UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
____________________
SCHEDULE 14A
____________________
(Rule
14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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Solitron Devices, Inc.
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SOLITRON DEVICES, INC.
3301
Electronics Way
West Palm Beach, Florida 33407
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on
December 9, 2021
To our
Stockholders:
The
Annual Meeting of Stockholders of Solitron Devices, Inc. (the
"Company") will be held on Thursday, December 9, 2021 at 10:00
a.m., Eastern Time, at 901 Sansburys Way, West Palm Beach, Florida
33411 for the following purposes:
(1)
The election of
five (5) directors. The Class III director will serve for a term
until the 2022 Annual Meeting of Stockholders, the Class I
directors will serve for a term until the 2023 Annual Meeting of
Stockholders and the Class II directors will serve for a term until
the 2024 Annual Meeting of Stockholders;
(2)
The ratification of
the selection of MaloneBailey LLP as the Company's independent
certified public accountants for the fiscal year ending February
28, 2022;
(3)
A non-binding
advisory vote on the compensation of the named executive officers
of the Company ("Say on Pay");
(4)
A non-binding
advisory vote on the frequency of the advisory vote on Say on Pay
in future years;
(5)
The approval of the
2019 Stock Incentive Plan; and
(6)
The transaction of
such other and further business as may properly come before the
meeting or any adjournments or postponements of the
meeting.
The
Board of Directors has fixed the close of business on October
12, 2021 as the record date for
the determination of stockholders entitled to notice of and to vote
at the annual meeting.
The
enclosed proxy statement contains information pertaining to the
matters to be voted on at the annual meeting. A copy of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 2021 is being made available with this proxy
statement.
By
order of the Board of Directors,
Tim
Eriksen
Chief Executive
Officer, Interim Chief Financial Officer and
Director
West
Palm Beach, Florida
November 5, 2021
INTERNET AVAILABILITY OF PROXY MATERIALS
Important Notice Regarding the Availability of Proxy Materials: A
full set of all proxy materials for the Annual Meeting of
Stockholders to be held on December 9, 2021 is enclosed with this
Notice. Additionally, the Company’s proxy statement, most
recent annual report on Form 10-K, and other proxy materials are
available at
https://www.cstproxy.com/solitrondevices/2021.
In
accordance with the rules of the Securities and Exchange Commission
(“SEC”), we are furnishing our proxy materials,
including this proxy statement and our annual report, to our
stockholders through the mail. On November 5, 2021, we began
mailing the proxy materials. The proxy materials contain
instructions on how to vote via the Internet or by mailing the
enclosed proxy.
Important Notice Regarding the Availability of Proxy
Materials
for the Stockholder Meeting to be Held on December
9, 2021
Our Annual Report and this proxy statement are available at
https://www.cstproxy.com/solitrondevices/2021.
YOU ARE REQUESTED, REGARDLESS OF THE NUMBER OF SHARES OWNED, TO
SIGN AND DATE THE ENCLOSED PROXY AND TO MAIL IT PROMPTLY, OR TO USE
THE INTERNET VOTING SYSTEM SET FORTH IN THE PROXY.
SOLITRON DEVICES, INC.
3301 Electronics Way
West Palm Beach, Florida 33407
PROXY STATEMENT
Annual
Meeting of Stockholders
To be held on
December 9, 2021
General
We are
providing these proxy materials in connection with the solicitation
by the Board of Directors of Solitron Devices, Inc. of proxies to
be voted at our 2021 Annual Meeting of Stockholders and at any and
all postponements or adjournments thereof. Our Annual Meeting will
be held on Thursday, December 9, 2021, at 10:00 a.m., Eastern Time,
at 901 Sansburys Way, West Palm Beach, Florida 33411. If you plan
to attend the Annual Meeting, you can obtain directions by
contacting Lana Pazienza at (561) 848-4311 extension 208. This
proxy statement and the enclosed form of proxy are first being sent
to stockholders on or about November 5, 2021. In this proxy
statement, Solitron Devices, Inc. is referred to as the "Company,"
"we," "our" or "us."
Purposes of the Meeting
At the Annual Meeting, our stockholders will consider and vote
upon the following matters:
(1)
The election of
five (5) directors. The Class III director will serve for a term
until the 2022 Annual Meeting of Stockholders, the Class I
directors will serve for a term until the 2023 Annual Meeting of
Stockholders and the Class II directors will serve for a term until
the 2024 Annual Meeting of Stockholders;
(2)
The ratification of the selection of
MaloneBailey LLP as the Company's
independent certified public accountants for the fiscal year ending
February 28, 2022;
(3)
A
non-binding advisory vote on the compensation of the named
executive officers of the Company ("Say on Pay");
(4)
A
non-binding advisory vote on the frequency of the advisory vote on
Say on Pay in future years;
(5)
The
approval of the 2019 Stock Incentive Plan; and
(6)
The
transaction of such other and further business as may properly come
before the meeting or any adjournments or postponements of the
meeting.
Outstanding Securities and Voting Rights
Only
holders of record of the Company's
common stock at the close of business on October 12,
2021, the record date, will be
entitled to notice of, and to vote at, the Annual Meeting. On that
date, we had 2,083,452 shares of common stock outstanding that are
entitled to notice of, and to vote at, the Annual Meeting. Each
share of common stock is entitled to one vote at the Annual
Meeting.
The holders of a majority of the issued and
outstanding shares of common stock present at the Annual Meeting,
either in person or by proxy, and entitled to vote at the Annual
Meeting, constitute a quorum for the transaction of business at the
Annual Meeting. Abstentions and broker non-votes will be included
in determining the presence of a quorum at the Annual Meeting. A
broker non-vote occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial
owner. Under New York Stock Exchange rules, a broker does not have
the discretion to vote on Proposal 1 — Election of Directors,
Proposal 3 — Say on Pay, Proposal 4 — Frequency of the
Vote on Say on Pay and Proposal 5 — Vote on the 2019 Stock
Incentive Plan. As a result, any broker that is a member of the New
York Stock Exchange will not have the discretion to vote on
Proposals 1, 3, 4 and 5 if such broker has not received
instructions from the beneficial owner. A broker non-vote or an
abstention will have no effect on the proposals, except that an
abstention will have the same effect as a vote against Proposal 2
— ratification of MaloneBailey LLP as our independent certified public accountants
for the year ending February 28, 2022 and Proposal 3 — Say on
Pay Proposal.
Proxy Voting
Shares for which proxy cards are properly executed
and returned will be voted at the Annual Meeting in accordance with
the directions given or, in the absence of directions, will be
voted "FOR" Proposal 1 — the election of each of the
nominees to the Board named herein, "FOR" Proposal 2 — the ratification of
MaloneBailey LLP as our independent
certified public accountants for the year ending February 28,
2022, "FOR" Proposal 3 — the approval of the Say on Pay
proposal, for the selection of “1 YEAR” as the frequency with
which stockholders are provided an advisory vote on Say on Pay and
"FOR" Proposal 5
— the approval of the 2019 Stock
Incentive Plan. If, however,
other matters are properly presented, the person named in the
proxies in the accompanying proxy card will vote in accordance with
their discretion with respect to such matters.
Voting by Stockholders of Record.
If you
are a stockholder of record (your shares are registered directly in
your name with our transfer agent), you may vote by proxy via the
Internet or by mail by following the instructions provided on the
proxy card. Stockholders of record who attend the Annual Meeting
may vote in person by obtaining a ballot from the inspector of
elections. Please be prepared to present photo identification for
admittance to the Annual Meeting.
Voting by Beneficial Owners.
If you
are a beneficial owner of shares (your shares are held in the name
of a brokerage firm, bank, or other nominee), you may vote by proxy
by following the instructions provided in the vote instruction
form, or other materials provided to you by the brokerage firm,
bank, or other nominee that holds your shares. To vote in person at
the Annual Meeting, you must obtain a legal proxy from the
brokerage firm, bank, or other nominee that holds your shares, and
present such legal proxy from the brokerage firm, bank, or other
nominee that holds your shares for admittance to the Annual
Meeting. Also, be prepared to present photo identification for
admittance to the Annual Meeting.
Changing Your Vote.
You may revoke your proxy and change your vote at
any time before the final vote at the Annual Meeting. You may vote
again on a later date via the
Internet (only your latest Internet proxy submitted prior to the
meeting will be counted), by signing and returning a new proxy card
with a later date, or by attending the Annual Meeting and voting in
person. Your attendance at the Annual Meeting will not
automatically revoke your proxy unless you vote again at the Annual
Meeting or specifically request in writing that your prior proxy be
revoked.
All votes will
be tabulated by an Inspector of Elections appointed for the Annual
Meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes. A list of the stockholders
entitled to vote at the Annual Meeting will be available at the
Company's executive office, located at 3301 Electronics Way, West
Palm Beach, Florida 33407, for a period of ten (10) days prior to
the Annual Meeting and will be available at the Annual Meeting for
examination by any stockholder.
ELECTION OF DIRECTORS
Upon
the recommendation of the Nominating Committee, our Board has
nominated the five persons listed below to stand for election. Each
director nominee is a current director who is standing for
re-election upon the recommendation of the Nominating Committee.
The Class III director identified below will hold office for a term
expiring at the 2022 Annual Meeting of Stockholders; the Class I
directors identified below will hold office for a term expiring at
the 2023 Annual Meeting of Stockholders; and the Class II directors
identified below will hold office for a term expiring at the 2024
Annual Meeting of Stockholders. At each Annual Meeting of
Stockholders following this election, the successors to the class
of directors whose terms expire at that meeting will be elected for
a term of office to expire at the third succeeding Annual Meeting
of Stockholders after their election, and until their successors
have been duly elected and qualified.
Each
nominee listed below is willing and able to serve as a director. If
any nominee becomes unavailable for any reason, a situation which
is not anticipated, a substitute nominee may be proposed by the
Board, and any shares represented by proxy will be voted for the
substitute nominee, unless the Board reduces the number of
directors.
The
following table sets forth certain information concerning the
nominees for director:
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Name
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Age
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Positions with the Company
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Class
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Year Term Expires(4)
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Dwight P. Aubrey(1)(2)
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75
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Director
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Class I
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2023
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John F. Chiste(1)(3)
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65
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Director
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Class I
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2023
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Tim
Eriksen
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52
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Chief Executive Officer, Interim Chief Financial Officer and
Director
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Class II
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2024
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David W. Pointer(2)(3)
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51
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Chairman
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Class II
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2024
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Charles M. Gillman(2)(3)
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51
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Director
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Class III
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2022
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The
following table sets forth certain information concerning the
directors and nominee for director:
____________
(1)
Member of the Audit
Committee.
(2)
Member of the Compensation
Committee.
(3)
Member of the Nominating
Committee.
(4)
The last annual meeting of
stockholders was held on August 26, 2016.
CLASS III — TERM EXPIRING AT 2022 ANNUAL MEETING
Charles Gillman
Mr.
Gillman was appointed a director on July 22, 2016. Mr. Gillman also
serves as Chairman of the Nominating Committee, and a member of the
Compensation Committee. The appointment of Mr. Gillman was a result
of both mutual business interest and discussions between the Board
and Novation Companies, Inc. regarding the avoidance of a proxy
contest. In return for Novation Companies, Inc. agreeing to not
pursue a proxy contest at the Company’s 2016 Annual Meeting
of Stockholders, the Board agreed to appoint Mr. Gillman as a Class
III director, nominate him for re-election at the 2016 Annual
Meeting of Stockholders and reimburse the reasonable expenses
incurred to date by Novation Companies, Inc. regarding a potential
proxy contest at the 2016 Annual Meeting of
Stockholders.
Mr.
Gillman is the Owner and Executive Managing Director of the IDWR
Multi-Family Office (the "IDWR"), a position he has held since
2013. The IDWR employs a team of analysts with expertise in finding
publicly traded companies that require operational enhancement and
an improvement in corporate capital allocation. From 2001 to 2013,
Mr. Gillman was a portfolio manager of certain family office
investment portfolios at Nadel and Gussman, LLC. Prior to his
employment at Nadel and Gussman, Mr. Gillman worked in the
investment industry and as a strategic management consultant at
McKinsey & Company, where he gained experience designing
operational turnarounds of U.S. and international companies. Mr.
Gillman currently serves on the board of directors of Digirad
Corporation, Hill International, and Points International.
Additionally, Mr. Gillman previously served on the board of
directors of the following companies during the last five years:
Hooper Holmes, Inc., Datawatch Corporation, Novation Companies
Inc., Digirad, Hill International, and Points International. Mr.
Gillman is a Summa Cum Laude graduate of the Wharton School and a
Director of the Penn Club of New York which serves as the Manhattan
home of the Wharton and Penn alumni community.
The
Board believes that Mr. Gillman’s significant experience
designing operational turnarounds of companies, as a successful
portfolio manager and his mergers and acquisition experience highly
qualifies him to serve as a member of the Board of
Directors.
CLASS I — TERM EXPIRING AT 2023 ANNUAL MEETING
Dwight P. Aubrey
Mr.
Aubrey was appointed a director on January 12, 2015. Mr. Aubrey
also serves as Chairman of the Compensation Committee and a member
of the Audit Committee. Mr. Aubrey served as the President of ES
Components LLC, a franchised distributor for wire bondable die and
surface mountable components used by hybrid and semiconductor
component manufacturers, from 1981 through 2017. Since 2017, Mr.
