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þNo fee required.¨Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.(1)Title of each class of securities to which transaction applies:(2)Aggregate number of securities to which transaction applies:(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(set forth the amount on which the filing fee is calculated and state how it was determined):(4)Proposed maximum aggregate value of transaction:(5)Total fee paid:¨Fee paid previously with preliminary materials.¨Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.(1)Amount Previously Paid:(2)Form, Schedule or Registration Statement No.:(3)Filing Party:(4)Date Filed:PRELIMINARY PROXY MATERIALSSUBJECT TO COMPLETION, DATED APRIL 1, 2019
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iconixbrand/2020 and using the 12-digit control number printed on your proxy card. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the enclosed proxy statement.Cordially,
29, 2020
10:00 a.m.Tuesday, June 16, 2020
1450 Broadway, Third Floor, New York, New York 10018
list.
29, 2020
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the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them set forth in the section titled “Voting Procedures” herein.
the section titled “Voting Procedures — Beneficial Stockholders” herein.
On March 14, 2019, the Company effected a 1-to-10 reverse stock split (the “Reverse Stock Split”) of its common stock.The Reverse Stock Split reduced the number of the Company’s outstanding shares of common stock from approximately 88.5 million shares to approximately 8.9 million shares.Unless the context otherwise requires, all share and per share amounts in this Proxy Statement have not been adjusted to reflect the Reverse Stock Split.
Broker “non-votes” are not counted in the tabulations of the votes cast on proposals that constitute “non-routine” or “non-discretionary” matters because stockholders are not considered to be entitled to vote on matters as to which broker authority is withheld. Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Accordingly, banks, brokers and other nominees have discretionary voting power only with respect to ProposalsProposal II (the ratification of the appointment of our auditor) and IV (authorization to effect the reverse stock split), as these arethis is the only proposalsproposal considered to be a “routine” matters.matter. Banks, brokers and other nominees will not have discretionary voting power with respect to Proposals I (the election of directors) and III (the non-binding advisory vote on named executive officer compensation) in the absence of specific instruction. We encourage all beneficial owners to vote their shares because banks, brokers and other nominees cannot vote on other matters.
ELECTION OF DIRECTORS
Name | | Age | | | Position with the Company | | |
Justin Barnes | | 55 | | | Director | | |
F. Peter Cuneo | | 76 | | | Chairman of the Board | | |
Drew Cohen | | 51 | | | Lead Director | | |
Robert C. Galvin | | 60 | | | Director and Chief Executive Officer | | |
James Marcum | | 60 | | | Director |
55
76
51
60
60
In February 2019, the Board determined to reduce the size of the Board to five members, effective upon the due election and qualification of directors at the Company’s 2019 Annual Meeting. Accordingly, Mr. Friedman and Ms. Gove will conclude their service as members of the Board and any committee thereof on the date of the Company’s 2019 Annual Meeting.
Biographies for Ms. Gove and Mr. Friedman are as follows:
MARK FRIEDMAN
Director Since 2006
Age 55
Mark Friedman has served on our Board of Directors since October 2006. Mr. Friedman has been a Managing Partner at The Retail Tracker, an investment advisory and consulting firm since May 2006. From 1996 to 2006, Mr. Friedman was with Merrill Lynch, serving in various capacities, including group head of its U.S. equity research retail team where he specialized in analyzing and evaluating specialty retailers in the apparel, accessory and home goods segments. Prior to joining Merrill Lynch, Mr. Friedman specialized in similar areas for Lehman Brothers Inc. and Goldman, Sachs & Co. Mr. Friedman has been ranked on the Institutional Investor All-American Research Team as one of the top-rated sector analysts. He received a Bachelor of Business Administration degree from the University of Michigan in 1986 and a Master’s degree in business administration from The Wharton School, University of Pennsylvania in 1990.
SUE GOVE
Director since 2014
Age 60
Sue Gove has served on our Board of Directors since October 2014. Ms. Gove has been the President of Excelsior Advisors, LLC since May 2014 and has also been retained as a Senior Advisor at Alvarez & Marsal. Ms. Gove had served as the President of Golf Smith International Holdings, Inc. from February 2012 through April 2014 and as Chief Executive Officer from October 2012 through April 2014. Previously, she was Chief Operating Officer of Golfsmith International Holdings, Inc. from September 2008 through October 2012, Executive Vice President from September 2008 through February 2012 and Chief Financial Officer from March 2009 through July 2012. Ms. Gove previously had been a self-employed consultant from April 2006 until September 2008, serving clients in specialty retail and private equity. She was Executive Vice President and Chief Operating Officer of Zale Corporation from 2002 to March 2006 and a director of Zale Corporation from 2004 to 2006. She was Executive Vice President, Chief Financial Officer of Zale Corporation from 1998 to 2002 and remained in the position of Chief Financial Officer until 2003. Ms. Gove served as a director of AutoZone, Inc. from 2005 to 2017, and has served as a director of Logitech International since September 2015 and a director of Tailored Brands, Inc. since August 2017. Ms. Gove received a Bachelor of Business Administration degree from the University of Texas at Austin.
Beginning
Oversight in Addressing Material Weaknesses in the Company’s Review Controls
The material weaknesses which existed at December 31, 2017, as identified by the Company in its evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) under the supervision and with the participation of its management were remediated as of December 31, 2018, except with respect to financial reporting for the modification of our debt.
We are in the process of remediating the above material weakness and testing the operating effectiveness of the new and existing controls. The material weakness cannot be considered completely addressed until the applicable additional controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
The Audit Committee, which as noted above consists of independent, non-executive directors, will continue to meet regularly with management, the Director of Internal Audit, and its independent accountants to review accounting, reporting, auditing and internal control matters. The Audit Committee has direct and private access to the Director of Internal Audit and the external auditors and will continue to meet with each, separately, in executive sessions of the Audit Committee.
Compensation Committee
2019
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers and directors, and persons who beneficially own more than ten percent (10%) of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater-than-ten-percent (10%) owners are required by certain SEC regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by us, we believe that during 2018, there was compliance with the filing requirements applicable to our officers, directors and greater-than-ten-percent (10%) stockholders of the Company.
