As filed with the Securities and Exchange Commission
on October 24, 2025
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
THE OLB GROUP, INC.
(Exact Name of Registrant as Specified in Its
Charter)
| Delaware |
|
13-4188568 |
(State
or Other Jurisdiction of
Incorporation or Organization) |
|
(I.R.S.
Employer
Identification No.) |
1120 Avenue of the Americas, 4th Floor, New
York, NY 10036
(Address of Principal Executive Offices) (Zip
Code)
Amended and Restated The OLB Group, Inc. 2020
Share Incentive Plan
(Full Title of the Plan)
Ronny Yakov
Chief Executive Officer
1120 Avenue of the Americas, 4th Floor, New
York, NY 10036
(Name and Address of Agent for Service)
(212) 278-0900
(Telephone Number, including area code, of agent
for service)
Copies to:
Barry I. Grossman, Esq.
David Selengut, Esq.
Justin Grossman, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of Americas, 11th Floor
New York, New York 10105
(212) 370-1300
Fax: (212) 370-7889
Indicate by check mark whether the Registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
| Non-accelerated
filer |
☒ |
Smaller
reporting company |
☒ |
| |
Emerging
growth company |
☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
Explanatory Note
This registration statement on Form S-8 of The
OLB Group, Inc. (this “Registration Statement”) has been prepared in accordance with the requirements of Form S-8 under the
Securities Act of 1933, as amended (the “Securities Act”) to register up to 2,600,000 shares of our common stock, par value
$0.0001 per share (the “Common Stock”), to be issued under our Amended and Restated 2020 Share Incentive Plan (the “Plan”)
to our employees, directors, consultants and “affiliates” as such term is defined in Rule 405 under the Securities Act, which
shares may include “control securities” as such term is defined in General Instruction C to Form S-8.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
| Item
1. |
Plan
Information.* |
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|
| Item
2. |
Registrant
Information and Employee Plan Annual Information.* |
| * | Information
required by Part I of Form S-8 to be contained in this Section 10(a) prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act. The documents containing the information specified in Part I will be delivered to the participants
in the Plan covered by this Registration Statement as required by Rule 428(b)(1) under the Securities Act. Such document(s) are not being
filed with the Securities and Exchange Commission (the “SEC”) as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 of the Securities Act. These document(s) and the documents incorporated by reference in the
Registration Statement pursuant to Item 3 of Part II of this form, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act. |
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item
3. |
Incorporation
of Documents by Reference. |
The OLB Group, Inc. (the
“Registrant”) hereby incorporates by reference into this Registration Statement the following documents previously filed
with the Securities and Exchange Commission (the “Commission”):
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● |
The
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed on April 15, 2025; |
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● |
The
Registrant’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2024 filed on April 29, 2025 |
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● |
The Registrant’s Quarterly Report on Form 10-Q for the three months ended March 31, 2025 filed on May 15, 2025 |
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● |
The Registrant’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025 filed on August 19, 2025 |
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● |
The
description of the Registrant’s Common Stock contained in Description of Registered Securities filed as Exhibit 4.5
to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on April 15, 2025. |
All reports and definitive
proxy or information statements filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 of any Current Report on Form 8-K) subsequent to the filing of this Registration Statement and prior
to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which de-registers all
securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof
from the date of filing such documents, except as to specific sections of such statements as set forth therein. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained in any subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement.
| Item
4. |
Description
of Securities. |
Not applicable.
| Item
5. |
Interests
of Named Experts and Counsel. |
The validity of the shares
of Common Stock offered hereby will be passed upon by Ellenoff Grossman & Schole LLP, counsel to the Registrant.
| Item
6. |
Indemnification
of Officers and Directors. |
Section 145 of the Delaware
General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by
reason of such person being or having been a director, officer, employee or agent of the corporation. Section 145 of the Delaware General
Corporation Law also provides that expenses (including attorneys’ fees) incurred by a director or officer in defending an action
may be paid by a corporation in advance of the final disposition of an action if the director or officer undertakes to repay the advanced
amounts if it is determined such person is not entitled to be indemnified by the corporation. The Delaware General Corporation Law provides
that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise. Our amended and restated bylaws provide that, to the fullest extent permitted
by law, we shall indemnify and hold harmless any person who was or is made or is threatened to be made a party or is otherwise involved
in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that such person, or the person for whom he is the legally representative, is or was a director or officer of ours, against
all liabilities, losses, expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such proceeding.