Aubrey has been a consultant for new business development at ES
Components. An immediate family member of Mr. Aubrey is the
majority owner of ES Components, and Mr. Aubrey is a minority
owner. Mr. Aubrey also served as the President and Owner of
Compatible Components LLC, a manufacturer's representative and
business development consulting company supplying microelectronic
components, from 1979 until 2005 when he elected to close the
business due to the growth of ES Components. Mr. Aubrey received an
Associate of Arts in Business Administration from Central N.E.
College in 1975.
The
Company believes that Mr. Aubrey's extensive operational and
business background in semiconductor component manufacturing highly
qualifies him to serve as a member of the Board of
Directors.
John F. Chiste
Mr.
Chiste was appointed a director on January 12, 2015. Mr. Chiste
also serves as Chairman of the Audit Committee and a member of the
Nominating Committee. Mr. Chiste has served as the Chief Financial
Officer of Encore Housing Opportunity Fund I, Fund II, Fund III and
Rescore Property Corp., a group of private equity funds with assets
under management in excess of $1.0 billion focused on acquiring
opportunistic and distressed residential real estate primarily in
Florida, Texas, Arizona and California, since 2010. Mr. Chiste was
a director and Chairman of the Audit Committee of Forward
Industries, Inc., a Nasdaq listed manufacturer and distributor of
specialty and promotional products, primarily for hand held
electronic devices, from February 2008 through January 2015. Mr.
Chiste has also served since 2005 as Chief Financial Officer of the
Falcone Group which owns a diversified real estate portfolio of
companies. Mr. Chiste previously served as Chief Financial Officer
of Bluegreen Corporation, a NYSE listed developer and operator of
timeshare resorts, residential land and golf communities, from 1997
until 2005. He also served as Chief Financial Officer of Computer
Integration Corp., a Nasdaq listed provider of information products
and services, from 1992 until 1997. From 1983 until 1992, Mr.
Chiste served as a Senior Manager with Ernst & Young LLP, a
nationally recognized accounting firm. Mr. Chiste received a
Bachelor of Business Administration in Accounting from Florida
Atlantic University in Boca Raton. Mr. Chiste is a licensed
Certified Public Accountant in the State of Florida.
The
Company believes that Mr. Chiste's extensive financial and
accounting experience highly qualifies him to serve as a member of
the Board of Directors.
CLASS II — TERM EXPIRING AT 2024 ANNUAL MEETING
Tim Eriksen
Mr.
Eriksen was elected a director on August 4, 2015. Mr. Eriksen
served as a member of the Audit Committee from October 14, 2015
through July 22, 2016 when he resigned from the Audit Committee and
was named Chief Executive Officer and Interim Chief Financial
Officer. Mr. Eriksen was appointed Chief Executive Officer and
Interim Chief Financial Officer of the Company on July 22, 2016.
Mr. Eriksen founded Eriksen Capital Management LLC ("ECM"), a
Lynden, Washington based investment advisory firm, in 2005. Mr.
Eriksen is the Managing Member of ECM and Cedar Creek Partners LLC
("CCP"), a hedge fund founded in 2006 that focuses primarily on
micro-cap and small cap stocks. Prior to founding ECM, Mr. Eriksen
worked for Walker’s Manual, Inc., a publisher of books and
newsletters on micro-cap stocks, unlisted stocks and community
banks. Earlier in his career, Mr. Eriksen worked for Kiewit Pacific
Co, a subsidiary of Peter Kiewit Sons, as an administrative
engineer on the Benicia Martinez Bridge project. Mr. Eriksen
received a B.A. from The Master’s University and an M.B.A.
from Texas A&M University. Mr. Eriksen was a director and
member of the Audit Committee of Novation Companies Inc. from April
2018 through August 2021. Mr. Eriksen was elected a director of TSR
Inc. on October 22, 2019, and appointed to the Audit, Nominating,
Compensation, and Special Committee on December 30, 2019. Mr.
Eriksen was elected on August 31, 2021 to the board of directors of
PharmChem, the manufacturer and sole source provider of the
PharmChek® Drugs of Abuse Sweat Patch.
The
Company believes that Mr. Eriksen’s extensive financial
expertise, including knowledge of unlisted micro-cap companies and
capital allocation, and his role as an officer of one of the
Company's largest institutional stockholders highly qualifies him
to serve as a member of the Board of Directors.
David W. Pointer
Mr.
Pointer was elected a director on August 4, 2015. Mr. Pointer was
named Chairman of the Board on July 22, 2016, and also serves as a
member of the Nominating Committee and Compensation Committee. On
March 27, 2018, Mr. Pointer was appointed to serve as Chief
Executive Officer and Chairman of the Board of Novation Companies
Inc. On August 12, 2020 the Board of Novation separated the CEO and
Chairman roles, with Mr. Pointer remaining CEO. Mr. Pointer is the
founder and managing partner of VI Capital Management, LLC
(“VICM”). VICM was founded on January 1, 2008, and is
the general partner for VI Capital Fund, LP, a value oriented
investment limited partnership. Prior to founding VICM, Mr. Pointer
served as Senior Vice President and Senior Portfolio Manager for
ICM Investment Management (“ICM”). Prior to ICM, Mr.
Pointer served as a Portfolio Manager for Invesco, Inc., where he
worked with a senior partner in managing two mutual funds with
assets in excess of $15 billion. Mr. Pointer has been a member of
the Board of Directors of CompuMed, Inc., a healthcare services
company, since January 2014 (and has served as Chairman of the
Board since November 2014). From September 2014 to June 2015, he
was a member of the Board of Directors of ALCO Stores, Inc., a
publicly traded retailer in liquidation under the provisions of
Chapter 11 of Title 11 of the United States Code. Mr. Pointer has
an M.B.A. from the University of Pennsylvania and holds the
Chartered Financial Analyst designation.
The
Company believes that Mr. Pointer’s experience as a director
at other companies and his ability to relate to the broader
investment community highly qualifies him to serve as a member of
the Board of Directors.
Legal/Disciplinary History
Below
is a summary of a consent order from the State of Washington
Department of Financial Institutions, Securities Division that one
of our directors was subject to and an SEC administrative order
that one of our directors was subject to.
V.I.
Capital Management, LLC (“V.I. Capital”) and Chairman
of the Board David W. Pointer are subject to a consent order (the
“Consent Order”) from the State of Washington
Department of Financial Institutions, Securities Division, dated
March 12, 2018 (Order Number S-16-2093-17-CO01), relating to
alleged breaches of their fiduciary duty as investment advisors to
their clients, including (i) failure to disclose certain conflict
of interest stemming from Mr. Pointer’s service on the Boards
of Directors of CompuMed and Solitron Devices, Inc., (ii) pledging
V.I. Capital investment fund assets as collateral for a line of
credit for CompuMed, Inc. and failing to disclose such pledge to
V.I. Capital’s year-end auditor, and (iii) failure to timely
distribute audited financial statements and a final fund audit to
investors. As conditions of the Consent Order, V.I. Capital and Mr.
Pointer agreed to (i) cease and desist from violating the
Securities Act of 1933, (ii) pay a fine of $10,000 and (iii) pay
costs of $2,500. Mr. Pointer also agreed that he will not be a
principal, officer or owner of an investment adviser or
broker-dealer for 10 years following the entry of the Consent
Order, but he may apply for a securities salesperson or investment
adviser representative registration with an acceptable plan of
supervision.
Company
director Charles M. Gillman is subject to an SEC administrative
order, dated February 14, 2017 (Securities Exchange Act Release No.
80038), relating to alleged violations of Section 13(d) of the
Exchange Act and the rules promulgated thereunder, including
failing to disclose the members of a stockholder group, and further
allegations that he violated Section 16(a) of the Exchange Act and
the rules promulgated thereunder, including failing to timely file
initial statements of beneficial ownership on Form 3 and changes
thereto on Form 4. Without admitting or denying any violations, Mr.
Gillman agreed to cease and desist from committing or causing any
violations of (i) Section 13(d) of the Exchange Act and Rules 13d-1
and 13d-2 promulgated thereunder and (ii) Section 16(a) of the
Exchange Act and Rules 16a-2 and 16a-3 promulgated thereunder, and
paid a civil penalty to the SEC in the amount of
$30,000.
Other
than as described above, our directors and executive officers have
not been convicted or named in a pending criminal proceeding
(excluding traffic and other minor offenses), or subject to any
judgment, order or legal proceeding of the nature described in Item
401(f) of Regulation S-K.
Vote Required and Recommendation
Directors are
elected by a majority of the votes cast with respect to such
director's election at the Annual Meeting.
The
Board of Directors recommends a vote "FOR" the nominees listed
above.
Director Compensation
The
following table sets forth information regarding the compensation
of our non-employee directors for the fiscal years ended February
28, 2021 and February 29, 2020.
|
Name and Principal Position
|
|
Fees
earned or
paid in
cash(1)
|
|
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David
W. Pointer, Chairman
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2021
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$48,000
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$-
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$48,000
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2020
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$41,000
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$14,000
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$55,000
|
|
|
|
|
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Dwight
P. Aubrey, Director
|
2021
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$36,000
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-
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$36,000
|
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2020
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$29,000
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$10,500
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$39,500
|
|
|
|
|
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|
John
F. Chiste, Director
|
2021
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$38,000
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-
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$38,000
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2020
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$31,000
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$10,500
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$41,500
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|
|
|
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Charles
Gillman
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2021
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$32,000
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-
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$32,000
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2020
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$25,000
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$10,500
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$35,500
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(1)
On November 13,
2020, and June 28, 2019, the Company awarded each non-employee
director a discretionary cash bonuses of $12,000 and $5,000,
respectively in recognition of the
significant work performed as members of the Board and committees
and additional contributions and services provided to the
Company.
(2)
On
June 28, 2019, the Company also awarded a grant of 6,000 shares of
common stock that are immediately vested pursuant to the Plan to
each non-employee director and a grant of 8,000 shares of common
stock that are immediately vested pursuant to the Plan to the
Chairman. Value of the grants were based on the closing market
price of $1.75 per share on the grant date.
For the
fiscal years ended February 28, 2021 and February 29, 2020 each
director who is not employed by the Company receives $4,500 per
quarter and the Chairman receives $9,000 per quarter. The Audit
Committee Chairman (Mr. Chiste) receives $2,000 per quarter, the
Compensation Committee Chairman (Mr. Aubrey) receives $1,500 per
quarter and the Nominating Committee Chairman (Mr. Gillman)
receives $500 per quarter. Payments for each quarter are paid in
advance. All out-of-pocket expenses incurred by a director for
attending Board or committee meetings are reimbursed by the
Company. Mr. Eriksen does not receive any additional compensation
as a director.
Board Meetings; Annual Meeting Attendance;
Independence
The
Board oversees our business and affairs and monitors the
performance of management. The Board met regularly during the
fiscal year ended February 28, 2021 ("fiscal 2021") and continues
to meet regularly to review matters affecting our company and to
act on matters requiring Board approval. The Board also holds
special meetings whenever circumstances require and may act by
unanimous written consent. During fiscal 2021, the Board of
Directors held four (4) meetings and took one (1) action by
unanimous written consent. During fiscal 2021, all directors
attended at least 75% of all board and committee meetings held
during this period. The Board of Directors encourages, but does not
require, its directors to attend the Company's annual meeting. All
directors attended the 2016 Annual Meeting of Stockholders which
was the most recent annual meeting of stockholders held by the
Company.
The
Board of Directors is currently composed of the following five
directors: Messrs. Aubrey, Chiste, Eriksen, Gillman and Pointer.
The Board has determined that Messrs. Aubrey, Chiste, Gillman and
Pointer all meet the criteria for independence specified in the
Nasdaq Stock Market Marketplace Rules (the "Nasdaq
Rules").
Code of Ethics
The
Company has adopted a Code of Ethics for senior officers, which
includes the Company’s principal executive officer, principal
financial officer and controller, pursuant to the Sarbanes-Oxley
Act of 2002. The Code of Ethics is published on the Company’s
web site at www.solitrondevices.com on the Investor Relations
page.
Board Leadership Structure
The
amended and restated bylaws primarily provide the Board with
flexibility, in its sole discretion, to separate the roles of
Chairman of the Board and Chief Executive Officer. The Board
decided to separate the positions of Chairman and Chief Executive
Officer because the Board believes that doing so provides the
appropriate leadership structure for the Company at this time. The
separation of those two positions enables the Company's Chief
Executive Officer to focus on the management of the business and
the development and implementation of strategic initiatives while
the Chairman leads the Board in the performance of its
responsibilities. At this time, the Board believes that the overall
corporate governance policies and practices combined with the
strength of the independent directors and internal controls will
complement the separate positions of Chairman and Chief Executive
Officer. The amended and restated bylaws do however provide the
Board with the flexibility to appoint a Chairman in the future who
is also an officer of the Company.
Board Oversight of Enterprise Risk
The Board of
Directors is actively involved in the oversight and management of
risks that could affect the Company. This oversight and management
is conducted primarily through the committees of the Board of
Directors identified below but the full Board of Directors has
retained responsibility for general oversight of risks. The Audit
Committee is primarily responsible for overseeing the risk
management function, specifically with respect to management's
assessment of risk exposures (including risks related to liquidity,
credit, operations and regulatory compliance, among others), and
the processes in place to monitor and control such exposures. The
Compensation Committee and Nominating Committee consider the risks
within their areas of responsibility. The Board of Directors
satisfies their oversight responsibility through full reports by
each committee chair regarding the committee's considerations and
actions, as well as through regular reports directly from officers
responsible for oversight of particular risks within the
Company.
