UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
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Preliminary
Proxy Statement |
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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Soliciting
Material Pursuant to Rule Sec.240.14a-12 |
GREENWAVE
TECHNOLOGY SOLUTIONS, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required |
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Fee
computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11. |
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Title
of each class of securities to which transaction applies: |
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Aggregate
number of securities to which transaction applies: |
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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): |
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Proposed
maximum aggregate value of transaction: |
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(5) |
Total
fee paid: |
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Fee
paid previously with preliminary materials: |
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
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Amount
previously paid: |
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Form,
Schedule or Registration Statement No.: |
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Date
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Greenwave
Technology Solutions, Inc.
4016
Raintree Rd, Suite 300
Chesapeake,
VA 23321
(800)
490-5020
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
be Held on October 13, 2023
To
the Stockholders of Greenwave Technology Solutions, Inc.:
NOTICE
IS HEREBY GIVEN that the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Greenwave Technology Solutions, Inc.,
a Delaware corporation (the “Company”), will be held on October 13, 2023
at 4:30 p.m. Eastern Time. The Annual Meeting will be a virtual meeting to be held as a listen-only conference call by calling 877-407-3088
(Toll Free) or by visiting www.GWAV.vote. There will not be a physical meeting location. If you encounter any technical difficulties
with the virtual meeting platform on the meeting day, please call 877-804-2062 (toll free) or email proxy@equitystock.com The meeting
will be held for the following purposes:
The
principal business of the meeting will be:
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To
elect five directors to serve until our next annual meeting of Stockholders or until their successor is duly elected and qualified; |
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To
approve the Company’s 2023 Equity Incentive Plan (the “2023 Plan”) and the reservation of up to 600,000 shares
of the Company’s Common Stock, par value $0.001 (the “Common Stock”) for issuance thereunder, subject to certain
conditions; |
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3. |
To
ratify the appointment of RBSM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; |
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4. |
To
hold a non-binding advisory vote on executive compensation; |
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5. |
To
approve, in accordance with Nasdaq Listing Rule 5635(d), the repricing of certain of our common stock purchase warrants; |
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To approve, in accordance with Nasdaq Listing Rule 5635(d),
the issuance of Common Stock to holders of certain Senior Secured Convertible Notes and Warrants. |
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7. |
To approve, in accordance with Nasdaq Listing Rule 5635(d),
the price protection feature of the warrants to purchase Common Stock issued in a private placement. |
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8. |
To
approve the adjournment of the Annual Meeting, if necessary or advisable, to solicit additional proxies in favor of the foregoing
proposals if there are not sufficient votes to approve the foregoing proposals; and |
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To
transact such other business as may be properly brought before the Annual Meeting and any adjournments thereof. |
You
may vote if you were the record owner of shares of the Company’s Common Stock, at the close of business on August 17, 2023.
The Board of Directors of the Company has fixed the close of business on August 17, 2023 as the record date (the “Record
Date”) for the determination of Stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournments thereof.
As
of the Record Date, there were 12,390,242 shares of Common Stock outstanding and entitled to vote at the Annual Meeting. The holders
of our Common Stock are entitled to one vote for each share of Common Stock held. The foregoing shares are referred to herein as the
“Shares”. Holders of our Common Stock will vote together as a single class on all matters described in this proxy statement
(the “Proxy Statement”).
All
Stockholders are cordially invited to virtually attend the Annual Meeting. Whether you plan to virtually attend the Annual Meeting or
not, you are requested to vote over the Internet, by telephone, or to complete, sign, date and return the enclosed proxy card promptly
in accordance with the instructions set forth on the proxy card. A pre-addressed, postage prepaid return envelope is enclosed for your
convenience. Voting by using the aforementioned methods will not prevent you from voting virtually at the annual meeting.
YOUR
VOTE AT THE ANNUAL MEETING IS IMPORTANT
Your
vote is important. Please vote as promptly as possible even if you plan to virtually attend the Annual Meeting.
For
information on how to vote your Shares, please see the instruction from your broker or other fiduciary, as applicable, as well as “How
Do I Vote?” in the Proxy Statement accompanying this notice.
We
encourage you to vote over the Internet, by telephone, or by completing, signing, and dating the proxy card, and returning it in the
enclosed envelope.
If
you have questions about voting your Shares, please contact our Chief Executive Officer at Greenwave Technology Solutions, Inc., at 4016
Raintree Rd, Suite 300, Chesapeake, VA 23321, telephone number (800) 490-5020.
If
you decide to change your vote, you may revoke your proxy in the manner described in the attached Proxy Statement at any time before
it is voted.
We
urge you to review the accompanying materials carefully and to vote as promptly as possible. Note that we have enclosed with this notice
a proxy statement.
THE
PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT:
www.GWAV.vote
By
Order of the Board of Directors of Greenwave Technology Solutions, Inc.
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Sincerely, |
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/s/
Danny Meeks |
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Danny
Meeks, Chief Executive Officer |
Date:
August __, 2023
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 13, 2023
The
Notice of Annual Meeting of Stockholders and our Proxy Statement are available at:
www.GWAV.vote
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REFERENCES
TO ADDITIONAL INFORMATION
This
Proxy Statement incorporates important business and financial information about Greenwave Technology Solutions, Inc. that is not included
in or delivered with this document. You may obtain this information without charge through the Securities and Exchange Commission (“SEC”)
website (www.sec.gov) or upon your written or oral request by contacting the Chief Executive Officer of Greenwave Technology Solutions,
Inc., at 4016 Raintree Rd, Suite 300, Chesapeake, VA 23321, telephone number (800) 490-5020.
To
ensure timely delivery of these documents, any request should be made no later than September 15, 2023 to receive them before the Annual
Meeting.
For
additional details about where you can find information about Greenwave Technology Solutions, Inc., please see the section entitled “Where
You Can Find More Information about the Company” in this Proxy Statement.
Greenwave
Technology Solutions, Inc.
4016
Raintree Rd, Suite 300
Chesapeake,
VA 23321
(800)
490-5020
2023
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 13, 2023
GENERAL
INFORMATION ABOUT THE ANNUAL MEETING
This
Proxy Statement, along with the accompanying notice of the 2023 Annual Meeting of Stockholders, contains information about the 2023 Annual
Meeting of Stockholders of Greenwave Technology Solutions, Inc., including any adjournments or postponements thereof (referred to herein
as the “Annual Meeting”). We are holding the Annual Meeting at 4:30 pm Eastern Time on October 13, 2023 or such later
date or dates as such Annual Meeting date may be adjourned or postponed. The Annual Meeting will be a completely virtual meeting of Stockholders
conducted via live audio webcast to enable our Stockholders to participate from any location around the world that is safe and convenient
to them. You will be able to attend the Annual Meeting by visiting www.GWAV.vote.
In
this Proxy Statement, we refer to Greenwave Technology Solutions, Inc. as “Greenwave,” the “Company,” “we,”
“us,” or “our.”
Why
Did You Send Me This Proxy Statement?
We
sent you this Proxy Statement in connection with the solicitation by the board of directors of the Company (referred to herein as the
“Board of Directors” or the “Board”) of proxies, in the accompanying form, to be used at the Annual Meeting to
be held at 4:30 p.m. Eastern Time on October 13, 2023 and any adjournments thereof. This Proxy Statement along with the accompanying
Notice of Annual Meeting of Stockholders summarizes the purposes of the Annual Meeting and the information you need to know to vote at
the Annual Meeting.
Important
Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on October 13, 2023. The Proxy Statement
and annual report to security holders are available at www.GWAV.vote.
This
Proxy Statement is being mailed on or about August 31, 2023 to all Stockholders entitled to notice of and to vote at the meeting.
You can also find a copy of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”), which
includes our financial statements for the fiscal year ended December 31, 2022 by following the instructions contained in the Notice of
Availability mailed to Stockholders entitled to notice of and to vote at the meeting along with this Proxy Statement on August 31,
2023, or on the Internet through the Securities and Exchange Commission’s electronic data system at www.sec.gov or at
www.GWAV.com.
Who
may attend and how to attend
Our
Board has fixed the close of business on August 17, 2023 as the record date for a determination of stockholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournment or postponement thereof (the “Record Date”). Each share of Common
Stock represents one vote to be voted on each matter presented at the Annual Meeting. Record holders and beneficial owners may attend
the Annual Meeting via phone. Set forth below is a summary of the information you need to attend the virtual Annual Meeting:
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Access
an audio-only conference call by calling 877-407-3088 (Toll Free) or +1 877-407-3088 (International); |
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Instructions
on how to attend and participate in the virtual Annual Meeting, including how to demonstrate proof of stock ownership, are also available
as follows: |
Stockholders
of Record
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Stockholders
of record as of the Record Date can attend the Annual Meeting by accessing the live audio conference call at +1-877-407-3088 and
presenting the unique 12-digit control number on the proxy card. |
Beneficial
Owners
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If
you were a beneficial owner of record as of the Record Date (i.e., you held your Shares in an account at a brokerage firm, bank or
other similar agent), you will need to obtain a legal proxy from your broker, bank or other agent. Once you have received a legal
proxy from your broker, bank or other agent, it should be emailed to our transfer agent, Equity Stock Transfer, at proxy@equitystock.com
and should be labeled “Legal Proxy” in the subject line. Please include proof from your broker, bank or other agent of
your legal proxy (e.g., a forwarded email from your broker, bank or other agent with your legal proxy attached, or an image of your
valid proxy attached to your email). Requests for registration must be received by Equity Stock Transfer no later than 5:00 p.m.
Eastern Time on October 13, 2023. You will then receive a confirmation of your registration, with a control number, by email
from Equity Stock Transfer. At the time of the meeting, access the live audio conference call at +1-877-407-3088 and present your
unique 12-digit control number. |
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Stockholders
may submit live questions on the conference line while attending the virtual Annual Meeting. |
What
if I have technical difficulties or trouble accessing the virtual Annual Meeting?
We
will have technicians ready to assist you with any technical difficulties you may have in accessing the virtual Annual Meeting. If you
encounter any difficulties, please call: 877-804-2062 (Toll Free) or email proxy@equitystock.com.
Why
is the 2023 Annual Meeting a virtual, online meeting?
We
believe hosting the Annual Meeting virtually will enable increased Stockholder attendance and will encourage more active Stockholder
engagement and participation at the Annual Meeting.
Who
Can Vote?
Stockholders
who owned Common Stock at the close of business on August 17, 2023 (the “Record Date”), are entitled to vote at the
Annual Meeting. As of the Record Date, there were 12,390,242 shares of Common Stock outstanding and entitled to vote at the Annual Meeting.
You
do not need to virtually attend the Annual Meeting to vote your Shares. Shares represented by valid proxies, received in time for the
Annual Meeting and not revoked prior to the Annual Meeting, will be voted at the Annual Meeting. A Stockholder may revoke a proxy before
the proxy is voted by delivering to our Secretary a signed statement of revocation or a duly executed proxy card bearing a later date.
Any Stockholder who has executed a proxy card but attends the Annual Meeting virtually may revoke the proxy and vote at the Annual Meeting.
How
Many Votes Do I Have?
Each
holder of Common Stock is entitled to one vote per share of Common Stock. Holders of our Common Stock will vote together as a single
class.
How
Do I Vote?
Whether
you plan to virtually attend the Annual Meeting or not, we urge you to vote by proxy. All Shares represented by valid proxies that we
receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or
as instructed via Internet or telephone. You may specify whether your Shares should be voted for or against each nominee for director,
and whether your Shares should be voted for, against or abstain with respect to each of the other proposals. Except as set forth below,
if you properly submit a proxy without giving specific voting instructions, your Shares will be voted in accordance with the Board’s
recommendations as noted below. Voting by proxy will not affect your right to virtually attend the Annual Meeting. If your Shares are
registered directly in your name through our stock transfer agent, Equity Stock Transfer, or you have stock certificates, you may vote:
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By
Internet or by telephone. Follow the instructions you received to vote by Internet or telephone. |
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By
mail. Complete and mail the enclosed proxy card in the enclosed postage prepaid envelope. Your proxy will be voted in accordance
with your instructions. If you sign the proxy card but do not specify how you want your Shares voted, they will be voted as recommended
by the Board. |
If
your Shares are held in “street name” (held in the name of a bank, broker or other nominee), you must provide the bank, broker
or other nominee with instructions on how to vote your Shares and can do so as follows:
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By
Internet or by telephone. Follow the instructions you receive from your broker to vote by Internet or telephone. |
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By
mail. You will receive instructions from your broker or other nominee explaining how to vote your Shares. |
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, under the rules of various national and regional securities exchanges, the organization that holds your Shares may generally
vote on routine matters, but cannot vote on non-routine matters.
How
Does The Board Recommend That I Vote On The Proposals?
The
Board recommends that you vote as follows:
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“FOR”
the election of the Board nominees as directors; |
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“FOR”
the approval the Company’s 2023 Equity Incentive Plan (the “2023 Plan”) and the reservation of up to 600,000 shares
of Common Stock for issuance thereunder, subject to certain conditions; |
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“FOR”
the ratification of the selection of RBSM LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2023; |
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“FOR”
the approval, on an advisory basis, of the compensation paid to our named executive officers; |
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“FOR”
the repricing of certain of our common stock purchase warrants in accordance with Listing Rule 5635(d); and |
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“FOR” the issuance of Common Stock
to holders of certain Senior Secured Convertible Notes and Warrants. |
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“FOR”
the approval of the price protection feature of the warrants to purchase Common Stock issued in a private placement to certain
institutional and accredited investors. |
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“FOR”
the approval of the adjournment of the Annual Meeting, if necessary or advisable, to solicit additional proxies in favor of the foregoing
proposals if there are not sufficient votes to approve the foregoing proposals. |
If
any other matter is presented, the proxy card provides that your Shares will be voted by the proxy holder listed on the proxy card in
accordance with his or her best judgment. At the time this Proxy Statement was printed, we knew of no matters that needed to be acted
on at the Annual Meeting, other than those discussed in this Proxy Statement.
May
I Change or Revoke My Proxy?
If
you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any
one of the following ways:
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by
signing a new proxy card and submitting it as instructed above; |
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by
re-voting by Internet or by telephone as instructed above — only your latest Internet or telephone vote will be counted; |
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if
your Shares are registered in your name, by notifying the Company’s Secretary in writing before the Annual Meeting that you
have revoked your proxy; or |
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by
virtually attending the Annual Meeting and voting; however, virtually attending the Annual Meeting will not in and of itself revoke
a previously submitted proxy unless you specifically request it. |
What
If I Receive More Than One Proxy Card?
You
may receive more than one proxy card or voting instruction form if you hold Shares in more than one account, which may be in registered
form or held in street name. Please vote in the manner described under “How Do I Vote?” on the proxy card for each account
to ensure that all of your Shares are voted.
What
is a Broker Non-Vote?
If
your Shares are held in street name, you must instruct the organization that holds your Shares how to vote your Shares. If you sign your
proxy card but do not provide instructions on how your broker should vote on “routine” proposals, your broker will vote your
Shares as recommended by the Board. If you do not provide voting instructions, your Shares will not be voted on any “non-routine”
proposals. This vote is called a “broker non-vote.”
What
Vote is Required to Approve Each Proposal and How are Votes Counted?
Proposal
1: Election of Directors |
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A
plurality of the Shares present virtually or represented by proxy and entitled to vote on the subject matter at the Annual Meeting
is required to elect the nominees as directors. Abstentions and broker non-votes will have no effect on the outcome of the vote on
this proposal. |
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Proposal
2: Approval of the Greenwave Technology Solutions, Inc. 2023 Equity Incentive Plan, and the reservation of up to 600,000 shares of
Common Stock for issuance thereunder, subject to certain conditions. |
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The
affirmative vote of a majority of the Shares present virtually or represented by proxy and entitled to vote on the subject matter
at the Annual Meeting is required to approve the 2023 Equity Incentive Plan. Abstentions are considered Shares present and entitled
to vote on this proposal, and thus, will have the same effect as a vote “AGAINST” this proposal. Broker non-votes will
have no effect on the outcome of this proposal. |
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Proposal
3: Ratification of the appointment of RBSM LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2023. |
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The
affirmative vote of a majority of the Shares present virtually or represented by proxy and entitled to vote on the subject matter at
the Annual Meeting is required to ratify the appointment of RBSM LLP as our independent registered public accounting firm for the
fiscal year ending December 31, 2023. This means that the votes cast by the Stockholders “FOR” the approval of the
proposal must exceed the number of votes cast “AGAINST” the approval of the proposal. If a Stockholder votes to
“ABSTAIN,” it has the same effect as a vote “AGAINST.” If you are a beneficial owner, your broker, bank or
other nominee may vote your Shares on this proposal without receiving voting instructions from you. |
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Proposal
4: Non-binding advisory vote to approve executive compensation. |
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To
be approved, this non-binding vote must be approved by a majority of the Shares present virtually or represented by proxy and entitled
to vote on the subject matter at the Annual Meeting. This means that the votes cast by the Stockholders “FOR” the approval
of the proposal must exceed the number of votes cast “AGAINST” the approval of the proposal. If a Stockholder votes to
“ABSTAIN,” it has the same effect as a vote “AGAINST.” Broker non-votes will have no effect on the outcome
of this proposal. |
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Proposal
5: The repricing of certain of our common stock purchase warrants in accordance with Listing Rule 5635(d). |
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The
affirmative vote of a majority of the outstanding Shares entitled to vote as of the record date is required to approve repricing
of certain of our common stock purchase warrants in accordance with Listing Rule 5635(d). Thus, abstentions and broker non-votes
will have the same effect as a vote “AGAINST” this proposal. |
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Proposal 6: The issuance of Common Stock to holders of certain Senior
Secured Convertible Notes and Warrants in accordance with Listing Rule 5635(d). |
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The affirmative vote of a majority of the outstanding
Shares entitled to vote as of the record date is required to approve the issuance of Common Stock to holders of certain Senior Secured
Convertible Notes and Warrants in accordance with Listing Rule 5635(d). Thus, abstentions and broker non-votes will have the same
effect as a vote “AGAINST” this proposal. |
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Proposal 7: The approval of the price
protection feature of the warrants to purchase Common Stock issued in a private placement to certain
institutional and accredited investors in accordance with Listing Rule
5635(d). |
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The affirmative vote of a
majority of the outstanding Shares entitled to vote as of the record date is required to approve the price protection feature of the
warrants to purchase Common Stock issued in a private placement to certain institutional and
accredited investors in accordance with Listing Rule 5635(d). Thus, abstentions and broker
non-votes will have the same effect as a vote “AGAINST” this proposal. |
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Proposal
8: Authorization to adjourn the Annual Meeting. |
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The
affirmative vote of a majority of the Shares present virtually or represented by proxy and entitled to vote on the subject matter
at the Annual Meeting is required to approve this proposal. This means that the votes cast by the Stockholders “FOR”
the approval of the proposal must exceed the number of votes cast “AGAINST” the approval of the proposal. If a Stockholder
votes to “ABSTAIN,” it has the same effect as a vote “AGAINST.” Broker non-votes will have no effect on the
outcome of this proposal. |
What
Constitutes a Quorum for the Annual Meeting?
