☐ |
Preliminary Proxy Statement
|
☐ |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
☒ |
Definitive Proxy Statement
|
☐ |
Definitive Additional Materials
|
☐ |
Soliciting Material Pursuant to §240.14a-12
|
(Name of Registrant as Specified In Its Charter)
|
||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
|
||
Payment of Filing Fee (Check the appropriate box):
|
☒ |
No fee required.
|
|
☐ |
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
|
|
(1)
|
Title of each class of securities to which transaction applies:
|
|
(2)
|
Aggregate number of securities to which transaction applies:
|
|
(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):
|
|
(4)
|
Proposed maximum aggregate value of transaction:
|
|
(5)
|
Total fee paid:
|
|
☐ |
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:
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
|
(3)
|
Filing Party:
|
|
(4)
|
Date Filed:
|
1. |
Election of five directors of the Company;
|
2. |
To consider and approve the Company’s 2018 Omnibus Equity Incentive Compensation Plan, referred to herein as the “2018 Plan”;
|
3. |
To consider and approve an amendment to the Company’s 2008 Omnibus Equity Incentive Compensation Plan to permit a one-time value-for-value option exchange;
|
4. |
To submit an advisory vote on the compensation of the Company’s named executive officers;
|
5. |
To ratify the appointment of Moss Adams, LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 25, 2018; and
|
6. |
To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
|
1
|
|
4
|
|
7
|
|
13
|
|
24
|
|
25
|
|
26
|
|
30
|
|
31
|
|
32
|
|
34
|
|
36
|
|
41
|
|
41
|
|
41
|
1. |
Election of five directors of the Company;
|
2. |
To consider and approve the Company’s 2018 Omnibus Equity Incentive Compensation Plan, referred to herein as the “2018 Plan”;
|
3. |
To consider and approve an amendment to the Company’s 2008 Omnibus Equity Incentive Compensation Plan to permit a one-time value-for-value option exchange;
|
4. |
To submit an advisory vote on the compensation of the Company’s named executive officers;
|
5. |
To ratify the appointment of Moss Adams, LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 25, 2018; and
|
6. |
To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
|
Name
|
Age
|
Director
Since |
Other Positions Held
the Company |
|||
Geoffrey R. Bailey
|
66
|
1996
|
Chairman of the Board
Member of the Audit Committee
Member of the Compensation Committee
|
|||
Boyd E. Hoback
|
63
|
1992
|
President and Chief Executive Officer
|
|||
Charles Jobson
|
58
|
2017
|
None
|
|||
Jason S. Maceda
|
49
|
None
|
||||
Robert J. Stetson
|
67
|
2014
|
Former Chairman of the Board
Former Chairman of the Audit Committee
|
· |
The Board will amend the Bylaws to reduce the number of directors to five to be effective upon the completion of the Annual Meeting.
|
· |
The Annual Meeting will be held May 24, 2018.
|
· |
The Company’s nominees of the Board for election at the Annual Meeting will be the above five persons and Messrs. Jobson and Stetson and their affiliated shareholders will vote in favor of the election of those five persons. Gary J. Heller, Eric W. Reinhard and Alan A. Teran will not be nominated for re-election as directors.
|
· |
Messrs. Jobson and Stetson will vote in favor of the Company’s Value-for-Value Option Exchange program.
|
· |
Messrs. Jobson and Stetson will vote in favor of the expansion of the Company’s Omnibus Plan.
|
· |
Following the Annual Meeting, the Board committees will consist of the following:
|
o |
Audit Committee: Mr. Maceda as Chairman, and Messrs. Jobson and Stetson; and
|
o |
Compensation Committee: Mr. Bailey as Chairman, and Messrs. Jobson and Stetson.
|
· |
If continued to be elected as a director, Mr. Bailey will continue to act as Chairman of the Board until the earlier of (i) the annual shareholders meeting for the 2019 fiscal year, or (ii) his resignation as Chairman or his removal by a vote of not less than two-thirds of the members of the Board.
|
· |
Messrs. Jobson and Stetson will amend their Schedule 13D/A filing to provide that they are no longer intending to vote for and to solicit proxies to vote for a change in the composition of the Board.
|
· |
The departing directors of the Board, Messrs. Heller, Reinhard, and Teran, will receive the following benefits in recognition of their long services for the Company:
|
o |
Prorated compensation based upon their annual rate of compensation for the fiscal 2018 year to the date of the Annual Meeting; and
|
o |
Pursuant to a subsequent amendment, a cash payment of $20,000 rather than the same amount in Restricted Stock Units.
|
· |
The total number of shares authorized for issuance under the 2018 Plan is 750,000.
|
· |
Unless sooner terminated, the 2018 Plan carries a 10-year term and will expire on May 24, 2028.