In connection with the departure of Mr. Haugh from the Company in June 2018, the Board formed a search committee to identify and recruit a new Chief Executive Officer of the Company (the “Search Committee”). Each member of the Search Committee received cash payments of $10,000 per month during its existence, other than its chairperson who received cash payments of $15,000 per month during its existence.
In 2018, Mr. Cuneo served as our Executive Chairman of the Board, as well as our Interim Chief Executive Officer. Mr. Cuneo did not receive compensation in respectwho received monthly cash payments of his service as a director during 2018.
$15,000).
Name | | | Fees earned or paid in cash ($) | | | Total ($) | | ||||||
Justin Barnes | | | | $ | 190,000 | | | | | $ | 190,000 | | |
F. Peter Cuneo | | | | | 250,000 | | | | | $ | 250,000 | | |
Drew Cohen | | | | $ | 210,000 | | | | | $ | 210,000 | | |
James A. Marcum | | | | $ | 190,000 | | | | | $ | 190,000 | | |
Mark Friedman(1) | | | | $ | 90,000 | | | | | $ | 90,000 | | |
Sue Gove(2) | | | | $ | 90,000 | | | | | $ | 90,000 | | |
Mr. Friedman ceased to serve on our Board of Directors, effective May 7, 2019. Fees earned or paid in cash to Mr. Friedman represent annual director fees attributable to his time of service on the Board of Directors during 2019. (2) Ms. Gove ceased to serve on our Board of Directors, effective May 7, 2019. Fees earned or paid in cash to Ms. Gove represent annual director fees attributable to her time of service on the Board of Directors during 2019. 12 |
Name | | | Age | | | Position | |
Robert C. Galvin | | 60 | | | President and Chief Executive Officer | | |
John T. McClain | | 59 | | | Executive Vice President and Chief Financial Officer | |
60
59
1:10 reverse stock split on March 14, 2019
Jeffrey Wood(1) | | | Former Interim Chief Financial Officer | |
| Robert C. Galvin | | | President, Chief Executive Officer and Director |
| | Executive Vice President and Chief Financial Officer | ||
Current Executive:
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What we do | | | What we don’t do | |||||||
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| | Clawback Policy. We have adopted a clawback policy that applies if there is a restatement of our financial statements that is required, within the previous three years, to correct accounting errors due to material non-compliance with any financial reporting requirements under the federal securities laws. This applies to equity as well as cash payments that were paid based on performance metrics. During 2016, we clawed back equity and cash payments from former executives pursuant to this policy. | | ✗ | | | No Excess Perquisites and Limited Retirement Benefits. We have a 401k program and have never had a defined benefit plan. We do not maintain any supplemental executive retirement plans or other pension benefits. We do not provide any excessive perquisites. | | ||
✓ | | | ||||||||
Anti-Pledging Policy. We have adopted a policy that prohibits directors and executive officers from pledging any additional shares of Common Stock following October 20, 2015. | | ✗ | | | No option or stock appreciation rights repricing or exchanges without stockholder approval. We have not engaged in the activities below and they are prohibited by repricing buying out underwater options or stock appreciation rights for cash. | | ||||
✓ | | | ||||||||
Anti-Hedging Policy. We have a policy prohibiting directors | | ✗ | | | No dividends or dividend equivalents on unvested awards. We do not pay dividends or dividend equivalents on unvested shares of restricted stock or unearned PSU awards. Accrued dividends on such awards are paid only when such awards become vested or earned, as applicable | | ||||
✓ | | | ||||||||
“Double-Trigger” Change in Control Provision. | | ✗ | | | No | |
What we do | | | What we don’t do | | ||||||
✓ | | | ||||||||
Independence of our Compensation Committee and Advisor. The Compensation Committee, which is comprised solely of independent directors, utilizes the services of FW Cook, as its independent, third party compensation consultant. FW Cook reports to the Compensation Committee, does not perform any other services for the Company and, to the Compensation Committee’s knowledge, has no economic or other ties to the Company or the management team that could compromise its independence or objectivity. | | | ✗ | | | No Gross-Ups on Compensation. We do not have any provisions requiring the Company to gross-up salary or bonus compensation to cover taxes owed by our executives. | |
Compensation Committee Interlocks and Insider Participation
Other than as set forth in the immediately following sentence, none
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Base Salary | | | Base salary represents amounts paid during the fiscal year to named executive officers as direct, fixed compensation under their respective employment agreements (in the case of Messrs. Galvin | |
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Annual cash bonuses (short-term incentives) | | | We award bonuses to promote the achievement of our short-term, targeted business objectives by providing competitive incentive reward opportunities to our executive officers who can significantly impact our performance towards those objectives. Further, a competitive bonus program enhances our ability to attract, develop and motivate individuals as members of a talented management team. Following its previously disclosed commitment to do so, the Compensation Committee eliminated the historical practice of determining annual cash bonuses on a solely discretionary basis in 2016. Cash bonus awards are currently made pursuant to the Company’s AIP, which requires the achievement of measurable, pre-determined goals in order to be eligible for performance-based cash bonuses as more fully described below. In • the effects of currency fluctuations in comparison to plan currency rates (if material); • gains or losses from litigation, claim judgments, or regulatory proceedings or legal and insurance settlements; • the effect of changes in laws, regulations, or accounting principles, methods or estimates; • write down or impairment of assets including material receivable write downs; • the gain or loss from the sale or discontinuance of a business segment, division, or unit, and the planned, unrealized EBITDA for this business segment, division, or unit; • results from an unplanned acquired business and costs related to the unplanned acquisition; • stock based compensation; • restructuring the workforce severance costs; • unusual and infrequently occurring items as defined by US GAAP; and • costs for investigations and legal action. After analyzing performance against the relevant goals, the Compensation Committee determined that performance was 104.5% of target. The bonus earned by each of Messrs. Galvin and McClain for 2019 is set forth below in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. Because of Mr. | |
| Long-term incentives | |
| Beginning in 2016, annual equity awards were made in the form of RSUs and a target amount of PSUs granted pursuant to the terms of