Section 102(b)(7) of the
Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation
shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit.
Our certificate of incorporation
provides that we shall, to the maximum extent permitted from time to time under the law of the State of Delaware, indemnify and upon
request shall advance expenses to any person who is or was a party or is threatened to be made a party to any threatened, pending or
completed action, suit, proceeding or claim, whether civil, criminal, administrative or investigative, by reason of the fact that such
person is or was or has agreed to be a director or officer of ours or while a director or officer is or was serving at our request as
a director, officer, partner, trustee, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, against expenses (including attorneys’ fees and expenses), judgments, fines, penalties
and amounts paid in settlement incurred in connection with the investigation, preparation to defend or defense of such action, suit,
proceeding or claim; provided, however, that the foregoing shall not require us to indemnify or advance expenses to any person in connection
with any action, suit, proceeding or claim initiated by or on behalf of such person or any counterclaim against us initiated by or on
behalf of such person. Such indemnification shall not be exclusive of other indemnification rights arising under any by-law, agreement,
vote of directors or stockholders or otherwise and shall inure to the benefit of the heirs and legal representatives of such person.
Any person seeking indemnification shall be deemed to have met the standard of conduct required for such indemnification unless the contrary
shall be established. Any repeal or modification of our certificate of incorporation shall not adversely affect any right or protection
of a director or officer of ours with respect to any acts or omissions of such director or officer occurring prior to such repeal or
modification.
Our bylaws provide we shall,
to the fullest extent permitted under the laws of the State of Delaware, as amended and supplemented from time to time, indemnify each
person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that such party is or was, or has agreed to become, a
director or officer of ours, or is or was serving, or has agreed to serve, at our request, as a director, officer or trustee of, or in
a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, including any employee benefit plan,
or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by such party or on such party’s behalf in connection
with such action, suit or proceeding and any appeal therefrom.
Expenses incurred by such
a person in defending a civil or criminal action, suit or proceeding by reason of the fact that such person is or was, or has agreed
to become, a director or officer of ours, or is or was serving, or has agreed to serve, at our request, as a director, officer or trustee
of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, including any employee
benefit plan, or by reason of any action alleged to have been taken or omitted in such capacity shall be paid by us in advance of the
final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified by us as authorized by relevant sections of the Delaware
General Corporation Law. Notwithstanding the foregoing, we shall not be required to advance such expenses to a person who is a party
to an action, suit or proceeding brought by us and approved by a majority of our Board of Directors that alleges willful misappropriation
of corporate assets by such person, disclosure of confidential information in violation of such person’s fiduciary or contractual
obligations to us or any other willful and deliberate breach in bad faith of such person’s duty to us or our stockholders.
We shall not indemnify any
such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless the initiation
thereof was approved by our Board of Directors.
The indemnification rights
provided in our amended and restated bylaws shall not be deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities
and as to action in another capacity while holding such office, continue as to such person who has ceased to be a director or officer,
and inure to the benefit of the heirs, executors and administrators of such a person.
If the Delaware General
Corporation Law is amended to expand further the indemnification permitted to indemnitees, then we shall indemnify such persons to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
We may, to the extent authorized
from time to time by our Board of Directors, grant indemnification rights to other employees or agents of ours or other persons serving
us and such rights may be equivalent to, or greater or less than, those set forth in our amended and restated bylaws.
