UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Amendment No. 1
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
CIRALIGHT GLOBAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CIRALIGHT GLOBAL, INC.
670 E. PARKRIDGE
SUITE 112
CORONA, CALIFORNIA 92879
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 2012
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Ciralight Global, Inc. ("Company")
will be held at the Embassy Suites Anaheim-North, Weeping Willow Room, 3100 East
Frontera Street, Anaheim, California 92806, on Monday, June 25, 2012, at 10:00,
a.m., Pacific Daylight Time, for the following purposes:
1. The election of six (6) directors, Terry S. Adams, Jeffrey S. Brain,
Larry Eisenberg, Frederick Feck, Richard Katz and William ("Smokey")
Robinson Jr., for the ensuing year;
2. Ratification of HJ Associates & Consultants, LLP as the Company's
independent accountants for the 2009, 2010, 2011 and 2012 fiscal
years;
3. To approve the Ciralight Global, Inc. 2010 Employee and Consultant
Stock Incentive Plan;
4. To approve the Ciralight Global, Inc. 2012 Employee and Consultant
Stock Incentive Plan; and
5. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
The board of directors has fixed the close of business on May 23, 2012, as
the record date ("Record Date") for the determination of shareholders who are
entitled to notice of and to vote at the meeting and any adjournment thereof.
We have enclosed the 2011 Annual Report on Form 10-K, including financial
statements, the Proxy Statement and a Proxy Card with this Notice of Annual
Meeting.
Attendance at the Annual Meeting will be limited to shareholders of the
Company. Shareholders will be required to furnish proof of ownership of the
Company's common stock before being admitted to the meeting. Shareholders
holding shares in the name of a broker or other nominee are requested to bring a
statement from the broker or nominee confirming their ownership in the Company's
stock. Directions to the meeting's location accompany the Proxy Statement.
Whether or not you expect to attend in person, we urge you to sign, date
and return the enclosed Proxy at your earliest convenience. You may mail, fax or
scan and email your proxy to us. Our fax number is (877) 520-5995. You can email
us at info@ciralight.com. This will ensure the presence of a quorum and your
representation at the meeting. PROMPTLY SIGNING, DATING AND RETURNING THE PROXY
WILL SAVE THE COMPANY THE EXPENSE AND EXTRA WORK OF ADDITIONAL SOLICITATION.
Sending in your Proxy will not prevent you from voting your stock at the meeting
if you desire to do so, as your proxy is revocable at your option.
By Order of the Board of Directors,
Date: June 4, 2012 /s/ Jeffrey S. Brain
------------------------------------
Jeffrey S. Brain,
President
CIRALIGHT GLOBAL, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
PROCEDURAL MATTERS
GENERAL
The enclosed Proxy Statement, which was first mailed to shareholders on
June 4, 2012, is furnished in connection with the solicitation of proxies by the
Board of Directors of Ciralight Global, Inc. ("Company") to be voted at the
Annual Meeting of Shareholders of the Company to be held on Monday, June 25,
2012, at 10:00 a.m. Pacific Daylight Time, at the Embassy Suites Anaheim-North,
Weeping Willow Room, 3100 East Frontera Street, Anaheim, California 92806, for
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
When proxies are properly dated, executed and returned, the shares they
represent will be voted at the meeting in accordance with the instructions of
the shareholder. If no specific instructions are given, the shares will be voted
"FOR" the election of the nominees for directors set forth herein, "FOR" the
proposals set forth herein and, at the discretion of the proxy holders, upon
such other business as may properly come before the meeting.
RECORD DATE AND VOTING SECURITIES
Shareholders of record at the close of business on May 23, 2012 ("Record
Date") will be entitled to vote at the meeting on the basis of one (1) vote for
each share of Common Stock held. Mr. George Adams, Sr., the holder of 1,000,000
shares of our Series A Preferred Stock ("Preferred Stock") will be entitled to
vote his Preferred Stock's super-voting rights for the election of the Directors
together with his Common Stock voting rights for a total of 51% of all castable
votes on the election of our Directors. Mr. Adams does not have super-voting
rights on Proposals No. 2, 3 or 4. On May 23, 2012, there were 14,344,067 shares
of the Common Stock outstanding, held of record by approximately 173
shareholders, and 1,000,000 shares of Preferred Stock, held of record by Mr.
George S. Adams.
REVOCABILITY OF PROXIES
Shareholders who execute proxies retain the right to revoke them at any
time prior to the exercise of the powers conferred thereby, by delivering a
signed statement to the Secretary of the Company at or prior to the meeting or
by executing another proxy dated as of a later date.
SOLICITATION
The cost of solicitation will be borne by the Company. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. The Company's directors, officers and employees, without
additional compensation, may solicit proxies personally or by telephone,
facsimile or telegram. Although the exact cost of preparation, mailing and
holding of the meeting is not known at this time, it is anticipated that the
cost will be approximately $5,000.00.
VOTING RIGHTS
Under the Nevada Revised Business Corporation Act, the Company's Articles
of Incorporation, and its Bylaws, the holders of Common Stock shall be entitled
to one vote for each share of Company's Common Stock held at the Record Date for
all matters, including the election of directors. The holder of our Series A
Preferred Stock has "super-voting" rights exercisable for the election of
Directors. The required quorum for the transaction of business at the Annual
Meeting is a majority of the votes eligible to be cast by holders of shares of
Common Stock and Preferred Stock issued and outstanding on the Record Date.
Shares that are voted "FOR," "AGAINST," "WITHHELD," OR "ABSTAIN" are treated as
being present at the Annual Meeting for the purposes of establishing a quorum
and are also treated as shares entitled to vote at the Annual Meeting ("Votes
Cast") with respect to such matters. Abstentions will not be counted as a vote
"FOR" or "AGAINST" a proposal.
Broker non-votes will be counted for the purpose of determining the
presence or absence of a quorum for the transaction of business, but such
non-votes will not be counted for the purposes of determining the number of
Votes Cast with respect to the particular proposal on which a broker has
expressly not voted. Thus, a broker non-vote will not affect the outcome of the
voting on a proposal. Except with respect to elections of directors, any
shareholder entitled to vote may vote part of his or her shares in favor of a
proposal and refrain from voting the remaining shares or vote them against the
proposal. If a shareholder fails to specify the number of shares he or she is
affirmatively voting, it will be conclusively presumed that the shareholder's
approving vote is cast with respect to all shares the shareholder is entitled to
vote.
VOTING PROXIES
The shares of Common Stock and Preferred Stock represented by all properly
executed proxies received in time for the meeting will be voted in accordance
with the directions given by the shareholders. If no specification is made, the
shares will be voted "FOR" the nominees named herein as directors and "FOR" all
other proposals.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED SHAREHOLDER MATTERS
The following tables set forth the ownership of our common stock and
preferred stock by (a) each person known by us to be the beneficial owner of
more than 5% of our outstanding common stock and preferred stock; and (b) by all
of named officers and our directors and by all of our named executive officers
and directors as a group. To the best of our knowledge, the persons named have
sole voting and investment power with respect to such shares and are beneficial
owners of the shares indicated in the tables, except as otherwise noted by
footnote.
The information presented below regarding beneficial ownership of our
voting securities has been presented in accordance with the rules of the U.S.
Securities and Exchange Commission and is not necessarily indicative of
ownership for any other purpose. Under these rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares the power to vote
or direct the voting of the security or the power to dispose or direct the
disposition of the security. A person is deemed to own beneficially any security
as to which such person has the right to acquire sole or shared voting or
investment power within 60 days through the conversion or exercise of any
convertible security, warrant, option or other right. More than one person may
be deemed to be a beneficial owner of the same securities. The percentage of
beneficial ownership by any person as of a particular date is calculated by
dividing the number of shares beneficially owned by such person, which includes
the number of shares as to which such person has the right to acquire voting or
investment power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has the right
to acquire voting or investment power within 60 days. Consequently, the
denominator used for calculating such percentage may be different for each
beneficial owner. Except as otherwise indicated below, we believe that the
beneficial owners of our common stock listed below have sole voting and
investment power with respect to the shares shown.
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(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
BENEFICIAL OWNERSHIP OF 5% OR MORE OF OUR COMMON STOCK
Title Name and Address of Amount and Nature of Percent
of Class Beneficial Owner Beneficial Ownership of Class
-------- ---------------- -------------------- --------
Common Stock George Adams, Sr. 4,823,224 (1) 33.62%
3200 E. Frontera Street
Anaheim, California 92806
Common Stock Jeffrey S. Brain 994,375 (2) 6.75%
670 E. Parkridge, Suite 112
Corona, California 92879
Common Stock Frederick Feck 800,000 (3) 5.50%
670 E. Parkridge, Suite 112
Corona, California 92879
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(1) In addition to the 4,823,224 shares owned of record and beneficially by Mr.
Adams, Mr. Adams owns 1,000,000 shares of Series A Preferred Stock. The
combination of common stock and the voting rights for the Series A
Preferred Stock result in Mr. Adams having the right to cast 51% of all
votes in the election of our Directors.
(2) These shares are registered in the name of Bayport Holding Company, LLC,
Jeffrey S. Brain's 100% owned, personal holding company. Mr. Brain is the
indirect beneficial owner of, and has sole dispositive and voting power
over, these shares. Of these shares, 619,375 of these shares represent
common stock issued and options to purchase 375,000 shares of common stock
that are exercisable within the next 60 days.
(3) Includes options to purchase 200,000 shares of common stock that are
exercisable within the next 60 days.
BENEFICIAL OWNERSHIP OF 5% OR MORE OF OUR SERIES A PREFERRED STOCK
Title Name and Address of Amount and Nature of Percent
of Class Beneficial Owner Beneficial Ownership of Class
-------- ---------------- -------------------- --------
Series A George Adams, Sr. 5,000,000 (1) 100.00%
Preferred 3200 E. Frontera Street
Stock Anaheim, California 92806
----------
(1) In addition to the 1,000,000 shares of Series A Preferred Stock owned of
record and beneficially by Mr. Adams, Mr. Adams owns 4,823,224 shares of
common stock. The combination of common stock and the voting rights for the
Series A Preferred Stock result in Mr. Adams having the right to cast 51%
of all votes in the election of our directors.
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(B) SECURITY OWNERSHIP OF MANAGEMENT:
Title Name of Amount and Nature of Percent
of Class Beneficial Owner Beneficial Ownership of Class
-------- ---------------- -------------------- --------
Common Stock Terry S. Adams 614,032 (1) 4.22%
Common Stock Jeffrey S. Brain 994,375 (2) 6.75%
Common Stock Jarrett Fenton 0 --%
Common Stock Larry Eisenberg 0 --%
Common Stock Frederick Feck 800,000 (3) 5.50%
Common Stock Richard Katz 0 --%
Common Stock William ("Smokey") Robinson Jr. 37,000 (4) less than 1%
Common Stock All officers and directors 2,445,407 16.47%
as a group (2 persons)
----------
(1) Includes options to purchase 200,000 shares of common stock that are
exercisable within the next 60 days.
(2) Includes 619,375 shares registered in the name of Bayport Holding Company,
LLC, Jeffrey S. Brain's 100% owned, personal holding company. Mr. Brain is
the indirect beneficial owner of, and has sole dispositive and voting power
over, these shares. Of these shares, 619,375 shares represent common stock
issued and options to purchase 375,000 shares of common stock that are
exercisable within the next 60 days.
(3) Includes options to purchase 200,000 shares of common stock that are
exercisable within the next 60 days.
(4) Includes 6,000 shares held in the name of Mr. Robinson's wife.
(C) CHANGES IN CONTROL:
We are not aware of any arrangements, including any pledge by any person of
our securities, the operation of which may at a subsequent date result in a
change in control of the Company.
SECTION 16(a) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent of the
Company's Common Stock, to file initial reports of beneficial ownership on Form
3, changes in beneficial ownership on Form 4 and an annual statement of
beneficial ownership on Form 5, with the SEC. Such executive officers, directors
and greater than ten percent shareholders are required by SEC rules to furnish
the Company with copies of all such forms that they have filed.
Based on our review of the copies of such form filed with the SEC
electronically, received by the Company and representations from certain
reporting persons, the Company believes that for the fiscal year ended December
31, 2011, and up through the quarterly period ending March 31, 2012, all the
officers, directors and more than 10% beneficial owners have filed all reports
required under the above described filing requirements.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officers are elected by the board of directors and serve at
the discretion of the board. All of the current directors serve until the next
annual shareholders' meeting or until their successors have been duly elected
and qualified. The following table sets forth certain information regarding our
current directors and executive officers:
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Name Age Position Director Since
---- --- -------- --------------
Terry S. Adams 52 Chairman of the Board and Director April 2012
Jeffrey S. Brain 52 President, Chief Executive Officer, April 2009
Chief Operating Officer, Treasurer
and Director
Larry Eisenberg 60 Director April 2012
Frederick Feck 80 Corporate Secretary and Director April 2009
Jarrett Fenton 35 Chief Financial Officer --
Richard Katz 61 Director April 2012
William ("Smokey") Robinson Jr. 72 Director May 2012
Certain biographical information of our directors and officers is set forth
below.
TERRY SCOT ADAMS, CHAIRMAN OF THE BOARD AND DIRECTOR
Terry S. Adams is a Director and Executive Vice President of SA Recycling.
Originally started by Terry's Father in 1973, as a small junk yard with a
handful of employees, SA Recycling currently operates over 50 facilities in
California, Arizona, Nevada and Mexico. The list of facilities includes two deep
water ports and four automobile shredding plants. SA Recycling has approximately
1,500 employees and will process and recycle more than three million tons of
steel this year, accounting for almost 10% of all scrap metal exported from the
U.S. Mr. Adams has worked for SA Recycling for the past 30 years.