For 2019, the Compensation Committee granted part of For 2019, Mr. Galvin earned 110% of the portion of the target cash award applicable to 2019, or $124,437.50, subject to reduction to 100% of the target cash award applicable to 2019, or $113,125, depending on TSR performance for 2019 and 2020. The portion of this cash award earned by Mr. Galvin for 2019 that is not subject to reduction based on TSR is set forth below in the “Non-Equity Incentive Plan
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Table. | ||
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| Post-termination compensation | | | We | |
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401(k) Retirement Plan | | | The Company offers a qualified employer-sponsored retirement plan pursuant to which eligible employees, including the named executive officers, may make salary-deferral contributions |
Matching contributions vest immediately. | |
Name and Principal Position | Year | Salary ($)(a) | Bonus ($)(b) | Stock Awards ($)(c) | Non-Equity Incentive Plan Compensation ($)(d) | All Other Compensation ($)(e) | Total ($)(f) | |||||||||||||||||||||
Robert C. Galvin(1) | 2018 | 850,000 | — | 1,180,000 | 225,000 | — | 2,255,000 | |||||||||||||||||||||
President and Chief Executive Officer | — | |||||||||||||||||||||||||||
John N. Haugh(2) | 2018 | 1,000,000 | — | 1,100,000 | 137,499 | — | 2,237,499 | |||||||||||||||||||||
Former President and Chief Executive Officer | 2017 | 1,000,000 | — | 2,200,000 | 826,688 | 32,303 | 4,058,991 | |||||||||||||||||||||
F. Peter Cuneo(3) | 2018 | 636,250 | — | 37,545 | — | — | 673,795 | |||||||||||||||||||||
Chairman of Board of Directors; Former Executive Chairman and Interim Chief Executive Officer | 2017 | — | — | — | — | — | — | |||||||||||||||||||||
David K. Jones(4) | 2018 | 620,000 | — | 300,000 | 87,500 | 15,000 | 1,022,500 | |||||||||||||||||||||
Former Executive Vice President and Chief Financial Officer | 2017 | 620,000 | — | 600,000 | 333,156 | 22,253 | 1,575,409 | |||||||||||||||||||||
Jason Schaefer(5) | 2018 | 500,000 | 250,000 | 250,000 | 88,541 | 16,500 | 1,105,041 | |||||||||||||||||||||
Former Executive Vice President and General Counsel | 2017 | 500,000 | — | 500,000 | 448,850 | 18,540 | 1,467,390 | |||||||||||||||||||||
Jeffrey Wood(6) | 2018 | 277,639 | — | 25,000 | 9,896 | — | 312,535 | |||||||||||||||||||||
Former Interim Chief Financial Officer |
(a) The amount in this column in respect of Mr. McClain includes the full amount of an inducement bonus paid to Mr. McClain in March 2019. (b) The amounts shown in this column represent the aggregate grant date fair value with respect to PSUs and RSUs granted in 2019 and 2018, as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”) (without regard to the effect of estimated forfeitures), assuming target performance for the PSUs was achieved. In respect of 2018 and 2019, assuming maximum performance of the PSUs had been achieved, the aggregate grant date fair value |
Employment Agreements and Executive Severance Plan Participation Agreements
The Compensation Committee determines the compensation for each of the named executive officers. As discussed above,officers would be $[1,688,554] in 2018 and $[850,001] in 2019 for Mr. Galvin, and $[787,500] for Mr. McClain in 2019. See Note 10 to Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for a discussion for the relevant assumptions used in calculating grant date fair value.
The Executive Severance Plan was not applicable to Mr. Haugh, whose former employment agreement remained in effect, and Mr. Cuneo, who entered into an employment agreement with the Company in 2017 in connection with his service as Executive Chairman (the “2017 Cuneo
On October 15, 2018, Mr. Galvin entered into an employment agreement with the Company in connection with his hiring as President and Chief Executive Officer by the Company, and appointment to the Board of Directors.
Agreements
2019.
Additionally, the employment agreement provides for the grant to Mr. Galvin of certain equity compensation, as set forth below.
2018 Annual Award RSUs: Mr. Galvin was granted an award of RSUs under the 2016 Plan, with an aggregate fair market value of $180,000 as of the date of grant. The RSUs will vest in three equal annual installments on each of March 31, 2019, 2020 and 2021, subject to Mr. Galvin’s continued employment with the Company on the applicable vesting date; provided that, if his employment is terminated by the Company without “cause,” by him for “good reason,” or due to his death or “disability” (each such term as defined in his employment agreement), Mr. Galvin will remain eligible to receive the pro rata number of any unvested RSUs that are scheduled to vest on the vesting date that immediately follows the date of termination, based on the number of days that he was employed with the Company during the period (i) from the date of grant through March 31, 2019 (in the event that the termination occurs prior to March 31, 2019), or (ii) from the most recent vesting date to the next-scheduled vesting date (in the event that the termination occurs after March 31, 2019), with such pro rata number of RSUs to vest and be settled on the vesting date on which such RSUs would have vested if Mr. Galvin’s employment had continued through such vesting date, subject to his continued compliance with the restrictive covenants contained in his employment agreement (as described below) through such vesting date.
2019 Annual Award PSUs: On the date on which 2019 annual equity awards are granted to the Company’s senior executives, Mr. Galvin will be granted an award of PSUs under the 2016 Plan, with an aggregate fair market value of $552,500 as of October 15, 2018. The PSUs will cliff vest based on performance criteria consistent with those contained in agreements relating to annual performance-based awards issued to other executives of the Company (including accelerated vesting upon a change in control).
2019 Annual Award RSUs: On the date on which 2019 annual equity awards are granted to the Company’s senior executives, Mr. Galvin will be granted an award of RSUs under the 2016 Plan, with an aggregate fair market value of $297,500 as of the date of grant. The RSUs will vest in three equal annual installments on the first three anniversaries of the grant date, but will only be payable in the event Mr. Galvin is employed by the Company as of the date of vesting. There is no accelerated vesting upon a change of control.
In addition to the annual awards of RSUs and PSUs described above, after 2019, the Company is required to grant PSUs and/or RSUs or other cash or equity-based long-term incentives to Mr. Galvin during the term of his employment agreement, with an aggregate target of 125% of Mr. Galvin’s then-current base salary serving as the annual guideline for the aggregate fair market value of such grants, with a maximum aggregate annual payout of 200% of Mr. Galvin’s then-current base salary if applicable performance targets are achieved, subject to approval by the Board’s Compensation Committee.
