RECRUITER.COM GROUP, INC.
10-Ks and 10-Qs
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ff
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule
14a-101)
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No.)
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Filed
by Registrant
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Filed
by Party other than Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission
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Only
(as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Materials Pursuant to §240.14a-12
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Recruiter.com Group, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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No fee
required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was
determined):
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$_____
per share as determined under Rule 0-11 under the Exchange
Act.
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
previously paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Recruiter.com Group, Inc.
100 Waugh Dr., Suite 300
Houston, Texas 77007
(855) 931-1500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the
stockholders of Recruiter.com Group, Inc.:
We are
pleased to invite you to attend our Annual Meeting of the
Stockholders (the “Annual Meeting”) of Recruiter.com
Group, Inc., a Nevada corporation (the “Company”),
which will be held at 11:00 a.m. local time on June 11, 2021 at the
Company’s New York office located at 142 W 57th, New York, NY
10019, for the following purposes:
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1.
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To
elect eight directors to our Board of Directors to serve until the
next Annual Meeting of Stockholders or until their successors have
been duly elected or appointed and qualified (“Director
Appointments”);
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2.
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To
ratify the appointment of Salberg & Company, P.A. as the
Company’s independent registered public accounting firm for
the fiscal year ending December 31, 2021 (the “Auditor
Appointment”); and
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3.
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To
approve an amendment to the Recruiter.com Group, Inc. 2017 Equity
Incentive Plan to increase the number of authorized shares under
the plan (the “Plan Amendment”); and
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4.
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Approve
the adjournment of the Annual Meeting to a later date or time, if
necessary, to permit further solicitation and vote of proxies if,
based upon the tabulated vote at the time of the Annual Meeting,
there are not sufficient votes to approve the Director
Appointments, the Auditor Appointment, and/or the Plan
Amendment.
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The
Company’s board of directors (the “Board”) has
fixed the close of business on April 13, 2021 as the date (the
“Record Date”) for a determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting or any
adjournment thereof.
This
Notice of Annual Meeting and the accompanying proxy statement and
form of proxy are first being mailed on or about May 24, 2021 to
our stockholders of record entitled to vote at the Annual
Meeting.
If You Plan to Attend
Please
note that space limitations make it necessary to limit attendance
to stockholders. Registration and seating will begin at 10:00 a.m.
local time. Shares can be voted at the meeting only if the holder
is present in person or is represented by valid proxy.
For
admission to the meeting, each stockholder may be asked to present
valid picture identification, such as a driver’s license or
passport, and proof of stock ownership as of the Record Date, such
as the enclosed proxy card or a brokerage statement reflecting
stock ownership. Cameras, recording devices and other electronic
devices will not be permitted at the meeting.
If you
do not plan on attending the meeting, please vote your shares via
the internet, by phone or by signing and dating the enclosed proxy
and return it in the business envelope provided. Your vote is very
important.
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By the
Order of the Board of Directors
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/s/ Evan Sohn
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Evan
Sohn
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Executive
Chairman
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Dated:
May 21, 2021
Whether
or not you expect to attend in person, we urge you to vote your
shares at your earliest convenience. This will ensure the presence
of a quorum at the meeting. Promptly voting your shares via the
Internet, by phone or by signing, dating, and returning the
enclosed proxy card will save us the expenses and extra work of
additional solicitation. An addressed envelope for which no postage
is required if mailed in the United States is enclosed if you wish
to vote by mail. Submitting your proxy now will not prevent you
from voting your shares at the meeting if you desire to do so, as
your proxy is revocable at your option. Your vote is important, so
please act today!
Table of Contents
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Page
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Recruiter.com Group, Inc.
100 Waugh Dr., Suite 300
Houston, Texas 77007
(855) 931-1500
PROXY STATEMENT
This
proxy statement (the “Proxy Statement”) is being sent
to the holders of shares of voting stock of Recruiter.com Group,
Inc., a Nevada corporation (the “Company”) in
connection with the solicitation of proxies by our Board of
Directors (the “Board”) for use at the Annual Meeting
of Stockholders of the Company which will be held at 11:00 a.m.
local time on June 11, 2021 at the Company’s New York office
located at 142 W 57th, New York, NY 10019 (the “Annual
Meeting”). The Notice of Annual Meeting and this Proxy
Statement and form of proxy are first being mailed on or about on
or about May 24, 2021 to our stockholders of record entitled to
vote at the Annual Meeting.
Who is entitled to vote at the Annual Meeting?
The
Board has fixed the close of business on April 13, 2021 as the
record date (the “Record Date”) for a determination of
the stockholders entitled to notice of, and to vote at, the Annual
Meeting. As of the Record Date, there were (i) 7,425,185 shares of
common stock, par value $0.0001 per share (“Common
Stock”) of the Company, (ii) 426,587 shares of Series D
Convertible Preferred Stock, par value $0.0001 per share
(“Series D Preferred Stock”) of the Company, (iii)
731,845 shares of Series E Convertible Preferred Stock, par value
$0.0001 per share (“Series E Preferred Stock”) of the
Company, and (iv) 46,848 shares of Series F Convertible Preferred
Stock, par value $0.0001 per share (“Series F Preferred
Stock,” and together with the Series D Preferred Stock and
Series E Preferred Stock, the “Preferred Stock”) of the
Company, outstanding. Each share of the Company’s Common
Stock represents one vote that may be voted on each matter that may
come before the Annual Meeting. The holders of Preferred Stock are
entitled to vote on all matters submitted to stockholders of the
Company and are entitled to the number of votes for each share of
Preferred Stock owned as of the Record Date equal to the number of
shares of Common Stock such shares of Preferred Stock are
convertible into at such time, subject to the limitation on the
beneficial ownership set forth in the Certificates of Designation
of Preferred Stock of 4.99% or 9.99%, to the extent the 4.99%
limitation has been waived by the holder. As of the Record Date,
the outstanding Series D Preferred Stock equals 4,529,971 votes,
the outstanding Series E Preferred Stock equals 4,812,677 votes,
and the outstanding Series F Preferred Stock equals 585,600 votes.
As of the Record Date, there are a total of 17,353,432 votes that
may be voted on each matter that may come before the Annual
Meeting. The share and per share information in this proxy does not
reflect a proposed reverse stock split of the outstanding Common
Stock of the Company.
What matters will be voted on at the Annual Meeting?
The
four proposals that are scheduled to be considered and voted on at
the Annual Meeting are as follows:
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1.
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To
elect eight members to the Board (the “Director
Appointments”);
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2.
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To
ratify the appointment of Salberg & Company, P.A. as the
Company’s independent registered public accounting firm for
the fiscal year ending December 31, 2021 (the “Auditor
Appointment”); and
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3.
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To
approve an amendment to the Recruiter.com Group, Inc. 2017 Equity
Incentive Plan to increase the number of authorized shares under
the plan from 1,714,000 to a total of 3,270,000 (the “Plan
Amendment”).
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4.
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Approve
the adjournment of the Annual Meeting to a later date or time, if
necessary, to permit further solicitation and vote of proxies if,
based upon the tabulated vote at the time of the Annual Meeting,
there are not sufficient votes to approve the Director Appointments
and/or Auditor Appointment (the
“Adjournment”).
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Why are we seeking stockholder approval for these
proposals?
Proposal No.
1
: The Nevada Revised Statutes,
as amended, require corporations to hold elections for directors
each year.
Proposal No.
2
: The Company appointed
Salberg & Company, P.A. to serve as the Company’s
independent auditors for the 2021 fiscal year. The Company elects
to have its stockholders ratify such
appointment.
Proposal No.
3
: The Internal Revenue Code,
as amended, requires shareholder approval of equity plans as one of
the conditions for allowing the Company to issue incentive stock
options pursuant to the
Recruiter.com Group, Inc. 2017
Equity Incentive Plan, as amended (the “2017
Plan”)
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Proposal No.
4
: To provide the Company
additional opportunities to receive approval for Proposals Numbers
1, 2, and 3 if necessary.
What are the Board’s voting recommendations?
The
Board of Directors recommends that you vote “FOR” the
Director Appointments, “FOR” the Auditor Appointment,
“FOR” the Plan Amendment, and “FOR” the
Adjournment.
What is the difference between holding shares as a record holder
and as a beneficial owner?
If your
shares are registered in your name with the Company’s
transfer agent, Philadelphia Stock Transfer, you are the
“record holder” of those shares. If you are a record
holder, these proxy materials have been provided directly to you by
the Company.
If your
shares are held in a stock brokerage account, a bank or other
holder of record, you are considered the “beneficial
owner” of those shares held in “street name.” If
your shares are held in street name, these proxy materials have
been forwarded to you by that organization. As the beneficial
owner, you have the right to instruct this organization on how to
vote your shares.
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Who may attend the Annual Meeting?
Record
holders and beneficial owners may attend the Annual Meeting. If
your shares are held in street name, you will need to bring a copy
of a brokerage statement or other documentation reflecting your
stock ownership as of the Record Date. Please see below for
instructions on how to vote at the Annual Meeting if your shares
are held in street name.
How do I vote?
If you
are a stockholder of record, you may:
1.
Vote
by Internet. The website address for Internet voting is on your
proxy card.
2.
Vote
by phone. The phone number for phone voting is on your proxy
card.
3.
Vote
by fax. The fax number for fax voting is on your proxy
card.
4.
Vote
by mail. Mark, date, sign and mail promptly the enclosed proxy
card.
5.
Vote
in person. Attend and vote at the Annual Meeting.
If you
vote by phone, fax or internet, please DO NOT mail your proxy
card.
If you
are a beneficial owner, you must follow the voting procedures of
your nominee included with your proxy materials. If your shares are
held by a nominee and you intend to vote at the Annual Meeting,
please bring with you evidence of your ownership as of the record
date (such as a letter from your nominee confirming your ownership
or a bank or brokerage firm account statement) and a legal proxy
from your nominee authorizing you to vote your shares.
What constitutes a quorum?
To
carry on the business of the Annual Meeting, we must have a quorum.
A quorum is present when one-third of the voting power of the
issued and outstanding capital stock of the Company, as of the
Record Date, or are represented in person or by proxy. Shares owned
by the Company are not considered outstanding or considered to be
present at the Annual Meeting. Broker non-votes and abstentions are
counted as present for the purpose of determining the existence of
a quorum.
As of the Record
Date, there are a total of 17,353,432 votes that may be voted on
each matter that may come before the Annual Meeting. The quorum is
therefore 5,784,478 votes.
5
What happens if the Company is unable to obtain a
quorum?
If a
quorum is not present to transact business at the Annual Meeting or
if we do not receive sufficient votes in favor of the proposals by
the date of the Annual Meeting, the persons named as proxies may
propose one or more adjournments of the Annual Meeting to permit
solicitation of proxies.
What is a “broker non-vote”?
Broker
non-votes occur with respect to shares held in “street
name,” in cases where the record owner (for instance, the
brokerage firm or bank) does not receive voting instructions from
the beneficial owner and the record owner does not have the
authority to vote those shares.
Various
national and regional securities exchanges applicable to brokers,
banks, and other holders of record determine whether the record
owner (for instance, the brokerage firm, or bank) is able to vote
on a proposal if the record owner does not receive voting
instructions from the beneficial owner. The record owner may vote
on proposals that are determined to be routine under these rules
and may not vote on proposals that are determined to be non-routine
under these rules. If a proposal is determined to be routine, your
broker, bank, or other holder of record is permitted to vote on the
proposal without receiving voting instructions from you. The
proposal to ratify the Auditor Appointment (Proposal 2) is a
routine matter and the record owner may vote your shares on this
proposal if it does not get instructions from you.
The
proposal for the Director Appointments (Proposal 1), the proposal
to approve the Plan Amendment (Proposal 3), and the proposal to
approve the Adjournment (Proposal 4) are non-routine and the record
owner may not vote your shares on any of these proposals if it does
not get instructions from you. If you do not provide voting
instructions on these matters, a broker non-vote will occur. Broker
non-votes, as well as abstentions, will each be counted towards the
presence of a quorum but will not be counted towards the number of
votes cast for any proposal.
How many votes are needed for each proposal to pass?
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Proposals
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Vote
Required
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(1)
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Approve
the Director Appointments
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Affirmative
vote of a plurality of the shares of the voting power present. The
eight persons receiving the greatest number of votes will be
elected as directors.
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(2)
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Approve
the Auditor Appointment
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Majority
of the voting power present
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(3)
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Approve
the Plan Amendment
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Majority
of the voting power present
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(4)
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Approve
the Adjournment.
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Majority
of the voting power present
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What constitutes outstanding shares entitled to vote?
At the
close of business on the Record Date, there were 17,353,432 shares
outstanding and entitled to vote, including: (i) 7,425,185 shares
of Common Stock and (ii) 9,928,247 votes as a result of the shares
of Preferred Stock outstanding as of the Record Date which were
convertible into shares of Common Stock as of such date, after
giving effect to the limitation on the beneficial ownership set
forth in the relevant Certificates of Designation of Preferred
Stock of 4.99% or 9.99%, to the extent the 4.99% limitation has
been waived by the holder.
6
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Proposals
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Broker
Discretionary Vote Allowed
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Effect of Broker
Non-Votes on the Proposal
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(1)
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Approve
the Director Appointments;
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No
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None
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(2)
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Approve
the Auditor Appointment;
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Yes
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None
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(3)
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Approve
the Plan Amendment
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No
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None
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(4)
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Approve
the Adjournment.
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No
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None
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What is an Abstention?
An
abstention is a stockholder’s affirmative choice to decline
to vote on a proposal. Under Nevada law, abstentions are counted as
shares present and entitled to vote at the Annual Meeting.
Generally, unless provided otherwise by applicable law, our Bylaws
provide that an action of our stockholders (other than the election
of directors) is approved if a majority of the number of shares of
stock entitled to vote thereon and present (either in person or by
proxy) vote in favor of such action. Therefore, votes that are
“WITHHELD” will have the same effect as an abstention
and will not count as a vote “FOR” or
“AGAINST” a director, because directors are elected by
plurality voting. A vote marked as “ABSTAIN” is not
considered a vote cast and will, therefore, not affect the outcome
in Proposals No. 1, 2, 3, and 4.
What are the voting procedures?
You may
vote in favor of each proposal or against each proposal, or in
favor of some proposals and against others, or you may abstain from
voting on any of these proposals. You should specify your
respective choices on the accompanying proxy card or your voting
instruction form.
Is my proxy revocable?
You may
revoke your proxy and reclaim your right to vote up to and
including the day of the Annual Meeting by giving written notice to
the Corporate Secretary of the Company, by delivering a proxy card
dated after the date of the proxy or by voting in person at the
Annual Meeting. All written notices of revocation and other
communications with respect to revocations of proxies should be
addressed to: Recruiter.com Group, Inc., 100 Waugh Dr. Suite 300,
Houston, Texas 77007, Attention: Corporate Secretary.
Who is paying for the expenses involved in preparing and mailing
this proxy statement?
All of
the expenses involved in preparing, assembling and mailing these
proxy materials and all costs of soliciting proxies will be paid by
the Company. In addition to the solicitation by mail, proxies may
be solicited by the Company’s officers and regular employees
by telephone or in person. Such persons will receive no
compensation for their services other than their regular salaries.
Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of the shares held of record by
such persons, and we may reimburse such persons for reasonable out
of pocket expenses incurred by them in so doing. We may hire an
independent proxy solicitation firm.
Could other matters be decided at the Annual Meeting?