|
· |
The Tax Cuts and Jobs Act of 2017 significantly changed Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) for tax years beginning after December 31, 2017, making certain provisions that have historically appeared in our equity plans superfluous. Although the 2018 Plan still allows the Compensation Committee to grant awards that vest based on the attainment of performance goals, the 2018 Plan generally does not include provisions that are no longer needed in light of the changes to Section 162(m) of the Code.
|
· |
The 2018 Plan provides that, during any one fiscal year, the sum of the total cash compensation paid and the aggregate grant date fair value of stock awarded under the 2018 Plan to any non-employee director over the same fiscal year shall not exceed $250,000.
|
· |
The 2018 Plan expands the types of awards available for grant and allows the Compensation Committee to make stock grant awards and stock unit awards.
|
· |
The 2018 Plan provides that the maximum number of shares that may be granted to any one participant during any one fiscal year with respect to one or more awards is 100,000.
|
· |
Any and all stock options and SARs granted shall be accelerated to become immediately exercisable in full;
|
· |
Any period of restriction and other restrictions imposed on restricted stock or restricted stock units shall lapse, and restricted stock units shall be immediately settled and payable;
|
· |
The target payout opportunities attainable under all outstanding awards of performance-restricted stock, performance-restricted stock units, performance shares and performance units shall be deemed to have been fully earned based on targeted performance being attained as of the effective date of the change in control;
|
· |
The vesting of all awards denominated in shares of stock shall be accelerated as of the effective date of the change in control, and shall be paid out to participants within 30 days following the effective date of the change of control; and
|
· |
To the extent permitted by Section 409A of the Code, awards denominated in cash shall be paid to participants in cash within 30 days following the effective date of the change in control.
|
· |
Any person acquires beneficial ownership, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's securities;
|
· |
Within any 24-month period, the individuals who were directors of the Company at the beginning of such period (the “Incumbent Directors”) shall cease to constitute at least a majority of the directors or the board of any successor to the Company; provided, however, that any director elected or nominated for election to the board by a majority of the Incumbent Directors then still in office shall be deemed to be an Incumbent Director for this purpose;
|
· |
The shareholders approve a merger, consolidation, share exchange, division, sale or other disposition of all or substantially all of the assets of the Company which is consummated (a “Corporate Event”), and immediately following the consummation of which the shareholders of the Company immediately prior to such Corporate Event do not hold, directly or indirectly, a majority of the voting power of: (a) in the case of a merger or consolidation, the surviving or resulting entity; (b) in the case of a share exchange, the acquiring entity; or (c) in the case of a division or a sale or other disposition of assets, each surviving, resulting or acquiring entity which, immediately following the relevant Corporate Event, holds more than 5% of the consolidated assets of the Company immediately prior to such Corporate Event; or
|
PROPOSAL #3 |
APPROVAL OF THE AMENDMENT TO THE COMPANY’S 2008 OMNIBUS EQUITY INCENTIVE COMPENSATION PLAN TO PERMIT A ONE-TIME VALUE-FOR-VALUE OPTION EXCHANGE
|
· |
employees who hold Eligible Exchange Options and who are employed by us, or one of our subsidiaries, at the time of commencement of the Option Exchange, and who continue to hold such Eligible Exchange Options through the date on which Replacement Options are granted at the conclusion of the Option Exchange; and
|
· |
non-employee directors who hold Eligible Exchange Options and are serving as directors at the time of commencement of the Option Exchange, and who continue to hold such Eligible Exchange Options through the date on which Replacement Options are granted at the conclusion of the Option Exchange. As described in more detail below, under this standard, we anticipate that only Mr. Bailey will be eligible to participate in the Option Exchange.
|
2015
|
||||||||
QUARTER ENDED
|
HIGH
|
LOW
|
||||||
December 31, 2014
|
$
|
7.74
|
$
|
5.17
|
||||
March 31, 2015
|
$
|
8.47
|
$
|
6.83
|
||||
June 30, 2015
|
$
|
9.90
|
$
|
6.91
|
||||
September 30, 2015
|
$
|
9.34
|
$
|
6.12
|
2016
|
||||||||
QUARTER ENDED
|
HIGH
|
LOW
|
||||||
December 31, 2015
|
$
|
6.99
|
$
|
4.15
|
||||
March 31, 2016
|
$
|
5.17
|
$
|
3.03
|
||||
June 30, 2016
|
$
|
4.11
|
$
|
2.85
|
||||
September 27, 2016
|
$
|
4.39
|
$
|
3.39
|
2017
|
||||||||
QUARTER ENDED
|
HIGH
|
LOW
|
||||||
December 27, 2016
|
$
|
3.45
|
$
|
2.95
|
||||
March 28, 2017
|
$
|
3.55
|
$
|
2.85
|
||||
June 27, 2017
|
$
|
3.70
|
$
|
3.10
|
||||
September 26, 2017
|
$
|
3.60
|
$
|
2.55
|
· |
The option exchange offers a reasonable, balanced and meaningful incentive for our employees
. Underwater options are options that have an exercise price that is greater than the trading price of the common stock for which they are exercisable. As of April 6, 2018, approximately 400,780 of the 674,925 stock options held by our officers, employees and non-employee directors were underwater and 20.4% had a per-share exercise price equal to or greater than $7.79. We believe that these underwater stock options no longer represent effective incentives to motivate or help retain many of our employees. By exchanging significantly underwater stock options for a lesser number of Replacement Options with lower exercise prices, we believe that the Option Exchange will aid both motivation and retention of those persons participating in the Option Exchange, while better aligning the interests of our employees with the interests of our shareholders.