Mr. Adams' many roles in the SA Recycling have included: shredder operator,
design engineer, plant manager, regulatory compliance officer, and in his
current capacity he is involved in acquisitions and strategic planning.
Over the past thirty years Mr. Adams has developed an extensive background
and expertise in the recycling, processing, shredding, and management of all
types of metals and waste streams, including hazardous, reactive, and
radioactive materials. In 1993, Mr. Adams helped form the first lithium
recycling company and was the chief design engineer for the world's first
lithium battery recycling plant located in Trail, British Columbia. That
company, Toxco, Inc. has grown into one of the largest battery recyclers in the
U.S. and is currently building a new Department of Energy sponsored facility at
one of its plants in Ohio. When completed in 2012, this plant will be the first
dedicated electric vehicle battery recycling operation in the U.S. Mr. Adams
served as President of Toxco, Inc. from 1999 to 2011, and is currently Chairman
of the Board of Toxco, Inc.
Mr. Adams is also on the Board of Directors of the following non-profit
organizations: Foundation Board Children's Hospital Orange County (CHOC),
Executive Board member Orange County Council, Boy Scouts of America, and USC
Viterbi (Engineering) Board of Councilors.
Mr. Adams holds a Bachelor of Science in Mechanical Engineering from USC
(1981) and a Masters in Business Administration from Cal State Fullerton (1985)
Mr. Adams has been married to his wife Leslie for 25 years and has son and
a daughter.
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JEFFREY BRAIN, PRESIDENT, CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER AND A
DIRECTOR
Since March 15, 2009, until the present time, Jeff has been involved in the
formation and operation of the Company and currently serves us in the capacities
of President, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer and as a director. Jeff is a successful entrepreneur, recognized civic
leader and government strategist. Jeff served as Chief Operating Officer of the
Smokey Robinson Food Company from October 2003 until November 2008. Jeff took
the company from startup to national distribution in just 18 months. Prior to
joining Smokey Robinson Food Company, Jeff was the Founder and President of
Valley Vote, Inc., one of the largest government reform organizations in U.S.
history. Jeff presided over a Board of Directors of 100 of Los Angeles' top
community and business leaders, directed 2,000 volunteers and a team of
professional consultants and attorneys.
As President of Valley Vote, Inc., Jeff was responsible for preparing a
$1.1 billion dollar budget and a public service plan to provide police, fire,
transportation, parks, utilities, etc. for a city that would be the sixth
largest city in the U.S. He also managed all the business functions, including
media relations, public speaking, community outreach, budgeting, government
structure and public service planning, message development, legislative
development and he oversaw the day-to-day administrative staff and operations.
Prior to forming Valley Vote, Jeff founded Jeff Brain's Real Estate
Network, a full service real-estate brokerage and consulting firm based in Los
Angeles. Before launching his entrepreneurial ventures, Jeff held the position
of Assistant Vice President at Eastern Pacific, a real estate development
company. In this role, Jeff was responsible for analyzing, budgeting and
syndicating multi-million dollar real estate development projects and managed
the Accounting Department. Jeff also served as the Director of Acquisition and
Finance at Triangle Investments, Inc., where he was responsible for real estate
acquisitions, project analysis, syndications and management.
Jeff has a Bachelor of Science degree in Finance as well as a Bachelor of
Science Degree in Accounting, both from the California State University of
Northridge.
LARRY EISENBERG, DIRECTOR
Since March 2011, Larry Eisenberg is Principal of Sustainable Strategies
Today. Sustainable Strategies Today helps clients across the nation implement
sustainable design and renewable energy solutions, working as a strategic
advisor and owner's representative.
From August 2003 until March 2011, Mr. Eisenberg served as the Executive
Director of Facilities Planning and Development for the Los Angeles Community
College District, the largest community college district in the nation. Serving
more than 36 cities in Los Angeles County and covering nearly 900 square miles,
the nine colleges of the LACCD have been educating and training the region's
diverse workforce since 1969.
As the Executive Director, Mr. Eisenberg oversaw all planning, facilities
development, maintenance and real estate activities at the District. Mr.
Eisenberg directed the District's award -winning $6 billion Sustainable Building
Program, one of the nation 's largest "green" construction and renewable energy
efforts. The program was established to modernize the LACCD's nine colleges,
focusing on sustainability by embracing nationally recognized environmental
standards and guidelines. By the time the construction and renewable energy
efforts are complete, the District is expected to have 85 new buildings that
meet the U.S. Green Building Council's LEED (Leadership in Energy and
Environmental Design) standards with nearly 20 of them being certified as LEED
Platinum. In addition, a significant share of the District's energy requirements
will be met with renewable energy.
Mr. Eisenberg has extensive experience with major construction projects and
is an expert on sustainable building practices. He has published numerous
articles on a variety of construction -related topics and on innovative
public/private partnerships in building projects. Mr. Eisenberg is a sought
after speaker, regularly serving as a keynote speaker at meetings and
conferences around the country on topics of sustainable design, renewable
energy, and building construction practices.
6
Mr. Eisenberg serves on the sustainability advisory committee for several
national organizations, including the American College and University Presidents
Climate Commitment, the Association for the Advancement of Sustainability in
Higher Education, and the National Association of College and University Budget
Officers.
Mr. Eisenberg received a bachelor's degree in urban studies from the
Massachusetts Institute of Technology and a master's degree in public affairs
from the LBJ School of Public Affairs at the University of Texas at Austin. He
was born and raised in California's San Fernando Valley and attended North
Hollywood High School. Mr. Eisenberg is married and has one son.
FREDERICK FECK, CORPORATE SECRETARY AND A DIRECTOR
Mr. Feck is a Director of the Company and our Corporate Secretary. Mr. Feck
has been in the real estate development and construction industry from 1960
until the present time. Mr. Feck developed the first true condominium with Fee
Title to cubical air space in California. After the passage of the Medicare bill
in late 1965, Mr. Feck entered the health care field syndicating and developing
convalescent hospitals. Mr. Feck acted as a general partner in the syndication
of a 204 bed convalescent hospital known as The Rio Hondo Convalescent Hospital
in Montebello, California. In 1970, Mr. Feck co-founded Environmental
Communities, Inc., to manufacture mobile and modular homes from a facility in
Corona, California. Mr. Feck sold his interest in 1972 and moved to San Diego
County. Mr. Feck formed Calco West, Inc. and was engaged in the development and
construction of single family tract homes. Mr. Feck also formed Calco West
Realty, Inc. in 1976, a general real estate operation with six offices and a
Real Estate School in the North San Diego County area. The company was sold to
its employees in 1981. Mr. Feck then formed Calco West Financial Corporation in
1981 for the management of commercial and residential real estate, primarily his
own. Mr. Feck was also one of the original founders of the San Marcos National
Bank in 1981 and served on its Board of Directors for a period of 14 years. Mr.
Feck was born in Maine, attended the University of Maine for two years, moved to
California in 1950 and attended Northrop Aeronautical Institute in Los Angeles
from which he graduated in 1952 as an aeronautical engineer. He worked for
Northrop Aircraft Company on the N-69 Guided Missile Program for two years
before going into the service. Mr. Feck served as a pilot in the United States
Air Force for five years. Mr. Feck is licensed in California as a general
contractor and a real estate broker and also holds a commercial pilot's license.
JARRETT FENTON, CHIEF FINANCIAL OFFICER
Effective April 9, 2012, the Company appointed Jarett Fenton, age 35, as
the Chief Financial Officer of the Company.
Since March 2011, Mr. Fenton has served as a Director at Orchid Capital
Partners. Orchid Capital is a transaction and capital markets consultancy
focused on helping small and mid-sized businesses raise funding and execute
strategic transactions. From December 2005 to December 2010, Mr. Fenton served
as Chief Financial Officer at Enova Systems. Enova designs and manufactures
clean vehicle drive systems for heavy vehicle applications. Enova is a dual
listed public company with active listings on NYSE Amex and London AIM. At
Enova, Mr. Fenton solicited and managed an international investor base that
included bulge bracket financial institutions, conglomerate pension funds, hedge
funds, venture funds, and private capital sources. During his five year tenure,
Mr. Fenton executed several multi tranche international equity raises of ~$50M.
While at Enova, he oversaw a capital expenditure program of ~$30M, and managed
high profile federal stimulus and incentive programs.
From March 2003 through February 2007, Mr. Fenton served as the Chief
Executive of the Clarity Group, a company he founded. The Clarity Group is a SEC
reporting and corporate compliance consultancy. Mr. Fenton's primary
responsibility was practice development and he eventually grew the company to
include such clients as Countrywide Financial and PC Mall Inc., as well as
smaller SEC registrants. From September 1998 to March of 2003, Mr. Fenton served
as a Senior Associate in the Middle Market practice of PricewaterhouseCoopers in
7
the Orange County, CA office. At PricewaterhouseCoopers Mr. Fenton facilitated
audit engagements, worked on SEC reporting issues, controls assessments, client
reporting, financial guidance interpretation and staff development. Mr. Fenton
has a BA in Business Economics with an emphasis in Accounting from the
University of California at Santa Barbara and is a Certified Public Accountant
in the State of California.
RICHARD KATZ, DIRECTOR
Since January 1997, Richard Katz has been the owner of a successful public
policy and government relations firm based in Los Angeles, Richard Katz
Consulting, Inc. ("RKC"). RKC offers a wide variety of services, including
strategic advice, message development, negotiations/mediation and government
relations strategies. RKC brings a vast knowledge of all levels of government
and can guide clients through the maze of both bureaucratic and regulatory
concerns. In addition, they can develop, direct and implement a communications
strategy to specific stakeholders. Targeting interest groups and helping clients
gain entry into organizations, stakeholders and corporations through their vast
contacts and decades of relationships is their specialty.
Mr. Katz was California's lead negotiator for the landmark Colorado River
Agreement between the State of California, the Federal Government, four
California Water Agencies, and the six Colorado River Basin States, furthering
his expertise as a negotiator on issues of statewide significance. Mr. Katz had
already played a pivotal role in renegotiating $30 Billion worth of California's
Energy contracts and developing California's Transportation Blueprint for the
21st Century, which the voters approved as Proposition III in 1990.
Shortly after his election in June of 2005, Los Angeles Mayor Antonio
Villaraigosa appointed Mr. Katz to serve with him on the Governing Board of the
Metropolitan Transportation Authority. After the horrific Metrolink accident in
2008, the Mayor appointed Mr. Katz to the Metrolink Board, where he now serves
as Chair.
In January 2003, Governor Davis appointed Mr. Katz his Senior Advisor on
Energy and Water issues. In 2001, Mr. Katz was appointed to the State Water
Resources Control Board, confirmed by the Senate and served for six years,
occupying the water quality seat.
Mr. Katz was first elected to the California State Assembly in 1980 and
served continuously for 16 years. As Democratic Leader in 1995, Mr. Katz led the
Democratic Party back to majority status by winning 43 seats in the 1996
elections. California's term lirnits law prohibited Mr. Katz from seeking
re-election.
For 10 years, Mr. Katz served as Chair of the powerful Assembly
Transportation Committee. Katz authored Proposition 111, a 10-year
Transportation Blueprint passed by the voters. He created the Congestion
Management Plan, requiring cities and counties to measure and mitigate impacts
of land use decisions on their streets, highways and transit systems. Mr. Katz
also spearheaded numerous investigations of governmental waste.
In addition to serving as Chair of the Transportation Committee, Mr. Katz
worked in policy areas including education, environment, criminal justice and
consumer issues. Some of his accomplishments include laws he wrote dealing with
prison reform, groundwater protection, computer education, a $100 million school
bus replacement program, Mono Lake restoration and landmark water market
legislation.
Mr. Katz was Chair of Angelenos for Better Classrooms, which led the
successful 1997 campaign to pass a $2.4 billion L.A. school bond. Mr. Katz
currently serves on the Management Committee and Board of the Economic Alliance
of the San Fernando Valley and the Boards of Heal the Bay, ValIey Presbyterian
Hospital, The Children's Community School, Project Grad and the West Coast
Sports Medicine Foundation,
8
WILLIAM ("SMOKEY") ROBINSON JR., DIRECTOR
Smokey Robinson has had a 50 year career in music.
Once pronounced by Bob Dylan as America's "greatest living poet," acclaimed
singer-songwriter Smokey Robinson's career spans over 4 decades of hits. He has
received numerous awards including the Grammy Living Legend Award, NARAS
Lifetime Achievement Award, Honorary Doctorate (Howard University), Kennedy
Center Honors and the National Medal of Arts Award from the President of the
United States. He has also been inducted into the Rock `n' Roll Hall of Fame and
the Songwriters' Hall of Fame.
Born and raised in Detroit, Michigan, Robinson founded The Miracles while still
in high school. The group was Berry Gordy's first vocal group, and it was at
Robinson's suggestion that Gordy started the Motown Record dynasty. Their single
of Robinson's "Shop Around" became Motown's first #1 hit on the R&B singles
chart. In the years following, Robinson continued to pen hits for the group
including "You've Really Got a Hold on Me," "Ooo Baby Baby," "The Tracks of My
Tears," "Going to a Go-Go," "More Love," "Tears of a Clown" (co-written with
Stevie Wonder), and "I Second That Emotion."
The Miracles dominated the R&B scene throughout the 1960's and early 70's and
Robinson became Vice President of Motown Records serving as in-house producer,
talent scout and songwriter.
