
Unit” means an Award of units denominated in cash or property
other than shares of Preferred Stock and/or Common Stock granted
under Section 11.2.
“Plan”
means this Can B Corp. 2020 Incentive Stock Option Plan.
“Preferred
Stock” means the Preferred Class C Series Stock of the
Company.
‘‘Related
Company” means any entity that is directly or indirectly
controlled by, in control of or under common control with the
Company.
“Restricted
Stock” means an Award of shares of Preferred Stock and/or
Common Stock granted under Section 10, the rights of ownership of
which are subject to restrictions prescribed by the
Committee.
“Retirement,”
unless otherwise defined in the instrument evidencing the Award or
in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means
“Retirement” as defined for purposes of the Plan by the Committee
or the Company’s chief human resources officer or other person
performing that function or, if not so defined, means Termination
of Service on or after the date the Participant reaches “normal
retirement age,” as that term is defined in Section 411(a)(8) of
the Code.
“Securities
Act” means the Securities Act of 1933, as amended from time to
time.
“Stock,”
means, as applicable, Common Stock and/or Preferred Stock of the
Company.
“Stock
Appreciation Right” or “SAR” means a right granted under
Section 9.1 to receive the excess of the Fair Market Value of a
specified number of shares of Preferred Stock and/or Common Stock
over the grant price.
“Stock
Award” means an Award of shares of Preferred Stock and/or
Common Stock granted under Section 10, the rights of ownership of
which are not subject to restrictions prescribed by the
Committee.
“Stock
Unit” means an Award denominated in units of Preferred Stock
and/or Common Stock granted under Section 10.
“Substitute
Awards” means Awards granted or shares of Stock issued by the
Company in substitution or exchange for awards previously granted
by an Acquired Entity.
“Successor
Company” means the surviving company, the successor company or
Parent Company, as applicable, in connection with a Company
Transaction.
“Termination
of Service” means a termination of employment or service
relationship with the Company or a Related Company for any reason,
whether voluntary or involuntary, including by reason of death,
Disability or Retirement. Any question as to whether and when there
has been a Termination of Service for the purposes of an Award and
the cause of such Termination of Service shall be determined by the
Company’s chief human resources officer or other person performing
that function or, with respect to directors and executive officers,
by the Committee, whose determination shall be conclusive and
binding. Transfer of a Participant’s employment or service
relationship between the Company and any Related Company shall not
be considered a Termination of Service for purposes of an Award.
Unless the Committee determines otherwise, a Termination of Service
shall be deemed to occur if the Participant’s employment or service
relationship is with an entity that has ceased to be a Related
Company. A Participant’s change in status from an employee of the
Company or a Related Company to a consultant, advisor or
independent contractor of the Company or a Related Company or a
change in status from a consultant, advisor or independent
contractor of the Company or a Related Company to an employee of
the Company or a Related Company, shall not be considered a
Termination of Service.
“Vesting
Commencement Date” means the Grant Date or such other date
selected by the Committee as the date from which an Award begins to
vest.
PLAN
ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY
PAGE
Date
of Board
Action
|
|
Action |
|
Section/Effect
of
Amendment
|
|
Date
of Shareholder
Approval
|
|
|
|
|
|
|
|
July
28, 2020 |
|
Initial
Plan Adoption |
|
|
|
July
28, 2020 |
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