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June 12, 2015
The following Notice ofDorian LPG (USA) LLC, located at 27 Signal Road, Stamford, CT 06902.
This year we are using the Internetappointment of
shares "FOR"
the election of Ted Kalborg, Øivind Lorentzen and John C. Lycouris to the Board of Directors and "FOR" the ratification of the appointment of Deloitte Certified Public Accountants S.A. as the Company's independent auditors for the fiscal year ending March 31, 2019.2018.
Notice of Annual Meeting of Shareholders of Dorian
27 Signal Road
Stamford, Connecticut 06902
Date of Meeting: | |||
Time: | |||
Place: | |||
Items of Business: | We are holding the | ||
· | to elect three directors to serve on our Board of Directors until the | ||
· | to ratify the selection of Deloitte
| ||
· | to transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. | ||
The attached proxy statement (the | |||
Record Date: | |||
Voting: |
Whether or not you plan to attend, we urge you to | ||
By order of the Board of Directors | |
/s/ John C. Hadjipateras | |
John C. Hadjipateras | |
Chairman of the Board | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on JuLY 23, 2015:
The Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report on Form 10-K for the fiscal year ended March 31, 2015 are available atwww.edocumentview.com/LPG.
(This Page Intentionally Left Blank)
Table of Contents
Director Compensation | 33 |
Executive Compensation | 34 |
Summary Compensation Table | |
Narrative Disclosure to the Summary Compensation Table | |
Equity Compensation | |
Outstanding Equity Awards at Fiscal Year-End | |
2014 Equity Incentive Plan | |
Securities Authorized for Issuance Under Equity Compensation Plans | 38 |
Equity Compensation Plans Table | 38 |
Retirement Benefits | 38 |
2014 Executive Severance and Change in Control Severance Plan | |
Certain Relationships and Related Transactions and Director Independence | |
Section 16(a) Beneficial Ownership Reporting Compliance | |
Shareholder Proposals for | |
Other Business | 44 |
Annual Report to Shareholders and Form 10-K | |
PROXY SOLICITATION AND VOTING INFORMATION
The proxy materials include our Notice of Annual Meeting of Shareholders,
November 13, 2018.
How can I access the proxy materials on the Internet?
In accordance with U.S. Securities and Exchange Commission (the “SEC”) rules, we are using the Internet as the primary means of furnishing proxy materials to shareholders. Accordingly, most shareholders will not receive paper copies of our proxy materials. We instead sent shareholders a Notice of Internet Availability of the Proxy Materials (the “Notice”) with instructions for accessing via the Internet the proxy materials including the Notice of Annual Meeting of Shareholders, Proxy Statement and annual report on form 10-K for the fiscal year ended March 31, 2015, and for voting via the Internet or by telephone. The Notice was mailed on or about June 10, 2015. The Notice also provides information on how shareholders may obtain paper copies of our proxy materials if they so choose. Additionally, and in accordance with SEC rules, you may access our proxy materials atwww.edocumentview.com/LPG.
The Notice provides you with instructions regarding how to:
Choosing to receive future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our annual meetings on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.
Only shareholders of record of our common stock at the close of business on June 1, 2015 (the “record date”), may vote, either in person or by proxy, at the Annual Meeting. On the record date, we had 58,057,493 shares of common stock outstanding. You are entitled to one vote for each share of common stock that you owned on the record date. The shares of common stock held in our treasury, which are not considered outstanding, will not be voted.
How do I know if I am a beneficial owner of shares?
If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice was forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. Those instructions are contained in a “voting instructions form.” If you request printed copies of the proxy materials by mail, you will receive a voting instructions form.
· | to elect three directors to serve on our Board until the |
· | to ratify the selection of our independent registered public accounting firm for the fiscal year ending March 31, |
· | to transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
· | FOR the election of the following three individuals nominated by the Board of Directors for election as directors: Ted Kalborg, Øivind Lorentzen and John C. Lycouris; and |
· | FOR ratification of the appointment of Deloitte Certified Public Accountants S.A. ("Deloitte") as our independent registered public accounting firm for the year ending March 31, 2019. |
· | Over the |
· | By |
· | By |
· | In person at the Annual |
Instructions for voting via the
Youproxy?
· | by giving written notice of the revocation prior to the commencement of the Annual Meeting to: Corporate Secretary, Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902; |
· | by executing and delivering another valid proxy with a later date; |
· | by voting by telephone or Internet at a later date; or |
· | by attending the Annual Meeting and voting in person by written ballot, if you are a shareholder of record or, if you are a beneficial owner of your shares, with a legal proxy from the entity that holds your shares giving you the right to vote the shares. |
If you hold yourclose of business on that date, approximately 55,166,775 of our common shares through a broker, bank or other nominee, you may revoke any priorwere outstanding and entitled to vote. Each common share is entitled to one vote on each matter properly brought before the meeting. Our articles of incorporation, as amended (the "Articles of Incorporation"), do not provide for cumulative voting instructions by contacting that firm or byand, accordingly, our shareholders do not have cumulative voting rights with respect to the election of directors. The common shares held in person via legal proxy at the Annual Meeting.
our treasury, which are not considered outstanding, will not be voted.
· | vote via the Internet or by telephone; |
· | return a properly executed proxy by mail (even if you do not provide voting instructions); or |
· | attend the Annual Meeting and vote in person. |
Will my shares be voted if I do not provide my proxy?
If you hold your shares directly in your own name, your shares will not be voted if you do not vote them or provide a proxy.
If your shares are held in the name of a brokerage firm or other nominee, under rules of the NYSE, your broker may vote your shares on “routine” matters even if you do not provide a proxy. The only routine matter to be voted on at the Annual Meeting is the ratification of the selection of our independent registered public accounting firm for the fiscal year ending March 31, 2016. If a brokerage firm votes your shares on a routine matter in accordance with these rules, your shares will count as present at the Annual Meeting for purposes of establishing a quorum and will count as “FOR” votes or “AGAINST” votes, as the case may be, depending on how the broker votes. If a brokerage firm signs and returns a proxy on your behalf that does not contain voting instructions, your shares will count as present at the Annual Meeting for quorum purposes and will be voted in connection with the selection of our independent registered public accounting firm for the fiscal year ending March 31, 2016, but will not count as a “FOR” vote for any other matter, including the election of directors.
What if I return my proxy but do not provide voting instructions?
If you hold your shares directly in your own name, and you sign and return your proxy card (including over the Internet or by telephone) but do not include voting instructions, your proxy will be voted as the Board recommends on each proposal.
elected.
Proposal 3.Approval of the 2014 Equity Incentive Plan.The affirmative vote of a majority of the votes cast by holders present, in person or by proxy, at the Annual Meeting is required to approve the adoption of the 2014 Equity Incentive Plan. If you do not instruct your broker how to vote with respect to this item, your broker may not vote with respect to this proposal. Abstentions will not be counted in determininghave the same effect as a vote "against" whether this proposal has been approved. Broker non-votesAbstentions will not be counted as present and are not entitled to votehave no effect on the results of this proposal.
· | By Internet—Shareholders of record may submit proxies over the Internet by following the instructions on the enclosed proxy card. |
· | By Telephone—Shareholders of record may vote by telephone by calling the number listed on the enclosed proxy card. |
· | By Mail—Shareholders of record who have received a paper copy of a proxy card by mail may submit proxies by completing, signing and dating their proxy card and mailing it in the accompanying pre-addressed envelope. |
· | In Person—Shareholders of record may vote shares held in their name in person at the Annual Meeting; however, attending the Annual Meeting without casting a ballot will not count as a vote. |
· | By Internet or Telephone—Beneficial owners may generally vote their shares over the Internet or by telephone, as indicated on your voting instruction card. Please refer to your voting instruction card or other information forwarded by your bank, broker, trustee or nominee to determine whether you may submit a proxy electronically over the Internet or by telephone, following the instructions on the voting instruction card or other information provided by the record holder. |
· | By Mail—You may vote your shares by completing, signing and dating your voting instruction card and returning it in the envelope provided. |
· | In Person with a Proxy from the Record Holder—Shares for which a shareholder is the beneficial holder but not the shareholder of record may be voted in person at the Annual Meeting only if such shareholder is able to obtain a legal proxy from the bank, broker, trustee or nominee that holds the shareholder's shares, indicating that the shareholder was the beneficial holder as of the record date and the number of shares for which the shareholder was the beneficial owner on the record date. |
· | by giving written notice of the revocation prior to the commencement of the Annual Meeting to: Corporate Secretary, Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902; |
· | by executing and delivering another valid proxy with a later date; |
· | by voting by telephone or Internet at a later date; or |
· | by attending the Annual Meeting and voting in person by written ballot, if you are a shareholder of record or, if you are a beneficial owner of your shares, with a legal proxy from the entity that holds your shares giving you the right to vote the shares. |
· | Proposal 1—Election of Directors: Each Dorian shareholder has the right to vote each share of stock owned by such shareholder on the record date for three director nominees to be elected. Cumulative voting is not permitted. To be elected, a director-nominee must receive a plurality of the votes cast at the Annual Meeting. Accordingly, the three nominees standing in the election who receive the greatest number of votes cast at the Annual Meeting will be elected as directors. Abstentions, votes withheld and broker non-votes will not be counted as votes cast for such purposes and therefore will have no effect on the results of the election. |
· | Proposal 2—Ratification of Selection of Deloitte: The affirmative vote of a majority of the votes cast on this proposal is required to ratify the selection of Deloitte as our independent registered public accounting firm for the fiscal year ending March 31, 2019. Abstentions and broker non-votes will have no effect on the results of this vote. |
2015 and has since been reduced to seven directors effective January 26, 2016
.2021.
Mr. McAvity and Mr. Hadjipateras were reelected at the 2016 annual meeting of shareholders.
Pursuant to our Articles
nominees make them the best candidates to serve on our Board.
Name | Age | Principal Occupation | ||
Ted Kalborg | 67 | Founder, Tufton Oceanic Group | ||
Øivind Lorentzen | 68 | |||
John C. Lycouris | 68 | Chief Executive Officer, Dorian LPG (USA) LLC | ||
Øivind LorentzenTed Kalborg has served as a director of the Company since December 12, 2014 and is currently a member of the Audit and Compensation Committees. Mr. Kalborg is the founder of the Tufton Group, a fund management group he founded in 1985 that specializes in the shipping and energy sectors. The group manages hedge funds and private equity funds. Mr. Kalborg's primary focus has been corporate reorganizations and he also serves on the board of Hafnia Tankers, a Norwegian OTC-listed tanker company, since 2014. Mr. Kalborg holds a BA from Stockholm School of Economics and received an MBA from Harvard Business School. Mr. Kalborg's diversified experience in the oil drilling, shipping, and investment industries, his specialty in maritime and transportation fund management, and his extensive background serving as director of several other companies equip him with the qualifications and skills to act as a member of our Board of Directors.
Ted Kalborg has served as a director of the Company since December 12, 2014. Mr. Kalborg is the founder of the Tufton Group, a fund management group he founded in 1985 that specializes in the shipping and energy sectors. The group manages hedge funds and private equity funds. Mr. Kalborg’s primary focus has been corporate reorganizations and he has served on the board of Hafnia Tankers, a Norwegian OTC-listed tanker company that was recently reorganized, since 2014. Mr. Kalborg holds a BA from Stockholm School of Economics and received an MBA from Harvard Business School. Mr. Kalborg’s diversified experience in the oil drilling, shipping, and investment industries, his specialty in maritime and transportation fund management, and his extensive background serving as director of several other companies equip him with the qualifications and skills to act as a member of our Board of Directors.