In addition to writing hits for the Miracles, Robinson wrote and produced hits
for other Motown greats including The Temptations, Mary Wells, Brenda Holloway,
Marvin Gaye and others. "The Way You Do the Things You Do," "My Girl," "Get
Ready," "You Beat Me to the Punch," "Don't Mess with Bill," "Ain't That
Peculiar," and "My Guy" are just a few of his songwriting triumphs during those
years.
John Lennon of The Beatles made countless remarks regarding Robinson's influence
on his music. The Beatles had recorded Robinson and The Miracles' "You've Really
Got A Hold On Me" in 1963 and in 1982 another popular British group, The Rolling
Stones covered the Robinson and the Miracles' hit "Going To A Go-Go."
He later turned to a solo career where he continued his tradition of hitmaking
with "Just to See Her," "Quiet Storm," "Cruisin'," and "Being with You," among
others.
He remained Vice President of Motown records until the sale of the company,
shaping the label's success with friend and mentor Berry Gordy. Following his
tenure at Motown, he continued his impressive touring career and released
several successful solo albums.
During the course of his 50-year career in music, Robinson has accumulated more
than 4,000 songs to his credit and continues to thrill sold-out audiences around
the world with his high tenor voice, impeccable timing, and profound sense of
lyric. Never resting on his laurels, Smokey Robinson remains a beloved icon in
our musical heritage.
COMMITTEES OF THE BOARD OF DIRECTORS
We do not currently have an audit committee or a compensation committee.
COMPENSATION OF DIRECTORS
Our directors do not receive any direct compensation for their service on
our board of directors. Any future director compensation will be determined by
our compensation committee, once it is chartered.
9
DIRECTORSHIPS
During the past five years, none of our directors or persons nominated or
chosen to become directors held any other directorship in any company with a
class of securities registered pursuant to Section 12 of the 1934 Act or subject
to the requirements of Section 15(d) of such Act or any other company registered
as an investment company under the Investment Company Act of 1940.
OTHER SIGNIFICANT EMPLOYEES
No other significant employees exist.
FAMILY RELATIONSHIPS
No family relationship exists between or among any of our officers and
directors. However, one of our Directors, Terry S. Adams, is the son of George
Adams, Sr., our largest shareholder, and another one of our Directors, Frederick
Feck, is the brother-in-law of George Adams, Sr.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Except as described below, during the past ten years, no present director,
executive officer or person nominated to become a director or an executive
officer of Ciralight:
(1) had a petition under the federal bankruptcy laws or any state
insolvency law filed by or against, or a receiver, fiscal agent or
similar officer appointed by a court for the business or property of
such person, or any partnership in which he was a general partner at
or within two years before the time of such filing, or any corporation
or business association of which he was an executive officer at or
within two years before the time of such filing;
(2) was convicted in a criminal proceeding or subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting his involvement in any of the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
Commodity Futures Trading Commission, or an associated person of
any of the foregoing, or as an investment adviser, underwriter,
broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and
loan association or insurance company, or engaging in or
continuing any conduct or practice in connection with such
activity;
(ii) engaging in any type of business practice; or
(iii)engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation
of federal or state securities laws or federal commodities laws;
or
(4) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of an federal or state authority
barring, suspending or otherwise limiting for more than 60 days the
right of such person to engage in any activity described in paragraph
(3) (i), above, or to be associated with persons engaged in any such
activity; or
10
(5) was found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and for which the judgment has not been reversed,
suspended or vacated;
(6) was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any Federal
commodities law, and the judgment in such civil action or finding by
the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated;
(7) was the subject of, or a party to, any Federal or State judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to any alleged violation of:
i. Any Federal or State securities or commodities law or regulation;
or
ii. Any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and-desist order,
or removal or prohibition order; or
iii. Any law or regulation prohibiting mail or wire fraud or fraud in
connection with any business entity; or
(8) was the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15
U.S.C. 78c(a)(26)), and registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C.1(a)(29)), or any
equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
Jeffrey Brain, our Chief Executive Officer, Chief Financial Officer and a
member of our board of directors, filed for protection under Chapter 7 of the
Federal Bankruptcy Code on October 7, 2005, and was discharged from bankruptcy
on February 3, 2006. The reason for the bankruptcy was that Mr. Brain had worked
as President of Valley Voters Organized Toward Empowerment ("Valley Vote") for
five years and was owed approximately $253,000 by Valley Vote, which had
continuously promised to pay him, but did not. In the meantime, Mr. Brain owed
approximately $60,000 in income and payroll taxes, which he could not pay
because of the money owed to him by Valley Vote. Our board of directors believes
that Mr. Brain is an excellent and dedicated officer, director and employee of
the Company and that his earlier bankruptcy is not reflective of his business
acumen or his value to the Company.
CODE OF BUSINESS CONDUCT AND ETHICS
On December 14, 2009, we adopted a Code of Business Conduct and Ethics
applicable to our officers, including our principal executive officer, principal
financial officer, principal accounting officer or controller and any other
persons performing similar functions. Our Code of Business Conduct and Ethics
was designed to deter wrongdoing and promote honest and ethical conduct, full,
fair and accurate disclosure, compliance with laws, prompt internal reporting
and accountability to adherence to our Code of Business Conduct and Ethics. Our
Code of Business Conduct and Ethics is posted on our website at
http://www.ciralightglobal.com. Our Code of Business Conduct and Ethics will be
provided free of charge by us to interested parties upon request. Requests
should be made in writing and directed to the Ciralight at the following
address: 670 E. Parkridge, Suite 112, Corona, California 92879
11
EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid by the
Company to our executive officers and directors of the Company for services
rendered during the periods indicated. Randall Letcavage resigned from his
offices of President, Chief Executive Officer and Director on March 18, 2010.
Jeffrey Bain was appointed President and Chief Executive Officer on March 19,
2010. The following table does not include compensation information for Terry S.
Adams, Larry Eisenberg, Richard Katz or William ("Smokey") Robinson Jr., who
were elected to the Board of Directors between April and May, 2012 and who will
serve as Directors until the Annual Meeting of Shareholders on June 8, 2012, or
until their successors are duly elected. The following table does not include
compensation information for Jarrett Fenton, who was appointed our Chief
financial Officer on April 9, 2012.
SUMMARY COMPENSATION TABLE
Name and
Principal Stock Option All Other
Position Year(1) Salary($) Bonus($) Awards($)(2) Awards($)(3) Compensation($) Total($)
-------- ------- --------- -------- ------------ ------------ --------------- --------
Jeffrey S. Brain 2011 $144,000 $ 0 $ 4,125 (4) $34,597 (5) $31,655 (6) $214,377
Chief Executive 2010 $139,000 $ 0 $ 0 $56,348 (7) $41,634 (8) $236,982
Officer 2009 $ 95,500 $ 0 $83,726 (9) $ 0 $ 0 $179,226
Director
Frederick Feck 2011 $ 0 $ 0 $ 0 $34,597 (10) $36,000 (11) $ 70,597
Corporate 2010 $ 0 $ 0 $ 0 $32,199 (12) $36,000 (13) $ 68,109
Secretary 2009 $ 0 $ 0 $ 400 (14) $ 0 $ 9,000 (15) $ 9,400
Director
Randall 2011 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Letcavage 2010 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
(Former President) 2009 $202,177 (16) $ 0 $60,052 (17) $ 0 $24,000 (18) $286,229
----------
(1) The compensation covered in 2009 includes the period from the Company's
inception on February 26, 2009, through December 31, 2009.
(2) The amounts listed in this column for 2009 reflect the fair value of
certain contractual rights to receive restricted stock in accordance with
the services rendered by such executives and anti-dilution rights granted
to such executives during the period from February 26, 2009 (inception) to
December 31, 2009. The grant date fair value of the restricted stock issued
as founders' shares of the Company's common stock was $.001 per share (the
par value of the Company's common stock on April 1, 2009 was utilized to
issue the amount of shares of common stock equating to the fair value of
the services rendered by Messrs. Letcavage, Brain and Feck as described in
footnotes (4), (6) and (7) to the above Summary Compensation Table). The
grant date fair value of the restricted stock issued as anti-dilution
shares of the Company's common stock as compensation and for services
rendered was $.25 per share (the price on December 31, 2009, based on
issuances of the Company's common stock to private offering subscribers for
cash) was utilized to issue the amount of shares of common stock equating
to the value of the services rendered by Messrs. Letcavage and Brain as
described in footnotes (4) and (6) to the above Summary Compensation
Table). The fair values were determined in accordance with Financial
Accounting Standards Codification Topic 718, Share-Based Payments (FASB ASC
718).
12
(3) The amounts listed in this column for 2010 reflect the fair value of
certain stock options granted to Messrs. Brain and Feck during 2010. On
December 30, 2010, the Company's Board of Directors approved and adopted
the Company's 2010 Employee and Consultant Stock Incentive Plan ("Plan")
and reserved a total of 800,000 shares of common stock for issuance
pursuant to the Plan. On December 30, 2010, the Board of Directors granted
a total of 605,000 options at an exercise price of $.425 per share,
exercisable over five years from the date of grant. 275,000 stock options
were granted to the Company's President, Jeffrey Brain, for achieving
certain milestones and for serving on the Board of Directors. 100,000 stock
options were granted to Frederick Feck, a Director of the Company, for
serving on the Board of Directors in 2010. The fair values were determined
in accordance with Financial Accounting Standards Codification Topic 718,
Share-Based Payments (FASB ASC 718).
The amounts listed in this column for 2011 reflect the fair value of
certain stock options granted to Messrs. Brain and Feck in January 2012,
for services rendered during 2011. In January 2012, the Company's Board of
Directors approved and adopted the Company's 2012 Employee and Consultant
Stock Incentive Plan ("Plan") and reserved a total of 621,500 shares of
common stock for issuance pursuant to the Plan. In January 2012, the Board
of Directors granted a total of 200,000 options to members of our Board of
Directors at an exercise price of $.4675 per share, exercisable over five
years from the date of grant. 100,000 stock options were granted to the
Jeffrey S. Brain and 100,000 stock options were granted to Frederick Feck
for serving on the Board of Directors in 2011. The fair values were
determined in accordance with Financial Accounting Standards Codification
Topic 718, Share-Based Payments (FASB ASC 718).
(4) In January 2012, the Board of Directors granted 7,500 shares of restricted
common stock to Mr. Brain for services rendered in 2011 as our Chief
Executive Officer. The fair value of these shares was determined to be
$4,125 in accordance with Financial Accounting Standards Codification Topic
718, Share-Based Payments (FASB ASC 718).
(5) Represents the fair value of 100,000 stock options granted to Mr. Brain for
serving on the Board of Directors during 2011, determined in accordance
with Financial Accounting Standards Codification Topic 718, Share-Based
Payments (FASB ASC 718).
(6) Includes (i) $20,547 in health and dental insurance premiums paid by the
Company for Mr. Brain and his dependents; (ii) $9,108 as an automobile
allowance from the Company; and (iii) $5,000 is royalty payments assigned
to Mr. Brain by our majority shareholder, George Adams, Sr., less $3,000 of
such royalty payments assigned by Mr. Brain to Jacqui Matsumoto, one of our
employees. See CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
(7) Represents the fair value of 275,000 stock options granted to Mr. Brain for
serving on the Board of Directors during 2010 and for achieving certain
milestones, determined in accordance with Financial Accounting Standards
Codification Topic 718, Share-Based Payments (FASB ASC 718).
(8) Includes (i) $14,256 in health insurance benefits paid by the Company for
Mr. Brain and his dependents; (ii) $1,518 as an automobile allowance from
the Company; and (iii) $25,860 is royalty payments assigned to Mr. Brain by
our majority shareholder, George Adams, Sr. See CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
(9) Includes (i) $320 as the value of 320,000 founder's shares of the Company's
common stock issued at $.001 par value to Mr. Brain in April 2009 for
services rendered; (ii) $30,000 as the value of 120,000 shares of common
stock issued at $.25 per share to Mr. Brain for services rendered, accrued
at $3,000 per month from March through December 2009; (iii) $23,350 as the
value of 94,118 anti-dilution shares of common stock issued to Mr. Brain;
and (iv) $29,876 as the value of 119,505 shares of common stock issued to
Mr. Brain as bonus compensation. All of the above shares of the Company's
common stock are beneficially owned by Mr. Brain, but held of record by
Bayport Holding Company, LLC, Mr. Brain's personal holding company, and Mr.
Brain has sole dispositive and voting control over such shares.
13
(10) Represents the fair value of 100,000 stock options granted to Mr. Feck for
serving on the Board of Directors during 2011, determined in accordance
with Financial Accounting Standards Codification Topic 718, Share-Based
Payments (FASB ASC 718).
(11) Represents rental payments accrued for payment to Mr. Feck in the amount of
$3,000 per month for the lease of our Corona, California warehouse facility
from January 1, 2011 through December 31, 2011, on a verbal month to month
lease.
(12) Represents the fair value of 100,000 stock options granted to Mr. Feck for
serving on the Board of Directors during 2010, determined in accordance
with Financial Accounting Standards Codification Topic 718, Share-Based
Payments (FASB ASC 718).
(13) Represents rental payments to Mr. Feck in the amount of $3,000 per month
for the lease of our Corona, California warehouse facility from January 1,
2010, through December 31, 2010, on a verbal month to month lease.
(14) Represents $400 as the value of 400,000 founder's shares of common stock
issued at par value of $.001 per share to Mr. Feck in April 2009 for
services rendered.
