A majority of the issued and outstanding shares entitled to vote, represented either in person or by proxy, is necessary to constitute a quorum for the transaction of business at the 2010 Annual Meeting. In the absence of a quorum, the 2010 Annual Meeting may be postponed from time to time until stockholders holding the requisite number of shares are represented in person or by proxy. Broker non-votes“non-votes” and abstentions will be counted towards a quorum at the 2010 Annual Meeting, but will not count as votes for or against Proposal I, Proposal II, Proposal III, Proposal IV or Proposal III.V. As to Proposals IV and V,Proposal VI, broker non-votes and abstentions will have the same effect as a vote against such proposals. A “non-vote” occurs when a broker or other nominee holding shares for a beneficial owner votes on one proposal but does not vote on another proposal because the broker does not have discretionary voting power and has not received instructions from the beneficial owner. If a quorum is present, the proposals presented in this proxy statement will be approved by the following votes (our Common Stock and Series B Preferred Stock voting together as onea single class):
·The three nominees who receive the highest number of affirmative votes of the shares present or represented and voting on the election of directors at the Annual Meeting will be elected to our Board of Directors.
·The approval of our named executive officers’ compensation requires the affirmative vote of a majority of the shares present, in person or represented by proxy, and voting on that proposal. Shares voted to abstain are included in the number of shares present or represented and voting on each matter. Shares subject to broker “non-votes” are considered to be not entitled to vote for the particular matter and have the practical effect of reducing the number of affirmative votes required to achieve a majority for such matter by reducing the total number of shares from which the majority is calculated.
·The proposal to approve, on an advisory basis, the frequency of future advisory votes on named executive officer compensation is being submitted to enable stockholders to express a preference as to whether future advisory votes on executive compensation should be held every year, every two years, or every three years, and therefore does not require “approval.”
·The proposal to ratify the appointment of Hall & Company as our independent registered public accountant for the fiscal year ending December 31, 2020, will require the affirmative vote of a majority of the shares present, in person or represented by proxy, and voting on such matter. Shares voted to abstain are included in the number of shares present or represented and voting. Brokers are entitled to vote on this matter without direction from you, and therefore are included in the number of affirmative votes required to achieve a majority.
·The proposal to approve the adoption of our 2020 Equity Incentive Plan will be approved if it is approved by a vote of the majority of shares present, in person or represented by proxy, and voting on the matter. Shares voted to abstain are included in the number of shares present or represented and voting on each matter. Shares subject to broker “non-votes” are considered to be not entitled to vote for the particular matter and have the practical effect of reducing the number of affirmative votes required to achieve a majority for such matter by reducing the total number of shares from which the majority is calculated.
·The proposal to adopt the Amendment to our Certificate of Incorporation to effect the Reverse Stock Split will require the affirmative vote of a majority of our outstanding voting shares (Common Stock and Series B Preferred Stock voting as a single class) entitled to vote at the Annual Meeting.
Solicitation, Voting and Revocation Ofof Proxies
This solicitation of proxies is being made by our Board, and we will pay the entire cost of preparing and distributing these proxy materials. In addition to the distribution of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communications by directors, officers and employees of our company, who will not receive any additional compensation for such solicitation activities. We also will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses, if any, for forwarding proxy and solicitation materials to our stockholders.
Shares of our Common Stock represented by a proxy properly signed and received at or prior to the 2010 Annual Meeting, unless properly revoked, will be voted in accordance with the instructions on the proxy. If a proxy is signed and returned without any voting instructions, shares of our Common Stock represented by the proxy will be voted “FOR” the proposals described in this proxy statement and for annual future advisory votes on named executive officer compensation, and in the proxy holder’s judgment as to any other matter which may properly come before the 2010 Annual Meeting, including any adjournment or postponement thereof. A stockholder may revoke any proxy given pursuant to this solicitation by: (i) delivering to the Company, at or prior to the 2010 Annual Meeting, a written notice revoking the proxy; (ii) delivering to the Company, at or prior to the 2010 Annual Meeting, a duly executed proxy relating to the same shares and bearing a later date; or (iii) voting in person at the 2010 Annual Meeting. Attendance at the 2010 Annual Meeting will not, in and of itself, constitute a revocation of a proxy. All written notices of revocation and other communications with respect to the revocation of a proxy should be addressed to:
Global Clean Energy Holdings, Inc.
2790 Skypark Drive, Suite
Torrance, California 90045
Attention: Corporate Secretary
Our Board of Directors is not aware of any business to be acted upon at the 2010 Annual Meeting other than consideration of the proposals described herein.
QUESTION AND ANSWER SUMMARY ABOUT THE 2010 ANNUAL MEETING
The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.
Q:WHAT IS THIS PROXY STATEMENT AND WHY AM I RECEIVING IT?
A:You are receiving this proxy statement in connection with the annual meeting of stockholders called by our Board with respect to soliciting stockholder votes for the purpose of (i) electing three (3) directors to our Board of Directors; (ii) approving, by non-binding advisory vote, the compensation of our named executive officers, (iii) conducting an advisory vote on the frequency of future advisory votes on named executive officer compensation, (iv) ratifying the appointment of Hall & Company as our independent registered public accountant for the fiscal year ending December 31, 2020, (v) approving the adoption of the Company’s 2020 Equity Incentive Plan; and (vi) approving the Amendment to our Certificate of Incorporation to effect the Reverse Stock Split at a reverse split ratio of 1-for-10; in each case, as more fully described in this proxy statement. The information included in this proxy statement relates to the proposals to be voted on at the Annual Meeting, and certain other required information.
Q:DO I HAVE CUMULATIVE VOTING RIGHTS IN CONNECTION WITH THE ELECTION OF DIRECTORS AT THE ANNUAL MEETING?
A:No. Our current Certificate of Incorporation and Bylaws do not provide for cumulative voting in connection with the election of directors to our Board.
Q:WHAT IS THE PURPOSE OF THE COMPANY’S 2020 EQUITY INCENTIVE PLAN?
A:The Board adopted the 2020 Equity Incentive Plan (“2020 Plan”) because our Company’s 2010 Equity Incentive Plan has expired. Without a replacement equity incentive plan, the Company has no ability to issue equity awards to officers, directors, employees and advisors. Management believes that granting options is an important incentive tool for the Company’s officers, directors and employees. As a result, the Board adopted the 2020 Plan to continue to provide a means by which employees, directors and consultants of the Company may be given an opportunity to contribute to the improved value of the Company and to benefit from increases in the value of our Common Stock, and to attract and retain the services of such persons. The 2020 Plan is attached to this proxy statement as Appendix A.
Q:WHAT IS THE PURPOSE OF THE REVERSE STOCK SPLIT?
A:The purpose of the Reverse Stock Split is to reduce the number of outstanding shares, increase the price at which our Common Stock is traded, attract potential additional investment by increasing investor interest in, and the marketability of, our securities, and to assist in the future possible listing of our Common Stock on The Nasdaq Stock Market or a national exchange.
Q:WHAT DOES THE REVERSE STOCK SPLIT ENTAIL?
A:The Board is requesting that our stockholders grant our Board authority to implement the Amendment to our Certificate of Incorporation to effect a reverse stock split of Common Stock at a reverse split ratio of 1-for-10. Upon receipt of stockholder approval, the Board will have the discretion to file the Amendment and effect the Reverse Stock Split on a date to be established at the discretion of the Board, but in any case no later than September 23, 2021, or not to effect the Reverse Stock Split if the Board concludes it is not in the best interest of the stockholders. The Amendment to effect the Reverse Stock Split is attached to this proxy statement as Appendix B.
Q:ARE THERE ANY RISKS ASSOCIATED WITH THE REVERSE STOCK SPLIT?
A:Yes. While our Board expects that the Reverse Stock Split will result in an increase in the price of our Common Stock, other factors may adversely affect our stock price, and there can be no assurance that
our stock price will increase following consummation of the Reverse Stock Split. The trading market for our Common Stock may also be harmed if there is a significant reduction in the trading volume of our shares as a result of the reduction on the public float.
Q:HOW WILL THE REVERSE STOCK SPLIT AFFECT MY RIGHTS AS A STOCKHOLDER?
A:If effected, as a result of the Reverse Stock Split, shares of our Common Stock issued and outstanding that you own shall be combined into a smaller number of shares of Common Stock. As a result, upon effectiveness of the Reverse Stock Split, you will own fewer shares of our Common Stock. Under the Reverse Stock Split, each 10 shares of our Common Stock issued and outstanding that you own shall be combined into one share of Common Stock. With respect to holders of our Series B Preferred Stock, if the Reverse Stock Split is effected, the conversion price of the Series B Preferred Stock (i.e., the ratio at which the Series B Preferred Stock converts into shares of our Common Stock) will be proportionately adjusted such that holders will be entitled to receive the number of shares of Common Stock which they would have been entitled to had the Series B Preferred Stock been converted immediately prior to implementing the Reverse Stock Split. As a result, while holders of Series B Preferred Stock will still own the same number of shares of Series B Preferred Stock, such shares will be convertible into one (1) share of Common Stock for every ten (1) shares of Common Stock it could have converted into prior to the Reverse Stock Split. Since the Reverse Stock Split will affect all stockholders uniformly, it will not affect any stockholder’s (common or preferred) percentage ownership of the Company.
Q:WHAT ARE THE TAX CONSEQUENCES TO ME OF THE REVERSE STOCK SPLIT?
A:If effected, we believe that the federal income tax consequences of the Reverse Stock Split to our U.S. stockholders will be as follows: (i) no gain or loss will be recognized by any of our U.S. stockholders; (ii) the aggregate tax basis of the shares after the Reverse Stock Split will equal the aggregate tax basis of the shares exchanged therefor; and (iii) the holding period of the shares after the Reverse Stock Split will include the holding period of the holder’s existing shares. We cannot assure you of the foregoing tax consequences, therefore, we urge stockholders to consult their own tax advisors regarding the tax consequences of the Reverse Stock Split.
Q:ARE DISSENTERS’ RIGHTS AVAILABLE IN CONNECTION WITH THE REVERSE STOCK SPLIT?
A:No. Dissenters’ rights are not available under Delaware law in connection with the Reverse Stock Split.
Q:SHOULD I SEND IN MY STOCK CERTIFICATES IN CONNECTION WITH THE REVERSE STOCK SPLIT?
A:No. Do not send us your stock certificates. If effected, following the Reverse Stock Split, each stock certificate representing issued and outstanding shares of our Common Stock will represent a fewer number of shares, as adjusted appropriately based on the Reverse Stock Split ratio selected by our Board. Stock certificates representing issued and outstanding shares of Series B Preferred Stock will continue to evidence the same number of shares, however, such shares of Series B Preferred Stock will be convertible into one (1) share of Common Stock for every ten (1) shares of Common Stock it could have converted into prior to the Reverse Stock Split.
Q:DOES OUR BOARD OF DIRECTORS RECOMMEND VOTING “FOR” THE PROPOSALS?
A:Yes. Our Board of Directors unanimously recommends that our stockholders vote “FOR” each of Proposal I, Proposal II, Proposal IV, Proposal V and Proposal VI. As to Proposal III, our Board of
Directors unanimously recommends that stockholders vote to have future advisory votes on named executive officer compensation every year.
Q:HOW DO I VOTE?
A;If you are a stockholder of record, there are four ways to vote:
·By Internet — You may submit your proxy from any location in the world by following the internet voting instructions on the proxy card or voting instruction card sent to you.
·By Telephone — You may submit your proxy by following the telephone voting instructions on the proxy card or voting instruction card sent to you.
·By Mail — You may vote by mail by marking, dating and signing your proxy card or, for shares held in street name, the voting instruction card provided to you by your broker or nominee, and mailing it in the enclosed, self-addressed, postage prepaid envelope. No postage is required if mailed in the United States. Please note that you will be mailed a printed proxy card or printed voting instruction card only if you request that such printed materials be sent to you by following the instructions in the Notice of Internet Availability for requesting paper copies of the proxy materials.
·In Person — You may vote by written ballot at the Annual Meeting, if you are a stockholder of record. If you are a street name stockholder, you will receive voting instructions from your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in order to instruct your broker, bank or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning an instruction card, or by telephone or on the internet. However, the availability of telephone and internet voting will depend on the voting process of your broker, bank or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares in person at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee. If you plan to attend the Annual Meeting in person, please either mark the appropriate box on the proxy card, or send an email to ShareholderMtg@gceholdings.com.
Q:CAN I SUBMIT PROPOSALSCHANGE MY MIND AND REVOKE MY PROXY?
A:Yes. If you are a stockholder of record, you may change your vote at any time before the polls close at the meeting. You may do this by (i) delivering to the Company, at or prior to the Annual Meeting, a written notice revoking the proxy; (ii) delivering to the Company, at or prior to the Annual Meeting, a duly executed proxy relating to the same shares and bearing a later date; or (iii) voting in person at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy. If you hold your shares in “street name,” you may submit new voting instructions by contacting your broker, bank or other nominee.
Q.HOW MAY I REQUEST A SINGLE SET OF PROXY MATERIALS FOR MY HOUSEHOLD?
A:If you share an address with another stockholder and have received multiple copies of our proxy materials, you may write us to request delivery of a single copy of these materials. Written requests should be made to Global Clean Energy Holdings, Inc., Attention: Corporate Secretary, 2790 Skypark Drive, Suite 105, Torrance, California 90505. Stockholders who beneficially own shares of our Common Stock held in street name may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
Q.WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?
A:You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date, and return each proxy card and voting instruction card that you receive.
Q.WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING?
A:Other than the proposals described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting.
Q.IS MY VOTE CONFIDENTIAL?
A:Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within the Company or to third parties, except: (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote, and (3) to facilitate a successful proxy solicitation. Occasionally, stockholders provide on their proxy card written comments, which are then forwarded to Company management.
Q.WHO IS PAYING FOR THIS PROXY SOLICITATION?
A:Our Board of Directors is making this solicitation, and we will pay the entire cost of preparing and distributing these proxy materials. In addition to the distribution of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communications by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for distributing proxy materials to stockholders.
Q:WHAT IS THE DEADLINE TO PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR’S ANNUAL MEETING OF STOCKHOLDERS OR TO NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS?
A:Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next Annual Meeting of Stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 2021 Annual Meeting of Stockholders, our Corporate Secretary must receive the written proposal at our principal executive offices not later than March 20, 2021, which is 120 days prior to the first anniversary of the mailing date of this proxy. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to Global Clean Energy Holdings, Inc., Attention: Corporate Secretary, 2790 Skypark Drive, Suite 105, Torrance, California 90505.
Q.HOW MAY I OBTAIN A COPY OF THE NEXT ANNUAL MEETING?BYLAW PROVISIONS REGARDING STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS?
A:A copy of the full text of the bylaw provisions regarding notice procedure for stockholders who wish to present certain matters before an Annual Meeting of Stockholders, including nominations for the election of directors, may be obtained by writing to our Corporate Secretary. In addition, this and other information about our Company may be obtained at the web site maintained by the U.S. Securities and Exchange Commission (“SEC”) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the SEC’s website is www.sec.gov. All notices of proposals by stockholders, whether or not included in our proxy materials, should be sent to our principal executive offices, Attention: Corporate Secretary.
Pursuant to our Bylaws, our Board has fixed the number of our directors at four,three, and there are currently fourthree individuals serving on our Board. The Board proposes that the following fourthree (3) nominees, all of whom currently serve on the Board, be elected as directors to serve for a term ending on the date of the next annual meeting of stockholders following the date such persons are initially elected as directors, and until their successors are duly elected and qualified. Each of the nominees has consented to serve if elected. If any nominee becomes unavailable to serve as a director, the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board. There is no family relationship between any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. We have determined that each of Messrs. Bernstein,Mr. Walker is a non-employee director and Wenzel are non-employee directors andis “independent” as defined under The Nasdaq Stock Market’s listing standards (see “Director Independence” below). The affirmative vote of a plurality of the shares cast at the 2010 Annual Meeting is required to elect each director.these three nominees. The following is information concerning the nominees for election as directors:
Director Nominees
Set forth below is information regarding the nominees, including information furnished by them as to their principal occupations for the last five years, and their ages as of May 1, 2010.
Name | Age | Position | ||
David R. Walker | 75 | Chairman of the Board | ||
Richard Palmer | 59 | President, Chief Executive Officer and Director | ||
Martin Wenzel | 62 | Director | ||
David R. Walker
David R. Walker joined the Board of Directors onin May 2, 1996 and was appointed Chairman of the Board of Directors onin May 10, 1998. He has served as Chairman of the Audit Committee since its establishment in 2001. For over 20 years, Mr. Walker has been retired since July 2016. From 1976 until his retirement in July 2016, Mr. Walker was the General Manager of Sunheaven Farms, the largest onion growing and packing entity in the State of Washington. In the capacity of General Manager, Mr. Walker performsperformed the functions of a traditional chief financial officer. Mr. Walker holds a Bachelor of Arts degree in economics from Brigham Young University with minors in accounting and finance.
The Board believes that Mr. Walker’s experience regarding the operation and management of large-scale agricultural farms and his experience as a financial officer are valuable resources to our Board in formulating business strategy, addressing business opportunities and resolving operational issues that arise from time to time.
