EXECUTIVE
COMPENSATION
This
section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary
Compensation Table” below. As an emerging growth company, we comply with the executive compensation disclosure rules applicable
to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act of 1933, as amended
(the “Securities Act”), which require compensation disclosure for our principal executive officer and the two most highly
compensated executive officers other than our principal executive officer. These three officers are referred to as our named executive
officers.
In
2021, our “named executive officers” and their positions were as follows:
• Eric.
D. Stonestrom, Chief Executive Officer and Chairman of the Board of Directors;
• David
Brant, Senior Vice President & Chief Financial Officer; and
• Henrik
Smith-Petersen, Chief Sales & Marketing Officer.
This
discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations
regarding future compensation programs. The actual compensation programs that we adopt in the future may differ materially from the currently
planned programs summarized in this discussion.
Summary
Compensation Table
The
following table provides summary information concerning compensation paid or accrued by us to or on behalf of our named executive officers.
Name
and Principal Position |
|
Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
Stock Awards ($)(1)
|
|
Option Awards ($)(2)
|
|
Non-equity Incentive Plan Compensation
($)(3) |
|
All
Other Compensation ($)(4) |
|
Total
($) |
Eric
D. Stonestrom, |
|
2021
|
|
|
$
|
512,922
|
|
$
|
216,945
|
|
$
|
6,825,000
|
|
$
|
851,245
|
|
$
|
7,000,000
|
|
$
|
169,113
|
|
$
|
15,575,225
|
Chief
Executive Officer and Chairman of the Board of Directors |
|
2020
|
|
|
$
|
500,000
|
|
$
|
225,000
|
|
$
|
609,128
|
|
$
|
602,395
|
|
$
|
—
|
|
$
|
11,400
|
|
$
|
1,947,923
|
David
Brant, |
|
2021
|
(5)
|
|
$
|
373,742
|
|
$
|
131,679
|
|
$
|
3,412,500
|
|
$
|
425,625
|
|
$
|
3,455,202
|
|
$
|
49,041
|
|
$
|
7,847,789
|
Senior
Vice President & Chief Financial Officer |
|
2020
|
(6)
|
|
$
|
340,369
|
|
$
|
127,639
|
|
$
|
304,564
|
|
$
|
301,197
|
|
$
|
—
|
|
$
|
25,530
|
|
$
|
1,099,299
|
Henrik
Smith-Petersen |
|
2021
|
(5)
|
|
$
|
359,504
|
|
$
|
—
|
|
$
|
2,849,438
|
|
$
|
355,372
|
|
$
|
3,213,775
|
|
$
|
26,963
|
|
$
|
6,805,052
|
Chief
Sales & Marketing Officer |
|
2020
|
(6)
|
|
$
|
307,678
|
|
$
|
—
|
|
$
|
76,147
|
|
$
|
677,205
|
|
$
|
215,555
|
|
$
|
23,249
|
|
$
|
1,299,834
|
____________
(1) The
amounts in this column represent the aggregate grant date fair value of restricted stock units granted to each named executive officer
pursuant to Legacy Airspan’s management incentive plan (the “MIP”) in connection with the Closing of the Business Combination,
computed in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718. See Note 17 to the audited consolidated
financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion
of the assumptions used in determining the grant date fair value of our equity awards.
(2) The
amounts in this column represent the aggregate grant date fair value of option awards granted to each named executive officer, computed
in accordance with FASB ASC Topic 718. See Note 17 to the audited consolidated financial statements included in our Annual Report on Form 10-K
for the year ended December 31, 2021, for a discussion of the assumptions used in determining the grant date fair value of our equity
awards.
(3) The
amounts in this column represent amounts paid pursuant to the MIP in connection with the Closing of the Business Combination and amounts
earned by Mr. Smith-Petersen under a sales compensation plan.
(4) With
respect to Mr. Stonestrom, represents our matching contributions under our 401(k) plan and payment for unused vacation. With
respect to Messrs. Brant and Smith-Petersen, represents our contributions under U.K. pension scheme and payment for unused
vacation.
(5) Amounts
have been converted from British pounds to U.S. dollars at a rate of £1 to $0.7266, which represents the average of the exchange
rate on the last day of each month in 2021.
(6) Amounts
have been converted from British pounds to U.S. dollars at a rate of £1 to $0.7774, which represents the average of the exchange
rate on the last day of each month in 2020.
18
Narrative
Disclosure to Summary Compensation Table
We
have historically provided compensation for our named executive officers by way of base salary and bonus, both of which are provided under
the named executive officer’s employment agreement, as well as equity awards.
Employment
Agreements
All
of our named executive officers are employed with employment agreements.
Eric
Stonestrom, Chief Executive Officer
Mr.
Stonestrom’s base salary under his employment agreement, dated January 12, 1998, is subject to periodic review
and adjustment by our Board. As of December 31, 2021, Mr. Stonestrom’s base salary was $517,500 per year.
On February 8, 2022, the Board increased Mr. Stonestrom’s base salary to $567,500 per year. Additionally,
Mr. Stonestrom is eligible to receive certain bonus compensation under our bonus plan at a target of 60% of his base salary
and is eligible to receive grants under our equity compensation plans. Mr. Stonestrom’s employment agreement has no
specified term. See the caption “Potential Payments Upon Termination or Change in Control” for details regarding potential
severance payments.
David
Brant, Senior Vice President & Chief Financial Officer
Mr.
Brant’s base salary under his employment agreement, effective as of January 1, 2007, has since been increased
to its current level of £273,877 per year, subject to periodic review and adjustment. Additionally, Mr. Brant is eligible
to receive certain bonus compensation under our bonus plan at a target of 50% of his base salary and is eligible to receive grants under
our equity compensation plans. Mr. Brant’s employment agreement has no specified term. See the caption “Potential
Payments Upon Termination or Change in Control” for details regarding potential severance payments.
Henrik
Smith-Petersen, Chief Sales and Marketing Officer
Mr.
Smith Petersen’s base salary under his employment agreement, dated October 7, 2009, has since been increased
to its current level of £254,999 per year, subject to periodic review and adjustment. Additionally, Mr. Smith-Petersen
is eligible to receive certain bonus compensation under our sales compensation plan at a level of up to 70% of his base salary, plus certain
spot bonuses for achieving specific sales goals. Mr. Smith-Petersen is also eligible to receive grants under
our equity compensation plans. Mr. Smith-Petersen’s employment agreement has no specified term. See the
caption “Potential Payments Upon Termination or Change in Control” for details regarding potential severance payments.
Equity
Awards
We
have historically offered stock options and restricted stock awards to our named executive officers, as the long-term incentive
component of our compensation program. Our stock options generally allow employees to purchase shares of common stock at a price equal
to the fair market value of that common stock on the date of grant. Our restricted stock awards generally remain subject to forfeiture
until the risks of forfeiture lapse according to their terms. Historically, restricted stock awards vested upon the earlier of either
of the following events that occurred on or prior to the 10th anniversary of
the date of grant: (i) the date of a change in control; or (ii) the effective date of an initial public offering. In connection
with the Closing of the Business Combination, the provisions of our outstanding restricted stock awards were amended to provide that vesting
would occur on the earliest to occur of (a) August 13, 2022, (b) death, (c) disability and (d) qualifying
separation, provided that the holder continues to be employed by us, or continues to be a director of ours, through such date or event.
19
The
following table sets forth the options to purchase shares of common stock granted to our named executive officers during 2021.
Named
Executive Officer |
|
2021 Stock Options Granted
|
Eric
D. Stonestrom |
|
135,333
|
David
Brant |
|
67,667
|
Henrik
Smith-Petersen |
|
56,498
|
These
stock options were granted on January 28, 2021 and vest as to 25% of the shares on the first anniversary of the date of grant,
and vest monthly as to 1/48 of the shares for each of the 36 months following the first anniversary of the date of grant,
such that the stock option is fully-vested in four years. The number of stock options presented in the above table represents
stock options to purchase Legacy Airspan stock. In connection with the Closing, the stock options were converted into options to purchase
shares of our common stock. See the “Outstanding Equity Awards at 2021 Fiscal Year-End” table below.
No
restricted stock awards were made to our named executive officers during 2021.
In
addition, as described in greater detail below, in connection with the Closing of the Business Combination, we granted restricted stock
units with respect to 1,750,000 shares of our common stock (“MIP RSUs”) to the participants in the MIP (the “MIP
Participants”), which included our named executive officers and certain of our directors.
MIP
At
the Closing of the Business Combination, certain of our directors and executive officers received, in full satisfaction of their rights
under the MIP, an aggregate of $17,500,000 in cash and MIP RSUs with respect to an aggregate of 1,750,000 shares of our common
stock. The MIP RSUs will vest on the earliest to occur of (i) August 13, 2022, (ii) the MIP Participant’s
death, (iii) the MIP Participant’s disability and (iv) the MIP Participant’s qualifying separation, provided that
the MIP Participant continues to be employed by us, or continues to be a director of ours, through such date or event. The amounts of
cash and MIP RSUs received by our directors and named executive officers under the MIP in connection with the Closing of the Business
Combination are set forth below:
Name
|
|
Cash
|
|
MIP
RSUs |
Eric
D. Stonestrom |
|
$
|
7,000,000
|
|
700,000
|
David
Brant |
|
$
|
3,500,000
|
|
350,000
|
Henrik
Smith-Petersen |
|
$
|
2,922,500
|
|
292,250
|
Thomas
S. Huseby |
|
$
|
1,750,000
|
|
175,000
|
Michael
T. Flynn |
|
$
|
577,500
|
|
57,750
|
20
Outstanding
Equity Awards at 2021 Fiscal Year-End
The
following table provides information regarding outstanding equity awards for our named executive officers as of December 31,
2021.
|
|
|
|
Option
Awards |
|
Stock
Awards |
Name
|
|
Grant
Date |
|
Number
of Securities Underlying Unexercised Options (#) Exercisable |
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable |
|
Option
Exercise Price ($) |
|
Option
Expiration Date |
|
Number
of Shares or Units of Stock That Have Not Vested (#)(1)
|
|
Market
Value of Shares or Units of Stock That Have Not Vested ($) |
Eric
D. Stonestrom |
|
8/13/21(1)
|
|
|
|
|
|
|
|
|
|
|
700,000
|
|
$
|
2,653,000
|
(5)
|
|
|
1/28/21(2)
|
|
—
|
|
42,292
|
|
$
|
6.29
|
|
1/28/31
|
|
|
|
|
|
|
|
|
2/11/20(2)
|
|
61,371
|
|
85,921
|
|
$
|
3.96
|
|
2/11/30
|
|
|
|
|
|
|
|
|
2/11/20(3)
|
|
|
|
|
|
|
|
|
|
|
153,712
|
|
$
|
582,568
|
(5)
|
|
|
1/29/19(2)
|
|
171,798
|
|
63,811
|
|
$
|
5.42
|
|
1/29/29
|
|
|
|
|
|
|
|
|
4/27/17(2)
|
|
234,739
|
|
—
|
|
$
|
3.36
|
|
4/27/27
|
|
|
|
|
|
|
|
|
2/3/16(2)
|
|
111,566
|
|
—
|
|
$
|
2.66
|
|
2/3/26
|
|
|
|
|
|
|
|
|
1/29/15(2)
|
|
83,334
|
|
—
|
|
$
|
2.53
|
|
1/29/25
|
|
|
|
|
|
|
|
|
11/4/14(2)
|
|
103,957
|
|
—
|
|
$
|
2.53
|
|
11/4/24
|
|
|
|
|
|
|
|
|
6/9/14(2)
|
|
194,803
|
|
—
|
|
$
|
1.95
|
|
6/9/14
|
|
|
|
|
|
|
David
Brant |
|
8/13/21(1)
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
$
|
1,326,500
|
(5)
|
|
|
1/28/21(2)
|
|
—
|
|
21,146
|
|
$
|
6.26
|
|
1/28/31
|
|
|
|
|
|
|
|
|
2/11/20(2)
|
|
30,685
|
|
42,961
|
|
$
|
3.96
|
|
2/11/30
|
|
|
|
|
|
|
|
|
2/11/20(3)
|
|
|
|
|
|
|
|
|
|
|
76,856
|
|
$
|
291,284
|
(5)
|
|
|
1/29/19(2)
|
|
85,899
|
|
31,906
|
|
$
|
5.42
|
|
1/29/29
|
|
|
|
|
|
|
|
|
4/27/17(3)
|
|
117,370
|
|
—
|
|
$
|
3.36
|
|
4/27/27
|
|
|
|
|
|
|
|
|
2/3/16(2)
|
|
55,783
|
|
—
|
|
$
|
2.66
|
|
2/3/26
|
|
|
|
|
|
|
|
|
1/29/15(2)
|
|
41,667
|
|
—
|
|
$
|
2.53
|
|
1/29/25
|
|
|
|
|
|
|
|
|
11/4/14(2)
|
|
51,976
|
|
—
|
|
$
|
2.53
|
|
11/4/24
|
|
|
|
|
|
|
|
|
6/9/14(2)
|
|
97,404
|
|
—
|
|
$
|
1.95
|
|
6/9/24
|
|
|
|
|
|
|
Henrik
Smith-Petersen |
|
8/13/21(1)
|
|
|
|
|
|
|
|
|
|
|
292,250
|
|
$
|
1,107,628
|
(5)
|
|
|
1/28/21(4)
|
|
—
|
|
17,656
|
|
$
|
6.29
|
|
1/28/31
|
|
|
|
|
|
|
|
|
2/11/20(4)
|
|
68,993
|
|
96,592
|
|
$
|
3.96
|
|
2/11/20
|
|
|
|
|
|
|
|
|
2/11/20(3)
|
|
|
|
|
|
|
|
|
|
|
19,215
|
|
$
|
72,825
|
(5)
|
|
|
1/29/19(4)
|
|
42,949
|
|
15,953
|
|
$
|
5.42
|
|
1/29/29
|
|
|
|
|
|
|
|
|
4/27/17(4)
|
|
58,685
|
|
—
|
|
$
|
3.36
|
|
4/27/27
|
|
|
|
|
|
|
|
|
2/3/16(4)
|
|
27,897
|
|
—
|
|
$
|
2.66
|
|
2/3/26
|
|
|
|
|
|
|
|
|
1/29/15(4)
|
|
20,831
|
|
—
|
|
$
|
2.53
|
|
1/29/25
|
|
|
|
|
|
|
|
|
11/4/14(4)
|
|
25,982
|
|
—
|
|
$
|
2.53
|
|
11/4/24
|
|
|
|
|
|
|
|
|
6/9/14(4)
|
|
72080
|
|
—
|
|
$
|
1.95
|
|
6/9/24
|
|
|
|
|
|
|
____________
(1) Represents
MIP RSUs granted at the Closing of the Business Combination. Vests on the earliest to occur of (i) August 13, 2022, (ii) the
MIP Participant’s death, (iii) the MIP Participant’s disability and (iv) the MIP Participant’s qualifying
separation, provided that the MIP Participant continues to be employed by us, or continues to be a director of ours, through such date
or event.
(2) Vests
(subject to continued service) as to 25% on first anniversary of grant date, and in 36 equal monthly installments thereafter, with all
remaining unvested options vesting upon a change in control.
(3) Originally
vested upon the earlier of either of the following events that occurred on or prior to the 10th
anniversary of the date of grant: (i) the date of a change in control; or (ii) the effective date of an initial public offering.
At Closing, the vesting restrictions with respect to these restricted stock awards were revised to provide that the restricted stock will
vest in full on
21
the
earliest to occur of (i) August 13, 2022, (ii) the holder’s death, (iii) the holder’s disability and (iv) the
holder’s qualifying separation, provided that the holder continues to be employed by us, or continues to be a director of ours,
through such date or event.
(4) Vests
(subject to continued service) as to 25% on first anniversary of grant date, and in 36 equal monthly installments thereafter, with 50%
of any remaining unvested options vesting upon a change in control.
(5) Valued
at $3.79 per share, the closing market price of one share of our common stock on the NYSE American on December 31, 2021.
Retirement
Benefits
We
maintain a 401(k) retirement savings plan for our U.S.-based employees, including Mr. Stonestrom. Mr.
Stonestrom is eligible to participate in the 401(k) plan on the same terms as other full-time employees, including
employer matching contributions.
With
respect to our European-based employees, including named executive officers, Messrs. Brant and Smith-Petersen,
we contribute an amount equivalent to 7.5 percent of base salary to a pension plan.
Potential
Payments Upon Termination or Change in Control
Name
|
|
Amount
Paid on Our Terminating the Employment Contract without Cause(4)
|
Eric
D. Stonestrom(1) |
|
$
|
517,500
(equivalent to 12 months’ base salary) |
David
Brant(2) |
|
$
|
376,929
(equivalent to 12 months’ base salary) |
Henrik
Smith-Petersen(3) |
|
$
|
350,948
(equivalent to 12 months’ base salary) |
____________
(1) On
involuntary termination of Mr. Stonestrom’s contract he is entitled to receive severance of 12 months’
base salary. On February 8, 2022, Mr. Stonestrom’s base salary under his employment agreement was increased to $567,500 per year.
(2) Under
Mr. Brant’s current employment agreement, which became effective January 1, 2007, in the event of termination of Mr.
Brant other than for “cause” (as defined in his employment agreement) or if he terminates his employment with “good
reason” (as defined in his employment agreement), Mr. Brant would be entitled to severance equal to 12 months’ base salary
as of the termination date or approximately $376,929, payable bi-weekly. If Mr. Brant is terminated within one year of the
effective date of a “change in control” (as defined in his employment agreement) or voluntarily terminates his employment
because of a required relocation or a material change in his responsibilities, Mr. Brant would be entitled to receive severance of 12
months’ total cash compensation that would otherwise have been payable, including all bonuses. Assuming termination based on a change
in control at December 31, 2021, Mr. Brant would have been entitled to compensation of approximately $376,929 (equivalent to 12 months’
base salary), plus bonuses and benefits, payable bi-weekly.
(3) On
termination without cause, Mr. Smith-Petersen would be entitled to severance equal to twelve months’ base
pay or approximately $350,948, assuming termination on December 31, 2021, plus any accrued commissions Mr. Smith-Petersen
had earned on Asia business.
(4) The
termination payment arrangements for the named executive officers were individually negotiated with each named executive officer at different
time periods. We do not have a policy or set parameters for such arrangements and do not believe that such arrangements materially affected
the other compensation elements for the named executive officers.
Upon
the occurrence of a “change in control”, as defined in our stock option agreements under our equity compensation plans, the
following provisions apply to option awards under our equity compensation plans:
Upon
the occurrence of a “change in control,” if we or any successor, assign, or purchaser thereof does not either: (a) continue
the option (as adjusted, if necessary, to retain its pre-“change in control” economic value and aggregate “spread”
between the option shares’ fair market value and exercise price) or (b) grant a new option of at least equivalent economic
value, aggregate “spread,” and other terms and conditions as the pre-“change in control” option, then an additional
50 percent (100 percent in the case of options granted to Mr. Stonestrom and Mr. Brant) of any remaining unvested
options will automatically vest. In the case of options granted to Mr. Stonestrom and Mr. Brant, if there is a “change
in control” and we or any successor, assign, or purchaser thereof either: (i) continues the option (as adjusted, if necessary,
to retain its pre-“change in control” economic value and aggregate “spread” between the option shares’ fair
market value and exercise price) or (ii) grants a new option of at least equivalent economic value, aggregate “spread,”
and other terms and conditions as the pre-“change in control” option, and within two years of the effective date of the “change
in control” either optionee’s employment is terminated, or the optionee voluntarily terminates their employment with good
reason, then 100 percent of any remaining options will automatically vest. All such vested
22
options
may be exercised (together with any other previously or subsequently vested options) until the later of (A) the date related to termination
of the employee, or (B) one year from such “change in control”, but in no event longer than ten years from the original
date of grant.