(15) Represents rental payments to Mr. Feck in the amount of $3,000 per month
for the lease of our Corona, California warehouse facility from October 1,
2009, through December 31, 2009, on a verbal month to month lease. Mr. Feck
allowed us to use this warehouse facility from March through September 2009
on a rent free basis.
(16) During the period from the Company's inception on February 26, 2009,
through December 31, 2009, the Company paid iCapital Finance, Inc.
consulting fees in the amount of $202,177. Mr. Letcavage is the majority
owner of iCapital Finance, Inc.
(17) Includes (i) $240 as the value of 240,000 founder's shares of the Company's
common stock issued at par value of $.001 per share to Mr. Letcavage in
April 2009 for services rendered; (ii) $400 as the value of 400,000
founder's shares of common stock issued at par value of $.001 per share to
iCapital Finance, Inc. in April 2009 for services rendered; (iii) $29,412
as the value of 117,647 anti-dilution shares of common stock issued to Mr.
Letcavage; and (iv) $30,000 as the value of 120,000 shares issued at $.25
per share to Mr. Letcavage for services rendered, accrued at $3,000 per
month from March through December 2009. As the majority owner of iCapital
Finance, Inc., Mr. Letcavage has sole dispositive and voting power over the
shares held of record by iCapital Finance, Inc.
(18) Represents rental payments to iCapital, Inc. commencing May 1, 2009, in the
amount of $3,000 per month on a verbal month to month basis for use of our
former executive offices at 2603 Main Street, Suite 1150, Irvine,
California 92614. This rental agreement is no longer in effect.
DIRECTOR COMPENSATION
We do not have a formal compensation plan for our directors. However, each
of our two Directors was granted 100,000 stock options for serving on our Board
of Directors during 2010 and an additional 100,000 stock options for serving on
our Board of Directors during 2011.
EMPLOYMENT CONTRACTS
We do not have any employment agreements with our employees or officers.
14
COMPENSATION DISCUSSION AND ANALYSIS
We have prepared the following Compensation Discussion and Analysis to
provide you with information that we believe is necessary to understand our
executive compensation policies and decisions as they relate to the compensation
of our named executive officers.
We have five members on our board of directors and do not currently have a
compensation committee. Larry Eisenberg and Richard Katz are deemed to be
independent Directors. The presence of independent directors on our board of
directors will allow us to form and constitute a compensation committee of our
board of directors in the future.
The primary objectives of the compensation committee with respect to
executive compensation will be to (i) attract and retain the best possible
executive talent available to us; (ii) motivate our executive officers to
enhance our growth and profitability and increase shareholder value; and (iii)
reward superior performance and contributions to the achievement of corporate
objectives.
The focus of our executive pay strategy will be to tie short-term and
long-term cash and equity incentives to the achievement of measurable corporate
and individual performance objectives or benchmarks and to align executive
compensation with the creation and enhancement of shareholder value. In order to
achieve these objectives, our compensation committee will be tasked with
developing and maintaining a transparent compensation plan that will tie a
substantial portion of our executives' overall compensation to our sales,
operational efficiencies and profitability.
Our board of directors has not set any performance objectives or benchmarks
for 2012, as it intends for those objectives and benchmarks to be determined by
the compensation committee once it is constituted and then approved by the
board. However, we anticipate that compensation benefits will include
competitive salaries, bonuses (cash and equity based), health insurance and
stock option plans.
When constituted, our compensation committee will meet at least quarterly
to assess the cost and effectiveness of each executive benefit and the
performance of our executive officers in light of our revenues, expenses and
profits.
SHARE-BASED COMPENSATION PLAN
On December 30, 2010, the Company's Board of Directors approved and adopted
the Company's 2010 Employee and Consultant Stock Incentive Plan ("2010 Plan")
and reserved a total of 800,000 shares of common stock for issuance pursuant to
the Plan. The purpose of the 2010 Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company by offering them an opportunity to
participate in the Company's future performance through awards of Options,
Restricted Stock and Stock Bonuses.
Effective January 1, 2012, the Company's Board of Directors approved and
adopted the Company's 2012 Employee and Consultant Stock Incentive Plan ("2012
Plan") and reserved a total of 621,500 shares of common stock for issuance
pursuant to the 2012 Plan. The purpose of the 2012 Plan is to provide incentives
to attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company by offering them an
opportunity to participate in the Company's future performance through awards of
Options, Restricted Stock and Stock Bonuses.
15
PLAN INFORMATION
Number of Securities
Number of Securities to be Remaining Available for
Issued Upon Exercise of Weighted-Average Exercise Future Issuance Under
Outstanding Options, Price of Outstanding Options, Equity Compensation Plans
Warrants and Rights Warrants and Rights (excluding column (a))
Plan Category (a) (b) (c)
------------- ------------------- ------------------- -------------------------
Equity Compensation Plans -- -- --
Approved by Security
Holders
Equity Compensation Plans Not 1,080,900 $.44 319,100
Approved by Security Holders
Total 1,080,900 $.44 319,100
Stock options exercisable into an aggregate of 680,900 shares of the
Company's common stock were outstanding on December 31, 2010, of which 580,900
were vested on the date granted and 100,000 vested during 2011. No options were
exercised by employees, officers or directors during the year ended December 31,
2010. Stock options exercisable into an aggregate of 400,000 shares of the
Company's common stock were granted and vested in January 2012 for services
performed during the 2011 fiscal year. The Black-Scholes option-pricing model
was used to estimate the option fair values, in accordance with the provisions
of Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure." This option-pricing
model requires a number of assumptions, of which the most significant are,
expected stock price volatility, the expected pre-vesting forfeiture rate and
the expected option term (the amount of time from the grant date until the
options are exercised or expire). Since the Company's stock does not have an
extended history of stock prices or volatility, expected volatility and average
contractual life variables were estimated utilizing a weighted average of
comparable published volatilities and contractual lives based on industry
comparables. Expected pre-vesting forfeitures were estimated based on expected
employee turnover. The fair value of options granted during the year ended
December 31, 2010, and in January 2012, for the year ended December 31, 2011,
were estimated as of the grant date using the Black-Scholes option pricing model
with the following assumptions: a dividend yield of zero percent, an expected
volatility of between 70.5% and 71.5%, a risk-free interest rate of 0% and a
remaining contractual life of between 1.0 and 5.0 years.
AGGREGATE OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
There have been no exercises of stock options or SARs by our directors or
executive officers.
LONG-TERM INCENTIVE PLAN AWARDS
There have been no long-term incentive plan awards made by the company.
REPRICING OPTIONS
We have not repriced any stock options.
16
PROPOSAL 1.
ELECTION OF DIRECTORS
A board of six (6) directors is to be elected. All directors will hold
office until the next Annual Meeting of Shareholders or until their respective
successors are elected and qualified.
Each proxy executed and returned by a holder of shares of Common and
Preferred Stock will be voted in favor of the nominees to serve as directors
unless the shareholder indicates to the contrary on the Proxy. Although the
board of directors does not contemplate that any of the nominees hereinafter
named will be unavailable for election, in the event that any such nominee is
unable to serve, the proxies will be voted for the remaining nominees and for
such other person(s), if any, as the board may propose. Votes withheld will be
counted for the purpose of determining the presence or absence of a quorum for
the transaction of business at the meeting, but have no other legal effect upon
the election of directors.
DIRECTOR NOMINEES FOR ELECTION
Name of Nominee Age Position with Company
--------------- --- ---------------------
Terry S. Adams 52 Chairman of the Board, Director
Jeffrey S. Brain 52 President, Chief Executive Officer,
Director
Larry Eisenberg 60 Director
Frederick Feck 80 Director
Richard Katz 61 Director
William ("Smokey") Robinson Jr. 72 Director
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE ELECTION OF THE NOMINEES
TO THE BOARD OF DIRECTORS
PROPOSAL 2.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed HJ Associates and Consultants, LLP, as
the Company's independent auditors for the fiscal years ending December 31,
2009, 2010, 2011 and 2012. Services provided to the Company by HJ Associates and
Consultants, LLP in fiscal 2012 will include, among others, review of the
Company's quarterly and annual financial statements.
Representatives of HJ Associates and Consultants, LLP will not be attending
the Annual Meeting; therefore, they will not be making a statement or be
available to respond to questions at the Annual Meeting.
17
AUDIT FEES. During the fiscal year ended December 31, 2011, the aggregate
fees billed by the Company's auditors for services rendered for the audit of our
annual financial statements and the review of the financial statements included
in our quarterly reports on Form 10-Q and for services provided in connection
with the statutory and regulatory filings or engagements for 2011, was $50,000.
During the fiscal year ended December 31, 2010, the aggregate fees billed by the
Company's auditors for services rendered for the audit of our annual financial
statements and the review of the financial statements included in our quarterly
reports on Form 10-Q and for services provided in connection with the statutory
and regulatory filings or engagements for 2010, was $45,000.
AUDIT-RELATED FEES. During the fiscal year ended December 31, 2011, the
aggregate fees billed by the Company's auditors for services related to
amendments to our Form S-1 registration statement reviews was $6,470. During the
fiscal year ended December 31, 2010, the aggregate fees billed by the Company's
auditors for services related to amendments to our Form S-1 registration
statement reviews was $18,580.
TAX FEES. Our auditors provided tax preparation services of $1,260 and
$1,120 during the fiscal years ended December 31, 2011, and 2010, respectively.
ALL OTHER FEES. No other fees were billed to the Company by our auditors
during the fiscal years ended December 31, 2011, and 2010.
PER-APPROVAL POLICIES AND PROCEDURES. The Board of Directors is responsible
for appointing, setting compensation, and overseeing the work of the independent
auditor. The Board has no established policy regarding pre-approval of any audit
or permissible non-audit services provided by the independent auditor.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 2.
PROPOSAL 3.
THE APPROVAL OF THE CIRALIGHT GLOBAL, INC. 2010 EMPLOYEE AND
CONSULTANT STOCK INCENTIVE PLAN
On December 30, 2010, the Ciralight Global, Inc. 2010 Employee and
Consultant Stock Incentive Plan ("2010 Plan") was adopted and approved by the
Board of Directors. The 2010 Plan authorized 800,000 shares of common stock of
the Company that may be granted to employees, consultants, officers, and
directors of the Company in the form of both incentive and non-qualified stock
options.
SUMMARY OF THE 2010 PLAN
The following shall serve as a brief summary of the terms and conditions of
the 2010 Plan, the full text of which is attached hereto as Appendix A and is
incorporated herein by reference. Under any circumstance where this summary and
the 2010 Plan are inconsistent, the plain language of the 2010 Plan shall be
controlling.
PURPOSE. The purpose of the 2010 Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company by offering them an opportunity to
participate in the Company's future performance through awards of options,
restricted stock and stock bonuses.
ADMINISTRATION. The 2010 Plan is administered by the Board of Directors.
Subject to the provisions of the 2010 Plan, the Board has full power (i) to
construe and interpret the terms of the Plan, any Award Agreement and any other
agreement or document executed pursuant to the plan; (ii) to prescribe, amend
and rescind rules and regulations relating to the plan; (iii) to adopt, amend
and rescind rules and guidelines for its own acts and proceedings; (iv) to
determine the provisions of Awards to be granted under the Plan, which include
approving:
18
* those individuals to receive awards;
* the terms and conditions of the awards, including the number of shares
and exercise price of the awards; and
* the time when the awards vest and have been earned.
AUTHORIZED SHARES. The 800,000 shares reserved under the 2010 Plan will be
subject to adjustment in the event of a stock dividend, stock split or other
change in corporate structure or capitalization affecting the common stock.
ELIGIBILITY. All employees, officers, directors, consultants, independent
contractors and advisors of the Company or any of its subsidiaries will be
eligible to participate in the 2010 Plan; provided such consultants, contractors
and advisors render bona fide services not in connection with the offer and sale
of securities in a capital raising transaction.
TYPES OF AWARDS. Awards under the 2010 Plan may be in the form of stock
options (either incentive stock options or non-qualified options), awards of
common stock (registered or restricted) and restricted stock units, or any
combination thereof.
* Stock Options. Stock options represent the right to purchase shares of
common stock within a specified period of time at a specified price.
The exercise price for a non-qualified stock option will not be less
than 85% of the fair market value of common stock on the date of
grant. The exercise price for an incentive stock option will not be
less than 100% (110% for an incentive stock option granted to a 10% or
more stockholder) of the fair market value of common stock on the date
of grant. The aggregate fair market value, determined on the date the
option is granted, of the stock for which any person may be granted
incentive stock options which become exercisable for the first time by
such person in any calendar year cannot exceed the sum of $100,000
(determined on the date such option is granted). No incentive stock
option will be granted to a person who is not an "employee" as defined
in the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and regulations issued thereunder. An incentive
stock option shall expire in ten years (five years in the case of an
incentive stock option granted to a 10% or more stockholder) after the
date of grant.
* Restricted Stock Awards. The Board of Directors may grant restricted
stock awards under the 2010 Plan subject to the satisfaction of
performance goals. A restricted stock award is an offer by the Company
to sell to eligible persons shares of common stock that are subject to
restrictions. The Committee will determine to whom an offer will be
made, the number of shares the person may purchase, the price to be
paid, the restrictions to which the shares will be subject and all
other terms and conditions of the restricted stock award.
* Stock Bonuses. The Board of Directors may grant stock bonuses to
eligible persons for extraordinary services rendered to the Company.
The Board will determine the number of shares to be awarded, the
performance goals imposed on the recipients of the stock bonuses and
the extent to which such stock bonuses have been earned.