Name | Age | Principal Occupation | ||
John C. Hadjipateras | 68 | President and Chief Executive Officer of Dorian LPG Ltd.; President, Dorian LPG (USA) Ltd. | ||
Malcolm McAvity | 68 | Retired Vice Chairman of Phibro LLC |
Ocean. HeOcean, which provides chartering, sale and purchase, protection and indemnity insurance and shipping finance services. Mr. Hadjipateras has served as a member of the boards of the Greek Shipping Co-operation Committee and of the Council of INTERTANKO, and has been a member of the Baltic Exchange since 1972 and of the American Bureau of Shipping since 2011. HeMr. Hadjipateras also served on the Board of Advisors of the Faculty of Languages and Linguistics of Georgetown University and is a trustee of Kidscape, a leading U.K. charity organization. HeMr. Hadjipateras was a Directordirector of SEACOR Holdings Inc., a global provider of marine transportation equipment and logistics services, from 2000 to 2013. We believe that Mr. Hadjipateras’sHadjipateras' expertise in the maritime and shipping industries provides him the qualifications and skills to serve as a member of our Board of Directors.Charles Fabrikant has served as a director of the Board since July 2013. Mr. Fabrikant currently serves as Executive Chairman of the Board and an officer and a director of SEACOR Holdings Inc. and several of its subsidiaries. Mr. Fabrikant is a director of Diamond Offshore Drilling, Inc., a contract oil and gas driller and Hawker Pacific Airservices Limited, an aviation sales product support company. Mr. Fabrikant serves as the Non-Executive Chairman of the Board of Era Group Inc., an international helicopter operator. He served as the President and Chief Executive Officer of Era Group Inc. from October 2011 through April 2012. He is also President of Fabrikant International Corporation, a privately owned corporation engaged in marine investments. Mr. Fabrikant is a graduate of Columbia University School of Law and Harvard University. We believe that Mr. Fabrikant’s expertise in the maritime and shipping industries provide him the qualifications and skills to serve as a member of our Board of Directors.David G. Savett has served as a director of our Board since April 2014. Since December 2012, Mr. Savett has been a Managing Partner at BH Logistics, LP (“BH Logistics”) a privately held advisory and investment firm that primarily focuses on the energy, infrastructure, logistics and environmental services sectors. Prior to joining BH Logistics, Mr. Savett spent six years at Crédit Suisse as a Director in the Global Commodities Group where he served as Head of Physical Natural Gas Trading and Head of Texas Electricity Trading. Mr. Savett was also influential in Crédit Suisse’s commodity structuring and marketing initiatives, collaborating with the broader investment bank to bring commodity solutions to project financings, acquisitions, and dividend recapitalizations. Prior to joining Crédit Suisse, Mr. Savett worked at Bank of America for four years in the Global Commodities Group and, earlier, the Energy & Power Investment Banking Group. At Bank of America, Mr. Savett was responsible for starting the NGL trading business and managing the bank’s NGL trading portfolio. Mr. Savett holds a BA from Emory University where he majored in Economics. We believe that Mr. Savett’s experience in energy finance, which has covered trading, portfolio management, structuring, sales and investment banking provides him the qualifications and skills to serve as a member of our Board of Directors.2015.2015 and is currently the Chairman of our Nominating and Corporate Governance Committee and a member of our Compensation Committee. Mr. McAvity formerly served as Vice Chairman of Phibro LLC, one of the world’sworld's leading international commodities trading firms, from 1986 through 2012. Mr. McAvity has held various positions trading crude oil and other commodities. Mr. McAvity earned a BA from Stanford University and an MBA from Harvard University. We believe that Mr. McAvity’sMcAvity's experience in commodities trading provides him the qualifications and skills to serve as a member of our Board of Directors.20172020 Annual Meeting of Shareholders20172020 annual meeting, together with certain biographical information, including their ages as of the date of this Proxy Statement.Age4852 Co-Founder and Co-President, Kensico Capital Management Corporation 6266 Executive Director, MT Maritime Management Group
Meeting of Shareholders." Theodore B. Young, of the UK P&I Club. Mr. Alexander C. Hadjipateras graduated from Georgetown University with a BA in history in 2001. See also Corporate Governance Matters—Director Independence. two meetings. held two meetings. 2018. Mail addressed to "Outside Directors" or "Non-Employee Directors" will be forwarded or delivered to the lead independent director, who is presently Mr. Thomas J. Coleman. Mail addressed to the "Board of Directors" will be forwarded or delivered to the Chairman of the Board. Name and Address of Beneficial Owner Common Shares Beneficially Owned(1) Percent of Class Beneficially Owned(1)2013.2013 and is currently the Chairman of the Company's compensation committee (the "Compensation Committee") and a member of the Nominating and Corporate Governance Committee. Mr. Coleman has served as co-Founder and co-President of Kensico Capital Management Corporation (Kensico)("Kensico") since 2000. Mr. Coleman is also the co-principal of each of Kensico’sKensico's affiliates. Prior to working with Kensico and its affiliates, Mr. Coleman was employed by Halo Capital Partners (“Halo”("Halo"). Prior to his employment at Halo, Mr. Coleman founded and served as Chief Executive Officer and a director of PTI Holding Inc. from 1990 until 1995. From October 2012 until January 2014, Mr. Coleman served as a director of WebMD. From February 2011 until its sale in January 2012, Mr. Coleman served as a director of Tekelec, a publicly traded global provider of core network solutions. We believe that Mr. Coleman’s deepColeman's knowledge of corporate finance provides him the qualifications and skills to serve as a member of our Board of Directors.2015.2015 and is currently a member of the Audit and Nominating and Corporate Governance Committees. Ms. Tan is an Executive Director of the MT Maritime Management Group (“("MTM Group”Group"), a position she has held since 1991. Ms. Tan has been an officer with the MTM Group for over 30 years, performing in a variety of capacities, including finance and chartering, and haswas also been a board member of Northern Shipping Funds since 2008.from 2008 to 2015, at which point she remained as a member of the Limited Partnership Advisory Committee (LPAC). For eight years prior to joining MTM Group, Ms. Tan was Vice President of Finance & Trading for Socoil Corporation, a major Malaysian palm oil refiner and trading company. Ms. Tan earned a BA in Economics and Mathematics from Western State College of Colorado. We believe that Ms. Tan’sTan's long-standing experience in the shipping industry and in maritime investments provide her the qualifications and skills to serve as a member of our Board of Directors.6468, has served as Chairman of the Board and as our President and Chief Executive Officer and as President of Dorian LPG (USA) LLC since our inception in July 2013. See “Proposal"Proposal 1. Election of Directors—Directors Continuing in Office Until the 20162019 Annual Meeting.”65,68, has served as Chief Executive Officer of Dorian LPG (USA) LLC and a director of the Company since our inception in July 2013. See “Proposal"Proposal 1. Election of Directors—Nominees for Election for a Three-Year Term Expiring at the 20182021 Annual Meeting.”Alexander C. Hadjipateras, 35, has served as Executive Vice PresidentMeeting of Business Development of Dorian LPG (USA) LLC since July 2013 and is the son of John Hadjipateras. Mr. Hadjipateras’s main areas of focus are business development and commercial strategy, and he also assists in the management of the Company’s operations in Athens, Greece. Since joining Eagle Ocean in 2006, Mr. Hadjipateras has been involved in managing its Aframax and Very Large Gas Carrier newbuilding program at Sumitomo Shipyard in Japan and Hyundai Heavy Industries in South Korea, and also has participated in its Aframax spot chartering from Highbury. Mr. Hadjipateras has worked closely with oil majors to secure approval for future time charter and newbuilding business development opportunities. Prior to joining Eagle Ocean, Mr. Hadjipateras worked as a Business Development Manager at Avenue AShareholders."| Razorfish, a leading digital consultancy and advertising agency based in San Francisco. Mr. Hadjipateras graduated from Georgetown University with a BA in history.47,51, has served as our Chief Financial Officer, Treasurer and Principal Financial and Accounting Officer since July 2013, as Chief Financial Officer and treasurerTreasurer of Dorian LPG (USA) LLC since July 2013, and as head of corporate development for Eagle Ocean from 2011 to 2013. From 2004 to 2011, Mr. Young was a Senior Managing Director and member of the Investment Committee at Irving Place Capital (“IPC”("IPC"), where he worked on investments in the industrial, transportation and business services sectors. Prior to joining IPC, Mr. Young was a principal at Harvest Partners, a New York-based middle market buyout firm, from 1997 to 2004. There, heMr. Young was active in industrial transactions and played a key role in the firm’sfirm's multinational investment strategy. Prior to his career in private equity, Mr. Young was an investment banker with Merrill Lynch & Co., Inc. and SBC Warburg Dillon Read and its predecessors in New York, Zurich, and London. Mr. Young holds an AB from Dartmouth College and an MBA from the Wharton School of the University of Pennsylvania with a major in accounting.Meetingsof Directors and BoardPresident and Chief Executive Officer of the Company. Mr. Alexander C. Hadjipateras' main areas of focus are business development, vessel sales and purchases, and assisting in the management of the Company's operations in Athens, Greece. Since joining Eagle Ocean in 2006, Mr. Alexander C. Hadjipateras has been involved in its newbuilding program at Sumitomo Shipyard in Japan and Hyundai Heavy Industries in South Korea and has also participated in its Aframax spot chartering. Prior to joining Eagle Ocean, Mr. Alexander C. Hadjipateras worked as a Business Development Manager at Avenue A/ Razorfish, a leading digital consultancy and advertising agency based in San Francisco. Since November 2016, Mr. Alexander C. Hadjipateras has served as a Director on the Members Committee Information2015,2018, the Board of Directors held a total of fifteenfive meetings including ten by(including regularly scheduled and special meetings) and acted seven times via unanimous written consent. In that fiscal year, all directors attended at least 75% of the aggregate number of meetings of the Board held during the period for which they were directors and the committees on which they served. Each directorOur directors are expected to attend our annual meeting of shareholders, with those directors unable to attend expected to notify the Chairman of the Board in advance. Three directors then in office attended our 20142017 annual meeting.meeting of shareholders. From time to time, the Board may create special committees to address specific matters such as financial or corporate transactions. During the fiscal year ended March 31, 2015, the Board held one special committee meeting to address various ad hoc corporate matters.compensation committee (the “Compensation Committee”)Compensation Committee and the Nominating and Corporate Governance Committee. Our Board may, in the future, establish such other committees as it determines from time to time. The charter of each of these committees is available on our website athttp://dorianlpg.investorroom.com/Corporate-Governancewww.dorianlpg.com/investor-center/corporate-governance/. You may also request printed copies of the charter(s) by sending a written request to our Corporate Secretary at the address set forth on the cover of this Proxy Statement.Coleman,Lorentzen and Kalborg and Savett,Ms. Tan, with Mr. KalborgLorentzen serving as its chairperson. The Audit Committee meets a minimum of threefour times a year, andperiodically meets with the Company’sCompany's management, internal auditors and independent outsideexternal auditors separately from the Board.Board. During the fiscal year ended March 31, 2015,2018, the Audit Committee held four meetings.Company’sCompany's financial statements and its financial reporting practices. To that end, the Audit Committee has direct responsibility for the appointment, replacement, compensation, retention, termination and oversight of the work of the independent registered public accounting firm engaged to prepare an audit report, to perform other audits and to perform review or attest services for us. The Audit Committee confers directly with the Company’sCompany's independent registered public accounting firm. The Audit Committee also assesses the outside auditors’auditors' qualifications and independence. The Audit Committee is responsible for the pre-approval of all audit and non-audit services performed by our independent registered public accounting firm. The Audit Committee acts on behalf of the Board in reviewing the scope of the audit of the Company’sCompany's financial statements and results thereof. Our Chief Financial Officer has direct access to the Audit Committee. The Audit Committee also oversees the operation of our internal controls covering the integrity of our financial statements and reports, compliance with laws, regulations and corporate policies, and the qualifications, performance and independence of our independent registered public accounting firm. Based on this oversight, the Audit Committee advises the Board on the adequacy of the Company’sCompany's internal controls, accounting systems, financial reporting practices and the maintenance of the Company’sCompany's books and records. The Audit Committee is also responsible for determining whether any waiver of our Code of Ethics will be permitted and for reviewing and determining whether to approve any related party transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K. Annually, the Audit Committee recommends that the Board request shareholder ratification of the appointment of the independent registered public accounting firm. The responsibilities and activities of the Audit Committee are further described in “Report"Report of the Audit Committee”Committee" and the Audit Committee charter.TheCompany’sCompany's financial statements to serve on the Audit Committee and is financially literate within the meaning of the NYSE listing standards as interpreted by the Board. The Board has further determined that Mr. Coleman satisfiesMessrs. Lorentzen and Kalborg satisfy the definition of “audit"audit committee financial expert”expert" as defined under the federal securities laws.one member.Messrs. Coleman, Kalborg and McAvity, with Mr. Coleman serving as its chairperson. The Compensation Committee meets a minimum of one time a year, and holds such additional meetingsas often as it deems necessary to perform its responsibilities.necessary. During the fiscal year ended March 31, 2015,2018, the Compensation Committee held one meeting.Committee’sCompensation Committee's oversight includes all matters related to the compensation of our executive officers. The Compensation Committee is also charged in particular with reviewing and approving corporate goals relevant to the compensation of our Chief Executive Officer and Chief Financial Officer, evaluating both officers’officers' performance in light of those goals, and determining and approving both officers’officers' compensation based on the evaluation. The Compensation Committee also reviews and approves employment agreements, compensation involving family members, severance agreements, change of control agreements and other similar agreements relating to executive officers, and makes general recommendations to the Board on the Company’sCompany's compensation philosophy.Mr.Messrs. Coleman, the sole member of our Compensation Committee, meetsKalborg and McAvity meet the independence requirements of the NYSE listing standards, including the additional independence requirements applicable to the members of a compensation committee. The Board has specifically considered all factors relevant to determining whether Mr.any of Messrs. Coleman, Kalborg or McAvity has a relationship to us which is material to his ability to be independent from management in connection with the duties of a compensation committeeCompensation Committee member.one member.Messrs. McAvity and Coleman and Ms. Tan, with Mr. McAvity serving as its chairperson. The Nominating and Corporate Governance Committee meets as often as it deems necessary. During the fiscal year ended March 31, 2015,2018, the Nominating and Corporate Governance Committee did not hold a meeting.Company’sCompany's Corporate Governance Guidelines, and recommends to the Board nominees to fill vacancies on the Board. The Nominating and Corporate Governance Committee makes recommendations from time to time regarding the size of the Board. The Nominating and Corporate Governance Committee also periodically evaluates and makes recommendations regarding corporate governance guidelines (the “Corporate"Corporate Governance Guidelines”Guidelines"). See “Corporate"Corporate Governance Matters—Corporate Governance Guidelines.”" The responsibilities and activities of the Nominating and Corporate Governance Committee are further described in the Nominating and Corporate Governance Committee charter. The Board may assign other duties to the Nominating and Corporate Governance Committee from time to time as necessary.Mr.Messrs. Coleman the sole member of the Nominating and Corporate Governance Committee, meetsMcAvity and Ms. Tan meet the independence requirements of the NYSE listing standards.candidate’scandidate's ability to devote the necessary time for service as a director (including directorships and other positions held at other corporations and organizations).management’smanagement's formulation and implementation of strategic initiatives. The Board believes this diversity is demonstrated in the range of experiences, qualifications and skills of the current members of the Board. In the Board’sBoard's executive sessions and in annual performance evaluations conducted by the Board and its committees, the Board from time to time considers whether the Board’sBoard's composition promotes a constructive and collegial environment. In determining whether an incumbent director should stand for reelection, the Nominating and Corporate Governance Committee considers the above factors, as well as that director’sdirector's personal and professional integrity, attendance, preparedness, participation and candor, the individual’sindividual's satisfaction of the criteria for the nomination of directors set forth in our Corporate Governance Guidelines and other relevant factors as determined by the Board.Company’sCompany's shareholders to nominate candidates for Board membership. The Committee will consider any such nominee in the same manner in which it evaluates other potential nominees, so long as the shareholder (i) submits a notice of nomination within the timeframe specified by Article III, Section 3 of the Company’sCompany's bylaws to the chairpersonChairperson of the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902 and (ii) includes in its notice the required information specified by said section of the Company’sCompany's bylaws. Further information about the time frame for shareholder proposals can be found elsewhere in this Proxy Statement under “Shareholder"Shareholder Proposals.”" A summary of the information that must appear in the notice is set forth below.