UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Rule 14d-101)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange
Act of 1934
TSR, Inc.
(Name of Subject Company)
TSR, Inc.
(Name of Persons Filing Statement)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
872885207
(CUSIP Number of Class of Securities)
Thomas Salerno
Chief Executive Officer
400 Oser Avenue, Suite 150
Hauppauge, NY 11788
(631) 231-0333
(Name, address, and telephone numbers of person
authorized to receive notices and communications on behalf of the persons filing statement)
With copies to:
Lawrence R. Bard, Esq.
Scott D. Museles, Esq.
Shulman Rogers, P.A.
12505 Park Potomac Ave, Suite 600
Potomac, MD 20854
(301) 230-5200
| ☐ | Check
the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
TABLE OF CONTENTS
Item 1. Subject Company Information
Name and Address
The name of the subject company is TSR, Inc., a Delaware
corporation (“TSR” or the “Company”). The address of TSR’s principal executive office is 400 Oser Avenue,
Suite 150, Hauppauge, NY 11788. The telephone number of TSR’s principal executive office is (631) 231-0333.
Securities
The title of the class of equity securities to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (together with the exhibits and annexes hereto, as it may be amended or supplemented,
this “Schedule 14D-9”) relates is TSR’s common stock, par value $0.01 per share (the “Shares”). As of the
close of business on May 27, 2024, there were (i) 2,169,546 shares of TSR common stock, par value $0.01 per share (the “Common Stock”)
issued and outstanding; and (ii) Unvested TSR Restricted Stock Awards outstanding in respect of 69,167 shares of Common Stock.
Item 2. Identity and Background of Filing Person
Name and Address
The name, business address and business
telephone number of TSR, which is both the person filing this Schedule 14D-9 and the subject company, are set forth under the section
entitled “Item 1. Subject Company Information—Name and Address.”
Tender Offer
This Schedule 14D-9 relates to the
cash tender offer (the “Offer”) by Vienna Acquisition Corporation (“Purchaser”), a Delaware corporation and wholly
owned subsidiary of Vienna Parent Corporation, an Indiana corporation (“Parent”), to purchase all of the issued and outstanding
Shares at a purchase price of $13.40 per Share (the “Offer Price”), net to the stockholder in cash, without interest, and
less any applicable tax withholding, on the terms and subject to the conditions set forth in the Offer to Purchase, dated as of May 30,
2024 (as may be amended or supplemented from time to time, the “Offer to Purchase”) and the related Letter of Transmittal
(as may be amended or supplemented from time to time, the “Letter of Transmittal”), and pursuant to the Agreement and Plan
of Merger, dated as of May 15, 2024, by and among Parent, Purchaser and TSR (as may be amended from time to time, the “Merger Agreement”).
Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Merger Agreement.
The Offer is described in a Tender
Offer Statement on Schedule TO (as may be amended or supplemented from time to time, and together with the exhibits thereto, the “Schedule
TO”), filed by Purchaser and Parent with the Securities and Exchange Commission (the “SEC”) on May 30, 2024. Consummation
of the Offer is subject to various conditions set forth in the Merger Agreement, including (i) that there have been validly tendered in
the Offer (and not properly withdrawn) prior to the expiration of the Offer that number of Shares (excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been “received” by the “depository,” as such terms are defined
by Section 251(h) of the General Corporation Law of the State of Delaware (“DGCL”)) that, when added to the Shares then owned
by Parent, Purchaser or any subsidiary of Parent, would represent at least a majority of the Shares outstanding as of immediately following
the consummation of the Offer (the “Minimum Tender Condition”); (ii) the accuracy of TSR’s representations and warranties
contained in the Merger Agreement (except, generally, for any inaccuracies that have not had, individually or in the aggregate, a Company
Material Adverse Effect); (iii) TSR’s performance in all material respects of its obligations under the Merger Agreement; and (iv)
the other conditions set forth in Exhibit A to the Merger Agreement which is incorporated herein by reference. The Offer and the Merger
(as defined below) are not subject to a financing condition.
Following consummation of the Offer
and subject to the satisfaction or waiver of the various conditions set forth in the Merger Agreement, Purchaser will merge with and into
TSR, with TSR surviving as a wholly owned subsidiary of Parent (the “Surviving Corporation”). This merger is referred to herein
as the “Merger” and, together with the Offer and the other transactions contemplated by the Merger Agreement, is referred
to herein as the “Transactions.” At the effective time of the Merger (the “Effective Time”), each Share issued
and outstanding immediately prior to the Effective Time (other than (i) Shares owned by TSR or any wholly owned subsidiary of TSR immediately
prior to the Effective Time; (ii) Shares owned by Parent, Purchaser or any other subsidiary of Parent or Purchaser at the commencement
of the Offer and owned by Parent, Purchaser or any other subsidiary of Parent immediately prior to the Effective Time; (iii) Shares irrevocably
accepted for purchase in the Offer or (iv) Shares that are held by stockholders who are entitled to demand and properly demand appraisal
for such Shares pursuant to and in compliance in all respects with Section 262 of the DGCL and do not fail to perfect or otherwise waive,
withdraw or lose their rights to such appraisal with respect to such Shares under the DGCL (the Shares described in (iv), the “Dissenting
Shares,” and the Shares described in (i), (ii) and (iv) collectively, the “Excluded Shares”)), will be converted into
the right to receive an amount in cash equal to the Offer Price, without interest (the “Merger Consideration”), from Purchaser,
less any applicable tax withholding.
The Merger Agreement provides that
the Merger will be effected pursuant to Section 251(h) of the DGCL, which permits completion of the Merger if, among other things, the
number of Shares irrevocably accepted for payment by Purchaser in connection with the Offer, when taken together with the Shares otherwise
owned by Purchaser or its affiliates, equals at least such percentage of the Shares that would be required to adopt the Merger Agreement
at a meeting of stockholders. In the case of TSR, this will be a number of Shares that, when added to the Shares, if any, owned by Purchaser
or its affiliates, represents one Share more than 50% of the number of Shares that are then issued and outstanding immediately prior to
the Effective Time. If the Merger is effected pursuant to Section 251(h) of the DGCL, no vote of the stockholders of TSR will be required
to consummate the Merger.
TSR does not expect there to be a
significant period of time between the consummation of the Offer and the consummation of the Merger. The Merger will be effected as soon
as practicable following Purchaser’s acceptance for payment of the Shares validly tendered and not properly withdrawn in the Offer
(the date and time of acceptance for payment, “Acceptance Time”). At the Effective Time, each Share issued and outstanding
immediately prior to the Effective Time (other than (i) Shares owned by TSR or any wholly owned subsidiary of TSR immediately prior to
the Effective Time; (ii) Shares owned by Parent, Purchaser or any other subsidiary of Parent or Purchaser at the commencement of the Offer
and owned by Parent, Purchaser or any other subsidiary of Parent immediately prior to the Effective Time; (iii) Shares irrevocably accepted
for purchase in the Offer or (iv) Dissenting Shares), will be converted into the right to receive the Merger Consideration, from Purchaser,
without interest and less any applicable tax withholding. A description of the treatment of equity awards under TSR’s equity compensation
plans, including unvested restricted stock awards, is set forth under the section entitled “Item 3. Past Contacts, Transactions,
Negotiations and Agreements—Arrangements with Current Executive Officers and Directors of TSR—Effect of the Offer and the
Merger Agreement on TSR Equity Incentive Plan and TSR Equity Compensation Awards.”
Purchaser expressly reserves the right (but is not obligated)
at any time and from time to time in its sole discretion to (i) waive, in whole or in part, any condition of the Offer, (ii) increase
the Offer Price or (iii) modify or amend the terms of the Offer in any manner not inconsistent with the terms of the Merger Agreement,
except that TSR’s prior written approval is required for Purchaser to, and for Parent to permit Purchaser to, (a) reduce the number
of Shares subject to the Offer (other than in connection with any adjustments made in accordance with the terms of the Merger Agreement);
(b) reduce the Offer Price (other than in connection with any adjustments made in accordance with the terms of the Merger Agreement);
(c) waive, amend or modify the Minimum Tender Condition or the condition that the Merger Agreement shall not have been terminated in accordance
with its terms prior to the closing of the Offer; (d) add conditions to the Offer or impose any other conditions on the Offer or amend,
modify or supplement any conditions to the Offer in any manner adverse to the holders of Shares; (e) except as otherwise provided in the
Merger Agreement, terminate (unless the Merger Agreement has been validly terminated in accordance with the terms of the Merger Agreement),
extend or otherwise amend or modify the expiration date of the Offer; (f) change the form or terms of consideration payable in the Offer;
(g) otherwise amend, modify or supplement any of the terms of the Offer in any manner adverse to the holders of Shares; or (h) provide
any “subsequent offering period” in accordance with Rule 14d-11 of the Securities Exchange Act of 1934, as amended (together
with the rules and regulations promulgated thereunder, the “Exchange Act”).
Purchaser commenced (within the
meaning of Rule 14d-2 promulgated under the Exchange Act) the Offer on May 30, 2024. Subject to the terms and conditions of the Merger
Agreement and the Offer, the Offer is initially scheduled to expire one minute after 11:59 p.m., Eastern time, on June 27, 2024 (the “Expiration
Time”), unless the expiration of the Offer is extended to a subsequent date in accordance with the terms of the Merger Agreement,
in which case the term “Expiration Time” means such subsequent time on such subsequent date. If at the scheduled Expiration
Time any of the conditions to the Offer (other than the Minimum Tender Condition) have not been satisfied or waived, Purchaser shall,
and Parent shall cause Purchaser to, extend the Offer for one or more consecutive increments of not more than 10 business days each (or
such longer period as may be agreed to by Parent and TSR), until such time as such conditions have been satisfied or waived. Purchaser
shall, and Parent shall cause Purchaser to, extend the Offer for the minimum period required by any rule, regulation, interpretation or
position of the SEC or the staff thereof or The Nasdaq Capital Market, in each case that are applicable to the Offer. In addition, if
at the scheduled Expiration Time, each condition to the Offer (other than the Minimum Tender Condition) shall have been satisfied or waived
and the Minimum Tender Condition shall not have been satisfied, Purchaser may elect to (and if so requested by TSR, Purchaser shall, and
Parent shall cause Purchaser to), extend the Offer for one or more consecutive increments of such duration as requested by TSR (or if
not so requested by TSR, as determined by Parent), but not more than 10 business days each (or for such longer period as may be agreed
to by Parent and TSR), provided that TSR shall not request Purchaser to, and Parent shall not be required to cause Purchaser to, extend
the Offer pursuant to this sentence on more than five occasions. In no event will Purchaser be required to extend the Offer beyond one
minute after 11:59 p.m., Eastern time, on August 15, 2024 (the “Outside Date”). If at the scheduled Expiration Time (as may
have been extended pursuant to the Merger Agreement), each Offer Condition shall have been satisfied or waived and Parent and Purchaser
are unable to obtain the proceeds of and consummate the Financing in an amount sufficient to pay the Required Amount, Purchaser may elect
to extend the Offer for one or more consecutive increments of such duration as is reasonably necessary to negotiate and enter into the
definitive agreements providing for the Financing and/or consummate the Financing, or to seek and obtain alternative financing in an amount
sufficient to pay the Required Amount in accordance with the terms and conditions of the Merger Agreement, but not more than 10 Business
Days each (or for such longer period as may be agreed to by Parent and TSR); provided that, without the prior written consent of TSR,
Purchaser shall not extend the Expiration Time beyond the Outside Date.
For the reasons described in more detail below, the Board
of Directors of TSR (the “TSR Board”) unanimously recommends that TSR’s stockholders accept the Offer and tender their
Shares pursuant to the Offer. These reasons are set forth under the section entitled “Item 4. The Solicitation or Recommendation—Background
of the Merger Agreement; Reasons for the Recommendation—Reasons for the Recommendation of the TSR Board.”
The foregoing summary of the Offer,
the Merger and the Merger Agreement is qualified in its entirety by the descriptions contained in the Offer to Purchase and the Letter
of Transmittal as well as the full text of the Merger Agreement. Copies of the Merger Agreement, the Offer to Purchase and the Letter
of Transmittal are filed as Exhibits (e)(1), (a)(1)(A) and (a)(1)(B), respectively, to this Schedule 14D-9 and are incorporated herein
by reference. The Offer to Purchase and form of Letter of Transmittal are being mailed to TSR’s stockholders together with this
Schedule 14D-9. Copies of certain letters distributed by Parent in connection with the Offer as well as Parent’s Summary Advertisement
published in The New York Times are filed as Exhibits (a)(1)(C), (a)(1)(D) and (a)(1)(E), respectively, to this Schedule 14D-9.
As set forth in the Schedule TO, the
principal executive offices of Parent and Purchaser are located at 9777 N. College Avenue, Indianapolis, IN 46280. The business telephone
number for each of Parent and Purchaser is (317) 493-2000.
The information relating to the Offer,
including the Offer to Purchase, the Letter of Transmittal and related documents (including the Merger Agreement) and this Schedule 14D-9
(including referenced documents), can be obtained without charge from the SEC’s website at www.sec.gov.
Item 3. Past Contacts, Transactions, Negotiations
and Agreements
Except as set forth in this Schedule
14D-9, as of the date hereof, to the knowledge of TSR, there are no material agreements, arrangements or understandings or any actual
or potential conflicts of interest between TSR or its affiliates, on the one hand, and (i) its executive officers, directors or affiliates
or (ii) Parent or Purchaser or their respective executive officers, directors or affiliates, on the other hand. The TSR Board was aware
of the agreements and arrangements described in this Item 3 during its deliberations of the merits of the Merger Agreement and in determining
to make the recommendation set forth in this Schedule 14D-9.
Relationship with Parent and Purchaser
Merger Agreement
On May 15, 2024, TSR, Parent and Purchaser
entered into the Merger Agreement. Section 11 of the Offer to Purchase, which contains a summary of the material provisions of the Merger
Agreement, and Section 15 of the Offer to Purchase, which contains a description of the conditions of the Offer, are each incorporated
herein by reference. Such summary and description are qualified in their entirety by reference to the Merger Agreement.
The foregoing summary of the material
terms of the Merger Agreement and the descriptions of the conditions to the Offer contained in the Offer to Purchase and incorporated
herein by reference do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement, which is filed
as Exhibit (e)(1) to this Schedule 14D-9 and is incorporated herein by reference. The Merger Agreement governs the contractual rights
among TSR, Parent and Purchaser in relation to the Offer and the Merger. The Merger Agreement has been included as an exhibit to this
Schedule 14D-9 to provide TSR’s stockholders with information regarding the terms of the Merger Agreement. The Merger Agreement
contains customary representations and warranties made by TSR to Parent and Purchaser and customary representations and warranties made
by Parent and Purchaser to TSR. Neither the inclusion of the Merger Agreement nor the summary of the Merger Agreement in this Schedule
14D-9 is intended to modify or supplement any factual disclosures about TSR, Parent or Purchaser in TSR’s public reports filed with
the SEC. In particular, the assertions embodied in the representations and warranties set forth in the Merger Agreement are qualified
by information in a confidential disclosure schedule provided by TSR to Parent and Purchaser in connection with the signing of the Merger
Agreement. The disclosure schedule contains information that modifies, qualifies and creates certain exceptions to the representations
and warranties set forth in the Merger Agreement. In addition, the representations and warranties in the Merger Agreement were negotiated
with the principal purpose of allocating risk among TSR, Parent and Purchaser, rather than establishing matters of fact. Additionally,
such representations and warranties may also be subject to a contractual standard of materiality that is different from what may be viewed
as material by TSR’s stockholders or from the standard of materiality generally applicable to reports or documents filed with the
SEC. Accordingly, the representations and warranties in the Merger Agreement may not constitute the actual state of facts about TSR, Parent
or Purchaser. TSR’s stockholders are not third-party beneficiaries of the Merger Agreement, except with respect to their right to
receive the Offer Price following the Acceptance Time or to receive the Merger Consideration at the Effective Time, and should not rely
on the representations, warranties and covenants therein or any descriptions thereof as characterizations of the actual state of facts
or conditions of TSR, Parent, Purchaser or any of their respective subsidiaries or affiliates. Information concerning the subject matter
of such representations, warranties and covenants, which do not purport to be accurate as of the date of this Schedule 14D-9, may have
changed since the date of the Merger Agreement, which subsequent information may or may not be fully reflected in TSR’s or Parent’s
public disclosure.
Confidentiality Agreement
On September 19, 2023, Bucher and
Christian Consulting, Inc., an Indiana corporation (“BCF”) and FOCUS Investment Banking LLC (“Focus” or “Focus
Investment Banking”), as the Company’s financial advisor, entered into a confidentiality agreement (the “Confidentiality
Agreement”) pursuant to which BCF and Focus agreed to, for a period continuing until September 14, 2025, (i) hold in confidence
and not disclose any confidential information of the other party to any third party and (ii) not use any confidential information of the
other party other than in connection with a potential transaction with the other party, in each case, subject to certain exceptions. The
Confidentiality Agreement included a standstill provision for the benefit of the Company.
This summary and description of the
Confidentiality Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Confidentiality
Agreement, a copy of which is filed as Exhibit (e)(4) to this Schedule 14D-9, which is incorporated herein by reference.
Due Diligence and Exclusivity Agreement and Amendments
Thereto
On January 10, 2024, the Company and
BCF entered into the Due Diligence and Exclusivity Agreement dated January 10, 2024 (the “Exclusivity Agreement”), to govern
the rights and obligations of the Company and BCF during the period in which the parties pursued a potential transaction. The parties
thereto amended the Exclusivity Agreement on March 11, 2024, March 26, 2024, and April 9, 2024 (respectively, the “First Amendment
to the Exclusivity Agreement,” “Second Amendment to the Exclusivity Agreement,” and “Third Amendment to the Exclusivity
Agreement”), to extend the parties’ exclusivity period to pursue a potential transaction through April 26, 2024.
This summary and description of the
Exclusivity Agreement, First Amendment to the Exclusivity Agreement, Second Amendment to the Exclusivity Agreement, and Third Amendment
to the Exclusivity Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Exclusivity
Agreement, First Amendment to the Exclusivity Agreement, Second Amendment to the Exclusivity Agreement, and Third Amendment to the Exclusivity
Agreement, copies of which is filed as Exhibits (e)(5) through (e)(8) to this Schedule 14D-9, which are incorporated herein by reference.
Tender and Support Agreements
Concurrently with entry into the Merger
Agreement, Parent and Purchaser entered into Tender and Support Agreements (the “Tender and Support Agreements”) with Zeff
Capital, L.P., Robert Fitzgerald and QAR Industries, Inc. (collectively, the “Supporting Stockholders”). Collectively, as
of May 15, 2024, the Supporting Stockholders beneficially owned approximately 45.55% of the outstanding Shares.
The Tender and Support Agreements provide
that, as promptly as practicable and no later than 10 business days after the commencement of the Offer, the Supporting Stockholders will
tender into the Offer, and not withdraw, all outstanding Shares the Supporting Stockholders own of record or beneficially (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) as of the date of the Tender and Support Agreements or that the Supporting Stockholders
acquire record ownership or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of after such date
during the Support Period (as defined below) (collectively, the “Subject Shares”).
During the period from May 15, 2024,
until the termination of the Tender and Support Agreements (the “Support Period”), the Supporting Stockholders have agreed,
in connection with any annual or special meeting of the stockholders of TSR, however called, including any adjournment or postponement
thereof, or any action proposed to be taken by written consent (if permitted at such time) of TSR’s stockholders, to (i) appear
at each such meeting or otherwise cause all Subject Shares to be counted as present at the meeting for purposes of determining a quorum
and (ii) be present (in person or by proxy) and vote or cause to be voted, or deliver (or cause to be delivered) a written consent with
respect to all of the Subject Shares, (a) against any Company Takeover Proposal (as defined below) (other than the Merger), and (b) against
any other proposed action, agreement or transaction involving TSR that would reasonably be expected to, impede, interfere with, delay,
postpone, adversely affect, or prevent the consummation of, the Offer, the Merger or the other Transactions, including (1) any extraordinary
corporate transaction, such as a merger, consolidation or other business combination involving TSR (other than the Merger); (2) a sale,
lease, license or transfer of a material amount of assets (including intellectual property rights) of TSR or any reorganization, recapitalization
or liquidation of TSR or (3) any change in the capitalization of TSR or any amendment or other change in TSR’s organizational documents.
“Company Takeover Proposal” means any inquiry, proposal or offer from any person or group (other than Parent and its subsidiaries)
relating to (i) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (a) 20%
or more (based on the fair market value thereof, as determined by the TSR Board) of the assets of TSR and TSR’s subsidiaries, taken
as a whole, or (b) 20% or more of the aggregate voting power of the capital stock of TSR; (ii) any tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving
TSR that, if consummated, would result in any person or group (or the stockholders of any person) beneficially owning, directly or indirectly,
20% or more of the aggregate voting power of the capital stock of TSR or of the surviving entity or the resulting direct or indirect parent
of TSR or such surviving entity, other than, in each case, the Transactions or (iii) any combination of the foregoing.
During the Support Period, each
Supporting Stockholder has further agreed not to, directly or indirectly, (i) create or permit to exist any lien, other than any permitted
lien pursuant to the terms of the Tender and Support Agreements, on any of such Supporting Stockholder’s Subject Shares; (ii) transfer,
sell (including short sell), assign, gift, hedge, pledge, grant a participation interest in, hypothecate or otherwise dispose of, or enter
into any derivative arrangement with respect to (collectively, “Transfer”), any of such Supporting Stockholder’s Subject
Shares, or any right or interest therein (or consent to any of the foregoing); (iii) enter into any contract with respect to any Transfer
of such Supporting Stockholder’s Subject Shares or any interest therein; (iv) grant or permit the grant of any proxy, power-of-attorney
or other authorization or consent in or with respect to any of such Supporting Stockholder’s Subject Shares; (v) deposit or permit
the deposit of any of such Supporting Stockholder’s Subject Shares into a voting trust or enter into a voting agreement or arrangement
with respect to any of such Supporting Stockholder’s Subject Shares or (vi) take or permit any other action that would reasonably
be expected to prevent or materially delay or materially impair such Supporting Stockholder’s ability to timely perform its obligations
or the consummation by such Supporting Stockholder of the transactions contemplated by the Tender and Support Agreements, or take or permit
any other action that would otherwise make any representation or warranty of such Supporting Stockholder therein untrue or incorrect.
The restrictions on Transfer are subject to certain customary exceptions.
During the Support Period, the Supporting
Stockholders, solely in their capacities as stockholders of TSR, will not, and will cause their representatives not to, directly or indirectly
(i) solicit, initiate, knowingly facilitate or knowingly encourage (including by way of providing information or taking any other action)
any inquiries, proposals or offers, or the making of any submission or announcement of any inquiry, proposal or offer that constitutes
or could reasonably be expected to lead to any Company Takeover Proposal; (ii) directly or indirectly engage in, enter into or participate
in any discussions or negotiations with any person regarding, or furnish to any person any information or afford access to the business,
properties, assets, books or records of TSR to, or take any other action to assist, knowingly facilitate or knowingly encourage any effort
by any person, in each case in connection with or in response to any inquiry, offer or proposal that constitutes, or could reasonably
be expected to lead to any Company Takeover Proposal; (iii) enter into any agreement in principle, letter of intent, term sheet, merger
agreement, purchase agreement, acquisition agreement, option agreement or other similar instrument relating to any Company Takeover Proposal;
(iv) knowingly encourage or recommend any other holder of Shares to vote against the Merger or to not tender Shares into the Offer or
(v) resolve or agree to do any of the foregoing. The Tender and Support Agreements provide that the Supporting Stockholders’ obligations
under the Tender and Support Agreements are solely in their respective capacities as stockholders of TSR, and not, if applicable, in such
stockholders’ or any of their affiliates’ capacity as a director, officer or employee of TSR, and that nothing in the Tender
and Support Agreements in any way restricts a director or officer of TSR in the taking of any actions (or failure to act) in his or her
capacity as a director or officer of TSR, or in the exercise of his or her fiduciary duties as a director or officer of TSR.
Each Tender and Support Agreement terminates
automatically upon the earliest of (i) the valid termination of the Merger Agreement in accordance with its terms; (ii) the Effective
Time; (iii) termination of such Tender and Support Agreement by written notice of termination from Parent to the applicable Supporting
Stockholder(s); (iv) the date on which any amendment or change to the Merger Agreement or the Offer is effected without the applicable
Supporting Stockholders’ consent that decreases the amount, or changes the form, of consideration payable to all stockholders of
TSR pursuant to the terms of the Merger Agreement; or (v) an Adverse Recommendation Change.
This summary and description of the Tender and Support Agreements
does not purport to be complete and is qualified in its entirety by reference to the full text of the Tender and Support Agreements, copies
of which are filed as Exhibits (e)(2) and (e)(3) to this Schedule 14D-9 and are incorporated herein by reference.
Arrangements with Current Executive Officers and Directors
of TSR
Overview
In considering the recommendation of
the TSR Board set forth under the section entitled “Item 4. The Solicitation or Recommendation— Recommendation of the TSR
Board,” TSR’s stockholders should be aware that certain of TSR’s executive officers and directors may be considered
to have interests in the Transactions that may be different from, or in addition to, those of TSR’s stockholders generally. The
TSR Board was aware of these interests and considered them, along with other matters, in evaluating and approving the Merger Agreement
and the Transactions and recommending that TSR’s stockholders accept the Offer and tender their Shares pursuant to the Offer.
The following is a discussion of all
known material agreements, understandings and any actual or potential conflicts of interest between TSR and its executive officers or
directors that relate to the Transactions. The following summaries are qualified in their entirety by reference to (i) the Merger Agreement;
(ii) the TSR, Inc. 2020 Equity Incentive Plan (the “TSR Equity Incentive Plan”); (iii) the award agreements governing the
Unvested TSR Restricted Stock Awards (as defined below) held by TSR’s executive officers and directors and (iv) the employment agreements
with TSR’s executive officers (collectively, the “Employment Agreements”). The TSR Equity Incentive Plan and the related
form of award agreements and the Employment Agreements are filed as Exhibits (e)(9) through (e)(18) to this Schedule 14D-9 and are incorporated
herein by reference.
Consideration for Shares Tendered Pursuant to the
Offer
Under the terms of the Merger Agreement,
TSR’s executive officers and directors would receive the same cash consideration per Share on the same terms and conditions as the
other stockholders of TSR. As of the close of business on May 27, 2024, the executive officers and directors of TSR named in the “Table
of Share-Based Payments” below beneficially owned, directly or indirectly, in the aggregate, 673,013 Shares (excluding for this
purpose outstanding Unvested TSR Restricted Stock Awards (defined below), which are set forth separately in the “Table of Equity
Compensation-Related Payments” below). If TSR executive officers and directors were to tender all 673,013 Shares beneficially owned,
directly or indirectly, by them as of the close of business on May 27, 2024, for purchase pursuant to the Offer and those Shares were
accepted for purchase and purchased by Purchaser, then such executive officers and directors would receive, in aggregate, approximately
$9,018,374 in cash pursuant to the Offer, before deduction of applicable withholding taxes and without interest.
The following table sets forth the
consideration that each TSR executive officer and director (and, if applicable, certain of his or her respective affiliates) would be
entitled to receive in respect of outstanding Shares beneficially owned by him or her as of the close of business on May 27, 2024 (which,
for clarity, excludes Shares underlying Unvested TSR Restricted Stock Awards), assuming such individual and certain of his or her respective
affiliates were to tender all of his or her outstanding Shares pursuant to the Offer and those Shares were accepted for purchase and purchased
by Purchaser. These numbers do not reflect any future Share issuances or dispositions that may occur between the close of business on
May 27, 2024, and the Effective Time (such as in connection with the vesting of Unvested TSR Restricted Stock Awards).
Table of Share-Based Payments
| Name | |
Number of Shares | | |
Total Merger Consideration Payable for Shares
($) | |
| | |
| | |
| |
| Thomas Salerno | |
| 18,198 | | |
$ | 243,853 | |
| | |
| | | |
| | |
| John Sharkey | |
| 18,274 | | |
$ | 244,872 | |
| | |
| | | |
| | |
| Mohammed Shah Syed | |
| 3,492 | | |
$ | 46,793 | |
| | |
| | | |
| | |
| Bradley M. Tirpak | |
| 63,446 | | |
$ | 850,176 | |
| | |
| | | |
| | |
| H. Timothy Eriksen | |
| 19,104 | | |
$ | 255,994 | |
| | |
| | | |
| | |
| Robert Fitzgerald* | |
| 550,499 | | |
$ | 7,376,687 | |
| | |
| | | |
| | |
| Total: | |
| 673,013 | | |
$ | 9,018,374 | |
| * | Includes 498,884 Shares held by QAR Industries, Inc. of which
Mr. Fitzgerald is President, Chairman of the Board and majority shareholder. |
Effect of the Offer and the
Merger Agreement on TSR Equity Incentive Plan and TSR Equity Compensation Awards
The discussion below describes the
treatment of the TSR Equity Incentive Plan and Unvested TSR Restricted Stock Awards in connection with the Transaction.
TSR Equity Incentive Plan
The TSR Equity Incentive Plan will be terminated at the
Effective Time and will not be assumed by Parent.
Treatment of Unvested TSR Restricted Stock Awards
At the Effective Time, each award of restricted Shares granted
under the TSR Equity Incentive Plan that is then-outstanding, but not then vested (collectively, the “Unvested TSR Restricted Stock
Awards”) will be canceled and converted into the right to receive, for each Share underlying such Unvested TSR Restricted Stock
Award, an amount in cash without interest equal to the Offer Price, less any applicable tax withholding (“Stock Award Cash Consideration”).
The Stock Award Cash Consideration will be paid at or reasonably promptly after the Effective Time (but no later than TSR’s next
regular payroll date after the Effective Time).
Table of Equity Compensation-Related Payments
The following table sets forth the estimated
cash amounts that each current executive officer and current non-employee director of TSR would be eligible to receive (before deduction
of applicable taxes) in connection with the Merger with regard to the number of Unvested TSR Restricted Stock Awards held by each such
executive officer and non-employee director.
The estimated cash values in the table
below are based on the Merger Consideration of $13.40 per Share. The table also assumes that the number of Unvested TSR Restricted Stock
Awards held by each TSR executive officer and non-employee director at the Effective Time will equal the number of Unvested TSR Restricted
Stock Awards that were outstanding as of the close of business on May 27, 2024, the latest practicable date to determine such amounts
before the filing of this Schedule 14D-9. Accordingly, these numbers do not reflect any forfeitures or additional vesting that may occur
between the close of business on May 27, 2024, and the Effective Time.
Table of Equity Compensation-Related
Payments
| Name | |
Number of Shares underlying Unvested TSR Restricted Stock Awards | | |
Stock Award Cash Consideration ($) | |
| Thomas Salerno | |
| 16,667 | | |
$ | 223,337.80 | |
| John Sharkey | |
| 10,000 | | |
$ | 134,000.00 | |
| Mohammed Shah Syed | |
| 5,000 | | |
$ | 67,000.00 | |
| Bradley M. Tirpak | |
| 10,000 | | |
$ | 134,000.00 | |
| H. Timothy Eriksen | |
| 10,000 | | |
$ | 134,000.00 | |
| Robert Fitzgerald | |
| 10,000 | | |
$ | 134,000.00 | |
Transaction Bonuses
On August 25, 2023, the Compensation
Committee (the “Compensation Committee”) of the Board of Directors of TSR approved the payment of cash bonuses to the directors
and executive officers of TSR in the event that a Sale of the Business occurs during the term of such directors’ service on the
Board of Directors of TSR and such executive officers’ employment with TSR, respectively (each, a “Transaction Bonus”).
For such purposes, a “Sale of the Business” means a transfer of the majority of the ownership by sale, acquisition, merger,
or other method of the equity or tangible or intangible assets of TSR.
Following the Compensation Committee’s
approval of Mr. John Sharkey’s Transaction Bonus, which was approved in the amount of (i) $75,000 for the Sale of the Business;
and (ii) an additional $15,000 for each full dollar in share price of TSR’s common stock that exceeds $12 per share at the time
of the Sale of the Business, TSR entered into an Addendum, effective as of November 3, 2023 (the “Addendum”), to the Amended
and Restated Employment Agreement between TSR and John Sharkey, dated as of November 2, 2020. Pursuant to the terms of the Addendum, Mr.
Sharkey’s Transaction Bonus was increased from $75,000 to $100,000. All other terms of Mr. Sharkey’s Transaction Bonus as
approved by the Compensation Committee remained the same.