The
presence, virtually or by proxy, of the holders of a majority of the outstanding shares of each class or series of voting stock then
entitled to vote at the Annual Meeting constitutes a quorum at the Annual Meeting. Votes of Stockholders of record who are present at
the virtual Annual Meeting virtually or by proxy, abstentions, and broker non-votes are counted for purposes of determining whether a
quorum exists.
Do
I Have Dissenters’ Rights of Appraisal?
The
Company’s Stockholders do not have appraisal rights under Delaware law or under the Company’s governing documents with respect
to the matters to be voted upon at the Annual Meeting.
Householding
of Annual Disclosure Documents
The
Securities and Exchange Commission (the “SEC”) previously adopted a rule concerning the delivery of annual disclosure documents.
The rule allows us or brokers holding our Shares on your behalf to send a single set of our annual report and proxy statement to any
household at which two or more of our Stockholders reside, if either we or the brokers believe that the Stockholders are members of the
same family. This practice, referred to as “householding,” benefits both Stockholders and us. It reduces the volume of duplicate
information received by you and helps to reduce our expenses. The rule applies to our annual reports, proxy statements and information
statements. Once Stockholders receive notice from their brokers or from us that communications to their addresses will be “householded,”
the practice will continue until Stockholders are otherwise notified or until they revoke their consent to the practice. Each Stockholder
will continue to receive a separate proxy card or voting instruction card.
Those
Stockholders who either (i) do not wish to participate in “householding” and would like to receive their own sets of our
annual disclosure documents in future years or (ii) who share an address with another one of our Stockholders and who would like to receive
only a single set of our annual disclosure documents should follow the instructions described below:
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Stockholders
whose Shares are registered in their own name should contact our transfer agent, Equity Stock Transfer, and inform them of their
request by calling them at (212) 575-5757 or writing them at 237 W 37th St #602, New York, NY 10018. |
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Stockholders
whose Shares are held by a broker or other nominee should contact such broker or other nominee directly and inform them of their
request. Stockholders should be sure to include their name, the name of their brokerage firm and their account number. |
Who
is Paying for this Proxy Solicitation?
The
Company is paying the cost of preparing, printing and mailing these proxy materials. In addition to mailed proxy materials, our directors,
officers and employees may also solicit proxies in person, by telephone, or by other means of communication. We will not pay our directors,
officers and employees any additional compensation for soliciting proxies. We may reimburse brokerage firms, banks and other agents for
the cost of forwarding proxy materials to beneficial owners.
Who
will Count the Votes?
A
representative from Equity Stock Transfer, LLC will act as the inspector of election and count the votes.
When
are Stockholder Proposals due for Next Year’s Annual Meeting?
At
our annual meeting each year, our Board submits to Stockholders its nominees for election as directors. In addition, the Board may submit
other matters to the Stockholders for action at the annual meeting.
Pursuant
to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Stockholders may present proper
proposals for inclusion in the Company’s proxy statement for consideration at the 2023 annual meeting of Stockholders by submitting
their proposals to the Company in a timely manner. These proposals must meet the Stockholder eligibility and other requirements of the
SEC. To be considered for inclusion in next year’s proxy materials, you must submit your proposal in writing no later than April
30, 2024, but no earlier than April 1, 2024 to the Company at Greenwave Technology Solutions, Inc., 4016 Raintree Rd, Suite 300, Chesapeake,
VA 23321; provided, however, if the date of the Annual Meeting is convened more than 30 days before, or delayed by more than 30 days
after the first anniversary of this Annual Meeting, a Stockholder proposal must be submitted in writing to the Company not less than
10 calendar days after the date the Company shall have mailed notice to its shareholders of the date that the annual meeting of shareholders
will be held or shall have issued a press release or otherwise publicly disseminated notice that an annual meeting of shareholders will
be held and the date of the meeting.
What
Interest Do Officers and Directors Have in Matters to Be Acted Upon?
None
of the members of the Board and none of the executive officers of the Company have any interest in any proposal that is not shared by
all other Stockholders of the Company except for Proposal No. 1 regarding the nomination of members to the Board, Proposal No. 2 regarding
the 2023 Plan, under which members of our Board and our executive officers will be eligible to participate and receive equity incentive
awards, and Proposal No. 4 regarding the advisory vote on executive compensation.
Where
Can I Find the Voting Results of the Annual Meeting?
We
will announce preliminary voting results at the annual meeting. We will also disclose voting results in a current report on Form 8-K
filed with the SEC within four business days after the Annual Meeting, which will be available on our website.
WHERE
YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY
The
Company files annual, quarterly and current reports, proxy statements and other information with the SEC. You can read and copy any materials
that the Company files with the SEC, which you can access over the Internet at http://www.sec.gov. The Company’s website address
is www.GWAV.com. Information contained on, or that can be accessed through, the Company’s website is not a part of this
Proxy Statement.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our Common Stock by (i) each person who, to our
knowledge, owns more than 5% of our Common Stock (ii) our current directors and the named executive officers identified under the heading
“Executive Compensation” and (iii) all of our current directors and executive officers as a group. We have determined beneficial
ownership in accordance with applicable rules of the SEC, and the information reflected in the table below is not necessarily indicative
of beneficial ownership for any other purpose. Under applicable SEC rules, beneficial ownership includes any shares as to which a person
has sole or shared voting power or investment power and any shares which the person has the right to acquire within 60 days after August
17, 2023 through the exercise of any option, warrant or right or through the conversion of any convertible security. Unless otherwise
indicated in the footnotes to the table below and subject to community property laws where applicable, we believe, based on the information
furnished to us that each of the persons named in this table has sole voting and investment power with respect to the shares indicated
as beneficially owned.
The
information set forth in the table below is based on 12,390,242 shares of our Common Stock issued and outstanding on August 17,
2023. In computing the number of shares of Common Stock beneficially owned by a person and the percentage ownership of that person, we
deemed to be outstanding all shares of Common Stock subject to options, warrants, rights or other convertible securities held by that
person that are currently exercisable or will be exercisable within 60 days after August 17, 2023. We did not deem these shares
outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the principal
address of each of the Stockholders below is in care of Greenwave Technology Solutions, Inc., 4016 Raintree Rd, Chesapeake, VA 23321.
| |
Number of Shares of Common Stock Beneficially Owned | | |
Percentage of Common Stock Beneficially Owned | | |
% of Total Voting Power | |
Directors and Named Executive Officers | |
| | | |
| | | |
| | |
Danny Meeks | |
| 4,398,169 | (1) | |
| 35.50 | % | |
| 35.50 | % |
John Wood | |
| 25,866 | | |
| * | | |
| * | |
Cheryl Lanthorn | |
| 880 | (2) | |
| * | | |
| * | |
Henry Sicignano III | |
| - | | |
| - | | |
| - | |
Ashley Sickles | |
| - | | |
| - | | |
| - | |
Howard Jordan | |
| - | | |
| - | | |
| - | |
Isaac Dietrich | |
| 168 | | |
| * | | |
| * | |
All directors and named executive officers as a group (5 people) | |
| 4,425,083 | | |
| 35.71 | % | |
| 35.71 | % |
Other 5% Stockholder | |
| | | |
| | | |
| | |
Arena Investors, LP | |
| 972,708 | | |
| 7.85 | % | |
| 7.85 | % |
* |
Represents
beneficial ownership of less than 1.0% of our outstanding Common Stock. |
(1) |
Consists
of (i) 3,575,703 shares of Common Stock and (ii) 822,466 shares of Common Stock underlying warrants. |
(2) |
Consists
of 880 shares owned by the reporting person’s spouse. |
PROPOSAL
ONE:
ELECTION
OF DIRECTORS
At
this Annual Meeting, five (5) people, comprising the entire membership of the Board, are to be elected. The elected directors will serve
until the Company’s next annual meeting of Stockholders and until a successor is elected and qualified. Each of the nominees currently
serves on the Board.
The
nominees have consented to serve if elected. We expect that the nominees will be available for election, but if they are not candidates
at the time the election occurs, such proxy will be voted for the election of another nominee to be designated by the Board to fill any
such vacancy.
The
term of office of the people elected as directors will continue until the next annual meeting or until their successor has been elected
and qualified, or until the director’s death, resignation or removal.
Biographical
and certain other information concerning the Company’s nominees for election to the Board is set forth below. Our directors are
not directors in any other reporting companies. We are not aware of any proceedings to which our directors, or any associate of our directors
are a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.
Name |
|
Age |
|
Executive
Position |
Danny
Meeks |
|
49 |
|
Chief
Executive Officer, Chairman of the Board |
Cheryl
Lanthorn |
|
53 |
|
Director |
Henry
Sicignano III |
|
55 |
|
Director |
John
Wood |
|
49 |
|
Director |
Jason
Adelman |
|
54 |
|
Director |
Board
Diversity Matrix (As of August 17, 2023) |
Total
Number of Directors: 5 |
|
|
Female |
|
Male |
|
Non-Binary |
|
Did
Not Disclose Gender |
Part
I: Gender Identity |
|
|
|
|
|
|
|
|
Directors |
|
1 |
|
4 |
|
- |
|
- |
Part
II: Demographic Background |
|
|
|
|
|
|
|
|
African
American or Black |
|
- |
|
- |
|
- |
|
- |
Alaskan
Native or Native American |
|
- |
|
- |
|
- |
|
- |
Asian |
|
- |
|
- |
|
- |
|
- |
Hispanic
or Latinx |
|
- |
|
1 |
|
- |
|
- |
Native
Hawaiian or Pacific Islander |
|
- |
|
- |
|
- |
|
- |
White |
|
1 |
|
2 |
|
- |
|
- |
Two
or More Races or Ethnicities |
|
- |
|
- |
|
- |
|
- |
LGBTQ+ |
|
- |
|
- |
|
- |
|
- |
Did
Not Disclose Demographic Background |
|
- |
|
- |
|
- |
|
- |
Mr.
Danny Meeks, Chief Executive Officer and Chairman – Mr. Meeks is the Chief Executive Officer of the Company, a position
he has held since September 30, 2021. He has served as a director and Chairman of the Board since June 2021. He has served as interim
Chief Financial Officer from November 30, 2021 until April 18, 2022. He was the sole owner and President of Empire Services, Inc., a
metal recycling company he founded in 2002, until its acquisition by the Company in September 2021. Additionally, Mr. Meeks has been
serving as the President of DWM Properties, LLC, his real estate holding company, since 2002 and as the President of Select Recycling
and Waste Services, Inc., a waste disposal and recycling company, from October 2016 to present. Mr. Meeks graduated from Manor High School
in 1993. Mr. Meeks is well-suited to serve on our Board due to his significant business and management experience and deep knowledge
of growth and commercialization strategies. Mr. Meeks joined the Company’s Board to foster revenue-generating capabilities of the
Company.
Mr.
Henry Sicignano III, Director – Mr. Sicignano has served as a Director of the Company since July 2023. Mr.
Sicignano currently serves as the President of Charlie’s Holdings, Inc. (OTC: CHUC), a publicly traded consumer goods company with
sales extending to more than 90 countries, a role which he has held since April 2021. Prior to this role, from March 2015 through July
2019, he served as Chief Executive Officer of 22nd Century Group, Inc. (Nasdaq: XXII), a publicly listed plant biotechnology company.
Additionally, Mr. Sicignano has served as director of Kartoon Studios, Inc. (NYSE: TOON) since May 2023 and served as General Manager
at NOCO Energy Corp, as well as Vice President at Kittinger Furniture Company, Inc. He also served on the board of directors of Anandia
Laboratories, Inc., which was acquired in 2018. Mr. Sicignano holds a B.A. degree from Harvard College and an M.B.A. degree from Harvard
University.
Mrs.
Cheryl Lanthorn, Director – Mrs. Lanthorn has served as a Director of the Company since April 2022. Mrs. Lanthorn began her
career as a Personal Administrator at Welton, Duke & Hawks before rising to an Accounting Administrator due to her work-ethic, extensive
accounting knowledge, and attention to detail. For the next 14 years, Mrs. Lanthorn was a Software Trainer and Content Developer for
Applied Systems, Inc., where she created webinars and instructional documentation to teach employees how to best utilize TAM, Vision,
Epic, and other scalable software programs. From December 2015 to July 2022, Mrs. Lanthorn served as an Account Executive at Brown &
Brown Insurance, where she managed one of the company’s largest books of business, managed employees and their books, trains new
employees, and performed various other administrative duties. Since August 2022, Mrs. Lanthorn has been a Senior Account Manager at Marsh
McLennan Agency, LLC, where she manages large corporate accounts.
Mr.
John Wood, Director – Mr. Wood has served as Director of the Company since April 2022. Since 1998, Mr. Wood has served as a
licensed real estate agent in Virginia. Since 2010, He has served as the Principal Broker of John E. Wood Realty, Inc., based in Chesapeake,
Virginia, where through his extensive relationships with business and community leaders, he has become one of the region’s most
active real Residential, Commercial and Property Management Brokers. He is also the Virginia Principal Broker for two other companies,
which rank in the top 10 in the nation. In July 2018, he launched American Contracting Services, LLC, which has successfully completed
hundreds of Commercial and Residential construction projects.
Mr.
Jason Adelman, Director – Mr. Adelman has served as Director of Greenwave since August
2023 and brings extensive experience in advising and investing in emerging growth companies in the technology, media, medical device
and biotech sectors. Mr. Adelman was the lead banker in Computer Motion’s merger with Intuitive Surgical and was a member of the board
of directors of Pharmacyclics prior to its acquisition by Abbvie for over $20 billion. Currently, Mr. Adelman serves as a member of the
board of directors of Trio-Tech International, a global semiconductor services company, and Oblong, Inc., a leader in next generation
collaboration technologies. Prior to founding Burnham Hill Capital Group, LLC in 2003, Mr. Adelman served as Managing Director of Investment
Banking at H.C. Wainwright and Co., Inc. Mr. Adelman holds a B.A degree in Economics from the University of Pennsylvania and a J.D. degree
from Cornell Law School.
Family
Relationships
There
are no family relationships among our directors and executive officers.
Involvement
in Legal Proceedings
We
are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters
in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set
forth under Item 401(f) of Regulation S-K.
Vote
Required
A
plurality of the Shares present virtually or represented by proxy and entitled to vote on the subject matter at the Annual Meeting is
required to elect the nominees as directors.
THE
BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED ABOVE, AND PROXIES SOLICITED BY THE BOARD WILL BE
VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
CORPORATE
GOVERNANCE
Governance
of Our Company
We
seek to maintain high standards of business conduct and corporate governance, which we believe are fundamental to the overall success
of our business, serving our Stockholders well and maintaining our integrity in the marketplace. Our corporate governance guidelines
and Code of Conduct and Ethics, together with our Second Amended and Restated Certificate of Incorporation, Bylaws and the charters for
each of our Board committees, form the basis for our corporate governance framework. We also are subject to certain provisions of the
Sarbanes-Oxley Act and the rules and regulations of the SEC. The full text of the Code of Conduct and Ethics is available on our website
at https://www.GWAV.com/code-of-conduct and is also filed as an exhibit to our Annual Report on Form 10-K for the year ended December
31, 2014 as filed with the SEC on April 1, 2015.
As
described below, our Board has established four standing committees to assist it in fulfilling its responsibilities to the Company and
its stockholders: The Audit Committee, the Compensation Committee, the Sustainability Committee and the Nominating and Corporate Governance
Committee.