Our obligation to provide
indemnification under our amended and restated bylaws shall be offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage under a policy maintained by us or any other person.
To assure indemnification
under our amended and restated bylaws of all directors, officers, employees or agents who are determined by us or otherwise to be or
to have been “fiduciaries” of any employee benefit plan of ours that may exist from time to time, Section 145 of the Delaware
General Corporation Law shall, for the purposes of our amended and restated bylaws, be interpreted as follows: an “other enterprise”
shall be deemed to include such an employee benefit plan, including without limitation, any plan of ours that is governed by the Act
of Congress entitled “Employee Retirement Income Security Act of 1974,” as amended from time to time; we shall be deemed
to have requested a person to serve an employee benefit plan where the performance by such person of his duties to us also imposes duties
on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; and excise taxes assessed
on a person with respect to an employee benefit plan pursuant to such Act of Congress shall be deemed “fines.”
Our bylaws shall be deemed
to be a contract between us and each person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that person is or was, or
has agreed to become, a director or officer of ours, or is or was serving, or has agreed to serve, at our request, as a director, officer
or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, including any
employee benefit plan, or by reason of any action alleged to have been taken or omitted in such capacity, at any time while this by-law
is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state
of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon
any such state of facts.
The indemnification provision
of our amended and restated bylaws does not affect directors’ responsibilities under any other laws, such as the federal securities
laws or state or federal environmental laws.
We may purchase and maintain
insurance on behalf of any person who is or was a director, officer or employee of ours, or is or was serving at our request as a director,
officer, employee or agent of another company, partnership, joint venture, trust or other enterprise against liability asserted against
him and incurred by him in any such capacity, or arising out of his status as such, whether or not we would have the power to indemnify
him against liability under the provisions of this section. We currently maintain such insurance.
The right of any person
to be indemnified is subject to our right, in lieu of such indemnity, to settle any such claim, action, suit or proceeding at our expense
of by the payment of the amount of such settlement and the costs and expenses incurred in connection therewith.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim
for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling
person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered herewith, we will, unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication of such issue.
| Item
7. |
Exemption
from Registration Claimed. |
Not applicable.
The Registrant has filed
the exhibits listed on the accompanying Exhibit Index of this Registration Statement.
EXHIBIT INDEX
A. The undersigned Registrant
hereby undertakes:
(1) To file,
during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect
in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective Registration Statement; and
(iii) To include
any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material
change to such information in the Registration Statement.
provided,
however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement.
(2) That, for
the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove
from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
B. The undersigned Registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s
annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on October 24, 2025.
| |
THE OLB
GROUP, INC. |
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|
|
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By: |
/s/ Ronny
Yakov |
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|
Name: |
Ronny
Yakov |
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|
Title: |
Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, that each person whose signature appears below does hereby constitute and appoint Ronny Yakov, and each of them, with full
power of substitution, such person’s true and lawful attorneys-in-fact and agents for such person, with full power and authority
to do any and all acts and things and to execute any and all instruments which said attorneys and agents, and any one of them, determine
may be necessary or advisable or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in connection with this Registration Statement. Without limiting
the generality of the foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to this Registration Statement, to any and all amendments, both pre-effective
and post-effective, and supplements to this Registration Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or any one of them, shall do or cause to be done by virtue hereof. This Power of Attorney may be
signed in several counterparts.
