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UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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(Rule
14a-101)
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
x
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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THE
INVENTURE GROUP, INC.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary
materials.
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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THE INVENTURE GROUP, INC.
5050 N. 40
th
STREET, SUITE #300
PHOENIX, ARIZONA 85018
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 19, 2009
Dear Stockholder:
The 2009 Annual
Meeting of Stockholders (the Annual Meeting) of The Inventure Group, Inc.,
a Delaware corporation (the Company), will be held on May 19, 2009, at
9:00 a.m. local time, at the JW Marriott Desert Ridge Resort &
Spa, 5250 East Marriott Drive, Phoenix, AZ 85054, for the following purposes:
(1)
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To elect the Directors of the Company to serve until the 2010 Annual
Meeting of Stockholders;
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(2)
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To approve an amendment to The Inventure Group, Inc. 2005 Equity
Incentive Plan (as amended, the Plan) to increase the number of shares of
Common Stock authorized for issuance under the Plan by 500,000; and
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(3)
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To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
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The Board of Directors has fixed March 26, 2009
as the record date (the Record Date) for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof. Only shareholders
of record at the close of business on the Record Date are entitled to notice of
and to vote at the Annual Meeting. The stock transfer books will not be closed
for the Annual Meeting.
Your copy of the 2008 Annual Report of the Company is
enclosed.
This notice, the attached Proxy Statement and Proxy,
and the Companys 2008 Annual Report are available on the Companys website at
www.inventuregroup.net by choosing Investors and then the SEC Filings
links.
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By Order of the Board of Directors
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Terry McDaniel
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Chief Executive Officer
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Phoenix,
Arizona
April 17,
2009
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR NOT YOU EXPECT TO ATTEND
THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO PROMPTLY MARK, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED, SELF-ADDRESSED, STAMPED ENVELOPE
SO THAT YOUR SHARES OF STOCK MAY BE REPRESENTED AND VOTED IN ACCORDANCE
WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE ASSURED
AT THE ANNUAL MEETING. YOUR PROXY WILL
BE RETURNED TO YOU IF YOU SHOULD BE PRESENT AT THE ANNUAL MEETING AND SHOULD
REQUEST SUCH RETURN OR IF YOU SHOULD REQUEST SUCH RETURN IN THE MANNER PROVIDED
FOR REVOCATION OF PROXIES ON THE INITIAL PAGES OF THE ENCLOSED PROXY
STATEMENT. PROMPT RESPONSE BY OUR
STOCKHOLDERS WILL REDUCE THE TIME AND EXPENSE OF SOLICITATION.
THE INVENTURE GROUP, INC.
5050 N. 40
th
STREET, SUITE #300
PHOENIX, ARIZONA 85018
PROXY STATEMENT FOR ANNUAL
MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 19,
2009
Solicitation of Proxies; Accompanying Documentation
We are delivering these proxy materials to solicit
proxies on behalf of the Board of Directors of The Inventure Group, Inc.
(which we refer to as the Company, we, or us), for the 2009 Annual
Meeting of Stockholders (the Annual Meeting), including any adjournment or
postponement thereof. The Annual Meeting
will be
held on May 19, 2009
, at 9:00 a.m. local time, at the JW Marriott Desert Ridge Resort & Spa, 5250 East Marriott
Drive, Phoenix, AZ 85054.
Starting on or about April 17, 2009, we are
mailing this proxy statement to shareholders entitled to vote at the Annual
Meeting, together with a form of proxy and voting instruction card (proxy card)
and the Companys Annual Report for the year ended December 27, 2008
(which includes a copy of the Companys Form 10-K for such period,
including audited financial statements, filed with the Securities and Exchange
Commission (the SEC).
Costs of Solicitation
All expenses of the Company in connection with this
solicitation will be borne by the Company.
In addition to the solicitation of proxies by use of the mail, officers,
Directors and employees of the Company may solicit the return of proxies by
personal interview, mail, telephone and/or facsimile. Such persons will not be additionally
compensated, but will be reimbursed for out-of-pocket expenses. The Company will also request brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of shares held of record by such persons and
will reimburse such persons and the Companys transfer agent, American Stock
Transfer & Trust Co., for their reasonable out-of-pocket expenses in
forwarding such material.
Stockholders Entitled to Vote at the Annual Meeting
If you were a registered shareholder at the close of
business on the record date, March 26, 2009 (the Record Date), you are
entitled to receive this notice and to vote at the Annual Meeting. There were 17,884,456 shares of common stock
outstanding on the Record Date. You will
have one vote on each matter properly brought before the Annual Meeting for each
share of Company common stock you own.
How to Vote Your Shares
Your vote is important. Your shares can be voted at
the Annual Meeting only if you are present in person or represented by
proxy. Even if you plan to attend the
Annual Meeting, we urge you to vote in advance.
If you own your shares in record name, you may cast your vote by simply
marking, dating and signing your proxy card, and then returning it to the
Companys transfer agent, American Stock Transfer & Trust Co., in the
postage-paid envelope provided.
Stockholders who hold their shares beneficially in a
street name through a nominee (such as a bank or broker) may be able to vote by
either the telephone or the Internet, as well as by mail. You should follow the instructions you
receive from your nominee to vote these shares.
How to Revoke Your Proxy
You may revoke your proxy at any time before it is
voted at the Annual Meeting by:
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delivering written notice of revocation to: Secretary, The Inventure
Group, Inc., 5050 N. 40
th
Street, Suite 300,
Phoenix, Arizona 85018, at any time before the proxy is voted;
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executing and delivering a later-dated proxy; or
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attending the Annual Meeting and voting by ballot.
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No notice of revocation or later-dated proxy will be
effective, however, until received by the Company at or prior to the Annual
Meeting. Such revocation will not affect
a vote on any matter taken prior to the receipt of such revocation. Your attendance at the Annual Meeting will
not by itself revoke your proxy.
Voting at the Annual Meeting
The method by which you vote
will in no way limit your right to vote at the Annual Meeting if you later
decide to vote in person at the Annual Meeting.
If you hold your shares in a street name, you must obtain a proxy
executed in your favor from your nominee (such as a bank or broker) to be able
to vote at the Annual Meeting.
Your shares will be voted at the Annual Meeting as
directed by the voting instructions on your proxy card if: (1) you are
entitled to vote, (2) your proxy was properly executed, (3) we
received your proxy prior to the Annual Meeting, and (4) you did not
revoke your proxy prior to the Annual Meeting.
The Boards Recommendations
If you send a properly executed proxy without
specific voting instructions, your shares represented by that proxy will be
voted as recommended by the Board of Directors:
·
FOR
the election of the nominated slate of
Directors (see pages 3 and 4).
·
FOR
the increase in the number of shares of
Common Stock authorized for issuance under the Plan by 500,000 (see pages 16
through 20).
If any other matters properly come before the Annual
Meeting, the shares represented by all properly executed proxies will be voted
in accordance with the judgment of the persons named on such proxies.
Votes Required to Approve Each Item
The presence at the Annual Meeting (in person or by
proxy) of the holders of at least a majority of the shares outstanding on the
Record Date is necessary to have a quorum allowing us to conduct business at
the Annual Meeting. The following votes are required to approve each item of
business at the Annual Meeting:
·
Election of Directors: A plurality of the
shares present at the Annual Meeting (in person or by proxy) and entitled to
vote is required to approve the election of the Directors. Under plurality
voting, the seven (7) nominees for Director who receive the greatest
number of favorable votes are elected.
·
Other Items: A majority of the shares present
at the Annual Meeting (in person or by proxy) and entitled to vote is required
to approve the other proposals and any other items of business that properly
come before the Annual Meeting.
Broker non-votes occur when a nominee (such as a
bank or broker) returns a proxy, but does not have the authority to vote on a
particular proposal because it has not received voting instructions from the
beneficial owner. Broker non-votes are
counted as present or represented for purposes of determining the presence or
absence of a quorum for the Annual Meeting, but are not counted for purposes of
determining the number of shares entitled to vote with respect to any proposal
for which the broker lacks discretionary authority. Accordingly, broker non-votes will have no
effect on the outcome of the vote for the election of Directors or any other
proposed matter. Stockholders of record
who are present in person or by proxy and who abstain, including brokers
holding customers shares of record who cause abstentions to be recorded at the
meetings, are considered shareholders who are present and entitled to vote and
are counted toward the quorum. A
properly executed proxy marked ABSTAIN with respect to any matter will not be
voted. Accordingly, abstentions will
have no effect on the outcome of the election of Directors, and will have the
same effect as a vote AGAINST any other proposed matter.
Annual Meeting Admission
You may attend the Annual Meeting if you are a
registered shareholder, a proxy for a registered shareholder, or a beneficial
owner of Company common stock with evidence of ownership.
Voting Results
We will include
the results of the Annual Meeting in the Companys next quarterly report filed
with the SEC.
* * * * *
2
PROPOSAL 1 ELECTION OF
DIRECTORS
(Item 1 on Proxy Card)
The Bylaws of the Company, as amended, provide that
the number of Directors constituting the Board of Directors shall be determined
by resolution of the Board of Directors at any meeting or by the shareholders
at the Annual Meeting. The Board of Directors of the Company has set the number
of Directors comprising the Board of Directors at seven (7).
The Board of
Directors has nominated seven (7) persons for election as Directors
of the Company at the Annual Meeting, each to serve until the 2010 Annual Meeting
of Stockholders of the Company or until his successor shall have been duly
elected and qualified. All of the
nominees are incumbent Directors standing for reelection. All of the nominees have been unanimously
approved by the independent Directors. Each
nominee has consented to be named in this Proxy Statement and to serve if
elected. If, prior to the meeting, any
nominee should become unavailable to serve for any reason, the shares
represented by all properly executed proxies will be voted for such alternate
individual as shall be designated by the Board of Directors, unless the Board
of Directors shall determine to reduce the number of Directors pursuant to the
Bylaws of the Company.
Assuming the presence of a quorum, the affirmative
vote of the holders of a plurality of the shares of Common Stock represented in
person or by proxy and entitled to vote at the Annual Meeting is required for
the election of Directors. Shares will
be voted for the nominees in accordance with the specifications marked on the
proxies applicable thereto, and if no specification is made, will be voted
FOR
the election of all the nominees.
The table below sets forth the names and ages of the
nominees for Director and, where applicable, the year each first became a
Director of the Company.
Name
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Age
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Year First Became a
Director of the Company
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Larry Polhill
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57
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2004
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Ashton D. Asensio
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64
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2006
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Mark S. Howells
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55
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1995
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Bryce Edmonson
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54
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2006
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Itzhak Reichman
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52
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2007
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Ronald C. Kesselman
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66
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2008
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Terry McDaniel
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52
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2008
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Set forth below for each person nominated to be a
Director is a description of all positions held by such person with the Company
and the principal occupations of such person during at least the last five
years.
Larry R. Polhill.
Mr. Polhill has
served as a Director of the Company since July 2004 and was appointed
Chairman of the Board of Directors in February 2006. Mr. Polhill
is Chairman of AmPac Tri State CDC Inc., a not-for-profit corporation which is
an SBA 504 lender. Mr. Polhill is Chairman of American Pacific
Financial Corp., a Grand Terrace, California-based asset management firm
(APFC), and a Manager of Capital Foods, LLC, a private investment company that
is a stockholder of the Company. From August 2005 to February 2008,
Mr. Polhill served as a Director of Realty Information Services Inc.,
a franchising organization (RIS). On March 28, 2008, an
involuntary action was filed against RIS under Chapter 7 of the Bankruptcy
Code, 11 U.S.C. Section 101, et.seq. in the United States Bankruptcy Court
for the District of Nevada. RIS disputed the petition but subsequently
consented to relief under Chapter 11 of the Bankruptcy Code on July 15,
2008. APFC and its affiliates prevailed as the successful credit bidder
for the RIS assets in a sale pursuant to an order of the Bankruptcy Court on December 30,
2008. Mr. Polhill has an extensive background in corporate and real
estate finance as well as mergers and acquisitions. During his over 30
years of business experience, he has been involved as an officer, director or
financier of a wide diversity of businesses, including companies in the
consumer products, retail, real estate and food industries.
Ashton D. Asensio.
Mr. Asensio has
served as a Director of the Company since February 2006 and was appointed
Chairman of the Audit Committee in July 2006. Since January 2009,
Mr. Asensio has served as Vice President and Chief Financial Officer of
Security Alarm Financing Enterprises, L.P., a California security alarm account
aggregator. From 2003 to January 2009, Mr. Asensio was a
financial and operations consultant and, from March 2005 to January 2009,
Mr. Asensio provided consulting services to American Pacific Financial
Corp., a Grand Terrace, California-based asset management firm (APFC) and
various entities in which APFC had an ownership interest, including Capital
Foods, LLC, a stockholder of the Company, and Realty Information Systems, Inc.,
a franchising organization (RIS). From August 2005 to February 2006,
Mr. Asensio served as Chief Financial Officer of RIS. On March 28,
2008, an involuntary action was filed against RIS under Chapter 7 of the
Bankruptcy Code, 11 U.S.C. Section 101, et.seq. in the United States
Bankruptcy Court for the District of Nevada. RIS disputed the petition
but subsequently consented to relief under Chapter 11 of the Bankruptcy Code on
July 15, 2008. APFC and its affiliates prevailed as the successful
credit bidder for the RIS assets in a sale pursuant to an order of the
Bankruptcy Court on December 30, 2008. From March 1, 2008
through December 31, 2008, Mr. Asensio provided services
3
to RIS as a consulting chief financial officer under a consulting
arrangement with RIS. From 1972 to 1979, Mr. Asensio was an audit
manager for Peat Marwick Mitchell. Mr. Asensio received his Bachelor
of Science degree in accounting from Florida Atlantic University and received
his Master of Accounting degree from Florida State University.