Richard Palmer
Richard Palmer was appointed as our President and Chief Operating Officer in September 2007 and been a member of the Board of Directors since September 2007. Mr. Palmer became our Chief Executive
Officer onin December 21, 2007. Prior to joining the Company in 2007, Mr. Palmer has over 25 years of hands-on experience in the energy field, holding senior level management positions with a number of large engineering, development, operations and construction companies. He iswas a co-founder of Mobius Risk Group, LLC, an energy risk advisory services consulting company that was formed in January 2002 and was a principal and Executive Vice President of that consulting company from January, 2002 until September 2007. From 1997 to 2002, Mr. Palmer was a Senior Director at Enron Energy Services. Prior thereto, from 1995 to 1996 Mr. Palmer was a Vice President of Bentley Engineering, and a Senior Vice President of Southland Industries from 1993 to 1996. Mr. Palmer received his designation as a Certified Energy Manager in 1999, holds two Business Management Certificates from University of Southern California’s Business School, and is an active member of both the American Society of Plant Biologists, and the International Tropical Farmers Association.
Over the last 2527 years, Mr. Palmer has held senior level management positions with a number of large engineering, development, operations and construction companies, and, as a result, he has garnered a wealth of experience in the energy field. Mr. Palmer’s experience is important to the development and execution of the Company’s business plan. Mr. Palmer is the only member of management who serves as a director of the Company.
Martin Wenzel
Martin Wenzel was appointed to the Board of Directors on June 30, 2008. Dr. Bernstein is current a teaching professor at The UniversityMay 7, 2020. Mr. Wenzel previously served on the Board from April 2010 until the end of Southern California (USC) where he also serves as the Managing Director of USC’s Energy Institute. Dr. Bernstein is an internationally recognized expert on energy policy and alternative energy technologies. Dr. Bernstein was awarded a Ph.D. in Energy Management and Policy from the University of Pennsylvania, holds a Masters degree in Mathematics from Ohio State University, and a B.A. from State University of New York at Albany.
Martin Wenzel joined our Board of Directors in April 2010, and serves on the Board’s audit committee.has been an Executive Vice President for Heorot Power Holdings since June 2016. Prior to joining Heorot Power Holdings, Mr. Wenzel is currentlyserved as Executive Vice President for Beowulf Energy from July 2012 to June 2016. Prior to his work at Beowulf, he was appointed as the President and Chief Executive Officer offor Colorado Energy the operating entity of Bicent Power, LLC, which is a privately owned limited liability company that owns and operates power generating stations in Colorado, Montana and California. From 2005 until August 2007, he served asManagement (2007-2012.) Mr. Wenzel was the Senior Vice President (Sales and Marketing) of Miasole Inc. Prior thereto, from 2001 to 2004,, a producer of solar cell products. Mr. Wenzel was President and Chief Executive Officer of Alpha Energy LLC.LLC from 2001 to 2004. He currently is also a member of the Board of the Deming Center of Entrepreneurship at the University ofDirectors for ION Clean Energy, a carbon capture technology company based in Colorado. Mr. Wenzel holds an Executive MBA from Columbia Business School;School, a Masters degreeMaster’s Degree in Systems Management from theThe University of Southern California;California, and a BachelorsBachelor’s degree in Engineering and Management from the USU.S. Naval Academy.
Mr. Wenzel has anwas chosen to serve as a director on the Board because of his extensive background in the energy industry, including over 2530 years of developing, financing, constructing and operating energy projects and marketing energy commodities and operating energy assets in the U.S. and internationally. The Board concluded that Mr. Wenzel’s expertise in energy policy and alternative energy technologies
Director Independence
Our Common Stock is a valuable asset for the Board of Directors of the Company.
In the absence of such requirements, we have elected to use the definition for “director independence” under The Nasdaq Stock Market’s listing standards, which defines an “independent director” as “a person other than an officer or employee of usthe Company or its subsidiaries or any other individual having a relationship, which in the opinion of the boardBoard of directors,Directors, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director.” The definition further provides that, among others, employment of a director by us (or any parent or subsidiary of ours) at any time during the past three years is considered a bar to independence regardless of the determination of our Board.
Our Board has determined that each of Messrs.Mr. Walker Bernstein and Wenzel arecurrently is our only independent directorsdirector as defined in The Nasdaq Stock Market rules relating to director independence. Each of Messrs. Walker Bernstein and Wenzel are non-employee directors.
Board of Director Meetings
All members of the Board of Directors hold office until the next annual meeting of stockholders or the election and qualification of their successors. During the fiscal year ended December 31, 2009,2019, the Board of Directors held fourbi-weekly meetings, atof which eachtwo were formal meetings. Each director who was in office at that time attended at least 75%all of such meetings of the Board of Directors. The Audit Committee met four timesdid not have any meetings or take any action during fiscal year ended December 31, 2009, and all Audit Committee members were present at those meetings.
Director Attendance at Annual Meetings
Although we do not have a formal policy regarding attendance by Board members at the annual meeting of stockholders, directors are strongly encouraged to attend annual meetings of stockholders. AllUnless they are unable to do so because of travel restrictions, all of our current directors (and nominees) are expected to attend the 2010 Annual Meeting.
Board Committees
Our Board of Directors has an Audit Committee but does not currently have a Compensation Committee or a Nominating Committee.
Audit Committee
. Our Audit Committee operates pursuant to a written·reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures; ·hiring our independent registered public accounting firm, and coordinating the oversight and review |
·reviewing and, if appropriate, approving all transactions between our company or its subsidiaries and any related party.
Because the Board of Directors currently only has three directors, only one of whom is independent according to The Nasdaq Stock Market rules, as of the date of this proxy statement, David Walker and Martin Wenzel constituted allis the sole member of the Audit Committee. The Board expects to appoint additional members to the Board of Directors, including additional members of the Audit Committee. Each of Messrs. Walker and Wenzel is a non-employee director and independent as defined underCommittee, in the Nasdaq Stock Market’s listing standards.near future. Mr. Walker has significant knowledge of financial matters, and our Board has designated Mr. Walker as the “audit committee financial expert” of the Audit Committee.
Nominating Committee
. We do not currently maintain a nominating committee on our Board of Directors. Rather, all of the directors on the Company’sseparate nominating committee. However, the Board may form a nominating committee for the purpose of nominating future director candidates.
Usually, nominees for election to the Board are proposed by our existing directors. In identifying and evaluating individuals qualified to become Board members, our current directors will consider such factors as they deem appropriate to assist in developing a boardBoard of directorsDirectors and committees thereof that are diverse in nature and comprised of experienced and seasoned advisors. Our Board of Directors has not adopted a formal policy with regard to the consideration of diversity when evaluating candidates for election to the Board. However, our Board believes that membership should reflect diversity in its broadest sense, but should not be chosen nor excluded based on race, color, gender, national origin or sexual orientation. In this context, the Board does consider a candidate’s experience, education, industry knowledge and, history with the Company, and differences of viewpoint when evaluating his or her qualifications for election the Board. In evaluating such candidates, the Board seeks to achieve a balance of knowledge, experience and capability in its composition. In connection with this evaluation, the Board determines whether to interview the prospective nominee, and if warranted, one or more directors interview prospective nominees in person or by telephone.
Our full Board also reviews the qualifications of director nominations submitted by stockholders of the Company, subject to the stockholders having followed procedures established under the Company’s bylaws (See the discussion under “STOCKHOLDER PROPOSALS” beginning on page [51]35 of this proxy statement). All potential director candidates, regardless of source, are reviewed under the same process.
Compensation Committee
. We do not currently maintain a compensation committee on our Board of Directors. All of our existing directors participate in determining the compensation of our executive officers and non-employee directors. As a result, the Board has not found it necessary to have a separate compensation committee.In determining the compensation of any executive officer or non-employee director, the full Board (excluding the executive officer or non-employee director whose compensation is being determined) will consider such factors as they deem appropriate in developing competitive compensation standards aimed at attracting and retaining qualified management personnel and directors. Some of these factors may include, but are not limited to, the level of compensation paid to senior executives and directors at businesses and other organizations of comparable size and industry, and the specific experience and expertise of any particular executive officer or non-employee director relative to the experience and expertise of other executive officers and non-employee directors. Our Board meets at least once a year to review and consider the current compensation of our executive officers and non-employee directors, and if appropriate, adjust the current levels of such compensation.
Certain Relationships Andand Related Transactions
From 2010 to 2018, Mr. Palmer deferred more than $1.7 million of his salary and annual bonus payable to him under his employment agreement with the Company. On October 16, 2018, Mr. Palmer entered into a loan and securitynew employment agreement with Mercator Momentum Fund III, L.P., pursuant to which Mercatorthe Company. Concurrently with the execution of the new employment agreement, because of the Company’s financial condition, Mr. Palmer agreed to make availabledefer $1 million of his accrued salary and bonus for an additional two years. In order to usevidence the foregoing deferral, the Company and Mr. Palmer entered into a secured term credit facility in the aggregate principal amount of up to $1,000,000. As of December 31, 2009,$1 million convertible promissory note. Mr. Palmer’s convertible note accrues simple interest on the outstanding principal balance of the Loan was $475,000,note at the annual rate of five percent (5%) and matures and becomes due and payable on October 15, 2020. Under the Loan was secured by a first priority lien onconvertible promissory note, Mr. Palmer has the right, exercisable at any time until the convertible promissory note is fully paid, to convert all or any portion of our assets. In March 2010, we repaid the outstanding principal balance and accrued and unpaid interest into shares of Common Stock at an exercise price of $0.0154 per share.
Martin Wenzel was appointed to the Loan. MercatorBoard of Directors on May 7, 2020. Until his appointment as a director, Mr. Wenzel served as an advisor to the Board pursuant to that certain Board Advisor Agreement, dated June 21, 2019. Under the Board Advisor Agreement, Mr. Wenzel was granted a five-year non-qualified
stock option to purchase 500,000 shares, which option automatically vested upon Mr. Wenzel’s appointment to the Board. The foregoing options have an affiliateexercise price of Monarch Pointe Fund, Ltd., a major stockholder of the Company until April 2010.
Communications with the Board of Directors
Stockholders may communicate directly with the Board by writing to them at Board of Directors, c/o Corporate Secretary, Global Clean Energy Holdings, Inc., 6033 W. Century Blvd.,2790 Skypark Drive, Suite 895, Los Angeles,105, Torrance, California 90045. Such90505. Written communications specifically marked as a communication for our Board of Directors, or a particular director, except those that are clearly marketing or soliciting materials, will be forwarded unopened to Mr. Walker, currently the Chairman of our Board, or to the particular director or directors to whom it isthey are addressed, except for communications that are (1) advertisements or promotional communications, (2) solely related to complaints with respect to ordinary course of business customer service and satisfaction issues, or (3) clearly unrelatedpresented to the Company’s business, industry, management orfull Board or committee matters.
Code of Ethics
Our Board of Directors has adopted a code of ethics that applies to our principal executive officers, principal financial officer or controller, or persons performing similar functions (“Code of Ethics”Ethics”). A copy of our Code of Ethics will be furnished without charge to any person upon written request. Requests should be sent to: Secretary, Global Clean Energy Holdings, Inc. 6033 W. Century Blvd.,2790 Skypark Drive, Suite 895 Los Angeles,105 Torrance, California 90045.
Delinquent Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and officers and persons who beneficially own more than 10% of a class of our equity securities registered under Section 12 of the Exchange Act with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities. To the Company’s knowledge, based solely on a review of the Section 16(a) reports filed electronically with the SEC and written representations that no other reports were required during 2019, all reports required by Section 16(a) applicable to our executive officers and directors and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater than 10% stockholders are required by SEC regulationsbeneficial owners were filed on a timely basis during 2019, except for the following: David Walker filed a Form 4 to furnish us with copiesreport the exercise of all Section 16(a) forms they file.
Board Leadership Structure and Role in Risk Oversight
Our Board does not have a formal policy on whether the positions of Chairman of the Board and Chief Executive Officer are to be held by the same person. However, our Board believes it is important to select the Company’s Chairman and Chief Executive Officer in the manner it considers in the best interests of the Company at any given time. Accordingly, the Chairman and Chief Executive Officer positions may be filled by one individual or by two different individuals, as determined by our Board based on circumstances then in existence. Currently, two individuals occupy these positions: David Walker serves as the Chairman of the Board, and Richard Palmer serves as the Company’s Chief Executive Officer.
Our Board believes that the separation of the offices of Chairman of the Board and Chief Executive Officer at this time enhances Board independence and oversight. Moreover, since we are a relatively newsmall participant in the energy agri-business, the current bifurcation of these positions enables our Chief Executive Officer to better focus on more managerial responsibilities, such as improving our Jatropha operations, enhancing stockholder value and expanding and strengthening the Company’s brand in the energy agri-business industry, while allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management. We believe that this leadership structure has to date been effective for the Company.
Management is responsible for the day-to-day management of risks the Company faces, while the Board as a whole plays an important role in overseeing the identification, assessment and mitigation of such risks. For example, the The
oversight of financial risk management lies primarily with the Board’s audit committee,Audit Committee, which is empowered to appoint and oversee our independent auditors, monitor the integrity of our financial reporting processes and systems of internal controls and provide an avenue of communication among our independent auditors, management and our boardBoard of directors.Directors. However, because of the size of the Board of Directors and the Audit Committee, the Company’s risk mitigation efforts have been overseen by the entire Board. In fulfilling its risk oversight responsibility, the Board as a whole and acting through any established committees, regularly consults with management and third parties to evaluate and, when appropriate, modify our risk management strategies.
Director Compensation
Pursuant to Company’s director compensation policy for 2019, each non-employee directors (“Compensation Policy”), which new policy became effective as of July 1, 2009. Pursuant to the Compensation Policy, non-employee directors will bedirector was entitled to receiveannual compensation of $24,000 in cash and options to purchase 500,000 shares for serving on the following benefits, among others, in considerationBoard of Directors. Directors who are employed by the Company as officers or employees are not entitled to any compensation for their services as directorsserving on the Board of Directors. David R. Walker, the Chairman of the Company:
DIRECTOR COMPENSATION FOR FISCAL YEAR 2009
| Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards(1)(2) | Non-Equity Incentive Plan Compensation | Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||
| David R. Walker | $ | 12,000 | $ | 9,100 | $ | 21,100 | ||||||||||||||||||||||
| Richard Palmer | ||||||||||||||||||||||||||||
| Mark A. Bernstein, Ph.D. | $ | 12,000 | $ | 9,100 | $ | 21,100 | ||||||||||||||||||||||
| Total | $ | 24,000 | $ | 18,200 | $ | 42,200 | ||||||||||||||||||||||
Name | Year | Fees Earned or Paid in Cash | Stock Awards | Option Awards(1)(2) | Non-Equity Incentive Plan Compensation | Nonqualified Deferred Compensation Earnings | All Other Compensation | Total |
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David R. Walker | 2019 | $24,000 |
| $12,304 |
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| $36,304 |
(1)This column represents the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. These amounts do not correspond to the actual value that will be recognized by the named directors from these awards.
(2)Pursuant to the company’s director compensation, each non-employee director is entitled to an annual grant of options to acquire 500,000 shares.
Vote Required and Recommendation of Board of Directors
Our Bylaws provide that directors are elected by a plurality of the votes cast by shares entitled to vote at such election of directors. In addition, applicable Securities and Exchange Commission voting requirements hold that stockholders have two voting choices for the election of directors: “FOR” or “WITHHOLD.” You may choose to vote “FOR” or “WITHHOLD” with respect to all of the nominees or any specific nominee(s). Stockholders entitled to vote at the 2010 Annual Meeting have the right to cast, in person or proxy, all of the votes to which the stockholder’s shares are entitled for each of the nominees. Under the plurality standard, the only votes that count when director votes are being tabulated are “FOR” votes. “WITHHOLD “ votes have no effect. Unless otherwise instructed on your signed proxy, your shares will be voted “FOR” the election of the nominees presented in this proxy statement. If you do not vote for a particular nominee, or if your broker does not vote your shares of common stock held in “street name,” or if you withhold authority for one or all nominees, your vote will not count either “FOR” or “AGAINST” the nominee, although it will be counted for purposes of determining whether there is a quorum present at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
EACH OF THE NOMINEES LISTED ABOVE.
* * *
Audit Committee Report
The following is the report of our Audit Committee with respect to our audited financial statements for the fiscal yearyears ended December 31, 2009.2016. 2017, 2018 and 2019. This report shall not be deemed soliciting material or to be filed with the Securities and Exchange CommissionSEC or subject to Regulation 14A or 14C under the Securities Exchange Act or to the liabilities of Section 18 of the Securities Exchange Act, nor shall any information in this report be incorporated by reference into any past or future filing under the Securities Act or the Securities Exchange Act, except to the extent we
specifically request that it be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Securities Exchange Act.
The Audit Committee provides assistance to our Board of Directors in fulfilling its oversight responsibilities as defined inresponsibility to the Company’s stockholders, potential stockholders, the investment community, and others relating to our financial statements and the financial reporting process, the systems of internal accounting and financial controls, the internal audit function, the annual independent audit of our financial statements and the ethics programs when established by our management and our Board of Directors. The Audit Committee has the sole authority (subject to stockholder ratification) to appoint or replace the outside auditors and is directly responsible for determining the compensation of the independent auditors. In discharging its charter,oversight role, the Audit Committee hasis empowered to investigate any matter brought to its attention, with full access to all of our books, records, facilities and personnel, and to retain its own legal counsel and other advisers as it deems necessary or appropriate.
As part of its oversight of our financial statements, the Audit Committee reviewed and discussed thewith both management and our outside auditors our interim financial statements and annual audited financial statements and reporting process, including the system of internal controls, with management and with Hansen, Barnett & Maxwell, P.C. (“HBM PC”), the Company’s independent registered public accounting firm for the year ended December 31, 2009. The committee has also discussed with HBM PC the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
During the fiscal year ended December 31, 2009 for filing with the SEC.