As an inducement to accept the Company’s offer of employment, on October 15, 2018, the Company also granted to Mr. Galvin 2,311,604 RSUs, which equals the number of shares of Common Stock with an aggregate fair market value as of October 15, 2018 of $500,000 and 2,311,604 PSUs, which equals the number of shares of Common Stock with an aggregate fair market value on October 15, 2018 of $500,000.
One-third of such employment inducement RSUs vested on October 15, 2018, with the remaining two-thirds of such employment inducement RSUs to vest on October 15, 2019, subject to Mr. Galvin’s continued employment with the Company through the vesting date; provided that, if Mr. Galvin’s employment terminates for any reason before such vesting date, then all such employment inducement RSUs will be forfeited immediately for no consideration; provided further, that if Mr. Galvin is terminated by the Company without cause and unrelated to the Company’s or Mr. Galvin’s performance, all unvested employment inducement RSUs shall vest (and be settled) on October 15, 2019.
The employment inducement PSUs cliff vest at the end of a three-year performance period ending on October 15, 2021 (the “Performance Period”) based on the percentile ranking of the Company’s total shareholder return (“TSR”) relative to its peer companies for such performance period. 100% of such PSUs will vest if the Company’s TSR ranks 75% or higher, 50% of the PSUs will vest if the Company’s TSR ranks 50%, and 25% of the PSUs will vest if the Company’s TSR ranks 35% (additional PSUs will vest proportionally if the Company’s TSR is between 35% and 50% and between 50% and 75%, respectively), and no PSUs will vest if the Company’s TSR is below 35%, in all events, subject to Mr. Galvin’s continued employment with the Company on the applicable vesting date; provided that, if Mr. Galvin’s employment is terminated by the Company without cause (and not due to his death or disability) or by him for good reason, then he will remain eligible to earn a pro rata number of the PSUs, based on the percentage of the Performance Period during which he was employed by the Company, provided that the applicable TSR ranking is achieved on the termination date as if the termination date had been the last day of the Performance Period. The pro rata number of PSUs that would be earned by Mr. Galvin in accordance with the prior sentence will become vested at the end of the three year performance period, subject to Mr. Galvin’s continued compliance with the restrictive covenants contained in his employment agreement.
If, during the Performance Period, a “change in control” (as defined in Mr. Galvin’s employment agreement) occurs, then the unvested employment inducement PSUs will be converted to a number of RSUs equal to the number of PSUs that would have vested on the date of such change in control based on the applicable TSR ranking if the date of such change in control had been the last day of the Performance Period, and such RSUs will vest on the last day of the Performance Period, subject to Mr. Galvin’s continued employment with the Company and his compliance with the restrictive covenants contained in his employment agreement through the last day of the Performance Period (except as described below). Notwithstanding the foregoing, if the employment inducement PSUs are not assumed, substituted with a similar award, or otherwise continued in such change in control, then such converted RSUs shall vest immediately prior to such change in control. In the event that Mr. Galvin is terminated by the Company without cause (and not due to his death or Disability) or by him with good reason, in either case, during the Performance Period, which termination occurs within 24 months after a change in control, then the RSUs into which the PSUs have converted upon such change in control will immediately vest on the date of termination (provided Mr. Galvin is in continued compliance with the restrictive covenants contained in his employment agreement through the date of termination), and such RSUs generally will be settled within thirty (30) days after the termination date.
The employment agreement also provides for Mr. Galvin to receive certain severance payments if the Company terminates his employment other than for cause (and not by reason of his death or disability) or if Mr. Galvin terminates his employment for good reason, in any case, subject to his execution and non-revocation of a general release of claims. These severance payments include (i) 24 months of base salary continuation, (ii) any earned but unpaid annual bonus for the calendar year preceding the calendar year in which such termination of employment occurs, (iii) a prorated annual bonus for the calendar year in which such termination of employment occurs, based on the number of days of his employment during such calendar year, and assuming target performance for such calendar year, (iv) up to 18 months of Company-subsidized COBRA continuation coverage, and (v) accelerated vesting of unvested equity awards, asif and to the extent provided for in the applicable grant agreement and as otherwise provided in the employmentequity award agreement. In the event that Mr. Galvin’s employment with the Company terminates under the circumstances described above but within 18 months after a “change in control” of the Company (as defined in the employment agreement), then Mr. Galvin will be entitled to a lump sum payment equal to two times the sum of (a) the annual base salary and (b) the average annual bonus paid to him for the two calendar years immediately prior to such change in control (or, if such change in control occurshad occurred in 2018 or 2019, an amount equal to 100% of his annual base salary), in addition to the other severance payments described in the foregoing clauses (ii), (iv) and (v). The employment agreement also contains certain confidentiality, non-disparagement and cooperation obligations for an indefinite period of time, and certain non-competition and non-solicitation obligations during employment and for 24 months thereafter.
F. Peter Cuneo
2018 Employment Agreements
As noted above,
Pursuant to the terms of the June 2018 Cuneo Employment Agreement (as amended), Mr. Cuneo received a monthly salary of $83,333 for thethree-year performance period beginning on June 15, 2018 and ending on October 15, 2018 (the2021 based on the percentile ranking of the Company’s total shareholder return (“TSR”) relative to its peer companies for such performance period. 100% of such PSUs will vest if the Company’s TSR ranks 75% or higher, 50% of the PSUs will vest if the Company’s TSR ranks 50%, and 25% of the PSUs will vest if the Company’s TSR ranks 35% (additional PSUs will vest proportionally if the Company’s TSR is between 35% and 50% and between
Company without cause (and not due to his death or disability) or by him with good reason, in either case, during the performance period, which termination occurs within 24 months after a change in control, then the RSUs into which the PSUs have converted upon such change in control will immediately vest on the date of termination (provided Mr. Galvin is in continued compliance with the restrictive covenants contained in his employment agreement through the date of termination), and such RSUs generally will be settled within thirty (30) days after the termination date.
Pursuant to the October 2018 Cuneo Employment Agreement, Mr. Cuneo received a yearly salary equal to $440,000 ($36,367 per month) through the termination date of December 31, 2018. Following the termination of the October 2018 Cuneo Employment Agreement in accordance with its terms on December 31, 2018, Mr. Cuneo resumed his role as Chairman of the Board of Directors.
Both the June 2018 Cuneo Employment Agreement and the October 2018 Cuneo Employment Agreement contained confidentiality provisions for an indefinite period.