Committees
The
standing committees of the Board of Directors are the Audit
Committee, the Compensation Committee and the Nominating
Committee.
Audit Committee
The
Audit Committee consists of Messrs. Chiste (Chairman), and Aubrey.
The Board of Directors has determined that the members of the Audit
Committee are independent pursuant to the Nasdaq Rules. The
Company’s Audit Committee generally has responsibility for
appointing, overseeing and approving the compensation of our
independent certified public accountants, reviewing and approving
the discharge of our independent certified public accountants,
reviewing the scope and approach of the independent certified
public accountants’ audit, reviewing our audit and control
functions, approving all non-audit services provided by our
independent certified public accountants and reporting to our full
Board of Directors regarding all of the foregoing. Additionally,
our Audit Committee provides our Board of Directors with such
additional information and materials as it may deem necessary to
make our Board of Directors aware of significant financial matters
that require its attention. The Company has adopted an Audit
Committee Charter, a copy of which is published on the
Company’s web site at www.solitrondevices.com on the Investor
Relations page. The Company has determined that the "audit
committee financial expert" is Mr. Chiste. The Audit Committee met
one time during fiscal year 2021.
Compensation Committee
The
members of the Compensation Committee are Messrs. Aubrey
(Chairman), Gillman and Pointer. The Board of Directors has
determined that the members of the Compensation Committee are
independent pursuant to the Nasdaq Rules. The responsibilities and
duties of the Compensation Committee consist of, but are not
limited to: reviewing, evaluating and approving the agreements,
plans, policies and programs of the Company to compensate the
officers and directors of the Company and otherwise discharging the
Board of Directors’ responsibilities relating to compensation
of the Company’s officers and directors. The Compensation
Committee has determined that no risks exist arising from the
Company’s compensation policies and practices for its
employees that are reasonably likely to have a material adverse
effect on the Company. During fiscal year 2021, the Compensation
Committee did not retain a compensation consultant to review our
policies and procedures with respect to executive compensation. The
Company has adopted a Compensation Committee Charter, a copy of
which is published on the Company's website,
www.solitrondevices.com on the Investor Relations page. The
Compensation Committee met one time during fiscal year
2021.
Nominating Committee
The
members of the Nominating Committee are Messrs. Gillman (Chairman),
Chiste and Pointer. The Board of Directors has determined that the
members of the Nominating Committee are independent pursuant to the
Nasdaq Rules. The responsibilities and duties of the Nominating
Committee consist of, but are not limited to: developing and
periodically reviewing the criteria used to evaluate the
suitability of potential candidates for membership on the Board of
Directors; identifying and evaluating potential director candidates
and submitting to the Board of Directors the candidates for
director to be recommended by the Board of Directors for election
at each annual meeting and to be added by the Board of Directors at
any other times due to expansions to the Board of Directors,
director resignations or retirements, and candidates for membership
on each committee of the Board of Directors; making recommendations
to the Board of Directors regarding the size and composition of the
Board of Directors and its committees; and receiving and evaluating
any stockholder nominations for directors received in accordance
with Article II, Section 12 of the Company's By-laws in the same
manner the Nominating Committee would evaluate a nomination
received from any other party. The Company has adopted a Nominating
Committee Charter, a copy of which is published on the Company's
website at www.solitrondevices.com on the Investor Relations page.
The Nominating Committee did not meet during fiscal year
2021.
Communications with our Board of Directors
Any
stockholder who wishes to send a communication to our Board of
Directors should address the communication either to the Board of
Directors or to the individual director c/o David W. Pointer,
Chairman of the Board, Solitron Devices, Inc., 3301 Electronics
Way, West Palm Beach, Florida 33407. Mr. Pointer will forward to
the directors all communications that, in his judgment, are
appropriate for consideration by the directors. Examples of
communications that would not be appropriate for consideration by
the directors include commercial solicitations and matters not
relevant to stockholders, to the functioning of the Board of
Directors, or to the affairs of the Company.
Nominees for Director
The
Nominating Committee will consider all qualified director
candidates identified by various sources, including members of the
Board, management and stockholders. Candidates for directors
recommended by stockholders will be given the same consideration as
those identified from other sources. The Nominating Committee is
responsible for reviewing each candidate’s biographical
information and assessing each candidate’s independence,
skills and expertise based on a number of factors. While we do not
have a formal policy on diversity, when considering the selection
of director nominees, the Nominating Committee considers
individuals with diverse backgrounds, viewpoints, accomplishments,
cultural backgrounds, and professional expertise, among other
factors.
The
Board of Directors has established board candidate selection
criteria to be applied by the Nominating Committee and by the full
Board of Directors in evaluating candidates for election to the
Board. These criteria include general characteristics, areas of
specific experience and expertise and considerations of diversity.
The criteria include the following:
●
Integrity and
commitment to ethical behavior;
●
Personal maturity
and leadership skills, especially in related fields;
●
Independence of
thought;
●
Diversity of
background and experience;
●
Broad business
and/or professional experience with the understanding of business
and financial affairs and the complexity of the Company's
business;
●
Commitment to the
Company's business and its continued well-being; and
●
Board members must
be able to offer unbiased advice.
In
addition to the minimum qualifications for each candidate described
above, the Nominating Committee shall recommend that the Board of
Directors select individuals to help ensure that:
●
Board members have
executive management experience;
●
Board members have
an understanding of the electronics/components
industry;
●
A majority of the
Board consists of independent directors;
●
Each of the
Company's Audit Committee, Compensation Committee and Nominating
Committee shall be comprised entirely of independent directors;
and
●
At least one member
of the Audit Committee shall have such experience, education and
other qualifications necessary to qualify as an "audit committee
financial expert" under SEC rules.
Only
individuals who are nominated in accordance with the procedures set
forth in Article II, Section 12 of our By-laws shall be eligible
for election as directors. Nominations of persons for election to
the Board of Directors may be made at a meeting of stockholders at
which directors are to be elected only (i) by or at the direction
of the Board of Directors or (ii) by any stockholder of the Company
entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in Article II,
Section 12 of our By-laws. Such nominations, other than those made
by or at the direction of the Board of Directors, shall be made by
timely notice in writing to the Secretary of the Company. To be
timely, a stockholder’s notice must be delivered or mailed to
and received at the principal executive offices of the Company not
less than 30 days prior to the date of the meeting, provided,
however, that in the event that less than 40 days’ notice or
prior public disclosure of the date of the meeting is given or made
to stockholders, to be timely, a stockholder’s notice must be
so received not later than the close of business on the tenth day
following the day on which such notice of the date of the meeting
was mailed or such public disclosure was made. Such
stockholder’s notice shall set forth (i) as to each person
whom such stockholder proposes to nominate for election or
reelection as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (including each such person’s written
consent to serving as a director if elected); and (ii) as to the
stockholder giving the notice (x) the name and address of such
stockholder as they appear on the Company’s books, and (y)
the class and number of shares of the Company’s capital stock
that are beneficially owned by such stockholder.
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The
Audit Committee of our Board of Directors has selected MaloneBailey
LLP (“MaloneBailey”) as our independent certified
public accountants for the fiscal year ending February 28, 2022.
MaloneBailey has served as our independent certified public
accountants since October 2, 2019. Prior to engaging MaloneBailey, neither the
Company nor anyone acting on the Company’s behalf consulted
MaloneBailey regarding either (i) the application of accounting
principles to a specified completed or proposed transaction, or the
type of audit opinion that might be rendered on the Company’s
financial statements, and neither a written report was provided to
the Company or oral advice was provided that was an important
factor considered by the Company in reaching a decision as to any
accounting, auditing or financial reporting issue, or (ii) any
matter that was either the subject of a disagreement (as defined in
Item 304(a)(1)(iv) of Regulation S-K and related instructions to
such item) or a reportable event (as described in Item 304
(a)(1)(v) of Regulation S-K).
If the selection of
MaloneBailey as our independent registered public accounting firm
is not ratified by our stockholders, the Audit Committee will
re-evaluate its selection, taking into consideration the
stockholder vote on the ratification. However, the Audit Committee
is solely responsible for selecting and terminating our independent
registered public accounting firm, and may do so at any time at its
discretion. A representative of MaloneBailey is expected to attend
the Annual Meeting and be available to respond to appropriate
questions. The representative also will be afforded an opportunity
to make a statement, if he or she desires to do so.
Auditor Fees And Services
The
following table sets forth the fees billed during fiscal 2021 and
fiscal 2020 by MaloneBailey. MaloneBailey is our independent
certified public accountant retained for the audit of the fiscal
years ended February 28, 2021 and February 29, 2020.
|
|
|
|
|
Audit
Fees
|
$95,000
|
55,000(1)
|
|
Audit-Related
Fees
|
-
|
-
|
|
Tax
Fees
|
-
|
-
|
|
All
Other Fees
|
-
|
-
|
|
Totals
|
$95,000
|
$55,000
|
________________
(1)
For most of 2020
the Company had no auditor. The amount for 2020 is based on an
equal split of the cost for the simultaneous audit of fiscal 2020
and 2019 that began after February 29, 2020.
Pre-Approval Policies and Procedures for Audit and Permitted
Non-Audit Services
The
Audit Committee has a policy of considering and, if deemed
appropriate, approving, on a case by case basis, any audit or
permitted non-audit service proposed to be performed by the
Company’s principal accountant in advance of the performance
of such service. These services may include audit services,
audit-related services, tax services and other services. The Audit
Committee has not implemented a policy or procedure which delegates
the authority to approve, or pre-approve, audit or permitted
non-audit services to be performed by the Company’s principal
accountant. In connection with making any pre-approval decision,
the Audit Committee must consider whether the provision of such
permitted non-audit services performed by the Company’s
principal accountant is consistent with maintaining the
Company’s principal accountant’s status as our
independent auditors at such time.
Consistent with
these policies and procedures, the Audit Committee approved all of
the services rendered by MaloneBailey for the fiscal years ended
February 28, 2021 and February 29, 2020 respectively as described
above.
Vote Required and Recommendation
The
proposal to ratify the selection of MaloneBailey as our independent
accountant for the fiscal year ending February 28, 2022,
requires the affirmative vote of a majority of the voting power of
the issued and outstanding stock of the Company entitled to vote,
present in person or represented by proxy at the Annual
Meeting.
The
Board of Directors recommends a vote "FOR" the proposal.
REPORT OF THE AUDIT COMMITTEE
The
Audit Committee reviews the Company's financial reporting process
on behalf of the Board of Directors. Management has the primary
responsibility for establishing and maintaining adequate internal
control over financial reporting, for preparing the financial
statements and for the report process. The Audit Committee members
do not serve as professional accountants or auditors, and their
functions are not intended to duplicate or to certify the
activities of management or the independent registered public
accounting firm. We have engaged MaloneBailey LLP
(“MaloneBailey”) as our independent registered public
accountants registered to report on the conformity of the Company's
financial statements to accounting principles generally accepted in
the United States. In this context, the Audit Committee hereby
reports as follows:
1.
The Audit Committee
has reviewed and discussed the audited financial statements with
management of the Company.
2.
The Audit Committee
has discussed with MaloneBailey, our independent registered public
accounting firm, the matters required to be discussed by the Public
Company Accounting Oversight Board ("PCAOB") and the Securities and
Exchange Commission.
3.
The Audit Committee
has also received the written disclosures and the letter from
MaloneBailey required by applicable requirements of the PCAOB
regarding the independent accountant's communications with the
Audit Committee concerning independence and the Audit Committee has
discussed the independence of MaloneBailey with that
firm.
4.
Based on the review
and discussion referred to in paragraphs (1) through (3) above, the
Audit Committee recommended to the Board of Directors and the Board
of Directors approved the inclusion of the audited financial
statements in the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 2021, for filing with the
SEC.
The
foregoing has been furnished by the Audit Committee:
John F.
Chiste, Chairman
Dwight P.
Aubrey
This "Audit Committee Report" is not "Soliciting Material," is not
deemed filed with the SEC and it not to be incorporated by
reference in any filing of the Company under the Securities Act of
1933, as amended or the Securities Exchange Act of 1934, whether
made before or after the date hereof and irrespective of any
general incorporation language in any such filing.
MANAGEMENT
Executive Officers for the Fiscal year Ended February 28,
2021
Our
executive officers are Tim Eriksen and Mark W. Matson. Mr.
Eriksen's position with the Company, his age and his biographical
and business experience appear above under the caption "Board of
Directors."
Mark W. Matson
Mr.
Matson, age 61, was appointed President and Chief Operating Officer
on July 22, 2016. Mr. Matson served as a consultant to the Company
from May 2016 through July 2016. Prior to working as a consultant
to the Company, Mr. Matson provided consulting services from March
2012 to May 2016 through Avlet, Denali Advanced Integration and
Tuxedo Technologies with respect to manufacturing supply chain
issues and systems and software issues related to security and
processes at global manufacturing plants. Mr. Matson served as the
Chief Operating Officer and Vice President of Operations at YSI, a
maker of environmental monitoring instruments, sensors, software,
systems and data collection platforms, from December 2010 to March
2012. Mr. Matson served as the Vice President of Global Operations
and Engineering for Rockford Corporation, a company that designed,
sourced and distributed high performance mobile audio products,
from January 2006 to December 2010. Prior to joining Rockford
Corporation, Mr. Matson was the General Manager and Chief
Operations Officer for Benchmark Electronics' Division in Redmond,
Washington from 2003 through 2005. Mr. Matson was a Vice President
at Advanced Digital Information Corporation from 1998 to 2003 and
prior to that at Interpoint Corporation. Mr. Matson has more than
20 years of operations experience.