The Audit Committee discussed with Hall & Company, the auditors of our 2016, 2017, 2018 and 2019 annual financial statements, matters relating to its independence, including a review of audit and non-audit fees and the letter and written disclosures made by Hall & Company to the Audit Committee pursuant to Public Company Accounting Oversight Board (United States) Rule 3526.
Audit and non-audit services to be provided by Hall & Company are subject to the prior approval of the Company’s last fiscal year.
Taking all of these reviews and Chief Operating Officer in September 2007, and been a member ofdiscussions into account, the Audit Committee recommended to our Board of Directors since September 2007. Mr. Palmer becamethat our Chief Executive Officer on December 21, 2007. SeeBoard of Directors approve the discussion above under “Director Nominees – Richard Palmer” for Mr. Palmer’s principal occupationsinclusion of our audited financial statements for the last five years.
Audit Committee
David Walker
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PROPOSAL II - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
We are asking our stockholders to approve, on an advisory basis, the compensation of our Named Executive Officers as Chief Financial Officerdescribed in the “Executive Compensation” section of US Modular, a private technology company locatedthis proxy statement, including the executive compensation tables and accompanying narrative disclosure, as provided on pages __ to __. Accordingly, we are asking our stockholders to vote on the following resolution:
RESOLVED, that the compensation paid to the named executive officers of Global Clean Energy Holdings, Inc., as disclosed in Irvine, California. From April 2002 through February 2007, Mr. Nelson served as Chief Financial Officerthe 2020 Proxy Statement of netGuru,Global Clean Energy Holdings, Inc., a NASDAQ-listed global engineering software pursuant to Item 402 of SEC Regulation S-K, including the compensation tables and IT service company. Prior to netGuru, Mr. Nelson founded and operated Millennium Information Technologies from 1997 to 2002. From 1992 to 1997 he served as President and CFO of Comprehensive Weight Management, a national healthcare service provider. From 1985 to 1991 he served as Treasurer of Comprehensive Care Corporation, a NYSE listed national healthcare provider. Mr. Nelson servednarrative discussion, hereby is approved.
This proposal, commonly known as a U.S. Naval Officer after graduating from“Say-on-Pay” proposal, gives our stockholders the Universityopportunity to express their views on our named executive officers’ compensation as a whole. This vote is advisory in nature and therefore is not binding on us, or our Board of Southern California, majoringDirectors. Our Board of Directors, however, values the opinions of our stockholders. To the extent there is any significant vote against the named executive officer compensation as disclosed in finance. He holds a MBA degree from Bryant University in Smithfield, R.I. He has also servedthis proxy statement, we will consider the stockholders’ concerns, and we will evaluate whether any actions are necessary to address those concerns.
Our Board of Directors believes that our executive compensation program aligns well with our philosophy and corporate performance, and that it incentivizes and rewards our leadership for increasing stockholder value, while aligning the interest of our leadership with those of our stockholders on the board of directors of two commercial banks, a NASDAQ-listed technology company,an annual and a privately held specialty hospital.
* * *
Summary Compensation Table
The following table setsets forth certain information concerning the annual and long-term compensation for services rendered to us in all capacities for the fiscal years ended December 31, 20092018 and 20082019 of all persons who served as our principal executive officer during such fiscal years and for any other executive officer who earned annual compensation during such fiscal year greater than $100,000 (collectively, the “Named Executive Officers”). The Company did not appoint a Chief Financial Officer for 2018 and 2019.
Name and |
| Fiscal Year Ended 12/31 |
| Salary Paid or Accrued ($) |
| Bonus Paid or Accrued ($) |
| Stock Awards ($) |
| Option Awards ($)(2) |
|
| All Other Compensation ($) |
| Total ($) |
Richard Palmer |
| 2019 |
| 300,000 |
| $150,000 |
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| $339,338 |
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| $789,338 |
President and |
| 2018 |
| 260,411(1) |
| $130,206 |
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| $25,324 |
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| $415,941 |
Chief Executive |
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Officer |
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Noah Verleun |
| 2019 |
| $176,538(3) |
| -0- |
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| $172,196 |
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| $348,734 |
Executive Vice |
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President |
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(1)On October 16, 2018, in order to accommodate the Company’s cash flow needs, Mr. Palmer agreed to defer payment of $1,000,000 of his accrued and unpaid salary for two years, which deferral is evidenced by a convertible promissory note.
(2)Amounts represent the aggregate grant date fair value of awards computed in accordance with ASC Topic 718, excluding the effects of any estimated forfeitures. For assumptions used in determining grant date fair market value, refer to Note [____] of Notes to the Financial Statements included in this Annual Report. The amounts reported for these options may not represent the actual economic values that our Named Executive Officers will realize from these options as the actual value realized will depend on our performance, stock price and their continued employment.
(3)Mr. Verleun was appointed as the Company’s Senior Vice President in January 2019 and promoted to Executive Vice President-Development & Regulatory Affairs in May 2020.
Option Grants
On October 16, 2018, the Company granted Mr. Palmer a five-year, non-qualified option to purchase 110 million shares. The foregoing option has an exercise price of $0.0154 per share (which price the Board determined was equal to or greater than the fair market price of Common Stock on the date of grant). The option provides that the 110 million shares vest as follows: (i) The right to purchase of 30 million shares vested when the Company’s Market Capitalization reached $7 million; (ii) The right to purchase of an additional 40 million shares vested when the Company’s Market Capitalization reached $15 million; and (iii) The right to purchase the remaining 40 million shares will vest if/when the Company’s Market Capitalization reaches or exceeds $25 million. The term “Market Capitalization” was defined as the product of the number of shares of Common Stock issued and outstanding at the time Market Capitalization is calculated, multiplied by the average closing price of the Common Stock for the thirty (30) consecutive trading days prior to the date of calculation of Market Capitalization as reported on the principal financial officersecurities trading system on which Common Stock is then listed for trading, including the OTC Pink marketplace, the NASDAQ Stock Market, or any other applicable stock exchange. The Company’s Market Capitalization has exceeded all of the foregoing target levels and, accordingly, Mr. Palmer’s option has fully vested.
Noah Verleun was promoted and became a Named Executive Officer during the fiscal year ended December 31, 2009. No other executive officers earned annual2019. On January 15, 2019, the Company granted Mr. Verleun a five-year non-qualified stock option to purchase 50 million shares of Common Stock. The foregoing option has an exercise price of $0.02 per share (which price the Board determined was greater than the fair market price of Common Stock on the date of grant). The option provides that the right to purchase the 50 million shares vested as follows: (i) The right to purchase 13,900,000 shares vested when the Company’s Market Capitalization reached $7 million; (ii) The right to purchase of an additional 16,300,000 shares vested when the Company’s Market Capitalization reached $15 million; and (ii) The right to purchase the remaining 19,800,000 shares vested when the Company’s Market Capitalization reached $ 25 million. “Market Capitalization” in Mr. Verleun’s option agreement is defined in the same manner as in Mr. Palmer’s option agreement. The Company’s Market Capitalization has exceeded all of the foregoing target levels and, accordingly, Mr. Verleun’s option has fully vested.
In connection with the acquisition of the Company’s Bakersfield refinery, the Board established certain performance milestones for Mr. Verleun. In April 2019 Mr. Verleun met those targets, and as compensation duringfor achieving his milestones, Mr. Verleun was granted an option on June 21, 2019 to purchase 10 million shares. The foregoing option has a five-year term and an exercise price of $0.0165 (the fair market value on the fiscal year ended December 31, 2009 that exceeded $100,000. The principal executive officerdate of grant). One quarter of the option shares vested on the date of grant, and the other named officers are collectively referred to asremaining portion of the “Named Executive Officers.”
Name and Principal Position | Fiscal Year Ended 12/31 | Salary Paid or Accrued ($) | Bonus Paid or Accrued ($) | Stock Awards ($) | Option Awards ($)(4) | All Other Compensation ($) | Total ($) | |||||||||||||||||||
| Richard Palmer | 2009 | 250,000 | 0 | 0 | (1) | 0 | 23,400 | 273,400 | ||||||||||||||||||
| 2008 | 250,000 | — | — | — | 23,400 | 273,400 | ||||||||||||||||||||
Bruce Nelson(1) | 2009 | 175,000 | 0 | 0 | (3) | 0 | 10,000 | 185,000 | ||||||||||||||||||
| 2008 | 145,833 | (2) | — | — | 189,000 | 10,000 | 344,833 | |||||||||||||||||||
Holdings of Previously Awarded Equity
The following table sets forth information as of December 31, 2009,2019, concerning unexercised options, unvested stock and equity incentive plan awards for the executive officers named in the Summary Compensation Table.our Named Executive Officers.
OUTSTANDING EQUITY AWARDS AT YEAR ENDED DECEMBER 31, 2009
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||
| Richard Palmer | 6,000,000 | 0.03 | 8/20/2012 | ||||||||||||||||||||||||||||||
| 6,000,000 | 0.03 | 8/20/2012 | |||||||||||||||||||||||||||||||
| Bruce Nelson | 500,000 | 0.05 | 3/20/2018 | ||||||||||||||||||||||||||||||
| 500,000 | 0.05 | 3/20/2018 | |||||||||||||||||||||||||||||||
| 500,000 | 0.05 | 3/20/2018 | |||||||||||||||||||||||||||||||
| 500,000 | 0.05 | 3/20/2018 | |||||||||||||||||||||||||||||||
| 1,250,000 | 0.05 | 3/20/2013 | |||||||||||||||||||||||||||||||
| 1,250,000 | 0.05 | 3/20/2013 | |||||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||
Name | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
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Richard Palmer | 110,000,000 | 0 |
| $0.0154 | 10/15/2023 |
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Noah Verleun | 50,000,000 | 0 |
| $0.0200 | 01/14/2024 |
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| 4,166,667 | 5,833,333 |
| $0.0165 | 04/09/2024 |
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| 2,812,500 | 2,187,500 |
| $0.0035 | 09/16/2023 |
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| 791,667 | 208,333 |
| $0.0022 | 10/31/2022 |
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| 1,500,000 | 0 |
| $0.0017 | 12/13/2021 |
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| 800,000 | 0 |
| $0.0030 | 04/24/2021 |
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| 500,000 | 0 |
| $0.0110 | 01/31/2020 |
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Employment Agreements
Richard Palmer. On September 7, 2007, weEffective December 31, 2014, the Company entered into an employment agreement (the “2014 Employment Agreement”) with Richard Palmer, pursuant to which we hired Mr. Palmer to serve as our President and Chief Operating Officer. Mr. Palmer was also appointed to serve as director on our Board of Directors to serve until the next election of directors by our stockholders. Upon the resignation of our prior Chief Executive Officer, in December 2007, Mr. Palmer also became our Chief Executive Officer.
On October 16, 2018, the eventCompany and Mr. Palmer also entered into a new Executive Employment Agreement (the “2018 Employment Agreement”) that (i) we terminatereplaced the 2014 Employment Agreement. Under the 2018 Employment Agreement, Mr. Palmer agreed to serve as the Company’s President and Chief Executive Officer through October 15, 2023 at an annual base salary of $300,000 per year. Upon the closing of the acquisition of the Company’s Bakersfield, California, refinery, on May 7, 2020 the Company and Mr. Palmer amended the 2018 Employment Agreement to increase Mr. Palmer’s annual base salary to $350,000, effective immediately. Under the 2018 Employment Agreement, Mr. Palmer is entitled to receive an annual bonus of up to 50% of his annual base salary if Mr. Palmer meets certain performance targets. If Mr. Palmer’s employment is terminated as a result of his death or disability, or by him for reasons other than “cause” (as“Good Reason” as defined in the 2018 Employment Agreement, in addition to include material breaches byreceiving a payment of all outstanding sums due and owing to him at the time of separation, the agreement, fraud, misappropriation of funds or embezzlement), or if (ii) Mr. Palmer resigns because we breached the Employment Agreement, we will be obligatedCompany is required to pay Mr. Palmer (or his estate) an amount equal to one (1) times histwelve months of Mr. Palmer’s then-current annual base salary in the form of salary continuation, plus fifty percent (50%)payment of the target bonus in effect on the date of his termination. However, if Mr. Palmer’s and his family’s medical insurance premiums. If Mr. Palmer’s employment is terminated for death or disability, or if Mr. Palmer resigns or is terminated for “cause,” hehis estate will notalso be entitled to receiveretain any severance payments or other post-employment benefits. The original termstock options that have vested as of the Employment Agreement commenced September 1, 2007, and was scheduled to expire on September 30, 2010.date of termination.
Under the Company and Richard Palmer entered into an amendment (the “Amendment”) to the2018 Employment Agreement. Pursuant to the Amendment, the Company extended the term of Mr. Palmer’s employment for an additional two years, i.e., through September 30, 2012. Thereafter, the term of employment shall automatically renew for successive one-year periods unless otherwise terminated. In connection with the Amendment, the Company and Mr. Palmer entered into an option agreement (“Option Agreement”). Pursuant to the Option Agreement, the Company granted Mr. Palmer a newfive-year non-qualified stock option (“Option”) to purchase 110 million shares of Common Stock at an exercise price of $0.0154, subject to the Company’s achievement of certain market capitalization goals. Under the Option, Mr. Palmer will vest, and can exercise the Option, with respect to 30,000,000 shares when the Company’s market capitalization first reaches $7 million, another 40,000,000 shares will vest under the Option when the Company’s market capitalization reaches $15 million, and 40,000,000 shares will vest when the Company’s market capitalization first reaches $25 million. The term “market capitalization” is defined in the 2018 Employment Agreement to mean the product of the number of shares of Common Stock issued and outstanding at the time market capitalization is calculated, multiplied by the average closing price of the Common Stock for the 30 consecutive trading days prior to the date of calculation as reported on the principal securities trading system on which the Common Stock is then listed for trading, including the OTC Pink marketplace, the NASDAQ Stock Market, or any other applicable stock exchange.
Noah Verleun. Effective January 15, 2019, the Company entered into a three-year employment agreement with Noah Verleun, the Company’s Executive Vice President, which agreement was amended on May 7, 2020. Under the employment agreement, Mr. Verleun is paid an annual base salary of $310,000 and is entitled to receive an annual bonus of up to 50% of his annual base salary if Mr. Verleun meets certain performance targets. In order to be eligible to receive a bonus, Mr. Verleun must be employed by the Company on the last day of the year in which the bonus is earned. If Mr. Verleun’s employment is terminated by him for “Good Reason” as defined in the Verleun Agreement, in addition to receiving a payment of all outstanding sums due and owing to him at the time of separation, the Company is required to pay Mr. Verleun (or his estate) an amount equal to four months of Mr. Verleun’s then-current base salary in the form of salary continuation, plus payment of Mr. Verleun’s and his family’s medical insurance premiums. If Mr. Verleun’s employment is terminated for death or disability, Mr. Verleun or his estate shall be entitled to the same four month’s salary, and he will be entitled to retain any stock options that have vested as of the date of termination.
Under Mr. Verleun’s employment agreement, the Company granted Mr. Verleun a five-year non-qualified stock option to acquire up to 12,000,000purchase 50 million shares of the Company’s common stockCommon Stock at an exercise price of $0.02, subject to the Company’s achievement of certain market capitalization goals. The newforegoing option expires after ten (10) years.
Bruce NelsonAmended & Restated Non-Solicitation And Confidentiality Agreements. On March 20, 2008, weIn order to fund the Company’s purchase of its Bakersfield, California, refinery in May 2020, the Company entered into an employment agreementvarious credit and other agreements with Bruce K. Nelson pursuant to which we hiredcertain institutional lenders. In connection with these credit agreements, Mr. Nelson to serve as our Executive Vice-PresidentPalmer and Chief Financial Officer effective April 1, 2008. Mr. Nelson’s employment agreement has an initial termVerleun entered into substantially identical Amended & Restated Non-Solicitation And Confidentiality Agreements (the “Non-Solicitation And Confidentiality Agreements”) with subsidiaries of employmentthe Company. Under the Non-Solicitation And Confidentiality Agreements, both Mr. Palmer and Mr. Verleun each individually agreed that, continues through March 20, 2010. Thereafter,during the term of employment shall automatically renew for successive one-year periods unless otherwise terminated by us. The employment agreement was automatically extended in March 2010 through March 20, 2011. We agreed to pay Mr. Nelson a base salary of $175,000, subject to annual increases based on the Consumer Price Index for the immediately preceding 12-month period and a bonus payment based on Mr. Nelson’s satisfaction of certain performance criteria establishedthat they are employed by the compensation committee of our Board of Directors. The bonus amount inCompany or any fiscal year will not exceed 100% of Mr. Nelson’s base salary. Mr. Nelson is eligible to participate in this company’s employee stock option plan and other benefit plans.
development, production, cultivation, distribution, storage, marketing and sale of renewable fuel feedstocks, including Camelina, or the ownership of an equity or profits interest in any entity engaged in renewable fuel feedstock development, production, cultivation, distribution, storage, marketing and sale.
Under the Non-Solicitation And Confidentiality Agreements, each of Mr. Palmer and Mr. Verleun agreed not make any sale, transfer or other disposition of any equity interests that they may own in the Company or any of its subsidiaries (including any shares of Common Stock or options that they may own) until the Company’s lenders have received a certain cumulative amount of distributions; unless (x) such sale, transfer or disposition is for estate planning purposes to an entity that is and remains in their control or (y) all of the cash proceeds from any such sale, transfer or disposition are used to pay costs and expenses (specifically including amounts needed to purchase any Common Stock in the Company or to cover any resultant tax liabilities) incurred in connection with the exercise of options to purchase such Common Stock in the Company.