Upon a Sale of the Business, the Transaction
Bonus for each director and executive officer named below shall be paid out as follows:
| (a) | Thomas Salerno, Chief Executive Officer, President and Treasurer: (i) $150,000 for the Sale of the Business; and (ii) an additional
$25,000 for each full dollar in share price of TSR’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (b) | John Sharkey, Senior Vice President, Chief Financial Officer and Secretary: (i) $100,000 for the Sale of the Business; and (ii) an
additional $15,000 for each full dollar in share price of TSR’s common stock that exceeds $12 per share at the time of the Sale
of the Business. |
| (c) | Mohammad Shah Syed, Managing Director of Sales and Recruiting: (i) $60,000 for the Sale of the Business; and (ii) an additional $10,000
for each full dollar in share price of TSR’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (d) | Bradley M. Tirpak, Chairman of the Board of Directors: (i) $50,000 for the Sale of the Business; and (ii) an additional $7,500 for
each full dollar in share price of TSR’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (e) | H. Timothy Eriksen, Director: (i) $50,000 for the Sale of the Business; and (ii) an additional $7,500 for each full dollar in share
price of TSR’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (f) | Robert Fitzgerald, Director: (i) $50,000 for the Sale of the Business; and (ii) an additional $7,500 for each full dollar in share
price of TSR’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
Agreements or Arrangements with Executive Officers
of TSR
Employment Agreements
TSR or a wholly-owned subsidiary of
TSR is a party to an employment agreement with each of its executive officers.
On November 3, 2020, TSR entered into
an Employment Agreement with its Chief Executive Officer, Thomas C. Salerno, as amended by that certain Addendum to Employment Agreement
dated July 31, 2023 between the Company and Mr. Salerno (collectively, the “CEO Employment Agreement”), effective as of November
2, 2020.
On November 3, 2020, TSR entered into an Amended and Restated
Employment Agreement with its Chief Financial Officer, John Sharkey (together with an Addendum thereto effective as of November 3, 2023,
the “CFO Employment Agreement”, collectively with the CEO Employment Agreement, the “Employment Agreements”),
effective as of November 2, 2020. The CFO Employment Agreement superseded the Amended and Restated Employment Agreement dated May 24,
2019 between the Company and Mr. Sharkey in its entirety.
On January 1, 2023, TSR entered into an Employment Agreement
with its Director of Recruiting and Sales, Mohammed Shah Syed, as amended by that certain Addendum to Employment Agreement dated August
1, 2023, between the Company and Mr. Syed (collectively, the “R&S Employment Agreement”), effective January 1, 2023.
Change in Control-Related Termination Entitlement and
Severance.
Messrs. Salerno and Sharkey
If, prior to the expiration of their respective term of
employment and within 12 months following a Change in Control (as defined in their Employment Agreements), Mr. Salerno or Mr. Sharkey
is subject to termination other than for Cause, then the Company will pay “Change in Control Severance Benefits” consisting
of (i) a payment equivalent to one year of base salary (as in effect immediately prior to the Change in Control, or the date of the termination
of the employee’s employment, whichever is greater), (ii) 100% of the employee’s annual bonus as paid in the previous year,
(iii) taxable cash payments for COBRA coverage for 18 months, and (iv) acceleration of vesting of 100% of the employee’s unvested
equity award compensation.
Pursuant to the Employment Agreements, the Company’s
obligation to pay any Change in Control Severance Benefits, or any related benefits to which Mr. Salerno or Mr. Sharkey, is not automatically
entitled under the law will be subject to the employee’s execution of an effective release of claims in favor of the Company, its
affiliates and their related persons, in a form to be provided by the Company. In addition, in the event that Mr. Salerno or Mr. Sharkey
breaches the restrictive covenants under his Employment Agreement, any remaining Change in Control Severance Benefits due to him will
be forfeited.
Mr. Syed
In the event that the Company terminates Mr. Syed’s
employment (a) for “Cause” (as defined in his R&S Employment Agreement) or (b) upon his death or disability or (c) due
to a threat of litigation or litigation is initiated by a third party against the Company or against Mr. Syed as it relates to his employment
with the Company, then the Company’s sole obligations to Mr. Syed shall be the Termination Entitlement.
In the event that the Company terminates Mr. Syed’s
employment for reasons other than the above-enumerated reasons, Mr. Syed will be entitled to the Termination Entitlement plus a severance
payment consisting of one year of base salary (the “Syed Severance Payment”) as well as a health benefit comprising of continued
participation in the Company’s group health plan for one year, subject to certain conditions provided in the R&S Employment
Agreement (the “Syed Health Benefit”).
Pursuant to the R&S Employment Agreement, the Company’s
obligation to pay any Syed Severance Payment or Syed Health Benefit or any related benefits to which Mr. Syed is not automatically entitled
under the law will be subject to his execution of an effective release of claims in favor of the Company, its affiliates and their related
persons, in a form to be provided by the Company. In addition, in the event that Mr. Syed breaches the restrictive covenants under his
R&S Employment Agreement, any amounts due to him other than his Termination Entitlement will be forfeited.
The table below sets forth each executive’s
estimated cash severance entitlement under his employment agreement, assuming for purposes of the table that the executive’s employment
by TSR or a wholly-owned subsidiary of TSR is terminated without “cause” (as defined in the applicable agreement) following
the Effective Time.
Table of Potential Executive Severance
Payments
| Name | |
Estimated Cash Severance
($) | |
| Thomas C. Salerno | |
| 551,896 | |
| John Sharkey | |
| 454,125 | |
| Mohammed Shah Syed | |
| 363,244 | |
Compensation of TSR Non-Employee Directors
As set forth under the section entitled
“—Effect of the Offer and the Merger Agreement on TSR Equity Incentive Plan and Unvested TSR Restricted Stock Awards,”
all then-outstanding Unvested TSR Restricted Stock Awards (including those held by non-employee directors) will be converted into the
right to receive the Stock Award Cash Consideration. In addition, prior to the Effective Time, TSR may provide cash and equity-based director
compensation to its non-employee directors in the ordinary course of business and consistent with past practice and may provide for pro-rata
payment of the director compensation for a partial year of service for the year in which the Effective Time occurs.
Effect of Merger Agreement on
Employee Benefits
Under the Merger Agreement, Parent
has agreed that, for a period of one year following the Effective Time (the “Continuation Period”) Parent shall provide or
shall cause to be provided to each individual who is employed by TSR or any TSR Subsidiary immediately prior to the Effective Time and
who continues employment with Parent or the Surviving Corporation or any of their respective subsidiaries or affiliates as of immediately
following the Effective Time (each, a “Company Employee”), except as provided in any agreement between any Company Employee
and the Surviving Corporation to be effective following the Effective Time, (i) a base salary or wage rate and target cash incentive opportunity
that are at least as favorable in the aggregate to those provided to such Company Employee by TSR or any TSR Subsidiary, as applicable,
as of immediately prior to the Effective Time and (ii) other employee benefits (excluding cash incentive opportunities, severance (except
as provided in the following sentence), equity and equity based awards, change in control plans, retention, transaction, nonqualified
deferred compensation, defined benefit pension, and post-termination or retiree health or welfare benefits) that are substantially comparable
in the aggregate to those provided to such Company Employee by TSR or any TSR Subsidiary under TSR’s benefit plans or TSR’s
benefit agreements that are disclosed in the disclosure schedule, as applicable, as of immediately prior to the Effective Time (or to
the extent a Company Employee becomes covered by an employee benefit plan or program of Parent or one of its other affiliates during such
period, benefits substantially comparable to those benefits maintained for and provided to similarly situated employees of Parent or the
relevant affiliate). During the six month period following the Effective Time, Parent has also agreed to provide (or cause the Surviving
Corporation to provide) any Company Employee (other than Company Employees who have been engaged to work with a particular client of TSR
or any TSR Subsidiary for a specified term or project) who experience a qualifying termination of employment under the circumstances set
forth in the Disclosure Letter with severance benefits of between two weeks and two months’ pay, based on such Company Employee’s
(i) years of service with TSR and its predecessors and (ii) past performance, subject to the Company Employee’s execution of a general
release of claims in favor of TSR, Parent and related persons.
Parent has also
agreed to use commercially reasonable efforts following the Effective Time to cause each Company Employee to be immediately eligible to
participate, without any waiting time, in any and all employee benefit plans of Parent and its other affiliates to the extent coverage
under any such plan replaces coverage under a comparable TSR benefit plan in which such Company Employee participated immediately prior
to the Effective Time.
Parent has additionally agreed that
for purposes of vacation, paid time-off, severance or 401(k) savings, legacy Company Employees’ service with TSR shall be treated
as service with Parent or an applicable subsidiary to the same extent and for the same purpose as such service was credited under the
analogous TSR plan or arrangement for purposes of determining eligibility to participate, level of benefits and vesting (subject to certain
customary exceptions, such as duplication of benefits). Also, with respect to any group health plan maintained by Parent or any of its
subsidiaries in which any Company Employee is eligible to participate after the Effective Time, for the plan year that includes the date
upon which the Effective Time occurs, Parent shall use commercially reasonable efforts, to the extent permitted by such plan, to (i) waive
all limitations as to preexisting conditions and exclusions with respect to participation and coverage requirements applicable to such
Company Employees and their eligible dependents and beneficiaries, to the extent such limitations were waived, satisfied or did not apply
to Company Employees or eligible dependents or beneficiaries under the corresponding TSR benefit plan that is a group health plan in which
such Company Employees participated immediately prior to the Effective Time and (ii) waive any waiting period or evidence of insurability
requirement that would otherwise be applicable to such Company Employee and their eligible dependents on or after the Effective Time,
in each case, to the extent such Company Employee or eligible dependent had satisfied any similar limitation or requirement under an analogous
TSR benefit plan that is a group health plan prior to the Effective Time.
Indemnification and Insurance
Pursuant to the terms of the Merger
Agreement, TSR’s directors and officers (including each of TSR’s executive officers) will be entitled to certain ongoing indemnification
and coverage under directors’ and officers’ liability insurance policies from TSR for a period of time following the Effective
Time. A summary of such indemnification and insurance coverage is set forth under the section entitled “—Effect of the Merger
on Director and Officer Indemnification and Insurance.”
Effect of the Merger on Director and Officer Indemnification
and Insurance
TSR’s Amended and Restated Bylaws
provide that TSR will indemnify its directors and officers to the fullest extent permitted by Delaware law, subject to very limited exceptions.
TSR’s Amended and Restated Bylaws also provide that TSR “shall have the power to advance to officers, directors, employees
and agents expenses incurred by them in defending a civil or criminal action, suit or proceeding relating to their service in such capacity
in advance of the final disposition thereof, upon receipt of an undertaking for repayment if it shall ultimately be determined that such
officer, director, employee or agent is not entitled to be indemnified under Delaware law and the Certificate of Incorporation and By-laws
of the Corporation.” TSR’s Amended and Restated Bylaws also permit it to purchase insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions as TSR’s officer, director, employee or agent, regardless
of whether Delaware law would permit indemnification.
In addition, TSR has entered into separate
indemnity agreements with its directors and executive officers (other than Mohammed Shah Syed) that require it, among other things, to
indemnify them against certain liabilities that may arise by reason of their status or service as directors or executive officers and
to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. Notwithstanding the
foregoing, TSR is not obligated to indemnify such director or executive officer in certain circumstances, including for an accounting
of profits made from the purchase and sale by such director or executive officer of securities of TSR within the meaning of Section 16(b)
of the Exchange Act or similar provisions of any federal, state or local statutory law, or in connection with any proceeding voluntarily
initiated by such director or executive officer (subject to specific exceptions), and certain other situations. This description of the
indemnity agreements entered into between TSR and each of its directors and executive officers is qualified in its entirety by reference
to the forms of indemnification agreement filed as Exhibits (e)(19) and (e)(20) hereto, which are incorporated herein by reference.
The Merger Agreement provides that
all rights to indemnification advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to
the Effective Time (and rights to advancement of expenses) existing at the execution of the Merger Agreement in favor of any person who
is or prior to the Effective Time becomes, or has been at any time prior to the date of the Merger Agreement, a director, officer, employee
or agent (including as a fiduciary with respect to an employee benefit plan) of TSR, any TSR subsidiary or any of their predecessors (each,
an “Indemnified Party”) (i) shall be assumed by the Surviving Corporation in the Merger, without further action, at the Effective
Time; (ii) shall survive the Merger; (iii) shall continue in full force and effect in accordance with their terms with respect to any
claims against any such Indemnified Party arising out of such acts or omissions and (iv) for a period of six years following May 15, 2024,
shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such Indemnified
Party. Parent has agreed to ensure that the Surviving Corporation complies with and honors the foregoing obligations.
The Merger Agreement further provides
that at or prior to the Effective Time, TSR may obtain and fully pay the premium for “tail” directors’ and officers’
liability insurance policies in respect of acts or omissions occurring at or prior to the Effective Time (including for acts or omissions
occurring in connection with the approval of the Merger Agreement and the consummation of the Transactions) for the period beginning upon
the Offer Acceptance Time and ending six years from the Effective Time, covering each Indemnified Party and containing terms (including
with respect to coverage and amounts) and conditions (including with respect to deductibles and exclusions) that are, individually and
in the aggregate, no less favorable to any Indemnified Party than those of TSR’s directors’ and officers’ liability
insurance policies in effect on May 15, 2024 (the “Existing D&O Policies”); provided that the maximum aggregate premium
for such “tail” insurance policies shall not exceed 300% of the aggregate annual premium payable by TSR for coverage for its
most recent renewal under the Existing D&O Policies.
Section 16 Matters
Prior to the Effective Time, TSR may take all steps as may
be required to cause any dispositions or cancellations or deemed dispositions or cancellations of TSR equity securities (including derivative
securities) in connection with the Merger by each individual who is a director or officer of TSR subject to Section 16 of the Exchange
Act to be exempt under Rule 16b-3 under the Exchange Act.
Rule 14d-10(d) Matters
Prior to the scheduled expiration of
the Offer, TSR (acting through the compensation committee of the TSR Board) shall use reasonable best efforts to cause to be exempt under
Rule 14d-10(d) promulgated under the Exchange Act any employment compensation, severance or other employee benefit arrangement that has
been, or after the date of the Merger Agreement will be, entered into by TSR with current or future directors, officers or employees of
TSR.
Executive Officer and Director Arrangements Following
the Merger
As of the date of the Merger Agreement and as of the date
of this Schedule 14D-9, none of TSR’s current directors have entered into, or committed to enter into, any arrangements or other
understandings with Parent, Purchaser or their respective affiliates regarding continued service with the Surviving Corporation or any
of its subsidiaries from and after the Effective Time. It is possible that Parent, Purchaser or their respective affiliates may enter
into employment or other arrangements with TSR’s directors in the future.
Employment Agreements Effective at Closing: New Salerno
Employment Agreement and New Syed Employment Agreement
On May 15, 2024, the Company entered into employment agreements,
effective as of the Merger Closing Date, as defined in the Merger Agreement, with each of Thomas Salerno, President and CEO of the Company,
and Mohammed Shah Syed, the Company’s Director of Recruiting (respectively, the “New Salerno Employment Agreement” and
the “New Syed Employment Agreement” and, collectively, the “New Employment Agreements”). The New Syed Employment
Agreement replaces in its entirety the Employment Agreement between the Company and Mr. Syed dated January 1, 2023, and subsequently
amended by the Addendum to Employment Agreement effective August 1, 2023 (as so amended, the “Prior Syed Employment Agreement”).
The New Salerno Employment Agreement replaces in its entirety the Employment Agreement between the Company and Mr. Salerno effective
November 2, 2020, and subsequently amended by the Addendum to Employment Agreement effective November 3, 2023 (as so amended, the “Prior Salerno
Employment Agreement”).
The New Salerno Employment Agreement provides for annualized
base salary in the amount of $395,000. In addition to base salary, the New Salerno Employment Agreement provides that Mr. Salerno will
be eligible to receive an annual cash bonus for fiscal year 2025 and for each subsequent fiscal year during the term of employment in
an amount up to forty-five percent (45%) of Mr. Salerno’s base salary. The New Salerno Employment Agreement further provides that
the Company will pay Mr. Salerno a cash bonus in an amount up to forty-five percent (45%) of Mr. Salerno’s base salary that remains
unpaid as of the New Salerno Employment Agreement effective date, which is the annual bonus that Mr. Salerno was eligible to receive under
the terms of the Prior Salerno Employment Agreement for the fiscal year ending May 31, 2024, and which the Company will pay
in a lump sum no later than thirty (30) days following the New Salerno Employment Agreement effective date. The New Salerno Employment
Agreement further provides that Mr. Salerno will be eligible to participate in a management incentive plan, the terms of which the Company
will establish no later than sixty (60) days following the New Salerno Employment Agreement effective date.
The New Salerno Employment Agreement provides for an initial
term of three (3) years, which automatically renews for successive renewal terms of one (1) year each unless either party gives notice
of non-renewal to the other party at least sixty (60) days prior to the expiration of the initial term or the then-current renewal term.
The New Syed Employment Agreement provides that, following
the effective date of the New Syed Employment Agreement, Mr. Syed will hold the position of Managing Director of the Company. The New
Syed Employment Agreement provides for an initial term of three (3) years, which automatically renews for successive renewal terms of
one (1) year each unless either party gives notice of non-renewal to the other party at least sixty (60) days prior to the expiration
of the initial term or the then-current renewal term.
The New Syed Employment Agreement provides for annualized
base salary in the amount of $325,000. In addition to base salary, the New Syed Employment Agreement provides that Mr. Syed will be eligible
to receive an annual cash bonus for fiscal year 2025 and for each subsequent fiscal year during the term of employment in an amount up
to twenty-five percent (25%) of Mr. Syed’s base salary. The New Syed Employment Agreement further provides that the Company will
pay Mr. Syed a cash bonus in an amount up to twenty-five percent (25%) of Mr. Syed base salary that remains unpaid as of the New Syed
Employment Agreement effective date, which is the annual bonus that Mr. Syed was eligible to receive under the terms of the Prior Syed
Employment Agreement for the fiscal year ending May 31, 2024, and which the Company will pay in a lump sum within thirty (30) days
following the New Syed Employment Agreement effective date. The New Syed Employment Agreement further provides that Mr. Syed will be eligible
to participate in a management incentive plan, the terms of which the Company will establish no later than sixty (60) days following the
New Syed Employment Agreement effective date.
Each of the New Employment Agreements provides that the
applicable executive will (a) be entitled to continue to participate in any retirement, group health, dental, vision, life insurance,
short term disability, and other employee benefit plans generally available to similarly situated Company employees; (b) receive a monthly
payment toward costs associated with such executive’s personal vehicle and cellular device, and (c) be entitled to four (4) weeks
of paid vacation and five (5) days for sick leave or personal use each year.
Each of the New Employment Agreements provides that, in
the event that either (a) the Company terminates the executive’s employment without “Cause,” or (b) the executive terminates
his employment due to the Company’s failure to timely cure a material breach of the New Employment Agreement, the executive will
be entitled to receive the following: (i) severance in the form of continued payment of the executive’s base salary for a period
of twelve (12) months; and (ii) continued group health benefits for the executive and his dependents at the same level of coverage and
at the same cost to the executive as if he had remained employed by the Company until the earlier of twelve (12) months following the
date of termination, or the date on which the executive ceases to be eligible for continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985. In addition to the foregoing benefits, the Company will also pay the executive the Termination Entitlements
(as defined and described below). With the exception of the Termination Entitlements, the Company’s obligation to pay the foregoing
benefits is subject to the executive’s execution and non-revocation of a release of claims in a form acceptable to the Company.
Each of the New Employment Agreements provides that, in
the event that either (a) the Company terminates the executive’s employment for “Cause,” (b) the executive voluntarily
resigns from his employment, or (c) the executive’s employment terminates as a result of his death or disability, the Company’s
sole obligation to the executive shall be: (i) payment of the executive’s earned but unpaid base salary through the termination
date; (ii) payment of any unreimbursed business expenses properly incurred by the executive, and (iii) any other obligations owed under
the Company’s benefit plans in accordance with their terms (collectively, the “Termination Entitlements”).
Each of the New Employment Agreements defines “Cause”
as (a) any act constituting fraud, embezzlement or theft; (b) willful misconduct or gross negligence materially damaging to the Company,
its reputation, products, services or customers; (c) willful failure or refusal to undertake good faith efforts to perform duties to the
Company (other than any such failure resulting from incapacity due to physical or mental impairment); (d) knowing and intentional violation
of any law or regulation; or (e) knowingly and intentionally making an unauthorized disclosure of any trade secret or confidential information
of the Company or a parent or subsidiary. In each case, the executive’s employment can be terminated “For Cause” following
the Company’s written notice of the conduct constituting Cause and the executive’s failure to cure such conduct, if capable
of cure, within thirty (30) days following receipt of such written notice.
Each of the New Employment Agreements sets forth the executive’s
covenants against: disclosure of the Company’s confidential information; competition with the Company for a period of one (1) year
following the termination date; and solicitation of employees, independent contractors, customers, suppliers, and other business relations
of the Company for one (1) year following the termination date.
Item 4. The Solicitation or Recommendation
Recommendation of the TSR Board
After careful consideration, including a thorough review
of the terms and conditions of the Merger Agreement and the Offer in consultation with TSR management and its legal and financial advisors,
on May 14, 2024, the TSR Board, among other things, unanimously (i) determined that the Merger Agreement and the Transactions, including
the Offer and the Merger, are fair to, and in the best interests of TSR and its stockholders, (ii) declared it advisable for TSR to enter
into the Merger Agreement, (iii) approved the execution, delivery and performance by TSR of the Merger Agreement and the consummation
of the Transactions, (iv) agreed that the Merger Agreement and the Merger will be governed by and effected under Section 251(h) of the
DGCL and that the Merger shall be consummated as soon as practicable following the Offer Closing Time and (v) agreed to recommend that
the holders of the Shares accept the Offer and tender their Shares pursuant to the Offer.
For the reasons described below,
the TSR Board unanimously recommends that TSR’s stockholders accept the Offer and tender their Shares to Purchaser pursuant to the
Offer.
In reaching the conclusions and in making
the recommendation described above, the TSR Board took into account a number of reasons set forth in the section entitled “—Background
of the Merger Agreement; Reasons for the Recommendation—Reasons for the Recommendation of the TSR Board.”
A copy of the joint press release issued
by TSR and Parent, dated as of May 15, 2024, announcing the execution of the Merger Agreement is filed as Exhibit (a)(1)(F) to this Schedule
14D-9 and is incorporated herein by reference.
Background of the Merger Agreement; Reasons for the Recommendation
Background of the Merger Agreement
The following chronology summarizes the key meetings and
events that led to the signing of the Merger Agreement. The following chronology does not purport to catalogue every conversation of or
among the members of the TSR Board, Parent, TSR’s representatives, Parent’s representatives and other parties.
The TSR Board, together with TSR’s management and
with the assistance of TSR’s outside advisors, periodically reviews the Company’s future growth prospects and long-term plans
and considers various strategic and other opportunities available to TSR and other ways to enhance stockholder value, including in light
of competitive dynamics and industry trends.
On May 30, 2023, TSR interviewed Shulman Rogers, P.A. (“Shulman
Rogers”) for a potential legal engagement.
On June 6, 2023, TSR entered into an engagement letter with
Shulman Rogers to serve as counsel to TSR.
On June 12, 2023, the TSR Board, along with Tom Salerno,
Chief Executive Officer of TSR, and John Sharkey, Chief Financial Officer of TSR, held a meeting via conference call during which the
Board discussed a potential strategic review.
On June 20, 2023, the TSR Board, along with Mr. Salerno
and Mr. Sharkey, held a meeting by conference call during which representatives of Shulman Rogers gave a presentation to the Board regarding
its fiduciary duties in connection with the potential strategic review. On July 10, 2023, TSR engaged Focus Investment Banking to serve
as TSR’s financial advisor. Thereafter, the Board generally held meetings via conference call on a weekly basis to discuss the status
of the potential strategic transaction and such meetings generally included one or more representatives of Focus. Certain key dates of
such meetings are included in the following chronology.
During July and August 2023, TSR’s management and
Focus began preparing a Confidential Information Memorandum (“CIM”) related to the potential sale transaction.
On August 25, 2023, the Compensation Committee of the TSR
Board, which consisted of all of the members of the Board, met and approved a transaction bonus for TSR’s executive officers and
certain other employees. The Board also approved a transaction bonus for the members of the Board (the foregoing, collectively, the “Transaction
Bonuses”).
On August 28, 2023, TSR announced via a press release published
on Business Wire that the Board initiated a process to identify and evaluate potential strategic alternatives to maximize shareholder
value. The press release noted that TSR expected to consider a range of options, such as a sale of or acquisitions by TSR or a special
dividend, as well as other potential alternatives. The press release noted that TSR retained Focus as its financial advisor and Shulman
Rogers as its legal advisor to assist the Board in the evaluation process.
Between September 6, 2023, and approximately September 11,
2023, Focus reached out to over one hundred and fifty potential buyers of TSR that they identified would potentially be interested in
a transaction with TSR.
In addition to the potential buyers contacted by Focus,
several parties who had read the press release reached out to the Company as potential buyers.
From September 2023 to December 2023, TSR’s management
engaged in discussions regarding a potential transaction with approximately thirty participants in the IT Staffing industry, including
BCF. These discussions primarily focused on a potential sale of 100% of the equity interests of TSR.
On September 11, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, representatives of Shulman Rogers and representatives of Focus, held a meeting via conference call during which Focus updated
management and the Board on their efforts, which included completing the CIM. Focus relayed that, as of the date of the meeting, they
had reached out to over one hundred and fifty potential buyers of TSR, executed ten Non-Disclosure Agreements with potential buyers and
had approximately ten more Non-Disclosure Agreements in process.
On September 18, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on their
efforts. Focus relayed that they executed twenty Non-Disclosure Agreements to-date with potential buyers and sent the CIM to all of such
counterparties. Focus also relayed that approximately seven additional Non-Disclosure Agreements were then in process.
On September 19, 2023, and September 20, 2023, Focus entered
into the Confidentiality Agreement with BCF, as well as confidentiality agreements with several other companies including Company A and
Company B.
On September 25, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on their
efforts. Focus relayed that, as of the date of the meeting, they had executed a total of twenty-six Non-Disclosure Agreements with potential
buyers and sent the CIM to all of such counterparties. Calls between TSR management and potential buyers commenced during the week of
September 25, 2023.
On October 2, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on their
efforts. Focus relayed that certain potential buyers had dropped out of the process and that nineteen potential buyers were still in the
process. Calls between TSR management and potential buyers were continuing.
On October 16, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey and representatives of Focus, held a meeting via conference call. Focus relayed that there were fifteen interested parties
at that point, all of which had signed Non-Disclosure Agreements and received the CIM. Focus indicated the next step was to finish management
calls and request Indications of Interest from the various parties.
On October 23, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on their
efforts. Focus relayed that certain potential buyers had dropped out of the process and that seventeen potential buyers were still in
the process.
On October 28, 2023, Company A submitted an Indication of
Interest with an enterprise value of $27-$32 million on a cash-free, debt-free basis, subject to Working Capital adjustments and other
due diligence adjustments. The payout included a 60% payment at closing and the balance over a three-year period. Focus had a conversation
with a Company A executive and explained the terms of their Indication of Interest were inappropriate for the purchase of a public company.
The Company A executive communicated that Company A would be providing a revised Indication of Interest.
On October 30, 2023, BCF submitted an Indication of Interest
with a range between $21.5 million to $29.0 million on a cash-free, debt-free basis, assuming certain financial metrics by TSR.
On November 6, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on their
efforts. Focus relayed that five potential buyers had submitted a written Indication of Interest (including Company A) and one potential
buyer had provided a verbal offer (Company B).
On November 8, 2023, Company A submitted a revised Indication
of Interest with a range of $22.0 to $25.0 million on a cash-free, debt-free basis, subject to Working Capital adjustments and other due
diligence adjustments.
On November 13, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, representatives of Focus and representatives of Shulman Rogers, held a meeting via conference call during which Focus indicated
that there were three potentially interested strategic counterparties.
On November 17, 2023, Company B submitted an Indication
of Interest at $25.0 million enterprise value, noting that net cash on hand would be added to the total purchase price.
On December 11, 2023, it was publicly announced that Company
B’s parent company was the target of a takeover by a large private equity group. Two days later, Company B’s advisor notified
Focus that Company B was not going to continue moving forward with the process due to this new development.
On December 22, 2023, Focus and Shulman Rogers had a conference
call with Company A about a potential transaction structure.
On December 22, 2023, Focus received and sent to the TSR
Board, along with Mr. Salerno and Mr. Sharkey, Letters of Intent (each, a “LOI”) from both BCF and Company A.
The BCF LOI included aggregate consideration equal to $25.5
million, plus an amount equal to 100% of the cash and cash equivalents of the Company on the closing date, such amount not to exceed $4.5
million, equating to an offer price of up to $13.40 per fully diluted share of common stock.
The Company A LOI included aggregate consideration equal
to $23.0 million. The Transaction Consideration assumed a cash-free, debt-free balance sheet, as well as an appropriate level of working
capital. Accordingly, the Transaction Consideration would be: 1) Increased by the amount of any cash at closing; to be defined during
due diligence and to be agreed in the definitive agreements; 2) Decreased by the amount of any debt or debt-like items, that are assumed
or retained by the Company at closing or paid by Purchaser at closing; 3) Decreased by the amount of any transaction expenses of the Company
that were not paid by the Company prior to the closing; and 4) Increased or decreased by the amount by which the Company’s working
capital at closing was greater than or less than an agreed target working capital. The Company A LOI included an escrow deposit required
to be made by TSR and other terms and conditions that were unfavorable to TSR.
On December 26, 2023, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, and representatives of Focus, held a meeting via conference call. The Board asked several questions about the potential buyers.
The Board discussed other assumptions and the deal structure proposed for each deal. Focus noted the BCF LOI seemed to have less risks,
more compatibility, and seemed more likely to close and recommended to the Board that TSR attempt to negotiate a higher deal price from
BCF. The Board discussed the deal price and directed Focus to propose a purchase price of $32.5 million to BCF.
On the morning of December 29, 2023, the TSR Board, along
with representatives of TSR and representatives of Focus, held a meeting via conference call during which the Board discussed the offers
from BCF and Company A. The Board noted that Company A’s Letter of Intent included a requirement that TSR deposit $200,000 into
escrow that would potentially be released to Company A for various reasons during the due diligence process. The Board decided to proceed
with negotiations with BCF due to the favorable terms of BCF’s LOI and higher likelihood of closing, as compared to Company A.
On the afternoon of December 29, 2023, Focus engaged in
successful verbal negotiations with BCF for a Letter of Intent at an enterprise value equal to $33.0 million, or an offer price of $14.74
per fully diluted share of Common Stock, with no adjustment for working capital, debt or cash.
From January 2, 2024, to January 9, 2024, representatives
of Shulman Rogers and representatives of BCF’s counsel, Ice Miller LLP (“Ice Miller”), negotiated certain terms in BCF’s
Letter of Intent.
On January 10, 2024, TSR and BCF executed the Exclusivity
Agreement, whereby TSR agreed to negotiate exclusively with BCF for a period of sixty days.
On January 12, 2024, a representative of BCF sent itemized
requests for due diligence materials to a representative of Focus.
From January 15, 2024, and continuing until the finalization
and execution of definitive agreements on May 15, 2024, representatives and advisors of BCF and representatives of Ice Miller were given
access to a data room to conduct due diligence on TSR.
Beginning in mid-January 2024, TSR interviewed several investment
banking and valuation firms regarding a possible retention to provide the Board with a Fairness Opinion in connection with the transaction.
On February 12, 2024, the TSR Board, along with Mr. Salerno,
Mr. Sharkey and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on the
due diligence process. Mr. Salerno gave an update on recent calls with the BCF management team. The Board considered the need for a Fairness
Opinion and discussed four proposals solicited from investment banking and valuation firms. The Board determined to engage Chessiecap
Securities, Inc. (“Chessiecap”) to provide the Fairness Opinion.
On February 19, 2024, representatives of Ice Miller delivered
an initial draft of the Merger Agreement to representatives of Shulman Rogers, which proposed that the $33 million enterprise value be
reduced by transaction expenses and proposed a termination fee of $1.5 million in the event that, among other things, TSR terminated the
Merger Agreement to accept a Superior Company Proposal, as defined in the drafted Merger Agreement. At this time, the entities that would
be the acquiring parties in the Merger Agreement were not finalized.
On February 22, 2024, the TSR Board directed management
to execute an engagement letter with Chessiecap to provide a Fairness Opinion.
On February 23, 2024, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, representatives of Shulman Rogers and representatives of Focus held a meeting via conference call. During the meeting, representatives
of Shulman Rogers reviewed the draft Merger Agreement with the Board, including, but not limited to, the scope of the representations
and warranties, the conditions to closing, the various termination rights of the parties and the proposed termination fee. Focus also
discussed the effect of the proposed reduction of the purchase price for transaction expenses.