Mr.
Matson graduated with honors with a B.A. from California State
University, Bakersfield.
EXECUTIVE COMPENSATION
Summary Compensation Table
The
following table provides certain summary information concerning
compensation paid by the Company, to or on behalf of the following
named executive officers for the fiscal years ended February 28,
2021 and February 29, 2020.
|
|
|
|
|
|
|
|
Tim Eriksen, CEO, Interim CFO(1)
|
|
$80,000
|
$50,000
|
-
|
-
|
$130,000
|
|
|
2020
|
$77,736
|
$10,000
|
$26,250
|
-
|
$113,986
|
|
|
|
|
|
|
|
|
Mark Matson, President, COO(2)
|
2021
|
$200,000
|
$100,000
|
-
|
$36,159(3)
|
$336,159
|
|
|
2020
|
$200,000
|
$20,000
|
$210,000
|
$35,756(3)
|
$465756
|
(1)
Mr. Eriksen was
appointed Chief Executive Officer and Interim Chief Financial
Officer effective as of July 22, 2016. On June 28, 2019 the Company
granted Mr. Eriksen a discretionary bonus of $10,000, a grant of
15,000 shares of common stock that were immediately vested (valued
at $26,250 based on the $1.75 closing price of the common stock on
the date of the grant), and effective July 1, 2019 Mr.
Eriksen’s salary was increased from $72,000 to $80,000. On
November 13, 2020, the Company granted Mr. Eriksen the option to
receive half of his bonus in shares instead of cash, which he
elected. Mr. Eriksen received 7,669 shares, with a fair market
value of $25,000, or $3.26 per share. Shares were issued under the
2019 Stock Incentive Plan.
(2)
Mr. Matson was
appointed President and Chief Operating Officer effective as of
July 22, 2016. On June 28, 2019 the Company granted Mr. Matson a
discretionary bonus of $20,000, a grant of 120,000 shares of common
stock that were immediately vested (valued at $210,000 based on the
$1.75 closing price of the common stock on the date of the grant),
and retroactive to January 1, 2019 Mr. Matson’s salary was
increased from $160,000 to $200,000. On November 13, 2020, the
Company granted Mr. Matson the option to receive half of his bonus
in shares instead of cash, which he elected. Mr. Matson received
15,337 shares, with a fair market value of $50,000, or $3.26 per
share. Shares were issued under the 2019 Stock Incentive
Plan.
(3)
Represents Life,
Disability and Medical Insurance premiums, personal auto expenses,
allocation of the company’s corporate housing, and cell
phone. For the year ended February 28, 2021, Life, Disability and
Medical Insurance premiums were $6,449, housing allocation was
$8,400, car expenses were $19,716, and cell phone was $1,594. For
the year ended February 29, 2020, Life, Disability and Medical
Insurance premiums were $4,890, housing allocation was $7,964, car
expenses were $21,638, and cell phone was $1,264.
Based
upon the Compensation Committee's review of the Company's
compensation design features, and the Company's applied
compensation philosophies and objectives, the Compensation
Committee determined that risks arising from the Company's
compensation policies and practices for its employees are not
reasonably likely to have a material adverse effect on the
Company.
NON-BINDING ADVISORY VOTE ON
SAY ON PAY
Background of the Proposal
The
Dodd-Frank Act requires all public companies to hold a separate
nonbinding advisory stockholder vote to approve the compensation of
executive officers as described in the executive compensation
tables and any related information in each such company's proxy
statement (commonly known as a "Say on Pay" proposal). At our 2016
annual meeting of stockholders, the most recent annual meeting of
stockholders held by the Company, our executive compensation
program was approved on an advisory basis by approximately 88% of
the votes cast.
Executive Compensation
The
Board of Directors believes that our executive compensation
programs are designed to secure and retain the services of high
quality executives and to provide compensation to our executives
that are commensurate and aligned with our performance and advances
both the short and long-term interests of our company and our
stockholders. We have historically sought to achieve these
objectives through three principal compensation programs: base
salary, annual cash incentive bonus, and long-term equity
incentives, in the form of grants of equity awards. Base salaries
are designed primarily to attract and retain talented executives.
Annual cash incentive bonuses are designed to motivate and reward
hard work and dedication to the Company. Grants of equity are
designed to provide a strong incentive for achieving long-term
results by aligning the interests of our executives with those of
our stockholders, while at the same time encouraging our executives
to remain with us. The Board of Directors believes that our
compensation program for our named executive officers for the
fiscal year ended February 28, 2021 was appropriately based upon
our performance and the individual performance and level of
responsibility of the executive officers.
This
Say on Pay proposal is set forth in the following
resolution:
RESOLVED, that the stockholders of
Solitron Devices, Inc. approve, on an advisory basis, the
compensation of its named executive officers, as disclosed in the
Solitron Devices, Inc.'s Proxy Statement for the 2021 Annual
Meeting of Stockholders, pursuant to the compensation disclosure
rules of the Securities and Exchange Commission, including the
compensation tables, and any related information found in the proxy
statement of Solitron Devices, Inc.
Because
your vote on this proposal is advisory, it will not be binding on
the Board of Directors, the Compensation Committee or the Company.
However, the Compensation Committee will take into account the
outcome of the vote when considering future executive compensation
arrangements.
Vote Required and Recommendation
The
advisory vote on the Say on Pay proposal requires the affirmative
vote of a majority of the voting power of the issued and
outstanding stock of the Company entitled to vote, present in
person or represented by proxy at the Annual Meeting.
The
Board of Directors recommends a vote "FOR" the Say on Pay
proposal.
NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF
THE ADVISORY VOTE ON SAY ON PAY IN FUTURE YEARS
Background of the Proposal
The
Dodd-Frank Act also requires all public companies to hold a
separate nonbinding advisory stockholder vote with respect to the
frequency of the vote on the Say on Pay proposal thereafter.
Companies must give stockholders the choice of whether to cast an
advisory vote on the Say on Pay proposal every year, every two
years, or every three years (commonly known as the “Frequency
Vote on Say on Pay”). Stockholders may also abstain from
making a choice. After such initial votes are held, the Dodd-Frank
Act requires all public companies to submit to their stockholders
no less often than every six years thereafter the Frequency Vote on
Say on Pay. Pursuant to Section 14A of the Securities Exchange Act
of 1934, as amended, we are holding a separate non-binding advisory
vote on the Frequency Vote on Say on Pay at the Annual
Meeting.
Frequency Vote on Say on Pay
As
discussed above, the Board of Directors believes that our executive
compensation programs are designed to secure and retain the
services of high quality executives and to provide compensation to
our executive that are commensurate and aligned with our
performance and advances both the short and long-term interests of
our company and our stockholders. The Board of Directors believes
that giving our stockholders the right to cast an advisory vote
every year on their approval of the compensation arrangements of
our named executive officers provides our stockholders with the
greatest amount of input on our executive compensation
program.
Although the Board
of Directors recommends that the Say on Pay proposal be voted on
every year, our stockholders will be able to specify one of four
choices for the frequency of the vote on the Say on Pay proposal as
follows: (i) one year, (ii) two years, (iii) three years, or (iv)
abstain. This is an advisory vote and will not be binding on the
Board of Directors or the Company. The Board of Directors may
determine that it is in the best interests of our stockholders and
the Company to hold an advisory vote on executive compensation more
or less frequently than may be indicated by this advisory vote of
our stockholders. Nevertheless, the Compensation Committee will
take into account the outcome of this advisory vote when
considering how frequently to seek an advisory vote on Say on Pay
in future years.
Vote Required and Recommendation
The
option receiving the highest number of votes will be deemed to be
the preferred frequency of our stockholders.
The
Board of Directors recommends the selection of “ONE YEAR” as your preference for the
frequency with which stockholders are provided an advisory vote on
Say on Pay.
APPROVAL OF THE ADOPTION OF THE SOLITRON DEVICES, INC. 2019 STOCK
INCENTIVE PLAN
On June
28, 2019, the Board of Directors of Solitron Devices, Inc. adopted
The Solitron Devices, Inc. 2019 Stock Incentive Plan (the
“2019 Plan”). The purpose of the 2019 Plan is to
attract, retain, reward and motivate eligible individuals by
providing them with an opportunity to acquire or increase a
proprietary interest in the Company and to incentivize them to
expend maximum effort for the growth and success of the Company, so
as to strengthen the mutuality of the interests between the
eligible individuals and the stockholders of the
Company.
The
full text of the 2019 Plan, is set forth in Appendix A to this
proxy statement.
Summary of the 2019 Stock Incentive Plan
Awards
The
2019 Plan provides for the grant of any or all of the following
types of awards (collectively, the “Awards”): (a)
options, (b) restricted stock, (c) restricted stock units, (d)
stock appreciation rights, and (e) stock-based awards. The common
stock that may be issued pursuant to Awards granted under the 2019
Plan shall be treasury shares or authorized but unissued shares of
common stock. Upon the granting of any Award, the number of shares
of common stock available for issuance under the 2019 Plan for
granting of further Awards shall be reduced pursuant to the 2019
Plan. Awards settled in cash or property other than common stock
shall not count against the total number of shares of common stock
available to be granted pursuant to the 2019 Plan. If any award
under the 2019 Plan is cancelled, forfeited or terminated for any
reason prior to exercise, delivery or becoming vested in full, the
shares of common stock that were subject to such Award shall, to
the extent cancelled, forfeited or terminated, immediately become
available for future Awards granted under the 2019 Plan; provided,
however, that any shares of common stock subject to an Award which
is cancelled, forfeited or terminated in order to pay the exercise
price of a stock option, purchase price or any taxes or tax
withholdings on an award shall not be available for future Awards
granted under the 2019 Plan. On October 12, 2021, the closing price
of a share of our common stock reported on the OTC market was
$8.55.
Forms of Awards
Stock Options. An
award of options gives the participant the right to purchase shares
of common stock on the terms and conditions that the Committee (as
defined below) deems appropriate. All stock options granted under
the 2019 Plan will be non-qualified stock options. The exercise
price of an award of stock options will be fixed by the Committee.
Options granted under the 2019 Plan shall terminate no later than
the tenth anniversary of the grant date.
Restricted Stock: An
award of restricted stock gives the participant the right to
receive a specified number of shares of common stock, subject to
certain restrictions and conditions of forfeiture as the Committee
deems appropriate.
Restricted Stock
Units: An award of restricted stock units gives the
participant the right to receive shares of common stock upon the
satisfaction of certain conditions, or if later, at the end of a
specified deferral period.
Stock-Appreciation
Rights: An award of stock appreciation rights gives the
participant the right to receive all or some portion of the
increase in value of a fixed number of shares of common stock
granted under the 2019 Plan. Upon exercise of a stock appreciation
right, a participant shall be entitled to receive payment, in cash,
shares of common stock, or a combination of both, as determined by
the Committee. The amount of such payment shall be determined by
multiplying the excess, if any, of the fair market value of a share
of common stock on the date of exercise over the fair market value
of a share of common stock on the grant date, by the number of
shares of common stock with respect to which the stock appreciation
rights are then being exercised.
Other Awards: Other
awards include awards of shares of common stock, phantom stock and
other awards that are valued in whole or in part by reference to,
or otherwise based on, common stock. Such awards may be made alone
or in addition to or in connection with any other award granted
hereunder.
Effect of a Change in Control
Upon a
"Change in Control" the surviving, continuing, successor or
purchasing entity or parent thereof may without the consent of any
participant assume or continue the Company's rights and obligations
under each award or any portion thereof outstanding immediately
prior to the Change in Control or substitute for each or any such
outstanding award or portion thereof a substantially equivalent
award with respect to the acquiror's stock, as applicable.
Outstanding awards which are not assumed, substituted for, or
otherwise continued by the acquiror shall accelerate and become
fully vested effective immediately prior to, but contingent upon,
the consummation of the Change in Control; and thereafter all
awards shall terminate to the extent not exercised or settled as of
the date of the Change in Control. Any award that is settled shall
be settled in such form as the Committee may specify, in an amount
equal to the Change in Control price with respect to shares subject
to the vested portion of the award net of the exercise price
thereof, if applicable.
Term and Amendments
The
2019 Plan became effective on June 28, 2019 (“Effective
Date”), the date the Board approved the 2019 Plan, and shall
terminate on the tenth anniversary of the Effective Date unless
earlier terminated by the Board.
The Board may, at any time and from time to time,
amend, suspend or terminate the 2019 Plan as to any shares of
common stock as to which awards have not been
granted; provided,
however, that the approval
of the stockholders of the Company in accordance with applicable
law and the Certificate of Incorporation and Bylaws of the Company
shall be required for any amendment of which stockholder approval
is necessary to comply with federal or state law. Except as
expressly provided in the 2019 Plan, no amendment, suspension or
termination of the 2019 Plan shall, without the consent of the
holder of an award, alter or impair rights or obligations under any
award theretofore granted under the 2019 Plan. Awards granted prior
to the termination of the 2019 Plan may extend beyond the date the
2019 Plan is terminated and shall continue subject to the terms of
the 2019 Plan as in effect on the date the 2019 Plan is
terminated.
Shares Subject to the 2019 Plan
The
2019 Plan originally covered an aggregate of 225,000 shares of
common stock, $0.01 par value, of the Company. As of October 12,
2021, 40,994 shares of common stock remain available for equity
awards under the 2019 Plan.