Change of Control Arrangements
The Company has no other change of control payment agreements in effect.
2010 Equity Incentive Plan
On April 22, 2009,May 13, 2010, our Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”) pursuant to which the Board of Directors reserved an aggregate of 20,000,000 shares of Common Stock for future issuance. The 2010 Plan was approved acceleratingby our stockholders at the vestingAnnual Meeting of Stockholders held in November 2010. The 2010 Plan provided for awards of incentive stock options, non-qualified stock options, and stock appreciation rights. At the time that the 2010 Plan expired on May 12, 2020, options for the issuance of all 3,500,000 unvested20,000,000 shares authorized by the 2010 Plan had been granted, of which options for the purchase of _____ shares were still outstanding. Since the 2010 Plan has expired, no additional awards may be made under the option.
2020 Equity Incentive Plan
On April 10, 2010, the event that, commencing after March 20, 2009, (i) we terminate Mr. Nelson’s employmentCompany’s Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”) pursuant to which the Board of Directors reserved an aggregate of 20,000,000 shares of Common Stock for reasons other than “cause” (as defined in his employment agreementfuture issuance. For a description of the 2020 Plan, see, “Proposal V—Approval of Adoption of the 2020 Equity Incentive Plan,” below. If the proposal to include material breaches by himapprove the Reverse Stock Split is approved and the Reverse Stock Split is implemented, the number of his employment agreement, fraud, misappropriation of funds or embezzlement), or if (ii) Mr. Nelson resigns because we breached his employment agreement, weshares reserved under the2020 Plan will be obligatedreduced to pay Mr. Nelson an amount equal to the salary he would have received through the end of the term of his employment agreement. However, if Mr. Nelson’s employment is terminated for death or disability, or if Mr. Nelson resigns or is terminated for “cause,” he will not be entitled to receive any severance payments or other post-employment benefits.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of our common stockCommon Stock as of May 1, 2010July 31, 2020 by (a) each person known by us to own beneficially 5% or more of each class of our common stock,outstanding voting shares (i.e. Common Stock and our Series B Preferred Stock), (b) each of our named executive officers namedlisted in the Summary Compensation Table and each of our directors and (c) all executive officers and directors of this companythe Company as a group. As of May 1, 2010,July 31, 2020, there were 270,464,478358,499,606 shares of our common stockCommon Stock issued and outstanding. As of the same date, there were 13,000 shares of our Series B Preferred Stock issued and outstanding, which shares of preferred stock were convertible into an aggregate of 11,818,181 shares of common stock.Common Stock. Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all the shares beneficially owned by them.
| Name and Address of Beneficial Owner (1) | Shares Beneficially Owned (2) | Percent of Class | ||||||
| Certain Beneficial Owners: | ||||||||
Corporativo LODEMO S.A DE CV Calle 18, #201-B x 23 y 25, Colonias Garcia Gineres, C.P. 97070 Merida, Yucatan, Mexico | 9,090,908 | (3) | 3.25 | % | ||||
Greenrock Capital Holdings LLC 10531 Timberwood Circle, Suite D Louisville, Kentucky 40223 | 2,727,273 | (4) | 1.00 | % | ||||
| Directors/Named Executive Officers: | ||||||||
| Richard Palmer | 72,030,241 | (5) | 25.50 | % | ||||
| Bruce Nelson | 5,543,000 | (6) | 2.02 | % | ||||
| David R. Walker | 1,653,539 | (7) | * | |||||
| Mark A. Bernstein | 500,000 | (8) | * | |||||
| Marin Wenzel | 300,000 | (9) | * | |||||
| All Named Executive Officers and Directors as a group (4 persons) | 80,026,780 | 27.69 | % | |||||
Name and Address of Beneficial Owner (1) |
| Shares Beneficially Owned (2) |
| Percent |
Preferred Stock: |
|
|
|
|
Corporativo LODEMO S.A DE CV Calle 18, #201-B x 23 y 25, Colonias Garcia Gineres, C.P. 97070 Merida, Yucatan, Mexico |
| 9,090,908(3) |
| 2.5% |
|
|
|
|
|
Greenrock Capital Holdings LLC 10531 Timberwood Circle, Suite D Louisville, Kentucky 40223 |
| 2,727,273(4) |
| * |
|
|
|
|
|
Common Stock: |
|
|
|
|
|
|
|
|
|
Pacific Sequoia Holdings LLC 250 University Avenue, Palo Alto, CA 94301 |
| 40,000,000(5) |
| 11.2% |
|
|
|
|
|
Roll Energy Investments LLC 11444 West Olympic Boulevard, 10th Floor Los Angeles, California 90064 |
| 33,094,500 |
| 9.3% |
|
|
|
|
|
Michael Zilkha 1001 McKinney, Suite 1900 Houston TX 77002 |
| 36,515,690 |
| 10.2% |
|
|
|
|
|
Directors/Named Executive Officers: |
|
|
|
|
|
|
|
|
|
Richard Palmer |
| 230,574,780 (6) |
| 42.7% |
David R. Walker |
| 3,195,206 (7) |
| * |
Martin Wenzel |
| 1,000,000 (8) |
| * |
Noah Verleun |
| 67,831,691 (9) |
| 18.5% |
Ralph Goehring |
| -- |
| -- |
All Named Executive Officers and Directors as a group (5 persons) |
| _____ (10) |
| ___% |
* Less than 1%
(1) Unless otherwise indicated, the business address of each person listed is c/o Global Clean Energy Holdings, Inc., 6033 W. Century Blvd, Suite 895, Los Angeles, California.
(2) For purposes of this table, shares of common stockCommon Stock are considered beneficially owned if the person directly or indirectly has the sole or shared power to vote or direct the voting of the securities or the sole or shared power to dispose of or direct the disposition of the securities. Shares of common stockCommon Stock are also considered beneficially owned if a person has the right to acquire beneficial ownership of the shares upon exercise or conversion of a security within 60 days of May 1, 2010.
(3) Consists of 9,090, 9089,090,908 shares of common stockCommon Stock that may be acquired upon the conversion of shares of Series B Preferred Stock. Corporativo LODEMO owns 10,000 shares of our Series B Preferred Stock, which represents approximately 76.92% of the issued and outstanding shares of that class of securities.
(4) Consists of 2,727,273 shares of common stockCommon Stock that may be acquired upon the conversion of shares of Series B Preferred Stock. Greenrock owns 3,000 shares of our Series B Preferred Stock, which represents approximately 23.08% of the issued and outstanding shares of that class of securities.
(5) ConsistsBased on information disclosed in a Schedule 13G jointly filed with the SEC on February 1, 2019 by Pacific Sequoia Holdings LLC (“PSH”), Jeffrey S. Skoll, and GrowthWorks Canadian Fund Ltd. (“GWC”), according to which PSH, Mr. Skoll and GWC share voting and dispositive control over the shares. Jeffrey S. Skoll, as the indirect sole member of 12,000,000PSH, may be deemed to share the power to direct the voting or disposition of the shares on behalf of PSH. The address of PSH and Jeffrey S. Skoll is 250 University Avenue, Palo Alto, CA 94301. The address of GWC is McCarthy Tétrault LLP, Box 48, Suite 5300, Toronto Dominion Bank Tower, Toronto, ON M5K 1E6.
(6) Includes 72,789,539 shares that may be acquired upon the conversion of the principal balance, plus all accrued interest, under an outstanding convertible promissory note, and 110,000,000 shares that may be acquired upon the exercise of currently exercisable options. Mr. Palmer also has
(7) Includes 2,291,667 shares that may be acquired upon the exercise of options to acquire 12,000,000that were vested as of July 31, 2020.
(8) Consists of shares that may be acquired upon the exercise of common stock that are not currently exercisable and will not become exercisable unless certain conditions are met.
(9) Includes 4,500,00060,570,834 shares that may be acquired upon the exercise of currently exercisable options.
(10) Includes 1,250,000(i) ________ shares that may be acquired upon the exercise of currently exercisable options.
Securities Authorized For Issuance Under Equity Compensation Plans
| Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) | |||||||||
| Equity compensation plans approved by security holders | ||||||||||||
| 1993 Incentive Plan (1) | 3,383,000 | $ | 0.13 | — | ||||||||
| 2002 Stock Incentive Plan | 19,700,000 | $ | 0.04 | 300,000 | ||||||||
| Equity compensation plans not approved by security holders | 1,350,000 | $ | 0.02 | |||||||||
| Options | ||||||||||||
| Warrants | 66,518,635 | $ | 0.02 | |||||||||
| Total | 90,951,635 | 300,000 | ||||||||||
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) |
Equity compensation plans approved by security holders | |||
2010 Equity Incentive Plan (1) | ______ | ______ | -0- |
Equity compensation plans not approved by security holders | |||
2020 Equity Incentive Plan(2) | 7,095,000 | ||
Common Stock Purchase Warrants(3) | ______ | ||
Non-Qualified Stock Options(3) | ______ | ||
Total | -0- |
(1)The 19932010 Equity Incentive Plan has expired, and no additional options or awards can be granted under this plan.
(2)The 2020 Equity Incentive Plan was adopted by the Company’s Board of Directors on April 10, 2020 and is subject to stockholder approval at the Annual Meeting (see, “Proposal V-Approval Of Adoption Of The 2020 Equity Incentive Plan,” below).
(3)Represents options and warrants to purchase Common Stock issued to officers and consultants pursuant to various employment and consulting agreements.
PROPOSAL IIIII - ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is required to include in this proxy statement and to present at the Annual Meeting a non-binding stockholder vote on whether an advisory vote on executive compensation should be held annually, every two years or every three years. The Board of Directors believes that an advisory “say on pay” vote on executive compensation should be held annually.
In line with best corporate governance practices, we believe it is in our best interest to hold our say on pay vote on an annual basis, as we believe holding this vote annually provides an effective way to obtain current information on stockholder sentiment about the Company’s executive compensation program. Additionally, while the say on pay vote is a formal means for soliciting stockholder feedback, we welcome the opportunity to engage with stockholders at any time.
Proposal No. III, commonly known as a “say on frequency” vote, gives stockholders the opportunity to endorse or not endorse the decision of the Board of Directors to hold an advisory vote on executive compensation at each annual meeting of stockholders hereafter. This proposal will be presented at the Annual Meeting as a resolution in substantially the following form:
RESOLVED, that the stockholders approve Global Clean Energy Holdings, Inc.’s presentation at every annual meeting of its stockholders hereafter of a proposal to approve the compensation of the Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in the compensation tables and related narrative disclosure in Global Clean Energy Holdings, Inc. ’s proxy statement for such annual meeting.
This vote will not be binding on the Board of Directors and may not be construed as overruling a decision by the Board of Directors or creating or implying any change to the fiduciary duties of the Board. The Board, or a Compensation Committee when such a committee is established, shall however take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.
Stockholders can choose one of four choices for this Proposal on the proxy card: one year, two years, three years, or abstain. Stockholders are not voting to approve or disapprove our Board’s recommendation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE, IN AN ADVISORY MANNER, TO HOLD AN ADVISORY VOTE TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION ANNUALLY.
* * *
REGISTERED PUBLIC ACCOUNTING FIRM
General
At the Annual Meeting, our stockholders are being asked to ratify the appointment of our Board has appointed Hansen, BarnettHall & Maxwell, P.C. (“HBM PC”), to actCompany as our independent registered public accounting firm for theour fiscal year ending December 31, 2010, and recommends that2020. We are submitting the appointment of Hall & Company to our stockholders vote to ratify such appointment. Representatives of HBM PC will not be available at the 2010 Annual Meeting. In the event of a negative votebecause we value our stockholders’ views on such ratification, the Board will reconsider its selection. No determination has been made as to what action the Board would take if the stockholders do not ratify the appointment.
If our stockholders do not ratify the appointment of Hall & Company, our Audit Committee may reconsider the appointment.
Principal Accountant Fees and Services
|
| 2019 |
| 2018 | ||
|
|
|
|
|
|
|
Audit fees: |
| $ | 69,100 |
| $ | 45,500 |
Audit related fees: |
| $ |
|
| $ |
|
Tax fees: |
| $ |
|
| $ |
|
All other fees: |
| $ |
|
| $ |
|
Total |
| $ | 69,100 |
| $ | 45,500 |
In the fiscal year ended December 31, 2008 and 2009above table, “audit fees” are fees for professional services for the audit of ourthe Company’s financial statements included in its Annual Report on Form 10-K for the fiscal years ended December 31, 2019 and the2018, and review of financial statements included in our Formsits quarterly reports on Form 10-Q and SECfor services that are normally provided in connection with regulatory filings were $43,038 and $45,119, respectively.
Audit Committee Pre-Approval Policies and Procedures
During 2019 and 2018, the Company only had two directors, one of whom represented the Company’s sole member of the Audit Committee. Because of the size of the Board and a one-member Audit Committee, charter provides thatall of the audit-related services and other services described in the above table were pre-approved by our Board, including the sole member of the Audit Committee shall pre-approve all audit engagement fees and terms and pre-approve any other significant compensation to be paid to the independent registered public accounting firm. No other significant compensation services were performed for us by HBM PC during 2008 and 2009.
THE BOARD OF DIRECTORS RECOMMENDS A Vote “For” The Ratification of Hansen, BarnettVOTE “FOR” THE RATIFICATION OF HALL & Maxwell,P.C. as our Independent Registered Public Accountants.
* * *
PROPOSAL IIIV – APPROVAL OF ADOPTION OF THE 20102020 EQUITY INCENTIVE PLAN
2020 Equity Incentive Plan
On May 13, 2010, ourApril 10, 2020, the Company’s Board of Directors adopted the Global“Global Clean Energy Holdings, Inc. 20102020 Equity Incentive Plan” (the “2020 Plan”). The 2020 Plan (the “replaces the 2010 Plan”), and recommended that expired in May 2020.
The Company’s Board of Directors is asking you to approve the Board’s adoption of the 20102020 Plan, be submitted for approval bywhich we believe includes policies and terms that represent corporate governance best practices designed to protect our stockholders. The Board adoptedstockholders’ interests, in addition to providing clarity, ease of administration, and compliance with recent developments in applicable laws. We believe the 2010 Plan because there are a limited number of shares available for grants of awards under our prior stock option plan, the Company’s 2002 Stock Incentive Plan (the “2002 Plan”). In addition, the 2002 Plan will expire in July 2012. Upon the expirationshare reserve of the 20022020 Plan the Company will no longer be ableprovides us with sufficient shares to enable us to grant any stock options or otherequity awards to its employees, officers and directors. The 2002 Plan authorized the Company to grant options to purchase a total of 20,000,000 shares. As of April 1, 2010, awards for 19,700,000 shares had been granted under the 2002 Plan and 300,000 shares remained available for future grants. Management of the Company believes that granting options and other stock awards is an important incentive tool for the Company’s employees, officers and directors. As a result, the Board adopted the 2010 Plan to continue to provide a means by which employees, directors and consultants of the Company may be given an opportunity to benefit from increases in the value of our Common Stock, and to attract and retain the services of such persons. All of our employees, directors and consultants are eligiblefor at least two years. This forecast is intended to participate in the 2010 Plan.
The Board has adopted the 2020 Plan, and stockholder approval is conditioned upon obtaining such stockholder approval. Ifnot required in order to implement the 2020 Plan. Accordingly, if the stockholders fail to approve the adoption of the 2020 Plan, the 2020 Plan will remain in effect. However, if the stockholders do not approval this proposal,approve the adoption of the 2020 Plan, we will not implementbe able to issue incentive stock options to our employees under the plan. In addition, stockholder approval of
the 2020 Plan is required by The Nasdaq Stock Market. Although we are not currently listed on any Nasdaq market, we plan to apply to have our Common Stock listed on Nasdaq in the near future.
WHY YOU SHOULD VOTE FOR THE 2020 PLAN
Equity Incentives Such as Stock Options Are an Important Part of Our Compensation Philosophy
The 2020 Plan is critical to our ongoing effort to build stockholder value through retaining and motivating key employees and directors. The purpose of the adoption of the 2020 Plan is to provide us with a sufficient reserve of Common Stock to offer appropriate incentives to our employees, consultants and directors. On May 7, 2020 we acquired a diesel refinery that we are currently converting into a renewable diesel refinery. In order to construct, maintain, and operate the renewable diesel refinery and the renewable fuels business related thereto, since May 7, 2020 we have hired over 50 employees, and expect to hire additional personnel. Our ability to operate the refinery and the renewable fuels business will, to a large extent, depend on our ability to attract and retain qualified personnel that have the specific technical, operational, or commercial expertise. Our equity plan is a key component of our strategy to attract and retain those individuals. Because our 2010 Plan expired in May 2020, our Board adopted the 2020 Plan from which we can grant incentive equity awards to our employees and any currently outstandingdirectors.
We believe that equity compensation is a critical component to motivate key employees and directors and effectively aligns employee compensation with stockholder interests. Furthermore, we believe that granting employees equity compensation makes employees feel and act like “owners” of the enterprise. Stock options will be the primary focus of our equity program, although we may also grant shares of restricted stock and other forms of equity awards underpermitted by the 2010 Plan will terminate2020 Plan. The potential value of stock options is realized only if our share price increases, although the other forms of equity awards also provide a strong incentive for individuals to work to grow our business and bebuild stockholder value. Awards generally vest over a period of no further forceservice with us or effect.