Mark S.
Howells.
Mr. Howells
has served as a Director of the Company since March 1995 and as Chairman
of the Compensation Committee from 2003 to 2008. From March 1995 to August 2004, Mr. Howells
served as Chairman of the Board of Directors of the Company. Since May 2000, Mr. Howells has
devoted a majority of his time to serving as the President and Chairman of M.S.
Howells & Co., a registered securities broker-dealer. From 1987 to May 2000, Mr. Howells
served as the President and Chairman of Arizona Securities Group, Inc., a
registered securities broker-dealer. For
the period from March 1995 to August 1995, Mr. Howells also
served as President and Chief Executive Officer of the Company.
Macon Bryce
Edmonson.
Mr. Edmonson
has served as a Director of the Company since July 2006 and as Chairman of
the Compensation Committee since 2008. Mr. Edmonson
has served as a Senior Vice President in charge of the North American business
of Del Monte Fresh Produce Company from 1995 to 2005 and, since mid-2005, has
been a consultant for the food industry helping companies realign their
strategies and position themselves for growth in the North American
market. Mr. Edmonson received
Bachelor and Master of Science degrees in Entomology from the University of
Florida, and an MBA in marketing from the University of Miami.
Itzhak Reichman.
Mr. Reichman has served as a
Director of the Company since October 2007. Mr. Reichman is the retired Chairman and
CEO of Desert Glory, North Americas leading grower of flavorful tomatoes with
greenhouse operations in Mexico and distribution operations throughout the
United States. He held this position
from April 2004 through November 2008. Prior to that role, Mr. Reichman worked
with the Borden organization while it was owned by Kohlberg, Kravis and
Roberts, fulfilling various strategic and merger and acquisition leadership
positions at the holding company, as well as operating roles at Borden Foods.
He also served as a member of the Board of Directors of Wise Foods, Inc. Mr. Reichman received a bachelors
degree in civil engineering from the Israeli Institute of Technology and a
masters degree in business management from M.I.T.
Ronald C. Kesselman.
Mr. Kesselman
has served as a Director of the Company since July 2008. Mr. Kesselman
has a 40-year career in senior executive and management positions with consumer
products and food processing companies, including past service as a Chairman
and Chief Executive Officer of Elmer Products, Inc. Mr. Kesselman currently serves on the
Board of Directors of American Italian Pasta Company, and Imperial Sugar
Company, a publicly traded sugar manufacturing and marketing company. Mr. Kesselman also serves on the Board
of Directors of Homax Products, Inc., a privately held company and
supplier of home improvement products. Mr. Kesselman
received a bachelors degree in economics from the University of Wisconsin and
an MBA from the Kellog School at Northwestern University.
Terry McDaniel.
Mr. McDaniel
has served as a Director and
Chief Executive Officer of the Company since May 2008 and as Chief
Operating Officer since April 2006.
Mr. McDaniel also serves on the Board of Directors of Foster Farms
Dairy, the largest privately owned dairy in California. From 2003 to 2006, Mr. McDaniel was
President and a Director of MSLI Worksite Benefits, a company that marketed
voluntary benefits through the worksite to Fortune 1000 companies. From 1998 to 2003, Mr. McDaniel served
as President, Chief Executive Officer and a Director of Wise Foods, Inc. Prior to 1998, Mr. McDaniel served as Vice
President of Sales and Marketing for Wise Foods, Inc., and as Vice
President of Sales for Haagen-Dazs Company, Inc. Prior to these positions, he held sales
leadership positions for companies such as the Nestle Corporation, Tropicana
Products, Inc. and Unilever. Mr. McDaniel
has been Vice Chairman of the Snack Food Association since 2007, and is
scheduled to assume the role of Chairman on March 31, 2009. Mr. McDaniel received a bachelors
degree in business and an MBA from Columbus State University.
* * * * *
THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS
VOTE FOR ALL NOMINEES FOR DIRECTOR.
* * * * *
4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
certain information regarding the beneficial ownership of the Companys Common
Stock as of the Record Date by (i) each person known by the Company to be
the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each
director and nominee for director, (iii) each executive officer listed in
the Summary Compensation Table set forth in Executive Compensation below, and
(iv) all directors and executive officers as a group.
Name and Address of
Beneficial Owner
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Amount and Nature
of Beneficial
Ownership of
Common Stock(1)
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Percent of Shares
of Common Stock
Beneficially
Owned(2)
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Larry Polhill
225 W. Hospitality Lane, Suite 201, San Bernardino, CA 92408
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2,163,173
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(3) (4)
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12.1
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Ashton D. Asensio
79812 Danielle Ct., La Quinta, CA 92253
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20,000
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(3)
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Mark S.
Howells
20555 N. Pima Road, Suite #100, Scottsdale, AZ 85255
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532,447
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(3) (5)
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3.0
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Macon
Bryce Edmonson
1254 Andalusia Avenue, Coral Gables,
FL 33134
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27,500
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(3)
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Itzhak Reichman
15315
Capital Port, San Antonio, TX 78249
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15,000
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(3)
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Ronald C. Kesselman
19
Keswick Drive, New Albany, OH 43054
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-0-
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(3)
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Terry McDaniel
8638 E. Villa Drive, Scottsdale, AZ 85262
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325,000
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(3)
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1.8
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Steve Weinberger
10451 N. 109
th
Way,
Scottsdale, AZ 85259
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154,999
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(3)
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0.9
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Steven Sklar
22684
N 93rd Street, Scottsdale, AZ 85255
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92,686
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(3)
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0.5
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Eric J. Kufel
330
W. Lawrence Road, Phoenix, AZ 85013
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243,333
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(3)
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1.4
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Capital Foods, LLC
7380 S. Eastern Ave., Suite 150, Las Vegas, NV 89123
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4,133,695
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(4)
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23.1
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Bradley J. Crandall
225 W. Hospitality Lane, Suite 201, San Bernardino, CA 92408
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2,066,848
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(6)
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11.6
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Dakota Farms, LLC
7380 S. Eastern Ave., Suite 150, Las Vegas, NV 89123
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2,066,848
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(6)
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11.6
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Stillwater Capital,
LLC
7380 S. Eastern Ave., Suite 150, Las Vegas, NV 89123
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2,066,848
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(6)
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11.6
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BC Advisors, LLC
300 Crescent Court, Suite 1111, Dallas, TX 75201
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2,016,097
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(7)
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11.3
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SRB Management, L.P.
300 Crescent Court, Suite 1111, Dallas, TX 75201
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2,016,097
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(7)
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11.3
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Steven R. Becker
300 Crescent Court, Suite 1111, Dallas, TX 75201
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2,016,097
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(7)
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11.3
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Heartland
Advisors, Inc.
789 N. Water Street, Milwaukee, WI 53202
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3,341,500
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(8)
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18.7
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William J. Nasgovitz
789 N. Water Street, Milwaukee, WI 53202
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3,341,500
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(8)
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18.7
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All officers and directors
above as a group (10 persons)
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3,574,138
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(9)
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20.0
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(1)
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Unless otherwise
indicated, each of the persons named has sole voting and investment power
with respect to the shares reported.
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(2)
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Shares that an individual or group has a right to acquire within 60
days of the Record Date pursuant to the exercise of stock options are deemed
to be outstanding for the purpose of computing the percentage ownership of
such individual or group, but are not deemed to be outstanding for the
purpose of computing the ownership percentage of any other person shown in
the table. On the Record Date, the date as of which these percentages are
calculated, there were 17,884,456 shares of Common Stock issued and
outstanding pursuant to Rule 13d-3(d)(1) of the Exchange Act of
1934, as amended.
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(3)
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Includes shares issuable to the indicated person upon the exercise of
stock options that are exercisable within 60 days of the Record Date as
follows: Mr. Polhill 35,000; Mr. Asensio 20,000;
Mr. Howells 30,000; Mr. Edmonson 27,500; Mr. Reichman 15,000;
Mr. Kesselman 0; Mr. McDaniel 300,000; Mr. Weinberger 149,999;
Mr. Sklar 53,333 and Mr. Kufel 243,333. Excludes shares
issuable to the indicated person upon the
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exercise of stock options
that have not yet vested and are not exercisable within 60 days of the Record
Date as follows: Mr. Polhill 0; Mr. Asensio 0; Mr. Howells
0; Mr. Edmonson 0; Mr. Reichman 0; Mr. Kesselman
10,000; Mr. McDaniel 298,000; Mr. Weinberger 244,001; Mr. Sklar
87,667 and Mr. Kufel 0.
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(4)
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According to Schedule 13G filed by the holder with the SEC on
February 17, 2009, disclosing sole voting power with respect to 56,325
shares and shared voting and dispositive power with respect to 2,066,848
shares by virtue of Mr. Polhills 50% pecuniary interest in the
4,133,695 shares registered in the name of Capital Foods, LLC. Consequently,
the shares beneficially owned by Mr. Polhill represent a portion of the
shares beneficially owned by, and disclosed in the above table with respect
to, Capital Foods, LLC. Mr. Polhill has pledged 1,500,000 of the shares
he holds.
|
|
|
(5)
|
Includes indirect ownership of 35,000 shares owned by the M.S.
Howells Foundation, of which Mr. Howells is the controlling person, and
10,000 shares owned by Audesi Capital Partners, LP, of which Mr. Howells
is the General Partner. Mr. Howells has pledged 430,646 of the shares he
holds.
|
|
|
(6)
|
According to Schedule 13G filed by the holder with the SEC on
February 17, 2009, disclosing shared voting and dispositive power with
respect to 2,066,848 shares. All of the shares beneficially owned by
Mr. Crandall, by Dakota Farms, LLC and by Stillwater Capital, LLC are
registered in the name of Capital Foods, LLC (see (4) above).
Consequently, the shares beneficially owned by these parties represent a
portion of the shares beneficially owned by, and disclosed in the above table
with respect to, Capital Foods, LLC.
|
|
|
(7)
|
According to Form SC 13G filed by the holder with the SEC on
February 17, 2009, disclosing shared voting and dispositive power with
respect to 2,016,097 shares, which shares are beneficially owned by SRB
Management, L.P., a Texas limited partnership (SRB Management) for the
accounts of (1) SRB Greenway Capital, L.P., a Texas limited partnership
(SRBLP), (2) SRB Greenway Capital (Q.P.), L.P., a Texas limited
partnership (SRBQP), (3) SRB Greenway Offshore Operating Fund, L.P., a
Cayman Islands limited partnership (SRB Offshore), SRB Greenway Opportunity
Fund, L.P., a Texas limited partnership (SRBOLP), and SRB Greenway
Opportunity Fund (QP), L.P., a Texas limited partnership (SRBOQP)
(collectively, the Greenway Funds). SRB Management is the general partner
of each of the Greenway Funds. BC Advisors, LLC, at Texas limited liability
company (BCA), is the general partner of SRB Management, and Steven R.
Becker is the sole member of BCA.
|
|
|
(8)
|
According to Schedule 13G filed by the holder with the SEC on
February 11, 2009, disclosing shared voting power with respect to
3,291,200 shares and shared dispositive power with respect to 3,341,500
shares. The shares beneficially owned by Mr.
Nasgovitz are included in the shares
beneficially owned by, and disclosed in the above table with respect to, Heartland
Advisors, Inc.
|
|
|
(9)
|
Includes 874,165 shares issuable upon the exercise of stock options
that are exercisable within 60 days of the Record Date. Excludes 639,668
shares issuable upon the exercise of stock options that have not yet vested
and are not exercisable within 60 days of the Record Date.
|
6
MEETINGS AND COMMITTEES OF THE
BOARD OF DIRECTORS
The Board of Directors
conducts its business through meetings of the Board of Directors and through
its standing committees. The Board of Directors has determined that
Ashton
D. Asensio, Mark S. Howells, Macon Bryce Edmonson, Itzhak Reichman and Ronald
C. Kesselman a
re independent,
within the meaning of currently applicable rules of the Securities
Exchange Act of 1934 (as amended, the Exchange Act) and the applicable
listing standards of The Nasdaq Stock Market LLC.
During the fiscal year ended
December 27, 2008, the Board of Directors met 7 times and took actions on
4 other occasions by unanimous written consent.
During such period, there were 4 meetings of the Audit Committee and 2
meetings of the Compensation Committee.
During the fiscal year ended December 27, 2008, each Director
attended at least 75% of the Board of Directors meetings and meetings of any
committees on which he served, except for Mr. Kesselman who attended all
meetings following his appointment in June 2008. It is the Companys policy to encourage the
Directors standing for election at the Annual Meeting to attend the Annual
Meeting. All Directors standing for
election at the 2008 Annual Stockholders Meeting attended the 2008 Annual
Stockholders Meeting.