Other
than the Director Appointments, Auditor Appointment, the Plan
Amendment, and the Adjournment proposal, no other matters will be
presented for action by the stockholders at the Annual
Meeting.
7
What is “householding” and how does it affect
me?
Record
holders who have the same address and last name will receive only
one copy of their proxy materials, unless we are notified that one
or more of these record holders wishes to continue receiving
individual copies. This procedure will reduce the Company’s
printing costs and postage fees. Stockholders who participate in
householding will continue to receive separate proxy
cards.
If you
are eligible for householding, but you and other record holders
with whom you share an address, receive multiple copies of these
proxy materials, or if you hold the Company’s Common Stock in
more than one account, and in either case you wish to receive only
a single copy of each of these documents for your household, please
contact the Company’s Corporate Secretary at: Recruiter.com
Group, Inc., 100 Waugh Dr. Suite 300, Houston, Texas 77007,
Attention: Corporate Secretary.
If you
participate in householding and wish to receive a separate copy of
these proxy materials, or if you do not wish to continue to
participate in householding and prefer to receive separate copies
of these documents in the future, please contact the
Company’s Corporate Secretary as indicated above. Beneficial
owners can request information about householding from their
brokers, banks or other holders of record.
Do I have dissenters’ (appraisal) rights?
Appraisal rights
are not available to the Company’s stockholders with any of
the proposals brought before the Annual Meeting.
Interest of Officers and Directors in Matters to Be Acted
Upon
None of
the officers or directors have any interest in any of the matters
to be acted upon at the Annual Meeting.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” PROPOSALS 1, 2. 3,
AND 4.
8
P
ROPOSAL 1. ELECTION OF
DIRECTORS
Our Board is currently composed of eight (8)
members. Directors hold office until the next Annual
Meeting of Stockholders or until their earlier death, resignation,
or removal, or until their successors are elected and
qualified.
Information Regarding our Directors
Our Corporate Governance and Nominating Committee (the
“Nominating Committee”) recommended, and our Board
of Directors approved Evan Sohn, Miles Jennings, Tim
O’Rourke, Douglas Roth, Wallace D. Ruiz, Deborah Leff, Robert
Heath and Steve Pemberton as nominees for election
as directors at the 2021 Annual Meeting to hold office
for a one-year term until our Annual Meeting of Stockholders to be
held in 2022.
The director nominees have consented to be named as
nominees in this proxy statement and have agreed to serve
as directors if elected. Unless otherwise instructed, the
proxy holders will vote the proxies received by them for the eight
(8) nominees named below. If any director nominee of the
Company is unable or declines to serve as a director at
the Annual Meeting, the proxies will be voted for any nominee
designated by the present Board to fill the vacancy. The
Board has no reason to believe that any of the nominees will
be unavailable for election. The elected directors will
hold office until the next Annual Meeting of Stockholders or until
their earlier death, resignation, or removal, or until their
successors are elected and qualified. There are no arrangements or
understandings between any of our directors and any other
person under which any director was selected to serve as
a director of our Company. There are no family
relationships among our directors or
officers.
9
The following sets forth the persons nominated by the
Board for election and certain information concerning those
individuals:
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Director Nominee
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Age
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Position
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Director Since
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Evan
Sohn
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54
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Executive
Chairman and Chief Executive Officer
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April
2019
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Miles
Jennings
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43
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Chief
Operating Officer and Director
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July
2020
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Deborah
Leff
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55
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Director
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August
2020
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Wallace
D. Ruiz
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69
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Director
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May
2018
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Timothy
O’Rourke
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54
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Director
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March
2019
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Douglas
Roth
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52
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Director
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February
2018
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Robert
Heath
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61
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Director
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December
2020
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Steve
Pemberton
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53
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Director
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March
2021
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The
following includes a brief biography of each of the nominees
standing for election to the Board at the Annual Meeting, based on
information furnished to us by each director nominee, with each
biography including information regarding the experiences,
qualifications, attributes or skills that caused the
Nominating Committee
and the Board to
determine that the applicable nominee should serve as a member of
our Board.
Evan Sohn
– Mr. Sohn
has served as our Chief Executive Officer since July 1, 2020 and
our Chairman since April 2019. He served as Vice President of Sales
at Veea Inc., a company offering a platform-as-a-service (PaaS)
platform for computing, mobile payment, point of sale, and retail
solutions, from April 2018 until June 2020 Prior to joining Veea
Inc., from September 2015 to April 2018, Mr. Sohn served as the
Vice President of Sales at Poynt Inc., a company developing and
marketing Poynt, a platform for next generation payments. Prior to
that, from April 2012 to September 2015, Mr. Sohn was the Vice
President of Sales at VeriFone, Inc., a company designing,
marketing, and servicing electronic payment systems. Mr. Sohn is
also the co-founder and Vice President of the Sohn Conference
Foundation, a non-for-profit dedicated to the treatment and cure of
pediatric cancer and related childhood diseases. He is a graduate
of the NYU Stern School of Business with a degree in computer
information systems and management.
Miles Jennings
– Mr.
Jennings has served as the Company’s Chief Operating Officer
and President since July 1, 2020. Prior to that, Mr. Jennings
founded the Company and served as the Chief Executive Officer of
Recruiter.com, Inc. from 2015 until October 2017, and then as Chief
Executive Officer of Truli Technologies, Inc. and its subsidiary,
VocaWorks, Inc., from then until March 31, 2019, when Truli
Technologies merged with Recruiter.com, Inc. Mr. Jennings served as
Chief Executive Officer of the merged company, Recruiter.com Group,
Inc. through July 1, 2020, when he moved into the role of President
and Chief Operating Officer. Mr. Jennings currently serves on
Recruiter.com’s Board. Mr. Jennings has worked in the
recruiting and online recruiting industry since 2003 at employers
including Modis, an Adecco division, and Indeed.com. He is a
graduate of Trinity College in Hartford, CT with a degree in
Philosophy.
Timothy O’Rourke
– Mr. O’Rourke has served on the
Board since March 31, 2019. Mr. O’Rourke was designated by
Genesys pursuant to the terms of the Asset Purchase. Mr.
O’Rourke has served as the Managing Director of Icon
Information Consultants, LP (“Icon”), a provider of
human capital solutions, consulting, payroll and professional
services, and a shareholder of Genesys, since February 2001. Mr.
O’Rourke brings to the Board his experience and expertise in
HR and recruitment solutions for employers. He is a graduate of the
University of Houston with a degree in electrical
engineering.
Douglas Roth
– Mr.
Roth has served on the Board since February 2018. Mr. Roth has been
a Director and Investment Manager at Connecticut Innovations, Inc.
since 2011 and is responsible for sourcing new investment
opportunities, serving on the boards of portfolio companies, and
supporting their growth and success. Mr. Roth was selected for
appointment to the Board for his experience serving on the board of
technology companies and the skills he gained from previously
advising companies regarding product development and launch. He is
a graduate of Boston University with an undergraduate degree in
economics and mathematics as well as a master’s degree in
electrical engineering. He also has an MBA in Entrepreneurial and
Strategic Management from the Wharton School of the University of
Pennsylvania.
Wallace D. Ruiz
–
Mr. Ruiz was appointed to the Board on May 24, 2018. Mr. Ruiz has
served as the Chief Financial Officer of Inuvo, Inc. (NYSE: INUV),
an advertising technology company based in Little Rock, AR since
June 2010. Mr. Ruiz was selected for appointment to the Board for
his experience with public companies as well as his accounting
skills. Mr. Ruiz is a Certified Public Accountant in the State of
New York. He is a graduate of St. John’s University with a
degree in computer science and Columbia University with a MBA in
finance and accounting.
10
Deborah S. Leff -
Ms. Leff was appointed to the Board on
August 31, 2020. Ms. Leff has served as a Global Leader
at IBM since October 2012 and most recently held the position of
Global Industry CTO for Data Science and
AI. Ms. Leff was selected for appointment to the
Board for her experience with successfully implementing Artificial
Intelligence and Machine Learning projects to drive strategic
outcomes. Ms. Leff has worked with Senior Leaders of
Fortune 1000 companies to gain critical insights from data to drive
customer experience and optimize business operations. In addition,
Ms. Leff has built and run global sales teams and brings
experience and expertise in Sales Management and Sales Execution.
Ms. Leff is also the Founder of Girls Who Solve, a STEM
education program for high school girls that focuses on how Data
Science and technology can be used to solve a range of challenges
in both for-profit and
nonprofit organizations.
Robert Heath –
Mr. Heath was appointed to the Board on
December 21, 2020. Mr. Heath is Executive Vice President at RPX
Corporation, a provider of patent risk management solutions. Mr.
Heath joined RPX in 2011 and served as the company’s Chief
Financial Officer, from 2015 to May 2017. During his tenure at RPX,
Mr. Heath has been the principal architect of some of the
industry’s largest syndicated licensing transactions. Before
coming to RPX, he served as Head of Strategy and Acquisitions for
Technicolor, a leading supplier of technology and services to media
companies, where he oversaw an acquisition and divestiture program
that refocused the company from consumer electronics to services
and technology licensing. Prior to Technicolor, Mr. Heath served as
Chief Operating Officer and Chief Financial Officer at iBahn, an
Internet service provider to the hospitality industry. Earlier in
his career, Mr. Heath worked as an investment banker, focusing on
technology and growth companies at Kidder Peabody, SG Warburg and
Robertson Stephens. Mr. Heath received his A.B. from Harvard
University and his M.B.A. from the University of Chicago Booth
School of Business.
Steve Pemberton
- Mr. Pemberton was appointed to
the Board on March 25, 2021. Mr. Pemberton has served as chief
human resources officer (CHRO) of Workhuman, a provider of
cloud-based human capital management solutions since December of
2017. In such capacity, Mr. Pemberton works with HR leaders
and senior management executives worldwide to help build inspiring
workplaces where every employee feels recognized, respected, and
appreciated for who they are and what they do. He champions and
promotes the Workhuman movement to inspire HR leaders to embrace
more humanity and foster a sense of purpose in the workplace. Prior
to joining Workhuman, Mr. Pemberton served as VP Diversity and
Inclusion, Chief Diversity Officer at Walgreens Boots Alliance (and
as Chief Diversity Officer at its predecessor Walgreens) from 2011
to 2017 and as VP, Chief Diversity Officer at Monster.com from 2005
to 2010. In 2015, Mr. Pemberton was appointed by United States
Secretary of Labor Thomas Perez to serve on the Advisory Committee
for the Competitive Integrated Employment of People with
Disabilities. Mr. Pemberton earned his undergraduate and graduate
degrees at Boston College and serves on several nonprofit boards,
including UCAN and Disability:IN, in addition to his own A Chance
in the World Foundation, the non-profit he founded to help young
people aging out of the foster care system.
Family Relationships
There are no family relationships among our directors and/or
executive officers.
Director Independence
Our Board has reviewed the materiality of any relationship that
each of our directors has with us, either directly or indirectly.
Based on this review, our Board has affirmatively determined that
each of Leff, Pemberton, Heath, Roth, and Ruiz, current members of
our Board, meets the independence requirements under the Listing
Rules of The Nasdaq Stock Market. LLC (the “Nasdaq Listing
Rules”).
Board Committees
The Board currently has the following standing committees: the
Audit Committee, the Compensation Committee, and the Corporate
Governance and Nominating Committee (the “Nominating
Committee”).
11
The following table identifies the independent and non-independent
current Board and committee members:
|
Name
|
|
Audit
|
|
Compensation
|
|
Nominating
|
|
Independent
|
|
Evan
Sohn
|
|
|
|
|
|
|
|
|
|
Miles
Jennings
|
|
|
|
|
|
|
|
|
|
Deborah
Leff
|
|
|
|
X
|
|
X
|
|
X
|
|
Timothy
O’Rourke
|
|
|
|
|
|
|
|
|
|
Douglas
Roth
|
|
X
|
|
|
|
Chairman
|
|
X
|
|
Wallace
D. Ruiz
|
|
Chairman
|
|
Chairman
|
|
|
|
X
|
|
Robert Heath
|
|
X
|
|
X
|
|
|
|
X
|
|
Steve Pemberton
|
|
|
|
|
|
X
|
|
X
|
Board and Committee Meetings
During the year ended December 31, 2020, the Board had four
meetings, the Audit Committee had four meetings, the Compensation
Committee had no meetings, and the Nominating Committee had no
meetings.
There were no directors (who were incumbent at the time), who
attended fewer than 75 percent of the aggregate total number of
Board meetings and meetings of the Board committees of which the
director was a member during the applicable period.
Audit Committee
Management has the primary responsibility for the financial
statements and the reporting process, including the system of
internal controls. The Audit Committee reviews the Company’s
financial reporting process on behalf of the Board and administers
our engagement of the independent registered public accounting
firm. The Audit Committee meets with the independent registered
public accounting firm, with and without management present, to
discuss the results of its examinations, the evaluations of our
internal controls, and the overall quality of our financial
reporting.
Audit Committee Financial Expert
Our Board has determined that Mr. Ruiz is qualified as an Audit
Committee Financial Expert, as that term is defined under the rules
of the Securities and Exchange Commission (the “SEC”)
and in compliance with the Sarbanes-Oxley Act.
Compensation Committee
The function of the Compensation Committee is to determine the
compensation of our executive officers. The Compensation Committee
has the power to set performance targets for determining annual
bonuses payable to executive officers and may review and make
recommendations with respect to stockholder proposals related to
compensation matters.
12
Nominating Committee
The responsibilities of the Nominating Committee include the
identification of individuals qualified to become Board members,
the selection of nominees to stand for election as directors, the
oversight of the selection and composition of committees of the
Board, establishing procedures for the nomination process,
oversight of possible conflicts of interests involving the Board
and its members, developing corporate governance principles, and
the oversight of the evaluations of the Board and management. The
Nominating Committee has not established a policy with regard to
the consideration of any candidates recommended by stockholders. If
we receive any stockholder recommended nominations, the Nominating
Committee will carefully review the recommendation(s) and consider
such recommendation(s) in good faith.
Board Diversity
While we do not have a formal policy on diversity, our Board
considers diversity to include the skill set, background,
reputation, type and length of business experience of our Board
members as well as a particular nominee’s contributions to
that mix. Our Board believes that diversity promotes a variety of
ideas, judgments and considerations to the benefit of our Company
and stockholders. Although there are many other factors, the Board
primarily focuses on public company board experience, knowledge of
the recruiting industry, or background in finance or technology,
and experience operating growing businesses.
Board Leadership Structure
Our Board has not adopted a formal policy regarding the separation
of the offices of Chief Executive Officer and Chairman of the
Board. Rather, the Board believes that different leadership
structures may be appropriate for the Company at different times
and under different circumstances, and it prefers flexibility in
making this decision based on its evaluation of the relevant facts
at any given time.
Beginning in April 2019, following the completion of our March 2019
merger and the appointment of Mr. Evan Sohn as our Executive
Chairman, we separated the offices of Chief Executive Officer and
Chairman of the Board. In July 2020, Mr. Sohn was appointed as
Chief Executive Officer and retained his position as Chairman of
the Board. Under our current Board leadership structure, the Chief
Executive Officer is responsible for the day-to-day leadership and
performance of the Company. Mr. Miles Jennings, our Chief Operating
Officer, focuses on allocation of resources, our recruiting
business and the Platform and products, while facilitating
strategic communication and high-quality investor
relations.