On March 1, 2024, representatives of Shulman Rogers delivered
a revised draft of the Merger Agreement to representatives of Ice Miller. This revised draft of the Merger Agreement provided for, among
other things, an offer price of $14.74 per share without deduction for transaction expenses and a termination fee of $1 million.
On March 4, 2024, representatives of Ice Miller delivered
an initial draft of a Form of Tender and Support Agreement to representatives of Shulman Rogers, proposed to be entered into by Zeff Capital,
L.P., Robert Fitzgerald and QAR Industries, Inc., holders of approximately 45.55% of outstanding shares of common stock of TSR.
On March 8, 2024, representatives of Ice Miller and representatives
of Shulman Rogers discussed an extension of the exclusivity period under the Exclusivity Agreement via conference call.
On March 11, 2024, representatives of Ice Miller delivered
a drafted amendment to the Exclusivity Agreement to representatives of Shulman Rogers.
On March 11, 2024, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, representatives of Focus and representatives of Shulman Rogers, held a meeting via conference call during which representatives
of Focus indicated that due diligence was in process and the data room had been populated with certain of BCF’s requested materials.
Representatives of Shulman Rogers led a discussion about the proposed extension of the exclusivity period until 5:00 pm Eastern Standard
Time on March 25, 2024. The Board approved the proposed extension. On the same day, TSR and BCF entered into the First Amendment to the
Exclusivity Agreement, pursuant to which BCF and TSR extended the exclusivity period under the Exclusivity Agreement until 5:00 pm Eastern
Standard Time on March 25, 2024, subject to extension or earlier termination by agreement of TSR and BCF.
On March 20, 2024, TSR provided BCF with revised forecasts
for the remainder of fiscal year 2024 (ending May 31, 2024) and for fiscal year 2025. In particular, the revised forecast for fiscal year
2024 projected revenue of $84.1 million (reduced from $93.5 million in the prior forecast provided to BCF) and $1.8 million of Net Income
Before Taxes (reduced from $2.5 million in the prior forecast provided to BCF); and the revised forecast for fiscal year 2025 projected
revenue of $94.4 million (reduced from $107.2 million in the prior forecast provided to BCF) and $3.1 million of Net Income Before Taxes
(reduced from $3.5 million in the prior forecast provided to BCF).
During the weekend of March 24, 2024, in light of the new
projections, BCF proposed a revised enterprise value of $29.5 million without deduction for transaction or other expenses. TSR in turn
proposed a revised enterprise value of $31.0 million and BCF proceeded to propose a revised enterprise value of approximately $30.0 million,
or an offer price of $13.40 per fully diluted share of Common Stock.
On March 25, 2024, the TSR Board approved the proposed enterprise
value of approximately $30 million and the proposed offer price of $13.40 per fully diluted share of Common Stock.
On March 26, 2024, BCF and TSR entered into the Second Amendment
to the Exclusivity Agreement, pursuant to which BCF and TSR extended the exclusivity period under the Exclusivity Agreement, as amended,
until 5:00 pm Eastern Standard Time on April 9, 2024, subject to extension or earlier termination by agreement of TSR and BCF.
On March 26, 2024, representatives of Ice Miller delivered
a revised draft of the Merger Agreement to representatives of Shulman Rogers, proposing a termination fee of $1.25 million.
On April 1, 2024, the TSR Board, along with Mr. Salerno,
Mr. Sharkey, representatives of Focus and representatives of Shulman Rogers, held a meeting via conference call during which representatives
of Focus discussed the status of due diligence and the potential transaction timeline. The TSR Board discussed the potential termination
fee under the Merger Agreement and the TSR Board approved a $1.25 million termination fee.
On April 3, 2024, representatives of Shulman Rogers delivered
a revised draft of the Merger Agreement to representatives of Ice Miller. This revised draft provided for, among other things, proposed
revisions to the draft representations and warranties in the Merger Agreement and an agreement by Parent to provide certain severance
benefits to certain employees of the Company if their employment was terminated by the Company without cause within 9 months of the Effective
Time.
On April 5, 2024, representatives of Shulman Rogers and
representatives of Ice Miller discussed the Transaction Bonuses and that BCF was unaware of the Transaction Bonuses. Representatives of
Shulman Rogers then discussed the Ice Miller call with representatives of TSR via conference call.
On April 9, 2024, BCF and TSR entered into the Third Amendment
to the Exclusivity Agreement, pursuant to which BCF and TSR extended the exclusivity period under the Exclusivity Agreement, as amended,
until 5:00 pm Eastern Standard Time on April 26, 2024, subject to extension or earlier termination by agreement of TSR and BCF.
On April 12, 2024, TSR filed an Amendment to Quarterly Report
on Form 10-Q for the quarterly period ending August 31, 2024, to disclose the Transaction Bonuses. Following discussion among the parties,
the parties agreed that there would not be a purchase price adjustment for the Transaction Bonuses, as those costs were offset by other
transaction expenses and liabilities that had been overestimated in TSR’s projections.
On April 24, 2024, Ice Miller informed Shulman Rogers that
Justin Christian, the majority stockholder of BCF, would be forming a new entity, that Mr. Christian would wholly own, and which was not
a subsidiary of BCF, to be party to the Merger Agreement. This entity in turn would form another subsidiary that would also be party to
the Merger Agreement.
On May 3, 2024, representatives of Shulman Rogers and representatives
of Ice Miller discussed Justin Christian’s potential arrangement of bank financing for the acquisition via conference call.
Between April 17, 2024, and May 14, 2024, representatives
of Ice Miller and representatives of Shulman Rogers exchanged drafts of the Merger Agreement and negotiated, among other things, representations,
warranties and covenants related to Parent’s capitalization and bank financing; a reverse termination fee of $6 million and terms
related thereto; Purchaser’s right in certain instances to extend the offer expiration date up to August 15, 2024; and the provision
of certain severance benefits to certain employees of the Company if their employment was terminated without cause within six months of
the Effective Time. The revised Merger Agreement reflected Mr. Christian’s capitalization of the entity with $9 million in cash.
Between May 3, 2024, and May 14, 2024, representatives of
Shulman Rogers and representatives of Ice Miller exchanged comments regarding a Commitment Letter for up to $24,000,000 of credit facilities
by and between First Merchants Bank, an Indiana bank, and Borrower, defined therein as an entity then to be formed by Justin Christian
to acquire TSR.
On May 14, 2024, representatives of Ice Miller informed
representatives of Shulman Rogers that First Merchants Bank and Justin Christian, individually and on behalf of Borrower, executed the
Commitment Letter.
On May 14, 2024, the TSR Board held a meeting, also attended
by members of TSR’s senior management and representatives of Shulman Rogers, Focus and Chessiecap, to discuss and review the terms
of the Merger Agreement (copies of the final form of which had been distributed to the members of the Company Board prior to the meeting),
and to consider approval of the Offer, the Merger and the other transactions contemplated by the Merger Agreement. Chessiecap also delivered
its analysis and oral opinion, which was subsequently confirmed by delivery of a written opinion dated May 14, 2024, that, as of such
date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations
upon the review undertaken by Chessiecap in preparing its opinion, the Offer Price to be paid to the holders of Shares (other than as
specified in such opinion) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. Following the Board’s
discussion, including of the factors summarized in “—Reasons for the Recommendation; Fairness of the Offer and the Merger,”
the directors unanimously determined that the terms of the Merger Agreement and the terms of the Offer, the Merger and the other transactions
contemplated by the Merger Agreement, including the Offer Price, were advisable, fair to, and in the best interests of, the Company and
its stockholders, authorized and approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation
of the transactions contemplated thereby, approved, adopted and declared advisable, fair to and in the best interests of the Company and
its stockholders the Merger Agreement and the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement,
including the Offer Price, and recommended that the stockholders of the Company accept the Offer and tender their shares of the Company’s
common stock in the Offer.
On May 15, 2024, TSR, Parent and Purchaser executed the
final Merger Agreement, and Parent and Purchaser entered into Tender and Support Agreements with Zeff Capital, L.P., Robert Fitzgerald
and QAR Industries, Inc., holders of approximately 45.55% of outstanding shares of common stock of TSR.
Following the closing of trading on May 15, 2024, TSR, Parent
and Purchaser issued a joint press release announcing the execution of the Merger Agreement and Parent’s forthcoming commencement
of a tender offer to acquire all the outstanding Shares for the Offer Price.
On May 30, 2024, Purchaser commenced the Offer, and TSR
filed this Schedule 14D-9.
Reasons for the Recommendation of the TSR Board
At a meeting on May 14, 2024, the TSR Board unanimously (i) determined
that the Merger Agreement and the Transactions, including the Offer and the Merger, are fair to, and in the best interest of, TSR and
its stockholders; (ii) declared it advisable for TSR to enter into the Merger Agreement; (iii) approved the execution, delivery
and performance by TSR of the Merger Agreement and the consummation of the Transactions, including the Offer and the Merger; (iv) resolved
that the Merger will be effected under Section 251(h) of the DGCL and (v) resolved to recommend that TSR’s stockholders
accept the Offer and tender their Shares pursuant to the Offer.
The TSR Board consulted with members of TSR’s senior
management and representatives from Focus Investment Banking, Chessiecap and Shulman Rogers at various times, and considered a number
of reasons, including the following non-exhaustive list of material reasons (not in any relative order of importance) that the
TSR Board believes support its unanimous decision and recommendation.
| ● | Business,
Financial Condition and Prospects. The TSR Board considered the current and historical financial condition and results of operations,
competitive position, assets, business and prospects of TSR including certain forecasts for TSR prepared by members of its senior management
(as discussed in the section entitled “—Certain Unaudited Prospective Financial Information of TSR”). The
TSR Board considered the potential opportunity to create value through continued execution of its business plan, and certain risks and
uncertainties associated with TSR and its business including other risk factors set forth in TSR’s Annual Report on Form 10-K for
the fiscal year ended May 31, 2023, and subsequent quarterly reports on Form 10-Q, all as filed with the SEC. |
| ● | Implied
Premium. The TSR Board considered the fact that the Offer Price of $13.40 represents an approximately 73.8% premium over TSR’s
closing share price of $7.71 on May 14, 2024, the last trading day before the TSR Board approved the Transactions and an approximately
72.6% premium over TSR’s 30-trading day volume-weighted average share price as of such date. |
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Cash Merger Consideration;
Certainty of Value. The TSR Board considered the fact that the Offer Price and Merger Consideration payable to TSR’s stockholders
in the Offer and the Merger will consist entirely of cash, which will provide TSR stockholders with immediate liquidity and certainty
of value. The TSR Board believed this certainty of value was compelling, especially when viewed against the risks and uncertainties associated
with TSR’s stand-alone strategy and the potential impact of such risks and uncertainties on the trading price of the
Shares.
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Reverse Termination Fee. The TSR Board considered the fact that the Merger Agreement includes
a reverse termination fee of $6,000,000, payable to the Company if (i) the Company terminates the Merger Agreement because Parent is
unable or fails to obtain financing in an amount sufficient to fund the Transactions by August 15, 2024; (ii) the Company terminates
the Merger Agreement because the Offer period (as may be extended by Parent per the above up to August 15, 2024) expires and the Offer
is not closed within 5 business days of expiration; or (iii) Parent or the Company terminate the Merger Agreement because the Offer
has not closed by August 15, 2024, and the reverse termination fee would have been payable if the Company had terminated the Merger
Agreement under clause (i) or (ii) above. |
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Negotiation Process. The TSR Board considered the fact that the terms of the Offer and the Merger were the result of robust, arms’-length negotiations conducted by TSR with the knowledge and at the direction of the TSR Board and with the assistance of independent financial and legal advisors. The TSR Board also considered that this process created a competitive dynamic (as more fully described above under the section entitled “—Background of the Merger Agreement”), resulting in an all-cash acquisition offer from Parent, who ultimately offered a higher, non-contingent upfront price. |
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Strategic Alternatives. After discussions with representatives of Focus Investment Banking, Chessiecap and TSR’s management, the TSR Board considered the risks and potential benefits associated with other strategic alternatives and the potential for stockholder value creation associated with those alternatives. As part of these evaluations, the TSR Board considered continuing to execute TSR’s strategy on a stand-alone basis, current public company market prices for the industry, potential acquisitions, and determined that the Offer, the Merger and the other transactions contemplated by the Merger Agreement constituted a more attractive alternative. |
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Certain Management Projections. The TSR Board considered certain forecasts for TSR prepared by members of senior management, which reflected an application of various assumptions of TSR’s management. For further discussion, see under the section entitled “—Certain Unaudited Prospective Financial Information of TSR.” |
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Chessiecap’s Fairness Opinion and Related Analysis. The TSR Board considered the oral opinion of Chessiecap rendered to the TSR Board on May 14, 2024, which was subsequently confirmed by delivery of a written opinion dated May 14, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Chessiecap in preparing its opinion, the Offer Price and the Merger Consideration to be paid to the holders of Shares (other than as specified in such opinion) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders, as more fully described below under the section entitled “—Opinion of TSR’s Financial Advisor” The full text of Chessiecap’s written opinion, dated May 14, 2024, which set forth, among other things, the various assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Chessiecap in preparing its opinion, has been included as Annex A to this Schedule 14D-9 and is incorporated herein by reference. |
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Tender and Support Agreements. The TSR Board considered the fact that Zeff Capital, L.P. (“Zeff Capital”), QAR Industries, Inc. (“QAR”) and Robert Fitzgerald (together with QAR, the “QAR Parties”) who together with certain of their respective affiliates collectively owned approximately 45.55% of the outstanding Shares as of May 15, 2024, support the transaction and agreed to tender their Shares in the Offer, and agreed to enter into Tender and Support Agreements with the Purchaser. |
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Speed and Likelihood of Consummation. The TSR Board considered that the structure of the transaction (a tender offer followed by a merger effected pursuant to Section 251(h) of the DGCL, which would not require additional approval by TSR’s stockholders) enables TSR’s stockholders to receive the Offer Price pursuant to the Offer in a relatively short timeframe. The TSR Board also considered the likelihood that the Offer would be completed and the Merger would be consummated based on, among other things (not in any relative order of importance): |
| ● | the
fact that, subject to its limited rights to terminate the Offer, Purchaser is required to extend the Offer beyond the initial expiration
date of the Offer if certain conditions to the completion of the Offer are not satisfied as of such date; |
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the fact that the completion of the Offer is conditioned on meeting the Minimum Tender Condition, which cannot be waived without the prior written consent of TSR; |
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the fact that there
is no financing condition to the completion of the Offer and consummation of the Merger; |
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the fact that Parent obtained a commitment letter from First
Merchants Bank for up to $24,000,000 of credit, which together with Parent’s cash on hand is to be used to finance the transaction; |
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the TSR Board’s perception that Justin Christian, as the owner of Parent, is willing to devote the resources necessary to complete the Offer and the Merger in an expeditious manner; and |
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the ability of TSR to enforce the Merger Agreement. |
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Appraisal Rights. Statutory appraisal rights under Delaware law in connection with the Merger will be available to stockholders who do not tender their Shares in the Offer and who otherwise comply with all required procedures under Delaware law. For a description of these appraisal rights, see information under the section entitled “Item 8. Additional Information—Appraisal Rights.” |
The TSR Board also considered a variety of potentially negative
factors in its deliberations concerning the Merger Agreement, the Offer and the Merger, including the following non-exhaustive list of
material reasons (not in any relative order of importance):
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No Ongoing Equity Interest in TSR.
The Offer and the Merger would preclude TSR’s stockholders from having the opportunity to directly participate in the future performance
of TSR’s assets and any potential future appreciation of the value of the Shares.
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Limited Capitalization of Parent and Merger Sub. Parent
and Merger Sub are newly formed shell companies with no business. Parent’s capitalization is limited to $9 million in cash, proceeds
from the First Merchants Bank commitment or other funding needed to close. Also, although Parent entered into a binding commitment letter
with First Merchants Bank for up to $24 million of credit, the issuance of such credit would be subject to subsequent definitive documentation
between the parties. |
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Inability to Solicit Takeover Proposals. The Merger Agreement contains covenants prohibiting TSR from soliciting other potential acquisition proposals and restricting its ability to entertain other potential acquisition proposals unless certain conditions are satisfied. The TSR Board also considered the fact that the right afforded to Parent under the Merger Agreement to match an alternative acquisition proposal that the TSR Board determines in good faith is a Superior Company Proposal (as defined in the Merger Agreement) may discourage other parties that might otherwise have an interest in a business combination with, or an acquisition of, TSR. |
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Termination Fee. TSR may be required to pay the approximately $1.25 million termination fee if the Merger Agreement is terminated under certain circumstances, including by TSR to accept a Superior Company Proposal. The TSR Board considered the risk that the amount of the termination fee would deter potential alternative acquisition proposals. |
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Effect of Announcement. The public announcement of the transaction could potentially affect TSR’s operations, employees and stock price, as well as its ability to attract and retain key personnel while the transaction is pending. |
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Litigation Risk. The execution of the Merger Agreement, the completion of the Offer and the consummation of the Merger increases the risk of litigation against TSR. |
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Interim Operating Covenants. The Merger Agreement imposes restrictions on the conduct of TSR’s business prior to the consummation of the Merger, which require TSR to conduct its business in the ordinary course and refrain from taking specified actions. The TSR Board considered that such restrictions could delay or prevent TSR from pursuing business strategies or opportunities that may arise pending consummation of the Merger. |
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● |
Risks that the Minimum Tender Condition Might Not Be Satisfied. TSR’s stockholders may tender an insufficient number of Shares to meet the Minimum Tender Condition. |
| |
● |
Risks the Merger Might Not Be Completed. Although TSR expects that the Offer will be completed and the Merger will be consummated, there can be no assurance that all conditions to the parties’ obligations will be satisfied. The TSR Board considered the risks and costs to TSR if the Offer is not completed or the Merger is not consummated, including the diversion of TSR’s management and its employees’ attention, potential employee attrition, the potential effect on vendors, partners, licensees and others that do business with TSR and the potential effect on the trading price of the Shares. |
| |
● |
Transaction Costs. Significant costs have been and will continue to be incurred in connection with negotiating and entering into the Merger Agreement and completing the Offer and the Merger, and substantial time and effort of TSR’s management will be required, potentially resulting in disruptions to the operation of TSR’s business. |
| |
● |
Potential Conflicts of Interest. The TSR Board considered the potential conflict of interest created by the fact that TSR’s executive officers and directors have financial interests in the Offer and the Merger that may be different from or in addition to those of other stockholders, as more fully described under the section entitled “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements with Current Executive Officers and Directors of TSR.” |
| |
● |
Tax Treatment. Gains realized by TSR’s stockholders as a result of the Offer and the Merger generally will be taxable to the stockholders for U.S. federal income tax purposes. |
The foregoing discussion of the information and reasons considered
by the TSR Board is not intended to be exhaustive but includes the material reasons considered by the TSR Board. In view of the variety
of reasons considered in connection with its evaluation of the Merger, the TSR Board did not find it practicable to, and did not, quantify
or otherwise assign relative weights to the specific reasons considered in reaching its determination and recommendation. The TSR Board
did not undertake to make any specific determination as to whether any reason, or any particular aspect of any reason, supported or did
not support its ultimate determination. Rather, the directors made their determinations and recommendations based on the totality of the
information presented to them, and the judgments of individual members of the TSR Board may have been influenced to a greater or lesser
degree by different factors. The TSR Board concluded that the risks, uncertainties, restrictions and potentially negative factors associated
with the Offer and Merger were substantially outweighed by the potential benefits of the Offer and Merger.
Opinion of TSR’s Financial Advisor
Opinion of Chessiecap Securities,
Inc.
On May 14, 2024, Chessiecap rendered
to the Company Board Chessiecap’s oral opinion, subsequently confirmed in a written opinion dated May 14, 2024, that, as of such
date and based upon various assumptions and limitations described in Chessiecap’s opinion, the Offer Price to be paid pursuant to
the Offer and the Merger to holders of shares was fair, from a financial point of view, to such holders.
The full text of the Chessiecap written
opinion delivered to the Company Board, which describes, among other things, the assumptions made, procedures followed, matters considered
and limitations on the review undertaken by Chessiecap, is attached as Annex A. Chessiecap provided its opinion to the Company Board for
the information and assistance of the Company Board (in its capacity as such) in connection with and for purposes of the Company Board’s
evaluation of the Offer Price from a financial point of view. Chessiecap’s opinion does not address any other aspect of the Offer
or the Merger and does not constitute advice or a recommendation as to whether or not any stockholder should tender their shares in the
Offer or how any stockholder should vote or act in connection with the Offer and Merger or any other matter relating to the Merger.
In connection with rendering its opinion,
Chessiecap, among other things:
| (1) | reviewed a draft of the Agreement and Plan of Merger dated May 13, 2024; |
| (2) | reviewed certain publicly available business and financial information relating to the Company that Chessiecap deemed to be relevant; |
| (3) | reviewed certain information, including the Company forecasts and other financial and operating information concerning the Company
as prepared by the management of the Company; |
| (4) | discussed the past and current business, operations, financial condition and prospects of the Company with members of senior management
of the Company as well as with certain of the Company’s representatives and advisors; |
| (5) | compared the Offer Price and financial terms, to the extent publicly available with certain other sale transactions that Chessiecap
deemed relevant; |
| (6) | compared the Offer Price and the financial and operating performance of the Company with that of other companies with publicly traded
equity securities that Chessiecap deemed relevant; and, |
| (7) | conducted such other financial analyses, studies and inquiries, and considered such other factors and information as Chessiecap deemed
appropriate. |
Chessiecap relied upon and assumed,
without independent verification, the accuracy and completeness of all data, material, financial and other information, including without
limitation the Company forecasts, publicly available or provided to it or otherwise reviewed by or discussed with Chessiecap. Chessiecap
relied upon the assurances of the management of the Company that they were not aware of any facts or circumstances that would make such
information or data inaccurate or misleading in any material respect. With respect to the Company forecasts, Chessiecap assumed,
without independent verification, that such forecasts were reasonably prepared on bases reflecting the best currently available estimates
and good faith judgments of the management of the Company as to the future financial performance of the Company. Chessiecap did not
make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company,
nor did it make any physical inspection of the properties or assets of the Company. Chessiecap assumed that the Offer and the Merger
will be consummated in accordance with the terms of the Agreement and Plan of Merger, without waiver, modification or amendment of any
material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals,
consents, releases and waivers for the Offer and the Merger, no delay, limitation, restriction or condition will be imposed that would
have an adverse effect on the Company or the contemplated benefits of the Offer and the Merger.
Chessiecap expressed no view or opinion
as to any terms or other aspects of the Offer or the Merger (other than the Offer Price to the extent expressly specified in Chessiecap’s
opinion), including, without limitation, the form or structure of the Offer or the Merger. Chessiecap’s opinion was limited to the
fairness, from a financial point of view, as of the date of its opinion, of the Offer Price to be paid to stockholders. In addition, no
opinion or view was expressed with respect to the fairness of the amount, nature, or any other aspect of any compensation to any of the
officers, directors, or employees of any party to the Offer and the Merger, or class of such persons, relative to the Offer Price or its
effect on the terms of the Offer and the Merger. Furthermore, no opinion or view was expressed as to the relative merits of the Offer
and the Merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might
engage or as to the underlying business decision of the Company to proceed with or effect the Offer and the Merger. Chessiecap’s
opinion was not intended to and did not constitute a recommendation to members of the Company Board as to whether they should have approved
the Offer and the Merger or the Merger Agreement, and Chessiecap expressed no opinion or recommendation as to whether any stockholder
should tender their shares in the Offer, or how any stockholder should act in connection with the Offer or the Merger or any related matter.
In preparing its opinion to the Company
Board, Chessiecap performed a variety of analyses, including those described below. The summary of Chessiecap’s analyses is not
a complete description of the analyses underlying Chessiecap’s opinion. The preparation of such an opinion is a complex process
involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative, and other analytical
methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. Therefore, neither
Chessiecap’s opinion nor its underlying analyses is readily susceptible to summary description. Chessiecap arrived at its opinion
based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with
regard to any individual analysis, methodology or factor. Accordingly, Chessiecap believes that its analyses and the following summary
must be considered as a whole and that selecting portions of its analyses, methodologies and factors or focusing on information presented
in tabular format, without considering all analyses, methodologies and factors or the narrative description of the analyses, could create
a misleading or incomplete view of the processes underlying Chessiecap’s analyses and opinion.
Chessiecap’s opinion was necessarily
based on financial, economic, monetary, market and other conditions and circumstances as they existed and could be evaluated on, and the
information made available to Chessiecap as of, the date of its opinion. It should be understood that subsequent developments could affect
Chessiecap’s opinion, and Chessiecap does not have any obligation to update, revise, or reaffirm its opinion. The issuance
of Chessiecap’s opinion was approved by Chessiecap’s fairness opinion committee.
The following is a summary of the material
financial analyses performed and presented by Chessiecap in connection with the preparation of its opinion and reviewed with the Company
Board on May 14, 2024. The order of the analyses does not represent relative importance or weight given to those analyses by Chessiecap.
Discounted Cash Flow Analysis
Chessiecap performed a discounted cash
flow analysis of the Company. A discounted cash flow analysis is a methodology used to derive a valuation of a company by calculating
the present value of the future cash flows of the Company. “Present value” refers to the current value of the future cash
flows and is calculated by discounting the future cash flows by a discount rate derived from economic assumptions, estimates of risk,
the opportunity cost of capital, expected returns and other factors. Chessiecap calculated the discounted cash flow of the Company based
on a Company forecast of revenue and profitability, the profitability being adjusted upward by Chessiecap to estimate the value of the
Company as if it did not have certain current one-time expenses and certain expenses related to being a publicly reporting entity. The
Company forecast provided to Chessiecap was limited to one quarter plus one full fiscal year forward.
For this prospective discounted cash
flow analysis, Chessiecap estimated the future after-tax free cash flows of the Company and applied a perpetuity growth rate of 3.15%,
consistent with the U.S. long-term GDP growth rate, and a discount rate of 19.02%, as derived for a firm of the Company’s size,
characteristics, and prospects. The discounted cash flow analysis indicated an implied value of $10.29 per share. We compared this value
with the Offer Price of $13.40 per share.
Guideline Public Companies Analysis
Chessiecap reviewed publicly available
financial, stock market and operating information for seven selected publicly traded companies that provide staffing services, emphasizing
industry participants that can provide technology staffing similar to the Company’s business. The selected public companies included
the following:
| Adecco Group AG |
| Hays plc |
| Kelly Services, Inc. |
| Kforce Inc. |
| ManpowerGroup Inc. |
| Randstad N.V. |
| Robert Half Inc. |
Because of the maturity of the staffing
industry, the public market participants are predominantly companies of significant size, ranging in market capitalization (the total
dollar market value of a company’s outstanding shares of stock) from approximately $850 million to $10 billion, the former being
more than 45 times the market capitalization of the Company. (The Company, with a market capitalization of less than $50 million, is labeled
a “nano cap.”) Using current stock prices and trailing four quarters data, Chessiecap determined the observable median earnings
multiple of enterprise value for the seven companies to be 10.55 times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization),
a standard best practices representation of cash flow. This multiple is applied to the Company’s trailing four quarters of reported
EBITDA and then discounted for lack of marketability (DLOM) at 34.2 %, using The Stout Restricted Stock StudyTM and DLOM calculator,
to make the Company’s nanocap valuation more comparable to the basket of large capitalization, publicly traded companies. The analysis
arrives at a valuation of $12.17 per share, compared with the Offer Price of $13.40 per share.
Comparable Transaction Analysis
Chessiecap reviewed and compared certain
information from merger and acquisition transactions that Chessiecap, based on its experience and professional judgement, deemed relevant
to consider in relation to the Company and this Merger. Chessiecap researched DealStats, a data base from Business Valuation Resources,
LLC, that incorporates financial information on acquired companies in both the private and public sectors. From among thousands of cataloged
transactions, Chessiecap used its experience and knowledge of the staffing industry to select from approximately the past ten years twenty
transactions that involved companies with certain operational, business and/or financial characteristics that, for purposes of this analysis,
may be considered similar to those of the Company. For example, Chessiecap included only transactions that were $220 million in revenue
and below as well as only transactions that had similar and positive operating margins. These transactions were:
| Sale
Date |
|
Target |
|
Acquirer |
| 12/08/2023 |
|
Undisclosed |
|
Undisclosed |
| 05/18/2022 |
|
Headway Workforce Solutions, Inc. |
|
Staffing 360 Solutions, Inc. |
| 11/04/2021 |
|
Undisclosed |
|
Undisclosed |
| 03/02/2021 |
|
Snelling Staffing, LLC |
|
HireQuest, Inc. |
| 01/31/2021 |
|
Undisclosed |
|
Undisclosed |
| 05/09/2019 |
|
Undisclosed |
|
Undisclosed |
| 01/01/2018 |
|
Undisclosed |
|
Undisclosed |
| 04/03/2017 |
|
SNI Holdco Inc. |
|
GEE Group Inc. |
| 01/01/2016 |
|
Paladin Consulting, Inc |
|
General Employment Enterprises, Inc. |
| 09/30/2015 |
|
Vision Technology Services, Inc. and Subsidiaries |
|
BG Staffing, Inc |
| 06/04/2015 |
|
Staffgroup Ltd |
|
Cordant Group Plc |
| 09/26/2013 |
|
Undisclosed |
|
Undisclosed |
| 04/05/2021 |
|
Softworld, Inc. |
|
Kelly Services, Inc. |
| 09/09/2020 |
|
Undisclosed |
|
Undisclosed |
| 03/13/2017 |
|
Undisclosed |
|
Undisclosed |
| 09/06/2016 |
|
Undisclosed |
|
Undisclosed |
| 01/12/2016 |
|
Undisclosed |
|
Undisclosed |
| 08/04/2015 |
|
Agile Resources, Inc |
|
General Employment Enterprises, Inc. |
| 06/15/2015 |
|
Hudson Information Technology (US) Business a
Division of Hudson Global, Inc. |
|
Mastech Holdings, Inc. |
| 12/31/2013 |
|
Undisclosed |
|
Undisclosed |
| |
|
Note: “Undisclosed” indicates a private transaction reported to and reviewed by DealStats analysts. |
Based on these transactions, Chessiecap
observed the transaction value of each transaction as multiple of its EBITDA and then chose the median multiple of the set which is 5.6
times. Chessiecap applied this multiple to the Company’s trailing four quarters of reported EBITDA to derive an implied enterprise
value for the Company of $10.48 per share. Chessiecap then compared this value with the Offer Price of $13.40 per share.
Other Factors
Chessiecap noted for the Company Board
certain additional factors solely for informational purposes, including, among other things, the following:
Historical
Stock Price Trading Analysis. Chessiecap reviewed the historical share price performance of shares of the Company for the 52-week
period ending May 10, 2024, which reflected low and high closing prices for the shares during this period of $6.08 and $9.39.
Premiums Paid Analysis.
Chessiecap performed an analysis of premiums paid in selected staffing industry transactions announced since January 1, 2013, using the
FactSet/BVR Control Premium Study database. These transactions were selected based on Chessiecap’s experience and professional judgment.
The premiums were calculated by comparing the per share acquisition price in each transaction to the closing price of the target company’s
common stock for the date one day prior to the date on which the trading price of the target’s common stock was perceived to be
affected by a potential transaction. Based on this analysis and other considerations that Chessiecap deemed relevant in its professional
judgment, Chessiecap observed a range of premia over 11 transactions from 5% to 34%, with a median of 24.2%. The premium paid using the
Offer Price for the Company shares calculated over the past month and prior to announcement of the Merger ranges from 61% to 84%.
General
The preparation of a financial opinion
is a complex analytical process involving, among other things, determinations as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances. Therefore, a financial opinion is not readily susceptible
to partial analysis or summary description. Chessiecap made its determination as to fairness of the Offer Price on the basis of its professional
judgment and experience after considering the results of all its analyses. No company or transaction used in the above analyses as a comparison
is directly comparable to the Company, the Offer, or the Merger.
Chessiecap was advised that its financial
analyses and opinion were only one of many factors taken into consideration by the Company Board in its evaluation of the Merger; therefore,
the analyses described above should not be viewed as determinative of the views of the Company Board with respect to the Offer Price or
the Merger Consideration. The decision to enter into the Merger Agreement and make its recommendation to the Company’s stockholders
in respect of the Offer and Merger was solely that of the Company Board.
The foregoing summary does not purport
to be a complete description of the analyses performed by Chessiecap in connection with its opinion and is qualified in its entirety by
reference to the written opinion of Chessiecap, attached as Annex A to this Schedule 14D-9.
Chessiecap is a securities firm engaged
directly and through affiliates and related persons in a number of investment banking and financial advisory activities. The Company Board
selected Chessiecap as a financial advisor based on Chessiecap’s reputation and experience with respect to the staffing and services
industries generally and with respect to Chessiecap’s experience in transactions similar to the Merger. Chessiecap does not have
any relationship that existed or that is contemplated in the future with the Company, the Parent, or the Merger Sub, including their principals.