Non-management Directors
generally meet in executive session at each regularly scheduled Board meeting
without any members of management being present. In lieu of a regularly
presiding Director, these sessions are presided over by the Chairman of the
Board. It is contemplated that at least twice each year, in conjunction with
regularly scheduled Board meetings, the Board will hold an executive session at
which only those Directors who are independent within the meaning of
currently applicable rules of the Exchange Act and the applicable listing
standards of The Nasdaq Stock Market LLC are present.
As of the date of this Proxy
Statement, two committees have been established, an Audit Committee and a
Compensation Committee. The Board of Directors does not currently utilize a
formal Nominating Committee or committee performing similar functions and
therefore does not have a Nominating Committee charter. Instead, a majority of
independent Directors identifies and recommends persons to be nominees for
positions on the Board of Directors at each Annual Stockholders Meeting and to
fill vacancies on the Board between annual meetings. Board candidates, including Directors up for
reelection, are considered based upon various criteria, such as broad-based
business and professional skills and experiences, understanding of the Companys
business and markets, concern for long-term interests of the stockholders, personal
integrity, freedom from conflicts of interest, sound business judgment, and
time available to devote to board activities. The Board of Directors has not
established any specific minimum qualification standards for nominees to the
Board, although from time to time the Board may identify certain skills or
attributes as being particularly desirable to help meet specific Board needs
that have arisen. In identifying
potential candidates, the independent Directors may rely on suggestions and
recommendations from the Board, management and others, and may also retain
search firms for assistance. Current
Directors whose terms are expiring and their past performance on the Board and
its committees will be considered first using the criteria set forth above. The
Board of Directors believes that this process is as effective in nominating
qualified Director candidates as a more formal process instituted by a separate
committee under a separate charter would be.
Because it also believes that its independent Directors are in the best
position to locate qualified candidates, the Board of Directors does not
currently have a policy with regard to the consideration of any Director
candidates recommended by stockholders.
Audit Committee
The Audit Committee has the
responsibility to assist the Board of Directors in its oversight of the
integrity of the Companys financial statements, the qualification and
independence of the Companys independent auditors, and the performance of the
independent auditors. Management has primary
responsibility for the Companys financial statements, reporting process and
internal controls, and the Companys independent auditors are responsible for
auditing the financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States) and issuing an
opinion as to whether the Companys financial statements are, in all material
respects, presented fairly in conformity with such principles. The Committee oversees the Companys
financial reporting process, hires and sets the compensation of the Companys
independent auditors, pre-approves all audit and non-audit engagements of the
Companys independent auditors and related party transactions, reviews reports
from the Companys independent auditors and the Companys financial statements,
monitors and informs the Board of the Companys accounting policies and
internal controls, reviews the scope of the audit, and monitors the quality and
objectivity of the Companys financial statements and the independence of the
Companys independent auditors. In
addition, pursuant to its Charter, the Committee performs an annual evaluation
of the adequacy of the Audit Committees Charter. A copy of the Audit Committee Charter is
available on our website, www.inventuregroup.net by choosing the Investors
and then Governance Documents links.
The Audit Committee is currently comprised of three members of the Board
of Directors, Messrs. Asensio, Edmonson and Howells. The Chairman of the
Audit Committee is Mr. Asensio. The Audit Committee was established on October 22,
1996. The report of the Audit Committee
with respect to the 2008 fiscal year is set forth under the heading Report of
the Audit Committee below.
7
Compensation Committee
The Companys Compensation
Committee is currently comprised of three members of the Board of Directors, Messrs. Edmonson,
Howells and Reichman. The Chairman of
the Compensation Committee is Mr. Edmonson. The Board has determined that each of the
Committee members is an outside Director within the meaning of the regulations
under Section 162(m) of the Internal Revenue Code of 1986, as
amended, a non-employee Director under Rule 16b-3 under the Exchange Act,
and independent within the meaning of currently applicable rules of the
Exchange Act and the applicable listing standards of The Nasdaq Stock Market
LLC. None of the members of the
Compensation Committee are former officers or employees of the Company, except
for Mr. Howells who resigned as President and Chief Executive Officer in August 1995. The Compensation Committee evaluates the
performance and reviews and approves the compensation of executive officers,
including the Chief Executive Officer, of the Company. The Compensation Committee was established on
June 12, 1997. A copy of the
Compensation Committee Charter is available on our website,
www.inventuregroup.net by choosing the Investors and then Governance
Documents links.
Stockholder Communications with Directors
Stockholders who wish to
communicate with the Board of Directors, the non-management Directors or an
individual Director may do so by sending a letter to the Secretary of the
Company at 5050 N. 40
th
Street, Suite 300, Phoenix, Arizona
85018. The mailing envelope must contain a clear notation indicating that the
enclosed letter is a Stockholder-Board Communication. The Secretary has been authorized to screen
commercial solicitations and materials which pose security risks, are unrelated
to the business or governance of the Company, or are otherwise
inappropriate. All such letters must
identify the author as a stockholder and clearly state whether the intended
recipients are all or individual members of the Board. The Secretary will make copies of all such
letters and circulate them to the appropriate Director or Directors.
REPORT OF THE AUDIT COMMITTEE
The Companys Audit
Committee consists of three directors, each of whom the Board of Directors has
determined to be independent within the meaning of currently applicable rules of
the Exchange Act and the applicable listing standards of The Nasdaq Stock
Market LLC for audit committee members, and to comply with the financial
knowledge requirements of the applicable listing standards of the Nasdaq Stock
Market LLC. In addition, the Board of
Directors has determined that
Ashton D. Asensio is an Audit Committee financial expert within the meaning of
currently applicable rules of the Exchange Act and complies with the
professional experience requirements of the applicable listing standards of the
Nasdaq Stock Market LLC. The Audit
Committee operates under a written charter adopted by the Board of Directors,
which is available on the Companys website at www.inventuregroup.net by
choosing the Investors and then the Governance Documents links.
The Audit Committee has
reviewed and discussed the Companys audited financial statements for the
fiscal year ended December 27, 2008 with management of the Company and
with Moss Adams LLP, the Companys independent registered public accounting
firm. The Audit Committee has also
discussed with Moss Adams LLP the matters required by Statement on Auditing
Standards No. 61, Communications with Audit Committees. The Audit Committee has also received the
written disclosures and the letter from Moss Adams LLP required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit
Committees and has discussed with Moss Adams LLP its independence.
Based on the review and
discussions referred to above, the Audit Committee has recommended to the Board
of Directors that the Companys audited financial statements be included in the
Companys Annual Report on Form 10-K for the year ended December 27,
2008 for filing with the Securities and Exchange Commission.
Submitted by the Audit
Committee of the Board of Directors,
Ashton D. Asensio
Mark S. Howells
Macon Bryce Edmonson
8
DIRECTOR COMPENSATION
Only non-employee Directors
are compensated for their services as Directors. The Companys 2008 compensation package for
non-employee Directors was comprised of cash (annual retainers and committee
meeting fees) and stock option grants. The annual pay package is designed to
attract and retain highly-qualified, independent professionals to represent our
stockholders and positioned to approximate the median of our peer group.
2008 compensation for
non-employee Directors consisted of the following:
·
Retainers
Each independent Director is paid an annual retainer of $4,000. Additionally,
the Chairman of the Board of Directors receives an annual retainer of $15,000;
the Chairman of the Audit Committee receives an annual retainer of $15,000; and
the Chairman of the Compensation Committee receives an annual retainer of
$3,000. The annual cash retainers are
paid in quarterly installments.
·
Meeting
Fees
During 2008, for each quarterly Board meeting, attendees were
compensated $2,500, or $500 if they participated telephonically. For Audit Committee meetings attendees were
compensated $2,000, or $500 if they participated telephonically. For Compensation Committee meetings attendees
were compensated $1,000, or $500 if they participated telephonically.
·
Stock
Options
Stock option grants (1) are made each year after each Annual
Meeting of Stockholders upon the Directors election to the Board, (2) are
exercisable on the date of the next Annual Meeting of Stockholders, (3) have
a five-year term and (4) are granted with exercise prices equal to the
closing price at the end of the day of the Annual Meeting of Stockholders. In May 2008, the Company granted options
to purchase 10,000 shares of Common Stock to each person who was elected to the
Board of Directors at the 2008 Annual Meeting of Stockholders (other than Mr. McDaniel). Such options have an exercise price of $1.86
per share, are exercisable on May 19, 2009 and have a term of five years.
Additionally, following his appointment as a Director on July 21, 2008, Mr. Kesselman
was granted an option to purchase 10,000 shares of Common Stock at an exercise
price of $1.59 per share. The Company
plans to continue to grant stock options in the amount of 10,000 options per
year to each continuing non-employee Director and 10,000 options to each newly
appointed Director.
·
Business
Expenses
Directors are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors and for other expenses incurred in
their capacity as Directors.
·
Director and Officer Liability Insurance
Director and officer liability insurance
individually insures our Directors and officers against certain losses that
they are legally required to pay as a result of their actions while performing
duties on our behalf. Our D&O insurance
policy does not break out the premium for Directors versus officers and,
therefore, a dollar amount cannot be assigned for individual Directors.
9
The following table sets for
the compensation paid to each non-employee Director for the 2008 fiscal year.
NON-EMPLOYEE
DIRECTORS COMPENSATION TABLE
Name
|
|
Fees Earned
or Paid in
Cash(1)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)(2)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
($)
|
|
Total
|
|
Larry Polhill
|
|
$
|
29,000
|
|
|
|
$
|
1,106
|
|
|
|
|
|
|
|
$
|
30,106
|
|
Ashton D. Asensio
|
|
$
|
44,000
|
|
|
|
$
|
1,106
|
|
|
|
|
|
|
|
$
|
45,106
|
|
Mark S. Howells
|
|
$
|
33,000
|
|
|
|
$
|
1,106
|
|
|
|
|
|
|
|
$
|
34,106
|
|
M. Bryce Edmonson
|
|
$
|
30,000
|
|
|
|
$
|
1,106
|
|
|
|
|
|
|
|
$
|
31,106
|
|
Itzhak Reichman
|
|
$
|
24,000
|
|
|
|
$
|
1,106
|
|
|
|
|
|
|
|
$
|
25,106
|
|
Ronald Kesselman(3)
|
|
$
|
6,000
|
|
|
|
$
|
629
|
|
|
|
|
|
|
|
$
|
6,629
|
|
(1)
|
The aggregate dollar
amount of all fees earned or paid in cash for services as a Director.
|
|
|
(2)
|
Represents the value of
options granted during the year to purchase shares of common stock.
Generally, options have a five-year term and become exercisable at the date
of the next Annual Meeting of Stockholders held in May of every year
with the exceptions of options granted to Directors who joined the Board
during the year. The value noted here reflects the compensation expense
recognized by the Company during 2008 under SFAS No. 123(R). Refer to
Note 1 to the Consolidated Financial Statements included in our Annual Report
on Form 10-K for the year ended December 27, 2008, for a discussion
of the relevant assumptions used in calculating the recognized compensation
expense and grant-date fair value pursuant to SFAS No. 123(R). The
recognized compensation expense and grant-date fair value of the stock option
awards for financial reporting purposes will likely vary from the actual
amount ultimately realized by the Director based on a number of factors.
These factors include stock price fluctuations, differences from the valuation
assumptions used and the timing of exercise.
|
|
|
(3)
|
Mr. Kesselman was
appointed to the Board of Directors on July 21, 2008 and, as such,
earned fewer fees than the other Directors due to his shorter tenure during
2008.
|
Aggregate number of vested options outstanding for each non-employee
Director at the end of fiscal year 2008:
Name
|
|
Aggregate Number of Vested
Options Outstanding (#)
|
|
Larry Polhill
|
|
25,000
|
|
Ashton D. Asensio
|
|
10,000
|
|
Mark S. Howells
|
|
20,000
|
|
Bryce Edmonson
|
|
17,500
|
|
Itzhak Reichman
|
|
5,000
|
|
Ronald C. Kesselman
|
|
-0-
|
|
EXECUTIVE
OFFICER COMPENSATION
The Compensation Committee of the Board of Directors
reviews and recommends to the Board of Directors for approval the compensation
packages for all executive officers of the Company, including the executive
officers named in the Summary Compensation Table below (the Named Executive
Officers).
The following table sets forth
certain compensation information for the fiscal years ended December 27,
2008 and December 29, 2007 for our prior Chief Executive Officer Eric J.
Kufel who served through May 19, 2008, our current Chief Executive Officer
Terry McDaniel who replaced Mr. Kufel on May 19, 2008 (i.e., those
individuals serving as our principal executive officer during the prior fiscal
year), and our Chief Financial Officer Steve Weinberger and Senior Vice
President of Marketing Steven Sklar, who are the two most highly compensated
executive officers aside from those individuals serving as our principal
executive officer during the prior fiscal year.
We refer to these individuals collectively as the Named Executive
Officers.