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.
| Signature |
|
Title |
|
Date |
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| /s/ Ronny Yakov |
|
Chief Executive Officer and Chairman |
|
October 24, 2025 |
| Ronny Yakov |
|
(Principal Executive Officer) |
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| /s/ Rachel Boulds |
|
Chief Financial Officer |
|
October 24, 2025 |
| Rachel Boulds |
|
(Principal Financial and Accounting Officer) |
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| /s/ Ehud Ernst |
|
Director |
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October 24, 2025 |
| Ehud Ernst |
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| /s/ Amir Sternhell |
|
Director |
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October 24, 2025 |
| Amir Sternhell |
|
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| /s/ Alina Dulimof |
|
Director |
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October 24, 2025 |
| Alina Dulimof |
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II-6
Exhibit 10.1
SECOND AMENDED AND RESTATED 2020 SHARE INCENTIVE
PLAN
Overview
Our Board has approved the second amendment and
restatement of the 2020 Share Incentive Plan, which is our primary plan for providing equity incentive compensation to our eligible employees,
directors and consultants, a copy of which is attached to this proxy statement as Annex A. Our Board believes that the number of
shares of Common Stock currently available in the 2020 Plan is insufficient to achieve the purpose of the 2020 Plan, which is to attract
and retain key personnel and to provide a means for directors, officers, employees, consultants and advisors to acquire and maintain an
interest in us, which interest may be measured by reference to the value of our Common Stock. We are amending the 2020 Plan principally
to increase the number of our shares of Common Stock available for issuance under the 2020 Plan from 200,000 to 3,000,000 shares.
As of the Record Date, and excluding the requested
share increase, there are 200,000 shares authorized for issuance under the 2020 Plan and no shares of Common Stock remain available for
future grants of awards under the 2020 Plan.
If stockholders approve the New Plan, the total
number of shares available for grants under the New Plan would be 3,000,000 shares of Common Stock.
Summary Description of the New Plan as amended
and restated
The following is a summary of the material features
of the New Plan, as amended and restated. This summary is qualified in its entirety by the full text of
the New Plan, a copy of which
is included as Annex A to this proxy statement.
Eligibility
Persons eligible to participate in the New Plan
will be officers, employees, non-employee directors and consultants of the Company and its subsidiaries as selected from time to time
by the plan administrator in its discretion. As of the date of this proxy statements, approximately 24 individuals will be eligible to
participate in the New Plan, which includes approximately 3 officers, 15 employees who are not officers, 3 non-employee directors and
3 consultants.
Administration
The New Plan will be administered by the Compensation
Committee, the Board, or such other similar committee pursuant to the terms of the New Plan. The plan administrator, which initially will
be the Compensation Committee, will have full power to select, from among the individuals eligible for awards, the individuals to whom
awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each
award, subject to the provisions of the New Plan. The plan administrator may delegate to one or more officers of the Company the authority
to grant awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act.
Share Reserve
Subject to the adjustment provisions contained
in the New Plan, the number of shares of Common Stock that may be issued under the New Plan is equal to 3,000,000, which is also the maximum
number of shares of Common Stock that may be issued upon the exercise of incentive stock options. Shares issuable under the New Plan may
be authorized, but unissued, or reacquired shares of Common Stock.
Shares underlying any awards under the New Plan
that are forfeited, cancelled, held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding,
satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added back to the shares available for
issuance under the New Plan.
Annual Limitation on Awards to Non-Employee Directors
The New Plan contains a limitation whereby the
value of all awards under the New Plan and all other cash compensation paid by the Company to any non-employee director may not exceed
$750,000 for the first calendar year a non-employee director is initially appointed to the Board, and $500,000 in any other calendar year.
Types of Awards
The New Plan provides for the grant of stock options,
stock appreciation rights, restricted stock, restricted stock units and other stock-based awards (collectively, “awards”).
Stock Options. The New Plan permits the
granting of both options to purchase Common Stock intended to qualify as incentive stock options under Section 422 of the Code and options
that do not so qualify. Options granted under the New Plan will be nonqualified options if they fail to qualify as incentive stock options
or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its
subsidiaries. Nonqualified options may be granted to any persons eligible to receive awards under the New Plan.
The option exercise price of each option will
be determined by the plan administrator but generally may not be less than 100% of the fair market value of Common Stock on the date of
grant or, in the case of an incentive stock option granted to a ten percent stockholder, 110% of such share’s fair market value.
