DEF 14A of Paradium.AI, Inc.
Filed Nov 18, 2024 · FY20230001493152-24-046514
To be held Thursday, December 12, 2024
To be held Thursday, December 12, 2024 This Proxy Statement (this “Proxy Statement”), and the enclosed proxy card, is solicited by the Board of Directors (our “Board”) of The Arena Group Holdings, Inc., a Delaware corporation, for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Thursday, December 12, 2024 at 12:00 p.m., Eastern Time, or at any adjournments or postponements thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will be a completely virtual meeting of stockholders conducted via live audio webcast to enable our stockholders to participate from anywhere. You will be able to virtually attend the Annual Meeting by logging on to https://web.lumiconnect.com/273495257 using the meeting password and the 11-digit control number found in the proxy materials previously distributed to you. The password for the meeting is agh2024. If you hold your shares through an intermediary, such as a bank, broker, or other nominee, you must register in advance to attend the Annual Meeting. To register, you must submit proof of your “legal proxy” obtained from your bank, broker, or nominee reflecting your holdings, along with your name and email address, to Equiniti Trust Company, LLC: (i) by email to proxy@equiniti.com; (ii) by facsimile to 718.765.8730; or by mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department, 55 Challenger Rd Suite 200B 2nd floor Ridgefield Park, NJ 07660. Please reference “Arena Group 2023 Annual Meeting December 12, 2024” in the subject line. Obtaining a “legal proxy” may take several days and stockholders are advised to register as far in advance as possible. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on December 10, 2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration. References in this Proxy Statement to “The Arena Group Holdings,” “Arena Group,” “we,” “us,” “our,” or the “Company” refers to The Arena Group Holdings, Inc. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, DECEMBER 12, 2024. This Proxy Statement, the enclosed proxy card, and the Annual Report on Form 10-K for the fiscal year ended on December 31, 2023 (the “Annual Report”) are all available on at https://www.astproxyportal.com/ast/26433. With respect to the Annual Meeting and all of our future stockholder meetings, please contact our Investor Relations Department, at 212.321.5002, or investorrelations@thearenagroup.net, to request a copy of this Proxy Statement, Annual Report, or proxy card, or to obtain information regarding such meeting. QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND PROCEDURAL MATTERS What is a proxy? A proxy is your legal designation of another person to vote the stock you own and are entitled to vote. The person you designate is your “proxy,” and, by submitting a proxy card, you give the proxy the authority to vote your shares. We have designated Sara Silverstein, Chief Executive Officer, and Geoffrey Wait, Principal Financial Officer, as proxies for the Annual Meeting. Why am I receiving these materials? You are receiving these proxy materials because our Board is soliciting your proxy to vote at the Annual Meeting for the purposes set forth herein. This Proxy Statement provides you with information on the matters to be voted on at the Annual Meeting as well as instructions on how to vote. We intend to begin mailing this Proxy Statement and accompanying proxy card on or about Monday, November 18, 2024 to all stockholders of record entitled to vote at the Annual Meeting. Who can vote at the Annual Meeting? You can vote if, as of the close of business on Friday, October 18, 2024 (the “Record Date”), you were a stockholder of record of the Company’s common stock, par value $0.01 per share (our “Common Stock”), our only class of voting stock issued and outstanding. On the Record Date, there were 47,448,047 shares of our Common Stock issued and outstanding. Stockholder of Record: Shares Registered in Your Name If on the Record Date, your shares were registered directly in your name with our transfer agent, Equiniti Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote virtually at the Annual Meeting or vote by proxy. Whether or not you plan to participate in the virtual Annual Meeting, we urge you to vote through the Internet prior to the Annual Meeting to ensure your vote is counted. Even if you vote by proxy, you may still vote at the virtual Annual Meeting. In order to virtually attend the Annual Meeting, please log on to https://web.lumiconnect.com/273495257 using the meeting password and the 11-digit control number found in the proxy materials previously distributed to you. The password for the meeting is agh2024. Beneficial Owner: Shares Registered in the Name of a Broker or Bank If on the Record Date, your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. If you do not direct your broker how to vote your shares, the broker will be entitled to vote the shares with respect to “discretionary” items but will not be permitted to vote the shares with respect to “non-discretionary” items (resulting in a “broker non-vote”). The ratification of the appointment of our independent registered public accounting firm, KPMG LLP (“KPMG”), under Proposal No. 2, is a “discretionary” matter. The election of directors under Proposal No. 1 is a “non-discretionary” matter. You are also invited to virtually participate in the Annual Meeting. However, since you are not the stockholder of record, you must register in advance to attend the Annual Meeting. To register, you must submit proof of your “legal proxy” obtained from your bank, broker, or nominee reflecting your holdings, along with your name and email address, to Equiniti Trust Company, LLC: (i) by email to proxy@equiniti.com; (ii) by facsimile to 718.765.8730; or (iii) by mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department, 55 Challenger Rd Suite 200B 2nd floor Ridgefield Park, NJ 07660. Please reference “Arena Group 2024 Annual Meeting December 12, 2024” in the subject line. Obtaining a “legal proxy” may take several days and stockholders are advised to register as far in advance as possible. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on December 10, 2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration. How many votes do I have? On each matter to be voted upon, you have one vote for each share of Common Stock you owned as of the Record Date. What am I voting on? The following matters are scheduled for the Annual Meeting: (i) the election of six directors to our Board, and (ii) the ratification of the selection of KPMG as our independent registered public accounting firm for the year ending December 31, 2024. A vote may also be held on any other business as may properly come before the Annual Meeting or any postponement or adjournment thereof, although there is no other business anticipated to come before the Annual Meeting. What are abstentions, withholds, and “broker non-vote” and their effects on voting?
To be held Thursday, December 12, 2024
Abstentions (i.e., shares of our Common Stock present at the Annual Meeting and marked “abstain”) are counted for purposes of determining whether a quorum is present and are deemed to be shares present or represented by proxy and entitled to vote. Abstentions will have no effect on Proposal No. 1 and the same effect as a vote against Proposal No. 2. A withhold vote, in the case of Proposal No. 1, will have no effect on the outcome of the proposal and will not prevent a candidate from being elected in an uncontested election. Brokers have limited discretionary authority to vote shares that are beneficially owned and, therefore, are not entitled to vote on non-routine matters in the absence of voting instructions from the beneficial owner of such shares. “Broker non-votes” occur when shares of our Common Stock held by a broker, bank, trustee, or other nominee for a beneficial owner are not voted either because (i) the broker, bank, trustee, or other nominee did not receive voting instructions from the beneficial owner, or (ii) the broker, bank, trustee, or other nominee lacked discretionary authority to vote the shares. Broker non-votes are counted for purposes of determining whether a quorum is present. Brokers have discretionary authority to vote shares that are beneficially owned only on Proposal No. 2 at the Annual Meeting. Note that if you are a beneficial holder and do not provide specific voting instructions to your broker, bank, trustee, or other nominee, the broker, bank, trustee, or other nominee that holds shares of our Common Stock will not be authorized to vote on Proposal No. 1. Accordingly, we encourage you to provide voting instructions to your broker, bank, trustee, or other nominee, whether or not you plan to attend the Annual Meeting. What are my voting choices for each of the items to be voted on at the Annual Meeting?
