SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant __
Check the appropriate box:
__ Preliminary Proxy Statement
__ Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
X Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EMPIRE GLOBAL CORP.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
__ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
__ Fee paid previously with preliminary materials.
__ Check box if any part of the fee if 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
EMPIRE GLOBAL CORP.
Suite 701, 130 Adelaide St., W.
Toronto, Ontario, M5H 2K4 Canada
July 12, 2016
To the Stockholders of EMPIRE GLOBAL CORP.:
You are cordially invited to attend the annual meeting of stockholders of EMPIRE
GLOBAL CORP., a Delaware corporation, on Monday, August 8, 2016 at Suite 701,
130 Adelaide St. W., Toronto, Ontario M5H 2K4 Canada. Management presentations,
and the formal annual meeting will commence at 10:00 a.m. (local time).
At this meeting, our stockholders will vote on matters set forth in the
accompanying Notice of Annual Meeting and Proxy Statement. A presentation on our
Company and business development will be made and also questions of general
interest to stockholders will be addressed.
The notice of annual meeting of stockholders and proxy statement, which describe
the formal business to be conducted at the meeting, are enclosed with this
letter.
After reading the proxy statement, please promptly mark, sign and return the
enclosed proxy card (attached hereto as Schedule A) in the prepaid envelope (if
mailing within the United States) by 10:00 a.m., July 27, 2016, to ensure that
your shares will be represented. Regardless of the number of shares of stock you
own, your careful consideration of, and vote on, the matters before our
stockholders are very important.
A Copy of our Annual Report on Form 10-K for the year ended December 31, 2015 is
also enclosed with this letter.
The board of directors and management look forward to seeing you at the annual
meeting.
Sincerely,
/s/ Michele Ciavarella
----------------------
Michele Ciavarella, B.Sc.
Chairman and Chief Executive Officer
Empire Global Corp.
dba. Newgioco Group
EMPIRE GLOBAL CORP.
Suite 701, 130 Adelaide St., W.
Toronto, Ontario, M5H 2K4 Canada
Notice of Annual Meeting of Stockholders
to be Held on August 8, 2016
To the Stockholders of EMPIRE GLOBAL CORP.:
NOTICE IS HEREBY GIVEN that EMPIRE GLOBAL CORP., a Delaware corporation, will
hold an annual meeting of stockholders on August 8, 2016 at 10:00 a.m. (local
time) at the Suite 701, 130 Adelaide St. W., Toronto, Ontario M5H 2K4 Canada
(the "Meeting"). The Meeting is being held for the following purposes:
1. To elect the Company's Board of Directors. The Board intends to nominate 8
persons to serve as directors of our company.
2. To act upon a proposal to authorize the 2016 Equity Incentive Plan and the
reservation of 3,000,000 shares of the company's $0.0001 par value common
stock for issuance upon the exercise of options granted thereunder;
3. To act upon an Advisory Resolution on Executive Compensation.
4. To ratify the appointment of Paritz and Company, PA as the independent
auditors of our company for the year ended December 31, 2016; and
5. To transact such other business as may properly come before the Meeting or
any adjournment or postponement thereof.
Our board of directors recommends that you vote "For" each of the nominees and
vote "For" each proposal.
Our board has fixed the close of business on June 10, 2016 as the record date
for determining the stockholders entitled to notice of, and to vote at, the
Meeting or any adjournment or postponement of the Meeting. At the Meeting, each
holder of record of shares of common stock, $0.0001 par value per share, will be
entitled to vote one vote per share of common stock held on each matter properly
brought before the Meeting. The number of shares of our common stock outstanding
as of June 10, 2016 was 23,376,473 which are entitled to a total of 23,376,473
votes.
Dated: July 12, 2016.
By Order of the Board of Directors,
/s/ Michele Ciavarella
----------------------
Michele Ciavarella, B.Sc.
Chairman and Chief Executive Officer,
IMPORTANT: Please complete, date, sign and promptly return the enclosed proxy
card in the prepaid envelope (if mailing within the United States) to ensure
that your shares will be represented. If you attend the meeting, you may choose
to vote in person even if you have previously sent in your proxy card.
TABLE OF CONTENTS
Page No.
General Information 1
Questions and Answers about the Proxy Materials and the Annual
Meeting of Stockholders 1
Voting Securities and Ownership of Voting Securities by
Certain Beneficial Owners and Management 6
Ownership Tables 7
Compliance with Section 16(A) of the Securities Exchange Act of 1934 8
Certain Relationships and Related Transactions 8
Interests of Certain Persons in Matters to be Acted Upon 8
Stockholder Proposals to be Presented at Next Annual Meeting 8
Annual Report 9
Proposals
Proposal 1 - Election of Directors 11
Vote required 11
Recommendation 11
Information about Nominees 11
Corporate Governance 14
A. Role of the Board of Directors - Board Leadership Structure 14
B. Operation of the Board of Directors 15
C. Committees of the Board 17
D. Stockholder Communications 19
Executive Compensation 20
E. Discussion of Director Compensation 21
F. Compensation Plans 21
G. Compensation of Directors 21
H. Indebtedness of Management 21
Proposal 2 - Approval of the 2016 Equity Incentive Plan 22
Introduction 22
Material Terms and Conditions 22
Vote Required 25
Recommendation of the Board 26
Proposal 3 - Advisory Resolution on Executive Compensation 27
Introduction 27
Rationale and Scope of Proposal 27
Vote Required-Indication of Support 28
Recommendation of the Board 28
Proposal 4 - Ratification of Appointment of Independent
Registered Public Accounting Firm 29
Audit Fees 29
Pre-Approval Policies and Procedures 30
Vote Required 30
Recommendation of the Board 30
ANNEX A - Equity Incentive Plan 31
SCHEDULE "A" - PROXY CARD 81
Instructions for Completion of Proxy 83
EMPIRE GLOBAL CORP.
(dba Newgioco Group)
Suite 701, 130 Adelaide St., W.
Toronto, Ontario, M5H 2K4 Canada
GENERAL INFORMATION
Proxy Statement for the Annual Meeting of Stockholders
The enclosed proxy is solicited on behalf of our Board of Directors (the
"Board") for use at the Annual Meeting of Stockholders (the "Meeting") to be
held on August 8, 2016 at 10:00 a.m. (local time) at Suite 701, 130 Adelaide St.
W., Toronto, Ontario M5H 2K4 Canada, or at any continuation, postponement or
adjournment thereof, for the purposes discussed in this proxy statement and in
the accompanying Notice of Annual Meeting and any business properly brought
before the Meeting. Proxies are solicited to give all stockholders of record an
opportunity to vote on matters properly presented at the Meeting, please read
the content carefully.
We intend to mail this proxy statement and accompanying proxy card (attached
hereto as Schedule A) on or about July 14, 2016 to all stockholders entitled to
vote at the Meeting.
Unless the context requires otherwise, references to "we," "us," "our" and
"Empire" refer to EMPIRE GLOBAL CORP.
Corporate Overview
EMPIRE GLOBAL CORP., (the "Company") was incorporated in the state of Delaware
on August 26, 1998 as Pender International Inc. and on September 30, 2005
changed its name to Empire Global Corp.
With the acquisition of Multigioco Srl. on August 15, 2014, we initiated a
fundamental change to our business and global growth plans. Empire Global is now
a fully integrated, ADM (Agenzia delle Dogane e dei Monopoli) licensed, gaming
operator offering a full suite of web-based and land-based gaming products
through its wholly owned subsidiaries in Italy. The Company has a network of
approximately 1,067 web-based shops, as well as 3 Corner and 112 Agency
land-based locations.
Annual Report
Our annual report on Form 10-K for the year ended December 31, 2015 is enclosed
with this proxy statement.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND
THE ANNUAL MEETING OF STOCKHOLDERS
Who Can Vote
You are entitled to vote if you were a holder of record of shares of our common
stock, $0.0001 par value per share (the "Common Stock") as of the close of
business on June 10, 2016. Your shares can be voted at the Meeting only if you
are present in person or represented by a valid proxy.
1
Shares Outstanding and Quorum
Holders of record of Common Stock at the close of business on the Record Date
will be entitled to receive notice of and vote at the Meeting. At the Meeting,
each of the shares of Common Stock represented will be entitled to one (1) vote
on each matter properly brought before the Meeting. As of the June 10, 2016
record date, there were 23,376,473 shares of Common Stock issued and
outstanding.
In order to carry on the business of the Meeting, we must have a quorum. Under
our bylaws, stockholders representing a majority of the issued and outstanding
shares entitled to vote, either present in person or by proxy, constitute a
quorum.
What is a Proxy?
A proxy is another person that you legally designate to vote your stock. If you
designate someone as your proxy in a written document, that document also is
called a proxy or a proxy card.
What is a Proxy Statement?
A proxy statement is a document that regulations issued by the U.S. Securities
and Exchange Commission require that we provide you when we ask you to sign a
proxy card to vote your stock at the annual meeting of stockholders.
Why am I receiving this Proxy Statement?
This Proxy Statement is being furnished to you in connection with the
solicitation of proxies by our Board of Directors for the 2016 Annual Meeting of
Stockholders to be held on Monday, August 8, 2016 at 10:00 a.m. at Suite 701,
130 Adelaide St., W. Toronto, Ontario, M5H 2K4. This Proxy Statement furnishes
you with information you need in order to vote, whether or not you attend the
meeting. Please see the Proxy Card attached as 'Schedule A' with this letter.
What are the Proposals I am being asked to consider and vote upon?
You are being asked to consider and vote upon the Proposals specified below:
1. To elect to the Company's Board of Directors the 8 persons nominated by the
Board of Directors;
2. To approve the adoption of the 2016 Equity Incentive Plan and the reservation
of 3,000,000 shares of the company's common stock for issuance upon the exercise
of options granted thereunder;
3. To consider and act upon an Advisory Resolution on Executive Compensation;
and
4. To ratify the appointment of Paritz and Company, P.A. as the Company's
independent registered public accounting firm for the 2016 fiscal year.
If you grant a proxy, your shares will be voted in the discretion of the proxy
holder on any proposal for which you do not register a vote and any other
business that properly comes before the Annual Meeting or any adjournment or
postponement thereof.
2
Will there be any other items of business addressed
at the Annual Meeting?
Our bylaws preclude consideration of any other business by the stockholders at
the Annual Meeting since the requisite notice to conduct such business would not
have been provided on a timely basis to the stockholders before the meeting.
Proxy Card and Revocation of Proxy
In voting, please specify your choices by marking the appropriate spaces on the
enclosed proxy card, signing and dating the proxy card and returning it in the
accompanying envelope. If no directions are given and the signed proxy is
returned, the proxy holders will vote the shares in favor of the resolutions set
out in the Notice of Annual Meeting and, at their discretion, on any other
matters that may properly come before the Meeting. The Board knows of no other
proposal that will be presented for consideration at the Meeting.
Any stockholder giving a proxy has the power to revoke the proxy at any time
before the proxy is voted. In addition to revocation in any other manner
permitted by law, a proxy may be revoked by an instrument in writing executed by
the stockholder or by his attorney authorized in writing, or, if the stockholder
is a corporation, under its corporate seal or by an officer or attorney thereof
duly authorized, and deposited at the offices of our transfer agent, Signature
Stock Transfer, Inc., 2632 Coachlight Court, Plano, Texas, 75093, at any time up
to and including the last business day preceding the day of the Meeting, or any
adjournment thereof, or with the chairman of the Meeting on the day of the
Meeting. Attendance at the Meeting will not in and of itself constitute
revocation of a proxy.
Can I change or revoke my vote?
Yes. You can revoke your vote at any time before the beginning of the Annual
Meeting in any one of three ways:
1. You may sign and mail another proxy card with a later date;
2. You may vote in person at the Annual Meeting; or
3. You may give notice of revocation to us by writing Michele Ciavarella, Chief
Executive Officer, Empire Global Corp., Suite 701 - 130 Adelaide St. W.,
Toronto, Ontario M5H 2K4.
Voting of Shares
Stockholders of record on the June 10, 2016 record date are entitled to one (1)
vote for each share of Common Stock held on all matters to be voted upon at the
Meeting. You may vote in person or by completing and mailing the enclosed proxy
card. All shares entitled to vote and represented by properly executed proxies
received before the polls are closed at the Meeting, and not revoked or
superseded, will be voted at the Meeting in accordance with the instructions
indicated on those proxies. YOUR VOTE IS IMPORTANT.
Counting of Votes
All votes will be tabulated by the Inspectors of Election appointed for the
Meeting, who will separately tabulate affirmative and negative votes and
3
abstentions. Shares represented by proxies that reflect abstentions as to a
particular proposal will be counted as present and entitled to vote for purposes
of determining a quorum. An abstention is counted as a vote against that
proposal. Shares represented by proxies that reflect a broker "non-vote" will be
counted as present and entitled to vote for purposes of determining a quorum.
A broker "non-vote" will be treated as not-voted for purposes of determining
approval of a proposal and will not be counted as "for" or "against" that
proposal. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary authority or does not have instructions from the
beneficial owner.
What is the difference between holding shares as a
stockholder of record and as a beneficial owner
of shares held in street name?
"Stockholder of record." If your shares are registered directly in your name
with our transfer agent, Signature Stock Transfer, Inc., you are considered the
stockholder of record with respect to those shares, and the Notice was sent
directly to you by the Company.
"Beneficial Owner of Shares Held in Street Name." If your shares are held in an
account at a brokerage firm, bank, broker-dealer, or other similar organization,
then you are the beneficial owner of the shares held in "street name," and the
Notice was forwarded to you by your brokerage firm, bank or other intermediary.
The organization holding your account is considered the stockholder of record
for purposes of voting at the Annual Meeting. As a beneficial owner, you have
the right to direct that organization on how to vote the shares held in your
account.
If I am a stockholder of record of Company shares
entitled to vote, how do I vote?
If you are a stockholder of record, you may vote in person at the Annual
Meeting. We will give you a ballot when you arrive.
If you do not wish to vote in person or if you will not be attending the Annual
Meeting, you may vote by proxy.
If I am a beneficial owner of shares entitled to vote held
in street name, how do I vote?
If you are a beneficial owner of shares held in street name and you wish to vote
in person at the Annual Meeting, you must obtain a valid legal proxy from the
organization that holds your shares. If you do not wish to vote in person or you
will not be attending the Annual Meeting, you may vote by proxy. Follow the
instructions provided to you by your broker, bank or other intermediary.
What happens if I do not give specific voting instructions?
Stockholders of record. If you are a stockholder of record and you sign and
return the proxy card without giving specific instructions then the proxy
holders will vote your shares in the manner recommended by our Board on all
4
matters presented in this Proxy Statement and as the proxy holders may vote in
their discretion with respect to any other matters properly presented for a vote
at the meeting.
Beneficial owners of shares held in street name. If you are a beneficial owner
of shares held in street name and do not provide the organization that holds
your shares with specific voting instructions, then the organization that holds
your shares cannot vote on "non-routine" matters (such as the election of
directors), however, they may generally vote on "routine" matters (such as the
ratification of our appointment of our independent registered public accounting
firm). If the organization that holds your shares does not receive instructions
from you on how to vote your shares on a non-routine matter, the organization
that holds your shares will inform our Inspectors of Election that it does not
have the authority to vote on this matter with respect your shares and your
shares will not be voted. This is generally referred to as a "broker non-vote."
When our Inspectors of Election tabulate the votes for any particular matter,
broker non-votes will be counted for purposes of determining whether a quorum is
present, but otherwise will not be counted. We encourage you to provide voting
instructions to the organization that holds your shares.
What are my choices when voting?
In the election of directors, you may vote for all nominees, or you may vote
against one or more nominees. The proposal related to the election of directors
is described in this proxy statement under the caption "Proposal 1." For
Proposal 2, you may vote for or against, or you may abstain from voting on the
proposals. Proposals 3 and 4 are advisory votes only, with the results being
non-binding on the Company or its board of directors.
What are the Board's recommendations?
The board of directors recommends a vote "For" all of the nominees for director
(Proposal 1) and recommends a vote "For" each of Proposals 2, 3, and 4.
What percentage of the vote is required for a proposal to be approved?
In accordance with the Company's bylaws, each nominee in Proposal 1 must receive
a plurality of the votes cast at the Annual Meeting. The board of directors has
determined that there shall be 8 directors and has nominated 8 individuals for
election as directors. There are no other nominees. Thus, if a quorum is present
at the meeting all nominees receiving votes will be elected as directors,
regardless of the percentage of the votes cast for each nominee.
Proposal 2 requires a majority of votes cast at the Annual Meeting. Proposals 3
and 4 are non-binding on the Company and its board of directors. Proposals 3 and
4 solicit advice only and, therefore, there is no minimum number of votes
required with respect to Proposals 3 and 4.
The total number of votes cast at the meeting includes only those common shares
actually voted and does not include "abstentions." While an abstention does
count for the purpose of determining whether holders of a majority of the of the
total number of outstanding shares are present at the Annual Meeting to conduct
business (i.e. a quorum), abstentions do not count for the purpose of
determining whether a majority of the votes cast were cast in favor of or
against a proposal.
5
Suppose I receive multiple proxy cards?
This means that your shares are held in more than one account. In order to make
sure you have voted all of your shares, please make sure you have properly
signed, dated and mailed each proxy card you may have received.
Solicitation of Proxies
The board of directors is soliciting your vote at the Annual Meeting by
distributing this proxy statement to all stockholders entitled to vote. The
board will also request brokerage firms, nominees, custodians and fiduciaries to
forward proxy materials to all beneficial owners of our common stock. We will
bear the entire cost of solicitation of proxies, including preparation, assembly
and mailing of this proxy statement, the proxy and any additional information
furnished to stockholders. Copies of solicitation materials will be furnished to
banks, brokerage houses, depositories, fiduciaries and custodians holding shares
of Common Stock in their names that are beneficially owned by others to forward
to these beneficial owners. We may reimburse persons representing beneficial
owners for their costs of forwarding the solicitation material to the beneficial
owners of the Common Stock. Original solicitation of proxies by mail may be
supplemented by telephone, facsimile, electronic mail or personal solicitation
by our directors, officers or other regular employees. No additional
compensation will be paid to directors, officers or other regular employees for
such services. To date, we have not incurred costs in connection with the
solicitation of proxies from our stockholders, however, our estimate for total
costs is $10,000.
How will I find out the outcome of the voting?
We will announce preliminary voting results at the meeting. We will publish the
final results in a Current Report (Form 8-K) filed with the Securities and
Exchange Commission within four business days after the Annual Meeting.
Dissenting Stockholder Rights
Dissenting stockholders have no appraisal rights under Delaware law, or under
our Articles of Incorporation, or under our bylaws in connection with the
matters to be voted on at the Meeting.
VOTING SECURITIES AND OWNERSHIP OF VOTING SECURITIES BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
We have set forth in the following table certain information regarding our
Common Stock beneficially owned on June 10, 2016 for: (i) each stockholder we
know to be the beneficial owner of 5% or more of our outstanding Common Stock,
(ii) each of our executive officers and directors, and (iii) all executive
officers and directors as a group. In general, a person is deemed to be a
"beneficial owner" of a security if that person has or shares the power to vote
or direct the voting of such security, or the power to dispose or to direct the
disposition of such security. A person is also deemed to be a beneficial owner
of any securities of which the person has the right to acquire beneficial
ownership within 60 days. As of June 10, 2016, we had 23,376,473 shares of
Common Stock outstanding.
6
OWNERSHIP TABLES
(i) The following is a tabular presentation of each stockholder we know to
be the beneficial owner of 5% or more of our outstanding Common Stock:
Title of Class Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership of Class(1)
Common Stock Gold Street Capital Corp.
Georgetown, Grand Cayman 17,796,520 73%
Common Stock Mississaugas of the
New Credit First Nation
Hagersville, Ontario 2,669,000 11%
(ii) The following is a tabular presentation of each of our executive
officers and directors ownership of Common Stock:
Title of Class Name Position and Address Amount and Nature of Percentage
of Officer or Director Beneficial Ownership of Class(1)
Common Michele Ciavarella(2),
Chief Executive Officer
and Chairman 0 0%
Common Alessandro Marcelli,
President 1,000,000 4.1%
Common Beniamino Gianfelici,
Director, VP 20,000 Less than 1%
Common Graham Martin,
Director, VP 0 0%
(iii) Executive Officers and Directors
as a group 1,020,000 4.2%
(1) Based on 23,376,473 shares of Common Stock outstanding as of June 10, 2016.
Except as otherwise indicated, we believe that the beneficial owners of the
Common Stock listed above, based on information furnished by such owners,
have sole investment and voting power with respect to such shares, subject
to community property laws where applicable. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect
to securities. Shares of Common Stock subject to options or warrants
currently exercisable, or exercisable within 60 days, are deemed
outstanding for purposes of computing the percentage ownership of the
person holding such option or warrants, but are not deemed outstanding for
purposes of computing the percentage ownership of any other person.
(2) Michele Ciavarella disclaims any beneficial ownership over the 17,796,520
shares of the Company held by Gold Street Capital Corp., a corporation
owned by his wife, Gilda Pia Ciavarella.
7
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires our executive officers and directors, and persons who own more than 10%
of our common stock, to file reports regarding ownership of, and transactions
in, our securities with the Securities and Exchange Commission and to provide us
with copies of those filings. Based solely on our review of the copies of such
forms received by us, or written representations from certain reporting persons,
we believe that during the year ended December 31, 2015, all filing requirements
applicable to its officers, directors and greater than 10% percent beneficial
owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than as listed below, we have not been a party to any transaction,
proposed transaction, or series of transactions in which the amount involved
exceeds $120,000, and in which, to our knowledge, any of our directors,
officers, five percent beneficial security holder, or any member of the
immediate family of the foregoing persons has had or will have a direct or
indirect material interest.
Our CEO has provided financing to the company in the form of demand notes with
no fixed or determinable repayment dates. The amounts are recorded as current
liabilities with the balance as of December 31, 2015 and March 31, 2016 of
$97,561 and $237 respectively.
On February 13, 2015, the Company issued a $150,000 promissory note to Braydon
Capital Corp., a company owned by Claudio Ciavarella, the brother of our CEO.
The Company subsequently issued 166,400 shares to repay the debt.
On December 15, 2015, the Company issued a promissory note for $186,233 to
Braydon Capital Corp. Also, the Company entered into a Securities Purchase
Agreement with Braydon Capital Corp. for the purchase of 155,000 common shares
for $155,000.