TRANSFERABILITY. Under the 2010 Plan, awards are generally non-transferable
other than by will or by the laws of descent and distribution.
FEDERAL INCOME TAX CONSEQUENCES
The U.S. Federal income tax consequences to the Company and its employees
of awards under the Plan are complex and subject to change. The following
discussion is only a summary of the general rules applicable to the Plan.
Recipients of awards under the Plan should consult their own tax advisors since
a taxpayer's particular situation may be such that some variation of the rules
described below will apply.
19
STOCK OPTIONS. The 2010 Plan is not qualified under Section 401(a) of the
Code. In general, neither the grant nor the exercise of an incentive stock
option granted under the Plan will result in taxable income to the option holder
or a deduction to the Company. If the option holder does not dispose of stock
received upon exercise of an incentive stock option within two years after the
date the option is granted and within one year after the date of exercise, any
later sale of such stock will result n a capital gain or loss.
If stock received upon the exercise of an incentive stock option is
disposed of before the holding period requirements described above have been
satisfied, the option holder will generally realize ordinary income at the time
of disposition. The amount of such ordinary income will generally be equal to
the difference between the fair market value of the common stock on the date of
exercise and the option price. In the case of a disqualifying disposition which
is a sale in which a loss (if sustained) would be recognized, then the amount of
ordinary income will not exceed the excess of the amount realized on such sale
over the adjusted basis of the stock, that is, in general, the price paid for
the stock. The Company will generally be entitled to a deduction for Federal
income tax purposes equal to the amount of ordinary income realized by the
option holder, subject to any necessary withholding and reporting requirements.
Certain option holders exercising incentive stock options may become
subject to the alternative minimum tax, under which the difference between (i)
the fair market value of stock purchased under incentive stock options,
determined on the date of exercise, and (ii) the exercise price, will be an item
of tax preference in the year of exercise for purposes of the alternative
minimum tax.
Options granted under the 2010 Plan which are not incentive stock options
are "non-qualified options." No income results upon the grant of a non-qualified
option. When an option holder exercises a non-qualified option, he or she will
realize ordinary income subject to withholding. Generally, such income will be
realized at the time of exercise and in an amount equal to the excess, measured
at the time of exercise, of the then fair market value of the common stock over
the option price. The Company will generally be entitled to a deduction for
Federal income tax purposes equal to the amount of ordinary income realized by
the option holder, subject to certain withholding and reporting requirements.
RESTRICTED STOCK. Generally, restricted stock is not taxable to a
participant at the time of grant, but instead is included in ordinary income (at
its then fair market value) when the restrictions lapse. A participant may elect
to recognize income at the time of grant, in which case the fair market value of
the common stock at the time of grant is included in ordinary income and there
is no further income recognition when the restrictions lapse. The Company is
entitled to a tax deduction in an amount equal to the ordinary income recognized
by the participant.
THIS SUMMARY IS NOT A COMPLETE DESCRIPTION OF THE U.S. FEDERAL INCOME TAX
ASPECTS OF THE 2010 PLAN. MOREOVER, THIS SUMMARY RELATES ONLY TO FEDERAL INCOME
TAXES; THERE MAY ALSO BE FEDERAL ESTATE AND GIFT TAX CONSEQUENCES ASSOCIATED
WITH THE 2010 PLAN, AS WELL AS STATE AND LOCAL TAX CONSEQUENCES.
NEW INCENTIVE PLAN BENEFITS
The future benefits or amounts that would be received under the 2010 Plan
by executive officers and other employees are discretionary and are therefore
not determinable at this time. In addition, the benefits or amounts which would
have been received by or allocated to such persons for the last completed fiscal
year if the plan had been in effect cannot be determined.
NO OPTIONS CURRENTLY OUTSTANDING
680,900 options are currently outstanding under the 2010 Plan.
20
VOTE REQUIRED FOR ADOPTION
The affirmative vote of holders of a majority of the Company's common stock
present in person or by proxy at the meeting is required to approve the 2010
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE 2010 PLAN
PROPOSAL 4.
THE APPROVAL OF THE CIRALIGHT GLOBAL, INC. 2012 EMPLOYEE AND
CONSULTANT STOCK INCENTIVE PLAN
Effective January 1, 2012, the Ciralight Global, Inc. 2012 Employee and
Consultant Stock Incentive Plan ("2012 Plan") was adopted and approved by the
Board of Directors. The 2012 Plan authorized 621,500 shares of common stock of
the Company that may be granted to employees, consultants, officers, and
directors of the Company in the form of both incentive and non-qualified stock
options.
SUMMARY OF THE 2012 PLAN
The following shall serve as a brief summary of the terms and conditions of
the 2012 Plan, the full text of which is attached hereto as Appendix B and is
incorporated herein by reference. Under any circumstance where this summary and
the 2012 Plan are inconsistent, the plain language of the 2012 Plan shall be
controlling.
PURPOSE. The purpose of the 2012 Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company by offering them an opportunity to
participate in the Company's future performance through awards of options,
restricted stock and stock bonuses.
ADMINISTRATION. The 2012 Plan is administered by the Board of Directors.
Subject to the provisions of the 2012 Plan, the Board has full power (i) to
construe and interpret the terms of the Plan, any Award Agreement and any other
agreement or document executed pursuant to the plan; (ii) to prescribe, amend
and rescind rules and regulations relating to the plan; (iii) to adopt, amend
and rescind rules and guidelines for its own acts and proceedings; (iv) to
determine the provisions of Awards to be granted under the Plan, which include
approving:
* those individuals to receive awards;
* the terms and conditions of the awards, including the number of shares
and exercise price of the awards; and
* the time when the awards vest and have been earned.
AUTHORIZED SHARES. The 621,500 shares reserved under the 2012 Plan will be
subject to adjustment in the event of a stock dividend, stock split or other
change in corporate structure or capitalization affecting the common stock.
ELIGIBILITY. All employees, officers, directors, consultants, independent
contractors and advisors of the Company or any of its subsidiaries will be
eligible to participate in the 2012 Plan; provided such consultants, contractors
and advisors render bona fide services not in connection with the offer and sale
of securities in a capital raising transaction.
21
TYPES OF AWARDS. Awards under the 2012 Plan may be in the form of stock
options (either incentive stock options or non-qualified options), awards of
common stock (registered or restricted) and restricted stock units, or any
combination thereof.
* Stock Options. Stock options represent the right to purchase shares of
common stock within a specified period of time at a specified price.
The exercise price for a non-qualified stock option will not be less
than 85% of the fair market value of common stock on the date of
grant. The exercise price for an incentive stock option will not be
less than 100% (110% for an incentive stock option granted to a 10% or
more stockholder) of the fair market value of common stock on the date
of grant. The aggregate fair market value, determined on the date the
option is granted, of the stock for which any person may be granted
incentive stock options which become exercisable for the first time by
such person in any calendar year cannot exceed the sum of $100,000
(determined on the date such option is granted). No incentive stock
option will be granted to a person who is not an "employee" as defined
in the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and regulations issued thereunder. An incentive
stock option shall expire in ten years (five years in the case of an
incentive stock option granted to a 10% or more stockholder) after the
date of grant.
* Restricted Stock Awards. The Board of Directors may grant restricted
stock awards under the 2010 Plan subject to the satisfaction of
performance goals. A restricted stock award is an offer by the Company
to sell to eligible persons shares of common stock that are subject to
restrictions. The Committee will determine to whom an offer will be
made, the number of shares the person may purchase, the price to be
paid, the restrictions to which the shares will be subject and all
other terms and conditions of the restricted stock award.
* Stock Bonuses. The Board of Directors may grant stock bonuses to
eligible persons for extraordinary services rendered to the Company.
The Board will determine the number of shares to be awarded, the
performance goals imposed on the recipients of the stock bonuses and
the extent to which such stock bonuses have been earned.
TRANSFERABILITY. Under the 2012 Plan, awards are generally non-transferable
other than by will or by the laws of descent and distribution.
FEDERAL INCOME TAX CONSEQUENCES
The U.S. Federal income tax consequences to the Company and its employees
of awards under the Plan are complex and subject to change. The following
discussion is only a summary of the general rules applicable to the Plan.
Recipients of awards under the Plan should consult their own tax advisors since
a taxpayer's particular situation may be such that some variation of the rules
described below will apply.
STOCK OPTIONS. The 2012 Plan is not qualified under Section 401(a) of the
Code. In general, neither the grant nor the exercise of an incentive stock
option granted under the Plan will result in taxable income to the option holder
or a deduction to the Company. If the option holder does not dispose of stock
received upon exercise of an incentive stock option within two years after the
date the option is granted and within one year after the date of exercise, any
later sale of such stock will result n a capital gain or loss.
If stock received upon the exercise of an incentive stock option is
disposed of before the holding period requirements described above have been
satisfied, the option holder will generally realize ordinary income at the time
of disposition. The amount of such ordinary income will generally be equal to
the difference between the fair market value of the common stock on the date of
exercise and the option price. In the case of a disqualifying disposition which
is a sale in which a loss (if sustained) would be recognized, then the amount of
ordinary income will not exceed the excess of the amount realized on such sale
over the adjusted basis of the stock, that is, in general, the price paid for
the stock. The Company will generally be entitled to a deduction for Federal
income tax purposes equal to the amount of ordinary income realized by the
option holder, subject to any necessary withholding and reporting requirements.
22
Certain option holders exercising incentive stock options may become
subject to the alternative minimum tax, under which the difference between (i)
the fair market value of stock purchased under incentive stock options,
determined on the date of exercise, and (ii) the exercise price, will be an item
of tax preference in the year of exercise for purposes of the alternative
minimum tax.
Options granted under the 2012 Plan which are not incentive stock options
are "non-qualified options." No income results upon the grant of a non-qualified
option. When an option holder exercises a non-qualified option, he or she will
realize ordinary income subject to withholding. Generally, such income will be
realized at the time of exercise and in an amount equal to the excess, measured
at the time of exercise, of the then fair market value of the common stock over
the option price. The Company will generally be entitled to a deduction for
Federal income tax purposes equal to the amount of ordinary income realized by
the option holder, subject to certain withholding and reporting requirements.
RESTRICTED STOCK. Generally, restricted stock is not taxable to a
participant at the time of grant, but instead is included in ordinary income (at
its then fair market value) when the restrictions lapse. A participant may elect
to recognize income at the time of grant, in which case the fair market value of
the common stock at the time of grant is included in ordinary income and there
is no further income recognition when the restrictions lapse. The Company is
entitled to a tax deduction in an amount equal to the ordinary income recognized
by the participant.
THIS SUMMARY IS NOT A COMPLETE DESCRIPTION OF THE U.S. FEDERAL INCOME TAX
ASPECTS OF THE 2012 PLAN. MOREOVER, THIS SUMMARY RELATES ONLY TO FEDERAL INCOME
TAXES; THERE MAY ALSO BE FEDERAL ESTATE AND GIFT TAX CONSEQUENCES ASSOCIATED
WITH THE 2012 PLAN, AS WELL AS STATE AND LOCAL TAX CONSEQUENCES.
NEW INCENTIVE PLAN BENEFITS
The future benefits or amounts that would be received under the 2012 Plan
by executive officers and other employees are discretionary and are, therefore,
not determinable at this time. In addition, the benefits or amounts which would
have been received by or allocated to such persons for the last completed fiscal
year if the plan had been in effect cannot be determined.
NUMBER OF OPTIONS CURRENTLY OUTSTANDING
400,000 options are currently outstanding under the 2012 Plan.
VOTE REQUIRED FOR ADOPTION
The affirmative vote of holders of a majority of the Company's common stock
present in person or by proxy at the meeting is required to approve the 2012
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE 2012 PLAN
"HOUSEHOLDING" OF PROXY MATERIALS
The Securities and Exchange Commission permits companies and intermediaries
such as brokers to satisfy the delivery requirements for proxy statements and
reports with respect to two or more shareholders sharing the same address by
delivering a single proxy statement or report, as applicable, addressed to those
shareholders. This process, which is commonly referred to as "householding"
potentially provides extra conveniences for shareholders and cost savings for
companies.
Although we do not intend to household for our shareholders of record, some
brokers household our proxy materials and reports, delivering a single copy of
proxy statement or report to multiple shareholders sharing an address unless
contrary instructions have been received from the affected shareholders. Once
23
you have received notice from your broker that it will be householding materials
to your address, householding will continue until you are notified otherwise or
until you revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate copy of proxy
statement or report, or if you are receiving multiple copies of either document
and wish to receive only one, please notify your broker. Shareholders who
currently receive multiple copies of the proxy statement at their address from
their brokers and would like to request "householding" of their communications
should contact their brokers.
WHERE YOU CAN FIND MORE INFORMATION
We file our reports, proxy statements and other information with the United
States Securities and Exchange Commission. The documents filed with the
Securities and Exchange Commission are available to the public from the United
States Securities and Exchange Commission's website at www.sec.gov. Additional
information regarding the Company and its business activities is available at
the Company's website located at www.nationalhealthpartners.com. A copy of our
Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which
has been filed with the SEC, including the financial statements, but without
exhibits, will be provided without charge to any shareholder or beneficial owner
of Common Stock upon written request to Ciralight Global, Inc. at the address on
the first page of this Proxy Statement to the attention of the President.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR THE 2013 ANNUAL MEETING
Any proposal intended to be presented for action at our 2013 Annual Meeting
pursuant to Rule 14a-8 under the Exchange Act must be received by our President
within a reasonable time before the solicitation of proxies for such meeting.