To be held Thursday, December 12, 2024
| Proposal No. | Board Recommendation | Voting Choices | Vote Required for Adoption | Effect of Absentions/ Withholds | Effect of Broker Non- Votes | | 1 – Election of Director Nominees | FOR ALL nominees | ● Vote “For All” to vote for all of the nominees listed ● Vote “Withhold All” to withhold your vote for all of the nominees listed ● Vote “For All Except” to vote for all of the nominees listed except one or more of the nominees you specify | Plurality of the votes present virtually or by proxy and entitled to vote at the Annual Meeting, which means that the seven nominees who receive the highest number of shares voted “for” their election will be elected | No effect | No effect | | 2 – Ratification of the Appointment of KPMG as our Independent Registered Public Accounting Firm for the Year Ending December 31, 2024 | FOR | ● Vote “For” the ratification of the appointment ● Vote “Against” the ratification of the appointment Abstain from voting on this proposal | Approved if a majority of the voting power of the shares of Common Stock present virtually or represented by proxy and entitled to vote, vote “for” the proposal | Treated as votes against proposal | No effect |
To be held Thursday, December 12, 2024
Information about cumulative voting Cumulative voting is not permitted under our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”). Are there interests of certain persons in matters to be acted upon? No person who has been a director or officer of ours at any time since the beginning of fiscal 2023, a director nominee, or any associate of any such persons, has any substantial interest, direct or indirect, in any of the proposals to be voted upon that differs from that of other stockholders, other than: (i) Proposal No. 1, the election of directors. Instructions for the Virtual Annual Meeting Participating in the Virtual Annual Meeting This year’s Annual Meeting will be a virtual annual meeting. There will be no physical meeting location. A virtual meeting format offers the same participation opportunities as those opportunities available to stockholders at in-person meetings. Stockholders will be able to listen and vote. To participate in the Annual Meeting, you must log on to https://web.lumiconnect.com/273495257 using the meeting password and the 11-digit control number found in the proxy materials distributed to you. The password for the meeting is agh2024. For registered stockholders, your 11-digit control number can be found on the proxy card. If you hold your shares beneficially through a bank or broker, you must register in advance to attend the Annual Meeting. To register, you must submit proof of your “legal proxy” obtained from your bank, broker, or nominee reflecting your holdings, along with your name and email address, to Equiniti Trust Company, LLC: (i) by email to proxy@equiniti.com; (ii) by facsimile to 718.765.8730; or (iii) by mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, New York, 11219. Please reference “Arena Group Annual Meeting December 12, 2024” in the subject line. Obtaining a “legal proxy” may take several days and stockholders are advised to register as far in advance as possible. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on December 10, 2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration. The Annual Meeting will begin promptly at 12:00 p.m., Eastern Time, on Thursday, December 12, 2024. We encourage you to access the virtual meeting website prior to the start time. Online check-in will begin 60 minutes prior to the start of the Annual Meeting. You should allow ample time to ensure your ability to access the meeting. The Chairman of the Annual Meeting has broad authority to conduct the Annual Meeting in an orderly manner. What if I have technical difficulties or trouble accessing the virtual Annual Meeting website during the check-in time or during the Annual Meeting? If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please click on the “Help” icon button in the virtual meeting platform for assistance. How do I vote? Stockholder of Record: Shares Registered in Your Name If you are a stockholder of record, you may vote using the following methods:
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| ● | By Internet. To vote by proxy via the Internet, simply follow the instructions described on the proxy card. |
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| ● | By Mail. To vote by mail using the proxy card, simply complete, sign, and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. |
To be held Thursday, December 12, 2024
| ● | In Person. To vote in person, follow the instructions to participate in the Annual Meeting in the section titled “Participating in the Virtual Annual Meeting,” above. |
To be held Thursday, December 12, 2024
Whether or not you plan to participate in the virtual Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still participate in the virtual Annual Meeting and vote electronically if you have already voted by proxy. Beneficial Owner: Shares Registered in the Name of Broker or Bank If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you can vote as follows:
To be held Thursday, December 12, 2024
| ● | By Internet. You may vote through the Internet only if your broker, bank, or other agent makes these methods available, in which case the instructions will be included with the proxy materials. If you want to vote electronically at the virtual Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent, follow the instructions from your broker, bank, or agent included with these proxy materials, or contact your broker, bank, or other agent to request a proxy form. |
To be held Thursday, December 12, 2024
| ● | By Mail. You should have received a proxy card and voting instructions with these proxy materials from the broker, bank, or other agent holding your shares rather than from us. To vote by mail, simply complete and mail the proxy card or voting instruction form to ensure that your vote is counted. |
To be held Thursday, December 12, 2024
| ● | In Person. To vote in person, follow the instructions to participate in the Annual Meeting in the section titled “Participating in the Virtual Annual Meeting,” above. |
To be held Thursday, December 12, 2024
What if I am a stockholder of record and return a proxy card but do not make specific choices? You should specify your choice for each matter on the proxy card. If you return a signed and dated proxy card without marking any voting selections, your shares will be voted:
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| ● | FOR each of the nominees listed under Proposal No. 1; and |
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| ● | FOR the ratification of KPMG as our independent registered public accounting firm under Proposal No. 2; |
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If any other matter is properly presented at the meeting, your proxy (the individual named on your proxy card) will vote your shares using his or her best judgment. What if I am a beneficial owner and do not give voting instructions to my broker? If you fail to provide your broker with voting instructions at least ten days before the meeting, your broker may be unable to vote on the non-discretionary matters. Your broker may use his or her discretion to cast a vote on any routine or discretionary matter. What does it mean if I receive more than one proxy card? If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete one of the available methods of voting for each control number you receive on each proxy card to ensure that all of your shares are voted. What is “householding”? The Securities and Exchange Commission (the “SEC”) has adopted rules that permit companies and intermediaries such as brokers to satisfy the delivery requirements for proxy materials with respect to two or more security holders sharing the same address by delivering a single copy of the proxy materials addressed to those security holders. This process, which is commonly referred to as “householding,” potentially means convenience for security holders and cost savings for companies. A number of brokers with account holders who are Arena Group stockholders will be “householding” our proxy materials. A single copy of the proxy materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or us that they will be “householding” communications 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 proxy statement, please notify your broker and also notify us by sending your written request to our Investor Relations Firm, FNK IR LLC, c/o Robert Fink, 225 West 34th Street, 9th Floor, New York, NY 10122, or by calling 646.971.8899, and indicate you are a stockholder of The Arena Group Holdings, Inc. Stockholders who currently receive multiple copies of the proxy materials at their address and would like to request “householding” of their communications should also contact their broker and notify us in writing or by telephone. Can I revoke or change my vote after submitting my proxy? Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. You may revoke your proxy by:
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| ● | submitting a new proxy with a later date; |
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| ● | sending written notice of revocation to our Corporate Secretary at The Arena Group Holdings, Inc., 200 Vesey Street, 24th Floor, New York, New York, 10281, or the address listed for our principal offices as set forth in our then-most recent filing with the SEC, in time for him to receive it before the Annual Meeting; or |
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| ● | voting electronically at the Annual Meeting. Simply participating virtually at the Annual Meeting will not, by itself, revoke your proxy. |
To be held Thursday, December 12, 2024
Who will count votes? Votes will be counted by the inspector of elections appointed for the Annual Meeting. The inspector of elections will also determine the number of shares of Common Stock outstanding, the voting power of each, the number of shares of Common Stock represented at the Annual Meeting, the existence of a quorum, and whether or not the proxies and ballots are valid and effective. What is the quorum requirement? A majority of the issued and outstanding shares of Common Stock entitled to vote must be present at the Annual Meeting (virtually or represented by proxy) in order for us to hold the Annual Meeting and conduct business. This is called a quorum. On the Record Date, there were an aggregate of 47,448,047 outstanding shares of our Common Stock entitled to vote. Thus, 23,724,024 shares of Common Stock must be present at the Annual Meeting (virtually or represented by proxy) to have a quorum. Your shares of Common Stock will be counted towards the quorum only if you submit a valid proxy or vote electronically at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the shares of Common Stock entitled to vote and present at the Annual Meeting (virtually or represented by proxy) may adjourn the meeting to another date. No rights of appraisal There are no rights of appraisal or similar rights of dissenters with respect to matters that are the subject of this proxy solicitation under the laws of the State of Delaware, our Certificate of Incorporation, or our Second Amended and Restated Bylaws (our “Bylaws”). How can I find out the results of the voting at the Annual Meeting? We will announce preliminary voting results at the Annual Meeting. In addition, final voting results will be tallied by the inspector of elections and will be published in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K with the SEC within four business days after the Annual Meeting, we intend to file a Form 8-K to publish the preliminary results within four business days after the Annual Meeting and file an additional Form 8-K to publish the final results within four business days after the final results are known to us. When are stockholder proposals for the fiscal 2025 Annual Meeting due? Stockholders interested in presenting a proposal to be considered for inclusion in our proxy statement for the 2025 annual meeting of stockholders (the “2025 Annual Meeting”) may do so by following the procedures prescribed in Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and our Bylaws. To be considered for inclusion, stockholder proposals must be submitted in writing to Attention: Corporate Secretary, at the address listed for our principal offices as set forth in our then-most recent filing with the SEC no later than July 21, 2025. With respect to proposals and nominations not to be included in our proxy statement for the 2025 Annual Meeting pursuant to Rule 14a-8 of the Exchange Act, our Bylaws provide that stockholders who wish to nominate a director or propose other business to be brought before the stockholders at an annual meeting of stockholders must be submitted in writing to Attention: Corporate Secretary, at the address listed for our principal offices as set forth in our then-most recent filing with the SEC not later than the 45th day nor earlier than the 75th day before the one-year anniversary of the date on which we first mail our proxy materials for the preceding year’s annual meeting. Stockholders wishing to present nominations for director or proposals for consideration at the 2025 Annual Meeting under these provisions of our Bylaws must submit their nominations or proposals in writing so that they are received by our Corporate Secretary at our principal executive offices not earlier than September 4, 2025 and not later than October 4, 2025 in order to be considered. In the event that the 2025 Annual Meeting is to be held on a date that is 30 days prior to or delayed by more than 60 days after the one-year anniversary of the Annual Meeting, then, for notice by the stockholder to be timely, it must be so received by the Corporate Secretary not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the tenth day following the day on which we first make a public announcement of the date of the 2025 Annual Meeting. To comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees for the 2025 Annual Meeting must provide notice to our Corporate Secretary at our principal executive offices that sets forth all information required by Rule 14a-19 under the Exchange Act no later than October 13, 2025 (or, if the 2025 Annual Meeting is called for a date that is not within 30 calendar days of the anniversary of the date of the 2024 Annual Meeting, then notice must be provided by the later of 60 calendar days prior to the date of the 2025 Annual Meeting or by the close of business on the tenth calendar day following the day on which public announcement of the date of the 2025 Annual Meeting is first made). How do I get a copy of the exhibits filed with our Annual Report? A copy of our Annual Report, and our audited consolidated financial statements, were provided to you with this Proxy Statement. We will provide copies of the exhibits filed with our Annual Report upon written request if you are a stockholder as of the Record Date. Requests for such copies should be directed to J. Alex Wasserburger, Esq., our General Counsel, at the address listed for our principal offices as set forth in our then-most recent filing with the SEC. In addition, copies of all of our electronically filed exhibits, including our Bylaws, may be reviewed and printed from the SEC website at http://www.sec.gov. PROPOSAL NO. 1 – ELECTION OF DIRECTORS Stockholders are being asked to elect six directors: Carlo Zola, Christopher Petzel, Laura Lee, H. Hunt Allred, Christopher Fowler and Cavitt Randall to serve for an additional one-year term ending at the annual meeting of stockholders following this Annual Meeting, or until their successors have been duly elected and qualified. Carlo Zola, Christopher Petzel, Laura Lee, H. Hunt Allred, Christopher Fowler and Cavitt Randall are all current members of our Board. Each of the nominees named below has been approved by our Board on recommendation from the Nominating and Corporate Governance Committee (the “Nomination Committee”). The Nomination Committee has evaluated our governance and leadership structure and determined that, at this time, the Company is best served by the Chief Executive Officer not serving as a director as well. Accordingly, Ms. Silverstein is not being nominated as a director. As Chief Executive Officer, Ms. Silverstein will still attend and play an active role in our board meetings. If any of the nominees becomes unable or unwilling to serve as a director before the Annual Meeting, an event which is not presently anticipated, the appointed proxy may exercise discretionary authority to vote for substitute nominees proposed by the Board, or, if no substitute is selected by our Board prior to or at the Annual Meeting, for a motion to reduce the present membership of our Board to the number of nominees available. Vote Required and Voting Recommendation
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The six nominees receiving the most “FOR” votes from the holders of shares present at the Annual Meeting or represented by proxy and entitled to vote will be elected as directors to hold office until the 2025 Annual Meeting. Only votes “FOR ALL” or “FOR ALL EXCEPT” will affect the outcome. In an uncontested election, “WITHHOLD” votes will have no effect on the outcome of the proposal and will not prevent a candidate from being elected. Broker non-votes will have no effect. OUR BOARD RECOMMENDS THAT YOU VOTE “FOR ALL” NOMINEES IN THE ELECTION OF THE SIX DIRECTOR NOMINEES. Board and Committee Composition Currently, we have a Board comprised of seven directors, with each director serving until the expiration of the term for which he or she was elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. We anticipate having a board comprised of six directors after the Annual Meeting. The following table includes the names, ages and titles of our directors and executive officers as of November 8, 2024. Our directors are elected to one-year terms by our stockholders at each annual meeting. Our executive officers are appointed by our Board. Each executive officer holds his or her office until he or she resigns or is removed by our Board or his or her successor is appointed and qualified.