2019 Plan Participants
From
time to time, a committee or sub-committee of the Board may
determine the eligible individuals under the 2019 Plan. The
eligible individuals under the 2019 Plan are any employee,
consultant, officer, director (employee or non-employee director)
or independent contractor of the Company and any prospective
employee to whom awards are granted in connection with an offer of
future employment with the Company.
Administration of the 2019 Plan
The
2019 Plan may be administered by a committee or sub-committee
(“Committee”) of the Board consisting of two or more
members of the Board, none of whom shall be an officer or other
salaried employee of the Company, and each of whom shall qualify in
all respects as a “non-employee director” as defined in
Rule 16b-3 under the Securities Exchange Act of 1934 (the
“Exchange Act”). If no Committee exists, the functions
of the Committee will be exercised by the Board. The 2019 Plan is
currently administered by the Compensation Committee.
Notwithstanding the foregoing, with respect to the grant of Awards
to non-employee directors, the Committee shall be the
Board.
The
Committee may delegate authority to officers or employees of the
Company to assist the Committee in the administration of the 2019
Plan. The Committee may designate professional advisors to assist
the Committee in the administration of the 2019 Plan and the
Company shall pay all expenses and costs for the engagement of the
advisors.
Transferability
A
participant may not transfer an award other than by will or the
laws of descent and distribution. Awards may be exercised during
the participant’s lifetime only by the participant. Any
purported transfer of an award in contravention of the provisions
of the 2019 Plan shall have no force or effect and shall be null
and void, and the purported transferee of such award shall not
acquire any rights with respect to such award. Notwithstanding
anything to the contrary, the Committee may in its sole and
absolute discretion permit the transfer of an award to a
participant’s “family member” under such terms
and conditions as specified by the Committee. In such case, such
award shall be exercisable only by the transferee approved of by
the Committee.
Federal Income Tax Consequences of Awards under the 2019
Plan
The
U.S. federal income tax consequences of the 2019 Plan under current
federal law, which is subject to change, are summarized in the
following discussion of the applicable general tax principles. This
summary is not intended to be exhaustive and, among other
considerations, does not describe state, local, or international
tax consequences.
With
respect to nonqualified stock options, the Company will generally
be entitled to deduct, and the participant will recognize, taxable
income in an amount equal to the difference between the option
exercise price and the fair market value of the shares at the time
of exercise.
The
current federal income tax consequences of other awards authorized
under the 2019 Plan generally follow certain basic patterns: stock
appreciation rights are taxed and deductible in substantially the
same manner as nonqualified stock options; nontransferable
restricted stock subject to a substantial risk of forfeiture and
performance shares result 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); performance share
units, performance units, dividend equivalents, and other types of
awards are generally subject to tax at the time of payment; and
compensation otherwise effectively deferred is taxed when paid. In
each of the foregoing cases, the Company will generally have a
corresponding deduction at the time the participant recognizes
income.
If an
award is accelerated under the 2019 Plan in connection with a
“change in control” (as this term is used under the
Code), the Company may not be permitted to deduct the portion of
the compensation attributable to the acceleration (parachute
payments) if it exceeds certain threshold limits under the Code
(and certain related excise taxes may be triggered). Furthermore,
the aggregate compensation in excess of $1,000,000 attributable to
awards granted to a covered employee within the meaning of Section
162(m) of the Code may not be permitted to be deducted by the
Company in certain circumstances.
If any
award constitutes non-qualified deferred compensation under Section
409A of the Code, the incentive will be structured with the intent
that it will comply with Section 409A to avoid the imposition of
additional tax, penalties, and interest on the
participant.
New Plan Benefits Under the 2019 Plan
Because
future awards under the 2019 Plan will be granted in the discretion
of the Compensation Committee or the Board of Directors, the type,
number, recipients, and other terms of such awards cannot be
determined at this time.
Vote Required and Recommendation
The
proposal to approve the 2019 Plan requires the affirmative vote of
a majority of the voting power of the issued and outstanding stock
of the Company entitled to vote, present in person or represented
by proxy at the Annual Meeting.
The
board of directors unanimously recommends a vote
“FOR” the
approval of The Solitron Devices, Inc. 2019 Stock Incentive
Plan.
BENEFICIAL OWNERSHIP OF SECURITIES AND SECURITY OWNERSHIP OF
MANAGEMENT
The
following table sets forth certain information regarding the
beneficial ownership of common stock of the Company as of October
12, 2021 by (i) all directors, (ii) the named executive officers
for the year ended February 28, 2021, (iii) all executive officers
and directors of the Company as a group, and (iv) each person known
by the Company to beneficially own in excess of 5% of the
Company’s outstanding common stock. Unless noted otherwise,
the corporate address of each person listed below is 3301
Electronics Way, West Palm Beach, Florida 33407.
The
Company does not know of any other beneficial owner of more than 5%
of the outstanding shares of common stock other than as shown
below. Unless otherwise indicated below, each stockholder has sole
voting and investment power with respect to the shares beneficially
owned. Except as noted below, all shares were owned directly with
sole voting and investment power.
|
Name and Address
|
Number of
Shares
Beneficially
Owned(1)
|
Percentage of
Outstanding
Shares(1)
|
|
Tim
Eriksen
|
279,956(2)
|
13.4%
|
|
|
|
|
|
Mark
Matson
|
157,091
|
7.5%
|
|
|
|
|
|
Dwight
P. Aubrey
|
6,000
|
0.3%
|
|
|
|
|
|
John
F. Chiste
|
6,000
|
0.3%
|
|
|
|
|
|
Charles
Gillman
|
6,000
|
0.3%
|
|
|
|
|
|
David
W. Pointer
|
90,054(3)
|
4.3%
|
|
|
|
|
|
All Executive Officers and Directors as a Group (6
persons)
|
545,101
|
26.2%
|
|
|
|
|
|
Olesen
Value Fund L.P.
60
W. Broad Street, Suite 304
Bethlehem,
Pennsylvania 18018
|
281,190(4)
|
13.5%
|
|
|
|
|
|
|
|
|
|
John
Stayduhar
3597
Birdie Dr.
Lake
Worth, Florida 33467
|
185,000(5)
|
8.9%
|
|
|
|
|
|
Bossert
Capital
729
N Washington Ave Suite 600
Minneapolis,
Minnesota 55401
|
154,747(6)
|
7.4%
|
|
|
|
|
|
|
|
|
________________
(1)
Based on
2,083,452 shares of our
common stock outstanding as of October 12, 2021. For purposes of
this table, beneficial ownership is computed pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended ("Act"); the
inclusion of shares beneficially owned should not be construed as
an admission that such shares are beneficially owned for purposes
of Section 16 of such Act.
(2)
Represents 198,341
shares of common stock owned by Cedar Creek Partners LLC, an
investment partnership, for which Eriksen Capital Management LLC
("ECM") is the Managing Member, 28,975 shares of common stock owned
by managed accounts of ECM, and 52,640 shares of common stock owned
solely by Mr. Eriksen. The respective owners of the managed
accounts are responsible to vote the shares of common stock. By
virtue of ECM's investment advisory agreement with the clients of
ECM, Mr. Eriksen may be deemed to beneficially own the shares owned
by Cedar Creek Partners and the managed accounts.
(3)
Represents 23,000
shares owned by Mr. Pointer and 67,054 shares of common stock owned
by V.I. Capital Fund, LP, for which Mr. Pointer is the managing
partner of V.I. Capital Fund LP and the founder and managing
partner of V.I Capital Management, LLC, the general partner of V.I.
Capital Fund, LP. Mr. Pointer disclaims beneficial ownership of the
reported securities owned by V.I. Capital except to the extent of
his pecuniary interest therein.
(4)
This information is
based solely on the Form 5 filed on April 11, 2019. Olesen Value
Fund L.P. ("OVF") is a private investment partnership existing
under the laws of the State of Delaware. Olesen Capital Management
LLC is the General Partner and Investment Advisor to OVF. Mr.
Christian Olesen is the Managing Member of OVF and has the sole
power to vote and dispose of the 281,190 shares of common
stock.
(5)
This information is
based solely on the Form 4 filed with the Securities and Exchange
Commission on July 29, 2016.
(6)
This information is
based solely on the Schedule 13G/A filed with the Securities and
Exchange Commission on February 11, 2021.
DELINQUENT SECTION 16(A) REPORTS
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires
directors and executive officers of the Company and ten percent
stockholders of the Company to file initial reports of ownership
and reports of changes in ownership of Common Stock and other
equity securities of the Company with the Securities and Exchange
Commission. Directors, executive officers, and ten percent
stockholders are required to furnish the Company with copies of all
Section 16(a) forms they file. To the Company’s knowledge,
based solely on a review of the copies of such reports furnished to
the Company and representations that no other reports were required
during the year ended February 28, 2021, all Section 16(a) filing
requirements applicable to directors and executive officers of the
Company and ten percent stockholders of the Company were timely
filed.
EQUITY COMPENSATION PLAN INFORMATION
The
following table sets forth information about our common stock that
may be issued upon the exercise of outstanding options and our
common stock that remains available for future issuance as of
February 28, 2021.
|
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 equity compensation
plans (excluding securities reflected in column
(a))
|
|
|
|
|
|
|
Equity
compensation plans approved by security holders
|
-
|
-
|
-
|
|
Equity
compensation plans not approved by security holders
|
-
|
-
|
40,994(1)
|
|
Total
|
-
|
-
|
40,994
|
(1)
Represents 40,994
shares of common stock available under the Solitron Devices, Inc.
2019 Stock Incentive Plan (the "2019 Plan") after the grant of
23,006 shares on November 13, 2020.
The
2019 Plan was created effective June 28, 2019 to enable the Company
to attract, retain, reward and motivate eligible individuals by
providing them with an opportunity to acquire or increase a
proprietary interest in the Company and to incentivize them to
expend maximum effort for the growth and success of the Company, so
as to strengthen the mutuality of the interests between the
eligible individuals and the stockholders of the Company. Pursuant
to the 2019 Plan, the Company may grant common stock, options,
restricted stock, stock appreciation rights and stock based awards
to eligible individuals. Pursuant to the 2019 Plan, the Company was
authorized to grant incentive awards for up to 225,000 shares of
common stock subject to adjustment in the event of a stock split,
stock dividend, recapitalization or similar capital change. All
employees, officers, directors (employee or non-employee directors)
of the Company were eligible to receive awards under the 2019
Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The
Company currently purchases and has purchased in the past die and
wafers, as specified by the Company's customers, from ES
Components. Mr. Aubrey is a minority owner, and an immediate family
member of Mr. Aubrey is the majority owner of ES Components. For
the fiscal year ended February 28, 2021, the Company purchased
$65,892 of die from ES Components and $11,600 of used equipment.
For the fiscal year ended February 29, 2020, the Company purchased
$58,395 of die from ES Components. The Company has included these
expenses in cost of goods sold in its statement of operations. The
Company occasionally makes sales to ES Components. For the fiscal
years ended February 28, 2021 and February 29, 2020, sales were
$0.
FINANCIAL STATEMENTS
A copy of our Form 10-K for the year ended
February 28, 2021, without exhibits, is being made available with
this proxy statement. Stockholders are referred to the report for financial and other information
about the Company.
Additional copies of our Form 10-K for the year
ended February 28, 2021 may be obtained without charge by writing
to Mr. Tim Eriksen, Chief Executive Officer, c/o Solitron Devices,
Inc., at corporate@solitrondevices.com. Exhibits will be furnished
upon request and upon payment
of a handling charge of $.25 per page, which represents our
reasonable cost of furnishing such exhibits. The Commission
maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of such site
is http://www.sec.gov.
OTHER MATTERS
Other Matters to be Submitted
Our
Board of Directors does not intend to present to the Annual Meeting
any matters not referred to in the form of proxy. If any proposal
not set forth in this proxy statement should be presented for
action at the Annual Meeting, and is a matter which should come
before the Annual Meeting, it is intended that the shares
represented by proxies will be voted with respect to such matters
in accordance with the judgment of the persons voting
them.
Proxy Solicitation
Costs
We
will pay for preparing, printing and mailing this proxy statement.
Proxies may be solicited on our behalf by our directors, officers
or employees in person or by telephone, electronic transmission and
facsimile transmission, but such persons will not receive any
special compensation for such services. We will reimburse banks,
brokers and other custodians, nominees and fiduciaries for their
out-of-pocket costs of sending the proxy materials to our
beneficial owners.
Deadline for Submission of Stockholder Proposals for the 2022
Annual Meeting
Proposals
of stockholders intended to be
presented at the 2022 Annual Meeting of Stockholders pursuant to
SEC Rule 14a-8 must be received at our principal office not later
than July 8, 2022 to be included in the proxy statement for that
meeting.
In addition, pursuant to our Bylaws, to be timely,
a stockholder proposal must be delivered or mailed to and received
at the principal executive offices of the Company not less than 30 days prior
to the date of an annual meeting; provided, however, that in the
event that less than 40 days' notice or prior public disclosure of
the date of a meeting is given or made to stockholders, to be
timely, a stockholder proposal must be so received not later than
the close of business on the tenth day following the day on which
such notice of the date of an annual meeting was mailed or such
public disclosure was made.
Appendix
A
SOLITRON DEVICES, INC.
