SEC Filings
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| DEF 14A | |
| HRG GROUP, INC. filed this Form DEF 14A on 07/27/2016 | |
| Entire Document | |
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PROPOSAL 3 RE-APPROVAL OF THE MATERIAL TERMS OF THE PERFORMANCE GOALS UNDER THE COMPANY’S 2011 OMNIBUS EQUITY AWARD PLAN FOR PURPOSES OF SECTION 162(m) OF THE CODE On August 10, 2011, the Board of Directors originally adopted and approved the 2011 Plan. The 2011 Plan was approved by our stockholders on September 15, 2011, and was amended effective April 24, 2014. In this proposal, we are asking our stockholders to re-approve the material terms of the performance goals for performance-based awards under the 2011 Plan pursuant to Section 162(m) of the Code. We are not seeking to increase the number of shares authorized for issuance under the 2011 Plan, nor are we making any changes to the 2011 Plan. Section 162(m) Re-approval Approval of this proposal will constitute re-approval of the material terms of the performance goals under the 2011 Plan for purposes of Section 162(m) of the Code. This will have the effect of extending the period (which would otherwise expire at the Annual Meeting) during which the Company may grant awards intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code to first meeting of stockholders that occurs in 2021. Section 162(m) of the Code generally does not allow a publicly held company to obtain tax deductions for compensation of more than $1,000,000 paid in any year to its chief executive officer, or any of its other three most highly compensated executive officers (other than its chief financial officer), unless such payments are “performance-based” in accordance with conditions specified under Section 162(m) of the Code. Generally ,under Section 162(m) of the Code, it is required that the material terms of the performance goals under the 2011 Plan must be approved every five years in order to grant “performance-based compensation.” We have in the past and we specifically reserve our right in the future to pay compensation that is not deductible under Section 162(m) of the Code. If our stockholders do not approve this proposal, then the current terms of the 2011 Plan will remain in effect. However, we will not be able to grant any “performance-based compensation” for purposes of Section 162(m) of the Code after the date of the Annual Meeting unless and until requisite stockholder approval is obtained in accordance with the provisions of Section 162(m) of the Code. As noted above, we will still be permitted to grant awards pursuant to the 2011 Plan, but we may be precluded from taking a deduction for awards that would otherwise qualify as “performance-based.” Our executive officers and directors (including our director nominees) have an interest in this proposal as they would be eligible to receive awards under the 2011 Plan. Summary of the 2011 Plan The following is a summary of the material features of the 2011 Plan. The summary is qualified in its entirety by reference to the complete text of the 2011 Plan, a copy of which is attached as Annex A to this Proxy Statement. Administration. Our Compensation Committee (or subcommittee thereof, if necessary for Section 162(m) of the Code) administers the 2011 Plan. Our Compensation Committee has the authority to determine the terms and conditions of any agreements evidencing any awards granted under the 2011 Plan and to adopt, alter and repeal rules, guidelines and practices relating to the 2011 Plan. Our Compensation Committee has full discretion to administer and interpret the 2011 Plan and to adopt such rules, regulations and procedures as it deems necessary or advisable, or to comply with any applicable law, including Section 162(m) of the Code and the regulations promulgated thereunder and to determine, among other things, the time or times at which the awards may be exercised and whether and under what circumstances an award may be exercised. Eligibility. Any employees, directors, officers or consultants of the Company or of its subsidiaries or their respective affiliates are eligible for awards under the 2011 Plan. Our Compensation Committee has the sole and complete authority to determine who will be granted an award under the 2011 Plan. Additionally, employees of certain non-U.S. subsidiaries may become eligible to participate in sub-plans that shall comply with local laws applicable to offerings in non-U.S. jurisdictions. The 2011 Plan will be a separate and independent plan from any sub-plans, but the total number of shares of Common Stock authorized to be issued under the 2011 Plan applies in the aggregate to both the 2011 Plan and any sub-plans. Number of Shares Authorized. An aggregate of 24,000,000 shares of our Common Stock is authorized for issuance under the 2011 Plan, of which a total of 6,451,200 are subject to outstanding awards as of July 18, 2016. The following sub-limits also apply under the 2011 Plan: no more than 24,000,000 shares of our Common Stock may be issued with respect to incentive stock options under the 2011 Plan; no participant may be granted awards of options and stock appreciation rights with respect to more than 3,000,000 shares of our Common Stock in any one year; no more than 24,000,000 shares of our Common Stock may be subject to grants of option and stock appreciation rights under the 2011 Plan; no more than 2,000,000 shares of our Common Stock may be granted under the 2011 Plan to any participant during any single fiscal year with respect to performance compensation awards denominated in shares in any one performance period; and the maximum amount payable to an individual participant under the 2011 Plan for any single year during a performance period pursuant to a performance compensation award denominated in cash is $20,000,000 (with respect to each year if the performance period is more than one year). Shares of our Common Stock subject to awards are generally unavailable for future grant; provided, in no event shall 10 | |
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