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| Name | Age | Position(s) | | Executive Officers | | | | Sara Silverstein | 43 | Chief Executive Officer | | Paul Edmondson | 50 | President, Platform | | Manoj Bhargava | 71 | President | | Geoffrey Wait | 37 | Principal Financial Officer | | Non-Employee Directors | | | | H. Hunt Allred | 40 | Director(1) | | Laura Lee | 49 | Director(2) | | Christopher Petzel | 53 | Director(3) | | Cavitt Randall | 47 | Director(4) | | Christopher Fowler | 65 | Director | | Carlo Zola | 46 | Director(6) |
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| (1) Mr. Allred is the Chair of our Compensation Committee and serves on our Nominating and Corporate Governance Committee and our Special Transaction Committee. | | (2) Ms. Lee is the Chair of our Audit Committee and serves on our Compensation Committee. | | (3) Mr. Petzel is the Chair of our Special Transaction Committee and serves on our Audit Committee, our Compensation Committee and our Nominating and Corporate Governance Committee. |
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| (4) Mr. Randall was appointed Chairman of our Board of Directors on January 23, 2024. Mr. Randall previously held the title of Chief Executive Officer from February 13, 2024 until April 19, 2024. | | (5) Mr. Zola is the Chair of our Nominating and Corporate Governance Committee and serves on our Audit Committee. |
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Biographical and Related Information – Director Nominees and Executive Officers The following is an overview of the biographical information for each of our director nominees and executive officers, including their age, the year they became directors or officers, to the extent applicable, their principal occupations or employment for at least the past five years, and certain of their other directorships. Nominees for Director H. Hunt Allred, 40, has served as one of our directors since October 2021. Currently and since May 2017, Mr. Allred has served as Director of Alternative Investments, leading investments on behalf of various Hunt Family entities, doing business as Petro-Hunt LLC. The Hunt Family entities are primarily focused on investing in technology, healthcare, and other venture opportunities. Currently and since June 2017, he also holds management positions with diversified investment firms RedCap Investments, LP and Mill Iron Operations, and medical diagnostics technology company mLife Diagnostics. Previously, Mr. Allred held roles at hedge funds Citadel LLC, from December 2016 to April 2017, and Vollero Beach Capital Partners, from June 2012 to September 2016, where he focused on public equity investing across the industrial, energy and utility sectors. Mr. Allred also previously served as an industrial public equity analyst at Aptigon Capital, a division of Citadel LLC, from October 2016 to April 2017. He held various roles at Commerce Street Capital, a private equity fund centered on investing in regional financial institutions. He began his career at ORIX USA, holding roles in both the corporate finance group, financing sponsored backed leverage buyouts, and the real estate structured credit group, working out distressed real estate assets. Mr. Allred received his Bachelor of Business Administration from Texas Christian University and M.B.A. from the University of Texas at Austin. Because of his extensive investment experience across multiple asset classes, with expertise including private equity, public equity, venture capital, credit origination, and structured credit resolutions, we believe Mr. Allred is qualified to serve as a director. Laura Lee, 49, has served as a member of our Board since October 2021. Since November 2022, Ms. Lee has been employed by Twitch, a video live streaming service, as its Chief Content Officer. Prior to this, she held the position of Senior Advisor at consulting firm McKinsey & Company, Inc., from August 2019 to November 2022, in addition to serving as an external adviser to growth companies such as Xoogler.co, an organization focused on entrepreneurial ventures for Google alumni, from September 2018 to November 2022, and SAAS membership platform for creators, Patreon Inc., from April 2018 to May 2020. Ms. Lee also previously held senior positions at various media, technology, and consumer companies, including serving as Executive Vice President of Content, Strategy, and Operations at the premiere media and entertainment company, NBC Universal Media LLC, during 2017, where she oversaw over $2 billion in key digital investments and relationships with Snap Inc., BuzzFeed, Inc., Vox Media, Inc., and YouTube LLC (“YouTube”), new business opportunities, and digital content production. From 2015 to 2016, Ms. Lee was the Chief Digital Officer and President of Media at Margaritaville Enterprises, LLC (“Margaritaville”), Jimmy Buffett’s lifestyle brand, where she grew Margaritaville’s digital footprint by 300% through original content and signed multi-million dollar deals for the new media business unit. From 2007 to 2015, Ms. Lee worked at the internet media channel YouTube where she oversaw the North American Content division, launched the global transaction (VOD/EST) business for YouTube and Google Play, and created the Global Top Creator team, which oversaw relationships with YouTube’s digital-native influencers. Prior to her time with YouTube, Ms. Lee held various roles at the mass media company Viacom Media Networks, Inc. from 2003 to 2007, including serving as Vice President of Business Development and Operations at its MTV Networks unit, where she launched VBS.TV, a digital video business joint venture with Vice Media, (and oversaw the acquisition of Harmonix Music Systems, the developer of iconic gaming hits Rock Band and Guitar Hero). From 2019-2022, Ms. Lee served on the board of MediaCo Holding Inc. (Nasdaq: MDIA) where she chaired several committees, including Audit, Digital M&A, and the COVID Task Force, and served on the Compensation Committee. She formerly was an independent director on the board of American Apparel LLC, where she served on the Nominating and Corporate Governance Committee. Ms. Lee also previously served on the board of WatchMojo, a top global entertainment network on YouTube (www.youtube.com/watchmojo). Ms. Lee currently serves on the board of Womensphere, a social enterprise business focused on empowering women and girls globally. Ms. Lee is a seasoned technology and media executive, advisor, and board director. She has been recognized for her industry expertise and as a top executive by Variety, National Association of Corporate Directors, Crain’s New York, and Multichannel News. Ms. Lee is a graduate of Brown University and Harvard Business School. We believe that her demonstrated experience corporate finance, strategy, digital content and marketing, as well as in the technology and media industries qualifies her to serve as a director.