A
“change in control” as defined in the stock option agreements under our equity compensation plans means any consolidation
or merger of us with or into another corporation or entity (after which our pre-existing stockholders do not own a majority
of the outstanding shares of the surviving entity), an acquisition or sale of substantially all of our assets or a sale of stock in a
single transaction (or several related transactions) to one person (or a group acting together) who, as a result of such transaction,
shall own more than 50% voting control of us, or any voluntary or involuntary liquidation, dissolution or winding up of our affairs.
Legacy
Airspan 2009 Omnibus Equity Compensation Plan
At
the Closing, we assumed Legacy Airspan’s 2009 Omnibus Equity Compensation Plan (the “Legacy Airspan Plan”) and the options
to purchase Legacy Airspan capital stock granted thereunder that were outstanding immediately prior to the Closing were converted into
options to purchase an aggregate of 5,815,796 shares of our common stock and the shares of Legacy Airspan restricted stock
granted thereunder that were outstanding immediately prior to the Closing were converted into an aggregate of 345,471 shares
of our restricted common stock. We have not granted and will not grant any awards under the Legacy Airspan Plan following the Closing.
Airspan
Networks Holdings Inc. 2021 Stock Incentive Plan
On
August 11, 2021, at a special meeting in lieu of the 2021 annual meeting of stockholders of New Beginnings, the stockholders
of New Beginnings considered and approved our 2021 Stock Incentive Plan (the “Original 2021 Plan”). The Original 2021 Plan
authorizes the compensation committee of the Board to provide incentive compensation to eligible employees, officers, non-employee
directors, consultants, independent contractors or advisors providing services to us, or any person to whom we extend an offer of employment
or engagement, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents
and other stock-based awards. The Original 2021 Plan authorizes the issuance of up to 6,007,718 shares of our
common stock, plus any shares of our common stock subject to outstanding awards under the Legacy Airspan Plan that are forfeited or reacquired
by us due to termination or cancellation. At the Annual Meeting, our stockholders will vote on the approval of our Amended and Restated
2021 Plan. See “Proposal Two — Amendment and Restatement of 2021 Stock Incentive Plan” for more information.
Director
Compensation
We
have historically paid certain of our directors annual fees, as well as meeting fees, for participation on certain committees. Prior to
the Closing on August 13, 2021, Legacy Airspan paid its directors the annual and meeting fees set forth in the following
table:
Director
|
|
Fee
|
Thomas
S. Huseby |
|
$175,000
annual fee and $1,000 per meeting of the Compensation Committee or Audit Committee |
Michael
T. Flynn |
|
$25,000
annual fee, $1,000 per meeting of the Audit Committee, $1,000 per meeting of the Compensation Committee and $750 per meeting of the Special
Committee |
Scot
B. Jarvis |
|
$2,000
per Board meeting, $1,500 per meeting of the Compensation Committee (Chair) and $1,000 per meeting of the Audit Committee |
Dominique
Trempont |
|
$50,000
annual fee, $1,500 per meeting of the Audit Committee (Chair) and $750 per meeting of the Special Committee |
In
addition to annual fees and meeting fees, Legacy Airspan historically granted options to its non-management directors under
the Legacy Airspan Plan. These options were granted at fair market value on the date of grant and were generally subject to vesting over
a four year period, with 25% vesting on the first anniversary of grant date, and 1/48th
of the shares vesting in 36 equal monthly installments thereafter; however, in certain instances, the options granted were subject to
vesting over a two year period, vesting in equal monthly installments. In the event of a change in control, historically all of the unvested
options would vest automatically immediately prior the change in control, subject to the option holder’s continued service through
the change in control. In 2020, we also granted shares of
23
restricted
stock to Messrs. Huseby and Flynn, which originally vested upon the earlier of either of the following events that occurred on or prior
to the 10th anniversary of the date of grant: (i) the date of a change
in control; or (ii) the effective date of an initial public offering. At Closing, the vesting restrictions with respect to the restricted
stock were revised to provide that the restricted stock will vest in full on the earliest to occur of (a) August 13, 2022, (b) the
holder’s death, (c) the holder’s disability and (d) the holder’s qualifying separation, provided that the
holder continues to be a director through such date or event.
New
Beginnings did not provide any fees to its directors for their service prior to the Closing.
During
the year ended December 31, 2021, following the Closing on August 13, 2021, we paid our non-management
directors the annual fees set forth in the following table:
Name
|
|
Board
Fee |
|
Board
Chair |
|
Audit
Committee |
|
Compensation
Committee |
|
Nominating
and Corporate Governance Committee |
|
Technology
and Cyber Security Committee |
|
Total
|
Bandel
L. Carano |
|
$
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,000
|
|
$
|
65,000
|
Michael
T. Flynn |
|
$
|
50,000
|
|
|
|
|
|
|
|
$
|
7,500
|
|
|
|
|
|
|
|
$
|
57,500
|
Thomas
S. Huseby |
|
$
|
50,000
|
|
$
|
45,000
|
|
|
|
|
$
|
7,500
|
|
$
|
10,000
|
|
|
|
|
$
|
112,500
|
Scot
B. Jarvis |
|
$
|
50,000
|
|
|
|
|
|
|
|
$
|
15,000
|
|
|
|
|
|
|
|
$
|
65,000
|
Michael
Liebowitz |
|
$
|
50,000
|
|
|
|
|
$
|
12,500
|
|
|
|
|
$
|
5,000
|
|
|
|
|
$
|
67,500
|
Mathew
Oommen |
|
$
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
50,000
|
Divya
Seshamani |
|
$
|
50,000
|
|
|
|
|
$
|
12,500
|
|
|
|
|
$
|
5,000
|
|
$
|
7,500
|
|
$
|
75,000
|
Dominique
Trempont |
|
$
|
50,000
|
|
|
|
|
$
|
25,000
|
|
|
|
|
$
|
5,000
|
|
|
|
|
$
|
80,000
|
In
addition to the annual fees set forth above, during the year ended December 31, 2021, following the Closing on August
13, 2021, we granted restricted stock units with respect to 20,173 shares of our common stock to each non-management
director. In connection with the Closing, we also granted the MIP RSUs described above to Messrs. Huseby and Flynn.
Mr.
Stonestrom does not receive any compensation for his services as a director.
The
following table provides information on the compensation of our non-management directors in 2021.
Name
|
|
Fees
Earned or Paid in Cash ($) |
|
Stock
Awards ($)(1)(2) |
|
Option
Awards ($)(3)(4) |
|
Non-Equity
Incentive Plan Compensation ($)(5) |
|
Total
($) |
Bandel
L. Carano |
|
21,808
|
|
140,000
|
|
—
|
|
—
|
|
161,808
|
Michael
T. Flynn |
|
37,677
|
|
703,063
|
|
85,123
|
|
577,500
|
|
1,403,363
|
Thomas
S. Huseby |
|
156,356
|
|
1,846,251
|
|
212,810
|
|
1,750,000
|
|
3,965,417
|
Scot
B. Jarvis |
|
32,432
|
|
140,000
|
|
53,157
|
|
—
|
|
225,589
|
Michael
Liebowitz |
|
25,890
|
|
140,000
|
|
—
|
|
—
|
|
165,890
|
Mathew
Oommen |
|
19,178
|
|
140,000
|
|
—
|
|
—
|
|
159,178
|
Divya
Seshamani |
|
13,151
|
|
140,000
|
|
—
|
|
—
|
|
153,151
|
Dominique
Trempont |
|
61,937
|
|
140,000
|
|
53,157
|
|
—
|
|
255,094
|
Benjamin
Garrett |
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Frank
Del Rio |
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Kate
Walsh |
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Perry
Weitz |
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
____________
(1) The
amounts in this column represent the aggregate grant date fair value of restricted stock units granted to our directors, computed in accordance
with FASB ASC Topic 718. See Note 17 to the audited consolidated financial statements included in our Annual Report on Form 10-K
for the year ended December 31, 2021, for a discussion of the assumptions used in determining the grant date fair value of our equity
awards.
(2) As
of December 31, 2021, Mr. Flynn had 25,359 and Mr. Huseby had 38,424 restricted common stock awards outstanding. As of December 31, 2021,
Mr. Flynn had restricted stock units with respect to 77,923 shares of common stock outstanding,
24
Mr.
Huseby had restricted stock units with respect to 195,173 shares of common stock outstanding and Messrs. Carano, Jarvis,
Liebowitz, Oommen and Trempont and Ms. Seshamani each had restricted stock units with respect to 20,173 shares of common
stock outstanding.
(3) The
amounts in this column represent the aggregate grant date fair value of option awards granted to certain directors, computed in accordance
with FASB ASC Topic 718. See Note 17 to the audited consolidated financial statements in our Annual Report on Form 10-K
for the year ended December 31, 2021, for a discussion of the assumptions used in determining the grant date fair value of our equity
awards.
(4) As
of December 31, 2021, the following stock options were outstanding and held by our directors: Mr. Flynn, 104,380; Mr. Huseby, 288,401;
Mr. Jarvis, 70,976; and Mr. Trempont, 79,304.
(5) The
amounts in this column represent cash amounts paid pursuant to the MIP in connection with the Closing of the Business Combination.
25
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Airspan
Registration
Rights and Lock-Up Agreement
On
August 13, 2021, the Company, certain stockholders of New Beginnings (the “Sponsor Holders”) and certain stockholders
of Legacy Airspan (collectively with the Sponsor Holders, the “Holders”) entered into a Registration Rights and Lock-Up
Agreement (the “Registration Rights and Lock-Up Agreement”).
Pursuant
to the terms of the Registration Rights and Lock-Up Agreement, we are obligated to file a shelf registration statement to
register the resale of certain of our securities held by the Holders. In addition, subject to certain requirements and customary conditions,
including with regard to the number of demand rights that may be exercised, the Holders may demand at any time or from time to time, to
sell all or any portion of their registrable securities in an underwritten offering pursuant to a shelf registration statement so long
as (i) the total offering price is reasonably expected to exceed $50 million or (ii) if such requesting Holder
reasonably expects to sell all of the registerable securities held by such Holder in such underwritten offering pursuant to a shelf registration
statement, the total offering price is reasonably expected to exceed $10 million. The Registration Rights and Lock-Up
Agreement also provides the Holders with “piggy-back” registration rights, subject to certain requirements and
customary conditions.
Subject
to certain exceptions, the Registration Rights and Lock-Up Agreement further provided for our securities held by Oak Investment
Partners, Qualcomm, Reliance Jio Infocomm USA Inc. (“Reliance”) and SoftBank to be locked-up for a period of
six months following the Closing, while the shares of common stock initially purchased by the Sponsor in a private placement in September 2020
(the “Founder Shares”) held by the Sponsor will be locked-up for a period of one year following the Closing,
in each case subject to earlier release upon (i) the date on which the last reported sale price of our common stock equals or exceeds
$12.50 per share for any 20 trading days within any 30-day trading period or (ii) the date on which we complete a liquidation,
merger, capital stock exchange or other similar transaction after the Closing that results in all of our stockholders having the right
to exchange their shares of our common stock for cash, securities or other property.
The
Registration Rights and Lock-Up Agreement also provided that the warrants (the “Private Placement Warrants”)
and shares of common stock underlying the units (the “Private Placement Units”) sold by New Beginnings in a private placement
concurrent with its initial public offering (the “IPO”), along with any shares of common stock underlying the Private Placement
Warrants, were locked-up for a period of 30 days following the Closing so long as such securities were held by the initial
purchasers of the Private Placement Units or their permitted transferees.
Stockholders
Agreement
On
August 13, 2021, the Company, the Sponsor and certain stockholders of Legacy Airspan entered into the Stockholders Agreement,
which provides, among other things, that, from and after the Closing and until such time as the Sponsor beneficially owns less than 1,535,000
shares of our common stock, the Sponsor will have the right to nominate the Sponsor Director, who is initially Michael Liebowitz.
The Stockholders Agreement also provides that for so long as the Sponsor Director is an independent director, the Sponsor Director will
be appointed to, and serve on, the Nominating and Corporate Governance Committee (or such other committee of the Board that is primarily
responsible for nominating and corporate governance matters).
Amended
Credit Agreement
At
Closing, on August 13, 2021, the Company, Legacy Airspan and certain of its subsidiaries who are party to our Assignment
Agreement, Resignation and Assignment Agreement and Credit Agreement (the “Fortress Credit Agreement”) with DBFIP ANI LLC
(“Fortress”) entered into a Waiver and Consent, Second Amendment, Restatement, Joinder and Omnibus Amendment to Credit Agreement
and Other Loan Documents relating to the Fortress Credit Agreement with Fortress to, among other things, add the Company as a guarantor,
recognize and account for the Business Combination, recognize and account for our senior secured convertible notes (the “Convertible
Notes”) and provide updated procedures for replacement of LIBOR. On March 29, 2022, the Company, Legacy Airspan and
certain of its subsidiaries who are party to the Fortress Credit Agreement entered into a Third Amendment and Waiver
28
to
Credit Agreement and Other Loan Documents relating to the Fortress Credit Agreement with Fortress (the “March 2022 Fortress
Amendment”) to, among other things, amend the financial covenants included in the Fortress Credit Agreement. SoftBank has an indirect,
non-controlling beneficial interest in Fortress, which is the agent and principal lender under the Fortress Credit Agreement.
At December 31, 2021, there was approximately $46.5 million aggregate principal amount of indebtedness outstanding
under the Fortress Credit Agreement, which is the largest aggregate principal amount outstanding during the year ended December
31, 2021. During the year ended December 31, 2021, we paid approximately $2.1 million in interest and
no principal under the Fortress Credit Agreement.
The
Fortress Credit Agreement has a maturity date of December 30, 2024. Under the Fortress Credit Agreement, the initial term
loan (“Tranche 1”) total commitment of $34.0 million and a term loan (“PIK”) commitment of $10.0
million (“Tranche 2”) were both funded to Legacy Airspan on December 30, 2020. Under the terms of the
Fortress Credit Agreement, we may expand the term loan commitment by $20.0 million, subject to the terms of the Fortress
Credit Agreement. The Fortress Credit Agreement contains a prepayment premium of 5.0% if the prepayment occurs during the period from
December 30, 2021 through December 29, 2022, and 3.0% if the prepayment occurs during the period from December
30, 2022 through December 29, 2023. The Fortress Credit Agreement also contains a prohibition on prepayment during
the period from December 30, 2020 through December 29, 2021 and a related fee in the amount of the make-whole
amount of interest that would have been payable had such prepayment not been made.
To
secure its obligations under the Fortress Credit Agreement, Fortress was assigned Pacific Western Bank’s security interest under
its Second Amended and Restated Loan and Security Agreement with Legacy Airspan and we granted Fortress, as security for the obligations,
a security interest in (a) all of the real, personal and mixed property in which liens are granted or purported to be granted pursuant
to any of the collateral documents as security for the obligations, (b) all products, proceeds, rents and profits of such property,
(c) all of each loan party’s book and records and (d) all of the foregoing whether now owned or existing, in each case
excluding certain excluded assets.
The
Fortress Credit Agreement contains representations and warranties, events of default and affirmative and negative covenants, which include,
among other things, certain restrictions on the ability to pay dividends, create liens, incur additional indebtedness, make investments,
dispose of assets, consummate business combinations (except for permitted investments, as defined in the Fortress Credit Agreement) and
make distributions. In addition, financial covenants apply. Prior to the March 2022 Fortress Amendment, these financial covenants
included (a) minimum liquidity of $4.0 million as of December 31, 2020 and $5.0 million thereafter,
(b) minimum last twelve-month revenue and (c) minimum last twelve-month Earnings before Interest,
Taxes, Depreciation, and Amortization (“EBITDA”). Pursuant to the March 2022 Fortress Amendment, the financial covenants
included in the Fortress Credit Agreement were amended to increase the minimum liquidity requirement to an amount between $15.0
million and $20.0 million, depending on EBITDA performance levels and whether a default or event of default exists
under the Fortress Credit Agreement, and decrease the minimum last twelve-month revenue and EBITDA requirements. Revenue
and EBITDA financial covenants are tested quarterly.
29
The
interest rate for Tranche 1 is based on the level of our Net EBITDA Leverage Ratio. The initial applicable rate for Tranche 1 is set at
Level V (see table below). After the initial applicable rate period, the relevant rate is as follows for Tranche 1:
Level
|
|
Net
EBITDA Leverage Ratio |
|
Base
Rate Loan |
|
LIBOR
Loan |
Level
I |
|
Less
than or equal to 2.00:1.00 |
|
The
applicable rate is the base rate plus 6.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 0.50%
|
|
The
applicable rate is LIBOR plus 7.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 1.50% |
|
|
|
|
|
|
|
Level
II |
|
Less
than or equal to 3.00:1.00 but greater than 2.00:1.00 |
|
The
applicable rate is the base rate plus 7.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 1.50%
|
|
The
applicable rate is LIBOR plus 8.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 2.50% |
|
|
|
|
|
|
|
Level
III |
|
Less
than or equal to 4.00:1.00 but greater than 3.00:1.00 |
|
The
applicable rate is the base rate plus 8.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 2.50%
|
|
The
applicable rate is LIBOR plus 9.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 3.50% |
|
|
|
|
|
|
|
Level
IV |
|
Less
than or equal to 5.00:1.00 but greater than 4.00:1.00 |
|
The
applicable rate is the base rate plus 9.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 3.50%
|
|
The
applicable rate is LIBOR plus 10.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 4.50%
|
|
|
|
|
|
|
|
Level
V |
|
Greater
than 5.00:1.00 |
|
The
applicable rate is the base rate plus 10.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 4.50%
|
|
The
applicable rate is LIBOR plus 11.00% per annum, of which the Margin Cash Component is 5.50% and the Margin PIK Component is 5.50%
|
Interest
with respect to Tranche 1 is payable monthly in accordance with the Cash Component/PIK Component split described in the foregoing table.
With respect to Tranche 2, the relevant applicable rate is 5.0% as of December 31, 2021, and is payable monthly
as interest paid in kind.
Convertible
Notes
Immediately
prior to Closing, on August 13, 2021, we issued $50,000,000 aggregate principal amount of Convertible Notes under a Senior
Secured Convertible Note Purchase and Guarantee Agreement (the “Convertible Note Purchase Agreement”). At Closing, Legacy
Airspan and certain of its subsidiaries who are party to the Fortress Credit Agreement entered into a joinder agreement to add Legacy
Airspan and such subsidiaries as guarantors under the Convertible Note Purchase Agreement and to reaffirm the obligations and security
intended to be granted thereby. On March 29, 2022, we and certain of our subsidiaries who are party to the Convertible Note
Purchase Agreement entered into a First Amendment and Waiver to Senior Secured Convertible Note Purchase and Guarantee Agreement and Other
Note Documents relating to the Convertible Note Purchase Agreement and the Convertible Notes (the “Convertible Note Purchase Agreement
Amendment”) to, among other things, amend the financial covenants included in the Convertible Note Purchase Agreement, the conversion
price of the Convertible Notes and the optional redemption provisions of the Convertible Notes. SoftBank has an indirect, non-controlling
beneficial interest in Fortress, which is the collateral agent and trustee under the Convertible Note Purchase Agreement and the Convertible
Notes. SoftBank has an indirect, non-controlling beneficial interest in each holder of Convertible Notes.