Board Role in Risk Oversight
Our Board bears responsibility for overseeing our risk management
function. Our management keeps the Board apprised of material risks
and provides to directors access to all information necessary for
them to understand and evaluate the effect of these risks,
individually or in the aggregate, on our business, and how
management addresses them. Our Executive Chairman works closely
together with the Board once material risks are identified on how
to best address such risks. If the identified risks present an
actual or potential conflict with management, our independent
directors may conduct the assessment.
13
Code of Ethics
Our Board has adopted a Code of Ethics that applies to all of our
employees, including our Executive Chairman, Chief Executive
Officer, and Chief Financial Officer. Although not required, the
Code of Ethics also applies to our directors. The Code of Ethics
provides written standards that we believe are reasonably designed
to deter wrongdoing and promote honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships, full,
fair, accurate, timely and understandable disclosure and compliance
with laws, rules and regulations, including insider trading,
corporate opportunities and whistleblowing or the prompt reporting
of illegal or unethical behavior. We will provide a copy of our
Code of Ethics, without charge, upon request in writing to
Recruiter.com Group, Inc. at 100 Waugh Dr. Suite 300, Houston,
Texas 77007, Attention: Corporate Secretary.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s
directors, executive officers, and persons who own more than 10% of
the Company’s Common Stock to file initial reports of
ownership and changes in ownership of the Company’s Common
Stock with the SEC. These individuals are required by the
regulations of the SEC to furnish us with copies of all Section
16(a) forms they file. Based solely on a review of the copies of
the forms furnished to us none of Company’s directors,
executive officers, and persons who own more than 10% of the
Company’s Common Stock failed to comply with Section 16(a)
filing requirements, except that one Form 4 for Mr. Miles Jennings,
our Chief Operating Officer, reporting his acquisition of shares of
Series E Preferred Stock as consideration in the Merger and one
Form 4 for Mr. Ashley Saddul, our Chief Technology Officer,
reporting a grant of stock options were not timely filed due in
each case to an administrative error.
Communication with our Board
Although the Company does not have a formal policy regarding
communications with the Board, stockholders may communicate with
the Board by writing to us at Recruiter.com Group, Inc., 100 Waugh
Dr. Suite 300, Houston, Texas 77007, Attention: Corporate
Secretary. Shareholders who would like their submission directed to
a member of the Board may so specify, and the communication will be
forwarded, as appropriate.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE
NOMINEES FOR ELECTION AS DIRECTORS.
The
Audit Committee of the Board has appointed Salberg & Company,
P.A. (“Salberg”) as our independent registered
accounting firm for the fiscal year ending December 31, 2021. We
are not required to seek stockholder approval for the appointment
of our independent registered public accounting firm, however, the
Audit Committee and the full Board believe it is sound corporate
practice to seek such approval. If the appointment is not ratified,
the Audit Committee will investigate the reasons for stockholder
rejection and will re-consider the appointment. Even if the
selection is ratified, the Audit Committee in its discretion may
direct the appointment of a different independent registered public
accounting firm at any time during the year if it determines that
such change would be in the best interests of us and our
stockholders.
Representatives of Salberg are not expected to be present at the
annual meeting. However, we will provide contact information for
Salberg to any stockholders who would like to contact the firm with
questions.
14
Fees Billed to the Company in fiscal years 2020 and
2019
The following table provides detail about fees for professional
services rendered to us by Salberg & Company, P.A., our
independent registered public accounting firm engaged to provide
accounting services for the fiscal year ended December 31, 2020 and
2019.
|
|
Fiscal
|
Fiscal
|
|
|
Year Ended
|
Year Ended
|
|
|
December 31,
|
December 31,
|
|
|
2020
|
2019
|
|
Audit
fees (1)
|
$
107,800
|
$
106,400
|
|
Audit
related fees (2)
|
16,300
|
41,300
|
|
Tax
fees
|
-
|
-
|
|
All
other fees
|
-
|
-
|
|
Total
|
$
124,100
|
$
147,700
|
|
(1)
|
Audit
fees relate to the audit of the Company’s annual consolidated
financial statements and the review of the
Company’s
interim
quarterly consolidated financial statements.
|
|
(2)
|
Audit
related fees mainly related to costs incurred in connection with
the acquisition audit of Genesys in 2019 and audit
related
consulting related to a registration statement in
2020.
|
Policy on Pre-Approval of Audit and Permissible Non-audit Services
of Independent Auditors
Consistent with the SEC policies regarding auditor independence,
our Board has responsibility for appointing, setting compensation
and overseeing the work of the independent auditor. In recognition
of this responsibility, our Board has established a policy to
pre-approve all audit and permissible non-audit services provided
by the independent auditor.
Prior to engagement of the independent auditor for the next
year’s audit, management will submit an aggregate of services
expected to be rendered during that year for each of the following
four categories of services to the Board for approval.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
“
FOR
”
THIS
PROPOSAL 2.
In
October 2017, our Board and shareholders authorized the 2017 Plan
covering 475,000 shares of common stock. In December 2019, the
number of shares authorized under the 2017 Plan was increased to
1,098,959 shares.
In May 2020, the number of shares authorized for issuance under the
2017 Plan was increased to 1,714,000 shares. The 2017 Plan as of
May 8, 2020 was approved by the shareholders of the Company in
connection with their approval on that date of the Company’s
predecessor Delaware entity merging with and into a Nevada entity
resulting in reincorporation from the State of Delaware to the
State of Nevada. In June 2020, the number of shares authorized for
issuance under the 2017 Plan was further increased to 2,770,000
shares. In December 2020, the number of shares authorized for
issuance under the 2017 Plan was further increased to 3,270,000
shares. In asking our shareholders to approve the Plan Amendment,
we are asking our shareholders to approve the June 2020 and
December 2020 increases to the number of shares authorized for
issuance under the 2017 Plan.
The
following is a summary of the principal purposes and provisions of
the 2017 Plan, which is qualified in its entirety by reference to
the complete text of the 2017 Plan, a copy of which is attached as
Annex A to this Proxy Statement. To the extent the description
below differs from the text of the 2017 Plan set forth in Annex A,
the text of the 2017 Plan controls.
15
The
purpose of the 2017 Plan is to advance the interests of the Company
and our related corporations by enhancing the ability of the
Company to attract and retain qualified employees, consultants,
officers, and directors, by creating incentives and rewards for
their contributions to the success of the Company and its related
corporations. The 2017 Plan is administered by our Board or by the
Compensation Committee. The following awards may be granted under
the 2017 Plan:
|
|
●
|
incentive
stock options (“ISOs”)
|
|
|
|
|
|
|
●
|
non-qualified
options (“NSOs”)
|
|
|
|
|
|
|
●
|
awards
of our restricted common stock
|
|
|
|
|
|
|
●
|
stock
appreciation rights (“SARs”)
|
|
|
|
|
|
|
●
|
restricted
stock units (“RSUs”)
|
Any
option granted under the 2017 Plan must provide for an exercise
price of not less than 100% of the fair market value of the
underlying shares on the date of grant and not less than $1.60 per
share, but the exercise price of any ISO granted to an eligible
employee owning more than 10% of our outstanding common stock must
not be less than 110% of fair market value on the date of the
grant. The plans further provide that with respect to ISOs the
aggregate fair market value of the common stock underlying the
options which are exercisable by any option holder during any
calendar year cannot exceed $100,000. The exercise price of any NSO
granted under the 2017 Plan is determined by the Board at the time
of grant, but must be at least equal to fair market value on the
date of grant. The term of each plan option and the manner in which
it may be exercised is determined by the Board or the Compensation
Committee, provided that no option may be exercisable more than 10
years after the date of its grant and, in the case of an incentive
option granted to an eligible employee owning more than 10% of the
common stock, no more than five years after the date of the grant.
The terms of any other type of award under the 2017 Plan is
determined by the Board at the time of grant. Subject to the
limitation on the aggregate number of shares issuable under the
plans, there is no maximum or minimum number of shares as to which
a stock grant or plan option may be granted to any
person.
In the
event of a Change of Control (as defined in the 2017 Plan) each
outstanding ISO, NSO, restricted common stock awarded pursuant to
the 2017 Plan, and RSU (collectively, “Stock Rights”)
shall be assumed (as defined in the 2017 Plan) or an equivalent
option or right substituted by the successor corporation or a
parent or subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for
the Stock Rights, the participants shall fully vest in and have the
right to exercise their Stock Rights as to which it would not
otherwise be vested or exercisable. If a Stock Right becomes fully
vested and exercisable in lieu of assumption or substitution in the
event of a merger or sale of assets, the Board or Compensation
Committee shall notify the participant in writing or electronically
that the Stock Right shall be fully vested and exercisable for a
period of at least 15 days from the date of such notice, and any
ISO, NSO or SARs shall terminate one minute prior to the closing of
the merger or sale of assets
The Board unanimously recommends that you vote FOR approval of the
Plan Amendment. The Board believes that it is in the best interests
of the Company and our stockholders to approve the Plan Amendment
in order to ensure the Company’s ability to continue our
equity-based compensation program and continue to motivate our
employees, consultants, and non-employee directors.
As of
the Record Date, we had approximately 660,335 shares remaining for
future grants under the 2017 Plan. As of the Record Date, the
following awards were outstanding under the 2017 Plan:
● 1,693,665 shares of common stock issuable upon exercise of
outstanding stock options, with a weighted-average exercise price
of $2.54 per share;
●
362,000 shares of restricted common stock and
● 554,000 shares of our common stock subject to Restricted
Stock Units.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
“
FOR
”
THIS
PROPOSAL 3.
P
ROPOSAL 4. APPROVAL OF THE
ADJOURNMENT
General
The
Company is asking stockholders to approve, if necessary,
adjournment of the Annual Meeting to solicit additional proxies in
favor of the Director Appointments, the Auditor Appointment, and/or
the Plan Amendment. Any adjournment of the Annual Meeting for the
purpose of soliciting additional proxies will allow stockholders
who have already sent in their proxies to revoke them at any time
prior to the time that the proxies are used.
Vote
Required
The
affirmative vote of a majority of the voting power present or
represented by proxy is required to approve the Adjournment
proposal. Abstentions represent the voting power present under the
Company’s bylaws, and accordingly will have the same effect
as a vote ‘against” on the outcome of this Proposal
4.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
“
FOR
”
THIS
PROPOSAL 4.
16
The
following table sets forth certain information with respect to the
beneficial ownership of our Common Stock as of the Record Date for
(i) each person who is known by the Company to own beneficially
more than 5% of the Common Stock, (ii) each of the Company’s
current directors and executive officers, and (iii) all of the
Company’s current directors and executive officers as a
group. Other than as set forth below, we are not aware of any other
stockholder who may be deemed a beneficial owner of more than 5% of
our Common Stock.
Beneficial
ownership is determined in accordance with the rules of the SEC. In
computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of Common Stock
subject to options or warrants held by that person that are
currently exercisable or will become exercisable within sixty (60)
days after April 13, 2021 are deemed outstanding, while such shares
are not deemed outstanding for purposes of computing percentage
ownership of any other person. Unless otherwise indicated in the
footnotes below, we believe that the persons and entities named in
the table have sole voting or investment power with respect to all
shares beneficially owned, subject to community property laws where
applicable.
Unless
otherwise indicated, the address for each beneficial owner listed
in the table below is c/o Recruiter.com Group, Inc., 100 Waugh Dr.
Suite 300, Houston, Texas,77007.
|
Title of Class
(1)
|
|
Beneficial
Owner
|
Amount of
Beneficial Ownership
|
Percent
Beneficially Owned
|
|
Named
Executive Officers:
|
|
|
|
|
|
Common
Stock
|
|
Miles Jennings
(2)
|
792,755
|
9.99
%
|
|
Common
Stock
|
|
Evan Sohn
(3)
|
1,025,674
|
12.91
%
|
|
Common
Stock
|
|
Rick Roberts
(4)
|
246,249
|
3.31
%
|
|
Common
Stock
|
|
Ashley Saddul
(5)
|
376,990
|
4.99
%
|
|
Common
Stock
|
|
Judy Krandel
(6)
|
26,087
|
*
%
|
|
Directors:
|
|
|
|
|
|
Common
Stock
|
|
Deborah Leff
(7)
|
18,750
|
*
%
|
|
Common
Stock
|
|
Tim O’Rourke
(8)
|
778,130
|
9.99
%
|
|
Common
Stock
|
|
Douglas Roth
(9)
|
44,280
|
*
|
|
Common
Stock
|
|
Wallace Ruiz
(10)
|
44,280
|
*
|
|
Officers
and Directors as a group (9 persons) (11)
|
|
|
3.353,195
|
41.19
%
|
|
5%
Stockholders: (12)
|
|
|
|
|
|
Common
Stock
|
|
Icon Information
Consultants, LP (13)
|
777,850
|
9.99
%
|
|
Common
Stock
|
|
Cavalry Fund I L.P.
(14)
|
791,230
|
9.99
%
|
|
Common
Stock
|
|
L1 Capital Global
Opportunities Master Fund (15)
|
811,000
|
9.99
%
|
|
Common
Stock
|
|
Joe Abrams
(16)
|
809.980
|
9.99
%
|
|
Common
Stock
|
|
Michael Woloshin
(17)
|
444,765
|
5.99
%
|
|
*
|
Less
than 1%.
|
17
|
(1)
|
Does
not include information regarding the holders of more than 5% of
shares of Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock as separate classes. The holders of Series
D Preferred Stock, Series E Preferred Stock and Series F Preferred
Stock vote together with the holders of Common Stock on all matters
on an as converted basis, subject to the 4.99% or 9.99% beneficial
ownership limitation, as applicable.
|
|
|
|
|
(2)
|
Miles
Jennings is the Chief Operating Officer of the Company. Includes
(i) 471,000 shares of our Common Stock issuable upon conversion of
Series E Preferred Stock beneficially owned by Mr. Jennings,
subject to the 9.99% beneficial ownership limitation, and (ii)
40,298 shares issuable upon exercise of stock options that are
vested or vesting within 60 days from April 29, 2021. Because of
this beneficial ownership limitation, the table does not include
any additional language upon conversion of his Series E Preferred
Stock.
|
|
|
|
|
(3)
|
Mr.
Sohn is the Executive Chairman and Chief Executive Officer.
Includes 520,129 shares of our Common Stock issuable upon exercise
of vested stock options.
|
|
|
|
|
(4)
|
Mr.
Roberts is the President of Recruiting Solutions. Includes (i)
83,050 shares of our Common Stock owned by The Roberts Living
Trust, of which Mr. Roberts is a trustee, and (ii) 25,536 shares of
our Common Stock issuable upon exercise of vested stock
options.
|
|
|
|
|
(5)
|
Mr.
Saddul is the Chief Technology Officer. Includes (i) 107,000 shares
of our Common Stock issuable upon conversion of Series E Preferred
Stock beneficially owned by Mr. Saddul, subject to the 4.99%
beneficial ownership limitation, and (ii) 17,024 shares issuable
upon exercise of stock options that are vested or vesting within 60
days from April 29, 2021. Because of this beneficial ownership
limitation, the table does not include any additional language upon
conversion of his Series E Preferred Stock.
|
|
|
|
|
(6)
|
Ms.