· the proposed nominee’snominee's name, age, business address and residence address;· the proposed nominee’snominee's principal occupation or employment;· the number of shares of capital stock of the Company owned beneficially or of record by the proposed nominee; and · any other information relating to the proposed nominee that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors by rules and regulations applicable to the Company. · the shareholder’sshareholder's name, record address and tax identification number;· the number of shares of capital stock of the Company owned beneficially and of record by the shareholder; · a description of all arrangements or understandings between the shareholder and each proposed nominee and any other person (including their names) pursuant to which the shareholder is making the nomination; · a representation that the shareholder intends to appear, in person or by proxy, at the annual meeting of shareholders to nominate the proposed nominee named in its notice; and · any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors by rules and regulations applicable to the Company. shareholder’sshareholder's notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.Mr.Messrs. Coleman, Kalborg and McAvity served ason the sole of our Compensation Committee. The current memberEach of our Compensation Committeethem is not, nor has hehave any of them ever been, an officer or employee of the Company or any of its subsidiaries. In addition, during the last fiscal year, no executive officer of the Company served as a member of the board of directors or the compensation committee of any other entity that has one or more executive officers serving on our Board or our Compensation Committee.“Company”"Company"), the Audit Committee oversees the operation of the Company’sCompany's system of internal controls in respect of the integrity of its financial statements and reports, compliance with laws, regulations and corporate policies, and the qualifications, performance and independence of its independent registered public accounting firm. The Audit Committee’sCommittee's function is one of oversight, recognizing that the Company’sCompany's management is responsible for preparing its financial statements, and the Company’sCompany's independent registered public accounting firm is responsible for auditing those financial statements.20152018 and management’smanagement's assessment of internal control over financial reporting as of March 31, 2015.Hadjipavlou Sofianos & CambanisCertified Public Accountants S.A. (“Deloitte”("Deloitte"), the independent registered public accounting firm, the audited financial statements of the Company for the year ended March 31, 20152018, and the other matters required to be discussed by the Statement on Auditing Standards No. 16, adopted by the Public Company Accounting Oversight Board (“PCAOB”).Standard 1301. The Audit Committee has also received the written disclosures in the letter from Deloitte required by the applicable requirements of the PCAOBPublic Company Accounting Oversight Board regarding Deloitte’sDeloitte's independence and has discussed with Deloitte its independence.Company’sCompany's audited financial statements for the year ended March 31, 20152018 be included in its annual report on Form 10-K for the fiscal year then ended. The Audit Committee has selected Deloitte as our independent registered public accounting firm for the fiscal year ending March 31, 20162019, and has asked the shareholders to ratify the selection. (Chair)Thomas J. ColemanDavid G. Savett15As a domestic issuer, weWe currently comply with the NYSE listing standards applicable to U.S. companies, as explained below. Pursuant to an exception set forth in Section 303A.11 of the NYSE Listed Company Manual, foreign private issuers listed on the NYSE are not required to comply with all of the corporate governance practices followed by U.S. companies, available atwww.nyse.com, and may instead opt to follow home country practice. The Company was previously a foreign private issuer, and no longer possesses that status as of September 30, 2014. While we were a foreign private issuer, we complied with the NYSE standards applicable to U.S. listed companies, except certain corporate governance practices described below for which we followed the corporate governance rules of Marshall Islands law. However, we now comply the NYSE standards applicable to U.S. listed companies and no longer rely on any of the below noted exceptions.·Upon the completion of our initial public offering, a majority of our directors did not qualify as independent under the independence tests set forth in Section 303A of the NYSE Listed Company Manual. As further described under “—Director Independence” below, at least a majority of our Board currently consists of independent directors.·The NYSE requires, among other things, that a listed company have an audit committee with a minimum of three independent members. As permitted under Marshall Islands law, our audit committee initially consisted of one independent director while we were a foreign private issuer. As further described under “Board Meetings and Board Committee Information—Audit Committee,” our Audit Committee consists entirely of directors who meet the independence requirements of the NYSE listing standards and Rule 10A-3 of the Exchange Act.·The NYSE requires listed companies to obtain prior shareholder approval to adopt or materially revise any equity compensation plan. As a foreign private issuer, and as permitted under Marshall Islands law and our bylaws, we were not required to seek shareholder approval to adopt or revise equity compensation plans, including our equity incentive plan.·The NYSE requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. As described under “—Corporate Governance Guidelines,” as a foreign private issuer we were not required to, but our Board of Directors has now adopted Corporate Governance Guidelines as required under the NYSE listing standards.Board’sBoard's role in overseeing the compensation of the Chief Executive Officer, Board committee structures and assignments, and the Board’sBoard's access to management and independent advisors. A copy of our Corporate Governance Guidelines is available on our website athttp://dorianlpg.investorroom.com/Corporate-Governancewww.dorianlpg.com/investor-center/corporate-governance/. You may also request a printed copy of the guidelines free of charge by sending a written request to our Corporate Secretary at the address on the cover of this proxy statement.“independent director”"independent director" as defined under the applicable NYSE standards, SEC rules and the Company’sCompany's Corporate Governance Guidelines: Messrs. Thomas J. Coleman, Ted Kalborg, David Savett,Øivind Lorentzen and Malcolm McAvity, and Ms. Christina Tan. Therefore, the Board has satisfied its objective as set forth in the Corporate Governance Guidelines as well as NYSE listing standards, requiring that at least a majority of the Board consist of independent directors. As required under the NYSE listing standards, in making its determinations, the Board of Directors has considered whether any director has a direct or indirect material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. In addition, the Board considered a series of certain specific transactions, relationships and arrangements expressly enumerated in the NYSE independence definition. Specifically, a member of the Board of Directors may be considered independent if such member:· has not been employed by the Company within the last three years (other than as interim Chairman of the Board of Directors or interim Chief Executive Officer); · does not have an immediate family member who is, or has been, employed by the Company as an executive officer within the last three years; · has not received, and does not have an immediate family member who has received, more than $120,000 in direct compensation from the Company during any twelve-month period within the last three years, other than for services as a member of the Board of Directors or compensation for prior service (including pension or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service); provided that, compensation received by a director for former service as an interim Chairman or Chief Executive Officer or other executive officer need not be considered in determining independence under this test; provided further that, compensation received by an immediate family member for service as an employee of the Company (other than an executive officer) need not be considered in determining independence under this test; · (A) is not a current partner or employee of a firm that is the Company’sCompany's internal or external auditor; (B) does not have an immediate family member who is a current partner of a firm that is the Company’sCompany's internal or external auditor; (C) does not have an immediate family member who is a current employee of a firm that is the Company’sCompany's internal or external auditor and personally works on the Company’sCompany's audit; and (D) is not, and has not been within the last three years, and does not have an immediate family member who is, or has been within the last three years, a partner or employee of a firm that is the Company’sCompany's internal or external auditor and personally worked on Company’sCompany's audit within such time;· is not, and has not been within the last three years, and does not have an immediate family member who is, or has been within the last three years, employed as an executive officer of a public company where any of the Company’sCompany's present executive officers at the same time serves or served as a member of such public company’scompany's compensation committee; and· is not, and has not been within the last three years, an employee of a significant customer or supplier of the Company, including any company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’scompany's consolidated gross revenues, and does not have an immediate family member who is, or has been within the last three years, an executive officer of such a significant customer or supplier; provided that contributions to not- for-profit organizations shall not be considered payments for purposes of this test.director’sdirector's business and personal activities and relationships as they may relate to us and our management, the Board has concluded that each such directorof the aforementioned directors has no relationshipsrelationship with the Company that would interfere with such director’sdirector's exercise of independent judgment in carrying out his responsibilities as a director of the Company.“Code"Code of Ethics”Ethics"), which fulfills applicable guidelines issued by the SEC. Our Code of Ethics can be found on our website atwww.dorianlpg.comhttp://www.dorianlpg.com/investor-center/corporate-governance/. We will also provide a hard copy of our Code of Ethics free of charge upon written request to Dorian LPG Ltd. c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902. Any waiver that is granted, and the basis for granting the waiver, will be publicly communicated as appropriate, including through posting on our website, as soon as practicable. We granted no waivers under our Code of Ethics during the fiscal year ended March 31, 2015.2018. We intend to post any amendments to and any waivers of our Code of Ethics on our website within four business days.Under our policies, ourOur Chief Financial Officer, in consultation with our outside counsel, is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for determining, based on the relevant facts and circumstances, whether a related person has a direct or indirect material interest in the transaction. Under our policy, transactions that (i) involve directors, director nominees, executive officers, significant shareholders or other “related persons”"related persons" in which the Company is or will be a participant and (ii) are of the type that must be disclosed under the SEC’sSEC's rules must be referred by the Chief Financial Officer, after consultation with our outside counsel, to our Audit Committee for the purpose of determining whether such transactions are in the best interests of the Company. Under our policy, it is the responsibility of the individual directors, director nominees, executive officers and holders of five percent or more of the Company’sCompany's common stock to promptly report to our Chief Financial Officer all proposed or existing transactions in which the Company and they, or any related person of theirs, are parties or participants. The Chief Financial Officer (or the Chief Executive Officer, in the event the transaction in question involves the Chief Financial Officer or a related person of the Chief Financial Officer) is then required to furnish to the chairperson of the Audit Committee reports relating to any transaction that, in the Chief Financial Officer’sOfficer's judgment with advice of outside counsel, may require reporting pursuant to the SEC’sSEC's rules or may otherwise be the type of transaction that should be brought to the attention of the Audit Committee. The Audit Committee considers material facts and circumstances concerning the transaction in question, consults with counsel and other advisors as it deems advisable and makes a determination or recommendation to the Board of Directors and appropriate officers of the Company with respect to the transaction in question. In its review, the Audit Committee considers the nature of the related person’sperson's interest in the transaction, the material terms of the transaction, the relative importance of the transaction to the related person, the relative importance of the transaction to the Company and any other matters deemed important or relevant. Upon receipt of the Audit Committee’sCommittee's recommendation, the Board of Directors or officers, excluding in all such instances the related party, take such action as deemed appropriate and necessary in light of their respective responsibilities under applicable laws and regulations.non-managementindependent directors hold an executive session without non-independent directors or management at each regularly scheduled Board meeting, withleast twice a year. Our Corporate Governance Guidelines allow for an independent director to be selected by a majority of the independent members of the Board of Directors present presidingto preside over each such executive session. AtIf a presiding director is not chosen to preside at all executive sessions, then the next regularly scheduled meetingresponsibility will rotate quarterly among the chairs of the Board of Directors, the Board intends to select a directorAudit Committee, Compensation Committee, and Nominating and Corporate Governance Committees. Presently, Mr. Thomas J. Coleman has been chosen to serve as Lead Director from among the members oflead independent director at all executive sessions. For the fiscal year ended March 31, 2018, our Board held three executive sessions without non-independent directors or management present. of Directors who are determined by the Board of Directors to be independent. Our Corporate Governance Guidelines also require that, at least twice each year, the independent members of the Board of Directors meet in executive session.Board’sBoard's functions, including magazines, solicitations or advertisements, the contents may be discarded.Board’sBoard's Role in Risk OversightCompany’sCompany's management. However, the Board believes that oversight of risk management is one of its fundamental responsibilities. The Audit Committee is primarily responsible for oversight of the quality and integrity of the Company’sCompany's financial reporting process, internal controls over financial reporting and the Company’sCompany's compliance programs. The Compensation Committee is responsible for reviewing compensation-related risks. The Nominating and Corporate Governance Committee is responsible for oversight of the Company’sCompany's corporate governance programs, including the Code of Ethics. Management regularly reports to the Board and its committees on the risks that the Company may face and the steps that management is taking to mitigate those risks.Security Ownership of Certain Beneficial Owners and Management and Related Shareholder MattersMay 15, 2015,November 6, 2018 unless otherwise indicated below by (i) each person, group or entity known by the Company to be the beneficial owner of more than 5% of the outstanding shares of its common stock, (ii) each of our directors and director nominees, (iii) each of our named executive officers and (iv) all of our executive officers and directors serving as of May 29, 2015, as a group. Unless otherwise stated, the address of each named executive officer and director is c/o Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902. 5% Shareholders Scorpio Tankers Inc.(2) 9,392,083 16.2 % Kensico Capital Management Corp(3).. 8,014,837 13.8 % Dorian Holdings LLC(4) 4,667,135 8.0 % Wellington Management Group LLP(5) 5,139,002 8.9 % SEACOR Holdings Inc.(6) 9,327,135 16.1 % Directors and Executive Officers John Hadjipateras 607,569 1.0 % Charles Fabrikant(7) 10,000 * Thomas J. Coleman(8) 8,014,837 13.8 % Ted Kalborg — — John Lycouris 188,000 * David G. Savett(9) 1,412,698 2.4 % Malcolm McAvity — — Christina Tan — — Øivind Lorentzen 10,000 * Theodore B. Young 104,082 * Alexander C. Hadjipateras 30,000 * All directors and executive officers as a group (11 persons) 10,377,186 17.9 % Name and Address of Beneficial Owner 5% Shareholders 8,014,837 14.5 % 7,826,560 14.2 % 6,333,772 11.5 % 5,200,000 9.4 % Directors and Executive Officers 8,030,740 14.6 % 5,995,680 10.9 % 490,513 * 149,494 * 71,817 * 55,903 * 35,903 * 35,050 * 15,903 * 14,587,892 26.4 %
* | The percentage of shares beneficially owned by such director or |
(1) | Each share of common stock is entitled to one vote on matters on which common shareholders are eligible to vote. Beneficial ownership described in the table above has been obtained by the Company only from public filings and information provided to the Company by the listed shareholders for inclusion herein. Beneficial ownership is required to be determined by the shareholder in accordance with the rules |
(2) | Percentages based on a total of |
(3) | According to filings made with the SEC on July 14, 2014 and June 6, 2014, Kensico |
(4) | According to |
Reporting Person | Number of Shares with Sole Voting and Dispositive | Number of Shares with Shared Voting and Dispositive Power | Aggregate Number of Shares Beneficially Owned | Percent of Class Beneficially Owned | ||||||||||||
Dorian Holdings LLC | — | 4,667,135 | 4,667,135 | 8.0 | % | |||||||||||
Astromar LLC | — | 4,667,135 | 4,667,135 | 8.0 | % |
According to filings made with the SEC, Dorian Holdings is wholly owned by Astromar LLC (“Astromar”), of which John Hadjipateras, our Chairman, President and Chief Executive Officer, is a shareholder and director. According to filings made with the SEC, the principal business address of each of Dorian Holdings and Astromar is c/o Eagle Ocean Transport Inc., 27 Signal Road, Stamford, Connecticut 06902. Dorian Holdings may have made additional transactions in our common stock since its most recent filings with the SEC. Accordingly, the information presented may not reflect all of the shares currently beneficially owned by Dorian Holdings.