Our
Board of Directors
As
of August 17, 2023, our Board consists of five members. The number of directors on our Board can be evaluated and amended by action
of our Board.
Our
Board judges the independence of its directors by the standards established by the Nasdaq Stock Market. Accordingly, the Board has determined
that our five non-employee directors, Cheryl Lanthorn, Henry Sicignano, John Wood and Jason Adelman each meet the independence
standards established by the Nasdaq Stock Market and the applicable independence rules and regulations of the SEC, including the rules
relating to the independence of the members of our Audit Committee and Compensation Committee. Our Board considers a director to be independent
when the director is not an officer or employee of the Company or its subsidiaries, does not have any relationship which would, or could
reasonably appear to, materially interfere with the independent judgment of such director, and the director otherwise meets the independence
requirements under the listing standards of the Nasdaq Stock Market and the rules and regulations of the SEC.
Our
Board believes its members collectively have the experience, qualifications, attributes and skills to effectively oversee the management
of our Company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad
range of issues, sufficient experience and background to resolve the issues facing our Company, a willingness to devote the necessary
time to their Board and committee duties, a commitment to representing the best interests of the Company and our stockholders and a dedication
to enhancing stockholder value.
Risk
Oversight. Our Board oversees the management of risks inherent in the operation of our business and the implementation of our business
strategies. Our Board performs this oversight role by using several different levels of review. In connection with its reviews of the
operations and corporate functions of our Company, our Board addresses the primary risks associated with those operations and corporate
functions. In addition, our Board reviews the risks associated with our Company’s business strategies periodically throughout the
year as part of its consideration of undertaking any such business strategies. Each of our Board committees also coordinates oversight
of the management of our risk that falls within the committee’s areas of responsibility. In performing this function, each committee
has full access to management, as well as the ability to engage advisors. The Board is also provided with updates by the Chief Executive
Officer and other executive officers of the Company on a regular basis.
Stockholder
Communications. Although we do not have a formal policy regarding communications with the Board, Stockholders may communicate with
the Board by writing to us at 4016 Raintree Rd, Chesapeake, VA 23321, Attention: Chairman. Stockholders who would like their submission
directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate. Please note that the foregoing
communication procedure does not apply to (i) stockholder proposals pursuant to Exchange Act Rule 14a-8 and communications made in connection
with such proposals or (ii) service of process or any other notice in a legal proceeding.
Board
and Committee Meetings
During
the fiscal year ended December 31, 2022, our Board held three meetings and operated primarily by unanimous written consent. For the fiscal
year ended December 31, 2022, our Board was composed of one member from January to April 2022 and four members from April 2022 to December
31, 2022. For the fiscal year ended December 31, 2021, our Board was composed of one member from January to June 2021, two members from
June to November 2021, and one member in December 2021, all of whom attended every meeting of our Board. Our Audit Committee held four
meetings during the year ended December 31, 2022. Our Compensation Committee and Nominating and Corporate Governance committee met once
during the fiscal year ended December 31, 2022. The Company held its 2022 Shareholder’s Meeting on November 29, 2022.
Board
Committees
On
December 9, 2015, our Board designated the following three committees of the Board: the Audit Committee, the Compensation Committee,
and the Nominating and Corporate Governance Committee. On September 13, 2022, the Board created a Sustainability Committee of the Board.
For the year ended December 31, 2021, the Company’s designated committees did not have any members and the Board acted in place
of such committees.
Audit
Committee. Effective as of April 18, 2022 the Board appointed each of Cheryl Lanthorn and John Wood as a member of the
Audit Committee. Effective as of April 19, 2022 the Board appointed J. Bryan Plumlee as a member of the Audit Committee. Effective July
12, 2023, Mr. Plumlee resigned from the Audit Committee and Henry Sicignano was appointed to the Audit Committee and as its Chairman.
Henry Sicgnano III is the Chairman of the Audit Committee. The Audit Committee is responsible for, among other things, overseeing the
financial reporting and audit process and evaluating our internal controls over financial reporting. The Board has determined that Henry
Sicgnano III is an “audit committee financial expert” serving on its Audit Committee. The Board has determined that each
member of the Audit Committee is “independent,” as that term is defined by applicable SEC rules. In addition, the Board has
determined that each member of the Audit Committee is “independent,” as that term is defined by the rules of the Nasdaq Stock
Market. A copy of the Audit Committee Charter is available on our website at https://www.GWAV.com/audit-committee-charter.
Compensation
Committee. Effective as of April 18, 2022 the Board appointed each of Cheryl Lanthorn and John Wood as a member of the
Compensation Committee. Effective as of April 19, 2022 the Board appointed J. Bryan Plumlee as a member of the Compensation Committee.
Effective July 12, 2023, Mr. Plumlee resigned from the Compensation Committee and Henry Sicignano was appointed to the Compensation Committee.
Effective July 12, 2023, Cheryl Lanthorn was appointed as Chairwoman of the Compensation Committee. Cheryl Lanthorn is the Chairwoman
of the Compensation Committee. The Compensation Committee is responsible for, among other things, establishing and overseeing the Company’s
executive and equity compensation programs, establishing performance goals and objectives, and evaluating performance against such goals
and objectives. The Board has determined that each member of the Compensation Committee is “independent,” as that term is
defined by applicable SEC rules. In addition, the Board has determined that each member of the Compensation Committee is “independent,”
as that term is defined by the rules of the Nasdaq Stock Market. A copy of the Compensation Committee Charter is available on our website
at https://www.GWAV.com/compensation-committee-charter.
Nominating
and Corporate Governance Committee. Effective as of April 18, 2022 the Board appointed each of Cheryl Lanthorn and John
Wood as a member of the Nomination and Corporate Governance Committee. Effective as of April 19, 2022 the Board appointed J. Bryan Plumlee
as a member of the Nomination and Corporate Governance Committee. Effective July 12, 2023, Mr. Plumlee resigned from the Nomination and
Corporate Governance Committee and Henry Sicignano was appointed to the Nomination and Corporate Governance Committee. Effective July
12, 2023, Cheryl Lanthorn was appointed as Chairwoman of the Nomination and Corporate Governance Committee. Cheryl Lanthorn is the Chairwoman
of the Nomination and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for, among other
things, identifying and recommending candidates to fill vacancies occurring between annual stockholder meetings and reviewing the Company’s
policies and programs relating to matters of corporate citizenship, including public issues of significance to the Company and its stockholders.
The Board has determined that each member of the Nominating and Corporate Governance Committee is “independent,” as that
term is defined by applicable SEC rules. In addition, the Board has determined that each member of the Nominating and Corporate Governance
Committee is “independent,” as that term is defined by the rules of the Nasdaq Stock Market. A copy of the Nominating and
Corporate Governance Committee Charter is available on our website at https://www.GWAV.com/ncg-charter.
Sustainability
Committee. Effective as of September 13, 2022 the Board appointed each of Cheryl Lanthorn, John Wood and J. Bryan Plumlee
as members of the Sustainability Committee. Effective July 12, 2023, Mr. Plumlee resigned from the Sustainability Committee Cheryl Lanthorn
is the Chairwoman of the Sustainability Committee. The Sustainability Committee is responsible for, among other things, setting and overseeing
the Company’s goals, strategies, and commitments related to sustainability and ESG, including climate risks and opportunities,
community and social impact, and diversity and inclusion. A copy of the Sustainability Committee Charter is available on our website
at https://www.GWAV.com/sustainability-committee-charter.
Risk
Oversight
The
Board is primarily responsible for overseeing our risk management processes. The Board receives and reviews periodic reports from management,
auditors, legal counsel and others, as appropriate, regarding the Company’s assessment of risks. The Board focuses on the most
significant risks facing the Company and our general risk management strategy, and also ensures that the risks we undertake are consistent
with the Board’s risk parameters. While the Board oversees the risk management process, our management is responsible for day-to-day
risk management and, if management identifies new or additional significant risks, it brings such risks to the attention of the Board.
Board
Leadership Structure
Danny
Meeks is the Chairman of our Board and Chief Executive Officer of the Company. The Chairman of the Board presides at all meetings of
the Board, unless such position is vacant, in which case, the Chief Executive Officer of the Company would preside.
Policy
on Hedging the Economic Risks of Equity Ownership.
The
Company has no policy regarding hedging the economic risks of equity ownership for the executive team or directors of the Company and
the Company does not engage in this practice.
Changes
to security holder director nomination procedures
The
Company has not adopted procedures for considering director candidates submitted by stockholders under Item 407(c)(2)(iv), Regulation
S-K.
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of our outstanding
shares of Common Stock (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and reports
of changes in ownership in our Common Stock and other equity securities. Such persons are required by SEC regulations to furnish to us
copies of all Section 16(a) forms they file. To our knowledge, based solely on our review of copies of the reports received by us or
written representations from certain Reporting Persons that no other reports were required, we believe that during the fiscal year ended
December 31, 2022, all filing requirements applicable to the Reporting Persons were timely met.
EXECUTIVE
OFFICERS
The
following are biographical summaries of our executive officers and their ages, except for Mr. Meeks, whose biography is set forth above:
Name |
|
Age |
|
Position |
Danny
Meeks |
|
49 |
|
Chief
Executive Officer and Chairman of the Board |
Isaac
Dietrich |
|
31 |
|
Chief
Financial Officer |
Danny
Meeks, Chairman, Chief Executive Officer, and Director – Biographical information regarding Mr. Meeks is provided above under
Board Nominees.
Isaac
Dietrich, Chief Financial Officer – Mr. Dietrich founded Greenwave and previously held the following positions with the company:
Chief Executive Officer (April 2013 – October 2017, December 2017 – September 2021); Chairman of the Board (April 2013 –
October 2017, December 2018 – June 2021); Chief Financial Officer (April 2013 – May 2014, August 2017 – October 2017,
March 2021 – November 2021, April 2023 to present); and a member of its Board of Directors (April 2013 – November 2021).
Mr. Dietrich was a consultant to Greenwave from February 2022 to April 2023. Since February 2023, Mr. Dietrich has served on Trueleum,
Inc.’s Board of Directors and as Chairman of its Audit Committee.
EXECUTIVE
COMPENSATION
Named
Executive Officers
Our
named executive officers for the year ended December 31, 2022 were Danny Meeks, our Chief Executive Officer, Ashley Sickles, our Chief
Financial Officer, and Howard Jordan, our former Chief Financial Officer.
The
following table presents the compensation awarded to, earned by or paid to our named executive officers for the years ended December
31, 2022 and December 31, 2021.
Name and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Stock awards ($) (1) | | |
Option awards ($) (1) | | |
Nonequity incentive plan compensation ($) | | |
Nonqualified deferred compensation earnings ($) | | |
All other compensation ($) (1) | | |
Total ($) | |
Danny Meeks | |
| 2022 | | |
| 500,000 | | |
| 1,450,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,950,000 | |
Chief Executive Officer | |
| 2021 | | |
| 125,000 | | |
| 250,000 | | |
| 166,855 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 541,855 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ashley Sickles | |
| 2022 | | |
| 41,250 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 41,250 | |
Chief Financial Officer | |
| 2021 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Howard Jordan | |
| 2022 | | |
| 84,346 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 84,635 | |
Former Chief Financial Officer | |
| 2021 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
(1) |
These
amounts are the aggregate fair value of the equity compensation incurred by the Company for payments to executives during the fiscal
year. The aggregate fair value is computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 718. The fair market value was calculated using the Black-Scholes options pricing
model. |
Outstanding
Equity Awards at December 31, 2022
There
were no outstanding equity awards held by our named executive officers as of December 31, 2022.
Narrative
Disclosure to the Summary Compensation Table
Danny
Meeks
On
September 30, 2021, the Company entered into an employment agreement with Danny Meeks pursuant to which Mr. Meeks serves as the Company’s
Chief Executive Officer. Pursuant to the terms of the employment agreement, Mr. Meeks shall receive an annual base salary of $500,000.
In addition, Mr. Meeks shall be eligible to receive an annual bonus and shall be eligible to receive such awards under the Company’s
incentive plans as determined by the Company’s Compensation Committee. Mr. Meeks may be terminated by the Company or may voluntarily
resign, at any time, with or without cause. Either the Company or Mr. Meeks may terminate Mr. Meeks’ employment upon two weeks
prior written notice.
Until
October 1, 2026, for every $1 million in annual revenue Empire Services, Inc., a Virginia corporation and wholly owned subsidiary of
the Company, generates over $20 million, Mr. Meeks shall be entitled to receive either 833,333 shares of the Company’s common stock
or $50,000 in cash, at the discretion of Mr. Meeks.
Upon
termination except by death (the “Termination Date”), the Company shall pay Mr. Meeks (i) any accrued but unpaid compensation,
(ii) a pro-rata portion of his annual bonus calculated as of the Termination Date and (iii) reimbursement of expenses incurred on or
prior to the Termination Date. In addition, Mr. Meeks may elect to receive Consolidated Omnibus Budget Reconciliation Act of 1985 benefits
for up to twelve months from the Termination Date. Upon termination of Mr. Meeks’ employment for death, the Company shall pay Mr.
Meeks (i) any accrued but unpaid compensation and (ii) reimbursement of expenses incurred on or prior to such date. Mr. Meeks is also
entitled to participate in any and all benefit plans such as health, dental and life insurance, from time to time, in effect for senior
executives, along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from
time to time. In the fiscal years ended December 31, 2022 and December 31, 2021, Mr. Meeks received $1,450,000 and $0 in bonuses, respectively.
In the fiscal years ended December 31, 2022 and December 31, 2021, Mr. Meeks received stock grants with a fair market value of $0 and
$166,855, respectively. Mr. Meeks did not receive any compensation related to his position as a director. As of December 31, 2022, Mr.
Meeks was owed $950,000 in accrued but unpaid bonuses.
Howard
Jordan
On
April 18, 2022, the Company hired Howard Jordan as Chief Financial Officer, for which he received a salary of $135,000 per year. On September
12, 2022, the Company terminated Mr. Jordan’s employment as Chief Financial Officer.
Ashley
Sickles
On
September 13, 2022, the Company hired Ashley Sickles as Chief Financial Officer, for which she receives a salary of $135,000 per year.
At
no time during the periods listed in the above tables, with respect to any named executive officers, was there:
|
● |
any
outstanding option or other equity-based award re-priced or otherwise materially modified (such as by extension of exercise periods,
the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the
bases upon which returns are determined); |
|
● |
any
waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock
incentive plan compensation or payouts; |
|
● |
any
non-equity incentive plan award made to a named executive officer; |
|
● |
any
nonqualified deferred compensation plans including nonqualified defined contribution plans; or |
|
● |
any
payment for any item to be included under the “All Other Compensation” column in the Summary Compensation Table. |
Director
Compensation
The
following table presents the total compensation for each person who served as a non-employee director of our Board during the fiscal
year ended December 31, 2022. Other than as set forth in the table and described more fully below, we did not pay any compensation, reimburse
any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other members of our Board
in such period.
Name | |
Fees Earned or Paid in Cash ($) | | |
Stock Awards ($) | | |
Option Awards ($) | | |
All Other Compensation ($) | | |
Total ($) | |
J. Bryan Plumlee | |
$ | 15,000 | | |
$ | - | | |
$ | - | | |
| | | |
$ | 15,000 | |
Cheryl Lanthorn | |
$ | 12,500 | | |
$ | - | | |
$ | - | | |
| | | |
$ | 12,500 | |
John Wood | |
$ | 12,500 | | |
$ | - | | |
$ | - | | |
| | | |
$ | 12,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total: | |
$ | 40,000 | | |
$ | - | | |
$ | - | | |
| - | | |
$ | 40,000 | |
Indemnification
of Officers and Directors
Our
Second Amended and Restated Certificate of Incorporation provides that we shall indemnify our officers and directors to the fullest extent
permitted by applicable law against all liability and loss suffered and expenses (including attorneys’ fees) incurred in connection
with actions or proceedings brought against them by reason of their serving or having served as officers, directors or in other capacities.
We shall be required to indemnify a director or officer in connection with an action or proceeding commenced by such director or officer
only if the commencement of such action or proceeding by the director or officer was authorized in advance by the Board of Directors.
Our
Equity Incentive Plans
Our
Stockholders approved our 2014 Equity Incentive Plan (“2014 Plan”) in June 2014, our 2015 Equity Incentive Plan (the “2015
Plan”) in December 2015, our 2016 Equity Incentive Plan (“2016 Plan”) in October 2016, our 2017 Equity Incentive Plan
(“2017 Plan”) in December 2016, our 2018 Equity Incentive Plan (“2018 Plan”) in June 2018, our 2021 Equity Incentive
Plan (“2021 Plan”) in September 2021, and our 2022 Equity Incentive Plan (“2022 Plan” and together with the 2014
Plan, 2015 Plan, 2016 Plan, 2017 Plan, 2018 Plan, and 2021 Plan, the “Plans”) in November 2022. The Plans are identical,
except for the number of shares of Common Stock reserved for issuance under each.
The
Plans provide for the grant of incentive stock options, non-statutory stock options, stock bonus awards, restricted stock awards, performance
stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. Our Plans also provide
that the grant of performance stock awards may be paid out in cash as determined by the Committee (as defined herein).