Krandel is the Chief Financial Officer. Includes 26,087 shares of
our Common Stock issuable upon exercise of vested stock
options.
|
|
(7)
|
Represents
vested stock options.
|
|
(8)
|
Includes
(i) 416,350 shares of our Common Stock and (ii) 330,000 shares of
our Common Stock issuable upon conversion of Series F Preferred
Stock beneficially owned by Icon Information Consultants, LP, of
which Mr. O’Rourke is the Managing Director, and (ii) 31,780
shares of our Common Stock issuable upon exercise of vested stock
options. Mr. O’Rourke disclaims beneficial ownership of the
shares beneficially owned by Icon Information Consultants, LP,
except to the extent of his pecuniary interest
therein.
|
|
|
|
|
(9)
|
Represents
vested stock options.
|
|
|
|
|
(10)
|
Represents
vested stock options.
|
|
|
|
|
(11)
|
Includes
(i) 908,000 shares of our Common Stock issuable upon conversion of
Series E Preferred Stock and Series F Preferred Stock, and (ii)
768,164 shares of Common Stock issuable upon exercise of stock
options that have vested or are vesting within 60 days from April
13, 2021.
|
|
|
|
|
(12)
|
To our
knowledge, except as noted in the table above, no person or entity
is the beneficial owner of more than 5% of the voting power of our
capital stock.
|
|
|
|
|
(13)
|
Includes
361,500 shares of Common Stock issuable upon conversion of Series F
Preferred Stock. Address is 100 Waugh Drive, Suite 300, Houston,
Texas 77007. Tim O’Rourke, Managing Director, has the sole
voting and investment power with respect to these
shares.
|
|
|
|
|
(14)
|
Includes
295,730 shares of Common Stock and 495,500 shares of Common Stock
issuable upon conversion of Series D Preferred Stock. Address is 61
Kinderkamack Road, Woodcliff Lake, NJ 07677. Thomas Walsh, the
Manager of Cavalry Fund I Management LLC, the General Partner of
Cavalry Fund I L.P. has the sole voting and investment power with
respect to these shares.
|
|
|
|
|
(15)
|
Includes
118,000 shares of Common Stock and 693,000 shares of Common Stock
issuable upon conversion of Series D Preferred Stock. Address is
135 East 57th Street, New York, NY 10022. David Feldman, Director
of the L1 Capital Global Opportunities Master Fund, has the sole
voting and investment power with respect to these
shares.
|
|
|
|
|
(16)
|
Includes
(i) 124,295 shares of Common Stock beneficially owned by Mr. Abrams
as the trustee of the Joseph W and Patricia G Abrams Family Trust,
(ii) 684,000 shares of Common Stock issuable upon conversion of
Series E Preferred Stock, and (iii) 1,685 shares of Common Stock
beneficially owned by Cicero Consulting Group LLC, which Mr. Abrams
controls together with Mr. Woloshin. Address is 131 Laurel Grove
Ave., Kentfield, CA 94904. Mr. Abrams has the sole voting and
investment power with respect to the shares discussed in (i) and
(ii) of this footnote and shared voting and investment power with
respect to the shares discussed in (iii) of this
footnote.
|
|
|
|
|
(17)
|
Includes
(i) 1,685 shares of Common Stock beneficially owned by Cicero
Consulting Group LLC, which Mr. Woloshin controls together with Mr.
Abrams, and (ii) 1,407 shares of Common Stock owned by Caesar
Capital Group LLC, with respect to which Mr. Woloshin has the
shared voting and dispositive power with respect to the shares
discussed in (i) of this footnote, and the sole voting and
dispositive power with respect to the shares discussed in (ii) of
this footnote. Address is 1858 Pleasantville Road Suite 110,
Briarcliff Manor NY 10510.
|
18
EXECUTIVE
COMPENSATION
The
following information is related to the compensation paid,
distributed or accrued by us for the years ended December 31, 2020
and December 31, 2019 for our Chief Executive Officer (principal
executive officer) serving during the year ended December 31, 2020
and the two other most highly compensated executive officers
serving at December 31, 2020 whose total compensation exceeded
$100,000 (the “Named Executive Officers”).
Summary Compensation Table
|
Name and
Principal Position
|
|
Year
|
Salary
($)
|
Stock
Awards
(
$)(1)
|
Option Awards
($)(1)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
All Other
Compensation ($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
Miles Jennings
|
|
2020
|
171,231
(2)
|
-
|
-
|
-
|
18,416
(3)
|
189,647
|
|
Chief Operating
|
|
2019
|
158,356
|
-
|
73,892
|
9,375
(2)
|
14,072
(3)
|
255,695
|
|
Officer (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evan Sohn
|
|
2020
|
175,090
|
1,662,000
|
-
|
-
|
10,329
(3)
|
1,847,419
|
|
Chief Executive Officer
(5)
|
|
2019
|
95,000
|
2,858,999
|
2,423,101
|
-
|
-
|
5,377,100
|
|
|
|
|
|
|
|
|
|
|
|
Judy Krandel
|
|
2020
|
43,350
|
-
|
1,143,209
|
-
|
-
|
1,186,559
|
|
Chief Financial Officer
(9)
|
|
2019
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Rick Roberts
|
|
2020
|
201,539
|
-
|
-
|
25,000
(2)
|
18,688
(3)
|
245,227
|
|
President of Subsidiary
(6)
|
|
2019
|
151,539
|
-
|
55,419
|
-
|
16,271
(3)
|
223,229
|
|
|
|
|
|
|
|
|
|
|
|
Ashley Saddul
|
|
2020
|
235,444
(8)
|
-
|
-
|
-
|
-
|
235,444
|
|
Chief Technology Officer
(7)
|
|
2019
|
196,400
(8)
|
-
|
36,946
|
9,375
(2)
|
-
|
242,721
|
|
(1)
|
The
amounts in this column represent the fair value of each award as of
the grant date as computed in accordance with FASB ASC Topic 718
and the SEC disclosure rules. Pursuant to SEC rules, the amounts
shown disregard the impact of estimated forfeitures related to
service-based vesting conditions. Does not reflect the actual
economic value realized by the Named Executive Officer. The
assumptions used in calculating the grant date fair value of stock
awards and option awards may be found in Note 1 to our audited
financial statements included in our Annual Report on Form
10-K.
|
|
(2)
|
For Mr.
Jennings and Mr. Saddul, this represents the amount earned upon
achievement in 2019 of the network growth performance objective of
20,000 recruiters under the executive cash incentive program
approved by the Board in December 2019. For Mr. Roberts, this
represents the amount earned upon achievement in 2020 for meeting
certain operational and customer growth milestones. See
“Executive Incentive Program—Performance
Bonuses”.
|
|
(3)
|
Represents
the cost of health insurance not generally available on a
non-discriminatory basis to all employees.
|
|
(4)
|
Mr.
Jennings has served as our Chief Executive Officer since October
31, 2017 through June 18, 2020. Mr. Jennings became Chief Operating
Officer on June 18, 2020. Mr. Jennings salary was $79,539 for the
period January 1, 2020 to June 18, 2020 and was $91,692
thereafter.
|
|
(5)
|
Mr.
Sohn has served as our Executive Chairman since March 31, 2019
through June 18, 2020. Mr. Sohn became Chief Executive Officer on
June 18, 2020. Mr. Sohn’s salary was $68,167 through June 18,
2020 and $106,923 thereafter. Mr. Sohn’s stock award was
granted upon his appointment to Chief Executive
Officer.
|
|
(6)
|
Mr.
Roberts has served as the President of Recruiting Solutions since
March 31, 2019.
|
|
(7)
|
Mr.
Saddul has served as the Company’s Chief Technology Officer
since April 2019.
|
|
(8)
|
Includes
$235,444 and $181,400 paid to Recruiter.com (Mauritius) Ltd. For
the years 2020 and 2019, respectively, of which Mr. Saddul is an
employee. See “Named Executive Officer Employment and
Consulting Agreements – Software Development and Maintenance
Agreement” for more information. For 2020, out of $235,444
paid to Recruiter.com (Mauritius) Ltd., Mr. Saddul received
approximately $148,617 (the equivalent of MUR 2,923,631 based on
the exchange rate as of December 31, 2020 of MUR 39.35 per one
Dollar plus $74.319). For 2019, out of $181,400 paid to
Recruiter.com (Mauritius) Ltd., Mr. Saddul received approximately
$93,725 (the equivalent of MUR 3,406,820 based on the exchange rate
as of December 31, 2019 of MUR 36.349 per one Dollar).
|
|
(9)
|
Ms.
Krandel has served as the Company’s Chief Financial Officer
since June 2020.
|
19
Named Executive Officer Employment Agreements
Jennings Agreement
We
entered into an employment agreement with Miles Jennings, our
former Chief Executive Officer and current Chief Operating Officer,
effective October 31, 2017 (the “Jennings Agreement”).
The Jennings Agreement provides that he will serve as the Chief
Executive Officer of the Company for a period of one year, subject
to an automatic renewal for successive one-year terms unless prior
notice of non-renewal is given by either party. Effective December
1, 2019, the Jennings Agreement was amended to increase Mr.
Jennings’ annual base salary from $150,000 to
$200,000.
Under
the Jennings Agreement, Mr. Jennings is entitled to severance in
case of termination of employment. The termination provisions are
intended to comply with Section 409A of the Internal Revenue Code
of 1986 (the “Code”) and the rules and regulations
thereunder.
In the
event of termination by the Company without “cause” or
resignation for “good reason,” Mr. Jennings is entitled
to receive three months’ base salary, will have six months
from the date of termination to exercise his outstanding stock
options and continued benefits for 12 months.
In case
of termination or change in title upon a change of control event,
Mr. Jennings is entitled to receive six months’ base salary,
immediate vesting of unvested equity awards, which he will have the
right to exercise within six months from the date of termination,
and continued benefits for 12 months.
“Change
of Control” is defined in the Jennings Agreement the same way
it is defined under Section 409A of the Code. Generally,
“good reason” is defined as a material diminution in
Mr. Jennings’ authority, duties or responsibilities due to no
fault of his own (unless he has agreed to such diminution); or (ii)
any other action or inaction that constitutes a material breach by
the Company under the Jennings Agreement; or (iii) generally a
relocation of the principal place of employment to a location
outside of New York metropolitan area.
Under
the terms of his Jennings Agreement, Mr. Jennings is subject to
non-competition and non-solicitation covenants during the term of
his employment and during one year following termination of
employment with the Company. The Jennings Agreement also contains
customary confidentiality and non-disparagement
covenants.
20
Sohn Agreement
On June
18, 2020, the Board appointed Mr. Evan Sohn as the Chief Executive
Officer of the Company, effective immediately. Mr. Sohn will also
continue to serve as the Chairman of our Board. In connection with
his appointment, on June 19, 2020 the Company entered into a
one-year employment agreement (the “Sohn Agreement”)
with Mr. Sohn. Pursuant to the Sohn Agreement, Mr. Sohn will be
paid an annual base salary of $200,000 and is entitled to earn a
bonus of up to $200,000, $150,000 of which is based on the Company
meeting the following milestones: (i) $50,000 upon the listing of
the Common Stock on the Nasdaq Capital Market or NYSE American, or
any successor thereof (the “Uplisting”); (ii) $50,000
upon a financing resulting in gross proceeds of at least
$5,000,000; and (iii) $50,000 upon the Company first achieving
profitability on a quarterly basis during the term of the
Employment Agreement. The remaining $50,000 of Mr. Sohn’s
bonus under the Sohn Agreement will be subject to the determination
of the Board in its discretion.
In
connection with his appointment, the Board approved a grant to Mr.
Sohn pursuant to the Sohn Agreement of 554,000 restricted stock
units (the “RSUs”), subject to and issuable upon the
Uplisting. The RSUs will vest in equal quarterly installments over
a two-year period from the date of the Uplisting, subject to Mr.
Sohn serving as an executive officer of the Company on each
applicable vesting date. The RSUs will be issued under the 2017
Plan.
Krandel Consulting Agreement
In
connection with her appointment, the Company entered into a
Consulting Agreement (the “Consulting Agreement”) with
Ms. Krandel, effective June 1, 2020. The initial term of the
Consulting Agreement is six months, subject to a 12-month extension
in the Company’s discretion. Pursuant to the Agreement, as
compensation for her services Ms. Krandel will receive a fixed fee
of $5,000 per month. The Company also issued to Ms. Krandel on the
effective date of her appointment, five-year non-qualified options
to purchase 26,087 shares of the Company’s common stock at an
exercise price per share at least equal to the closing price of the
Company’s common stock on OTCQB as of the trading day
immediately preceding the effective date of her appointment (the
“Initial Term Options”). The Initial Term Options vest
in six equal monthly installments on the last calendar day of each
calendar month, with the first portion vesting on May 31, 2020,
subject to Ms. Krandel serving as the Chief Financial Officer of
the Company on each applicable vesting date. The Initial Term
Options will vest in full upon the listing of the Company’s
securities on NYSE American or the Nasdaq Capital Market. The
Company also agreed to issue to Ms. Krandel five-year non-qualified
options to purchase 431,251 shares of the Company’s common
stock at an exercise price per share at least equal to the closing
price of the Company’s common stock on OTCQB as of the
trading day immediately preceding the effective date of her
appointment (the “Uplist Options”). The Uplist Options
will vest over a two-year period in equal quarterly installments on
the last day of each calendar quarter, with the first portion
vesting on the last day of the calendar quarter during which the
Company’s securities begin trading on NYSE American or the
Nasdaq Capital Market, subject to Ms. Krandel serving as the Chief
Financial Officer of the Company on each applicable vesting date.
The Initial Term Options and the Uplist Options are to be issued
under the Company’s 2017 Equity Incentive Plan.
The
Krandel Consulting Agreement was amended on January 7, 2021. The
Consulting Agreement was extended for another 6 months from
December 1, 2020 until May 31, 2021 unless sooner terminated as a
result of the uplist to a national exchange such as Nasdaq or NYSE.
The monthly compensation was increased to $13,350, the additional
monthly compensation of $8,350 will be accrued and paid upon a
successful uplist.
Software Development and Maintenance Agreement
On
January 17, 2020, we entered into a Technology Services Agreement
(the “Services Agreement”) with Recruiter.com
(Mauritius) Ltd., a Mauritius private company (“Recruiter.com
Mauritius”) and a related party, for the provision of certain
services to the Company, including software development and
maintenance related to the Company’s website and platform on
an independent contractor basis. Recruiter.com Mauritius had been
providing software development services to Pre-Merger Recruiter.com
since August 25, 2014 pursuant to an oral agreement. Our Chief
Technology Officer is an employee of, and exercises control over,
Recruiter.com Mauritius. Recruiter.com Mauritius was formed solely
for the purpose of performing services to us and has no other
clients.
21
Pursuant
to the Services Agreement, the Company has agreed to pay
Recruiter.com Mauritius fees in the amount equal to the actualized
documented costs incurred by Recruiter.com Mauritius in rendering
the services pursuant to the Services Agreement. We paid
Recruiter.com Mauritius $235,444 in fees from January 1 through
December 31, 2020 and $181,400 for 2019. As of December 31, 2020,
we did not owe Recruiter.com Mauritius any fees.
The
initial term of the Services Agreement is five years, whereupon it
shall automatically renew for additional successive 12-month terms
until terminated by either party by submitting a 90-day prior
written notice of non-renewal. The Services Agreement may be
terminated without cause by either party upon prior written notice,
which shall be a 15-day prior written notice if given by the
Company and a 90-day prior written notice if given by the Service
Provider.