The
Convertible Notes bear interest at a rate equal to 7.0% per annum (the “Base Rate”), payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, beginning on September 30, 2021. Under certain
circumstances, a default interest will apply following an event of default under the Convertible Notes at a per annum
30
rate
equal to the lower of (i) the Base Rate plus 3.75% and (ii) the maximum amount permitted by law. The Convertible Notes mature
on December 30, 2024, unless earlier accelerated, converted, redeemed or repurchased. The Convertible Notes are secured by
substantially all of our assets and a pledge of the capital stock of our subsidiaries.
Prior
to the Convertible Note Purchase Agreement Amendment, each Convertible Note, together with all accrued but unpaid interest thereon, was
convertible, in whole or in part, at the option of the holder thereof, at any time prior to the payment in full of the principal amount
thereof (together with all accrued but unpaid interest thereon), into shares of our common stock at a conversion price equal to $12.50
per share. Pursuant to the Convertible Note Purchase Agreement Amendment, the conversion price with respect to the Convertible Notes was
decreased to $8.00 per share. The conversion price with respect to the Convertible Notes is subject to adjustment to reflect stock splits
and subdivisions, stock and other dividends and distributions, recapitalizations, reclassifications, combinations and other similar changes
in capital structure. The conversion price with respect to the Convertible Notes is subject to a broad-based weighted average
anti-dilution adjustment in the event we issue, or are deemed to have issued, shares of our Common Stock, other than certain
excepted issuances, at a price below the conversion price then in effect. In addition, pursuant to the Convertible Note Purchase Agreement
Amendment, if, during the period commencing on and including the date of the Convertible Note Purchase Agreement Amendment and ending
on and including the 15-month anniversary of the date of the Convertible Note Purchase Agreement Amendment, there is no 30
consecutive trading day-period during which the average of the daily volume weighted average price of our common stock (“Daily
VWAP”) for such 30 consecutive trading day-period (after excluding the three highest and three lowest Daily VWAPs during
such period) equals or exceeds $10.00 (as adjusted for stock splits, stock combinations, dividends, distributions, reorganizations, recapitalizations
and the like), the conversion price with respect to the Convertible Notes will be reduced to the amount that such conversion price would
otherwise have been had the conversion price with respect to the Convertible Notes been $6.00 on the date of the Convertible Note Purchase
Agreement Amendment (the “Stock Threshold Reduction”). Notwithstanding the above, the number of shares of our common stock
that may be acquired by a holder upon any conversion of a Convertible Note will be limited to the extent necessary to insure that, following
such conversion, the total number of shares of our common stock then beneficially owned by that holder and its affiliates and any other
person whose beneficial ownership of our common stock would be aggregated with the holder’s for purposes of Section 13(d) of
the Exchange Act does not exceed 4.999% of the total number of issued and outstanding shares of our common stock (including the shares
of our common stock issuable upon such conversion).
Upon
the occurrence of a change of control, or if our common stock or other securities into which the Convertible Notes are then convertible
cease to be listed for trading on a U.S. national securities exchange, in each case, prior to the maturity date of the Convertible Notes,
a holder of Convertible Notes will have the right, at its option, to require us to repurchase for cash all or a portion of the holder’s
Convertible Notes at a repurchase price equal to the sum of (i) all of the principal to be repurchased, (ii) any accrued and
unpaid interest thereon through the date of repurchase and (iii) any applicable make-whole amount. In addition, a future
voluntary prepayment of our senior secured debt under the Fortress Credit Agreement will grant a holder of Convertible Notes the right,
at its option, to require us to repurchase for cash a proportionate amount of the holder’s Convertible Notes at a repurchase price
equal to the sum of (a) the principal to be repurchased, (b) any accrued and unpaid interest thereon to the date of repurchase
and (c) any applicable make-whole amount. In the event certain other events occur or conditions exist, including the
issuance of certain indebtedness, certain asset dispositions, and certain issuances of equity, a holder of Convertible Notes will have
the right, at its option, to require us to repurchase for cash a portion of the holder’s Convertible Notes at a repurchase price
equal to the sum of (x) the principal to be repurchased, (y) any accrued and unpaid interest thereon to the date of repurchase
and (z) any applicable make-whole amount. In the event certain cash flow thresholds are exceeded or certain proceeds
of condemnation or insurance are received and not reinvested, a holder of Convertible Notes will have the right, at its option, to require
us to repurchase for cash a portion of the holder’s Convertible Notes at a repurchase price equal to the sum of (A) all of
the principal to be repurchased and (B) any accrued and unpaid interest thereon to or through, as applicable, the date of repurchase.
The
Convertible Notes will not be redeemable by us prior to the second anniversary of the issuance of the Convertible Notes. On or after such
second anniversary, the Convertible Notes will be redeemable, in whole or in part, by us for cash, shares of our common stock or any combination
thereof, at our option, if the last reported sale price of our common stock has been at least 130% of the “triggering price”
then in effect for the 30 consecutive trading days ending on, and including, the trading day immediately preceding the date on which we
provide notice of redemption to the holders of Convertible Notes at a redemption price equal to (i) all of the principal to be redeemed,
(ii) any accrued and unpaid interest thereon through the date of redemption and (iii) any applicable make-whole
amount. The current “triggering price” is $12.50 per share, which triggering price is subject to adjustment in the same manner
and
31
at
the same times as the conversion price with respect to the Convertible Notes is adjusted pursuant to the terms of the Convertible Notes,
except that no adjustment will be made to the triggering price in connection with the Stock Threshold Reduction.
The
terms of the Convertible Notes and the Convertible Note Purchase Agreement contains representations and warranties, events of default
and affirmative and negative covenants, which include, among other things, certain restrictions on the ability to pay dividends, create
liens, incur additional indebtedness, make investments, dispose of assets, consummate business combinations (except for permitted investments,
as defined in the Convertible Note Purchase Agreement) and make distributions. In addition, financial covenants apply. Prior to the Convertible
Note Purchase Agreement Amendment, these financial covenants included (a) minimum liquidity of $5.0 million, (b) minimum
last twelve-month revenue and (c) minimum last twelve-month EBITDA and certain other expenses including
non-cash stock compensation, non-recurring costs in connection with the loan and Convertible Notes documentation
and the Business Combination, warrant liabilities, and other noncash amortization expenses, in each case, determined in accordance with
accounting principles generally accepted in the United States of America. Pursuant to the Convertible Note Purchase Agreement Amendment,
the financial covenants included in the Convertible Note Purchase Agreement were amended to increase the minimum liquidity requirement
to an amount between $15.0 million and $20.0 million, depending on EBITDA performance levels and whether a default
or event of default exists under the Convertible Note Purchase Agreement, and decrease the minimum last twelve-month revenue
and EBITDA requirements. Revenue and EBITDA financial covenants are tested quarterly. The Convertible Notes are pari
passu in right of payment and lien priority and are secured by a security interest in (a) all of the real, personal and mixed
property in which liens are granted or purported to be granted pursuant to any of the collateral documents as security for the obligations,
(b) all products, proceeds, rents and profits of such property, (c) all of each loan party’s book and records and (d) all
of the foregoing whether now owned or existing, in each case excluding certain excluded assets.
During
the year ended December 31, 2021, we paid approximately $1.3 million in interest and no principal under the
Convertible Notes.
Indemnification
Agreements
We
have entered into separate indemnification agreements with our directors and executive officers, in addition to the indemnification provided
for in the Certificate of Incorporation and our Bylaws. These agreements, among other things, require us to indemnify our directors and
executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director
or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers or as a director
or executive officer of any other company or enterprise to which the person provides services at our request. We believe that these provisions
and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
The
limitation of liability and indemnification provisions in the Certificate of Incorporation and our Bylaws may discourage stockholders
from bringing a lawsuit against our directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative
litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s
investment may decline in value to the extent we pay the costs of settlement and damage awards against directors and officers pursuant
to these indemnification provisions.
Prior
to the Closing, Legacy Airspan and New Beginnings had also entered into customary indemnification agreements with all of their respective
directors and executive officers.
Legacy
Airspan
Investment
Private Placement
Contemporaneously
with the execution of the Business Combination Agreement, certain investors entered into certain subscription agreements, pursuant to
which such investors agreed to subscribe for and purchase shares of our common stock at a purchase price of $10.00 per share in a transaction
to be consummated immediately prior to the consummation of the Business Combination (the “PIPE”). SoftBank and Oak Investment
Partners, each of whom, at the time of the subscription agreements, beneficially owned more than 5% of the issued and outstanding Legacy
Airspan common stock, on a fully-converted basis, agreed to invest in the PIPE. The investments in the PIPE closed on August
13, 2021. In addition, Bandel Carano, the general partner of Oak, and Scot Jarvis and Thomas Huseby, venture partners of Oak, were
members of the Legacy Airspan board of directors prior to Closing and are current members of our Board.
32
Stockholder
Support Agreement
Concurrently
with the execution of the Business Combination Agreement, New Beginnings and Oak, Qualcomm and SoftBank (collectively, the “Key
Airspan Stockholders”) entered into a Stockholder Support Agreement, pursuant to which such Key Airspan Stockholders agreed, among
other things, to vote their shares of Legacy Airspan common stock, Legacy Airspan Class B common stock and voting Legacy Airspan
preferred stock in favor of adopting the Business Combination Agreement and approving the Business Combination. The Key Airspan Stockholders
include Oak, with whom our current Board members Bandel Carano, Scot Jarvis and Thomas Huseby are affiliated, and Qualcomm, with whom,
Quinn Li, a former member of the Legacy Airspan board of directors, is affiliated. The Stockholder Support Agreement terminated at Closing.
Equity
Financings
From
December 14, 2020 to February 2, 2021, Legacy Airspan sold an aggregate of 181,294 shares of its
Series H Senior Preferred Stock at a purchase price of $61.50 per share, for an aggregate purchase price of $11,149,581, pursuant to its
Series H Senior Preferred Stock financing.
The
following table summarizes purchases of Legacy Airspan’s Series H Senior Preferred Stock by related persons and their affiliated
entities. None of Legacy Airspan’s executive officers purchased shares of its Series H Senior Preferred Stock.
Stockholder
|
|
Shares
of Legacy Airspan Series H Senior Preferred Stock |
|
Total Purchase Price
|
Oak
Investment Partners XIII, Limited Partnership(1) |
|
56,910
|
|
$
|
3,499,965 |
Qualcomm
Incorporated(2) |
|
12,194
|
|
$
|
749,931 |
Connis
Point Partners, LLC(3) |
|
4,066
|
|
$
|
250,059 |
New
Enterprise Associates 14, L.P.(4) |
|
29,594
|
|
$
|
1,820,031 |
NEA
15 Opportunity Fund, L.P.(4) |
|
2,928
|
|
$
|
180,072 |
SoftBank
Group Capital Limited(5) |
|
48,780
|
|
$
|
2,999,970 |
____________
(1) Bandel
Carano, a member of Legacy Airspan’s board of directors at the time of the investment and current member of our Board, is general
partner of Oak. Scot Jarvis and Thomas Huseby, members of Legacy Airspan’s board of directors at the time of the investment and
current members of our Board, are venture partners in Oak.
(2) Quinn
Li, a member of Legacy Airspan’s board of directors at the time of the investment, is affiliated with Qualcomm.
(3) Scot
Jarvis, a member of Legacy Airspan’s board of directors at the time of the investment and a current member of our Board is an affiliate
of Connis Point Partners, LLC.
(4) These
entities are former stockholders of our subsidiary Mimosa Networks, Inc. and, prior to the Closing, held 234,856 shares of
Legacy Airspan’s Class B common stock.
(5) SoftBank
is our subordinated lender and has an indirect, non-controlling beneficial interest in Fortress, which is the agent and principal
lender under the Fortress Credit Agreement and the collateral agent and trustee under the Convertible Note Purchase Agreement and the
Convertible Notes, and also has an indirect, non-controlling beneficial interest in each holder of Convertible Notes.
SoftBank
On
October 1, 2015, Legacy Airspan issued a warrant to SoftBank to purchase shares of Legacy Airspan’s Series D Preferred
Stock, which was amended by Amendment No. 1, dated February 3, 2016, Amendment No. 2, dated July 1, 2016,
and Amendment No. 3, dated July 3, 2017 (the “SoftBank Warrant”). In connection with the Business Combination,
on March 8, 2021, concurrently with the execution of the Business Combination Agreement, SoftBank and New Beginnings entered
into the an irrevocable proxy agreement (the “Proxy Agreement”), pursuant to which, among other things, SoftBank granted to
the proxyholder named therein an irrevocable proxy and power of attorney with respect to any shares of common stock held by SoftBank representing
in excess of 9.90% of our voting power in any applicable vote, consent, election, waiver or other action of our stockholders (the “Subject
Shares”). Pursuant to the Proxy Agreement the proxyholder named in the Proxy Agreement will vote the Subject Shares in the same
manner
33
and
proportion as all other shares of stock entitled or eligible to vote on the applicable matter, excluding any shares of stock held by SoftBank
and its affiliates. As consideration for, among other things, SoftBank’s cooperation with, participation in and consent to the Business
Combination and the entry into the Proxy Agreement, Legacy Airspan and SoftBank agreed to amend and restate the SoftBank Warrant to, among
other things, (i) reduce the purchase price to $45.9875 per share and (ii) provide for the automatic net exercise of the SoftBank
Warrant upon the completion of the Business Combination.
As
further described above under “Certain Relationships and Related Person Transactions —
Airspan — Amended Credit Agreement” and “Certain Relationships
and Related Person Transactions — Airspan — Convertible Notes,” SoftBank has an indirect, non-controlling
beneficial interest in Fortress, which is the agent and principal lender under the Fortress Credit Agreement and the collateral agent
and trustee under the Convertible Note Purchase Agreement and the Convertible Notes, and also has an indirect, non-controlling
beneficial interest in each holder of Convertible Notes.
SoftBank
is a subordinated lender to Legacy Airspan under the term loan agreement, dated February 9, 2016, as amended by amendments
thereto, including Amendment No. 5 thereto dated as of December 30, 2020 (the “SoftBank Working Capital Agreement”).
At December 31, 2021, there was approximately $38.0 million aggregate principal amount of indebtedness outstanding
under the SoftBank Working Capital Agreement. The SoftBank Working Capital Agreement bears interest at a rate of 9% per annum. Since January
1, 2021, we have paid no principal and have accrued, but not yet paid any interest, under the SoftBank Working Capital Agreement.
We
derived approximately $0.6 million in revenue from sales of products and services to SoftBank from January 1,
2021 through December 31, 2021. Additionally, we derived approximately $1.2 million in revenue from sales of
products and services to Dense Air Limited between January 1, 2021 and December 31, 2021. During the year ended
December 31, 2021, Dense Air Limited was controlled by SoftBank.
Pendrell
Corporation (“Pendrell”)
Pendrell
is a lender under the Fortress Credit Agreement and through affiliates, prior to Closing, held warrants to purchase an aggregate of 8,130
shares of Legacy Airspan’s Series H Senior Preferred Stock at a price of $61.50 per share expiring on December 30,
2025. Prior to the Closing, Pendrell also owned an aggregate of 16,260 shares of Legacy Airspan’s Series H Senior Preferred
Stock.
Reliance
We
are a supplier of products to Reliance. Reliance has accounted for approximately $38.4 million of our revenues between January
1, 2021 through December 31, 2021. Prior to the Closing, Reliance held an aggregate of 162,602 shares
of Legacy Airspan’s Series D Preferred Stock.
Mr.
Mathew Oommen, our director, is affiliated with Reliance.
Foxconn
Technology Group (“Foxconn”)
Foxconn
is our principal manufacturing supplier and has extensive commercial relationships with our Company. In the period from January
1, 2021 to December 31, 2021, we paid Foxconn approximately $66.8 million. Prior to Closing, Foxconn
affiliated entities held an aggregate of 96,699 shares of Legacy Airspan’s Series E Senior Preferred Stock (held by
ICREATE Investments Limited) and 113,821 shares of Legacy Airspan’s Series G Senior Preferred Stock (held by Fii USA
Inc.).
Legacy
Airspan Investors’ Rights Agreement
Legacy
Airspan entered into a Second Amended and Restated Investors’ Rights Agreement, dated December 14, 2020 (the “Investors’
Rights Agreement”), which granted rights to certain holders of Legacy Airspan’s stock, including Oak, with whom our current
Board members Bandel Carano, Scot Jarvis and Thomas Huseby are affiliated, Reliance, with whom our Board member Mathew Oommen is affiliated,
and Qualcomm, with whom Quinn Li, a member of Legacy Airspan’s board of directors, is affiliated. The Investors’ Rights Agreement
also provided the parties thereto with certain registration rights, information and inspection rights, drag-along rights
and right of first offer rights, among other rights. The Investors’ Rights Agreement terminated upon the consummation of the Business
Combination.
34
New
Beginnings
In
September 2020, the Sponsor purchased 2,156,250 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.012
per share. On October 20, 2020, New Beginnings effected a stock dividend resulting in the Sponsor holding 2,875,000 Founder
Shares, representing an adjusted purchase price of approximately $0.009 per share. The Founder Shares, after giving effect to the stock
dividend, included an aggregate of up to 375,000 shares of common stock subject to forfeiture if the over-allotment
option with respect to the IPO was not exercised by the underwriters in full. In connection with the underwriters’ full exercise
of their over-allotment option in November 2020, the 375,000 shares were no longer subject to forfeiture.
The
Sponsor has agreed not to transfer, assign or sell its Founder Shares until the earlier of (i) one year after the date of the consummation
of the Business Combination or (ii) the date on which the closing price of our shares of common stock equals or exceeds $12.50 per
share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading day period commencing after the Business Combination, or earlier, in either case, if, subsequent to the Business
Combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
In
September 2020, New Beginnings issued an unsecured promissory note to the Sponsor, pursuant to which New Beginnings could borrow
up to an aggregate principal amount of $200,000 to be used for a portion of the expenses of the IPO. This loan was non-interest
bearing, unsecured and due at the earlier of December 31, 2020 or the closing of the IPO. The loan would be repaid upon the
closing of the IPO out of the offering proceeds not held in New Beginnings’ trust account. On November 2, 2020, New
Beginnings repaid $120,000 to the Sponsor.
Contemporaneously
with the execution of the Business Combination Agreement, on March 8, 2021, the Sponsor entered into a Sponsor Support Agreement
with Legacy Airspan and New Beginnings (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreed, among other
things, subject to the terms and conditions of the Sponsor Support Agreement, (a) to forfeit 125,000 shares of our common
stock held by the Sponsor immediately prior to the Closing, (b) to vote all shares of common stock held by the Sponsor at such time
in favor of the approval and adoption of the Business Combination Agreement and approval of the Business Combination and the other related
proposals, (c) to abstain from exercising any redemption rights with respect to any shares of common stock held by Sponsor and (d) that
it would not transfer any of the shares of common stock held by the Sponsor or otherwise agree to transfer such shares, except pursuant
to the Sponsor Support Agreement. The Sponsor Support Agreement terminated at the Closing.