The term of each option will be fixed by the plan administrator and may not exceed ten years from the date of grant (or five years for
an incentive stock option granted to a ten percent stockholder). The plan administrator will determine at what time or times each option
may be exercised, including the ability to accelerate the vesting of such options.
Upon exercise of options, the option exercise
price must be paid in full either in cash, check or cash equivalent, or by delivery (or attestation to the ownership) of shares of Common
Stock that are beneficially owned by the optionee free of restrictions or were purchased in the open market. Subject to applicable law,
the exercise price may also be made by means of a broker-assisted cashless exercise. In addition, the plan administrator may permit nonqualified
options to be exercised using a “net exercise” arrangement that reduces the number of shares issued to the optionee by the
largest whole number of shares with fair market value that does not exceed the aggregate exercise price.
Stock Appreciation Rights. The plan administrator
may award stock appreciation rights subject to such conditions and restrictions as it may determine. Stock appreciation rights entitle
the recipient to shares of Common Stock or cash equal to the value of the appreciation in the stock price of Common Stock over the exercise
price. The exercise price generally may not be less than 100% of the fair market value of Common Stock on the date of grant. The term
of each stock appreciation right will be fixed by the plan administrator and may not exceed ten years from the date of grant. The plan
administrator will determine at what time or times each stock appreciation right may be exercised, including the ability to accelerate
the vesting of such stock appreciation rights.
Restricted Stock. A restricted stock award
is an award of Common Stock that vests in accordance with the terms and conditions established by the plan administrator. The plan administrator
will determine the persons to whom grants of restricted stock awards are made, the number of restricted shares to be awarded, the price
(if any) to be paid for the restricted shares, the time or times within which awards of restricted stock may be subject to forfeiture,
the vesting schedule and rights to acceleration thereof, and all other terms and conditions of restricted stock awards. Unless otherwise
provided in the applicable award agreement, a participant generally will have the rights and privileges of a stockholder as to such restricted
shares, including without limitation the right to vote such restricted shares and the right to receive dividends, if applicable.
Restricted Stock Units. Restricted stock
units are the right to receive Common Stock at a future date in accordance with the terms of such grant upon the attainment of certain
conditions specified by the plan administrator. Restrictions or conditions could include, but are not limited to, the attainment of performance
goals, continuous service with the Company or its subsidiaries, the passage of time or other restrictions or conditions. The plan administrator
determines the persons to whom grants of restricted stock units are made, the number of restricted stock units to be awarded, the time
or times within which awards of restricted stock units may be subject to forfeiture, the vesting schedule and rights to acceleration thereof,
and all other terms and conditions of the restricted stock unit awards. The value of the restricted stock units may be paid in Common
Stock, cash, other securities, other property or a combination of the foregoing, as determined by the plan administrator.
The holders of restricted stock units will have
no voting rights. Prior to settlement or forfeiture, restricted stock units awarded under the New Plan may, at the plan administrator’s
discretion, provide for a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all dividends
paid on one share of Common Stock while each restricted stock unit is outstanding. Dividend equivalents may be converted into additional
restricted stock units. Settlement of dividend equivalents may be made in the form of cash, Common Stock, other securities, other property,
or a combination of the foregoing. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions
as the restricted stock units to which they are payable.
Other Stock-Based Awards. Other stock-based
awards may be granted either alone, in addition to, or in tandem with, other awards granted under the New Plan and/or cash awards made
outside of the New Plan. The plan administrator shall have authority to determine the persons to whom and the time or times at which other
stock-based awards will be made, the amount of such other stock-based awards, and all other conditions, including any dividend and/or
voting rights.
Tax Withholding
Participants in the New Plan are responsible for
the payment of any federal, state, or local taxes that the Company or its subsidiaries are required by law to withhold upon the exercise
of options or stock appreciation rights or vesting of other awards. The plan administrator may cause any tax withholding obligation of
the Company or its subsidiaries to be satisfied, in whole or in part, by the applicable entity withholding from shares of Common Stock
to be issued pursuant to an award a number of shares with an aggregate fair market value that would satisfy the withholding amount due.