10
Summary Compensation Table
Name and
Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)(5)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in Pension
Value and Non-
Qualified Deferred
Compensation
Earnings
|
|
All Other
Compensation
($)
|
|
Total ($)
|
|
Eric J. Kufel(1)
|
|
2007
|
|
413,992
|
|
|
|
|
|
48,940
|
|
|
|
|
|
23,586
|
(6)
|
486,518
|
|
|
|
2008
|
|
460,103
|
|
|
|
|
|
|
|
|
|
|
|
11,826
|
(7)
|
471,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry McDaniel(2)
|
|
2007
|
|
339,062
|
|
|
|
|
|
32,625
|
|
|
|
506
|
|
29,376
|
(8)
|
401,569
|
|
|
|
2008
|
|
385,619
|
|
92,400
|
|
|
|
19,936
|
|
|
|
|
|
28,909
|
(9)
|
526,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steve
Weinberger(3)
|
|
2007
|
|
234,159
|
|
10,000
|
|
|
|
16,314
|
|
|
|
|
|
30,523
|
(10)
|
290,996
|
|
|
|
2008
|
|
256,867
|
|
55,620
|
|
|
|
14,710
|
|
|
|
|
|
32,665
|
(11)
|
359,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven Sklar(4)
|
|
2007
|
|
210,436
|
|
9,500
|
|
58,215
|
|
8,157
|
|
|
|
|
|
20,604
|
(12)
|
306,912
|
|
|
|
2008
|
|
224,826
|
|
32,410
|
|
31,812
|
|
3,793
|
|
|
|
|
|
22,541
|
(13)
|
315,382
|
|
(1)
|
Mr. Kufel served as Chief Executive Officer from
February 13, 2006 to May 19, 2008. From December 19, 2005
until February 13, 2006, he served as Interim Chief Executive Officer.
He served as President and Chief Executive Officer from February 1997 to
August 2004, as a Director from February 1997 to May 19, 2008
and as Chairman of the Board from August 2004 until February 13,
2006.
|
|
|
(2)
|
Mr. McDaniel served as Chief Operating Officer from
April 2006 to May 2008 and as Chief Executive Officer since
May 2008.
|
|
|
(3)
|
Mr. Weinberger has served as Chief Financial Officer since
August 2006.
|
|
|
(4)
|
Mr. Sklar has served as Senior Vice President of Marketing since
August 2005.
|
|
|
(5)
|
Represents the value of options granted during the relevant year to
purchase shares of common stock. Refer to Note 1 to the Consolidated
Financial Statements included in our Annual Report on Form 10-K for the
year ended December 27, 2008, for a discussion of the relevant
assumptions used in calculating the recognized compensation expense and
grant-date fair value pursuant to SFAS No. 123(R).
|
|
|
(6)
|
Represents an automobile allowance of $12,000, $7,267 of health
insurance benefits, $341 of life insurance benefits and $3,978 of disability
insurance benefits paid on behalf of Mr. Kufel.
|
|
|
(7)
|
Represents an automobile allowance of $5,077, $1,350 of health
insurance benefits, $156 of life insurance benefits and $5,243 of disability
insurance benefits paid on behalf of Mr. Kufel.
|
|
|
(8)
|
Represents an automobile allowance of $10,200, NQDC Company matching
payments of $4,706, $8,035 of health insurance benefits, $341 of life
insurance benefits and $6,093 of disability insurance benefits paid on behalf
of Mr. McDaniel.
|
|
|
(9)
|
Represents an automobile allowance of $11,400, NQDC Company matching
payments of $3,875, $8,000 of health insurance benefits, $341 of life
insurance benefits and $5,293 of disability insurance benefits paid on behalf
of Mr. McDaniel
|
|
|
(10)
|
Represents an automobile allowance of $10,200, NQDC Company matching
payments of $1,983, $8,035 of health insurance benefits, $341 of life
insurance benefits and $9,964 of disability insurance benefits paid on behalf
of Mr. Weinberger.
|
|
|
(11)
|
Represents an automobile allowance of $11,400, NQDC Company matching
payments of $2,960, $8,000 of health insurance benefits, $341 of life
insurance benefits and $9,964 of disability insurance benefits paid on behalf
of Mr. Weinberger.
|
|
|
(12)
|
Represents an automobile allowance of $7,800, NQDC Company matching
payments of $630, $8,000 of health insurance benefits, $341 of life insurance
benefits and $3,833 of disability insurance benefits paid on behalf of
Mr. Sklar.
|
|
|
(13)
|
Represents an automobile allowance of $7,800, NQDC Company matching
payments of $2,567, $8,000 of health insurance benefits, $341 of life
insurance benefits and $3,833 of disability insurance benefits paid on behalf
of Mr. Sklar.
|
11
The following table sets
forth certain information concerning outstanding option awards to the Named
Executive Officers as at December 27, 2008:
Outstanding
Equity Awards
at Fiscal
Year-End
Name
|
|
Number of
Securities
Underlying
Unexercised
Options -
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options -
Unexercisable
|
|
Option Exercise
Price ($)
|
|
Option Expiration
Date
|
|
Number of
Securities
Underlying All
Other Stock
Awards
|
|
Eric Kufel
|
|
5,000
|
|
|
|
$
|
2.50
|
|
5/19/09
|
|
|
|
|
|
5,000
|
|
|
|
$
|
5.00
|
|
5/19/09
|
|
|
|
|
|
133,333
|
|
|
|
$
|
2.81
|
|
5/19/09
|
|
|
|
|
|
100,000
|
|
|
|
$
|
2.69
|
|
5/19/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry McDaniel
|
|
66,667
|
|
33,333
|
|
$
|
2.81
|
|
4/17/11
|
|
|
|
|
|
66,667
|
|
133,333
|
|
$
|
2.69
|
|
2/23/12
|
|
|
|
|
|
|
|
200,000
|
|
$
|
1.94
|
|
5/17/13
|
|
|
|
|
|
|
|
98,000
|
|
$
|
1.70
|
|
12/8/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steve Weinberger
|
|
33,332
|
|
16,668
|
|
$
|
2.31
|
|
8/8/11
|
|
|
|
|
|
33,334
|
|
66,666
|
|
$
|
2.69
|
|
2/23/12
|
|
|
|
|
|
|
|
150,000
|
|
$
|
1.94
|
|
5/7/13
|
|
|
|
|
|
|
|
94,000
|
|
$
|
1.70
|
|
12/8/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven Sklar
|
|
8,000
|
|
4,000
|
|
$
|
2.80
|
|
5/23/11
|
|
35,353
|
(1)
|
|
|
16,667
|
|
33,333
|
|
$
|
2.69
|
|
2/23/12
|
|
|
|
|
|
|
|
40,000
|
|
$
|
1.86
|
|
5/19/18
|
|
|
|
|
|
|
|
39,000
|
|
$
|
1.70
|
|
12/8/18
|
|
|
|
(1)
Restricted Stock
Award granted on 8/30/05
Equity Incentive Plan Approved by Stockholders
As
of December 27, 2008, the only compensation plan of the Company approved
by the stockholders is The Inventure Group, Inc. 2005 Equity Incentive
Plan (as amended, the 2005 Plan). As of December 27, 2008, the aggregate
number of shares of Common Stock reserved for issuance under the 2005 Plan is
the sum of (a) 410,518, which is the number of reserved but unissued shares
available for issuance under the Companys 1995 Stock Option Plan (the 1995
Plan), (b) 500,000, which is the number of additional shares approved by
the stockholders on May 23, 2006 to be added to the 2005 Plan, and (c) 500,000,
which is the number of additional shares approved by the stockholders on May 19,
2008 to be added to the 2005 Plan. In
addition, to the extent shares of Common Stock are subject to awards granted
under the 1995 Plan or the 2005 Plan that are canceled or expire prior to the
issuance of such shares, those shares will again be available for future awards
under the 2005 Plan. As of December 27,
2008, there were 3,032 shares of Common Stock available for Awards under the
2005 Plan. All of the options listed in
the table above were granted pursuant to the 2005 Plan. They vest in equal installments over a
three-year period. The following table
sets forth information as of December 27, 2008 with respect to
compensation plans under which shares of Common Stock of the Company are
authorized for issuance:
Securities
Authorized for Issuance Under Equity Compensation Plans
Plan Category
|
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation Plans Approved by
Stockholders
|
|
2,223,833
|
|
$
|
2.34
|
|
3,032
|
|
|
|
|
|
|
|
|
|
|
|
Retirement
Benefits
The Company does not have a pension plan.
12
Non-Qualified
Deferred Compensation
On
January 18, 2007, the Compensation Committee of our Board of Directors
adopted the Nonqualified Deferred Compensation Plan (the Deferred Compensation
Plan), effective January 1, 2007.
The
Deferred Compensation Plan is a nonqualified deferred compensation plan that
allows certain individuals designated by the Company from a select group of
management or highly compensated service providers to defer a portion of their
salary and bonus under the Deferred Compensation Plan (Compensation Deferrals). Compensation Deferrals under the Plan
represent obligations of the Company to pay participants certain compensation
amounts that the participants have elected to defer. The Deferred Compensation Plan is intended to
provide participants with the ability to defer income that would otherwise be
payable to them for tax planning purposes.
The Compensation Deferrals are payable in cash and generally will be
paid in either a lump sum or in annual installments over a certain term upon
retirement or in a lump sum upon death or other termination of service,
according to the Deferred Compensation Plan.
Subject
to the terms and conditions of the Deferred Compensation Plan, each participant
may specify one or more investment funds or benchmarks made available by the
Plan Administrator in which their deferrals shall be deemed to be invested, and
each participants deferral account will be adjusted periodically in accordance
with the procedures adopted by the Plan Administrator to reflect such deemed
investments. A participants deferral
account will be 100% vested at all times.
The
obligation to pay the vested balance of each Deferred Compensation Plan
participants account shall at all times be an unfunded and unsecured
obligation of the Company. Benefits are
payable solely from the Companys general funds and are subject to the risk of
corporate insolvency. Participants will
not have any interest in any particular assets of the Company by reason of any
obligation created under the Deferred Compensation Plan. A participants right to Compensation
Deferrals cannot be transferred, assigned, pledged or encumbered.
Potential Payments Upon
Termination or Change in Control
Our
executive officers are eligible to receive certain benefits in the event their
employment is terminated (1) by the Company without cause, (2) upon
their retirement, disability or death or (3) in certain circumstances
following a change in control. The
amount of benefits will vary based on the reason for the termination.
The
following sections present calculations as of December 27, 2008 of the
estimated benefits our executive officers would receive in each of these
situations. Although the calculations
are intended to provide reasonable estimates of the potential benefits, they
are based on numerous assumptions and may not represent the actual amount an
executive would receive if an eligible termination event were to occur.
In
addition to the amounts disclosed in the following sections, each executive
officer would retain the amounts which he has earned or accrued over the course
of his employment
prior to
the
termination event, such as the executives balances under our Deferred
Compensation Plan, our 401(k) plan and previously vested stock options.
Severance Benefits
If the employment of an
executive is terminated without cause, then he or she will be entitled to
receive benefits under their employment agreements. Benefits are not available if an executive is
terminated for cause. Messrs. Kufel,
McDaniel, Weinberger and Sklar have severance benefits in their respective
employment agreements. The following
table sets forth the benefits payable to our Named Executive Officers as
severance.
Name
|
|
Salary ($)
|
|
Bonus(1)
|
|
Options ($)
|
|
Restricted
Stock ($)
|
|
Health
Benefits ($)
|
|
Auto
Allowance ($)
|
|
Outplacement
($)
|
|
Total
($)(2)
|
|
Eric Kufel(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry McDaniel
|
|
192,500
|
|
|
|
|
|
|
|
|
|
6,000
|
|
9,000
|
|
207,500
|
|
Steve Weinberger
|
|
132,500
|
|
|
|
|
|
|
|
|
|
6,000
|
|
9,000
|
|
147,500
|
|
Steven Sklar
|
|
162,050
|
|
|
|
|
|
|
|
|
|
5,850
|
|
10,000
|
|
177,900
|
|
(1)
|
Each Named Executive Officer would be entitled to any applicable
prorated bonus. Because bonuses are performance based, we are unable to
reasonably estimate these amounts.
|
|
|
(2)
|
Generally, if Named Executive Officers are terminated without cause,
they are eligible to receive their then current monthly base salary and
monthly auto allowance for the 6-month period following the date of
termination paid on the Companys regular paydays throughout that 6-month
period. For purposes of this table, we have assumed termination on
March 26, 2009.
|
13
(3)
|
Eric J. Kufel resigned as the
Companys Chief Executive Officer effective on May 19, 2008 (the
Effective Date). In lieu of any and all payments, benefits and amounts
under Mr. Kufels Executive Employment Agreement dated February 14,
2006, contingent upon Mr. Kufels execution of a release and continued
compliance with non-competition and other restrictive covenants, the Company
agreed to (a) continue paying Mr. Kufels existing base salary of
$35,253.77 per month, and pay all of the costs of Mr. Kufels COBRA
coverage during the 9-month period following the Effective Date and
(b) extend the period following the Effective Date during which
Mr. Kufel could exercise Company stock options vested as of the
Effective Date from 60 days to 1 year.
|
Payments
Triggered Upon a Change in Control
The
following table sets forth the value of the payments to which each Named
Executive Officer would be entitled as of December 27, 2008 in the event
of a change in control of the Company.