David K. Jones
2017 Executive Severance Plan Participation Agreement
On January 24, 2017, Mr. Jones entered into a participation agreement to the Executive Severance Plan, which was effective as of January 15, 2017 and superseded and replaced his former employment agreement (except as noted herein). Pursuant to the terms of the participation agreement, Mr. Jones was subject to the terms of the Executive Severance Plan generally applicable to all participants. The participation agreement provided for Mr. Jones to be employed as our Executive Vice President and Chief Financial Officer. In addition, the participation agreement entitled him to an annual base salary of $620,000 (subject to annual performance review), a target annual cash bonus opportunity equal to 65% of his annual base salary (which actual cash bonus payment may be above or below such target based on actual performance as determined by the Compensation Committee), a guaranteed minimum cash bonus of $250,000 for the 2017 calendar year (consistent with the terms of his former employment agreement) and certain automobile benefits. Mr. Jones’s participation agreement also provided that the terms governing the RSUs and PSUs granted to Mr. Jones in connection with his former employment agreement would remain in force until such grants vest or are otherwise forfeited, and that any “change in control” which relates to such RSUs and PSUs shall refer to the definition of “change in control” provided in his former employment agreement.
Jason Schaefer
2017 Executive Severance Plan Participation Agreement
On December 30, 2016, Mr. Schaefer entered into a participation agreement to the Executive Severance Plan, which was effective as of January 1, 2017 and supersedes and replaces his former employment agreement. Pursuant to the terms of the participation agreement, Mr. Schaefer is subject to the terms of the Executive Severance Plan generally applicable to all participants. The participation agreement provides for Mr. Schaefer to be employed as our Executive Vice President and General Counsel. In addition, the participation agreement entitles him to an annual base salary of $500,000 (subject to annual performance review), a target annual cash bonus opportunity equal to sixty-five percent (65%) of his annual base salary (which actual cash bonus payment may be above or below such target based on actual performance as determined by the Compensation Committee), and certain automobile benefits.
John N. Haugh
2016 Employment Agreement
On February 18, 2016, we entered into an employment agreement with Mr. John N. Haugh that provided for the employment of Mr. Haugh as our PresidentOfficer commencing as of February 23, 2016 (the “Commencement Date”) and as our President and Chief Executive Officer commencing April 1, 2016 and continuing until February 23, 2019 (the “Term”).
Pursuant to the11, 2019. The employment agreement provides that Mr. Haugh was entitled toMcClain will be an at-will employee and will receive an annual base salary of not less than $1,000,000.
Under$525,000 per year (to be prorated for any partial calendar year of employment) and certain other benefits consistent with those provided to other senior executives of the employment agreement,Company, including major medical, dental, life insurance, short-term disability insurance, long-term disability insurance, and retirement. In addition, Mr. Haugh was entitled to participate in our executive bonus program and wasMcClain is eligible to receiveearn an annual bonus, with a target bonusesbonus opportunity of up to 100%at least 75% of his base salary with increasesand an annual maximum bonus opportunity of up to a maximum of 200%150% of his base salary. Mr. Haugh was also entitled to various benefits, including benefits available to our other senior executives and certain expenses for his relocation
the Company timely filing its annual report in respect of the Company’s 2018 financial year on Form 10-K with the SEC.
In connection
Name | | | Number of (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | | 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 ($)(1) | | ||||||||||||
Robert C. Galvin | | | | 55,478(2) | | | | | | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | 231,160(3) | | | | | | 312,066 | | | |||
| | | | 154,145(4) | | | | | | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | 71,567(5) | | | | | | 96,616 | | | |||
| | | | 71,568(6) | | | | | | | | | | | | | | | | | | | |||
John | | | 116,666(7) | | | | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | 87,500(8) | | | | | | 118,125 | | | ||||
| | | 87,500(9) | | | | | ||||||||||||||||||
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Name and Address of Beneficial Owner | Number of Shares of Common Stock Beneficially Owned | Percentage of Company’s Outstanding Common Stock Beneficially Owned | ||||||
F. Peter Cuneo | 52,243 | * | ||||||
Robert C. Galvin | 478,914 | * | ||||||
John T. McClain | 354,258 | * | ||||||
Justin Barnes | — | — | ||||||
Drew Cohen | 61,737 | * | ||||||
Mark Friedman | 65,981 | * | ||||||
Sue Gove | 30,052 | * | ||||||
James A. Marcum | 74,057 | * | ||||||
John N. Haugh | 484,184 | * | ||||||
David K. Jones | 77,003 | * | ||||||
Jason Schaefer | 55,446 | * | ||||||
Jeffrey Wood | 30,999 | * | ||||||
All directors and executive officers as a group (8 persons)(1) | 1,117,242 | 1.3 | % | |||||
UBS Group AG 1450 Broadway New York, NY 10018 | 11,265,289 | (2) | 9.985 | %(3) | ||||
Sports Direct International plc Unit A Brook Park East Shirebrook, England NG20 8RY | 5,664,115 | (4) | 6.4 | % | ||||
Monecor (London) Limited (trading as ETX Capital) One Broadgate London EC2M 2QS United Kingdom | 5,001,575 | (5) | 5.6 | % | ||||
Radcliffe Capital Management, L.P. 50 Monument Road, Suite 300 Bala Cynwyd, PA 19004 | 7,707,845 | (6) | 8.7 | % |
Name and Address of Beneficial Owner | | | Number of Shares of Common Stock Beneficially Owned | | | Percentage of Company’s Outstanding Common Stock Beneficially Owned | | ||||||
F. Peter Cuneo | | | | | 5,224 | | | | | | * | | |
Robert C. Galvin | | | | | 429,826 | | | | | | * | | |
John T. McClain | | | | | 109,910 | | | | | | * | | |
Justin Barnes | | | | | — | | | | | | — | | |
Drew Cohen | | | | | 6,174 | | | | | | * | | |
James A. Marcum | | | | | 7,406 | | | | | | * | | |
All directors and executive officers as a group (6 persons) | | | | | 558,540 | | | | | | 4.7% | | |
UBS Group AG 1450 Broadway New York, NY 10018 | | | | | 616,908(1) | | | | | | 5.2%(2) | | |
On July 25, 2018, we entered into a cooperation agreement (the “Agreement”) with Sports Direct International plc (“Sports Direct”), which beneficially owned 5,664,115 shares of Common Stock on such date, that allowed Sports Direct to appoint two members to the Company’s Board of Directors. The Board appointed Justin Barnes and James Marcum as directors designated by Sports Direct. A copy of the Agreement is attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 27, 2018. Pursuant to the terms of the Agreement, it terminated in January 2019.