Plan
Details
The
following table and information below sets forth information as of August 17, 2023 with respect to our Plans:
| |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | |
Weighted- average exercise price of outstanding options, warrants and rights (b) | | |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | |
Equity compensation plans approved by security holders | |
| 92,166 | | |
$ | 148.11 | | |
| 441,371 | |
Equity compensation plans not approved by security holders | |
| — | | |
| — | | |
| — | |
Total | |
| 92,166 | | |
$ | 148.11 | | |
| 441,371 | |
Summary
of the Plans
Authorized
Shares
No
shares of our Common Stock are reserved for issuance pursuant to the 2014 Plan, 2015 Plan, the 2016 Plan, the 2017 Plan, the 2018 Plan,
the 2021 Plan, or the 2022 Plan. There are currently 633 shares of our Common Stock available for issuance pursuant to the 2018 Plan,
166,667 shares of our Common Stock available for issuance pursuant to the 2021 Plan, and 274,071 shares of our Common Stock available
for issuance pursuant to the 2022 Plan. Shares of Common Stock issued under our Plans may be authorized but unissued or reacquired shares
of our Common Stock. Shares of Common Stock subject to stock awards granted under our Plans that expire or terminate without being exercised
in full, or that are paid out in cash rather than in shares of Common Stock, will not reduce the number of shares of Common Stock available
for issuance under our Plans. Additionally, shares of Common Stock issued pursuant to stock awards under our Plans that we repurchase
or that are forfeited, as well as shares of Common Stock reacquired by us as consideration for the exercise or purchase price of a stock
award, will become available for future grant under our Plans.
Administration
Our
Board, or a duly authorized committee thereof (collectively, the “Committee”), has the authority to administer our Plans.
Our Board may also delegate to one or more of our officers the authority to designate employees other than Directors and officers to
receive specified stock, which, in respect to those awards, said officer or officers shall then have all authority that the Committee
would have.
Subject
to the terms of our Plans, the Committee has the authority to determine the terms of awards, including recipients, the exercise price
or strike price of stock awards, if any, the number of shares of Common Stock subject to each stock award, the fair market value of a
share of our Common Stock, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration,
if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under the
Plans. The Committee has the power to modify outstanding awards under the Plans, subject to the terms of the Plans and applicable law.
Subject to the terms of our Plans, the Committee has the authority to reprice any outstanding option or stock appreciation right, cancel
and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash or other consideration, or take
any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected
participant.
Stock
Options
Stock
options may be granted under the Plans. The exercise price of options granted under our Plans must at least be equal to the fair market
value of our Common Stock on the date of grant. The term of an ISO may not exceed 10 years, except that with respect to any participant
who owns more than 10% of the voting power of all classes of our outstanding stock, the term must not exceed 5 years and the exercise
price must equal at least 110% of the fair market value on the grant date. The Committee will determine the methods of payment of the
exercise price of an option, which may include cash, shares of Common Stock or other property acceptable to the Committee, as well as
other types of consideration permitted by applicable law. No single participant may receive more than 25% of the total options awarded
in any single year. Subject to the provisions of our Plans, the Committee determines the other terms of options.
Performance
Shares
Performance
shares may be granted under our Plans. Performance shares are awards that will result in a payment to a participant only if performance
goals established by the administrator are achieved or the awards otherwise vest. The Committee will establish organizational or individual
performance goals or other vesting criteria in its discretion, which, depending on the extent to which they are met, will determine the
number and/or the value of performance shares to be paid out to participants. After the grant of a performance share, the Committee,
in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such performance shares. The Committee,
in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares of Common Stock or in some
combination thereof, per the terms of the agreement approved by the Committee and delivered to the participant. Such agreement will state
all terms and condition of the agreement.
Restricted
Stock
The
terms and conditions of any restricted stock awards granted to a participant will be set forth in an award agreement and, subject to
the provisions in the Plans, will be determined by the Committee. Under a restricted stock award, we issue shares of our Common Stock
to the recipient of the award, subject to vesting conditions and transfer restrictions that lapse over time or upon achievement of performance
conditions. The Committee will determine the vesting schedule and performance objectives, if any, applicable to each restricted stock
award. Unless the Committee determines otherwise, the recipient may vote and receive dividends on shares of restricted stock issued under
our Plans.
Other
Share-Based Awards and Cash Awards
The
Committee may make other forms of equity-based awards under our Plans, including, for example, deferred shares, stock bonus awards and
dividend equivalent awards. In addition, our Plans authorizes us to make annual and other cash incentive awards based on achieving performance
goals that are pre-established by our compensation committee.
Merger,
Consolidation or Asset Sale
If
the Company is merged or consolidated with another entity or sells or otherwise disposes of substantially all of its assets to another
company while awards or options remain outstanding under the Plans, unless provisions are made in connection with such transaction for
the continuance of the Plans and/or the assumption or substitution of such awards or options with new options or stock awards covering
the stock of the successor company, or parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares
and prices, then all outstanding options and stock awards which have not been continued, assumed or for which a substituted award has
not been granted shall, whether or not vested or then exercisable, unless otherwise specified in the relevant agreements, terminate immediately
as of the effective date of any such merger, consolidation or sale.
Change
in Capitalization
If
the Company shall effect a subdivision or consolidation of shares of Common Stock or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of Common Stock outstanding, without receiving consideration therefore
in money, services or property, then awards amounts, type, limitations, and other relevant consideration shall be appropriately and proportionately
adjusted. The Committee shall make such adjustments, and its determinations shall be final, binding and conclusive.
Plan
Amendment or Termination
Our
Board has the authority to amend, suspend, or terminate our Plans, provided that such action does not materially impair the existing
rights of any participant without such participant’s written consent. Each of the Plans will terminate ten years after the earlier
of (i) the date that each such Plan is adopted by the Board, or (ii) the date that each such Plan is approved by the Stockholders, except
that awards that are granted under the applicable Plan prior to its termination will continue to be administered under the terms of the
that Plan until the awards terminate, expire or are exercised.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Except
for the below, from January 1, 2022 through the date of this proxy statement, we have not been a party to any transaction or proposed
transaction in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of our total
assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, to our knowledge,
beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will
have a direct or indirect material interest, other than equity and other compensation which are described elsewhere in this prospectus.
Agreements
with Danny Meeks and Affiliates of Danny Meeks
As
of June 30, 2023, the Company leases 13 scrap yard facilities by an entity controlled by the Company’s Chief Executive
Officer, described below. Since January 1, 2022, the Company had a rent expense of $3,833,320, respectively to an entity controlled
by the Company’s Chief Executive Officer. Further, during the same time period, an entity controlled by the Company’s
Chief Executive Officer made an insurance down payment of $105,000 and debt payments of $189,615 on behalf of the Company. During
the same time period, the Company paid $122,866 in accrued rents owed to an entity controlled by the Company’s Chief Executive
Officer at December 31, 2021. Also during the same time period, the Company purchased equipment for $152,500 from an entity
controlled by the spouse of the Company’s Chief Executive Officer. During the year ended December 31, 2022, the Company
purchased equipment for $20,000 from an entity controlled by the Chief Executive Officer. As of June 30, 2023 and December 31, 2022,
the Company owed $1,925,970 and $317,781, respectively, in accrued rent and reimbursements to an entity controlled by the
Company’s Chief Executive Officer.
On
April 1, 2022, the Company entered into amendments to the leases for its Kelford and Carrolton yards, increasing the monthly rent payments
by an aggregate of $50,000 per month for use of an automotive shredder and downstream processing system, respectively, being installed
on those properties, increasing by 3% on January 1st of every year for the duration of the leases.
On
September 1, 2022, the Company terminated the lease for its Portsmouth yard on account of the Company purchasing the land underlying
the lease, reducing the lease payment by $11,200 per month.
On
September 30, 2021, the Company authorized the issuance of 500 shares of Series Z Preferred Stock, par value $0.001 per share. The Series
Z Preferred Stock has a $20,000 stated value per share and all 500 Series Z preferred shares, in aggregate, are convertible into 19.98%
of the issued and outstanding common shares of the Company (post conversion). The conversion rate is applicable on a pro rata basis to
each share of Series Z Preferred Stock upon conversion. This anti-dilutive conversion feature is in effect until such time an S-1 Registration
Statement is declared effective by the SEC in conjunction with a NASDAQ listing. On September 30, 2021, the Company entered into a Series
Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer whereby the Company entered into a non–convertible
note payable agreement for $1,000,000 in exchange for: (i) a $1,000,000 cash payment directly paid to the warrant holder; and (ii) the
issuance of 250 Series Z Preferred Shares having a fair value of $6,530,867. The note bears interest of 8% per annum and is due within
three days of the Company’s next closing of equity financing of $3,000,000 or more. The proceeds received were allocated to the
debt and equity on a relative fair value basis. Accordingly, debt discount of $867,213 was recognized with a corresponding increase in
additional paid-in capital. Since the due date is contingent upon a future event, the entire debt discount was amortized to interest
expense immediately. On July 28, 2023, the Company entered into an exchange agreement with Danny Meeks, the Company’s Chief Executive
Officer, pursuant to which Mr. Meeks exchanged (the “Exchange”) 250 shares of the Company’s Series Z Preferred Stock,
par value $0.001 per share (the “Series Z Preferred Stock”) for 1,013,500 shares of Common Stock. Following the Exchange,
no shares of Series Z Preferred Stock remain outstanding. The issuance of the shares of Common Stock pursuant to the Exchange was made
in reliance on the exemption provided by Section 3(a)(9) of the Securities Act.
We
lease our scrap yard located at 22097 Brewers Neck Blvd., Carrollton, VA 23314, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer, for $55,850 per month. The lease expires on January 1, 2024, with two five year options to extend at the
Company’s election.
We
lease our scrap yard located at 1576 Millpond Rd., Elizabeth City, NC 27909, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two one year options to extend at the
Company’s election.
We
lease our scrap yard located at 130 Courtland Rd., Emporia, VA 23847, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s
election.
We
lease our scrap yard located at 623 Highway 903 N., Greenville, NC 27834, from DWM Properties, LLC, which is owned by our Chairman and
Chief Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s
election.
We
lease our scrap yard located at 8952 Richmond Rd., Toano, VA 23168, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s
election.
We
lease our scrap yard located at 945 NC 11N, Kelford, NC 27805, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive
Officer, for $39,293 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.
We
lease our scrap yard located at 1100 E Princess Anne Rd, Norfolk, VA 23504, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer, for $16,391 per month. The lease expires on January 1, 2024, with two five year options to extend at the
Company’s election.
We
lease our scrap yard located at 277 Suburban Drive, Suffolk, VA 23434, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer, for $15,450 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s
election.
We
lease our scrap yard located at 9922 Hwy 17 S., Vanceboro, NC 28586, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer, for $8,742 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s
election.
We
lease our scrap yard located at 1040 Oceana Blvd, Virginia Beach, VA 23454, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer, for $15,407 per month. The lease expires on January 1, 2024, with two five year options to extend at the
Company’s election.
We
lease our scrap yard located at 406 Sandy Street, Fairmont, NC 28340, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer, for $8,000 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s
election.
On
January 1, 2023, the Company entered into a lease agreement for the Company’s Chesapeake location with an entity controlled by
the Company’s Chief Executive Officer. Under the terms of the lease agreement, the Company pays $9,000 per month in rent, increasing
3% on January 1st of each year. The lease expires on January 1, 2025 and the Company has two options to extend the lease by a term of
five years per option.
On
November 29, 2021, the Company’s Chief Executive Officer rolled debt and accrued interest of $4,762,838 received as consideration
for the acquisition of Empire Services, Inc. into the Company’s senior secured debt and warrant offering. On July 22, 2022, the
Company issued 870,976 shares of common stock to the Company’s Chief Executive Officer for the conversion of debt in the principal
amount of $4,762,838 together with accrued interest of $185,751, upon uplist of the Company’s common stock to The Nasdaq Capital
Market.
On
July 31, 2023, the Company entered into a Bill of Sale (the “Bill of Sale”) with DWM Properties LLC (“DWM”),
an entity wholly-owned by Danny Meeks, the Company’s Chief Executive Officer, pursuant to which the Company agreed to purchase
certain assets held by DWM in exchange for the issuance of a secured promissory note to DWM (the “DWM Note”) in an
aggregate principal amount equal to $17,218,350. The DWM Note bears interest at a rate of 7% per annum and matures on the twentieth
(20th) anniversary of the issuance thereof. Interest on the DWM Note is payable on the first business day of each calendar month,
provided that commencing on the first business day of the calendar month following the date on which no Senior Notes remain
outstanding, the Company shall pay to DWM equal payments of interest and principal until the DWM Note is repaid in its
entirety.
PROPOSAL
TWO:
APPROVAL
OF THE COMPANY’S 2023 EQUITY INCENTIVE PLAN AND THE RESERVATION OF UP TO 600,000 SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER
Summary
The
Company’s 2023 Equity Incentive Plan (the “2023 Plan”) was adopted by the Board on August 14, 2023, and we are
requesting approval of this new equity compensation plan because we need to be able to issue equity awards to service providers in order
to motivate and retain such persons and to further align their interests with those of our Stockholders. The 2023 Plan will only become
effective if approved by the Stockholders. If approved, the 2023 Plan will be effective immediately, subject to any restrictions on the
issuance of awards under the 2023 Plan because of a lack of available or reserved shares of Common Stock to underlie such awards.
Having
an adequate number of shares available for future equity compensation grants is necessary to promote our long-term success and the creation
of Stockholder value by:
|
● |
Enabling
us to continue to attract and retain the services of key service providers who would be eligible to receive grants; |
|
|
|
|
● |
Aligning
participants’ interests with Stockholders’ interests through incentives that are based upon the performance of our Common
Stock; and |
|
|
|
|
● |
Motivating
participants, through equity incentive awards, to achieve long-term growth in the Company’s business, in addition to short-term
financial performance. |
The
2023 Plan is identical to the Prior Plans, except for the number of shares of Common Stock reserved for issuance under each. The 2023
Plan will provide for the grant of incentive stock options (“ISOs”), non-qualified stock options (“NQSOs”), stock
appreciation rights (“SARs”), other equity awards and/or cash awards to employees, directors and consultants. The 2023 Plan
will remain in effect until the earlier of (i) August 14, 2033 and (ii) the date upon which the 2023 Plan is terminated pursuant
to its terms, and in any event subject to the maximum share limit of the 2023 Plan.
On
August 14, 2023, our Board adopted the 2023 Plan and authorized the reservation of up to 600,000 shares of Common Stock for issuance
thereunder, subject to availability. To the extent that there are no authorized and unreserved shares of Common Stock available, the
awards underlying the 2023 Plan will not be issuable until such time, and from time to time, as shares of Common Stock are available
to be reserved and in such amounts as are available. Assuming all 600,000 shares become available and the Company may issue the full
amount of awards under the 2023 Plan, the number of shares available for issuance under the 2023 Plan shall constitute approximately
4.7% of our issued and outstanding shares of Common Stock as of the Record Date. The 2023 Plan is intended to provide us with a sufficient
number of shares to satisfy our equity grant requirements until our 2023 annual meeting of Stockholders, based on the current scope and
structure of our equity incentive programs and the rate at which we expect to grant stock options, restricted stock, and/or other forms
of equity compensation.
When
approving the reservation of up to 600,000 shares of Common Stock issuable pursuant to the 2023 Plan, the Board considered a number of
factors, including those set forth below:
|
● |
Alignment
with our Stockholders. Achieving superior, long-term results for our Stockholders remains one of our primary objectives. We believe
that stock ownership enhances the alignment of the long-term economic interests of our employees and our Stockholders. |
|
● |
Attract,
Motivate and Retain Key Employees. We compete for employees in a variety of geographic and talent markets and strive to maintain
compensation programs that are competitive in order to attract, motivate and retain key employees. If we are unable to grant equity
as part of our total compensation strategy, our ability to attract and retain all levels of talent we need to operate our business
successfully would be significantly harmed. |
|
|
|
|
● |
Balanced
Approach to Compensation. We believe that a balanced approach to compensation - using a mix of salaries, performance-based bonus
incentives and long-term equity incentives (including performance based equity) encourages management to make decisions that favor
long-term stability and profitability, rather than short-term results. |
|
|
|
|
● |
Burn
Rate and Dilution. When deciding to adopt the 2023 Plan, the Board evaluated our projected need for equity grants over the next
year, our expected burn rate of shares under the 2023 Plan and the dilutive impact of the proposed share allocation. |
Burn
rate is the rate at which a company is granting equity awards and is typically measured as the gross number of shares awarded as a percentage
of our weighted average shares outstanding. We estimate that our projected annual burn rate will be 100%. The Board determined that our
projected rate of equity compensation usage is reasonable and that the 2023 Plan should not need an additional increase of shares until
July 31, 2024.
In
addition, the Board considered whether the potential dilutive effect to Stockholders is reasonable. Dilution is typically calculated
by adding the number of shares of Common Stock subject to outstanding awards plus shares of Common Stock available to grant plus the
proposed additional shares, and expressing such sum as a percentage of the total number of diluted outstanding shares of Common Stock.