2019 STOCK INCENTIVE PLAN
1. ESTABLISHMENT,
EFFECTIVE DATE AND TERM
Solitron Devices,
Inc., a Delaware corporation, hereby establishes the Solitron
Devices, Inc. 2019 Stock Incentive Plan. The Effective Date of the
Plan shall be the date the Plan was approved by the Board. Unless
earlier terminated pursuant to Section 15(k) hereof, the Plan shall
terminate on the tenth anniversary of the Effective Date.
Capitalized terms used herein are defined in Annex A attached
hereto.
2. PURPOSE
The
purpose of the Plan is to enable the Company to attract, retain,
reward, and motivate Eligible Individuals by providing them with an
opportunity to acquire or increase a proprietary interest in the
Company and to incentivize them to expend maximum effort for the
growth and success of the Company, so as to strengthen the
mutuality of the interests between the Eligible Individuals and the
stockholders of the Company.
3. ELIGIBILITY
Awards
may be granted under the Plan to any Eligible Individual, as
determined by the Committee from time to time, on the basis of
their importance to the business of the Company, pursuant to the
terms of the Plan.
4. ADMINISTRATION
(a) Committee.
The Plan shall be administered by the Committee, which shall have
the full power and authority to take all actions, and to make all
determinations not inconsistent with the specific terms and
provisions of the Plan and deemed by the Committee to be necessary
or appropriate to the administration of the Plan, any Award granted
or any Award Agreement entered into hereunder. The Committee may
correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award Agreement in the manner
and to the extent it shall deem expedient to carry the Plan into
effect as it may determine in its sole discretion. The decisions by
the Committee shall be final, conclusive, and binding with respect
to the interpretation and administration of the Plan, any Award, or
any Award Agreement entered into under the Plan.
(b) Delegation
to Officers or Employees. The Committee may
designate officers or employees of the Company to assist the
Committee in the administration of the Plan. The Committee may
delegate authority to officers or employees of the Company to grant
Awards and execute Award Agreements or other documents on behalf of
the Committee in connection with the administration of the Plan,
subject to whatever limitations or restrictions the Committee may
impose and in accordance with applicable law.
(c) Designation
of Advisors. The Committee may
designate professional advisors to assist the Committee in the
administration of the Plan. The Committee may employ such legal
counsel, consultants, and agents as it may deem desirable for the
administration of the Plan and may rely upon any advice and any
computation received from any such counsel, consultant, or agent.
The Company shall pay all expenses and costs incurred by the
Committee for the engagement of any such counsel, consultant, or
agent.
(d) Participants
Outside the U.S. In order to conform with
the provisions of local laws and regulations of foreign countries
which may affect the Awards or the Participants, the Committee
shall have the sole discretion to (i) modify the terms and
conditions of the Awards granted under the Plan to Eligible
Individuals located outside the United States; (ii) establish
subplans with such modifications as may be necessary or advisable
under the circumstances present by local laws and regulations; and
(iii) take any action which it deems advisable to comply with or
otherwise reflect any necessary governmental regulatory procedures,
or to obtain any exemptions or approvals necessary with respect to
the Plan or any subplan established hereunder.
(e) Liability
and Indemnification. No Covered
Individual shall be liable for any action or determination made in
good faith with respect to the Plan, any Award granted hereunder or
any Award Agreement entered into hereunder. The Company shall, to
the maximum extent permitted by applicable law and the Certificate
of Incorporation and Bylaws of the Company, indemnify and hold
harmless each Covered Individual against any cost or expense
(including reasonable attorney fees reasonably acceptable to the
Company) or liability (including any amount paid in settlement of a
claim with the approval of the Company), and amounts advanced to
such Covered Individual necessary to pay the foregoing at the
earliest time and to the fullest extent permitted, arising out of
any act or omission to act in connection with the Plan, any Award
granted hereunder or any Award Agreement entered into hereunder.
Such indemnification shall be in addition to any rights of
indemnification such individuals may have under other agreements,
applicable law or under the Certificate of Incorporation or Bylaws
of the Company. Notwithstanding anything else herein, this
indemnification will not apply to the actions or determinations
made by a Covered Individual with regard to Awards granted to such
Covered Individual under the Plan or arising out of such Covered
Individual’s own fraud or bad faith.
5. SHARES
OF COMMON STOCK SUBJECT TO PLAN
(a) Shares
Available for Awards. The Common Stock
that may be issued pursuant to Awards granted under the Plan shall
be treasury shares or authorized but unissued shares of the Common
Stock. The maximum number of shares of Common Stock that may be
issued pursuant to Awards granted under the Plan shall be 225,000
shares.
(b) Reduction
of Shares Available for Awards. Upon the granting
of an Award, the number of shares of Common Stock available for
issuance under this Section for the granting of further Awards
shall be reduced as follows:
(i) In connection with
the granting of an Option or Stock Appreciation Right, the number
of shares of Common Stock shall be reduced by the number of shares
of Common Stock subject to the Option or Stock Appreciation
Right;
(ii) In
connection with the granting of an Award that is settled in Common
Stock, other than the granting of an Option or Stock Appreciation
Right, the number of shares of Common Stock shall be reduced by the
number of shares of Common Stock subject to the Award;
and
(iii) Awards
settled in cash or property other than Common Stock shall not count
against the total number of shares of Common Stock available to be
granted pursuant to the Plan.
(c) Cancelled,
Forfeited, or Surrendered Awards. Notwithstanding
anything to the contrary in this Plan, if any award under this Plan
is cancelled, forfeited or terminated for any reason prior to
exercise, delivery or becoming vested in full, the shares of Common
Stock that were subject to such Award shall, to the extent
cancelled, forfeited or terminated, immediately become available
for future Awards granted under this Plan; provided, however, that
any shares of Common Stock subject to an Award which is cancelled,
forfeited or terminated in order to pay the exercise price of a
stock option, purchase price or any taxes or tax withholdings on an
award shall not be available for future Awards granted under this
Plan.
(d) Recapitalization.
If the outstanding shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or
kind of shares or other securities by reason of any
recapitalization, reclassification, reorganization, stock split,
reverse split, combination of shares, exchange of shares, stock
dividend or other distribution payable in capital stock of the
Company or other increase or decrease in such shares effected
without receipt of consideration by the Company occurring after the
Effective Date, an appropriate and proportionate adjustment shall
be made by the Committee to: (i) the aggregate number and kind of
shares of Common Stock available under the Plan, (ii) the
calculation of the reduction of shares of Common Stock available
under the Plan, (iii) the number and kind of shares of Common Stock
issuable pursuant to outstanding Awards granted under the Plan
and/or (iv) the Exercise Price of outstanding Options or Stock
Appreciation Rights granted under the Plan. No fractional shares of
Common Stock or units of other securities shall be issued pursuant
to any such adjustment under this Section 5(d), and any fractions
resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share or
unit.
6. OPTIONS
(a) Grant
of Options. Subject to the
terms and conditions of the Plan, the Committee may grant to such
Eligible Individuals as the Committee may determine, Options to
purchase such number of shares of Common Stock and on such terms
and conditions as the Committee shall determine in its sole and
absolute discretion. Each grant of an Option shall satisfy the
requirements set forth in this Section.
(b) Type
of Options. All Options
granted under the Plan shall be Non-Qualified Stock
Options.
(c) Exercise
Price. The Exercise
Price of an Option shall be fixed by the Committee and stated in
the respective Award Agreement, provided that the Exercise Price of
the shares of Common Stock subject to such Option may not be less
than Fair Market Value of such Common Stock on the Grant Date, or
if greater, the par value of the Common Stock.
(d) Reserved.
(e) Limitation
on Option Period. Options granted
under the Plan and all rights to purchase Common Stock thereunder
shall terminate no later than the tenth anniversary of the Grant
Date of such Options, or on such earlier date as may be stated in
the Award Agreement relating to such Option. In the case of Options
expiring prior to the tenth anniversary of the Grant Date, the
Committee may in its discretion, at any time prior to the
expiration or termination of said Options, extend the term of any
such Options for such additional period as it may determine, but in
no event beyond the tenth anniversary of the Grant Date
thereof.
(f) Vesting
Schedule and Conditions. No Options may be
exercised prior to the satisfaction of the conditions and vesting
schedule provided for in the Plan and in the Award Agreement
relating thereto.
(g) Exercise.
When the conditions to the exercise of an Option have been
satisfied, the Participant may exercise the Option only in
accordance with the following provisions. The Participant shall
deliver to the Company a written notice stating that the
Participant is exercising the Option and specifying the number of
shares of Common Stock which are to be purchased pursuant to the
Option, and such notice shall be accompanied by payment in full of
the Exercise Price of the shares for which the Option is being
exercised, by one or more of the methods provided for in the Plan.
An attempt to exercise any Option granted hereunder other than as
set forth in the Plan shall be invalid and of no force and
effect.
(h) Payment.
Payment of the Exercise Price for the shares of Common Stock
purchased pursuant to the exercise of an Option shall be made by
one of the following methods:
(i) by cash, certified
or cashier’s check, bank draft or money order;
(ii) through
the delivery to the Company of shares of Common Stock which have
been previously owned by the Participant for the requisite period
necessary to avoid a charge to the Company’s earnings for
financial reporting purposes; such shares shall be valued, for
purposes of determining the extent to which the Exercise Price has
been paid thereby, at their Fair Market Value on the date of
exercise; without limiting the foregoing, the Committee may require
the Participant to furnish an opinion of counsel acceptable to the
Committee to the effect that such delivery would not result in the
Company incurring any liability under Section 16(b) of the Exchange
Act; or
(iii) by
any other method which the Committee, in its sole and absolute
discretion and to the extent permitted by applicable law, may
permit, including, but not limited to through a “cashless
exercise sale and remittance procedure” pursuant to which the
Participant shall concurrently provide irrevocable instructions (1)
to a brokerage firm approved by the Committee to effect the
immediate sale of the purchased shares and remit to the Company,
out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for
the purchased shares plus all applicable federal, state and local
income, employment, excise, foreign and other taxes required to be
withheld by the Company by reason of such exercise and (2) to the
Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the
sale.
(i) Termination
of Employment. Unless otherwise
provided in an Award Agreement in the case of the
Participant’s death or Disability, upon the termination of
the employment or other service of a Participant with Company for
any reason, all of the Participant’s outstanding Options
(whether vested or unvested) shall be subject to the rules of this
paragraph. Upon such termination, the Participant’s unvested
Options shall expire.
(i) Termination for Reason Other Than
Cause, Disability or Death. If a Participant’s
termination of employment or other service is for any reason other
than death, Disability, Cause or a voluntary termination within
ninety (90) days after occurrence of an event which would be
grounds for termination of employment or other service by the
Company for Cause, any Option held by such Participant may be
exercised, to the extent exercisable at termination, by the
Participant at any time within a period not to exceed ninety (90)
days from the date of such termination, but in no event after the
termination of the Option pursuant to its terms that are unrelated
to termination of service.
(ii) Disability.
If a Participant’s termination of employment or other service
with the Company is by reason of a Disability of such Participant,
any Option held by such Participant may be exercised, to the extent
exercisable at termination, by the Participant at any time within a
period not to exceed one (1) year after such termination, but in no
event after the termination of the Option pursuant to its terms
that are unrelated to termination of service; provided, however,
that if the Participant dies within such period, any vested Option
held by such Participant upon death shall be exercisable by the
Participant’s estate, devisee or heir at law (whichever is
applicable) for a period not to exceed one (1) year after the
Participant’s death, but in no event after the termination of
the Option pursuant to its terms that are unrelated to termination
of service.
(iii) Death.
If a Participant dies while in the employment or other service of
the Company, any Option held by such Participant may be exercised,
to the extent exercisable at termination, by the
Participant’s estate or the devisee named in the
Participant’s valid last will and testament or the
Participant’s heir at law who inherits the Option, at any
time within a period not to exceed one (1) year after the date of
such Participant’s death, but in no event after the
termination of the Option pursuant to its terms that are unrelated
to termination of service.
(iv) Termination
for Cause. In the event the termination is for Cause or is a
voluntary termination within ninety (90) days after occurrence of
an event which would be grounds for termination of employment or
other service by the Company for Cause (without regard to any
notice or cure period requirement), any Option held by the
Participant at the time of such termination shall be deemed to have
terminated and expired upon the date of such
termination.
7. RESTRICTED
STOCK AND RESTRICTED STOCK UNITS
(a) Grant
of Restricted Stock and Restricted Stock Units. Subject to the
terms and conditions of the Plan, the Committee may grant to such
Eligible Individuals as the Committee may determine, Restricted
Stock or Restricted Stock Units, in such amounts and on such terms
and conditions as the Committee shall determine in its sole and
absolute discretion. Each grant of Restricted Stock and Restricted
Stock Units shall satisfy the requirements as set forth in this
Section.
(b) Restrictions.
The Committee shall impose such restrictions on any Restricted
Stock or Restricted Stock Unit granted pursuant to the Plan as it
may deem advisable including, without limitation, time-based
vesting restrictions or the attainment of Performance
Goals.
(c) Certificates
and Certificate Legend. With respect to a
grant of Restricted Stock, the Company may issue a certificate
evidencing such Restricted Stock to the Participant or issue and
hold such shares of Restricted Stock for the benefit of the
Participant until the applicable restrictions expire. The Company
may legend the certificate representing Restricted Stock to give
appropriate notice of such restrictions. In addition to any such
legends, each certificate representing shares of Restricted Stock
granted pursuant to the Plan shall bear the following
legend:
“Shares
of stock represented by this certificate are subject to certain
terms, conditions, and restrictions on transfer as set forth in the
Solitron Devices, Inc. 2019 Stock Incentive Plan (the
“Plan”), and in an agreement entered into by and
between the registered owner of such shares and Solitron Devices,
Inc. (the “Company”), dated ___, 20__ (the “Award
Agreement”). A copy of the Plan and the Award Agreement may
be obtained from the Secretary of the Company.”