(5) | According to |
(6) | According to |
(7) |
SEC, Mr. Coleman serves as co-President of Kensico alongside Mr. Lowenstein. As a controlling person of Kensico, Mr. Coleman thus may be deemed to also beneficially own the entire number of |
(8) | Mr. Hadjipateras possesses sole voting power over 2,035,678 shares, shared voting power over 3,960,002 shares, sole dispositive power over 2,035,678 shares and shared dispositive power over 72,080 shares. Specifically, Mr. Hadjipateras may be deemed to beneficially own (i) 2,035,678 shares over which he has sole voting and dispositive power; (ii) 26,166 shares by virtue of pledges of such shares given under funding and security agreements with each of Theodore B. Young and Alexander J. Ciaputa, pursuant to which Mr. Hadjipateras may be deemed to share the power to vote and dispose of such shares; (iii) 25,000 shares through Mr. Hadjipateras' spouse, 250 shares through Mr. Hadjipateras' son, and 20,664 through the LMG Trust (Mr. Hadjipateras and his wife are trustees of the LMG Trust and the beneficiary of the LMG Trust is one of their children), pursuant to which Mr. Hadjipateras may be deemed to share the power to vote and dispose of such shares; and (iv) 3,887,922 shares by virtue of a revocable proxy granted to Mr. Hadjipateras by each of Mark C. Hadjipateras, Angeliki C. Hadjipateras, Aikaterini C. Hadjipateras, Konstantinos Markakis, Olympia Kedrou, Chrysanthi Xyla, Scott M. Sambur, as Trustee of the Kyveli Trust, and George J. Dambassis, pursuant to which Mr. Hadjipateras may be deemed to share the power to vote such shares. Mr. Hadjipateras disclaims beneficial ownership of the reported Dorian shares, and the proceeds thereof, except to the extent of any pecuniary interest therein. |
(9) |
(10) | According to filings made with the SEC, Mr. Young has pledged 13,083 shares to John C. Hadjipateras as security under a funding and security agreement. |
(11) | According to filings made with the SEC, Mr. Kalborg beneficially owns 15,903 Dorian common shares. According to filings made with the SEC, Christmas Common Investments Ltd., of which Kalborg Trust is the sole shareholder, currently holds 20,000 common shares (the "Trust Shares"). Mr. Kalborg and other members of his family are |
(12) | To avoid double counting: (i) the 280,028 common shares that may be deemed to be |
2019
2015 | 2014 | |||||||
Audit Fees(1) | $ | 527,706 | $ | 653,391 | ||||
All other fees(2) | 2,020 | 2,020 | ||||||
Total | $ | 529,726 | $ | 655,411 |
2018 | 2017 | |||||||
Audit fees(1) | $ | 407,859 | $ | 355,757 | ||||
All other fees(2) | — | 1,914 | ||||||
Total | $ | 407,859 | $ | 357,671 |
(1) | Audit fees consist of aggregate fees for professional services, including out-of-pocket expenses, provided in connection with the audits of our consolidated financial statements, reviews of interim financial statements included in filings with the SEC, including services performed in connection with our |
2018.
Name | Fees earned or paid in cash ($)(1) | Stock Awards ($)(2) | Total ($) | |||||||||
Thomas J. Coleman | 85,000 | 48,691 | 133,691 | |||||||||
Ted Kalborg | 75,000 | 48,691 | 123,691 | |||||||||
Øivind Lorentzen | 50,000 | 48,691 | 98,691 | |||||||||
Malcolm McAvity | 75,000 | 48,691 | 123,691 | |||||||||
Christina Tan | 70,000 | 48,691 | 118,691 |
Represents cash compensation earned for services rendered as a director for the fiscal year ended March 31, 2018. |
(2) | Represents equity compensation for services rendered as a director for the fiscal year ended March 31, 2018. The value of each stock award equals the grant date fair values of $8.18, $6.82, $8.22, and $7.49 per share on June 30, 2017, September 29, 2017, December 29, 2017 and March 29, 2018, respectively. |
· | John C. Hadjipateras, our Chief Executive Officer, President, and Chairman of the Board of Directors; |
· | John C. Lycouris, Chief Executive Officer of Dorian LPG (USA) LLC and a Director on our Board of Directors; and |
· | Theodore B. Young, our Chief Financial Officer. |
Name and Principal Position | Fiscal Year Ended March 31, | Salary | Bonus(1) | Stock Awards(2) | All Other Compensation(3) | Total | ||||||||||||||||
John C. Hadjipateras(4) | 2018 | $ | 550,000 | $ | 601,500 | $ | 549,000 | $ | 8,100 | $ | 1,708,600 | |||||||||||
Chief Executive Officer | 2017 | $ | 550,000 | $ | 751,500 | $ | 586,500 | $ | 10,275 | $ | 1,898,275 | |||||||||||
John C. Lycouris(5) | 2018 | $ | 450,000 | $ | 251,500 | $ | 219,600 | $ | 8,100 | $ | 929,200 | |||||||||||
Chief Executive Officer, Dorian LPG (USA) LLC | 2017 | $ | 450,000 | $ | 301,500 | $ | 234,600 | $ | 9,525 | $ | 995,625 | |||||||||||
Theodore B. Young | 2018 | $ | 400,000 | $ | 251,500 | $ | 201,300 | $ | 8,100 | $ | 860,900 | |||||||||||
Chief Financial Officer | 2017 | $ | 400,000 | $ | 276,500 | $ | 215,050 | $ | 9,150 | $ | 900,700 | |||||||||||
(1) | Represents cash bonuses to each of the named executive officers awarded by the Compensation Committee. The table above excludes cash bonuses awarded by the Compensation Committee after March 31, 2018 to each of Mr. Hadjipateras, Mr. Lycouris and Mr. Young in the amounts of $300,000, $200,000, and $200,000, respectively. |
(2) | The amounts set forth next to each award represent the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value reported in these columns are set forth in Note 11 of the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended March 31, 2018. The table above excludes one-time restricted share awards granted by the Compensation Committee after March 31, 2018 to each of Mr. Hadjipateras, Mr. Lycouris and Mr. Young in the amounts of 64,700 restricted shares, 20,000 restricted shares, and 20,000 restricted shares, respectively, with the restricted shares vesting in equal installments on the grant date and on the first, second, and third anniversary of the grant date. |
(3) | The amounts set forth represent contributions by the Company to each of the named executive officer's 401(k) defined contribution plan. |
(4) | As our Chief Executive Officer, Mr. Hadjipateras does not receive any additional compensation for his services as a director. |
(5) | As the Chief Executive Officer of our subsidiary, Dorian LPG (USA) LLC, Mr. Lycouris does not receive any additional compensation for his services as a director. |
vessel management services and the associated agreements for our fleet were transferred from DHSA and are now provided through our wholly owned subsidiaries Dorian LPG (USA) LLC, Dorian LPG (UK) Ltd. and Dorian LPG Management Corp. Eagle Ocean continues to incur related travel costs for certain transitioned employees as well as office-related costs, for which we reimbursed Eagle Ocean $0.1 million, $0.4 million and $0.8 million for the years ended March 31, 2018, 2017, and 2016, respectively. Such expenses are reimbursed based on their actual cost.
Stock Awards | ||||
Name | Grant Date | Number of shares or units of stock that have not vested(1) | Market value of shares or units of stock that have not vested(2) | |
John C. Hadjipateras | 6/15/2017 | 56,250(3) | $421,313 | |
6/15/2016 | 37,500(4) | $280,875 | ||
6/30/2014 | 233,333(5) | $1,747,664 | ||
John C. Lycouris | 6/15/2017 | 22,500(3) | $168,525 | |
6/15/2016 | 15,000(4) | $112,350 | ||
6/30/2014 | 123,333(5) | $923,764 | ||
Theodore B. Young | 6/15/2017 | 20,625(3) | $154,481 | |
6/15/2016 | 13,750(4) | $102,988 | ||
6/30/2014 | 60,000(5) | $449,400 | ||
(1) | The table above excludes one-time restricted share awards granted by the Compensation Committee after March 31, 2018, to each of Mr. Hadjipateras, Mr. Lycouris and Mr. Young in the amounts of 64,700 restricted shares, 20,000 restricted shares, and 20,000 restricted shares, respectively, with the restricted shares vesting in equal installments on the grant date and on the first, second, and third anniversary of the grant date. |
(2) | Fair market value of our common stock on March 31, 2018. The amount listed in this column represents the product of the closing market price of the Company's stock as of March 31, 2018 ($7.49) multiplied by the number of shares of stock subject to the award. |
(3) | Granted on June 15, 2017 and vested or vests ratably on each of the grant date and first, second and third anniversaries of the date of grant. |
(4) | Granted on June 15, 2016 and vested or vests ratably on each of the grant date and first, second and third anniversaries of the date of grant. |
(5) | Granted on June 30, 2014 and vested or vests ratably on each of the third, fourth and fifth anniversaries of the date of grant. |
Purpose and Background
Each year, the compensation committee of our Board of Directors and our management team review our overall compensation strategy and determine the allocations of cash and equity compensation. The purpose of the 2014 Equity Incentive Plan is to provide us withPlan.
We strongly believe that the approval of the 2014 Equity Incentive Plan is essential to our continued success. The compensation committee, the Board and management believe that equity awards motivate high levels of performance, align the interests of our personnel and consultants with our shareholders by giving officers, employees, directors and consultants the perspective of an owner with an equity stake"Change in the Company, and effectively recognize their contributions to our success. The 2014 Equity Incentive Plan will be the sole available plan for granting equity compensation to our officers, employees, directors and consultants.