Name
|
|
Salary ($)
|
|
Bonus(1)
|
|
Auto Allowance
($)
|
|
Stock
Options ($)
|
|
Restricted
Stock ($)
|
|
Outplacement
($)
|
|
Total ($)
|
|
Eric Kufel(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry McDaniel
|
|
385,000
|
|
|
|
|
|
|
|
|
|
9,000
|
|
394,000
|
|
Steve Weinberger
|
|
265,000
|
|
|
|
|
|
|
|
|
|
9,000
|
|
274,000
|
|
Steven Sklar
|
|
432,132
|
|
|
|
7,800
|
|
|
|
|
|
10,000
|
|
449,932
|
|
(1)
|
Each Named Executive Officer would be entitled to any applicable
prorated bonus. Because bonuses are performance based, we are unable to
reasonably estimate these amounts.
|
|
|
(2)
|
Eric J. Kufel resigned as the
Companys Chief Executive Officer effective on May 19, 2008.
|
Employment Agreements
Terry McDaniel
The
Company entered into an executive employment agreement with Mr. McDaniel
on April 17, 2006, employing him as Chief Operating Officer, which
agreement was amended on May 8, 2008 when Mr. McDaniel took over as
Chief Executive Officer. Pursuant to the
terms of this agreement, Mr. McDaniel is an at will employee. Under the terms of his employment agreement, Mr. McDaniel
receives an annual base salary of $385,000, a $60,000 relocation allowance,
eligibility for bonus as determined by the Board of Directors (or its
Compensation Committee) in its discretion, an auto allowance of $1,000 per
month, and, to the extent eligible thereunder, will be included in the Companys
plans that provide benefits to executive employees, including, medical, dental,
vision, disability, life insurance, 401(k) plan, sick days, vacation and
holidays. Mr. McDaniel is also eligible to participate in all
non-qualified deferred compensation and similar compensation, bonus and stock
plans offered, sponsored or established by the Company on substantially the
same or a more favorable basis as any other employee of the Company.
In
the event that Mr. McDaniels employment is terminated by the Company for
cause or Mr. McDaniel resigns, Mr. McDaniel will be entitled to
receive his then current base salary through the date his employment is
terminated, but no other compensation of any kind. In the event Mr. McDaniels
employment is terminated by the Company without cause, he will be entitled to
receive as severance his then current base salary and monthly car allowance for
the six-month period following his termination, up to $9,000 for outplacement
services and, to the extent that Mr. McDaniel lists the sale of his
residence with a licensed real estate broker during such 6-month period and
completes the sale of such residence during the 12-month period following
expiration of such 6-month period at a sale price less than the amount Mr. McDaniel
initially paid for such residence (net of real estate commissions and other
closing costs), the Company shall reimburse Mr. McDaniel for such loss in
a lump sum payment up to a maximum of $96,250. In the event of a Change in Control (as
defined in his employment agreement), if Mr. McDaniels employment is
terminated by his resignation within twelve months following such Change in
Control, he shall be entitled to receive the outplacement services described
above, and if his employment is terminated for good reason as defined in his
employment agreement, within specified time periods before or after a Change in
Control, he shall be entitled to receive a lump sum amount equal to his then
current annual base salary.
Mr. McDaniels
employment agreement includes non-competition and non-solicitation provisions
which will end one year after Mr. McDaniels employment ends and
confidentiality provisions that continue indefinitely.
Steve Weinberger
The
Company entered into an executive employment agreement with Mr. Weinberger
on July 27, 2006, employing him as Chief Financial Officer, which
agreement was amended on May 8, 2008. Pursuant to the terms of this agreement,
14
Mr. Weinberger
is an at will employee. Under the terms of his employment agreement, Mr. Weinberger
receives an annual base salary of $265,000, a $60,000 relocation allowance,
eligibility for bonus as determined by the Board of Directors (or its
Compensation Committee) in its discretion, an auto allowance of $1,000 per
month, and, to the extent eligible thereunder, will be included in the Companys
plans that provide benefits to executive employees, including, medical, dental,
vision, disability, life insurance, 401(k) plan, sick days, vacation and
holidays. Mr. Weinberger is also eligible to participate in all
non-qualified deferred compensation and similar compensation, bonus and stock plans
offered, sponsored or established by the Company on substantially the same or a
more favorable basis as any other employee of the Company.
In
the event that Mr. Weinbergers employment is terminated by the Company
for cause or Mr. Weinberger resigns, Mr. Weinberger will be entitled
to receive his then current base salary through the date his employment is
terminated, but no other compensation of any kind. In the event Mr. Weinbergers
employment is terminated by the Company without cause, he will be entitled to
receive as severance his then current base salary and monthly car allowance for
the six-month period following his termination, up to $9,000 for outplacement
services and
, to the extent that Mr. Weinberger to lists the sale of his residence with a
licensed real estate broker during such 6-month period and completes the sale
of such residence during the 12-month period following expiration of such
6-month period at a sale price less than the amount Mr. Weinberger
initially paid for such residence (net of real estate commissions and other
closing costs), the Company shall reimburse Mr. Weinberger for such loss
in a lump sum payment up to a maximum of $66,250. In the event of a Change in Control (as defined in his
employment agreement), if Mr. Weinbergers employment is terminated by his
resignation within twelve months following such Change in Control, he shall be
entitled to receive the outplacement services described above, and if his
employment is terminated for good reason as defined in his employment
agreement, within specified time periods before or after a Change in Control,
he shall be entitled to receive a lump sum amount equal to his then current
annual base salary.
Mr. Weinbergers
employment agreement includes non-competition and non-solicitation provisions
which will end one year after Mr. Weinbergers employment ends and
confidentiality provisions that continue indefinitely.
Steven Sklar
The
Company entered into an executive employment agreement with Mr. Sklar on August 1,
2005, employing him as Senior Vice President of Marketing. Pursuant to the terms of this agreement, Mr. Sklar
is an at will employee. Under the terms of his employment agreement, Mr. Sklar
receives an annual base salary of $216,000, a $75,000 relocation allowance,
eligibility for bonus as determined by the Board of Directors (or its
Compensation Committee) in its discretion, an auto allowance of $650 per month,
and, to the extent eligible thereunder, will be included in the Companys plans
that provide benefits to executive employees, including, medical, dental,
vision, disability, life insurance, 401(k) plan, sick days, vacation and
holidays. Mr. Sklar is also eligible to participate in all
non-qualified deferred compensation and similar compensation, bonus and stock
plans offered, sponsored or established by the Company on substantially the
same or a more favorable basis as any other employee of the Company.
In
the event that Mr. Sklars employment is terminated by the Company for
cause or Mr. Sklar resigns, Mr. Sklar will be entitled to receive his
then current base salary through the date his employment is terminated, but no
other compensation of any kind. In the event Mr. Sklars employment
is terminated by the Company without cause, he will be entitled to receive as
severance his then current base salary and monthly car allowance for the nine
month period following his termination, and up to $10,000 for outplacement
services. In the event of a Change
in Control (as defined in his employment agreement), if Mr. Sklars
employment is terminated by his resignation within twelve months following such
Change in Control, he shall be entitled to receive the outplacement services
described above, and if his employment is terminated for good reason as
defined in his employment agreement, within specified time periods before or
after a Change in Control, he shall be entitled to receive a lump sum amount
equal to 200% of his then current annual base salary and continuation of his
car allowance for the 12-month period following such termination.
Mr. Sklars employment
agreement includes non-competition and non-solicitation provisions which will
end one year after Mr. Sklars employment ends and confidentiality
provisions that continue indefinitely
EXECUTIVE OFFICERS
The Board of Directors appoints the Companys
executive officers. Certain information concerning the Companys executive
officers is set forth below, except that information concerning Mr. McDaniel,
the Companys Chief Executive Officer, is set forth above under Proposal
1Election of Directors.
Steve
Weinberger
, age 57,
has served as Chief Financial Officer since August 2006. From 2004 to 2006, Mr. Weinberger was
Chief Financial Officer for Fiera Foods Co.
From 1999 to 2003, Mr. Weinberger was Senior Vice President of
Finance at Canada Bread Company. From
1979 to 1999, Mr. Weinberger was employed at Nabisco Canada, where he last
served as Senior Vice President of Finance of the Christie Brown &
Company division. Mr. Weinberger
received his honors Bachelor of Arts degree and MBA from York University.
15
Steve
Sklar
, age 45, has
served as Senior Vice President Marketing since August 1, 2005. Prior to that, Mr. Sklar was Director of
Marketing for Au Bon Pain from 2002 to 2005, Director of Marketing for Legal
Seafoods from 2001 to 2002, owner of Gourmet Food Marketing Company from 1998
to 2001, and Vice President Marketing for MC Retail Foods from 1986 to
1996. Mr. Sklar received a Bachelor
of Science degree in Food Marketing from the University of Massachusetts.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The
Company leases a farming, processing and storage facility located on
approximately 696 acres of land in Whatcom County, Washington from the Uptrail
Group LLC, a limited liability company controlled by the former owners of Rader
Farms, including Brad Rader, an officer of the Company. The ground lease extends through May 17,
2017, and the lease payment is $43,500 per month. The Company has a right of first offer prior
to any sale of the leased premises during the term, and an option to purchase
the premises until 90 days prior to expiration of the term.
Policy on
Review of Related Person Transactions
It
is the policy of the Board of Directors that all related party transactions
must be approved by a majority of the disinterested members of the Board of
Directors. A related party transaction
may not be approved by a single director.
For purposes of the policy, the term related party transaction means
any transaction that is required to be disclosed in the Companys proxy
statements or other filings with the SEC pursuant to Item 404(a) of
Regulation S-K under the Securities Exchange Act of 1934 and any material conflict
of interest transaction with a director.
* * * * *
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE INVENTURE GROUP, INC. 2005
EQUITY INCENTIVE PLAN
General
Information
On
February 24, 2009, the Board adopted, subject to stockholder approval, an
amendment to The Inventure Group, Inc. 2005 Equity Incentive Plan (as
amended, the 2005 Plan) to increase the number of shares of Common Stock
authorized for issuance under the 2005 Plan by 500,000. As of December 27,
2008, the aggregate number of shares of Common Stock reserved for issuance
under the 2005 Plan is the sum of (a) 410,518, which is the number of reserved
but unissued shares available for issuance under the Companys 1995 Stock
Option Plan (the 1995 Plan), (b) 500,000, which is the number of
additional shares approved by the stockholders on May 23, 2006 to be added
to the 2005 Plan, and (c) 500,000, which is the number of additional
shares approved by the stockholders on May 19, 2008 to be added to the
2005 Plan. In addition, to the extent
shares of Common Stock are subject to awards granted under the 1995 Plan or the
2005 Plan that are canceled or expire prior to the issuance of such shares,
those shares will again be available for future awards under the 2005
Plan. As of December 27, 2008,
there were 3,032 shares of Common Stock available for Awards under the 2005
Plan. If the proposed amendment is
approved by the stockholders, the total number of shares of Common Stock
authorized for issuance under the 2005 Plan would be increased by 500,000.
The
Board of Directors believes that a robust equity incentive plan is necessary
for the Company to continue to attract, retain and provide appropriate
incentive compensation to key personnel, and that the number of shares
authorized for issuance under the 2005 Plan should be increased. If the amendment to the 2005 Plan to increase
the number of shares available for issuance thereunder is not approved, the
Company may become unable to provide suitable equity-based incentives to
present and future employees. Whether or
not stockholder approval is obtained, the 2005 Plan will remain in effect, and
equity incentives may continue to be awarded pursuant to the provisions of the 2005
Plan until the share reserve is depleted.
The
following is a summary of the material terms of the 2005 Plan, as proposed to
be amended (the Amended and Restated Plan), and is qualified in its entirety
by reference to the Amended and Restated Plan.
A copy of the Amended and Restated Plan is attached to this proxy
statement as Appendix A.
Summary of
the Amended and Restated 2005 Equity Incentive Plan
Administration
The
Compensation Committee will administer the Amended and Restated Plan, with
certain actions subject to the review and approval of the full Board or a panel
consisting of all of the independent Directors. The Committee will have full
power and authority to determine when and to whom awards will be granted,
including the type, amount, form of payment and other terms and conditions of
each award, consistent with the provisions of the Amended and Restated Plan. In
addition the Committee has the authority to interpret the Amended and Restated
Plan and the awards granted under the plan, and establish rules and
regulations for the administration of the
plan. The Committee may delegate the administration of the plan to the
Companys officers, including the maintenance of records of the awards and the
interpretation of the terms of the awards.
Eligible
Participants
Any
officer, employee, consultant, independent contractor, or adviser providing
services to the Company or any subsidiary, who is selected by the Committee, is
eligible to receive awards under the Amended and Restated Plan.
16
Shares
Available for Awards
The
aggregate number of shares of the Common Stock that may be issued as awards
under the Amended and Restated Plan is the sum of (a) 410,518, which is
the number of reserved but unissued shares available for issuance under the
Companys 1995 Stock Option Plan (the 1995 Plan), (b) 500,000, which is
the number of additional shares approved by the stockholders on May 23,
2006 to be added to the 2005 Plan, (c) 500,000, which is the number of
additional shares approved by the stockholders on May 19, 2008 to be added
to the 2005 Plan and (d) 500,000, which is the number of additional shares
approved by the stockholders on May 19, 2009 to be added to the 2005 Plan. The aggregate number of shares of Common
Stock which may be granted to any one participant in any one year under the
Amended and Restated Plan is 250,000 shares. The Committee may adjust the
aggregate number of shares reserved for issuance under the plan in the case of
a stock dividend or other distribution, including a stock split, merger,
extraordinary dividend, 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 plan.