In connection with Chessiecap’s
services to the Company’s Board, the Company has agreed to pay Chessiecap an aggregate fee of $66,000 of which half was paid on
the initiation of this engagement and half was paid upon delivery of the fairness opinion. In addition, the Company has agreed to reimburse
certain of Chessiecap’s expenses arising out of Chessiecap’s engagement, and to indemnify Chessiecap against certain liabilities
that may arise out of this engagement.
Certain Unaudited Prospective Financial Information of
TSR
TSR’s management does not, as
a matter of course, publicly disclose forecasts or internal projections as to future performance, or results of operations, earnings or
other results, due to, among other things, the inherent difficulty of predicting financial performance for future periods and the likelihood
that the underlying assumptions and estimates may not be realized.
In connection with the evaluation of
the Transactions and the other strategic alternatives considered by the TSR Board described in the section entitled “—Background
of the Merger Agreement”, TSR’s senior management prepared certain non-public, unaudited, risk-adjusted, prospective financial
information for fiscal years 2024 and 2025 at the instruction of the TSR Board (the “Projections”). The Projections were prepared
based on TSR’s continued operation as a stand-alone company and do not take into account the Transactions, including the effect
of any business or strategic decision or action that has been or will be taken as a result of the execution of the Merger Agreement.
The Projections
were presented to the TSR Board in connection with its consideration of the Transactions, and, at the instruction of the TSR Board, were
relied upon by Chessiecap in connection with the rendering of its opinion to the TSR Board and in performing its financial analysis as
described in the section entitled “—Opinion of TSR’s Financial Advisor” and were the only financial projections
with respect to TSR used by Chessiecap in performing its financial analysis.
The following table presents a summary of the Projections:
Projections
| TSR SUMMARY - BY QUARTER | |
| | |
| | |
| | |
| | |
| |
| FY24 (May 31, 2024) | |
TSR COMPANY CONFIDENTIAL INFORMATION | |
| (Forecast Update 03.19.24) | |
Actual | | |
Actual | | |
Budget | | |
Budget | | |
Budget | |
| | |
Q1 | | |
Q2 | | |
Q3 | | |
Q4 | | |
TOTAL | |
| CONSOLIDATED SUMMARY | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| |
| Revenues ($) | |
| 22,580,754 | | |
| 21,687,444 | | |
| 19,702,992 | | |
| 20,115,738 | | |
| 84,086,928 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net Profit Before Taxes ($) | |
| 749,789 | | |
| 640,984 | | |
| -26,227 | | |
| 475,852 | | |
| 1,840,398 | |
| TSR CONSOLIDATED SUMMARY | |
| |
| FY25 (May 31, 2025) | |
FORECAST | | |
FORECAST | | |
FORECAST | | |
FORECAST | | |
| |
| | |
Q1 | | |
Q2 | | |
Q3 | | |
Q4 | | |
FORECAST | |
| | |
Total | | |
Total | | |
Total | | |
Total | | |
TOTAL | |
| | |
| | |
| | |
| | |
| | |
| |
| Revenues ($) | |
| 20,734,650 | | |
| 23,863,190 | | |
| 24,252,400 | | |
| 25,513,380 | | |
| 94,363,620 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net Profit Before Taxes ($) | |
| 710,330 | | |
| 980,696 | | |
| 438,778 | | |
| 1,008,941 | | |
| 3,138,745 | (a) |
| (a) | Still Includes all Public Company Expenses |
TSR is summarizing the Projections in this Schedule 14D-9
to provide holders of Shares with access to certain non-public, unaudited, risk-adjusted prospective financial information that was prepared
for the TSR Board for the purposes described above. TSR makes and has made no representation to Parent or Purchaser, in the Merger Agreement
or otherwise, concerning any projected financial information, including the Projections.
The Projections were based upon certain
financial, operating and commercial assumptions and estimates developed solely using the information available to TSR’s management
at the time the Projections were created.
Cautionary Note About the Projections
In light of the foregoing factors
and the uncertainties inherent in the Projections, holders of Shares are cautioned not to place undue, if any, reliance on the Projections.
The Projections were not prepared with a view toward public disclosure. The inclusion of the Projections in this Schedule 14D-9 should
not be regarded as an indication that TSR or any of its affiliates, advisors or representatives (including Chessiecap) considered or consider
the Projections to be predictive of actual future events, and the Projections should not be relied upon as such or construed as financial
guidance. Further, the inclusion of the Projections in this Schedule 14D-9 does not constitute an admission or representation by TSR,
the TSR Board, or any of their affiliates or representatives (including Chessiecap) that the information presented is material. Neither
TSR nor any of its affiliates or representatives (including Chessiecap) assumes any responsibility for the accuracy of this information.
Neither TSR nor any of its affiliates, advisors, officers, directors or representatives (including Chessiecap) can give any assurance
that actual results will not differ from the Projections, and none of them undertakes any obligation to update or otherwise revise or
reconcile the Projections to reflect circumstances existing after the date the Projections were generated or to reflect the occurrence
of future events, even in the event that any or all of the assumptions and estimates underlying the Projections are shown to be in error.
TSR does not intend to make publicly available any update or other revision to the Projections, except as otherwise required by law.
Neither TSR nor any of its affiliates,
advisors, officers, directors or representatives (including Chessiecap) has made or makes any representation or warranty to any holder
of Shares or other person, including Parent or Purchaser, regarding the ultimate performance of TSR compared to the information contained
in the Projections, or that the Projections will be realized. The Projections were prepared based on TSR’s continued operation as
a stand-alone company and do not take into account the Transactions, including the effect of any business or strategic decision or action
that has been or will be taken as a result of the execution of the Merger Agreement. The Projections are subjective in many respects and
are forward looking statements that remain subject to interpretation. Please refer to the section entitled “Item 8. Additional Information—Forward-Looking
Statements.”
The Projections were not prepared with
a view toward compliance with published SEC guidelines, the guidelines established by the American Institute of Certified Public Accountants
for preparation and presentation of financial forecasts, or U.S. generally accepted accounting principles (“GAAP”). Non-GAAP
financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with
GAAP, and non-GAAP financial measures as used by TSR may not be comparable to similarly titled amounts used by other companies. In addition,
the Projections were not prepared with the assistance of, or reviewed, compiled or examined by, independent accountants. The Projections
are not being included in this Schedule 14D-9 to influence any stockholder’s decision on whether to tender their Shares in the Offer,
but instead are being included because the Projections were provided to the TSR Board to evaluate the Transactions and other potential
strategic opportunities and were provided to Chessiecap in connection with the rendering of its opinion to the TSR Board and in performing
its financial analysis as described under the section entitled “—Opinion of TSR’s Financial Advisor” The Projections
may differ from publicly available analyst estimates, and the Projections do not take into account any events or circumstances after the
date they were prepared, including the announcement of the Transactions.
TSR DOES NOT INTEND TO UPDATE OR
OTHERWISE REVISE THE PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS,
EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS AND ESTIMATES UNDERLYING THE PROJECTIONS ARE NO LONGER APPROPRIATE.
The Projections were prepared in March
2024 by TSR management based on their assumptions and estimates about TSR’s continued operation as a stand-alone, publicly traded
company. The foregoing is a summary of certain key assumptions and estimates and does not purport to be a comprehensive or exhaustive
overview of all metrics, assumptions and estimates included or reflected in the Projections. For information on factors that may cause
TSR’s future results to vary materially, please refer to the section entitled “Item 8. Additional Information—Forward-Looking
Statements.”
Intent to Tender
To the knowledge of TSR, each executive
officer and director of TSR currently intends to tender all of his or her Shares in the Offer. Zeff Capital, L.P, Robert Fitzgerald and
QAR Industries, Inc. entered into the Tender and Support Agreements concurrently with the execution of the Merger Agreement, as described
further under the section entitled “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Relationship with Parent
and Purchaser—Tender and Support Agreements,” pursuant to which they agreed to tender their respective Shares.
Item 5. Persons/Assets Retained, Employed, Compensated
or Used
Pursuant to Focus’s engagement
letter with TSR, TSR retained Focus as its investment bank in connection with the Offer and the Merger. In connection with Focus’s
services to the TSR Board, TSR has agreed to pay Focus an aggregate fee of approximately $880,000. Additional information related to Focus’s
retention as TSR’s financial advisor is set forth under the sections entitled “Item 4. The Solicitation or Recommendation—Background
of the Merger Agreement; Reasons for the Recommendation—Background of the Merger Agreement” and are hereby incorporated herein
by reference.
Pursuant to Chessiecap’s engagement
letter with TSR, TSR retained Chessiecap as its financial advisor in connection with the Offer and the Merger and to render Chessiecap’s
opinion to the TSR Board. Chessiecap’s opinion does not constitute a recommendation to any stockholder of TSR as to whether or not
such holder should tender Shares in connection with the Offer or otherwise act with respect to the Transactions or any other matter. In
connection with Chessiecap’s services as the financial advisor to the TSR Board, TSR has agreed to pay Chessiecap an aggregate fee
of approximately $66,000. Additional information related to Chessiecap’s retention as TSR’s financial advisor is set forth
under the sections entitled “Item 4. The Solicitation or Recommendation—Background of the Merger Agreement; Reasons for the
Recommendation—Background of the Merger Agreement” and “—Opinion of TSR’s Financial Advisor” and are
hereby incorporated herein by reference.
Neither TSR nor any person acting
on its behalf has or currently intends to employ, retain or compensate any person to make solicitations or recommendations to the stockholders
of TSR on its behalf with respect to the Transactions or related matters, except that such solicitations or recommendations may be made
by directors, officers or employees of TSR, for which services no additional compensation will be paid.
Item 6. Interest in Securities of the Subject Company
No transactions with respect to the
Shares have been effected by TSR or, to the knowledge of TSR after making reasonable inquiry, by any of its executive officers, directors,
affiliates or subsidiaries during the 60 days prior to the date of this Schedule 14D-9.
Item 7. Purposes of the Transaction and Plans or Proposals
Except as indicated in this Schedule
14D-9 (including the exhibits to this Schedule 14D-9 or incorporated in this Schedule 14D-9 by reference), TSR is not currently undertaking
or engaged in any negotiations in response to the Offer that relate to, or would result in, (i) a tender offer for or other acquisition
of TSR’s securities by TSR, any subsidiary of TSR or any other person; (ii) any extraordinary transaction, such as a merger, reorganization
or liquidation, involving TSR or any subsidiary of TSR; (iii) any purchase, sale or transfer of a material amount of assets of TSR or
any subsidiary of TSR or (iv) any material change in the present dividend rate or policy, or indebtedness or capitalization of TSR.
Except as indicated in this Schedule
14D-9 (including the exhibits to this Schedule 14D-9 or incorporated in this Schedule 14D-9 by reference), there are no transactions,
resolutions of the TSR Board, agreements in principle or signed contracts that were entered into in response to the Offer that relate
to, or would result in, one or more of the matters referred to in the preceding paragraph.
Item 8. Additional Information
The information contained in all of the exhibits to this
Schedule 14D-9 referred to in Item 9 below is incorporated herein by reference in its entirety.
The information set forth under the
section entitled “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements with Current Executive Officers
and Directors of TSR” is incorporated herein by reference.
Appraisal Rights
No
appraisal rights are available to stockholders of TSR in connection with the Offer. However, if the Offer is successful and the
Merger is consummated, TSR stockholders who continuously held Shares from the date of the demand for appraisal through the Effective
Time who: (i) did not tender their Shares in the Offer or vote in favor of, or consent to the consummation of, the Merger; (ii)
otherwise comply with the applicable requirements and procedures of Section 262 of the DGCL, including providing documentary
evidence of such stockholder’s beneficial ownership of such Shares and (iii) do not thereafter withdraw their demand for
appraisal of such Shares or otherwise lose their appraisal rights, in each case in accordance with Section 262 of the DGCL, will be
entitled to demand appraisal of their Shares and receive, in lieu of the consideration payable in the Merger, a cash payment equal
to the “fair value” of such Shares exclusive of any element of value arising from the accomplishment or expectation of
the Merger, together with a fair rate of interest, if any, as determined by the Delaware Court of Chancery (the “Delaware
Court”), in accordance with Section 262 of the DGCL. Stockholders should be aware that the fair value of their Shares could be
more than, the same as, or less than the Offer Price or the consideration payable in the Merger (which is equivalent in amount to
the Offer Price), and that an investment banking opinion as to the fairness, from a financial TSR of view, of the consideration
payable in a sale transaction, such as the Offer and the Merger, is not an opinion as to, and does not otherwise address, fair value
under Section 262 of the DGCL. Any stockholder contemplating the exercise of such appraisal rights should review carefully the
provisions of Section 262 of the DGCL, particularly the procedural steps required to properly demand and perfect such rights.
The
following is a summary of the procedures to be followed by stockholders that wish to exercise their appraisal rights under Section
262 of the DGCL, the full text of which is accessible without subscription or cost at the following publicly available website:
https://delcode.delaware.gov/title8/c001/sc09/index.html#262. This summary does not purport to be a complete statement of, and is
qualified in its entirety by reference to, Section 262 of the DGCL and to any amendments to such section adopted or otherwise made
effective after the date of this Schedule 14D-9. Failure to follow any of the procedures of Section 262 of the DGCL may result in
termination or waiver of appraisal rights under Section 262 of the DGCL. Stockholders should assume that TSR will take no action to
perfect any appraisal rights of any stockholder.
Due to the complexity of the appraisal
process, any stockholder who desires to exercise his, her or its appraisal rights should review carefully Section 262 of the DGCL and
is urged to consult his, her or its legal advisor before electing or attempting to exercise such rights. Failure to timely and fully comply
with the procedures set forth in Section 262 of the DGCL will result in the loss of such rights. The following summary of such procedures
does not constitute any legal or other advice nor does it constitute a recommendation that TSR’s stockholders exercise appraisal
rights under Section 262 of the DGCL.
Under Section 262 of
the DGCL, if a merger is approved under Section 251(h) of the DGCL, either a constituent corporation before the effective date of
the merger, or the surviving corporation within 10 days thereafter, must notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall
include in such notice a copy of Section 262 of the DGCL. THIS SCHEDULE 14D-9 CONSTITUTES THE FORMAL NOTICE OF APPRAISAL RIGHTS
UNDER SECTION 262 OF THE DGCL. FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY
RESULT IN THE LOSS OF SUCH RIGHTS.
Stockholders wishing to exercise the right to seek an appraisal
of their Shares must do ALL of the following:
| ● | prior to the later of the consummation of the Offer (which will
occur at the date and time of the acceptance for payment of Shares pursuant to and subject to the conditions of the Offer) and 20 days
after the mailing of this Schedule 14D-9, deliver to TSR a written demand for appraisal of Shares held, which demand must reasonably
inform TSR of the identity of the stockholder and that the stockholder is demanding appraisal; |
| ● | not tender his, her or its Shares in the Offer, vote in favor
of the Merger nor consent thereto in writing pursuant to Section 228 of the DGCL; |
| ● | continuously hold the Shares from the date on which the written
demand for appraisal is made through the Effective Time; and |
| ● | comply with the procedures of Section 262 of the DGCL for
perfecting appraisal rights thereafter. |
Written Demand by the Beneficial Owner
All written demands for appraisal should be addressed to
TSR, Inc., 400 Oser Avenue, Suite 150, Hauppauge, NY 11788, Attention: Legal. The demand for appraisal may be made by a beneficial owner
in such person’s name, provided that such stockholder continuously owns such Shares through the Effective Time and the demand (i)
reasonably identifies the holder of record of the Shares for which the demand is made, (ii) is accompanied by documentary evidence of
such beneficial owner’s beneficial ownership of the Shares and a statement that such documentary evidence is true and correct and
(iii) provides an address at which such beneficial owner consents to receive notices given by the Surviving Corporation and to be set
forth on the verified list required by Section 262 of the DGCL.
Filing a Petition for Appraisal
Within 120 days after the Effective Time, but not thereafter,
the Surviving Corporation, or any holder of Shares who has complied with Section 262 of the DGCL and is entitled to appraisal rights under
Section 262, may commence an appraisal proceeding by filing a petition (a “Petition”) in the Delaware Court demanding a determination
of the fair value of the Shares held by all holders who did not tender their Shares in the Offer nor vote to approve the Merger and who
properly demanded appraisal. If no such Petition is filed within that 120-day period, appraisal rights will be lost for all holders of
Shares who had previously demanded appraisal of their Shares. The Surviving Corporation is under no obligation to and has no present intention
to file a Petition and holders should not assume that the Surviving Corporation will file a Petition or that it will initiate any negotiations
with respect to the fair value of the Shares. Accordingly, it is the obligation of the holders of Shares to initiate all necessary action
to perfect their appraisal rights in respect of the Shares within the period prescribed in Section 262 of the DGCL.
Within 120 days after the Effective Time,
any holder of Shares who has complied with the requirements for exercise of appraisal rights will be entitled, upon request given in writing
(or by electronic transmission directed to any information processing system (if any) expressly designed for that purpose in the notice
of appraisal), to receive from the Surviving Corporation a statement setting forth the aggregate number of Shares not tendered into, and
accepted for purchase or exchange in, the Offer and with respect to which demands for appraisal have been received and the aggregate number
of holders of such Shares. Such statement must be given to the stockholder within 10 days after a request by such stockholder for the
information has been received by the Surviving Corporation or within 10 days after the expiration of the period for delivery of demands
for appraisal, whichever is later.
Upon the filing of such Petition by any such holder of Shares
(a “Dissenting Stockholder”), service of a copy thereof must be made upon the Surviving Corporation, which will then be obligated
within 20 days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders
who have demanded payment for their Shares and with whom agreements as to the value of their Shares have not been reached. Upon the filing
of a Petition by a Dissenting Stockholder, the Delaware Court may order a hearing and that notice of the time and place fixed for the
hearing on the Petition be mailed to the Surviving Corporation and all the Dissenting Stockholders. Notice will also be published at least
one week before the day of the hearing in a newspaper of general circulation published in the City of Wilmington, Delaware, or in another
publication deemed advisable by the Delaware Court. The costs relating to these notices will be borne by the Surviving Corporation.
If a hearing on the Petition is held,
the Delaware Court is empowered to determine which Dissenting Stockholders have complied with the provisions of Section 262 of the DGCL
and are entitled to an appraisal of their Shares. The Delaware Court may require that Dissenting Stockholders submit their Share certificates
for notation thereon of the pendency of the appraisal proceedings. The Delaware Court is empowered to dismiss the proceedings as to any
Dissenting Stockholder who does not comply with such requirement. Accordingly, Dissenting Stockholders are cautioned to retain their Share
certificates pending resolution of the appraisal proceedings. In addition, because immediately before the Effective Time, the Shares were
listed on a national securities exchange, the Delaware Court shall dismiss the proceedings as to all holders of such Shares who are otherwise
entitled to appraisal rights unless (i) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class
or series eligible for appraisal, (ii) the value of the consideration provided in the merger or consolidation for such total number of
shares exceeds $1 million, or (iii) the merger was approved pursuant to Section 253 or Section 267 of the DGCL.
The Shares will be appraised by the
Delaware Court at the fair value thereof exclusive of any element of value arising from the accomplishment or expectation of the Merger,
together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the Delaware Court in its discretion
determines otherwise for good cause shown, interest from the Effective Time through the date of payment of the judgment will be compounded
quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during
the period between the Effective Time and the date of payment of the judgment. In determining the value, the court is to take into account
all relevant factors. At any time before the entry of judgment in the proceedings, the Surviving Corporation may pay to each stockholder
entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (i) the
difference, if any, between the amount so paid and the fair value of the shares as determined by the Delaware Court, and (ii) interest
theretofore accrued, unless paid at that time.
The Delaware Court may also (i) assess
costs of the proceeding among the parties as the Delaware Court deems equitable and (ii) order all or a portion of the expenses incurred
by any Dissenting Stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’
fees and fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. Determinations by
the Delaware Court are subject to appellate review by the Delaware Supreme Court.
Dissenting Stockholders are generally permitted to participate
in the appraisal proceedings. No appraisal proceedings in the Delaware Court shall be dismissed as to any Dissenting Stockholder without
the approval of the Delaware Court, and this approval may be conditioned upon terms which the Delaware Court deems just.
Stockholders considering whether to
seek appraisal should bear in mind that the fair value of their Shares determined under Section 262 of the DGCL could be more than, the
same as, or less than the value of consideration to be issued and paid in the Merger as set forth in the Merger Agreement. Also, the Surviving
Corporation may assert in any appraisal proceeding that, for purposes thereof, the “fair value” of the Shares is less than
the value of the consideration to be issued and paid in the Merger as set forth in the Merger Agreement.
The process of dissenting and exercising appraisal rights
requires strict compliance with technical prerequisites. Stockholders wishing to dissent should consult with their own legal counsel in
connection with compliance with Section 262 of the DGCL.
Any stockholder who has duly demanded
and perfected appraisal rights in compliance with Section 262 of the DGCL will not, after the Effective Time, be entitled to vote his
or her Shares for any purpose or be entitled to the payment of dividends or other distributions thereon, except for dividends or other
distributions payable to holders of record of Shares as of a date prior to the Effective Time.
If any stockholder who demands appraisal
of Shares under Section 262 of the DGCL fails to perfect, successfully withdraws or loses such holder’s right to appraisal, such
stockholder’s Shares will be deemed to have been converted at the Effective Time into the right to receive the Merger Consideration.
A stockholder will fail to perfect, or effectively lose, the stockholder’s right to appraisal if no Petition for appraisal is filed
within 120 days after the Effective Time. In addition, as indicated above, a stockholder may withdraw his, her or its demand for appraisal
in accordance with Section 262 of the DGCL and accept the Merger Consideration.
This summary of appraisal rights under
the DGCL is not complete and is qualified in its entirety by reference to Section 262 of the DGCL and the Offer. A copy of Section 262
of the DGCL is included as Annex B to this Schedule 14D-9.
FAILURE TO FOLLOW THE STEPS REQUIRED
BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF APPRAISAL RIGHTS. IN THAT EVENT, YOU WILL BE ENTITLED
TO RECEIVE THE OFFER PRICE DESCRIBED IN THE MERGER AGREEMENT FOR YOUR SHARES IN ACCORDANCE WITH THE MERGER AGREEMENT. IN LIGHT OF THE
COMPLEXITY OF THE PROVISIONS OF SECTION 262 OF THE DGCL, IF YOU ARE A HOLDER OF SHARES AND ARE CONSIDERING EXERCISING YOUR APPRAISAL RIGHTS
UNDER THE DGCL, YOU SHOULD CONSULT YOUR OWN LEGAL ADVISOR.
Anti-Takeover Statute
In general, Section 203 of the DGCL
prevents an “interested stockholder” (defined generally to include a person who, together with such person’s affiliates
and associates, owns or has the right to acquire 15% or more of a corporation’s outstanding voting stock) from engaging in a “business
combination” (defined to include mergers and certain other actions and transactions) with a Delaware corporation whose stock is
publicly traded or held of record by more than 2,000 stockholders for a period of three years following the date such person became an
interested stockholder unless:
| ● | the transaction in which the stockholder became an interested
stockholder or the business combination was approved by board of directors of the corporation before the other party to the business
combination became an interested stockholder; |
| ● | upon consummation of the transaction that made the stockholder
an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the commencement
of the transaction (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by
the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the
employees do not have a confidential right to tender or vote stock held by the plan); or |
| ● | the business combination was approved by the board of directors
of the corporation and authorized at a meeting of stockholders by the affirmative vote of the holders of at least 66 2/3% of the outstanding
voting stock that the interested stockholder did not own. |
In addition, the TSR Board has approved
the Merger Agreement and the Transactions, including the Offer and the Merger, as described under the section entitled “Item 4.
The Solicitation or Recommendation” above and, therefore, the restrictions set forth in Section 203 of the DGCL are inapplicable
to the Offer, the Merger and the Transactions.
Regulatory Approvals
There are no antitrust, competition
or other material regulatory filings required to consummate the Offer or the Merger.
Stockholder Approval of the Merger Not Required
Because the Merger will be consummated
in accordance with Section 251(h) of the DGCL, no stockholder vote or consent will be necessary to effect the Merger. Section 251(h) of
the DGCL generally provides that stockholder approval of a merger is not required if certain requirements are met, including that (i)
the acquiring company consummates a tender offer for any and all of the outstanding stock of the company to be acquired that, absent Section
251(h) of the DGCL, would be entitled to vote on the adoption of the merger agreement and (ii) following the consummation of such tender
offer, the acquiring company owns at least such percentage of the stock of the company to be acquired that, absent Section 251(h) of the
DGCL, would be required to adopt the merger. If the Minimum Tender Condition is satisfied and Purchaser accepts Shares for payment pursuant
to the Offer, Purchaser will hold a sufficient number of Shares to consummate the Merger under Section 251(h) of the DGCL without submitting
the adoption of the Merger Agreement to a vote of the TSR stockholders. Following the consummation of the Offer and subject to the satisfaction
of the remaining conditions set forth in the Merger Agreement, Parent, Purchaser and TSR will take all necessary and appropriate action
to effect the Merger as soon as practicable without a meeting of TSR stockholders in accordance with Section 251(h) of the DGCL.
Legal Proceedings
Lawsuits arising out of or relating to the Offer, the Merger
or the other Transactions may be filed in the future.
Annual and Quarterly Reports
For additional information regarding
the business and the financial results of TSR, please see TSR’s Annual Report on Form 10-K for the fiscal year ended May 31, 2023,
and TSR’s subsequent Quarterly Reports. Annual and Quarterly Reports filed by TSR can be obtained without charge from the SEC’s
website at www.sec.gov.
Forward-Looking Statements
This Schedule 14D-9 contains forward-looking
statements related to TSR, Parent and Purchaser (together, the “Vienna Filing Persons”), BCF, and the proposed transaction
that involve substantial risks and uncertainties. Forward-looking statements include any statements containing the words “anticipate,”
“believe,” “estimate,” “expect,” “intend”, “goal,” “may”, “might,”
“plan,” “predict,” “project,” “seek,” “target,” “potential,” “will,”
“would,” “could,” “should,” “continue” and similar expressions. All statements other than
statements of historical fact are statements that could be deemed forward-looking statements. In this communication, TSR’s forward-looking
statements include statements about the parties’ ability to satisfy the conditions to the consummation of the tender offer and the
other conditions to the consummation of the proposed transaction; statements about the expected timetable for completing the proposed
transaction; TSR’s plans, objectives, expectations and intentions; the financial condition, results of operations and business of
TSR, the Vienna Filing Persons and BCF; and the anticipated timing of the closing of the proposed transaction.
Forward-looking statements are subject
to certain risks, uncertainties or other factors that are difficult to predict and could cause actual events or results to differ materially
from those indicated in any such statements due to a number of risks and uncertainties. Those risks and uncertainties that could cause
the actual results to differ from expectations contemplated by forward-looking statements include, among other things: uncertainties as
to the timing of the tender offer and the merger; uncertainties as to how many of TSR’s stockholders will tender their shares in
the tender offer; the possibility that the Vienna Filing Persons will not be able to obtain the financing necessary to fund the transaction;
the possibility that competing offers will be made; the possibility that various closing conditions for the proposed transaction may not
be satisfied or waived; the effects of the proposed transaction on relationships with employees, other business partners or governmental
entities; the impact of competitive services and pricing; other business effects, including the effects of industry, economic or political
conditions outside of the companies’ control; transaction costs; actual or contingent liabilities; and other risks listed under
the heading “Risk Factors” in TSR’s periodic reports filed with the U.S. Securities and Exchange Commission, including
current reports on Form 8-K, quarterly reports on Form 10-Q, annual reports on Form 10-K, as well as the Schedule 14D-9 to be filed by
TSR and the Schedule TO and related tender offer documents to be filed by the Vienna Filing Persons. You should not place undue reliance
on these statements. All forward-looking statements are based on information currently available to TSR and the Vienna Filing Persons,
and TSR and the Vienna Filing Persons disclaim any obligation to update the information contained in this communication as new information
becomes available.
Item 9. Exhibits
The following Exhibits are attached hereto:
| Exhibit No. |
|
Description |
| |
|
|
| (a)(1)(A) |
|
Offer to Purchase, dated May 30, 2024 (incorporated by reference to Exhibit (a)(1)(A) to the Schedule TO). |
| (a)(1)(B) |
|
Form of Letter of Transmittal (including Internal Revenue Service Form W-9) (incorporated by reference to Exhibit (a)(1)(B) to the Schedule TO). |
| (a)(1)(C) |
|
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(C) to the Schedule TO). |
| (a)(1)(D) |
|
Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(D) to the Schedule TO). |
| (a)(1)(E) |
|
Summary Advertisement, as published in The New York Times on May 30, 2024 (incorporated by reference to Exhibit (a)(1)(E) to the Schedule TO). |
| (a)(1)(F) |
|
Joint Press Release issued by Parent and TSR, dated May 15, 2024 (incorporated by reference to Exhibit 99.1 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(A) |
|
Form of Email Distributed to Company Employees (incorporated by reference to Exhibit 99.2 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(B) |
|
Form of Email Distributed to Company Consultants (incorporated by reference to Exhibit 99.3 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(C) |
|
Form of Email Distributed to Company Customers (incorporated by reference to Exhibit 99.4 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(D) |
|
Form of Company LinkedIn Post (incorporated by reference to Exhibit 99.5 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(E) |
|
Company Guidelines for Employee Responses to Inquiries (incorporated by reference to Exhibit 99.6 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(F) |
|
Company Employee Presentation (incorporated by reference to Exhibit 99.7 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(G) |
|
Company Customer Presentation (incorporated by reference to Exhibit 99.8 to the Schedule 14D-9C filed with the SEC by TSR on May 16, 2024). |
| (a)(5)(H) |
|
Opinion of Chessiecap Securities, Inc., dated March 14, 2024 (included as Annex A to this Schedule 14D-9).* |
| (e)(1) |
|
Agreement and Plan of Merger, dated March 15, 2024, by and among Vienna Parent Corporation, Vienna Acquisition Corporation and TSR (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by TSR on March 17, 2024). |
| (e)(2) |
|
Tender and Support Agreement, dated March 15, 2024, by and among Vienna Parent Corporation, Vienna Acquisition Corporation, Robert Fitzgerald and QAR Industries, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC by TSR on March 17, 2024). |
| (e)(3) |
|
Tender and Support Agreement, dated March 15, 2024, by and among Vienna Parent Corporation, Vienna Acquisition Corporation and Zeff Capital, L.P. (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed with the SEC by TSR on March 17, 2024). |
| (e)(4) |
|
Confidentiality Agreement, dated September 19, 2023, by and between Focus Investment Banking, LLC and Bucher and Christian Consulting, Inc.* |
| (e)(5) |
|
Due Diligence and Exclusivity Agreement, dated January 10, 2024, by and between TSR and Bucher and Christian Consulting, Inc.* |
| (e)(6) |
|
First Amendment to Due Diligence and Exclusivity Agreement, dated March 11, 2024, by and between TSR and Bucher and Christian Consulting, Inc.* |
| (e)(7) |
|
Second Amendment to Due Diligence and Exclusivity Agreement, dated March 26, 2024, by and between TSR and Bucher and Christian Consulting, Inc.* |
| (e)(8) |
|
Third Amendment to Due Diligence and Exclusivity Agreement, dated April 9, 2024, by and between TSR and Bucher and Christian Consulting, Inc.* |
| (e)(9) |
|
TSR, Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-8 filed by TSR on December 18, 2020). |
| (e)(10) |
|
Form of Restricted Stock Grant Notice and Restricted Stock Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by TSR on February 1, 2021). |
| (e)(11) |
|
Employment Agreement, dated as of November 2, 2020, by and between TSR and Thomas Salerno (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on November 6, 2020). |
| (e)(12) |
|
Addendum to Employment Agreement, dated as of July 31, 2023, by and between TSR and Thomas Salerno (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August 2, 2023). |
| (e)(13) |
|
Amended and Restated Employment Agreement, dated as of November 2, 2020, by and between TSR and John G. Sharkey (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on November 6, 2020). |
| (e)(14) |
|
Addendum to Employment Agreement, dated as of October 27, 2023, by and between TSR and John G. Sharkey (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on October 27, 2023). |
| (e)(15) |
|
Employment Agreement dated as of November 18, 2022, by and between TSR and Mohammed Shah Syed.* |
| (e)(16) |
|
Addendum to Employment Agreement, dated as of August 1, 2023, by and between TSR and Mohammed Shah Syed.* |
| (e)(17) |
|
Employment Agreement, dated as of May 15, 2024, by and between TSR and Thomas Salerno.* |
| (e)(18) |
|
Employment Agreement, dated as of May 15, 2024, by and between TSR and Mohammed Shah Syed.* |
| (e)(19) |
|
Form of Indemnification Agreement for Directors (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by TSR on November 2, 2007). |
| (e)(20) |
|
Form of Indemnification Agreement for Officers (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by TSR on November 2, 2007). |
SIGNATURE
After due inquiry and to the best
of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: May 30, 2024
| TSR, Inc. |
|
| |
|
|
| By: |
/s/ Thomas Salerno |
|
| Name: |
Thomas Salerno |
|
| Title: |
Chief Executive Officer |
|
ANNEX A
OPINION OF CHESSIECAP
SECURITIES, INC.