|
· |
The exchange ratios will be calculated to minimize accounting costs
. We will calculate the exchange ratios to result in an aggregate fair value, for accounting purposes, of the Replacement Options approximately equal to the aggregate fair value of the surrendered options, which we believe will not have a material impact on our reported earnings. Although the exchange ratios cannot be determined now, we provide below an example based on certain assumptions
|
· |
The option exchange will enable us to recapture value from compensation costs that we are already incurring that have very little motivational impact
. We believe it is not an efficient use of our resources to recognize compensation expense on options that are not perceived by our employees to provide value. Under applicable accounting rules, we are required to recognize current compensation expense related to these awards, even if these awards are never exercised because they are underwater. By replacing options that have relatively little retentive or incentive value with a lesser number of Replacement Options with an exercise price equal to the
greater of the closing price of our common stock on the grant date for the Replacement Options or the ninety-day trailing daily average closing price of the common stock for the 90 trading days preceding and including the grant date, we can increase both retention and incentive value without creating additional compensation expense (other than expense that might result from fluctuations in our stock price after the exchange ratio has been set but before the exchange actually occurs).
|
· |
The option exchange will reduce our equity award overhang
. Underwater options are not likely to be exercised, but not only do they have little or no retention value, they also remain part of our total number of outstanding options, or issued overhang, until they are exercised, expire or are cancelled. Because officers, employees and non-employee directors who participate in the Option Exchange will receive a lesser number of Replacement Options in exchange for their surrendered Eligible Exchange Options, the number of shares of common stock subject to all outstanding equity awards will be reduced, thereby reducing our issued overhang. At the same time, we will eliminate our most ineffective options that are currently outstanding. Based on the assumptions described herein, if all Eligible Exchange Options are exchanged, options to purchase approximately 137,831 shares would be surrendered and cancelled, while Replacement Options covering approximately 52,839 shares will be granted, resulting in an approximate 13.9% reduction in our equity award overhang.
|
· |
The option exchange will decrease pressure for additional grants
. If we are unable to conduct a program in which underwater stock options with low incentive value may be exchanged for stock options with higher motivation and retention value, we may find it necessary to issue significant additional stock options or other equity awards to employees above and beyond our ongoing equity grant practices in order to provide renewed incentive value to employees. Any such additional grants would increase our overhang, as well as our compensation expense.
|
· |
The option exchange will also decrease pressure for increased cash compensation
. To offset the reduced retentive power of the underwater options, we could instead increase base and target bonus cash compensation. However, significant increases in cash compensation would substantially increase our cash compensation expenses and reduce our cash flow from operations, which could adversely affect our business and operating results. In addition, these increases would not reduce our equity overhang and would not necessarily best align the interests of our employees with those of our shareholders.
|
· |
an amendment to the 2008 Plan necessary to permit the Option Exchange pursuant to this Proposal # 3, and
|
· |
adoption of the 2018 Plan pursuant to Proposal # 2 in this Proxy Statement.
|
· |
employees who hold Eligible Exchange Options and who are employed by us, or one of our subsidiaries, at the time of commencement of the Option Exchange, and who continue to hold such Eligible Exchange Options through the date on which Replacement Options are granted at the conclusion of the Option Exchange; and
|
· |
Mr. Bailey, if he continues to serve on our Board through the date on which Replacement Options are granted at the conclusion of the Option Exchange. No other non-employee directors hold Eligible Exchange Options.
|
Grant Date
|
Number of Options
|
Exercise Price
|
||||||
03/13/2015
|
1,527
|
$
|
9.17
|
|||||
05/07/2015
|
136,304
|
$
|
7.79
|
Grant Date
|
Exercise Price
for Grants
|
Potential
Exchange Ratio
|
Number of Shares
Underlying Eligible Options |
Expected New
Options to be Issued |
|||||||||
03/13/2015
|
$
|
9.17
|
3.6:1
|
1,527
|
424
|
||||||||
05/07/2015
|
$
|
7.79
|
2.6:1
|
136,304
|
52,415
|
· |
the Option Exchange is implemented as described herein, and
|
· |
all Eligible Exchange Options are exchanged in the Option Exchange based upon the exchange ratios estimated herein and described in the chart above for illustrative purposes.