To be held Thursday, December 12, 2024
Christopher Petzel, 53, has served on our Board since October 2021. Mr. Petzel has broad entrepreneurial, corporate finance, and public company board experience. He has been a managing director at Broadside Capital, LLC, a strategic advisory firm based in Puerto Rico since January 2022, and a registered representative at Spartan Capital Securities, LLC, an investment bank in New York focused on microcap IPOs, bridge financings and private placements since June 2023. Mr. Petzel has served as Chairman of Broadside Enterprises, Inc. (OTC:BRSE), the operator of a digital multi-brand food delivery platform, since 2016, and as Chairman and CEO of Chancellor Group, Inc. (OTC:CHAG), a small cap vehicle seeking acquisitions, since 2020. Previously, he served as Managing Director for predecessor companies of Broadside Capital, LLC in Los Angeles from 2010 until December 2021. From August 2019 until December 2023, Mr. Petzel was co-founder and Chairman at Byte to Bite Industries, Inc., a hospitality operator in Southern California, and, from 2001 to 2014, founder and CEO of Fierce Entertainment, LLC, an independent production company which created a technology platform for major international film distributors. During his tenure at Fierce, he financed several hundred million dollars of entertainment assets and produced films with major stars including Sylvester Stallone, Jet Li, Jason Statham, Nicholas Cage, Jason Sudeikis and Shirley MacLaine. Prior to this, Mr. Petzel worked for the technology, media, and telecommunications group at investment banking firm Houlihan Lokey in Los Angeles from 1999 until 2001. Mr. Petzel commenced his career working for the media finance department of Berliner Bank AG and in international film finance and distribution at Goldcrest Films International Ltd. in London. Mr. Petzel is fluent in German, English, French and Spanish. He studied finance and economics at the Universities of Barcelona (Spain) and Fribourg (Switzerland), where he graduated summa cum laude in 1995. He holds FINRA Series 7 (General Securities Representative), Series 63 (Uniform Securities Agent State Law) and Series 79 (Investment Banking Representative) licenses. We believe that Mr. Petzel is qualified to serve as a director because of his experience with media, hospitality, technology, and corporate finance, as well as his experience in building technology platforms and working with small cap public companies, including with respect to their reporting requirements. Cavitt Randall, 47, has served as one of our directors since December 2023 and as Chairman of the Board since January 23, 2024. Mr. Randall also served as our Chief Executive Officer from February 13, 2024 until April 19, 2024. Since August 2022, Mr. Randall has served as the Chief Executive Officer of MBX Clearing LLC, an investment firm registered broker-dealer that self-clears at Option Clearing Corporation (OCC). Prior to joining MBX Clearing LLC, from August 2018 to August 2022, Mr. Randall was the Chief Operating Officer of SI Capital LLC prior to it changing its name to MBX Group LLC. Prior to SI Capital LLC, from June 2000 to August 2018, Mr. Randall held various executive roles at GE Capital including roles as the Senior Vice President. Mr. Randall has over twenty years’ experience in equity, options and debt trading and holds Series 24 (General Securities Principal), Series 57 (Securities Trader) and FINRA SIE licenses. Mr. Randall holds a Bachelor of Arts in Finance from Michigan State University. We believe that Mr. Randall is qualified to serve as a director given his executive leadership experience and over twenty years’ experience in capital markets. Christopher Fowler, 65, has served on our Board of Directors since December 1, 2023. Mr. Fowler has served as the Chief Investment Officer of MBX Group, an investment firm where he is responsible for overseeing all investment activity since 2015. MBX Group is an affiliate of Simplify. For 15 years, Mr. Fowler worked as a Managing Director at GE Capital. Prior, Mr. Fowler worked at JPMorgan Chase & Co. as a Senior Vice President of Leveraged Lending for 11 years. Mr. Fowler holds a Bachelor of Science in Business/Industrial Engineering from the University of Southern California. We believe that Mr. Fowler is qualified to serve as a director given his executive leadership and investment experience. Carlo Zola, 46, has served as a member of our Board since June 2021. Since January 2021, Mr. Zola has served as Partner and REIT Portfolio Manager for Atlas Capital Team, L.P., a hedge fund, where he focuses on Real Estate and ESG investments, and where he was a founding partner. Previously, Mr. Zola served as a principal of Warlock Partners, LLC (“Warlock”) and as a principal of Roundtable Media L.L.C. From January 2020, Mr. Zola served as a founding partner at Percival Ventures, an investment firm focused on early stage blockchain investments and cryptocurrencies. He was also previously a founding partner at Paladin Trust, a leading trust and custodian business dedicated to cryptocurrency markets. Additionally, Mr. Zola worked for 13 years in various positions as an analyst and portfolio manager in the Los Angeles, New York, Toronto and London offices of Capital Group, a large multi-national fund management company with over $2 trillion in assets under management, with responsibilities including managing a portfolio of over $1 billion in assets, and with a focus on global and fixed income asset portfolios as well as asset portfolios in Media, Metals and Mining, Chemicals and Real Estate (REITs). During his last three years at Capital Group, Mr. Zola also served as its Research Portfolio Coordinator (RPC) overseeing diverse investments and, during his tenure with Capital Group, Mr. Zola successfully managed a team of over 20 analysts for one of its growth and income funds. Mr. Zola started his professional career working as a research analyst at Intermonte SIM in Milan, a leading independent Italian investment bank. Mr. Zola is an investment professional with over 19 years of active experience in the financial markets. Mr. Zola earned a B.A. in Economics from Bocconi University in Milan, Italy, where he graduated summa cum laude, and a Masters’ degree in Management from CEMS, the Community of European Management Schools, in Barcelona, Spain. We believe that Mr. Zola is qualified to serve as a director because of his extensive financial market experience. Executive Officers Who Do Not Serve as Directors Sara Silverstein has served as our Chief Executive Officer since April 19, 2024. Ms. Silverstein previously served as General Manager - Finance Arena of the Company since November 2021. Prior to that, she was Executive Editor at Business Insider from 2013 to 2020. Ms. Silverstein started her career at a hedge fund and has been working in the media industry for the past 14 years, including other positions with Bloomberg Media. Ms. Silverstein has a bachelor’s degree in mathematics from the University of Colorado and an MBA from the University of Chicago Booth School of Business.
To be held Thursday, December 12, 2024
Paul Edmondson has served as our President of Platform since February 2021, when we split our President role into two separate officer roles. As President of Platform, Mr. Edmondson currently oversees our Platform business, which offers the core content management system, programmatic advertising technology and multitenant subscription stack for publishers serving partner publishers and our owned and operated properties. As part of his responsibilities, Mr. Edmondson also oversees our Adventure Network and HubPages properties. Prior to this appointment, he had served as our President since October 2019. Prior to that, Mr. Edmondson served as our Chief Operating Officer from August 2018 to December 2019. Mr. Edmondson joined our Company in January 2018 with our acquisition of HubPages, Inc. (“HubPages”), where he had served as Founder and Chief Executive Officer since 2006. Prior to HubPages, he served as the Group Product Manager for Microsoft Corporation’s MSN Entertainment, having joined Microsoft Corporation in 2000 through its acquisition of MongoMusic, Inc. Prior thereto, he developed applications for Hewlett-Packard Company. Manoj Bhargava has served as President of the Company since April 26, 2024. Previously, Mr. Bhargava served as the Company’s Interim Chief Executive Officer from December 11, 2023 until January 4, 2024 and as Co-President from February 16, 2024 through April 26, 2024. Mr. Bhargava is the control person of Simplify Inventions LLC, a Delaware limited liability company (“Simplify”). Mr. Bhargava is the Founder of Innovation Ventures LLC (5-hour ENERGY) and has served as its Chief Executive Officer since its inception. Mr. Bhargava founded 5-hour ENERGY in 2000 and has grown 5-hour ENERGY to annual retail sales over $1 billion. Mr. Bhargava has extensive management, operations and marketing experience, which he has applied to numerous new business start-ups including a water filtration company, an R&D shop and an investment company. Mr. Bhargava is a distinguished philanthropist and the founder of several charities. Geoffrey Wait was appointed as the Principal Financial Officer of The Arena Group Holdings, Inc. (the “Company”). Mr. Wait has served as a senior financial advisor to the Company since June 2024 and, from April 2024 through June 2024, served as Controller of Simplify Inventions, LLC, an affiliate of the Company (“Simplify”). Prior to that, he served in various capacities at American Axle & Manufacturing, Inc. beginning in 2016, including most recently as Plant Finance Manager since March 2019. Mr. Wait began his career at Grant Thornton LLP where he served most recently as a Manager. He has a Bachelor of Arts – Accounting and a Master of Science – Accounting, both from Michigan State University and is a Certified Public Accountant. Family Relationships There are no family relationships among any of our directors or executive officers. Involvement in Certain Legal Proceedings None of our directors, director nominees, and executive officers has been involved in any legal or regulatory proceedings, as set forth in Item 401 of Regulation S-K, during the past ten years. CORPORATE GOVERNANCE Director Qualifications The Nomination Committee determines the qualifications, qualities, skills, and other expertise required to be a director and to develop, and recommend to our Board for its approval, criteria to be considered in selecting nominees for