Executive Incentive Program
Performance Bonuses
Effective
December 1, 2019, the Board approved an executive cash incentive
program for the 2019 and 2020 performance periods. Pursuant to the
terms of the program, for each performance period beginning January
1 and ending December 31, 2019 and 2020 (each a “Performance
Period”), each of our executive officers is eligible to earn
a cash bonus in the amount of up to 100% of the maximum amount,
such maximum amount ranging from $25,000 to $150,000, determined by
the Compensation Committee for each such executive officer and
respective performance period. The actual amount of the cash
incentive award to be received by each executive officer is
determined by the Compensation Committee based on the achievement
by such executive officer of certain performance objectives set by
the Compensation Committee, including the Company achieving certain
revenue thresholds, EBITDA, and the number on recruiters on our
Platform. The actual amount of the cash incentive award that each
executive officer is entitled to receive is to be determined as a
percentage of their respective maximum amounts as
follows:
|
(i)
|
Performance
Objective #1 – 45% of the maximum amount;
|
|
(ii)
|
Performance
Objective #2 – 30% of the maximum amount; and
|
|
(iii)
|
Performance
Objective #3 – 25% of the maximum amount.
|
The
Compensation Committee has approved the performance objectives for
our executive officers for the 2019 and 2020 performance periods.
Pursuant to the terms of the Cash Incentive Program, (i) Mr.
Jennings is eligible to receive up to $37,500 for the 2019
Performance Period and up to $50,000 for the 2020 Performance
Period if the Company reaches certain capital raising, revenue and
network growth milestones; (ii) Mr. Sohn is eligible to receive up
to $37,500 for the 2019 Performance Period and up to $50,000 for
the 2020 Performance Period if the Company reaches certain capital
raising milestones; (iii) Mr. Scherne is eligible to receive for
each Performance Period up to $25,000 if the Company meets certain
financial reporting and audit milestones; (iv) Mr. Saddul is
eligible to receive up to $37,500 for the 2019 Performance Period
and up to up to $50,000 for the 2020 Performance Period if the
Company meets certain operational, network growth, and
technological milestones; and (v) Mr. Roberts is eligible to
receive up to $112,500 for the 2019 Performance Period and up to
$150,000 for the 2020 Performance Period if the Company meets
certain revenue, operational and customer growth milestones. The
Company has met the network growth objective for the 2019
Performance Period, which entitled each of Miles Jennings and
Ashley Saddul to receive a cash award of $9,375. In 2020, the
Company met financial reporting and audit milestones and Mr.
Scherne earned a bonus of $25,000. Mr. Roberts hit certain levels
of his milestones and earned a bonus of $25,000.
Discretionary Equity Awards
The
Compensation Committee has the authority to grant discretionary
equity awards to our executive officers, including our NSOs, under
the 2017 Plan.
On May
14, 2020, the Compensation Committee approved the following grants
to Judy Krandel. 26,087 stock options to purchase shares of Common
Stock, of the Company, at an exercise price of $2.50. One-sixth of
the stock options were vested upon grant and the balance vested in
equal installments over the next 5 months. Judy Krandel also
received a grant of 431,251 stock options which vest over a 2 year
period in equal quarterly installments on the last day of each
calendar quarter, with the first portion vesting on the last day of
the calendar quarter during which the Company’s securities
begin trading on NYSE American or the NASDAQ Capital Market,
subject to the Consultant serving as the Chief Financial Officer of
the Company on each applicable vesting date. The stock options were
granted under the Company’s 2017 Equity Incentive
Plan.
On June
17, 2020, the Compensation Committee approved a grant of 554,000
Restricted Stock Units to Evan Sohn subject to and issuable upon
the listing of the Company’s common stock on the NYSE
American or the NASDAQ Capital Market. The RSUs vest over a 2 year
period from the date of the Uplisting in equal quarterly
installments on the last day of the calendar quarter during which
the Uplisting takes place, subject to Mr. Sohn serving as an
executive officer of the Company on each applicable vesting date,
provided that the RSUs shall vest in full immediately upon the
termination of Mr. Sohn’s employment by the Company without
cause (as defined in the employment agreement).
22
Outstanding Equity Awards at December 31, 2020
Listed
below is information with respect to unexercised options that have
not vested, and equity incentive plan awards for each Named
Executive Officer outstanding as of December 31, 2020:
Outstanding Equity Awards At Fiscal Year-End
|
|
Option
Awards
|
Stock
Awards
|
|||||
|
Name
|
Number of
Securities Underlying Unexercised Options (#)
Exercisable
|
Number of
Securities Underlying Unexercised Options
(#)
Unexercisable
|
|
Option Exercise
Price($)
|
Option
Expiration Date
|
Number of Shares
of Stock That Have Not Vested( #)
|
MarketValue of
Sharesof Stock That Have NotVested
($)
|
|
|
|
|
|
|
|
|
|
|
Miles Jennings
|
6,250
|
2
|
|
6.40
|
2/11/2023
|
-
|
-
|
|
|
34,048
|
17,024
|
(1
)
|
1.45
|
12/23/2022
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Evan Sohn
|
43,423
|
-
|
|
3.52
|
2/4/2024
|
554,000
(6)
|
1,828,200
(7)
|
|
|
451,170
|
-
|
|
6.40
|
5/14/2024
|
-
|
-
|
|
|
25,536
|
12,768
|
(2
)
|
1.45
|
12/23/2022
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Rick Roberts
|
25,536
|
12,768
|
(3
)
|
1.45
|
12/23/2022
|
-
|
-
|
|
Ashley Saddul
|
17,024
|
8,512
|
(4
)
|
1.45
|
12/23/2022
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Judy Krandel
|
26,087
|
-
|
|
2.50
|
5/14/2025
|
-
|
-
|
|
|
-
|
431,251
|
(5
)
|
2.50
|
|
-
|
-
|
|
(1)
|
The
remainder vests in December 23, 2021.
|
|
(2)
|
The
remainder vests in December 23, 2021.
|
|
(3)
|
The
remainder vests in December 23, 2021.
|
|
(4)
|
The
remainder vests in December 23, 2021.
|
|
(5)
|
Will be
issued upon the effective date of her appointment as the Chief
Financial Officer of the Company, and will vest over a two-year
period in equal quarterly installments.
|
|
(6)
|
Will be
issued upon the listing of the Company’s common stock on the
NASDAQ Capital Market or NYSE, American, or other successor of the
foregoing, and vest over a two-year period from the date of the
Uplisting in equal quarterly installments.
|
|
(7)
|
Based
on $3.30 per share, the closing price of the Company’s Common
Stock as of December 31, 2020.
|
Compensation of Non-Employee Directors
We do
not compensate employees for serving as members of our Board. Our
non-employee directors receive compensation for their service as
directors and members of committees of the Board, consisting of
cash and equity awards. In December 2019, our Compensation
Committee approved an annual retainer to be paid to each
non-employee director in the amount of $20,000 in cash. Directors
are reimbursed for reasonable expenses incurred in attending
meetings and carrying out duties as board and committee members.
Under the 2017 Plan, our non-employee directors receive grants of
stock options as compensation for their services on the
Board.
On
August 28, 2020, the Compensation Committee approved an annual
retainer in the amount of $20,000 cash and a grant of three-year
stock options to Deborah Leff to purchase 50,000 shares of our
Common Stock at an exercise price of $2.00 per share for serving on
the Board. The options shall vest in equal quarterly amounts
beginning on the Effective Date and ending on the third anniversary
of the Effective Date. On December 21, 2020, the Compensation
Committee approved a grant of three-year stock options to Robert
Heath to purchase 50,000 shares of our Common Stock at an exercise
price of $2.50. Mr. Heath has not yet started his term as a
Director. On December 23, 2019, the Compensation Committee approved
a grant to each of Timothy O’Rourke, Douglas Roth, and
Wallace D. Ruiz, our non-employee directors, of three-year stock
options to purchase 47,668 shares of our Common Stock at an
exercise price of $1.45 per share for serving on the Board.
One-third of the stock options were vested upon grant and the
balance vest in equal annual installments on December 23, 2020 and
December 23, 2021, subject to continued service as members of the
Board on each applicable vesting date. The stock options were
granted under the Company’s 2017 Equity Incentive
Plan.
23
For the
year ended 2020, our non-employee directors were compensated as
follows:
|
Name
(1)
|
|
Year
|
Fees Earnedor
Paid
in
Cash
($)
|
Option
Awards
($)(2)
|
All
Other
Compensation
($)
|
Total
($)
|
|
Deborah Leff
(3)
|
|
2020
|
5,000
|
79,990
|
-
|
84,990
|
|
|
|
|
|
|
|
|
|
Timothy
O’Rourke (4)
|
|
2020
|
20,000
|
-
|
-
|
20,000
|
|
|
|
|
|
|
|
|
|
Douglas Roth
(5)
|
|
2020
|
20,000
|
-
|
-
|
20,000
|
|
|
|
|
|
|
|
|
|
Wallace D. Ruiz
(6)
|
|
2020
|
20,000
|
-
|
-
|
20,000
|
|
(1)
|
Because
our employees do not receive additional compensation for their
service on the Board, Messrs. Sohn and Jennings are omitted from
this table. Compensation of Messrs. Sohn and Jennings is fully
reflected in the Summary Compensation Table.
|
|
(2)
|
Amounts
reported represent the aggregate grant date fair value of awards
granted without regards to forfeitures granted to the independent
members of our Board for the year ended December 31, 2020, computed
in accordance with ASC 718. This amount does not reflect the actual
economic value realized by the director.
|
The
table below sets forth the unexercised stock options held by each
of our non-employee directors outstanding as of December 31,
2020:
|
Name
|
Aggregate
Number
of
Unexercised
Option
Awards
Outstanding
at
December 31,2020
|
|
|
|
|
Deborah
Leff
|
50,000
|
|
Timothy O’Rourke
|
47,668
|
|
Douglas
Roth
|
60,168
|
|
Wallace D.
Ruiz
|
60,168
|
|
(3)
|
Ms.
Leff has served as a director since October 1, 2020.
|
|
|
|
|
|
(4)
|
Mr.
O’Rourke has served as a director since March 31,
2019.
|
|
(5)
|
Mr.
Roth has served as a director since May 24, 2018.
|
|
(6)
|
Mr.
Ruiz has served as a director since May 24, 2018.
|
|
|
|
|
(7)
|
Includes
(i) 1,685 shares of Common Stock beneficially owned by Cicero
Consulting Group LLC, which Mr. Woloshin controls together with Mr.
Abrams, and (ii) 1,407 shares of Common Stock owned by Caesar
Capital Group LLC, with respect to which Mr. Woloshin has the
shared voting and dispositive power with respect to the shares
discussed in (i) of this footnote, and the sole voting and
dispositive power with respect to the shares discussed in (ii) of
this footnote. Address is 1858 Pleasantville Road Suite 110,
Briarcliff Manor NY 10510.
|
24
Securities Authorized for Issuance under Equity Compensation
Plans
The
following table sets forth information as of December 31, 2020 with
respect to our compensation plans under which equity securities may
be issued.
|
Plan
Category
|
Number of
Securities to be Issued upon Exercise of Outstanding Options,
Warrants and Rights
|
Weighted-Average
Exercise
Price
of Outstanding Options,Warrants and Rights
|
Number of
Securities Remaining Available for Future Issuance under Equity
Compensation Plans (Excluding Securities Reflected in
Column (a))
|
|
|
(a)
|
(b)
|
(c)
|
|
Equity compensation
plans approved by security holders:
|
|
|
|
|
2014 Equity
Compensation Plan (1)
|
-
|
-
|
6,385
|
|
2017 Equity
Incentive Plan (2)
|
1,196,165
|
2.21
|
1,207,335
|
|
Equity compensation
plans not approved by security holders
|
|
|
|
|
Total
|
1,196,165
|
2.21
|
1,207,335
|
|
(1)
|
The
2014 Equity Compensation Plan (“2014 Plan”) is
administered by the Board and provides for the issuance of up to
6,385 shares of Common Stock. Under our 2014 Plan, we may grant
stock options, restricted stock, stock appreciation rights,
restricted stock units, performance units, performance shares and
other stock based awards. As of December 31, 2020, no awards are
outstanding under the 2014 Plan and the Company does not expect to
grant any awards under the 2014 Plan in the future.
|
|
(2)
|
In
October 2017, our Board authorized the 2017 Equity Incentive Plan
(the “2017 Plan”) covering 475,000 shares of Common
Stock. In December 2019, the number of shares authorized under the
2017 Plan was increased to 1,098,959 shares. In June 2020, the
number of shares authorized under the 2017 Plan was increased to
2,770,000. In December 2020, the plan was increased again to
3,270,000. The purpose of the 2017 Plan is to advance the interests
of the Company and our related corporations by enhancing the
ability of the Company to attract and retain qualified employees,
consultants, officers, and directors, by creating incentives and
rewards for their contributions to the success of the Company and
its related corporations. The 2017 Plan is administered by the
Board. Incentive stock options, non-qualified options, awards
of restricted common stock, stock appreciation rights, and
restricted stock units may be granted under the 2017 Plan. Any
option granted under the 2017 Plan must provide for an exercise
price of not less than 100% of the fair market value of the
underlying shares on the date of grant and not less than $1.60 per
share. The term of each plan option and the manner in which it may
be exercised is determined by the Board, provided that no option
may be exercisable more than 10 years after the date of its grant
and, in the case of an incentive option granted to an eligible
employee owning more than 10% of the common stock, no more than
five years after the date of the grant. As of December 31, 2020,
1,196,165 options were outstanding under the 2017 Plan. In
addition, 554,000 RSUs and 312,500 common shares have been issued
under the 2017 plan.
|
25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The
following includes a summary of transactions since July 1, 2017 to
which we have been a party in which the amount involved exceeded or
will exceed $120,000, and in which any of our directors, executive
officers or, to our knowledge, beneficial owners of more than 5% of
our capital stock or any member of the immediate family of any of
the foregoing persons had or will have a direct or indirect
material interest, other than equity and other compensation,
termination, change in control and other arrangements, which are
described under “Executive and Director Compensation.”
We also describe below certain other transactions with our
directors, executive officers and stockholders.
Director Agreement with Leff
We
entered into a Director Agreement with Deborah Leff as a director
of the Company. The terms of the appointment of Leff were finalized
on September 7, 2020 with her effective start date on Octonber 1,
2020. In consideration of Ms. Leff’s agreement to join the
Board, Ms. Leff shall receive an annual cash stipend of $20,000,
payable in equal quarterly installments of $5,000. In addition, Ms.
Leff shall receive a grant of 50,000 Stock Options, with an
exercise price of $2.00, and which shall vest in equal amounts over
a period of three years from the Effective Date, as shall be
determined by the Board, subject to her continued service on the
Board through such vesting date. Upon the occurrence of a Change in
Control (as defined in the Company’s 2017 Equity Incentive
Plan), any un-vested options shall vest immediately, provided Ms.
Leff serves on the Board as of the date of such Change in Control.
The Stock Options will be issued under the Company’s 2017
Equity Incentive Plan (the “Plan”).
Merger with Recruiter.com, Inc.
In
March 2019, we and Truli Acquisition Co., Inc., our wholly-owned
subsidiary (the “Merger Sub”) entered into an Agreement
and Plan of Merger with Pre-Merger Recruiter.com, pursuant to which
the Merger Sub merged with and into Pre-Merger Recruiter.com, with
Pre-Merger Recruiter.com continuing as the surviving corporation
and our wholly-owned subsidiary. Miles Jennings, our Chief
Executive Officer, was the principal stockholder and director of
Pre-Merger Recruiter.com. As consideration in the merger, we issued
a total of 775,000 shares of Series E with a value of approximately
$417,000 to the stockholders of the Pre-Merger Recruiter.com,
including Mr. Jennings. We appointed Evan Sohn as a special
consultant to oversee the Merger and interface with the independent
directors of the Company because of a conflict of interest due to
Mr. Jennings’ control of Pre-Merger Recruiter.com. See
“Part I. Item 1. Business – March 31, 2019
Acquisitions” for more information. Mr. Sohn subsequently
became Executive Chairman.