If
any shares of Common Stock subject to any award or to which an award relates,
granted under the 1995 Stock Option Plan or the Amended and Restated Plan, are
forfeited, become unexercisable, or if any award terminates without the
delivery of any shares, the shares of Common Stock previously set aside for
such awards will be available for future awards under the Amended and Restated
Plan.
Types of
Awards and Terms and Conditions
The
Amended and Restated Plan permits the grant of the following awards:
·
nonqualified stock options
·
incentive stock options
·
restricted stock
·
restricted stock units
·
stock appreciation rights
·
performance units
·
stock-reference awards
Awards
may be granted alone, in addition to, or in combination with any other award
granted under the Amended and Restated Plan.
Stock
Options
The
holder of an option will be entitled to purchase a number of shares of Common
Stock at a specified exercise price during a specified time period, all as
determined by the Committee. The option exercise price may be payable either in
cash or, at the discretion of the Committee, in shares of Common Stock having a
fair market value on the exercise date equal to the exercise price.
Restricted
Stock and Restricted Stock Units
The
holder of restricted stock will own shares of Common Stock subject to
restrictions imposed by the Committee (including for example, restrictions on
the right to vote the restricted shares or to receive any dividends with
respect to the shares) and subject to forfeiture to the Company if the holder
does not satisfy certain requirements (including, for example, continued
employment with the Company) for a specified period of time. The holder of
restricted stock units will have the right, subject to any restrictions imposed
by the Committee, to receive shares of Common Stock, or a cash payment equal to
the fair market value of those shares, at some future date determined by the
Committee, provided that the holder has satisfied certain requirements
(including, for example, continued employment with the Company until such
future date).
The
awards of restricted stock and restricted stock units that are intended to
qualify as performance based compensation within the meaning of Section 162(m) of
the Internal Revenue Code will be subject to the attainment of performance
goals relating to the performance criteria selected by the Committee.
Performance goals must be based solely on one or more of the following business
criteria: (i) cash flow; (ii) earnings per share, including earnings
per share as adjusted (a) to exclude the impact of any (1) significant
acquisitions or dispositions of businesses by the Company, (2) one-time,
non-operating charges and (3) accounting changes (including but not
limited to any accounting changes that require the expensing of stock options
and any accounting changes the Company adopts early); and (b) for any
stock split, stock dividend or other recapitalization; (iii) earnings
before interest, taxes, depreciation and amortization; (iv) return on
equity; (v) total stockholder return; (vi) share price performance; (vii) return
on capital; (viii) return on assets or net assets; (ix) revenue; (x) income;
(xi) operating income; (xii) operating profit; (xiii) profit margin; (xiv)
return on operating revenue; (xv) return on invested capital; (xvi) market
price; (xvii) brand recognition/acceptance; (xviii) customer satisfaction;
(xix) productivity; or (xx) sales growth and volume.
Stock
Appreciation Rights
Participants
may be granted tandem SARs (consisting of SARs with underlying options) and
stand-alone SARs. The holder of a tandem SAR is entitled to elect between the
exercise of the underlying option for shares of Common Stock or the
17
surrender
of the option in exchange for the receipt of a cash payment equal to the excess
of the fair market value on the surrender date over the aggregate exercise
price payable for such shares. The holder of stand-alone SARs will be entitled
to receive the excess of the fair market value (on the exercise date) over the
exercise price for such shares.
Change of
Control
The
Committee has the discretion to include provisions in awards that provide for
acceleration of certain restrictions in the event of a change of control of the
Company (as defined by the Committee and set forth in such awards), including
provisions that provide that, upon the occurrence of such change of control:
·
options and SARs may become fully vested and
immediately exercisable;
·
restriction periods and restrictions imposed
on restricted stock or restricted stock units that are not performance-based may
lapse; and
·
restrictions and other conditions applicable
to other awards may lapse, and the awards may become free of restrictions,
limitations or conditions and become fully vested and transferable.
Termination
of Employment
Vested
options granted under the Amended and Restated Plan will expire, terminate, or
otherwise be forfeited as follows:
·
sixty (60) days after termination of a
participant, including voluntary termination by the participant, other than in
the circumstances described below;
·
upon termination of a participant for Cause
(as defined in the Amended and Restated
Plan);
·
six (6) months after the date on which a
participant is terminated due to Disability (as defined in the Amended and
Restated Plan); and
·
six (6) months after the death of a
participant.
Duration,
Termination and Amendment
The
Amended and Restated Plan will terminate on the tenth anniversary of the date
the Companys stockholders approved the initial version of the plan, May 17,
2015, unless terminated by the Board or the Committee earlier, or extended by
an amendment approved by the Companys stockholders. No awards may be made
after the termination date. However, unless otherwise expressly provided in an
applicable award agreement, any award granted under the Amended and Restated
Plan prior to the expiration may extend beyond the end of such period through
the awards normal expiration date.
The
Board, and the Committee, may generally amend or terminate the plan as
determined to be advisable. Stockholder approval may also be required for
certain amendments by the Internal Revenue Code, the rules of The Nasdaq
Stock Market LLC, or rules of the Securities and Exchange Commission. The
Board or the Committee has specific authority to amend the plan without
stockholder approval to comply with legal, regulatory and listing requirements
and to avoid unanticipated consequences determined to be inconsistent with the
purpose of the plan or any award agreement.
Prohibition
on Repricing Awards
Without
the approval of the Companys stockholders, no option or SAR may be amended to
reduce its exercise price or grant price at any time during the term of such
option or SAR.
Transferability
of Awards
Unless
otherwise provided by the Committee, awards under the Amended and Restated Plan
may only be transferred by will or the laws of descent and distribution. The
Committee may permit further transferability pursuant to conditions and
limitations that it may impose, except that no transfers for consideration will
be permitted.
Federal
Income Tax Consequences
The
federal income tax consequences of awards under the Amended and Restated Plan
to the Company and the Companys employees, officers and directors are complex
and subject to change. The following discussion is only a summary of the
general rules applicable to the Amended and Restated Plan. Recipients of
awards under the Amended and Restated Plan should consult their own tax
advisors since a taxpayers particular situation may be such that some
variation of the rules described below will apply.
Options
Options
granted under the Amended and Restated Plan may be either incentive stock
options or nonqualified stock options. Incentive stock options are options
which are designated as such by the Company and which meet certain
18
requirements
under Section 422 of the Internal Revenue Code of 1986, as amended (the Code)
and the regulations thereunder. Any option which does not satisfy these
requirements will be treated as a nonqualified stock option.
Incentive
Stock Options
If
an option granted under the Amended and Restated Plan is treated as an
incentive stock option, the optionee will not recognize any income upon either
the grant or the exercise of the option, and the Company will not be entitled
to a deduction for federal tax purposes. Upon a sale of the shares, the tax
treatment to the optionee and the Company will depend primarily upon whether
the optionee has met certain holding period requirements at the time he or she
sells the shares. In addition, as discussed below, the exercise of an incentive
stock option may subject the optionee to alternative minimum tax liability.
If
an optionee exercises an incentive stock option and does not dispose of the
shares received within two years after the date the
option was granted
or within one year after the transfer of the shares to him or her, any gain
realized upon the disposition will be characterized as long-term capital gain
and, in such case, the Company will not be entitled to a federal tax deduction.
If
the optionee disposes of the shares either within two years after the date the
option is granted or within one year after the transfer of the shares to him or
her, the disposition will be treated as a disqualifying disposition and an
amount equal to the lesser of (1) the fair market value of the shares on
the date of exercise minus the exercise price, or (2) the amount realized
on the disposition minus the exercise price, will be taxed as ordinary income
to the optionee in the taxable year in which the disposition occurs. However,
in the case of gifts, sales to related parties, and certain other transactions,
the full difference between the fair market value of the stock and the purchase
price will be treated as compensation income. The excess, if any, of the amount
realized upon disposition over the fair market value at the time of the
exercise of the option will be treated as long-term capital gain if the shares
have been held for more than one year following the exercise of the option.
The
exercise of an incentive stock option may subject an optionee to alternative
minimum tax liability. The excess of the fair market value of the shares at the
time an incentive stock option is exercised over the purchase price of the
shares is included in income for purposes of the alternative minimum tax even
though it is not included in taxable income for purposes of determining the
regular tax liability of an optionee. Consequently, an optionee may be
obligated to pay alternative minimum tax in the year he or she exercises an
incentive stock option.
In
general, the Company will not be entitled to a federal income tax deduction
upon the grant, exercise, or termination of an incentive stock option. However,
in the event an optionee sells or otherwise disposes of the stock received on
the exercise of an incentive stock option in a disqualifying disposition, the
Company will be entitled to a deduction for federal income tax purposes in an
amount equal to the ordinary income, if any, recognized by the optionee upon
disposition of the shares, provided that the deduction is not otherwise
disallowed under the Code.
Nonqualified
Stock Options
Nonqualified
stock options granted under the Amended and Restated Plan do not qualify as incentive
stock options and will not qualify for any special tax benefits to the
optionee. An optionee generally will not recognize any taxable income at the
time he or she is granted a nonqualified option. However, upon its exercise,
the optionee will recognize ordinary income for federal tax purposes measured
by the excess of the then fair market value of the shares over the exercise
price. The income realized by the optionee will be subject to income and other
employment withholding taxes.
The
optionees basis for determination of gain or loss upon the subsequent
disposition of shares acquired upon the exercise of a nonqualified stock option
will be the amount paid for such shares plus any ordinary income recognized as
a result of the exercise of such option. Upon disposition of any shares
acquired pursuant to the exercise of a nonqualified stock option, the
difference between the sale price and the optionees basis in the shares will
be treated as a capital gain or loss and generally will be characterized as
long-term capital gain or loss if the shares have been held for more than one
year at the time of their disposition.
In
general, the Company will not be entitled to a federal income tax deduction
upon the grant or termination of a nonqualified stock option or a sale or disposition
of the shares acquired upon the exercise of a nonqualified stock option.
However, upon the exercise of a nonqualified stock option, the Company will be
entitled to a deduction for federal income tax purposes equal to the amount of
ordinary income that an optionee is required to recognize as a result of the
exercise, provided that the deduction is not otherwise disallowed under the
Code.
Restricted
Stock and Restricted Stock Units
Generally,
absent a timely election by the holder under Section 83(b) of the
Code, the holder of restricted stock will recognize ordinary compensation
income at the time the stock becomes vested. The amount of ordinary
compensation income recognized will be equal to the excess, if any, of the fair
market value of the stock on the date it becomes vested over any amount paid by
the holder in exchange for stock.
19
In
the case of restricted stock units, the holder will recognize ordinary
compensation income at the time the stock is received equal to the excess of
value of the stock on the date of receipt over any amount paid by the holder in
exchange for stock. If the holder of a restricted stock unit receives the cash
equivalent of the stock issuable under the restricted stock unit in lieu of
actually receiving the stock, the holder will recognize ordinary compensation
income at the time of the receipt of such cash in the amount of the cash
received. In the case of both restricted stock and restricted stock units, the
income recognized by the holder will generally be subject to U.S. income tax
withholding and employment taxes.
In
the year that the recipient of a stock award recognizes ordinary taxable income
in respect of restricted stock or a restricted stock unit, the Company will be
entitled to a deduction for federal income tax purposes equal to the amount of
ordinary income that the recipient is required to recognize, provided that the
deduction is not otherwise disallowed under the Code.
Stock
Appreciation Rights
As
discussed above, the Company may grant either stand-alone SARs or tandem SARs
under the Amended and Restated Plan. Generally, the recipient of a SAR will not
recognize any taxable income at the time the SAR is granted.
With
respect to stand-alone SARs, if the holder receives the appreciation inherent
in the SARs in cash, the cash will be taxable as ordinary compensation income
to the employee at the time that it is received. If the holder receives the
appreciation inherent in the stand-alone SARs in stock, the holder will
recognize ordinary compensation income equal to the excess of the fair market
value of the stock on the day it is received over any amounts paid by the
holder for the stock.
With
respect to tandem SARs, if a holder elects to surrender the underlying option
in exchange for cash or stock equal to the appreciation inherent in the
underlying option, the tax consequences to the holder will be the same as
discussed above relating to stand-alone SARs. If the holder elects to exercise
the underlying option, the holder will be taxed at the time of exercise as if
he or she had exercised a nonqualified stock option (discussed above), i.e.,
the holder will recognize ordinary income for federal tax purposes measured by
the excess of the then fair market value of the shares of stock over the
exercise price.
The
income recognized by the holder of a stand-alone SAR or tandem SAR will
generally be subject to U.S. income tax withholding and employment taxes.
In
general, the Company will not be entitled to a federal income tax deduction
upon the grant or termination of stand-alone SARs or tandem SARs. However, upon
the exercise of either a stand-alone SAR or a tandem SAR, the Company will be
entitled to a deduction for federal income tax purposes equal to the amount of
ordinary income that the holder is required to recognize as a result of the
exercise, provided that the deduction is not otherwise disallowed under the
Code.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE APPROVAL OF THE AMENDMENT TO THE INVENTURE GROUP, INC. 2005 EQUITY
INCENTIVE PLAN
New Plan
Benefits
Because
the Amended and Restated 2005 Equity Incentive Plan is a discretionary plan, it
is not possible to determine what awards the Board of Directors or the
Committee will grant under the plan.