Such proposals should be submitted by certified mail, return receipt requested.
Nothing in this paragraph shall be deemed to require us to include any
shareholder proposal that does not meet all the requirements for such inclusion
established by the SEC in effect at that time and there is no guarantee that any
proposal submitted by a shareholder will be included in the proxy statement.
All shareholder proposals, notices and requests should be made in writing
and sent via registered, certified or express mail, to Ciralight Global, Inc.,
at the address on the first page of this Proxy Statement to the attention of the
President. With respect to business to be brought before our meeting of
shareholders to be held on June 25, 2012, we have received no notices from our
shareholders that we were required to be included in this proxy statement.
OTHER BUSINESS
The Company knows of no other matters to be submitted at this meeting. If
any other matters properly come before the meeting or any adjournment or
postponement thereof, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend.
By Order of the Board of Directors
/s/ Jeffrey S. Brain
-----------------------------------------------
Date: June 4, 2012 Jeffrey S. Brain
Director, President and Chief Executive Officer
24
APPENDICES
Appendix A: Ciralight Global, Inc. 2010 Employee and Consultant Stock Incentive
Plan.
Appendix B: Ciralight Global, Inc. 2012 Employee and Consultant Stock Incentive
Plan.
25
APPENDIX A
CIRALIGHT GLOBAL, INC.
2010 EMPLOYEE AND CONSULTANT STOCK INCENTIVE PLAN
AS ADOPTED DECEMBER 30, 2010
1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company by offering them an opportunity to
participate in the Company's future performance through awards of Options,
Restricted Stock and Stock Bonuses. Capitalized terms not defined in the text
are defined in Section 2.
2. DEFINITIONS.
As used in this Plan, the following terms will have the following meanings:
"AWARD" means any award under this Plan, including any Option, Restricted
Stock or Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means any cause, as defined by applicable law, for the termination
of a Participant's employment with the Company or a Parent or Subsidiary of the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" means Ciralight Global, Inc., a Nevada corporation, or any
successor corporation.
"DEBT OBLIGATION" means any obligation of the Company to a Participant
(including an Insider) for accounting, engineering, legal and other services
rendered to the Company.
"DISABILITY" means a disability, whether temporary or permanent, partial or
total, as determined by the Board.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE PRICE" means the price at which Shares are exchanged with holders
of Debt Obligations.
"EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of
determination on the principal national securities exchange on which
the Common Stock is listed or admitted to trading as reported in The
Wall Street Journal;
(b) if such Common Stock is quoted on the NASDAQ National Market, its
closing price on the NASDAQ National Market on the date of
determination as reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not listed or admitted
to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported
by Bloomberg, L.P.;
(d) in the case of an Award made on the Effective Date, the price per
share at which shares of the Company's Common Stock are initially
offered for sale to the public by the Company's underwriters in the
initial public offering of the Company's Common Stock pursuant to a
registration statement filed with the SEC under the Securities Act; or
(e) if none of the foregoing is applicable, by the Board in good faith.
"INSIDER" means an officer or director of the Company or any other person
whose transactions in the Company's Common Stock are subject to Section 16 of
the Exchange Act.
"OPTION" means an award of an option to purchase Shares pursuant to Section
6.
"PARTICIPANT" means a person who receives an Award under this Plan.
"PERFORMANCE FACTORS" means the factors selected by the Board, in its sole
and absolute discretion, from among the following measures to determine whether
the performance goals applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;
2
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added;
(k) Individual confidential business objectives;
(l) Assisting the Company is becoming a publicly-held entity;
(m) Serving on the Board;
(n) Assisting the Company in getting its listed on an exchange or quoted
on the OTC Bulletin Board;
(o) Assisting the Company's entry into major business relationships; and
(p) Any other performance benchmark, goal or milestone determined by the
Board in its sole and absolute discretion.
"PERFORMANCE PERIOD" means the period of service determined by the Board,
not to exceed five years, during which years of service or performance is to be
measured for Restricted Stock Awards or Stock Bonuses.
"PLAN" means this Ciralight Global, Inc. 2010 Employee and Consultant Stock
Incentive Plan, as amended from time to time.
"RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section 7.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock reserved for issuance
3
under this Plan, as adjusted pursuant to Sections 3 and 19, and any successor
security.
"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant
to Section 8.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect
to a Participant, that the Participant has for any reason ceased to provide
services as an employee, officer, director, consultant, independent contractor,
or advisor to the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or (iii)
any other leave of absence approved by the Company, provided that such leave is
for a period of not more than 90 days, unless reemployment upon the expiration
of such leave is guaranteed by contract or statute or unless provided otherwise
pursuant to a formal policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any employee on an
approved leave of absence, the Board may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company
or a Subsidiary as it may deem appropriate, except that in no event may an
Option be exercised after the expiration of the term set forth in the Option
agreement. The Board will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services ("TERMINATION DATE").
"UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.
"VESTED SHARES" means "Vested Shares" as defined in the Award Agreement.
3. SHARES SUBJECT TO THE PLAN.
3.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 3.2 and 19, the total
aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 800,000 plus Shares that are subject to: (a)
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option; (b) an Award granted hereunder
but forfeited or repurchased by the Company at the original issue price; and (c)
an Award that otherwise terminates without Shares being issued. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Options granted under
this Plan and all other outstanding but unvested Awards granted under this Plan.
3.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
4
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Board.
4. ELIGIBILITY.
ISOs (as defined in Section 6 below) may be granted only to employees
(including officers and directors who are also employees) of the Company. All
other Awards may be granted to employees, officers, directors, consultants,
independent contractors and advisors of the Company or any Parent or Subsidiary
of the Company; provided such consultants, contractors and advisors render bona
fide services not in connection with the offer and sale of securities in a
capital-raising transaction.
5. ADMINISTRATION.
5.1 BOARD AUTHORITY. This Plan will be administered by the Board. Subject
to the general purposes, terms and conditions of this Plan, the Board will have
full power to implement and carry out this Plan. Without limitation, the Board
will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination with,
in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, ability to exercise and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency
in this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned;
5
and
(k) make all other determinations necessary or advisable for the
administration of this Plan.
5.2 BOARD DISCRETION. Any determination made by the Board with respect to
any Award will be made at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. The Board may delegate to one
or more officers of the Company the authority to grant an Award under this Plan
to Participants who are not Insiders of the Company.
6. OPTIONS.
The Board may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code
("ISO") or Nonqualified Stock Options ("NQSOS"), the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
6.1 FORM OF OPTION GRANT. Each Option granted under this Plan will be
evidenced by an Award Agreement that will expressly identify the Option as an
ISO or an NQSO (hereinafter referred to as the "STOCK OPTION AGREEMENT"), and
will be in such form and contain such provisions (which need not be the same for
each Participant) as the Board may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
6.2 DATE OF GRANT. The date of grant of an Option will be the date on which
the Board makes the determination to grant such Option, unless otherwise
specified by the Board. The Stock Option Agreement and a copy of this Plan will
be delivered to the Participant within a reasonable time after the granting of
the Option.
6.3 EXERCISE PERIOD. Options may be exercisable within the times or upon
the events determined by the Board as set forth in the Stock Option Agreement
governing such Option; provided, however, that no Option will be exercisable
after the expiration of ten (10) years from the date the Option is granted; and
provided further that no ISO granted to a person who directly or by attribution
owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company
("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration of five (5)
years from the date the ISO is granted. The Board also may provide for Options
to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Board
determines. All Options granted hereunder shall grant the Participants the right
to exercise their Options immediately or at the rate of at least 20% per year
for five years, subject to the continued employment of the Participant by the
Company.
6.4 EXERCISE PRICE. The Exercise Price of an Option will be determined by
the Board when the Option is granted and may be not less than 85% of the Fair
6
Market Value of the Shares on the date of grant; provided that: (a) the Exercise
Price of an ISO will be not less than 100% of the Fair Market Value of the
Shares on the date of grant; and (b) the Exercise Price of any ISO granted to a
Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 9 of this Plan.
6.5 METHOD OF EXERCISE. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement ("EXERCISE AGREEMENT") in a
form approved by the Board, (which need not be the same for each Participant),
stating the number of Shares being purchased, the restrictions imposed on the
Shares purchased under such Exercise Agreement, if any, and such representations
and agreements regarding Participant's investment intent and access to
information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full
of the Exercise Price for the number of Shares being purchased.
6.6 TERMINATION. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a) If the Participant's service is Terminated for any reason except death
or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than three (3) months
after the Termination Date(or such shorter or longer time period not
exceeding five (5) years as may be determined by the Board, with any
exercise beyond three (3) months after the Termination Date deemed to
be an NQSO), but in any event, no later than the expiration date of
the Options.
(b) If the Participant's service is Terminated because of Participant's
death or Disability (or the Participant dies within three (3) months
after a Termination other than for Cause or because of Participant's
Disability), then Participant's Options may be exercised only to the
extent that such Options would have been exercisable by Participant on
the Termination Date and must be exercised by Participant (or
Participant's legal representative or authorized assignee) no later
than twelve (12) months after the Termination Date (or such shorter or
longer time period not exceeding five (5) years as may be determined
by the Board, with any such exercise beyond (i) three (3) months after
the Termination Date when the Termination is for any reason other than
the Participant's death or Disability, or (ii) twelve (12) months
after the Termination Date when the Termination is for Participant's
death or Disability, deemed to be an NQSO), but in any event no later
than the expiration date of the Options.
(c) Notwithstanding the provisions in paragraph 6.6(a) above, if a
Participant's service is Terminated for Cause, neither the
Participant, the Participant's estate nor such other person who may
then hold the Option shall be entitled to exercise any Option with
respect to any Shares whatsoever, after Termination, whether or not
after Termination the Participant may receive payment from the Company
or Subsidiary for vacation pay, for services rendered prior to
7
Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits. For
the purpose of this paragraph, Termination shall be deemed to occur on
the date when the Company dispatches notice or advice to the
Participant that his service is Terminated.
6.7 LIMITATIONS ON EXERCISE. The Board may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent Participant from exercising the Option
for the full number of Shares for which it is then exercisable.
6.8 LIMITATIONS ON ISO. The aggregate Fair Market Value (determined as of
the date of grant) of Shares with respect to which ISO are exercisable for the
first time by a Participant during any calendar year (under this Plan or under
any other incentive stock option plan of the Company, Parent or Subsidiary of
the Company) will not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.
6.9 MODIFICATION, EXTENSION OR RENEWAL. The Board may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Board may reduce the Exercise Price of outstanding Options without the
consent of Participants affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 6.4 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.
6.10 NO DISQUALIFICATION. Notwithstanding any other provision in this Plan,
no term of this Plan relating to ISO will be interpreted, amended or altered,
nor will any discretion or authority granted under this Plan be exercised, so as
to disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code.
8
7. RESTRICTED STOCK.
A Restricted Stock Award is an offer by the Company to sell to an eligible
person Shares that are subject to restrictions. The Board will determine to whom
an offer will be made, the number of Shares the person may purchase, the price
to be paid ("PURCHASE PRICE"), the restrictions to which the Shares will be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:
7.1 FORM OF RESTRICTED STOCK AWARD. All purchases under a Restricted Stock
Award made pursuant to this Plan will be evidenced by an Award
Agreement("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form
(which need not be the same for each Participant) as the Board will from time to
time approve, and will comply with and be subject to the terms and conditions of
this Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise extended by the Board.
7.2 PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Board on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Purchase Price will be 110% of the Fair Market
Value. Payment of the Purchase Price must be made in accordance with Section 9
of this Plan.
7.3 TERMS OF RESTRICTED STOCK AWARDS. Restricted Stock Awards shall be
subject to such restrictions as the Board may impose. These restrictions may be
based upon completion of a specified number of years of service with the Company
or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Board shall:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant. Prior to the payment of any
Restricted Stock Award, the Board shall determine the extent to which such
Restricted Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and have different
performance goals and other criteria.
7.4 TERMINATION DURING PERFORMANCE PERIOD. If a Participant is Terminated
during a Performance Period for any reason, then such Participant will be
entitled to payment (whether in Shares, cash or otherwise) with respect to the
Restricted Stock Award only to the extent earned as of the date of Termination
in accordance with the Restricted Stock Purchase Agreement, unless the Board
determines otherwise.
9
7.5 "RESTRICTED STOCK MEANS." "Restricted Stock" as used in this Plan means
Shares that are subject to restrictions imposed by this Plan and not by
restrictions required by the Securities Act and, therefore, "Restricted Stock"
is not intended to be the same as "Restricted Securities" under the Securities
Act.
8. STOCK BONUSES.
8.1 AWARDS OF STOCK BONUSES. A Stock Bonus is an award of Shares (which may
consist of Restricted Stock) for extraordinary services rendered to the Company.
A Stock Bonus will be awarded pursuant to an Award Agreement ("STOCK BONUS
AGREEMENT") that will be in such form (which need not be the same for each
Participant) as the Board will from time to time approve, and will comply with
and be subject to the terms and conditions of this Plan. A Stock Bonus may be
awarded upon satisfaction of such performance goals as are set out in advance in
the Participant's individual Award Agreement ("PERFORMANCE STOCK BONUS
AGREEMENT") that will be in such form (which need not be the same for each
Participant) as the Board will from time to time approve, and will comply with
and be subject to the terms and conditions of this Plan. Stock Bonuses may vary
from Participant to Participant and between groups of Participants, and may be
based upon the achievement of the Company and/or individual performance factors
or upon such other criteria as the Board may determine.