A vote to approve this proposal will also constitute a vote to approve the material terms of the performance goals under the 2014 Equity Incentive Plan, i.e., the employees eligible to receive awards under the plan (as described under “—2014 Equity Incentive Plan—Eligibility” below), the business criteria on which performance goals may be based (as described under “—2014 Equity Incentive Plan—Performance Compensation Awards” below) and the limits on the maximum aggregate amounts of awards that may be made to any individual participant under the plan (as described under “—2014 Equity Incentive Plan—Individual Limits” below).
Description of the 2014 Equity Incentive Plan
The material terms and provisions of the 2014 Equity Incentive Plan, as amended, are summarized below. This summary, however, does not purport to be a complete description of the 2014 Equity Incentive Plan and is qualified in its entirety by reference to the complete text of the 2014 Equity Incentive Plan, a copy of which is included asAppendix A to this Proxy Statement.
Administration.The plan shall be administered by a committee appointed by the board of directors among its members (which may be the Compensation Committee) (such committee, the “Administrator”) and shall be comprised, unless otherwise determined by the Board, solely of not less than two members who shall be (i) “Non-Employee Directors” within the meaning of Rule 16b-3 (or any successor rule) under the U.S. Securities Exchange Act of 1934, as amended (the “1934 Act”), and (ii) “outside directors” for purposes of Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The Administrator is authorized, subject to the terms of the plan, to establish such rules and regulations as it deems necessary for the proper administration of the plan and to make such determinations and interpretations and to take such action in connection with the plan and any awards granted hereunder as it deems necessary or advisable.
Shares Available for Awards.Subject to adjustment in the event of corporate transaction or event, affecting the shares of common stock, the maximum number of shares of common stock of the Company, par value $0.01, that may delivered to participants (including permitted assignees) and their beneficiaries under the plan shall be 2,850,000, which may be authorized and unissued or treasury shares. Any shares of common stock covered by an Award (or portion of an award) granted under the plan which is forfeited or canceled, expires or, in the case of an Award other than an option, is settled in cash, shall be deemed not to have been delivered for purposes of determining the maximum number of shares available for delivery under the plan. The following shares of common stock may not again be made available for delivery to participants under the plan during the term of the plan: (i) shares of common stock not issued or delivered as a result of the net settlement of an outstanding option or stock appreciation right or (ii) shares of common stock used to pay the exercise price or withholding taxes related to an outstanding award. Shares of common stock delivered under the plan in settlement, assumption or substitution of outstanding awards (or obligations to grant future Awards) under the plans or arrangements of another entity shall not reduce the maximum number of shares of common stock available for delivery under the plan, to the extent that such settlement, assumption or substitution is a result of the Company or its subsidiaries or affiliates acquiring another entity (or an interest in another entity).
Individual Limits.The maximum number of shares of common stock with respect to which awards may be granted or measured to any individual participant under the plan during any one calendar year during the term of the plan, and the maximum number of shares of common stock with respect to which awards may be granted under the Plan in the form of options and stock appreciation rights to any individual participant under the Plan during any one calendar year, shall not exceed 1,425,000, and the maximum performance-based awards that may be granted to any one participant under the plan during any one calendar year shall not exceed 1,425,000 shares of common stock (or, in the event the performance-based awards are paid in cash, other securities, other Awards or other property, the equivalent cash value of such shares of common stock on the first day of the performance period to which such award relates), and the maximum number of shares of common stock that may be granted to any non-employee director of the Company (with such status as a non-employee director being determined as the date of grant of the applicable Award for this purpose) in any one calendar year shall not exceed 142,500 shares of common stock (or, in the event the awards are paid in cash, other securities, other awards or other property, the equivalent cash value of such shares of common stock on the first day of the calendar year in which such Awards are granted).
Eligibility.The persons eligible to receive awards under the plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its subsidiaries and affiliates and consultants and service providers to (including persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and affiliates, as well as entities wholly-owned or generally exclusively controlled by such persons, as the plan administrator shall select.
Options and Stock Appreciation Rights.Under the terms of the plan, stock options and stock appreciation rights granted under the plan would have an exercise price as determined by the plan administrator, but in no event would the exercise price be less than the fair market value of a common share on the date of grant. We expect that options and stock appreciation rights would be exercisable at times and under conditions as determined by the plan administrator, but in no event would they be exercisable later than ten years from the date of grant.
Stock Awards.Under the terms of the plan, the plan administrator would also be able to grant shares issued or transferred to participants with or without other payments therefor. Such stock awards may be subject to such terms and conditions as the plan administrator may determine, including, without limitation, restrictions on the sale or other disposition of such shares, and/or the right of the Company to reacquire such shares for no consideration upon termination of the participant’s employment or service within specified periods, and the plan administrator would have the authority to determine whether the grantee of any such share award would have all the rights of a holder of common shares of the Company, including the right to receive dividends and to vote the shares.
Restricted Stock Units.Under the terms of the plan, the plan administrator is permitted to grant awards of restricted stock units subject to vesting criteria as determined by the plan administrator. Restricted stock units will be paid out in the form of common shares unless the plan administrator, with the consent of the participant, provides for payment in cash or partly in cash and partly in common shares.
Performance Compensation Awards.As determined by the Administrator in its sole discretion, either the vesting or the exercise of such performance-based awards shall be based on one or more business criteria that apply to the individual participant, one or more business units of the Company or the Company as a whole. The business criteria shall be as follows, individually or in combination, adjusted in such manner as the Administrator shall determine: (i) net sales; (ii) pretax income before allocation of corporate overhead and bonus; (iii) budget; (iv) earnings per share; (v) net income; (vi) division, group or corporate financial goals; (vii) return on stockholders’ equity; (viii) return on assets; (ix) attainment of strategic and operational initiatives; (x) appreciation in and/or maintenance of the price of the Common Stock or any other publicly-traded securities of the Company; (xi) market share; (xii) gross profits; (xiii) earnings before interest and taxes; (xiv) earnings before interest, taxes, depreciation and amortization; (xv) economic value-added models and comparisons with various stock market indices; (xvi) reductions in costs; or (xvii) any combination of the foregoing. In addition, Performance-Based Awards may include comparisons to the performance of other companies, such performance to be measured by one or more of the foregoing business criteria. With respect to performance-based awards, (a) the Administrator shall establish in writing (1) the performance goals applicable to a given period, and such performance goals shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the participant if such performance goals are obtained and (2) the individual employees or class of employees to which such performance goals apply no later than 90 days after the commencement of such period (but in no event after 25% of such period has elapsed) and (b) no performance-based awards shall be payable to or vest with respect to, as the case may be, any participant for a given period until the Administrator certifies in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied. With respect to any awards intended to qualify as performance-based awards, after establishment of a performance goal, the Administrator shall not revise such performance goal or increase the amount of compensation payable thereunder (as determined in accordance with Section 162(m) of the IRS Code) upon the attainment of such performance goal. Notwithstanding the preceding sentence, the Administrator may reduce or eliminate the number of shares of common stock or cash granted or the number of shares of common stock vested upon the attainment of such performance goal.
Non-US Employees. Further, under the terms of the plan, the administrator is permitted to grant awards to individual participants who are subject to the tax laws of nations other than the United States, which awards may have terms and conditions as determined by the administrator as necessary to comply with applicable foreign laws, provided, however, that no such awards may be granted and no action may be taken with respect to such awards which would result in a violation of applicable law, including the Exchange Act or the Internal Revenue Code.
Change of Control.Under the plan, adjustments may be made to outstanding awards in the event of a corporate transaction or change in capitalization or other extraordinary event. In the event of a “change in control”Control" (as defined in the plan), unless otherwise provided by the plan administrator in an award agreement, awards then outstanding would become fully vested and exercisable in full. For purposes of the2014 Equity Incentive Plan, “Change in Control” is generally defined as the occurrence of any of the following: (i) any person, company or other entity acquires beneficial ownership, directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directorsInventive Plan) of the Company, provided that acquisitions by certain related parties (as specified in the plan) will not constitute a “Change in Control,” (ii) the sale of all or substantially all the Company’s assets in one or more related transactions to any person, company or other entity, provided that such a sale to certain related parties (as specified in the plan) will not constitute a “Change in Control,” (iii) any merger, consolidation, reorganization or similar event of the Company or any Subsidiary, provided that no Change in Control shall have occurred in the event 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such event in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such event; (iv) the approval by the Company’s stockholders of a plan of complete liquidation or dissolution of the Company; (v) during any period of 12 consecutive calendar months, individuals (A) who were directors of the Company on the first day of such period, or (B) whose election or nomination for election to the board of directors was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved, shall cease to constitute a majority of the board.
Amendment and Termination.Under the terms of the plan, our board of directors is authorized to amend or terminate the plan and may amend outstanding awards, provided that no such amendment or termination may be made that would materially impair any rights, or materially increase any obligations, of a grantee under an outstanding award. Shareholder approval of plan amendments will be required under certain circumstances. Unless terminated earlier by our board of directors, no awards could be granted under the plan more than ten years after the date the plan is adopted.
Federal Income Tax Information
The following discussion summarizes the principal U.S. federal income tax consequences to participants who may receive grants of awards under the 2014 Equity Incentive Plan. This summary discussion of U.S. federal income tax consequences does not purport to be a complete analysis of all of the potential tax effects of the 2014 Equity Incentive Plan. This discussion is based upon interpretations of laws, regulations, rulings and decisions now in effect, all of which are subject to change. This discussion is limited to the U.S. federal income tax consequences for individuals who are U.S. citizens or residents for U.S. federal income tax purposes. No information is provided with respect to foreign, state or local tax laws, or estate and gift tax considerations.
Non-Qualified Stock Options.For federal income tax purposes, no income will be recognized by a participant upon grant of a non-qualified stock option under the 2014 Equity Incentive Plan. Upon exercise of a non-qualified stock option, an amount equal to the excess of the fair market value of the shares acquired on the date of exercise of such option over the exercise price will be taxable to the participant as ordinary income.
The participant’s tax basis in the shares acquired will generally be the sum of the exercise price and the amount taxed as ordinary income upon exercise. Gain or loss on a subsequent disposition of shares acquired pursuant to an option will be treated as capital gain or loss, and will be long-term capital gain or loss if such shares were held for more than one year after the date of exercise.
If a participant uses previously acquired shares to pay all or a portion of the exercise price on the exercise of an option, no gain or loss will be recognized with respect to the previously acquired shares. The shares received upon exercise of the option, to the extent of the number of previously acquired shares exchanged therefor, will have the same basis and holding period for capital gain purposes as the previously acquired shares. The additional shares received will have a basis equal to the sum of the cash paid on exercise and the amount included in the participant’s ordinary income as a result of the exercise.
Other Awards.Stock-settled SARs will be taxed in substantially the same manner as non-qualified stock options, discussed above. Nontransferableunvested restricted stock subject to a substantial risk of forfeiture will generally 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 makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) to accelerate recognition as of the date of grant). Stock-based performance awards, dividend equivalents and other types of awards will generally be subject to tax at the time of payment.
Deferred Compensation Subject to Sections 409A and 457A.Certain types of awards under the 2014 Equity Incentive Plan, including cash-settled SARs, restricted stock units and deferred stock units may constitute, or provide for, a deferral of compensation subject to Sections 409A and/or 457A of the Code. Unless certain requirements set forth in Sections 409A and/or 457A of the Code are complied with, participants may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% income tax (and, potentially, certain interest penalties). To the extent applicable, the 2014 Equity Incentive Plan and awards granted under the 2014 Equity Incentive Plan will be interpreted to comply with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance that may be issued thereunder. To the extent determined necessary or appropriate by the plan administrator, the 2014 Equity IncentiveInventive Plan and applicablerelated restricted stock award agreements may be amended to comply with Sections 409A and 457A of the Code or to exempt the applicable awards from Sections 409A and 457A of the Code.
Parachute Payments; Acceleration on Change of Control.If the exercisability of an option, SAR or other outstanding award is accelerated as a result of a Change of Control, all or a portion of the value of the award at that time may be taken into account for purposes of determining whether a participant is subject to an excise tax equal to 20% of the amount of the “excess parachute payment” within the meaning of Section 280G of the Code.
Tax Withholding. When cash is to be paid pursuant to an award under the 2014 Equity Incentive Plan, we may deduct an amount sufficient to satisfy any U.S. federal, state or other taxes required by law to be withheld. When common shares are to be delivered pursuant to an award under the 2014 Equity Incentive Plan, we may require the participant to remit to us in cash an amount sufficient to satisfy any U.S. federal, state or other taxes required by law to be withheld. With a prior approval from the Administrator under the 2014 Equity Incentive Plan, a participant may satisfy the foregoing requirement by electing to have us withhold from delivery share of our common stock having a value equal to the minimum amount of required tax to be withheld.
New Plan Benefits
Because it is within the compensation committee’s discretion to determine which officers, employees, directors and consultants receive awards under the 2014 Equity Incentive Plan, and the types and amounts of those awards, it is not possible at present to specify the persons to whom awards will be granted in the future or the amounts and types of individual grants. However, it is anticipated that, among others, all of our current executive officers, including our named executive officers, will receive equity awards under the 2014 Equity Incentive Plan. In June 2014, we granted 655,000 shares of restricted stock to certain of our officers and, in March 2015, we granted 274,000 shares of restricted stock to certain of our directors, employees and non-employee consultants. 1,921,000 shares remain available for future issuance under our 2014 Equity Incentive Plan. See “Executive Compensation—become fully vested.