|
Number and Terms of Eligible
Exchange Options Held (1) |
||||||||||||||||
Name and Position
|
Date of
Grant |
# of
Options |
Exercise
Price |
# of
Estimated Replacement Options (2) |
||||||||||||
Named Executive Officers:
|
||||||||||||||||
Boyd E. Hoback, President and Chief Executive
Officer |
8/31/2015
|
77,022
|
$
|
7.79
|
29,622
|
|||||||||||
Ryan M. Zink, Chief Financial Officer
(3)
|
-
|
-
|
-
|
--
|
||||||||||||
Susan M. Knutson, Controller
|
8/31/2015
|
5,520
|
$
|
7.79
|
2,123
|
|||||||||||
Scott G. LeFever, Vice President of Operations
|
8/31/2015
|
11,553
|
$
|
7.79
|
4,443
|
|||||||||||
James K. Zielke, Former Chief Financial Officer
(4)
|
-
|
-
|
-
|
--
|
||||||||||||
All Executive Officers as a group
|
8/31/2015
|
94,095
|
$
|
7.79
|
36,188
|
|||||||||||
Current Directors:
|
||||||||||||||||
Geoffrey R. Bailey, Chairman of the Board of
Directors |
8/31/2015
|
7,060
|
$
|
7.79
|
2,715
|
|||||||||||
Gary J. Heller
(5)
|
-
|
-
|
-
|
--
|
||||||||||||
Eric W. Reinhard
(5)
|
-
|
-
|
-
|
--
|
||||||||||||
Alan Teran
(5)
|
-
|
-
|
-
|
--
|
||||||||||||
Director Nominees:
|
||||||||||||||||
Charles Jobson
(6)
|
-
|
-
|
-
|
--
|
||||||||||||
Jason S. Maceda
|
-
|
-
|
-
|
--
|
||||||||||||
Robert J. Stetson
(6)
|
-
|
-
|
-
|
--
|
||||||||||||
Total Non-Executive Officer Director Group
|
8/31/2015
|
7,060
|
$
|
7.79
|
2,715
|
|||||||||||
Non-Executive Officer Employee Group
|
3/13/2015
|
1,527
|
$
|
9.17
|
424
|
|||||||||||
11/23/2015
|
35,149
|
$
|
7.79
|
13,512
|
||||||||||||
Total
|
137,831
|
52,839
|
(1) |
The options in this column represent the number and terms of options that are held by each person or group described that are subject to the Option Exchange.
|
(2) |
The numbers in this column assume that the Option Exchange is effected on the basis of the estimated exchange ratios described herein, and are subject to change when the final exchange ratios are determined.
|
(3) |
Mr. Zink began employment with the Company on July 31, 2017 and does not hold any Eligible Exchange Options.
|
(4) |
Mr. Zielke terminated employment with the Company on August 31, 2017 and his stock options expired 30 days thereafter. Mr. Zielke is not eligible to participate in the Option Exchange.
|
(5) |
At the time of this filing, Messrs. Heller, Reinhard, and Teran hold options that would otherwise qualify as Eligible Exchange Options. However, as these directors have not been nominated for re-election, under the 2018 Plan, they will not qualify to be issued Replacement Options at the time the Option Exchange is conducted; therefore they will not be eligible to participate in the Option Exchange.
|
(6) |
Messrs. Jobson and Stetson resigned from the Board on January 10, 2018, but have been nominated to rejoin the Board. Neither has any outstanding options.
|
· |
Any and all stock options and SARs granted shall be accelerated to become immediately exercisable in full;
|
· |
Any period of restriction and other restrictions imposed on restricted stock or restricted stock units shall lapse, and restricted stock units shall be immediately settled and payable;
|
· |
The target payout opportunities attainable under all outstanding awards of performance-based restricted stock, performance-based restricted stock units, performance shares and performance units (including, but not limited to, awards intended to be performance-based compensation) shall be deemed to have been fully earned based on targeted performance being attained as of the effective date of the change of control, and:
|
· |
The vesting of all awards denominated in shares of common stock shall be accelerated as of the effective date of the change of control, and shall be paid out to participants within 30 days following the effective date of the change of control; and
|
· |
Awards denominated in cash shall be paid to participants in cash within 30 days following the effective date of the change of control;
|
· |
Upon a change of control, unless otherwise specifically provided in a written agreement entered into between the participant and us or an affiliate, the Committee shall immediately vest and pay out all other stock-based awards as determined by the Committee; and
|
· |
The Committee shall have the ability to unilaterally determine that all outstanding awards are cancelled upon a change in control, and the value of such awards, as determined by the Committee in accordance with the terms of the 2008 Plan and the award agreement, be paid out in cash in an amount based on the change of control price within a reasonable time subsequent to the change in control; provided, however, that no such payment shall be made on account of an incentive stock option using a value higher than the fair market value on the date of settlement.