Please refer to our annual report on Form 10-K for the year ended December 31,
2015 enclosed with this proxy statement for a complete overview of related party
transactions.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of our directors or executive officers, no nominee for election as a
director of our company and no associate of any of the foregoing persons has any
substantial interest, direct or indirect, in any matter to be acted upon at the
Meeting.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
The deadline for the Company to receive stockholder proposals for presentation
at the annual meeting of stockholders to be held in 2017 is one month prior to
the Company printing and mailing out proxy materials for that annual meeting.
The Company anticipates that the mail out of proxy materials for next year's
annual general meeting of stockholders will occur in June 2017.
8
Accordingly, to be eligible for inclusion in our 2017 proxy statement, your
proposal must be received by us no later than May 1, 2017, and must otherwise
comply with Rule 14a-8 under the Exchange Act. Further, if you would like to
nominate a director or bring any other business before the stockholders at the
2017 annual meeting, you must notify us in writing and such notice must be
delivered to or received by our Chief Executive Officer no later than May 1,
2017. While the Board will consider stockholder proposals, we reserve the right
to omit from our 2017 proxy statement stockholder proposals that are not
required to be included under the Exchange Act, including Rule 14a-8 of the
Exchange Act.
Stockholder Communications
We do not currently have a process that provides for stockholders to send
communications, including recommendations and nominations, to the Board. The
Board does not believe that it is necessary to have such a policy because
current management is capable of responding to any questions or concerns of
stockholders. In addition, we believe that the creation and implementation of
such a policy would be overly costly and burdensome and is not warranted in our
circumstances given our current size. Although we do not have such a process,
stockholders are encouraged to contact the Company through the contact page on
our website at www.emglcorp.com or calling +1-647-229-0136 with any comments or
questions.
"Householding" of Proxy Material
The Securities and Exchange Commission permits companies and intermediaries
(e.g. brokers) to satisfy the delivery requirements for proxy statements with
respect to two or more stockholders sharing the same address by delivering a
single proxy statement addressed to those stockholders. This process, commonly
referred to as "householding," potentially means extra conveniences for
stockholders and cost savings for companies.
A number of brokers with accountholders who are stockholders of our Company will
be "householding" our proxy materials. As indicated in the notice previously
provided by these brokers to stockholders, a single proxy statement will be
delivered to multiple stockholders sharing an address unless contrary
instructions have been received from an affected stockholder. Once you have
received notice from your broker that they will be "householding" communications
to your address, "householding" will continue until you are notified otherwise
or until you revoke your consent. If at any time, you no longer wish to
participate in "householding" and would prefer to receive a separate proxy
statement, please notify your broker.
Stockholders who currently receive multiple copies of the proxy statement at
their address and would like to request "householding" of their communications
should contact their broker.
ANNUAL REPORT
Our annual report on Form 10-K for the year ended December 31, 2015 is enclosed
with this proxy statement.
9
Other Business
In addition to the matters to be voted upon by the stockholders of our common
stock, we will receive and consider both the Report of the Board to the
stockholders, and the audited financial statements of our company for the fiscal
year ended December 31, 2015, together with the auditors' report thereon. These
matters do not require stockholder approval, and therefore stockholders will not
be required to vote upon these matters.
The Board knows of no other business that will be presented for consideration at
the Meeting. However, if other matters are properly brought before the Meeting,
it is the intention of the persons named in the accompanying proxy to vote the
shares represented thereby on such matters in accordance with their best
judgment.
If there are insufficient votes to approve any of the proposals contained
herein, the Board may adjourn the Meeting to a later date and solicit additional
proxies. If a vote is required to approve such adjournment, the proxies will be
voted in favor of such adjournment.
By Order of the Board of Directors,
/s/ Michele Ciavarella
----------------------
Michele Ciavarella, B.Sc.
Chairman and Chief Executive Officer
Dated: July 12, 2016
Toronto, Ontario
10
PROPOSALS
PROPOSAL 1 - ELECTION OF DIRECTORS
Our bylaws provide for our Board to consist of at least one director. Each
director is elected by a plurality of votes at each annual meeting, continuing
in office until the next annual meeting and until such director's successor is
elected and has been qualified, or until such director's earlier death,
resignation or removal. We currently operate with a Board of 4 (four) directors
and will expand our board by 4 additional positions, which includes 2 (two)
independent directors.
The nominees for election at the Meeting to fill the positions on the Board are
Michele Ciavarella, Alessandro Marcelli, Beniamino Gianfelici, Gabriele Peroni,
Luca Pasquini, Franco Salvagni, Quirino Mancini and Graham Martin. If elected,
the nominees will serve as directors until the next annual meeting of
stockholders, or until their successors are elected and qualified. If a nominee
declines to serve or becomes unavailable for any reason, the proxies may be
voted for such substitute nominee as the proxy holders may designate.
Vote Required
In accordance with the Company's bylaws, each nominee in Proposal 1 must receive
a plurality of the votes cast at the Annual Meeting. The board of directors has
determined that there shall be 8 (eight) directors and has nominated 8 (eight)
individuals for election as directors. There are no other nominees. Thus, if a
quorum is present at the meeting all nominees receiving votes will be elected as
directors, regardless of the percentage of the votes cast for each nominee.
Recommendation
The Board unanimously recommends a vote "FOR" the nominees: Michele Ciavarella,
Alessandro Marcelli, Beniamino Gianfelici, Gabriele Peroni, Luca Pasquini,
Franco Salvagni, Graham Martin, and Quirino Mancini.
For further information, please refer to the heading below "Information about
Nominees."
1. To elect the Board of Directors. The Board intends to present the following
8 (eight) nominees to serve as directors of our company:
Mr. Michele Ciavarella
Mr. Alessandro Marcelli
Mr. Beniamino Gianfelici
Mr. Gabriele Peroni
Mr. Luca Pasquini
Mr. Franco Salvagni
Mr. Quirino Mancini
Mr. Graham Martin
Information about Nominees
The following table sets forth the names, positions and ages of our current
executive officers and directors. All of our directors serve until the date of
annual meeting of stockholders or until their successors are elected and
qualified. The Board appoints officers and their terms of office are, except to
the extent governed by an employment contract, at the discretion of the Board.
11
Name Position(s) Held Date First Elected
with the Company Age or Appointed
Michele Ciavarella Chief Executive Officer
and Chairman 54 June 6, 2011
Alessandro Marcelli Director, President 47 February 23, 2015
Beniamino Gianfelici Director,
VP Legal Affairs 63 August 9, 2015
Graham Martin Director,
VP International
Development 61 November 20, 2015
Nominees
Mr. Michele Ciavarella has served in various roles and executive capacities
since 2004 and has been our Chairman and CEO since June 2011. From 2004 to 2011
Mr. Ciavarella was engaged in senior executive and director roles for a variety
of private and publically listed companies as well as business development
officer for a successful family business in the commercial retail fixture
industry. From 1990 to 2004, Mr. Ciavarella served as a senior executive,
financial planner and life insurance underwriter with Dagmar Insurance Services
and financial advisor with Manulife Financial and Sun Life Financial. Mr.
Ciavarella earned his Bachelor of Science degree from Laurentian University in
Sudbury, Ontario.
Mr. Ciavarella has over 25 years of executive, c-level and senior board level
experience along with practical and lean business process management skill as
well as serving several roles in community involvement and development of youth
hockey throughout Canada and United States.
Mr. Alessandro Marcelli has served as our President since August 2014 and was
appointed to our board of directors on August 9, 2015. Mr. Marcelli brings 20
years of professional experience in the technology industry having a broad range
of applicable cross border experience including a key role as Project Manager of
Software with NATO in 1996 working within the Turkish Army. He was employed with
Vodafone Group PLC from 1997 through 2010 as manager of the operational and
maintenance center for central and south Italy operations.
Mr. Marcelli has extensive experience in communications, team building as well
as management skills in fast changing environments. Since 2007, Mr. Marcelli has
been the COO and Managing Director of Multigioco and has been instrumental to
the development and expansion of the Newgioco/Multigioco operations to over EUR
80 Million in gross annual gaming turnover.
Mr. Beniamino (Benji) Gianfelici is the founder and director Newgioco and has
served as our Vice President of Legal Affairs and as a member of the board of
directors since August 9, 2015. Prior to establishing Newgioco in 1996 and
entering the gaming business, Mr. Gianfelici, formed and managed a highly
successful construction enterprise which designed, engineered and constructed a
number of prominent buildings in Rome, Italy. Mr. Gianfelici brings over 35
years of experience in gaming operations in Italy along with a wealth of
business relationships in a broad range of industries and several key business
centers throughout Italy.
12
Mr. Luca Pasquini, brings 30 years of Information Technology experience has held
the key roles of team leader, service manager and project manager in various
software and technology development projects. From 2011 to 2013, Mr. Pasquini
was IT Manager with GoldBet sportwetten Gmbh where he provided executive
oversight of technology adaptation and software development during a period of
substantial growth in GoldBet's betting turnover.
In 2013, Mr. Pasquini co-founded a gaming IT service provider where he was
instrumental in the planning and creation of a powerful, leading edge sports
betting and gaming technology system. Mr. Pasquini was also instrumental in
assembling a solid team of gaming specialist software engineers that have
developed a comprehensive bookmaker platform and a full suite of gaming
products.
Mr. Gabriele Peroni, brings 20 years of experience in the online and land-based
gaming business. From 2011 to 2013, Mr. Peroni was the senior sales manager for
GoldBet Sportwetten Gmbh in charge of business development throughout Italy. Mr.
Peroni was influential in leading the company to doubling betting turnover to
over EUR 500 million during his tenure.
In 2013, Mr. Peroni co-founded a gaming IT service provider where he has been
instrumental to securing a number of significant B2B contracts producing
approximately EUR 12 million in betting turnover per week.
Mr. Franco Salvagni, has 20 years of experience at the retail level in Italian
gaming business. In 2013, Mr. Salvagni joined a gaming operator as the Area
Manager in charge of developing the land-based distribution of betting shops in
Italy. Mr. Salvagni has been a key player in rapidly growing and managing the
location portfolio from start-up to over 100 locations during his tenure.
Mr. Quirino Mancini, is one of the leading Italian gaming and gambling lawyers
with a specialist practice of more than 15 years. He acts for many Italian and
foreign-based online and land-based companies operating in the Italian gaming
market. Mr. Mancini is the global head of the gaming and gambling practice at
Tonucci & Partners (www.tonucci.com), a top Italian general practice firm with
offices in Rome, Milan, Brescia, Padua, Florence, Tirana, Bucharest and Belgrad.
Mr. Mancini is a regular speaker at most European and international gaming
conferences and sits in the editorial board of various sector reviews and
magazines. Co-founder and editor of www.gaminglaw.eu, a pan-European information
and commentary portal focusing on legal and regulatory issues under European and
national gaming laws. In addition, he is heavily engaged in the sports &
entertainment fields and regularly advises market analysts, banks, investment
houses and venture capital funds directly or indirectly involved in the Italian
market.
Mr. Mancini is Secretary and fellow member of the Leadership Committee of the
International Masters of Gaming Law, a worldwide organisation gathering
regulators, lawyers and advisors, in-house counsels and educators engaged in the
gaming business.
Mr. Graham Martin serves as our director and VP of International Development He
is a third generation retail bookmaker and widely recognized expert in the
online gaming industry. Mr. Martin brings over three decades of experience and
knowledge to our board and management team. His responsibility is to attract
human and financial capital to foster consolidation synergies for Empire in
regulated gaming jurisdictions within which he is well versed and respected.
Previously, Mr. Martin served as Chairman of Probability Games Corporation and
an AIM listed company from August 2006 and in 2011, founded and owned Scotbet
13
International Limited, the largest Scottish retail bookmaking company and
currently serves as a director to gaming specialist firms Cardinal House Group
Pty Ltd in Australia and Catalyst Gaming Corporation Limited based in Hong Kong,
as well as a number of gaming companies with a presence in European countries,
Asia, and North America.
Information about Executive Officers
In addition to serving in the role of Chief Executive Officer, Michele
Ciavarella also holds the title of Chief Financial Officer. The Company intends
to fill this position with an appropriate candidate during the 2016 fiscal year.
CORPORATE GOVERNANCE
Conduct of Business
All proceedings of the board of directors were conducted by resolutions
consented to in writing by all the directors and filed with the minutes of the
proceedings of the directors. Such resolutions consented to in writing by the
directors entitled to vote on that resolution at a meeting of the directors are,
according to the Delaware Corporations Law and the By-laws of our company, as
valid and effective as if they had been passed at a meeting of the directors
duly called and held.
Empire believes it is important to disclose to you a summary of our major
corporate governance practices. Some of these practices have been in place since
the Company's inception. Others have been adopted as our business has recently
developed and in response to legislative and regulatory changes.
We will continue to assess our corporate governance practices and refine them as
appropriate due to various circumstances. We will share any future changes with
you on an ongoing basis.
A. Role of the Board of Directors - Board Leadership Structure
All corporate authority resides in the board of directors as the representative
of the stockholders. The board has delegated authority to management to
implement the Company's mission of maximizing long-term stockholder value while
adhering to the laws of the jurisdictions where we operate and at all times
observing the highest ethical standards. With respect to its relationship to
management, the board's role is not to manage but to provide independent
oversight of management's decisions.
Management's responsibilities include the development and implementation of the
Company's strategic plans, utilization of company resources, authorization of
spending limits and the authority to hire consultants and employees and
terminate their services when deemed appropriate or necessary. The board retains
responsibility to recommend candidates to the stockholders for election to the
board of directors. The board retains responsibility for selection and
evaluation of the chief executive officer, determination of senior management
compensation, approval of the annual budget, and assurance of adequate financial
and accounting systems, procedures and controls. The board also provides advice
and counsel to senior management on a regular basis.
All major decisions are considered by the board as a whole; however, the board
has chosen to exercise certain of its responsibilities through committees of the
14
board. Since Empire is a smaller reporting company it does not have any existing
standing committees of the board, however, the board will consider establishing
such standing committees as resources become available.
Due to the developing nature of our business and classification as a smaller
reporting company, the role of chairman of the board and chief executive officer
are currently held by the same person, Mr. Michele Ciavarella. The role of the
board chairman is to set board agendas, priorities and procedures to facilitate
the board in its review and oversight function. The role of the chief executive
officer is to establish and implement the Company's strategic direction, subject
to board oversight. Mr. Ciavarella has thus far been able to carry out these
duties in an effective and dependable manner and has also been a capable steward
of our stockholder's interests during the development stage of our new business.
Consistent with the Company's view of our board of directors' and management's
distinct but mutually supportive roles described above, the Company plans to
separate the positions of board chairman and chief executive officer as our
business expands and such tasks grow more demanding and as resources become
available.
Risk Oversight
The board oversees the Company's risk management process through regular
discussions about the Company's credit, liquidity, operational, compliance and
similar risks with senior management both during and outside of regularly
scheduled board meetings. In addition, our executive management administers such
oversight function with respect to risks relating to the Company's accounting
and financial controls.
Annual Meeting Attendance
It is the Company's policy that all directors attend the annual stockholders
meeting. All persons who were directors on the date of last year's annual
stockholders meeting attended such meeting either in person or by telephonic
conference.
B. Operation of the Board of Directors
The Board of Directors, either in person or by telephonic conference as
permitted by the Company's Bylaws, took official action 12 times during the
period from January 1, 2015 through December 31, 2015.
Director Independence
The Company is currently lead by 4 directors, consisting of Michele Ciavarella,
Alessandro Marcelli, Beniamino Gianfelici, and Graham Martin. Quotations for our
common stock are entered on the Over-the-Counter inter-dealer quotation system
(OTCQB), which does not have director independence requirements. For the purpose
of determining director independence, the Company applies the definitions set
out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200 (a)(15), a director is
not considered to be independent if he or she is also an executive officer or
employee of the corporation. Therefore, the Company does not currently maintain
an independent director.
Despite the Company's common stock not being listed, the board has determined
that it shall voluntarily adopt and implement the NASD's "listed company rules"
15
regulating the composition and operation of the board and its committees as in
effect from time to time.
Under NASD's rules applicable to listed companies, a majority of the board must
be independent except in the case of smaller reporting companies. This
requirement means that a majority of the Company's board must be composed of
persons who are not executive officers or employees of the Company or who have a
relationship with the Company which, in the board's opinion, would interfere
with the exercise of independent judgment in carrying out his responsibilities
as a director. In addition, a director cannot be considered independent if he is
compensated by the Company for any reason other than for service rendered as a
member of the board and/or its committees. Although the board will not be
composed of a majority of independent directors, it will consist of at least 2
independent directors until the next annual meeting of stockholders.
Based upon these independence standards and all of the relevant facts and
circumstances, the board has affirmatively determined that the nominees, Mr.
Quirino Mancini and Mr. Graham Martin (constituting 2 members of the 8-person
board) are independent. In making this determination, the board noted that
neither of these directors will be executive officers or employees of the
Company.
In making its determination with respect to Mr. Mancini, the board considered
that while the Company has a retainer agreement with Tonucci and Company, the
law firm with which Mr. Mancini is employed, the agreement does not impair Mr.
Mancini's independence since the amount paid under the agreement in any one year
since its inception (and since a prior agreement's inception) did not exceed the
greater of $200,000 or 5% of such company's gross revenues during such period.
Code of Ethics / Committee Charters
The board has adopted, implemented and published on the Company's website
(www.emglcorp.com) the Company's code of business conduct which applies to all
members of the Board, all executive and financial officers and all employees and
consultants of the Company, its divisions and its subsidiaries. The code
mandates that all Company personnel observe the highest standards of business
and personal conduct in the performance of their duties and responsibilities,
especially in dealing with other Company personnel, our stockholders, the
general public, the business community, customers, suppliers, and governmental
authorities. It addresses conflicts of interest, corporate opportunities,
confidentiality, fair dealing, protection and proper use of corporate assets,
compliance with laws, rules and regulations and requires the reporting of any
illegal or unethical behavior.
We require our employees, our officers and directors to talk to supervisors,
managers or other appropriate personnel to report and discuss any known or
suspected unethical, illegal or criminal activity involving the Company and/or
its employees. We have established a process which allows employees, officers
and directors to anonymously report any known or suspected violation of policies
and rules set forth in the code of business conduct.
Waivers or amendments of the code's provisions are generally not permitted,
however, they may be granted only by the board of directors, and if granted,
will be disclosed promptly by the Company by posting the waiver or amendment on
the Company's website and by filing a current report (Form 8-K) with the
Securities and Exchange Commission. There were no waivers and/or amendments of
the code during 2015.
16
The board has also adopted, implemented and posted on the Company's website the
Company's audit committee, improper payment, disclosure, business practices and
money laundering charters and guidelines. The guidelines mandate that the
Company's results of operations and financial position must be recorded in
accordance with the requirements of law and generally accepted accounting
principles and that all books, records and accounts must be maintained in
reasonable detail so that they accurately and fairly reflect the business
transactions and disposition of assets of the Company. The additional guidelines
were adopted in order to provide a structured environment for employees or
related stakeholders in order to achieve a consistent financial and ethical
integrity standard within the Company.
The board adopted an Audit Committee charter delineating the composition and the
responsibilities of the Audit Committee which became effective on January 1,
2006. The charter was revised by the board effective September 4, 2015. The
charter is available on the Company's website.
Policy / Procedure for Review / Approval of Related Party Transactions
Business transactions between the Company and its officers or directors,
including companies in which a director or officer (or an immediate family
member) has a substantial ownership interest or a company where such director or
officer (or an immediate family member) serves as an executive officer ("related
party transactions") are not prohibited. In fact, certain related party
transactions can be beneficial to the Company and to its stockholders.
It is important, however, to ensure that any related party transactions are
beneficial to the Company. Accordingly, any related party transaction,
regardless of amount, is submitted to the board of directors in advance for
review and approval upon the advice of counsel, which may be outside legal
counsel. All existing related party transactions are reviewed when occurred and
at least annually by the board of directors.
No related party transaction may be approved by the board of directors, or any
Committee of the board of directors should any one be established, if such
transaction, regardless of its benefit to the Company, would violate the
Company's written code of business conduct and /or its written financial
integrity and compliance program.
Any director or officer with an interest in a related party transaction is
expected to remove himself from considering the matter and abstain from voting
upon it. In all cases, a director or officer with an interest in a related party
transaction may not attempt to influence Company personnel in making any
decision with respect to the transaction.
Executive Sessions of Independent Directors
The Company currently does not maintain any independent directors, therefore
were no executive sessions of independent directors for the year ended December
31, 2015.
C. Committees of the Board
The Company currently does not maintain any committees of the board.
17
Audit Committee Financial Expert
The Company does not currently maintain an audit committee or an audit committee
financial expert (as defined in Item 407 of Regulation S-K) serving on its Board
of Directors. All current Board of Directors members lack sufficient financial
expertise for overseeing financial reporting responsibilities. The Company has
not yet employed an audit committee financial expert on its Board due to the
inability to attract such a person.
Although we are not legally required to have an audit committee, the Company
intends to establish an audit committee of the board of directors, which will
consist of independent directors. The audit committee's duties will be to
recommend to the Company's board of directors the engagement of an independent
registered public accounting firm to audit the Company's financial statements
and to review the Company's accounting and auditing principles. The audit
committee will review the scope, timing and fees for the annual audit and the
results of audit examinations performed by the internal auditors and independent
registered public accounting firm, including their recommendations to improve
the system of accounting and internal controls. The audit committee will at all
times be composed exclusively of directors who are, in the opinion of the
Company's board of directors, free from any relationship which would interfere
with the exercise of independent judgment as a committee member and who possess
an understanding of financial statements and generally accepted accounting
principles.
Other Committees
We currently do not have nominating or compensation committees, or committees
performing similar functions. We will create one or more of these committees at
such time as the Board determines it would not be overly costly or burdensome to
do so, and is warranted given our then stage of development.
Family Relationships
Beniamino Gianfelici is the founder of Newgioco Srl and Multigioco Srl and is
the father in law of Alessandro Marcelli.
Involvement in Certain Legal Proceedings
Our directors, executive officers and control persons, as well as the nominees
for directors discussed herein, have not been involved in any of the following
events during the past five years:
1. No bankruptcy petition has been filed by or against any business of which
any director was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time.
2. No current director has been convicted in a criminal proceeding and is not
subject to a pending criminal proceeding (excluding traffic violations and
other minor offences).
3. No current director has been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities.
18
4. No director has been found by a court of competent jurisdiction (in a civil
action), the Securities Exchange Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or commodities
law, that has not been reversed, suspended, or vacated.