The Board of Directors recommends that you vote “FOR” approval of the adoption of the 2014 Equity Incentive Plan.
The following table provides certainshows information concerning the compensation for services rendered in all capacities by each of our non-employee directors serving on our Board for the year ended March 31, 2015.
Name | Stock Awards ($)(1) | All Other Compensation ($) | Total | |||||||||
Nigel D. Widdowson(4) | 354,900 | (2) | 224,657 | (3) | 579,557 | |||||||
Charles Fabrikant | - | - | - | |||||||||
Øivind Lorentzen | - | - | - | |||||||||
Thomas J. Coleman | - | - | - | |||||||||
Eric Fabrikant(5) | - | - | - | |||||||||
Ted Kalborg | - | - | - | |||||||||
David G. Savett | - | - | - | |||||||||
Malcolm McAvity | - | - | - | |||||||||
Robert Bugbee(6) | - | - | - |
During the year ended March 31, 2015, none of our non-employee directors, besides Mr. Widdowson, received any compensation for serving as a director on our Board of Directors. However, compensation for our non-management directors’ services may, in the future, include annual cash retainers, shares of our common stock and options for such shares, meeting fees, and fees for serving as a committee chairperson. In addition, each director is reimbursed for out-of-pocket expenses in connection with attending meetings of the board of directors or committees. Each director will be fully indemnified by us for actions associated with being a directorrelating to the extent permittednumber of shares authorized for issuance under Marshall Islands law. Further, none of the members of our board of directors will receive any benefits upon termination of their directorship positions. Our directors are eligible to receive awards under an equity incentive plan that we adopted prior to the completion of our IPO and which is described below under “—Equity Incentive Plan.” Our Compensation Committee reviews director compensation annually and makes recommendations to the Board with respect to compensation and benefits provided to the members of the Board. Our Corporate Governance Guidelines provide that director compensation should be fair and equitable to enable the Company to attract qualified members to serve on its Board.
Mr. Widdowson served as a director of our Company since its inception until May 1, 2015. Since the formation of our predecessor companies (that is companies that previously owned the vessels which we now own), Mr. Widdowson also provided certain chartering and commercial services to our Company, its subsidiaries, and the predecessor companies. On May 1, 2015, Mr. Widdowson entered into a consulting agreement that provides for, among other things, an annual fee of $250,000, payable for services rendered commencing on May 8, 2014. In addition, services to be provided by Mr. Widdowson shall include serving on the board of Helios LPG Pool LLC, a 50/50 joint venture between the Company and Mitsui O.S.K. Lines Ltd.
Our named executive officers, consisting of our principal executive officer and our two most highly compensated executive officers other than our principal executive officer for the fiscal year ended March 31, 2015 are:
Mr. Lycouris is employed and compensated by our subsidiary Dorian LPG (USA) LLC but is considered one of our executive officers because he performs policy making functions for us.
As an emerging growth company, we have opted to comply with the executive compensation rules applicable to “smaller reporting companies,” as such term is defined under the Securities Act, which require compensation disclosure for our principal executive officer and our next two most highly compensated executive officers other than our principal executive officer (collectively, the “named executive officers”).
The table below sets forth the annual compensation awarded or paid to our named executive officers for the year ended March 31, 2015.
Name and Principal Position | Fiscal Year Ended March 31, | Salary (1) | Bonus (2) | Stock Awards(3) | All Other Compensation(4) | Total | ||||||||||||||||||
John Hadjipateras (5) | 2015 | $ | 550,000 | $ | 1,500 | $ | 8,046,500 | $ | 5,850 | $ | 8,603,850 | |||||||||||||
Chief Executive Officer | ||||||||||||||||||||||||
John Lycouris(6) | 2015 | $ | 450,000 | $ | 1,500 | $ | 4,253,150 | $ | 5,850 | $ | 4,710,500 | |||||||||||||
Chief Executive Officer, Dorian LPG (USA) LLC | ||||||||||||||||||||||||
Theodore B. Young | 2015 | $ | 400,000 | $ | 1,500 | $ | 2,069,100 | $ | 5,850 | $ | 2,476,450 | |||||||||||||
Chief Financial Officer |
Narrative Disclosure to the Summary Compensation Table
As of July 1, 2014, vessel management services and the associated agreements for our fleet were transferred from Dorian (Hellas), S.A. (“DHSA” or the “Manager”) and are now provided through our wholly owned subsidiaries Dorian LPG (USA) LLC, Dorian LPG (UK) Ltd. and Dorian LPG Management Corp. Subsequent to the transfer, Eagle Ocean Transport Inc. (“Eagle Ocean Transport”) continues to incur related travel costs for certain transitioned employees as well as office-related costs, for which we reimburse Eagle Ocean Transport at cost, for which we reimbursed Eagle Ocean Transport $0.7 million for the year ended March 31, 2015. Eagle Ocean Transport was reimbursed for an amount of $0.3 million, representing costs incurred on behalf of the Company relating to equity issuances and debt restructuring for the period July 1, 2013 to March 31, 2014. Prior to July 1, 2014 and pursuant to management agreements entered into by each vessel owning subsidiary on July 26, 2013, as amended, with DHSA, which terminated on June 30, 2014, the technical, crew and commercial management as well as insurance and accounting services of its vessels was outsourced to DHSA. In addition, under these management agreements, strategic and financial services had also been outsourced to DHSA. DHSA had entered into agreements with each of Eagle Ocean Transport and Highbury Shipping Services Limited (“HSSL”), to provide certain of these services on its behalf to the vessel owning companies. Mr. John Hadjipateras, our Chairman, President and CEO, who is also the chairman of Dorian Holdings, owns 100% of Eagle Ocean Transport, and our Vice President of Chartering, Insurance and Legal, Nigel Grey-Turner, owns 100% of HSSL. The fees payable for the above services to DHSA amounted to $93,750 per month per vessel, payable one month in advance.
None of our members of senior management, including Mr. Hadjipateras, Mr. Lycouris and Mr. Young are subject to an employment agreement with us or our subsidiaries.
On June 30, 2014, Mr. Hadjipateras, Mr. Lycouris and Mr. Young received 350,000 shares, 185,000 and 90,000 shares of restricted stock, respectively, vesting in equal installments on the third, fourth and fifth anniversary of the grant date. All restricted shares of a named executive officer will vest (i) if such named executive officer’s employment terminates other than for Cause (as defined in the Executive Severance and Change in Control Severance Plan) or on account of death or Disability or (ii) upon a Change of Control (as defined in the Equity Incentive Plan) that occurs while such named executive officer is still employed with us.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information concerning unexercised options outstandingplans as of March 31, 2015, for each named executive officer:
Stock Awards | ||||||||||
Name | Grant Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested (1) | |||||||
John Hadjipateras | 6/30/14 | 350,000 | (2) | $ | 4,560,500 | |||||
John Lycouris | 6/30/14 | 185,000 | (2) | $ | 2,410,550 | |||||
Theodore B. Young | 6/30/14 | 90,000 | (2) | $ | 1,172,700 |
March 31, 2018 | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | |||||||||
Equity compensation plans | ||||||||||||
·Approved by shareholders | — | (1) | $ | — | 1,352,910 | |||||||
·Not approved by shareholders | — | $ | — | – | ||||||||
Total | — | $ | — | 1,352,910 |
(1) | Does not include 918,344 issued restricted shares, which are subject to vesting, and the 200,000 restricted shares granted by the Compensation Committee after March 31, 2018 to certain of our |
(2) | Represents available shares for future issuance under the |
See “Proposal 3—To Adopt the 2014 Equity Incentive Plan—2014 Equity Incentive Plan.”
Other than
Securities Authorized for Issuance Under Equity Compensation Plans
Equity Compensation Plans Table
The following table shows information relating to the number of shares authorized for issuance under our equity compensation plans as of March 31, 2015.
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Certain Relationships and Related Transactions and Director Independence
· | the amounts involved exceeded or will exceed $120,000; and |
· | any of our directors, executive officers or holders of more than 5% of our common stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest. |
Management Agreements
As of July 1, 2014, vessel management services
In addition, as of July 1, 2014, vessel management services and the associated agreements for our fleet and are now provided through our wholly owned subsidiaries. Prior to July 1, 2014, pursuant to a newbuilding supervision agreement entered into with DHSA, DHSA provided newbuilding supervision services through Eagle Ocean TransportRelated Person Transactions Policy" for a fixed monthly fee of $15,000 per hull was payable to the Manager for pre-delivery services provided during the period from July 29, 2013 until the date of delivery of each newbuilding. These management agreements terminated on June 30, 2014.
Shareholders Agreement and Purchase Agreement
On November 26, 2013, we entered into a purchase agreement with Scorpio Tankers, pursuant to which we issued 7,990,425 common shares to Scorpio Tankers in exchange for shipbuilding contracts for the construction of 13 newbuilding VLGCs, under which aggregate installments of $83.1 million had been paid, and cash in the amount of $1.9 million. Concurrently, we entered into a shareholders agreement with Scorpio Tankers and our existing shareholders SeaDor Holdings and Dorian Holdings, pursuant to which we granted Scorpio Tankers, SeaDor Holdings and Dorian Holdings certain rights, including consent rights, preemptive rights, rights of first offer and tag-along rights, which expired prior to the closingdiscussion of our IPO. Scorpio Tankers also received the rightpolicies and procedures related to appoint one director to our Board for so long as Scorpio Tankers beneficially owns at least 10%conflicts of our outstanding common shares. In addition, until the earlier of April 27, 2015 and the date that Scorpio Tankers ceases to be entitled to appoint one director to our Board, Scorpio Tankers, SeaDor Holdings and Dorian Holdings agreed not to compete with us, either directly or indirectly, in the business of owning and operating VLGC and large gas carrier (“LGC”) vessels.
interest.
On July 10, 2015, the SEC declared effective our registration statement on Form S-3, filed pursuant to the Shareholder Agreement, that permits SeaDor Holdings and Dorian Holdings LLC (which was owned by Astromar LLC, of which Mr. John C. Hadjipateras, our Chairman, President, and Chief Executive Officer, was a member and director, and which has subsequently been dissolved and the shares held by it distributed pro rata to the members of Astromar LLC), or their respective donees, pledgees, transferees or other successors in interest, to offer their shares for resale from time to time pursuant to the Shareholder Agreement.
In addition, our board of directors has approved and we
See “Corporate Governance Matters — Business Relationships and Related Party Transactions Policy”Summary Compensation Table" for a discussion of related travel costs for certain transitioned employees as well as office-related costs for which we reimbursed Eagle Ocean, a company 100% owned by Mr. John C. Hadjipateras, the Chairman of the Board, our policiesPresident and procedures relatedour Chief Executive Officer, during the fiscal year ended March 31, 2018.
Director Independence
See “Corporate Governance Matters — Director Independence.”
certain chartering and marine operation services to DHSA, for which income was earned and included in other income totaling $0.4 million for the year ended March 31, 2018. Mr. John C. Hadjipateras, the Chairman of the Board, our President and our Chief Executive Officer, has an indirect economic interest in the transaction.
In respect of
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company was
Shareholder Proposals for 2016 Annual Meeting of Shareholders
Company's officers, directors, and greater than ten percent beneficial owners were complied with.
/s/ John C. Hadjipateras | |
John C. Hadjipateras Chairman of the Board |
DORIAN LPG LTD.
2014 EQUITY INCENTIVE PLAN
ARTICLE I.
General
1.1. Purpose
The Dorian LPG Ltd. 2014 Equity Incentive Plan (the “Plan”) is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of Dorian LPG Ltd. (the “Company”), with incentives to (a) enter into and remain in the service of the Company or its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.
1.2. Administration
(a) Administration. The Plan shall be administered by a committee appointed by the Company’s Board of Directors (the “Board”) from among its members (which may be the Compensation Committee) (such committee, the “Administrator”) and shall be comprised, unless otherwise determined by the Board, solely of not less than two members who shall be (i) “Non-Employee Directors” within the meaning of Rule 16b-3 (or any successor rule) under the U.S. Securities Exchange Act of 1934, as amended (the “1934 Act”), and (ii) “outside directors” for purposes of Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The Administrator is authorized, subject to the terms of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan and any Awards granted hereunder as it deems necessary or advisable. Without limiting the generality of the foregoing, the Administrator may, in its sole discretion, clarify, construe or resolve any ambiguity in any provision of the Plan or any Award Agreement, accelerate or waive vesting of Awards and exercisability of Awards, extend the term or period of exercisability of any Award, waive any terms or conditions applicable to any Award or correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement. All determinations and interpretations made by the Administrator under or with respect to the Plan or any Award shall be binding and conclusive and binding upon all Persons (as defined below). Notwithstanding anything in this Section 1.2(a) to the contrary, the Board, or any other committee or sub-committee established by the Board, is hereby authorized (in addition to any necessary action by the Administrator) to grant or approve Awards as necessary to satisfy the requirements of Section 16 of the 1934 Act and the rules and regulations thereunder and to act in lieu of, and as, the Administrator with respect to Awards made to non-employee directors under the Plan. No member of the Board or the Administrator and no officer or employee of the Company or any Affiliate (such Persons, a “Covered Person”) shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any act or failure to act hereunder by any other member, officer or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify each Covered Person and any agent of the Administrator who is an employee of the Company or an Affiliate against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances involving such Person’s bad faith, gross negligence or willful misconduct.