The plan administrator may also require any tax withholding obligation of the Company or its subsidiaries to be satisfied, in whole or
in part, by an arrangement whereby a certain number of shares issued pursuant to any award are immediately sold and proceeds from such
sale are remitted to the Company or its subsidiaries in an amount that would satisfy the withholding amount due.
Equitable Adjustments
In the event of a merger, consolidation, recapitalization,
stock split, reverse stock split, reorganization, split-up, spin-off, combination, repurchase or other change in corporate structure affecting
shares of Common Stock, the maximum number and kind of shares reserved for issuance or with respect to which awards may be granted under
the New Plan will be adjusted to reflect such event, and the plan administrator will make such adjustments as it deems appropriate and
equitable in the number, kind, and exercise price of shares of Common Stock covered by outstanding awards made under the New Plan.
Change in Control
In the event of any proposed change in control
(as defined in the New Plan), the plan administrator will take any action as it deems appropriate, which action may include, without limitation,
the following: (i) the continuation of any award, if the Company is the surviving corporation; (ii) the assumption of any award by the
surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of
equivalent awards; (iv) accelerated vesting of the award, with all performance objectives and other vesting criteria deemed achieved at
targeted levels, and a limited period during which to exercise the award prior to closing of the change in control, or (v) settlement
of any award for the change in control price (less, to the extent applicable, the per share exercise price).
Transferability
Unless determined otherwise by the plan administrator,
an award may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner, except to a participant’s estate
or legal representative, and may be exercised, during the lifetime of the participant, only by the participant. If the plan administrator
makes an award transferable, such award will contain such additional terms and conditions as the plan administrator deems appropriate.
Term
The 2020 Plan became effective when adopted by
the Board on August 6, 2020 and, unless terminated, the New Plan will continue in effect for a term ending August 6, 2030.
Amendment and Termination
The Board may amend or terminate the New Plan
at any time. Any such termination will not affect outstanding awards. No amendment, alteration, suspension, or termination of the New
Plan will materially impair the rights of any participant, unless mutually agreed otherwise between the participant and the Company. Approval
of the stockholders shall be required for any amendment, where required by applicable law, as well as (i) to increase the number of shares
available for issuance under the New Plan and (ii) to change the persons or class of persons eligible to receive awards under the New
Plan.
Form S-8
Following the approval of the stockholders of
the New Plan, the Company intends to file with the SEC a registration statement on Form S-8 covering the shares of Common Stock issuable
under the New Plan.
Material United States Federal Income Tax Considerations
The following is a general summary under current
law of the material U.S. federal income tax considerations related to awards and certain transactions under the New Plan, based upon the
current provisions of the Code and regulations promulgated thereunder. This summary deals with the general federal income tax principles
that apply and is provided only for general information. It does not describe all federal tax consequences under the New Plan, nor does
it describe state, local, or foreign income tax consequences or federal employment tax consequences. The rules governing the tax treatment
of such awards are quite technical, so the following discussion of tax consequences is necessarily general in nature and is not complete.
In addition, statutory provisions are subject to change, as are their interpretations, and their application may vary in individual circumstances.
This summary is not intended as tax advice to participants, who should consult their own tax advisors.
The New Plan is not qualified under the provisions
of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.
The Company’s ability to realize the benefit of any tax deductions described below depends on the Company’s generation of
taxable income as well as the requirement of reasonableness and the satisfaction of the Company’s tax reporting obligations.