D. Stockholder Communications
We do not currently have a process that provides for stockholders to send
communications, including recommendations and nominations, to the Board. The
Board does not believe that it is necessary to have such a policy because
current management is capable of responding to any questions or concerns of
stockholders. In addition, we believe that the creation and implementation of
such a policy would be overly costly and burdensome and is not warranted in our
circumstances given our current size.
19
Executive Compensation
The following table sets out particulars of compensation paid to our principal
executive officers.
(all amounts in US Dollars)
Name and Stock All Other Total
principal Salary Bonus Award(s) Compensation Compensation Compensation
position Year ($) ($) ($) ($) ($) ($)
------------------- ---- ------- ------ ------- ------------- ------------ ------------
Michele Ciavarella
CEO, CFO, Chairman 2015 120,000 0 0 0 0 120,000
2014 90,000 0 0 0 0 90,000
Alessandro Marcelli
Director, President 2015 60,480 0 0 0 0 60,480
2014 42,900 0 0 0 0 42,900
Beniamino Gianfelici
Director,
VP Legal Affairs 2015 0 0 0 0 0 0
Graham Martin,
Director,
VP International
Development 2015 0 0 0 0 0 0
20
E. Discussion of Director Compensation
As of December 31, 2015, we did not have any outstanding equity awards.
F. Compensation Plans
As of December 31, 2015, we did not have any compensation plans in
place. However, we may issue stock options to our directors, officers
and employees in the future, upon adoption of an equity incentive plan.
Long-Term Incentive Plans
There are no current arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers,
except that our directors and executive officers may receive stock
options at the discretion of our Board. We do not have any material
bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers,
except that stock options may be granted at the discretion of our Board.
We have no plans or arrangements in respect of remuneration received or
that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of
resignation, retirement, change of control) or a change of
responsibilities following a change of control, where the value of such
compensation exceeds $60,000 per executive officer.
Employment Contracts
We have not entered into any employment agreements or compensation arrangements
with any of our named executive officers.
G. Compensation of Directors
We have no formal plan for compensating our directors for their service in their
capacity as directors, although such directors are expected in the future to
receive stock options to purchase common stock as awarded by our board of
directors or (as to future stock options) a compensation committee which may be
established. Directors are entitled to reimbursement for reasonable travel and
other out-of-pocket expenses incurred in connection with attendance at meetings
of our board of directors. Our board of directors may award special remuneration
to any director undertaking any special services on our behalf other than
services ordinarily required of a director. No director received and/or accrued
any compensation for their services as a director, including committee
participation and/or special assignments.
H. Indebtedness of Management
None of our directors, officers or employees, or any of our former directors,
officers and employees, and none of the proposed nominees for election, or any
of the associates of any such persons is or has been indebted to our company or
its subsidiaries at any time since the beginning of our last completed financial
year and no indebtedness is outstanding as at the date of this proxy statement.
21
PROPOSAL 2 - APPROVAL OF THE 2016 EQUITY INCENTIVE PLAN
Introduction
On July 1, 2016, the Board adopted, subject to the receipt of stockholder
approval, the 2016 Equity Incentive Plan (the "2016 Plan") providing for the
issuance of up to 3,000,000 million shares of our common stock. The purpose of
the Plan is to assist the Company in attracting and retaining key employees,
directors and consultants and to provide incentives to such individuals to align
their interests with those of our stockholders.
At the Annual Meeting, you will be asked to approve the adoption of the 2016
Plan in the form attached hereto as Annex A. A total of 3,000,000 shares of
common stock have been reserved for issuance under the 2016 Plan. The 2016 Plan
will only become effective upon our receipt of stockholder approval of this
Proposal No. 2.
General Description of the 2016 Plan
The following is a summary of the material provisions of the 2016 Plan and is
qualified in its entirety by reference to the complete text of the 2016 Plan.
Administration
The 2016 Plan is administered by a committee of the Board. Among other things,
the committee of the board has complete discretion, subject to the express
limits of the 2016 Plan, to determine the directors, officers, employees and
nonemployee consultants to be granted an award, the type of award to be granted
the terms and conditions of the award, the form of payment to be made and/or the
number of shares of common stock subject to each award, the exercise price of
each option and base price of each stock appreciation right ("SAR"), the term of
each award, the vesting schedule for an award, whether to accelerate vesting,
the value of the common stock underlying the award, and the required
withholding, if any. The committee of the board may amend, modify or terminate
any outstanding award, provided that the participant's consent to such action is
required if the action would impair the participant's rights or entitlements
with respect to that award. The committee of the board is also authorized to
construe the award agreements, and may prescribe rules relating to the 2016
Plan. Notwithstanding the foregoing, the committee of the board does not have
any authority to grant or modify an award under the 2016 Plan with terms or
conditions that would cause the grant, vesting or exercise thereof to be
considered nonqualified "deferred compensation" subject to Code Section 409A.
MATERIAL TERMS AND CONDITIONS
Grant of Awards; Shares Available for Awards
The 2016 Plan provides for the grant of stock options, SARs, performance share
awards, performance unit awards, distribution equivalent right awards,
restricted stock awards, restricted stock unit awards and unrestricted stock
awards to non-employee directors, officers, employees and nonemployee
consultants of the Company or its affiliates. We have reserved a total of
3,000,000 million shares of common stock for issuance as or under awards to be
made under the 2016 Plan. If any award expires, is cancelled, or terminates
unexercised or is forfeited, the number of shares subject thereto is again
available for grant under the 2016 Plan.
22
Currently, there are no employees who would be entitled to receive stock options
and/or shares of restricted stock under the 2016 Plan. Future new hires and
additional non-employee directors and/or consultants would be eligible to
participate in the 2016 Plan.
Stock Options
The 2016 Plan provides for either "incentive stock options" ("ISOs"), which are
intended to meet the requirements for special federal income tax treatment under
the Code, or "nonqualified stock options" ("NQSOs"); provided, however, that
ISOs may only be issued if our stockholders approve the 2016 Plan at the annual
meeting. Stock options may be granted on such terms and conditions as the
committee of the board may determine; provided, however, that the per share
exercise price under a stock option may not be less than the fair market value
of a share of the Company's common stock on the date of grant and the term of
the stock option may not exceed 10 years (110% of such value and five years in
the case of an ISO granted to an employee who owns (or is deemed to own) more
than 10% of the total combined voting power of all classes of capital stock of
our company or a parent or subsidiary of our company). ISOs may only be granted
to employees. In addition, the aggregate fair market value of our common stock
covered by one or more ISOs (determined at the time of grant) which are
exercisable for the first time by an employee during any calendar year may not
exceed $100,000. Any excess is treated as a NQSO.
Stock Appreciation Rights
A SAR entitles the participant, upon exercise, to receive an amount, in cash or
stock or a combination thereof, equal to the increase in the fair market value
of the underlying common stock between the date of grant and the date of
exercise. SARs may be granted in tandem with, or independently of, stock options
granted under the 2016 Plan. A SAR granted in tandem with a stock option (i) is
exercisable only at such times, and to the extent, that the related stock option
is exercisable in accordance with the procedure for exercise of the related
stock option; (ii) terminates upon termination or exercise of the related stock
option (likewise, the common stock option granted in tandem with a SAR
terminates upon exercise of the SAR); (iii) is transferable only with the
related stock option; and (iv) if the related stock option is an ISO, may be
exercised only when the value of the stock subject to the stock option exceeds
the exercise price of the stock option. A SAR that is not granted in tandem with
a stock option is exercisable at such times as the committee of the board may
specify.
Performance Shares and Performance Unit Awards
Performance share and performance unit awards entitle the participant to receive
cash or shares of our common stock upon the attainment of specified performance
goals. In the case of performance units, the right to acquire the units is
denominated in cash values.
Restricted Stock Awards and Restricted Stock Unit Awards
A restricted stock award is a grant or sale of common stock to the participant,
subject to our right to repurchase all or part of the shares at their purchase
price (or to require forfeiture of such shares if issued to the participant at
no cost) in the event that conditions specified by the committee of the board in
23
the award are not satisfied prior to the end of the time period during which the
shares subject to the award may be repurchased by or forfeited to us. Our
restricted stock unit entitles the participant to receive a cash payment equal
to the fair market value of a share of common stock for each restricted stock
unit subject to such restricted stock unit award, if the participant satisfies
the applicable vesting requirement.
Unrestricted Stock Awards
An unrestricted stock award is a grant or sale of shares of our common stock to
the participant that is not subject to transfer, forfeiture or other
restrictions, in consideration for past services rendered to the Company or an
affiliate or for other valid consideration.
Amendment and Termination
The committee of the board may adopt, amend and rescind rules relating to the
administration of the 2016 Plan, and amend, suspend or terminate the 2016 Plan,
but no such amendment or termination will be made that materially and adversely
impairs the rights of any participant with respect to any award received thereby
under the 2016 Plan without the participant's consent, other than amendments
that are necessary to permit the granting of awards in compliance with
applicable laws. We have attempted to structure the 2016 Plan so that
remuneration attributable to stock options and other awards will not be subject
to the deduction limitation contained in Code Section 162(m).
Certain Federal Income Tax Consequences of the 2016 Plan
The following is a general summary of the federal income tax consequences under
current U.S. tax law to the Company and to participants in the 2016 Plan who are
individual citizens or residents of the United States for federal income tax
purposes ("U.S. Participants") of stock options, stock appreciation rights,
restricted stock, performance shares, performance units, restricted stock units,
distribution equivalent rights and unrestricted stock. It does not purport to
cover all of the special rules including special rules relating to limitations
on the ability of the Company to deduct the amounts for federal income tax
purposes of certain compensation, special rules relating to deferred
compensation, golden parachutes, participants subject to Section 16(b) of the
Exchange Act or the exercise of a stock option with previously-acquired shares
of the Company's common stock. For purposes of this summary it is assumed that
U.S. Participants will hold their shares of the Company's common stock received
under the 2016 Plan as capital assets within the meaning of Section 1221 of the
Code. In addition, this summary does not address the non-U.S. state or local
income or other tax consequences, or any U.S. federal non-income tax
consequences, inherent in the acquisition, ownership, vesting, exercise,
termination or disposition of an award under the 2016 Plan, or shares of the
Company's common stock issued pursuant thereto. All participants are urged to
consult with their own tax advisors concerning the tax consequences to them of
an award under the 2016 Plan or shares of the Company's common stock issued
thereto pursuant to the 2016 Plan.
A U.S. Participant does not recognize taxable income upon the grant of a NQSO or
an ISO. Upon the exercise of a NQSO, the U.S. Participant recognizes ordinary
income in an amount equal to the excess, if any, of the fair market value of the
shares acquired on the date of exercise over the exercise price paid therefor
under the NQSO, and the Company will generally be entitled to a deduction for
24
such amount at that time. If the U.S. Participant later sells shares acquired
pursuant to the exercise of a NQSO, the U.S. Participant recognizes long-term or
short-term capital gain or loss, depending on the period for which the shares
were held. Long-term capital gain is generally subject to more favorable tax
treatment than ordinary income or short-term capital gain. Upon the exercise of
an ISO, the U.S. Participant does not recognize taxable income. If the U.S.
Participant disposes of the shares acquired pursuant to the exercise of an ISO
more than two years after the date of grant and more than one year after the
transfer of the shares to the U.S. Participant, the U.S. Participant recognizes
long-term capital gain or loss and the Company will not be entitled to a
deduction. However, if the U.S. Participant disposes of such shares prior to the
end of the required holding period, all or a portion of the gain is treated as
ordinary income and the Company is generally entitled to deduct such amount. In
addition to the tax consequences described above, a U.S. Participant may be
subject to the alternative minimum tax, which is payable to the extent it
exceeds the U.S. Participant's regular tax. For this purpose, upon the exercise
of an ISO, the excess of the fair market value of the shares over the exercise
price paid therefor under the ISO is a preference item for alternative minimum
taxable income determination purposes. In addition, the U.S. Participant's basis
in such shares is increased by such excess for purposes of computing the gain or
loss on the disposition of the shares for alternative minimum tax purposes.
A U.S. Participant does not recognize taxable income upon the grant of an SAR.
The U.S. Participant has ordinary compensation income upon exercise of the SAR
equal to the increase in the value of the underlying shares, and the Company
will generally be entitled to a deduction for such amount.
A U.S. Participant does not recognize taxable income upon the receipt of a
performance share award until the shares are received. At such time, the U.S.
Participant recognizes ordinary compensation income equal to the excess, if any,
of the fair market value of the shares over any amount thereby paid for the
shares, and the Company will generally be entitled to deduct such amount at such
time.
A U.S. Participant does not recognize taxable income upon the receipt of a
performance unit award, restricted stock unit award or dividend equivalent right
award until a cash payment is received. At such time, the U.S. Participant
recognizes ordinary compensation income equal to the amount of cash received,
and the Company will generally be entitled to deduct such amount at such time.
A U.S. Participant who receives a grant of restricted stock generally recognizes
ordinary compensation income equal to the excess, if any, of the fair market
value of such shares of stock at the time the restriction lapses over any amount
paid timely for the shares. Alternatively, the U.S. Participant may elect to be
taxed on the fair market value of such shares at the time of grant. The Company
thereby will generally be entitled to a deduction at the same time and in the
same amount as the income required to be included by the U.S. Participant.
A U.S. Participant recognizes ordinary compensation income upon receipt of the
shares under an unrestricted stock award equal to the excess, if any, of the
fair market value of the shares over any amount paid thereby for the shares, and
the Company will generally be entitled to deduct such amount at such time.
Vote Required
In accordance with the Company's bylaws, majority of votes cast at the Annual
Meeting is required in order to pass Proposal 2.
25
Recommendation of the Board
Our Board of Directors unanimously recommends that you vote "FOR" the 2016
Equity Incentive Plan Proposal.
26
PROPOSAL 3 - ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION
Introduction
As of December 31, 2015, we did not have any compensation plans in place and
have not entered into any employment agreements or compensation arrangements
with any of our named executive officers. However, the Company is considering
engaging each of its executive officers under independent contractor agreements
during the 2016 fiscal year and we may also issue stock options to our
directors, officers and employees in the future, upon adoption of an equity
incentive plan.
Effective July 1, 2006, the Company entered into an independent contractor
agreement with Gold Street Capital Corp. through which our existing Chief
Executive Officer, Mr. Ciavarella, has billed for his services to the Company up
to date. In connection with this agreement, Mr. Ciavarella billed $120,000 for
the year ended December 31, 2015 and was reimbursed for out of pocket expenses
paid on behalf of the Company during the business development period.
Beginning with the 2016 fiscal year, the Company intends to standardise
executive officer compensation agreements commensurate with operational
performance.
Rationale and Scope of Proposal
In recent years, good corporate governance commentators and advisors have
advocated and increasingly governmental regulatory authorities, including the
Securities and Exchange Commission, are mandating that public companies, such as
Empire, initiate procedures to ensure that our stockholders have input on our
named executive officer compensation programs (the "say on pay" movement).
Basically, our named executive officer compensation policies and programs are
designed to attract, motivate, and retain the key executives who are responsible
to drive our success and enhance stockholder value. Pay that reflects
performance and alignment of that pay with the interests of long-term
stockholders are key principles that underlie our executive officer compensation
program design.
Our board of directors values and encourages constructive dialogue on executive
compensation and other important governance topics with our stockholders, to
whom it is ultimately accountable. Beginning with the 2016 annual meeting, the
Company's stockholders are being asked to approve the board's proposal to seek
stockholder advice on executive compensation on an annual basis, consistent with
the board's view that such an annual procedure is the most effective means to
obtain current information on investor sentiment about our executive
compensation philosophy, policies, and procedures.
Although Proposal 3 is advisory-only and is non-binding on the Company and the
board of directors, our board and all relevant board committees will review the
voting results. To the extent there is any significant negative say-on-pay
advice, we would initiate procedures to better understand the concerns that
influenced the advice. The board and related committees would consider
constructive feedback obtained through this process in making future decisions
about its named executive officer compensation.
Accordingly, the board of directors proposes that you indicate your support for
Empire's executive officer compensation described above and the compensation
philosophy, policies, and procedures underlying such compensation for the 2016
calendar year as described in this Proxy Statement.
27
Vote Required - Indication of Support
This Proposal is non-binding on the Company and our board of directors. Marking
the Proxy Card "For" indicates support; marking the Proxy Card "Against"
indicates lack of support. You may abstain by marking the "Abstain" box on the
Proxy Card.
Recommendation of the Board
The Board of Directors unanimously recommends that the stockholders support the
named executive officer compensation programs in effect for the 2016 calendar
year by marking "For" on the Proxy Card.
28
PROPOSAL 4 - RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
On May 15, 2006, Paritz and Company, PA was first engaged as our principal
accountant to audit our financial statements and has served as such to date.
The Board also selected Paritz and Company, PA as our independent auditors for
the fiscal year ended December 31, 2016, and has further directed that
management submit the appointment of independent auditors for ratification by
the stockholders at the Meeting.
Stockholder ratification of the appointment of Paritz and Company, PA as our
independent auditors is not required by our bylaws or otherwise. However, the
Board is submitting the selection of Paritz and Company, PA to the stockholders
for ratification as a matter of corporate practice. If the stockholders fail to
ratify the selection, the Board will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Board in its discretion may direct
the appointment of a different independent accounting firm at any time during
the year if the Board determines that such a change would be in the best
interests of our company and its stockholders.
The Board has considered the nature and amount of fees billed by Paritz and
Company, PA and believes that the provision of services for activities unrelated
to the audit is compatible with maintaining the principal accountant's
independence.
Representatives of Paritz and Company, PA are not expected to be present at the
Meeting and will not have the opportunity to make a statement or respond to
questions at the Meeting.
For further information, please refer to the heading below "Independent Public
Accountants."
Audit Fees
Fees
Audit Fees. This category includes the fees for the audit of our consolidated
financial statements and the quarterly reviews of interim financial statements.
This category also includes advice on audit and accounting matters that arose
during or as a result of the audit or the review of interim financial statements
and services in connection with Securities and Exchange Commission filings.
Audit-Related Fees. This category includes assurance and related services that
are reasonably related to the performance of the audit or review of the
financial statements that are not reported under Audit Fees, and describes the
nature of the services comprising the fees disclosed under this category.
Tax Fees. This category includes the fees for professional services rendered for
tax compliance, tax advice and tax planning, and describes the nature of the
services comprising the fees disclosed under this category.
All Other Fees. This category includes products and services provided by the
principal accountant, other than the services reported under Audit Fees,
Audit-Related Fees or Tax Fees.
Our current and former independent public accountants provided audit and other
services during the fiscal years ended December 31, 2015 and 2014 as follows:
29
Fiscal
2015 2014
Audit Fees $92,860 $35,000
Audit-Related Fees 0 0
Tax Fees 0 0
All Other Fees 0 0
Total Fees $92,860 $35,000
We do not use Paritz and Company, PA for financial information system design and
implementation. These services, which include designing or implementing a system
that aggregates source data underlying the financial statements or generates
information that is significant to our financial statements, are provided
internally or by other service providers. We do not engage Paritz and Company,
PA to provide compliance outsourcing services.
Pre-Approval Policies and Procedures
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that
require that before Paritz and Company, PA is engaged by us to render any
auditing or permitted non-audit related service, the engagement be:
- approved by our audit committee (which consists of our entire Board); or
- entered into pursuant to pre-approval policies and procedures established by
the Board, provided the policies and procedures are detailed as to the
particular service, the Board is informed of each service, and such policies
and procedures do not include delegation of the Board' responsibilities to
management.
The Board pre-approves all services provided by our independent auditors. All of
the above services and fees were reviewed and approved by the Board either
before or after the respective services were rendered.
Vote Required
This Proposal is non-binding on the Company and our board of directors. Marking
the Proxy Card "For" indicates support; marking the Proxy Card "Against"
indicates lack of support. You may abstain by marking the "Abstain" box on the
Proxy Card.
Recommendation of the Board
The Board of Directors unanimously recommends that the stockholders ratify the
appointment of Paritz and Company, PA as the Company's independent registered
public accounting firm for the 2016 fiscal year.
30
ANNEX A - EQUITY INCENTIVE PLAN
2016 EQUITY INCENTIVE PLAN
EMPIRE GLOBAL CORP.
TABLE OF CONTENTS
Equity Incentive Plan
Page No.
1. PURPOSE OF THE PLAN. 32
2. DEFINITIONS. 32
3. SHARES SUBJECT TO THE PLAN. 39
4. ADMINISTRATION. 40
5. ELIGIBILITY. 42
6. OPTIONS. 42
7. RESTRICTED STOCK AWARDS. 45
8. RESTRICTED STOCK UNITS. 46
9. STOCK APPRECIATION RIGHTS. 47
10. PERFORMANCE AWARDS. 48
11. STOCK BONUS AWARDS. 48
12. PAYMENT FOR SHARE PURCHASES. 49
13. GRANTS TO OUTSIDE DIRECTORS. 49
14. WITHHOLDING TAXES. 50
15. TRANSFERABILITY. 50
16. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES. 51
17. CERTIFICATES. 51
18. ESCROW; PLEDGE OF SHARES. 51
19. REPRICING; EXCHANGE AND BUYOUT OF AWARDS. 52
20. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. 52
21. CHANGE IN CONTROL. 52
22. ADOPTION AND STOCKHOLDER APPROVAL. 53
23. TERM OF PLAN/GOVERNING LAW. 53
24. AMENDMENT OR TERMINATION OF PLAN. 53
25. NON-EXCLUSIVITY OF THE PLAN. 53
26. NO EFFECT ON EMPLOYMENT. 54
27. INSIDER TRADING POLICY. 54
NOTICE OF GRANT OF RESTRICTED STOCK UNITS 55
EXHIBIT A - Terms and Conditions of the Restricted Stock Units 57
NOTICE OF GRANT OF STOCK OPTION 72
EXHIBIT B - Terms and Conditions of Stock Option Grant 73
EXHIBIT C - Exercise Notice 79
31
EMPIRE GLOBAL CORP.
2016 Equity Incentive Plan
1. PURPOSE OF THE PLAN. The purposes of the Empire Global Corp. 2016 Equity
Incentive Plan (this "Plan") is to provide incentives to attract, retain
and motivate best available personnel for positions of substantial
responsibility, provide additional incentive to Employees, Directors and
Consultants, and promote the success of the Company's business and further
align the interests of the Company with those of its stockholders.
Capitalized terms not defined elsewhere in the text are defined in Section
2.