The Board considered that dilution from the 2023 Plan would be approximately 4.7% and believes that this is an acceptable amount of dilution
from the 2023 Plan.
After
carefully considering each of these points, the Board believes the 2023 Plan is essential for our future success and encourages Stockholders
to consider these points in voting to approve this proposal.
Set
forth below is a summary of the 2023 Plan, which is qualified in its entirety by reference to the full text of the 2023 Plan, a copy
of which is included as Appendix A to
this Proxy Statement. If there is any inconsistency between the following summary of the 2023
Plan and Appendix A, the full text of the 2023 Plan included as Appendix
A shall govern.
Key
Features of the 2023 Plan
Certain
key features of the 2023 Plan are summarized as follows:
|
● |
If
not terminated earlier by the Board, the 2023 Plan will terminate on August 14,
2033. |
|
● |
Up
to a maximum aggregate of 600,000 shares of Common Stock may be issued under the 2023 Plan,
subject to availability. The maximum number of shares that may be issued pursuant to the exercise of ISOs is also 600,000, subject
to availability. |
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|
|
● |
The
2023 Plan will generally be administered by the Board or a committee designated by the
Board (the “2023 Plan Committee”). The Board may also designate a separate committee to make awards to employees who
are not officers subject to the reporting requirements of Section 16 of the Exchange Act. |
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|
● |
Employees,
consultants and Board members are eligible to receive awards, provided that the 2023 Plan Committee has the discretion to determine
(i) who shall receive any awards, and (ii) the terms and conditions of such awards. |
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|
● |
Awards
may consist of ISOs, NQSOs, restricted stock, SARs, other equity awards and/or cash awards. |
|
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|
● |
Stock
options and SARs may not be granted at a per share exercise price below the fair market value of a share of our Common Stock on the
date of grant. |
|
● |
Stock
options and SARs may not be repriced or exchanged without Stockholder approval. |
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|
● |
The
maximum exercisable term of stock options and SARs may not exceed ten years. |
|
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|
● |
Awards
are subject to recoupment of compensation policies adopted by the Company. |
Background
and Purpose of the 2023 Plan. The purpose of the 2023 Plan is to promote our long-term success and the creation of Stockholder
value by:
|
● |
Attracting
and retaining the services of key employees who would be eligible to receive grants as selected participants; |
|
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|
|
● |
Motivating
selected participants through equity-based compensation that is based upon the performance of our Common Stock; and |
|
|
|
|
● |
Further
aligning selected participants’ interests with the interests of our Stockholders, through the award of equity compensation
grants which increases their interest in the Company, to achieve long-term growth over short-term performance. |
The
2023 Plan permits the grant of the following types of equity-based incentive awards: (1) stock options (which can be either ISOs or NQSOs),
(2) SARs, (3) restricted stock, (4) other equity awards and (5) cash awards. The vesting of awards can be based on either continuous
service and/or performance goals. Awards are evidenced by a written agreement between the selected participant and the Company.
Eligibility
to Receive Awards. Employees, consultants and Board members of the Company and certain of our affiliated companies are eligible
to receive awards under the 2023 Plan. The 2023 Plan Committee will determine, in its discretion, the selected participants who will
be granted awards under the 2023 Plan. As of the Record Date, approximately 5 individuals (including 2 officers and 4 directors) were
eligible to participate in the 2023 Plan.
Shares
Subject to the 2023 Plan. The maximum number of shares of Common Stock that can be issued under the 2023 Plan is 600,000 shares.
The shares underlying forfeited or terminated awards (without payment of consideration), or unexercised awards become available again
for issuance under the 2023 Plan. The 2023 Plan also imposes and other limits that are intended to comply with the legal requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and which are discussed elsewhere in this proposal.
No fractional shares may be issued under the 2023 Plan. No shares will be issued with respect to a participant’s award unless applicable
tax withholding obligations have been satisfied by the participant. To the extent that there are no authorized and unreserved shares
of Common Stock available for the 2023 Plan, the awards underlying the 2023 Plan will not be issuable until such time, and from time
to time, as shares of Common Stock are available and in such amounts as are available.
Administration
of the 2023 Plan. The 2023 Plan will be administered by the 2023 Plan Committee. Subject to the terms of the 2023 Plan, the 2023
Plan Committee has the sole discretion, among other things, to:
|
● |
Select
the individuals who will receive awards; |
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|
● |
Determine
the terms and conditions of awards (for example, performance conditions, if any, and vesting schedule); |
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● |
Correct
any defect, supply any omission, or reconcile any inconsistency in the 2023 Plan or any award agreement; |
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Accelerate
the vesting, extend the post-termination exercise term or waive restrictions of any awards at any time and under such terms and conditions
as it deems appropriate, subject to the limitations set forth in the 2023 Plan; |
|
● |
Permit
a participant to defer compensation to be provided by an award; and |
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Interpret
the provisions of the 2023 Plan and outstanding awards. |
The
2023 Plan Committee may suspend vesting, settlement, or exercise of awards pending a determination of whether a selected participant’s
service should be terminated for cause (in which case outstanding awards would be forfeited). In addition, the 2023 Plan Committee may
use the 2023 Plan to issue shares under other plans or sub-plans as may be deemed necessary or appropriate, such as to provide for participation
by non-U.S. employees and those of any of our subsidiaries and affiliates.
Types
of Awards.
Stock
Options. A stock option is the right to acquire shares at a fixed exercise price over a fixed period of time. The 2023 Plan Committee
will determine, among other terms and conditions, the number of shares covered by each stock option and the exercise price of the shares
subject to each stock option, but such per share exercise price cannot be less than the fair market value of a share of our Common Stock
on the date of grant of the stock option. The fair market value of a share of our Common Stock for the purposes of pricing our awards
shall be equal to the closing price for our Common Stock as reported by the Nasdaq Capital Market or such other principal trading market
on which our securities are traded on the date of determination. Stock options may not be repriced or exchanged without Stockholder approval.
Stock
options granted under the 2023 Plan may be either ISOs or NQSOs. As required by the Code and applicable regulations, ISOs are subject
to various limitations not imposed on NQSOs. For example, the exercise price for any ISO granted to any employee owning more than 10%
of our Common Stock may not be less than 110% of the fair market value of the Common Stock on the date of grant, and such ISO must expire
no later than five years after the grant date. The aggregate fair market value (determined at the date of grant) of Common Stock subject
to all ISOs held by a participant that are first exercisable in any single calendar year cannot exceed $100,000. ISOs may not be transferred
other than upon death, or to a revocable trust where the participant is considered the sole beneficiary of the stock option while it
is held in trust. In order to comply with Treasury Regulation Section 1.422-2(b), the 2023 Plan provides that all 600,000 shares may
be issued pursuant to the exercise of ISOs, subject to the availability of underlying shares of Common Stock.
A
stock option granted under the 2023 Plan generally cannot be exercised until it becomes vested. The 2023 Plan Committee establishes the
vesting schedule of each stock option at the time of grant. The maximum term for stock options granted under the 2023 Plan may not exceed
ten years from the date of grant although the 2023 Plan Committee may establish a shorter period at its discretion. The exercise price
of each stock option granted under the 2023 Plan must be paid in full at the time of exercise, either with cash, or through a broker-assisted
“cashless” exercise and sale program, or net exercise, or through another method approved by the 2023 Plan Committee. The
optionee must also make arrangements to pay any taxes that are required to be withheld at the time of exercise.
SARs.
A SAR is the right to receive, upon exercise, an amount equal to the difference between the fair market value of the shares on the date
of the SAR’s exercise and the aggregate exercise price of the shares covered by the exercised portion of the SAR. The 2023 Plan
Committee determines the terms of SARs, including the exercise price (provided that such per share exercise price cannot be less than
the fair market value of a share of our Common Stock on the date of grant), the vesting and the term of the SAR. The maximum term for
SARs granted under the 2023 Plan may not exceed ten years from the date of grant, subject to the discretion of the 2023 Plan Committee
to establish a shorter period. Settlement of a SAR may be in shares of Common Stock or in cash, or any combination thereof, as the 2023
Plan Committee may determine. SARs may not be repriced or exchanged without Stockholder approval.
Restricted
Stock. A restricted stock award is the grant of shares of our Common Stock to a selected participant and such shares may be subject
to a substantial risk of forfeiture until specific conditions or goals are met. The restricted shares may be issued with or without cash
consideration being paid by the selected participant as determined by the 2023 Plan Committee. The 2023 Plan Committee also will determine
any other terms and conditions of an award of restricted stock. In determining whether an award of restricted stock should be made, and/or
the vesting schedule for any such award, the 2023 Plan Committee may impose whatever conditions to vesting it determines to be appropriate.
During the period of vesting, the participant will not be permitted to transfer the restricted shares but will generally have voting
and dividend rights (subject to vesting) with respect to such shares.
Other
Awards. The 2023 Plan also provides that other equity awards, which derive their value from the value of our shares or from increases
in the value of our shares, may be granted. In addition, cash awards may also be issued. Substitute awards may be issued under the 2023
Plan in assumption of or substitution for or exchange for awards previously granted by an entity which we (or an affiliate) acquire.
Limited
Transferability of Awards. Awards granted under the 2023 Plan generally are not transferrable other than by will or by the laws of
descent and distribution. However, the 2023 Plan Committee may in its discretion permit the transfer of awards other than ISOs. Generally,
where transfers are permitted, they will be permitted only by gift to a member of the selected participant’s immediate family or
to a trust or other entity for the benefit of the selected participant and/or member(s) of his or her immediate family.
Adjustments
upon Changes in Capitalization.
In
the event of the following actions:
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stock
split of our outstanding shares of Common Stock; |
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stock
dividend; |
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dividend
payable in a form other than shares in an amount that has a material effect on the price of the shares; |
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consolidation; |
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combination
or reclassification of the shares; |
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recapitalization; |
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spin-off;
or |
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other
similar occurrences, |
then
the following shall each be equitably and proportionately adjusted by the 2023 Plan Committee:
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maximum
number of shares that can be issued under the 2023 Plan (including the ISO share grant limit); |
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number
and class of shares issued under the 2023 Plan and subject to each award; |
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exercise
prices of outstanding awards; and |
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number
and class of shares available for issuance under the 2023 Plan. |
Merger,
Consolidation or Asset Sale. If the Company is merged or consolidated with another entity or sells or otherwise disposes of substantially
all of its assets to another company while awards remain outstanding under the 2023 Plan, unless provisions are made in connection with
such transaction for the continuance of the 2023 Plan and/or the assumption or substitution of such awards with new options or stock
awards covering the stock of the successor company, or parent or subsidiary thereof, with appropriate adjustments as to the number and
kind of shares and prices, then all outstanding awards which have not been continued, assumed or for which a substituted award has not
been granted shall, whether or not vested or then exercisable, unless otherwise specified in the applicable award agreement, terminate
immediately as of the effective date of any such merger, consolidation or sale
Term
of the 2023 Plan. The 2023 Plan is in effect until August 14, 2033 or until earlier terminated by the Board. Outstanding awards
shall continue to be governed by their terms after the termination of the 2023 Plan.
Governing
Law. The 2023 Plan shall be governed by the laws of the State of Delaware (which is the state of our incorporation) except for conflict
of law provisions.
Amendment
and Termination of the 2023 Plan. The Board generally may amend or terminate the 2023 Plan at any time and for any reason, except
that it must obtain Stockholder approval of material amendments to the extent required by applicable laws, regulations or rules.
Certain
Federal Income Tax Information
The
following is a general summary, as of September 29, 2021, of the federal income tax consequences to us and to U.S. participants for awards
granted under the 2023 Plan. The federal tax laws may change and the federal, state and local tax consequences for any participant will
depend upon his or her individual circumstances. This summary is not intended to be exhaustive and does not discuss the tax consequences
of a participant’s death or provisions of income tax laws of any municipality, state or other country. We advise participants to
consult with a tax advisor regarding the tax implications of their awards under the 2023 Plan.
Incentive
Stock Options. For federal income tax purposes, the holder of an ISO has no taxable income at the time of the grant or exercise of
the ISO. If such person retains the Common Stock acquired under the ISO for a period of at least two years after the stock option is
granted and one year after the stock option is exercised, any gain upon the subsequent sale of the Common Stock will be taxed as a long-term
capital gain. A participant who disposes of shares acquired by exercise of an ISO prior to the expiration of two years after the stock
option is granted or before one year after the stock option is exercised will realize ordinary income equal to the lesser of (i) the
excess of the fair market value over the exercise price of the shares on the date of exercise, or (ii) the excess of the amount realized
on the disposition over the exercise price for the shares. Any additional gain or loss recognized upon any later disposition of the shares
would be a short- or long-term capital gain or loss, depending on whether the shares have been held by the participant for more than
one year. Utilization of losses is subject to special rules and limitations.
Nonstatutory
Stock Options. A participant who receives a nonstatutory stock option generally will not realize taxable income on the grant of such
option, but will realize ordinary income at the time of exercise of the stock option equal to the difference between the option exercise
price and the fair market value of the stock on the date of exercise.
Restricted
Stock. A participant will generally not have taxable income upon grant of unvested restricted shares unless he or she elects to be
taxed at that time pursuant to an election under Code Section 83(b). Instead, he or she will recognize ordinary income at the time(s)
of vesting equal to the fair market value (on each vesting date) of the shares or cash received minus any amount paid for the shares,
if any.
Stock
Units. No taxable income is generally reportable when unvested stock units are granted to a participant. Upon settlement of the vested
stock units, the participant will recognize ordinary income in an amount equal to the fair market value of the shares issued or payment
received in connection with the vested stock units.
Stock
Appreciation Rights. No taxable income is generally reportable when a stock appreciation right is granted to a participant. Upon
exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received plus the fair market value
of any shares received.
Income
Tax Effects for the Company. We generally will be entitled to a tax deduction in connection with an award under the 2023 Plan in
an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income (for example, upon
the exercise of an nonqualified stock option or vesting of restricted stock).
Internal
Revenue Code Section 162(m) Deduction Limitation. Section 162(m) of the Code places a limit of $1 million on the amount of compensation
that we may deduct in any one fiscal year with respect to our executive officers and other persons who are subject to Code Section 162(m).
Therefore, compensation derived from 2023 Plan awards may not be fully deductible by the Company.
Internal
Revenue Code Section 280G. For certain persons, if a change in control of the Company causes an award to vest or become newly payable,
or if the award was granted within one year of a change in control and the value of such award or vesting or payment, when combined with
all other payments in the nature of compensation contingent on such change in control, equals or exceeds the dollar limit provided in
Section 280G of the Code (generally, this dollar limit is equal to three times the five-year historical average of the individual’s
annual compensation received from the Company), then the entire amount exceeding the individual’s average annual compensation will
be considered an excess parachute payment. The recipient of an excess parachute payment must pay a 20% excise tax on this excess amount
and the Company cannot deduct the excess amount from its taxable income.
Internal
Revenue Code Section 409A. Section 409A of the Code governs the federal income taxation of certain types of nonqualified deferred
compensation arrangements. A violation of Section 409A of the Code generally results in an acceleration of the recognition of income
of amounts intended to be deferred and the imposition of a federal excise tax of 20% on the employee over and above the income tax owed,
plus possible penalties and interest. The types of arrangements covered by Section 409A of the Code are broad and may apply to certain
awards available under the 2023 Plan (such as stock units). The intent is for the 2023 Plan, including any awards available thereunder,
to comply with or be exempt from the requirements of Section 409A of the Code, to the extent applicable. As required by Code Section
409A, certain nonqualified deferred compensation payments to specified employees may be delayed to the seventh month after such employee’s
separation from service.
New
Plan Benefits. All 2023 Plan awards are granted at the 2023 Plan Committee’s discretion, subject to the limitations contained
in the 2023 Plan. Future benefits and amounts that will be received or allocated under the 2023 Plan are not presently determinable.
As of the Record Date, the fair market value of a share of our Common Stock (as determined by the closing price quoted by the Nasdaq
Capital Market on that date) was $1.10.
Existing
Plan Benefits. As of the Record Date, no awards have been granted under the 2023 Plan.
Vote
Required
The
affirmative vote of a majority of the Shares present virtually or represented by proxy and entitled to vote on the subject matter at
the Annual Meeting is required to approve the 2023 Plan.
THE
BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE 2023 PLAN AND THE RESERVATION OF UP TO 600,000 SHARES FOR ISSUANCE
THEREUNDER, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL
THREE:
RATIFICATION
OF THE APPOINTMENT OF RBSM LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER
31, 2023
The
Board has appointed RBSM LLP (“RBSM”) as our independent registered public accounting firm to audit our financial statements
for the fiscal year ending December 31, 2023. The Board proposes that our Stockholders ratify this appointment. RBSM has served as our
independent registered public accounting firm since December 28, 2017.
We
expect that representatives of RBSM will be available via phone at the Annual Meeting, will be able to make a statement if they so desire,
and will be available to respond to appropriate questions.