Related
Party Transactions Policies
Our
Code of Business Conduct and Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual
or potential conflicts of interests, except under guidelines approved by our Board (or the Audit Committee). A conflict of interest situation
can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively.
Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of
his or her position.
Our
Audit Committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to
the extent we enter into such transactions. The Audit Committee will consider all relevant factors when determining whether to approve
a related party transaction, including whether the related party transaction is on terms no less favorable to us than terms generally
available from an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s
interest in the transaction. No director may participate in the approval of any transaction in which he or she is a related party, but
that director is required to provide the Audit Committee with all material information concerning the transaction. We also require each
of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about
related party transactions.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict
of interest on the part of a director, employee or officer.
35
PROPOSAL
TWO -— AMENDMENT AND RESTATEMENT OF 2021 STOCK
INCENTIVE PLAN
At
the Meeting, stockholders will be asked to approve the Amended and Restated 2021 Plan.
The
Original 2021 Plan was adopted by the Board on July 23, 2021, was approved by our stockholders on August 11,
2021 and became effective upon the Closing of the Business Combination on August 13, 2021. The amendments to the Original
2021 Plan made pursuant to the Amended and Restated 2021 Plan were adopted by the Board, upon the recommendation of the Compensation Committee,
on February 8, 2022, and April 27, 2022, subject to the approval of our stockholders at the Annual Meeting.
The
Amended and Restated 2021 Plan increases the number of shares of common stock available under the Original 2021 Plan by 5,643,450
shares and makes other changes summarized below. The term of the Amended and Restated 2021 Plan remains unchanged, expiring July 23,
2031, unless terminated earlier.
Summary
of Amendments to the Original 2021 Plan
The
primary purpose of the amendments to the Original 2021 Plan is to increase the number of shares of common stock available by 5,643,450
shares. In addition, the Amended and Restated 2021 Plan contemplates several additional changes to the Original 2021 Plan as described
below:
• Establish
a one-year minimum vesting period for all awards, subject to limited exceptions;
• Provide
for “double-trigger” vesting upon a change in control;
• Eliminate
Board and Compensation Committee discretion to accelerate the vesting of awards in connection with a change in control or certain corporate
transactions described below; and
• Make
a number of other non-material typographical or technical revisions to the Original 2021 Plan.
Increased
Share Authorization
As
of December 31, 2021, there were 8,452,376 shares subject to outstanding awards under the Legacy Airspan Plan
and the Original 2021 Plan, 3,059,623 shares of common stock remaining available for future awards under the Original 2021
Plan and no shares of common stock remaining available for future awards under the Legacy Airspan Plan. The Amended and Restated 2021
Plan authorizes 5,643,450 additional shares of common stock for issuance that are not currently authorized for issuance under the Original
2021 Plan. In setting the number of shares authorized for issuance under the Amended and Restated 2021 Plan, the Compensation Committee
and the Board considered a number of factors, including: (i) shares available under the Original 2021 Plan and how long the shares
available are expected to last; (ii) historical equity award granting practices; and (iii) the dilutive impact of the Amended
and Restated 2021 Plan. If approved by our stockholders, the shares available for issuance under the Amended and Restated 2021 Plan are
expected to be sufficient to cover awards for approximately three years.
Set
forth below is a summary of the dilutive impact of the Original 2021 Plan and Legacy Airspan Plan as of December 31, 2021,
and the dilutive impact after giving effect to the Amended and Restated 2021 Plan:
|
|
Actual
on December 31, 2021 |
|
Assuming Approval
of Amended and Restated 2021 Plan |
Outstanding
shares of common stock |
|
72,335,952
|
|
|
72,335,952
|
|
Total
shares available for future issuance under equity plans |
|
3,059,623
|
|
|
8,703,073
|
|
Shares
subject to outstanding options |
|
5,489,492
|
|
|
5,489,492
|
|
Shares
subject to outstanding restricted stock units |
|
2,962,884
|
|
|
2,962,884
|
|
Total
shares subject to outstanding awards |
|
8,452,376
|
|
|
8,452,376
|
|
Fully-diluted
outstanding shares |
|
83,847,951
|
|
|
89,491,401
|
|
Percentage
of fully-diluted shares subject to outstanding awards or available for future issuance |
|
13.7
|
%
|
|
19.2
|
%
|
36
Summary
of Amended and Restated 2021 Plan
The
principal features of the Amended and Restated 2021 Plan, most of which remain unchanged from the Original 2021 Plan, are summarized below.
This summary does not contain all the information about the Amended and Restated 2021 Plan, a copy of which is included as Appendix A
to this proxy statement. The summary below is qualified in its entirety by reference to the text of the Amended and Restated 2021 Plan.
The
purpose of the Amended and Restated 2021 Plan is to promote the interests of the Company and its stockholders by aiding us in attracting
and retaining employees, officers, consultants, advisors and non-employee directors capable of assuring our future success,
to offer such persons incentives to put forth maximum efforts for the success of our business and to compensate such persons through various
stock-based arrangements and provide them with opportunities for stock ownership in the Company, thereby aligning the
interests of such persons with our stockholders.
The
Amended and Restated 2021 Plan provides for the grant of nonqualified stock options, incentive stock options, restricted stock, restricted
stock units, stock appreciation rights (“SARs”), dividend equivalents and other stock-based awards to employees,
officers, consultants, advisors, non-employee directors and independent contractors designated by the Compensation Committee.
Under the Amended and Restated 2021 Plan, the maximum number of shares of common stock that may be issued, subject to adjustment as described
below, is 11,651,168 shares of common stock, plus any shares of common stock subject to awards under the Legacy Airspan Plan that
are forfeited or reacquired by us due to termination or cancellation. The number of shares covered by an award or to which such award
relates will be counted on the date of grant of such award against the aggregate number of shares available for granting awards under
the Amended and Restated 2021 Plan.
If
awards under the Amended and Restated 2021 Plan expire or otherwise terminate without being exercised, the shares not acquired pursuant
to such awards again become available for issuance under the Amended and Restated 2021 Plan in accordance with its terms. However, under
the following circumstances, shares will not again be available for issuance under the Amended and Restated 2021 Plan: (i) any shares
which would have been issued upon any exercise of an option but for the fact that the exercise price was paid by a “net exercise”
or any shares tendered in payment of the exercise price of an option; (ii) any shares withheld by us or shares tendered to satisfy
any tax withholding obligation with respect to an award; (iii) shares covered by a stock-settled SAR issued under
the Amended and Restated 2021 Plan that are not issued in connection with settlement in shares upon exercise; or (iv) shares that
are repurchased by us using option exercise proceeds.
Directors
who are not also our employees will be subject to individual annual limits on their awards. Specifically, the maximum value of all equity
and cash-based compensation granted to a director who is not also an employee of the Company or an affiliate thereof
cannot exceed $500,000 in any calendar year (and for this purpose equity value is determined using grant date value under applicable financial
accounting rules). The Compensation Committee may make exceptions to this limit for a non-executive Chair of the Board
under extraordinary circumstances as determined by the Compensation Committee, provided that the non-employee director
receiving such additional compensation may not participate in the decision to award such compensation.
Administration
The
Amended and Restated 2021 Plan will be administered by the Compensation Committee. The Board will fill vacancies on and from time to time
may remove or add members to the Compensation Committee, and the Compensation Committee will be so constituted to permit awards granted
under the Amended and Restated 2021 Plan to be exempt from Section 16(b) of the Exchange Act.
Subject
to the express provisions of the Amended and Restated 2021 Plan, the Compensation Committee has authority to administer and interpret
the Amended and Restated 2021 Plan, including the authority to determine who is eligible to participate in the Amended and Restated 2021
Plan and to whom and when awards are granted under the Amended and Restated 2021 Plan, to grant awards, to determine the number of shares
of common stock subject to awards and the exercise or purchase price of such shares under an award, to determine the terms and conditions
of awards, including vesting and forfeiture conditions, to accelerate vesting or exercisability or waive restrictions, subject to the
limitations of the Amended and Restated 2021 Plan, to prescribe and amend the terms of the agreements evidencing awards made under the
Amended and Restated 2021 Plan, to make other determinations deemed necessary or advisable for the administration of the Amended and Restated
2021 Plan and to adopt such modifications, rules, procedures and sub-plans as may be necessary or desirable to comply
with the provisions of the laws of non-U.S. jurisdictions, including,
37
without
limitation, establishing any special rules for affiliates of the Company, eligible persons under the Amended and Restated 2021 Plan or
participants under the Amended and Restated 2021 Plan located in a particular country, in order to meet the objectives of the Amended
and Restated 2021 Plan and to ensure the viability of the intended benefits of awards granted to participants under the Amended and Restated
2021 Plan located in such non-U.S. jurisdictions. Also, subject to the requirements of the General Corporation Law of the
State of Delaware and any limitations under applicable stock exchange rules, the Compensation Committee also has the power to delegate
to officers the authority to grant and determine the terms and conditions of awards granted under the Amended and Restated 2021 Plan.
These delegated officers will not be permitted to grant awards to any person subject to Rule 16b-3 under the Exchange
Act.
Eligibility
Participants
under the Amended and Restated 2021 Plan are limited to employees, officers, non-employee directors, consultants, independent
contractors or advisors providing services to the Company, or any person to whom an offer of employment or engagement with the Company
is extended. In determining to whom awards will be granted and the nature of such each award, the Compensation Committee may take into
account the nature of the services rendered by the respective participant, their present and potential contributions to the success of
the Company or such other factors as the Compensation Committee, in its discretion, deems relevant. Airspan estimates that approximately
760 persons will be eligible to participate in the Amended and Restated 2021 Plan, which includes approximately 746 employees, 6 executive
officers and 8 non-employee directors.
General
Terms and Conditions of Awards
Nonqualified
Stock Options
The
Compensation Committee may grant nonqualified stock options under the Amended and Restated 2021 Plan, which do not meet the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and which will be subject to the following
terms and conditions. The option exercise price per share will be determined by the Compensation Committee but will not be less than 100%
of the “fair market value” of our common stock on the date of grant of such option; provided, however, that if the option
being granted is in substitution for an option previously granted by an entity that is acquired by or merged with the Company, the grant
value of such option may be lower than the fair market value of a share of our common stock on the date of grant. The term “fair
market value” means either (a) if our common stock is listed on any established stock exchange, the closing price for our common
stock on the date of grant or (b) if our common stock is not listed on any established stock exchange, the average of the closing
“bid” and “asked” prices quoted on the OTC Bulletin Board, the National Quotation Bureau, or any comparable reporting
service on the date of grant. The exercise price of an option may be paid through various means specified by the Compensation Committee,
including in cash, by delivering to us shares of common stock or, if allowed under the terms of the option, by a “net exercise”
(i.e., a reduction in the number of shares issuable pursuant to such option).
Every option which has not been exercised within 10 years of its date of grant will lapse upon the expiration of the 10-year period,
unless it has lapsed at an earlier date as determined by the Compensation Committee.
Incentive
Stock Options
The
Compensation Committee may grant incentive stock options under the Amended and Restated 2021 Plan which meet the requirements of Section 422
of the Code. To the extent that the aggregate fair market value (determined at the time of grant) of the shares with respect to which
incentive stock options are exercisable for the first time by any participant during any calendar year (under all plans of the Company
and any of its affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules
governing incentive stock options, the options or portions thereof that exceed such limit (according to the order in which they were granted)
or otherwise do not comply with such rules will be treated as non-qualified stock options, notwithstanding any contrary
provision of the applicable award agreement. The option exercise price per share will be determined by the Compensation Committee but
will not be less than 100% of the fair market value of our common stock on the date of grant of such option (except for substituted options
as described above). In the case of a grant of an incentive stock option to a participant who, at the time such option is granted, owns
stock possessing more than 10% of the combined voting power of all classes of our stock, the option exercise price per share under such
option will not be less than 110% of the “fair market value” of our common stock on the date of grant of such option and such
option will expire and no longer be exercisable no later than five years from the date of grant of such option.
38
SARs
The
Compensation Committee may grant SARs under the Amended and Restated 2021 Plan. Subject to the express provisions of the Amended and Restated
2021 Plan and as discussed in this paragraph, the Compensation Committee has discretion to determine the grant value, term, methods of
exercise, dates of exercise, methods of settlement and any other terms and conditions of any SAR. The grant value of each SAR granted
under the Amended and Restated 2021 Plan will be determined by the Compensation Committee and will not be less than 100% of the fair market
value of a share of our common stock on the date of grant of the SAR; provided, however, that if the SAR being granted is in substitution
for a SAR previously granted by an entity that is acquired by or merged with the Company, the grant value of such SAR may be lower than
the fair market value of a share of our common stock on the date of grant of the SAR. Every SAR that has not been exercised within 10 years
of its date of grant will lapse upon the expiration of such 10-year period, unless it has lapsed at an earlier date
as determined by the Compensation Committee.
Restricted
Stock and Restricted Stock Units
The
holder of restricted stock will own shares of our common stock subject to restrictions imposed by the Compensation Committee for a specified
time period determined by the Compensation Committee. The holder of restricted stock units will have the right, subject to any restrictions
imposed by the Compensation Committee, to receive shares of our common stock, or a cash payment equal to the fair market value of those
shares, at some future date determined by the Compensation Committee. The grant, issuance, retention, vesting and/or settlement of restricted
stock and restricted stock units will occur at such times and in such installments as are determined by the Compensation Committee, subject
to the minimum vesting provisions described below. For example, awards may, at the Compensation Committee’s discretion, be conditioned
upon a participant’s completion of a specified period of service, or upon the achievement of one or more performance goals (including
goals specific to the participant’s individual performance) established by the Compensation Committee, or upon any combination of
service-based or performance-based conditions (subject to minimum vesting requirements described below).
A restricted stock or restricted stock unit award that is conditioned in whole or in part upon the achievement of one or more financial
or other Company-related performance goals (other than performance of service alone) is generally referred to as a performance
share or performance share unit award. Rights to dividends or dividend equivalent amounts during the restricted period are discussed below.
Dividend
Equivalents
Dividend
equivalents entitle holders to receive payments (in cash, shares of common stock, other securities or other property) equivalent to the
amount of dividends paid by us to our stockholders, with respect to the number of shares determined by the Compensation Committee. Dividend
equivalents may not be awarded with respect to grants of options, stock appreciation rights or any other awards the value of which is
based solely on an increase in the value of shares after the grant date. Dividends and dividend equivalent amounts with respect to any
share underlying any other award may be accrued but not paid to a holder until all conditions or restrictions relating to such share have
been satisfied.
Other
Stock-Based Awards
The
Compensation Committee may grant other awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise
based on or related to, shares of our common stock. No such stock-based award will contain a purchase right or an option-like feature.
Transferability
Generally,
no award (other than fully-vested and unrestricted shares) and no right under any such award will be transferable by
a participant other than by will or by the laws of descent and distribution, and no award (other than fully-vested and
unrestricted shares) or right under any such award may be pledged, alienated, attached or otherwise encumbered. If a transfer is allowed
by the Compensation Committee (other than for fully vested and unrestricted shares), the transfer will be for no value and will comply
with the rules relating to Form S-8 registration statements filed with the SEC. The Compensation Committee may
establish procedures to allow a participant to designate a beneficiary or beneficiaries, to exercise the rights of the participant and
receive any property distributable with respect to an award in the event of the participant’s death.
39
Prohibition
on Repricing Awards
Without
the approval of our stockholders, (i) no option or SAR may be amended to reduce its exercise or grant price, (ii) no option
or SAR may be cancelled and replaced with an option or SAR having a lower exercise price and (iii) no option or SAR may be cancelled
or repurchased for cash or other securities, except in connection with a stock dividend or other distribution, including a stock split,
merger or other similar corporate transaction or event, in order to prevent dilution or enlargement of the benefits, or potential benefits
intended to be provided, under the Amended and Restated 2021 Plan.
Minimum
Vesting
Except
as provided below, no award may be granted with terms providing for any right of exercise or lapse of any vesting obligations earlier
than a date that is at least one year following the date of grant (or, in the case of vesting based upon performance based objectives,
one year from the commencement of the period over which performance is evaluated). Notwithstanding the foregoing, the following awards
that do not comply with the one-year minimum exercise and vesting requirements may be issued:
• awards
providing for acceleration or waiver of the minimum restrictions upon a change in control in accordance with the provisions described
below or upon the participant’s death or disability;
• substitute
awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction
entered into by us or any of our subsidiaries;
• shares
delivered in lieu of fully vested cash awards or any cash incentive compensation earned by a participant, provided that the performance
period for such incentive compensation was at least one fiscal year;
• awards
issued to non-employee directors that provide for a right of exercise or lapse of any vesting obligations no earlier than
the next annual meeting of stockholders following the grant date, so long as the date of the next annual meeting of stockholders is at
least 50 weeks after the date of the immediately preceding annual meeting of stockholders; and
• any
additional awards the Compensation Committee may grant, up to a maximum of 5% of the aggregate number of shares available for issuance
under the Amended and Restated 2021 Plan.
Limitation
on Acceleration or Waiver of Restrictions
Neither
the Compensation Committee nor the terms of any award agreement may accelerate the exercisability of any award or the lapse of restrictions
relating to any award in connection with a change in control or other corporate transaction described below, except:
• to
the extent that the definitive agreement among the parties to a change in control contemplates that the acquiring or surviving entity
will not assume the award and replace the shares issuable thereunder with replacement equity securities with the same pre-transaction
economic value and award terms (and aggregate spread, in the case of options or SARs), the award will vest and be paid upon the consummation
of the change in control (or immediately prior to the consummation of the change in control, provided the consummation of the change in
control subsequently occurs), and in the case of performance-based awards, the payout will be calculated assuming target-level
performance has been achieved; and
• to
the extent that the definitive agreement among the parties to a change in control contemplates that the acquiring or surviving entity
will assume the award and replace the shares issuable thereunder with replacement equity securities with the same pre-transaction
economic value and award terms (and aggregate spread, in the case of options or SARs), then no awards will vest solely on account of the
consummation of the change in control, but will vest on account of any one of the following events that occurs to the participant upon
or following the change in control: (i) death; (ii) disability; (iii) termination without cause (or, in the case of a non-employee
director, the termination of such individual’s Board service on account of being removed from such role or otherwise not being asked
to stand for re-election) within a time period following the change in control specified in the award not to exceed 24
months; or (iv) resignation
40
for
good reason within a period following the change in control specified in the award agreement not to exceed 24 months, and
in the case of performance-based awards, the payout under clauses (i) through (iv) above will be calculated assuming
target-level performance has been achieved.
Corporate
Transactions
In
the event of any reorganization, merger, consolidation, split-up, spin-off, combination, plan of arrangement,
take-over bid or tender offer, repurchase or exchange of common stock or other securities of the Company or any other
similar corporate transaction or event involving the Company, the Compensation Committee or the Board, in its sole discretion but subject
to the limitations in the Amended and Restated 2021 Plan (for example, limitations on re-pricing and limitations on acceleration
of vesting and waiver of related restrictions), can provide for one or more of the following to be effective upon the consummation of
the event (or immediately prior to the consummation of the event, provided the consummation of the event subsequently occurs):
• either
(i) terminate any award in exchange for an amount of cash and/or other property equal to the amount that would have been attained
upon the exercise of the award or the realization of the vested rights under the award or (ii) replace the award with other rights
or property of comparable value selected by the Compensation Committee or the Board;
• that
the award be assumed by the successor or survivor corporation or be substituted for by similar options, rights or awards covering the
stock of the successor or survivor corporation; or
• that
the award cannot vest, be exercised or become payable (and therefore terminate) after a certain date in the future.