8.2 TERMS OF STOCK BONUSES. The Board will determine the number of Shares
to be awarded to the Participant. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Board will: (a) determine the nature, length and starting
date of any Performance Period for each Stock Bonus; (b) select from among the
Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Stock Bonus, the Board shall determine the extent to which
such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Board. The Board
may adjust the performance goals applicable to the Stock Bonuses to take into
account changes in law and accounting or tax rules and to make such adjustments
as the Board deems necessary or appropriate to reflect the impact of
extraordinary or unusual items, events or circumstances to avoid windfalls or
hardships.
8.3 FORM OF PAYMENT. The earned portion of a Stock Bonus may be paid to the
Participant by the Company either currently or on a deferred basis, with such
interest or dividend equivalent, if any, as the Board may determine. Payment may
be made in the form of cash or whole Shares or a combination thereof, either in
a lump sum payment or in installments, all as the Board will determine.
10
9. PAYMENT FOR SHARE PURCHASES.
9.1 PAYMENT. Payment for Shares purchased pursuant to this Plan may be made
in cash (by check) or, where expressly approved for the Participant by the Board
and where permitted by law:
(a) by cancellation of, or credit against, indebtedness of the Company to
the Participant;
(b) by surrender of shares that either: (1) have been owned by Participant
for more than one year and have been paid for within the meaning of
Rule 144 of the Securities Act of 1933 (and, if such shares were
purchased from the Company by use of a promissory note, such note has
been fully paid with respect to such shares); or (2) were obtained by
Participant in the public market;
(c) by waiver of compensation due or accrued to the Participant for
services rendered; or
(e) by any combination of the foregoing.
10. WITHHOLDING TAXES.
10.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.
10.2 STOCK WITHHOLDING. When, under applicable tax laws, a participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Board may allow the Participant
to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a
Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Board and be in writing in a form acceptable to the Board.
11. PRIVILEGES OF STOCK OWNERSHIP.
11.1 VOTING AND DIVIDENDS. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
11
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Purchase Price or Exercise Price pursuant
to Section 12.
11.2 FINANCIAL STATEMENTS. Pursuant to regulation 260.140.46 of the Rules
of the California Corporations Commissioner, the Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
12. TRANSFERABILITY.
Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, other than by will or by the laws of
descent and distribution. During the lifetime of the Participant an Award will
be exercisable only by the Participant. During the lifetime of the Participant,
any elections with respect to an Award may be made only by the Participant
unless otherwise determined by the Board and set forth in the Award Agreement
with respect to Awards that are not ISOs.
13. RESTRICTIONS ON SHARES.
At the discretion of the Board, the Company may reserve to itself and/or
its assignee(s) in the Award Agreement a right to repurchase a portion of or all
Unvested Shares held by a Participant following such Participant's Termination
at any time within ninety (90) days after the later of (a) Participant's
Termination Date, or (b) the date Participant purchases Shares under this Plan.
Such repurchase by the Company shall be for cash and/or cancellation of purchase
money indebtedness, and the price per share shall be the Participant's Exercise
Price or the Purchase Price, as applicable; provided that the Company's right to
repurchase at the original Purchase Price shall lapse at the rate of 20% of
Unvested Shares per year over five years from the date the Options were granted
(without respect to the date the Options were exercised or became exercisable).
14. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan
will be subject to such stock transfer orders, legends and other restrictions as
the Board may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
12
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
15. ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant's Shares, the Board may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Board appropriately endorsed in blank, with the Company or an agent designated
by the Company to hold in escrow until such restrictions have lapsed or
terminated, and the Board may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory note;
provided, however, that the Board may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Board will
from time to time approve. The Shares purchased with the promissory note may be
released from the pledge on a pro rata basis as the promissory note is paid.
16. EXCHANGE AND BUYOUT OF AWARDS.
The Board may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The Board
may at any time buy from a Participant an Award previously granted with payment
in cash, Shares (including Restricted Stock) or other consideration, based on
such terms and conditions as the Board and the Participant may agree.
17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
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18. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or any Parent or Subsidiary
of the Company or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.
19. CORPORATE TRANSACTIONS.
19.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the event of (a)
a dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Board will determine. Notwithstanding anything in this Plan to the
contrary, the Board may provide that the vesting of any or all Awards granted
pursuant to this Plan will accelerate upon a transaction described in this
Section 19. If the Board exercises such discretion with respect to Options, such
Options will become exercisable in full prior to the consummation of such event
at such time and on such conditions as the Board determines, and if such Options
are not exercised prior to the consummation of the corporate transaction, they
shall terminate at such time as determined by the Board.
19.2 OTHER TREATMENT OF AWARDS. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 19, in the event of
14
the occurrence of any transaction described in Section 19.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.
19.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either: (a) granting an Award under this Plan in substitution of such other
company's award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain
unchanged(except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.
20. ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which it is adopted by the
Board ("EFFECTIVE DATE"). This Plan shall be approved by the stockholders of the
Company within twelve (12) months before or after the date this Plan is adopted
by the Board. Upon the Effective Date, the Board may grant Awards pursuant to
this Plan. In the event that stockholder approval of this Plan is not obtained
within the time period provided herein, all Awards granted hereunder shall be
cancelled, any Shares issued pursuant to any Awards shall be cancelled and any
purchase of Shares issued hereunder shall be rescinded.
21. TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate ten
(10) years from the date this Plan is adopted by the Board or, if earlier, the
date of stockholder approval. This Plan and all agreements thereunder shall be
governed by and construed in accordance with the laws of the State of Nevada.
22. AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect,
including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the
Board will not, without the approval of the stockholders of the Company, amend
this Plan in any manner that requires such stockholder approval.
23. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan
to the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
24. ACTION BY BOARD.
Any action permitted or required to be taken by the Board or any decision
or determination permitted or required to be made by the Board pursuant to this
Plan shall be taken or made in the Board's sole and absolute discretion.
Adopted by the Board of Directors on December 30, 2010.
15
APPENDIX B
CIRALIGHT GLOBAL, INC.
2012 EMPLOYEE AND CONSULTANT STOCK INCENTIVE PLAN
ADOPTED AS OF JANUARY 1, 2012 / AMENDED AS OF FEBRUARY 2, 2012
1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company by offering them an opportunity to
participate in the Company's future performance through awards of Options,
Restricted Stock and Stock Bonuses. Capitalized terms not defined in the text
are defined in Section 2.
2. DEFINITIONS.
As used in this Plan, the following terms will have the following meanings:
"AWARD" means any award under this Plan, including any Option, Restricted
Stock or Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means any cause, as defined by applicable law, for the termination
of a Participant's employment with the Company or a Parent or Subsidiary of the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" means Ciralight Global, Inc., a Nevada corporation, or any
successor corporation.
"DEBT OBLIGATION" means any obligation of the Company to a Participant
(including an Insider) for accounting, engineering, legal and other services
rendered to the Company.
"DISABILITY" means a disability, whether temporary or permanent, partial or
total, as determined by the Board.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE PRICE" means the price at which Shares are exchanged with holders
of Debt Obligations.
"EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of
determination on the principal national securities exchange on which
the Common Stock is listed or admitted to trading as reported in The
Wall Street Journal;
(b) if such Common Stock is quoted on the NASDAQ National Market, its
closing price on the NASDAQ National Market on the date of
determination as reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not listed or admitted
to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported
by Bloomberg, L.P.;
(d) in the case of an Award made on the Effective Date, the price per
share at which shares of the Company's Common Stock are initially
offered for sale to the public by the Company's underwriters in the
initial public offering of the Company's Common Stock pursuant to a
registration statement filed with the SEC under the Securities Act; or
(e) if none of the foregoing is applicable, by the Board in good faith.
"INSIDER" means an officer or director of the Company or any other person
whose transactions in the Company's Common Stock are subject to Section 16 of
the Exchange Act.
"OPTION" means an award of an option to purchase Shares pursuant to Section
6.
"PARTICIPANT" means a person who receives an Award under this Plan.
"PERFORMANCE FACTORS" means the factors selected by the Board, in its sole
and absolute discretion, from among the following measures to determine whether
the performance goals applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
(g) Return on equity;
(h) Operating cash flow return on income;
2
(i) Adjusted operating cash flow return on income;
(j) Economic value added;
(k) Individual confidential business objective;
(l) Serving on the Board;
(m) Assisting the Company in getting its listed on an exchange;
(n) Assisting the Company's entry into major business relationships; and
(o) Any other performance benchmark, goal or milestone determined by the
Board in its sole and absolute discretion.
"PERFORMANCE PERIOD" means the period of service determined by the Board,
not to exceed five years, during which years of service or performance is to be
measured for Restricted Stock Awards or Stock Bonuses.
"PLAN" means this Ciralight Global, Inc. 2012 Employee and Consultant Stock
Incentive Plan, as amended from time to time.
"RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section 7.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock reserved for issuance
under this Plan, as adjusted pursuant to Sections 3 and 19, and any successor
security.
"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant
to Section 8.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect
to a Participant, that the Participant has for any reason ceased to provide
services as an employee, officer, director, consultant, independent contractor,
or advisor to the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or (iii)
any other leave of absence approved by the Company, provided that such leave is
for a period of not more than 90 days, unless reemployment upon the expiration
of such leave is guaranteed by contract or statute or unless provided otherwise
pursuant to a formal policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any employee on an
approved leave of absence, the Board may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company
or a Subsidiary as it may deem appropriate, except that in no event may an
Option be exercised after the expiration of the term set forth in the Option
agreement. The Board will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services ("TERMINATION DATE").
"UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.
"VESTED SHARES" means "Vested Shares" as defined in the Award Agreement.
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3. SHARES SUBJECT TO THE PLAN.
3.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 3.2 and 19, the total
aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 621,500 plus Shares that are subject to: (a)
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option; (b) an Award granted hereunder
but forfeited or repurchased by the Company at the original issue price; and (c)
an Award that otherwise terminates without Shares being issued. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Options granted under
this Plan and all other outstanding but unvested Awards granted under this Plan.
3.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Board.
3.3 LIMITATION ON TOTAL NUMBER OF SHARES ISSUABLE UNDER THE PLAN. In order
to comply with the California Code of Regulations, the Company will insure that
at no time shall the total number of Shares issuable under this Plan and upon
the exercise of all outstanding options and the total number of shares provided
for under this Plan and any other Company plan or agreement of the Company
exceed the applicable percentage as calculated in accordance with the conditions
and exclusions of Regulation 260.140.45 of Rules of the California Corporations
Commissioner.
4. ELIGIBILITY.
ISOs (as defined in Section 6 below) may be granted only to employees
(including officers and directors who are also employees) of the Company. All
other Awards may be granted to employees, officers, directors, consultants,
independent contractors and advisors of the Company or any Parent or Subsidiary
of the Company; provided such consultants, contractors and advisors render bona
fide services not in connection with the offer and sale of securities in a
capital-raising transaction.
5. ADMINISTRATION.
5.1 BOARD AUTHORITY. This Plan will be administered by the Board. Subject
to the general purposes, terms and conditions of this Plan, the Board will have
full power to implement and carry out this Plan. Without limitation, the Board
will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this
Plan or any Award
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination with,
in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
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(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, ability to exercise and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency
in this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the
administration of this Plan.
5.2 BOARD DISCRETION. Any determination made by the Board with respect to
any Award will be made at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. The Board may delegate to one
or more officers of the Company the authority to grant an Award under this Plan
to Participants who are not Insiders of the Company.
6. OPTIONS.
The Board may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code
("ISO") or Nonqualified Stock Options ("NQSOS"), the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
6.1 FORM OF OPTION GRANT. Each Option granted under this Plan will be
evidenced by an Award Agreement that will expressly identify the Option as an
ISO or an NQSO (hereinafter referred to as the "STOCK OPTION AGREEMENT"), and
will be in such form and contain such provisions (which need not be the same for
each Participant) as the Board may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
6.2 DATE OF GRANT. The date of grant of an Option will be the date on which
the Board makes the determination to grant such Option, unless otherwise
specified by the Board. The Stock Option Agreement and a copy of this Plan will
be delivered to the Participant within a reasonable time after the granting of
the Option.
6.3 EXERCISE PERIOD. Options may be exercisable within the times or upon
the events determined by the Board as set forth in the Stock Option Agreement
governing such Option; provided, however, that no Option will be exercisable
after the expiration of ten (10) years from the date the Option is granted; and
provided further that no ISO granted to a person who directly or by attribution
owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company
("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration of five (5)
years from the date the ISO is granted. The Board also may provide for Options
to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Board
determines. All Options granted hereunder shall grant the Participants the right
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to exercise their Options immediately or at the rate of at least 20% per year
for five years, subject to the continued employment of the Participant by the
Company.
6.4 EXERCISE PRICE. The Exercise Price of an Option will be determined by
the Board when the Option is granted and may be not less than 85% of the Fair
Market Value of the Shares on the date of grant; provided that: (a) the Exercise
Price of an ISO will be not less than 100% of the Fair Market Value of the
Shares on the date of grant; and (b) the Exercise Price of any ISO granted to a
Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 9 of this Plan.
6.5 METHOD OF EXERCISE. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement ("EXERCISE AGREEMENT") in a
form approved by the Board, (which need not be the same for each Participant),
stating the number of Shares being purchased, the restrictions imposed on the
Shares purchased under such Exercise Agreement, if any, and such representations
and agreements regarding Participant's investment intent and access to
information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full
of the Exercise Price for the number of Shares being purchased.