2. DEFINITIONS. As used in this Plan, and except as elsewhere defined herein,
the following terms will have the following meanings:
(a) "Administrator" means the Board or any of its Committees as will be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Affiliate" means any entity that, directly or indirectly, controls, is
controlled by, or is under common control with, the Company.
(c) "Applicable Laws" means the requirements relating to the administration
of equity-based awards under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable
laws of any foreign country or jurisdiction where Awards are, or will
be, granted under the Plan.
(d) "Award" means, individually or collectively, a grant under the Plan of
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Units, Performance Shares, Substitute Awards or
other stock or cash awards as the Administrator may determine.
(e) "Award Agreement" means, with respect to each Award, the written or
electronic agreement between the Company and the Participant setting
forth the terms and conditions of the Award, which shall be in
substantially a form (which need not be the same for each Participant)
that the Administrator has from time to time approved, and will comply
with and be subject to the terms and conditions of this Plan.
(f) "Award Transfer Program" means any program instituted by the
Administrator which would permit Participants the opportunity to
transfer any outstanding Awards to a financial institution or other
person or entity approved by the Administrator.
(g) "Board" means the Board of Directors of the Company.
(h) "Cause" means (i) Participant's willful failure substantially to perform
his or her duties and responsibilities to the Company or deliberate
violation of a Company policy; (ii) Participant's commission of any act
of fraud, embezzlement, dishonesty or any other willful misconduct that
has caused or is reasonably expected to result in material injury to
the Company; (iii) unauthorized use or disclosure by Participant of any
proprietary information or trade secrets of the Company or any other
party to whom the Participant owes an obligation of nondisclosure as a
result of his or her relationship with the Company; or (iv)
Participant's willful breach of any of his or her obligations under any
written agreement or covenant with the Company. The determination as to
whether a Participant is being terminated for Cause shall be made in
32
good faith by the Company and shall be final and binding on the
Participant. The foregoing definition does not in any way limit the
Company's ability to terminate a Participant's employment or consulting
relationship at any time as provided in Section 6.6 and Section 26, and
the term "Company" will be interpreted to include any Subsidiary or
Parent, as appropriate.
(i) "Change in Control" means the occurrence of any of the following events:
(i) A change in the ownership of the Company which occurs on the date
that any one person, or more than one person acting as a group
("Person"), acquires ownership of the stock of the Company that,
together with the stock held by such Person, constitutes more than
fifty percent (50%) of the total voting power of the stock of the
Company; provided, however, that for purposes of this subsection,
the acquisition of additional stock by any one Person, who is
considered to own more than fifty percent (50%) of the total voting
power of the stock of the Company will not be considered a Change
in Control; or
(ii) A change in the effective control of the Company which occurs on
the date that a majority of members of the Board is replaced during
any twelve (12) month period by Directors whose appointment or
election is not endorsed by a majority of the members of the Board
prior to the date of the appointment or election. For purposes of
this clause (ii), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of
the Company by the same Person will not be considered a Change in
Control;
(iii) The consummation of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation that
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving or resulting entity) 35% or more of the combined
voting power of the surviving or resulting entity outstanding
immediately after such merger or consolidation; or
(iv) A change in the ownership of a substantial portion of the
Company's assets which occurs on the date that any Person acquires
(or has acquired during the twelve (12) month period ending on the
date of the most recent acquisition by such person or persons)
assets from the Company that have a total gross fair market value
equal to or more than fifty percent (50%) of the total gross fair
market value of all of the assets of the Company immediately prior
to such acquisition or acquisitions; provided, however, that for
purposes of this subsection (iv), the following will not constitute
a change in the ownership of a substantial portion of the Company's
assets: (A) a transfer to an entity that is controlled by the
Company's stockholders immediately after the transfer, or (B) a
transfer of assets by the Company to: (1) a stockholder of the
Company (immediately before the asset transfer) in exchange for or
with respect to the Company's stock, (2) an entity, fifty percent
(50%) or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns,
directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all the outstanding stock of the Company,
or (4) an entity, at least fifty percent (50%) of the total value
33
or voting power of which is owned, directly or indirectly, by a
Person described in this subsection (iv)(B)(3). For purposes of
this subsection (iv), gross fair market value means the value of
the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities
associated with such assets.
For purposes of this definition, persons will be considered to be
acting as a group if they are owners of a corporation that enters
into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a
Change in Control unless the transaction qualifies as a change in
control event within the meaning of Code Section 409A, as it has
been and may be amended from time to time, and any proposed or
final Treasury Regulations and Internal Revenue Service guidance
that has been promulgated or may be promulgated thereunder from
time to time.
Further and for the avoidance of doubt, a transaction will not
constitute a Change in Control if: (i) its sole purpose is to
change the state of the Company's incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in
substantially the same proportions by the persons who held the
Company's securities immediately before such transaction.
(j) "Code" the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder will include such
section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or
regulation.
(k) "Committee" means a committee of Directors or of other individuals
satisfying Applicable Laws appointed by the Board, or a duly authorized
committee of the Board, in accordance with Section 4 hereof.
(l) "Common Stock" means the common stock of the Company.
(m) "Company" means EMPIRE GLOBAL CORP., a Delaware corporation, or any
successor thereto.
(n) "Consultant" means any natural person, including an advisor or
independent contractor, engaged by the Company or a Parent, Subsidiary
or Affiliate to render bona fide services to such entity, provided the
services (i) are not in connection with the offer or sale of securities
in a capital-raising transaction, and (ii) do not directly promote or
maintain a market for the Company's securities in each case, within the
meaning of Form S-8 promulgated under the Securities Act, and provided,
further, that a Consultant will include only those persons to whom the
issuance of Shares may be registered under Form S-8 promulgated under
the Securities Act..
(o) "Director" means a member of the Board.
(p) "Disability" means in the case of incentive stock options, total and
permanent disability as defined in Section 22(e)(3) of the Code and in
the case of other Awards, that the Participant is unable to engage in
34
any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of
not less than 12 months.
(q) "Employee" means any person, including Officers and Directors, employed
by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company
will be sufficient to constitute "employment" by the Company.
(r) "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
(s) "Exchange Program" means a program under which (i) outstanding Awards
are surrendered or cancelled in exchange for awards of the same type
(which may have higher or lower exercise prices and different terms),
awards of a different type, and/or cash, (ii) Participants would have
the opportunity to transfer any outstanding Awards to a financial
institution or other person or entity selected by the Administrator,
and/or (iii) the exercise price of an outstanding Award is increased or
reduced (or combination thereof).
(t) "Exercise Price" means, with respect to an Option, the price at which a
holder may purchase the Shares issuable upon exercise of an Option and
with respect to a SAR, the price at which the SAR is granted to the
holder thereof.
(u) "Fair Market Value" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the New York
Stock Exchange ("NYSE"), the NYSE-MKT, the NASDAQ Global Select
Market, the NASDAQ Global Market or the NASDAQ Capital Market of
The NASDAQ Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system on the day of
determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(ii) If the Common Stock is not listed on a national securities
exchange, then the closing price if reported or the average bid and
asked price for the Company's shares as published on the OTCQB or
the OTCQX operated by OTC MARKETS;
(iii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair
Market Value of a Share will be the mean between the high bid and
low asked prices for the Common Stock on the date of determination
(or, if no bids and asks were reported on that date, as applicable,
on the last trading date such bids and asks were reported), as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or
(iv) In the absence of an established market for the Common Stock,
the Fair Market Value will be determined in good faith by the
Administrator.
(v) "Incentive Stock Option" means an Option that by its terms qualifies and
is intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code.
35
(w) "Insider" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to
Section 16 of the Exchange Act.
(x) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(y) "Option" means an award of an option to purchase Shares pursuant to
Section 6.
(z) "Outside Director" means a Director who is not an Employee of the
Company or a Subsidiary.
(aa) "Parent" means any "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code (other than the
Company) in an unbroken chain of corporations ending with the
Company if each of such corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
(bb) "Participant" means a person who holds an Award under this Plan.
(cc) "Performance Award" means cash or stock granted pursuant to Section
10 or Section 13 of the Plan.
(dd) "Performance Goals" means any of objective criteria within the
meaning of Code Section 162(m) selected by the Administrator and
specified in an Award Agreement, to determine whether the performance
goals established by the Administrator with respect to applicable
Awards have been satisfied including cash flow; cash flow from
operations; total earnings; earnings per share, diluted or basic;
earnings per share from continuing operations, diluted or basic;
earnings before interest and taxes; earnings before interest, taxes,
depreciation, and amortization; earnings from operations; net asset
turnover; inventory turnover; capital expenditures; net earnings;
operating earnings; gross or operating margin; profit margin, debt;
working capital; return on equity; return on net assets; return on
total assets; return on capital; return on investment; return on sales;
net or gross sales; market share; economic value added; cost of
capital; change in assets; expense reduction levels; debt reduction;
productivity; new product introductions; delivery performance; safety
record; stock price; total stockholder return. Any Performance Goals
may be used to measure the performance of the Company as a whole or,
except with respect to stockholder return metrics, to a region,
business unit, affiliate or business segment, and may be measured
either on an absolute basis, a per share basis or relative to a
pre-established target, to a previous period's results or to a
designated comparison group, and, with respect to financial metrics,
which may be determined in accordance with United States Generally
Accepted Accounting Principles ("GAAP"), in accordance with accounting
principles established by the International Accounting Standards Board
("IASB Principles") or which may be adjusted when established to either
exclude any items otherwise includable under GAAP or under IASB
Principles or include any items otherwise excludable under GAAP or
under IASB Principles. The Performance Goals may differ from
Participant to Participant and from Award to Award. Prior to the
Determination Date, the Administrator will determine whether any
36
significant element(s) will be included in or excluded from the
calculation of any Performance Goal with respect to any Participant.
The Administrator may, in recognition of unusual or non-recurring
items such as acquisition-related activities or changes in applicable
accounting rules, provide for one or more equitable adjustments (based
on objective standards) to the Performance Goals to preserve the
Administrator's original intent regarding the Performance Goals at the
time of the initial award grant. It is within the sole discretion of
the Administrator to make or not make any such equitable adjustments.
(ee) "Performance Period" means the period of service determined by the
Administrator, during which years of service or performance is to be
measured for the Award.
(ff) "Performance Share" means a performance share bonus granted as a
Performance Award.
(gg) "Permitted Transferee" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law (including adoptive relationships) of
the Employee, any person sharing the Employee's household (other than a
tenant or employee), a trust in which these persons (or the Employee)
have more than 50% of the beneficial interest, a foundation in which
these persons (or the Employee) control the management of assets, and
any other entity in which these persons (or the Employee) own more than
50% of the voting interests.
(hh) "Plan" means this EMPIRE GLOBAL CORP. 2016 Equity Incentive Plan.
(ii) "Purchase Price" means the price to be paid for Shares acquired
under the Plan, other than Shares acquired upon exercise of an Option or
SAR.
(jj) "Restricted Stock Award" means an award of Shares pursuant to
Section 7 or Section 13 of the Plan, or issued pursuant to the early
exercise of an Option.
(kk) "Restricted Stock Unit" or "RSU" means an Award granted pursuant to
Section 8 or Section 13 of the Plan.
(ll) "Retirement" means termination of an Employee's employment with the
Company and its Affiliates for retirement purposes if such termination
occurs (1) on or after his or her sixty-fifth (65th) birthday; or (2)
on or after his or her fifty-fifth (55th) birthday with the written
consent of the Chief Executive Officer of the Company or, in the case
of the Chief Executive Officer's retirement, with the consent of the
Administrator. In the case of a Director, "Retirement" shall be
determined by the Administrator in its discretion. In no event shall
termination of a Consultant's services with the Company and Affiliates
be treated as a Retirement under the Plan.
(mm) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(nn) "SEC" means the United States Securities and Exchange Commission.
(oo) "Section 16(b)" means Section 16(b) of the Exchange Act.
37
(pp) "Securities Act" means the United States Securities Act of 1933, as
amended.
(qq) "Service Provider" means an Employee, Officer, Director or
Consultant.
(rr) "Shares" means shares of the Company's Common Stock and the common
stock of any successor security.
(ss) "Stock Appreciation Right" or "SAR" means an Award granted pursuant
to Section 9 or Section 13 of the Plan.
(tt) "Stock Bonus" means an Award granted pursuant to Section 11 or
Section 13 of the Plan.
(uu) "Subsidiary" means any "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code (other
than the Company) in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
(vv) "Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason
ceased to provide services as an employee, officer, director,
consultant, independent contractor or advisor to the Company or a
Parent or Subsidiary of the Company. An employee will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved by the
Administrator; provided, that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant
to formal policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any employee on
an approved leave of absence, the Administrator may make such
provisions respecting suspension of vesting of the Award while on leave
from the employ of the Company or a Parent or Subsidiary of the Company
as it may deem appropriate, except that in no event may an Award be
exercised after the expiration of the term set forth in the applicable
Award Agreement. In the event of military leave, if required by
applicable laws, vesting shall continue for the longest period that
vesting continues under any other statutory or Company approved leave
of absence and, upon a Participant's returning from military leave
(under conditions that would entitle him or her to protection upon such
return under the Uniform Services Employment and Reemployment Rights
Act), he or she shall be given vesting credit with respect to Awards to
the same extent as would have applied had the Participant continued to
provide services to the Company throughout the leave on the same terms
as he or she was providing services immediately prior to such leave. An
employee shall have terminated employment as of the date he or she
ceases to be employed (regardless of whether the termination is in
breach of local laws or is later found to be invalid) and employment
shall not be extended by any notice period or garden leave mandated by
local law. The Administrator will have sole discretion to determine
whether a Participant has ceased to provide services for purposes of
the Plan and the effective date on which the Participant ceased to
provide services (the "Termination Date").
38
(ww) "Unvested Shares" means Shares that have not yet vested or are
subject to a right of repurchase in favor of the Company (or any
successor thereto).
3. SHARES SUBJECT TO THE PLAN.
3.1 Plan Maximums. Subject to adjustment in accordance with Section 3.5, and
except for Substitute Awards, a maximum number of Shares available for the
grant of Awards under the Plan shall not exceed in the aggregate 3,000,000
which may all be granted as Incentive Stock Options.
3.2 Types of Shares. Shares available for distribution under the Plan may
consist, in whole or in part, of authorized and unissued shares, treasury
shares, or shares reacquired by the Company in any manner.
3.3 Lapsed, Returned Awards. Shares subject to Awards, and Shares issued under
the Plan under any Award, will again be available for grant and issuance in
connection with subsequent Awards under this Plan to the extent such
Shares: (a) are subject to issuance upon exercise of an Option or SAR
granted under this Plan but which cease to be subject to the Option or SAR
for any reason other than exercise of the Option or SAR; (b) are subject to
Awards granted under this Plan that are forfeited or are repurchased by the
Company at the original issue price; (c) are subject to Awards granted
under this Plan that otherwise terminate without such Shares being issued;
or (d) are surrendered pursuant to an Exchange Program. To the extent an
Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for
issuance under the Plan. Shares used or withheld to pay the exercise price
of an Award or to satisfy the tax withholding obligations related to an
Award will become available for future grant or sale under the Plan. For
the avoidance of doubt, Shares that otherwise become available for grant
and issuance because of the provisions of this Section 3.3 shall not
include Shares subject to Awards that initially became available because of
the substitution clause in Section [22] hereof.
3.4 Limitations. Subject to adjustment in accordance with Section 3.5, no
Participant shall be granted, during any one (1)-year period, Options to
purchase Shares and Stock Appreciation Rights with respect to more than
2,000,000 Shares in the aggregate, any other Awards with respect to more
than 2,000,000 Shares in the aggregate, or cash-based Awards that relate to
no more than $250,000. If an Award is to be settled in cash, the number of
Shares on which the Award is based shall not count toward the individual
share limit set forth in this Section 3.4.
3.5 Adjustment of Shares. If the number of outstanding Shares is changed by a
stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company, without consideration, then (a) the number of
Shares reserved for issuance and future grant under the Plan set forth in
Section 3.1, (b) the Exercise Prices of and number of Shares subject to
outstanding Options and SARs, (c) the number of Shares subject to other
outstanding Awards, (d) the maximum number of shares that may be issued as
ISOs set forth in Section 3.4, (e) the maximum number of Shares that may be
issued to an individual or to a new Employee in any one calendar year set
forth in Section 5 and (f) the number of Shares that are granted as Awards
to Outside Directors as set forth in Section 13, shall be proportionately
adjusted, subject to any required action by the Board or the stockholders
of the Company and in compliance with applicable securities laws; provided
that fractions of a Share will not be issued.
39
3.6 Minimum Share Reserve. At all times the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Awards granted under this Plan.
3.7 Automatic Share Reserve Increase. The number of Shares available for grant
and issuance under the Plan shall be increased on January 1, of each of the
ten (10) calendar years during the term of the Plan, by the lesser of (i)
two and one half percent (2.5%) of the number of Shares issued and
outstanding on each December 31 immediately prior to the date of increase
or (ii) such number of Shares determined by the Board.
4. ADMINISTRATION.
4.1 Administrator Composition; Authority. This Plan will be administered by the
Administrator or by the Board acting as the Administrator. Subject to the
general purposes, terms and conditions of this Plan, and to the direction
of the Board, the Administrator will have full power to implement and carry
out this Plan, except, however, the Board shall establish the terms for the
grant of an Award to Outside Directors. The Administrator will have the
authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan
or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the
time or times when Awards may vest and be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding
any Award or the Shares relating thereto, based in each case on such
factors as the Administrator will determine;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine the Fair Market Value in good faith and interpret the
applicable provisions of this Plan and the definition of Fair Market
Value in connection with circumstances that impact the Fair Market
Value, if necessary;
(g) determine whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(h) grant waivers of Plan or Award conditions;
(i) determine the vesting, exercisability and payment of Awards;
(j) correct any defect, supply any omission or reconcile any inconsistency
in this Plan, any Award or any Award Agreement;
(k) determine whether an Award has been earned;
40
(l) determine the terms and conditions of any, and to institute any Exchange
Program;
(m) reduce or waive any criteria with respect to Performance Goals;
(n) adjust Performance Goals to take into account changes in law and
accounting or tax rules as the Administrator deems necessary or
appropriate to reflect the impact of extraordinary or unusual items,
events or circumstances to avoid windfalls or hardships provided that
such adjustments are consistent with the regulations promulgated under
Section 162(m) of the Code with respect to persons whose compensation
is subject to Section 162(m) of the Code;
(o) adopt rules and/or procedures (including the adoption of any subplan
under this Plan) relating to the operation and administration of the
Plan to accommodate requirements of local law and procedures outside of
the United States;
(p) make all other determinations necessary or advisable for the
administration of this Plan; and
(q) delegate any of the foregoing to a sub-Committee consisting of one or
more executive officers pursuant to a specific delegation.
4.2 Administrator Interpretation and Discretion. Any determination made by the
Administrator with respect to any Award shall be made in its sole
discretion at the time of grant of the Award or, unless in contravention of
any express term of the Plan or Award, at any later time, and such
determination shall be final and binding on the Company and all persons
having an interest in any Award under the Plan. Any dispute regarding the
interpretation of the Plan or any Award Agreement shall be submitted by the
Participant or Company to the Administrator for review. The resolution of
such a dispute by the Administrator shall be final and binding on the
Company and the Participant. The Administrator may delegate to one or more
executive officers the authority to review and resolve disputes with
respect to Awards held by Participants who are not Insiders, and such
resolution shall be final and binding on the Company and the Participant.
4.3 Section 162(m) of the Code and Section 16 of the Exchange Act. When
necessary or desirable for an Award to qualify as "performance-based
compensation" under Section 162(m) of the Code the Administrator shall
include at least two persons who are "outside directors" (as defined under
Section 162(m) of the Code) and at least two (or a majority if more than
two then serve on the Administrator) such "outside directors" shall approve
the grant of such Award and timely determine (as applicable) the
Performance Period and any Performance Goals upon which vesting or
settlement of any portion of such Award is to be subject. When required by
Section 162(m) of the Code, prior to settlement of any such Award at least
two (or a majority if more than two then serve on the Administrator) such
"outside directors" then serving on the Administrator shall determine and
certify in writing the extent to which such Performance Goals have been
timely achieved and the extent to which the Shares subject to such Award
have thereby been earned. Awards granted to Participants who are subject to
Section 16 of the Exchange Act must be approved by two or more "Outside
Directors" (as defined in the regulations promulgated under Section 16 of
the Exchange Act). With respect to Participants whose compensation is
subject to Section 162(m) of the Code, and provided that such adjustments
are consistent with the regulations promulgated under Section 162(m) of the
Code, the Administrator may adjust the performance goals to account for
41
changes in law and accounting and to make such adjustments as the
Administrator deems necessary or appropriate to reflect the impact of
extraordinary or unusual items, events or circumstances to avoid windfalls
or hardships, including without limitation (i) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring
charges, (ii) an event either not directly related to the operations of the
Company or not within the reasonable control of the Company's management,
or (iii) a change in accounting standards required by generally accepted
accounting principles.
4.4 Documentation. The Award Agreement for a given Award, the Plan and any
other documents may be delivered to, and accepted by, a Participant or any
other person in any manner (including electronic distribution or posting)
that meets applicable legal requirements.
5. ELIGIBILITY.
5.1 Awards. ISOs may be granted only to Employees. All other Awards including
NSO's may be granted to Employees, Consultants, Directors and Outside
Directors of the Company or any Parent or Subsidiary of the Company;
provided such Consultants, Directors and Outside Directors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction. No Participant will be eligible to receive
more than 1,500,000 Shares in any calendar year under this Plan pursuant to
the grant of Awards except that new Employees of the Company or of a Parent
or Subsidiary of the Company (including new Employees who are also officers
and directors of the Company or any Parent or Subsidiary of the Company)
are eligible to receive up to a maximum of 1,000,000 Shares in the calendar
year in which they commence their employment.
5.2 Substitute Awards. Holders of equity-based awards granted by an entity
acquired by the Company or with which the Company combines are eligible for
grants of substitute awards under the Plan to the extent permitted under
applicable listing standards of any stock exchange on which the Company is
listed.
6. OPTIONS. The Administrator may grant Options to Participants and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOs") or Non-qualified Stock Options ("NSOs"), the
number of Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may vest and be exercised, and all other
terms and conditions of the Option, subject to the following:
6.1 Option Grant. Each Option granted under this Plan will identify the Option
as an ISO or an NSO. An Option may be, but need not be, awarded upon
satisfaction of such Performance Goals during any Performance Period as are
set out in advance in the Participant's individual Award Agreement. If the
Option is being earned upon the satisfaction of Performance Goals, then the
Administrator will: (i) determine the nature, length and starting date of
any Performance Period for each Option; and (ii) select from among the
Performance Goals to be used to measure the performance, if any.