SUMMARY OF THE 2020 PLAN
The following summary of the 2010material terms of the 2020 Plan is set forth below. The summary is qualified in its entirety by reference to the full text of the 20102020 Plan, a copy of which is set forth as Appendix Battached to this proxy statement.
Effective Date and Duration of the 2020 Plan.The 20102020 Plan became effective on April 10, 2020. As of the date of the Proxy Statement, options for the purchase of 7,095,000 shares have been granted under the 2020 Plan. Except with respect to awards then outstanding, unless sooner terminated, the 2020 Plan will expire on April 9, 2030, and no further awards may be granted after such date.
Types of Awards. The 2020 Plan provides for awardsthe following types of awards: incentive stock options, non-statutorynonstatutory stock options, rights to acquire restricted stock andawards, restricted stock unit awards, stock appreciation rights, performance stock awards, performance cash awards, and other stock-based awards. We refer to these stock awards collectively as the stock awards or SARs. Incentive stock options granted underawards. If the 20102020 Plan are intendedis not approved by the stockholders at the Annual Meeting, we will not be able to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Non-statutory stock options granted under the 2010 Plan are not intended to qualify asgrant incentive stock options under the Code. See “Federal Income Tax Consequences” below for a discussion of the principal federal income tax consequences of2020 Plan.
Eligibility. Stock awards may be granted under the 2010 Plan.
Annual Compensation to Non-Employee Directors; Limitation on Annual Stock Awards to Participants. The 2020 Plan provides that the compensation payable by us to a non-employee director for services performed as a non-employee director, including, without limitation, the grant date value (determined under U.S. generally accepted accounting principles) of awards, cash retainers, committee fees and other
compensation, shall not exceed $500,000 in the valueaggregate during any calendar year. Furthermore, the 2020 Plan provides that a maximum of our Common Stock, to assist in attracting and retaining the services of such persons, to bind the interests of eligible recipients more closely to the Company’s interests by offering them opportunities to acquire1,000,000 shares of our Common Stock subject to options and other stock awards may be granted to afford such persons stock-based compensation opportunitiesany non-employee director during any calendar year. The 2020 Plan also provides that are competitive with those afforded by similar businesses. Allno officer, employee or consultant may be granted stock awards covering more than 5,000,000 shares of our employees, directorsCommon Stock during any calendar year pursuant to stock options, stock appreciation rights and consultants are eligibleother stock awards.
Administration. The 2020 Plan is administered by our Board of Directors, which may in turn delegate authority to participate inadminister the 2010 Plan.
If the provisionsadministration of the 20102020 Plan is delegated to a newly formed Compensation Committee by the Board hasof Directors, that Compensation Committee shall be comprised of at least two directors, each of whom is (1) a “non-employee director” within the powermeaning of Rule 16b-3 under the Exchange Act, and (2) an “independent director” under applicable rules of The NASDAQ Stock Market LLC, including the independence rules of such stock exchange relating to construecompensation committee members. The 2020 Plan also permits delegation to one or more officers of the ability to determine the recipients, number of shares and interprettypes of stock awards (to the 2010 Plan, andextent permitted by law) to determine: (i) the fair value of Common Stockbe granted to employees other than our officers, subject to a maximum limit on the aggregate number of shares subject to stock awards issued under the 2010 Plan; (ii) the persons to whom and the dates on which awards willthat may be granted; (iii) what types or combinations of types of awards will be granted; (iv) thegranted by such officers.
Stock Available for Awards. The total number of shares of Common Stock to be subject to each award; (v) the time or times during the term of each award within which all or a portion of such award may be exercised; (vi) the exercise price or purchase price of each award; and (vii) the types of consideration permitted to exercise or purchase each award and other terms of the awards.
Appropriate adjustments will be made to the Company,Share Reserve, to the limit on the number of shares that may be issued as incentive stock options, to the limit on the number of shares that may be awarded to any one person in any calendar year and to outstanding awards in the event of any change in our Common Stock without the receipt of consideration by the Company through reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, spin-off, split-off, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, other than the conversion of convertible securities.
Repricing. The 2020 Plan expressly provides that, without the approval of our stockholders, the Compensation Committee may not provide for either the cancellation of underwater stock options or stock appreciation rights outstanding under the 2020 Plan in exchange for the grant of new awards, or the amendment of outstanding stock options or stock appreciation rights to reduce their exercise price.
Dividends and Dividend Equivalents. The 2020 Plan provides that (1) no dividends or dividend equivalents may be paid with respect to any shares of our Common Stock subject to an award before the date that such shares have vested, (2) any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award agreement (including, without limitation, any vesting conditions), and (3) any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to us on the date, if any, such shares are forfeited to or repurchased shall again be availableby us due to a failure to meet any vesting conditions under the 2010 Plan. Whereterms of the applicable award agreement.
Terms of Options. A stock option is the right to purchase shares of our Common Stock at a fixed exercise price during a specified period of time. Stock option grants may be incentive stock options or nonstatutory stock options. Each option is evidenced by a stock option agreement. The Board of Directors determines the terms of a stock option including the exercise price, the form of consideration paid on exercise, the vesting schedule, restrictions on transfer and the term of the option.
Generally, the exercise price of a stock option may not be less than 100% of the fair market value of the stock subject to the option on the date of grant. Options granted under the 2020 Plan will vest at the rate specified in the option agreement.
The term of an option granted under the 20102020 Plan is paidwill be determined by meansthe Board of Directors, but may not exceed ten years. The Board of Directors will determine the optionee’s surrendertime period, including the time period following a termination of previouslyan optionholder’s continuous service relationship with us or any of our affiliates, during which an optionholder has the right to exercise a vested option. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s continuous service relationship with us, or any of our affiliates, ceases for any reason other than disability or death, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. Unless otherwise provided in the option agreement, if an optionholder’s service relationship with us, or any of our affiliates, ceases due to disability or death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of eighteen months in the event of disability and eighteen months in the event of death. The Board of Directors has discretion to extend the term of any outstanding option and to extend the time period during which a vested option may be exercised following a termination of continuous service. The Board of Directors also has discretion to accelerate the vesting of an option or a stock appreciation right following a participant’s termination of continuous service or to provide in an award agreement for continued vesting of an option or a stock appreciation right following a termination of continuous service.
Acceptable forms of consideration for the purchase of our Common Stock issued under the 2020 Plan may include cash, payment pursuant to a “cashless” exercise program developed under Regulation T as promulgated by the Federal Reserve Board, Common Stock owned sharesby the participant, payment through a net exercise feature, or other approved forms of commonlegal consideration.
Generally, an optionholder may not transfer a stock option other than by will or the Company’s withholdinglaws of shares otherwise issuable upon exercise ofdescent and distribution or pursuant to a domestic relations order. However, to the option as may beextent permitted under the 2010 Plan, onlyterms of the net numberapplicable stock option agreement, an optionholder may designate a beneficiary who may exercise the option following the optionholder’s death.
Tax Limitations on Incentive Stock Options. The aggregate fair market value, determined at the time of grant, of shares issued and which remain outstanding in connectionof our Common Stock with such exercise shall be deemed “issued” and no longer availablerespect to incentive stock options that are exercisable for issuancethe first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000. The options or portions of options that exceed this limit are generally treated as nonstatutory stock options. If the 2020 Plan is approved by the stockholders at the Annual Meeting, all of the shares authorized under the 2010 Plan.
·The option exercise price ismust be at least 110% of the fair market value of the stock subject to the option on the date of grantgrant; and the
·The term of theany incentive stock option doesaward must not exceed five years from the date of grant. In addition, no employee
Terms of Restricted Stock Awards. Restricted stock awards are awards of shares of our Common Stock. Each restricted stock award is evidenced by an award agreement that sets forth the terms and conditions of the award. A restricted stock award may be granted optionsin consideration for cash, the recipient’s services performed, or to be performed, for us or an affiliate of ours or other form of legal consideration. Shares of our Common Stock acquired under the 2010 Plan exercisable for more than 500,000 shares of commona restricted stock during any twelve-month period.
Terms of Restricted Stock Unit Awards. A restricted stock unit is a right to receive stock or cash (or a combination of cash and stock) equal to the value of a share of stock at the end of a set period. No stock is issued at the time of grant. Each restricted stock unit award is evidenced by an agreement asthat sets forth the Board shall determineterms and conditions of the award. Restricted stock unit awards may be subject to vesting in its discretion, so long as sharesaccordance with a vesting schedule determined at grant. When a participant’s continuous service with us or any of Common Stock awarded underour affiliates terminates for any reason, the unvested portion of the restricted stock unit award will be forfeited unless otherwise provided in the restricted stock unit award agreement.
Terms of Stock Appreciation Rights. Stock appreciation rights will be granted pursuant to a stock appreciation rights agreement. Each stock appreciation right is denominated in Common Stock share equivalents. The Board of Directors determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our Common Stock on the date of grant. A stock appreciation right granted under the 2020 Plan vests at the rate specified in the stock appreciation right agreement remains subjectas determined by the Board of Directors.
When a stock appreciation right is exercised, the holder is entitled to an amount equal to the termsproduct of (1) the excess of the such agreement.
The Board of Directors determines the term of stock appreciation rights granted under the 2020 Plan, up to a maximum of ten years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if a participant’s continuous service with us, or any of our affiliates, ceases for any reason other than disability or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of eighteen months in the event of disability and eighteen months in the event of death. The Board of Directors has discretion to extend the term of any outstanding stock appreciation right and to extend the time period during which a vested stock appreciation right may be exercised following a termination of continuous service.
Terms of Performance Awards. The 2020 Plan provides for the grant of performance stock awards and performance cash awards. A performance award may vest or be exercised upon achievement of pre-determined performance goals during a specified period. A performance award may also require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be determined by the Board of Directors.
Terms of Other Stock Awards. The Board of Directors may grant other forms of stock awards that are valued in whole or in part by reference to the 2010value of our Common Stock. Subject to the provisions of the 2020 Plan, the Board of Directors has the authority to determine the persons to whom and outstanding awards. In that event, the 2010 Plandates on which such other stock awards will be appropriately adjusted ingranted, the class and maximum number of shares of Common Stock (or cash equivalents) to be subject to the 2010 Plan,each award, and outstandingother terms and conditions of such awards. Such awards may be adjustedgranted either
alone or in addition to other stock awards granted under the class, number2020 Plan. Such other forms of shares and price per share of Common Stockstock awards may be subject to such awards.
Corporate Events
Corporate Transaction. In the event of (i) a liquidationcertain significant corporate transactions, the Board of Directors has the discretion to take one or dissolutionmore of the Company; (ii)following actions with respect to outstanding stock awards under the 2020 Plan:
·Arrange for assumption, continuation, or substitution of a mergerstock award by a surviving or consolidationacquiring entity (or its parent company);
·Arrange for the assignment of any reacquisition or repurchase rights applicable to any shares of our Common Stock issued pursuant to a stock award to the surviving or acquiring corporation (or its parent company);
·Accelerate the vesting and exercisability of a stock award followed by the termination of the Companystock award;
·Arrange for the lapse of any reacquisition or repurchase rights applicable to any shares of our Common Stock issued pursuant to a stock award; and
·Arrange for the surrender of a stock award in exchange for a payment equal to the excess of (1) the value of the property the holder of the stock award would have received upon the exercise of the stock award, over (2) any exercise price payable by such holder in connection with or into another corporation or entity (other thansuch exercise.
The Board of Directors need not take the same action for each stock award.
For purposes of the 2020 Plan, a merger with a wholly-owned subsidiary); (iii)corporate transaction will be deemed to occur in the event of (1) the consummation of a sale of all or substantially all of our consolidated assets, (2) the assetsconsummation of a sale of at least 90% of our outstanding securities, (3) the consummation of a merger or consolidation in which we are not the surviving corporation, or (4) the consummation of a merger or consolidation in which we are the surviving corporation but shares of our outstanding Common Stock are converted into other property by virtue of the Company;transaction.
Change in Control. A stock award may be subject to additional acceleration of vesting and exercisability upon or (iv) a purchase or other acquisition of more than 50% ofafter specified change in control transactions (as defined in the outstanding stock of the Company by one person or by more than one person acting2020 Plan), as provided in concert, any surviving or acquiring corporation may assume awards outstanding under the 2010 Plan or may substitute similar awards. Unless the stock award agreement otherwise provides,or in any other written agreement between us or any affiliate and the event any surviving or acquiring corporation does not assume such awards or substitute similar awards, thenparticipant.
Duration, Suspension, Termination and Amendment of the awards will terminate if not exercised at or prior to such event.
The Board of Directors may also amend the 20102020 Plan at any time, and from time to time. However, exceptno amendment or termination of the plan will adversely affect any rights under awards already granted to a participant unless agreed to by the affected participant. Furthermore, without stockholder approval, the Board of Directors does not have the right or authority (1) to increase the aggregate number of shares of Common Stock (including upon the exercise of incentive stock options) that may be issued under the 2020 Plan, other than in connection with specified capitalization adjustments such as providedstock splits and stock dividends and the other transactions described above under “Stock Available for Awards,” (2) to amend the provisions in Section 6.1.1 and 8.2the 2020 Plan relating to
a prohibition on the repricing of stock awards, (3) to amend the 2020 Plan in any respect that requires stockholder approval under applicable stock exchange rules, or (4) to amend the 2020 Plan in any respect that requires stockholder approval under the Internal Revenue Code of 1986, as amended (the “Code”), or any other applicable law.
Tax Withholding. The Board of Directors may require a participant to satisfy any federal, state, local, or foreign tax withholding obligation relating to adjustments upon changes in commona stock no amendment will be effective unless approvedaward by our stockholders(1) causing the participant to tender a cash payment, (2) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the extent stockholder approval is necessary to preserve incentive stock option treatment for federal income tax purposes. Our Board may submit anyparticipant in connection with the award, (3) withholding cash from an award settled in cash or from other amendmentamounts payable to the 2010 Plan for stockholder approval if it concludes that stockholder approval is otherwise advisable.
U.S. Federal Income Tax Consequences
The following is a summary of the principal United States federal income tax consequences to the recipientparticipants and the Company with respect to participation in the 20102020 Plan. ThisThe summary is not intended to be exhaustive and does not discuss the income tax laws of any city,local, state or foreign jurisdiction in which a participant may reside.
Incentive Stock Options. The 2020 Plan provides for the grant of stock options that qualify as “incentive stock options,” as defined in Section 422 of the Code. Under the Code, an optionholder generally is not subject to ordinary income tax upon the grant or exercise of an incentive stock option. UponIf the optionholder holds a share received on the exercise of an incentive stock option for more than two years from the date the option was granted and more than one year from the date the option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the holder’s tax basis in that share will be long-term capital gain or loss.
If, however, an optionholder disposes of a share acquired on exercise of an incentive stock option before the end of the required holding period, which is referred to as a disqualifying disposition, the optionholder generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date the incentive stock option was exercised over the exercise price, orprice. However, if the “spread,” will be added tosales proceeds are less than the alternative minimum tax basefair market value of the recipient unlessshare on the date of exercise of the option, the amount of ordinary income recognized by the optionholder will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition is made inexceeds the year of exercise. A disqualifying disposition is the salefair market value of the stock prior to the expiration of two years fromshare on the date of exercise of the option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year.
We will not be allowed an income tax deduction with respect to the grant and one year fromor exercise of an incentive stock option or the datedisposition of exercise.a share acquired on exercise of an incentive stock option after the required holding period. If the shares of common stock are disposed of inthere is a disqualifying disposition the recipientof a share, however, we will realize taxable ordinarygenerally be allowed an income tax deduction in an amount equal to the spread attaxable ordinary income realized by the time of exercise, and we will be entitled (subjectoptionholder, subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code andsummarized below.
Nonstatutory Stock Options. Generally, there is no taxation upon the satisfactiongrant of a tax reporting obligation) to a federal income tax deductionnonstatutory stock option if the option is granted with an exercise price equal to, such amount. Ifor greater than, the recipient sellsfair market value of the shares of commonunderlying stock after the specified periods, the gain or loss on the sale of the sharesgrant date. On exercise, an optionholder will be long-term capital gain or loss and we will not be entitled to a federal income tax deduction.
the provisions of Section 162(m) of the Code, we will generally be entitled to an income tax deduction equal to the extenttaxable ordinary income realized by the optionholder.
Restricted Stock. Generally, the recipient of a restricted stock award will recognize ordinary income at the time the stock is subjectreceived equal to “a substantial riskthe excess, if any, of forfeiture” (as defined in Section 83 of the Code), the taxable event will be delayed until the forfeiture provision lapses unless the recipient elects to be taxed on receipt of the stock by making a Section 83(b) election within 30 days of receipt of the stock. If such election is not made, the recipient generally will recognize income as and when the forfeiture provision lapses, and the income recognized will be based on the fair market value of the stock on such future date. On that date,received over any amount paid by the recipient’s holding periodrecipient in exchange for purposes of determining the long-term or short-term nature of any capital gain or loss recognized on a subsequent disposition ofstock. If, however, the stock is not vested when it is received (for example, if the employee is required to work for a period of time in order to have the right to sell the stock), the recipient generally will begin. If a recipient makes a Section 83(b) election,not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the difference betweenexcess, if any, of the stock’s fair market value andof the purchase price, ifstock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days of his or her receipt of the stock award, to recognize ordinary income, as of the date the recipient receives the award, equal to the excess, if any, of receipt and the holding periodfair market value of the stock on the date the award is granted over any amount paid by the recipient in exchange for purposesthe stock. The recipient’s basis for the determination of characterizing as long-term or short-term any subsequent gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will begin atbe the amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock becomes vested.