Stockholder
ratification of the selection of RBSM as our independent registered public accounting firm is not required by our Bylaws or the Delaware
General Corporation Law. The Board seeks such ratification as a matter of good corporate practice. Should the Stockholders fail to ratify
the selection of RBSM as our independent registered public accounting firm, the Board will reconsider whether to retain that firm for
fiscal year 2023. In deciding to appoint RBSM, the Board, standing in for the vacant Audit Committee, reviewed auditor independence issues
and existing commercial relationships with RBSM and concluded that RBSM has no commercial relationship with the Company that would impair
its independence for the fiscal year ending December 31, 2023. Set forth below are approximate fees for services rendered by RBSM, our
independent registered public accounting firm, for the fiscal years ended December 31, 2022 and December 31, 2021.
| |
RBSM | |
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2022 | | |
2021 | |
Audit Fees | |
$ | 310,000 | | |
$ | 129,000 | |
Audit-Related Fees | |
| - | | |
| - | |
Tax Fees | |
| - | | |
| - | |
Other Fees | |
| - | | |
| 135,208 | |
Totals | |
$ | 310,000 | | |
$ | 264,208 | |
Audit
Fees
The
aggregate fees billed for each of the last two fiscal years for professional services rendered by RBSM for the audit of the Company’s
annual financial statements and review of financial statements included in the Company’s annual report on Form 10-K and in the
Company’s quarterly reports on Form 10-Q, or services that are normally provided by the independent registered public accounting
firm in connection with statutory and regulatory filings or engagements for the fiscal years ending December 31, 2022 and 2021 were $310,000
and $129,000, respectively.
Audit-Related
Fees
The
aggregate fees billed in either of the last two fiscal years for assurance and related services by RBSM that are reasonably related to
the performance of the audit or review of the registrant’s financial statements and are not reported under “Audit Fees”
for the fiscal years ending December 31, 2022 and 2021 were $0 and $0, respectively.
Tax
Fees
The
aggregate fees were billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning
for the fiscal years ending December 31, 2022 and 2021 was $0 and $0, respectively, for RBSM.
All
Other Fees
Other
fees billed for professional services provided by the principal accountant, other than the services reported above, for the fiscal years
ending December 31, 2022 and 2021 were $0 and $135,208, respectively, for RBSM. These fees were related to the audit of Empire Services,
Inc.’s financial statements for the years ended December 31, 2020 and 2019, along with the review of Empire’s financial statements
for the nine months ended September 30, 2021.
The
Company’s Audit Committee approves all auditing services and the terms thereof and non-audit services (other than non-audit services
published under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Pubic Company Accounting Oversight Board)
to be provided to the Company by the independent auditor; provided, however, the pre-approval requirement is waived with respect to the
provisions of non-audit services for the Company if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act
are satisfied.
Vote
Required
The
affirmative vote of a majority of the Shares present virtually or represented by proxy and entitled to vote on the subject matter at
the Annual Meeting is required to ratify the appointment of RBSM as our independent registered public accounting firm for the fiscal
year ending December 31, 2022. We are not required to obtain the approval of our Stockholders to appoint the Company’s independent
registered public accounting firm. However, if our Stockholders do not ratify the appointment of RBSM as the Company’s independent
registered public accounting firm for the fiscal year ending December 31, 2022, the Board may reconsider its appointment.
THE
BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF RBSM AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER
HAS INDICATED OTHERWISE ON THE PROXY.
REPORT
OF THE AUDIT COMMITTEE
The
Board, standing in for the Audit Committee, has:
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reviewed
and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2022 with management; |
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discussed
with the Company’s independent auditors the matters required to be discussed under Public Company Accounting Oversight Board
Auditing Standard No. 1301; and |
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received
the written disclosures and letter from the independent auditors required by the applicable requirements of the Public Accounting
Oversight Board regarding the independent auditors communications with the Board concerning independence, and has discussed with
RBSM matters relating to its independence. |
In
reliance on the review and discussions referred to above, the Board recommended that the consolidated financial statements audited by
RBSM for the fiscal year ended December 31, 2022 be included in its Annual Report on Form 10-K for such fiscal year.
PROPOSAL
FOUR:
NON-BINDING
ADVISORY VOTE ON THE APPROVAL OF EXECUTIVE COMPENSATION
The
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act entitle our Stockholders to vote
to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to SEC
rules.
Our
executive compensation programs are designed to (1) motivate and retain executive officers, (2) reward the achievement of our short-term
and long-term performance goals, (3) establish an appropriate relationship between executive pay and short-term and long-term performance,
and (4) align executive officers’ interests with those of our Stockholders. Please read the section of this Proxy Statement entitled
“Executive Compensation” for additional details about our executive compensation programs, including information about the
fiscal year 2022 compensation of our named executive officer.
The
Compensation Committee continually reviews the compensation programs for our executive officers to ensure they achieve the desired goals
of aligning our executive compensation structure with our Stockholders’ interests and current market practices. During the fiscal
year 2022, our Compensation Committee was comprised of no members from January to April 2022 and three members from April to December
2022.
We
are asking our Stockholders to indicate their support for our named executive officers compensation as disclosed in this Proxy Statement
and the accompanying Annual Report. This proposal, commonly known as a “say-on-pay” proposal, gives our Stockholders the
opportunity to express their views on our executive compensation. This vote is not intended to address any specific item of compensation,
but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy
Statement and the accompanying Annual Report. Accordingly, we are asking our Stockholders to vote “FOR” the following resolution
at the Annual Meeting:
“RESOLVED,
that the compensation paid to Greenwave Technology Solutions, Inc.’s named executive officers, as disclosed in Greenwave’s
Proxy Statement for the 2023 Annual Meeting of Stockholders and the accompanying Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion, is hereby APPROVED.”
Vote
Required
To
be approved, this non-binding vote must be approved by a majority of the Shares present virtually or represented by proxy and entitled
to vote on the subject matter at the Annual Meeting. The say-on-pay vote is advisory, and therefore not binding on the Compensation Committee
or the Board. The Board and the Compensation Committee value the opinions of our Stockholders and to the extent there is any significant
vote against the named executive officers’ compensation as disclosed in this Proxy Statement and the accompanying Annual Report,
we will consider our Stockholders’ concerns and evaluate whether any actions are necessary to address those concerns.
THE
BOARD RECOMMENDS A VOTE “FOR” THE PROPOSAL TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICER
AS DESCRIBED UNDER THE HEADING “EXECUTIVE COMPENSATION,” AND THE RELATED DISCLOSURES CONTAINED IN THIS PROXY STATEMENT, AND
PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL
FIVE:
APPROVAL
OF the repricing CERTAIN of our common stock purchase warrants
Background
On
August 1, 2023, we closed a transaction (the “Transaction”) with certain institutional investors as purchasers (the “Investors”)
in which we sold, and the Investors purchased, approximately $15,000,000, which consisted of approximately $13,968,750 in cash and $1,031,250
of our existing debt which was exchanged for the notes and warrants issued in the Transaction. In connection with the Transaction, we
entered into a letter agreement (the “Warrant Repricing Agreement”) with the holders (the “Holders”) of common
stock purchase warrants to purchase an aggregate of 9,756,876 shares of Common Stock (the “2021 Warrants”) issued to the
Holders pursuant to a Securities Purchase Agreement dated as of November 29, 2021, by and among the Company and the Holders. Pursuant
to the Warrant Repricing Agreement, we agreed, subject to receipt of approval from our stockholders, to reduce the exercise price of
the 2021 Warrants from $5.50 per share to $1.50 per share.
Nasdaq
Stockholder Approval Requirement
Listing
Rule 5635(d) requires stockholder approval in connection with a transaction, other than a public offering, involving the sale or issuance
by the issuer of Common Stock (or securities convertible into or exchangeable for Common Stock) equal to 20% or more of the Common Stock
or 20% or more of the voting power of such company outstanding before the issuance for a price that is less than the lower of: (i) the
closing price of the Common Stock immediately preceding the signing of the binding agreement for the issuance of such securities and
(ii) the average closing price of the Common Stock for the five trading days immediately preceding the signing of the binding agreement
for the issuance of such securities.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the shares present at the Annual Meeting, either in person or by proxy, and
entitled to vote, is required for approval of this Proposal 5. For purposes of the approval of Proposal 5, abstentions will have the
same effect as a vote against this proposal, and broker non-votes will have no effect on the result of the vote.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO REPRICE THE WARRANTS TO PURCHASE COMMON STOCK.
PROPOSAL
SIX:
approval
of THE ISSUANCE OF SHARES OF COMMON STOCK TO HOLDERS OF CERTAIN OF OUR SENIOR SECURED CONVERTIBLE NOTES and warrants
We
are seeking stockholder approval, for purposes of complying with Listing Rule 5635(d), for the issuance of (i) 15,000,000 shares
of Common Stock to holders of our senior secured convertible notes with an original principal amount of approximately $18,000,000 issued
on or around July 31, 2023 and (ii) 4,420,460 shares of Common Stock issuable upon exercise of certain outstanding warrants issued
on or around July 31, 2023.
The
information set forth in this Proposal 6 is qualified in its entirety by reference to the full text of the form of the July Purchase
Agreement (defined below), July Warrants (defined below) and the July Notes attached as exhibits 10.1, 4.1 and 4.2, respectively, to
our Current Report on Form 8-K filed with the SEC on July 31, 2023. Stockholders are urged to carefully read these documents.
Background
On
July 31, 2023, we entered into a Securities Purchase Agreement (the “July Purchase Agreement”)
with certain institutional investors as purchasers (the “Investors”). Pursuant to the July Purchase Agreement, we sold, and
the Investors purchased, approximately $15,000,000, which consisted of approximately $13,968,750 in cash and $1,031,250 of our existing
debt which was exchanged for the notes and warrants issued in the transaction in principal amount of senior secured convertible notes
(the “July Notes”) and warrants (the “July Warrants”), each July Warrant entitling the holder to purchase
one share of our Common Stock. The transaction closed on August 1, 2023.
The
July Notes were issued with an original issue discount of 16.67%, do not bear interest unless in
the event of an event of default, in which case the notes bear interest at the rate of 18% per annum until such default has been cured,
and mature after 24 months, on July 31, 2025. We will pay to the Investors an aggregate
of $1,000,000 per month beginning on the last business day of the sixth full calendar month following the issuance thereof. The July
Notes are convertible into shares of our Common Stock, at a conversion price per share of $1.50, subject to adjustment under certain
circumstances described in the July Notes. To secure our obligations thereunder and under the July Purchase Agreement, we have granted
a security interest over substantially all of our assets to the collateral agent for the benefit of the Investors, pursuant to a security
agreement and a related trademark security agreement. We have the option to redeem the July Notes at a 10% redemption premium. The maturity
date of the July Notes also may be extended by the holders under circumstances specified therein. Danny Meeks, our Chief Executive Officer,
and our subsidiaries, each guaranteed our obligations under the July Notes.
The
July Warrants are exercisable for five years to purchase an aggregate of 4,420,460 shares of Common Stock at an exercise price of $0.01,
subject to adjustment under certain circumstances described in the July Warrants.
Nasdaq
Stockholder Approval Requirement
Listing
Rule 5635(d) requires stockholder approval in connection with a transaction, other than a public offering, involving the sale
or issuance by the issuer of Common Stock (or securities convertible into or exchangeable for Common Stock) equal to 20% or more of the
Common Stock or 20% or more of the voting power of such company outstanding before the issuance for a price that is less than the lower
of: (i) the closing price of the Common Stock immediately preceding the signing of the binding agreement for the issuance of such
securities and (ii) the average closing price of the Common Stock for the five trading days immediately preceding the signing
of the binding agreement for the issuance of such securities.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the shares present at the Annual Meeting, either in person or by proxy, and
entitled to vote, is required for approval of this Proposal 6. For purposes of the approval of Proposal 6, abstentions will
have the same effect as a vote against this proposal, and broker non-votes will have no effect on the result of the vote.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE
PROPOSAL TO ISSUE SHARES OF COMMON STOCK
TO HOLDERS OF CERTAIN OF OUR SENIOR SECURED CONVERTIBLE NOTES and warrants.
PROPOSAL
SEVEN:
approval
of THE PRICE PROTECTION FEATURE OF THE warrants to purchase SHARES OF COMMON STOCK in
a private placement to certain INSTITUTIONAL AND ACCREDITED INVESTORS
We
are seeking stockholder approval, for purposes of complying with Listing Rule 5635(d), for the price protection feature of the
warrants to purchase 5,022,332 shares of Common Stock issued in a private placement to certain institutional and accredited
investors.
Overview
Nasdaq Listing Rule 5635(d)
requires stockholder approval in connection with a transaction, other than a public offering, involving the sale or issuance by the issuer
of Common Stock (or securities convertible into or exchangeable for Common Stock) equal to 20% or more of the Common Stock or 20% or
more of the voting power of such company outstanding before the issuance for a price that is less than the lower of: (i) the closing
price of the Common Stock immediately preceding the signing of the binding agreement for the issuance of such securities and (ii) the
average closing price of the Common Stock for the five trading days immediately preceding the signing of the binding agreement for the
issuance of such securities. Because the exercise price of the warrants to purchase Common Stock
On
August 21, 2023, we entered into a securities purchase agreement with certain institutional and accredited investors, pursuant to
which we agreed to issue to certain institutional and accredited investors in a private placement warrants to purchase 5,022,332
shares of Common Stock. The warrants to purchase Common Stock will have an exercise price of $1.02 per share, will be immediately
exercisable upon issuance, and will expire 5.5 years from the date of issuance. In connection with the private placement, we agreed
to file a registration statement under the Securities Act of 1933, as amended, with the Securities and Exchange Commission covering
the resale of the shares of Common Stock issuable upon exercise of the warrants within 45 days following the closing of the
offering. The warrants to purchase Common Stock contain price protection provisions that could result in a downward adjustment of
the exercise price below the Minimum Price as a result of certain issuances of securities for a per share price less than the lower
of (i) the closing price of the Common Stock immediately preceding the signing of the binding agreement for the issuance of such
securities and (ii) the average closing price of the Common Stock for the five trading days immediately preceding the signing of the
binding agreement for the issuance of such securities. As a result of the price protection provision, listing Rule 5635(d) is
applicable, and therefore we are seeking stockholder approval for the price protection feature of such warrants.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the shares present at the Annual Meeting, either in person or by proxy, and
entitled to vote, is required for approval of this Proposal 7. For purposes of the approval of Proposal 7, abstentions will
have the same effect as a vote against this proposal, and broker non-votes will have no effect on the result of the vote.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE PROPOSAL TO APPROVE THE PRICE PROTECTION FEATURE
IN THE warrants to purchase SHARES OF COMMON STOCK ISSUED
in a private placement to certain INSTITUTIONAL AND ACCREDITED INVESTORS.
PROPOSAL
EIGHT:
AUTHORIZATION
TO ADJOURN THE ANNUAL MEETING
If
the Annual Meeting is convened and a quorum is present, but there are not sufficient votes to approve the forgoing proposals described
in this Proxy Statement, the Company may move to adjourn the Annual Meeting at that time in order to enable our Board to solicit additional
proxies.
In
this Proposal Nine, we are asking our Stockholders to authorize the Company to adjourn the Annual Meeting to another time and
place, if necessary or advisable, to solicit additional proxies in the event that there are not sufficient votes to approve the forgoing
proposals, each as described in this Proxy Statement. If our Stockholders approve this Proposal Nine, we could adjourn the Annual
Meeting and any adjourned session of the Annual Meeting and use the additional time to solicit additional proxies, including the solicitation
of proxies from our Stockholders that have previously voted. Among other things, approval of this proposal could mean that, even if we
had received proxies representing a sufficient number of votes to defeat the forgoing proposals, we could adjourn the Annual Meeting
without a vote on such proposals and seek to convince our Stockholders to change their votes in favor of such proposals.
If
it is necessary or advisable to adjourn the Annual Meeting, no notice of the adjourned meeting is required to be given to our Stockholders,
other than an announcement at the Annual Meeting of the time and place to which the Annual Meeting is adjourned, so long as the meeting
is adjourned for 30 days or less and no new record date is fixed for the adjourned meeting. At the adjourned meeting, we may transact
any business which might have been transacted at the original meeting. If, however, after the adjournment the Board fixes a new record
date for the adjourned meeting, a notice of adjourned meeting, shall be provided to each Stockholder of record on the new record date
entitled to vote at such meeting.
Vote
Required
The
affirmative vote of a majority of the Shares present virtually or represented by proxy and entitled to vote on the subject matter at
the Annual Meeting is required to approve this proposal.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO AUTHORIZE THE ADJOURNMENT OF THE ANNUAL MEETING.
OTHER
MATTERS
As
of the date of this Proxy Statement, the Board knows of no other business that will be presented at the Annual Meeting. If any other
business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof
in accordance with the best judgment and in the discretion of the persons voting the proxies.
|
By
order of the Board of Directors, |
|
|
|
/s/
Danny Meeks |
|
Danny
Meeks |
|
Chief
Executive Officer |
August
__, 2023
Chesapeake,
VA
Appendix
A
Greenwave
Technology Solutions, Inc.
2023
Equity Incentive Plan
1.
Purpose
Greenwave
Technology Solutions, Inc. 2023 Equity Incentive Plan is intended to promote the best interests of Greenwave Technology Solutions, Inc.
and its stockholders by (i) assisting the Corporation and its Affiliates in the recruitment and retention of persons with ability and
initiative, (ii) providing an incentive to such persons to contribute to the growth and success of the Corporation’s businesses
by affording such persons equity participation in the Corporation and (iii) associating the interests of such persons with those of the
Corporation and its Affiliates and stockholders.