Cicero Investment in the March 2019 Private Placement
In
April 2019, Cicero Transact Group US, Inc. (“Cicero”),
an entity controlled by Michael Woloshin, a principal stockholder
of the Company purchased 13,750 units, with each unit consisting of
one share of Series D preferred stock and a warrant to purchase
seven shares of our common stock, subject to adjustment as provided
for therein, in exchange for the delivery of common stock of a
second company, with a market value of $240,000. Subsequently, the
Company determined that, because the Company was unable to realize
the full value of the common stock of the second company, part of
the 13,750 units provided to Cicero, the percent of which could not
be paid for, should be returned to the Company. On January 6, 2021,
8,755 units were returned to the Company.
26
Back Office, Accounting and EOR Services Arrangements with
Icon
Icon
Information Consultants performs all of the back office and
accounting roles for Recruiting Solutions. Icon Information
Consultants then charges a fee for the services along with charging
for office space. Icon Information Consultants and Icon Industrial
Solutions (collectively “Icon”) also provide
“Employer of Record” (“EOR”) services to
Recruiting Solutions which means that they process all payroll and
payroll tax related duties of temporary and contract employees
placed at customer sites and is then paid a reimbursement and fee
from Recruiting Solutions. A representative of Icon is a member of
our board of directors. Icon Canada also acts as an EOR and
collects the customer payments and remits the net fee back to
Recruiting Solutions. Revenue related to customers processed by
Icon Canada is recognized on a gross basis the same as other
revenues and was $140,642 and $208,158 for the years ended
December 31, 2020 and 2019, respectively. EOR costs related to
customers processed by Icon Canada was $131,546 and $194,641 for
the years ended December 31, 2020 and 2019, respectively.
Currently, there is no intercompany agreement for those charges and
they are calculated on a best estimate basis. As of December 31,
2020, the Company owes Icon $706,515 in payables and Icon Canada
owes $19,143 (included in accounts receivable) to the Company.
During the years ended December 31, 2020 and 2019, we charged
to cost of revenue $1,232,359 and $1,887,726, respectively, related
to services provided by Icon as our employer of record for a total
of $3,120,085 from March 31, 2019 through December 31, 2020.
During the year ended
December 31, 2020, we charged to interest expense $12,276,
related to finance charges on accounts payable owed to
Icon.
We paid
Icon (including its entity affiliates) $80,040 in fees and
administrative expense for the period from March 31, 2019, the
effective date of the Genesys Asset Purchase, through December 31,
2019 and $120,312 in fees and administrative expense for the year
ended December 31, 2020, for a total of $200,352 in fees and
administrative expense from March 31, 2019 through December 31,
2020. The fees and charges are based upon a best estimate basis
rather than a formula.
We also
recorded placement revenue from Icon of $31,041 during the year
ended December 31, 2020, of which $21,981 is included in
accounts receivable at December 31, 2020.
Icon Sublease
Effective
March 31, 2019, Recruiting Solutions, our wholly-owned subsidiary,
entered into a sublease agreement (the “Sublease
Agreement”) with Icon, a significant stockholder. Pursuant to
the Sublease Agreement, Icon agreed to sublet to us office space in
Houston, Texas and Recruiting Solutions agreed to pay rent at a
monthly rate of approximately $7,078 a month, subject to an
immaterial annual increase. We paid Icon $111,689 in rent for the
period from March 31, 2019, the effective date of the Genesys Asset
Purchase, through December 31, 2019 and $150,851 in rent for the
year ended December 31, 2020, for a total of $262,540 in rent
through December 31, 2020. As of December 31, 2020, we have a
remaining minimum lease commitment to Icon of $194,542 under the
Sublease Agreement.
Genesys License Agreement
We are
a party to that certain license agreement covering Genesys’s
software (which was licensed but not transferred to the Company in
connection with the asset purchase agreement with Genesys on March
31, 2019). An executive officer of Genesys, Tim O’Rourke, is
a significant equity holder and a member of our Board of directors.
Pursuant to the License Agreement Genesys has granted us an
exclusive license to use certain candidate matching software and
render certain related services to us. The Company has agreed to
pay to Genesys a monthly license fee of $5,000 beginning June 29,
2019 and an annual fee of $1,995 for each recruiter user being
licensed under the License Agreement, of which there have been
nine. During the years ended December 31, 2020 and 2019, we charged
to operating expenses $167,157 and $93,671, respectively, for
services provided by Genesys. As of December 31, 2020, the
Company owes Genesys $73,352 in payables.
27
Woloshin Consulting Agreement
We are
a party to a consulting agreement with Michael Woloshin, a
principal stockholder, entered into in January, 2019 (the
“Consulting Agreement”). Pursuant to the Consulting
Agreement, Mr. Woloshin has agreed to act as the Company’s
non-exclusive consultant with respect to introducing potential
acquisition and partnership targets, and we have agreed to pay the
consultant a retainer of $10,000 per month as a non-recoverable
draw against any finder fees earned. The Company has also agreed to
pay the consultant the sum of $5,500 per month for three years
($198,000 total) as a finder’s fee for introducing Genesys to
the Company. This payment is included in the $10,000 monthly
retainer payment. We have recorded consulting fees expense of
$54,000 and $238,500 during the years ended December 31, 2020
and 2019, respectively. At December 30, 2020, $104,500 of the
Genesys finder’s fee and $18,000 of monthly fee expense is
included in accrued compensation. In April 2019, Michael Woloshin
forgave accrued fees due to him in the amount of $187,500. This
amount has been credited to paid-in capital of the
Company.
Recruiter.com Mauritius
We use
a related party firm of the Company, for software development and
maintenance related to our website and the platform underlying our
operations. The firm was formed outside of the United States solely
for the purpose of performing services for the Company and has no
other clients. Our Chief Technology Officer is an employee of this
firm and exerts control over the firm. Payments to this firm were
$235,444 and $181,400 for the years ended December 31, 2020
and 2019, respectively.
Cicero Marketing Partnership Agreement
We are
a party to a marketing partnership agreement (the “Marketing
Agreement”), entered into in September 2018, between
pre-Merger Recruiter.com and Cicero Consulting Group LLC, an entity
controlled by Michael Woloshin, a principal stockholder. The
Marketing Agreement provides for payment by us of a fee for the use
of a certain database for marketing purposes in the amount of 10%
of gross revenue generated through the use of the database. The
Marketing Agreement also provides for a fee payable to us in the
amount of 10% of the revenue generated by Cicero using our social
media groups for marketing. We did not incur any fees to Cicero for
2020 or 2019 under the Marketing Agreement and did not earn any
fees for 2020 or 2019 from Cicero under the Marketing
Agreement.
Cicero Investment in the March 2019 Private Placement
In
April 2019, Cicero Transact Group US, Inc. (“Cicero”),
an entity controlled by Michael Woloshin, purchased 13,750 units,
with each unit consisting of one share of Series D preferred stock
and a warrant to purchase seven shares of our common stock, subject
to adjustment as provided for therein, in exchange for the delivery
of common stock of a second company, with a market value of
$240,000. Subsequently, the Company determined that, because the
Company was unable to realize the full value of the common stock of
the second company, part of the 13,750 units provided to Cicero,
the percent of which could not be paid for, should be returned to
the Company. On January 6, 2021, 8,755 units were returned to the
Company.
Recruiter.com License
In
connection with the closing of the Merger, we amended the License
Agreement, dated October 30, 2017 (the “License”)
between Pre-Merger Recruiter.com and VocaWorks, Inc., our newly
created wholly-owned subsidiary, to terminate the right of
Pre-Merger Recruiter.com to receive shares of Series B, Series B
were subsequently cancelled and returned to the status of our
undesignated preferred stock. In March 2019, Pre-Merger
Recruiter.com distributed to its stockholders the 1,562,500 shares
of our Common Stock, previously acquired pursuant to the
License.
See
Note 13 to our consolidated financial statements included in our
Annual Report on Form 10-K for further information on these related
party transactions.
28
The
Company has no knowledge of any other matters that may come before
the Annual Meeting and does not intend to present any other
matters.
If you
do not plan to attend the Annual Meeting, in order that your shares
may be represented and in order to assure the required quorum,
please sign, date and return your proxy promptly. In the event you
are able to attend the Annual Meeting, at your request, the Company
will cancel your previously submitted proxy.
Where You Can Find More Information
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. Such filings are made available on
our Internet website,
www.recruiter.com
,
as soon as reasonably practicable after they are filed with, or
furnished to, the SEC. The information on our website is not, and
shall not be deemed to be, a part of this Proxy Statement or
incorporated into any other filings we make with the SEC. The SEC
maintains an Internet site,
www.sec.gov
,
which contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the
SEC, including the Company.
We have filed our Annual Report on Form 10-K for the year ended
December 31, 2020 with the SEC. It is available free of charge at
the SEC’s web site at www.sec.gov. Upon written request by a
Recruiter.com Group, Inc. stockholder, we will mail without charge
a copy of our Annual Report on Form 10-K, including the financial
statements and financial statement schedules, but excluding
exhibits to the Annual Report on Form 10-K. Exhibits to the Annual
Report on Form 10-K are available upon payment of a reasonable fee,
which is limited to our expenses in furnishing the requested
exhibit. All requests should be directed to Recruiter.com Group,
Inc., 100 Waugh Dr. Suite 300, Houston, Texas 77007, Attention:
Corporate Secretary.
|
By Order of the Board of Directors,
|
|
|
|
|
|
|
/s/ Evan Sohn
|
|
Name:
|
Evan Sohn
|
|
Title:
|
Chief Executive Officer and Executive Chairman
|
May 21, 2021
29
ANNEX
A
RECRUITER.COM GROUP, INC.
2017 EQUITY INCENTIVE PLAN
1.
Scope of Plan;
Definitions
.
(a)
This 2017 Equity Incentive Plan (the “Plan”) is
intended to advance the interests of Recruiter.com Group, Inc. (the
“Company”) and its Related Corporations by enhancing
the ability of the Company to attract and retain qualified
employees, consultants, Officers, and directors, by creating
incentives and rewards for their contributions to the success of
the Company and its Related Corporations. This Plan will provide to
(a) Officers and other employees of the Company and its Related
Corporations opportunities to purchase common stock (“Common
Stock”) of the Company pursuant to Options granted hereunder
which qualify as incentive stock options (“ISOs”) under
Section 422(b) of the Internal Revenue Code of 1986 (the
“Code”), (b) directors, Officers, employees, and
consultants of the Company and Related Corporations opportunities
to purchase Common Stock in the Company pursuant to options granted
hereunder which do not qualify as ISOs (“Non-Qualified
Options”); (c) directors, Officers, employees, and
consultants of the Company and Related Corporations opportunities
to receive shares of Common Stock of the Company which normally are
subject to restrictions on sale (“Restricted Stock”);
(d) directors, Officers, employees, and consultants of the Company
and Related Corporations opportunities to receive grants of stock
appreciation rights (“SARs”); and (e) directors,
Officers, employees, and consultants of the Company and Related
Corporations opportunities to receive grants of restricted stock
units (“RSUs”). ISOs and Non-Qualified Options are
referred to hereafter as (“Options”). Options,
Restricted Stock and RSUs are sometimes referred to hereafter
collectively as (“Stock Rights”). Any of the Options
and/or Stock Rights may in the Compensation Committee’s
discretion be issued in tandem to one or more other Options and/or
Stock Rights to the extent permitted by law.
(b) For
purposes of the Plan, capitalized words and terms shall have the
following meaning:
“Board”
means the board of directors of the Company.
“Change of
Control” means the occurrence of any of the following events:
(i) the consummation of the sale or disposition by the Company of
all or substantially all of the Company’s assets in a
transaction which requires shareholder approval under applicable
state law; or (ii) the consummation of a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at
least 50% of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or
consolidation.
“Code”
has the meaning given to it in Section 1(a).
“Common
Stock” has the meaning given to it in Section
1(a).
1
“Company”
has the meaning given to it in Section 1(a).
“Compensation
Committee” means the compensation committee of the Board, if
any, which shall consist of two or more members of the Board, each
of whom shall be both an “outside director” within the
meaning of Section 162(m) of the Code and a “non-employee
director” within the meaning of Rule 16b-3. All references in
this Plan to the Compensation Committee shall mean the Board when
(i) there is no Compensation Committee or (ii) the Board has
retained the power to administer this Plan.
“Disability”
means “permanent and total disability” as defined in
Section 22(e)(3) of the Code or successor statute.
“Disqualifying
Disposition” means any disposition (including any sale) of
Common Stock underlying an ISO before the later of (i) two years
after the date of employee was granted the ISO or (ii) one year
after the date the employee acquired Common Stock by exercising the
ISO.
“Exchange
Act” means the Securities Exchange Act of 1934.
“Fair Market
Value” shall be determined as of the last Trading Day before
the date a Stock Right is granted and shall mean:
(1) the
closing price on the principal market if the Common Stock is listed
on a national securities exchange or the OTCQB or
OTCQX.
(2) if
the Company’s shares are not listed on a national securities
exchange or the OTCQB or OTCQX, then the closing price if reported
or the average bid and asked price for the Company’s shares
as quoted by OTC Pink;
(3) if
there are no prices available under clauses (1) or (2), then Fair
Market Value shall be based upon the average closing bid and asked
price as determined following a polling of all dealers making a
market in the Company’s Common Stock; or
(4) if
there is no regularly established trading market for the
Company’s Common Stock or if the Company’s Common Stock
is listed, quoted, or reported under clauses (1) or (2) but it
trades sporadically rather than every day, the Fair Market Value
shall be established by the Board or the Compensation Committee
taking into consideration all relevant factors including the most
recent price at which the Company’s Common Stock was
sold.
“ISO”
has the meaning given to it in Section 1(a).
“Non-Qualified
Options” has the meaning given to it in Section
1(a).
|
|
|
|
2
“Officer”
means a person who is an executive officer of the Company and is
required to file ownership reports under Section 16(a) of the
Exchange Act.
“Option”
has the meaning given to it in Section 1(a).
“Plan”
has the meaning given to it in Section 1(a).
“Related
Corporation” means a corporation which is a subsidiary
corporation with respect to the Company within the meaning of
Section 425(f) of the Code.
“Restricted
Stock” has the meaning given to it in Section
1(a).
“RSU”
has the meaning given to it in Section 1(a).
“SAR”
has the meaning given to it in Section 1(a).
“Securities
Act” means the Securities Act of 1933.
“Stock
Rights” has the meaning given to it in Section
1(a).
“Trading
Day” means a day on which the New York Stock Exchange is open
for business.
This
Plan is intended to comply in all respects with Rule 16b-3
(“Rule 16b-3”) and its successor rules as promulgated
under Section 16(b) of the Exchange Act for participants who are
subject to Section 16 of the Exchange Act. To the extent any
provision of the Plan or action by the Plan administrators fails to
so comply, it shall be deemed null and void to the extent permitted
by law and deemed advisable by the Plan administrators.
Provided
,
however
, such
exercise of discretion by the Plan administrators shall not
interfere with the contract rights of any grantee. In the event
that any interpretation or construction of the Plan is required, it
shall be interpreted and construed in order to ensure, to the
maximum extent permissible by law, that such grantee does not
violate the short-swing profit provisions of Section 16(b) of the
Exchange Act and that any exemption available under Rule 16b-3 or
other rule is available.
2.
Administration of the
Plan
.