Performance Periods may overlap and Participants may participate
simultaneously with respect to Options that are subject to different
performance goals and other criteria.
6.2 Date of Grant. The date of grant of an Option will be the date on which the
Administrator makes the determination to grant such Option, or a specified
future date. The Award Agreement and a copy of this Plan will be delivered
to the Participant within a reasonable time after the granting of the
Option.
42
6.3 Exercise Period. Options may be vested and exercisable within the times or
upon the conditions as set forth in the Award Agreement governing such
Option; provided, however, that no Option will be exercisable after the
expiration of ten (10) years from the date the Option is granted; and
provided further that no ISO granted to a person who, at the time the ISO
is granted, directly or by attribution owns more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or
of any Parent or Subsidiary of the Company ("Ten Percent Stockholder") will
be exercisable after the expiration of five (5) years from the date the ISO
is granted. The Administrator also may provide for Options to become
exercisable at one time or from time to time, periodically or otherwise, in
such number of Shares or percentage of Shares as the Administrator
determines.
6.4 Exercise Price. The Exercise Price of an Option will be determined by the
Administrator when the Option is granted; provided that: (i) the Exercise
Price of an Option will be not less than one hundred percent (100%) of the
Fair Market Value of the Shares on the date of grant and (ii) the Exercise
Price of any ISO granted to a Ten Percent Stockholder will not be less than
one hundred ten percent (110%) of the Fair Market Value of the Shares on
the date of grant. Payment for the Shares purchased may be made in
accordance with Section 12 and the Award Agreement and in accordance with
any procedures established by the Company. In the case of Substitute
Awards, such Option Exercise Price shall not be less than the Fair Market
Value of the Common Stock on the Grant Date of such Option.
6.5 Method of Exercise. Any Option granted hereunder will be vested and
exercisable according to the terms of the Plan and at such times and under
such conditions as determined by the Administrator and set forth in the
Award Agreement. An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) notice of
exercise (in such form as the Administrator may specify from time to time)
from the person entitled to exercise the Option, and (ii) full payment for
the Shares with respect to which the Option is exercised (together with
applicable withholding taxes). Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan. Shares issued upon exercise
of an Option will be issued in the name of the Participant. Until the
Shares are issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a stockholder
will exist with respect to the Shares, notwithstanding the exercise of the
Option. The Company will issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 3.5 of the Plan. Exercising an Option
in any manner will decrease the number of Shares thereafter available, both
for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.
6.6 Termination. The exercise of an Option will be subject to the following
(except as may be otherwise provided in an Award Agreement):
(a) If the Participant is Terminated for any reason except for Cause or the
Participant's death or Disability, then the Participant may exercise
such Participant's Options only to the extent that such Options would
have been exercisable by the Participant on the Termination Date no
later than ninety (90) days after the Termination Date (or such shorter
time period or longer time period not exceeding five (5) years as may
43
be determined by the Administrator, with any exercise beyond three (3)
months after the Termination Date deemed to be the exercise of an NSO),
but in any event no later than the expiration date of the Options.
(b) If the Participant is Terminated because of the Participant's death (or
the Participant dies within ninety (90) days after a Termination other
than for Cause or because of the Participant's Disability), then the
Participant's Options may be exercised only to the extent that such
Options would have been exercisable by the Participant on the
Termination Date and must be exercised by the Participant's legal
representative, or authorized assignee, no later than twelve (12)
months after the Termination Date (or such shorter time period not less
than six (6) months or longer time period not exceeding five (5) years
as may be determined by the Administrator), but in any event no later
than the expiration date of the Options.
(c) If the Participant is Terminated because of the Participant's
Disability, then the Participant's Options may be exercised only to the
extent that such Options would have been exercisable by the Participant
on the Termination Date and must be exercised by the Participant (or
the Participant's legal representative or authorized assignee) no later
than six (6) months after the Termination Date (with any exercise
beyond (a) three (3) months after the Termination Date when the
Termination is for a Disability that is not a "permanent and total
disability" as defined in Section 22(e)(3) of the Code, or (b) twelve
(12) months after the Termination Date when the Termination is for a
Disability that is a "permanent and total disability" as defined in
Section 22(e)(3) of the Code, deemed to be exercise of an NSO), but in
any event no later than the expiration date of the Options.
(d) If the Participant is terminated for Cause, then Participant's Options
shall expire on such Participant's Termination Date, or at such later
time and on such conditions as are determined by the Administrator, but
in any no event later than the expiration date of the Options. Unless
otherwise provided in the Award Agreement, Cause will have the meaning
set forth in the Plan.
(e) If the Participant is terminated for any other reason, the Participant's
Award Agreement may also provide that if the exercise of the Option
following the termination of Participant (other than upon the
Participant's death or Disability) would result in liability under
Section 16(b), then the Option will terminate on the earlier of (A) the
expiration of the term of the Option set forth in the Award Agreement,
or (B) the tenth (10th) day after the last date on which such exercise
would result in such liability under Section 16(b). Finally, a
Participant's Award Agreement may also provide that if the exercise of
the Option following the termination of the Participant (other than
upon the Participant's death or Disability) would be prohibited at any
time solely because the issuance of Shares would violate the
registration requirements under the Securities Act, then the Option
will terminate on the earlier of (A) the expiration of the term of the
Option or (B) the expiration of a period of three (3) months after the
termination of the Participant during which the exercise of the Option
would not be in violation of such registration requirements.
6.7 Limitations on Exercise. The Administrator may specify a minimum number of
Shares that may be purchased on any exercise of an Option, provided that
such minimum number will not prevent any Participant from exercising the
Option for the full number of Shares for which it is then exercisable.
44
6.8 Limitations on ISOs. With respect to Awards granted as ISOs, to the extent
that the aggregate Fair Market Value of the Shares with respect to which
such ISOs are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds one hundred thousand dollars ($100,000), such Options will be
treated as NSOs. For purposes of this Section 6.8, ISOs will be taken into
account in the order in which they were granted. The Fair Market Value of
the Shares will be determined as of the time the Option with respect to
such Shares is granted. In the event that the Code or the regulations
promulgated thereunder are amended after the Effective Date to provide for
a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit will be automatically incorporated
herein and will apply to any Options granted after the effective date of
such amendment.
6.9 Modification, Extension or Renewal. The Administrator may modify, extend or
renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights
under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with
Section 424(h) of the Code. Subject to Section 19 of this Plan, by written
notice to affected Participants, the Administrator may reduce the Exercise
Price of outstanding Options without the consent of such Participants;
provided, however, that the Exercise Price may not be reduced below the
Fair Market Value on the date the action is taken to reduce the Exercise
Price.
6.10 No Disqualification. Notwithstanding any other provision in this Plan,
no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO
under Section 422 of the Code.
7. RESTRICTED STOCK AWARDS.
7.1 Awards of Restricted Stock. A Restricted Stock Award is an offer by the
Company to sell to a Participant Shares that are subject to restrictions
("Restricted Stock"). The Administrator will determine to whom an offer
will be made, the number of Shares the Participant may purchase, the
Purchase Price, the restrictions under which the Shares will be subject and
all other terms and conditions of the Restricted Stock Award, subject to
the Plan.
7.2 Restricted Stock Purchase Agreement. All purchases under a Restricted Stock
Award will be evidenced by an Award Agreement. Except as may otherwise be
provided in an Award Agreement, a Participant accepts a Restricted Stock
Award by signing and delivering to the Company an Award Agreement with full
payment of the Purchase Price, within thirty (30) days from the date the
Award Agreement was delivered to the Participant. If the Participant does
not accept such Award within thirty (30) days, then the offer of such
Restricted Stock Award will terminate, unless the Administrator determines
otherwise.
7.3 Purchase Price. The Purchase Price for a Restricted Stock Award will be
determined by the Administrator and may be less than Fair Market Value on
the date the Restricted Stock Award is granted. Payment of the Purchase
45
Price must be made in accordance with Section 12 of the Plan, and the Award
Agreement and in accordance with any procedures established by the Company.
7.4 Terms of Restricted Stock Awards. Restricted Stock Awards will be subject
to such restrictions as the Administrator may impose or are required by
law. These restrictions may be based on completion of a specified number of
years of service with the Company or upon completion of Performance Goals,
if any, during any Performance Period as set out in advance in the
Participant's Award Agreement. Prior to the grant of a Restricted Stock
Award, the Administrator shall: (a) determine the nature, length and
starting date of any Performance Period for the Restricted Stock Award; (b)
select from among the Performance Goals to be used to measure performance
goals, if any; and (c) determine the number of Shares that may be awarded
to the Participant. Performance Periods may overlap and a Participant may
participate simultaneously with respect to Restricted Stock Awards that are
subject to different Performance Periods and having different performance
goals and other criteria.
7.5 Termination of Participant. Except as may be set forth in the Participant's
Award Agreement, vesting ceases on such Participant's Termination Date
(unless determined otherwise by the Administrator).
8. RESTRICTED STOCK UNITS.
8.1 Awards of Restricted Stock Units. A Restricted Stock Unit ("RSU") is an
award to a Participant covering a number of Shares that may be settled in
cash, or by issuance of those Shares (which may consist of Restricted
Stock). All RSUs shall be made pursuant to an Award Agreement.
8.2 Terms of RSUs. The Administrator will determine the terms of an RSU
including, without limitation: (a) the number of Shares subject to the RSU;
(b) the time or times during which the RSU may be settled; (c) the
consideration to be distributed on settlement; and (d) the effect of the
Participant's Termination on each RSU. An RSU may be awarded upon
satisfaction of such performance goals, if any, based on Performance Goals
during any Performance Period as are set out in advance in the
Participant's Award Agreement. If the RSU is being earned upon satisfaction
of Performance Goals, then the Administrator will: (i) determine the
nature, length and starting date of any Performance Period for the RSU;
(ii) select from among the Performance Goals to be used to measure the
performance, if any; and (iii) determine the number of Shares deemed
subject to the RSU. Performance Periods may overlap and participants may
participate simultaneously with respect to RSUs that are subject to
different Performance Periods and different performance goals and other
criteria.
8.3 Form and Timing of Settlement. Payment of earned RSUs shall be made as soon
as practicable after the date(s) determined by the Administrator and set
forth in the Award Agreement. The Administrator, in its sole discretion,
may settle earned RSUs in cash, Shares, or a combination of both. The
Administrator may also permit a Participant to defer payment under a RSU to
a date or dates after the RSU is earned provided that the terms of the RSU
and any deferral satisfy the requirements of Section 409A of the Code.
8.4 Termination of Participant. Except as may be set forth in the Participant's
Award Agreement, vesting ceases on such Participant's Termination Date
(unless determined otherwise by the Administrator).
46
9. STOCK APPRECIATION RIGHTS.
9.1 Awards of SARs. A Stock Appreciation Right ("SAR") is an award to a
Participant that may be settled in cash, or Shares (which may consist of
Restricted Stock), having a value equal to (a) the difference between the
Fair Market Value on the date of exercise over the Exercise Price
multiplied by (b) the number of Shares with respect to which the SAR is
being settled (subject to any maximum number of Shares that may be issuable
as specified in an Award Agreement). All SARs shall be made pursuant to an
Award Agreement.
9.2 Terms of SARs. The Administrator will determine the terms of each SAR
including, without limitation: (a) the number of Shares subject to the SAR;
(b) the Exercise Price and the time or times during which the SAR may be
settled; (c) the consideration to be distributed on settlement of the SAR;
and (d) the effect of the Participant's Termination on each SAR. The
Exercise Price of the SAR will be determined by the Administrator when the
SAR is granted, and may not be less than Fair Market Value. A SAR may be
awarded upon satisfaction of Performance Goals, if any, during any
Performance Period as are set out in advance in the Participant's
individual Award Agreement. If the SAR is being earned upon the
satisfaction of Performance Goals, then the Administrator will: (i)
determine the nature, length and starting date of any Performance Period
for each SAR; and (ii) select from among the Performance Goals to be used
to measure the performance, if any. Performance Periods may overlap and
Participants may participate simultaneously with respect to SARs that are
subject to different Performance Goals and other criteria.
9.3 Exercise Period and Expiration Date. A SAR will be exercisable within the
times or upon the occurrence of events determined by the Administrator and
set forth in the Award Agreement governing such SAR. The SAR Agreement
shall set forth the expiration date; provided that no SAR will be
exercisable after the expiration of ten (10) years from the date the SAR is
granted. The Administrator may also provide for SARs to become exercisable
at one time or from time to time, periodically or otherwise (including,
without limitation, upon the attainment during a Performance Period of
performance goals based on Performance Goals), in such number of Shares or
percentage of the Shares subject to the SAR as the Administrator
determines.
9.4 Form and Timing of Settlement. Upon exercise of a SAR, a Participant will
be entitled to receive payment from the Company in an amount determined by
multiplying (i) the difference between the Fair Market Value of a Share on
the date of exercise over the Exercise Price; times (ii) the number of
Shares with respect to which the SAR is exercised. At the discretion of the
Administrator, the payment from the Company for the SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof. The
portion of a SAR being settled may be paid currently or on a deferred basis
with such interest or dividend equivalent, if any, as the Administrator
determines, provided that the terms of the SAR and any deferral satisfy the
requirements of Section 409A of the Code. In the case of Substitute Awards,
such exercise or hurdle price shall not be less than the Fair Market Value
of a share of Common Stock on the Grant Date of such Stock Appreciation
Rights.
9.5 Termination of Participant. Except as may be set forth in the Participant's
Award Agreement, vesting ceases on such Participant's Termination Date
(unless determined otherwise by the Administrator). Notwithstanding the
foregoing, the rules of Section 6.6 also will apply to SARs.
47
10. PERFORMANCE AWARDS.
10.1 Performance Awards. A Performance Award is an award to a Participant of
a cash bonus or a Performance Share bonus. Grants of Performance Awards
shall be made pursuant to an Award Agreement.
10.2 Terms of Performance Awards. The Administrator will determine, and each
Award Agreement shall set forth, the terms of each award of Performance
Award including, without limitation: (a) the amount of any cash bonus; (b)
the number of Shares deemed subject to a Performance Share bonus; (c) the
Performance Goals and Performance Period that shall determine the time and
extent to which each Performance Award shall be settled; (d) the
consideration to be distributed on settlement; and (e) the effect of the
Participant's Termination on each Performance Award. In establishing
Performance Goals and the Performance Period the Administrator will: (i)
determine the nature, length and starting date of any Performance Period;
and (ii) select from among the Performance Goals to be used. Prior to
settlement the Administrator shall determine the extent to which
Performance Awards have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Performance
Awards that are subject to different Performance Periods and different
performance goals and other criteria. No Participant will be eligible to
receive more than $1,000,000 in Performance Awards in any calendar year
under this Plan.
10.3 Value, Earning and Timing of Performance Shares. Any Performance Share
bonus will have an initial value equal to the Fair Market Value of a Share
on the date of grant. After the applicable Performance Period has ended,
the holder of a Performance Share bonus will be entitled to receive a
payout of the number of Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which
the corresponding Performance Goals or other vesting provisions have been
achieved. The Administrator, in its sole discretion, may pay an earned
Performance Share bonus in the form of cash, in Shares (which have an
aggregate Fair Market Value equal to the value of the earned Performance
Shares at the close of the applicable Performance Period) or in a
combination thereof. Performance Share bonuses may also be settled in
Restricted Stock.
10.4 Termination of Participant. Except as may be set forth in the
Participant's Award Agreement, vesting ceases on such Participant's
Termination Date (unless determined otherwise by the Administrator).
11. STOCK BONUS AWARDS.
11.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to an eligible
person of Shares for services to be rendered or for past services already
rendered to the Company or any Parent or Subsidiary. All Stock Bonus Awards
shall be made pursuant to an Award Agreement. No payment from the
Participant will be required for Shares awarded pursuant to a Stock Bonus
Award.
11.2 Terms of Stock Bonus Awards. The Administrator will determine the
number of Shares to be awarded to the Participant under a Stock Bonus Award
and any restrictions thereon. These restrictions may be based upon
completion of a specified number of years of service with the Company or
upon satisfaction of performance goals based on Performance Goals during
any Performance Period as set out in advance in the Participant's Stock
Bonus Agreement. Prior to the grant of any Stock Bonus Award the
48
Administrator shall: (a) determine the nature, length and starting date of
any Performance Period for the Stock Bonus Award; (b) select from among the
Performance Goals to be used to measure performance goals; and (c)
determine the number of Shares that may be awarded to the Participant.
Performance Periods may overlap and a Participant may participate
simultaneously with respect to Stock Bonus Awards that are subject to
different Performance Periods and different performance goals and other
criteria.
11.3 Form of Payment to Participant. Payment may be made in the form of
cash, whole Shares, or a combination thereof, based on the Fair Market
Value of the Shares earned under a Stock Bonus Award on the date of
payment, as determined in the sole discretion of the Administrator.
11.4 Termination of Participation. Except as may be set forth in the
Participant's Award Agreement, vesting ceases on such Participant's
Termination Date (unless determined otherwise by the Administrator).
12. PAYMENT FOR SHARE PURCHASES.Payment from a Participant for Shares purchased
pursuant to this Plan may be made in cash or by check or, where expressly
approved for the Participant by the Administrator and where permitted by
law (and to the extent not otherwise set forth in the applicable Award
Agreement):
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Company held by the Participant that have
a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Award will be exercised or
settled;
(c) by waiver of compensation due or accrued to the Participant for services
rendered or to be rendered to the Company or a Parent or Subsidiary of
the Company;
(d) by consideration received by the Company pursuant to a broker-assisted
or other form of cashless exercise program implemented by the Company in
connection with the Plan;
(e) by any combination of the foregoing; or
(f) by any other method of payment as is permitted by applicable law.
13. GRANTS TO OUTSIDE DIRECTORS.
13.1 Types of Awards. Outside Directors are eligible to receive any type of
Award offered under this Plan except ISOs. Awards pursuant to this Section
13 may be automatically made pursuant to policy adopted by the Board, or
made from time to time as determined in the discretion of the Board.
13.2 Eligibility. Awards pursuant to this Section 13 shall be granted only
to Outside Directors. A Outside Director who is elected or re-elected as a
member of the Board will be eligible to receive an Award under this Section
13.
13.3 Vesting, Exercisability and Settlement. Except as set forth in Section
21.3, Awards shall vest, become exercisable and be settled as determined by
the Board. With respect to Options and SARs, the exercise price granted to
49
Outside Directors shall not be less than the Fair Market Value of the
Shares at the time that such Option or SAR is granted.
13.4 Election to receive Awards in Lieu of Cash. A Outside Director may
elect to receive his or her annual retainer payments and/or meeting fees
from the Company in the form of cash or Awards or a combination thereof, as
determined by the Administrator. Such Awards shall be issued under the
Plan. An election under this Section 13.4 shall be filed with the Company
on the form prescribed by the Company.
14. WITHHOLDING TAXES.
14.1 Withholding Generally. Whenever Shares are to be issued in satisfaction
of Awards granted under this Plan, the Company may require the Participant
to remit to the Company, or to the Parent or Subsidiary employing the
Participant, an amount sufficient to satisfy applicable U.S. federal,
state, local and international withholding tax requirements or any other
tax liability legally due from the Participant prior to the delivery of
Shares pursuant to exercise or settlement of any Award. Whenever payments
in satisfaction of Awards granted under this Plan are to be made in cash,
such payment will be net of an amount sufficient to satisfy applicable U.S.
federal, state, local and international withholding tax requirements or any
other tax liability legally due from the Participant.
14.2 Stock Withholding. The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time and to
limitations of local law, may require or permit a Participant to satisfy
such tax withholding obligation or any other tax liability legally due from
the Participant, in whole or in part by (without limitation) (i) paying
cash, (ii) electing to have the Company withhold otherwise deliverable cash
or Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld, or (iii) delivering to the Company already-owned
Shares having a Fair Market Value equal to the minimum amount required to
be withheld. The Fair Market Value of the Shares to be withheld or
delivered will be determined as of the date that the taxes are required to
be withheld.
15. TRANSFERABILITY.
15.1 Transfer Generally. Unless determined otherwise by the Administrator or
pursuant to Section 15.2, an Award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will
or by the laws of descent or distribution. If the Administrator makes an
Award transferable, including, without limitation, by instrument to an
inter vivos or testamentary trust in which the Awards are to be passed to
beneficiaries upon the death of the trustor (settlor) or by gift to a
Permitted Transferee, such Award will contain such additional terms and
conditions as the Administrator deems appropriate. All Awards shall be
exercisable: (i) during the Participant's lifetime only by (A) the
Participant, or (B) the Participant's guardian or legal representative;
(ii) after the Participant's death, by the legal representative of the
Participant's heirs or legatees; and (iii) in the case of all awards except
ISOs, by a Permitted Transferee.
15.2 Award Transfer Program. Notwithstanding any contrary provision of the
Plan, the Administrator shall have all discretion and authority to
determine and implement the terms and conditions of any Award Transfer
Program instituted pursuant to this Section 15.2 and shall have the
authority to amend the terms of any Award participating, or otherwise
50
eligible to participate in, the Award Transfer Program, including (but not
limited to) the authority to (i) amend (including to extend) the expiration
date, post-termination exercise period and/or forfeiture conditions of any
such Award, (ii) amend or remove any provisions of the Award relating to
the Award holder's continued service to the Company, (iii) amend the
permissible payment methods with respect to the exercise or purchase of any
such Award, (iv) amend the adjustments to be implemented in the event of
changes in the capitalization and other similar events with respect to such
Award, and (v) make such other changes to the terms of such Award as the
Administrator deems necessary or appropriate in its sole discretion.
16. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
16.1 Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant, except for any dividend equivalent rights permitted by an
applicable Award Agreement. After Shares are issued to the Participant, the
Participant will be a stockholder and have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares;
provided, that if such Shares are Restricted Stock, then any new,
additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock
split or any other change in the corporate or capital structure of the
Company will be subject to the same restrictions as the Restricted Stock;
provided, further, that the Participant will have no right to retain such
stock dividends or stock distributions with respect to Shares that are
repurchased at the Participant's Purchase Price or Exercise Price, as the
case may be, pursuant to Section 16.2.