FY 2018 | ||||
Joint Venture Partner | ||||
Global Brands Group Asia Limited | $ | 19,544 | ||
MHMC | 2,927 | |||
Albion Equity Partners LLC / GL Damek | 2,644 | |||
Rise Partners, LLC / Top On International Group Limited | 977 | |||
Sports Direct International plc | 915 | |||
Anthony L&S | 623 | |||
M.G.S. Sports Trading Limited | 610 | |||
Pac Brands USA, Inc. | 246 | |||
Buffalo International ULC | — | |||
Roc Nation | — | |||
$ | 28,486 |
| | | FY 2019 | | |||
| | | (in thousands) | | |||
Joint Venture Partner | | | |||||
MHMC(1) | | | | $ | 7 | | |
Albion Equity Partners LLC / GL Damek | | | | | 2,350 | | |
Sports Direct International plc | | | | | 1,188 | | |
M.G.S. Sports Trading Limited | | | | | 440 | | |
Pac Brands USA, Inc. | | | | | 363 | | |
| | | | $ | 4,348 | | |
2019.
Sue Gove,ChairpersonMark Friedman
Proposal II
$1,245,000, and (b) the Company’s annual financial statements for 2019, the reviews of the financial statements included in the Company’s Forms 10-Q and consents related to SEC registration statements for 2019 totaled approximately $835,051.
2018. In 2019, BDO USA, LLP billed an aggregate of $1,748,011 for legal fees.
Proposal III
Proposal IV
To Approve Reverse Stock Split
On March 14, 2019, we effected a one-for-ten (1:10) reverse stock split of the Company’s outstanding Common Stock (the “Reverse Stock Split”). The reverse stock split reduced the number of our outstanding shares of Common Stock from approximately 88.5 million shares to approximately 8.9 million shares. The number of authorized shares of Common Stock was not adjusted as a result of the reverse stock split. The reverse stock split became effective at 12:01 a.m. Eastern time on March 14, 2019 and the consolidated common stock began trading on The Nasdaq Global Select Market on a split-adjusted basis at market open on March 14, 2019. In the event that it be necessary to comply with Nasdaq listing standards, we are soliciting shareholder approval of an additional reverse stock split.
We are asking stockholders to approve the Certificate of Amendment to the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to effect a reverse stock split of the issued shares of the Company’s Common Stock at a reverse stock split ratio of not less than 1-for-2 and not more than 1-for- , the exact reverse stock split ratio to be determined by the Board of Directors and publicly announced prior to the filing of the Certificate of Amendment to the Certificate of Incorporation.
If the proposal is adopted by the stockholders, the reverse stock split will be accomplished by the filing with the Secretary of State of the State of Delaware of the Certificate of Amendment to the Certificate of Incorporation. The Certificate of Amendment that is filed will contain the reverse stock split ratio determined by the Board of Directors to be in the best interests of the Company and its stockholders, which determination shall be made within ninety (90) days after the date of the Annual Meeting.
Except for adjustments that may result from the treatment of fractional shares as described below, each stockholder will hold the same percentage of Common Stock outstanding immediately following the reverse stock split as that stockholder held immediately before the reverse stock split.
Reasons for the Reverse Stock Split
The Board believes that a reverse stock split is desirable and may be necessary to maintain the continued listing of our Common Stock on Nasdaq.
Our Common Stock is currently listed on Nasdaq under the symbol “ICON.” On November 27, 2018, the Company received a written notice from Nasdaq that the Company’s Common Stock would be delisted from the Nasdaq Global Select Market for compliance with (a) Nasdaq’s Listing Rule 5550(a)(2) (the “Minimum Closing Bid Price Rule”) (as the minimum closing bid price of our Common Stock had been below $1.00 for thirty (30) consecutive business days) and (b) Nasdaq Listing Rule 5450(b)(3)(c) (the “Minimum Market Value Rule” and, together with the Minimum Closing Bid Price Rule, the “Rules”) (as the minimum market value of the Company’s Common Stock fell below $15,000,000 for a period of 30 consecutive business days). In accordance with Nasdaq’s procedures, the Company appealed Nasdaq’s determination by requesting a hearing (the “Hearing”) before a Nasdaq Hearings Panel (the “Panel”) to seek continued listing, which stayed the delisting of the Company’s Common Stock. The Hearing occurred on January 10, 2019.
On January 15, 2019, the Panel granted the Company’s request for continued listing of the Company’s Common Stock on The Nasdaq Global Select Market pursuant to an extension through May 27, 2019, subject to the condition that the Company regain compliance with the Minimum Closing Bid Price Rule by such date and provide the Panel with certain interim progress reports. If the Company does not regain compliance with the Minimum Closing Bid Price Rule by May 27, 2019 or, based on the Company’s interim progress reports, the Panel reconsiders the extension before then, Nasdaq will delist the Company’s Common Stock from the Nasdaq Global Select Market. As noted above, the Company completed the Reverse Stock Split in March 2019, which may bring the Company into compliance with the Minimum Closing Bid Price Rule.
The reverse stock split could enhance our ability to regain compliance if the price of our Common Stock following the reverse stock split is at least $1.00 for ten (10) consecutive trading days. However, we cannot provide any assurance that any increase our stock price would remain following the reverse stock split or that we would satisfy the other requirements for continued listing on Nasdaq.
The ratio of the reverse stock split, if approved and implemented, will be a ratio of not less than 1-to-2 and not more than 1-to- , as determined by our Board in its sole discretion. The Board believes that stockholder adoption of a range of reverse stock split ratios (as opposed to adoption of a single reverse stock split ratio or a set of fixed ratios) provides maximum flexibility to achieve the purposes of a reverse stock split and, therefore, is in the best interests of the Company and its stockholders. In determining a ratio following the receipt of stockholder adoption, the Board (or any authorized committee of the Board) may consider, among other factors:
The Board (or any authorized committee of the Board) reserves the right to elect to abandon the reverse stock split, notwithstanding stockholder adoption thereof, if it determines, in its sole discretion, that the reverse stock split is no longer in the best interests of the Company and its stockholders. The reverse stock split, if authorized pursuant to this proposal and if deemed by the Board to be in the best interests of the Company and its stockholders, will be effected, if at all, at a time that is not later than twelve (12) months from the date of the Annual Meeting.