INDEPENDENT
AUDITORS
On July 14, 2008, The Company informed Deloitte & Touche
LLP (Deloitte) that Deloitte was being dismissed as the Companys principal
accountants, effective immediately. The decision to dismiss Deloitte was
approved by the Audit Committee of the Companys Board of Directors. On July 15, 2008, the Company engaged
Moss Adams LLP (Moss Adams) as its new principal accountants for the year
ending December 27, 2008. The decision to engage Moss Adams was
approved by the Companys Audit Committee.
Deloittes audit reports on the Companys consolidated financial
statements as of and for the years ended December 29, 2007 and December 30,
2006 did not contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting
principles. During the years ended December 29,
2007 and December 30, 2006, and in the subsequent interim period through March 29,
2008, there were: (i) no disagreements between the Company and Deloitte on
any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Deloitte, would have caused Deloitte to make reference
to the subject matter of the disagreement in their reports on the financial
statements for such years, and; (ii) no reportable events as that term
is defined in Item 304(a)(1)(v) of Regulation S-K.
In deciding to engage Moss Adams, the Audit Committee reviewed auditor
independence issues and prior commercial relations with Moss Adams and
concluded that Moss Adams has no commercial relationship with the Company that
would impair its independence for the year ended December 27, 2008.
Representatives
of Moss Adams are expected to be present at the Annual Meeting and will have
the opportunity to make a statement, if they so desire, and are expected to be
available to respond to appropriate questions from those stockholders who
attend the meeting. Stockholder ratification
of the selection of Moss Adams as our independent public accountants is not
required by our Bylaws or otherwise.
20
Principal
Accountant Fees and Services
The following
table itemizes fees billed to the Company by (a) Deloitte during fiscal
year 2007 and thru July 14, 2008 and (b) Moss Adams for fiscal year
2008:
|
|
2008
|
|
2008
|
|
|
|
|
|
Deloitte
|
|
MossAdams
|
|
2007
|
|
Audit Fees (includes quarterly review
procedures)
|
|
$
|
377,325
|
|
$
|
41,785
|
|
$
|
232,189
|
|
|
|
|
|
|
|
|
|
Audit Related Fees (Fees related to the review
of Form S-8 in 2008, and acquisition of Rader Farms in 2007.)
|
|
5,000
|
|
|
|
19,483
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Committee approval is required before an accountant is engaged to
render audit or non-audit services unless (a) the engagement is entered
into pursuant to detailed pre-approval policies established by the Audit
Committee and such policies do not include delegation of the committees
responsibilities to management or (b) the engagement is with respect to
services other than audit, review or attest services and they aggregate less
than 5% of the total paid to the accountant during the fiscal year, such
services were not recognized by the Company at the time of the engagement to be
non-audit and such services are promptly brought to committees attention and
approved prior to completion of the audit.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of
the Exchange Act requires that the Companys directors, executive officers and
persons who own more than 10% of the Companys Common Stock file with the SEC
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors and greater than 10%
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) reports they file.
To
the Companys knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representation that no other reports were
required, during the fiscal year ended December 27, 2008, all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with, except that (a) Terry McDaniel and
Steve Weinberger each filed one late Form 4 on July 25, 2008 to
report an option grant from the Company on May 7, 2008 and (b) Larry
Polhill, Ash Asensio, Mark Howells, Itzhak Reichman and Macon Bryce Edmonson each
filed one late Form 4 on July 25, 2008 to report an option grant from
the Company on May 19, 2008.
STOCKHOLDER PROPOSALS FOR 2010 ANNUAL MEETING
If
any stockholder intends to present a proposal to be considered for inclusion in
the Companys proxy material in connection with the 2010 Annual Meeting of
Stockholders, the proposal must be on matters appropriate for stockholder
action, in proper form and otherwise consistent with the rules and
regulations under the Exchange Act and the Companys Bylaws, and received by
the Secretary of the Company on or before December 19, 2009. Proposals should be directed to the Companys
Secretary, The Inventure Group, Inc., 5050 N. 40
th
Street, Suite #300,
Phoenix, Arizona 85018.
OTHER BUSINESS
The
Board of Directors does not know of any business to be brought before the
Annual Meeting other than the matters described in the Notice of Annual
Meeting. However, if any other matters
are properly presented for action, it is the intention of each person named in
the accompanying proxy to vote said proxy in accordance with his judgment on
such matters.
21
AVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO
STOCKHOLDERS
The Company is required to provide an Annual Report to stockholders who
receive this proxy statement. The
Company will also provide copies of the Annual Report to brokers, dealers,
banks, voting trustees and their nominees for the benefit of their beneficial
owners of record. Additional copies of
the Annual Report, along with copies of the Companys Annual Report on Form 10-K
for the fiscal year ended December 27, 2008 (not including documents
incorporated by reference), are available without charge to stockholders upon
written request to the Company: The Inventure Group, Inc., Attention:
Corporate Secretary, 5050 N. 40
th
Street, Suite 300, Phoenix, Arizona
85018. You may review the Companys
filings with the Securities and Exchange Commission by visiting the Companys
website at www.inventuregroup.net.
|
By Order of the Board of Directors
|
|
|
|
|
|
Terry McDaniel
|
|
Chief Executive Officer
|
Phoenix,
Arizona
April 17,
2009
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE
ANNUAL MEETING AND DESIRE THEIR STOCK TO BE VOTED ARE URGED TO MARK, DATE, SIGN
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
* * * * *
22
APPENDIX A
THE INVENTURE GROUP, INC.
AMENDED AND RESTATED
2005 EQUITY INCENTIVE PLAN
ARTICLE 1.
PURPOSE
1.1
General
. The purpose of The Inventure Group, Inc. Amended and
Restated
2005 Equity Incentive Plan
(the
Plan) is to promote the interests of The Inventure Group, Inc. (the Company),
by enabling the Company to motivate, attract, and retain the services of
persons upon whose judgment, efforts, and contributions the success of the
Companys business depends. The plan is further intended to align the
personal interests of such persons with the interests of stockholders of the
Company through equity participation in the Companys growth and success.
Capitalized terms not otherwise defined in the text are defined in Article 16.
ARTICLE 2.
EFFECTIVE DATE; TERM
2.1
Effective Date
. The effective date of the Plan is May 17,
2005 (the Effective Date), which is the date as of which the Plan was
approved by the stockholders of the Company.
2.2
Term
. This Plan shall continue in effect until terminated in
accordance with Article 14, except that no Awards shall be granted after
the tenth (10
th
) anniversary of the Effective Date.
ARTICLE 3.
SHARES SUBJECT TO THE PLAN
3.1
Number of Shares
. The aggregate number of shares of
Stock (the Shares) reserved and available for Awards or which may be used to
provide a basis of measurement or valuation of an Award (such as an SAR,
Restricted Stock Award or Performance Unit Award) shall be the sum of (a) 410,518,
which is the number of shares of Stock reserved under the Companys 1995 Stock
Option Plan (the Prior Plan) that were not subject to outstanding awards
under the Prior Plan on the Effective Date, (b) 500,000, which is the
number of shares of Stock approved by the stockholders on May 23, 2006 to
be added to the number of Shares reserved and available for Awards or which may
be used to provide a basis of measurement or valuation for an Award, (c) 500,000,
which is the number of shares of Stock approved by the stockholders on May 19,
2008 to be added to the number of Shares reserved and available for Awards or
which may be used to provide a basis of measurement or valuation for an Award, (d) 500,000,
which is the number of shares of Stock approved by the stockholders on May 19,
2009 to be added to the number of Shares reserved and available for Awards or
which may be used to provide a basis of measurement or valuation for an Award,
and (e) the number of shares of Stock that prior to issuance are released
from, or reacquired by the Company pursuant to, the terms of awards outstanding
under the Prior Plan.
3.2
Re-use of Shares
. Shares that: (a) are subject to
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option; (b) are subject to an Award
granted hereunder but prior to issuance are released from, or reacquired by the
Company pursuant to, the terms of such Award; or (c) are subject to an
Award that otherwise terminates without Shares being issued; will again be
available for grant and issuance in connection with future Awards under this
Plan. In addition, Shares that are
withheld by the Company and not issued in order to pay for Shares purchased
pursuant to an Award or any withholding taxes due upon issuance of an Award or
Shares thereunder shall not be deemed to have been delivered for purposes of
determining the maximum number of Shares available for delivery under the Plan
and such Shares shall again be available for grant of Awards under the Plan,
other than an Award that includes Incentive Stock Options.
3.3
Maximum Number of Shares for Certain Awards
. No more than 100% of the Shares shall
be issued pursuant to Incentive Stock Options, and no more than 100% of the
Shares shall be issued pursuant to Non-Qualified Stock Options, Restricted
Stock Awards, SARs, Performance Units and Stock Reference Awards. A
person may be granted more than one Award under this Plan.
3.4
Stock Distributed
. Any Stock distributed pursuant to an
Award may consist, in whole or in part, of authorized and unissued Stock,
treasury Stock, or Stock purchased on the open market. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Awards granted under
this Plan.
A-1
ARTICLE
4.
ELIGIBILITY
4.1
General
. Awards may be granted only to an individual who is an employee
(including an employee who also is a director or officer), officer, director,
consultant, independent contractor, or adviser of the Company or a Subsidiary,
as determined by the Board;
provided
such consultants, contractors and advisors render bona fide services not
in connection with the offer and sale of securities in a capital-raising
transaction.
4.2
Individual Award Limits
. In no event shall any Participant
receive an Award or Awards during any calendar year covering an aggregate of
more than 250,000 Shares.
4.3
Description of Criteria for Performance-Based
Awards to Named Executive Officers
. In determining performance goals applicable to any Award
granted to a Named Executive Officer, one or more of the following business
criteria shall be used: (a) cash flow; (b) earnings per share,
including earnings per share as adjusted (i) to exclude the impact of any (1) significant
acquisitions or dispositions of businesses by the Company, (2) one-time,
non-operating charges and (3) accounting changes (including but not
limited to any accounting changes that require the expensing of stock options
and any accounting changes the Company adopts early); and (ii) for any
stock split, stock dividend or other recapitalization; (c) earnings before
interest, taxes, depreciation and amortization; (d) return on equity; (e) total
shareholder return; (f) share price performance; (g) return on capital;
(h) return on assets or net assets; (i) revenue; (j) income; (k) operating
income; (l) operating profit; (m) profit margin; (n) return on
operating revenue; (o) return on invested capital; (p) market price; (q) brand
recognition/acceptance; (r) customer satisfaction; (s) productivity;
or (t) sales growth and volume.
ARTICLE
5.
ADMINISTRATION
5.1
Board
. The Plan shall be administered by the Board or a Committee
appointed by the Board to administer the Plan at any time or from time to
time. To the extent required for Awards to qualify for the exemptions
available under Rule 16b-3 under the Exchange Act, or successor
legislation, members of the Committee shall be non-employee directors within
the meaning of Rule 16b-3. To the extent required for compensation
realized from Awards to be deductible by the Company pursuant to Section 162(m) of
the Code, members of the Committee shall be outside directors within the
meaning of such Section. Once appointed, the Committee shall continue to
serve until otherwise directed by the Board. From time to time, the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), appoint new members in substitution
therefor, and fill vacancies however caused.
5.2
Authority of Board
. The Board has the exclusive power,
authority, and discretion to:
(a)
Designate Participants;
(b)
Determine the type or types of Awards to be
granted to each Participant;
(c)
Determine the number of Awards to be granted
and the number of shares of Stock subject to an Award;
(d)
Prescribe the form of each Award Agreement,
which need not be identical for each Participant;
(e)
Determine the terms and conditions of any
Award granted under the Plan, including but not limited to, the exercise price,
grant price, or purchase price, any restrictions or limitations on the Award,
any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award and accelerations or waivers thereof, any performance
criteria, and any modification or amendment of any Award previously granted,
based in each case on such considerations as the Board in its sole discretion
determines;
(f)
Determine whether, to what extent, and under
what circumstances an Award may be settled in, or the exercise price of an
Award may be paid in, cash, Stock, other Awards, or other property, or an Award
may be canceled, forfeited, or surrendered;
(g)
Determine whether, to what extent, and under
what circumstances cash, Stock, other Awards, other property, and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the holder thereof or of the Board;
(h)
Decide all other matters that must be
determined in connection with an Award;
A-2
(i)
Establish, adopt, or revise any rules and
regulations as it may deem necessary or advisable to administer the Plan;
(j)
Interpret the Plan, any Award, and any Award
Agreement in its discretion; and
(k)
Make all other decisions and determinations
that may be required under the Plan or as the Board deems necessary or
advisable to administer the Plan.
5.3
Decisions Binding
. All decisions, interpretations, and
determinations by the Board with respect to the Plan, any Award, and any Award
Agreement are final, binding, and conclusive on all parties.
5.4
Repricing of Stock Options and SARs
. In no event shall any outstanding
Option or SAR be repriced to a lower exercise or grant price per Share at any
time during the term of such Option or SAR without the prior affirmative vote
of holders of a majority of the shares of Common Stock of the Company present
at a stockholders meeting in person or represented by proxy and entitled to
vote thereon.
ARTICLE
6.