Chessiecap Securities, Inc.
7911 Sherwood Avenue
Towson, Maryland 21204
May 14, 2024
TSR, Inc.
400 Oser Avenue
Suite 150
Hauppauge, NY 11788
Members of the Board of Directors:
We understand that TSR, Inc.
(the “Company”), a Delaware corporation, intends to enter into an Agreement and Plan of Merger (the “Agreement”)
between the Company, Vienna Parent Corporation, an Indiana Corporation (“Parent”), and Vienna Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, among other things (i) Parent will
cause Merger Sub to commence a cash tender offer (the “Offer”) to purchase all the outstanding shares of common stock, par
value $0.01 per share, of the Company (the “Company Common Stock”) at a price per share of Company Common Stock of $13.40
(the “Offer Price”), net to the sellers in cash, without interest, and (ii) following the acceptance for payment of shares
of Company Common Stock pursuant to the Offer, Merger Sub shall be merged with and into the Company (the “Merger”), with the
Company continuing as the surviving corporation. Pursuant to the Merger, each share of Company Common Stock that is not validly tendered
and irrevocably accepted for purchase pursuant to the Offer, except as provided in the Agreement, shall be converted in the Merger into
the right to receive an amount equal to the Offer Price, net to the stockholders of the Company in cash and without interest.
You have asked for our opinion as to the fairness
from a financial point of view to the holders of Company Common Stock of the Offer Price to be paid to such holders in the Merger.
In conducting our analysis and arriving at the opinion expressed herein,
we have, among other things:
| (1) | reviewed a draft of the Agreement and Plan of Merger dated May 13, 2024; |
| | | |
| (2) | reviewed certain publicly available business and financial information relating to the Company that Chessiecap deemed to be relevant; |
| | | |
| (3) | reviewed certain information, including the Company forecasts and other financial and operating information concerning the Company
as prepared by the management of the Company; |
| | | |
| (4) | discussed the past and current business, operations, financial condition, and prospects of the Company with members of senior management
of the Company as well as with certain of the Company’s representatives and advisors; |
| | | |
| (5) | compared the Offer Price and financial terms with the price and financial terms of certain other sale transactions that Chessiecap
deemed relevant, to the extent publicly available; |
| | | |
| (6) | compared the Offer Price and the financial and operating performance of the Company with that of other companies with publicly traded
equity securities that Chessiecap deemed relevant; and, |
| | | |
| (7) | conducted such other financial analyses, studies and inquiries, and considered such other factors and information as Chessiecap deemed
appropriate. |
In our review and analysis and in rendering this
opinion, we have assumed and relied upon, but have not assumed any responsibility to independently investigate or verify, the accuracy,
completeness, and fair presentation of all financial and other information that was provided to us by the Company or that was publicly
available to us (including, without limitation, the information described above), or that was otherwise reviewed by us. This opinion is
expressly conditioned upon such information (whether written or oral) being complete, accurate, and fair in all respects material to our
analysis. We have further relied upon the assurance of management of the Company that they are unaware of any facts that would make the
information provided to us incomplete or misleading in any respect. Our analyses were based, among other things, on the financial projections
of the Company (the “Financial Projections”) furnished to us by senior management of the Company. With respect to the Financial
Projections, we have assumed that the Financial Projections have been reasonably prepared by management and reflect management’s
best currently available estimates and good faith judgment of the future competitive, operating, and regulatory environment and related
financial performance of the Company.
In our review, we did not obtain or receive any
independent evaluation or appraisal of the assets or liabilities of, nor did we conduct a comprehensive physical inspection of any of
the assets of, the Company, nor have we been furnished with any such evaluations or appraisals or reports of such physical inspections,
nor do we assume any responsibility to obtain any such evaluations, appraisals, or inspections. We did not estimate, and express no opinion
regarding, the liquidation value of any entity or business.
Our opinion is based on economic, monetary, regulatory,
market, and other conditions existing and which can be evaluated as of the date hereof. We have made no independent investigation of any
legal or accounting matters affecting the Company, and we have assumed the correctness in all respects material to our analysis of all
legal and accounting advice given to the Company and its Board of Directors, including, without limitation, advice as to the legal, accounting,
and tax consequences of the terms of, and transactions contemplated by, the Agreement to the Company and its stockholders. In addition,
in preparing this opinion, we have not taken into account any tax consequences of the Merger to either the Company or to any stockholder.
Our opinion speaks only as of the date hereof
and we expressly disclaim any undertaking or obligation to advise any person of any change in any fact or matter affecting our opinion
of which we become aware after the date hereof.
In rendering this opinion we have also assumed
that: (i) in all respects material to our analysis that the representations and warranties of each party contained in the Agreement
are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the Agreement,
and that all conditions to the consummation of the Merger will be satisfied without waiver thereof which would affect the amount or timing
of receipt of the Offer Price; (ii) there is not now, and there will not as a result of the consummation of the transactions contemplated
by the Agreement be, any default, or event of default, under any indenture, credit agreement, or other material agreement or instrument
to which the Company or any of its subsidiaries or affiliates is a party; and (iii) all material assets and liabilities (contingent
or otherwise, known or unknown) of the Company were as set forth in the consolidated financial statements provided to us by the Company
as of the respective dates of such financial statements.
In addition, we were not requested to and did
not provide advice concerning the structure, the specific amount of the consideration, or any other aspects of the Merger, or to provide
services other than the delivery of this opinion. We were not authorized to and did not solicit any expressions of interest from any other
parties with respect to the sale of all or any part of the Company or any other alternative transaction. We did not participate in negotiations
with respect to the terms of the Merger and related transactions. Consequently, we have assumed that such terms are the most beneficial
terms from the Company’s perspective that could under the circumstances be negotiated among the parties to such Merger.
This opinion is furnished for the use and benefit
of the Board of Directors in connection with their consideration of the Merger and may not be used for any other purpose without our prior
written consent. The opinion does not address the relative merits of the transactions contemplated by the Agreement as compared to any
alternative transactions that might be available to the Company, nor does it address the underlying business decision by the Company to
engage in the Merger or the terms of the Agreement or the documents referred to therein. Our opinion does not constitute a recommendation
as to how any stockholder should vote or act on any matter relevant to the Agreement.
Based upon and subject to the foregoing, it is
our opinion that, as of the date hereof, the Offer Price to be paid to the stockholders pursuant to the Agreement is fair from a financial
point of view to the stockholders of the Company.
| |
Very truly yours, |
| |
|
| |
/s/ Chessiecap Securities, Inc. |
| |
Chessiecap Securities, Inc. |
ANNEX B
SECTION 262 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
§ 262. Appraisal
rights
(a) Any stockholder of
a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the effective date of the merger, consolidation, conversion, transfer,
domestication or continuance, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the
merger, consolidation, conversion, transfer, domestication or continuance nor consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means
a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily
meant by those words; the words “depository receipt” mean a receipt or other instrument issued by a depository representing
an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository;
the words “beneficial owner” mean a person who is the beneficial owner of shares of stock held either in voting trust or by
a nominee on behalf of such person; and the word “person” means any individual, corporation, partnership, unincorporated association
or other entity.
(b) Appraisal rights
shall be available for the shares of any class or series of stock of a constituent, converting, transferring, domesticating or continuing
corporation in a merger, consolidation, conversion, transfer, domestication or continuance to be effected pursuant to § 251 (other
than a merger effected pursuant to § 251(g) of this title), § 252, § 254, § 255, § 256, § 257, § 258,
§ 263, § 264, § 266 or § 390 of this title (other than, in each case and solely with respect to a converted or domesticated
corporation, a merger, consolidation, conversion, transfer, domestication or continuance authorized pursuant to and in accordance with
the provisions of § 265 or § 388 of this title):
(1) Provided, however,
that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository
receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders,
or at the record date fixed to determine the stockholders entitled to consent pursuant to § 228 of this title, to act upon the agreement
of merger or consolidation or the resolution providing for the conversion, transfer, domestication or continuance (or, in the case of
a merger pursuant to § 251(h) of this title, as of immediately prior to the execution of the agreement of merger), were either: (i)
listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights
shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval
the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title.
(2) Notwithstanding paragraph
(b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent,
converting, transferring, domesticating or continuing corporation if the holders thereof are required by the terms of an agreement of
merger or consolidation, or by the terms of a resolution providing for conversion, transfer, domestication or continuance, pursuant to
§ 251, § 252, § 254, § 255, § 256, § 257, § 258, § 263, § 264, § 266 or § 390 of
this title to accept for such stock anything except:
a. Shares of stock of
the corporation surviving or resulting from such merger or consolidation, or of the converted entity or the entity resulting from a transfer,
domestication or continuance if such entity is a corporation as a result of the conversion, transfer, domestication or continuance, or
depository receipts in respect thereof;
b. Shares of stock of
any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or
depository receipts at the effective date of the merger, consolidation, conversion, transfer, domestication or continuance will be either
listed on a national securities exchange or held of record by more than 2,000 holders;
c. Cash in lieu of fractional
shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or
d. Any combination of
the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing
paragraphs (b)(2)a., b. and c. of this section.
(3) In the event all
of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 or § 267 of this title is not owned
by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
(4) [Repealed.]
(c) Any corporation may
provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or
series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation
is a constituent corporation, the sale of all or substantially all of the assets of the corporation or a conversion effected pursuant
to § 266 of this title or a transfer, domestication or continuance effected pursuant to § 390 of this title. If the certificate
of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d), (e), and (g)
of this section, shall apply as nearly as is practicable.
(d) Appraisal rights
shall be perfected as follows:
(1) If a proposed merger,
consolidation, conversion, transfer, domestication or continuance for which appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of
its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with §
255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section
that appraisal rights are available for any or all of the shares of the constituent corporations or the converting, transferring, domesticating
or continuing corporation, and shall include in such notice either a copy of this section (and, if 1 of the constituent corporations or
the converting corporation is a nonstock corporation, a copy of § 114 of this title) or information directing the stockholders to
a publicly available electronic resource at which this section (and, § 114 of this title, if applicable) may be accessed without
subscription or cost. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation,
before the taking of the vote on the merger, consolidation, conversion, transfer, domestication or continuance, a written demand for appraisal
of such stockholder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed
to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal
of such stockholder’s shares. A proxy or vote against the merger, consolidation, conversion, transfer, domestication or continuance
shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided.
Within 10 days after the effective date of such merger, consolidation, conversion, transfer, domestication or continuance, the surviving,
resulting or converted entity shall notify each stockholder of each constituent or converting, transferring, domesticating or continuing
corporation who has complied with this subsection and has not voted in favor of or consented to the merger, consolidation, conversion,
transfer, domestication or continuance, and any beneficial owner who has demanded appraisal under paragraph (d)(3) of this section, of
the date that the merger, consolidation or conversion has become effective; or
(2) If the merger, consolidation,
conversion, transfer, domestication or continuance was approved pursuant to § 228, § 251(h), § 253, or § 267 of this
title, then either a constituent, converting, transferring, domesticating or continuing corporation before the effective date of the merger,
consolidation, conversion, transfer, domestication or continuance, or the surviving, resulting or converted entity within 10 days after
such effective date, shall notify each stockholder of any class or series of stock of such constituent, converting, transferring, domesticating
or continuing corporation who is entitled to appraisal rights of the approval of the merger, consolidation, conversion, transfer, domestication
or continuance and that appraisal rights are available for any or all shares of such class or series of stock of such constituent, converting,
transferring, domesticating or continuing corporation, and shall include in such notice either a copy of this section (and, if 1 of the
constituent corporations or the converting, transferring, domesticating or continuing corporation is a nonstock corporation, a copy of
§ 114 of this title) or information directing the stockholders to a publicly available electronic resource at which this section
(and § 114 of this title, if applicable) may be accessed without subscription or cost. Such notice may, and, if given on or after
the effective date of the merger, consolidation, conversion, transfer, domestication or continuance, shall, also notify such stockholders
of the effective date of the merger, consolidation, conversion, transfer, domestication or continuance. Any stockholder entitled to appraisal
rights may, within 20 days after the date of giving such notice or, in the case of a merger approved pursuant to § 251(h) of this
title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days after the date of giving
such notice, demand in writing from the surviving, resulting or converted entity the appraisal of such holder’s shares; provided
that a demand may be delivered to such entity by electronic transmission if directed to an information processing system (if any) expressly
designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs such entity of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify
stockholders of the effective date of the merger, consolidation, conversion, transfer, domestication or continuance, either (i) each such
constituent corporation or the converting, transferring, domesticating or continuing corporation shall send a second notice before the
effective date of the merger, consolidation, conversion, transfer, domestication or continuance notifying each of the holders of any class
or series of stock of such constituent, converting, transferring, domesticating or continuing corporation that are entitled to appraisal
rights of the effective date of the merger, consolidation, conversion, transfer, domestication or continuance or (ii) the surviving, resulting
or converted entity shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however,
that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant
to § 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and
20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal
rights and who has demanded appraisal of such holder’s shares in accordance with this subsection and any beneficial owner who has
demanded appraisal under paragraph (d)(3) of this section. An affidavit of the secretary or assistant secretary or of the transfer agent
of the corporation or entity that is required to give either notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each
constituent corporation or the converting, transferring, domesticating or continuing corporation may fix, in advance, a record date that
shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective
date of the merger, consolidation, conversion, transfer, domestication or continuance, the record date shall be such effective date. If
no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day
next preceding the day on which the notice is given.
(3) Notwithstanding subsection
(a) of this section (but subject to this paragraph (d)(3)), a beneficial owner may, in such person’s name, demand in writing an
appraisal of such beneficial owner’s shares in accordance with either paragraph (d)(1) or (2) of this section, as applicable; provided
that (i) such beneficial owner continuously owns such shares through the effective date of the merger, consolidation, conversion, transfer,
domestication or continuance and otherwise satisfies the requirements applicable to a stockholder under the first sentence of subsection
(a) of this section and (ii) the demand made by such beneficial owner reasonably identifies the holder of record of the shares for which
the demand is made, is accompanied by documentary evidence of such beneficial owner’s beneficial ownership of stock and a statement
that such documentary evidence is a true and correct copy of what it purports to be, and provides an address at which such beneficial
owner consents to receive notices given by the surviving, resulting or converted entity hereunder and to be set forth on the verified
list required by subsection (f) of this section.
(e) Within 120 days after
the effective date of the merger, consolidation, conversion, transfer, domestication or continuance, the surviving, resulting or converted
entity, or any person who has complied with subsections (a) and (d) of this section and who is otherwise entitled to appraisal rights,
may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock
of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger, consolidation,
conversion, transfer, domestication or continuance, any person entitled to appraisal rights who has not commenced an appraisal proceeding
or joined that proceeding as a named party shall have the right to withdraw such person’s demand for appraisal and to accept the
terms offered upon the merger, consolidation, conversion, transfer, domestication or continuance. Within 120 days after the effective
date of the merger, consolidation, conversion, transfer, domestication or continuance, any person who has complied with the requirements
of subsections (a) and (d) of this section, upon request given in writing (or by electronic transmission directed to an information processing
system (if any) expressly designated for that purpose in the notice of appraisal), shall be entitled to receive from the surviving, resulting
or converted entity a statement setting forth the aggregate number of shares not voted in favor of the merger, consolidation, conversion,
transfer, domestication or continuance (or, in the case of a merger approved pursuant to § 251(h) of this title, the aggregate number
of shares (other than any excluded stock (as defined in § 251(h)(6)d. of this title)) that were the subject of, and were not tendered
into, and accepted for purchase or exchange in, the offer referred to in § 251(h)(2) of this title)), and, in either case, with respect
to which demands for appraisal have been received and the aggregate number of stockholders or beneficial owners holding or owning such
shares (provided that, where a beneficial owner makes a demand pursuant to paragraph (d)(3) of this section, the record holder of such
shares shall not be considered a separate stockholder holding such shares for purposes of such aggregate number). Such statement shall
be given to the person within 10 days after such person’s request for such a statement is received by the surviving, resulting or
converted entity or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section,
whichever is later.
(f) Upon the filing of
any such petition by any person other than the surviving, resulting or converted entity, service of a copy thereof shall be made upon
such entity, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed
a duly verified list containing the names and addresses of all persons who have demanded appraisal for their shares and with whom agreements
as to the value of their shares have not been reached by such entity. If the petition shall be filed by the surviving, resulting or converted
entity, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give
notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving, resulting or converted
entity and to the persons shown on the list at the addresses therein stated. The forms of the notices by mail and by publication shall
be approved by the Court, and the costs thereof shall be borne by the surviving, resulting or converted entity.
(g) At the hearing on
such petition, the Court shall determine the persons who have complied with this section and who have become entitled to appraisal rights.
The Court may require the persons who have demanded an appraisal for their shares and who hold stock represented by certificates to submit
their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any
person fails to comply with such direction, the Court may dismiss the proceedings as to such person. If immediately before the merger,
consolidation, conversion, transfer, domestication or continuance the shares of the class or series of stock of the constituent, converting,
transferring, domesticating or continuing corporation as to which appraisal rights are available were listed on a national securities
exchange, the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless
(1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal,
(2) the value of the consideration provided in the merger, consolidation, conversion, transfer, domestication or continuance for such
total number of shares exceeds $1 million, or (3) the merger was approved pursuant to § 253 or § 267 of this title.
(h) After the Court determines
the persons entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery,
including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of
the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, consolidation, conversion,
transfer, domestication or continuance, together with interest, if any, to be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise
for good cause shown, and except as provided in this subsection, interest from the effective date of the merger, consolidation, conversion,
transfer, domestication or continuance through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5%
over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective
date of the merger, consolidation or conversion and the date of payment of the judgment. At any time before the entry of judgment in the
proceedings, the surviving, resulting or converted entity may pay to each person entitled to appraisal an amount in cash, in which case
interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the
fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application
by the surviving, resulting or converted entity or by any person entitled to participate in the appraisal proceeding, the Court may, in
its discretion, proceed to trial upon the appraisal prior to the final determination of the persons entitled to an appraisal. Any person
whose name appears on the list filed by the surviving, resulting or converted entity pursuant to subsection (f) of this section may participate
fully in all proceedings until it is finally determined that such person is not entitled to appraisal rights under this section.
(i) The Court shall direct
the payment of the fair value of the shares, together with interest, if any, by the surviving, resulting or converted entity to the persons
entitled thereto. Payment shall be so made to each such person upon such terms and conditions as the Court may order. The Court’s
decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving, resulting or converted entity
be an entity of this State or of any state.
(j) The costs of the
proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application
of a person whose name appears on the list filed by the surviving, resulting or converted entity pursuant to subsection (f) of this section
who participated in the proceeding and incurred expenses in connection therewith, the Court may order all or a portion of such expenses,
including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the
value of all the shares entitled to an appraisal not dismissed pursuant to subsection (k) of this section or subject to such an award
pursuant to a reservation of jurisdiction under subsection (k) of this section.
(k) Subject to the remainder
of this subsection, from and after the effective date of the merger, consolidation, conversion, transfer, domestication or continuance,
no person who has demanded appraisal rights with respect to some or all of such person’s shares as provided in subsection (d) of
this section shall be entitled to vote such shares for any purpose or to receive payment of dividends or other distributions on such shares
(except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger,
consolidation, conversion, transfer, domestication or continuance). If a person who has made a demand for an appraisal in accordance with
this section shall deliver to the surviving, resulting or converted entity a written withdrawal of such person’s demand for an appraisal
in respect of some or all of such person’s shares in accordance with subsection (e) of this section, either within 60 days after
such effective date or thereafter with the written approval of the corporation, then the right of such person to an appraisal of the shares
subject to the withdrawal shall cease. Notwithstanding the foregoing, an appraisal proceeding in the Court of Chancery shall not be dismissed
as to any person without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just, including
without limitation, a reservation of jurisdiction for any application to the Court made under subsection (j) of this section; provided,
however that this provision shall not affect the right of any person who has not commenced an appraisal proceeding or joined that proceeding
as a named party to withdraw such person’s demand for appraisal and to accept the terms offered upon the merger, consolidation,
conversion, transfer, domestication or continuance within 60 days after the effective date of the merger, consolidation, conversion, transfer,
domestication or continuance, as set forth in subsection (e) of this section. If a petition for an appraisal is not filed within the time
provided in subsection (e) of this section, the right to appraisal with respect to all shares shall cease.
(l) The shares or other
equity interests of the surviving, resulting or converted entity to which the shares of stock subject to appraisal under this section
would have otherwise converted but for an appraisal demand made in accordance with this section shall have the status of authorized but
not outstanding shares of stock or other equity interests of the surviving, resulting or converted entity, unless and until the person
that has demanded appraisal is no longer entitled to appraisal pursuant to this section.
B-5
Exhibit (e)(4)
CONFIDENTIALITY AGREEMENT
This Confidentiality
Agreement (the “Agreement”) is entered into by and between FOCUS Investment Banking LLC, with its principal place of business
at 8065 Leesburg Pike, Suite 750, Vienna, VA 22182 USA, and Bucher and Christian Consulting, Inc. dba BCforward (“Bidder”),
with its principal place of business at 9777 N. College Avenue, Indianapolis, IN 46280 (each, a “Party” and collectively, the “Parties”),
The Parties agree:
| 1. | Confidential Information Defined. As
used in this Agreement, the term “Confidential Information” means all disclosures made by one Party (the “Disclosing Party’’)
to the other or by both Parties to each other, whether in writing, by oral communication, by visual observation or otherwise, regarding
FOCUS’ client company TSR, Inc. (hereinafter referred to as the “Client”), in connection with a potential negotiated transaction
between Client and Bidder (a “Possible Transaction”). Confidential Information shall include the fact that the Confidential Information
has been made available and that the Parties are discussing a Possible Transaction. Confidential Information shall not include information
that: (a) is now or subsequently becomes publicly known through no breach of this Agreement; or (b) the receiving Party can show by written
records is known to the receiving Party at the time of disclosure or is independently developed by the receiving Party without use of
or reference to the Confidential Information; or (c) is received from a third party, other than the Client, who had a lawful right to
disclose such Confidential Information. |
| 2. | Nondisclosure and Nonuse of Confidential Information. Unless
otherwise authorized in writing, a Party which receives Confidential Information (“Recipient”) shall keep Confidential
Information secret and will not disclose, publish or disseminate any Confidential Information to anyone other than: (a) those of its
directors, officers, employees, financial or legal advisors, or clients with a need to know for the specific purpose of evaluating
the information and participating in negotiations regarding a Possible Transaction, provided that such persons agree to be bound by
the obligations set forth in this Agreement; or (b) as required by judicial or governmental request, requirement or order, provided
that Recipient first immediately notifies the Disclosing Party of any such request, requirement or order so that the Disclosing
Party may seek a protective order or other appropriate remedy. Recipient agrees to use reasonable care, but in no event less than
the same degree of care that is used to protect its own confidential and proprietary information, to prevent the unauthorized use,
disclosure, publication or dissemination of Confidential Information. Recipient agrees to accept and use Confidential Information
for the sole purpose of evaluation of the Possible Transaction, and for no other purpose. |
| 3. | Return of Confidential Information. Upon termination of this
Agreement or within ten (10) business days after receipt of a written request, all Confidential Information in tangible formats
shall be returned by the Recipient to the other Party or the Recipient shall certify in writing to the other Party that all such
Confidential Information has been destroyed. |
| 4. | Length of Obligation. Recipient
shall safeguard Confidential Information furnished by the other Party for a period of twenty-four (24) months from the date of disclosure
of any such Confidential Information. |
| 5. | No Obligation to Complete Transaction. Neither
the delivery nor the receipt of Confidential Information shall be interpreted as obligating either party to continue any discussions
or negotiate or enter into any definitive agreement regarding a transaction. The Recipient understands that the other Party has not made
nor is making any representation or warranty to the Recipient as to the accuracy or completeness of the Confidential Information delivered
hereunder. |
| 6. | No Solicitation. Bidder
agrees that, for a period of twenty-four (24) months from the date of this Agreement, it and its affiliates will not knowingly, as a
result of knowledge or information obtained from the Disclosing Party’s Confidential Information or otherwise in connection with a Possible
Transaction, directly or indirectly: (a) divert or attempt to divert any business or customer of the Client or its affiliates; or (b)
employ, other than pursuant to a general solicitation of employment, or attempt to employ a key employee of the Client or any of its
affiliates with whom Recipient has contact during the discussion, so long as such person remains employed by Client or any of its affiliates. |
| 7. | Securities Laws. Bidder
acknowledges that the Confidential Information may include material nonpublic information (within the meaning of the securities laws
of the United States) with respect to Client. Bidder
hereby acknowledges that it is aware, and that it will advise its respective representatives who are informed as to the matters which
are the subject of this Agreement, that the United States securities laws prohibit any person who has received from the other party material,
non-public information concerning the matters which are the subject of this Agreement from purchasing or selling the securities of Client
or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person
is likely to purchase or sell securities of the other party in reliance upon such information. Bidder agrees not to use and will cause
its representatives to agree not to use any Confidential Information of Client in violation of applicable securities laws. |
| 8. |
Standstill. Bidder agrees that beginning on the date of this Agreement and continuing for twenty-four (24) months after the date on which the parties terminate discussions concerning a potential transaction (the “Standstill Period”), neither Bidder nor any of its affiliates or representatives will in any manner, directly or indirectly, unless specifically invited in writing by the Client’s Board of Directors: |
| (a) | offer, seek, effect or propose (whether publicly or otherwise) to effect, or cause or participate
in, or in any way assist any other person to offer, seek, effect or propose (whether publicly or otherwise) to effect or participate
in (i) any acquisition of beneficial ownership of any securities issued by Client or its
affiliates or any of Client’s or its affiliates’ assets; (ii) any tender or exchange offer, merger or other business
combination involving Client or its affiliates; (iii) any recapitalization, restructuring, liquidation, dissolution or other similar
transaction with respect to Client or its affiliates; or (iv) any “solicitation” of “proxies” (as those
terms are used in the proxy rules of the Securities and Exchange Commission) to vote, or refrain from voting, any voting securities
issued by Client or to solicit any consents of the stockholders of Client or its affiliates; |
| (b) | form, join or in any way participate in a “group”
(as defined in the Securities Exchange Act of 1934, as amended) with respect to any securities issued by Client or its affiliates, or
otherwise seek, alone or together with other persons, to control or influence the management, Board of Directors or policies of Client
or its affiliates; |
| (c) | make any public announcement with respect to, or submit an
unsolicited proposal for or offer of (with or without condition), any extraordinary transaction involving Client or its securities or
assets; |
| (d) | take any action that could require Client or its affiliates
to make a public announcement regarding any of the types of transactions or matters set forth in paragraph (a); |
| (e) | agree or offer to take, or encourage or propose (publicly
or otherwise) the taking of, any action referred to in clauses (a), (b), (c), or (d); |
| (f) | assist, advise, induce or encourage any other person to take
any action of the type referred to in clauses (a), (b), (c), (d), or (e); or |
| (g) | enter into any discussion or arrangements with any third party
with respect to any of the foregoing. |
Bidder also
agrees during the Standstill Period not to request Client (or its directors, officers, employees or agents), directly or indirectly,
to amend or waive any provision of this Section 8 (including this sentence).
Bidder
further agrees that unless otherwise directed by Client in writing (i) all communications with Client regarding a Possible
Transaction, (ii) requests for additional information, facility tours, or management meetings, and (iii) discussions or questions
regarding procedures with respect to a Possible Transaction, will be submitted or directed by Bidder or its representatives only to
FOCUS Investment Banking LLC (“FOCUS”), as Client’s financial advisor, or a person or persons designated in
writing by FOCUS.
The provisions
of this Section 8 shall terminate upon the public announcement by Client that it has entered into a definitive agreement providing for
the Possible Transaction with any person or persons. The expiration of this Section 8 shall not terminate or otherwise affect any of the
other provisions of this letter agreement.
| 9. | Miscellaneous Provisions. This Agreement expresses the
entire Agreement and understanding of the Parties with respect to the subject matter hereof. Each Party retains its entire right, title
and interest, including all intellectual property rights, in and to all of its Confidential Information. Any disclosure of such Confidential
Information hereunder shall not be construed as an assignment, grant, option, license or other transfer of any such right, title or interest
whatsoever to the Recipient or any of its Representatives. The provisions of this Agreement are severable and the unenforceability of
any provision of this Agreement shall not affect the enforceability of any other provision hereof. This Agreement shall be construed
and enforced in accordance with the laws of the State of Delaware. No failure or delay by either party to exercise its rights under this
Agreement will operate as a waiver thereof. Neither party shall have the right to assign this Agreement without the prior written consent
of the other party. Client is an express third-party
beneficiary of this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were
a party hereto. The Parties agree that money damages would not be a sufficient remedy for any breach of this Agreement by the Recipient
and that, in addition to all other remedies it may be entitled to, the other Party shall be entitled
to seek specific performance and injunction or other equitable relief as a remedy for any breach. |
This Agreement is understood and agreed
to by the duly authorized representatives of the Parties:
| FOCUS INVESTMENT BANKING LLC |
|
BUCHER AND CHRISTIAN
CONSULTING, INC. dba BCFORWARD |
| |
|
|
| By: |
/s/ George M. Shea |
|
By: |
/s/
Justin P Christian |
| Name: |
George M. Shea |
|
Name: |
Justin P
Christian |
| Title: |
Managing Director |
|
Title: |
President
& CEO |
| |
|
|
| Date: |
9/19/2023 |
|
Date: |
9/14/2023 |
3
Exhibit (e)(5)
DUE DILIGENCE AND EXCLUSIVITY
AGREEMENT
This Due Diligence
and Exclusivity Agreement (this “Agreement”) is dated as of January 10, 2024 (the “Effective Date”),
by and between Bucher and Christian Consulting, Inc. d/b/a BCforward or an affiliate thereto (“BCF”) and TSR, Inc.,
a Delaware corporation (the “Company”).
Recitals
WHEREAS,
BCF and the Company are exploring a potential transaction (the “Proposed Transaction”) pursuant to which BCF or one
or more of its affiliates would acquire all of the issued and outstanding equity interests of the Company (through merger or otherwise).
In order to allow discussions with respect to the Proposed Transaction to occur among the parties and their representatives and in consideration
of the significant time and expense to be incurred by each party in evaluating the Proposed Transaction, the parties desire to set forth
certain understandings and commitments related to the matters described in this Agreement.
NOW, THEREFORE,
in consideration of the recitals set forth above, the terms and conditions set forth below, the substantial commitment of time and resources
by each party necessary to conduct the due diligence investigation described herein and other good and valuable consideration, the receipt
and sufficiency of which the parties acknowledge, and intending to be legally bound, the parties agree as follows:
1. This
Agreement shall be subject to the terms of that certain Confidentiality Agreement executed between BCF and the Company on September 14,
2023 (the “NDA”).
2. During
the Exclusivity Period (as defined below), each party (the “Responding Party”) shall respond promptly to and in good
faith, and shall direct its Representatives (as defined below) as necessary to respond promptly and in good faith, to reasonable due diligence
requests concerning the Responding Party and its business or the Proposed Transaction posed in good faith by the other party (the “Requesting
Party”) or its Representatives, including without limitation personnel of the Requesting Party and its affiliates, outside legal
counsel, independent auditors, tax and insurance advisors, other outside advisors and consultants that the Requesting Party or its affiliates
may specifically retain in connection with its due diligence activities or its evaluation of the Proposed Transaction, and BCF’s
or its affiliates’ financing sources and their respective Representatives, so long as such due diligence requests do not unreasonably
interfere with the operations of the business of the Company and provided, that in no event shall the foregoing require the Responding
Party or any of its Representatives to take or omit to take any action following such time as the Company may determine in its sole discretion
not to proceed with the Proposed Transaction. As used in this Agreement, the “Representatives” of a person are its
directors, officers, managers, employees, agents, investment bankers, lending institutions, attorneys, accountants, consultants, advisors,
and other representatives. Each Requesting Party shall conduct its due diligence investigation subject to the NDA and will work with the
Responding Party to minimize the disruption to the operations of the Responding Party caused by the investigation.
3.