(a) The
Plan may be administered by the entire Board or by the Compensation
Committee. Once appointed, the Compensation Committee shall
continue to serve until otherwise directed by the Board. A majority
of the members of the Compensation Committee shall constitute a
quorum, and all determinations of the Compensation Committee shall
be made by the majority of its members present at a meeting. Any
determination of the Compensation Committee under the Plan may be
made without notice or meeting of the Compensation Committee by a
writing signed by all of the Compensation Committee members.
Subject to ratification of the grant of each Stock Right by the
Board (but only if so required by applicable state law), and
subject to the terms of the Plan, the Compensation Committee shall
have the authority to (i) determine the employees of the Company
and Related Corporations (from among the class of employees
eligible under Section 3 to receive ISOs) to whom ISOs may be
granted, and to determine (from among the class of individuals and
entities eligible under Section 3 to receive Non-Qualified Options,
Restricted Stock, RSUs and SARs) to whom Non-Qualified Options,
Restricted Stock, RSUs and SARs may be granted; (ii) determine when
Stock Rights may be granted; (iii) determine the exercise prices of
Stock Rights other than Restricted Stock and RSUs, which shall not
be less than the Fair Market Value; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v)
determine when Stock Rights shall become exercisable, the duration
of the exercise period, and when each Stock Right shall vest; (vi)
determine whether restrictions such as repurchase options are to be
imposed on shares subject to or issued in connection with Stock
Rights, and the nature of such restrictions, if any, and (vii)
interpret the Plan and promulgate and rescind rules and regulations
relating to it. The interpretation and construction by the
Compensation Committee of any provisions of the Plan or of any
Stock Right granted under it shall be final, binding, and
conclusive unless otherwise determined by the Board. The
Compensation Committee may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem
best.
3
No
members of the Compensation Committee or the Board shall be liable
for any action or determination made in good faith with respect to
the Plan or any Stock Right granted under it. No member of the
Compensation Committee or the Board shall be liable for any act or
omission of any other member of the Compensation Committee or the
Board or for any act or omission on his own part, including but not
limited to the exercise of any power and discretion given to him
under the Plan, except those resulting from his own gross
negligence or willful misconduct.
(b) The
Compensation Committee may select one of its members as its
chairman and shall hold meetings at such time and places as it may
determine. All references in this Plan to the Compensation
Committee shall mean the Board if no Compensation Committee has
been appointed. From time to time the Board may increase the size
of the Compensation Committee and appoint additional members
thereof, remove members (with or without cause), and appoint new
members in substitution therefor, fill vacancies however caused, or
remove all members of the Compensation Committee and thereafter
directly administer the Plan.
(c)
Stock Rights may be granted to members of the Board, whether such
grants are in their capacity as directors, Officers, or
consultants. All grants of Stock Rights to members of the Board
shall in all other respects be made in accordance with the
provisions of this Plan applicable to other eligible persons.
Members of the Board who are either (i) eligible for Stock Rights
pursuant to the Plan or (ii) have been granted Stock Rights may
vote on any matters affecting the administration of the Plan or the
grant of any Stock Rights pursuant to the Plan.
(d) In
addition to such other rights of indemnification as he may have as
a member of the Board, and with respect to administration of the
Plan and the granting of Stock Rights under it, each member of the
Board and of the Compensation Committee shall be entitled without
further act on his part to indemnification from the Company for all
expenses (including advances of litigation expenses, the amount of
judgment, and the amount of approved settlements made with a view
to the curtailment of costs of litigation) reasonably incurred by
him in connection with or arising out of any action, suit, or
proceeding, including any appeal thereof, with respect to the
administration of the Plan or the granting of Stock Rights under it
in which he may be involved by reason of his being or having been a
member of the Board or the Compensation Committee, whether or not
he continues to be such member of the Board or the Compensation
Committee at the time of the incurring of such expenses;
provided
,
however
, that such
indemnity shall be subject to the limitations contained in any
indemnification agreement between the Company and the Board member
or Officer. The foregoing right of indemnification shall inure to
the benefit of the heirs, executors, or administrators of each such
member of the Board or the Compensation Committee and shall be in
addition to all other rights to which such member of the Board or
the Compensation Committee would be entitled to as a matter of law,
contract, or otherwise.
(e) The
Board may delegate the powers to grant Stock Rights to Officers to
the extent permitted by the laws of the Company’s state of
incorporation.
3.
Eligible Employees and
Others
. ISOs may be granted to any employee of the Company
or any Related Corporation. Those Officers and directors of the
Company who are not employees may not be granted ISOs under the
Plan. Subject to compliance with Rule 16b-3 and other applicable
securities laws, Non-Qualified Options, Restricted Stock, RSUs, and
SARs may be granted to any director (whether or not an employee),
Officers, employees, or consultants of the Company or any Related
Corporation. The Compensation Committee may take into consideration
a recipient’s individual circumstances in determining whether
to grant an ISO, a Non-Qualified Option, Restricted Stock, RSUs, or
a SAR. Granting of any Stock Right to any individual or entity
shall neither entitle that individual or entity to, nor disqualify
him from participation in, any other grant of Stock
Rights.
4.
Common Stock
. The
Common Stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock, par value $0.0001, or shares of
Common Stock reacquired by the Company in any manner, including
purchase, forfeiture, or otherwise. The aggregate number of shares
of Common Stock which may be issued pursuant to the Plan is
3,270,000 less any Stock Rights previously granted or exercised
subject to adjustment as provided in Section 14.
Provided
,
however
, 6,250 of such shares
shall be reserved for future grants to the Company’s Chief
Executive Officer and 3,750 of such shares shall be reserved for
future grants to the Company’s Chief Financial Officer. Any
such shares may be issued under ISOs, Non-Qualified Options,
Restricted Stock, RSUs, or SARs, so long as the number of shares so
issued does not exceed the limitations in this Section. If any
Stock Rights granted under the Plan shall expire or terminate for
any reason without having been exercised in full or shall cease for
any reason to be exercisable in whole or in part, or if the Company
shall reacquire any unvested shares, the unpurchased shares subject
to such Stock Rights and any unvested shares so reacquired by the
Company shall again be available for grants under the
Plan.
4
5.
Granting of Stock
Rights
.
(a) The
date of grant of a Stock Right under the Plan will be the date
specified by the Board or Compensation Committee at the time it
grants the Stock Right;
provided
,
however
, that such date shall
not be prior to the date on which the Board or Compensation
Committee acts to approve the grant. The Board or Compensation
Committee shall have the right, with the consent of the optionee,
to convert an ISO granted under the Plan to a Non-Qualified Option
pursuant to Section 17.
(b) The
Board or Compensation Committee shall grant Stock Rights to
participants that it, in its sole discretion, selects. Stock Rights
shall be granted on such terms as the Board or Compensation
Committee shall determine, except that ISOs shall be granted on
terms that comply with the Code and regulations
thereunder.
(c) A
SAR entitles the holder to receive, as designated by the Board or
Compensation Committee, cash or shares of Common Stock, value equal
to (or otherwise based on) the excess of: (a) the Fair Market Value
of a specified number of shares of Common Stock at the time of
exercise over (b) an exercise price established by the Board or
Compensation Committee. The exercise price of each SAR granted
under this Plan shall be established by the Compensation Committee
or shall be determined by a method established by the Board or
Compensation Committee at the time the SAR is granted, provided the
exercise price shall not be less than $0.02 per share, subject to
equitable adjustment, or such higher price as is established by the
Board or Compensation Committee. A SAR shall be exercisable in
accordance with such terms and conditions and during such periods
as may be established by the Board or Compensation Committee.
Shares of Common Stock delivered pursuant to the exercise of a SAR
shall be subject to such conditions, restrictions, and
contingencies as the Board or Compensation Committee may establish
in the applicable SAR agreement or document, if any. The Board or
Compensation Committee, in its discretion, may impose such
conditions, restrictions, and contingencies with respect to shares
of Common Stock acquired pursuant to the exercise of each SAR as
the Board or Compensation Committee determines to be desirable. A
SAR under the Plan shall be subject to such terms and conditions,
not inconsistent with the Plan, as the Board or Compensation
Committee shall, in its discretion, prescribe. The terms and
conditions of any SAR to any grantee shall be reflected in such
form of agreement as is determined by the Board or Compensation
Committee. A copy of such document, if any, shall be provided to
the grantee, and the Board or Compensation Committee may condition
the granting of the SAR on the grantee executing such
agreement.
(d) An
RSU gives the grantee the right to receive a number of shares of
the Company’s Common Stock on applicable vesting or other
dates. Delivery of the RSUs may be deferred beyond vesting as
determined by the Board or Compensation Committee. RSUs shall be
evidenced by an RSU agreement in the form determined by the Board
or Compensation Committee. With respect to an RSU that becomes
non-forfeitable due to the lapse of time, the Compensation
Committee shall prescribe in the RSU agreement the vesting period.
With respect to the granting of an RSU that becomes non-forfeitable
due to the satisfaction of certain pre-established
performance-based objectives imposed by the Board or Compensation
Committee, the measurement date of whether such performance-based
objectives have been satisfied shall be a date no earlier than the
first anniversary of the date of the RSU. A recipient who is
granted an RSU shall possess no incidents of ownership with respect
to such underlying Common Stock, although the RSU agreement may
provide for payments in lieu of dividends to such
grantee.
(e)
Notwithstanding any provision of this Plan, the Board or
Compensation Committee may impose conditions and restrictions on
any grant of Stock Rights including forfeiture of vested Options,
cancellation of Common Stock acquired in connection with any Stock
Right, and forfeiture of profits.
(f) The
Options and SARs shall not be exercisable for a period of more than
10 years from the date of grant.
6.
Sale of Shares
. The
shares underlying Stock Rights granted to any Officer, director, or
a beneficial owner of 10% or more of the Company’s securities
registered under Section 12 of the Exchange Act shall not be sold,
assigned, or transferred by the grantee until at least six months
elapse from the date of the grant thereof.
5
7.
ISO Minimum Option Price
and Other Limitations
.
(a) The
exercise price per share relating to all Options granted under the
Plan shall not be less than $0.02 per share, subject to equitable
adjustment. For purposes of determining the exercise price, the
date of the grant shall be the later of (i) the date of approval by
the Board or Compensation Committee or the Board, or (ii) for ISOs,
the date the recipient becomes an employee of the Company. In the
case of an ISO to be granted to an employee owning Common Stock
which represents more than 10% of the total combined voting power
of all classes of stock of the Company or any Related Corporation,
the price per share shall not be less than 110% of the Fair Market
Value per share of Common Stock on the date of grant and such ISO
shall not be exercisable after the expiration of five years from
the date of grant.
(b) In
no event shall the aggregate Fair Market Value (determined at the
time an ISO is granted) of Common Stock for which ISOs granted to
any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the
Company and any Related Corporation) exceed $100,000.
8.
Duration of Stock
Rights
. Subject to earlier termination as provided in
Sections 3, 5, 9, 10 and 11, each Option and SAR shall expire on
the date specified in the original instrument granting such Stock
Right (except with respect to any part of an ISO that is converted
into a Non-Qualified Option pursuant to Section 17),
provided
,
however
, that such instrument
must comply with Section 422 of the Code with regard to ISOs and
Rule 16b-3 with regard to all Stock Rights granted pursuant to the
Plan to Officers, directors, and 10% shareholders of the
Company.
9.
Exercise of Options and
SARs; Vesting of Stock Rights
. Subject to the provisions of
Sections 3 and 9 through 13, each Option and SAR granted under the
Plan shall be exercisable as follows:
(a) The
Options and SARs shall either be fully vested and exercisable from
the date of grant or shall vest and become exercisable in such
installments as the Board or Compensation Committee may
specify.
(b)
Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option and SAR, unless
otherwise specified by the Board or Compensation
Committee.
(c)
Each Option and SAR or installment, once it becomes exercisable,
may be exercised at any time or from time to time, in whole or in
part, for up to the total number of shares with respect to which it
is then exercisable.
(d) The
Board or Compensation Committee shall have the right to accelerate
the vesting date of any installment of any Stock Right;
provided
that the
Board or Compensation Committee shall not accelerate the exercise
date of any installment of any Option granted to any employee as an
ISO (and not previously converted into a Non-Qualified Option
pursuant to Section 17) if such acceleration would violate the
annual exercisability limitation contained in Section 422(d) of the
Code as described in Section 7(b).
10.
Termination of
Employment
. Subject to any greater restrictions or
limitations as may be imposed by the Board or Compensation
Committee or by a written agreement, if an optionee ceases to be
employed by the Company and all Related Corporations other than by
reason of death or Disability, no further installments of his
Options shall vest or become exercisable, and his Options shall
terminate as provided for in the grant or on the day 12 months
after the day of the termination of his employment (except three
months for ISOs), whichever is earlier, but in no event later than
on their specified expiration dates. Employment shall be considered
as continuing uninterrupted during any bona fide leave of absence
(such as those attributable to illness, military obligations, or
governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such
optionee’s right to re-employment is guaranteed by statute. A
leave of absence with the written approval of the Board shall not
be considered an interruption of employment under the Plan,
provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of
the optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by any change of employment
within or among the Company and any Related Corporations so long as
the optionee continues to be an employee of the Company or any
Related Corporation.
6
11.
Death; Disability
.
Unless otherwise determined by the Board or Compensation Committee
or by a written agreement:
(a) If
the holder of an Option or SAR ceases to be employed by the Company
and all Related Corporations by reason of his death, any Options or
SARs held by the optionee may be exercised to the extent he could
have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the Options or SARs
by will or by the laws of descent and distribution, at any time
prior to the earlier of: (i) the Options’ or SARs specified
expiration date or (ii) one year (except three months for an ISO)
from the date of death.
(b) If
the holder of an Option or SAR ceases to be employed by the Company
and all Related Corporations, or a director or Officer can no
longer perform his duties, by reason of his Disability, any Options
or SARs held by the optionee may be exercised to the extent he
could have exercised it on the date of termination due to
Disability until the earlier of (i) the Options’ or
SARs’ specified expiration date or (ii) one year from the
date of the termination.
12.
Assignment, Transfer or
Sale
.
(a) No
ISO granted under this Plan shall be assignable or transferable by
the grantee except by will or by the laws of descent and
distribution, and during the lifetime of the grantee, each ISO
shall be exercisable only by him or his guardian or legal
representative.
(b)
Except for ISOs, all Stock Rights are transferable subject to
compliance with applicable securities laws and Section 6 of this
Plan.
13.
Terms and Conditions of
Stock Rights
. Stock Rights shall be evidenced by instruments
(which need not be identical) in such forms as the Board or
Compensation Committee may from time to time approve. Such
instruments shall conform to the terms and conditions set forth in
Sections 5 through 12 hereof and may contain such other provisions
as the Board or Compensation Committee deems advisable which are
not inconsistent with the Plan. In granting any Stock Rights, the
Board or Compensation Committee may specify that Stock Rights shall
be subject to the restrictions set forth herein with respect to
ISOs, or to such other termination and cancellation provisions as
the Board or Compensation Committee may determine. The Board or
Compensation Committee may from time to time confer authority and
responsibility on one or more of its own members and/or one or more
Officers of the Company to execute and deliver such instruments.
The proper Officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to
carry out the terms of such instruments.
7
14.
Adjustments Upon Certain
Events
.