|
· |
Without the prior approval of our shareholders, stock options and SARs issued under the 2008 Plan will not be re-priced, replaced, or re-granted such that the stock option price of a previously granted stock option or the grant price of a previously granted SAR is effectively reduced from the original stock option price or grant price.
|
· |
No amendment or modification which would increase the total number of shares of common stock available for issuance under the 2008 Plan or the total number of shares of common stock available for incentive stock options under the 2008 Plan shall be effective unless approved by our shareholders.
|
· |
To the extent necessary under any applicable law, regulation, or securities exchange or market requirement, no amendment shall be effective unless approved by our shareholders in accordance with applicable law, regulation, or securities exchange or market requirement.
|
Shares Underlying
Options (#) (1) |
Restricted Stock
Unit Awards (#) (1) |
|||||||||||||||
Outstanding
|
Previously
Exercised |
Outstanding
|
Previously
Vested |
|||||||||||||
Named Executive Officers:
|
||||||||||||||||
Boyd E. Hoback, Director/President and
Chief Executive Officer |
242,384
|
62,898
|
17,109
|
50,995
|
||||||||||||
Ryan M. Zink, Chief Financial Officer
|
-
|
-
|
37,037
|
-
|
||||||||||||
Scott G. LeFever, Vice President of
Operations |
81,591
|
73,342
|
7,851
|
31,672
|
||||||||||||
Susan M. Knutson, Controller
|
54,134
|
63,667
|
5,873
|
23,721
|
||||||||||||
James K. Zielke, Former Chief Financial
Officer |
-
|
-
|
-
|
8,246
|
||||||||||||
Current executive officers, as a group:
|
378,109
|
199,907
|
67,870
|
106,388
|
||||||||||||
Directors, including nominees (who are not
current executive officers), as a group: |
66,364
|
52,667
|
16,698
|
16,093
|
||||||||||||
All Employees (including officers who are
not current executive officers), as a group: |
608,561
|
93,574
|
90,166
|
172,701
|
(1) |
For a further description of outstanding options and restricted stock units as of September 26, 2018 granted to our Named Executive Officers, see the “Outstanding Equity Awards at Fiscal Year-End 2017” table below in this Proxy Statement, and for a further description of outstanding options as of September 26, 2018 granted to our non-employee directors, see the paragraph following the Directors’ Compensation table below in this Proxy Statement.
|
Name
|
Fees Earned or
Paid in Cash ($) |
Restricted
Stock Unit Awards ($) (1) |
Option
Awards ($) (1) |
Total $
|
||||||||||||||
Geoffrey R. Bailey
|
20,500
|
9,480
|
17,357
|
47,337
|
||||||||||||||
Gary J. Heller
|
15,000
|
6,977
|
17,357
|
(6)
|
39,334
|
|||||||||||||
Eric W. Reinhard
|
19,500
|
9,480
|
17,357
|
(6)
|
46,337
|
|||||||||||||
Alan A. Teran
|
17,000
|
6,977
|
17,357
|
(6)
|
41,334
|
|||||||||||||
Robert J. Stetson
(2)
|
18,750
|
9,480
|
17,357
|
45,587
|
||||||||||||||
Steve Johnson
(3)
|
8,250
|
272
|
6,691
|
15,213
|
||||||||||||||
Charles Jobson
(4)
|
-
|
-
|
-
|
-
|
||||||||||||||
Boyd E. Hoback
(5)
|
-
|
-
|
-
|
-
|
(1) |
In the value of equity awards shown in these columns includes all amounts expensed in the Company’s financial statements in fiscal years 2017 for equity awards in accordance with the guidance of FASB ASC 718-10-30, Compensation – Stock Compensation, excluding any estimate for forfeitures. The Company’s accounting treatment for, and assumptions made in the valuations of, equity awards is set forth in Note 7 of the notes to the Company’s 2017 consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 26, 2017. There were no option awards re-priced in 2017.
|
(2) |
Mr. Stetson resigned from the Board on January 10, 2018. His unvested restricted stock units expired immediately and his options expired thirty days thereafter.
|
(3) |
Mr. Johnson resigned from the Board on April 12, 2017. His options expired thirty days thereafter.
|
(4) |
Mr. Jobson joined the Board on April 12, 2017 and resigned from the Board on January 10, 2018. Mr. Jobson did not receive compensation for his service as a director during fiscal 2017.