The Company and BCF shall continue to discuss on an exclusive basis the Proposed Transaction, including the negotiation of the terms
thereof and the potential definitive documentation regarding the same (collectively, the “Definitive Agreements”)
for a period beginning upon the Effective Date and any applicable extension, until the earlier of (i) the execution of a definitive
agreement by the Company and BCF with respect to the Proposed Transaction, (ii) the mutual agreement of the Company and BCF to
terminate this Agreement, and (iii) 11:59 PM (EDT) on the date that is 60 calendar days following the Effective Date (the
“Exclusivity Period”); provided, however, that in no event shall the foregoing require the Company to continue
such discussions if the Company determines in its sole discretion not to proceed with the Proposed Transaction. The Exclusivity
Period shall be extended for an additional 14 calendar day period subject to BCF’s confirmation that it does not intend to
reduce the most recent price per share offered in writing by BCF to the Company prior to the Effective Date. For the avoidance of
doubt, nothing in this Agreement shall give rise to or result in any obligation on the part of the Company, any of its shareholders
or BCF to enter into any Definitive Agreement or otherwise consummate or agree to consummate any transaction and the Company and BCF
hereby agree that they will have no obligation to continue discussions or negotiations with each other over the Proposed Transaction
following expiration of the Exclusivity Period. Each party reserves the right, in its sole discretion, for any reason or for no
reason, to reject any and all proposals made to it or its Representatives with regard to the Proposed Transaction and to determine
to not proceed with the Proposed Transaction at any time.
4. The
Company shall not, and shall cause its subsidiaries and use its commercially reasonable efforts to cause its and their officers and directors
not to, and shall direct the Company and its subsidiaries’ agents, Representatives, stockholders or affiliates, in each case who
have been informed of the Proposed Transaction (the Company and all such persons and entities, the “Company Group”),
not to, directly or indirectly, discuss, negotiate, or engage with any third party (other than BCF or its affiliates), during the Exclusivity
Period, regarding any potential transaction pursuant to which such third party or any group of one or more third parties would acquire,
directly or indirectly, by purchase, merger, exchange, lease, license or other means, either (a) all or a majority of the equity interests,
now or hereafter existing, in the Company or any direct or indirect owner of any equity interest in the Company or (b) all or substantially
all of the business or the assets of the Company used or useful in the Company’s business in any case outside the ordinary course of the
Company’s business as it is presently conducted (each, a “Prohibited Potential Transaction”). During the Exclusivity
Period, the Company shall promptly notify BCF of the receipt by the Company or any of its Representatives of any oral, written, or electronic
offer, indication of interest, proposal or inquiry (collectively, an “Offer”) relating to any Prohibited Potential
Transaction. Notwithstanding the foregoing, nothing in this paragraph shall prohibit or limit a member of the Company Group, in response
to an unsolicited inquiry received during the Exclusivity Period, from indicating to any person or entity making such unsolicited inquiry
that it is not permitted to respond to any Prohibited Potential Transaction.
5.
BCF and the Company each acknowledges that any breach of paragraph 4 of this Agreement would cause irreparable harm for which
monetary damages would be an inadequate remedy. Accordingly, BCF and the Company agrees that BCF or the Company, as the case may be,
may seek equitable relief in the event of any breach or threatened breach of paragraph 4 of this Agreement, including without
limitation injunctive relief against any such breach and specific performance of the obligations in such paragraphs, in addition to
any other remedy to which the other party may be entitled, without the need to post any security.
6. BCF
and the Company each shall be responsible for its own costs and expenses with respect to this Agreement and the Proposed Transaction.
7. This
Agreement, together with the NDA previously executed between BCF and the Company, represents the entire agreement among the parties concerning
the Proposed Transaction and supersedes any prior or contemporaneous understanding concerning such subject matter. This Agreement may
only be amended by a writing signed by BCF and the Company. The parties acknowledge that no party should be deemed the principal or sole
draftsman of this Agreement for any purpose. References to one gender shall be deemed to include the other gender and the neuter, and
references to the neuter shall be deemed to include both genders.
8. This
Agreement and any disputes or proceedings (whether in contract or tort) that may be based upon, arise out of, or relate to this Agreement
shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the principles
of conflicts of law thereof. The parties agree (i) that any action arising out of, relating to or in connection with this Agreement shall
be instituted in the Chancery Court of the State of Delaware and any state appellate court therefrom located within the State of Delaware
(or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court
within the state of Delaware); (ii) that in the event of any such action, such parties will consent and submit to the personal jurisdiction
of any such court described in the preceding clause (i) of this section and to service of process upon them in accordance with the rules
and statutes governing service of process; and (iii) waive to the full extent permitted by law any objection that they may now or hereafter
have to the venue of any such action in any such court or that any such action was brought in an inconvenient forum. THE PARTIES HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING IN ANY COURT RELATING TO ANY DISPUTE, CONTROVERSY
OR CLAIM ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS LETTER AGREEMENT.
9. This
Agreement may be executed in one or more counterparts, all of which shall collectively be considered a single instrument, and either party
may execute this Agreement using a signature page in “PDF” format.
[Signatures on next page]
The parties have executed this Agreement by their duly authorized
representatives as of the date first above written.
| Bucher and Christian Consulting, Inc. |
|
TSR Inc. |
| |
|
|
|
|
| By: |
/s/ Justin P. Christian |
|
By: |
/s/ Thomas C. Salerno |
| Name: |
Justin P. Christian |
|
Name: |
Thomas C. Salerno |
| Title: |
President / CEO |
|
Title: |
CEO |
Signature Page to Due
Diligence and Exclusivity Agreement
Exhibit (e)(6)
FIRST AMENDMENT TO
DUE DILIGENCE AND EXCLUSIVITY
AGREEMENT
This First
Amendment to Due Diligence and Exclusivity Agreement (“First Amendment”) is effective as of March 11, 2024, by and
between Bucher and Christian Consulting, Inc. d/b/a BCforward, an Indiana corporation (“BCF”), and TSR, Inc., a Delaware
corporation (the “Company” and together with BCF, the “Parties”)
WHEREAS,
the Parties entered into that certain Due Diligence and Exclusivity Agreement dated January 10, 2024 (“Original Agreement”).
WHEREAS,
the Parties desire to amend the Original Agreement on the terms and conditions set forth in this First Amendment. As amended, the Original
Agreement is referred to as the “Agreement.”
NOW THEREFORE,
in consideration of the mutual covenants and agreements included in this First Amendment and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agrees as follows:
| 1. | The first sentence of paragraph 3 of the Original Agreement
is hereby amended and restated and replaced in its entirety by the following sentence: |
“The Company and BCF shall
continue to discuss on an exclusive basis the Proposed Transaction, including the negotiation of the terms thereof and the potential definitive
documentation regarding the same (collectively, the “Definitive Agreements”) for a period beginning upon the Effective
date and any applicable extension, until the earlier of (i) the execution of a definitive agreement by the Company and BCF with respect
to the Proposed Transaction, (ii) the mutual agreement of the Company and BCF to terminate this Agreement, and (iii) 5:00 pm Eastern Standard
Time on March 25, 2024 (the “Exclusivity Period”); provided, however, that in no event shall the foregoing require
the Company to continue such discussions if the Company determines in its sole discretion not to proceed with the Proposed Transaction.”
| 2. | The Agreement is and shall continue to be in full force and
effect, except as amended by this First Amendment. |
| 3. | Any and all defined terms which are not explicitly defined
herein shall have the meaning ascribed to them in the Original Agreement. |
| 4. | This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall be deemed to be one and the same instrument. A signed copy of this First
Amendment delivered by facsimile, e-mail, or other means of electronic transmission shall have the same legal effect as delivery of an
original signed copy of this Agreement. |
[Signatures on next page]
IN WITNESS WHEREOF, the Parties
have duly executed and delivered this First Amendment effective as of the date first written above.
| |
Bucher and Christian Consulting, Inc. |
| |
|
|
| |
By: |
/s/ Justin P. Christian |
| |
Name: |
Justin P. Christian |
| |
Title: |
President and Chief Executive Officer |
| |
TSR, Inc. |
| |
|
| |
By: |
/s/ Thomas Salerno |
| |
Name: |
Thomas Salerno |
| |
Title: |
President & CEO |
Exhibit (e)(7)
SECOND AMENDMENT TO
DUE DILIGENCE AND EXCLUSIVITY
AGREEMENT
This
Second Amendment to Due Diligence and Exclusivity Agreement (“Second Amendment”) is effective as of March 26,
2024, by and between Bucher and Christian Consulting, Inc. d/b/a BCforward, an Indiana corporation (“BCF”), and
TSR, Inc., a Delaware corporation (the “Company” and together with BCF, the “Parties”).
WHEREAS,
the Parties entered into that certain Due Diligence and Exclusivity Agreement, dated January 10, 2024 (“Original Agreement”),
as amended by that certain First Amendment to Due Diligence and Exclusivity Agreement, dated March 11, 2024 (“First Amendment”).
WHEREAS,
the Parties desire to amend the Original Agreement on the terms and conditions set forth in this Second Amendment. As amended, the
Original Agreement is referred to as the “Agreement.”
NOW
THEREFORE, in consideration of the mutual covenants and agreements included in this Second Amendment and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agrees as
follows:
| 1. | The first sentence of paragraph 3 of the Original Agreement is hereby amended and restated and
replaced in its entirety by the following sentence: |
“The
Company and BCF shall continue to discuss on an exclusive basis the Proposed Transaction, including the negotiation of the terms
thereof and the potential definitive documentation regarding the same (collectively, the “Definitive Agreements”)
for a period beginning upon the Effective date and any applicable extension, until the earlier of (i) the execution of a definitive
agreement by the Company and BCF with respect to the Proposed Transaction, (ii) the mutual agreement of the Company and BCF to
terminate this Agreement, (iii) in the event that BCF fails to confirm in writing a purchase price of $13.40 per share within 24
hours following a written request for such confirmation by the Company; and (iv) 5:00 pm Eastern Standard Time on April 9, 2024 (the
“Exclusivity Period”); provided, however, that in no event shall the foregoing require the Company to continue
such discussions if the Company determines in its sole discretion not to proceed with the Proposed Transaction.”
| 2. | The Agreement is and shall continue to be in full force and effect, except as amended
by this Second Amendment. |
| 3. | Any and all defined terms which are not explicitly defined herein shall have the
meaning ascribed to them in the Original Agreement. |
| 4. | This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed to be one and the same instrument. A signed copy of this Second Amendment
delivered by facsimile, e-mail, or other means of electronic transmission shall have the same legal effect as delivery of an
original signed copy of this Agreement. |
[Signatures on next page]
IN WITNESS WHEREOF, the Parties
have duly executed and delivered this Second Amendment effective as of the date first written above.
| |
Bucher and Christian Consulting, Inc. |
| |
|
| |
By: |
/s/ Justin P. Christian |
| |
Name: |
Justin P. Christian |
| |
Title: |
President and Chief Executive Officer |
| |
|
|
| |
TSR, Inc. |
| |
|
|
| |
By: |
/s/ Thomas Salerno |
| |
Name: |
Thomas Salerno |
| |
Title: |
President and CEO |
Exhibit (e)(8)
THIRD AMENDMENT
TO
DUE
DILIGENCE AND EXCLUSIVITY AGREEMENT
This
Third Amendment to Due Diligence
and Exclusivity Agreement (“Third Amendment”)
is effective as of April 9, 2024,
by and between Bucher and
Christian Consulting, Inc. d/b/a BCforward, an Indiana corporation
(“BCF”), and TSR, Inc., a Delaware corporation (the “Company” and together
with BCF, the “Parties”).
WHEREAS,
the Parties entered into that
certain Due Diligence and Exclusivity Agreement, dated January
10, 2024 (“Original Agreement”), as amended by
that certain First Amendment to
Due Diligence and Exclusivity Agreement, dated March
11, 2024 (“First Amendment”), and as amended
by that certain Second Amendment
to Due Diligence and Exclusivity
Agreement, dated March 26, 2024 (“Second Amendment”).
WHEREAS,
the Parties desire to
amend the Original Agreement on the terms and conditions
set forth in this Third Amendment.
As amended, the Original Agreement is referred to
as the “Agreement.”
NOW
THEREFORE, in consideration
of the mutual covenants and agreements
included in this Third Amendment and other good and valuable consideration,
the receipt and sufficiency of
which are hereby acknowledged,
the Parties, intending to be
legally bound, agrees as follows:
| 1. | The
first sentence of paragraph 3 of the Original Agreement is hereby amended and restated and replaced in its entirety by the following
sentence: |
“The
Company and BCF shall continue to discuss on an exclusive basis the Proposed Transaction, including the negotiation of the terms
thereof and the potential definitive documentation regarding the same (collectively, the “Definitive Agreements”)
for a period beginning upon the Effective date and any applicable extension, until the earlier of (i) the execution of a definitive
agreement by the Company and BCF with respect to the Proposed Transaction, (ii) the mutual agreement of the Company and BCF to
terminate this Agreement, and (iii) 5:00 pm Eastern Standard Time on April 26, 2024 (the
“Exclusivity Period”); provided, however, that (x) the Company shall have the right to terminate this Agreement
(and the Exclusivity Period shall expire) upon 1 days’
written notice to BCF in the event that BCF or any of its advisors proposes or communicates to the Company or any of its advisors a
purchase price of less than $13.40 per share and (y) in no event shall the foregoing require the Company to continue such
discussions if the Company determines in its sole discretion not to proceed with the Proposed Transaction.”
| 2. | The
Agreement is and shall continue to be in full force and effect, except as amended by this Third Amendment. |
| 3. | Any
and all defined terms which are not explicitly defined herein shall have the meaning ascribed to them in the Original Agreement. |
| 4. | This
Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be
one and the same instrument. A signed copy of this Third Amendment delivered by facsimile, e-mail, or other means of electronic transmission
shall have the same legal effect as delivery of an original signed copy of this Agreement. |
[Signatures on next
page]
IN
WITNESS WHEREOF, the Parties have duly executed and delivered this Third Amendment effective as of the date first written above.
|
Bucher and Christian Consulting, Inc. |
| |
| |
| |
By: | /s/ Justin P.
Christian |
| |
Name: | Justin P.
Christian |
| |
Title: | President and
Chief Executive Officer |
| |
| |
| |
TSR, Inc. |
| |
| |
| |
By: | /s/ Thomas
Salerno |
| |
Name: | Thomas Salerno |
| |
Title: |
President and CEO |
Exhibit (e)(15)
January 1, 2023
Mohammed Shah Syed
90 Russell Street
Woodbridge, NJ 07095
Dear Shah:
TSR, Inc., a
Delaware corporation (“TSR” or the “Company”) is pleased to offer you employment pursuant to the following
terms and conditions provided herein, and this will constitute your employment agreement (“Agreement”).
1. Term of
Employment. Except for earlier termination as provided in Section 4 hereof, the term of employment under this Agreement (“Term
of Employment”) will commence on January 1, 2023, unless otherwise agreed to in writing by you and the Company (“Effective
Date”) and will continue thereafter until second (2nd) anniversary of the Effective Date. Your employment with the
Company upon the expiration of this Agreement shall be at-will if no new or amended employment agreement is in place between the parties
at that time. Your at-will employment relationship shall mean that you or the Company may separate your employment at any time, with
or without reason, without notice. For the avoidance of doubt, you shall not be eligible for any severance benefits pursuant to this
Agreement, under any circumstances, after the Term of Employment.
2. Employment
Position and Duties.
2.1 During
the employment, you shall serve as the Director of Recruiting and Sales and shall have the duties, responsibilities, functions and authority
appropriate to the position of Director of Recruiting and Sales, in each case subject to the power and authority of the Chief Executive
Officer of the Company (the “CEO”). Employee shall render to Company services that are consistent with Employee’s position,
or as the Company may, from time to time, reasonably direct.
2.2 You
shall report to the CEO and shall devote your full business time and attention to the business and affairs of the Company. So long as
you are employed by the Company, you shall not, without the prior written consent of the Company CEO, perform other services for compensation
for the benefit of any Person other than the Company and its Affiliates; provided, that the foregoing shall not prevent you from
(i) serving on the boards of directors of non-profit organizations and, with the prior written approval of the CEO, other for profit companies,
(ii) participating in charitable, civic, educational, governmental, professional, community or industry affairs, and (iii) managing your
passive personal investments, in each case, so long as such activities do not violate Section 5, and do not, individually or in the aggregate,
materially or unreasonably interfere or conflict with Employee’s duties hereunder or create a potential or actual business or fiduciary
conflict.
For purposes
of this Agreement, “Affiliate” of any specified Person means, with respect to (i) any Person, any other Person directly
or indirectly controlling, controlled by or under direct or indirect common control with, such specified Person and (ii) any Person that
is a natural Person, the spouse, ancestors or lineal descendants of such Person, any limited partnership or limited liability company
controlled by such Person or such Person’s spouse, ancestors or lineal descendants or in which such Person or such Person’s spouse, ancestors
or lineal descendants holds a majority interest, any trust established for the benefit of any of them and such Person’s estate or legal
representative. For purposes of this Agreement, “Person” means any natural person, corporation, partnership (whether
general or limited), limited liability company, association, custodian, nominee, trust, estate, joint venture, governmental authority
or other individual or entity.
3. Compensation
and Other Remuneration. In exchange for services rendered by you hereunder, Company shall provide the following:
3.1 Base
Salary. During your Term of Employment, the Company will pay to you a base salary at the rate of not less than Three Hundred and Twenty-Five
Thousand Dollars ($325,000.00) per annum as adjusted from time to time (the “Base Salary”). Base Salary will be paid
in accordance with the Company’s customary payroll practices (in effect from time to time, but in no event less frequently than monthly)
and shall be subject to payroll deductions and required withholdings. Any increases to the Base Salary shall be determined by the CEO
in his sole discretion.
3.2 Annual
Bonus Program. In addition to the Base Salary, you shall be eligible to participate in the Company’s annual bonus for each fiscal
year during the Term of Employment (the “Annual Bonus”). The fiscal year (“FY”) is June 1 to May 31. The Annual Bonus
will be payable by the Company within 30 days of the end of the FY for which such Annual Bonus relates, in accordance with the Company’s
customary payroll practices in effect from time to time. In order to be eligible, you must be actively working for the Company on the
date any bonuses are paid including the Annual Bonus. For the avoidance of doubt, the Annual Bonus is not earned until paid. The Annual
Bonus during the Term of Employment shall be agreed upon in writing by you and the Company and determined based on individual performance
and Company financial information, among other factors as agreed upon by you and the Company, and which shall be attached as Addendum
A. Any Annual Bonus for following years after the Term of Employment, if any, shall be established by the Company in its sole discretion.
3.3
Equity. Employee shall be eligible to participate in the TSR, Inc. 2020 Equity Incentive Plan.
3.4 Benefits.
During your employment, you shall be eligible to participate in the Company’s retirement, health and welfare employee benefit plans
and to the Company’s long-term incentive plans that are generally available to its senior management employees. Your participation
in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company
policies. Notwithstanding the foregoing, the Company, in its sole discretion, may modify or terminate any employee benefit plan at
any time.
3.5 Car
Allowance. During the Term of Employment, the Company shall provide you with a car allowance of Five Hundred Dollars ($500.00) per
month.
3.6 Business
Expenses. During Employee’s employment, the Company shall reimburse Employee for all reasonable and approved business expenses incurred
by Employee in the course of performing Employee’s duties and responsibilities under this Agreement, which business expenses are consistent
with the Company’s policies in effect from time to time, subject to the Company’s requirements with respect to reporting and documentation
of such expenses.
4.
Termination.
4.1 Termination
for Cause. The Company may terminate your employment and all of the Company’s obligations hereunder, other than its obligations set
forth below in this Section 4.1, at any time for “Cause.” “Cause” shall mean termination because of your (a)
conviction (treating a nolo contendere plea as a conviction) of a felony (whether or not any right to appeal has been or may be exercised),
(b) willful failure or refusal without proper cause to perform your duties with the Company, including your obligations under this Agreement
(other than any such failure resulting from your incapacity due to physical or mental impairment) and, after having been given written
notice thereof by the Company, failure to correct such willful failure or refusal to perform (if curable) within thirty (30) days after
receipt of such notice, (c) misappropriation, embezzlement or reckless or willful destruction of Company property, (d) breach of any statutory
or common law duty of loyalty to the Company, (e) violation of any material Company policy including its harassment, discrimination and
retaliation policies; (f) intentional and improper conduct materially prejudicial to the business of the Company or any of its Affiliates,
(g) breach of this Agreement including any of the covenants provided for in Section 5 hereof, or (h) breach of any non-solicitation obligations
pursuant to any contract or agreement with any third party including non-solicitation of clients, customers, potential clients/customers,
employees and consultants. In the
event of the termination of your employment by the Company for Cause, without prejudice to any other rights or remedies that the Company
may have at law or in equity, the Company shall have no further obligations to you other than to: (i) pay Base Salary through the effective
date of termination, (ii) pay approved, unreimbursed business expenses in accordance with Company policy; and (iii) comply with obligations
owed under the Company’s benefit plans in accordance with their terms as in effect as of the effective date of termination ((i) through
(iii) collectively, the “Termination Entitlement”).
4.2 Termination
Due to Death. This Agreement shall terminate upon your death and the Company shall not have any further obligations hereunder, except
that your estate will be entitled to receive, in addition to any regular life insurance benefits paid by the Company, the Termination
Entitlement.
4.3 Termination
Due to Disability. If, during your employment, you become physically or mentally disabled, whether totally or partially, so that you
are prevented from performing the material functions of your position, with or without accommodation, for periods aggregating six (6)
months in any twelve (12) month period, the Company will be entitled to terminate your employment upon written notice to you given at
any time thereafter during which you are still disabled. You will thereafter be entitled to receive the Termination Entitlement.
4.4 Termination
Due to your Purported Breach of Third Party Obligations. With the exception of the circumstances described in 4. l(h) which
shall result in immediate termination for Cause, if, during the Term of Employment, a threat of litigation or litigation is
initiated by a third party against the Company or against you as it relates to your employment with the Company, the Company may
terminate your employment or place you on an unpaid leave of absence, as determined by the Company in its sole discretion, in which
case the Company would pay you the Termination Entitlement and one month of pay at your Base Salary in exchange for a general
release agreement. Unless agreed upon otherwise in writing, Company shall not have any obligations to indemnify or reimburse you for
legal fees related to threatened or actual litigation.
4.5
Other Termination by the Company.
(a) The
Company may terminate your employment during the Term of Employment, other than a termination under Sections 4.1, 4.2, 4.3 or 4.4, at
any time upon written notice to you. In the event that your employment is so terminated during the Term of Employment, in addition to
the Termination Entitlement, you will receive (subject to the requirements of Section 4.8), for the duration of the Severance Period (defined
in Section 4.4(b) below), bi-weekly payments made in substantially equal installments in accordance with the customary payroll practices
of the Company, and subject to payroll deductions and required withholdings, at an annualized rate equal to your Base Salary; provided
however, that:
(i) if
you die during the Severance Period, your payments pursuant to this Section 4.5(a) shall cease, and your estate will be entitled to receive,
in addition to any regular life insurance benefits paid by the Company, any payments due pursuant to this Section 4.5(a) through the date
of your death;
(ii) if
you accept benefits-eligible employment with any other corporation, partnership, trust, government or other entity during the Severance
Period (notice of such employment to be provided to the Company within ten (10) business days) or otherwise notify the Company in writing
of your intention to terminate your benefits during the Severance Period, you will continue to receive all payments pursuant to this Section
4.5(a), but shall cease to receive any applicable post-termination benefits described in Section 4.5(c) below, effective upon the commencement
of such employment or the effective date of such termination as specified by you in your notice of intention to terminate benefits;
(iii) if
you accept employment with the Company or an Affiliate during the Severance Period, your payments pursuant to this Section 4.5 shall cease
effective the first date of employment with the Company or with such related or affiliated entity;
(iv) you
understand that Base Salary shall not include any additional compensation or incentives and that severance does not include any bonus
that has not already been paid out; and
(v) you
understand that this Section only applies if you are terminated from employment for any reason other than under Sections 4.1, 4.2, 4.3
or 4.4 during the Term of Employment.
(b)
The “Severance Period” shall be twelve (12) months.
(c) Subject
to (A) your timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
and (B) your continued copayment of premiums at the same level and cost to you as if you were an employee of the Company (excluding, for
purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), continued participation in the Company’s group
health plan (to the extent permitted under applicable law and the terms of such plan) which covers you (and your eligible dependents)
during the Severance Period at the Company’s expense, provided that you are eligible and remains eligible for COBRA coverage. Notwithstanding
the foregoing, the Company shall not be obligated to provide the continuation coverage contemplated by this Section 4.5(c) if it would
result in the imposition of excise taxes on the Company for failure to comply with the nondiscrimination requirements of the Patient Protection
and Affordable Care Act of 2010, as amended, and the Health Care and Education Reconciliation Act of 2010, as amended (to the extent applicable).
During the Severance Period, you will not be entitled to any additional awards or grants under any equity plan or any incentive plan or
to continue elective deferrals in or accrue additional benefits under the Company’s 401(k) plan or any other qualified or nonqualified
retirement programs maintained by the Company.
(d) Any
payments or benefits provided in this Section 4.5 shall be in lieu of and offset any payments required under federal, state or local laws
including, but not limited to, any notice pay required under the federal Worker’s Adjustment Retraining Notification (“WARN”)
Act or state equivalent.
4.6 Resignation.
You may terminate the Term of Employment for any reason, including, without limitation, your retirement, at any time on thirty (30)
days’ prior written notice to the Company. In such event, the Company’s only obligation to you will be payment of the Termination
Entitlement. In any instance in
which you provide written notice of your termination of the Term of Employment to the Company, the Company may elect to terminate
your employment immediately, in which case the Company’s only obligation to you will be payment of the Termination Entitlement,
treating the last day of the notice period as the date of termination solely for purposes of calculating the Termination
Entitlement. In no event will the Company’s early termination of your employment pursuant to the preceding sentence be considered a
termination of the Term of Employment by the Company under Section 4.5 and in no event shall the Company’s early termination of you
pursuant to the preceding sentence require the Company to provide the Termination Entitlement for any greater period than the period
beginning on the date your written notice of termination is received by the Company and ending thirty (30) days thereafter.
4.7 Release.
In the event of a termination of the Term of Employment pursuant to Sections 4.4, or 4.5 above, a condition precedent to the Company’s
obligation to make or continue to make the payments associated with such termination shall be your execution and delivery to the Company
of a release of all claims you may have against the Company, its Affiliates and their related persons arising out of or in connection
with your employment or termination of employment, including, but not limited to, a release of all claims of discrimination, in a form
to be provided by the Company. Any severance payments made to you shall be in installments on regular payroll dates following the effective
date of the release agreement and subject to applicable withholdings and deductions.
4.8 No
Other Payments or Benefits. In the event your employment is terminated during the Term of Employment, you shall not be entitled to
any severance under the Company’s general employee policies or any severance policy or plan maintained by the Company, the payment and
benefits provided for in this Agreement constituting the sole source of any payments or benefits payable to you except any amounts payable
to you as required by applicable law. Except as may be otherwise provided in Section 4.4(c), your rights to benefits and payments under
any benefit plan, Long-Term Incentive Plan, or other plan of the Company will be determined in accordance with the then current terms
and provisions of such plans and any agreements under which such benefits or payments were granted.
4.9 Forfeiture.
In the event you breach the terms of Section
5 of this Agreement, you acknowledge and agree that you shall forfeit any remaining amounts due to you under this Section 4 other than
your Termination Entitlement. The Company’s rights contained in this Section 4.9 shall be in addition to, and shall not limit, any other
rights or remedies that the Company may have under law or in equity.
5.
Protection of Confidential Information, Non-Competition, Non-Solicitation, Non-Disparagement and Cooperation.
5.1
Protection of Confidential Information and Non-Competition Covenants.
(a) Acknowledgements.
You acknowledge that your employment by the Company will bring you into close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, products, key personnel, operational methods, technical processes, plans for future
development and other business affairs and editorial matters not readily available to the public. You further acknowledge that the services
to be performed under this Agreement are of a special, unique, unusual, extraordinary and intellectual character. You further acknowledge
that the business of the Company is international in scope, that its products are marketed throughout the world, that the Company competes
in nearly all of its business activities with other organizations that are or could be located in nearly any part of the world and that
the nature of your services, position and expertise are such that you are capable of competing with the Company from nearly any location
in the world. In recognition of the foregoing, you covenant and agree to the requirements of this Section 5.
(b) Safeguarding
of Confidential Information. You will keep secret all confidential matters of the Company, including without limitation, the
terms and provisions of this Agreement and any payments or benefits you receive pursuant to this Agreement in connection with a
termination of employment, and will not use for your own benefit or intentionally disclose such matters to anyone outside of the
Company, either during or after your employment, except with the Company’s written consent, provided that (i) you will have
no such obligation to the extent such matters are or become publicly known other than as a result of your breach of your obligations
hereunder; (ii) you may, after giving prior notice to the Company to the extent practicable under the circumstances, disclose such
matters to the extent required by applicable laws or governmental regulations or judicial or regulatory process; and (iii) you may
disclose the terms of this Agreement to your spouse or life partner, attorney, accountant, and/or financial advisor, provided that
such persons also agree to maintain such confidentiality. Nothing in this provision prohibits you from reporting possible violations
of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the
Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected
under the whistleblower provisions of federal law or regulation. You do not need the Company’s prior authorization to make any such
reports or disclosures, and you are not required to notify the Company that you have made such reports or disclosures. The rights
set forth herein are in addition to all rights the Company may have under the common law or applicable statutory laws relating to
the protection of trade secrets;
(c) Return
of Company Property and Information. Upon termination of your employment for any reason, or at any other time the Company may so request,
you will deliver promptly to the Company all memoranda, notes, records, reports and other documents (and all copies thereof) in any form
whatsoever (including information contained in computer memory or on any computer disks or other storage devices) relating to the Company’s
business, which you obtained while employed by, or otherwise serving or acting on behalf of, the Company and which you may then possess
or have under your control and not maintain copies of any such documents on any personal computer, cloud account, or other storage device
in your personal possession. No later than the effective date of your termination, you will also return all Company property previously
in your possession, including but not limited to any Company equipment, electronic devices, keys, identification cards, and credit cards.
(d) Nonsolicitation
of Employees. (i) During your employment, and (ii) for a period of one (1) year after the termination of your employment (the “Restriction
Period”), and (iii) during the Severance Period for any termination of your employment pursuant to Sections 4.5, you will
not, directly or indirectly, employ or solicit the employment of, and shall not assist, induce, cause or encourage any other person
or entity to employ or solicit the employment of, any person who was an employee of the Company or any of its affiliated companies
at the date of your termination or within six (6) months prior thereto; provided, however, that this Section 5.1 (d) shall
not preclude general advertising for personnel or responding to an unsolicited request for a personal recommendation for or
evaluation of an employee of the Company or any of its subsidiaries or affiliates.
(e) Noncompetition.
(i) During your employment, (ii) during the Restriction Period and (iii) during the Severance Period for any termination of your employment
pursuant to Sections 4.5; you will not, directly or indirectly, without the prior written consent of the CEO of the Company, or his designee,
render any services to any other person or entity, or own or acquire any interest of any type in any other person or entity which is engaged,
either directly or indirectly, in the services provided by the Company or any other business engaged in material competition with the
Company including any expert recruiting company or entity, or any company that provides IT staffing, IT consulting, experienced
technical personnel and consultants anywhere in the United States. The foregoing shall not be deemed to prohibit you from acquiring
securities of any corporation which are publicly traded so long as such securities do not constitute more than one percent (1%) of the
outstanding voting power of that public company.
5.2 No Use of
Client Information; Nonsolicitation of Company Clients or Prospective Clients. You acknowledge that the Company has a compelling
business interest in preventing unfair competition stemming from the use or disclosure of confidential client information, including
but not limited to the identity of clients and prospective clients (“Client Information”), in the event that, after
any termination of your employment with the Company, you go to work for or become affiliated with a competitor of the Company or
otherwise engage in business activities that are competitive with those of the Company. You further acknowledge that all clients
serviced by you as an executive of the Company are clients of the Company and not yours personally, and that by virtue of your
employment with the Company, you have gained or will gain knowledge of the identity, characteristics, and preferences of clients,
and that you would inevitably have to draw on Client Information if you were to solicit or service the Company’s clients or contact
prospective clients on behalf of a competing business enterprise. Accordingly, you agree that during the Restriction Period, you
will not, in connection with a business in competition with the Company, solicit the business of or service any actual or
prospective client for whom you provided any services or as to whom you had access to Client Information during the course of your
employment with the Company. You also agree that, during the Restriction Period, you will not encourage or assist any person or
entity in competition with the Company to solicit or service any actual or prospective client of the Company covered by this Section
5.2, or otherwise seek to encourage or induce any such client to cease doing business with, or lessen its business with, the
Company.