director. The Nomination Committee and our Board believe that at this time, it is unnecessary to adopt criteria for the selection of directors. Instead, the Nomination Committee and our Board believe that the desirable background of a new individual member of our Board may change over time and that a thoughtful, thorough selection process is more important than adopting criteria for directors. Meetings of the Board and its Committees The Board has an Audit Committee, a Compensation Committee, and a Nomination Committee. The entire Board met 7 times, including regularly scheduled and special meetings, during fiscal year 2023. The Audit Committee met 5 times, the Compensation Committee met 4 times, and the Nomination Committee met zero times, during fiscal year 2023. All directors attended at least 75% of the aggregate of our Board meetings and meetings of all committees on which they served. We held our last annual stockholders’ meeting on June 1, 2023. When we hold annual stockholders’ meetings, it is our policy that all of our directors are required to make a concerted and conscientious effort to attend our annual stockholders’ meeting in each year during which that director serves as a member of our Board. All of our directors then serving attended our 2023 annual meeting of stockholders. Audit Committee. The Audit Committee currently consists of Laura Lee (Chair), Christopher Petzel and Carlo Zola. The Audit Committee met 5 times during fiscal year 2023. The meetings included discussions with management and with our independent registered public accounting firm to discuss our interim and annual financial statements and our annual report, and the effectiveness of our financial and accounting functions and organization. The Audit Committee acts pursuant to a written charter adopted by our Board, a copy of which can be accessed at https://investors.thearenagroup.net/corporate-governance/documents-and-charters. Information on or accessible through our website is not incorporated by reference in this Proxy Statement. The Audit Committee assists our Board in fulfilling its responsibility to oversee (i) the integrity of our financial statements, our accounting and financial reporting processes and financial statement audits, (ii) our compliance with legal and regulatory requirements, (iii) our systems of internal control over financial reporting and disclosure controls and procedures, (iv) the independent auditor’s engagement, qualifications, performance, compensation, and independence, (v) review and approval of related party transactions, and (vi) the communication among our independent auditors, our financial, and senior management and our Board. Our Board has determined that the Audit Committee is comprised entirely of independent members who meet the requirements for independence under the NYSE American listing standards and SEC rules and regulations. Our Board has determined that Ms. Lee, the Chair of the Audit Committee, is an “audit committee financial expert” as defined under SEC rules. Compensation Committee. The Compensation Committee currently consists of H. Hunt Allred (Chair), Christopher Petzel, and Laura Lee. The Compensation Committee met 4 times during fiscal year 2023. The Compensation Committee acts pursuant to a written charter adopted by our Board, a copy of which can be accessed at https://investors.thearenagroup.net/corporate-governance/documents-and-charters. Information on or accessible through our website is not incorporated by reference in this Proxy Statement.
To be held Thursday, December 12, 2024
The purpose of the Compensation Committee is to evaluate, recommend, approve, and review our executive officer and director compensation arrangements, plans and programs and to administer our cash-based and equity-based plans for employees and consultants. The Compensation Committee’s principal functions are to: (i) review and recommend to our Board for approval all forms of our non-equity and equity-based compensation of executive officers and directors; and (ii) administer our equity-based compensation plans, including administering the 2022 Stock and Incentive Plan (our “2022 Plan”), pursuant to which various types of incentive awards, including, without limitation, stock options, restricted stock awards, stock appreciation rights, and stock units may be granted to our directors, executive officers, and key employees. The Compensation Committee is responsible for evaluating executive compensation, including equity awards for all of our executive officers, setting base salary amounts, fixing incentive opportunity levels, and other supplemental benefits. This includes reviewing and making recommendations to our Board regarding corporate goals and objectives relevant to the compensation of Chief Executive Officer and all other executive officers that report to him, evaluating, at least annually, the performance of these officers in light of these goals and objectives, and reviewing and making recommendations to our Board regarding the compensation level of these officers based on such evaluation. The Compensation Committee also annually reviews director compensation to ensure non-employee directors are adequately compensated for the time expended in fulfilling their duties to us, as well as the skill-level required by us of members of our Board. From time to time as the Compensation Committee deems appropriate or as requested by our Board, the Compensation Committee evaluates director compensation arrangements and makes recommendations to our Board accordingly. The Compensation Committee is authorized to engage compensation consultants, if they deem necessary, to assist with the Compensation Committee’s responsibilities related to our executive compensation program and the director compensation program. Our Board has determined that the Compensation Committee is comprised entirely of independent members who meet the requirements for independence under the NYSE American listing standards and SEC rules and regulations. Nomination Committee. The Nomination Committee currently consists of Carlo Zola (Chair), Christopher Petzel, and H. Hunt Allred. The Nomination Committee did not meet separately during fiscal year 2023. The Nomination Committee acts pursuant to a written charter adopted by our Board, a copy of which can be accessed at https://investors.thearenagroup.net/corporate-governance/documents-and-charters. Information on or accessible through our website is not incorporated by reference in this Proxy Statement. The purpose of the Nomination Committee is to exercise general oversight with respect to the governance of our Board by (i) identifying, reviewing the qualifications of, and recommending to our Board proposed nominees for election to our Board, consistent with criteria approved by our Board, and (ii) selecting, or recommending that our Board select, the director nominees for the next annual meeting of stockholders. The Nomination Committee provides advice, counsel, and direction to management on the basis of the information it receives, discussions with management, and the experience of the Nomination Committee members. Our Board has determined that the Nomination Committee is comprised entirely of independent members who meet the requirements for independence under the NYSE American listing standards and SEC rules and regulations. Nominations Process and Criteria The Nomination Committee determines the qualifications, qualities, skills, and other expertise required to be a director and to develop, and recommend to our Board for its approval, criteria to be considered in selecting nominees for director. The Nomination Committee and our Board believe that at this time, it is unnecessary to adopt criteria for the selection of directors. Instead, the Nomination Committee and our Board believe that the desirable background of a new individual member of our Board may change over time and that a thoughtful, thorough selection process is more important than adopting criteria for directors. The Nomination Committee will also identify, recruit, and screen candidates for our Board, consistent with criteria approved by our Board. The Nomination Committee and our Board are fully open to utilizing whatever methodology is efficient in identifying new, qualified directors when needed, including industry contacts of our directors or professional search firms. The Nomination Committee also considers any director candidates recommended by our stockholders pursuant to the procedures described in this Proxy Statement and any nominations of director candidates validly made by stockholders in accordance with applicable laws, rules, and regulations, and the provisions of our charter documents. In recommending candidates for nomination, the Nomination Committee considers candidates recommended by directors, officers, employees, stockholders, and others, using the same criteria to evaluate all candidates. Evaluations of candidates generally involve a review of background materials, internal discussions, and interviews with selected candidates as appropriate. There were no fees paid or due to third parties in fiscal year 2023 to identify or evaluate, or to assist in evaluating or identifying, potential director nominees. For purposes of the Annual Meeting, the Nomination Committee recommended seven incumbent directors as nominees for re-election to our Board, and our Board approved the nominees for inclusion in this Proxy Statement. Any stockholder wishing to propose that a person be nominated for or appointed to our Board may submit such a proposal, according to the procedure described above in the section titled “Questions And Answers About The Annual Meeting And Procedural Matters” to: Corporate Secretary, The Arena Group Holdings, Inc., at the address for our principal offices as set forth in our then-most recent filing with the SEC. Director Independence As our Common Stock is currently listed for trading on the NYSE American, we have evaluated independence in accordance with the rules of the NYSE American Company Guide and the SEC with respect to each director and director nominee. Our Board undertook a review of the independence of the members of our Board and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon the information requested from and provided by each director concerning their background, employment, and affiliations, including family relationships, our Board has determined that each of the following non-employee directors are independent as that term is defined under the rules of the NYSE American Company Guide.