2.
Definitions
As
used in this Plan the following definitions shall apply:
A.
“Affiliate” means (i) any Subsidiary, (ii) any Parent, (iii) any corporation, or trade or business (including, without
limitation, a partnership, limited liability company or other entity) which is directly or indirectly controlled fifty percent (50%)
or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Corporation or one of its
Affiliates, and (iv) any other entity in which the Corporation or any of its Affiliates has a material equity interest and which is designated
as an “Affiliate” by resolution of the Committee.
B.
“Award” means any Option or Stock Award granted hereunder.
C.
“Board” means the Board of Directors of the Corporation.
D.
“Code” means the Internal Revenue Code of 1986, and any amendments thereto.
E.
“Committee” means the Board or any Committee of the Board to which the Board has delegated any responsibility for
the implementation, interpretation or administration of this Plan.
F.
“Common Stock” means the common stock, $0.001 par value, of the Corporation.
G.
“Consultant” means (i) any person performing consulting or advisory services for the Corporation or any Affiliate,
or (ii) a director of an Affiliate.
H.
“Corporation” means Greenwave Technology Solutions, Inc., a Delaware corporation.
I.
“Corporation Law” means the Delaware Revised Statutes, as the same shall be amended from time to time.
J.
“Date of Grant” means the date that the Committee approves an Option grant; provided, that all terms of such grant,
including the amount of shares subject to the grant, exercise price and vesting are defined at such time.
K.
“Deferral Period” means the period of time during which Deferred Shares are subject to deferral limitations under
Section 7.D of this Plan.
L.
“Deferred Shares” means an award pursuant to Section 7.D of this Plan of the right to receive shares of Common Stock
at the end of a specified Deferral Period.
M.
“Director” means a member of the Board.
N.
“Eligible Person” means an employee of the Corporation or an Affiliate (including a corporation that becomes an Affiliate
after the adoption of this Plan), a Director or a Consultant to the Corporation or an Affiliate (including a corporation that becomes
an Affiliate after the adoption of this Plan).
O.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
P.
“Fair Market Value” means, on any given date, the current fair market value of the shares of Common Stock as determined
as follows:
|
(i) |
If
the Common Stock is traded on a national securities exchange, the closing price for the day of determination as quoted on such market
or exchange, including the NASDAQ Global Market or NASDAQ Capital Market, which is the primary market or exchange for trading of
the Common Stock or if no trading occurs on such date, the last day on which trading occurred, or such other appropriate date as
determined by the Committee in its discretion, as reported in The Wall Street Journal or such other source as the Committee
deems reliable; |
|
|
|
|
(ii) |
If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and the low asked prices for the Common Stock for the day of determination; or |
|
|
|
|
(iii) |
In
the absence of an established market for the Common Stock, Fair Market Value shall be determined by the Committee in good faith. |
Q.
“Family Member” means a parent, child, spouse or sibling.
R.
“Incentive Stock Option” means an Option (or portion thereof) intended to qualify for special tax treatment under
Section 422 of the Code.
S.
“Nonqualified Stock Option” means an Option (or portion thereof) which is not intended or does not for any reason
qualify as an Incentive Stock Option.
T.
“Option” means any option to purchase shares of Common Stock granted under this Plan.
U.
“Parent” means any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation
if each of the corporations (other than the Corporation) owns stock possessing at least fifty percent (50%) of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
V.
“Participant” means an Eligible Person who (i) is selected by the Committee or an authorized officer of the Corporation
to receive an Award and (ii) is party to an agreement setting forth the terms of the Award, as appropriate.
W.
“Performance Agreement” means an agreement described in Section 8 of this Plan.
X.
“Performance Objectives” means the performance objectives established by the Committee pursuant to this Plan for Participants
who have received grants of Awards. Performance Objectives may be described in terms of Corporation-wide objectives or objectives that
are related to the performance of the individual Participant or the Affiliate, division, department or function within the Corporation
or Affiliate in which the Participant is employed or has responsibility. If the Committee determines that a change in the business, operations,
corporate structure or capital structure of the Corporation (including an event described in Section 9), or the manner in which it conducts
its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may modify such Performance
Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable.
Y.
“Performance Period” means a period of time established under Section 8 of this Plan within which the Performance
Objectives relating to a Stock Award are to be achieved.
Z.
“Performance Share” means an award pursuant to Section 8 of this Plan of the right to receive shares of Common Stock
upon the achievement of specified Performance Objectives.
AA.
“Plan” means this Greenwave Technology Solutions, Inc. 2023 Equity Incentive Plan.
BB.
“Repricing” means, other than in connection with an event described in Section 9 of this Plan, (i) lowering the exercise
price of an Option after it has been granted or (ii) canceling an Option at a time when the exercise price exceeds the then-Fair Market
Value of the Common Stock in exchange for another Option.
CC.
“Restricted Stock Award” means an award of Common Stock under Section 7.B.
DD.
“Securities Act” means the Securities Act of 1933, as amended.
EE.
“Stock Award” means a Stock Bonus Award, Restricted Stock Award, Stock Appreciation Right, Deferred Shares, or Performance
Shares.
FF.
“Stock Bonus Award” means an award of Common Stock under Section 7.A.
GG.
“Stock Award Agreement” means a written agreement between the Corporation and a Participant setting forth the specific
terms and conditions of a Stock Award granted to the Participant under Section 7. Each Stock Award Agreement shall be subject to the
terms and conditions of this Plan and shall include such terms and conditions as the Committee shall authorize.
HH.
“Stock Option Agreement” means an agreement (written or electronic) between the Corporation and a Participant setting
forth the specific terms and conditions of an Option granted to the Participant. Each Stock Option Agreement shall be subject to the
terms and conditions of this Plan and shall include such terms and conditions as the Committee shall authorize.
II.
“Subsidiary” means any corporation (other than the Corporation) in an unbroken chain of corporations beginning with
the Corporation if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing at least fifty
percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain.
JJ.
“Ten Percent Owner” means any Eligible Person owning at the time an Option is granted more than ten percent (10%)
of the total combined voting power of all classes of stock of the Corporation or of a Parent or Subsidiary. An individual shall, in accordance
with Section 424(d) of the Code, be considered to own any voting stock owned (directly or indirectly) by or for such Eligible Person’s
brothers, sisters, spouse, ancestors and lineal descendants and any voting stock owned (directly or indirectly) by or for a corporation,
partnership, estate or trust shall be considered as being owned proportionately by or for its stockholders, partners, or beneficiaries.
3.
implementation, interpretation and Administration
A.
Delegation to Board Committee. The Board shall have the sole authority to implement, interpret, and/or administer this Plan unless
the Board delegates all or any portion of its authority to implement, interpret, and/or administer this Plan to a Committee. To the extent
not prohibited by the Certificate of Incorporation or Bylaws of the Corporation, the Board may delegate all or a portion of its authority
to implement, interpret, and/or administer this Plan to a Committee of the Board appointed by the Board and constituted in compliance
with the applicable Corporation Law. The Committee shall consist solely of two (2) or more Directors who are (i) Non-Employee Directors
(within the meaning of Rule 16b-3 under the Exchange Act) for purposes of exercising administrative authority with respect to Awards
granted to Eligible Persons who are subject to Section 16 of the Exchange Act; and (ii) to the extent required by the rules of the market
on which the Corporation’s shares are traded or the exchange on which the Corporation’s shares are listed, “independent”
within the meaning of such rules.
B.
Delegation to Officers. The Committee may delegate to one or more officers of the Corporation the authority to grant and administer
Awards to Eligible Persons who are not Directors or executive officers of the Corporation; provided that the Committee shall have fixed
the total number of shares of Common Stock that may be subject to such Awards. No officer holding such a delegation is authorized to
grant Awards to himself or herself. In addition to the Committee, the officer or officers to whom the Committee has delegated the authority
to grant and administer Awards shall have all powers delegated to the Committee with respect to such Awards.
C.
Powers of the Committee. Subject to the provisions of this Plan, and in the case of a Committee appointed by the Board, the specific
duties delegated to such Committee, the Committee (and the officers to whom the Committee has delegated such authority) shall have the
authority:
|
(i) |
To
construe and interpret all provisions of this Plan and all Stock Option Agreements, Stock Award Agreements, Performance Agreements,
or any other agreement under this Plan. |
|
|
|
|
(ii) |
To
determine the Fair Market Value of Common Stock in the absence of an established market for the Common Stock. |
|
|
|
|
(iii) |
To
select the Eligible Persons to whom Awards are granted from time to time hereunder. |
|
|
|
|
(iv) |
To
determine the number of shares of Common Stock covered by an Award; to determine whether an Option shall be an Incentive Stock Option
or Nonqualified Stock Option; and to determine such other terms and conditions, not inconsistent with the terms of this Plan, of
each such Award. Such terms and conditions include, but are not limited to, the exercise price of an Option, purchase price of Common
Stock subject to a Stock Award, the time or times when Options or a Stock Award may be exercised or Common Stock issued thereunder,
the vesting schedule of an Option, the right of the Corporation to repurchase Common Stock issued pursuant to the exercise of an
Option or a Stock Award and other restrictions or limitations (in addition to those contained in this Plan) on the forfeitability
or transferability of Options, Stock Awards or Common Stock issued upon exercise of an Option or pursuant to a Stock Award. Such
terms may include conditions which shall be determined by the Committee and need not be uniform with respect to Participants. |
|
|
|
|
(v) |
To
accelerate the time at which any Option or Stock Award may be exercised, or the time at which a Stock Award or Common Stock issued
under this Plan may become transferable or non-forfeitable. |
|
|
|
|
(vi) |
To
determine whether and under what circumstances an Option or Stock Award may be settled in cash, shares of Common Stock or other property
under Section 6.H instead of in Common Stock. |
|
|
|
|
(vii) |
To
waive, amend, cancel, extend, renew, accept the surrender of, modify or accelerate the vesting of or lapse of restrictions on all
or any portion of an outstanding Award. Except as otherwise provided by this Plan, Stock Option Agreement, Stock Award Agreement
or Performance Agreement or as required to comply with applicable law, regulation or rule, no amendment, cancellation or modification
shall, without a Participant’s consent, adversely affect any rights of the Participant; provided, however, that (x) an amendment
or modification that may cause an Incentive Stock Option to become a Nonqualified Stock Option shall not be treated as adversely
affecting the rights of the Participant and (y) any other amendment or modification of any Stock Option Agreement, Stock Award Agreement
or Performance Agreement that does not, in the opinion of the Committee, adversely affect any rights of any Participant, shall not
require such Participant’s consent. Notwithstanding the foregoing, the restrictions on the Repricing of Options, as set forth
in this Plan, may not be waived. |
|
|
|
|
(viii) |
To
prescribe the form of Stock Option Agreements, Stock Award Agreements, Performance Agreements, or any other agreements under this
Plan; to adopt policies and procedures for the exercise of Options or Stock Awards, including the satisfaction of withholding obligations;
to adopt, amend, and rescind policies and procedures pertaining to the administration of this Plan; and to make all other determinations
necessary or advisable for the administration of this Plan. Except for the due execution of the award agreement by both the Corporation
and the Participant, the Award’s effectiveness will not be dependent on any signature unless specifically so provided in the
award agreement. |
The
express grant in this Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee;
provided that the Committee may not exercise any right or power reserved to the Board. Any decision made, or action taken, by the Committee
or in connection with the implementation, interpretation, and administration of this Plan shall be final, conclusive and binding on all
persons having an interest in this Plan.
4.
Eligibility
A.
Eligibility for Awards. Awards, other than Incentive Stock Options, may be granted to any Eligible Person selected by the Committee.
Incentive Stock Options may be granted only to employees of the Corporation or a Parent or Subsidiary.
B.
Eligibility of Consultants. A Consultant shall be an Eligible Person only if the offer or sale of the Corporation’s securities
would be eligible for registration on Form S-8 Registration Statement (or any successor form) because of the identity and nature of the
service provided by such person, unless the Corporation determines that an offer or sale of the Corporation’s securities to such
person will satisfy another exemption from the registration under the Securities Act and complies with the securities laws of all other
jurisdictions applicable to such offer or sale. Accordingly, an Award may not be granted pursuant to this Plan for the purpose of the
Corporation obtaining financing or for investor relations purposes.
C.
Substitution Awards. The Committee may make Awards under this Plan by assumption, in substitution or replacement of performance
shares, phantom shares, stock awards, stock options or similar awards granted by another entity (including an Affiliate) in connection
with a merger, consolidation, acquisition of property or stock or similar transaction. Notwithstanding any provision of this Plan (other
than the maximum number of shares of Common Stock that may be issued under this Plan), the terms of such assumed, substituted, or replaced
Awards shall be as the Committee, in its discretion, determines is appropriate.
5.
Common Stock Subject to Plan
A.
Share Reserve and Limitations on Grants. The maximum aggregate number of shares of Common Stock that may be (i) issued under this
Plan pursuant to the exercise of Options (without regard to whether payment on exercise of the Stock Option is made in cash or shares
of Common Stock) and (ii) issued pursuant to Stock Awards, shall be 600,000 shares in the aggregate. The number of shares of Common Stock
subject to the Plan shall be subject to adjustment as provided in Section 9. Notwithstanding any provision hereto to the contrary, shares
subject to the Plan shall include shares forfeited in a prior year as provided herein. For purposes of determining the number of shares
of Common Stock available under this Plan, shares of Common Stock withheld by the Corporation to satisfy applicable tax withholding obligations
pursuant to Section 10 of this Plan shall be deemed issued under this Plan. No single participant may receive more than 25% of the total
Options awarded in any single year.
B.
Reversion of Shares. If an Option or Stock Award is terminated, expires or becomes unexercisable, in whole or in part, for any
reason, the unissued or unpurchased shares of Common Stock which were subject thereto shall become available for future grant under this
Plan. Shares of Common Stock that have been actually issued under this Plan shall not be returned to the share reserve for future grants
under this Plan; except that shares of Common Stock issued pursuant to a Stock Award which are forfeited to the Corporation or repurchased
by the Corporation at the original purchase price of such shares, shall be returned to the share reserve for future grant under this
Plan.
C.
Source of Shares. Common Stock issued under this Plan may be shares of authorized and unissued Common Stock or shares of previously
issued Common Stock that have been reacquired by the Corporation.
6.
Options
A.
Award. In accordance with the provisions of Section 4, the Committee will designate each Eligible Person to whom an Option is
to be granted and will specify the number of shares of Common Stock covered by such Option. The Stock Option Agreement shall specify
whether the Option is an Incentive Stock Option or Nonqualified Stock Option, the exercise price of such Option, the vesting schedule
applicable to such Option, the expiration date of such Option, events of termination of such Option, and any other terms of such Option.
No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock Option.
B.
Option Price. The exercise price per share for Common Stock subject to an Option shall be determined by the Committee, but shall
comply with the following:
|
(i) |
The
exercise price per share for Common Stock subject to an Option shall not be less than one hundred percent (100%) of the Fair Market
Value on the date of grant. |
|
|
|
|
(ii) |
The
exercise price per share for Common Stock subject to an Incentive Stock Option granted to a Participant who is deemed to be a Ten
Percent Owner on the date such option is granted, shall not be less than one hundred ten percent (110%) of the Fair Market Value
on the date of grant. |
C.
Maximum Option Period. The maximum period during which an Option may be exercised shall be ten (10) years from the date such Option
was granted. In the case of an Incentive Stock Option that is granted to a Participant who is or is deemed to be a Ten Percent Owner
on the date of grant, such Option shall not be exercisable after the expiration of five (5) years from the date of grant.
D.
Maximum Value of Options which are Incentive Stock Options. To the extent that the aggregate Fair Market Value of the Common Stock
with respect to which Incentive Stock Options granted to any Participant are exercisable for the first time during any calendar year
(under all stock option plans of the Corporation or any Parent or Subsidiary) exceeds $100,000 (or such other amount provided in Section
422 of the Code), the Options shall not be deemed to be Incentive Stock Options. For purposes of this section, the Fair Market Value
of the Common Stock will be determined as of the time the Incentive Stock Option with respect to the Common Stock is granted. This section
will be applied by taking Incentive Stock Options into account in the order in which they are granted.
E.
Nontransferability. Options granted under this Plan which are intended to be Incentive Stock Options shall be nontransferable
except by will or by the laws of descent and distribution and, during the lifetime of the Participant, shall be exercisable by only the
Participant to whom the Incentive Stock Option is granted. Except to the extent transferability of a Nonqualified Stock Option is provided
for in the Stock Option Agreement or is approved by the Committee, during the lifetime of the Participant to whom the Nonqualified Stock
Option is granted, such Option may be exercised only by the Participant. If the Stock Option Agreement so provides or the Committee so
approves, a Nonqualified Stock Option may be transferred by a Participant through a gift or domestic relations order to the Participant’s
family members to the extent such transfer complies with applicable securities laws and regulations and provided that such transfer is
not a transfer for value (within the meaning of applicable securities laws and regulations). The holder of a Nonqualified Stock Option
transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option during the period that
it was held by the Participant. No right or interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation,
or liability of such Participant, unless such obligation is to the Corporation itself or to an Affiliate.
F.