Amendment
and Termination
No
awards may be granted pursuant to the Amended and Restated 2021 Plan after July 23, 2031. Except to the extent stockholder
approval or participant consent is required as provided by the Amended and Restated 2021 Plan, the Board may amend, modify or terminate
the Amended and Restated 2021 Plan.
The
Compensation Committee may amend, modify or terminate an outstanding award; provided, however, that the Compensation Committee may not,
without the participant’s consent, amend, modify or terminate an outstanding award unless it determines that the action would not
adversely alter or impair the terms or conditions of such award, except where expressly permitted under the Amended and Restated 2021
Plan (such as in the case of a corporate transaction).
Material
Federal Income Tax Consequences
The
following is a summary of the material U.S. federal income tax consequences generally applicable to awards made under the Amended and
Restated 2021 Plan. The summary does not contain a complete analysis of all the potential tax consequences relating to awards granted
under the Amended and Restated 2021 Plan, including state, local or foreign tax consequences.
Nonqualified
Stock Options
A
participant will not be deemed to have received taxable income upon the grant of a nonqualified stock option. Upon the exercise of a nonqualified
stock option, a participant generally will be deemed to have received taxable ordinary income in an amount equal to the excess of the
fair market value of the common stock received on the date of exercise over the option price.
Upon
the exercise of a nonqualified stock option, we will ordinarily be entitled to a deduction for federal income tax purposes in an amount
equal to the amount included in income by the participant as a result of such exercise. This deduction will be available to us in the
tax year in which the participant recognizes the income.
The
income arising from a participant who is an employee exercising a nonqualified stock option will be treated as compensation income for
income and payroll tax withholding purposes, and the Compensation Committee may allow the participant to satisfy the tax withholding obligation
by withholding a portion of the shares that would otherwise be delivered upon exercise. The basis of shares received upon the exercise
of a nonqualified stock option will be the
41
option
exercise price paid plus the amount recognized by the participant as taxable income attributable to such shares as a result of the exercise.
Gain or loss recognized by the participant on a subsequent disposition of any such shares will be capital gain or loss if such shares
constitute a capital asset in the hands of the participant. A participant’s holding period will commence on the date of exercise.
Incentive
Stock Options
Participants
will not be deemed to recognize taxable income upon the grant or exercise of an incentive stock option. If a participant makes no disqualifying
disposition of the common stock received upon exercise within the one-year period beginning after the transfer of such
common stock to the participant nor within two years from the date of grant of the incentive stock option, and if the participant at all
times from the date of the grant of the incentive stock option to a date three months before the date of exercise has been our employee,
any gain recognized on the disposition of the common stock acquired upon exercise will be long-term capital gain. The
difference between the fair market value of the common stock at the time of exercise and the exercise price will, however, be an item
of tax preference, and may subject a participant to the alternative minimum tax. We will not be entitled to any deduction with respect
to the grant or exercise of the incentive stock option or the transfer of common stock acquired upon exercise.
If
the participant makes a disqualifying disposition of the common stock before the expiration of the one- or two-year holding
periods described above, the participant will be deemed to have received taxable ordinary income at the time of such disposition to the
extent that the fair market value of the common stock at the time of exercise, or, if less, the amount realized on such disposition, exceeds
the exercise price. To the extent that the amount realized on such disposition exceeds the fair market value of the common stock at the
time of exercise, such excess will be taxed as capital gain if the common stock is otherwise a capital asset in the hands of the participant.
To the extent the participant recognizes ordinary income on a disqualifying disposition of the common stock, we may be entitled to a deduction
for federal income tax purposes in an amount equal to the ordinary income recognized by the participant.
SARs
A
participant will not be deemed to have received taxable income upon the grant or vesting of a SAR. Upon the exercise of a SAR, a participant
generally will be deemed to have received income, taxable for U.S. federal income tax purposes at ordinary income rates, equal to the
fair market value at the time of exercise of any common stock received plus the amount of any cash received, and we will ordinarily be
entitled to a deduction for federal income tax purposes equal to the amount of ordinary income recognized by the participant as a result
of such exercise.
The
income arising from a participant who is an employee exercising a SAR will be treated as compensation income for withholding tax purposes
and the Compensation Committee may allow the participant to satisfy the tax withholding obligation by withholding a portion of the shares
that would otherwise be delivered upon exercise. The basis of shares received upon the exercise of a SAR will equal the fair market value
of the shares at the time of exercise. Gain or loss recognized by the participant on a subsequent disposition of any such shares will
be capital gain or loss if such shares constitute a capital asset in the hands of the participant.
Restricted
Stock
Recipients
of grants of restricted stock generally will be required to include as taxable ordinary income the fair market value of the restricted
stock at the time it is no longer subject to a substantial risk of forfeiture. In contrast, unrestricted stock grants are taxable at grant.
An award holder who makes an election under Section 83(b) of the Code (an “83(b) election”) within 30 days of the
date of grant of the restricted stock will incur taxable ordinary income on the date of grant equal to the fair market value of such shares
of restricted stock (determined without regard to forfeiture restrictions). With respect to the sale of shares after the forfeiture restrictions
have expired, the holding period to determine whether the award recipient has long-term or short-term capital
gain (or loss) generally begins when the restrictions expire, and the tax basis for such shares will generally be based on the fair market
value of the shares on that date. However, if the award holder made an 83(b) election as described above, the holding period commences
on the date of such election, and the tax basis will be equal to the fair market value of the shares on the date of the election (determined
without regard to the forfeiture restrictions on the shares). If the award permits dividends to accrue while the restricted stock is subject
to a substantial risk of forfeiture, such dividends will be paid if and when the underlying stock vests and will also be taxed as ordinary
income. We generally will be entitled to an income tax deduction equal to amounts the award holder includes in ordinary income at the
time of such income inclusion.
42
Restricted
Stock Units and Other Stock-Based Awards
Recipients
of grants of restricted stock units (including performance share units) will not incur any U.S. federal income tax liability at the time
the awards are granted. Award holders will recognize ordinary income equal to (i) the amount of cash received under the terms of
the award or, as applicable, (ii) the fair market value of the shares received (determined as of the date of receipt) under the terms
of the award. If the award permits dividend equivalent amounts to accrue while the restricted stock unit is subject to a substantial risk
of forfeiture, such dividend equivalent amounts will be paid if and when the underlying stock unit vests and will also be taxed as ordinary
income. Cash or shares to be received pursuant to any other stock-based award generally become payable when applicable
forfeiture restrictions lapse; provided, however, that, if the terms of the award so provide, payment may be delayed until a later date
to the extent permitted under applicable tax laws. We generally will be entitled to an income tax deduction for any amounts included by
the award holder as ordinary income. For awards that are payable in shares, the participant’s tax basis is equal to the fair market
value of the shares at the time the shares become payable. Upon the sale of the shares, appreciation (or depreciation) after the shares
are paid is treated as either short-term or long-term capital gain (or loss) depending on how long
the shares have been held.
Section 162(m)
of the Code
In
general, Section 162(m) of the Code (“Section 162(m)”) limits our compensation deduction to $1,000,000 paid in any
tax year to any “covered employee” as defined under Section 162(m). Section 162(m) may result in all or a portion
of the awards granted under the Amended and Restated 2021 Plan to “covered employees” failing to be deductible by us for U.S.
federal income tax purposes.
Section 409A
of the Code
The
Compensation Committee intends to administer and interpret the Amended and Restated 2021 Plan and all award agreements in a manner designed
to satisfy the requirements of Section 409A of the Code and to avoid any adverse tax results thereunder to a holder of an award.
Clawback
or Recoupment
All
awards under the Amended and Restated 2021 Plan will be subject to forfeiture or other penalties pursuant to any clawback policy we may
adopt or amend from time to time, as determined by the Compensation Committee.
Israeli
Aspects of the Plan
The
Amended and Restated 2021 Plan includes a sub-plan for Israeli participants (the “Sub-Plan”),
which provides for grants of share-settled awards under the Amended and Restated 2021 Plan (“Section 102
Awards”) in compliance with Section 102 of the Israeli Income Tax Ordinance [New Version], 1961, and all rules and regulations
promulgated thereunder (the “Ordinance”). The Sub-Plan provides that Section 102 Awards may be granted
only to Israeli employees, officers and directors (excluding “Controlling Share Holders,” as defined in the Ordinance).
Amended
and Restated 2021 Plan Benefits
The
awards, if any, that will be made to eligible persons under the Amended and Restated 2021 Plan are subject to the complete discretion
of the Compensation Committee, compensation programs and policies adopted by the Compensation Committee or the Board, the speed and nature
of new hires and other factors and, therefore, we cannot currently determine the benefits or number of shares of common stock subject
to awards that may be granted in the future to eligible persons under the Amended and Restated 2021 Plan. However, the Compensation Committee
has granted options with respect to 2,253,749 shares of common stock and restricted stock units with respect to 2,803,781
shares of common stock, in each case, subject to approval of the Amended and Restated 2021 Plan by our stockholders at the Annual
Meeting, as described in the below table:
43
Airspan
Networks Holdings Inc. Amended and Restated 2021 Stock Incentive Plan
Name
and Position |
|
Restricted Stock Units (Number of
Shares) |
|
Stock Options (Number of
Shares) |
Eric
D. Stonestrom (Chief Executive Officer and Chairman of the Board of Directors) |
|
838,480
|
|
477,286
|
David
Brant (Senior Vice President & Chief Financial Officer) |
|
419,240
|
|
238,642
|
Henrik
Smith-Petersen (Chief Sales & Marketing Officer) |
|
419,240
|
|
—
|
Executive
Group |
|
2,250,820
|
|
1,195,747
|
Non-Executive
Director Group |
|
—
|
|
—
|
Non-Executive
Officer Employee Group |
|
552,961
|
|
1,058,002
|
During
2021, we granted options with respect to 52,500 shares of common stock and restricted stock units with respect to 2,964,884
shares of common stock under the Original 2021 Plan, as described in the below table:
Airspan
Networks Holdings Inc. 2021 Stock Incentive Plan
Name
and Position |
|
Restricted Stock Units (Number of
Shares) |
|
Stock Options (Number of
Shares) |
Eric
D. Stonestrom (Chief Executive Officer and Chairman of the Board of Directors) |
|
700,000
|
|
—
|
David
Brant (Senior Vice President & Chief Financial Officer) |
|
350,000
|
|
—
|
Henrik
Smith-Petersen (Chief Sales & Marketing Officer) |
|
292,250
|
|
—
|
Executive
Group |
|
1,572,250
|
|
—
|
Non-Executive
Director Group |
|
394,134
|
|
—
|
Non-Executive
Officer Employee Group |
|
998,500
|
|
52,500
|
The
following table summarizes equity compensation plans that were approved by our stockholders and equity compensation plans that were not
approved by our stockholders as of December 31, 2021.
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants and rights |
|
Weighted-average exercise price
of outstanding options, warrants and rights |
|
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected
in column (a)) |
Plan
category |
|
(a)
|
|
(b)
|
|
(c)
|
Equity
compensation plans approved by security holders |
|
8,452,376
|
(1)
|
|
4.23
|
(2)
|
|
3,059,623
|
(3)
|
Equity
compensation plans not approved by security holders |
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
8,452,376
|
|
|
4.23
|
|
|
3,059,623
|
|
____________
(1) Represents
shares of common stock to be issued upon the exercise of options and the vesting of restricted stock units granted under the Legacy Airspan
Plan and the Original 2021 Plan. As a result of the Business Combination, outstanding options to purchase Legacy Airspan stock were converted
into options to purchase an aggregate of 5,815,796 shares of our common stock.
44
(2) Reflects
the weighted-average exercise price of outstanding options. Outstanding restricted stock units are not included as such awards
do not have an exercise price.
(3) Represents
3,059,623 shares of common stock available for issuance under the Original 2021 Plan. Other than the shares of common stock
reflected in column (a), no shares of common stock are available for issuance under the Legacy Airspan Plan.
For
an understanding of awards made to our named executive officers in the past, see the “Outstanding Equity Awards at 2021 Fiscal Year-End”
table in “Executive Compensation” above.
The
Board believes strongly that the approval of the Amended and Restated 2021 Plan is essential to our continued success.
Interests
of Certain Persons in this Proposal
Our
directors and executive officers may be considered to have an interest in the approval of the Amended and Restated 2021 Plan because they
may receive awards under the Amended and Restated 2021 Plan, including the awards described above. Nevertheless, our Board believes that
it is important to provide incentives and rewards for the performance and the retention of executive officers and experienced directors
by adopting the Amended and Restated 2021 Plan.
Required
Vote
The
approval of our Amended and Restated 2021 Plan requires the affirmative vote of a majority in voting power of the votes cast on this proposal.
For this purpose, “votes cast” means all votes cast in favor of or against this proposal by the stockholders present in person
or represented by proxy at the Annual Meeting and entitled to vote thereon, provided a quorum is present, but will not include abstentions
or broker non-votes. Accordingly, if you “ABSTAIN” from voting with respect to this proposal, it will have no
effect on the vote for this proposal. Similarly, broker non-votes will also have no effect on the vote for this proposal.
If
this proposal is not approved, the Compensation Committee will continue to make grants under the Original 2021 Plan.
Board
Recommendation
Our
Board unanimously recommends that you vote “FOR” the approval of
the Amended and Restated 2021 Plan.
45
PROPOSAL
THREE — RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee has appointed Grant Thornton as our independent registered public accounting firm for the fiscal year ending December
31, 2022. Although neither our Certificate of Incorporation nor our Bylaws, nor applicable law, requires stockholder ratification
of the appointment of Grant Thornton, our Board believes that our stockholders should be given the opportunity to express their views
on the subject. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain Grant Thornton.
Even if the appointment of Grant Thornton is ratified, the Audit Committee, in its discretion, may direct the appointment of a different
independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests
of the Company and its stockholders. Representatives of Grant Thornton are expected to be present at the Annual Meeting and will have
the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions from our stockholders.
Grant Thornton has served as our independent registered accounting firm since 2005, inclusive of serving as Legacy Airspan’s independent
registered public accounting firm prior to the Business Combination.
As
previously disclosed in our filings with the SEC, on August 13, 2021, the Audit Committee approved the engagement of Grant
Thornton as our independent registered public accounting firm to audit our consolidated financial statements as of and for the fiscal
year ended December 31, 2021. Grant Thornton served as the independent registered public accounting firm of Legacy Airspan prior
to the Business Combination. Accordingly, Marcum LLP (“Marcum”), New Beginnings’ independent registered public accounting
firm prior to the Business Combination, was informed that it would be replaced by Grant Thornton as our independent registered public
accounting firm following the consummation of the Business Combination on August 13, 2021. Representatives of Marcum will
not be present at the Annual Meeting.
Marcum’s
report on New Beginnings’ financial statements as of December 31, 2020 and the related statements of operations, changes in
stockholders’ equity and cash flows for the period from August 20, 2020 (inception) through December 31, 2020 did not
contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting
principles, but the report was modified to contain an explanatory paragraph indicating correction of misstatements.
During
the period from August 20, 2020 (inception) through December 31, 2020, and in the subsequent interim period
through August 13, 2021 (the “Relevant Period”) there were no disagreements, as the term is defined in Item 304(a)(1)(iv) and
the related instructions of Regulation S-K, promulgated by the SEC pursuant to the Exchange Act, with Marcum on any matter
of accounting principles or practices, financial statement disclosures or audited scope or procedures, which disagreements if not resolved
to Marcum’s satisfaction would have caused Marcum to make reference to the subject matter of the disagreement in connection with
its report on New Beginnings’ financial statements.
During
the Relevant Period, there were no “reportable events,” as that term is defined in Item 304(a)(1)(v) of Regulation S-Km
promulgated by the SEC pursuant to the Exchange Act, except that in connection with New Beginnings’ internal control over financial
reporting there was a material weakness. Management identified a specific deficiency related to controls over proper classification of
certain warrants that New Beginnings issued with its IPO and private placement that constituted a material weakness in New Beginnings’
internal controls over financial reporting as of December 31, 2020. We did not maintain effective internal controls related
to the proper classification and accounting of warrants that were a part of IPO and private placement during the period from August
20, 2020 (inception) through December 31, 2020. This material weakness resulted in material misstatements and audit
adjustments to warrant liability, common stock subject to possible redemption, common stock, additional paid-in capital,
accumulated deficiency, warrant issuance costs and change in fair value of warrants to the consolidated financial statements for the period
from August 20, 2020 (inception) through December 31, 2020.
During
the Relevant Period, neither we, nor (to our knowledge) anyone acting on our behalf consulted with Grant Thornton with respect to either
(i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion
that might be rendered on our financial statements, and no written report or oral advice was provided to us by Grant Thornton that Grant
Thornton concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting
issue; or (ii) any matter that was either the subject of a disagreement, as that term is described in Item 304(a)(1)(iv) of
Regulation S-K, promulgated
47
by
the SEC pursuant to the Exchange Act, and the related instructions to Item 304 of Regulation S-K, promulgated by
the SEC pursuant to the Exchange Act, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K,
promulgated by the SEC pursuant to the Exchange Act.
We
have provided Marcum with a copy of the foregoing disclosures and have requested that Marcum furnish us with a letter addressed to the
SEC stating whether it agrees with the statements made by us in response to Item 304(a) of Regulation S-K, promulgated
by the SEC pursuant to the Exchange Act, and, if not, stating the respects in which it does not agree. A letter from Marcum is attached
as Exhibit 16.1 to our Current Report on Form 8-K, filed with the SEC on August 19, 2021.
Required
Vote
The
ratification of the appointment of Grant Thornton requires the affirmative vote of a majority in voting power of the votes cast on this
proposal. For this purpose, “votes cast” means all votes cast in favor of or against this proposal by the stockholders present
in person or represented by proxy at the Annual Meeting and entitled to vote thereon, provided a quorum is present, but will not include
abstentions or broker non-votes. Accordingly, if you “ABSTAIN” from voting with respect to this proposal, it
will have no effect on the vote for this proposal. Similarly, broker non-votes will also have no effect on the vote for this
proposal.
Board
Recommendation
Our
Board unanimously recommends that you vote “FOR” the ratification
of the appointment of Grant Thornton as our independent registered public accounting firm for the fiscal year ending December 31,
2022.
Principal
Accounting Fees and Services
The
aggregate fees billed by Grant Thornton for professional services rendered to us for the fiscal years ended December 31,
2021 and 2020 are set forth in the table below.
|
|
For
the Fiscal Years Ended December 31, |
|
|
2021
|
|
2020
|
Audit
Fees(1) |
|
$
|
746,948 |
|
$
|
539,267 |
Audit-Related
Fees(2) |
|
|
—
|
|
|
—
|
Tax
Fees(3) |
|
|
34,442
|
|
|
84,226
|
All
Other Fees(4) |
|
|
—
|
|
|
—
|
Total
|
|
$
|
781,390 |
|
$
|
623,494 |
____________
(1) Audit
fees consist of fees billed for professional services rendered for the audit of our consolidated financial statements, reviews of interim
financial information and services that are normally provided by our independent auditors in connection with statutory and regulatory
filings or engagements. The aggregate fees billed in 2021 include audit services related to the Business Combination.