Incentive Stock Options. No taxable income
is generally realized by the optionee upon the grant or exercise of an incentive stock option. If shares of Common Stock issued to an
optionee pursuant to the exercise of an incentive stock option are sold or transferred after two years from the date of grant and after
one year from the date of exercise, then generally (i) upon sale of such shares, any amount realized in excess of the option exercise
price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term
capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes; provided that such incentive
stock option otherwise meets all of the technical requirements of an incentive stock option. The exercise of an incentive stock option
will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If shares of Common Stock acquired upon the exercise
of an incentive stock option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying
disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess
(if any) of the fair market value of the shares of Common Stock at exercise (or, if less, the amount realized on a sale of such shares)
over the option exercise price thereof, and (ii) the Company will be entitled to deduct such amount. Special rules will apply where all
or a portion of the exercise price of the incentive stock option is paid by tendering shares of Common Stock.
If an incentive stock option is exercised at a
time when it no longer qualifies for the tax treatment described above, the option is treated as a nonqualified option. Generally, an
incentive stock option will not be eligible for the tax treatment described above if it is exercised more than three months following
termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of
employment by reason of death, the three-month rule does not apply.
Nonqualified Options. No income is generally
realized by the optionee at the time a nonqualified option is granted. Generally (i) at exercise, ordinary income is realized by the optionee
in an amount equal to the difference between the option exercise price and the fair market value of the shares of Common Stock on the
date of exercise, and the Company receives a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation
after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares have been
held. Special rules will apply where all or a portion of the exercise price of the nonqualified option is paid by tendering shares of
Common Stock. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the
exercise price of the option.
Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, and Other Stock-Based Awards. The current federal income tax consequences of other awards authorized under
the New Plan generally follow certain basic patterns: (i) stock appreciation rights are taxed and deductible in substantially the same
manner as nonqualified options; (ii) nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition
equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions lapse (unless the recipient
elects to accelerate recognition as of the date of grant through a Section 83(b) election); and (iii) restricted stock units, dividend
equivalents and other stock or cash based awards are generally subject to tax at the time of payment. The Company or our subsidiaries
or affiliates generally should be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the
participant at the time the participant recognizes such income.
The participant’s basis for the determination
of gain or loss upon the subsequent disposition of shares acquired from a stock appreciation right, restricted stock, restricted stock
unit, or other stock-based award will be the amount paid for such shares plus any ordinary income recognized when the shares were originally
delivered, and the participant’s capital gain holding period for those shares will begin on the day after they are transferred to
the participant.
Parachute Payments. The vesting of any
portion of an award that is accelerated due to the occurrence of a change in control (such as a corporate transaction) may cause all or
a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the
Code. Any such parachute payments may be non-deductible to the Company, in whole or in part, and may subject the recipient to a non-deductible
20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Section 409A. The foregoing description
assumes that Section 409A of the Code does not apply to an award under the New Plan. In general, stock options and stock appreciation
rights are exempt from Section 409A if the exercise price per share is at least equal to the fair market value per share of the underlying
stock at the time the option or stock appreciation right was granted. Restricted stock awards are not generally subject to Section 409A.
Restricted stock units are subject to Section 409A unless they are settled within two and one half months after the end of the later of
(1) the end of the Company’s fiscal year in which vesting occurs or (2) the end of the calendar year in which vesting occurs. If
an award is subject to Section 409A and the provisions for the exercise or settlement of that award do not comply with Section 409A, then
the participant would be required to recognize ordinary income whenever a portion of the award vested (regardless of whether it had been
exercised or settled). This amount would also be subject to a 20% U.S. federal tax and premium interest in addition to the U.S. federal
income tax at the participant’s usual marginal rate for ordinary income.
Vote Required for Approval
The affirmative vote of a majority of the votes
cast at the Annual Meeting by the holders of Common Stock and Preferred Stock, voting together as a single class is required to approve
the New Plan.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE AMENDED ANA RESTATED 2020 SHARE INCENTIVE PLAN PROPOSAL.
The existence of financial and personal interests
of one or more of directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe
is in the best interests of the Company and its stockholders and what he, she or they may believe is best for himself, herself or themselves
in determining to recommend that stockholders vote for the proposals.