(a)
Subject to any required action by the shareholders of the Company,
the number of shares of Common Stock covered by each outstanding
Stock Right, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no
Stock Rights have yet been granted or which have been returned to
the Plan upon cancellation or expiration of a Stock Right, as well
as the price per share of Common Stock (or cash, as applicable)
covered by each such outstanding Option or SAR, shall be
proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination, or
reclassification of Common Stock, or any other increase or decrease
in the number of issued shares of Common Stock effected without
receipt of consideration by the Company;
provided
,
however
, that conversion of any
convertible securities of the Company or the voluntary
cancellation, whether by virtue of a cashless exercise of a
derivative security of the Company or otherwise, shall not be
deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board or
Compensation Committee, whose determination in that respect shall
be final, binding, and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject
to a Stock Right. No adjustments shall be made for dividends or
other distributions paid in cash or in property other than
securities of the Company.
(b) In
the event of the proposed dissolution or liquidation of the
Company, the Board or Compensation Committee shall notify each
participant as soon as practicable prior to the effective date of
such proposed transaction. To the extent it has not been previously
exercised, a Stock Right will terminate immediately prior to the
consummation of such proposed action.
(c) In
the event of a merger of the Company with or into another
corporation, or a Change of Control, each outstanding Stock Right
shall be assumed (as defined below) or an equivalent option or
right substituted by the successor corporation or a parent or
subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Stock
Rights, the participants shall fully vest in and have the right to
exercise their Stock Rights as to which it would not otherwise be
vested or exercisable. If a Stock Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board or Compensation Committee shall
notify the participant in writing or electronically that the Stock
Right shall be fully vested and exercisable for a period of at
least 15 days from the date of such notice, and any Options or SARs
shall terminate one minute prior to the closing of the merger or
sale of assets.
For the
purposes of this Section 14(c), the Stock Right shall be considered
“assumed” if, following the merger or Change of
Control, the option or right confers the right to purchase or
receive, for each share of Common Stock subject to the Stock Right
immediately prior to the merger or Change of Control, the
consideration (whether stock, cash, or other securities or
property) received in the merger or Change of Control by holders of
Common Stock for each share held on the effective date of the
transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of
the outstanding shares);
provided
,
however
, that if such
consideration received in the merger or Change of Control is not
solely common stock of the successor corporation or its parent, the
Board or Compensation Committee may, with the consent of the
successor corporation, provide for the consideration to be received
upon the exercise of the Stock Right, for each share of Common
Stock subject to the Stock Right, to be solely common stock of the
successor corporation or its parent equal in Fair Market Value to
the per share consideration received by holders of Common Stock in
the merger or Change of Control.
8
(d)
Notwithstanding the foregoing, any adjustments made pursuant to
Section 14(a), (b) or (c) with respect to ISOs shall be made only
after the Board or Compensation Committee, after consulting with
counsel for the Company, determines whether such adjustments would
constitute a “modification” of such ISOs (as that term
is defined in Section 425(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Board
or Compensation Committee determines that such adjustments made
with respect to ISOs would constitute a modification of such ISOs,
it may refrain from making such adjustments.
(e) No
fractional shares shall be issued under the Plan and the optionee
shall receive from the Company cash in lieu of such fractional
shares.
15.
Means of Exercising Stock
Rights
.
(a) An
Option or SAR (or any part or installment thereof) shall be
exercised by giving written notice to the Company at its principal
office address. Such notice shall identify the Stock Right being
exercised and specify the number of shares as to which such Stock
Right is being exercised, accompanied by full payment of the
exercise price therefor (to the extent it is exercisable in cash)
either (i) in United States dollars by check or wire transfer; or
(ii) at the discretion of the Board or Compensation Committee,
through delivery of shares of Common Stock having a Fair Market
Value equal as of the date of the exercise to the cash exercise
price of the Stock Right; or (iii) at the discretion of the Board
or Compensation Committee, by any combination of (i) and (ii)
above. If the Board or Compensation Committee exercises its
discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (ii) or (iii) of the
preceding sentence, such discretion need not be exercised in
writing at the time of the grant of the Stock Right in question.
The holder of a Stock Right shall not have the rights of a
shareholder with respect to the shares covered by his Stock Right
until the date of issuance of a stock certificate to him for such
shares. Except as expressly provided above in Section 14 with
respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which
the record date is before the date such stock certificate is
issued.
(b)
Each notice of exercise shall, unless the shares of Common Stock
are covered by a then current registration statement under the
Securities Act, contain the holder’s acknowledgment in form
and substance satisfactory to the Company that (i) such shares are
being purchased for investment and not for distribution or resale
(other than a distribution or resale which, in the opinion of
counsel satisfactory to the Company, may be made without violating
the registration provisions of the Securities Act), (ii) the holder
has been advised and understands that (1) the shares have not been
registered under the Securities Act and are “restricted
securities” within the meaning of Rule 144 under the
Securities Act and are subject to restrictions on transfer and (2)
the Company is under no obligation to register the shares under the
Securities Act or to take any action which would make available to
the holder any exemption from such registration, and (iii) such
shares may not be transferred without compliance with all
applicable federal and state securities laws. Notwithstanding the
above, should the Company be advised by counsel that issuance of
shares should be delayed pending registration under federal or
state securities laws or the receipt of an opinion that an
appropriate exemption therefrom is available, the Company may defer
exercise of any Stock Right granted hereunder until either such
event has occurred.
9
16.
Term, Termination, and
Amendment
.
(a)
This Plan was adopted by the Board. This Plan may be approved by
the Company’s shareholders, which approval is required for
ISOs.
(b) The
Board may terminate the Plan at any time. Unless sooner terminated,
the Plan shall terminate on October 24, 2027. No Stock Rights may
be granted under the Plan once the Plan is terminated. Termination
of the Plan shall not impair rights and obligations under any Stock
Right granted while the Plan is in effect, except with the written
consent of the grantee.
(c) The
Board at any time, and from time to time, may amend the Plan.
Provided
,
however
, except as
provided in Section 14 relating to adjustments in Common Stock, no
amendment shall be effective unless approved by the shareholders of
the Company to the extent (i) shareholder approval is necessary to
satisfy the requirements of Section 422 of the Code or (ii)
required by the rules of the principal national securities exchange
or trading market upon which the Company’s Common Stock
trades. Rights under any Stock Rights granted before amendment of
the Plan shall not be impaired by any amendment of the Plan, except
with the written consent of the grantee.
(d) The
Board at any time, and from time to time, may amend the terms of
any one or more Stock Rights;
provided
,
however
, that the rights under
the Stock Right shall not be impaired by any such amendment, except
with the written consent of the grantee.
17.
Conversion of ISOs into
Non-Qualified Options; Termination of ISOs
. The Board or
Compensation Committee, at the written request of any optionee, may
in its discretion take such actions as may be necessary to convert
such optionee’s ISOs (or any installments or portions of
installments thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of
such conversion.
Provided
,
however
, the Board or
Compensation Committee shall not reprice the Options or extend the
exercise period or reduce the exercise price of the appropriate
installments of such Options without the approval of the
Company’s shareholders. At the time of such conversion, the
Board or Compensation Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Board or Compensation Committee in its
discretion may determine, provided that such conditions shall not
be inconsistent with this Plan. Nothing in the Plan shall be deemed
to give any optionee the right to have such optionee’s ISOs
converted into Non-Qualified Options, and no such conversion shall
occur until and unless the Board or Compensation Committee takes
appropriate action. The Compensation Committee, with the consent of
the optionee, may also terminate any portion of any ISO that has
not been exercised at the time of such termination.
18.
Application of
Funds
. The proceeds received by the Company from the sale of
shares pursuant to Options or SARS (if cash settled) granted under
the Plan shall be used for general corporate purposes.
19.
Governmental
Regulations
. The Company’s obligation to sell and
deliver shares of the Common Stock under this Plan is subject to
the approval of any governmental authority required in connection
with the authorization, issuance, or sale of such
shares.
20.
Withholding of Additional
Income Taxes
. In connection with the granting, exercise, or
vesting of a Stock Right or the making of a Disqualifying
Disposition, the Company, in accordance with Section 3402(a) of the
Code, may require the optionee to pay additional withholding taxes
in respect of the amount that is considered compensation includable
in such person’s gross income.
10
To the
extent that the Company is required to withhold taxes for federal
income tax purposes as provided above, any optionee may elect to
satisfy such withholding requirement by (i) paying the amount of
the required withholding tax to the Company; (ii) delivering to the
Company shares of its Common Stock (including shares of Restricted
Stock) previously owned by the optionee; or (iii) having the
Company retain a portion of the shares covered by an Option
exercise. The number of shares to be delivered to or withheld by
the Company times the Fair Market Value of such shares shall equal
the cash required to be withheld.
21.
Notice to Company of
Disqualifying Disposition
. Each employee who receives an ISO
must agree to notify the Company in writing immediately after the
employee makes a Disqualifying Disposition of any Common Stock
acquired pursuant to the exercise of an ISO. If the employee has
died before such stock is sold, the holding periods requirements of
the Disqualifying Disposition do not apply and no Disqualifying
Disposition can occur thereafter.
22.
Continued
Employment
. The grant of a Stock Right pursuant to the Plan
shall not be construed to imply or to constitute evidence of any
agreement, express or implied, on the part of the Company or any
Related Corporation to retain the grantee in the employ of the
Company or a Related Corporation, as a member of the
Company’s Board, or in any other capacity, whichever the case
may be.
23.
Governing Law;
Construction
. The validity and construction of the Plan and
the instruments evidencing Stock Rights shall be governed by the
laws of the Company’s state of incorporation. In construing
this Plan, the singular shall include the plural and the masculine
gender shall include the feminine and neuter, unless the context
otherwise requires.
24. (a)
Forfeiture of Stock Rights
Granted to Employees or Consultants
. Notwithstanding any
other provision of this Plan, and unless otherwise provided for in
a Stock Rights Agreement, all vested or unvested Stock Rights
granted to employees or consultants shall be immediately forfeited
at the discretion of the Board if any of the following events
occur:
(1)
Termination of the relationship with the grantee for cause
including, but not limited to, fraud, theft, dishonesty, and
violation of Company policy;
(2)
Purchasing or selling securities of the Company in violation of the
Company’s insider trading guidelines then in
effect;
(3)
Breaching any duty of confidentiality including that required by
the Company’s insider trading guidelines then in
effect;
(4)
Competing with the Company;
(5)
Being unavailable for consultation after leaving the
Company’s employment if such availability is a condition of
any agreement between the Company and the grantee;
(6)
Recruitment of Company personnel after termination of employment,
whether such termination is voluntary or for cause;
(7)
Failure to assign any invention or technology to the Company if
such assignment is a condition of employment or any other
agreements between the Company and the grantee; or
(8) A
finding by the Board that the grantee has acted disloyally and/or
against the interests of the Company.
11
(b)
Forfeiture of Stock Rights
Granted to Directors
. Notwithstanding any other provision of
this Plan, and unless otherwise provided for in a Stock Rights
Agreement, all vested or unvested Stock Rights granted to directors
shall be immediately forfeited at the discretion of the Board if
any of the following events occur:
(1)
Purchasing or selling securities of the Company in violation of the
Company’s insider trading guidelines then in
effect;
(2)
Breaching any duty of confidentiality including that required by
the Company’s insider trading guidelines then in
effect;
(3)
Competing with the Company;
(4)
Recruitment of Company personnel after ceasing to be a director;
or
(5) A
finding by the Board that the grantee has acted disloyally and/or
against the interests of the Company.
The
Company may impose other forfeiture restrictions which are more or
less restrictive and require a return of profits from the sale of
Common Stock as part of said forfeiture provisions if such
forfeiture provisions and/or return of provisions are contained in
a Stock Rights Agreement.
(c)
Profits on the Sale of
Certain Shares; Redemption
. If any of the events specified
in Section 24(a) or (b) of the Plan occur within one year from the
date the grantee last performed services for the Company in the
capacity for which the Stock Rights were granted (the
“Termination Date”) (or such longer period required by
any written agreement), all profits earned from the sale of the
Company’s securities, including the sale of shares of Common
Stock underlying the Stock Rights, during the two-year period
commencing one year prior to the Termination Date shall be
forfeited and immediately paid by the grantee to the Company.
Further, in such event, the Company may at its option redeem shares
of Common Stock acquired upon exercise of the Stock Right by
payment of the exercise price to the grantee. To the extent that
another written agreement with the Company extends the events in
Section 24(a) or (b) beyond one year following the Termination
Date, the two-year period shall be extended by an equal number of
days. The Company’s rights under this Section 24(c) do not
lapse one year from the Termination Date but are contract rights
subject to any appropriate statutory limitation
period.
12
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RECRUITER.COM GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JUNE 11,2021 AT 11:00 AM LOCAL
TIME
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CONTROL ID:
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REQUEST ID:
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The
stockholder(s) hereby appoint(s) Miles Jennings and Evan Sohn, or
either of them, as proxies, each with the power to appoint his
substitute, and hereby authorize(s) them to represent and to vote,
as designated on the reverse side of this ballot, all of the shares
of Common Stock and Preferred Stock of RECRUITER.COM GROUP, INC.
that the stockholder(s) is/are entitled to vote at the Annual
Meeting of Stockholders to be held at 11:00 A.M., local time on
June 11, 2021 at the Company’s New York office located at 142
W 57th, New York, NY 10019, and any adjournment or postponement
thereof.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING
INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/RCRT
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PHONE:
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1-866-752-VOTE(8683)
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13
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ANNUAL MEETING OF THE STOCKHOLDERS OFRECRUITER.COM GROUP,
INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal
1
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FOR ALL
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WITHHOLD
ALL
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FOR ALL
EXCEPT
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To
Elect all eight (8) directors
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☐
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☐
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Evan
Sohn
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☐
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Miles
Jennings
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☐
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CONTROL
ID:
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Deborah
Leff
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☐
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REQUEST
ID:
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Wallace
D. Ruiz
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☐
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Timothy
O’Rourke
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☐
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Douglas
Roth
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☐
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Robert
Heath
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☐
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Steve
Pemberton
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☐
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Proposal
2
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FOR
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AGAINST
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ABSTAIN
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To
ratify the appointment of Salberg & Company, P.A. as the
Company’s independent registered public accounting firm for
the fiscal year ending December 31, 2021 (the “Auditor
Appointment”).
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☐
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☐
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☐
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Proposal
3
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FOR
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AGAINST
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ABSTAIN
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To
approve an amendment to the Recruiter.com Group, Inc. 2017 Equity
Incentive Plan to increase the number of authorized shares under
the plan (the “Plan Amendment”).
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☐
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☐
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☐
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Proposal
4
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FOR
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AGAINST
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ABSTAIN
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Approve
the adjournment of the Annual Meeting to a later date or time, if
necessary, to permit further solicitation and vote of proxies if,
based upon the tabulated vote at the time of the Annual Meeting,
there are not sufficient votes to approve the Director Appointments
and/or Auditor Appointment.
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
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The
Board of Directors recommends you FOR all the nominees to the
Board, the Board of Directors recommends you vote FOR proposals
2,3, and 4.
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MARK
HERE FOR ADDRESS CHANGE
☐
New Address (if
applicable):
_________________________
_________________________
_________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
Dated:
________________________, 2021
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(Print
Name of Stockholder and/or Joint Tenant)
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(Signature
of Stockholder)
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(Second
Signature if held jointly)
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14
TABLE OF CONTENTS
Questions and Answers Regarding the Annual Meeting of StockholdersProposal 1. Approval of the Director AppointmentsProposal 2. Approval of the Auditor AppointmentProposal 3. Approval of the Plan AmendmentProposal 4. Approval of the AdjournmentSecurity Ownership of Certain Beneficial Owners and ManagementOther Matters