16.2 Restrictions on Shares. At the discretion of the Administrator, the
Company may reserve to itself and/or its assignee(s) a right to repurchase
(a "Right of Repurchase") a portion of any or all Unvested Shares held by a
Participant following such Participant's Termination at any time within
ninety (90) days after the later of the Participant's Termination Date and
the date the Participant purchases Shares under this Plan, for cash and/or
cancellation of purchase money indebtedness, at the Participant's Purchase
Price or Exercise Price, as the case may be.
17. CERTIFICATES. All Shares or other securities whether or not certificated,
delivered under this Plan will be subject to such stock transfer orders,
legends and other restrictions as the Administrator may deem necessary or
advisable, including restrictions under any applicable U.S. federal, state
or foreign securities law, or any rules, regulations and other requirements
of the SEC or any stock exchange or automated quotation system upon which
the Shares may be listed or quoted and any non-U.S. exchange controls or
securities law restrictions to which the Shares are subject.
18. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant's
Shares, the Administrator may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Administrator, appropriately
endorsed in blank, with the Company or an agent designated by the Company
to hold in escrow until such restrictions have lapsed or terminated, and
the Administrator may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is
permitted to execute a promissory note as partial or full consideration for
the purchase of Shares under this Plan will be required to pledge and
deposit with the Company all or part of the Shares so purchased as
51
collateral to secure the payment of the Participant's obligation to the
Company under the promissory note; provided, however, that the
Administrator may require or accept other or additional forms of collateral
to secure the payment of such obligation and, in any event, the Company
will have full recourse against the Participant under the promissory note
notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, the Participant will be
required to execute and deliver a written pledge agreement in such form as
the Administrator will from time to time approve. The Shares purchased with
the promissory note may be released from the pledge on a pro rata basis as
the promissory note is paid.
19. REPRICING; EXCHANGE AND BUYOUT OF AWARDS. Without prior stockholder
approval the Administrator may (i) reprice Options or SARS (and where such
repricing is a reduction in the Exercise Price of outstanding Options or
SARS, the consent of the affected Participants is not required provided
written notice is provided to them, notwithstanding any adverse tax
consequences to them arising from the repricing), and (ii) with the consent
of the respective Participants (unless not required pursuant to Section 6.9
of the Plan), pay cash or issue new Awards in exchange for the surrender
and cancellation of any, or all, outstanding Awards.
20. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable U.S. and
foreign federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as
they are in effect on the date of grant of the Award and also on the date
of exercise or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates
for Shares under this Plan prior to: (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or
advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal or foreign law or ruling of any
governmental body that the Company determines to be necessary or advisable.
The Company will be under no obligation to register the Shares with the SEC
or to effect compliance with the registration, qualification or listing
requirements of any foreign or state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
21. CHANGE IN CONTROL.
21.1 Assumption or Replacement of Awards by Successor. In the event of a
Change in Control any or all outstanding Awards may be assumed or replaced
by the successor corporation, which assumption or replacement shall be
binding on all Participants. In the alternative, the successor corporation
may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking
into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company
held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant. In
the event such successor or acquiring corporation (if any) refuses to
assume, convert, replace or substitute Awards, as provided above, pursuant
to a Change in Control, then notwithstanding any other provision in this
Plan to the contrary, such Awards shall have their vesting accelerate as to
all shares subject to such Award (and any applicable right of repurchase
fully lapse) immediately prior to the Change in Control unless otherwise
52
determined by the Board and then such Awards will terminate. In addition,
in the event such successor or acquiring corporation (if any) refuses to
assume, convert, replace or substitute Awards, as provided above, pursuant
to a Change in Control, the Administrator will notify the Participant in
writing or electronically that such Award will be exercisable for a period
of time determined by the Administrator in its sole discretion, and such
Award will terminate upon the expiration of such period. Awards need not be
treated similarly in a Change in Control.
21.2 Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution
of such other company's award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied
to an Award granted under this Plan. Such substitution or assumption will
be permissible if the holder of the substituted or assumed award would have
been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of
such award will remain unchanged (except that the Purchase Price or the
Exercise Price, as the case may be, and the number and nature of Shares
issuable upon exercise or settlement of any such Award will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option in substitution rather than assuming
an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.
21.3 Outside Directors' Awards. Notwithstanding any provision to the
contrary herein, in the event of a Change in Control, the vesting of all
Awards granted to Outside Directors shall accelerate and such Awards shall
become exercisable (as applicable) in full prior to the consummation of
such event at such times and on such conditions as the Administrator
determines.
22. ADOPTION AND STOCKHOLDER APPROVAL. This Plan shall be submitted for the
approval of the Company's stockholders, consistent with applicable laws,
within twelve (12) months before or after the date this Plan is adopted by
the Board.
23. TERM OF PLAN/GOVERNING LAW. Subject to Section 22 of the Plan, the Plan
will become effective upon its adoption by the Board. It will continue in
effect for a term of ten (10) years from the date adopted by the Board,
unless terminated earlier under Section 24 of the Plan. This Plan and all
Awards granted hereunder shall be governed by and construed in accordance
with the laws of the State of Delaware.
24. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or
amend this Plan in any respect, including, without limitation, amendment of
any form of Award Agreement or instrument to be executed pursuant to this
Plan; provided, however, that the Board will not, without the approval of
the stockholders of the Company, amend this Plan in any manner that
requires such stockholder approval; provided further, that a Participant's
Award shall be governed by the version of this Plan then in effect at the
time such Award was granted.
25. NON-EXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
53
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock awards and bonuses otherwise than under this Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
26. NO EFFECT ON EMPLOYMENT. Nothing in this Plan or any Award granted under
this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with,
the Company or any Parent or Subsidiary of the Company or limit in any way
the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant's employment or other relationship at any time.
27. INSIDER TRADING POLICY. Each Participant who receives an Award shall comply
with any policy adopted by the Company from time to time covering
transactions in the Company's securities by Employees, officers and/or
directors of the Company.
54
EMPIRE GLOBAL CORP.
2016 EQUITY INCENTIVE PLAN
NOTICE OF GRANT OF RESTRICTED STOCK UNITS
Unless otherwise defined herein, the terms defined in the EMPIRE GLOBAL CORP.
2016 Equity Incentive Plan (the "Plan") will have the same defined meanings in
this Notice of Grant of Restricted Stock Units (the "Notice of Grant") and in
the Terms and Conditions of the Restricted Stock Units, attached hereto as
Exhibit A (the "Agreement").
NAME: _________________________
ADDRESS:
_________________________
_________________________
_________________________
COUNTRY:
_________________________
You have been granted the right to receive Restricted Stock Units, subject to
the terms and conditions of the Plan, this Notice of Grant and the Agreement,
including any special terms and conditions for your country in the appendix
thereto (the "Appendix"), as follows:
Date of Grant: ____________ (mm/dd/yyyy)
Vesting Commencement Date: ____________ (mm/dd/yyyy)
Total Number of Restricted Stock Units: RSU's granted
Vesting Schedule: ____________
Subject to any vesting acceleration provisions below or in the Plan and provided
Participant accepts the Restricted Stock Units prior to the first anniversary of
the Vesting Commencement Date, twenty-five percent (25%) of the Restricted Stock
Units will vest on each anniversary of the Vesting Commencement Date, provided
that Participant continues to be a Service Provider through such dates (the
"Base Vesting Schedule").
Accelerated Vesting:
Notwithstanding the previous sentence, in the event that Participant ceases to
be a Service Provider due to Retirement, death or Disability, the Restricted
Stock Units will immediately vest in full, provided such acceleration vesting is
not deemed to be discriminatory under any applicable employment laws in which
Participant resides.
In the event Participant ceases to be a Service Provider for any or no reason
(excluding Retirement, death or Disability) before Participant vests in the
Restricted Stock Units, Participant's right to acquire any Shares hereunder will
immediately terminate. If Participant does not accept the Restricted Stock Units
prior to the first anniversary of the Vesting Commencement Date, all Restricted
Stock Units may be forfeited in its entirety and neither Participant nor the
55
Company (or its Affiliates) shall have any rights or obligations under the Plan,
the Agreement or this Notice of Grant or any right to any equivalent amounts or
payments in lieu of the Restricted Stock Units.
By Participant's acceptance of the Restricted Stock Units and/or the underlying
shares of common stock of EMPIRE GLOBAL CORP. ("Shares") thereto, Participant
and EMPIRE GLOBAL CORP. (the "Company") agree that this Award is granted under
and governed by the terms and conditions of the Plan and the Agreement,
including the Appendix, attached hereto as Appendix A, all of which are made a
part of this document.
56
EXHIBIT A - TERMS AND CONDITIONS OF THE RESTRICTED STOCK UNITS
1. Grant. The Company hereby grants to Participant named in the Notice of Grant
the number of Restricted Stock Units set forth in the Notice of Grant,
subject to all of the terms and conditions in this Agreement, including the
Notice of Grant, Appendix, and the Plan, which is incorporated herein by
reference. Depending upon Participant's country of residence, the terms and
conditions in this Agreement may be supplemented or replaced by the terms
and conditions in the Appendix applicable to Participants in that country.
Subject to Section 21 of the Plan, in the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this
Agreement, including the Appendix, the terms and conditions of the Plan
will prevail.
2. Company's Obligation to Pay.
(a) General. Each Restricted Stock Unit represents the right to receive a
Share on the date it vests, including to the limited extent permitted
under Section 7(b) for satisfying any withholding obligation for income
tax, social insurance, payroll tax, fringe benefits tax, payment on
account or other tax-related items related to Participant's
participation in the Plan and legally applicable to Participant
("Tax-Related Items"). Unless and until the Restricted Stock Units will
have vested in the manner set forth in Sections 3, 4 or 7, Participant
will have no right to payment of any such Restricted Stock Units. Prior
to actual payment of any vested Restricted Stock Units, such Restricted
Stock Unit will represent an unsecured obligation of the Company,
payable (if at all) only from the general assets of the Company.
(b) Timing of Payment - General. Any Restricted Stock Units that vest in
accordance with Sections 3 or 4 will be paid to Participant (or in the
event of Participant's death, to his or her estate) in whole Shares,
subject to Participant satisfying any applicable Tax-Related Items
withholding obligations as set forth in Section 7. Subject to the
provisions of Section 2(c), such vested Restricted Stock Units will be
paid in Shares as soon as practicable after vesting, but in each such
case by the fifteenth (15th) day of the third (3rd) month of the
calendar year following the calendar year in which the Restricted Stock
Units vest.
(c) Timing of Payment - Section 409A.
(i) Payment if Deferred Compensation under Section 409A. For U.S.
taxpayers, if the Restricted Stock Units are considered to be
"deferred compensation" within the meaning of Section 409A (as
defined in Section 2(c)(iii) hereof), then except as necessary to
satisfy any Tax-Related Items withholding obligations as set forth
in Section 7, the vested Restricted Stock Units will be paid upon
the earliest of (A) the dates provided in the Base Vesting
Schedule, (B) Participant's "separation from service" within the
meaning of Section 409A, (C) Participant's death, (D) Participant's
"disability" within the meaning of Section 409A, or (E) a "change
in control event" within the meaning of Treasury Regulation Section
1.409A-3(i)(5).
(ii) Specified Employee Under Section 409A. Notwithstanding anything
in the Plan or this Agreement to the contrary, if (i) the
Restricted Stock Units are considered deferred compensation subject
to Section 409A, (ii) the Restricted Stock Units are payable upon a
57
"separation from service" within the meaning of Section 409A, as
determined by the Company in accordance with Section 409A, and
(iii) Participant is a "specified employee" within the meaning of
Section 409A at the time of such separation from service, then the
payment of such Restricted Stock Units will not be made until the
earlier of (A) the date six (6) months and one (1) day following
the date of Participant's separation from service and (B)
Participant's death, to the extent necessary to avoid a prohibited
acceleration under Section 409A.
(iii) Section 409A. For purposes of this Agreement, "Section 409A"
means Section 409A of the Code and the final Treasury Regulations
and U.S. Internal Revenue Service guidance thereunder, as each may
be amended from time to time. It is the intent of this Agreement to
comply with the requirements of Section 409A so that none of the
Restricted Stock Units provided under this Agreement or Shares
payable thereunder will be subject to the additional tax imposed
under Section 409A, and any ambiguities herein will be interpreted
to so comply. It is understood that Section 409A is applicable to
U.S. taxpayer Participants only. The Company reserves the right, to
the extent the Company deems necessary or advisable in its sole
discretion, to unilaterally amend or modify this Agreement as may
be necessary to ensure that all vesting or payouts provided under
this Agreement are made in a manner that complies with Section 409A
or to mitigate any additional tax, interest and/or penalties or
other adverse tax consequences that may apply under Section 409A if
compliance is not practical; provided, however, that nothing in
this Section 2(c)(iii) creates an obligation on the part of the
Company to modify the terms of this Agreement or the Plan, and the
Company makes no representation that the terms of Restricted Stock
Units will comply with Section 409A or that payments under the
Restricted Stock Units will not be subject to taxes, interest and
penalties or other adverse tax consequences under Section 409A. In
no event whatsoever shall the Company or any of its affiliates be
liable to any party for any additional tax, interest or penalties
that may be imposed on Participant or any other person by Section
409A or any damages for failing to comply with Section 409A.
3. Vesting Schedule. Except as provided in Sections 4 and 7, and subject to
Section 5, the Restricted Stock Units awarded by this Agreement will vest
in accordance with the Base Vesting Schedule set forth in the Notice of
Grant. Restricted Stock Units scheduled to vest on a certain date or upon
the occurrence of a certain condition will not vest in Participant in
accordance with any of the provisions of this Agreement, unless Participant
will have been continuously a Service Provider from the Date of Grant until
the date such vesting occurs.
4. Administrator's Discretion. The Administrator, in its discretion, may
accelerate the vesting of some or all of the unvested Restricted Stock
Units at any time, subject to the terms of the Plan. If so accelerated,
such Restricted Stock Units shall be considered as having vested as of the
date specified by the Administrator.
5. Forfeiture upon Termination as Service Provider. Notwithstanding any
contrary provision of this Agreement, if Participant ceases to be a Service
Provider for any or no reason (excluding Retirement, death or Disability),
any unvested Restricted Stock Units shall be forfeited immediately upon
termination at no cost to the Company and Participant will have no further
rights to Shares or otherwise under this Agreement.
58
For purposes of the Restricted Stock Units, Participant will cease to be a
Service Provider as of the date Participant is no longer actively employed
by or providing services to the Company or one of its Affiliates
(regardless of the reason for such termination and whether or not later to
be found invalid or in breach of applicable employment laws in the
jurisdiction where Participant is a Service Provider or the terms of
Participant's service agreement, if any); the Administrator shall have the
exclusive discretion to determine when Participant is no longer actively
employed or providing services for purposes of the Restricted Stock Unit
grant (including whether Participant may still be considered to be
providing services while on a leave of absence).
6. Payments after Death. Any distribution or delivery to be made to Participant
under this Agreement will, if Participant is then deceased, be made to
Participant's designated beneficiary, or if no beneficiary survives
Participant, the administrator or executor of Participant's estate. Any
such transferee must furnish the Company with (a) written notice of his or
her status as transferee, and (b) evidence satisfactory to the Company to
establish the validity of the transfer and compliance with any laws or
regulations pertaining to said transfer.
7. Tax Withholding.
(a) Responsibility for Taxes. Participant acknowledges that, regardless of
any action taken by the Company or, if different, Participant's employer
(the "Employer"), the ultimate liability for all Tax-Related Items is
and remains Participant's responsibility and may exceed the amount
actually withheld by the Company or the Employer. Participant further
acknowledges that the Company and/or the Employer (i) make no
representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the Restricted Stock
Units, including, but not limited to, the grant, vesting or settlement
of the Restricted Stock Units, the subsequent sale of Shares acquired
pursuant to such settlement and the receipt of any dividends; and (ii)
do not commit to and are under no obligation to structure the terms of
the grant or any aspect of the Restricted Stock Units to reduce or
eliminate Participant's liability for Tax-Related Items or achieve any
particular tax result. Further, if Participant is subject to Tax-Related
Items in more than one jurisdiction between the Date of Grant and the
date of any relevant taxable or tax withholding event, as applicable,
Participant acknowledges that the Company and/or the Employer (or former
employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.
Prior to any relevant taxable or tax withholding event, as applicable,
Participant agrees to make adequate arrangements satisfactory to the
Company and/or the Employer to satisfy all Tax-Related Items. In this
regard, Participant authorizes the Company or its agent to satisfy the
obligations with regard to all Tax-Related Items by withholding in
Shares to be issued upon settlement of the Restricted Stock Units. In
the event that such withholding in Shares is problematic under
applicable tax or securities law or has materially adverse accounting
consequences, by Participant's acceptance of the Restricted Stock Units,
Participant authorizes and directs the Company and any brokerage firm
determined acceptable to the Company to sell on Participant's behalf a
whole number of Shares from those Shares issued to Participant as the
Company determines to be appropriate to generate cash proceeds
sufficient to satisfy the obligation for Tax-Related Items.
59
Depending on the withholding method, the Company may withhold or account
for Tax-Related Items by considering applicable minimum statutory
withholding rates or other applicable withholding rates, including
maximum applicable rates, in which case Participant will receive a
refund of any over-withheld amount in cash and will have no entitlement
to the Share equivalent. If the obligation for Tax-Related Items is
satisfied by withholding in Shares, for tax purposes, Participant is
deemed to have been issued the full number of Shares subject to the
vested Restricted Stock Units, notwithstanding that a number of the
Shares are held back solely for the purpose of paying the Tax-Related
Items.
Finally, Participant agrees to pay to the Company or the Employer,
including through withholding from Participant's wages or other cash
compensation paid to Participant by the Company and/or the Employer, any
amount of Tax-Related Items that the Company or the Employer may be
required to withhold or account for as a result of Participant's
participation in the Plan that cannot be satisfied by the means
previously described. The Company may refuse to issue or deliver the
shares or the proceeds of the sale of Shares if Participant fails to
comply with Participant's obligations in connection with the Tax-Related
Items.
(b) Tax Withholding Arising Prior to Payment. A portion of the Restricted
Stock Units automatically and with no exercise of discretion by the
Administrator shall fully vest in an amount necessary to satisfy any
Tax-Related Items withholding obligation that arises prior to payment of
the Shares underlying the Restricted Stock Units (for example, upon
Participant becoming Retirement eligible prior to vesting date and
payment). Accordingly, the Company will have the right (but not the
obligation) to withhold from Participant those Shares or to sell shares
on Participant's behalf that vest pursuant to the preceding sentence to
satisfy any Tax-Related Items withholding obligation. Further, if
Participant is a U.S. taxpayer and a portion of the Shares subject to
the Restricted Stock Units will be withheld to satisfy any Tax-Related
Items withholding liability prior to payment of Restricted Stock Units
with respect to any portion of the Restricted Stock Unit considered
deferred compensation subject to Section 409A, then the number of Shares
withheld or sold on Participant's behalf shall not exceed an amount
equal in value to the Tax-Related Items withholding liability.
8. Rights as Stockholder. Neither Participant nor any person claiming under or
through Participant will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder
unless and until such Shares will have been deposited into Participant's
brokerage account with the Company's designated broker. After such Shares
are deposited, Participant will have all the rights of a stockholder of the
Company with respect to voting such Shares and receipt of dividends and
distributions on such Shares.
9. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT
(EXCEPT IN THE EVENT OF DEATH, DISABILITY OR RETIREMENT) THE VESTING OF THE
RESTRICTED STOCK UNITS PURSUANT TO THE BASE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY
OR THE EMPLOYER AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE
RESTRICTED STOCK UNITS OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE BASE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE
60
AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER
FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE
IN ANY WAY WITH PARTICIPANT'S RIGHT OR THE RIGHT OF THE COMPANY OR THE
EMPLOYER TO TERMINATE PARTICIPANT'S RELATIONSHIP AS A SERVICE PROVIDER AT
ANY TIME, WITH OR WITHOUT CAUSE.
10. Nature of Grant. In accepting the Restricted Stock Units, Participant
acknowledges, understands and agrees that:
(a) the Plan is established voluntarily by the Company, it is discretionary
in nature and it may be modified, amended, suspended or terminated by
the Company at any time, to the extent permitted by the Plan;
(b) the grant of the Restricted Stock Units is voluntary and occasional and
does not create any contractual or other right to receive future grants
of Restricted Stock Units, or benefits in lieu of Restricted Stock
Units, even if Restricted Stock Units have been granted in the past;
(c) all decisions with respect to future Restricted Stock Unit or other
grants, if any, will be at the sole discretion of the Company;
(d) the Restricted Stock Unit grant and Participant's participation in the
Plan shall not create a right to continued service with the Employer,
the Company or any Affiliate or be interpreted as forming a service
contract with the Employer, the Company or any Affiliate;
(e) Participant is voluntarily participating in the Plan;
(f) the grant of Restricted Stock Units and the Shares subject to the
Restricted Stock Units are not intended to replace any pension rights
or compensation;
(g) the Restricted Stock Units and the Shares subject to the Restricted
Stock Unit, and the income and value of same, are not part of normal or
expected compensation for purposes of calculating any severance,
resignation, termination, redundancy, dismissal, end-of-service
payments, bonuses, long-service awards, pension or retirement or
welfare benefits or similar payments;
(h) unless otherwise agreed with the Company, the Restricted Stock Units and
the Shares subject to the Restricted Stock Units, and the income and
value of same, are not granted as consideration for, or in connection
with, the service Participant may provide as a director of an
Affiliate;
(i) the future value of the underlying Shares is unknown, indeterminable and
cannot be predicted with certainty;
(j) no claim or entitlement to compensation or damages shall arise from
forfeiture of the Restricted Stock Units resulting from Participant's
termination as a Service Provider (for any reason whatsoever whether or
not later found to be invalid or in breach of applicable laws in the
jurisdiction where Participant is employed or the terms of
Participant's service agreement, if any), and in consideration of the
grant of the Restricted Stock Units to which Participant is otherwise
not entitled, Participant irrevocably agrees never to institute any
claim against the Company, any of its Affiliates or the Employer,
waives his or her ability, if any, to bring any such claim, and
releases the Company, any Affiliates and the Employer from any such
61
claim; if, notwithstanding the foregoing, any such claim is allowed by
a court of competent jurisdiction, then, by participating in the Plan,
Participant shall be deemed irrevocably to have agreed not to pursue
such claim and agrees to execute any and all documents necessary to
request dismissal or withdrawal of such claim; and
(k) the following provisions apply only if Participant is providing services
outside the United States:
(i) the Restricted Stock Units and the Shares subject to the Restricted
Stock Units are not part of normal or expected compensation or
salary for any purpose; and
(ii) Participant acknowledges and agrees that neither the Company,
the Employer nor any Affiliate shall be liable for any foreign
exchange rate fluctuation between Participant's local currency and
the United States Dollar that may affect the value of the Restricted
Stock Units or of any amounts due to Participant pursuant to the
settlement of the Restricted Stock Units or the subsequent sale of
any Shares acquired upon settlement.