(2) Audit-related
fees consist of fees that are reasonably related to the performance of the audit or review of our financial statements and are not reported
as audit fees.
(3) Tax
fees consist of fees for professional services rendered for tax compliance, tax advice and tax planning.
(4) Other
fees consist of fees not otherwise reported as audit fees, audit-related fees or tax fees.
Pre-Approval
Policy
Our
Audit Committee charter requires the Audit Committee to review and pre-approve all audit services and all permissible non-audit
services to be performed for us by our independent registered public accounting firm, other than non-audit services that
are subject to exceptions to pre-approval available under applicable laws and rules related to immaterial aggregate amounts
of services. All services provided by of our independent registered public accounting firm for the fiscal years ended December 31,
2021 and 2020 were pre-approved by the Audit Committee.
48
ADDITIONAL
INFORMATION
Stockholder
Proposals for 2023 Annual Meeting of Stockholders
Stockholders
who intend to have a proposal considered for inclusion in our proxy materials for presentation at our 2023 annual meeting of stockholders
pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to us at our principal executive offices, Airspan
Networks Holdings Inc., 777 Yamato Road, Suite 310, Boca Raton, Florida 33431, Attention: Secretary, no later than January 10,
2023. The proposal must comply Rule 14a-8 under the Exchange Act, which lists the requirements for the inclusion of
stockholder proposals in company-sponsored proxy materials.
In
addition, our Bylaws establish an advance notice procedure with regard to director nominations and other proposals by stockholders that
are not intended to be included in our proxy materials, but that a stockholder instead wishes to present directly at an annual meeting.
To be properly brought before the 2023 annual meeting of stockholders, a notice of such nomination or proposal must be in writing and
delivered to or mailed and received by our Secretary at our principal executive offices at the address specified above not later than
March 23, 2023, and not before February 21, 2023, unless the date of the 2023 annual meeting of stockholders
is more than 30 days before or more than 60 days after the one-year anniversary of the Annual Meeting, in which
case such notice must be delivered to or mailed and received by our Secretary at our principal executive officers at the address specified
above not later than the 90th day prior to the 2023 annual meeting of stockholders
or, if later, the 10th day following the day on which public disclosure of
the date of the 2023 annual meeting of stockholders is first made by us. Stockholders are advised to review our Bylaws, which contain
additional requirements with respect to advance notice of director nominations and stockholder proposals.
Other
Matters
Our
Board is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above. However, if
other matters should properly come before the Annual Meeting, or any adjournment or postponement thereof, it is intended that holders
of the proxies will vote thereon in their discretion.
Solicitation
of Proxies
The
accompanying proxy is solicited by and on behalf of our Board, whose notice of meeting is attached to this proxy statement.
WE
WILL FURNISH, WITHOUT CHARGE, TO EACH PERSON WHOSE PROXY IS BEING SOLICITED AND WHO REPRESENTS THAT, AS OF THE RECORD DATE FOR THE ANNUAL
MEETING, THEY WERE A BENEFICIAL OWNER OF SHARES OF COMMON STOCK ENTITLED TO BE VOTED AT THE ANNUAL MEETING, A COPY OF OUR ANNUAL REPORT
ON FORM 10-K
FOR THE YEAR ENDED DECEMBER
31, 2021, INCLUDING
OUR CONSOLIDATED FINANCIAL STATEMENTS, UPON WRITTEN REQUEST MADE TO Airspan
Networks Holdings Inc., 777
Yamato Road, SUITE 310, Boca
Raton, Florida 33431, Attention:
Secretary. ANY EXHIBITS TO
SUCH ANNUAL REPORT ON FORM
10-K
WILL ALSO BE PROVIDED UPON WRITTEN REQUEST.
WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ELECTRONICALLY, WE URGE YOU TO VOTE YOUR SHARES VIA THE TOLL-FREE
TELEPHONE NUMBER OR OVER THE INTERNET, AS DESCRIBED IN THIS PROXY STATEMENT. IF YOU RECEIVED A COPY OF THE PROXY CARD BY MAIL, YOU MAY
SIGN, DATE AND MAIL THE PROXY CARD IN THE ENCLOSED RETURN ENVELOPE. PROMPTLY VOTING YOUR SHARES WILL ENSURE THE PRESENCE OF A QUORUM AT
THE ANNUAL MEETING AND WILL SAVE US THE EXPENSE OF FURTHER SOLICITATION.
By
Order of the Board of Directors,
/s/
Eric D. Stonestrom
Eric
D. Stonestrom
Chief Executive Officer and Chairman of the Board
Boca Raton, Florida
May
10, 2022
49
APPENDIX
A
AMENDED AND RESTATED
AIRSPAN
NETWORKS HOLDINGS INC. 2021 STOCK INCENTIVE PLAN
Section 1. Purpose
The
purpose of the Plan is to promote the interests of the Company and its stockholders by aiding the Company in attracting and retaining
employees, officers, consultants, independent contractors and non-employee Directors capable of assuring the future success
of the Company, to provide such persons with opportunities for stock ownership in the Company and to offer such persons other incentives
to put forth maximum efforts for the success of the Company’s business.
Section 2. Definitions
As
used in the Plan, the following terms shall have the meanings set forth below:
(a) “Affiliate”
shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, in each case as determined by the Committee.
(b) “Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend Equivalent or Other Stock-Based
Award granted under the Plan.
(c) “Award
Agreement” shall mean any written agreement, contract or other instrument or document evidencing an Award granted under the
Plan (including a document in an electronic medium) executed in accordance with the requirements of Section 9(b).
(d) “Board”
shall mean the Board of Directors of the Company.
(e) “Business
Combination Agreement” shall mean the Business Combination Agreement by and among the Company, Artemis Merger Sub Corp. and
Airspan Networks Inc. dated as of March 8, 2021.
(f) “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.
(g) “Committee”
shall mean the Compensation Committee of the Board or such other committee designated by the Board to administer the Plan. The Committee
shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under
Rule 16b-3, and each member of the Committee shall be a “non-employee director” within the
meaning of Rule 16b-3.
(h) “Company”
shall mean Airspan Networks Holdings Inc., a Delaware corporation, and any successor corporation.
(i) “Director”
shall mean a member of the Board.
(j) “Dividend
Equivalent” shall mean any right granted under Section 6(d) of the Plan.
(k) “Effective
Time” shall mean have the meaning ascribed to that term in Section 2.01(a) of the Business Combination Agreement (referring
to the effective time of the merger of the Company and Artemis Merger Sub Corp.).
(l) “Eligible
Person” shall mean any employee, officer, non-employee Director, consultant, independent contractor or advisor
providing services to the Company or any Affiliate, or any person to whom an offer of employment or engagement with the Company or any
Affiliate is extended. An Eligible Person must be a natural person.
(m) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
(n) “Fair
Market Value” with respect to one Share as of any date shall mean (a) if the Share is listed on any established stock
exchange, the price of one Share at the close of the regular trading session of such market or exchange on such date, as reported by The
Wall Street Journal or a comparable reporting service, or, if no sale of Shares shall
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have
occurred on such date, on the next preceding date on which there was a sale of Shares; (b) if the Shares are not so listed on any
established stock exchange, the average of the closing “bid” and “asked” prices quoted by the OTC Bulletin Board,
the National Quotation Bureau, or any comparable reporting service on such date or, if there are no quoted “bid” and “asked”
prices on such date, on the next preceding date for which there are such quotes for a Share; or (c) if the Shares are not publicly
traded as of such date, the per share value of a Share, as determined by the Board, or any duly authorized Committee of the Board, in
its sole discretion, by applying principles of valuation with respect thereto.
(o) “Incentive
Stock Option” shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements
of Section 422 of the Code or any successor provision.
(p) “Non-Qualified
Stock Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
(q) “Option”
shall mean an Incentive Stock Option or a Non-Qualified Stock Option to purchase shares of the Company.
(r) “Other
Stock-Based
Award” shall mean any right granted under Section 6(e) of the Plan.
(s) “Participant”
shall mean an Eligible Person designated to be granted an Award under the Plan.
(t) “Plan”
shall mean the Airspan Networks Holdings Inc. Amended and Restated 2021 Stock Incentive Plan, as amended from time to time.
(u) “Prior
Plan” shall mean the Airspan Networks Inc. 2009 Omnibus Equity Plan (and any predecessor plan to such plan), as amended from
time to time.
(v) “Prior
Plan Unallocated Pool” shall mean the Company Equity Plan Unallocated Pool as that term is defined in Section 3.01(a)
of the Business Combination Agreement, which refers to the remaining, unused reserve available for future equity awards under the Prior
Plan as of the Effective Time, converted into Shares of the Company.
(w) “Restricted
Stock” shall mean any Share granted under Section 6(c) of the Plan.
(x) “Restricted
Stock Unit” shall mean any unit granted under Section 6(c) of the Plan evidencing the right to receive a Share (or a
cash payment equal to the Fair Market Value of a Share) at some future date.
(y) “Rule 16b-3”
shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended, or any successor rule or regulation.
(z) “Section 409A”
shall mean Section 409A of the Code, or any successor provision, and applicable Treasury Regulations and other applicable guidance
thereunder.
(aa) “Securities
Act” shall mean the Securities Act of 1933, as amended.
(bb) “Share”
or “Shares” shall mean share(s) of common stock, $1.00 par value
per share, of the Company or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c)
of the Plan.
(cc) “Specified
Employee” shall mean a specified employee as defined in Section 409A(a)(2)(B) of the Code or applicable proposed or
final regulations under Section 409A, determined in accordance with procedures established by the Company and applied uniformly with
respect to all plans maintained by the Company that are subject to Section 409A.
(dd) “Stock
Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.
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Section 3. Administration
(a) Power
and Authority of the Committee. The Plan shall be administered by the Committee. Subject to the express provisions of the Plan
and to applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or
the method by which payments or other rights are to be calculated in connection with) each Award; (iv) determine the terms and conditions
of any Award or Award Agreement, including any terms relating to the vesting and forfeiture of any Award and the forfeiture, recapture
or disgorgement of any cash, Shares or other amounts payable with respect to any Award; (v) amend the terms and conditions of any
Award or Award Agreement, subject to the limitations under Sections 6 and 7; (vi) accelerate the exercisability of any Award
or the lapse of any restrictions relating to any Award, subject to the limitations of Sections 6 and 7; (vii) determine whether,
to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property
(but excluding promissory notes), or canceled, forfeited or suspended; (viii) determine whether, to what extent and under what circumstances
amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof
or the Committee, subject to the requirements of Section 409A; (ix) interpret and administer the Plan and any instrument or
agreement, including an Award Agreement, relating to the Plan; (x) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) make any other determination
and take any other action that the Committee deems necessary or desirable for the administration of the Plan; and (xii) adopt such
modifications, rules, procedures and subplans as may be necessary or desirable to comply with provisions of the laws of non-U.S.
jurisdictions in which the Company or an Affiliate may operate, including, without limitation, establishing any special rules for Affiliates,
Eligible Persons or Participants located in any particular country, in order to meet the objectives of the Plan and to ensure the viability
of the intended benefits of Awards granted to Participants located in such non-United States jurisdictions. Unless otherwise
expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan
or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive
and binding upon any Participant, any holder or beneficiary of any Award or Award Agreement, and any employee of the Company or any Affiliate.
(b) Delegation.
The Committee may delegate to one or more officers or Directors of the Company, subject to such terms, conditions and limitations as the
Committee may establish in its sole discretion, the authority to grant Awards; provided,
however, that the Committee shall not delegate such authority (i) with regard to grants of Awards to be made to officers of
the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in such a manner as would cause the Plan
not to comply with applicable exchange rules or applicable law.
(c) Power
and Authority of the Board. Notwithstanding anything to the contrary contained herein, (i) the Board may, at any time and
from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan, unless
the exercise of such powers and duties by the Board would cause the Plan not to comply with the requirements of Rule 16b-3;
and (ii) only the Committee (or another committee of the Board comprised of directors who qualify as independent directors within
the meaning of the independence rules of any applicable securities exchange where the Shares are then listed) may grant Awards to Directors
who are not also employees of the Company or an Affiliate.
(d) Indemnification.
To the full extent permitted by law, (i) no member of the Board, the Committee or any person to whom the Committee delegates authority
under the Plan shall be liable for any action or determination taken or made in good faith with respect to the Plan or any Award made
under the Plan, and (ii) the members of the Board, the Committee and each person to whom the Committee delegates authority under
the Plan shall be entitled to indemnification by the Company with regard to such actions and determinations. The provisions of this paragraph
shall be in addition to such other rights of indemnification as a member of the Board, the Committee or any other person may have by virtue
of such person’s position with the Company.
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Section 4. Shares
Available for Awards
(a) Shares
Available.
(i) Subject
to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under all Awards under the
Plan shall equal the sum of: (A) 10,693,450, plus (B) the Prior Plan Unallocated Pool, plus (C) any Shares subject to any outstanding
award under the Prior Plan that, after the Effective Time, are not purchased or are forfeited or reacquired by the Company, or otherwise
not delivered to the Participant due to termination or cancellation of such award, subject to the share counting provisions of Section 4(b)
below.
(ii) On
and after Effective Time, grants of new awards were permanently discontinued under the Prior Plan, but immediately after the Effective
Time all outstanding awards previously granted under the Prior Plan remained outstanding and subject to the terms of the Prior Plan.
(iii) Awards
issued under the Plan after the Effective Time but before the adoption of this amended and restated Plan shall continue to be governed
by the terms and conditions of the Plan in effect as of the Effective Time.
(b) Counting
Shares. Except as set forth in this Section 4(b) below, if an Award entitles the holder thereof to receive or purchase Shares,
the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against
the aggregate number of Shares available for granting Awards under the Plan.
(i) Shares
Added Back to Reserve. Subject to the limitations in Section 4(b)(ii) below, if any Shares covered by an Award or to
which an Award relates are not purchased or are forfeited or are reacquired by the Company, or if an Award otherwise terminates or is
cancelled without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the
Plan with respect to such Award, to the extent of any such forfeiture, reacquisition by the Company, termination or cancellation, shall
again be available for granting Awards under the Plan.
(ii) Shares
Not Added Back to Reserve. Notwithstanding anything to the contrary in Section 4(b)(i) above, the following Shares will not
again become available for issuance under the Plan: (A) any Shares which would have been issued upon any exercise of an Option but
for the fact that the exercise price was paid by a “net exercise” pursuant to Section 6(a)(iii)(B) or any Shares tendered
in payment of the exercise price of an Option; (B) any Shares withheld by the Company or Shares tendered to satisfy any tax withholding
obligation with respect to an Award; (C) Shares covered by a stock-settled Stock Appreciation Right issued under the
Plan that are not issued in connection with settlement in Shares upon exercise; or (D) Shares that are repurchased by the Company
using Option exercise proceeds.
(iii) Cash-Only
Awards. Awards that do not entitle the holder thereof to receive or purchase Shares shall not be counted against the aggregate
number of Shares available for Awards under the Plan.
(iv) Substitute
Awards Relating to Acquired Entities. Shares issued under Awards granted in substitution for awards previously granted by an entity
that is acquired by or merged with the Company or an Affiliate shall not be counted against the aggregate number of Shares available for
Awards under the Plan.
(c) Adjustments.
In the event that any dividend (other than a regular cash dividend) or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that
an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or other property) that thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards, (iii) the purchase price or exercise
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price
with respect to any Award and (iv) the limitations contained in Section 4(d)(i) below; provided,
however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number. Such adjustment
shall be made by the Committee or the Board, whose determination in that respect shall be final, binding and conclusive.
(d) Annual
Limitation for Compensation Granted to Non-Employee
Directors. The maximum value of all equity and cash-based compensation granted to a Director who is not also an employee
of the Company or an Affiliate cannot exceed $500,000 in any calendar year (and for this purpose equity value is determined using grant
date value under applicable financial accounting rules). Furthermore, the Committee may make exceptions to this limit in extraordinary
circumstances, as the Committee may determine in its discretion, for a non-executive chair of the Board, provided that the
non-employee director receiving such additional compensation may not participate in the decision to award such compensation.
Section 5. Eligibility
Any
Eligible Person shall be eligible to be designated as a Participant. In determining which Eligible Persons shall receive an Award and
the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their
present and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem
relevant. Notwithstanding the foregoing, an Incentive Stock Option may only be granted to full-time or part-time
employees (which term as used herein includes, without limitation, officers and Directors who are also employees), and an Incentive Stock
Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the
Company within the meaning of Section 424(f) of the Code or any successor provision.
Section 6. Awards
(a) Options.
The Committee is hereby authorized to grant Options to Eligible Persons with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Exercise
Price. The purchase price per Share purchasable under an Option shall be determined by the Committee and shall not be less than
one hundred percent (100%) of the Fair Market Value of a Share on the date of grant of such Option; provided,
however, that the Committee may designate a purchase price below Fair Market Value on the date of grant if the Option is granted
in substitution for a stock option previously granted by an entity that is acquired by or merged with the Company or an Affiliate.
(ii) Option
Term. The term of each Option shall be fixed by the Committee at the date of grant but shall not be longer than 10 years from
the date of grant.
(iii) Time
and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised within the Option term,
either in whole or in part, and the method of exercise, except that any exercise price tendered shall be in either cash, Shares having
a Fair Market Value on the exercise date equal to the applicable exercise price or a combination thereof, as determined by the Committee.
(A) Promissory
Notes. For avoidance of doubt, the Committee may not accept a promissory note as consideration.
(B) Net
Exercises. The terms of any Option may be written to permit the Option to be exercised by delivering to the Participant a number
of Shares having an aggregate Fair Market Value (determined as of the date of exercise) equal to the excess, if any, of the Fair Market
Value of the Shares underlying the Option being exercised, on the date of exercise, over the exercise price of the Option for such Shares.
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(iv) Incentive
Stock Options. Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant
of stock options which are intended to qualify as Incentive Stock Options:
(A) To
the extent that the aggregate Fair Market Value (determined at the time of grant) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and any Affiliates)
exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options,
the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply
with such rules will be treated as Non-Qualified Stock Options, notwithstanding any contrary provision of the applicable
Award Agreement(s).
(B) All
Incentive Stock Options must be granted within ten years from the earlier of the date on which this Plan was adopted by the Board or the
date this Plan was approved by the stockholders of the Company.
(C) Unless
sooner exercised, all Incentive Stock Options shall expire and no longer be exercisable no later than ten (10) years after the date of
grant; provided, however, that in the case of a grant of an Incentive Stock
Option to a Participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) stock possessing
more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of its Affiliates, such Incentive
Stock Option shall expire and no longer be exercisable no later than five (5) years from the date of grant.
(D) The
purchase price per Share for an Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of a
Share on the date of grant of the Incentive Stock Option; provided, however,
that, in the case of the grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (within the
meaning of Section 422 of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or of its Affiliates, the purchase price per Share purchasable under an Incentive Stock Option shall be not less
than one hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option.
(E) Any
Incentive Stock Option authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, but shall
in all events be consistent with and contain all provisions required in order to qualify the Option as an Incentive Stock Option.