Subject to the provisions of Section 162(m) of the Code, we will generally be entitled to an income tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock award.
Restricted Stock Units. Generally, no taxable income is recognized upon receipt of a restricted stock unit award. The recipient will recognize ordinary income in the year in which the shares subject to that unit are actually issued to the participant (or cash in lieu of shares is delivered to the recipient) in an amount equal to the fair market value of the shares on the date of receipt.
Stock Appreciation Rights or SARs
Section 162(m) of the Code. Generally, whenever a participant recognizes ordinary income under the 2020 Plan, a corresponding deduction is available to any publicly held corporationthe Company, provided that the Company complies with certain reporting requirements. However, under Code Section 162(m), the Company will be denied a deduction for compensation paid to certain senior executives ofthat exceeds $1,000,000, unless the Company (a “covered employee”) in a taxable year tocompensation is “performance-based compensation” within the extent that compensation to such employees exceeds $1,000,000. It is possible that compensation attributable to awards, when combined with all other types of compensation received by a covered employee from the Company, may cause this limitation to be exceeded in any particular year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE REINCORPORATION MERGER IS NOT SUFFICIENT TO PERFECT YOUR DISSENTERS’ RIGHTS AND SUCH RIGHTS WILL BE LOST IF THE PROCEDURAL REQUIREMENTS OF SECTIONS 16-10a-1301 THROUGH 16-10a-1331 ARE NOT FULLY AND PRECISELY SATISFIED. A SUMMARY“FOR” APPROVAL OF THE STATUTORY PROCEDURE TO PERFECT YOUR DISSENTER'S RIGHTS IS PROVIDED BELOW AND A COPY OF SECTIONS 16-10a-1301 THROUGH 16-10a-1331 IS ATTACHED AS APPENDIX G.
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PROPOSAL VVI – APPROVAL OF AMENDMENT TO CERTIFICATE (ARTICLES) OF
Overview
Our Board of Directors has unanimously adopted a resolution approving, declaring advisable and recommending to the stockholders for their approval, a proposal to grant discretionary authority to our Board of Directors to
amend GCEH-Delaware’sthe Company’s Certificate of Incorporation (or if the Reincorporation Merger is not approved, to amend GCEH-Utah’s Articles of Incorporation)(the “Amendment”) to effect a Reverse Stock Splitreverse stock split of our issued and outstanding common stockCommon Stock, at any time prior to our next annual meetinga ratio of stockholders, at any whole number ratio between one for five and one for twenty (1-for-5 to 1-for-20), with the exact exchange ratio and timing of the Reverse Stock Split (if at all) to be determined at the discretion of the Board of Directors.
If this proposal is approved by the stockholders, our Board of Directors will be granted the discretionary authority to select any whole number ratio between 1-for-5 to 1-for-20 for the Amendment and the Reverse Stock Split, and will be authorized to implement the Amendment and effect a reverse stock split at a ratio of 1-for-10 (the “Reverse Stock Split”), or not to effect the Reverse Stock Split at any time prior to our next annual meetingif the directors conclude it is not in the best interest of the stockholders but no later than September 30, 2011, withof the exact exchange ratio and timing ofCompany. If the Reverse Stock Split (if at all)is implemented, it will effected on a date to be determinedestablished at the discretion of the Board, but in no event later than September 23, 2021.
Notwithstanding the approval of Directors. Our Board of Directors’ decision whether or not (and when) to file the Amendment and effect the Reverse Stock Split (and at what whole number ratio to effect the Reverse Stock Split) will also be based on a number of factors, including market conditions, existing and anticipated trading prices for our common stock and the listing requirements of a national stock exchange or the Nasdaq Capital Market.
Reasons for Reverse Stock Split
The Board proposes to effect, and believes that stockholders should authorize, the Reverse Stock Split for the following reasons:
·The Reverse Stock Split would allow a broader range of institutions and other investors to invest in our Common Stock, such as funds that are prohibited from buying stock whose price is below a certain threshold, potentially increasing trading volume and liquidity. Further, the Reverse Stock Split would help increase broker interest in shares of our Common Stock as their policies can discourage them from recommending companies with lower stock prices. Because of the trading volatility often associated with lower-priced stocks, many brokerage houses and institutional investors have adopted internal policies and practices that either prohibit or discourage them from investing in such stocks or recommending them to their customers. Additionally, because brokers’ commissions on transactions in lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our Common Stock can result in
individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the stock price were substantially higher.
·Our Board believes that the increase in the stock price expected to result from the Reverse Stock Split could decrease price volatility, as small changes in the price of our Common Stock currently result in relatively large percentage changes in the stock price.
·Our Common Stock is traded on the OTC Pink marketplace, an inter-dealer, over-the-counter market that provides significantly less liquidity than national securities exchanges, such as The Nasdaq Stock Market. We would like to have the flexibility in the future to consider listing our Common Stock on the Nasdaq Stock Market or on another national stock exchange, but we do not currently meet the listing requirements for The Nasdaq Stock Market or any other national stock exchange. Most national stock exchanges maintain minimum share price requirements to determine a security’s eligibility for listing on the stock exchange. While the Reverse Stock Split may not increase our stock price to the minimum share price level immediately, our Board believes that the Reverse Stock Split may make it easier for the Company to achieve that level in the future, thereby facilitating listing of our Common Stock on the Nasdaq Stock Market or on another national stock exchange.
Possible Disadvantages of Reverse Stock Split
The Board believes that the potential advantages of the Reverse Stock Split significantly outweigh any disadvantages that may result. The following are possible disadvantages of the Reverse Stock Split:
·Although our Board expects that the Reverse Stock Split will result in an increase in the price of our Common Stock, the effect of the Reverse Stock Split cannot be predicted with certainty. Other factors, such as the Company’s financial results, market conditions and the market perception of the Company’s business may adversely affect our stock price. As a result, there can be no assurance that the Reverse Stock Split, if completed, will result in the intended benefits described above; that the stock price will increase following the Reverse Stock Split; or that the stock price will not decrease in the future.
·Because the Reverse Stock Split will reduce the number of shares of our Common Stock available in the public market, the trading market for such securities may be harmed, particularly if the stock price does not increase as a result of the Reverse Stock Split. The Reverse Stock Split will reduce the number of shares outstanding, including the number of shares in the public float (i.e. the shares that trade on the public markets). A reduction in the public float could reduce the amount of trading in our shares of Common Stock.
Effects of Reverse Stock Split
General
If the Reverse Stock Splitis approved and implemented, the principal effects will be to decrease the number of outstanding shares of the Company’s common stockCommon Stock based on the reverse stock split ratio selected by the Board. As of May 1, 2010, approximately 270,464,478July 31, 2020, 358,499,606 shares of our Common Stock were issued and outstanding. Without taking into account fractional shares that will be rounded up to the nearest whole share or cashed out as described below, based on this number of shares issued and outstanding and, for illustrative purposes only, assuming a reverse split ratio of 1-for-10, the Company would have approximately 27,046,44835,742,818 shares outstanding immediately following the completion of the Reverse Stock Split.
With respect to holders of our Series B Preferred Stock, if the Reverse Stock Split is effected, the conversion price of the Series B Preferred Stock (i.e., the ratio at which the Series B Preferred Stock converts into shares of our Common Stock) will be proportionately adjusted such that holders will be entitled to receive the number of shares of Common Stock which they would have been entitled to had the Series B Preferred Stock been converted immediately prior to implementing the Reverse Stock Split. As a result, while our preferred stockholders will still own the same number of shares of Series B Preferred Stock, such shares will be convertible into a smaller numberone (1) share of our Common Stock for every ten (10) shares of our Common Stock. The specific numberStock prior to the Reverse Stock Split. As of the Record Date, the outstanding shares of Series B Preferred Stock were convertible into 11,818,181 shares of Common Stock. Following the Reverse Stock into whichSplit, the outstanding shares of Series B Preferred Stock will be convertible following effectiveness of the Reverse Stock Split will depend on the reverse stock split ratio selected by the Board.
The proposed Reverse Stock Split will affect all of our stockholders (common or preferred) uniformly and will not affect any common stockholder’sCommon Stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split results in any holders of our common stockholdersCommon Stock owning a fractional share, and suchthat fractional share will be rounded up to a whole share. The proposed Reverse Stock Split will not affect voting rights and other rights and preferences of our stockholders (common or preferred), nor will it affect the number of our stockholders of record.
The Amendment to our Certificate of Incorporation (or Articles of Incorporation if the Reincorporation Merger is not approved) to effect the Reverse Stock Split will not proportionately change the number of authorized shares of our Common Stock or Series B Preferred Stock. As a result, with respect to each class of capital stock, one of the effects of the Reverse Stock Split if effected, will be to effectively increase the proportion of authorized shares, which are unissued relative to those which are issued. This could result in us being able to issue more shares without further stockholder approval.
Effectiveness of Reverse Stock Split
The Amendment and Reverse Stock Split, if approved by our stockholders, would become effective upon the filing and effectiveness of a Certificate of Amendment to GCEH-Delaware’sthe Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware (assuming stockholderDelaware. Notwithstanding the approval of the Reincorporation Merger). However, the exact timing of the filing of the Amendment will be determined by the Board based on its evaluation as to when such action will be the most advantageous to the Company and its stockholders, if at all. Accordingly, the Board reserves the right, notwithstanding stockholder approval and without further action by the stockholders, to elect not to proceed with the Reverse Stock Split if, at any time prior to filing the Amendment, the Board in its solewill have the discretion determines that it is no longer in the Company’s best interests and the best interests of its stockholders to proceed with the Reverse Stock Split.
Effect on Stock Certificates
Stockholders are not required to send in their current certificates for exchange. Following the Reverse Stock Split, each stock certificate representing issued and outstanding shares of our Common Stock will represent a fewer number of shares, as adjusted appropriately based on the Reverse Stock Split ratio selected by our Board.of one-for-ten shares. For example, a stock certificate evidencing 1,000 shares of Common Stock will, upon effectiveness of the Reverse Stock Split, represent 100 shares of Common Stock (assuming that the Board effects the Reverse Stock Split at a 1-for 10 ratio).Stock. With respect to holders of our Series B Preferred Stock, if the Reverse Stock Split is effected, the conversion price of the Series B Preferred Stock (i.e., the ratio at which the Series B Preferred Stock converts into shares of our Common Stock) will be proportionately adjusted such that holders will be entitled to receive the numberone (1) share of Common Stock for every ten (10) shares of Common Stock into which they would have been entitled to had the Series B Preferred Stock been converted immediatelywas convertible prior to implementing the Reverse Stock Split. As a result, while you will still ownHowever, the same number ofcertificates representing the outstanding shares of Series B Preferred Stock such shares will not be convertible into a smaller number of shares of our Common Stock. The specific number of shares of Common Stock into which your Series B Preferred Stock will be convertible following effectiveness of the Reverse Stock Split will depend on the reverse stock split ratio selected by the Board.
Effect on Company’s Stock Plans
reverse split ratio selected by the Board if the Reverse Stock Split is effected. As a result, using the above data as of May 14, 2010, and assuming for illustrative purposes only that a 1-for-10 reverse stock splitJuly 31, 2020, if the Reverse Stock Split is effected, the number of shares issuable upon exercise or vesting of outstanding awardsoptions would be adjusted from 19,700,000reduced to 1,970,000,[_________] and [_______] under the 2010 Plan and the 300,00 shares2020 Plan, respectively. Since the 2010 Plan has expired, no additional share awards can be granted under that were available for future issuanceplan. However, the number of remaining share awards that can be granted under the stock plans would2020 Plan will be adjusted to30,000reduced from ______ shares to _______ shares (subject to increase as and when awards made under the stock plans2020 plan expire or are forfeited and are returned in accordance with the terms of the plans)2020 Plan).
For individual holders of stock options and Common Stock purchase warrants, the number of shares subject to outstanding awardsissuable under the options and warrants would be reduced by a factor of 10 and, in the case of outstanding stock options and warrants, the exercise price per share would be increased by a multiple of 10, such that upon an exercise, the aggregate exercise price payable by the optionee or warrantholder to the Company would remain the same. For example, an outstanding stock option for 5,000 shares of common stock,Common Stock, exercisable at $0.10 per share, would be adjusted as a result of a 1-for-10 split ratio into an option exercisable for 500 shares of common stockCommon Stock at an exercise price of $1.00 per share. In connection with the proposed Reverse Stock Split, the number of shares of our Common Stock issuable upon exercise of outstanding stock awards will be rounded to the nearest whole share and no cash payment will be made in respect of such rounding. The proposed Reverse Stock Split will have a similar effect upon our outstanding warrants.
Fractional Shares
We will not issue any fractional shares of common stockCommon Stock to holders of our Common Stock in connection with the Reverse Stock Split. Instead, with respect to any fractional share resulting from the Reverse Stock Split, and subject to applicable law, we will either pay in cash the value of such fractional share, or round up such fractional share to the nearest whole share.
Effect on Registered and Beneficial Holders
If the Reverse Stock Split is implemented, the Company intends to treat beneficial holders (i.e., stockholders who hold their shares in “street name” through a bank, broker or other nominee) in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding shares in “street name”. However, these banks, brokers or other nominees may have their own procedures for processing the Reverse Stock Split. Stockholders who hold shares with a bank, broker or other nominee and have questions in this regard are encouraged to contact their bank, broker or other nominee.
No Dissenters’ Rights
Under UtahDelaware law, the Company’s stockholders are not entitled to dissenter’s rights or appraisal rights with respect to the Amendment and the Reverse Stock Split described in this proposal.
Accounting Consequences
The par value of our Common Stock in effect at the time of the Reverse Stock Split would remain unchanged after such Reverse Stock Split. Also, our capital account would remain unchanged, and we do not anticipate that any other accounting consequences would arise as a result of the Reverse Stock Split.
Certain Federal Income Tax Consequences of Reverse Stock Split
The following is a general summary of certain U.S. federal income tax consequences of the Reverse Stock Split that may be relevant to stockholders. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, published administrative rulings and judicial decisions as of the date hereof, all of which may change, possibly with retroactive effect, resulting in U.S. federal income tax consequences that may differ from those discussed
below. This summary does not purport to be complete and does not address all aspects of federal income taxation that may be relevant to stockholders in light of their particular circumstances or to stockholders that may be subject to special tax rules. In addition, this summary does not address the tax consequences arising under the laws of any foreign, state or local jurisdiction and U.S. federal tax consequences other than federal income taxation.
The Company has not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service (“IRS”) regarding the United States federal income tax consequences of the Reverse Stock Split and there can be no assurance the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge. EACH STOCKHOLDER SHOULD CONSULT SUCH HOLDER’S TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH STOCKHOLDER.
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a stockholder generally should not recognize gain or loss upon the Reverse Stock Split. A stockholder’s aggregate tax basis in the shares of the common stockCommon Stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of the common stockCommon Stock surrendered, (excluding the effect of any fractional shares that are rounded up, if at all), and such stockholder’s holding period in the shares of the common stockCommon Stock received should include the holding period in the shares of the common stockCommon Stock surrendered. Treasury regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of the shares of the common stockCommon Stock surrendered to the shares of the common stockCommon Stock received pursuant to the Reverse Stock Split. Stockholders who acquired their shares of common stockCommon Stock on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
THE BOARD OF DIRECTORS RECOMMENDS A Vote “For” The Proposal to amend the Company’s Certificate
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Stockholder Nominations for Board of Directors
. Stockholders may nominate persons to be elected as directors of the Company or present proposals to the Company for inclusion in our proxy statement prepared in connection with our annual meeting of stockholders to be held in the fiscal year ending December 31,Stockholders may nominate persons to be eligibleelected as directors of the Company, or present other proposals, to submit a proposalbe considered at annual meeting of stockholders, whether or not such proposals are for inclusion in our proxy materials,materials. Pursuant to our Bylaws, in order to timely submit such a stockholder must have continuously held at least $2,000 in market value, or 1% of our securities entitled to voteproposal for consideration at the meeting for at least prior to the date of the submission of the proposal. In addition, SEC rules require that stockholders give written notice of anyNext Annual Meeting (whether or not such proposal to the Company.
disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors, or may otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
Certain stockholders who share an address are being delivered only one copy of this proxy statement unless the Company or one of its mailing agents has received contrary instructions. Upon the written or oral request of a stockholder at a shared address to which a single copy of this proxy statement was delivered, the Company shall promptly deliver a separate copy of this proxy statement to such stockholder. Written requests should be made to Global Clean Energy Holdings, Inc., 6033 W. Century Blvd.,2790 Skypark Drive, Suite 895, Los Angeles,105, Torrance, California 90045,90505, Attention: Corporate Secretary, and oral requests may be made by calling the Company at (310) 641-4234. In addition, if such stockholder wishes to receive separate annual reports, proxy statements or information statements in the future, such stockholder should notify the Company either in writing addressed to the foregoing address or by calling the foregoing telephone number. Stockholders sharing an address who are receiving multiple copies of this proxy statement may request delivery of a single annual report, proxy statement or information statement in the future by directing such request in writing to the address above or calling the number above.
Management does not intend to present any other items of business and knows of no other matters that will be brought before the 2010 Annual Meeting. Whether or not you plan to attend the 2010 Annual Meeting, please sign and date the enclosed proxy card and return it in the enclosed envelope to ensure your representation at the 2010 Annual Meeting.