(b) Delegation. The Administrator may delegate to one or more of its members, or to one or more agents, such administrative duties as it may deem advisable, and the Administrator, or any Person to whom it has so delegated duties, may employ one or more Persons to render advice with respect to any responsibility the Administrator or such Person may have under the Plan. The Administrator may employ such legal or other counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Administrator in the engagement of such counsel, consultant or agent shall be paid by the Company, or the Subsidiary or Affiliate whose employees have benefited from the Plan, as determined by the Administrator.
1.3. Persons Eligible for Awards
The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its Subsidiaries and Affiliates and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries and Affiliates, as well as entities wholly-owned or generally exclusively controlled by such persons (collectively, “Key Persons”), as the Administrator shall select. Designation of a Key Person as a participant in any year shall not require the Administrator to designate such Key Person to receive an Award in any other year or, once designated, to receive the same type of amount of Awards as granted to the Key Person in any other year.
1.4. Types of Awards
Awards may be made under the Plan in the form of (a) non-qualified stock options (i.e., any stock options granted under the Plan that are not “incentive stock options”), (b) stock appreciation rights, (c) stock awards, (d) restricted stock units, and (e) performance compensation awards that the Administrator determines are consistent with the purposes of the Plan and the interests of the Company, all as more fully set forth in the Plan. The term “Award” means any of the foregoing that are granted under the Plan. Options issued under the Plan shall not be “incentive stock options” within the meaning of Section 422 of the Code. Stock Awards, performance compensation Awards, and restricted stock unit Awards may, as determined by the Administrator in its discretion, constitute Performance-Based Awards, as described in Section 2.7 below. Awards shall be evidenced by agreements (“Award Agreements”)(which need not be identical) in such forms as the Administrator may from time to time approve, and Awards shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.
1.5. Shares Available for Awards; Adjustments for Changes in Capitalization
(a) Maximum Number. Subject to the provisions of this Section 1.5, including any adjustment as provided in Section 1.5(c), the maximum number of shares of common stock of the Company, par value $0.01 (“Common Stock”), that may delivered to participants (including permitted assignees) and their beneficiaries under the Plan shall be 2,850,000, which may be authorized and unissued or treasury shares. Any shares of Common Stock covered by an Award (or portion of an Award) granted under the Plan which is forfeited or canceled, expires or, in the case of an Award other than an option, is settled in cash, shall be deemed not to have been delivered for purposes of determining the maximum number of shares available for delivery under the Plan. The preceding sentence shall apply only for the purposes of determining the aggregate number of shares of Common Stock subject to Awards and that are available for delivery under the Plan, but shall not apply for purposes of determining pursuant to Section 1.5(d) the maximum number of shares of Common Stock with respect to which Awards (including the maximum number of shares of Common Stock subject to options and stock appreciation rights) may be granted or measured to an individual participant under the Plan.
(b) The following shares of Common Stock may not again be made available for delivery to participants under the Plan during the term of the Plan: (i) shares of Common Stock not issued or delivered as a result of the net settlement of an outstanding option or stock appreciation right or (ii) shares of Common Stock used to pay the exercise price or withholding taxes related to an outstanding Award. Shares of Common Stock delivered under the Plan in settlement, assumption or substitution of outstanding Awards (or obligations to grant future Awards) under the plans or arrangements of another entity shall not reduce the maximum number of shares of Common Stock available for delivery under the Plan, to the extent that such settlement, assumption or substitution is a result of the Company or its Subsidiaries or Affiliates acquiring another entity (or an interest in another entity). This Section 1.5(b) shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Awards and that are available for delivery under the Plan, but shall not apply for purposes of determining pursuant to Section 1.5(d) the maximum number of shares of Common Stock (A) with respect to which Awards (including the maximum number of shares of Common Stock subject to options and stock appreciation rights) may be granted or measured to an individual participant under the Plan or (B) that may be delivered through options under the Plan.
(c) Adjustments. (i) In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan, including with respect to individual limitations in Section 1.5(d).
(ii) The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an Equity Restructuring) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the exercise price with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share exercise price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor).
(iii) In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company’s assets or (C) a merger, reorganization or consolidation involving the Company or one of its Subsidiaries, the Administrator shall have the power to:
(1) provide that outstanding options, stock appreciation rights, restricted stock units (including any related dividend equivalent right) and/or other Awards granted under the Plan shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor entity or a parent or subsidiary entity;
(2) cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, restricted stock units (including each dividend equivalent right related thereto) and/or other Awards granted under the Plan outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award (or the value of such Award, as determined by the Administrator, if not based on the Fair Market Value of shares) over the aggregate exercise price of such Award (or the grant price of such Award, if any, if applicable)(it being understood that, in such event, any option or stock appreciation right having a per share exercise price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or
(3) notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).
(iv) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):
(A) The number and type of securities or other property subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and
(B) The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations set forth in Sections 1.5(a) and 1.5(d)). The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.
(d) Individual Limits. The maximum number of shares of Common Stock with respect to which Awards may be granted or measured to any individual participant under the Plan during any one calendar year during the term of the Plan, and the maximum number of shares of Common Stock with respect to which Awards may be granted under the Plan in the form of options and stock appreciation rights to any individual participant under the Plan during any one calendar year, shall not exceed 1,425,000, and the maximum Performance-Based Awards that may be granted to any one Key Person under the Plan during any one calendar year shall not exceed 1,425,000 shares of Common Stock (or, in the event the Performance-Based Awards are paid in cash, other securities, other Awards or other property, the equivalent cash value of such shares of Common Stock on the first day of the performance period to which such Award relates), and the maximum number of shares of Common Stock that may be granted to any non-employee director of the Company (with such status as a non-employee director being determined as the date of grant of the applicable Award for this purpose) in any one calendar year shall not exceed 142,500 shares of Common Stock (or, in the event the Awards are paid in cash, other securities, other Awards or other property, the equivalent cash value of such shares of Common Stock on the first day of the calendar year in which such Awards are granted) (in each case subject to the restrictions set forth in Section 1.5(a) and the adjustments made in accordance with Section 1.5(c) hereof).
(e) Stock Legends. The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.
1.6. Definitions of Certain Terms
(a) “Affiliate” shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.
(b) Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term “for Cause” shall be defined as follows:
(i) if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or an Affiliate, on the other hand, that contains a definition of “cause” (or similar phrase), for purposes of the Plan, the term “for Cause” shall mean those acts or omissions that would constitute “cause” under such agreement; or
(ii) if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term “for Cause” shall mean any of the following:
(A) any failure by the grantee substantially to perform the grantee’s employment or consulting/service or Board membership duties;
(B) any excessive unauthorized absenteeism by the grantee;
(C) any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;
(D) any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
(E) any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;
(F) the grantee’s gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
(G) the grantee’s material violation of any of the policies of the Company or any Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;
(H) the grantee’s material breach of his or her employment or service contract with the Company or any Affiliate;
(I) the grantee’s unauthorized (1) removal from the premises of the Company or any Affiliate of any document (in any medium or form) relating to the Company or any Affiliate or the customers or clients of the Company or any Affiliate or (2) disclosure to any Person of any of the Company’s, or any Affiliate’s, confidential or proprietary information;
(J) the grantee’s being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and
(K) the grantee’s commission of any act involving dishonesty or fraud.
Any rights the Company or any Affiliate may have under the Plan in respect of the events giving rise to a termination or dismissal “for Cause” shall be in addition to any other rights the Company or any Affiliate may have under any other agreement with a grantee or at law or in equity. Any determination of whether a grantee’s employment or consultancy/service relationship is (or is deemed to have been) terminated “for Cause” shall be made by the Administrator. If, subsequent to a grantee’s voluntary termination of employment or consultancy/service relationship or involuntary termination of employment or consultancy/service relationship without Cause, it is discovered that the grantee’s employment or consultancy/service relationship could have been terminated “for Cause”, the Administrator may deem such grantee’s employment or consultancy/service relationship to have been terminated “for Cause” upon such discovery and determination by the Administrator.
(c) Unless otherwise set forth in the applicable Award Agreement, “Disability” shall mean the grantee’s being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee’s, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee’s employer. The existence of a Disability shall be determined by the Administrator.
(d) “Equity Restructuring” shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.
(e) The “Fair Market Value” of a share of Common Stock on any day shall be the closing price on the New York Stock Exchange, or, if not traded on the New York Stock Exchange, such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal (or, if not reported in The Wall Street Journal, such other reliable source as the Administrator may determine), or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day. If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day. Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator. The “Fair Market Value” of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.
(f) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.
(g) Unless otherwise set forth in the applicable Award Agreement, “Retirement” shall mean a grantee’s formal retirement from employment with the Company and its Subsidiaries under acceptable circumstances as determined by the Administrator in its sole discretion (which determination may be conditioned upon, among other things, the grantee entering into a non-competition agreement with the Company and its Subsidiaries and Affiliates).
(h) “Subsidiary” shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.
ARTICLE II.
Awards Under The Plan
2.1. Grant of Stock Options
Stock options will consist of Awards from the Company that will enable the holder to purchase a number of shares of Common Stock, at set terms. The Administrator will have the authority to grant to any Key Person one or more options. Each option shall be subject to such terms and conditions consistent with the Plan as the Administrator may impose from time to time, subject to the following limitations:
(a) Exercise Price. Each option granted hereunder shall have such per share exercise price as the Administrator may determine at the date of grant; provided, however, that, subject to adjustment as provided under Section 1.5(c), the per-share exercise price shall not be less than 100% of the Fair Market Value of the Common Stock on the date the option is granted.
(b) Payment of Exercise Price. The option exercise price may be paid in cash or, in the discretion of the Administrator, by the delivery of shares of Common Stock of the Company then owned by the participant, by the withholding of shares of Common Stock for which an option is exercisable or by a combination of these methods. In the discretion of the Administrator, payment may also be made by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the exercise price. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Administrator may prescribe any other method of paying the exercise price that it determines to be consistent with applicable law and the purpose of the Plan, including, without limitation, in lieu of the exercise of an option by delivery of shares of Common Stock of the Company then owned by a participant, providing the Company with a notarized statement attesting to the number of shares owned, where upon verification by the Company, the Company would issue to the participant only the number of incremental shares to which the participant is entitled upon exercise of the option. In determining which methods a participant may utilize to pay the exercise price, the Administrator may consider such factors as it determines are appropriate.
(c) Exercise Period. Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator; provided, however, that no option shall be exercisable later than ten years after the date it is granted. All options shall terminate at such earlier times and upon such conditions or circumstances as the Administrator shall in its discretion set forth in such option Award Agreement at the date of grant.
2.2. Stock Appreciation Rights
(a) Nature of Stock Appreciation Rights. The Administrator may, in its discretion, grant stock appreciation rights to the holders of any options granted hereunder. In addition, stock appreciation rights may be granted independently of, and without relation to, options. A stock appreciation right means a right to receive a payment, in cash, Common Stock or a combination thereof, in an amount equal to the excess of (i) the Fair Market Value, or other specified valuation, of a specified number of shares of Common Stock on the date the right is exercised over (ii) the Fair Market Value, or other specified valuation (which shall be no less than the Fair Market Value) of such shares of Common Stock on the date the right is granted, all as determined by the Administrator; provided, however, that if a stock appreciation right is granted in tandem with an option, the designated Fair Market Value in the Award Agreement may be the Fair Market Value on the date such Stock Option was granted. Each stock appreciation right shall be subject to such terms and conditions as the Administrator shall impose from time to time.
(b) Exercise of Stock Appreciation Rights. Stock appreciation rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator; provided, however, that no stock appreciation rights shall be exercisable later than ten years after the date it is granted. All stock appreciation rights shall terminate at such earlier times and upon such conditions or circumstances as the Administrator shall in its discretion set forth in such stock appreciation right’s Award Agreement at the date of grant.
2.3. Options and Stock Appreciation Rights.
(a) No Stockholders Rights. No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares or an account in the name of the grantee evidences ownership of stock in uncertificated form. Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.
(b) Repricing. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the terms of outstanding options and stock appreciation rights may not be amended by the Administrator to (i) reduce the exercise price of such outstanding options or stock appreciation rights or (ii) cancel such outstanding options or stock appreciation rights in exchange for cash, other Awards or options or stock appreciation rights with an exercise price that is less than the exercise price of the original options or stock appreciation rights without stockholder approval.