|
(5) |
Mr. Hoback is an employee director and does not receive additional fees for service as a member of the Board.
|
(6) |
Pursuant to the Settlement Agreement, the period for Messrs. Heller, Reinhard and Teran to exercise their non-qualified stock options will be extended three years following the Annual Meeting.
|
(a)
|
(b)
|
(c)
|
||||
Plan category
|
Number of securities
to be issued upon exercise of outstanding options, warrants & rights (1) |
Weighted-average
exercise price of outstanding options, warrants & rights (2) |
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 |
796,691
|
$4.25
|
225,195
|
(1) |
In addition to shares underlying outstanding options, the amount in column (a) includes 115,039 shares of common stock subject to restricted stock units (with an exercise price of $0) that entitle each holder to one share of common stock for each unit that vests over the holder’s period of continued service or based upon the achievement of certain performance criteria.
|
(2) |
Excludes restricted stock units which are issued with an exercise price of $0.
|
HOLDER:
|
Number of shares
beneficially owned** |
Percent
of class (1) |
||||||||
Principal Shareholders:
|
||||||||||
Affiliates of Delta Advisors, LLC
265 Franklin Street, Ste. 903, Boston, MA 02110 |
1,369,640
|
(2)
|
10.98%
|
|
||||||
Manatuk Hill Partners, LLC
1465 Post Road, East, Westport, CT 06880 |
1,041,400
|
(3)
|
8.35%
|
|||||||
Directors and Officers:
|
||||||||||
Geoffrey R. Bailey, Director
|
31,545
|
(4)
|
*
|
|||||||
Gary J. Heller, Director
|
14,998
|
(5)
|
*
|
|||||||
Eric W. Reinhard, Director
|
127,981
|
(6)
|
1.03%
|
|||||||
Alan A. Teran, Director
|
75,766
|
(7)
|
*
|
|||||||
Boyd E. Hoback, Director/President and Chief Executive Officer
|
301,909
|
(8)
|
2.38%
|
|||||||
Ryan M. Zink, Chief Financial Officer
|
25,000
|
*
|
||||||||
Scott G. LeFever, VP of Operations
|
99,009
|
(9)
|
*
|
|||||||
Susan M. Knutson, Controller
|
61,526
|
(10)
|
*
|
|||||||
Charles Jobson, Former Director
|
2,248,757
|
(11)
|
18.04%
|
|||||||
Robert J. Stetson, Former Director
|
616,711
|
(12)
|
4.95%
|
|||||||
James K. Zielke, Former Chief Financial Officer
|
98,346
|
(13)
|
*
|
|||||||
All current directors and executive officers as a group (8 persons)
|
737,734
|
5.74%
|
(1) |
Based on 12,468,326 shares of Common Stock outstanding as of March 26, 2018.
|
(2) |
Represents shares directly held by Prism Partners, L.P. and Delta Growth Master Fund L.P. Delta Advisors, LLC is the general partner of Prism Partners, L.P. and Delta Growth Master Fund L.P.
|
(3) |
The information as to Manatuk Hill Partners, LLC and entities controlled directly or indirectly by Manatuk Hill Partners, LLC is derived in part from Schedule 13G/A, as filed with the SEC on February 14, 2017.
|
(4) |
Includes 23,580 shares underlying presently exercisable stock options.
|
(5) |
Includes 9,581 shares underlying presently exercisable stock options.
|
(6) |
Includes 9,581 shares underlying presently exercisable stock options.
|
(7) |
Includes 18,581 shares underlying presently exercisable stock options and 8,000 shares held in the entity Termar Enterprises, Inc. (“Termar”). Mr. Teran is the President of Termar.
|
(8) |
Includes 208,937 shares underlying presently exercisable stock options.
|
(9) |
Includes 67,337 shares underlying presently exercisable stock options.
|
(10) |
Includes 45,479 shares underlying presently exercisable stock options.
|
(11) |
The information as to Charles Jobson and affiliates is derived from the Schedule 13D/A as filed with the SEC on March 14, 2018.
Represents 1,363,440 shares held by Prism Partners, L.P., 6,200 shares held by Delta Growth Master Fund L.P., and 208,333 shares held by the Jobson Family Foundation. Delta Advisors, LLC is the general partner of Prism Partners, L.P. and Delta Growth Master Fund L.P. Delta Partners GP, LLC is the general partner of Delta Partners, LP. Charles Jobson is the managing member of Delta Advisors, LLC and Delta Partners GP, LLC. Charles Jobson is the trustee of the Jobson Family Foundation
.