11. No Advice Regarding Grant. The Company is not providing any tax, legal or
financial advice, nor is the Company making any recommendations regarding
Participant's participation in the Plan, or Participant's acquisition or
sale of the underlying Shares. Participant is hereby advised to consult
with his or her own personal tax, legal and financial advisors regarding
his or her participation in the Plan before taking any action related to
the Plan.
12. Data Privacy. Participant hereby explicitly and unambiguously consents to
the collection, use and transfer, in electronic or other form, of
Participant's personal data as described in this Agreement and any other
Restricted Stock Unit grant materials ("Data") by and among, as applicable,
the Employer, the Company and its Affiliates for the exclusive purpose of
implementing, administering and managing Participant's participation in the
Plan.
Participant understands that the Company and the Employer may hold certain
personal information about Participant, including, but not limited to,
Participant's name, home address and telephone number, date of birth,
social insurance number or other identification number, salary,
nationality, job title, any Shares or directorships held in the Company,
details of all Restricted Stock Units or any other entitlement to Shares
awarded, canceled, exercised, vested, unvested or outstanding in
Participant's favor, for the exclusive purpose of implementing,
administering and managing the Plan.
Participant understands that Data will be transferred to one or more stock
plan service provider as may be selected by the Company in the future,
which is assisting the Company with the implementation, administration and
management of the Plan. Participant understands that the recipients of the
Data may be located in the United States or elsewhere, and that the
recipients' country of operation (e.g., the United States) may have
different data privacy laws and protections than Participant's country.
Participant understands that if he or she resides outside the United
States, he or she may request a list with the names and addresses of any
potential recipients of the Data by contacting his or her local human
resources representative. Participant authorizes the Company, or any other
stock plan service provider and any other possible recipients which may
62
assist the Company (presently or in the future) with implementing,
administering and managing the Plan to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the sole purpose of
implementing, administering and managing his or her participation in the
Plan. Participant understands that Data will be held only as long as is
necessary to implement, administer and manage Participant's participation
in the Plan. Participant understands if he or she resides outside the
United States, he or she may, at any time, view Data, request additional
information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, in any case
without cost, by contacting in writing his or her local human resources
representative. Further, Participant understands that he or she is
providing the consents herein on a purely voluntary basis. If Participant
does not consent, or if Participant later seeks to revoke his or her
consent, his or her service and career with the Employer will not be
adversely affected; the only adverse consequence of refusing or withdrawing
Participant's consent is that the Company would not be able to grant
Participant Restricted Stock Units or other equity awards or administer or
maintain such awards. Therefore, Participant understands that refusing or
withdrawing his or her consent may affect Participant's ability to
participate in the Plan. For more information on the consequences of
Participant's refusal to consent or withdrawal of consent, Participant
understands that he or she may contact his or her local human resources
representative.
13. Address for Notices. Any notice to be given to the Company under the terms
of this Agreement will be addressed to the Company, in care of its Equity
Administrator at EMPIRE GLOBAL CORP., Suite 701, 130 Adelaide St. W.,
Toronto, Ontario, M5H 2K4, Canada, or at such other address as the Company
may hereafter designate in writing.
14. Grant is Not Transferable. Except to the limited extent provided in Section
6, this grant and the rights and privileges conferred hereby will not be
transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to sale under
execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this grant, or any
right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this grant and the rights and
privileges conferred hereby immediately will become null and void.
15. Binding Agreement. Subject to the limitation on the transferability of this
grant contained herein, this Agreement will be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
16. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any
local, state or federal law, or the consent or approval of any governmental
regulatory authority is necessary or desirable as a condition to the
issuance of Shares to Participant (or his estate), such issuance will not
occur unless and until such listing, registration, qualification, consent
or approval will have been effected or obtained free of any conditions not
acceptable to the Company. Where the Company determines that the delivery
of the payment of any Shares will violate securities laws or other
applicable laws, the Company will defer delivery until the earliest date at
which the Company reasonably anticipates that the delivery of Shares will
no longer cause such violation. The Company will make all reasonable
63
efforts to meet the requirements of any such local, state or federal law or
securities exchange and to obtain any such consent or approval of any such
governmental authority.
17. Plan Governs. This Agreement is subject to all terms and provisions of the
Plan. In the event of a conflict between one or more provisions of this
Agreement and one or more provisions of the Plan, the provisions of the
Plan will govern.
18. Administrator's Authority. The Administrator will have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are
consistent therewith and to interpret or revoke any such rules (including,
but not limited to, the determination of whether or not any Restricted
Stock Units have vested). All actions taken and all interpretations and
determinations made by the Administrator in good faith will be final and
binding upon Participant, the Company and all other interested persons. No
member of the Administrator will be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan
or this Agreement.
19. Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to Restricted Stock Units awarded under the
Plan or future Restricted Stock Units that may be awarded under the Plan by
electronic means. Participant hereby consents to receive such documents by
electronic delivery and agrees to participate in the Plan through any
on-line or electronic system established and maintained by the Company or
another third party designated by the Company.
20. Captions. Captions provided herein are for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
21. Agreement Severable. In the event that any provision in this Agreement will
be held invalid or unenforceable, such provision will be severable from,
and such invalidity or unenforceability will not be construed to have any
effect on, the remaining provisions of this Agreement.
22. Language. If Participant has received this Agreement or any other document
related to the Plan translated into a language other than English and if
the meaning of the translated version is different than the English
version, the English version will control.
23. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. Participant expressly
warrants that he or she is not accepting this Agreement in reliance on any
promises, representations, or inducements other than those contained
herein. Notwithstanding anything to the contrary in the Plan or this
Agreement, the Company reserves the right to impose other requirements on
Participant's participation in the Plan, on the Restricted Stock Units and
on any Shares acquired under the Plan, including, but not limited to, any
other requirements as may be necessary to comply with Section 409A or to
otherwise avoid imposition of any additional tax or income recognition
under Section 409A, and to require Participant to sign any additional
agreements or undertakings that may be necessary to accomplish the
foregoing.
24. Amendment, Suspension or Termination of the Plan. By accepting this Award,
Participant expressly warrants that he or she has received an Award of
Restricted Stock Units under the Plan, and has received, read and
64
understood a description of the Plan. Participant understands that the Plan
is discretionary in nature and may be amended, suspended or terminated by
the Company at any time.
25. Forfeiture Events. If a clawback event should occur, then to the extent
permitted by applicable law, rules and regulations, the Administrator may,
in its sole discretion, cause the Participant to forfeit and/or recover
from the Participant the amount by which this Award, as originally
determined, exceeded the size this Awards would have been had the financial
statements been initially filed as restated, as determined by the
Administrator. In this respect, the Administrator may (i) cancel, without
payment or any consideration whatsoever, the portion of this Award that has
not yet been settled, (ii) require the Participant to return Shares
previously issued upon settlement of this Award, or (iii) if such Shares
were sold, transferred or otherwise disposed by the Participant, cause the
Participant to repay to the Company the amount that the Participant
realized upon settlement of the Award.
If the Company reasonably believes that a clawback event has occurred, the
Participant understands and agrees that the Company may, in its sole
discretion, restrict the Participant's ability to directly or indirectly
sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, swap, hedge, transfer, or otherwise
dispose of any Shares held by the Participant (whether issued in connection
with this Option or otherwise) pending a final determination by the
Administrator that a clawback event has or has not occurred. Such
determination shall be made as soon as administratively practicable but in
no event will the Participant be restricted in accordance with the
preceding sentence for more than that period of time reasonably necessary
for the Administrator to determine the existence of a clawback event. The
Participant further understands and agrees that that the Company shall have
no responsibility or liability for any fluctuations that occur in the price
of Shares or for any potential loss or gain the Participant could have
realized from the sale of his or her Shares during the period of time in
which the Participant is restricted in accordance with this Section 25.
Any failure by the Company to assert the forfeiture and repayment rights
under this Section 25 with respect to specific claims against the
Participant shall not waive, or operate to waive, the Company's right to
later assert its rights hereunder with respect to other or subsequent
claims against the Participant.
The Company's forfeiture and repayment rights under this Section 25 shall
be in addition to, and not in lieu of, actions the Company may take to
remedy or discipline any misconduct by the Participant including, but not
limited to, termination of employment or initiation of appropriate legal
action.
A "clawback event" will be deemed to have occurred if at any time while the
Participant is or was an executive officer of the Company:
(i) the financial statements of the Company are restated;
(ii) in the reasonable judgment of a majority of the independent members
of the Board or the Administrator, the financial statements as so
restated would have resulted in either this Award not having been
granted or the size of this Award reduced if such information had been
known at the time this Award granted or the size of this Award had
originally been calculated or determined; and
65
(iii) Participant's intentional misconduct, fraud, and/or embezzlement
led, in whole or in part, to restatement of the financial statements.
26. Governing Law; Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its
rules of conflict of law principles thereof. For purposes of litigating any
dispute that arises under this grant of Restricted Stock Units or this
Agreement, the parties hereby submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located
in the State of Delaware (the "Delaware Courts") for any litigation arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except
in such courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts, and agrees not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in any
inconvenient forum and no other courts, where this grant of Restricted
Stock Units is made and/or to be performed. Each of the parties hereto
agrees, (a) to the extent such party is not otherwise subject to service of
process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process,
and (b) that service of process may also be made on such party by prepaid
certified mail with a proof of mailing receipt validated by United States
Postal Service constituting evidence of valid service. Service made
pursuant to (a) or (b) above shall have the same legal force and effect as
if served upon such party personally with the State of Delaware.
27. Appendix. Notwithstanding any provisions in this Agreement, the Restricted
Stock Unit grant shall be subject to any special terms and conditions set
forth in any Appendix to this Agreement for Participant's country.
Moreover, if Participant relocates to one of the countries included in the
Appendix, the special terms and conditions for such country will apply to
Participant, to the extent the Company determines that the application of
such terms and conditions is necessary or advisable for legal or
administrative reasons. The Appendix constitutes part of this Agreement.
28. Waiver. Participant acknowledges that a waiver by the Company of breach of
any provision of this Agreement shall not operate or be construed as a
waiver of any other provision of this Agreement, or of any subsequent
breach by Participant or any other Service Provider.
29. Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges
that, depending on Participant's country of residence, Participant may be
subject to insider trading restrictions and/or market abuse laws, which
affect Participant's ability to acquire or sell Shares or rights to Shares
(e.g., Restricted Stock Units) under the Plan during such times as
Participant is considered to have "inside information" regarding the
Company (as defined by the laws in Participant's country). Any restrictions
under these laws or regulations are separate from and in addition to any
restrictions that may be imposed under any applicable Company insider
trading policy. Participant is responsible for complying with any
applicable restrictions and are advised to speak with a personal legal
advisor on this matter.
30. Foreign Asset/Account Reporting Requirements; Exchange Controls. Participant
acknowledges that his or her country may have certain foreign asset and/or
account reporting requirements and/or exchange controls that may affect his
or her ability to acquire or hold Shares or cash received from
participating in the Plan (including from any dividends received or sale
proceeds arising from the sale of Shares) in a brokerage or bank account
66
outside Participant's country. Participant may be required to report such
accounts, assets or transactions to the tax or other authorities in his or
her country. Participant also may be required to repatriate sale proceeds
or other funds received as a result of his or her participation in the Plan
to his or her country through a designated bank or broker and/or within a
certain time after receipt. Participant acknowledges that it is his or her
responsibility to be compliant with such regulations, and Participant is
advised to speak with a personal legal advisor for any details.
APPENDIX TO THE
TERMS AND CONDITIONS OF THE RESTRICTED STOCK UNITS
Terms and Conditions
This Appendix includes additional terms and conditions that govern the
Restricted Stock Units granted to Participant under the Plan if Participant
works in one of the countries listed below. If Participant is a citizen or
resident of a country (or if Participant is considered as such for local law
purposes) other than the one in which Participant is currently working or if
Participant moves to another country after the grant is made, the Company will,
in its discretion, determine the extent to which the terms and conditions in
this Appendix will apply to Participant.
Unless otherwise provided below, capitalized terms used but not defined in this
Appendix shall have the same meanings assigned to them in the Plan and the
Agreement, as applicable.
Notifications
This Appendix also includes notifications regarding certain other issues of
which Participant should be aware with respect to the Restricted Stock Units
granted under the Plan. The information is based on the securities, exchange
control and other laws in effect in the respective countries as of January 2016.
Such laws are often complex and change frequently. As a result, the Company
strongly recommends that Participant not rely on the information in this
Appendix as the only source of information relating to the Restricted Stock
Units because the information may be out of date at the time that the Restricted
Stock Units vest and Shares are issued or such Shares are subsequently sold.
In addition, the information contained herein is general in nature and may not
apply to Participant's particular situation and the Company is not in a position
to assure Participant of any particular result. Further, if Participant is a
citizen or resident of a country (or if Participant is considered as such for
local law purposes) other than the one in which Participant is currently working
or if Participant moves to another country after Participant's Restricted Stock
Units are granted, the information contained herein may not be applicable to
Participant. Accordingly, Participant is advised to seek appropriate
professional advice as to how the relevant laws in Participant's country may
apply to Participant's situation.
AUSTRIA
Notifications
Exchange Control Information. If Participant holds Shares acquired under the
Plan outside Austria (even if Participant holds them outside of Austria with an
Austrian bank), Participant must submit an annual report to the Austrian
67
National Bank using the form "Standmeldung/Wertpapiere." An exemption applies if
the value of the shares held outside Austria as of December 31 does not exceed
EUR 5,000,000 or the value of the shares as of any quarter does not exceed
EUR 30,000,000. If the former threshold is exceeded, annual reporting
obligations are imposed, whereas if the latter threshold is exceeded, quarterly
reports must be submitted. The deadline for filing the annual report is March 31
of the following year.
When the Shares are sold, there may be exchange control obligations if the cash
received is held outside Austria, as a separate reporting requirement applies to
any non-Austrian cash accounts. If the transaction volume of all of
Participant's cash accounts abroad exceeds EUR 3,000,000, the movements and the
balance of all accounts must be reported monthly, as of the last day of the
month, on or before the 15th day of the following month, using the form
"Meldungen SI-Forderungen und/oder SI-Verpflichtungen." If the transaction value
of all cash accounts abroad is less than EUR 3,000,000, no ongoing reporting
requirements apply. Participant is responsible for complying with applicable
reporting obligations and should speak with a personal legal advisor in this
regard.
Consumer Protection Information. Participant may be entitled to revoke the
Agreement on the basis of the Austrian Consumer Protection Act (the "Act") under
the conditions listed below, if the Act is considered to be applicable to the
Agreement and the Plan:
(i) The revocation must be made within one week after Participant receives
the Agreement.
(ii) The revocation must be in written form. It is sufficient if
Participant returns the Agreement to the Company or the Company's
representative with language that can be understood as his or her
refusal to honor the Agreement, provided the revocation is sent within
the period noted above.
CANADA
Terms and Conditions
Forfeiture upon Termination as Service Provider. The following provision
replaces the second paragraph in Section 5 of the Agreement:
In the event Participant ceases to be a Service Provider, regardless of the
reason for such termination and whether such termination is effected by
Participant or the Employer, with or without cause, Participant's right to vest
in the Restricted Stock Units and receive Shares under the Plan, if any, will
terminate as of the actual Date of Termination. For this purpose, "Date of
Termination" shall mean the last day on which Participant is actively employed
by the Employer, and shall not include or be extended by any period following
such day during which Participant is in receipt of or eligible to receive any
notice of termination, pay in lieu of notice of termination, severance pay or
any other payments or damages, whether arising under statute, contract or at
common law.
Notifications
Securities Law Information. Participant is permitted to sell Shares acquired
under the Plan through the designated broker appointed by the Company, provided
that such sale takes place outside of Canada through facilities of a stock
68
exchange on which the Shares are listed. The Shares are quoted on the OTC
Markets Inc. OTCQB certified Market under the ticker symbol "EMGL."
Foreign Asset/Account Reporting Information. Canadian residents are required to
report any foreign property, including Shares and rights to receive Shares
(e.g., Restricted Stock Units), annually on Form T1135 (Foreign Income
Verification Statement) if the total cost of the individual's foreign property
exceeds C$100,000 at any time during the year. Thus, if the C$100,000 cost
threshold is exceeded by other foreign property held by the individual,
Restricted Stock Units must be reported. Such Restricted Stock Units may be
reported at a nil cost.
For purposes of the reporting, Shares acquired under the Plan may be reported at
their adjusted cost bases. The adjusted cost basis of a Share is generally equal
to the fair market value of such Share at the time of acquisition; however, if
the individual owns other Shares (e.g., acquired under other circumstances or at
another time), the adjusted cost basis may be different.
Participant is advised to consult his or her personal tax advisor to determine
Participant's exact reporting requirements in this regard.
ITALY
Terms and Conditions
Data Privacy. The following provisions replace Section 12 of the Agreement:
Participant understands that the Employer, the Company, and any Affiliate may
hold certain personal information about Participant, including his or her name,
home address and telephone number, date of birth, social insurance number or
other identification number, salary, nationality, job title, any shares or
directorships Participant holds in the Company, details of the Plan or any other
entitlement to Shares awarded, canceled, exercised, vested, unvested or
outstanding in Participant's favor ("Data"), for the exclusive purpose of
managing and administering the Plan.
Participant also understands that providing the Company with the Data is
necessary for the performance of the Plan and that his or her refusal to provide
such Data would make it impossible for the Company to perform its obligations
and may affect Participant's ability to participate in the Plan. The Controller
of personal data processing is EMPIRE GLOBAL CORP. with registered offices at
Suite 701, 130 Adelaide St. W., Toronto, Ontario, M5H 2K4, Canada, and, pursuant
to D.lgs 196/2003, its representative in Italy is EMPIRE GLOBAL CORP. Sede
Secondaria, with branch registered at Viale JF Kennedy 6, Grottaferrata (RM),
Italy.
Participant understands that Participant's Data will not be publicized, but it
may be transferred to banks, other financial institutions or brokers involved in
the management and administration of the Plan. Participant further understands
that the Company and any Affiliate will transfer Data amongst themselves as
necessary for the purpose of implementation, administration and management of
the Plan, and that the Company and any Affiliate may each further transfer Data
to third parties assisting the Company in the implementation, administration and
management of the Plan, including any requisite transfer to a broker or another
third party with whom Participant may elect to deposit any Shares acquired under
the Plan. Such recipients may receive, possess, use, retain and transfer the
Data in electronic or other form, for the purposes of implementing,
administering and managing the Plan. Participant understands that these
69
recipients may be located in the European Economic Area or elsewhere, such as
the U.S. Should the Company exercise its discretion in suspending all necessary
legal obligations connected with the management and administration of the Plan,
it will delete Participant's Data as soon as it has accomplished all the
necessary legal obligations connected with the management and administration of
the Plan.
Participant understands that Data processing related to the purposes specified
above shall take place under automated or non-automated conditions, anonymously
when possible, that comply with the purposes for which Data is collected and
with confidentiality and security provisions as set forth by applicable laws and
regulations, with specific reference to Legislative Decree no. 196/2003.
The processing activity, including communication, the transfer of Participant's
Data abroad, including outside of the European Economic Area, as herein
specified and pursuant to applicable laws and regulations, does not require
Participant's consent thereto as the processing is necessary to performance of
contractual obligations related to implementation, administration and management
of the Plan. Participant understands that, pursuant to Section 7 of the
Legislative Decree no. 196/2003, Participant has the right to, including but not
limited to, access, delete, update, ask for rectification of Participant's Data
and cease, for legitimate reason, the Data processing. Furthermore, Participant
is aware that Participant's Data will not be used for direct marketing purposes.
In addition, the Data provided may be reviewed and questions or complaints can
be addressed by contacting Participant's human resources department.
Plan Document Acknowledgment. By accepting the Restricted Stock Units,
Participant acknowledges that Participant has received a copy of the Plan and
the Agreement and has reviewed the Plan and the Agreement, including this
Appendix, in their entirety and fully understands and accepts all provisions of
the Plan and the Agreement, including this Appendix. Participant further
acknowledges that Participant has read and specifically and expressly approves
the following sections of the Agreement: Section 2 - Company's Obligation to
Pay; Section 3 - Vesting Schedule; Section 5 - Forfeiture upon Termination as
Service Provider; Section 7 - Tax Withholding; Section 9 - No Guarantee of
Continued Service; Section 10 - Nature of Grant; Section 19 - Electronic
Delivery; Section 26 - Governing Law; Venue; Section 27 - Appendix; and the
above Data Privacy notice which replaces Section 12 of the Agreement.
Notifications
Foreign Asset/Account Reporting Information. Italian residents who, at any time
during the fiscal year, hold foreign financial assets (including Shares) which
may generate income taxable in Italy are required to report these assets on
their annual tax returns (UNICO Form, RW Schedule) for the year during which the
assets are held, or on a special form if no tax return is due. These reporting
obligations will also apply to Italian residents who are the beneficial owners
of foreign financial assets under Italian money laundering provisions.
Participant is responsible for complying with this reporting obligation and
should speak with a personal legal advisor in this regard.
UNITED KINGDOM
Terms and Conditions
Responsibility for Taxes. The following supplements Section 7(a) of the
Agreement:
70
Participant acknowledges and agrees that, if payment or withholding of
Participant's income tax liability is not made within ninety (90) days of the
end of the U.K. tax year in which the event giving rise to such liability occurs
or such other period specified in Section 222(1)(c) of Income Tax (Earnings and
Pensions) Act 2003 (the "Due Date"), the amount of any uncollected income tax
shall constitute a loan owed by Participant to the Employer, effective on the
Due Date. The loan will bear interest at the then-current Official Rate of HM
Revenue & Customs ("HMRC"), it will be immediately due and repayable, and the
Company or the Employer may recover it from Participant at any time thereafter
by any of the means referred to the Section 7(a) of the Agreement.