(b) Stock
Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Persons subject to the terms
of the Plan and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a
right to receive upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee, which price shall not be less than one hundred percent (100%)
of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right; provided,
however, that the Committee may designate a grant price below Fair Market Value on the date of grant if the Stock Appreciation
Right is granted in substitution for a stock appreciation right previously granted by an entity that is acquired by or merged with the
Company or an Affiliate. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise,
dates of exercise, methods of settlement and any other terms and conditions of any Stock Appreciation Right shall be as determined by
the Committee (except that the term of each Stock Appreciation Right shall be subject to the term limitation in Section 6(a)(ii) applicable
to Options). The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate.
(c) Restricted
Stock and Restricted Stock Units. The Committee is hereby authorized to grant an Award of Restricted Stock and Restricted Stock
Units to Eligible Persons with the following terms and conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i) Restrictions.
Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without
limitation, any limitation on the right
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to
vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions
may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate.
For purposes of clarity and without limiting the Committee’s general authority under Section 3(a), vesting of such Awards may,
at the Committee’s discretion, be conditioned upon the Participant’s completion of a specified period of service with the
Company or an Affiliate, or upon the achievement of one or more performance goals established by the Committee, or upon any combination
of service-based and performance-based conditions (subject to the minimum requirements in Section 6). Notwithstanding
the foregoing, rights to dividend or Dividend Equivalent payments shall be subject to the limitations described in Section 6(d).
(ii) Issuance
and Delivery of Shares. Any Restricted Stock granted under the Plan shall be issued at the time such Awards are granted and may
be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock
certificate or certificates, which certificate or certificates shall be held by the Company or held in nominee name by the stock transfer
agent or brokerage service selected by the Company to provide such services for the Plan. Shares representing Restricted Stock that are
no longer subject to restrictions shall be delivered (including by updating the book-entry registration) to the Participant
promptly after the applicable restrictions lapse or are waived. In the case of Restricted Stock Units, no Shares shall be issued at the
time such Awards are granted. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing
the right to receive Shares, such Shares shall be issued and delivered to the holder of the Restricted Stock Units.
(d) Dividend
Equivalents. The Committee is hereby authorized to grant Dividend Equivalents to Eligible Persons under which the Participant shall
be entitled to receive payments (in cash, Shares, other securities, other Awards or other property as determined in the discretion of
the Committee) equivalent to the amount of cash dividends paid by the Company to holders of Shares with respect to a number of Shares
determined by the Committee. Subject to the terms of the Plan and any applicable Award Agreement, such Dividend Equivalents may have such
terms and conditions as the Committee shall determine. Notwithstanding the foregoing, (i) the Committee may not grant Dividend Equivalents
to Eligible Persons in connection with grants of Options, Stock Appreciation Rights or other Awards the value of which is based solely
on an increase in the value of the Shares after the grant of such Award, and (ii) dividend and Dividend Equivalent amounts with respect
to any Share underlying any other Award may be accrued but not paid to a Participant until all conditions or restrictions relating to
such Share have been satisfied, waived or lapsed.
(e) Other
Stock-Based Awards.
The Committee is hereby authorized to grant to Eligible Persons such other Awards that are denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares),
as are deemed by the Committee to be consistent with the purpose of the Plan. The Committee shall determine the terms and conditions of
such Awards, subject to the terms of the Plan and any applicable Award Agreement. No Award issued under this Section 6(e) shall contain
a purchase right or an option-like exercise feature.
(f) General.
(i) Consideration
for Awards. Awards may be granted for no cash consideration or for any cash or other consideration as may be determined by the
Committee or required by applicable law.
(ii) Awards
May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to,
in tandem with or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards
granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any other plan of the Company
or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
(iii) Forms
of Payment under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made
by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall
determine (including, without limitation, cash, Shares, other securities (but excluding promissory notes), other
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Awards
or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis,
in each case in accordance with rules and procedures established by the Committee, in each case, as set forth in the applicable Award
Agreement.
(iv) Limits
on Transfer of Awards. No Award (other than fully vested and unrestricted Shares issued pursuant to any Award) and no right under
any such Award shall be transferable by a Participant other than by will or by the laws of descent and distribution, and no Award (other
than fully vested and unrestricted Shares issued pursuant to any Award) or right under any such Award may be pledged, alienated, attached
or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against
the Company or any Affiliate. Notwithstanding the foregoing, the Committee may permit the transfer of an Award to family members if such
transfer is for no value and in accordance with the rules of Form S-8. The Committee may also establish procedures as
it deems appropriate for a Participant to designate a person or persons, as beneficiary or beneficiaries, to exercise the rights of the
Participant and receive any property distributable with respect to any Award in the event of the Participant’s death.
(v) Restrictions;
Securities Exchange Listing. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such restrictions as the Committee may deem advisable under the Plan, applicable federal or state securities laws
and regulatory requirements, and the Committee may cause appropriate entries to be made with respect to, or legends to be placed on the
certificates for, such Shares or other securities to reflect such restrictions. The Company shall not be required to deliver any Shares
or other securities covered by an Award unless and until the requirements of any federal or state securities or other laws, rules or regulations
(including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.
(vi) Prohibition
on Option and Stock Appreciation Right Repricing. Except as provided in Section 4(c) hereof, the Committee may not, without
prior approval of the Company’s stockholders, seek to effect any re-pricing of any previously granted, “underwater”
Option or Stock Appreciation Right by: (i) amending or modifying the terms of the Option or Stock Appreciation Right to lower the
exercise price; (ii) canceling the underwater Option or Stock Appreciation Right and granting either (A) replacement Options
or Stock Appreciation Rights having a lower exercise price; or (B) Restricted Stock, Restricted Stock Units or Other Stock-Based
Award in exchange; or (iii) cancelling or repurchasing the underwater Option or Stock Appreciation Right for cash or other securities.
An Option or Stock Appreciation Right will be deemed to be “underwater” at any time when the Fair Market Value of the Shares
covered by such Option or Stock Appreciation Right is less than the exercise price.
(vii) Minimum
Vesting. Except as provided below, no Award shall be granted with terms providing for any right of exercise or lapse of any vesting
obligations earlier than a date that is at least one (1) year following the date of grant (or, in the case of vesting based upon
performance-based objectives, exercise and vesting restrictions cannot lapse earlier than the one (1) year anniversary measured
from the commencement of the period over which performance is evaluated); provided,
however, that the Award Agreement may provide for acceleration or waiver of the minimum restrictions upon a change in control solely
in accordance with paragraph (viii) below or upon the Participant’s death or disability. Notwithstanding the foregoing, the
following Awards that do not comply with the one (1) year minimum exercise and vesting requirements may be issued:
(A) substitute
Awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction
entered into by the Company or any of its subsidiaries;
(B) shares
delivered in lieu of fully vested cash Awards or any cash incentive compensation earned by a Participant, provided that the performance
period for such incentive compensation was at least one fiscal year;
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(C) Awards
issued to non-employee Directors that provide for a right of exercise or lapse of any vesting obligations no earlier than
the next annual stockholder meeting date following the grant date, so long as the next annual stockholder meeting date is at least fifty
(50) weeks after the immediately preceding annual meeting date; and
(D) any
additional Awards the Committee may grant, up to a maximum of five percent (5%) of the aggregate number of Shares available for issuance
under this Plan. For purposes of counting Shares against the five percent (5%) limitation, the Share counting rules under Section 4
of the Plan apply.
Nothing
in this Section 6 shall limit the authority of the Committee to amend or modify any Award to accelerate the exercisability of any
Award or the lapse of any restrictions relating to any Award except where expressly limited in Section 6(f)(viii).
(viii) Limits
on Acceleration or Waiver of Restrictions. Neither the Committee in its discretion nor an Award Agreement by operation of its terms
may accelerate the exercisability of any Award or the lapse of restrictions relating to any Award in connection with a change in control
or any other corporate transaction described in Section 7(b), except:
(A) to
the extent that the definitive agreement among the parties to a change in control contemplates that the acquiring or surviving entity
will not assume the Awards and replace the Shares issuable thereunder with replacement equity securities with the same pre-transaction
economic value and Award terms (and aggregate spread, in the case of Options or Stock Appreciation Rights), any Awards then outstanding
shall vest and be paid upon the consummation of (or effective immediately prior to the consummation of, provided that the consummation
subsequently occurs) the change in control. In the case of a performance-based Award, the payout shall be calculated assuming
target level performance has been achieved;
(B) to
the extent that the definitive agreement among the parties to a change in control contemplates that the acquiring or surviving entity
will assume the Awards and replace the Shares issuable thereunder with replacement equity securities with the same pre-transaction
economic value and Award terms (and aggregate spread, in the case of Options or Stock Appreciation Rights), then no Awards shall vest
solely on account of the consummation of the change in control, but shall vest on account of any one of the following events that occurs
to the Participant upon or following the change in control: (1) death; (2) disability; (3) termination without cause (or,
in the case of a non-employee Director, the termination of such individual’s Board service on account of being removed
from such role or otherwise not being asked to stand for re-election) within a period following the change in control specified
in the Award Agreement not to exceed 24 months; or (4) resignation for good reason within a period following the change
in control specified in the Award Agreement not to exceed 24 months (and in the case of a performance-based
Award, the payout under (1) through (4) shall be calculated assuming target level performance has been achieved).
(ix) Section 409A
Provisions. Notwithstanding anything in the Plan or any Award Agreement to the contrary, to the extent that any amount or benefit
that constitutes “deferred compensation” to a Participant under Section 409A and applicable guidance thereunder is otherwise
payable or distributable to a Participant under the Plan or any Award Agreement solely by reason of the occurrence of a change in control
or due to the Participant’s disability or “separation from service” (as such term is defined under Section 409A),
such amount or benefit will not be payable or distributable to the Participant by reason of such circumstance unless the Committee determines
in good faith that (i) the circumstances giving rise to such change in control event, disability or separation from service meet
the definition of a change in control event, disability, or separation from service, as the case may be, in Section 409A(a)(2)(A)
of the Code and applicable proposed or final regulations, or (ii) the payment or distribution of such amount or benefit would be
exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise. Any payment
or distribution that otherwise would be made to a Participant who is a Specified Employee (as determined by the Committee in good faith)
on account of separation from service may not be
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made
before the date which is six months after the date of the Specified Employee’s separation from service (or if earlier, upon the
Specified Employee’s death) unless the payment or distribution is exempt from the application of Section 409A by reason of
the short-term deferral exemption or otherwise.
Section 7. Amendment
and Termination; Corrections
(a) Amendments
to the Plan and Awards. The Board may from time to time amend, suspend or terminate this Plan, and the Committee may amend the
terms of any previously granted Award, provided that no amendment to the terms of any previously granted Award may (except as expressly
provided in the Plan) adversely alter or impair the terms or conditions of the Award previously granted to a Participant under this Plan
without the written consent of the Participant or holder thereof. Any amendment to this Plan, or to the terms of any Award previously
granted, is subject to compliance with all applicable laws, rules, regulations and policies of any applicable governmental entity or securities
exchange, including receipt of any required approval from the governmental entity or stock exchange. For greater certainty and without
limiting the foregoing, the Board may amend, suspend, terminate or discontinue the Plan, and the Committee may amend or alter any previously
granted Award, as applicable, without obtaining the approval of stockholders of the Company in order to:
(i) amend
the eligibility for, and limitations or conditions imposed upon, participation in the Plan;
(ii) subject
to the limitations in Section 6, amend any terms relating to the granting or exercise of Awards, including but not limited to terms
relating to the amount and payment of the exercise price, or the vesting, expiry, assignment or adjustment of Awards, or otherwise waive
any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively;
(iii) make
changes that are necessary or desirable to comply with applicable laws, rules, regulations and policies of any applicable governmental
entity or stock exchange (including amendments to Awards necessary or desirable to maximize any available tax deduction or to avoid any
adverse tax results, and no action taken to comply with such laws, rules, regulations and policies shall be deemed to impair or otherwise
adversely alter or impair the rights of any holder of an Award or beneficiary thereof); or
(iv) amend
any terms relating to the administration of the Plan, including the terms of any administrative guidelines or other rules related to the
Plan.
For
greater certainty and except as provided in Section 4(c), prior approval of the stockholders of the Company shall be required for
any amendment to the Plan or an Award that would:
(I) require
stockholder approval under the rules or regulations of the Securities and Exchange Commission or any securities exchange that is applicable
to the Company;
(II) increase
the number of shares authorized under the Plan as specified in Section 4(a) of the Plan;
(III) permit
repricing of Options or Stock Appreciation Rights, which is currently prohibited by Section 6 of the Plan;
(IV) permit
the award of Options or Stock Appreciation Rights at a price less than one hundred percent (100%) of the Fair Market Value of a Share
on the date of grant of such Option or Stock Appreciation Right, contrary to the provisions of Section 6(a)(i) and Section 6(b)
of the Plan;
(V) increase
the maximum term permitted for Options and Stock Appreciation Rights as specified in Section 6(a) and Section 6(b); or
(VI) increase
the annual limitation contained in Section 4(d) of the Plan.
(b) Corporate
Transactions. Nothing in this Section 7(b) is intended to override any limitation on the Committee, the Board or any Award
terms under Section 6. In the event of any reorganization, merger, consolidation, split-up, spin-off, combination,
plan of arrangement, take-over bid or tender offer, repurchase or exchange of Shares or other securities of the Company or
any other similar corporate transaction or event involving the Company (or the Company shall enter into a written agreement to undergo
such a transaction or event), the Committee or the Board
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may,
in its sole discretion but subject to the limitations in Section 6 (e.g.,
limitations on re-pricing and limitations on acceleration of vesting and waiver of related restrictions), provide for any
of the following to be effective upon the consummation of the event (or effective immediately prior to the consummation of the event,
provided that the consummation of the event subsequently occurs), and no action taken under this Section 7(b) shall be deemed to
impair or otherwise adversely alter or impair the rights of any holder of an Award or beneficiary thereof:
(i) either
(A) termination of any Award, whether or not vested, in exchange for an amount of cash and/or other property, if any, equal to the
amount that would have been attained upon the exercise of the vested portion of the Award or realization of the Participant’s vested
rights (and, for the avoidance of doubt, if, as of the date of the occurrence of the transaction or event described in this Section 7(b)(i)(A),
the Committee or the Board determines in good faith that no amount would have been attained upon the exercise of the Award or realization
of the Participant’s rights, then the Award may be terminated by the Company without any payment) or (B) the replacement of
the Award with other rights or property selected by the Committee or the Board, in its sole discretion;
(ii) that
the Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar
options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; or
(iii) that
the Award cannot vest, be exercised or become payable (and therefore terminate) after a date certain in the future, which may be the effective
date of the event.
(c) Correction
of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency
in the Plan or in any Award or Award Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness
of the Plan.
Section 8. Income
Tax Withholding
In
order to comply with all applicable federal, state, local or foreign income tax laws or regulations, the Company may take such action
as it deems appropriate to ensure that all applicable federal, state, local or foreign payroll, withholding, income or other taxes, which
are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant. Without limiting the foregoing,
for avoidance of doubt, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit
the Participant to satisfy such tax obligation by (a) electing to have the Company withhold a portion of the Shares otherwise to
be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount
of such taxes (subject to any limitations required by ASC Topic 718 to avoid adverse accounting treatment); (b) delivering to the
Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes or (c) by any other means set forth in the applicable Award Agreement.
Section 9. General
Provisions
(a) No
Rights to Awards. No Eligible Person, Participant or other person shall have any claim to be granted any Award under the Plan,
and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the
Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.
(b) Award
Agreements. No Participant shall have rights under an Award granted to such Participant unless and until an Award Agreement shall
have been signed by the Participant (if requested by the Company), or until such Award Agreement is delivered and accepted through an
electronic medium in accordance with procedures established by the Company. An Award Agreement need not be signed by a representative
of the Company unless required by the Committee. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan
and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.
(c) Plan
Provisions Control. In the event that any provision of an Award Agreement conflicts with or is inconsistent in any respect with
the terms of the Plan as set forth herein or subsequently amended, the terms of the Plan shall control.
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(d) No
Rights of Stockholders. Except with respect to Shares issued under Awards (and subject to such conditions as the Committee may
impose on such Awards), neither a Participant nor the Participant’s legal representative shall be, or have any of the rights and
privileges of, a stockholder of the Company with respect to any Shares issuable upon the exercise or payment of any Award, in whole or
in part, unless and until such Shares have been issued.
(e) No
Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation plans or arrangements, and such plans or arrangements may be either generally
applicable or applicable only in specific cases.
(f) No
Right to Employment or Directorship. The grant of an Award shall not be construed as giving a Participant the right to be retained
as an employee of the Company or any Affiliate, or the right to be retained as a Director, nor will it affect in any way the right of
the Company or an Affiliate to terminate a Participant’s employment at any time, with or without cause, or remove a Director in
accordance with applicable law. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment, or remove
a Director who is a Participant, free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided
in the Plan or in any Award Agreement. Nothing in this Plan shall confer on any person any legal or equitable right against the Company
or any Affiliate, directly or indirectly, or give rise to any cause of action at law or in equity against the Company or an Affiliate.
Under no circumstances shall any person ceasing to be an employee or Director of the Company or any Affiliate be entitled to any compensation
for any loss of any right or benefit under the Plan which such employee or Director might otherwise have enjoyed but for termination of
employment or directorship, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract
or otherwise. By participating in the Plan, each Participant shall be deemed to have accepted all the conditions of the Plan and the terms
and conditions of any rules and regulations adopted by the Committee and shall be fully bound thereby.
(g) Governing
Law. The internal law, and not the law of conflicts, of the State of Delaware shall govern all questions concerning the validity,
construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award.
(h) Severability.
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially
altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder
of the Plan or any such Award shall remain in full force and effect.
(i) No
Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind
or a fiduciary relationship between the Company or any Affiliate and a Participant or any other person. To the extent that any person
acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right
of any unsecured general creditor of the Company or any Affiliate.
(j) Other
Benefits. No compensation or benefit awarded to or realized by any Participant under the Plan shall be included for the purpose
of computing such Participant’s compensation or benefits under any pension, retirement, savings, profit sharing, group insurance,
disability, severance, termination pay, welfare or other benefit plan of the Company, unless required by law or otherwise provided by
such other plan.
(k) No
Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash shall be paid in lieu of any fractional Share or whether such fractional Share or any rights thereto shall be canceled,
terminated or otherwise eliminated.
(l) Headings.
Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
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Section 10. Clawback
or Recoupment
All
Awards under this Plan shall be subject to forfeiture or other penalties pursuant to any Company clawback policy, as may be adopted or
amended from time to time, and such forfeiture and/or penalty conditions or provisions as determined by the Committee.
Section 11. Effective
Date of the Plan
The
Plan was originally adopted by the Board on July 23, 2021 and became effective when approved by the stockholders of the Company
on August 11, 2021. The amendments to the Plan made under this Amended and Restated 2021 Stock Incentive Plan were adopted
by the Board on February 8, 2022, and April 27, 2022 and shall be subject to approval by the stockholders of
the Company at the annual meeting of stockholders of the Company to be held on June 21, 2022, and such amendments shall be
effective as of the date of such stockholder approval.
Section 12. Term
of the Plan
No
Award shall be granted under the Plan, and the Plan shall terminate, on the tenth anniversary of the earlier of the date of initial adoption
of the Plan by the Board or date of initial approval by the Company’s stockholders or any earlier date of discontinuation or termination
established pursuant to Section 7(a) of the Plan. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement,
any Award theretofore granted may extend beyond such dates, and the authority of the Committee provided for hereunder with respect to
the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend beyond the termination of the Plan.