|
(12) |
The information as to Robert J. Stetson and affiliates is derived from the Schedule 13D/A as filed with the SEC on March 14, 2018 and Form 4 as filed with the SEC on February 21, 2018, adjusted to reflect the forfeiture of 9,581 stock options reported therein which were forfeited on February 9, 2018. Includes 440,000 shares of Common Stock held beneficially by REIT Redux, LP. Mr. Stetson is the President of REIT Redux GP, LLC, which is the general partner of REIT Redux, LP. Also includes 24,000 shares held in Leanlien, LLC.,
a trust in which Mr. Stetson beneficially owns 61% and his children beneficially own 39%. Also
includes 103,894 shares of Common Stock held directly by Mr. Stetson. Also includes 48,817 shares of Common Stock held beneficially by SLKW Investments LLC. SLKW Investments LLC is an investment entity of which Mr. Stetson is the managing member.
|
(13) |
Mr. Zielke resigned his position as Chief Financial Officer, effective as of August 31, 2017. The information for Mr. Zielke is based on information available to the Company as of his termination date and may not reflect current beneficial ownership as of March 26, 2018.
|
* |
Less than one percent.
|
** |
Under SEC rules, beneficial ownership includes shares over which the individual or entity has voting or investment power and any shares which the individual or entity has the right to acquire within sixty days.
|
Name
|
Age
|
Position
|
With Company Since:
|
|||
Boyd E. Hoback
|
63
|
President & CEO
|
September 1987
|
|||
Ryan M. Zink
|
39
|
Chief Financial Officer
|
July 2017
|
|||
Susan M. Knutson
|
59
|
Controller
|
September 1987
|
|||
Scott G. LeFever
|
59
|
VP of Operations
|
September 1987
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
(2)
|
Stock
Awards (3) |
Option
Awards (3) |
All Other
Comp . (4), (5) |
Total
|
|||||||||||||||||||
Boyd E. Hoback, President and CEO
|
2017
|
$
|
231,000
|
$
|
63,885
|
$
|
67,481
|
$
|
61,586
|
$
|
24,740
|
$
|
448,692
|
|||||||||||||
2016
|
218,590
|
58,652
|
51,109
|
53,430
|
26,345
|
408,126
|
||||||||||||||||||||
Ryan M. Zink, Chief Financial Officer
|
2017
|
32,308
|
(1)
|
-
|
-
|
-
|
18,650
|
50,958
|
||||||||||||||||||
2016
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Scott G. LeFever, Vice President of Operations
|
2017
|
157,500
|
30,096
|
28,756
|
27,720
|
18,956
|
263,028
|
|||||||||||||||||||
2016
|
149,038
|
26,400
|
24,892
|
22,769
|
19,871
|
242,970
|
||||||||||||||||||||
Susan M. Knutson, Controller
|
2017
|
121,275
|
16,770
|
17,714
|
19,502
|
11,802
|
187,063
|
|||||||||||||||||||
2016
|
114,760
|
18,572
|
21,903
|
13,358
|
12,366
|
180,959
|
||||||||||||||||||||
James K. Zielke, Former Chief Financial Officer
|
2017
|
174,845
|
(6)
|
-
|
40,259
|
38,808
|
16,678
|
270,590
|
||||||||||||||||||
2016
|
185,042
|
36,960
|
14,521
|
31,875
|
13,800
|
282,198
|
(1) |
Mr. Zink began employment with the Company on July 31, 2017.
|
(2) |
The amounts indicated for Bonuses represent the amounts earned in the fiscal year.
|
(3) |
The value of equity awards shown in these columns represents the grant date fair value calculated in accordance with the guidance of FASB ASC 718-10-30, Compensation – Stock Compensation. The Company’s accounting treatment for, and assumptions made in the valuations of, equity awards is set forth in Note 7 of the notes to the Company’s 2017 consolidated financial statements included in the Annual Report. There were no option awards re-priced in 2017.
|
(4) |
The amounts indicated for Mr. Hoback, Mr. LeFever, Mr. Zielke and Ms. Knutson include an automobile allowance, long-term disability and the Company’s matching contribution to the 401(k) Plan.
|
(5) |
The amount indicated for Mr. Zink includes an automobile allowance and relocation expenses.
|
(6) |
Mr. Zielke terminated employment with the Company on August 31, 2017 and his stock options expired thirty days thereafter.