To be held Thursday, December 12, 2024
| Allred | Due to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on March 31, 2023 | | Levinsohn | Due to inadvertent error, the withholding of shares for tax withholding on March 6, 2023 was reported late on a Form 4 filed on March 31, 2023 | | Zola | Due to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on April 10, 2023 | | Petzel | Due to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on April 10, 2023 | | Lee | Due to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on April 10, 2023. | | Barrett | Due to inadvertent error, the withholding of shares for tax withholding on March 6, 2023 was reported late on a Form 4 filed on April 28, 2023. | | Kraft | Due to inadvertent error, the withholding of shares for tax withholding on March 6, 2023 was reported late on a Form 4 filed on November 6, 2023. | | Kulik | Due to administrative issues, a Form 3 was not filed for Ms. Kulik upon his start date or prior to her departure from Company, and a Form 4 was not filed to report an option granted on November 23, 2023. | | Tripp | Due to administrative issues, a Form 3 was not filed for Mr. Tripp upon his start date or prior to his departure from Company, and a Form 4 was not filed to report an option granted on January 1, 2023. |
To be held Thursday, December 12, 2024
| (a) Name and Principal Position | (b) Year | (c) Salary | (e) Stock Awards(1) | (f) Option Awards (1)(2) | (g) Non-Equity Incentive Plan Compensation | (f) All Other Compensation | (i) Total Compensation | | Ross Levinsohn(3)(4) | 2023 | $742,708 | $- | $- | $- | $- | $742,708 | | Former Chief Executive Officer and Chairman | 2022 | 550,000 | 801,640 | 759,018 | 1,750,000 | - | 3,860,658 | | Manoj Bhargava (5) | 2023 | - | - | - | - | - | - | | President and Former Interim Chief Executive Officer | | | | | | | | | Grady D Tripp (6) | 2023 | 300,000 | 212,200 | 105,762 | - | - | 617,962 | | Former Senior Vice President and Chief People Officer | | | | | | | | | Kathryn Kulik (7) | 2023 | 106,250 | 282,800 | 82,959 | - | - | 472,009 | | Former Chief Revenue Officer | | | | | | | | | Avi Zimak(8)(9)(10) | 2023 | 225,000 | - | 284,254 | | 206,250 | 715,504 | | Former Chief Revenue Officer | 2022 | 450,000 | 320,700 | 411,814 | 566,794 | - | 1,749,308 | | Henry Robertson Barrett(11)(12) | 2023 | 338,125 | - | - | - | 278,820 | 616,945 | | Former President, Media | 2022 | 420,000 | 320,700 | 253,233 | 472,351 | - | 1,466,284 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Director Compensation The following table provides information for the year ended December 31, 2023 regarding all compensation awarded to, earned by, or paid to each person who served as a director for some portion or all of 2023, other than Mr. Levinsohn, our Chief Executive Officer and Chairman. Mr. Levinsohn is not included in the table below, as he was an employee and received no additional compensation for his service as a director during 2023. The compensation received by Mr. Levinsohn as an employee is shown in the “Executive Compensation-2023 Summary Compensation Table” above.
DIRECTOR COMPENSATION
| (a) Name of Director | (b) Fees Earned or Paid in Cash(1) | (c) Stock Awards(2) | (h) Total | | H. Hunt Allred(3) | $87,750 | $47,257 | $135,007 | | Laura Lee(3) | 87,750 | 47,257 | 135,007 | | Christopher Petzel(4) | 55,250 | 29,750 | 85,000 | | Daniel Shribman(4), (6) | 55,250 | 29,750 | 85,000 | | Todd D. Sims(3), (6) | 87,750 | 47,257 | 135,007 | | Carlo Zola(4) | 55,250 | 29,750 | 85,000 | | Cavitt Randall(5) | 4,607 | - | 4,607 | | Christopher Fowler(5) | 4,607 | - | 4,607 |
DIRECTOR COMPENSATION
| (1) Fees Earned or Paid in Cash set forth in column (b) includes all meeting and retainer fees paid quarterly in cash. | | (2) Restricted stock awards were issued pursuant to the 2022 Plan and our Director Compensation Policy. Each of these restricted stock awards were fully vested as of December 31, 2023. The table reflects the fair value of the stock awards calculated in accordance with FASB ASC 718. Refer to our consolidated financial statements for the year ended December 31, 2023 in Note 22, Stock-Based Compensation, filed as part of our Annual Report. | | (3) As of December 31, 2023, the aggregate number of shares of our common stock underlying the stock awards in column (c), corresponding to equity awards granted to each of Allred, Lee and Sims was 4,454 shares. | | (4) As of December 31, 2023, the aggregate number of shares of our common stock underlying the stock awards in column (c), corresponding to equity awards granted to each of Petzel, Shribman and Zola was 2,804 shares. | | (5) Appointed to the Board on December 1, 2023. | | (6) Resigned from the Board prior to December 31, 2023. |
DIRECTOR COMPENSATION
Director Compensation Policies Our current Director Compensation Policy for our non-employee directors provides that the non-employee directors will be granted annually a restricted stock award of a number of shares of our common stock equal in value to $29,750, vesting monthly in 12 equal installments, and annual cash compensation to each non-employee director of $55,250, payable in four equal quarterly installments at each quarter end. The Director Compensation Policy also provides that any non-employee director who serves as the chairperson of one or more committees of our Board will be granted annually an additional restricted stock award of a number of shares of our common stock equal in value to $17,500, vesting monthly, and additional annual cash compensation of $32,500, payable in four equal quarterly installments at each quarter end. Risks from Compensation Policies and Practices The Compensation Committee reviews our compensation policies and practices to determine areas of potential risks and the actions we have taken, or should take, to mitigate any such identified risks. Based on the Compensation Committee’s review of our compensation policies and practices, we do not believe that any risks relating to our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on our business. EQUITY COMPENSATION PLAN INFORMATION Equity Compensation Plan Information A summary of our securities authorized for issuance under equity compensation plans as of December 31, 2023 is as follows:
DIRECTOR COMPENSATION
| Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | Equity compensation plans approved by security holders | 5,331,781 | $9.59 | 701,251 | | Equity compensation plans not approved by security holders | 1,129,527 | 11.17 | 114,110 | | Total | 6,461,308 | $9.86 | 815,361 |
DIRECTOR COMPENSATION