(d) Removal
of Restrictions. Except as
otherwise provided in the Plan or under federal or state securities
laws, shares of Restricted Stock shall become freely transferable
by the Participant upon the lapse of the applicable restrictions.
Once the shares of Restricted Stock are released from the
restrictions and if permitted under federal and state securities
laws, the Participant shall be entitled to have the legend required
by paragraph (c) above removed from the share certificate
evidencing such Restricted Stock and the Company shall pay or
distribute to the Participant all dividends and distributions held
in escrow by the Company with respect to such Restricted Stock, if
any.
(e) Stockholder
Rights. Unless otherwise
provided in an Award Agreement, until the expiration of all
applicable restrictions, (i) the Restricted Stock shall be treated
as outstanding, (ii) the Participant holding shares of Restricted
Stock may exercise full voting rights with respect to such shares,
and (iii) the Participant holding shares of Restricted Stock shall
be entitled to receive all dividends and other distributions paid
with respect to such shares while they are so held. If any such
dividends or distributions are paid in shares of Common Stock, such
shares shall be subject to the same restrictions on transferability
and forfeitability as the shares of Restricted Stock with respect
to which they were paid. Notwithstanding anything to the contrary,
at the discretion of the Committee, all such dividends and
distributions shall be held in escrow by the Company (subject to
the same restrictions on forfeitability) until all restrictions on
the respective Restricted Stock have lapsed. Holders of the
Restricted Stock Units shall not have any of the rights of a
stockholder, including the right to vote or receive dividends and
other distributions, until Common Stock shall have been issued in
the Participant’s name pursuant to the Restricted Stock
Units.
(f) Termination
of Service. Unless otherwise
provided in an Award Agreement in the case of the
Participant’s death or Disability, if a Participant’s
employment or other service with the Company terminates for any
reason, all unvested shares of Restricted Stock and Restricted
Stock Units held by the Participant and any dividends or
distributions held in escrow by the Company with respect to
Restricted Stock shall be forfeited immediately and returned to the
Company.
(g) Payment
of Common Stock with respect to Restricted Stock
Units. Notwithstanding
anything to the contrary herein, unless otherwise provided in the
Award Agreement, Common Stock will be issued with respect to
Restricted Stock Units no later than March 15 of the year
immediately following the year in which the Restricted Stock Units
are first no longer subject to a substantial risk of forfeiture as
such term is defined in Section 409A of the Code and the
regulations issued thereunder (“RSU Payment Date”). In
the event that Participant has elected to defer the receipt of
Common Stock pursuant to an Award Agreement beyond the RSU Payment
Date, then the Common Stock will be issued at the time specified in
the Award Agreement or related deferral election form. In addition,
unless otherwise provided in the Award Agreement, if the receipt of
Common Stock is deferred past the RSU Payment Date, Dividend
Equivalents on the Common Stock covered by Restricted Stock Units
shall be deferred until the RSU Payment Date.
8. STOCK
APPRECIATION RIGHTS
(a) Grant
of Stock Appreciation Rights. Subject to the
terms and conditions of the Plan, the Committee may grant to such
Eligible Individuals as the Committee may determine, Stock
Appreciation Rights, in such amounts and on such terms and
conditions as the Committee shall determine in its sole and
absolute discretion. Each grant of a Stock Appreciation Right shall
satisfy the requirements as set forth in this Section.
(b) Terms
and Conditions of Stock Appreciation Rights. Unless otherwise
provided in an Award Agreement, the terms and conditions
(including, without limitation, the limitations on the Exercise
Price, exercise period, repricing and termination) of the Stock
Appreciation Right shall be substantially identical (to the extent
possible taking into account the differences related to the
character of the Stock Appreciation Right) to the terms and
conditions that would have been applicable under Section 6 above
were the grant of the Stock Appreciation Rights a grant of an
Option.
(c) Exercise
of Stock Appreciation Rights. Stock
Appreciation Rights shall be exercised by a Participant only by
written notice delivered to the Company, specifying the number of
shares of Common Stock with respect to which the Stock Appreciation
Right is being exercised.
(d) Payment
of Stock Appreciation Right. Unless otherwise
provided in an Award Agreement, upon exercise of a Stock
Appreciation Right, the Participant or Participant’s estate,
devisee or heir at law (whichever is applicable) shall be entitled
to receive payment, in cash, in shares of Common Stock, or in a
combination thereof, as determined by the Committee in its sole and
absolute discretion. The amount of such payment shall be determined
by multiplying the excess, if any, of the Fair Market Value of a
share of Common Stock on the date of exercise over the Fair Market
Value of a share of Common Stock on the Grant Date, by the number
of shares of Common Stock with respect to which the Stock
Appreciation Rights are then being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable
with respect to a Stock Appreciation Right by including such
limitation in the Award Agreement.
9. RESERVED
10. OTHER
AWARDS
Awards
of shares of Common Stock, phantom stock and other Awards that are
valued in whole or in part by reference to, or otherwise based on,
Common Stock, may also be made, from time to time, to Eligible
Individuals as may be selected by the Committee. Such Common Stock
may be issued in satisfaction of Awards granted under any other
plan sponsored by the Company or compensation payable to an
Eligible Individual. In addition, such Awards may be made alone or
in addition to or in connection with any other Award granted
hereunder. The Committee may determine the terms and conditions of
any such Award. Each such Award shall be evidenced by an Award
Agreement between the Eligible Individual and the Company which
shall specify the number of shares of Common Stock subject to the
Award, any consideration therefore, any vesting or Performance Goal
requirements, and such other terms and conditions as the Committee
shall determine in its sole and absolute discretion.
11. RESERVED
12. CHANGE
IN CONTROL
Except
as otherwise provided for in an Award Agreement, and subject to the
requirements and limitations of Section 409A of the Code, if
applicable, in the event of a Change in Control: (a) the surviving,
continuing, successor, or purchasing corporation or other business
entity or parent thereof, as the case may be (the
“Acquiror”), may, without the consent of any
Participant, assume or continue the Company’s rights and
obligations under each or any Award or portion thereof outstanding
immediately prior to the Change in Control or substitute for each
or any such outstanding Award or portion thereof a substantially
equivalent award with respect to the Acquiror’s stock, as
applicable; and (b) outstanding Awards which are not assumed,
substituted for, or otherwise continued by the Acquiror shall
accelerate and become fully vested effective immediately prior to,
but contingent upon, the consummation of the Change in Control; and
thereafter, all Awards shall terminate to the extent not exercised
or settled as of the date of the Change in Control. Any Award that
is settled shall be settled in such form as the Committee may
specify, in an amount equal to the Change in Control Price with
respect to shares subject to the vested portion of the Award net of
the Exercise Price thereof, if applicable.
13. CHANGE
IN STATUS OF PARENT OR SUBSIDIARY
Unless
otherwise provided in an Award Agreement or otherwise determined by
the Committee, in the event that an entity or business unit which
was previously a part of the Company is no longer a part of the
Company, as determined by the Committee in its sole discretion, the
Committee may, in its sole and absolute discretion: (i) provide on
a case by case basis that some or all outstanding Awards held by a
Participant employed by or performing service for such entity or
business unit may remain outstanding, may continue to vest, and/or
may remain exercisable for a period not exceeding one (1) year,
subject to the terms of the Award Agreement and this Plan; and/or
(ii) treat the employment or other services of a Participant
performing services for such entity or business unit as terminated,
if such Participant is not employed by the Company or any entity
that is a part of the Company, immediately after such
event.
14. REQUIREMENTS
OF LAW
(a) Violations
of Law. The Company shall
not be required to make any payments, sell or issue any shares of
Common Stock under any Award if the sale or issuance of such shares
would constitute a violation by the individual exercising the
Award, the Participant or the Company of any provisions of any law
or regulation of any governmental authority, including without
limitation any provisions of the Sarbanes-Oxley Act, and any other
federal or state securities laws or regulations. Any determination
in this connection by the Committee shall be final, binding, and
conclusive. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Award, the
issuance of shares pursuant thereto or the grant of an Award to
comply with any law or regulation of any governmental
authority.
(b) Registration.
At the time of any exercise or receipt of any Award, the Company
may, if it shall determine it necessary or desirable for any
reason, require the Participant (or Participant’s heirs,
legatees or legal representative, as the case may be), as a
condition to the exercise or grant thereof, to deliver to the
Company a written representation of present intention to hold the
shares for their own account as an investment and not with a view
to, or for sale in connection with, the distribution of such
shares, except in compliance with applicable federal and state
securities laws with respect thereto. In the event such
representation is required to be delivered, an appropriate legend
may be placed upon each certificate delivered to the Participant
(or Participant’s heirs, legatees or legal representative, as
the case may be) upon the Participant’s exercise of part or
all of the Award or receipt of an Award and a stop transfer order
may be placed with the transfer agent. Each Award shall also be
subject to the requirement that, if at any time the Company
determines, in its discretion, that the listing, registration or
qualification of the shares subject to the Award upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of or in connection with, the
issuance or purchase of the shares thereunder, the Award may not be
exercised in whole or in part and the restrictions on an Award may
not be removed unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Company in its sole
discretion. The Participant shall provide the Company with any
certificates, representations and information that the Company
requests and shall otherwise cooperate with the Company in
obtaining any listing, registration, qualification, consent or
approval that the Company deems necessary or appropriate. The
Company shall not be obligated to take any affirmative action in
order to cause the exercisability or vesting of an Award, to cause
the exercise of an Award or the issuance of shares pursuant
thereto, or to cause the grant of Award to comply with any law or
regulation of any governmental authority.
(c) Withholding.
The Committee may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of any taxes
that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic
or foreign, to withhold in connection with the grant or exercise of
an Award, or the removal of restrictions on an Award including, but
not limited to: (i) the withholding of delivery of shares of Common
Stock until the holder reimburses the Company for the amount the
Company is required to withhold with respect to such taxes; (ii)
the canceling of any number of shares of Common Stock issuable in
an amount sufficient to reimburse the Company for the amount it is
required to so withhold; (iii) withholding the amount due from any
such person’s wages or compensation due to such person; or
(iv) requiring the Participant to pay the Company cash in the
amount the Company is required to withhold with respect to such
taxes.
(d) Governing
Law. The Plan shall be
governed by, and construed and enforced in accordance with, the
laws of the State of Delaware.
15. GENERAL
PROVISIONS
(a) Award
Agreements. All Awards
granted pursuant to the Plan shall be evidenced by an Award
Agreement. Each Award Agreement shall specify the terms and
conditions of the Award granted and shall contain any additional
provisions as the Committee shall deem appropriate, in its sole and
absolute discretion (including, to the extent that the Committee
deems appropriate, provisions relating to confidentiality,
non-competition, non-solicitation and similar matters). The terms
of each Award Agreement need not be identical for Eligible
Individuals provided that each Award Agreement shall comply with
the terms of the Plan.
(b) Purchase
Price. To the extent the
purchase price of any Award granted hereunder is less than par
value of a share of Common Stock and such purchase price is not
permitted by applicable law, the per share purchase price shall be
deemed to be equal to the par value of a share of Common
Stock.
(c) Dividends
and Dividend Equivalents. Except as set
forth in the Plan, an Award Agreement or provided by the Committee
in its sole and absolute discretion, a Participant shall not be
entitled to receive, on a deferred basis, cash or stock dividends,
Dividend Equivalents, or cash payments in amounts equivalent to
cash or stock dividends on shares of Common Stock covered by an
Award. The Committee in its absolute and sole discretion may credit
a Participant’s Award with Dividend Equivalents with respect
to any Awards. To the extent that dividends and distributions
relating to an Award are held in escrow by the Company, or Dividend
Equivalents are credited to an Award, a Participant shall not be
entitled to any interest on any such amounts. No dividends or
Dividend Equivalents shall be paid to Participants with respect to
unvested Awards until such Awards vest, but this sentence shall not
prohibit the payment of dividends or Dividend Equivalents
attributable to the period while the Awards were unvested to be
paid upon or after the vesting date.
(d) Deferral
of Awards. The Committee may
from time to time establish procedures pursuant to which a
Participant may elect to defer, until a time or times later than
the vesting of an Award, receipt of all or a portion of the shares
of Common Stock or cash subject to such Award and to receive Common
Stock or cash at such later time or times, all on such terms and
conditions as the Committee shall determine. The Committee shall
not permit the deferral of an Award unless counsel for the Company
determines that such action will not result in adverse tax
consequences to a Participant under Section 409A of the Code. If
any such deferrals are permitted, then notwithstanding anything to
the contrary herein, a Participant who elects to defer receipt of
Common Stock shall not have any rights as a stockholder with
respect to deferred shares of Common Stock unless and until shares
of Common Stock are actually delivered to the Participant with
respect thereto, except to the extent otherwise determined by the
Committee.
(e) Prospective
Employees. Notwithstanding
anything to the contrary, any Award granted to a Prospective
Employee shall not become vested prior to the date the Prospective
Employee first becomes an employee of the Company.