6.6 TERMINATION. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a) If the Participant's service is Terminated for any reason except
death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable upon
the Termination Date no later than three (3) months after the Termination
Date(or such shorter or longer time period not exceeding five (5) years as may
be determined by the Board, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO), but in any event, no later than the
expiration date of the Options.
(b) If the Participant's service is Terminated because of
Participant's death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant's
Disability), then Participant's Options may be exercised only to the extent that
such Options would have been exercisable by Participant on the Termination Date
and must be exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve (12) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may be
determined by the Board, with any such exercise beyond (i) three (3) months
after the Termination Date when the Termination is for any reason other than the
Participant's death or Disability, or (ii) twelve (12) months after the
Termination Date when the Termination is for Participant's death or Disability,
deemed to be an NQSO), but in any event no later than the expiration date of the
Options.
(c) Notwithstanding the provisions in paragraph 6.6(a) above, if a
Participant's service is Terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any Shares whatsoever, after
Termination, whether or not after Termination the Participant may receive
payment from the Company or Subsidiary for vacation pay, for services rendered
prior to Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits. For the purpose
of this paragraph, Termination shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that his service is
terminated.
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6.7 LIMITATIONS ON EXERCISE. The Board may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent Participant from exercising the Option
for the full number of Shares for which it is then exercisable.
6.8 LIMITATIONS ON ISO. The aggregate Fair Market Value (determined as of
the date of grant) of Shares with respect to which ISO are exercisable for the
first time by a Participant during any calendar year (under this Plan or under
any other incentive stock option plan of the Company, Parent or Subsidiary of
the Company) will not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.
6.9 MODIFICATION, EXTENSION OR RENEWAL. The Board may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Board may reduce the Exercise Price of outstanding Options without the
consent of Participants affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 6.4 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.
6.10 NO DISQUALIFICATION. Notwithstanding any other provision in this Plan,
no term of this Plan relating to ISO will be interpreted, amended or altered,
nor will any discretion or authority granted under this Plan be exercised, so as
to disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code.
7. RESTRICTED STOCK.
A Restricted Stock Award is an offer by the Company to sell to an eligible
person Shares that are subject to restrictions. The Board will determine to whom
an offer will be made, the number of Shares the person may purchase, the price
to be paid ("PURCHASE PRICE"), the restrictions to which the Shares will be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:
7.1 FORM OF RESTRICTED STOCK AWARD. All purchases under a Restricted Stock
Award made pursuant to this Plan will be evidenced by an Award Agreement
("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form (which need
not be the same for each Participant) as the Board will from time to time
approve, and will comply with and be subject to the terms and conditions of this
Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise extended by the Board.
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7.2 PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Board on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Purchase Price will be 110% of the Fair Market
Value. Payment of the Purchase Price must be made in accordance with Section 9
of this Plan.
7.3 TERMS OF RESTRICTED STOCK AWARDS. Restricted Stock Awards shall be
subject to such restrictions as the Board may impose. These restrictions may be
based upon completion of a specified number of years of service with the Company
or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Board shall:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant. Prior to the payment of any
Restricted Stock Award, the Board shall determine the extent to which such
Restricted Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and have different
performance goals and other criteria.
7.4 TERMINATION DURING PERFORMANCE PERIOD. If a Participant is Terminated
during a Performance Period for any reason, then such Participant will be
entitled to payment (whether in Shares, cash or otherwise) with respect to the
Restricted Stock Award only to the extent earned as of the date of Termination
in accordance with the Restricted Stock Purchase Agreement, unless the Board
determines otherwise.
7.5 "RESTRICTED STOCK MEANS." "Restricted Stock" as used in this Plan means
Shares that are subject to restrictions imposed by this Plan and not by
restrictions required by the Securities Act and, therefore, "Restricted Stock"
is not intended to be the same as "Restricted Securities" under the Securities
Act.
8. STOCK BONUSES.
8.1 AWARDS OF STOCK BONUSES. A Stock Bonus is an award of Shares (which may
consist of Restricted Stock) for extraordinary services rendered to the Company.
A Stock Bonus will be awarded pursuant to an Award Agreement ("STOCK BONUS
AGREEMENT") that will be in such form (which need not be the same for each
Participant) as the Board will from time to time approve, and will comply with
and be subject to the terms and conditions of this Plan. A Stock Bonus may be
awarded upon satisfaction of such performance goals as are set out in advance in
the Participant's individual Award Agreement ("PERFORMANCE STOCK BONUS
AGREEMENT") that will be in such form (which need not be the same for each
Participant) as the Board will from time to time approve, and will comply with
and be subject to the terms and conditions of this Plan. Stock Bonuses may vary
from Participant to Participant and between groups of Participants, and may be
based upon the achievement of the Company and/or individual performance factors
or upon such other criteria as the Board may determine.
8.2 TERMS OF STOCK BONUSES. The Board will determine the number of Shares
to be awarded to the Participant. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Board will: (a) determine the nature, length and starting
8
date of any Performance Period for each Stock Bonus; (b) select from among the
Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Stock Bonus, the Board shall determine the extent to which
such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Board. The Board
may adjust the performance goals applicable to the Stock Bonuses to take into
account changes in law and accounting or tax rules and to make such adjustments
as the Board deems necessary or appropriate to reflect the impact of
extraordinary or unusual items, events or circumstances to avoid windfalls or
hardships.
8.3 FORM OF PAYMENT. The earned portion of a Stock Bonus may be paid to the
Participant by the Company either currently or on a deferred basis, with such
interest or dividend equivalent, if any, as the Board may determine. Payment may
be made in the form of cash or whole Shares or a combination thereof, either in
a lump sum payment or in installments, all as the Board will determine.
9. PAYMENT FOR SHARE PURCHASES.
9.1 PAYMENT. Payment for Shares purchased pursuant to this Plan may be made
in cash (by check) or, where expressly approved for the Participant by the Board
and where permitted by law:
(a) by cancellation of, or credit against, indebtedness of the Company to
the Participant;
(b) by surrender of shares that either:
i. have been owned by Participant for more than one year and have
been paid for within the meaning of Rule 144 of the Securities
Act of 1933 (and, if such shares were purchased from the Company
by use of a promissory note, such note has been fully paid with
respect to such shares); or
ii. were obtained by Participant in the public market;
(c) by waiver of compensation due or accrued to the Participant for
services rendered; or
(d) by any combination of the foregoing.
10. WITHHOLDING TAXES.
10.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.
10.2 STOCK WITHHOLDING. When, under applicable tax laws, a participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Board may allow the Participant
9
to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a
Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Board and be in writing in a form acceptable to the Board.
11. PRIVILEGES OF STOCK OWNERSHIP.
11.1 VOTING AND DIVIDENDS. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Purchase Price or Exercise Price pursuant
to Section 12.
11.2 FINANCIAL STATEMENTS. Pursuant to regulation 260.140.46 of the Rules
of the California Corporations Commissioner, the Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
12. TRANSFERABILITY.
Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, other than by will or by the laws of
descent and distribution. During the lifetime of the Participant an Award will
be exercisable only by the Participant. During the lifetime of the Participant,
any elections with respect to an Award may be made only by the Participant
unless otherwise determined by the Board and set forth in the Award Agreement
with respect to Awards that are not ISOs.
13. RESTRICTIONS ON SHARES.
At the discretion of the Board, the Company may reserve to itself and/or
its assignee(s) in the Award Agreement a right to repurchase a portion of or all
Unvested Shares held by a Participant following such Participant's Termination
at any time within ninety (90) days after the later of (a) Participant's
Termination Date, or (b) the date Participant purchases Shares under this Plan.
Such repurchase by the Company shall be for cash and/or cancellation of purchase
money indebtedness, and the price per share shall be the Participant's Exercise
Price or the Purchase Price, as applicable; provided that the Company's right to
repurchase at the original Purchase Price shall lapse at the rate of 20% of
Unvested Shares per year over five years from the date the Options were granted
(without respect to the date the Options were exercised or became exercisable).
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14. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan
will be subject to such stock transfer orders, legends and other restrictions as
the Board may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
15. ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant's Shares, the Board may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Board appropriately endorsed in blank, with the Company or an agent designated
by the Company to hold in escrow until such restrictions have lapsed or
terminated, and the Board may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory note;
provided, however, that the Board may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Board will
from time to time approve. The Shares purchased with the promissory note may be
released from the pledge on a pro rata basis as the promissory note is paid.
16. EXCHANGE AND BUYOUT OF AWARDS.
The Board may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The Board
may at any time buy from a Participant an Award previously granted with payment
in cash, Shares (including Restricted Stock) or other consideration, based on
such terms and conditions as the Board and the Participant may agree.
17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
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18. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or any Parent or Subsidiary
of the Company or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.
19. CORPORATE TRANSACTIONS.
19.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the event of (a)
a dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Board will determine. Notwithstanding anything in this Plan to the
contrary, the Board may provide that the vesting of any or all Awards granted
pursuant to this Plan will accelerate upon a transaction described in this
Section 19. If the Board exercises such discretion with respect to Options, such
Options will become exercisable in full prior to the consummation of such event
at such time and on such conditions as the Board determines, and if such Options
are not exercised prior to the consummation of the corporate transaction, they
shall terminate at such time as determined by the Board.
19.2 OTHER TREATMENT OF AWARDS. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 19, in the event of
the occurrence of any transaction described in Section 19.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.
19.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either: (a) granting an Award under this Plan in substitution of such other
company's award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be
12
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain
unchanged(except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.
20. ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which it is adopted by the
Board ("EFFECTIVE DATE"). This Plan shall be approved by the stockholders of the
Company within twelve (12) months before or after the date this Plan is adopted
by the Board. Upon the Effective Date, the Board may grant Awards pursuant to
this Plan. In the event that stockholder approval of this Plan is not obtained
within the time period provided herein, all Awards granted hereunder shall be
cancelled, any Shares issued pursuant to any Awards shall be cancelled and any
purchase of Shares issued hereunder shall be rescinded.
21. TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate ten
(10) years from the date this Plan is adopted by the Board or, if earlier, the
date of stockholder approval. This Plan and all agreements thereunder shall be
governed by and construed in accordance with the laws of the State of Nevada.
22. AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect,
including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the
Board will not, without the approval of the stockholders of the Company, amend
this Plan in any manner that requires such stockholder approval.
23. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan
to the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
24. ACTION BY BOARD.
Any action permitted or required to be taken by the Board or any decision
or determination permitted or required to be made by the Board pursuant to this
Plan shall be taken or made in the Board's sole and absolute discretion.
Adopted by the Board of Directors as of January 1, 2012.
Amended by the Board of Directors as of February 2, 2012.
13
CIRALIGHT GLOBAL, INC.
2012 PROXY
The undersigned hereby appoints Jeffrey S. Brain and Terry S. Adams as
Proxies with the power to appoint their substitutes, and hereby authorizes them
to represent and to vote ALL of the shares of the Common Stock and/or Preferred
Stock of Ciralight Global, Inc., standing in the name of the undersigned at the
Annual Meeting of Shareholders to be held June 25, 2012 and upon such other
matters as may properly come before the meeting. Any prior proxy or voting
instructions are hereby revoked.
1. Nominees for Directors:
SHAREHOLDERS VOTE FOR THE SIX DIRECTORS DIRECTLY BELOW:
Terry S. Adams
FOR __ AGAINST __ ABSTAIN __
Jeffrey S. Brain
FOR __ AGAINST __ ABSTAIN __
Larry Eisenberg
FOR __ AGAINST __ ABSTAIN __
Frederick Feck
FOR __ AGAINST __ ABSTAIN __
Richard Katz
FOR __ AGAINST __ ABSTAIN __
William ("Smokey") Robinson Jr.
FOR __ AGAINST __ ABSTAIN __
2. To ratify the selection of HJ & Associates & Consultants, LLP. As the
Company's independent accountants for the 2009, 2010, 2011 and 2012 fiscal
years.
FOR __ AGAINST __ ABSTAIN __
3. To approve the Company's 2010 Employee and Consultant Stock Incentive Plan.
FOR __ AGAINST __ ABSTAIN __
4. To approve the Company's 2012 Employee and Consultant Stock Incentive Plan.
FOR __ AGAINST __ ABSTAIN __
PROXY/VOTING INSTRUCTIONS
ANNUAL MEETING OF SHAREHOLDERS JUNE 25, 2012
The shares represented by this proxy will be voted as directed by the
Shareholder. If no specification is made, the shares will be voted FOR ALL
proposals. When signing as attorney, executor, administrator, trustee or
guardian, give full title as such, and when stock has been issued in the names
of two or more persons, all should sign unless evidence of authority to sign on
behalf of the others is attached.
Dated:
------------------------------ ------------------------------------------
Number of Shares Represented by this Proxy
----------------------------------- ------------------------------------------
Signatures Signatures
----------------------------------- ------------------------------------------
Name of Shareholder Name of Shareholder
PLEASE RETURN ALL PROXIES USING THE ENCLOSED RETURN ENVELOPE TO:
Transfer Online, Inc. 512 SE Salmon St. Portland, OR 97214
YO0 MAY FAX YOUR SIGNED AND DATED PROXY TO TRANSFER ONLINE AT:
(503) 227-6874.
YOU MAY ALSO SCAN AND EMAIL YOUR SIGNED AND DATED PROXY TO TRANSFER ONLINE AT:
info@transferonline.com
Instructions for voting electronically:
1. Go to www.transferonline.com/proxy
2. Enter your Proxy Code and Security Code
3. Press Submit
4. Make your selections
5. Press Submit
Your Proxy Code is: 358
Your Security Code is: _________________