Principal Effects of the Reverse Stock Split
By approving this proposal, stockholders will approve the combination of any number of shares of Common Stock between and including and , with the exact number to be determined by the Board, into one share. The Certificate of Amendment to be filed with the Secretary of State of the State of Delaware will include only that number determined by the Board to be in the best interests of the Company and its stockholders. In accordance with these resolutions, the Board will not implement any amendment providing for a different split ratio.
As explained above, the reverse stock split will be effected simultaneously for all issued and outstanding shares of Common Stock and the exchange ratio will be the same for all issued and outstanding shares of Common Stock.
The reverse stock split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company, except to the extent that the reverse stock split results in any of our stockholders having his or her shares rounded up to a whole share in lieu of owning a fractional share, as described in the section titled “Fractional Shares” below.
The reverse stock split will not change the terms of our Common Stock. After the reverse stock split, the shares of our Common Stock will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to our Common Stock now authorized. Common Stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. The reverse stock split will not affect the Company’s continuing obligations under the periodic reporting requirements of the Exchange Act. Following the reverse stock split, unless we are delisted from The Nasdaq Global Select Market, our Common Stock will continue to be quoted on The Nasdaq Global Select Market under the symbol “ICON.”
The shares that are authorized but unissued after the reverse stock split will be available for issuance, and, if we issue these shares, the ownership interest of holders of our Common Stock may be diluted. We may issue such shares to raise capital and/or as consideration in acquiring other businesses or establishing strategic relationships with other companies. Such acquisitions or strategic relationships may be effected using shares of Common Stock or other securities convertible into Common Stock and/or by using capital that may need to be raised by selling such securities. We do not have any agreement, arrangement or understanding at this time with respect to any specific transaction or acquisition for which the newly unissued authorized shares would be issued.
The reverse stock split will have the effect of significantly increasing the number of authorized but unissued shares of Common Stock available for issuance. As a result, the number of shares of Common Stock that we are authorized to issue will be decreased ratably in proportion to reverse split ratio authorized by the Board of Directors. Therefore, the number of shares available for future issuance by us will not be increased. As of March 22, 2019, we have 251,162,341 authorized and unissued shares of Common Stock, all of which are currently reserved for issuance.
Procedure for Effecting Reverse Stock Split
If the reverse stock split is approved by the Company’s stockholders, and if at such time the Board still believes that the reverse stock split is in the best interests of the Company and its stockholders, the Board will determine the ratio of the reverse stock split to be implemented. The reverse stock split will become effective as of 12:01 a.m., Eastern Time, on the date specified in the Certificate of Amendment as filed with the office of the Secretary of State of the State of Delaware (the “effective time”). The Board will determine the exact timing of the filing of the Certificate of Amendment based on its evaluation as to when the filing would be the most advantageous to the Company and its stockholders. If the Board does not decide to implement the reverse stock split within twelve (12) months from the date of the Annual Meeting, the authority granted in this proposal to implement the reverse stock split will terminate.
Except as described below under the section titled “Fractional Shares,” at the effective time, each number of issued and outstanding pre-reverse split shares that the Board has determined will be combined into one post-reverse split share, will, automatically and without any further action on the part of our stockholders, be combined into and become one share of Common Stock.
Fractional Shares
No fractional shares will be issued in connection with the reverse stock split. Instead, stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares not evenly divisible by the split ratio will automatically be entitled to receive an additional share of Common Stock. In other words, any fractional share will be rounded up to the nearest whole number. Stockholders of record at the effective time of the reverse stock split who otherwise would be entitled to receive fractional shares because they hold a number of pre-split shares not evenly divisible by the number of pre-split shares for which each post-split share is to be exchanged, will, in lieu of a fractional share, be entitled, upon surrender to the exchange agent of certificate(s) representing such pre-split shares, to receive an additional share of Common Stock. In other words, any fractional share will be rounded up to the nearest whole number.
Risks Associated with the Reverse Stock Split
We cannot predict whether the reverse stock split will increase the market price for our Common Stock. The history of similar stock split combinations for companies in similar circumstances is varied, and the market price of our Common Stock will also be based on our performance and other factors, some of which are unrelated to the number of shares outstanding. Further, there are a number of risks associated with the reverse stock split, including:
All of our outstanding Common Stock is uncertificated, or held in book-entry form (i.e., shares not represented by a physical stock certificate). If the reverse stock split is effected, stockholders who hold uncertificated shares, either as direct or beneficial owners, will have their holdings electronically adjusted automatically by our transfer agent (and, for beneficial owners, by their brokers or banks that hold in “street name” for their benefit, as the case may be) to give effect to the reverse stock split. Stockholders who hold uncertificated shares as direct owners will be sent a statement of holding from our transfer agent that indicates the number of post-reverse stock split shares of our Common Stock owned in book-entry form.
Principal Effects of Reverse Stock Split on Outstanding Options, Outstanding Convertible Debt, and Option Plan
As of December 31, 2018, as adjusted for the completion of the Reverse Stock Split, there were outstanding stock options to purchase an aggregate of 1,500 shares of our Common Stock with a weighted average exercise price of $171.60 per share. In addition, as of December 31, 2018, we had approximately $109.7 million in aggregate principal balance of our 5.75% convertible notes outstanding entitling the holders thereof to acquire approximately 6.4 million shares of our Common Stock (as adjusted for the completion of the Reverse Stock Split). In addition, if our convertible debt is converted before maturity, the Company would be required to pay a make-whole amount to the holders thereof in respect of future interest payments, which may be payable in additional shares of Common Stock. When the reverse stock split becomes effective, the number of shares of Common Stock covered by such rights will be reduced to between and including one- th and one- th of the number currently covered (rounded up to the nearest whole number), and the exercise or conversion price per share will be increased by between and including and times the current exercise or conversion price (rounded down to the nearest $0.01), resulting in the same aggregate price being required to be paid therefor upon exercise or conversion thereof as was required immediately preceding the reverse stock split.