|
Option Awards
|
Stock Awards | |||||||||||||||||||||
# of Securities Underlying
Unexercised Options |
Option
Exercise |
Option
Expiration |
# of Shares or
Units of Stock That Have Not |
Market Value
of Shares or Units of Stock That Have Not |
||||||||||||||||||
Name
|
Exercisable(#)
|
Unexercisable(#)
|
Price $
|
Date
|
Vested (#)
|
Vested (#)
|
||||||||||||||||
Boyd E. Hoback
|
9,501
|
-
|
$
|
4.41
|
11/14/18
|
8,151
|
(2)
|
$
|
23,231
|
(2)
|
||||||||||||
4,551
|
_
|
$
|
3.45
|
11/06/19
|
19,551
|
(3)
|
$
|
55,720
|
(3)
|
|||||||||||||
10,647
|
_
|
$
|
1.56
|
12/13/20
|
||||||||||||||||||
5,000
|
_
|
$
|
1.31
|
12/14/21
|
||||||||||||||||||
45,696
|
_
|
$
|
2.31
|
01/02/23
|
||||||||||||||||||
44,000
|
_
|
$
|
2.48
|
11/21/23
|
||||||||||||||||||
51,348
|
25,674
|
$
|
7.79
|
03/13/25
|
||||||||||||||||||
3,327
|
13,308
|
(1)
|
$
|
5.29
|
11/23/25
|
|||||||||||||||||
-
|
29,333
|
(4)
|
$
|
3.15
|
11/16/26
|
|||||||||||||||||
Scott G. LeFever
|
5,669
|
-
|
$
|
4.41
|
11/14/18
|
3,970
|
(2)
|
$
|
11,315
|
(2)
|
||||||||||||
1,449
|
_
|
$
|
3.45
|
11/06/19
|
8,900
|
(3)
|
$
|
25,080
|
(3)
|
|||||||||||||
7,985
|
_
|
$
|
1.56
|
12/13/20
|
||||||||||||||||||
22,346
|
_
|
$
|
2.31
|
01/02/23
|
||||||||||||||||||
13,000
|
_
|
$
|
2.48
|
11/21/23
|
||||||||||||||||||
7,702
|
3,851
|
$
|
7.79
|
03/13/25
|
||||||||||||||||||
1,418
|
5,671
|
(1)
|
$
|
5.29
|
11/23/25
|
|||||||||||||||||
-
|
12,500
|
(4)
|
$
|
3.15
|
11/16/26
|
|||||||||||||||||
Susan M. Knutson
|
2,033
|
-
|
$
|
4.41
|
11/14/18
|
3,493
|
(2)
|
$
|
9,956
|
(2)
|
||||||||||||
1,267
|
_
|
$
|
3.45
|
11/06/19
|
6,191
|
(3)
|
$
|
17,644
|
(3)
|
|||||||||||||
5,323
|
_
|
$
|
1.56
|
12/13/20
|
||||||||||||||||||
18,132
|
_
|
$
|
2.31
|
01/02/23
|
||||||||||||||||||
10,000
|
_
|
$
|
2.48
|
11/21/23
|
||||||||||||||||||
3,680
|
1,840
|
$
|
7.79
|
03/13/25
|
||||||||||||||||||
832
|
3,327
|
(1)
|
$
|
5.29
|
11/23/25
|
|||||||||||||||||
-
|
7,700
|
(4)
|
$
|
3.15
|
11/16/26
|
|||||||||||||||||
James K. Zielke
|
None
|
|||||||||||||||||||||
Ryan M. Zink
|
None
|
(1) |
The options were granted on November 23, 2015. Assuming continued employment with the Company, the shares under the stock award vest ratably over a five-year period and become fully vested on November 23, 2020.
|
(2) |
The stock awards were issued on November 23, 2015. Assuming continued employment with the Company, the shares under the stock awards vest ratably over a three-year period and become fully vested on November 23, 2018.
|
(3) |
The stock awards were issued on November 16, 2016. Assuming continued employment with the Company, the shares under the stock awards vest ratably over a three-year period and become fully vested on November 16, 2019.
|
(4) |
The options were granted on November 16, 2016. Assuming continued employment with the Company, the shares under the stock award vest ratably over a five-year period and become fully vested on November 16, 2021.
|
Geoffrey R. Bailey
|
For
☐
|
Against
☐
|
Abstain
☐
|
||
Boyd E. Hoback
|
For
☐
|
Against
☐
|
Abstain
☐
|
||
Charles Jobson
|
For
☐
|
Against
☐
|
Abstain
☐
|
||
Jason S. Maceda
|
For
☐
|
Against
☐
|
Abstain
☐
|
||
Robert J. Stetson
|
For
☐
|
Against
☐
|
Abstain
☐
|
For
☐
|
Against
☐
|
Abstain
☐
|
For
☐
|
Against
☐
|
Abstain
☐
|
For
☐
|
Against
☐
|
Abstain
☐
|
For
☐
|
Against
☐
|
Abstain
☐
|
Shares Owned:
|
Dated:
|
|||
Signature of shareholder
|
Signature (if held jointly)
|
|||
(Sign exactly as name appears on stock certificate)
|
GOOD TIMES RESTAURANTS INC.
|
||
By:
|
||
Its:
|
GOOD TIMES RESTAURANTS INC.
|
||
By:
|
||
Its:
|