5.3 Non-Disparagement.
You will not make any statements that are professionally or personally disparaging about, or adverse to, the interests of the Company
(including any subsidiaries or affiliates and each of their officers, directors, and employees), including, but not limited to, any statements
that disparage any person, product, service, financial condition, or any other aspect of the business of the Company, Company subsidiaries
or affiliates, provided, however, that nothing herein shall prevent you from exercising your rights under Section 7 of the National
Labor Relations Act. Nothing herein shall prevent you or the Company from testifying truthfully under oath pursuant to any lawful court
order or subpoena or otherwise responding to or providing disclosures required by law. Nothing in this Agreement prohibits you from making
claims or complaints that may not be waived by law.
5.4 Cooperation.
Following the termination of your employment under this Agreement for any reason, you agree to cooperate with the Company in providing
for an orderly transition through the effective date of your termination of employment pursuant to Section 4 and thereafter, which cooperation
shall include giving such assistance at reasonable times as may be reasonably requested by the Company. Such cooperation shall extend
to additional matters as reasonably requested by the Company from time to time, including, without limitation, legal matters about which
you have knowledge by virtue of your employment with the Company. The Company will reimburse you for your reasonable out-of-pocket expenses
(excluding attorneys’ fees) incurred by you in connection with providing such assistance to the extent allowed by applicable law.
5.5 Immunity
from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Sealed Court Filing. The federal Defend
Trade Secrets Act of 2016 immunizes you against criminal and civil liability under federal or state trade secret laws -under certain
circumstances - if you disclose a trade secret for the purpose of reporting a suspected violation oflaw. Immunity is available if
you disclose a trade secret in either of these two circumstances: (i) you disclose the trade secret (a) in confidence, (b) directly
or indirectly to a government official (federal, state or local) or to a lawyer, and (c) solely for the purpose of reporting or
investigating a suspected violation of law; or (ii) in a legal proceeding, you disclose the trade secret in the complaint or other
documents filed in the case, so long as the document is filed “under seal” (meaning that it is not accessible to the
public).
5.6 No
Breach of Third Party Obligations. You agree that by accepting this Agreement, you warrant that you are not in breach of any other
third party obligations and no contract or agreement to which you are bound prevents you from complying with the terms of this Agreement.
You also acknowledge that the Company does not want and prohibits you frorri bringing any third party confidential information to the
Company’s premises or to use such information in the performance of your job responsibilities.
6. Ownership
of Work Product. You acknowledge that during the your employment, you may, in the course of your employment, conceive of,
discover, invent or create inventions, improvements, new contributions, literary property, material, ideas and discoveries, whether
patentable or copyrightable or not (all of the foregoing being collectively referred to herein as “Work Product”),
and that various business opportunities shall be presented to you by reason of your employment by the Company. You acknowledge that,
unless the Company otherwise agrees in writing, all of the foregoing shall be owned by and belong exclusively to the Company and
that you will have no personal interest therein, provided that they are, in the case of Work Product, conceived or made on
the Company’s time or with the use of the Company’s facilities or materials, or, in the case of business opportunities, are
presented to you for the possible interest or participation of the Company. You will further, unless the Company otherwise agrees in
writing, (i) promptly disclose any such Work Product and business opportunities to the Company; (ii) assign to the Company, upon
request and without additional compensation, the entire rights to such Work Product and business opportunities to the extent not
otherwise owned at law by the Company; (iii) sign all papers necessary to carry out the foregoing; and (iv) give testimony in
support of your inventorship or creation in any appropriate case. You agree that you will not assert any rights to any Work Product
or business opportunity as having been made or acquired by you prior to the date of this Agreement except for Work Product or
business opportunities, if any, disclosed to and acknowledged by the Company in writing prior to the date hereof. In furtherance of
and without limiting the foregoing, any copyrightable work created in connection with the services provided by you hereunder shall
be considered “work made for hire” under the Copyright Law of 1976 and any successor thereto, and the Company shall be the
owner of such work.
7.
Representations.
(a) You
represent and warrant that you are not a party to any agreements or understandings which would prevent your fulfillment of the terms of
this Agreement or which would be violated by entering into this Agreement and performing your obligations hereunder;
(b) The
Company shall have the right to use your name, biography and likeness in connection with its respective businesses and that of its subsidiaries
and affiliates, but not as a direct endorsement;
(c) Upon
execution of this Agreement by the Company, this Agreement shall be your valid and binding obligation enforceable in accordance with its
terms; and
(d) You
are not subject to any pending, or to your knowledge, any threatened lawsuit, action, investigation or proceeding involving your prior
employment or consulting work or the use of any information or techniques of any former employee or contracting party.
8. Enforcement.
Because your services are unique and because you have access to Confidential Information and Work Product, the parties to agree that Parent
and its Subsidiaries would suffer irreparable harm from a breach or threatened breach of Sections 5, 6 and 7 by you and that money damages
would not be an adequate remedy for any such breach or threatened breach of this Agreement. In the event of any breach or threatened breach
of this Agreement, Parent and its Subsidiaries, in addition to other rights and remedies existing in their favor, shall be entitled to
specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other security). In addition, in the event of an alleged breach of
violation by you of Section 5, the Restriction Period shall be extended automatically by the amount of time between the initial occurrence
of the breach or violation and when such breach or violation has been duly cured
9.
General.
9.1 Notices.
All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given, if delivered personally or mailed first-class, postage prepaid, by registered or certified mail, as follows
(or to such other or additional address as either party shall designate by notice in writing to the other in accordance herewith):
If to the Company:
Thomas Salerno, CEO
TSR, Inc.
400 Oser Avenue, Suite 150
Hauppauge,
New York 11788
If to you, to the address set forth
on the records of the Company.
9.2 Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
regard to conflicts of law principles.
9.3 Captions.
The section headings and boldface type contained herein are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.4 Entire
Agreement and No Other Representations. The parties expressly acknowledge, represent and agree that this Agreement (together with
all exhibits and the Company’s Standards of Business Conduct) is fully integrated, and contains and constitutes the complete and entire
agreement and understanding of the parties with respect to the subject matters hereof and supersedes any and all agreements, understandings,
and discussions, whether written or oral, between the parties with respect to the subject matters hereof. The parties further acknowledge,
represent and agree that neither has made any representations, promises or statements to induce the other party to enter into this Agreement,
and each party specifically disclaims reliance, and represents that there has been no reliance, on any such representations, promises
or statements and any rights arising therefrom.
9.5 Assignability.
This Agreement and your rights and obligations hereunder may not be assigned by you. The Company may assign its rights, together with
its obligations, hereunder in connection with any sale, transfer or other disposition of all or substantially all of the business and
assets of the Company or of the magazine, group, or division, which is employing you and such rights and obligations shall inure to, and
be binding upon, any successor to the business or substantially all of the assets of the Company or of the magazine, group, or division
which is employing you; whether by merger, purchase of stock or assets or otherwise, and such successor shall expressly assume such obligations.
9.6 Amendments,
Waivers. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance.
The failure of either party at any time or times to require performance of any provisions hereof shall in no manner affect such party’s
right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver
of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.
9.7 Mediation;
Arbitration. The parties agree that all claims, disputes, and/or controversies arising under this Agreement and/or related to your
employment hereunder (whether or not based on contract, tort or upon any federal, state or local statute, including but not limited to
claims asserted under the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, any
state fair employment practices act, and/or the Americans with Disabilities Act), shall be resolved exclusively through mediation first
and then arbitration by JAMS, in the County of New York in the State of New York, in accordance with the JAMS Rules and Procedures for
Mediation/Arbitration of Employment Disputes; provided, however, that in the event that the Company alleges that you are in breach
of any of the provisions contained in Section 5 or 6 of this Agreement, the Company shall not be exclusively required to submit such dispute
to mediation/arbitration. In such event, the Company may, at its option, seek and obtain from any court having jurisdiction, injunctive
or equitable relief, in addition to pursuing at arbitration all other remedies available to it (including without limitation any claims
for relief arising out of any breach of Sections 5, 6 or 7 of this Agreement). In the event that the Company chooses to bring any such
suit, proceeding or action for injunctive or equitable relief in an appropriate court, you hereby waive your right, if any, to trial by
jury, and hereby waive your right, if any, to interpose any counterclaim or set-off for any cause whatever and agree to arbitrate any
and all such claims.
9.8 Specific
Remedy. In addition to such other rights and remedies as the Company may have at equity or in law with respect to any breach of
this Agreement, if you commit a material breach of any of the provisions of Sections 5, 6 or 7, the Company will have the right and
remedy to have such provisions specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company. In the event that you violate any of the provisions of Sections 5, 6 or 8, the period of the
restrictive covenants set forth in those provisions shall be extended for the period of time you remain in violation. You also agree
to indemnify the Company and hold the Company harmless from any and all losses suffered by the Company as a result of any violation
by you of this Agreement, and to pay the Company’s reasonable attorneys’ fees and other legal expenses incurred to enforce this
Agreement.
9.9 Acknowledgment
and Consent. You acknowledge that the restrictions contained in this Agreement, including but not limited to those contained in Sections
5 or 6, are fair, reasonable and necessary for the protection of the legitimate business interests of the Company, and that the Company
will suffer irreparable harm in the event of any actual or threatened breach by you. You therefore consent to the entry of a restraining
order, preliminary injunction, or other court order to enforce this Agreement and expressly waive any security that might otherwise be
required in connection with such relief. You also agree that any request for such relief by the Company shall be in addition to and without
prejudice to any claim or monetary damages which the Company might elect to assert.
9.10 Severability.
If any provision of this Agreement is held to be unenforceable by a court, the remaining provisions shall be enforced to the maximum extent
possible. If a court should determine that any provision of this Agreement is overbroad or unreasonable, such provision shall be given
effect to the maximum extent possible by narrowing or enforcing in part that aspect of the provision found overbroad or unreasonable.
9.11 Standards
of Business Conduct. The Company’s Standards of Business Conduct is provided with this Agreement and made a part hereof. You confirm
that you have read, understand and will comply with the terms thereof and any reasonable amendments thereto. In addition, as a condition
of your employment under this Agreement, you understand that you may be required periodically to confirm that you have read, understand
and will comply with the Standards of Business Conduct as the same may be revised from time to time. You will also comply with all other
written policies of the Company.
9.12 Withholding
Taxes. Payments made to you pursuant to this Agreement shall be subject to withholding and social security taxes and other ordinary
and customary payroll deductions.
9.13 Compliance
with IRC Section 409A. To the extent that payments and benefits in this Agreement are subject to Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), this Agreement is intended to comply with and will be interpreted in
a manner intended to comply with Section 409A of the Code. Notwithstanding anything herein to the contrary, if at the time of your
termination of employment with the Company you are a “specified employee” as defined in Section 409A of the Code (and any
related regulations or other pronouncements thereunder) and the deferral of the commencement of any payments or benefits otherwise
payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax
under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or provided to you) until the expiration of the
six-month period measured from the date of your separation from service with the Company (or the earliest date as is permitted under
Section 409A of the Code). On the first day of the seventh month following the date of your separation from service, or if earlier,
the date of your death, (x) all payments delayed pursuant to this paragraph (whether they would have otherwise been paid or
reimbursed to you in a single sum or in installments) shall be paid or reimbursed to you in a single sum and any remaining payments
and benefits due under this Agreement shall be paid or provided in accordance with the normal dates specified for them in this
Agreement. In addition, if any other payments of money or other benefits due to you hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will
make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be
restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional
tax. To the extent any reimbursements or in-kind benefits due to you under this Agreement constitute “deferred
compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner
consistent with Treas. Reg. Section 1.409A-3(i)(l)(iv). Each payment made under this Agreement shall be designated as a
“separate payment” within the meaning of Section 409A of the Code. References herein to a termination of your employment
shall be deemed to refer to the date upon which you have experienced a “separation from service” within the meaning of
Code Section 409A. The Company shall consult with you in good faith regarding the implementation of the provisions of this Section
9.13; provided that neither the Company nor any of its employees or representatives shall have any liability to you with
respect thereto.
9.14 No
Offset. Neither you nor the Company shall have any right to offset any amounts owed by one party hereunder against amounts owed or
claimed to be owed to such party, whether pursuant to this Agreement or otherwise, and you and the Company shall make all the payments
provided for in this Agreement in a timely manner.
9.15 Survival.
Sections 5 and 6 (and their subparts) shall survive your employment and any expiration of this Agreement and shall apply for the duration
of employment and beyond in accordance with their terms.
9.16 Counterparts.
This Agreement may be executed in any number of counterparts all of which shall constitute one original instrument.
9.17 Interpretation.
The parties to this Agreement have cooperated in the drafting and preparation of this Agreement. Hence, in any construction or interpretation
of this Agreement, the same shall not be construed against any party on the basis that such party was the drafter.
If the foregoing correctly
sets forth the understanding between you and the Company, please sign and date below and return this Agreement to the Company.
| TSR CONSULTING, INC. |
|
CONFIRMED AND AGREED: |
| |
|
|
| By: |
/s/ Tom Salerno |
|
By: |
/s/ Mohammed Shah Syed |
| |
Tom Salerno, CEO |
|
|
Mohammed Shah Syed |
| |
|
|
|
|
| Date: |
11/17/2022 |
|
Date: |
11/18/2022 |
Exhibit (e)(16)
ADDENDUM TO EMPLOYMENT AGREEMENT
This
Addendum supplements and replaces certain terms to the Employment Agreement between TSR, Inc., a Delaware corporation
(“TSR” or the “Company”) and Mohammed Shah Syed (“You”), effective as of
January 1, 2023 (the “Agreement”). You and the Company hereby agree to the following modifications. Unless stated
otherwise, the modifications shall be effective August 1, 2023. Any provision of the Agreement
shall remain in full force and effect unless specifically modified by this Addendum.
1. Term
of Employment. Except for earlier termination as provided in Section 4 of the Agreement, your term of employment under this
Agreement (“Term of Employment”) will commence on August 1, 2023, unless otherwise agreed to in writing by you
and the Company (“Effective Date”) and will continue thereafter until July 31, 2026. Your employment with the
Company upon the expiration of this Agreement shall be at-will if no new or amended employment agreement is in place between the
parties upon July 31, 2026. Your at-will employment relationship shall mean that you or the Company may separate your employment at
any time, with or without reason, without notice. For the avoidance of doubt, you shall not be eligible for any severance benefits
pursuant to this Agreement, under any circumstances, after the Term of Employment.
By signing
below, You acknowledge that You have read this Addendum or it has been read to You; You understand and accept the terms and conditions
set out within it, and that this Addendum, together with the Employment Agreement, establish the terms and conditions of Your employment.
CONFIRMED
AND AGREED:
| TSR, Inc. |
|
Employee: |
| |
|
|
|
|
| /s/ Tom Salerno |
|
/s/ Mohammed Shah Syed |
| By: |
Tom Salerno, CEO |
|
By: |
Mohammed Shah Syed |
| Date: |
08/01/2023 |
|
Date: |
08/01/2023 |
Exhibit (e)(17)
Execution Version
THIS EMPLOYMENT
AGREEMENT (hereinafter “Agreement”), is entered into this 15th day of May, 2024, to be effective upon the consummation
of the Merger (as defined herein) by and between TSR, Inc., a Delaware corporation, with offices located at 1090 King Georges Post Road,
Edison, New Jersey 08837 (hereinafter “Employer” or “Company”), and, Thomas Salerno (hereinafter “Employee”).
Employer and Employee are collectively referred to herein as (the “Parties”).
RECITALS
WHEREAS,
Employer is a consulting firm which provides IT consulting, staffing, contingent labor, and professional services to individual, business
and governmental customers; and
WHEREAS, Employee
is employed by the Company;
WHEREAS,
Employer is the surviving corporation of the merger between the Company and Vienna Acquisition Corporation (the “Merger”)
which was accomplished pursuant to the terms of an Agreement and Plan of Merger, dated May 15, 2024 among Vienna Parent Corporation, Vienna
Acquisition Corporation and Target; and
WHEREAS,
Employer and Employee desire to enter into this Agreement pursuant to which Employee shall provide management services to Employer as
described herein.
NOW, THEREFORE,
in consideration of the promises and mutual covenants set forth in this Agreement, the receipt and adequacy of which are acknowledged,
the undersigned agree as follows:
| 1. | Employee’s Duties. Employee shall act as President and CEO of Employer and in such
capacity consistent with the duties and responsibilities associated with and related to such position and as otherwise reasonably requested
by the board of directors of the Company. Employee shall use his or her best efforts in carrying out Employee’s duties and shall
abide by the rules, regulations and policies of Employer pertaining to the performance of such duties. |
| 2. | Term of Agreement. Employee’s employment pursuant to this Agreement
shall commence on the date the Merger is consummated (the “Effective Date”) and shall continue until the third anniversary
of the Effective Date (the “Initial Term”). At the end of the Initial Term and on each subsequent anniversary of the Effective
Date, the term of this Agreement shall be extended for an additional one (1) year ending on the next anniversary of the Effective Date
(each, a “Renewal Term”), unless either party provides at least sixty (60) days’ advance written notice prior to the
expiration of the then-current Initial Term or Renewal Term to the other party that this Agreement will not be renewed. The Initial Term
and any Renewal Term(s) shall collectively be referred to as the “Term of Employment.” During the Term of Employment, Employee
is employed at will, subject to the termination provisions set forth in this Section 2. |
| A. | Severance. In the event that Employer terminates Employee’s employment without Cause,
subject to the execution of a release in the form acceptable to the Company (“Release”) within the time frame set forth therein
but not more than sixty (60) days following Employee’s “separation from service” (as defined under Treasury Regulation
Section 1.409A-1(h) and without regard to any alternate definition thereunder), and not revoking the Release as described therein, Employer
shall provide Employee with the following “Severance Benefits”: |
| i. | continued payment of Employee’s (x) Base Salary and (y) Car Allowance for twelve (12) months, less
applicable withholdings and deductions, with payment to commence
on the first regular payroll date following the effective date of the Release and continuing thereafter in accordance with Employer’s
regular payroll practices for a period of twelve (12) months; |
| ii. | payment of an amount equal to 50% of the Annual Bonus awarded to Employee in the
fiscal year prior to the year in which Employee’s employment is terminated, which shall be paid in approximately equal installments
over a period of twelve (12) months in accordance with the Employer’s regular payroll practices, with payments commencing on the
Employer’s first regular payroll date following the effective date of the Release; and |
| iii. | provided Employee timely elects continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”) and continues copayment of premiums at the same level and cost to
Employee as if Employee remained employed by the Company (excluding, for purposes of calculating cost, an employee’s ability to
pay premiums with pre-tax dollars), continued participation in the Company’s group health plan for Employee and Employee’s
eligible dependents at the Company’s expense until the earlier of (x) twelve (12) months following the termination date of Employee’s
employment, or (y) the date on which Employee ceases to be eligible for COBRA coverage. |
In the event
that Employee voluntarily resigns from employment with Employer or is terminated For Cause, Employee shall not be entitled to any compensation
following the date of separation other than (i) Employee’s Base Salary earned up through such date, (ii) approved, unreimbursed
business expenses in accordance with Company policy; and (iii) obligations owed under the Company’s benefit plans in accordance
with their terms as in effect as of the effective date of termination (collectively, the “Termination Entitlement”). For the
avoidance of doubt, non-renewal of this Agreement shall not, of itself, constitute a termination of Employee’s employment and, absent
further action by Employer or Employee, Employee shall remain an employee at will of Employer following the expiration of this Agreement.
| i. | “For Cause” shall be defined as any act constituting fraud, embezzlement,
or theft; willful misconduct or gross negligence materially damaging to the Company, its reputation, products, services, or customers;
willful failure or refusal to undertake good faith efforts to perform Employee’s duties to the Company (other than any such failure
resulting from Employee’s incapacity due to physical or mental impairment); knowing and intentional violation of any law or regulation;
knowingly and intentionally making an unauthorized disclosure of any trade secret or confidential information of the Company or a parent
or subsidiary. |
| ii. | Company may terminate Employee’s employment For Cause at any time by giving
written notice to Employee setting forth in reasonable detail the nature of such Cause, provided that, any such conduct capable of cure
remains uncured for a period of thirty (30) days following receipt of written notice from the Company. |
| Page | 2 |
| Salary Agreement |
| C. | Termination Without Cause. Employer may terminate Employee’s
employment without Cause at any time by providing Employee with written notice. In the event Employee’s employment is terminated
by Employer without Cause, subject to Section 2.A of this Agreement, in addition to the Termination Entitlements, Employee will receive
the Severance Benefits. |
| D. | Termination Due to Company’s Material Breach. Employee will have the right, exercisable
by written notice to the Company, to terminate Employee’s employment during the Term of Employment, effective thirty (30) days after
the giving of notice and a reasonable detail of the nature of the material breach, if at the time of such written notice, the Company
shall be in material breach of its obligations hereunder; provided, however, that Employee provides such written notice to the Company
within thirty (30) days after the occurrence of such material breach; and provided further, this Agreement and Employee’s employment
will not so terminate if within such thirty (30)-day notice period the Company has cured all such material breaches of its obligations
hereunder. If such material breach has not been so cured, Employee may elect to treat such breach as a termination of employment by the
Company without Cause pursuant to Section 2.C above, and Employee shall be entitled to the rights and benefits provided for therein. |
| E. | Resignation by Employee. Employee may terminate this Agreement and
Employee’s employment hereunder for any reason at any time by providing Employer with (30) days’ prior written notice. In
the event Employee voluntarily resigns from employment with Employer other than pursuant to Section 2.D as a result of the Company’s
material breach, Employee will receive the Termination Entitlements. |
| F. | Termination Due to Death or Disability. This Agreement shall terminate
upon Employee’s death, and the Company shall not have further obligations hereunder, except that Employee’s estate will be
entitled to receive the Termination Entitlement. Because o Employee’s position, if, during Employee’s employment, Employee
becomes physically or mentally disabled, whether totally or partially, so that Employee is prevented from performing the material functions
of Employee’s position, with or without accommodation, for periods aggregating six (6) months in any twelve (12) month period, the
Company will be entitled to terminate Employee’s employment upon written notice to Employee given at any time thereafter during
which Employee is still disabled. Employee will thereafter be entitled to receive the Termination Entitlement, and the Company shall have
no further obligations hereunder. |
| 3. | Compensation. Employee’s compensation shall consist of the following components: |
| A. | Base Salary. Employee shall be paid an annual base salary of Three
Hundred and Ninety- Five Thousand Dollars ($395,000.00) (“Base Salary”). Employee shall be paid on a biweekly basis, according
to Employer’s pay schedule. In the event that Employer makes an overpayment in error, Employee authorizes Employer to withhold the
amount overpaid from future pay periods, provided Employer provides written notice in advance detailing the overpayment and otherwise
complies with applicable laws governing deductions from wages. |
| B. | Performance Bonus. The Parties acknowledge and agree that
Employee is eligible to receive an Annual Bonus for fiscal year 2024 (“2024 Annual Bonus”) pursuant to the terms of the
Employment Agreement between TSR, Inc. and Thomas C. Salerno dated November 2, 2020, along with any addenda thereto (collectively,
“Prior Employment Agreement”). Employer agrees to pay Employee any portion of the 2024 Annual Bonus that remains unpaid
as of the Effective Date
within thirty (30) days following the Effective Date. Beginning in fiscal year 2025 and for each subsequent fiscal year during the Term
of Employment, Employee shall be eligible to earn an annual bonus of up to 45% of Employee’s Base Salary in accordance with the
terms of the Employer’s applicable bonus program, to be implemented within sixty (60) days following the Effective Date. |
| Page | 3 |
| Salary Agreement |
| C. | Management Incentive Plan. Employer intends to establish a Management Incentive Plan (MIP)
of which Employee shall be a participant. Specific terms and conditions will be defined in the MIP documents, to be finalized and adopted
within sixty (60) days of the Effective Date. The MIP is offered and administered in accordance with written agreement(s) and/or applicable
plan documents. Employee’s MIP participation will be in the same plan as other Company executives. |
| 4. | Vacation, Sick and Personal Days and Holidays. |
| A. | Paid Time Off. The Employee shall be entitled to four (4) weeks of
paid vacation and an additional five (5) days for sick leave or personal use (collectively, “PTO”). PTO will be granted to
the Employee based upon a calendar year which begins January 1st and ends on December 31st. PTO is not eligible
for rollover from one year to the next and must be used within the year it was allocated or it will be forfeited. Upon Employee’s
voluntary resignation or termination of Employee’s employment For Cause, any remaining unused PTO will be forfeited and will not
be paid upon separation. |
| B. | Holidays. Employee shall be entitled to paid holidays pursuant to the annual holiday schedule
adopted each year by Employer. |
| 5. | Fringe Benefits. Employee shall be entitled to participate in such fringe benefit programs
as are provided by Employer to similarly situated employees during the term of this Agreement, which benefits currently include participation
in Employer’s 401(k), group health, dental, vision and life insurance policy and the Employer’s group short term disability
policy. In addition, the Company will provide Employee with a monthly car allowance of $1,800.00 (“Car Allowance”) and monthly
stipend for Employee’s personal cellular device in the amount of $120.00. |
| 6. | Expenses. Employer shall pay for or reimburse to Employee, within
a reasonable period after presentation of vouchers, receipts or other proof as normally required by Employer, the reasonable and necessary
travel, entertainment and other expenses incurred by Employee in carrying out Employee’s duties under this Agreement. Employer shall
be the sole determiner of what constitutes reasonable and necessary travel, entertainment and other expenses for purposes of payment for
or reimbursement to Employee. Employee shall seek and obtain approval from Employer of any expense which solely or in the aggregate will
exceed the sum of $250.00 before incurring such expense. Expense reports are due no later than the 3rd business day following
the end of the month. Expense reports must be turned in every month. |
| Page | 4 |
| Salary Agreement |
| 7. | Acknowledgments. Employee acknowledges that Employer is in the
highly competitive business of contingent labor. Employee acknowledges that Employer recruits or provides on a temporary or
permanent basis technical service personnel (including, but not limited to, such personnel as engineers, designers, drafters,
computer programmers, database administrators, systems analysts or other similarly skilled individuals engaged in similar lines of
work), business analysts, bookkeeping, accounting, industrial personnel (including, but not limited to, assemblers, warehousemen,
shipping/receiving, technicians, or other similarly skilled individuals engaged in similar lines of work), or office support
personnel (including, but not limited to, secretaries, data entry personnel,
mailroom personnel, administrative assistants, word processors, desktop publishers or other similarly skilled individuals engaged in similar
lines of work) for its clients. Further, Employee acknowledges that in the course of Employee’s employment with Employer, Employee
(i) will be given access to trade secrets and other Confidential Information (as hereinafter defined); (ii) will participate in the development,
execution, and or usage of products, concepts, strategies, methods, or technologies which are related to Employer’s business; (iii)
will be given specialized training relating to Employer’s products, processes and/or services; and (iv) will be given access to
information regarding Employer’s customers, clients, vendors and other business relationships. |
| 8. | Termination; Non-Disclosure Covenant and Liquidated Damages. This
Agreement may be terminated with or without cause by either party; provided however, if Employee is terminated without cause, Employee
shall be entitled to the Severance Benefits consistent with and subject to the conditions of Section 2A of this Agreement. If Employee’s
employment with the Employer under this Agreement is terminated for any reason, Employer reserves the exclusive right to notify its clients
of such termination. Employee shall not, during the term of this Agreement and for the thirty (30) day period following the termination
of this Agreement, inform any of Employer’s clients, directly or indirectly, whether through Employee’s own actions or by
the actions of anyone acting on the Employee’s behalf, of the termination of this Agreement or Employee’s employment with
Employer (hereinafter “Non-Disclosure Covenant”). The Parties agree that it is probable the Employer is likely to suffer damage
if Employee breaches the Non-Disclosure Covenant, and that the amount of such damage is not readily ascertainable as of the execution
of this Agreement, the Parties agree that a fair and reasonable amount to be paid by the Employee to Employer for damages the Employer
will suffer in the event of a breach of the Non-Disclosure Covenant is the sum of One Thousand and 00/100 Dollars $1,000 (“Liquidated
Damages”). Employer reserves all legal remedies to collect Liquidated Damages including, but not limited to, the reasonable attorney’s
fees, cost and expenses incurred by Employer in collecting the Liquidated Damages. |
| 9. | Restriction on Services and Covenant Not to Compete. |
| i. | From the date of termination of this Agreement (“Termination Date”)
until the first (1st) anniversary of the Termination Date (the “Restricted Period”), without prior written approval
from Employer, Employee shall not, directly or indirectly, engage in, own, manage, operate, join, control, lend money or other assistance
to, or participate in or be connected with, as an officer, director, employee, partner, shareholder, member, consultant, manager, agent
or otherwise, a business which provides staffing services in the information technology and financial sectors (the “Restricted
Business”) in the geographic area in which the Employer was engaged in business at any time during the twelve (12) months prior
to the Termination Date. Geographic area shall include, but not be limited to (a) a 50 mile radius of each office location maintained
by the Employer at which Employee worked; (b) the following Metropolitan Statistical Areas: (1) Indianapolis, (2)
Cincinnati, (3) Minneapolis-St. Paul; (4) New York City; (5) Edison, New Jersey; (6) Puerto Rico; and (7) India (the
“Restricted Area”). Notwithstanding the foregoing, nothing in this Agreement or in the definition of Restricted
Business shall prohibit Employee from: (A) performing services for the Employer as an employee or consultant; or (B) making or
maintaining passive investments of less than two percent (2%) of the outstanding equity securities in any entity engaged in a
Restricted Business listed for trading on any recognized securities exchange or in the over-the-counter markets. |
| Page | 5 |
| Salary Agreement |
| ii. | Employee hereby acknowledges and agrees that the Restricted Period of time, geographic
scope and scope of Restricted Business specified herein are reasonable and necessary in view of the transactions contemplated by this
Agreement and the nature of the business in which Employer is engaged as of the Effective Date, and the restrictions set forth in this
Section 9 are reasonable and necessary to protect Employer. Employee acknowledges and agrees that Employer would not have entered into
this Agreement but for Employee’s agreements and obligations pursuant to this Section 9. If the scope of any stated restriction
is too broad to permit enforcement of such restriction(s) to its full extent, then the Parties agree that such restriction shall be enforced
and/or modified to the maximum extent permitted by applicable law. The Parties agree that in the event of a breach of this Section 9,
the Restricted Period shall be extended with respect to the breaching party by the period of the breach. |
| B. | Non-Solicitation. During the Restricted Period, for any purpose other
than in connection with Employee’s continued employment with Employer, Employee shall not, directly or indirectly: |
| i. | call upon, solicit, contact or have any communication with any person who is a customer, supplier, licensee,
licensor, franchisee, distributor, employee, consultant or other person who is a known business relation of Employer as of the Termination
Date, or who was a customer, supplier, licensee, licensor, franchisee, distributor, employee, consultant or business relation of Employer
at any time within the twelve (12) month period immediately preceding the end of Employee’s employment with the Employer, if applicable,
for the purpose of: (A) diverting or attempting to divert or influence any business of such customer or supplier to any Restricted Business;
(B) marketing, selling, distributing, leasing or providing any products or services in competition with the Employer; or (C) otherwise
interfering in any fashion with the operations being conducted by the Employer as of the Termination Date or with any operations conducted
by the Employer during the Restricted Period; or |
| ii. | for the benefit of a competing business, solicit for employment, hire or retain any person who is an employee
or independent contractor of the Employer within twelve (12) months of the end of Employee’s employment with the Employer, if applicable.