Vesting. Options will vest as provided in the Stock Option Agreement.
G.
Termination. Options will terminate as provided in the Stock Option Agreement.
H.
Exercise. Subject to the provisions of this Plan and the applicable Stock Option Agreement, an Option may be exercised to the
extent vested in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee
shall determine. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with
this Plan and the applicable Stock Option Agreement with respect to the remaining shares subject to the Option. An Option may not be
exercised with respect to fractional shares of Common Stock. The Participant may face certain restrictions on his/her ability to exercise
Options and/or sell underlying shares when such Participant is potentially in possession of insider information. The Corporation will
make the Participant aware of any formal insider trading policy it adopts, and the provisions of such insider trading policy (including
any amendments thereto) shall be binding upon the Participant.
I.
Payment. Unless otherwise provided by the Stock Option Agreement, payment of the exercise price for an Option shall be made in
cash or a cash equivalent acceptable to the Committee or if the Common Stock is traded on an established securities market, by payment
of the exercise price by a broker-dealer or by the Option holder with cash advanced by the broker-dealer if the exercise notice is accompanied
by the Option holder’s written irrevocable instructions to deliver the Common Stock acquired upon exercise of the Option to the
broker-dealer or by delivery of the Common Stock to the broker-dealer with an irrevocable commitment by the broker-dealer to forward
the exercise price to the Corporation. With the consent of the Committee, payment of all or a part of the exercise price of an Option
may also be made (i) by surrender to the Corporation (or delivery to the Corporation of a properly executed form of attestation of ownership)
of shares of Common Stock that have been held for such period prior to the date of exercise as is necessary to avoid adverse accounting
treatment to the Corporation, or (ii) any other method acceptable to the Committee. If Common Stock is used to pay all or part of the
exercise price, the sum of the cash or cash equivalent and the Fair Market Value (determined as of the date of exercise) of the shares
surrendered must not be less than the Option price of the shares for which the Option is being exercised.
J.
Stockholder Rights. No Participant shall have any rights as a stockholder with respect to shares subject to an Option until the
date of exercise of such Option and the certificate for shares of Common Stock to be received on exercise of such Option has been issued
by the Corporation.
K.
Disposition and Stock Certificate Legends for Incentive Stock Option Shares. A Participant shall notify the Corporation of any
sale or other disposition of Common Stock acquired pursuant to an Incentive Stock Option if such sale or disposition occurs (i) within
two years of the grant of an Option or (ii) within one year of the issuance of the Common Stock to the Participant. Such notice shall
be in writing and directed to the Chief Financial Officer of the Corporation or is his/her absence, the Chief Executive Officer. The
Corporation may require that certificates evidencing shares of Common Stock purchased upon the exercise of Incentive Stock Options issued
under this Plan be endorsed with a legend in substantially the following form:
THE
SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO ___, 20___, IN THE ABSENCE OF A WRITTEN STATEMENT FROM THE
CORPORATION TO THE EFFECT THAT THE CORPORATION IS AWARE OF THE FACTS OF SUCH SALE OR TRANSFER.
The
blank contained in this legend shall be filled in with the date that is the later of (i) one year and one day after the date of the exercise
of such Incentive Stock Option or (ii) two years and one day after the grant of such Incentive Stock Option.
L.
No Repricing. In no event shall the Committee permit a Repricing of any Option without the approval of the stockholders of the
Corporation.
7.
Stock Awards
A.
Stock Bonus Awards. Stock Bonus Awards may be granted by the Committee. Each Stock Award Agreement for a Stock Bonus Award shall
be in such form and shall contain such terms and conditions (including provisions relating to consideration, vesting, reacquisition of
shares following termination, and transferability of shares) as the Committee shall deem appropriate. The terms and conditions of Stock
Award Agreements for Stock Bonus Awards may change from time to time and need not be uniform with respect to Participants, and the terms
and conditions of separate Stock Bonus Awards need not be identical.
B.
Restricted Stock Awards. Restricted Stock Awards may be granted by the Committee. Each Stock Award Agreement for a Restricted
Stock Award shall be in such form and shall contain such terms and conditions (including provisions relating to purchase price, consideration,
vesting, reacquisition of shares following termination, and transferability of shares) as the Committee shall deem appropriate. The terms
and conditions of the Stock Award Agreements for Restricted Stock Awards may change from time to time and need not be uniform with respect
to Participants, and the terms and conditions of separate Restricted Stock Awards need not be identical. Vesting of any grant of Restricted
Stock Awards may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with
the applicable provisions of Section 8 of this Plan regarding Performance Shares.
C.
Deferred Shares. The Committee may authorize grants of Deferred Shares to Participants upon the recommendation of the Corporation’s
management, and upon such terms and conditions as the Committee may determine in accordance with the following provisions:
|
(i) |
Each
grant shall constitute the agreement by the Corporation to issue or transfer shares of Common Stock to the Participant in the future
in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the
Committee may specify. |
|
|
|
|
(ii) |
Each
grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that
is less than the Fair Market Value on the date of grant. |
|
(iii) |
Each
grant shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed by the Committee
on the date of grant, and any grant or sale may provide for the earlier termination of such period in the event of a change in control
of the Corporation or other similar transaction or event. |
|
|
|
|
(iv) |
During
the Deferral Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any
rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or after the
date of grant, authorize the payment of dividend or other distribution equivalents on such shares in cash or additional shares on
a current, deferred or contingent basis. |
|
|
|
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(v) |
Any
grant, or the vesting thereof, may be further conditioned upon the attainment of Performance Objectives established by the Committee
in accordance with the applicable provisions of Section 8 of this Plan regarding Performance Shares. |
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(vi) |
Each
grant shall be evidenced by an agreement delivered to and accepted by the Participant and containing such terms and provisions as
the Committee may determine consistent with this Plan. The terms and conditions of the agreements for Deferred Shares may change
from time to time and need not be uniform with respect to Participants, and the terms and conditions of separate Deferred Shares
need not be identical. |
8.
Performance Shares
A.
The Committee may authorize grants of Performance Shares, which shall become payable to the Participant upon the achievement of specified
Performance Objectives, upon such terms and conditions as the Committee may determine in accordance with the following provisions:
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(i) |
Each
grant shall specify the number of Performance Shares to which it pertains, which may be subject to adjustment to reflect changes
in compensation or other factors. |
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(ii) |
The
Performance Period with respect to each Performance Share shall commence on the date established by the Committee and may be subject
to earlier termination in the event of a change in control of the Corporation or similar transaction or event. |
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(iii) |
Each
grant shall specify the Performance Objectives that are to be achieved by the Participant. |
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(iv) |
Each
grant may specify in respect of the specified Performance Objectives a minimum acceptable level of achievement below which no payment
will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such
minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives. |
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(v) |
Each
grant shall specify the time and manner of payment of Performance Shares that shall have been earned, and any grant may specify that
any such amount may be paid by the Corporation in cash, shares of Common Stock or any combination thereof and may either grant to
the Participant or reserve to the Committee the right to elect among those alternatives. |
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(vi) |
Any
grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee
on the date of grant. |
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(vii) |
Any
grant of Performance Shares may provide for the payment to the Participant of dividend or other distribution equivalents thereon
in cash or additional shares of Common Stock on a current, deferred or contingent basis. |
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(viii) |
If
provided in the terms of the grant, the Committee may adjust Performance Objectives and the related minimum acceptable level of achievement
if, in the sole judgment of the Committee, events or transactions have occurred after the date of grant that are unrelated to the
performance of the Participant and result in distortion of the Performance Objectives or the related minimum acceptable level of
achievement. |
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(ix) |
Each
grant shall be evidenced by an agreement that shall be delivered to and accepted by the Participant, which shall state that the Performance
Shares are subject to all of the terms and conditions of this Plan and such other terms and provisions as the Committee may determine
consistent with this Plan. The terms and conditions of the agreements for Performance Shares may change from time to time and need
not be uniform with respect to Participants, and the terms and conditions of separate Performance Shares need not be identical. |
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(x) |
Until
the achievement of the Performance Objectives and the resulting issuance of the Performance Shares, the Participant shall not have
any rights as a stockholder in the Performance Shares and shall not have any right to vote such shares, but the Committee may on
or after the date of grant, authorize the payment of dividend or other distribution equivalents on such shares in cash or additional
shares on a current, deferred or contingent basis. |
9.
Changes in Capital Structure
A.
No Limitations of Rights. The existence of outstanding Awards shall not affect in any way the right or power of the Corporation
or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Corporation’s
capital structure or its business, or any merger or consolidation of the Corporation, or any issuance of bonds, debentures, preferred
or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Corporation,
or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
B.
Changes in Capitalization. If the Corporation shall effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving
consideration therefore in money, services or property, then (i) the number, class, and per share price of shares of Common Stock subject
to outstanding Options and other Awards hereunder and (ii) the number of and class of shares then reserved for issuance under this Plan
and the maximum number of shares for which Awards may be granted to a Participant during a specified time period shall be appropriately
and proportionately adjusted. The conversion of convertible securities of the Corporation shall not be treated as effected “without
receiving consideration.” The Committee shall make such adjustments, and its determinations shall be final, binding and conclusive.
C.
Merger, Consolidation or Asset Sale. If the Corporation is merged or consolidated with another entity or sells or otherwise disposes
of substantially all of its assets to another company while Options or Stock Awards remain outstanding under this Plan, unless provisions
are made in connection with such transaction for the continuance of this Plan and/or the assumption or substitution of such Options or
Stock Awards with new options or stock awards covering the stock of the successor company, or parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, then all outstanding Options and Stock Awards which have not been continued,
assumed or for which a substituted award has not been granted shall, whether or not vested or then exercisable, unless otherwise specified
in the Stock Option Agreement or Stock Award Agreement, terminate immediately as of the effective date of any such merger, consolidation
or sale.
D.
Limitation on Adjustment. Except as previously expressly provided, neither the issuance by the Corporation of shares of stock
of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon
direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Corporation
convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition
or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or
price of shares of Common Stock then subject to outstanding Options or Stock Awards.
10.
Withholding of Taxes
The
Corporation or an Affiliate shall have the right, before any certificate for any Common Stock is delivered, to deduct or withhold from
any payment owed to a Participant any amount that is necessary in order to satisfy any withholding requirement that the Corporation or
Affiliate in good faith believes is imposed upon it in connection with U.S federal, state, or local taxes, including transfer taxes,
as a result of the issuance of, or lapse of restrictions on, such Common Stock, or otherwise require such Participant to make provision
for payment of any such withholding amount. Subject to such conditions as may be established by the Committee, the Committee may permit
a Participant to (i) have Common Stock otherwise issuable under an Option or Stock Award withheld to the extent necessary to comply with
minimum statutory withholding rate requirements; (ii) tender back to the Corporation shares of Common Stock received pursuant to an Option
or Stock Award to the extent necessary to comply with minimum statutory withholding rate requirements for supplemental income; (iii)
deliver to the Corporation previously acquired Common Stock; (iv) have funds withheld from payments of wages, salary or other cash compensation
due the Participant; (v) pay the Corporation or its Affiliate in cash, in order to satisfy part or all of the obligations for any taxes
required to be withheld or otherwise deducted and paid by the Corporation or its Affiliate with respect to the Option of Stock Award;
or (vi) establish a 10b5-1 trading plan for withheld stock designed to facilitate the sale of stock in connection with the vesting of
such shares, the proceeds of which shall be utilized to make all applicable withholding payments in a manner to be coordinated by the
Corporation’s Chief Financial Officer.
11.
Compliance with Law and Approval of Regulatory Bodies
A.
General Requirements. No Option or Stock Award shall be exercisable, no Common Stock shall be issued, no certificates for shares
of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Corporation
is a party, and the rules of all domestic stock exchanges or quotation systems on which the Corporation’s shares may be listed.
The Corporation shall have the right to rely on an opinion of its counsel as to such compliance. In the absence of an effective and current
registration statement on an appropriate form under the Securities Act, or a specific exemption from the registration requirements of
the Securities Act, shares of Common Stock issued under this Plan shall be restricted shares. Any share certificate issued to evidence
Common Stock when a Stock Award is granted or for which an Option is exercised may bear such restrictive legends and statements as the
Committee may deem advisable to assure compliance with federal and state laws and regulations. No Option or Stock Award shall be exercisable,
no Stock Award shall be granted, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall
be made under this Plan until the Corporation has obtained such consent or approval as the Committee may deem advisable from regulatory
bodies having jurisdiction over such matters.
B.
Participant Representations. The Committee may require that a Participant, as a condition to receipt or exercise of a particular
award, execute and deliver to the Corporation a written statement, in form satisfactory to the Committee, in which the Participant represents
and warrants that the shares are being acquired for such person’s own account, for investment only and not with a view to the resale
or distribution thereof. The Participant shall, at the request of the Committee, be required to represent and warrant in writing that
any subsequent resale or distribution of shares of Common Stock by the Participant shall be made only pursuant to either (i) a registration
statement on an appropriate form under the Securities Act of 1933, which registration statement has become effective and is current with
regard to the shares being sold, or (ii) a specific exemption from the registration requirements of the Securities Act of 1933, but in
claiming such exemption the Participant shall, prior to any offer of sale or sale of such shares, obtain a prior favorable written opinion
of counsel, in form and substance satisfactory to counsel for the Corporation, as to the application of such exemption thereto.
12.
General Provisions
A.
Effect on Employment and Service. Neither the adoption of this Plan, its operation, nor any documents describing or referring
to this Plan (or any part thereof) shall (i) confer upon any individual any right to continue in the employ or service of the Corporation
or an Affiliate, (ii) in any way affect any right and power of the Corporation or an Affiliate to change an individual’s duties
or terminate the employment or service of any individual at any time with or without assigning a reason therefor or (iii) except to the
extent the Committee grants an Option or Stock Award to such individual, confer on any individual the right to participate in the benefits
of this Plan.
B.
Use of Proceeds. The proceeds received by the Corporation from any sale of Common Stock pursuant to this Plan shall be used for
general corporate purposes.
C.
Unfunded Plan. This Plan, insofar as it provides for grants, shall be unfunded, and the Corporation shall not be required to segregate
any assets that may at any time be represented by grants under this Plan. Any liability of the Corporation to any Participant with respect
to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Corporation shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Corporation.
D.
Rules of Construction. Headings are given to the Sections of this Plan solely as a convenience to facilitate reference. The reference
to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision
of law.
E.
Choice of Law. This Plan and all Stock Option Agreements, Stock Award Agreements, and Performance Agreements (or any other agreements)
entered into under this Plan shall be interpreted under the Corporation Law excluding (to the greatest extent permissible by law) any
rule of law that would cause the application of the laws of any jurisdiction other than the Corporation Law.
F.
Fractional Shares. The Corporation shall not be required to issue fractional shares pursuant to this Plan. The Committee may provide
for elimination of fractional shares or the settlement of such fractional shares in cash.
G.
Foreign Employees. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may
provide for such special terms for Awards to Participants who are foreign nationals, or who are employed by the Corporation or any Affiliate
outside of the United States, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy
or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, this Plan
as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan, as then in effect, unless
this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Corporation.
13.
Amendment and Termination
The
Board may amend or terminate this Plan from time to time; provided, however, stockholder approval shall be required for any amendment
that (i) increases the aggregate number of shares of Common Stock that may be issued under this Plan, except as contemplated herein;
(ii) changes the class of employees eligible to receive Incentive Stock Options; (iii) modifies the restrictions on Repricings set forth
in this Plan; or (iv) is required by the terms of any applicable law, regulation or rule, including the rules of any market on which
the Corporation shares are traded or exchange on which the Corporation shares are listed. Except as specifically permitted by this Plan,
any Stock Option Agreement or any Stock Award Agreement or as required to comply with applicable law, regulation or rule, no amendment
shall, without a Participant’s consent, adversely affect any rights of such Participant under any Option or Stock Award outstanding
at the time such amendment is made; provided, however, that an amendment that may cause an Incentive Stock Option to become a Nonqualified
Stock Option shall not be treated as adversely affecting the rights of the Participant. Any amendment requiring stockholder approval
shall be approved by the stockholders of the Corporation within twelve (12) months of the date such amendment is adopted by the Board.
14.
Effective Date of Plan; Duration of Plan
A.
This Plan shall be effective upon adoption by the Board, subject to approval within twelve (12) months by the stockholders of the Corporation.
Unless and until the Plan has been approved by the stockholders of the Corporation, no Option or Stock Award may be exercised, no shares
of Common Stock may be issued under this Plan. In the event that the stockholders of the Corporation shall not approve the Plan within
such twelve (12) month period, the Plan and any previously granted Options or Stock Awards shall terminate.
B.
Unless previously terminated, this Plan will terminate ten (10) years after the earlier of (i) the date this Plan is adopted by the Board,
or (ii) the date this Plan is approved by the stockholders, except that Awards that are granted under this Plan prior to its termination
will continue to be administered under the terms of this Plan until the Awards terminate, expire or are exercised.
IN
WITNESS WHEREOF, the Corporation has caused this Plan to be executed by a duly authorized officer as of the date of adoption of this
Plan by the Board of Directors.
GREENWAVE
TECHNOLOGY SOLUTIONS, INC.
By: |
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Danny
Meeks |
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Chief
Executive Officer |
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