Our financial statements and other information with the Securities and Exchange Commission (“SEC”). You can read and copy these reports, proxy statements, and other information concerningfor our companyfiscal year ended December 31, 2019 are included in our 2019 Annual Report, which we will make available to stockholders at the SEC’s Public Reference Roomsame time as this proxy statement. This proxy statement and our annual report are posted on our website at 100 F Street, N.E., Washington, D.C. 20549. Please callwww.gceholdings.com and are also available from the SEC at 1-800-SEC-0330 for further information about the operation of the SEC’s Public Reference Room. The SECits website at www.sec.gov. You may also maintains an Internet site that contains all reports, proxy statements and other information that we file electronically with the SEC. The address of that website is http://www.sec.gov.
Global Clean Energy Holdings, Inc.
2790 Skypark Drive, Suite
Torrance, California 90045
Attention: Corporate Secretary
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. YOU MAY REVOKE THE PROXY BY GIVING WRITTEN NOTICE OF REVOCATION TO THE COMPANY PRIOR TO THE ANNUAL MEETING, BY EXECUTING A LATER DATED PROXY AND DELIVERING IT TO COMPANY’S CORPORATE SECRETARY PRIOR TO THE ANNUAL MEETING OR BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
By Order of the Board of Directors,
RICHARD PALMER
Chief Executive Officer
August [__], 2020
APPENDIX A
2020 EQUITY INCENTIVE PLAN
OF
GLOBAL CLEAN ENERGY HOLDINGS, INC.
Adopted by these presents that the undersigned stockholderBoard of GLOBAL CLEAN ENERGY HOLDINGS, INC. (“Company”) hereby constitutesDirectors on April 10, 2020
1.GENERAL.
(a)Eligible Award Recipients. The persons eligible to receive Awards are Employees, Directors and appoints Richard Palmer,Consultants.
(b)Available Awards. The Plan provides for the Company’s Chief Executive Officer, as attorney and proxy to appear, attend and vote allgrant of the sharesfollowing Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; (vii) Performance Cash Awards; and (viii) Other Stock Awards.
(c)Purpose. The Company, by means of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Awards as set forth in Section 1(a), to provide incentives for such persons to exert maximum efforts for the success of the Company standingand any Affiliate and to provide a means by which such eligible recipients may be given an opportunity to benefit from increases in the namevalue of the undersigned atCommon Stock through the Annual meetinggranting of Stockholders of the CompanyAwards.
(d)Successor to held at the Company’s executive offices at 6033 W. Century Blvd., Suite 895, Los Angeles, California 90045, and at any adjournment thereof.
(e)Definitions. Section 13 sets forth the definitions of certain capitalized terms used in the Plan.
2.ADMINISTRATION.
(a)Administration by the Board. The Board shall administer the Plan unless and advisers to improve operations and increaseuntil the profitabilityBoard delegates administration of the Company;
(b)Powers of the common stockBoard. The Board shall have the power and authority, subject to, and within the limitations of, the Company, no par value per share (the “Common Stock”). All references herein to stock or shares, unless otherwise specified, shall mean Common Stock.
(i)To determine from time to time: (A) which of the persons eligible under the Plan shall be granted Awards; (B) when and how each Award shall be granted; (C) what type or combination of types of Awards shall be granted; (D) the provisions of each Award granted (which need not be identical), including the time takeor times when a person shall be permitted to receive cash or Common Stock pursuant to a Stock Award; (E) the following action, separatelynumber of shares of Common Stock with respect to which a Stock Award shall be granted to each such person; and (F) the Fair Market Value applicable to a Stock Award;
(ii)To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration; the Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in combination,any Stock Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it shall deem necessary or expedient to make the Plan or Award fully effective;
(iii)To settle all controversies regarding the Plan and Awards granted under it;
(iv)To accelerate the Plan: (i) grant “incentive stock options” (“ISOs”)time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest;
(v)To amend, suspend or terminate the Plan at any time; provided that amendment, suspension or termination of the Plan shall not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant;
(vi)To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 422 of the Internal Revenue Code regarding “incentive stock options” or (B) Rule 16b-3 under the Exchange Act;
(vii)To approve forms of 1986,Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided, however, that a Participant’s rights under any Award shall not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant and (B) such Participant consents in writing; notwithstanding the foregoing, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent if necessary to maintain the qualified status of the Award as amended,an Incentive Stock Option or to bring the Award into compliance with Section 409A of the Code;
(viii)To exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards; and
(ix)To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States.
(c)Delegation to a Committee.
(i)General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee 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. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. If administration of the Plan is delegated to a Committee, references in the Plan to the Board shall, as applicable, refer to the Committee or subcommittee to the extent consistent with the Board’s delegation of Plan administration to the Committee.
(ii)Members of the Committee. Unless otherwise determined by the Board, the Committee shall be comprised of at least two Directors, each of whom shall be an Outside Director. The failure of the Committee to be comprised solely of Outside Directors shall not affect the validity of any action of the Committee (including the grant of any Award) that otherwise complies with the terms of the Plan.
(d)Delegation to an Officer. The Board may delegate to one or more Officers the authority to do one or both of the following: (i) designate Employees who are not Officers to be recipients of Options and Stock Appreciation Rights (and, to the extent permitted by applicable law, other Stock Awards) and the regulations thereunder (the “Code”);terms thereof, and (ii) grant “non-qualified options” (“NQOs,” and together with ISOs, “Options”); (iii) grant or sell Common Stock subject to restrictions (“restricted stock”) and (iv) grant stock appreciation rights (in general,determine the right to receive the excessnumber of the fair market valueshares of Common Stock on the exercise date over its fair market value on the grant date (“SARs”)), either in tandem with Options or as separate and independent grants. Any such awards may be made to employees, including employees who are officers or directors, and to individuals described in Section 1 of this Plan who the Administrator believes have made or will make a contribution to the Company or any Affiliate (as defined below); provided, however, that only a person who is an employee of the Company or any Affiliate at the date of the grant of an Option is eligible to receive ISOs under the plan. The term “Affiliate” as used in this Plan means a parent or subsidiary corporation as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term “employee” includes an officer or director who is an employee of the Company. The term “consultant” includes persons employed by, or otherwise affiliated with, a consultant. The term “adviser” includes persons employed by, or otherwise affiliated with, an adviser.
to such Employees; provided, however, that the Board resolutions regarding such delegation shall be void. No right or benefit under this Plan shall in any manner be liable for or subject to debts, contracts, liabilities, or torts of any option holder or any other person except as otherwise may be expressly required by applicable law.
(e)Effect of the Board’s Determinations. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.
(f)No Repricing of Stock Awards or Cancellation and Re-Grant of Stock Awards. Except with respect to adjustments that are made in accordance with Section 9, neither the Board nor any Committee shall have the authority to (i) reduce the exercise price of any outstanding Option or SAR or take any other action that would be treated, for accounting purposes, as a “repricing” of any outstanding Stock Award under the Plan or (ii) cancel and re-grant any outstanding Stock Award under the Plan, unless the stockholders of the Company approve such reduction, cancellation, re-grant or other action within twelve months before or after such reduction, cancellation, re-grant or other action.
(g)Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a Stock Award (other than an Option or SAR), as determined by the Board and contained in the applicable Stock Award Agreement; provided, however, that (i) no dividends or dividend equivalents may be paid with respect to any such shares before the date such shares have vested under the terms of such Stock Award Agreement, (ii) any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of such Stock Award Agreement (including, without limitation, any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to the Company on the date, if any, such shares are forfeited to or repurchased by the Company due to a failure to meet any vesting conditions under the terms of such Stock Award Agreement.
3.SHARES SUBJECT TO THE PLAN.
(a)Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards granted under the Plan from and after the Effective Date shall not exceed 20,000,000 shares (the “Share Reserve”), of which up to 20,000,000 shares may be issued pursuant to Incentive Stock Options. To the extent permitted by NASDAQ Listing Rule 5635(c)(3) or other applicable national stock exchange rule, shares of Common Stock may be issued by the Company in connection with a merger or acquisition without reducing the number of shares available for issuance under the Plan. Furthermore, if a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement shall not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan.
(b)Reversion of Shares to the Share Reserve. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased shall revert to and again become available for issuance under the Plan. Any shares reacquired or withheld by the Company pursuant to Section 8(g) or as restrictedconsideration for the exercise of an Option shall also revert to and again become available for issuance under the Plan.
(c)Annual Compensation to Non-Employee Directors; Limitation on Annual Stock Awards to Participants.
(i)In no event shall the compensation payable by the Company to a Non-Employee Director for services performed as a Non-Employee Director, including, without limitation, the grant date value (determined under U.S. generally accepted accounting principles) of Awards, cash retainers, Committee fees and other compensation, exceed $500,000 in the aggregate during any calendar year, and in no event shall the number of shares of Common Stock subject to Stock Awards (including, without limitation, Options) granted to any Non-Employee Director, subject to the provisions of Section 9(a) relating to Capitalization Adjustments, exceed 1,000,000 shares during any calendar year.
(ii)Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, a maximum of 5,000,000 shares of Common Stock subject to Stock Awards (including, without limitation, Options) may be granted to any Participant other than a Non-Employee Director during any calendar year.
(d)Source of Shares. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
4.ELIGIBILITY.
(a)Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 of the Securities Act, unless the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code because the Stock Awards are granted pursuant to a corporate transaction (such as a spin-off transaction) or unless such Stock Awards comply with the distribution requirements of Section 409A of the Code.
(b)Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five years from the date of grant.
5.PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.
(a)Each Option or SAR shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, then the Option shall be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Option Agreement or Stock Appreciation Right Agreement shall conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:
(b)Term. The term of each Option and SAR shall be set by the Board in its sole discretion; provided, however, that the term shall not be more than ten years from the date the Option or SAR is granted or five years from the date an Incentive Stock Option is granted to a Ten Percent Stockholder. The Board shall determine the time period, including the time period following any termination of a Participant's Continuous Service, during which the Participant has the right to exercise a vested Option or SAR, which time period may not extend beyond the expiration date of the Option or SAR term. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the Board may extend the term of any outstanding Option or SAR, and may extend the time period during which a vested Option or SAR may be exercised, in connection with any termination of the Participant's Continuous Service, and may amend any other term or condition of such Option or SAR relating to such a termination of Continuous Service,
provided, however, that such term or time period shall not be extended beyond the date described in the first sentence of this paragraph.
(c)Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise price (or strike price) of each Option or SAR shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Option or SAR is granted. Notwithstanding the foregoing, an Option or SAR may be issued with an exercise price (or strike price) lower than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR if such Option or SAR is issued pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.
(d)Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board shall have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The permitted methods of payment are as follows:
(i)By cash, check, bank draft or money order payable to the Company;
(ii)Pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;
(iii)By delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;
(iv)If the option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued; provided, further, that shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; and
(v)In any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.
(e)Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation distribution payable on the exercise of Options or SARs undera SAR will be not greater than an amount equal to the Plan shall not exceed Twenty Million (20,000,000)excess of (i) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock.Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR and with respect to which the Participant is exercising the SAR on such date over (ii) the strike price that will be determined by the Board at the time of grant of the SAR. The appreciation distribution in respect to a SAR may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such SAR.
(f)Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs shall apply:
(i)Restrictions on Transfer. An Option or SAR shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may, in its sole discretion, permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.
(ii)Domestic Relations Orders. Notwithstanding the foregoing, an Option or SAR may be transferred pursuant to a domestic relations order; provided, however, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.
(iii)Beneficiary Designation. Notwithstanding the foregoing, the Participant may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect Option exercises, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate shall be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise.
(g)Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR granted undermay vest and therefore become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the Plan that expire, terminatetime or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are cancelled unexercised shall become available again for grants under this Plan. If shares of restricted stock awarded undersubject to any Option or SAR provisions governing the Plan are forfeited to the Company or repurchased by the Company, theminimum number of shares forfeited or repurchased shall again be available under the Plan. Where the exercise price of an Option is paid by means of the optionee’s surrender of previously owned shares of Common Stock as to which an Option or SAR may be exercised.
(h)Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company or except as otherwise extended by the Board, if a Participant’s Continuous Service terminates (other than for Cause or upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) but only within such period of time ending on the earlier of (i) the date three months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Award Agreement) or (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the time specified herein or in the Award Agreement (as applicable), the Option or SAR shall terminate except as otherwise determined by the Board. Notwithstanding any provision in the Plan to the contrary, the Board may, in its discretion and subject to whatever terms and conditions it elects, accelerate the vesting of an Option or SAR following a termination of Continuous Service or provide in the Award Agreement for continued vesting of an Option or SAR following a termination of Continuous Service.
(i)Extension of Termination Date. If the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause or upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR shall terminate on the earlier of (i) the expiration of a total period of three months (that need not be consecutive) after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement or as otherwise determined by the Board. In addition, unless otherwise
provided in a Participant’s Award Agreement or as otherwise determined by the Board, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s withholdinginsider trading policy, then the Option or SAR shall terminate on the earlier of shares otherwise issuable(i) the expiration of a period equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.
(j)Disability of a Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company or except as otherwise extended by the Board, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date eighteen months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement) or (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the time specified herein or in the Award Agreement (as applicable), the Option or SAR (as applicable) shall terminate except as otherwise determined by the Board.
(k)Death of a Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company or except as otherwise extended by the Board, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death or (ii) the Participant dies within the period (if any) specified in the Award Agreement after the termination of the Participant’s Continuous Service for a reason other than death, then the Option or SAR may be permittedexercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date eighteen months following the date of death (or such longer or shorter period specified in the Award Agreement) or (ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the time specified herein onlyor in the net number of shares issuedAward Agreement (as applicable), the Option or SAR shall terminate except as otherwise determined by the Board.
(l)Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement or except as otherwise extended by the Board, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR shall terminate upon the date on which the Participant’s Continuous Service terminated, and which remain outstanding in connection with such exercisethe Participant shall be deemed “issued”prohibited from exercising his or her Option or SAR from and no longer available for issuance under this Plan. No eligible personafter the date of such termination of Continuous Service.
6.PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS.
(a)Restricted Stock Awards. Each Restricted Stock Award Agreement shall be granted Options or other awards during any twelve-month period covering more than Five Hundred Thousand (500,000)in such form and shall contain such terms and conditions as the Board shall deem appropriate. To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock.
(i)Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an
Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii)Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.
(iii)Termination of a Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.
(iv)Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.
(b)Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical; provided, however, that each Restricted Stock Unit Award Agreement shall conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
(i)Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii)Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(iii)Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board of Directorsand contained in the Restricted Stock Unit Award Agreement.
(iv)Additional Restrictions. At the time of the Company (the “grant of a Restricted Stock Unit Award, the Board,”) as it deems appropriate, may impose such restrictions or byconditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a committee (the “Committee”)Restricted Stock Unit Award to which administrationa time after the vesting of this Plan,such Restricted Stock Unit Award.
(v)Termination of a Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.
(c)Performance Awards.
(i)Performance Stock Awards. A Performance Stock Award is a Stock Award that may vest or may be exercised contingent upon the attainment during a Performance Period of partcertain Performance Goals. A Performance Stock Award may, but need not, require the completion of this Plan, is delegateda specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Board, (in either case,in its sole discretion. The Board may provide for or, subject to such terms and conditions as the “Administrator”)Board may specify, may permit a Participant to elect for, the payment of any Performance Stock Award to be deferred to a specified date or event. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.
(ii)Performance Cash Awards. A Performance Cash Award is a cash award that may be paid contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Board, in its sole discretion. The Board may provide for or, subject to such terms and conditions as the Board may specify, may permit a Participant to elect for, the payment of any Performance Cash Award to be deferred to a specified date or event. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.
(iii)Discretion. The Board shall appoint and remove membershave the right to reduce, eliminate or increase the amount that is payable under a Performance Stock Award or Performance Cash Award by taking into account additional factors that the Board may deem relevant, including the assessment of individual or corporate performance for the CommitteePerformance Period.
(d)Other Stock Awards. Other forms of Stock Awards valued in its discretionwhole or in accordance with applicable laws. Atpart by reference to, or otherwise based on, Common Stock, including the Board’s discretion, the Committeeappreciation in value thereof may be comprised solely of “non-employee directors” within the meaning of Rule 16b-3granted either alone or in addition to Stock Awards provided for under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or “outside directors” within the meaning of Section 162(m) of the Code. The Administrator may delegate non-discretionary administrative duties to such employees of the Company as the Administrator deems proper5 and the Board, in its absolute discretion, may at any time and from time to time exercise any and all rights and dutiespreceding provisions of the Administrator under this Plan.
7.COVENANTS OF THE COMPANY.
(a)Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock reasonably required to satisfy such Stock Awards.
(b)Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and provisionsto issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant shall not be eligible for the grant of a Stock Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or issuance would be in violation of any applicable agreementsecurities law.
(c)No Obligation to Notify or Minimize Taxes. The Company shall have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award may not be
exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.
8.MISCELLANEOUS.
(a)Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards shall constitute general funds of the Company.
(b)Corporate Action Constituting the Grant of Stock Awards. Corporate action constituting a grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant.
(c)Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all Optionsrequirements for exercise of the Stock Award pursuant to its terms, if applicable, and SARs(ii) the issuance of the Common Stock subject to such Stock Award has been entered into the books and records of the Company.