This Section shall be applicable only as to those employees or independent contractors who have or had access to or possess any knowledge
that would give a competitor an unfair advantage. This Section shall not preclude placement by Employee of advertisements for job openings
in any media, including the internet, newspapers and trade journals of general circulation. |
| Page | 6 |
| Salary Agreement |
| C. | Acknowledgement. Employee hereby acknowledges and agrees that the
Restricted Period of time, Restricted Area and Restricted Business specified herein are reasonable and necessary in
view of the relationship contemplated by this Agreement. Employee further acknowledges and agrees that the restrictions set forth in this
Section 9 are reasonable and necessary to protect the Employer’s interests under this Agreement and to safeguard the value and goodwill
in connection with the same. Employee acknowledges and agrees that Employer would not have entered into this Agreement but for Employee’s
agreements and obligations pursuant to this Section 9 to protect such value and goodwill. If the scope of any stated restriction is too
broad to permit enforcement of such restriction(s) to its full extent, then the Parties agree that such restriction shall be enforced
and/or modified to the maximum extent permitted by applicable law. The Parties agree that in the event of a breach of this Section 9,
the Restricted Period shall be extended with respect to the breaching party by the period of the breach. |
| 10. | Confidential Information. During the performance of the Employee’s
duties under this Agreement, the Employee shall become familiar with various confidential information of the Employer that is not generally
known to the public or other third parties which have or could have economic commercial value to the Employer’s business, including
but not limited to current and prospective customer and client lists, including client contacts (not including the special accounts),
methods, means, processes, know-how, techniques and manners of operating business covered under this Agreement, trade secrets, marketing
plans and strategies, advertising material, forms systems, data processing, statistics, pricing information, costing information, customer
requirements, trade secrets, propriety software products, financial information, and other knowledge and information pertaining to the
operation of the business of the Employer (hereinafter “Confidential Information”). Employee acknowledges that Confidential
Information is a valuable, special, and unique asset of Employer, and solely the property of the Employer. The Employee covenants not
to disclose, reveal or otherwise divulge any such Confidential Information to any person, company, firm or entity during the term of this
Agreement or following its termination, and further covenants to return promptly to the Employer upon termination of this Agreement any
records, forms, software, computer software codes, customers lists and addresses, statements, documents or other writings in the Employer’s
possession which contain information related to or pertaining in any respect to such Confidential Information. The foregoing confidentiality
provision shall not apply to the professional skill set of the Employee existing prior to or developed during the term of this Agreement
or to information which is in the public domain. Employee will notify Employer in writing of any circumstances which may constitute the
unauthorized disclosure, transfer, or use of Confidential Information. Employee will use Employee’s best efforts to protect Confidential
Information from unauthorized disclosure, transfer, or use. Employee will implement and abide by all procedures adopted by Employer to
prevent unauthorized disclosure, transfer, or use of Confidential Information. |
| 11. | Covenant Not to Disparage. Neither Employer nor Employee will make
or publish any disparaging or derogatory statements about the other or their services provided; about Employer’s products, processes,
or services; or about Employer’s past, present and future officers directors, employees and agents. Disparaging or derogatory statements
include without limitation negative statements regarding Employer’s business or other practices; provided, however, nothing herein
shall prohibit Employee from providing any information as may be compelled by law or legal process. |
| 12. | Injunctive Relief and Independent Covenants. Any violations by the Employee of the covenants
contained in Sections 9, 10 or 11 of this Agreement shall be deemed to be a material breach of this Agreement and a wrongful action for
which a remedy at law may not available or adequate and shall entitle the Employer to obtain immediate injunctive relief from a court
of proper jurisdiction to restrain and prohibit the violation of such covenants, without any requirement to post a bond or other security
and without thereby restricting the Employer from any action to collect damages or seek any other available remedy for any such violations. |
| Page | 7 |
| Salary Agreement |
| 13. | Attorneys’ Fees. If any action, at law or in equity, is brought to enforce or interpret
this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees from the non-prevailing party, in addition
to any other relief that may be awarded. |
| 14. | Reasonableness of Terms. Employee acknowledges and agrees that the restrictive covenants
contained in this Agreement restrict Employee from engaging in activities for a competitive purpose and are reasonably necessary to protect
Employer’s legitimate interests in Confidential Information and goodwill. Additionally, Employee acknowledges and agrees that the
restrictive covenants are reasonable in all respects, including without limitation temporal duration, scope of prohibited activities and
geographic areas. Employee further acknowledges and agrees that the restrictive covenants set forth in this Agreement are not intended
to deprive Employee of the ability to earn a livelihood without violating any provision of this agreement. |
| 15. | Obligations to Others and Indemnity. Employee warrants that Employee is not bound by the
terms of a confidentiality agreement, noncompete agreement or any other legal obligation which would either preclude or limit Employee
from fulfilling Employee’s obligations to Employer. While employed by Employer, Employee shall not disclose or use any confidential
information belonging to another entity or other person. |
| 16. | No Waiver. The failure of either party to insist in any one or more
instances upon performance of any provision of this Agreement or to pursue its rights hereunder shall not be construed as a waiver of
any such provisions or the relinquishment of any such rights. |
| 17. | Notices. Notices to the Parties required under this Agreement shall be made in writing by
United States certified mail, return receipt requested, postage prepaid, or by personal hand delivery to the respective party at their
last known address or any subsequent address provided by notice under the provisions of this paragraph to the other party. |
| 18. | Assignment or Transfer. This Agreement, and the parties’ respective duties hereunder,
may not be assigned or transferred by Employee without the written consent of the Company. The Company reserves the right to assign and/or
transfer this Agreement at its sole discretion. |
| 19. | Other Agreements. The Employer and Employee represent to each other that this Agreement
and the performance of duties and exercise of rights hereunder does not conflict with or violate any other agreement to which either may
be a party. This Agreement is intended to replace any prior employment agreements or compensation arrangements between the Parties. To
the extent the terms of this Agreement conflict with other terms or policies of Employer, the terms of this Agreement shall prevail. |
| 20. | General Provisions. This Agreement and any amendments hereto may be modified or amended
only by a written agreement signed or initialed by both Parties. No action or failure to act on the part of any party shall constitute
a waiver of breach hereunder or be used as a defense against the enforcement of any provision herein. In the event any court, administrative
agency or other government entity shall determine that any term or provision of this Agreement is invalid or unenforceable, the other
terms and provisions of the Agreement shall be construed to accomplish the apparent purpose of this Agreement to the extent possible and
those provisions not declared invalid or unenforceable shall remain valid and enforceable. The use of the masculine, feminine or neutral
gender throughout this Agreement shall be deemed to include all genders, and the use of the singular shall include the plural, and the
plural the singular, unless the context indicates otherwise. The title and paragraph headings are inserted for reference purposes only
and shall not be germane to the interpretation or construction of this Agreement. |
| Page | 8 |
| Salary Agreement |
| 21. | Binding Effect. Upon execution by both Parties, this Agreement and the rights, duties and
privileges hereunder shall be binding upon and inure to the benefit of the Parties’ respective successors, permitted assigns, heirs
and personal representatives. |
| 22. | Compliance with IRC Section 409A. To the extent that payments and
benefits in this Agreement are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), this
Agreement is intended to comply with and will be interpreted in a manner intended to comply with Section 409A of the Code. Notwithstanding
anything herein to the contrary, if at the time of Employee’s termination of employment with the Company Employee is a “specified
employee” as defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder) and the deferral
of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary
in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of
the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided
to Employee) until the expiration of the six-month period measured from the date of Employee’s separation from service with the
Company (or the earliest date as is permitted under Section 409A of the Code). On the first day of the seventh month following the date
of Employee’s separation from service, or if earlier, the date of Employee’s death, all payments delayed pursuant to this
paragraph (whether they would have otherwise been paid or reimbursed to Employee in a single sum or in installments) shall be paid or
reimbursed to Employee in a single sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance
with the normal dates specified for them in this Agreement. In addition, if any other payments of money or other benefits due to Employee
hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits
shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment
or other benefits shall be restructured, to the extent possible, in a manner that does not cause such an accelerated or additional tax.
To the extent any reimbursements or in-kind benefits due to Employee under this Agreement constitute “deferred compensation”
under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Employee in a manner consistent with Treas.
Reg. Section 1.409A-3(i)(1)(iv). Each payment made under this Agreement shall be designated as a “separate payment” within
the meaning of Section 409A of the Code. References herein to a termination of Employee’s employment shall be deemed to refer to
the date upon which Employee have experienced a “separation from service” within the meaning of Code Section 409A. The Company
shall consult with Employee in good faith regarding the implementation of the provisions of this Section 22. |
| 23. | Governing Law. This Agreement shall be construed under and governed by the laws of the State
of Indiana. Any legal proceeding brought to enforce the terms of this Agreement shall be commenced in the Superior Courts in Marion County,
Indiana. |
| Page | 9 |
| Salary Agreement |
IN WITNESS WHEREOF the parties have set
their hands the date first written above as of the 15th day of May 2024.
| “EMPLOYER” |
|
“EMPLOYEE” |
| |
|
|
|
| By: |
/s/ John Sharkey |
|
/s/ Thomas Salerno |
| Name: |
John Sharkey |
|
Thomas Salerno |
| Title: |
Sr VP |
|
|
| Page | 10 |
| Salary Agreement |
Exhibit (e)(18)
Execution Version
THIS EMPLOYMENT
AGREEMENT (hereinafter “Agreement”), is entered into this 15th day of May, 2024, to be effective upon the consummation
of the Merger (as defined herein) by and between TSR, Inc., a Delaware corporation, with offices located at 1090 King Georges Post Road,
Edison, New Jersey 08837 (hereinafter “Employer” or “Company”), and, Mohammed Shah Syed (hereinafter “Employee”).
Employer and Employee are collectively referred to herein as (the “Parties”).
RECITALS
WHEREAS,
Employer is a consulting firm which provides IT consulting, staffing, contingent labor, and professional services to individual, business
and governmental customers; and
WHEREAS, Employee
is employed by the Company;
WHEREAS,
Employer is the surviving corporation of the merger between the Company and Vienna Acquisition Corporation (the “Merger”)
which was accomplished pursuant to the terms of an Agreement and Plan of Merger, dated May 15, 2024 among Vienna Parent Corporation, Vienna
Acquisition Corporation and the Company; and
WHEREAS,
Employer and Employee desire to enter into this Agreement pursuant to which Employee shall provide management services to Employer as
described herein.
NOW, THEREFORE,
in consideration of the promises and mutual covenants set forth in this Agreement, the receipt and adequacy of which are acknowledged,
the undersigned agree as follows:
| 1. | Employee’s Duties. Employee shall act
as Managing Director of Employer and in such capacity consistent with the duties and responsibilities associated with and related to
such position and as otherwise reasonably requested by the Company and/or the board of directors of the Company. Employee shall use his
or her best efforts in carrying out Employee’s duties and shall abide by the rules, regulations and policies of Employer pertaining
to the performance of such duties. |
| 2. | Term of Agreement. Employee’s employment
pursuant to this Agreement shall commence on the date the Merger is consummated (the “Effective Date”) and shall continue
until the third anniversary of the Effective Date (the “Initial Term”). At the end of the Initial Term and on each subsequent
anniversary of the Effective Date, the term of this Agreement shall be extended for an additional one (1) year ending on the next anniversary
of the Effective Date (each, a “Renewal Term”), unless either party provides at least sixty (60) days’ advance written
notice prior to the expiration of the then-current Initial Term or Renewal Term to the other party that this Agreement will not be renewed.
The Initial Term and any Renewal Term(s) shall collectively be referred to as the “Term of Employment.” During the Term of
Employment, Employee is employed at will, subject to the termination provisions set forth in this Section 2. |
| A. | Severance. In the event that Employer terminates
Employee’s employment without Cause, subject to the execution of a release in the form acceptable to the Company (“Release”)
within the time frame set forth therein but not more than sixty (60) days following Employee’s “separation from service”
(as defined under Treasury Regulation Section 1.409A-1(h) and without regard to any alternate definition thereunder), and not revoking
the Release as described therein, Employer shall provide Employee with the following “Severance Benefits”: |
| i. | continued payment of Employee’s Base Salary for twelve
(12) months, less applicable withholdings and deductions, with payment to commence on the first regular payroll date following the effective
date of the Release and continuing thereafter on the Employer’s regular payroll dates and in accordance with Employer’s regular
payroll practices for a period of twelve (12) months; and |
| ii. | provided Employee timely elects continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”) and continues copayment of premiums at the same level and cost to
Employee as if Employee remained employed by the Company (excluding, for purposes of calculating cost, an employee’s ability to
pay premiums with pre-tax dollars), continued participation in the Company’s group health plan for Employee and Employee’s
eligible dependents at the Company’s expense until the earlier of (x) twelve (12) months following the termination date of Employee’s
employment, or (y) the date on which Employee ceases to be eligible for COBRA coverage. |
In the event
that Employee voluntarily resigns from employment with Employer or is terminated For Cause, Employee shall not be entitled to any compensation
following the date of separation other than (i) Employee’s Base Salary earned up through such date, (ii) approved, unreimbursed
business expenses in accordance with Company policy; and (iii) obligations owed under the Company’s benefit plans in accordance
with their terms as in effect as of the effective date of termination (collectively, the “Termination Entitlement”). For the
avoidance of doubt, non-renewal of this Agreement shall not, of itself, constitute a termination of Employee’s employment and, absent
further action by Employer or Employee, Employee shall remain an employee at will of Employer following the expiration of this Agreement.
| i. | “For Cause” shall be defined as any act constituting fraud, embezzlement,
or theft; willful misconduct or gross negligence materially damaging to the Company, its reputation, products, services, or customers;
willful failure or refusal to undertake good faith efforts to perform Employee’s duties to the Company (other than any such failure
resulting from Employee’s incapacity due to physical or mental impairment); knowing and intentional violation of any law or regulation;
knowingly and intentionally making an unauthorized disclosure of any trade secret or confidential information of the Company or a parent
or subsidiary. |
| ii. | Company may terminate Employee’s employment For Cause at any time by giving
written notice to Employee setting forth in reasonable detail the nature of such Cause, provided that, any such conduct capable of cure
remains uncured for a period of thirty (30) days following receipt of written notice from the Company. |
| C. | Termination Without Cause. Employer may terminate Employee’s
employment without Cause at any time by providing Employee with written notice. In the event Employee’s employment is terminated
by Employer without Cause, subject to Section 2.A of this Agreement, in addition to the Termination Entitlements, Employee will receive
the Severance Benefits. |
| D. | Termination Due to Company’s Material Breach. Employee will have the right, exercisable
by written notice to the Company, to terminate Employee’s employment during the Term of Employment, effective thirty (30) days after
the giving of notice and a reasonable detail of the nature of the material breach, if at the time of such written notice, the Company
shall be in material breach of its obligations hereunder; provided, however, that Employee provides such written notice to the Company
within thirty (30) days after the occurrence of such material breach; and provided further, this Agreement and Employee’s employment
will not so terminate if within such thirty (30)-day notice period the Company has cured all such material breaches of its obligations
hereunder. If such material breach has not been so cured, Employee may elect to treat such breach as a termination of employment by the
Company without Cause pursuant to Section 2.C above, and Employee shall be entitled to the rights and benefits provided for therein. |
| E. | Resignation by Employee. Employee may terminate this Agreement and
Employee’s employment hereunder for any reason at any time by providing Employer with (30) days’ prior written notice. In
the event Employee voluntarily resigns from employment with Employer other than pursuant to Section 2.D as a result of the Company’s
material breach, Employee will receive the Termination Entitlements. |
| F. | Termination Due to Death or Disability. This Agreement shall terminate
upon Employee’s death, and the Company shall not have further obligations hereunder, except that Employee’s estate will be
entitled to receive the Termination Entitlement. Because o Employee’s position, if, during Employee’s employment, Employee
becomes physically or mentally disabled, whether totally or partially, so that Employee is prevented from performing the material functions
of Employee’s position, with or without accommodation, for periods aggregating six (6) months in any twelve (12) month period, the
Company will be entitled to terminate Employee’s employment upon written notice to Employee given at any time thereafter during
which Employee is still disabled. Employee will thereafter be entitled to receive the Termination Entitlement, and the Company shall have
no further obligations hereunder. |
| 3. | Compensation. Employee’s compensation shall consist of the following components: |
| A. | Base Salary. Employee shall be paid an annual base salary of Three
Hundred and Twenty- Five Thousand Dollars ($325,000.00) (“Base Salary”). Employee shall be paid on a biweekly basis, according
to Employer’s pay schedule. In the event that Employer makes an overpayment in error, Employee authorizes Employer to withhold the
amount overpaid from future pay periods, provided Employer provides written notice in advance detailing the overpayment and otherwise
complies with applicable laws governing deductions from wages. |
| B. | Performance Bonus. The Parties acknowledge and agree that Employee
is eligible to receive an Annual Bonus for fiscal year 2024 (“2024 Annual Bonus”) pursuant to the terms of the Employment
Agreement between TSR, Inc. and Mohammed Shah Syed dated January 1, 2023, along with any addenda thereto (collectively, “Prior Employment
Agreement”). Employer agrees to pay Employee any portion of the 2024 Annual Bonus that remains unpaid as of the Effective Date within
thirty (30) days following the Effective Date. Beginning in fiscal year 2025 and for each subsequent fiscal year during the Term of Employment,
Employee shall be eligible to earn an annual bonus of up to 25% of Employee’s Base Salary in accordance with the terms of the Employer’s
appliable bonus program, to be implemented within sixty (60) days following the Effective Date. |
| C. | Management Incentive Plan. Employer intends to establish a Management Incentive Plan (MIP)
of which Employee shall be a participant. Specific terms and conditions will be defined in the MIP documents, to be finalized and adopted
within sixty (60) days of the Effective Date. The MIP is offered and administered in accordance with written agreement(s) and/or applicable
plan documents. Employee’s MIP participation will be in the same plan as other Company executives. |
| 4. | Vacation,
Sick and Personal Days and Holidays. |
| A. | Paid Time Off. The Employee shall be entitled to four (4) weeks
of paid vacation and an additional five (5) days for sick leave or personal use (collectively, “PTO”). PTO will be granted
to the Employee based upon a calendar year which begins January 1st and ends on December 31st. PTO is not eligible
for rollover from one year to the next and must be used within the year it was allocated or it will be forfeited. Upon Employee’s
voluntary resignation or termination of Employee’s employment For Cause, any remaining unused PTO will be forfeited and will not
be paid upon separation. |
| B. | Holidays. Employee shall be entitled to paid holidays pursuant to the annual holiday schedule
adopted each year by Employer. |
| 5. | Fringe Benefits. Employee shall be entitled to participate in such fringe benefit programs
as are provided by Employer to similarly situated employees during the term of this Agreement, which benefits currently include participation
in Employer’s 401(k), group health, dental, vision and life insurance policy and the Employer’s group short term disability
policy. In addition, the Company will provide Employee with a monthly car allowance of $500.00 and monthly stipend for Employee’s
personal cellular device in the amount of $100.00. |
| 6. | Expenses. Employer shall pay for or reimburse to Employee, within
a reasonable period after presentation of vouchers, receipts or other proof as normally required by Employer, the reasonable and necessary
travel, entertainment and other expenses incurred by Employee in carrying out Employee’s duties under this Agreement. Employer shall
be the sole determiner of what constitutes reasonable and necessary travel, entertainment and other expenses for purposes of payment for
or reimbursement to Employee. Employee shall seek and obtain approval from Employer of any expense which solely or in the aggregate will
exceed the sum of $250.00 before incurring such expense. Expense reports are due no later than the 3rd business day following
the end of the month. Expense reports must be turned in every month. |
| 7. | Acknowledgments. Employee acknowledges that Employer is in the highly
competitive business of contingent labor. Employee acknowledges that Employer recruits or provides on a temporary or permanent basis technical
service personnel (including, but not limited to, such personnel as engineers, designers, drafters, computer programmers, database administrators,
systems analysts or other similarly skilled individuals engaged in similar lines of work), business analysts, bookkeeping, accounting,
industrial personnel (including, but not limited to, assemblers, warehousemen, shipping/receiving, technicians, or other similarly skilled
individuals engaged in similar lines of work), or office support personnel (including, but not limited to, secretaries, data entry personnel,
mailroom personnel, administrative assistants, word processors, desktop publishers or other similarly skilled individuals engaged in similar
lines of work) for its clients. Further, Employee acknowledges that in the course of Employee’s employment with Employer, Employee
(i) will be given access to trade secrets and other Confidential Information (as hereinafter defined); (ii) will participate in the development,
execution, and or usage of products, concepts, strategies, methods, or technologies which are related to Employer’s business; (iii)
will be given specialized training
relating to Employer’s products, processes and/or services; and (iv) will be given access to information regarding Employer’s
customers, clients, vendors and other business relationships. |
| 8. | Termination; Non-Disclosure Covenant and Liquidated Damages. This
Agreement may be terminated with or without cause by either party; provided however, if Employee is terminated without cause, Employee
shall be entitled to the Severance Benefits consistent with and subject to the conditions of Section 2A of this Agreement. If Employee’s
employment with the Employer under this Agreement is terminated for any reason, Employer reserves the exclusive right to notify its clients
of such termination. Employee shall not, during the term of this Agreement and for the thirty (30) day period following the termination
of this Agreement, inform any of Employer’s clients, directly or indirectly, whether through Employee’s own actions or by
the actions of anyone acting on the Employee’s behalf, of the termination of this Agreement or Employee’s employment with
Employer (hereinafter “Non-Disclosure Covenant”). The Parties agree that it is probable the Employer is likely to suffer damage
if Employee breaches the Non-Disclosure Covenant, and that the amount of such damage is not readily ascertainable as of the execution
of this Agreement, the Parties agree that a fair and reasonable amount to be paid by the Employee to Employer for damages the Employer
will suffer in the event of a breach of the Non-Disclosure Covenant is the sum of One Thousand and 00/100 Dollars $1,000 (“Liquidated
Damages”). Employer reserves all legal remedies to collect Liquidated Damages including, but not limited to, the reasonable attorney’s
fees, cost and expenses incurred by Employer in collecting the Liquidated Damages. |
| 9. | Restriction
on Services and Covenant Not to Compete. |
| i. | From the date of termination of this Agreement (“Termination Date”)
until the first (1st) anniversary of the Termination Date (the “Restricted Period”), without prior written approval
from Employer, Employee shall not, directly or indirectly, engage in, own, manage, operate, join, control, lend money or other assistance
to, or participate in or be connected with, as an officer, director, employee, partner, shareholder, member, consultant, manager, agent
or otherwise, a business which provides staffing services in the information technology and financial sectors (the “Restricted
Business”) in the geographic area in which the Employer was engaged in business at any time during the twelve (12) months prior
to the Termination Date. Geographic area shall include, but not be limited to (a) a 50 mile radius of each office location maintained
by the Employer at which Employee worked; (b) the following Metropolitan Statistical Areas: (1) Indianapolis, (2) Cincinnati,
(3) Minneapolis-St. Paul; (4) New York City; (5) Edison, New Jersey; (6) Puerto Rico; and (7) India (the “Restricted Area”).
Notwithstanding the foregoing, nothing in this Agreement or in the definition of Restricted Business shall prohibit Employee from: (A)
performing services for the Employer as an employee or consultant; or (B) making or maintaining passive investments of less than two percent
(2%) of the outstanding equity securities in any entity engaged in a Restricted Business listed for trading on any recognized securities
exchange or in the over-the-counter markets. |
| ii. | Employee hereby acknowledges and agrees that the Restricted Period of time, geographic
scope and scope of Restricted Business specified herein are reasonable and
necessary in view of the transactions contemplated by this Agreement and the nature of the business in which Employer is engaged as of
the Effective Date, and the restrictions set forth in this Section 9 are reasonable and necessary to protect Employer. Employee acknowledges
and agrees that Employer would not have entered into this Agreement but for Employee’s agreements and obligations pursuant to this
Section 9. If the scope of any stated restriction is too broad to permit enforcement of such restriction(s) to its full extent, then the
Parties agree that such restriction shall be enforced and/or modified to the maximum extent permitted by applicable law. The Parties agree
that in the event of a breach of this Section 9, the Restricted Period shall be extended with respect to the breaching party by the period
of the breach. |
| B. | Non-Solicitation. During the Restricted Period, for any purpose
other than in connection with Employee’s continued employment with Employer, Employee shall not, directly or indirectly: |
| i. | call upon, solicit, contact or have any communication with any person who is a customer, supplier, licensee,
licensor, franchisee, distributor, employee, consultant or other person who is a known business relation of Employer as of the Termination
Date, or who was a customer, supplier, licensee, licensor, franchisee, distributor, employee, consultant or business relation of Employer
at any time within the twelve (12) month period immediately preceding the end of Employee’s employment with the Employer, if applicable,
for the purpose of: (A) diverting or attempting to divert or influence any business of such customer or supplier to any Restricted Business;
(B) marketing, selling, distributing, leasing or providing any products or services in competition with the Employer; or (C) otherwise
interfering in any fashion with the operations being conducted by the Employer as of the Termination Date or with any operations conducted
by the Employer during the Restricted Period; or |
| ii. | for the benefit of a competing business, solicit for employment, hire or retain any person who is an employee
or independent contractor of the Employer within twelve (12) months of the end of Employee’s employment with the Employer, if applicable.
This Section shall be applicable only as to those employees or independent contractors who have or had access to or possess any knowledge
that would give a competitor an unfair advantage. This Section shall not preclude placement by Employee of advertisements for job openings
in any media, including the internet, newspapers and trade journals of general circulation. |
| C. | Acknowledgement. Employee hereby acknowledges and agrees that the
Restricted Period of time, Restricted Area and Restricted Business specified herein are reasonable and necessary in view of the relationship
contemplated by this Agreement. Employee further acknowledges and agrees that the restrictions set forth in this Section 9 are reasonable
and necessary to protect the Employer’s interests under this Agreement and to safeguard the value and goodwill in connection with
the same. Employee acknowledges and agrees that Employer would not have entered into this Agreement but for Employee’s agreements
and obligations pursuant to this Section 9 to protect such value and goodwill. If the scope of any stated restriction
is too broad to permit enforcement of such restriction(s) to its full extent, then the Parties agree that such restriction shall be enforced
and/or modified to the maximum extent permitted by applicable law. The Parties agree that in the event of a breach of this Section 9,
the Restricted Period shall be extended with respect to the breaching party by the period of the breach. |
| 10. | Confidential Information. During the performance of the Employee’s
duties under this Agreement, the Employee shall become familiar with various confidential information of the Employer that is not generally
known to the public or other third parties which have or could have economic commercial value to the Employer’s business, including
but not limited to current and prospective customer and client lists, including client contacts (not including the special accounts),
methods, means, processes, know-how, techniques and manners of operating business covered under this Agreement, trade secrets, marketing
plans and strategies, advertising material, forms systems, data processing, statistics, pricing information, costing information, customer
requirements, trade secrets, propriety software products, financial information, and other knowledge and information pertaining to the
operation of the business of the Employer (hereinafter “Confidential Information”). Employee acknowledges that Confidential
Information is a valuable, special, and unique asset of Employer, and solely the property of the Employer. The Employee covenants not
to disclose, reveal or otherwise divulge any such Confidential Information to any person, company, firm or entity during the term of this
Agreement or following its termination, and further covenants to return promptly to the Employer upon termination of this Agreement any
records, forms, software, computer software codes, customers lists and addresses, statements, documents or other writings in the Employer’s
possession which contain information related to or pertaining in any respect to such Confidential Information. The foregoing confidentiality
provision shall not apply to the professional skill set of the Employee existing prior to or developed during the term of this Agreement
or to information which is in the public domain. Employee will notify Employer in writing of any circumstances which may constitute the
unauthorized disclosure, transfer, or use of Confidential Information. Employee will use Employee’s best efforts to protect Confidential
Information from unauthorized disclosure, transfer, or use. Employee will implement and abide by all procedures adopted by Employer to
prevent unauthorized disclosure, transfer, or use of Confidential Information. |
| 11. | Covenant Not to Disparage. Neither Employer nor Employee will make
or publish any disparaging or derogatory statements about the other or their services provided; about Employer’s products, processes,
or services; or about Employer’s past, present and future officers directors, employees and agents. Disparaging or derogatory statements
include without limitation negative statements regarding Employer’s business or other practices; provided, however, nothing herein
shall prohibit Employee from providing any information as may be compelled by law or legal process. |
| 12. | Injunctive Relief and Independent Covenants. Any violations by the Employee of the covenants
contained in Sections 9, 10 or 11 of this Agreement shall be deemed to be a material breach of this Agreement and a wrongful action for
which a remedy at law may not available or adequate and shall entitle the Employer to obtain immediate injunctive relief from a court
of proper jurisdiction to restrain and prohibit the violation of such covenants, without any requirement to post a bond or other security
and without thereby restricting the Employer from any action to collect damages or seek any other available remedy for any such violations. |
| 13. | Attorneys’ Fees. If any action, at law or in equity, is brought to enforce or interpret
this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees from the non-prevailing party, in addition
to any other relief that may be awarded. |
| 14. | Reasonableness of Terms. Employee acknowledges and agrees that the restrictive covenants
contained in this Agreement restrict Employee from engaging in activities for a competitive purpose and are reasonably necessary to protect
Employer’s legitimate interests in Confidential Information and goodwill. Additionally, Employee acknowledges and agrees that the
restrictive covenants are reasonable in all respects, including without limitation temporal duration, scope of prohibited activities and
geographic areas. Employee further acknowledges and agrees that the restrictive covenants set forth in this Agreement are not intended
to deprive Employee of the ability to earn a livelihood without violating any provision of this agreement. |
| 15. | Obligations to Others and Indemnity. Employee warrants that Employee is not bound by the
terms of a confidentiality agreement, noncompete agreement or any other legal obligation which would either preclude or limit Employee
from fulfilling Employee’s obligations to Employer. While employed by Employer, Employee shall not disclose or use any confidential
information belonging to another entity or other person. |
| 16. | No Waiver. The failure of either party to insist in any one or more
instances upon performance of any provision of this Agreement or to pursue its rights hereunder shall not be construed as a waiver of
any such provisions or the relinquishment of any such rights. |
| 17. | Notices. Notices to the Parties required under this Agreement shall be made in writing by
United States certified mail, return receipt requested, postage prepaid, or by personal hand delivery to the respective party at their
last known address or any subsequent address provided by notice under the provisions of this paragraph to the other party. |
| 18. | Assignment or Transfer. This Agreement, and the parties’ respective duties hereunder,
may not be assigned or transferred by Employee without the written consent of the Company. The Company reserves the right to assign and/or
transfer this Agreement at its sole discretion. |
| 19. | Other Agreements. The Employer and Employee represent to each other that this Agreement
and the performance of duties and exercise of rights hereunder does not conflict with or violate any other agreement to which either may
be a party. This Agreement is intended to replace any prior employment agreements or compensation arrangements between the Parties. To
the extent the terms of this Agreement conflict with other terms or policies of Employer, the terms of this Agreement shall prevail. |
| 20. | General Provisions. This Agreement and any amendments hereto may be modified or amended
only by a written agreement signed or initialed by both Parties. No action or failure to act on the part of any party shall constitute
a waiver of breach hereunder or be used as a defense against the enforcement of any provision herein. In the event any court, administrative
agency or other government entity shall determine that any term or provision of this Agreement is invalid or unenforceable, the other
terms and provisions of the Agreement shall be construed to accomplish the apparent purpose of this Agreement to the extent possible and
those provisions not declared invalid or unenforceable shall remain valid and enforceable. The use of the masculine, feminine or neutral
gender throughout this Agreement shall be deemed to include all genders, and the use of the singular shall include the plural, and the
plural the singular, unless the context indicates otherwise. The title and paragraph headings are inserted for reference purposes only
and shall not be germane to the interpretation or construction of this Agreement. |
| 21. | Binding Effect. Upon execution by both Parties, this Agreement and the rights, duties and
privileges hereunder shall be binding upon and inure to the benefit of the Parties’ respective successors, permitted assigns, heirs
and personal representatives. |
| 22. | Compliance with IRC Section 409A. To the extent that payments and
benefits in this Agreement are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), this
Agreement is intended to comply with and will be interpreted in a manner intended to comply with Section 409A of the Code. Notwithstanding
anything herein to the contrary, if at the time of Employee’s termination of employment with the Company Employee is a “specified
employee” as defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder) and the deferral
of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary
in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of
the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided
to Employee) until the expiration of the six-month period measured from the date of Employee’s separation from service with the
Company (or the earliest date as is permitted under Section 409A of the Code). On the first day of the seventh month following the date
of Employee’s separation from service, or if earlier, the date of Employee’s death, all payments delayed pursuant to this
paragraph (whether they would have otherwise been paid or reimbursed to Employee in a single sum or in installments) shall be paid or
reimbursed to Employee in a single sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance
with the normal dates specified for them in this Agreement. In addition, if any other payments of money or other benefits due to Employee
hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits
shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment
or other benefits shall be restructured, to the extent possible, in a manner that does not cause such an accelerated or additional tax.
To the extent any reimbursements or in-kind benefits due to Employee under this Agreement constitute “deferred compensation”
under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Employee in a manner consistent with Treas.
Reg. Section 1.409A-3(i)(1)(iv). Each payment made under this Agreement shall be designated as a “separate payment” within
the meaning of Section 409A of the Code. References herein to a termination of Employee’s employment shall be deemed to refer to
the date upon which Employee have experienced a “separation from service” within the meaning of Code Section 409A. The Company
shall consult with Employee in good faith regarding the implementation of the provisions of this Section 22. |
| 23. | Governing Law. This Agreement shall be construed under and governed by the laws of the State
of Indiana. Any legal proceeding brought to enforce the terms of this Agreement shall be commenced in the Superior Courts in Marion County,
Indiana. |
IN WITNESS WHEREOF the parties have set their hands
the date first written above as of the 15th day of May, 2024.
| “EMPLOYER” |
|
“EMPLOYEE” |
| |
|
|
|
| By: |
/s/ Thomas C. Salerno |
|
/s/ Mohammed Shah Syed |
| Name: |
Thomas C. Salerno |
|
Mohammed Shah Syed |
| Title: |
CEO |
|
|
| Page | 10 |
| Salary Agreement |
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