In addition, the number of shares of our Common Stock available for grant under, and the number of shares of our Common Stock subject to stock options or other rights authorized under, the Company’s equity incentive plan will automatically be proportionately adjusted for the reverse stock split ratio, such that fewer shares will be subject to such plans and awards. Further, the per share exercise price under such awards will automatically be proportionately adjusted for the reverse stock split.
The reverse stock split will not affect the Common Stock capital account on our balance sheet. However, because the par value of our Common Stock will remain unchanged at the effective time of the split, the components that make up the Common Stock capital account will change by offsetting amounts. Depending on the size of the reverse stock split the Board decides to implement, the stated capital component will be reduced proportionately based upon the reverse stock split and the additional paid-in capital component will be increased with the amount by which the stated capital is reduced. Immediately after the reverse stock split, the per share net income or loss and net book value of our Common Stock will be increased because there will be fewer shares of Common Stock outstanding. All historic share and per share amounts in our financial statements and related footnotes will be adjusted accordingly for the reverse stock split.
The reverse stock split will not affect the par value of our Common Stock, which will remain at $0.001 per share.
Notwithstanding the decrease in the number of outstanding shares following the proposed reverse stock split, our Board does not intend for this transaction to be the first step in a “going-private transaction” within the meaning of Rule 13e-3 of the Exchange Act.
Potential Anti-Takeover Effect
Although the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of the Company with another company), the reverse stock split proposal is not being proposed in response to any effort of which we are aware to accumulate shares of our Common Stock or obtain control of the Company, nor is it part of a plan by management to recommend a series of similar amendments to the Board and the stockholders. Other than the reverse stock split proposal, the Board does not currently contemplate recommending the adoption of any other actions that could be construed to affect the ability of third parties to take over or change control of the Company.
No Dissenters’ Appraisal Rights
Under the Delaware General Corporation Law, our Certificate of Incorporation or our By-Laws, the Company’s stockholders are not entitled to dissenters’ appraisal rights with respect to the reverse stock split, and we will not independently provide stockholders with any such right.
Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following is not intended as tax or legal advice. Each holder should seek advice based on his, her or its particular circumstances from an independent tax advisor.
The following is a summary of certain United States federal income tax consequences of the reverse stock split generally applicable to beneficial holders of shares of our Common Stock. This summary addresses only such stockholders who hold their pre-split shares as capital assets and will hold the post-split shares as capital assets. This discussion does not address all U.S. federal income tax considerations that may be relevant to particular stockholders in light of their individual circumstances or to stockholders that are subject to special rules, such as financial institutions, trusts, estates, entities treated as partnerships for U.S. federal income tax purposes, tax-exempt organizations, regulated investment companies, REITs, insurance companies, dealers in securities, and foreign stockholders. The following summary is based upon the provisions of the Code, applicable Treasury Regulations thereunder, judicial decisions and IRS rulings, as of the date hereof, all of which are subject to change, possibly on a retroactive basis. Tax consequences under state, local, foreign, and other laws are not addressed herein. Each stockholder should consult his, her or its tax advisor as to the particular facts and circumstances which may be unique to such stockholder and also as to any estate, gift, state, local or foreign tax considerations arising out of the reverse stock split.
Exchange Pursuant to Reverse Stock Split
The reverse stock split is intended to qualify as a tax-free recapitalization under the Code. Assuming the reverse stock split so qualifies, then generally, for U.S. federal income tax purposes, no gain or loss will be recognized by the Company in connection with the reverse stock split, and no gain or loss will be recognized by the stockholders that exchange their pre-split shares for post-split shares. The post-split shares in the hands of a stockholder following the reverse stock split will generally have an aggregate tax basis equal to the aggregate tax basis of the pre-split shares held by that stockholder immediately prior to the reverse stock split, and a stockholder’s holding period for its post-split shares generally will be the same as that stockholder’s holding period for the pre-split shares.
Whole Shares in-Lieu-of Fractional Shares
A stockholder who receives a whole share of Common Stock in lieu of a fractional share generally may recognize gain in an amount not to exceed the excess of the fair market value of such whole share over the fair market value of the fractional share to which the stockholder was otherwise entitled. Any such recognition of gain may affect the holding period and adjusted tax basis of the stockholder’s whole share received in lieu of a fractional share. Stockholders should consult with their own tax advisors regarding the U.S. federal income tax consequences to them of the reverse stock split. Backup withholding may apply to a stockholder who receives a whole share of Common Stock in lieu of a fractional share unless the stockholder provides the exchange agent with appropriate documentation establishing that backup withholding is not required.
Interests of Directors and Executive Officers
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal except to the extent of their ownership of shares of our Common Stock.
Reservation of Right to Abandon Reverse Stock Split
We reserve the right to not file the Certificate of Amendment and to abandon the reverse stock split without further action by our stockholders at any time before the effectiveness of the filing with the Secretary of State of the State of Delaware of the Certificate of Amendment, even if the authority to effect the amendment is approved by our stockholders at the Annual Meeting. By voting in favor of a reverse stock split, you are expressly also authorizing the Board to delay, not proceed with, and abandon, the proposed amendment if it should so decide, in its sole discretion, that such action is in the best interests of the Company and its stockholders.
Board Recommendation
The affirmative vote of the holders of record of a majority in voting interest of the shares of Common Stock outstanding are required for approval of this proposal.The Board of Directors unanimously recommends a vote “FOR” the proposal to effect a reverse stock split.
STOCKHOLDER PROPOSALS FOR 20202021 ANNUAL MEETING AND OTHER INFORMATION
Director Nominations, Proposals for Action and Other Business Brought Before the Annual Meeting
This Proxy Statement and the Form 10-K also are available on our website at www.iconixbrand.com.
PRELIMINARY PROXY MATERIALSSUBJECT TO COMPLETION, DATED APRIL 1, 2019
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Signature _____________ Signature, if held jointly _____________ Date ______, 2019
Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 7, 2019.
The Proxy Statement and our 2018 Annual Report on Form 10-K are available at:
http://www.cstproxy.com/iconixbrand/2019
▲FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED ▲
PROXY
ICONIX BRAND GROUP, INC.1450 BROADWAY, THIRD FLOORNEW YORK, NEW YORK 10018
PROXY FOR ANNUAL MEETING