2.4. Stock Awards
The Administrator may, in its discretion, grant stock awards (which may include mandatory payment of bonus incentive compensation in stock) consisting of Common Stock issued or transferred to participants with or without other payments therefor. Stock Awards may be subject to such terms and conditions as the Administrator determines appropriate, including, without limitation, restrictions on the sale or other disposition of such shares, the right of the Company to reacquire such shares for no consideration upon termination of the participant’s employment or service within specified periods, and may constitute Performance-Based Awards, as described below. The Administrator may require the participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such stock Award. The Administrator may also require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed. The stock Award shall specify whether the participant shall have, with respect to the shares of Common Stock subject to a stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the right to receive dividends and to vote the shares.
2.5. Restricted Stock Units
(a) Nature of Restricted Stock Units. The Administrator may, in its discretion, grant restricted stock units to Key Persons hereunder. The Administrator shall determine the criteria for the vesting of restricted stock units and may provide for payment in shares of Common Stock, in cash or in any combination of shares of Common Stock and cash, at such time as the Award Agreement shall specify. Restricted stock units may constitute Performance-Based Awards. Shares of Common Stock issued pursuant to this Section 2.5 may be issued with or without other payments therefor as may be required by applicable law or such other consideration as may be determined by the Administrator. The Administrator shall determine whether a Key Person granted a restricted stock unit shall be entitled to a Dividend Equivalent Right (as defined below).
(b) Settlement. Upon vesting of a restricted stock unit, unless the Administrator has determined to defer payment with respect to such restricted stock unit or a grantee has elected to defer payment under subsection (c) below, shares of Common Stock representing the restricted stock units shall be distributed to the participant unless the Administrator, with the consent of the participant, provides for the payment of the restricted stock units in cash or partly in cash and partly in shares of Common Stock equal to the Fair Market Value of the shares of Common Stock which would otherwise be distributed to the participant.
(c) Delayed Settlement. Prior to the year with respect to which a restricted stock unit may vest, the Administrator may, in its discretion, permit a participant to elect not to receive shares of Common Stock and/or cash, as applicable, upon the vesting of such restricted stock unit and for the Company to continue to maintain the restricted stock unit on its books of account. In such event, the value of a restricted stock unit shall be payable in shares of Common Stock and/or cash, as applicable, pursuant to the agreement of deferral.
(d) Definitions. A “restricted stock unit” means a notional account representing one share of Common Stock. A “Dividend Equivalent Right” means the right to receive the amount of any dividend paid on the share of Common Stock underlying a restricted stock unit, which shall be payable in cash or in the form of additional restricted stock units at the time or times specified by the Administrator or as the Award Agreement shall specify.
(e) No Stockholder Rights. No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Award unless and until a stock certificate is issued with respect to such Award upon the vesting of such Award or an account in the name of the grantee evidences ownership of stock in uncertificated form (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both). Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate, if any, is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.
2.6. Performance Compensation Awards
(a) Nature of Performance Compensation Awards. Performance compensation Awards may be granted to participants at any time and from time to time, as shall be determined by the Administrator. Performance compensation Awards may, as determined by the Administrator in its sole discretion, constitute Performance-Based Awards. The Administrator shall have complete discretion in determining the number, amount and timing of performance compensation Awards granted to any Key Person. Such performance compensation Awards may be in the form of shares of Common Stock or restricted stock units. Performance compensation Awards may be awarded as short-term or long-term incentives. With respect to those performance compensation Awards that are intended to constitute Performance-Based Awards, the Administrator shall set performance targets at its discretion which, depending on the extent to which they are met, will determine the number and/or value of performance compensation Awards that will be paid out to the participants, and may attach to such performance compensation Awards one or more restrictions. Performance targets may be based upon, without limitation, Company-wide, divisional and/or individual performance.
(b) Adjustments. With respect to those performance compensation Awards that are not intended to constitute Performance-Based Awards, the Administrator shall have the authority at any time to make adjustments to performance targets for any outstanding performance compensation Awards which the Administrator deems necessary or desirable unless at the time of establishment of goals the Administrator shall have precluded its authority to make such adjustments.
(c) Settlement. Payment of earned performance compensation Awards shall be made in accordance with terms and conditions prescribed or authorized by the Administrator. The Administrator may require or permit the deferral of, the receipt of performance compensation Awards upon such terms as the Administrator deems appropriate and in accordance with Sections 409A and 457A of the Code, to the extent applicable.
2.7. Performance-Based Awards
Certain Awards granted under the Plan (following the receipt of any requisite shareholder approval) may be granted in a manner such that the Awards are intended to qualify for the performance-based compensation exemption of Section 162(m) of the Code (“Performance-Based Awards”). As determined by the Administrator in its sole discretion, either the vesting or the exercise of such Performance-Based Awards shall be based on one or more business criteria that apply to the individual participant, one or more business units of the Company or the Company as a whole. The business criteria shall be as follows, individually or in combination, adjusted in such manner as the Administrator shall determine: (i) net sales; (ii) pretax income before allocation of corporate overhead and bonus; (iii) budget; (iv) earnings per share; (v) net income; (vi) division, group or corporate financial goals; (vii) return on stockholders’ equity; (viii) return on assets; (ix) attainment of strategic and operational initiatives; (x) appreciation in and/or maintenance of the price of the Common Stock or any other publicly-traded securities of the Company; (xi) market share; (xii) gross profits; (xiii) earnings before interest and taxes; (xiv) earnings before interest, taxes, depreciation and amortization; (xv) economic value-added models and comparisons with various stock market indices; (xvi) reductions in costs; or (xvii) any combination of the foregoing. In addition, Performance-Based Awards may include comparisons to the performance of other companies, such performance to be measured by one or more of the foregoing business criteria. With respect to Performance-Based Awards, (a) the Administrator shall establish in writing (1) the performance goals applicable to a given period, and such performance goals shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the participant if such performance goals are obtained and (2) the individual employees or class of employees to which such performance goals apply no later than 90 days after the commencement of such period (but in no event after 25% of such period has elapsed) and (b) no Performance-Based Awards shall be payable to or vest with respect to, as the case may be, any participant for a given period until the Administrator certifies in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied. With respect to any Awards intended to qualify as Performance-Based Awards, after establishment of a performance goal, the Administrator shall not revise such performance goal or increase the amount of compensation payable thereunder (as determined in accordance with Section 162(m) of the Code) upon the attainment of such performance goal. Notwithstanding the preceding sentence, the Administrator may reduce or eliminate the number of shares of Common Stock or cash granted or the number of shares of Common Stock vested upon the attainment of such performance goal.
2.8. Foreign Laws.
The Administrator may grant Awards to individual participants who are subject to the tax laws of nations other than the United States, which Awards may have terms and conditions as determined by the Administrator as necessary to comply with applicable foreign laws. The Administrator may take any action which it deems advisable to obtain approval of such Awards by the appropriate foreign governmental entity; provided, however, that no such Awards may be granted pursuant to this Section 2.8 and no action may be taken with respect to such Awards which would result in a violation of the 1934 Act, the Code or any other applicable law.
ARTICLE III.Miscellaneous
3.1. Duration, Amendment, Termination and Duration
(a) Amendment/Termination of the Plan. The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee’s death, the Person having the rights to the Award).
(b) Stockholder Approval Requirement. No amendment of the Plan may be made without approval of the stockholders of the Company if the amendment will: (i) increase the aggregate number of shares of Common Stock that may be delivered (either in the aggregate or through options) under the Plan (other than an increase solely to reflect a reorganization, stock split, merger, spin-off or similar transaction); (ii) increase the maximum amounts which can be paid to an individual under the Plan; (iii) change the types of business criteria on which Performance-Based Awards are to be based under the Plan; (iv) modify the requirements as to eligibility for participation in the Plan; (v) expand the types of awards available under the Plan; (vi) materially extend the term of the Plan; (vii) materially change the method of determining the exercise price of options under the Plan; or (viii) delete or limit any provision prohibiting repricing of options.
(c) Modification of Awards. The Administrator may cancel or amend any Award under the Plan, including, without limitation, by amendment which would accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised. However, any such cancellation or amendment (other than an amendment made in accordance with Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee’s death, the Person having the right to the Award).
(d) Duration. No Award shall be granted more than ten years after the Effective Date.
3.2. Other Provisions
Awards under the Plan may also be subject to such other provisions (whether or not applicable to the Award granted to any other Key Person) as the Administrator determines appropriate, including, without limitation, for the installment purchase of Common Stock under options, for the installment exercise of stock appreciation rights, to assist the participant in financing the acquisition of Common Stock, for the forfeiture of, or restrictions on resale or other disposition of, Common Stock acquired under any form of Award, for the termination of any Award and the forfeiture of any gain realized in respect of an Award upon the occurrence of certain activity by the participant that is harmful to the Company, for the acceleration of exercisability or vesting of Awards or the payment of the value of Awards in the event that the control of the Company changes (including, without limitation, a Change in Control), or to comply with Federal and state securities laws, or understandings or conditions as to the participant’s employment (including, without limitation, any restrictions on the ability of the participant to engage in activities that are competitive with the Company) in addition to those specifically provided for under the Plan.
3.3. Nontransferability
Each Award granted under the Plan to a participant shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the participant’s lifetime, only by the participant. In the event of the death of a participant, each then-outstanding option or stock appreciation right theretofore granted to him or her under the Plan shall be exercisable during such period after his or her death as the Administrator shall in its discretion set forth in such option or stock appreciation right Award Agreement at the date of grant and then only by the executor or administrator of the estate of the deceased participant or the Persons to whom the deceased participant’s rights under the option or stock appreciation right shall pass by will or the laws of descent and distribution. Notwithstanding the foregoing, at the discretion of the Administrator, an Award Agreement may permit the transferability of an Award by a participant solely to the participant’s spouse, siblings, parents, children and grandchildren or trusts for the benefit of such persons or partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to any restriction included in the Award Agreement. All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.
3.4. Taxes
(a) Withholding. A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company and its Affiliates shall have the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes. Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of minimum tax required to be withheld. Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.
(b) Liability for Taxes. Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes. The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Sections 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a “permissible distribution event” within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code. The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.
3.5. Change in Control
(a) Change in Control Defined. Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, “Change in Control” shall mean the occurrence of any of the following:
(i) any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity acquires “beneficial ownership” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company; provided, however, that no Change in Control shall have occurred in the event of such an acquisition by (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate, (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock ordinarily entitled to elect directors of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such acquisition or (D) Scorpio Tankers Inc. (“Scorpio”), SeaDor Holdings LLC (“SeaDor”), Dorian Holdings LLC (“Dorian”) or Kensico Capital (“Kensico”) or any entity which Scorpio, SeaDor, Dorian or Kensico directly or indirectly “controls” (as defined in Rule 12b-2 under the 1934 Act);
(ii) the sale of all or substantially all the Company’s assets in one or more related transactions to any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity;provided,however, that no Change in Control shall have occurred in the event of such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company, (B) to an entity (the “Acquiring Entity”) which has acquired all or substantially all the Company’s assets if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such sale in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale or (C) to Scorpio, SeaDor, Dorian or Kensico or any entity which Scorpio, SeaDor, Dorian or Kensico directly or indirectly “controls” (as defined in Rule 12b-2 under the 1934 Act);
(iii) any merger, consolidation, reorganization or similar event of the Company or any Subsidiary;provided,however, that no Change in Control shall have occurred in the event 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such event in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such event;
(iv) the approval by the Company’s stockholders of a plan of complete liquidation or dissolution of the Company; or
(v) during any period of 12 consecutive calendar months, individuals:
(A) who were directors of the Company on the first day of such period, or
(B) whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,
shall cease to constitute a majority of the Board.
Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, (1) in no event shall a Change in Control be deemed to have occurred in connection with an initial public offering of Common Stock, and (2) for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code,provided that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.
(b) Effect of a Change in Control. Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:
(i) notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any forfeiture provisions thereon imposed pursuant to the Plan and the applicable Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable; and
(ii) to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate.
3.6. Operation and Conduct of Business
Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company or any Affiliate from taking any action with respect to the operation and conduct of its business that its deems appropriate or in its best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company or any Affiliate, any merger or consolidation of the Company or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.
3.7. No Rights to Awards
No Key Person or other Person shall have any claim to be granted any Award under the Plan.
3.8. Right of Discharge Reserved
Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company or any Affiliate, his or her consultancy/service relationship with the Company or any Affiliate, or his or her position as a director of the Company or any Affiliate, or affect any right that the Company or any Affiliate may have to terminate such employment or consultancy/service relationship or service as a director.
3.9. Non-Uniform Determinations
The Administrator’s determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated). Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.
3.10. Headings
Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such section, subsection, paragraph or subdivision.
3.11. Effective Date
The Plan shall be effective as of April 24, 2014, the date on which the Plan was adopted by the Board (the “Effective Date”). The Board may, but need not, make the granting of any Awards under the Plan subject to the approval or ratification of the Plan and/or the Award by the Company’s stockholders.
3.12. Restriction on Issuance of Stock Pursuant to Awards
The Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fully paid and non-assessable under applicable law. Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder’s then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no shares shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator. The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder hereunder on such Person’s undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions. The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder. Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.
3.13. Requirement of Notification of Election Under Section 83(b) of the Code
If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.
3.14. Severability
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
3.15. Sections 409A and 457A
To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.
3.16. Unfunded Plan
Participants shall have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
3.17. No Fractional Shares
No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, Awards, other securities or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
3.18. Governing Law
The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.