Plans Adopted by Stockholders 2016 Stock Incentive Plan In December 2016 our Board approved the 2016 Stock Incentive Plan (the “2016 Plan”) which was subsequently approved by our stockholders. The purpose of the 2016 Plan is to retain the services of our directors, employees, and consultants, align the interests of these individuals with the interests of our stockholders, and to serve as an aid and inducement in the hiring of new employees through awards of stock options, restricted stock awards, unrestricted stock awards, and performance stock awards (collectively, “2016 Plan Awards”). Under the terms of the 2016 Plan, 2016 Plan Awards to purchase up to 454,545 shares of our Common Stock may be granted to eligible participants. As of March 31, 2023, no shares of our Common Stock remain available for issuance pursuant to the 2016 Plan. The 2016 Plan will terminate on December 19, 2026, unless previously terminated by our Board. The 2016 Plan is administered by our Board, or any committee of directors designated by our Board and their respective delegates, as described in the 2016 Plan. 2019 Stock Incentive Plan In April 2019 our Board approved the 2019 Stock Incentive Plan (the “2019 Plan”) which was subsequently approved by our stockholders. The purpose of the 2019 Plan is to retain the services of our directors, employees, and consultants and align the interests of these individuals with the interests of our stockholders through awards of stock options, restricted stock awards, unrestricted stock awards, and stock appreciation rights (collectively, “2019 Plan Awards”). Under the terms of the 2019 Plan, 2019 Plan Awards to purchase up to 8,409,090 shares of our Common Stock may be granted to eligible participants. As of March 31, 2023, no shares of our Common Stock remain available for issuance pursuant to the 2019 Plan. The 2019 Plan will terminate on April 4, 2029, unless previously terminated by our Board. The 2019 Plan is administered by our Board, or any committee of directors designated by our Board and their respective delegates, as described in the 2019 Plan. 2022 Plan In April 2022 our Board adopted the 2022 Plan which was subsequently approved by our stockholders. The purpose of the 2022 Plan is to foster the growth and success of the Company by providing a means to attract, motivate and retain officers, directors, key employees, and consultants through awards of stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards and restricted stock units (collectively, the “2022 Plan Awards”). Under the terms of the 2022 Plan, 2022 Plan Awards to purchase up to 1,800,000 shares of our Common Stock may be granted to eligible participants. As of March 31, 2023, 363,599 shares of our Common Stock remain available for issuance pursuant to the 2022 Plan. Shares subject to an award that have been canceled, expired, settled in cash, or not issued or forfeited for any reason will not reduce the aggregate number of shares that may be subject to or delivered under the 2022 Plan and will be available for future awards granted under the 2022 Plan. The 2022 Plan will continue unless terminated by our Board. The 2022 Plan is administered by our Board, or any committee of directors designated by our Board and their respective delegates, as described in the 2022 Plan.
Plans Adopted Without Approval of Security Holders
| Fiscal Year | Summary Compensation Table Total for Former CEO(1) | Summary Compensation Table Total for Interim CEO(1) | Compensation Actually Paid to Former CEO(2) | Compensation Actually Paid to Former CEO(2) | Average Summary Compensation Table Total for Non-CEO NEOs(1) | Average Compensation Actually Paid to Non-CEO NEOs(2) | Total Shareholder Return(4) | Net Income (Loss)(5) | | 2023 | $742,708 | $- | $504,634 | $- | $605,605 | $(520,850) | $18.03 | $(55,582,000) | | 2022 | $3,860,658 | $- | $3,604,568 | $- | $1,607,796 | $1,401,026 | $80.37 | $(70,858,000) | | 2021 | $10,733,857 | $- | $7,663,426 | $- | $3,803,592 | $2,901,166 | $106.67 | $(89,940,000) |
Plans Adopted Without Approval of Security Holders
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to our CEO, while the dollar amounts reported in column (e) represent the average amount of “compensation actually paid” for the NEOs (excluding our CEO) for the applicable year. Compensation Actually Paid has been calculated based on the requirements and methodology set forth in applicable SEC rules (Item 402(v) of Regulation S-K). The details for the Compensation Actually Paid calculation for 2022 and 2021 are available in the prior year’s proxy statement. To calculate Compensation Actually Paid for 2023 the following amounts were deducted from and added to the total compensation number shown in the Summary Compensation Table. |
Plans Adopted Without Approval of Security Holders
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for 2023 | | | | | Adjustments | Former PEO ($) | Interim PEO ($) | Average of Other NEOs ($) | | Total Compensation from SCT | 742,708 | — | 605,605 | | Adjustments for stock and option awards | | | | | Deduction Amounts Reported under the “Stock Awards” Column in the Summary Compensation Table | — | — | (495,000) | | Deduction for Amounts Reported under the “Option Awards” Columns in the Summary Compensation Table | — | — | (472,975) | | Increase for Fair Value of Awards Granted During Current Fiscal Year which Remain Unvested as of the End of Current Fiscal Year | — | — | 252,350 | | Increase for Fair Value at Vesting of Option Awards and Stock Awards Granted During Current Fiscal Year That Vested During Current Fiscal Year | — | — | | | Change in Fair Value from Prior Fiscal Year End to Current Fiscal Year End of Option Awards and Stock Awards Granted Prior to Current Fiscal Year that were Outstanding and Unvested as of Current Fiscal Year End | — | — | | | Change in Fair Value from Prior Fiscal Year End to Vesting Date of Option Awards and Stock Awards Granted Prior to Current Fiscal Year But Which Vested During Current Fiscal Year | (238,075) | — | (695,084) | | Deduction of Fair Value of Option Awards and Stock Awards Granted prior to Current Fiscal Year That Were Forfeited During the Current Fiscal Year | — | — | | | Increase Based upon Incremental Fair Value of Option Awards and Stock Awards Modified During Current Fiscal Year | — | — | 284,254 | | Subtract fair value at end of prior year for awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during fiscal year 2023 | — | — | | | Add dividends or other earnings paid on stock or option awards in 2023 prior to vesting if not otherwise included in total compensation for fiscal year 2023 | — | — | | | Compensation Actually Paid (as calculated) | 504,634 | — | (520,850) |
Plans Adopted Without Approval of Security Holders
| * “CAP” stands for “Compensation Actually Paid” and is presented in thousands. ** “TSR” stands for “or Total Shareholder Return.” Our Interim CEO had no compensation reported in the Summary Compensation Table in 2023 and thus, is not shown in the graph provided. |
Plans Adopted Without Approval of Security Holders
| * “CAP” stands for “Compensation Actually Paid” and is presented in thousands. Our Interim CEO had no compensation reported in the Summary Compensation Table in 2023 and thus, is not shown in the graph provided. |