Notwithstanding the foregoing, if Participant is a director or executive officer
of the Company (within the meaning of Section 13(k) of the U.S. Securities and
Exchange Act of 1934, as amended), Participant shall not be eligible for a loan
from the Company or the Employer to cover the unpaid income tax liability. In
this case, Participant acknowledges that the amount of any income tax not
collected from or paid by Participant by the Due Date may constitute a benefit
to Participant on which additional income tax and employee National Insurance
contributions ("NICs") may be payable. Participant will be responsible for
reporting and paying any income tax due on this additional benefit directly to
HMRC under the self-assessment regime and for paying to the Company and/or the
Employer (as appropriate) the amount of any employee NICs due on this additional
benefit, which may also be recovered from Participant by any of the means
referred to in Section 7(a) of the Agreement.
71
EMPIRE GLOBAL CORP.
2016 EQUITY INCENTIVE PLAN
NOTICE OF GRANT OF STOCK OPTION
Unless otherwise defined herein, the terms defined in the EMPIRE GLOBAL CORP.
2016 Equity Incentive Plan (the "Plan") will have the same defined meanings in
this Notice of Grant of Stock Option (the "Notice of Grant") and Terms and
Conditions of Stock Option Grant, attached hereto as Exhibit B (together, the
"Agreement").
NAME: _________________________
ADDRESS:
_________________________
_________________________
_________________________
COUNTRY:
_________________________
You have been granted an option to purchase common stock of the Company, subject
to the terms and conditions of the Plan and this Agreement, as follows:
Date of Grant: ____________ (mm/dd/yyyy)
Vesting Commencement Date: ____________ (mm/dd/yyyy)
Exercise Price per Share: ____________
Total Number of Shares
Granted: ____________ shares granted
Total Exercise Price: ____________
Type of Option: ____________
Term/Expiration Date: ____________ (mm/dd/yyyy)
Vesting Schedule: ____________
Subject to any accelerated vesting provisions set forth below or in the Plan,
this Option shall be exercisable, in whole or in part, in accordance with the
following schedule:
Twenty-five (25%) of the Shares subject to the Option shall vest twelve (12)
months after the Vesting Commencement Date, and one forty-eighth (1/48th) of the
Shares subject to the Option shall vest each month thereafter on the same day of
the month as the Vesting Commencement Date (and if there is no corresponding
day, on the last day of the month), subject to Participant continuing to be a
Service Provider through each such date.
Accelerated Vesting:
Notwithstanding the previous sentence, in the event that Participant ceases to
be a Service Provider due to Retirement, death or Disability, the Restricted
Stock Units will immediately vest in full.
72
Termination Period:
This Option may be exercised for three (3) months after Participant ceases to be
a Service Provider; except that in the case of termination of status as a
Service Provider by death, Retirement or Disability, such Option may be
exercised for twelve (12) months after such applicable qualifying event. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.
By your acceptance and/or exercise of this Option, you and the Company agree
that this Option is granted under and governed by the terms and conditions of
the Plan and this Option Agreement. Participant has reviewed the Plan and this
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to acceptance of this Option and fully understands all provisions
of the Plan and this Agreement. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to the Plan and this Agreement. Participant further
agrees to notify the Company upon any change in his or her residence address.
EXHIBIT B - TERMS AND CONDITIONS OF STOCK OPTION GRANT
1. Grant. The Company hereby grants to the Participant named in the Notice of
Grant ("Participant") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share
set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions in this Agreement and the Plan, which is incorporated
herein by reference. Subject to Section 20 of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Agreement, the terms and conditions of the Plan will
prevail.
If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
this Option is intended to qualify as an Incentive Stock Option as defined
in Section 422 of the Code. However, if this Option is intended to be an
Incentive Stock Option, to the extent that it exceeds the $100,000 rule of
Code Section 422(d) it will be treated as a Non-statutory Stock Option
("NSO"). Further, if for any reason this Option (or portion thereof) will
not qualify as an ISO, then, to the extent of such nonqualification, such
Option (or portion thereof) shall be regarded as a NSO granted under the
Plan. In no event will the Administrator, the Company or any Affiliate or
any of their respective employees or directors have any liability to
Participant (or any other person) due to the failure of the Option to
qualify for any reason as an ISO.
2. Vesting Schedule. Except as provided in Section 3, the Option awarded by
this Agreement will vest in according to the vesting schedule set forth in
the Notice of Grant. Shares scheduled to vest on a certain date or upon the
occurrence of a certain condition will not vest in Participant in
accordance with any of the provisions of this Agreement, unless Participant
will have been continuously a Service Provider from the Date of Grant until
the date such vesting occurs.
3. Administrator's Discretion. The Administrator, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the
balance, of the unvested Option at any time, subject to the terms of the
Plan. If so accelerated, such Option will be considered as having vested as
of the date specified by the Administrator.
73
4. Exercise of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Agreement.
This Option is exercisable by delivery of an exercise notice, in the form
attached as Exhibit C (the "Exercise Notice") or in a manner and pursuant
to such procedures as the Administrator may determine, which will state the
election to exercise the Option, the number of Shares in respect of which
the Option is being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company pursuant
to the provisions of the Plan. The Exercise Notice will be completed by
Participant and delivered to the Company. The Exercise Notice will be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares together with any applicable tax withholding. This Option will be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by the aggregate Exercise Price.
5. Method of Payment. Payment of the aggregate Exercise Price will be by any of
the following, or a combination thereof, at the election of Participant:
a. cash;
b. check;
c. consideration received by the Company under a formal cashless exercise
program adopted by the Company in connection with the Plan; or
d. surrender of other Shares which have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.
6. Tax Obligations.
(a) Withholding of Taxes. Notwithstanding any contrary provision of this
Agreement, no certificate representing the Shares will be issued to
Participant, unless and until satisfactory arrangements (as determined
by the Administrator) will have been made by Participant with respect
to the payment of income, employment and other taxes which the Company
determines must be withheld with respect to such Shares. To the extent
determined appropriate by the Company in its discretion, it shall have
the right (but not the obligation) to satisfy any tax withholding
obligations by reducing the number of Shares otherwise deliverable to
Participant. If Participant fails to make satisfactory arrangements for
the payment of any required tax withholding obligations hereunder at
the time of the Option exercise, Participant acknowledges and agrees
that the Company may refuse to honor the exercise and refuse to deliver
the Shares if such withholding amounts are not delivered at the time of
exercise.
(b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted
to Participant herein is an ISO, and if Participant sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before
the later of (i) the date two (2) years after the Grant Date, or (ii)
the date one (1) year after the date of exercise, Participant will
immediately notify the Company in writing of such disposition.
Participant agrees that Participant may be subject to income tax
withholding by the Company on the compensation income recognized by
Participant.
(c) Code Section 409A. Under Code Section 409A, an Option that was granted
with a per Share exercise price that is determined by the Internal
Revenue Service (the "IRS") to be less than the Fair Market Value of a
Share on the date of grant (a "Discount Option") may be considered
74
"deferred compensation." A Discount Option may result in (i) income
recognition by Participant prior to the exercise of the option, (ii) an
additional twenty percent (20%) federal income tax, and (iii) potential
penalty and interest charges. The Discount Option may also result in
additional state income, penalty and interest tax to the Participant.
Participant acknowledges that the Company cannot and has not guaranteed
that the IRS will agree that the per Share exercise price of this
Option equals or exceeds the Fair Market Value of a Share on the Date
of Grant in a later examination. Participant agrees that if the IRS
determines that the Option was granted with a per Share exercise price
that was less than the Fair Market Value of a Share on the date of
grant, Participant will be solely responsible for Participant's costs
related to such a determination.
7. Rights as Stockholder. Neither the Participant nor any person claiming under
or through the Participant will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder
unless and until certificates representing such Shares will have been
issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Participant. After such issuance,
recordation and delivery, Participant will have all the rights of a
stockholder of the Company with respect to voting such Shares and receipt
of dividends and distributions on such Shares.
8. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT
THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE
AFFILIATE EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR
AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT'S RIGHT OR THE
RIGHT OF THE COMPANY (OR THE AFFILIATE EMPLOYING OR RETAINING PARTICIPANT)
TO TERMINATE PARTICIPANT'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
WITH OR WITHOUT CAUSE.
9. Address for Notices. Any notice to be given to the Company under the terms
of this Agreement will be addressed to the Company, in care of its Stock
Administrator at EMPIRE GLOBAL CORP., Suite 701, 130 Adelaide St. W.,
Toronto, Ontario, M5H 2K4, Canada, or at such other address as the Company
may hereafter designate in writing.
10. Grant is Not Transferable. This grant and the rights and privileges
conferred hereby will not be transferred, assigned, pledged or hypothecated
in any way (whether by operation of law or otherwise) and will not be
subject to sale under execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of
this grant, or any right or privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process, this
grant and the rights and privileges conferred hereby immediately will
become null and void.
11. Binding Agreement. Subject to the limitation on the transferability of this
grant contained herein, this Agreement will be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
75
12. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory
authority is necessary or desirable as a condition to the issuance of
shares to the Participant (or his estate), such issuance will not occur
unless and until such listing, registration, qualification, consent or
approval will have been effected or obtained free of any conditions not
acceptable to the Company. Where the Company determines that the delivery
of the payment of any Shares will violate federal securities laws or other
applicable laws, the Company will defer delivery until the earliest date at
which the Company reasonably anticipates that the delivery of Shares will
no longer cause such violation. The Company will make all reasonable
efforts to meet the requirements of any such state or federal law or
securities exchange and to obtain any such consent or approval of any such
governmental authority.
13. Plan Governs. This Agreement is subject to all terms and provisions of the
Plan. In the event of a conflict between one or more provisions of this
Agreement and one or more provisions of the Plan, the provisions of the
Plan will govern.
14. Administrator's Authority. The Administrator will have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are
consistent therewith and to interpret or revoke any such rules (including,
but not limited to, the determination of whether or not any Options have
vested). All actions taken and all interpretations and determinations made
by the Administrator in good faith will be final and binding upon
Participant, the Company and all other interested persons. No member of the
Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this
Agreement.
15. Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to Options awarded under the Plan or future
Options that may be awarded under the Plan by electronic means or request
Participant's consent to participate in the Plan by electronic means.
Participant hereby consents to receive such documents by electronic
delivery and agrees to participate in the Plan through any on-line or
electronic system established and maintained by the Company or another
third party designated by the Company.
16. Captions. Captions provided herein are for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
17. Agreement Severable. In the event that any provision in this Agreement will
be held invalid or unenforceable, such provision will be severable from,
and such invalidity or unenforceability will not be construed to have any
effect on, the remaining provisions of this Agreement.
18. Language. If Participant has received this Agreement or any other document
related to the Plan translated into a language other than English and if
the meaning of the translated version is different than the English
version, the English version will control.
19. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. Participant expressly
warrants that he or she is not accepting this Agreement in reliance on any
76
promises, representations, or inducements other than those contained
herein. Modifications to this Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the
Company. Notwithstanding anything to the contrary in the Plan or this
Agreement, the Company reserves the right to revise this Agreement as it
deems necessary or advisable, in its sole discretion and without the
consent of Participant, to comply with Section 409A of the Code or to
otherwise avoid imposition of any additional tax or income recognition
under Section 409A of the Code in connection to this Option.
20. Amendment, Suspension or Termination of the Plan. By accepting this Award,
Participant expressly warrants that he or she has received an Option under
the Plan, and has received, read and understood a description of the Plan.
Participant understands that the Plan is discretionary in nature and may be
amended, suspended or terminated by the Company at any time.
21. Forfeiture Events. If a clawback event should occur, then to the extent
permitted by applicable law, rules and regulations, the Administrator may,
in its sole discretion, cause the Participant to forfeit and/or recover
from the Participant the amount by which this Award, as originally
determined, exceeded the size this Option would have been had the financial
statements been initially filed as restated, as determined by the
Administrator. In this respect, the Administrator may (i) cancel, without
payment or any consideration whatsoever, the portion of this Option that
has not yet been exercised, (ii) require the Participant to return Shares
previously issued upon exercise of this Option, or (iii) if such Shares
were sold, transferred or otherwise disposed by the Participant, cause the
Participant to repay to the Company the amount, net of any Exercise Price,
that the Participant realized upon exercise of the Option.
If the Company reasonably believes that a clawback event has occurred, the
Participant understands and agrees that the Company may, in its sole
discretion, restrict the Participant's ability to directly or indirectly
sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, swap, hedge, transfer, or otherwise
dispose of any Shares held by the Participant (whether issued in connection
with this Option or otherwise) pending a final determination by the
Administrator that a clawback event has or has not occurred. Such
determination shall be made as soon as administratively practicable but in
no event will the Participant be restricted in accordance with the
preceding sentence for more than that period of time reasonably necessary
for the Administrator to determine the existence of a clawback event. The
Participant further understands and agrees that that the Company shall have
no responsibility or liability for any fluctuations that occur in the price
of Shares or for any potential loss or gain the Participant could have
realized from the sale of his or her Shares during the period of time in
which the Participant is restricted in accordance with this Section 21.
Any failure by the Company to assert the forfeiture and repayment rights
under this Section 21 with respect to specific claims against the
Participant shall not waive, or operate to waive, the Company's right to
later assert its rights hereunder with respect to other or subsequent
claims against the Participant.
The Company's forfeiture and repayment rights under this Section 21 shall
be in addition to, and not in lieu of, actions the Company may take to
remedy or discipline any misconduct by the Participant including, but not
limited to, termination of employment or initiation of appropriate legal
action.
77
A "clawback event" will be deemed to have occurred if at any time while the
Participant is or was an executive officer of the Company:
(i) the financial statements of the Company are restated;
(ii) in the reasonable judgment of a majority of the independent members
of the Board or the Administrator, the financial statements as so
restated would have resulted in either this Award not having been
granted or the size of this Award reduced if such information had been
known at the time this Award granted or the size of this Award had
originally been calculated or determined; and
(iii) Participant's intentional misconduct, fraud, and/or embezzlement
led, in whole or in part, to restatement of the financial statements.
22. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its
rules of conflict of law principles thereof. For purposes of litigating any
dispute that arises under this grant of Restricted Stock Units or this
Agreement, the parties hereby submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located
in the State of Delaware (the "Delaware Courts") for any litigation arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except in
such courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts, and agrees not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in any
inconvenient forum and no other courts, where this grant of Restricted
Stock Units is made and/or to be performed. Each of the parties hereto
agrees, (a) to the extent such party is not otherwise subject to service of
process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process,
and (b) that service of process may also be made on such party by prepaid
certified mail with a proof of mailing receipt validated by United States
Postal Service constituting evidence of valid service. Service made
pursuant to (a) or (b) above shall have the same legal force and effect as
if served upon such party personally with the State of Delaware.
23. Waiver. Participant acknowledges that a waiver by the Company of breach of
any provision of this Agreement shall not operate or be construed as a
waiver of any other provision of this Agreement, or of any subsequent
breach by Participant or any other Service Provider.
24. Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges
that, depending on Participant's country of residence, Participant may be
subject to insider trading restrictions and/or market abuse laws, which
affect Participant's ability to acquire or sell Shares or rights to Shares
under the Plan during such times as Participant is considered to have
"inside information" regarding the Company (as defined by the laws in
Participant's country). Any restrictions under these laws or regulations
are separate from and in addition to any restrictions that may be imposed
under any applicable Company insider trading policy. Participant is
responsible for complying with any applicable restrictions and are advised
to speak with a personal legal advisor on this matter.
78
EXHIBIT C - EXERCISE NOTICE
EMPIRE GLOBAL CORP.
2016 EQUITY INCENTIVE PLAN
EMPIRE GLOBAL CORP.
Suite 701, 130 Adelaide St., W.
Toronto, Ontario, M5H 2K4 Canada
Attention: Stock Administrator
1. Exercise of Option. Effective as of today, ________________, _____, the
undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the common stock of EMPIRE GLOBAL CORP. (the "Company")
under and pursuant to the 2016 Equity Incentive Plan (the "Plan") and the
Stock Option Agreement dated ________ (the "Agreement"). The purchase price
for the Shares will be $_____________, as required by the Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price of the Shares and any required tax withholding to be paid in
connection with the exercise of the Option.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of
the Company) of the Shares, no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to the Shares subject
to Option, notwithstanding the exercise of the Option. The Shares so
acquired will be issued to Participant as soon as practicable after
exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date of issuance, except as
provided in Section 15 of the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse
tax consequences as a result of Purchaser's purchase or disposition of the
Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company
for any tax advice.
6. Entire Agreement; Governing Law. The Plan and Agreement are incorporated
herein by reference. This Exercise Notice, the Plan and the Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest
except by means of a writing signed by the Company and Purchaser. This
agreement is governed by the internal substantive laws, but not the choice
of law rules, of the State of Delaware.
(Signature Page Follows)
79
Submitted by: Accepted by:
PURCHASER EMPIRE GLOBAL CORP.
Signature By
Print Name Its
Address: Address:
Suite 701, 130 Adelaide St. W.
Toronto, Ontario, M5H 2K4
Date Received
80
SCHEDULE "A" - PROXY CARD
ANNUAL GENERAL MEETING OF STOCKHOLDERS OF
EMPIRE GLOBAL CORP.
(the "Company")
TO BE HELD AT Suite 701, 130 Adelaide St. W, Toronto, Ontario, Canada M5H 2K4
ON Monday, August 8, 2016 at 10:00 a.m. (local time)
(the "Meeting")
The undersigned stockholder ("Registered Stockholder") of the Company hereby
appoints, Michele Ciavarella, a director and officer of the Company, or failing
this person, Alessandro Marcelli, or in the place of the foregoing,
__________________________________________________________________ [print name]
as proxyholder for and on behalf of the Registered Stockholder with the power of
substitution to attend, act and vote for and on behalf of the Registered
Stockholder in respect of all matters that may properly come before the Meeting
and at every adjournment thereof, to the same extent and with the same powers as
if the undersigned Registered Stockholder were present at the said Meeting, or
any adjournment thereof.
The Registered Stockholder hereby directs the proxyholder to vote the securities
of the Company registered in the name of the Registered Stockholder as specified
herein.
The undersigned appoints Michele Ciavarella and Alessandro Marcelli as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the Common Stock of EMPIRE
GLOBAL CORP. (the "Company") held of record by the undersigned on June 10, 2016,
at the Annual Meeting of Stockholders to be held at Suite 701, 130 Adelaide St.
W., Toronto, Ontario, M5H 2K4, on August 8, 2016, or any adjournment thereof.
___ Please check this box only if you intend to attend and vote at the Meeting
To assist the Company in tabulating the votes submitted by proxy prior to the
Meeting, we request that you mark, sign, date and return this Proxy by 10:00 am,
July 27, 2016 using the enclosed envelope.
THIS PROXY IS SOLICITED ON BEHALF MANAGEMENT OF THE COMPANY.
PLEASE MARK YOUR VOTE IN THE BOX.
PROPOSAL 1: Election of Directors
For Withhold
Nominees:
Michele Ciavarella ___ ___
Alessandro Marcelli ___ ___
Beniamino Gianfelici ___ ___
Luca Pasquini ___ ___
Gabriele Peroni ___ ___
Franco Salvagni ___ ___
Quirino Mancini ___ ___
Graham Martin ___ ___
81
PROPOSAL 2: To authorize the 2016 Equity
For Against Withhold
Incentive Plan ___ ___ ___
PROPOSAL 3: For an Advisory Resolution on
Executive compensation ___ ___ ___
PROPOSAL 4: Appointment of Independent Auditors
To ratify the selection of Paritz and Company, PA,
as independent auditors
___ ___ ___
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the Meeting. This Proxy, when properly executed,
will be voted in the manner directed by the Registered Stockholder. If no
direction is made, this Proxy will be voted "FOR" each of the nominated
directors and "FOR" the remaining Proposals.
Dated: Signature:
__________________ __________________________
Please sign exactly as name appears below. When shares are held jointly, both
Registered Stockholders should sign. When signing as attorney, executor,
administrator, trustee or guardian, please indicate full title as such.
If a corporation, please indicate full corporate name; and if signed by the
president or another authorized officer, please specify the officer's capacity.
If a partnership, please sign in partnership name by authorized person.
SIGN HERE:
_____________________________________
PLEASE PRINT NAME:
_____________________________________
DATE:
_____________________________________
NUMBER OF SHARES:
_____________________________________
REPRESENTED BY PROXY:
_____________________________________
THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED AND DATED.
SEE IMPORTANT INFORMATION AND INSTRUCTIONS ON REVERSE.
82
INSTRUCTIONS FOR COMPLETION OF PROXY
1. This form of proxy ("Instrument of Proxy") must be signed by you, the
Registered Stockholder, or by your attorney duly authorized by you in
writing, or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and if executed by an attorney, officer,
or other duly appointed representative, the original or a notarial copy of
the instrument so empowering such person, or such other documentation in
support as shall be acceptable to the Chairman of the Meeting, must
accompany the Instrument of Proxy.
2. If this Instrument of Proxy is not dated in the space provided, authority is
hereby given by you, the Registered Stockholder, for the proxyholder to
date this proxy seven (7) calendar days after the date on which it was
mailed to you, the Registered Stockholder.
3. A Registered Stockholder who wishes to attend the Meeting and vote on the
resolutions in person, may simply register with the Inspectors of Election
before the Meeting begins.
4. Registered Stockholder who is not able to attend the Meeting in person but
wishes to vote on the resolutions, may do the following:
a. appoint one of the management proxyholders named on the Instrument of
Proxy, by leaving the wording appointing a nominee as is; OR
b. appoint another proxyholder.
5. The securities represented by this Instrument of Proxy will be voted or
withheld from voting in accordance with the instructions of the Registered
Stockholder on any poll of a resolution that may be called for and, if the
Registered Stockholder specifies a choice with respect to any matter to be
acted upon, the securities will be voted accordingly. Further, the
securities will be voted by the appointed proxyholder with respect to any
amendments or variations of any of the resolutions set out on the
Instrument of Proxy or matters which may properly come before the Meeting
as the proxyholder in its sole discretion sees fit.
INSTRUCTIONS AND OPTIONS FOR VOTING:
To be represented at the Meeting, this Instrument of Proxy must be DEPOSITED at
the office of Signature Stock Transfer, Inc., by mail or by fax, at any time up
to and including 10:00 a.m. (local time) on Wednesday, July 27, 2016, or at
least 48 hours (excluding Saturdays, Sundays and holidays) before the time that
the Meeting is to be reconvened after any adjournment of the Meeting.
Signature Stock Transfer, Inc.
2632 Coachlight Court
Plano, Texas, 75093
Fax: 972.612.4122