(d)No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted under this Plan,pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without Cause, (ii) the service of any restricted stock award under this Plan; (vi)a Consultant pursuant to prescribe, amend, and rescind rules and regulations relating to this Plan; (vii) to determine the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of eachthe corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
(e)Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and SAR grantedany Affiliates) exceeds $100,000, the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreements.
(f)Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and awardexperience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of restricted stock (whichevaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award, and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then-currently effective registration statement under the Securities Act or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be identical),met in the circumstances under the then-applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the time or times at which Options and SARs shall be exercisable or the time at which the restrictions on restricted stock shall lapse; (viii) with the consenttransfer of the grantee, to rescind any award or exercise of an Option or SAR and to modify or amendCommon Stock.
(g)Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any Option, SARfederal, state or restricted stock; (ix) to reduce the exercise price of any Option, the base value from which appreciation is to be determined with respectlocal tax withholding obligation relating to an SAR or the purchase price of restricted stock, provided that
Award by any such reduction shall not be less than provided with Sections 6.2.1 and 6.3.1; (x) to accelerate or defer (with the consent of the grantee)following means or by a combination of such means: (i) causing the exercise date of any Option or SAR or the date on which the restrictions on restricted stock lapse; (xi)Participant to issuetender a cash payment; (ii) withholding shares of restricted stockCommon Stock from the shares of Common Stock issued or otherwise issuable to an optioneethe Participant in connection with the acceleratedAward; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.
(h)Electronic Delivery. Any reference herein to a “written” agreement or document shall include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet.
(i)Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants shall be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an Employee or otherwise providing services to the Company or an Affiliate. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, a Participant may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.
(j)Compliance with Section 409A of the Code. To the extent that the Board determines that any Award granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall be deemed to incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount shall be made upon a “separation from service” before a date that is six months following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code.
(k)Clawback Provisions. All Awards granted under the Plan shall be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of an Option byevent constituting Cause. No recovery of compensation under such optionee; (xii)a clawback policy shall be an event giving rise to authorize any persona right to execute on behalf ofresign for “good reason” or “constructive termination” (or similar term) under the Company any instrument evidencing the grant of an Option. SAR or award of restricted stock; (xiii) to determine the duration and purposes of leaves of absence which may be granted to participants without constituting a termination of their employment for the purposes of the Plan; and (xiv) to make all other determinations deemed necessary or advisable for the administration of this Plan, any applicable agreement, Option, SAR or award of restricted stock.
9.ADJUSTMENTS UPON CHANGES IN THE COMMON STOCK; OTHER CORPORATE EVENTS.
(a)Capitalization Adjustments. In the event of a conflict betweenCapitalization Adjustment, the terms or conditionsBoard shall appropriately and proportionately adjust (i) the class(es) and maximum number of an agreement and the terms and conditions of this Plan, the terms and conditions of this Plan shall govern.
person pursuant to Section 3(c)(ii), and (iii) the Company is changed by reasonclass(es) and number of a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification, or if the Company effects a spin-off of the Company’s subsidiary, appropriate adjustments shall be made by the Administrator, in its sole discretion, in (a) the numbersecurities and class of sharesprice per share of stock subject to this Planoutstanding Stock Awards. The Board shall make such adjustments, and each Option and SAR outstanding under this Plan, and (b) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustments. Any adjustment, however, in an outstanding Option shall be made without change in the total price applicable to the unexercised portion of the Option but with a corresponding adjustment in the price for each share covered by the unexercised portion of the Option. Adjustments under this Section 6.1.1 shall be made by the Administrator, whoseits determination as to the nature of the adjustments that shall be made, and the extent thereof, shall be final, binding and conclusive. If an adjustment under this Section 6.1.1 would result in a fractional share interest under an option
(b)Dissolution or any installment, the Administrator’s decision as to inclusion or exclusion of that fractional share interest shall be final, but no fractional shares of stock shall be issued under the Plan on account of any such adjustment.
(c)Corporate Transaction. The following provisions shall apply to Stock Awards in the event of a Corporate Transaction (as defined below),unless otherwise provided in the Administrator shall notify eachinstrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the holder of the Stock Award or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board shall take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:
(i)Arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an Optionaward to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);
(ii)Arrange for the assignment of any reacquisition or SARrepurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);
(iii)Accelerate the vesting of the Stock Award (and, if applicable, the time at least thirty (30)which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five days prior theretoto the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or as soonprior to the effective time of the Corporate Transaction;
(iv)Arrange for the lapse of any reacquisition or repurchase rights held by the Company with respect to the Stock Award; and
(v)Make a payment, in such form as may be practicable. Todetermined by the extent not then exercised all Options and SARs shall terminateBoard equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Corporate Transaction over (B) any exercise price payable by such holder in connection with such exercise.
The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants.
(d)Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant.
10.AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.
(a)Amendment of the Plan. The Board has the power and authority to amend any provision of the Plan at any time; provided, however, that without the approval of the Company’s stockholders given within twelve months before or after any such Plan amendment, the Board shall not have the right or authority (i) to increase the aggregate number of shares of Common Stock (including upon the exercise of Incentive Stock Options) that may be issued under the Plan pursuant to Section 3(a), provided that an increase that is made pursuant to Section 9(a) in connection with a Capitalization Adjustment shall not require stockholder approval and may be made by the Board, (ii) to amend Section 2(f) relating to the repricing, cancellation and re-grant of Stock Awards, (iii) to amend the Plan in any respect that requires stockholder approval under the rules of The NASDAQ Stock Market LLC (or under the rules of any other national securities exchange on which the Common Stock may subsequently be traded), or (iv) to amend the Plan in any respect that requires stockholder approval under the Code or any other applicable law.
(b)Termination or Suspension of the Plan. The Board may suspend or terminate the Plan at any time. Unless terminated sooner by the Board, the Plan shall automatically terminate on the day before the tenth anniversary of the date that the Plan was adopted by the Board. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
(c)No Impairment of Rights. Unless otherwise provided in the applicable Award Agreement, the amendment, suspension or termination of the Plan shall not impair rights and obligations under any Award that is granted prior to such amendment, suspension or termination, except with the written consent of the affected Participant.
11.EFFECTIVE DATE OF THE PLAN.
The Plan became effective on April 10, 2020, the date of adoption by the Board. The Company will seek stockholder approval in the manner and to the degree required under applicable laws. If the Company fails to obtain any required stockholder approval of the Plan within twelve (12) months after the date this Plan is adopted by the Board, pursuant to Section 422 of the Code, any Option granted as an Incentive Stock Option at any time under the Plan will not qualify as an Incentive Stock Option within the meaning of the Code and will be deemed to be a Non-Qualified Stock Option. The Board may at any time adopt a resolution stating that no more awards will be granted under the Plan. The Plan shall terminate upon the first date at which there shall not be any outstanding Options or SARs or any outstanding Restricted Stock subject to vesting and/or repurchase conditions following the first to occur of: (a) April 9, 2030, or (b) the date the Board adopts a resolution discontinuing the grant of awards under the Plan.
12.CHOICE OF LAW.
The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of the Plan, without regard to that state’s conflict of laws rules.
13.DEFINITIONS.
As used in the Plan, the following definitions shall apply to the capitalized terms indicated below:
(a)“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(b)“Award” means a Stock Award or a Performance Cash Award.
(c)“Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.
(d)“Board” means the Board of Directors of the Company.
(e)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company through reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, spin-off, split-off, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a Capitalization Adjustment.
(f)“Cause” shall have the meaning ascribed to such term in any written agreement between the Participant and the Company or an Affiliate defining such term and, in the absence of such agreement, such term shall mean, with respect to a Participant, the occurrence of any of the following events: (i) the Participant’s commission of an act of fraud, embezzlement or dishonesty that has a material adverse impact on the Company or an Affiliate; (ii) the Participant’s conviction of, or plea of “guilty” or “no contest” to, a felony; (iii) the Participant’s unauthorized use or disclosure of confidential information or trade secrets of the Company or an Affiliate that has a material adverse impact on such entity; or (iv) the Participant’s intentional misconduct that has a material adverse impact on the Company or an Affiliate. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant shall have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
(g)“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)Any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then-outstanding securities other than by virtue of a merger, consolidation or similar transaction; notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this clause) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then-outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii)There is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such Corporate Transaction unlessmerger, consolidation or similar transaction, the Administrator determines otherwisestockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in its sole discretion; provided, however, thatsuch merger, consolidation or similar transaction or (B) more than 50% of the Administrator,combined outstanding voting power of the parent of the surviving Entity in its sole discretion, may (i) permit exercise of any Optionssuch merger, consolidation or SARs prior tosimilar transaction, in each case in substantially the same proportions as their termination, even if such Options or SARs would not otherwise have been exercisable, and/or (ii) provide that all or certainOwnership of the outstanding Options and SARs shall be assumed or an equivalent Option or SAR substituted by an applicable successor corporation or entity or any Affiliate of the successor corporation or entity. A “Corporate Transaction” means (i) a liquidation or dissolution of the Company; (ii) a merger or consolidationvoting securities of the Company withimmediately prior to such transaction;
(iii)There is consummated a sale, lease, exclusive license or into another corporation or entity (other than a merger with a wholly-owned subsidiary); (iii) a saleother disposition of all or substantially all of the consolidated assets of the Company; or (iv)Company and its Subsidiaries, other than a purchasesale, lease, license or other acquisitiondisposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(iv)Individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (i) the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (ii) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply.
(h)“Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(i)“Committee” means a committee of two or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).
(j)“Common Stock” means the common stock of the Company.
(k)“Company” means Global Clean Energy Holdings, Inc., a Delaware corporation.
(l)“Consultant” means any individual, including an advisor, who is engaged by the Company or an Affiliate to render bona fide consulting or advisory services to the Company or an Affiliate, provided that such services are not in connection with the offer or sale of the Company’s securities in a capital-raising transaction and that such services do not directly or indirectly promote or maintain a market for the Company’s securities. Service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered a “Consultant” for purposes of the Plan.
(m)“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service; provided, however, if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by one person or by more than one person actingthe Board, in concert.
(n)“Corporate Transaction” means the Company and the grantee.
(i)The consummation of payment:
(ii)The consummation of a sale or other disposition of at least 90% of the Option, delivery byoutstanding securities of the optioneeCompany;
(iii)The consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv)The consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock already ownedoutstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
Notwithstanding the foregoing or any other provision of the Plan, the term Corporate Transaction shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company.
(o)“Director” means a member of the Board.
(p)“Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months, as provided in Sections 22(e)(3) and 409A(a)(2)(C)(i) of the Code, and shall be determined by the optionee for all or partBoard on the basis of such medical evidence as the Board deems warranted under the circumstances.
(q)“Effective Date” means the effective date of the Option price, providedPlan, which is the fair market value (determined asdate set forth inon the first page of the Plan on which the Board approved and adopted the Plan.
(r)“Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for purposes of the Plan.
(s)“Entity” means a corporation, partnership, limited liability company or other entity.
(t)“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(u)“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 6.1.9)13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such sharessecurities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then-outstanding securities.
(v)“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:
(i)If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock is equalshall be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of exercise todetermination, as reported in a source the OptionBoard deems reliable;
(ii)Unless otherwise provided by the Board, if there is no closing sales price or such portion thereof asfor the optionee is authorized to pay by delivery of such stock;
(iii)In the optionee is authorized to pay by surrenderabsence of such stock; and
(w)“Incentive Stock Option” means an option granted under thispursuant to Section 5 of the Plan shall include such provisionsthat is intended to be, and conditions as are necessary to qualify the Optionqualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
(x)“Non-Employee Director
(y)“6.1.9Nonstatutory Stock OptionDetermination” means any option granted pursuant to Section 5 of Valuethe Plan that does not qualify as an Incentive Stock Option.
(z)“Officer. For purposes” means a person who is an officer of this Plan, the fair market valueCompany within the meaning of Section 16 of the Exchange Act.
(aa)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock or other securities ofgranted pursuant to the Plan.
(bb)“Option Agreement” means a written agreement between the Company shall be determined as follows:
(cc)“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(dd)“Other Stock on the date of grant.Award
(ee)“Other Stock Award Agreement” means a director, consultant or adviser. For purposes of this Section 6.2.2, a grantee’s employment shall not be deemed to terminate by reason of the grantee’s transfer fromwritten agreement between the Company toand a holder of an Affiliate, or vice versa, or sick leave, military leave or other leaveOther Stock Award evidencing the terms and conditions of absence approved by the Administrator, if the period of any such leave does not exceed ninety (90) days or, if longer, if the grantee’s right to reemployment by the Company or any Affiliate is guaranteed either contractually or by statute.
(ff)“Outside Director” means a Director who is (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) an “independent director” under applicable rules of The NASDAQ Stock Market LLC (or under the rules of any other national securities exchange on which the Common Stock may subsequently be traded), including the independence rules of such stock coveredexchange relating to compensation committee members.
(gg)“Own,” “Owned,” “Owner,” “Ownership” means that a person or Entity owns, owned, is the owner of or has acquired ownership of securities, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise and has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(hh)“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.
(ii)“Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section (6)(c)(ii).
(jj)“Performance Criteria” means the one or more criteria that the Board shall select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the OptionBoard: (i) earnings (including earnings per share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total stockholder return; (v) return on equity or average stockholders’ equity; (vi) return on assets, investment or capital employed; (vii) stock price; (viii) margin (including gross margin); (ix) income (before or after taxes); (x) operating income; (xi) operating income after taxes; (xii) pre-tax profit, operating profit or net operating profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses and cost reduction goals; (xvii) improvement in or attainment of working capital levels; (xviii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt levels or debt reduction; (xxiv) commercialization of a product or product line; (xxv) implementation, completion or attainment of objectives relating to the development of one or more new products the achievement of commercial or strategic milestones for such products; (xxvi) acquisition of other companies, businesses or product lines; (xxvii) measures of customer satisfaction or retention; (xxviii) strategic transactions, partnerships or joint ventures; (xxix) investor relations activities; (xxx) stockholders’ equity; (xxxi) capital expenditures; (xxxii) measures of workforce diversity or retention; (xxxiii) growth of net income or operating income; and (xxxiv) any other measures of performance selected by the Board.
(kk)“Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board may, in its sole discretion, make appropriate adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated Performance Goals; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of Common Stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to stockholders other than regular cash dividends; (9) to exclude the effects of stock-based compensation and/or the award of bonuses under the Company’s bonus plans; (10) to exclude expenses incurred in the acquisition or disposition of businesses; and (11) to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item. In addition, the Board retains the sole discretion to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award.
(ll)“Performance Period” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(mm)“Performance Stock Award” means a Stock Award granted under the terms and conditions of Section 6(c)(i).
(nn)“Plan” means this Global Clean Energy Holdings, Inc. 2020 Equity Incentive Plan, as it may be amended from time to time.
(oo)“Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).
(pp)“Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(qq)“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).
(rr)“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and conditions of the Plan.
(ss)“Securities Act” means the Securities Act of 1933, as amended.
(tt)“Share Reserve” has the meaning set forth in Section 3(a).
(uu)“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.
(vv)“Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions of the Plan.
(ww)“Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.
(xx)“Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(yy)“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is granted. The exercise priceat the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of an ISO granted to anyvoting or participation in profits or capital contribution) of more than 50%.
(zz)“Ten Percent Stockholder” means a person who owns, directly or by attribution underOwns (or is deemed to Own pursuant to Section 424(d) of the Code (currently Section 424(d)),Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Affiliate (a “Affiliate.
Ten Percent Stockholder”) shall in no event be less than one hundred ten percent (110%) of the fair market value (determined in accordance with Section 6.1.9) of the stock covered by the Option at the time the Option is granted.
GLOBAL CLEAN ENERGY HOLDINGS, INC.
CERTIFICATE OF MERGER
OF
CERTIFICATE OF MERGER (this “Merger Agreement”) dated as of _______, 2010, by and between INCORPORATION
Global Clean Energy Holdings, Inc. (the “Corporation”), a Utah corporation (“GCEH-Utah”), and Global Clean Energy Holdings, Inc., a Delaware corporation (“GCEH-Delaware”).
FIRST: Article FOURTHof the Utah Revised Business Corporation Act (“UBCA”), such that GCEH-Delaware shall be the surviving corporation (hereinafter referred to as the “Surviving Corporation”). The Merger shall become effective on the date and at the time (the “Effective Time”) at which a certified copy of this Merger Agreement, or aCorporation’s Certificate of Merger complying with the DGCL, executed and acknowledged on behalf of GCEH-Delaware and GCEH-Utah in accordance with the requirements of the DGCL and the UBCA, has beenIncorporation, filed with the Delaware Secretary of State of Delaware on July 13, 2010, shall be amended to add the following paragraph to Article FOURTH:
“Upon the filing and effectiveness (the “Effective Time”) pursuant to the Utah SecretaryDelaware General Corporation Law of State.
SECOND: This Certificate of Incorporation, bylaws, or a resolutionAmendment shall become effective on [date].
THIRD: This Certificate of Amendment was duly adopted by the board of directors, a shareholder must have been a shareholder with respect to the shares for which payment is demanded as of the date the proposed corporate action creating dissenters’ rights under Section 16-10a-1302 is approved by the shareholders, if shareholder approval is required, or as of the effective date of the corporate action if the corporate action is authorized other than by a vote of shareholders.
IN WITNESS WHEREOF, the corporation to receive a payment demand, which may be the payment demand form contemplated in Subsection 16-10a-1322(2)(d), duly completed, or may be stated in another writing;
Global Clean Energy Holdings, Inc. | |
By: ___________________________ Name: Richard Palmer | |
Title: President and Chief Executive Officer |