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AIRSPAN
NETWORKS HOLDINGS INC.
AMENDED AND RESTATED 2021 STOCK INCENTIVE PLAN
SUB-PLAN FOR ISRAELI PARTICIPANTS
1. GENERAL
1.1 This
Sub-Plan (the “Sub-Plan”)
shall apply only to Participants who are tax residents of the State of Israel on the date of the grant of the Award, as defined below
in Section 2, and are engaged by an Israeli resident Affiliate (collectively, “Israeli
Participants”). The provisions specified hereunder shall form an integral part of the Airspan Networks Holdings Inc. 2021
Stock Incentive Plan (hereinafter the “Plan”).
1.2 This
Sub-Plan is adopted pursuant to the authority of the Committee under Section 3(a) of the Plan. This Sub-Plan
is to be read as a continuation of the Plan and applies to Awards granted to Israeli Participants only to the extent necessary to comply
with the requirements set by Israeli law, and in particular, with the provisions of the Israeli Income Tax Ordinance [New Version] 1961,
as may be amended or replaced from time to time. This Sub-Plan does not add to or modify the Plan in respect of any other
category of Participants.
1.3 The
Plan and this Sub-Plan are complimentary to each other and shall be deemed as one. In the event of any conflict, whether
explicit or implied, between the provisions of this Sub-Plan and the Plan, the provisions set out in the Sub-Plan
shall prevail to the extent necessary to comply with the requirements set by the Israeli law in general, and in particular, with the provisions
of the Israeli Income Tax Ordinance [New Version] 1961, as may be amended or replaced from time to time.
1.4 Any
capitalized term not specifically defined in this Sub-Plan shall be construed according to the interpretation given to it
in the Plan.
2. DEFINITIONS
2.1 “102
Award” means any Award intended to qualify (as determined by the Committee and/or the Israeli Award Agreement and/or a tax
ruling from the ITA) and which qualifies as an award under Section 102, issued to an Approved Israeli Participant.
2.2 “Applicable
Law” shall mean any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or
decree of any federal, provincial, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and
the rules and regulations of any stock exchange, over-the-counter market or trading system on which the Shares are then traded
or listed.
2.3 “Approved
Israeli Participant” means an Israeli Participant who is an employee, director or an officer of an Employer, excluding any
Controlling Share Holder of the Company.
2.4 “Award”
means any Award granted under the Plan settled in Shares and which will not be capable of being settled in cash including pursuant to
Section 6(f)(iii) of the Plan.
2.5 “Capital
Gain Award” means a Trustee 102 Award elected and designated by the Company to qualify under the capital gain tax treatment
in accordance with the provisions of Sections 102(b)(2) and 102(b)(3) of the Ordinance.
2.6 “Controlling
Share Holder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.
2.7 “Employer”
means, for purpose of a Trustee 102 Award, an Israeli resident Affiliate of the Company which is an “employing company” within
the meaning and subject to the conditions of Section 102(a) of the Ordinance.
2.8 “Israeli
Award Agreement” means the Award Agreement between the Company and an Israeli Participant that sets out the terms and conditions
of an Award.
2.9 “ITA”
means the Israeli Tax Authority.
2.10 “Non-Trustee
102 Award” means a 102 Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.
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2.11 “Ordinance”
means the Israeli Income Tax Ordinance [New Version] – 1961, as now in effect or as hereafter amended.
2.12 “Ordinary
Income Award” means a Trustee 102 Award elected and designated by the Company to qualify under the ordinary income tax treatment
in accordance with the provisions of Section 102(b)(1) of the Ordinance.
2.13 “Rules”
means the Income Tax Rules (Tax Benefits in Stock Issuance to Employees) 5763-2003.
2.14 “Section 102”
means Section 102 of the Ordinance and any regulations, rules, orders or procedures promulgated thereunder as now in effect or as
hereafter amended.
2.15 “Tax”
means any applicable tax and other compulsory payments, such as any social security and health tax contributions under any Applicable
Law.
2.16 “Trust
Agreement” means the agreement to be signed between the Company, and/or Employer and the Trustee for the purposes of Section 102.
2.17 “Trustee”
means any person or entity appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions
of Section 102(a) of the Ordinance, as may be replaced from time to time.
2.18 “Trustee
102 Award” means a 102 Award granted to an Approved Israeli Participant pursuant to Section 102(b) of the Ordinance
and held in trust by a Trustee for the benefit of an Approved Israeli Participant.
2.19 “Unapproved
Israeli Participant” means an Israeli Participant who is not an Approved Israeli Participant, including a Consultant or a
Controlling Share Holder of the Company.
3. ISSUANCE
OF AWARDS
3.1 The
persons eligible for participation in the Plan as Israeli Participants shall include Approved Israeli Participants and Unapproved Israeli
Participants, provided, however, that only Approved Israeli Participants may be granted 102 Awards.
3.2 The
Committee may designate Awards granted to Approved Israeli Participants pursuant to Section 102 as Trustee 102 Awards or Non-Trustee
102 Awards.
3.3 The
grant of Trustee 102 Awards shall be subject to this Sub-Plan and shall not become effective prior to the lapse of 30 days
from the date the Plan has been submitted for approval by the ITA and shall be conditioned upon the approval of the Plan and this Sub-Plan
by the ITA.
3.4 Trustee
102 Awards may either be classified as Capital Gain Awards or Ordinary Income Awards.
3.5 No
Trustee 102 Award may be granted under this Sub-Plan to any Approved Israeli Participant, unless and until the Company has
filed with the ITA its election regarding the type of Trustee 102 Awards, whether Capital Gain Awards or Ordinary Income Awards, that
will be granted under the Plan and this Sub-Plan (the “Election”).
Such Election shall become effective beginning the first date of grant of a Trustee 102 Award under this Sub-Plan and shall
remain in effect at least until the end of the year following the year during which the Company first granted Trustee 102 Awards. The
Election shall obligate the Company to grant only the type of Trustee 102 Award it has elected, and shall apply to all Israeli Participants
who are granted Trustee 102 Awards during the period indicated herein, all in accordance with the provisions of Section 102(g) of
the Ordinance. For the avoidance of doubt, the Election shall not prevent the Company from granting Non-Trustee 102 Awards
simultaneously.
3.6 All
Trustee 102 Awards must be held in trust by, or subject to the approval of the ITA, under the control or supervision of a Trustee, as
described in Section 5 below.
3.7 The
designation of Non-Trustee 102 Awards and Trustee 102 Awards shall be subject to the terms and conditions set forth in Section 102.
3.8 Awards
granted to Unapproved Israeli Participants shall be subject to tax according to the provisions of the Ordinance and shall not be subject
to the Trustee arrangement detailed herein.
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4. 102
AWARD GRANT DATE
Each
102 Award will be deemed granted on the date determined by the Committee, subject to the provisions of the Plan, provided that and subject
to (i) the Israeli Participant has signed all documents required by the Company or Applicable Law, and (ii) with respect to
any Trustee 102 Award, the Company has provided all applicable documents to the Trustee in accordance with the guidelines published by
the ITA such that if the guidelines are not met the Award will be considered as granted on the date determined by the Committee as a Non-Trustee
Award.
5. TRUSTEE
5.1 Trustee
102 Awards which shall be granted under this Sub-Plan and/or any Shares allocated or issued upon the grant, vesting or exercise
of a Trustee 102 Award and/or other Shares received following any realization of rights under the Plan, shall be allocated or issued to
the Trustee or controlled by the Trustee, for the benefit of the Approved Israeli Participants, in accordance with the provisions of Section 102.
In the event the requirements for Trustee 102 Awards are not met, the Trustee 102 Awards may be regarded as Non-Trustee 102
Awards or as Awards which are not subject to Section 102, all in accordance with the provisions of Section 102.
5.2 With
respect to any Trustee 102 Award, subject to the provisions of Section 102, an Approved Israeli Participant shall not sell or release
from trust any Shares received upon the grant, vesting or exercise of a Trustee 102 Award and/or any Shares received following any realization
of rights, including, without limitation, stock dividends, under the Plan at least until the lapse of the period of time required under
Section 102 or any shorter period of time determined by the ITA (the “Holding
Period”). Notwithstanding the foregoing, if any such sale or release occurs during the Holding Period, the sanctions under
Section 102 shall apply to and shall be borne by such Approved Israeli Participant.
5.3 Notwithstanding
anything to the contrary, the Trustee shall not release or sell any Shares allocated or issued upon the grant, vesting or exercise of
a Trustee 102 Award unless the Company, its Israeli Affiliate and the Trustee are satisfied that the full amounts of any Tax due have
been paid or will be paid.
5.4 Upon
receipt of any Trustee 102 Award, the Approved Israeli Participant will consent to the grant of such Award under Section 102 and
undertake to comply with the terms of Section 102 and the trust arrangement between the Company and the Trustee.
6. WRITTEN
PARTICIPANT UNDERTAKING
6.1 With
respect to any Trustee 102 Award, as required by Section 102 and the Rules, by virtue of the receipt of such Award, the Israeli Participant
is deemed to have provided, undertaken and confirmed the following written undertaking (and such undertaking is deemed incorporated into
any documents entered into by the Israeli Participant in connection with the grant of such Award), and which undertaking shall be deemed
to apply and relate to all Trustee 102 Awards granted to the Israeli Participant, whether under the Plan and this Sub-Plan
or other plans maintained by the Company, and whether prior to or after the date hereof:
6.1.1 The
Israeli Participant shall comply with all terms and conditions set forth in Section 102 with regard to the Capital Gain Awards or
Ordinary Income Awards, as applicable, and the applicable rules and regulations promulgated thereunder, as amended from time to time;
6.1.2 The
Israeli Participant is familiar with, and understands the provisions of, Section 102 in general, and the tax arrangement under the
Capital Gain Awards or Ordinary Income Awards in particular, and its tax consequences; the Israeli Participant agrees that the Trustee
102 Awards and any Shares that may be issued upon vesting or (if applicable) exercise of the Trustee 102 Awards (or otherwise in relation
to such Awards), will be held by a Trustee appointed pursuant to Section 102 for at least the duration of the Holding Period under
the Capital Gain Awards or Ordinary Income Awards, as applicable. The Israeli Participant understands that any release of such Trustee
102 Awards or Shares from trust, or any sale of the Shares prior to the termination of the Holding Period, will result in taxation at
the marginal tax rate, in addition to deductions of any appropriate income tax, social security, health tax contributions or other compulsory
payments; and
6.1.3 The
Israeli Participant agrees to the Trust Agreement entered into by and between the Company, the Employer and the Trustee appointed pursuant
to Section 102.
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7. THE
AWARDS
The
terms and conditions upon which Awards shall be granted, issued and exercised or vested under this Sub-Plan, shall be specified
in an Israeli Award Agreement to be executed pursuant to the Plan and to this Sub-Plan. Each Israeli Award Agreement shall
provide, inter alia, the number of Shares to which the Award relates, the type of Award granted thereunder (i.e., a Capital Gain Awards
or Ordinary Income Awards or Non-Trustee 102 Award or any Award granted to Unapproved Israeli Participant), and any applicable
vesting provisions and exercise price that may be payable. For the avoidance of doubt, it is clarified that there is no obligation for
uniformity of treatment of Israeli Participants and that the terms and conditions of Awards granted to Israeli Participants need not be
the same with respect to each Israeli Participant (whether or not such Israeli Participants are similarly situated). The grant, vesting
and exercise of Awards granted to Israeli Participants shall be subject to the terms and conditions and, with respect to exercise, the
method, as may be determined by the Committee (including the provisions of the Plan) and, when applicable, by the Trustee, in accordance
with the requirements of Section 102.
8. ASSIGNABILITY,
DESIGNATION AND SALE OF AWARDS
8.1 Notwithstanding
any provision of the Plan, no Award subject to this Sub-Plan or any right with respect thereto, whether fully paid or not,
shall be assignable, transferable or given as collateral, and no right with respect to any such Award shall be given to any third party
whatsoever, and during the lifetime of the Israeli Participant, each and all of such Israeli Participant’s rights with respect to
an Award shall belong only to the Israeli Participant. Any such action made, directly or indirectly, for an immediate or future validation,
shall be void.
8.2 As
long as Awards and/or Shares issued or purchased hereunder are held by the Trustee on behalf of the Israeli Participant, all rights of
the Israeli Participant over the Award and Shares cannot be transferred, assigned, pledged or mortgaged, other than by will or laws of
descent and distribution.
9. INTEGRATION
OF SECTION 102 AND TAX ASSESSING OFFICER’S APPROVAL
9.1 With
regard to Trustee 102 Awards, the provisions of the Plan, the Sub-Plan and/or the Israeli Award Agreement shall be subject
to the provisions of Section 102 and any approval issued by the ITA and the said provisions shall be deemed an integral part of the
Plan, the Sub-Plan and the Israeli Award Agreement.
9.2 Any
provision of Section 102 and/or said approval issued by the ITA, which must be complied with in order to receive and/or to maintain
any tax treatment with respect to an Award pursuant to Section 102, which is not expressly specified in the Plan, the Sub-Plan
or the Israeli Award Agreement, shall be considered binding upon the Company, any Israeli Affiliate and the Israeli Participants. Furthermore,
if any provision of the Plan or Sub-Plan disqualifies Awards that are intended to qualify as 102 Awards from the beneficial
tax treatment pursuant to Section 102, such provision shall not apply to the 102 Awards.
10. TAX
CONSEQUENCES; DISCLAIMER
10.1 Any
tax consequences arising from the grant, purchase, exercise, vesting or sale of any Award issued hereunder, from the payment for or sale
of Shares covered thereby or from any other event or act (of the Company, and/or its Affiliates, and the Trustee or the Israeli Participant),
hereunder, shall be borne solely by the Israeli Participant. The Company and/or its Affiliates, and/or the Trustee shall withhold Tax
according to the requirements of Applicable Laws, rules, and regulations, including withholding taxes at source. Furthermore, the Israeli
Participant agrees to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all
liability for any such Tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold,
or to have withheld, any such Tax from any payment made to the Israeli Participant.
10.2 The
Company and/or, when applicable, the Trustee shall not be required to release any Award or Shares to an Israeli Participant until all
required Tax payments have been fully made.
10.3 Awards
that do not comply with the requirements of Section 102 shall be subject to tax under Section 3(i) or 2 of the Ordinance.
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10.4 With
respect to Non-Trustee 102 Awards, if the Israeli Participant ceases to be employed by the Company or any Affiliate, or otherwise
if so requested by the Company and/or its Affiliates, the Israeli Participant shall extend to the Company and/or its Affiliates a security
or guarantee for the payment of Tax due at the time of the sale of Shares, in accordance with the provisions of Section 102.
10.5 TAX
TREATMENT. THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) DO NOT UNDERTAKE OR ASSUME ANY LIABILITY OR RESPONSIBILITY TO
THE EFFECT THAT ANY AWARD SHALL QUALIFY WITH ANY PARTICULAR TAX REGIME OR RULES APPLYING TO PARTICULAR TAX TREATMENT, OR BENEFIT FROM
ANY PARTICULAR TAX TREATMENT OR TAX ADVANTAGE OF ANY TYPE AND THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) SHALL BEAR NO LIABILITY
IN CONNECTION WITH THE MANNER IN WHICH ANY AWARD IS EVENTUALLY TREATED FOR TAX PURPOSES, REGARDLESS OF WHETHER THE AWARD WAS GRANTED OR
WAS INTENDED TO QUALIFY UNDER ANY PARTICULAR TAX REGIME OR TREATMENT. THIS PROVISION SHALL SUPERSEDE ANY DESIGNATION OF AWARDS OR TAX
QUALIFICATION INDICATED IN ANY CORPORATE RESOLUTION OR AWARD AGREEMENT, WHICH SHALL AT ALL TIMES BE SUBJECT TO THE REQUIREMENTS OF APPLICABLE
LAW. THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) DO NOT UNDERTAKE AND SHALL NOT BE REQUIRED TO TAKE ANY ACTION IN ORDER TO
QUALIFY ANY AWARD WITH THE REQUIREMENTS OF ANY PARTICULAR TAX TREATMENT AND NO INDICATION IN ANY DOCUMENT TO THE EFFECT THAT ANY AWARD
IS INTENDED TO QUALIFY FOR ANY TAX TREATMENT SHALL IMPLY SUCH AN UNDERTAKING. NO ASSURANCE IS MADE BY THE COMPANY AND ANY OF ITS AFFILIATES
(INCLUDING THE EMPLOYER) THAT ANY PARTICULAR TAX TREATMENT ON THE DATE OF GRANT WILL CONTINUE TO EXIST OR THAT THE AWARD WILL QUALIFY
AT THE TIME OF VESTING, EXERCISE OR DISPOSITION THEREOF WITH ANY PARTICULAR TAX TREATMENT. THE COMPANY AND ITS AFFILIATES (INCLUDING THE
EMPLOYER) SHALL NOT HAVE ANY LIABILITY OR OBLIGATION OF ANY NATURE IN THE EVENT THAT AN AWARD DOES NOT QUALIFY FOR ANY PARTICULAR TAX
TREATMENT, REGARDLESS OF WHETHER THE COMPANY OR ITS AFFILIATES (INCLUDING THE EMPLOYER) COULD HAVE TAKEN ANY ACTION TO CAUSE SUCH QUALIFICATION
TO BE MET AND SUCH QUALIFICATION REMAINS AT ALL TIMES AND UNDER ALL CIRCUMSTANCES AT THE RISK OF THE ISRAELI PARTICIPANT. THE COMPANY
AND ITS AFFILIATES (INCLUDING THE EMPLOYER) DO NOT UNDERTAKE OR ASSUME ANY LIABILITY TO CONTEST A DETERMINATION OR INTERPRETATION (WHETHER
WRITTEN OR UNWRITTEN) OF ANY TAX AUTHORITY, INCLUDING IN RESPECT OF THE QUALIFICATION UNDER ANY PARTICULAR TAX REGIME OR RULES APPLYING
TO PARTICULAR TAX TREATMENT. AWARDS THAT DO NOT QUALIFY UNDER ANY PARTICULAR TAX TREATMENT COULD RESULT IN ADVERSE TAX CONSEQUENCES TO
THE ISRAELI PARTICIPANT.
11. ONE
TIME BENEFIT
The
Awards granted hereunder are extraordinary, one-time Awards granted to the Israeli Participants, and are not and shall not
be deemed a salary component for any purpose whatsoever, including but not limited to, in connection with calculating severance compensation
under Applicable Law, nor shall receipt of an Award entitle an Israeli Participant to any future Awards.
12. TERM
OF PLAN AND SUB-PLAN
Notwithstanding
anything to the contrary in the Plan and in addition thereto, the Company shall obtain all approvals for the adoption of this Sub-Plan
or for any amendment to this Sub-Plan as are necessary to comply with any Applicable Law, applicable to Awards granted to
Israeli Participants under this Sub-Plan or with the Company’s incorporation documents.
13. GOVERNING
LAW
Solely
for the purpose of determining the Israeli tax treatment of Awards granted pursuant to this Sub-Plan, this Sub-Plan
shall be governed by, construed and enforced in accordance with the laws of the State of Israel, without reference to conflicts of law
principles.
*
* * * *
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