(f) Stockholder
Rights. Except as
expressly provided in the Plan or an Award Agreement, a Participant
shall not have any of the rights of a stockholder with respect to
Common Stock subject to the Awards prior to satisfaction of all
conditions relating to the issuance of such Common Stock, and no
adjustment shall be made for dividends, distributions or other
rights of any kind for which the record date is prior to the date
on which all such conditions have been satisfied.
(g) Transferability
of Awards. A Participant may
not Transfer an Award other than by will or the laws of descent and
distribution. Awards may be exercised during the
Participant’s lifetime only by the Participant. No Award
shall be liable for or subject to the debts, contracts, or
liabilities of any Participant, nor shall any Award be subject to
legal process or attachment for or against such person. Any
purported Transfer of an Award in contravention of the provisions
of the Plan shall have no force or effect and shall be null and
void, and the purported transferee of such Award shall not acquire
any rights with respect to such Award. Notwithstanding anything to
the contrary, the Committee may in its sole and absolute discretion
permit the Transfer of an Award to a Participant’s
“family member” as such term is defined in the Form S-8
Registration Statement under the Securities Act of 1933, as
amended, under such terms and conditions as specified by the
Committee. In such case, such Award shall be exercisable only by
the transferee approved of by the Committee.
(h) Buyout
and Settlement Provisions. The Committee may
at any time on behalf of the Company offer to buy out any Awards
previously granted based on such terms and conditions as the
Committee shall determine which shall be communicated to the
Participants at the time such offer is made.
(i) Use
of Proceeds. The proceeds
received by the Company from the sale of Common Stock pursuant to
Awards granted under the Plan shall constitute general funds of the
Company.
(j) Modification
or Substitution of an Award. Subject to the
terms and conditions of the Plan, the Committee may modify
outstanding Awards, provided that, except as expressly provided in
the Plan, no modification of an Award shall adversely affect any
rights or obligations of the Participant under the applicable Award
Agreement without the Participant’s consent. Nothing in the
Plan shall limit the right of the Company to pay compensation of
any kind outside the terms of the Plan.
(k) Amendment
and Termination of Plan. The Board may, at
any time and from time to time, amend, suspend or terminate the
Plan as to any shares of Common Stock as to which Awards have not
been granted; provided, however, that the approval of the
stockholders of the Company in accordance with applicable law and
the Certificate of Incorporation and Bylaws of the Company shall be
required for any amendment of which stockholder approval is
necessary to comply with federal or state law (including without
limitation Rule 16b-3 under the Exchange Act) or with the rules of
any stock exchange or automated quotation system on which the
Common Stock may be listed or traded. Except as expressly provided
in the Plan, no amendment, suspension or termination of the Plan
shall, without the consent of the holder of an Award, alter or
impair rights or obligations under any Award theretofore granted
under the Plan. Awards granted prior to the termination of the Plan
may extend beyond the date the Plan is terminated and shall
continue subject to the terms of the Plan as in effect on the date
the Plan is terminated.
(l) Section
409A of the Code. This Plan is
intended to comply with the requirements of Section 409A of the
Code, and the provisions hereof shall be interpreted in a manner
that satisfies its requirements and the related regulations, and
the Plan shall be operated accordingly. If any provision of this
Plan or any term or condition of any Award would otherwise
frustrate or conflict with this intent, the provision, term or
condition will be interpreted and deemed amended so as to avoid
this conflict.
(m) Notification
of 83(b) Election. If in connection
with the grant of any Award, any Participant makes an election
permitted under Code Section 83(b), such Participant must notify
the Company in writing of such election within ten (10) days of
filing such election with the Internal Revenue
Service.
(n) Disclaimer
of Rights. No provision in
the Plan, any Award granted hereunder, or any Award Agreement
entered into pursuant to the Plan shall be construed to confer upon
any individual the right to remain in the employ of or other
service with the Company or to interfere in any way with the right
and authority of the Company either to increase or decrease the
compensation of any individual, including any holder of an Award,
at any time, or to terminate any employment or other relationship
between any individual and the Company. The grant of an Award
pursuant to the Plan shall not affect or limit in any way the right
or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or
to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.
(o) Unfunded
Status of Plan. The Plan is
intended to constitute an “unfunded” plan for incentive
and deferred compensation. With respect to any payments as to which
a Participant has a fixed and vested interest but which are not yet
made to such Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than
those of a general creditor of the Company.
(p) Nonexclusivity
of Plan. The adoption of
the Plan shall not be construed as creating any limitations upon
the right and authority of the Board to adopt such other incentive
compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or
specifically to a particular individual or individuals) as the
Board in its sole and absolute discretion determines
desirable.
(q) Other
Benefits. No Award payment
under the Plan shall be deemed compensation for purposes of
computing benefits under any retirement plan of the Company or any
agreement between a Participant and the Company, nor affect any
benefits under any other benefit plan of the Company now or
subsequently in effect under which benefits are based upon a
Participant’s level of compensation.
(r) Headings.
The section headings in the Plan are for convenience only; they
form no part of this Agreement and shall not affect its
interpretation.
(s) Pronouns.
The use of any gender in the Plan shall be deemed to include all
genders, and the use of the singular shall be deemed to include the
plural and vice versa, wherever it appears appropriate from the
context.
(t) Successors
and Assigns. The Plan shall be
binding on all successors of the Company and all successors and
permitted assigns of a Participant, including, but not limited to,
a Participant’s estate, devisee, or heir at law.
(u) Severability.
If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in
any jurisdiction, the remaining provisions hereof and thereof shall
be severable and enforceable in accordance with their terms, and
all provisions shall remain enforceable in any other
jurisdiction.
(v) Notices.
Any communication or notice required or permitted to be given under
the Plan shall be in writing, and mailed by registered or certified
mail or delivered by hand, to the Company, to its principal place
of business, and if to the holder of an Award, to the address as
appearing on the records of the Company.
ANNEX A
DEFINITIONS
“Award”
means any Common Stock, Option, Restricted Stock, Restricted Stock
Unit, Stock Appreciation Right or any other award granted pursuant
to the Plan.
“Award
Agreement” means a written agreement entered into by the
Company and a Participant setting forth the terms and conditions of
the grant of an Award to such Participant.
“Board”
means the board of directors of the Company.
“Cause”
means, with respect to a termination of employment or other service
with the Company, a termination of employment or other service due
to a Participant’s dishonesty, fraud, or willful misconduct;
provided, however, that if the Participant and
the Company have entered into an employment agreement or consulting
agreement which defines the term Cause, the term Cause shall be
defined in accordance with such agreement with respect to any Award
granted to the Participant on or after the effective date of the
respective employment or consulting agreement. The Committee shall
determine in its sole and absolute discretion whether Cause exists
for purposes of the Plan.
“Change in
Control” means: (i) any Person (other than the Company, any
trustee or other fiduciary holding securities under any employee
benefit plan of the Company, or any company owned, directly or
indirectly, by stockholders of the Company in substantially the
same proportions as their ownership of Company Common Stock)
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than fifty percent
(50%) or more of the value of the Company’s then outstanding
securities (the “Majority Owner”); provided, however,
that no Change in Control shall occur under this paragraph (i)
unless a person who was not a Majority Owner at some time after the
Effective Date becomes a Majority Owner after the Effective Date;
(ii) a merger, consolidation, reorganization, or other business
combination of the Company with any other entity, other than a
merger or consolidation which would result in the 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) more than fifty
percent (50%) by value of the securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or (iii) the consummation of the sale or disposition
by the Company of all or substantially all of its assets other than
(x) the sale or disposition of all or substantially all of the
assets of the Company to a Person or Persons who beneficially own,
directly or indirectly, at least fifty percent (50%) or more of the
securities of the Company by value at the time of the sale or (y)
pursuant to a spin-off type transaction, directly or indirectly, of
such assets to the stockholders of the Company.
However, to the
extent that Section 409A of the Code would cause an adverse tax
consequence to a Participant using the above definition, the term
“Change in Control” shall have the meaning ascribed to
the phrase “Change in the Ownership or Effective Control of a
Corporation or in the Ownership of a Substantial Portion of the
Assets of a Corporation” under Treasury Department Regulation
1.409A-3(i)(5), as revised from time to time in either subsequent
regulations or other guidance, and in the event that such
regulations are withdrawn or such phrase (or a substantially
similar phrase) ceases to be defined, as determined by the
Committee.
“Change in
Control Price” means the price per share of Common Stock paid
in any transaction related to a Change in Control of the
Company.
“Code”
means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
“Committee”
means a committee or sub-committee of the Board consisting of two
or more members of the Board, none of whom shall be an officer or
other salaried employee of the Company, and each of whom shall
qualify in all respects as a “non-employee director” as
defined in Rule 16b-3 under the Exchange Act. If no Committee
exists, the functions of the Committee will be exercised by the
Board. Notwithstanding the foregoing, with respect to the grant of
Awards to non-employee directors, the Committee shall be the
Board.
“Common
Stock” means the common stock, par value $0.01 per share, of
the Company or any other security into which such common stock
shall be changed as contemplated by the adjustment provisions of
Section 5 of the Plan.
“Company”
means Solitron, the subsidiaries of Solitron and all other entities
whose financial statements are required to be consolidated with the
financial statements of Solitron pursuant to United States
generally accepted accounting principles, and any other entity
determined to be an affiliate of Solitron as determined by the
Committee in its sole and absolute discretion.
“Covered
Individual” means any current or former member of the
Committee, any current or former officer or director of the
Company, or, if so determined by the Committee in its sole
discretion, any individual designated pursuant to Section
4(c).
“Disability”
means a “permanent and total disability” within the
meaning of Code Section 22(e)(3); provided, however, that if a
Participant and the Company have entered into an employment or
consulting agreement which defines the term Disability for purposes
of such agreement, Disability shall be defined pursuant to the
definition in such agreement with respect to any Award granted to
the Participant on or after the effective date of the respective
employment or consulting agreement. The Committee shall determine
in its sole and absolute discretion whether a Disability exists for
purposes of the Plan.
“Dividend
Equivalents” means an amount equal to the cash dividends paid
by the Company upon one share of Common Stock subject to an Award
granted to a Participant under the Plan.
“Eligible
Individual” means any employee, consultant, officer, director
(employee or non-employee director) or independent contractor of
the Company and any Prospective Employee to whom Awards are granted
in connection with an offer of future employment with the
Company.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Exercise
Price” means the purchase price per share of each share of
Common Stock subject to an Award.
“Fair Market
Value” means, unless otherwise required by the Code, as of
any date, the last sales price reported for the Common Stock on the
day immediately prior to such date (i) as reported by the national
securities exchange in the United States on which it is then
traded, or (ii) if not traded on any such national securities
exchange, as quoted on an automated quotation system sponsored by
the Financial Industry Regulatory Authority, Inc., or if the Common
Stock shall not have been reported or quoted on such date, on the
first day prior thereto on which the Common Stock was reported or
quoted; provided, however, that the Committee may modify the
definition of Fair Market Value to reflect any changes in the
trading practices of any exchange or automated system sponsored by
the Financial Industry Regulatory Authority, Inc. on which the
Common Stock is listed or traded. If the Common Stock is not
readily traded on a national securities exchange or any system
sponsored by the Financial Industry Regulatory Authority, Inc., the
Fair Market Value shall be determined in good faith by the
Committee.
“Grant
Date” means, unless otherwise provided by applicable law, the
date on which the Committee approves the grant of an Award or such
later date as is specified by the Committee and set forth in the
applicable Award Agreement.
“Non-Qualified
Stock Option” means an Option which is not an
“incentive stock option” within the meaning of Code
Section 422.
“Option”
means an option to purchase Common Stock granted pursuant to
Sections 6 of the Plan.
“Participant”
means any Eligible Individual who holds an Award under the Plan and
any of such individual’s successors or permitted
assigns.
“Performance
Goals” means the specified performance goals which have been
established by the Committee in connection with an
Award.
“Person”
shall mean any person, corporation, partnership, limited liability
company, joint venture or other entity or any group (as such term
is defined for purposes of Section 13(d) of the Exchange Act),
other than a Parent or subsidiary of the Company.
“Plan”
means this Solitron Devices, Inc. 2019 Stock Incentive
Plan.
“Prospective
Employee” means any individual who has committed to become an
employee or independent contractor of the Company within sixty (60)
days from the date an Award is granted to such
individual.
“Restricted
Stock” means Common Stock subject to certain restrictions, as
determined by the Committee, and granted pursuant to Section 7
hereunder.
“Restricted
Stock Unit” means a right, granted under this Plan, to
receive Common Stock upon the satisfaction of certain conditions,
or if later, at the end of a specified deferral period following
the satisfaction of such conditions.
“Solitron”
means Solitron Devices, Inc., a Delaware corporation.
“Stock
Appreciation Right” means the right to receive all or some
portion of the increase in value of a fixed number of shares of
Common Stock granted pursuant to Section 8 hereunder.
“Transfer”
means, as a noun, any direct or indirect, voluntary or involuntary,
exchange, sale, bequeath, pledge, mortgage, hypothecation,
encumbrance, distribution, transfer, gift, assignment or other
disposition or attempted disposition of, and, as a verb, directly
or indirectly, voluntarily or involuntarily, to exchange, sell,
bequeath, pledge, mortgage, hypothecate, encumber, distribute,
transfer, give, assign or in any other manner whatsoever dispose or
attempt to dispose of.
Grafico Azioni Solitron Devices (PK) (USOTC:SODI)
Storico
Da Mar 2025 a Apr 2025
Grafico Azioni Solitron Devices (PK) (USOTC:SODI)
Storico
Da Apr 2024 a Apr 2025