STOCK OPTIONS
6.1
General
. The Board is authorized to grant Options to Participants on the
following terms and conditions:
(a)
Exercise Price
. The exercise price per share of Stock
under an Option other than an Incentive Stock Option shall be determined by the
Board, provided that the exercise price for any such Option may not be less
than 85% of the Fair Market Value as of the date of the grant.
(b)
Payment
. Payment for Stock issued upon exercise of an Option shall be
made in accordance with Article 11 of the Plan.
(c)
Time and Conditions of Exercise
. The Board shall determine the time or times
at which an Option may be exercised in whole or in part, provided that no
Option may be exercisable prior to six months following the date of the grant
of such Option if and to the extent such limitation is necessary or required
under Rule 16b-3 or successor legislation under the Exchange Act.
(d)
Evidence of Option
. All Options shall be evidenced by a
written Award Agreement between the Company and the Participant. The
Award Agreement shall include such provisions as may be specified by the Board.
6.2
Incentive Stock Options
. The terms of any Incentive Stock
Options granted under the Plan must comply with the following additional rules,
and, to the extent that an Incentive Stock Option fails to comply with such
rules, it will be treated as a Non Qualified Stock Option:
(a)
Employees Only
. Incentive Stock Options may only be
granted to employees (including officers and directors who are also employees)
of the Company or a Subsidiary.
(b)
Exercise Price
. The exercise price per share of Stock
shall be set by the Board, provided that the exercise price for any Incentive
Stock Option may not be less than the Fair Market Value as of the date of the
grant.
(c)
Exercise
. In no event may any Incentive Stock Option be exercisable for
more than ten years from the date of its grant.
(d)
Individual Dollar Limitation
. The aggregate Fair Market Value
(determined as of the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed $100,000.00.
(e)
Ten Percent Owners
. An Incentive Stock Option may be
granted to a Ten Percent Owner, provided that at the time such option is
granted the exercise price per share of Stock shall not be less than 110% of
the Fair Market Value and such option by its terms is not exercisable after the
expiration of five (5) years from the date of its grant.
(f)
Expiration of Incentive Stock Options
. No Award of an Incentive Stock Option
may be made pursuant to this Plan after the expiration of ten (10) years
from the Effective Date.
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(g)
Right to Exercise
. During a Participants lifetime, an
Incentive Stock Option may be exercised only by the Participant.
(h)
Tax-Qualified ISOP Options
. All provisions of the Plan relating
to Incentive Stock Options shall be administered and interpreted in accordance,
and so as to comply, with the provisions of Section 422 of the Code.
6.3
Termination of Participant
. Notwithstanding the exercise periods
set forth in any Award Agreement, Options shall be subject to the following:
(a)
An Option shall lapse ten years after it is
granted, unless an earlier time is set in the Award Agreement.
(b)
If a Participants employment is terminated
due to Retirement or for any other reason other than for Cause, such
Participant may exercise his or her Incentive Stock Options only to the extent
that such Incentive Stock Options would have been exercisable on the
Termination Date; provided, that such exercise is made prior to the earlier of
the date sixty (60) days after the Termination Date and the expiration date of
the Option set forth in the Award Agreement. If a Participants
employment is terminated due to Cause, the Participants Incentive Stock
Options shall automatically lapse and not be exercisable by the Participant,
whether or not such Options were vested.
(c)
If a Participants employment, contractual or
other relationship with the Company is terminated due to Retirement or for any
other reason other than for Cause, such Participant may exercise his or her
Non-Qualified Stock Options, only to the extent that such Options would have
been exercisable on the Termination Date; provided, that such exercise is made
prior to the earlier of the date sixty (60) days after the Termination Date (or
such other time period as set forth in the Award Agreement) and the expiration
date of the Option set forth in the Award Agreement. If a Participants
employment, contractual or other relationship is terminated due to Cause, the
Participants Non-Qualified Stock Options shall automatically lapse and not be
exercisable by the Participant, whether or not such Options were vested.
(d)
If a Participant dies or is terminated due to
Disability, then the Participants Options may be exercised, only to the extent
that such Options would have been exercisable on the date of the Participants
death or termination due to Disability; provided that such exercise is made
prior to the earlier of (i) the six-month anniversary of such Participants
death or termination due to Disability, as the case may be or (ii) the
expiration date of the Option set forth in the Award Agreement. Upon the
Participants death or termination due to Disability, any exercisable Options
may be exercised by the Participants legal representative or representatives.
ARTICLE
7.
STOCK APPRECIATION RIGHTS
7.1
Grant of SARs
. The Board is authorized to grant SARs
to Participants on the following terms and conditions:
(a)
Right to Payment
. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right to
receive the excess, if any, of:
(1)
The Fair Market Value of one share of Stock
on the date of exercise; over
(2)
The grant price of the SAR as determined by
the Board, which shall not be less than 85% of the Fair Market Value of one
share of Stock on the date of grant in the case of any SAR.
(b)
Other Terms
. All awards of Stock Appreciation Rights shall be evidenced by
an Award Agreement. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms
and conditions of any Stock Appreciation Right shall be determined by the Board
at the time of the grant of the Award and shall be reflected in the Award
Agreement. A Stock Appreciation Right may be granted in combination with,
in addition to, or completely independent of an Option or any other Award under
the Plan.
ARTICLE
8.
PERFORMANCE UNITS
8.1
Grant of Performance Units
. The Board is authorized to grant
Performance Units to Participants on such terms and conditions as may be
selected by the Board. The Board shall have the complete discretion to
determine the number of Performance Units granted to each Participant.
All Awards of Performance Units shall be evidenced by an Award Agreement.
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8.2
Right Under Performance Units
. A grant of Performance Units gives
the Participant rights, valued as determined by the Board, and payable to, or
exercisable by, the Participant to whom the Performance Units are granted, in
whole or in part, as the Board shall establish at grant or thereafter.
The Board shall set performance goals and other terms or conditions to payment
of the Performance Units in its discretion which, depending on the extent to
which they are met, will determine the amount and value of cash, Stock, Awards,
and/or other property that will be paid to the Participant.
8.3
Other Terms
. Performance Units may be payable in cash, Stock, or other
Awards or property, or any combination thereof, and have such other terms and
conditions as determined by the Board and reflected in the Award Agreement.
ARTICLE
9.
RESTRICTED STOCK AWARDS
9.1
Restricted Stock Awards
. The Board is authorized to make
Awards of Restricted Stock to Participants either in the form of a grant of
Stock or an offer to sell Stock to a Participant, in such amounts and subject
to such terms, conditions and restrictions as may be selected by the
Board. All Awards of Restricted Stock shall be evidenced by an Award
Agreement.
9.2
Issuance and Restrictions
. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions, including without
limitation vesting or forfeiture restrictions, as the Board may impose.
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Board determines
at the time of the grant of the Award or thereafter.
9.3
Forfeiture
. Except as otherwise determined by the Board at the time of the
grant of the Award or thereafter, upon termination of employment during the
applicable restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited and reacquired by the Company; provided,
however, that the Board may provide in any Award Agreement that restrictions or
forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in specified circumstances, and the Board may in other cases waive in
whole or in part restrictions or forfeiture conditions relating to Restricted
Stock.
9.4
Payment and Certificates for Restricted Stock
. If a Restricted Stock Award provides
for the purchase of Stock by a Participant, payment shall be made pursuant to Article 11
of the Plan. Restricted Stock granted under the Plan may be evidenced in
such manner as the Board shall determine. To the extent that an Award is
granted in the form of newly issued Restricted Stock, the Award recipient, as a
condition to the grant of such an Award, shall be required to pay to the
Company in cash, cash equivalents or other legal consideration an amount equal
to the par value of such Restricted Stock. To the extent that an Award is
granted in the form of Restricted Stock from the Companys treasury, no such
cash consideration shall be required of the Award recipients. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock,
and the Company shall retain physical possession of the certificate until such
time as all applicable restrictions lapse.
9.5
Restricted Stock Units
. Restricted Stock Awards may be
granted as Awards of Restricted Stock Units.
(a)
A Restricted Stock Unit means a contractual
right granted to a Participant under this Plan to receive a Share (or cash equivalent)
which is subject to restrictions of this Plan and the applicable Award
Agreement. A Restricted Stock Unit shall entitle the Participant to
receive one Share at such future time and upon such terms as specified by the
Board in the Award Agreement evidencing such Award. Restricted Stock Units
issued under the Plan may have restrictions which lapse based upon the service
of a Participant, or based upon other criteria that the Board may determine
appropriate. The Board may require a cash payment from the Participant in
exchange for the grant of Restricted Stock Units or may grant Restricted Stock
Units without the requirement of a cash payment. The Board may grant Restricted
Stock Units that vest on the attainment of performance goals determined by the
Board based upon one or more of the performance criteria listed in Section 4.3,
and must have the attainment of such performance goals certified in writing by
the Board.
(b)
The Board shall establish the vesting
schedule applicable to Restricted Stock Units and shall specify the times,
vesting and performance goal requirements. Until the end of the period(s) of
time specified in the vesting schedule and/or the satisfaction of any
performance criteria set forth in the Award Agreement, the Restricted Stock
Units subject to such Award Agreement shall remain subject to forfeiture.
(c)
If the Participants employment (or in the
case of a non-employee, such Participants service) with the Company terminates
before the Restricted Stock Awards vest, the Participant shall forfeit all
unvested Restricted Stock
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Awards,
unless the termination is a result of such Participants death, Disability or
Retirement (a Qualifying Event) or the Board determines that the Participants
unvested Restricted Stock Awards shall vest as of the Termination Date;
provided, however, the Board may grant Restricted Stock Awards precluding such
accelerated vesting in order to qualify the Restricted Stock Awards for the
performance-based exception from the tax deductibility limitations of Code Section 162(m).
(d)
In the event a Qualifying Event occurs before
the date or dates on which Restricted Stock Units vest, the expiration of the
applicable restrictions (other than restrictions based on performance criteria
listed in Section 4.3) shall be accelerated and the Participant shall be
entitled to receive the Shares free of all such restrictions. In the case
of Restricted Stock Units which are based on performance criteria set forth in Section 4.3,
then as of the date on which such Qualifying Event occurs, the Participant
shall be entitled to receive a number of Shares that is determined by measuring
the selected performance criteria from the Companys most recent publicly
available quarterly results that are available as of the date the Qualifying
Event occurs; provided, however, the Board may grant Restricted Stock Units
precluding such partial awards when a Qualifying Event occurs in order to
qualify the Restricted Stock Units for the performance-based exception from the
tax deductibility limitations of Code Section 162(m). All other Shares
subject to such Restricted Stock Units shall be forfeited and returned to the
Company as of the date on which such Qualifying Event occurs.
(e)
Notwithstanding anything to the contrary in
this Plan, the Board shall have the power to permit, in its sole discretion, an
acceleration of the applicable restrictions or the applicable period of such
restrictions with respect to any part or all of the Restricted Stock Units
awarded to a Participant; provided, however, the Board may grant Restricted
Stock Units precluding such accelerated vesting on order to qualify the
Restricted Stock Units for the performance-based exception from the tax
deductibility limitations of Code Section 162(m).
(f)
Each grant of Restricted Stock Unit(s) shall
be evidenced by an Award Agreement that shall specify the terms, conditions and
restrictions regarding the Participants right to receive Share(s) in the
future, and shall incorporate such other terms and conditions as the Board,
acting in its sole discretion, deems consistent with the terms of this Plan.
The Board shall have sole discretion to modify the terms and provisions of
Restricted Stock Unit(s) in accordance with Article 14 of this Plan.
(g)
Except as otherwise provided in a Participants
Award Agreement, no Restricted Stock Unit granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by the
Participant, except upon the death of the Participant by will or by the laws of
descent and distribution.
(h)
Except as otherwise provided in a Participants
Award Agreement, holders of Restricted Stock Units shall not be entitled to
vote or to receive dividends until they become owners of the Shares pursuant to
their Restricted Stock Units.
ARTICLE
10.
STOCK-REFERENCE AWARDS
10.1
Grant of Stock-Reference Awards
. The Board is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that are payable in, valued in whole or in part by reference to, or otherwise
based on or related to shares of Stock, as deemed by the Board to be consistent
with the purposes of the Plan, including without limitation shares of Stock
awarded purely as a bonus and not subject to any restrictions or conditions,
other rights convertible or exchangeable into shares of Stock, and awards
valued by reference to book value of shares of Stock or the value of securities
of or the performance of specified divisions or Subsidiaries of the
Company. The Board shall determine the terms and conditions of such
Awards.
ARTICLE
11.
PAYMENT FOR STOCK PURCHASES;
WITHHOLDING TAXES; RELOAD OPTIONS
11.1
Payment
. Payment for Stock purchased pursuant to the Plan may be made in
cash (by check) or, where expressly approved for the Participant by the Board
in an Award Agreement or otherwise in writing and where permitted by law:
(a)
by cancellation of indebtedness of the
Company to the Participant;
(b)
by surrender of (or attestation to the
ownership of) Stock valued at Fair Market Value on the date new Stock is
purchased under the Plan; provided, however, that such surrender or attestation
shall not be permitted if such action would cause the Company to recognize
compensation expense (or additional compensation expense) with respect to the
Award for financial reporting purposes;
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(c)
by waiver of compensation due or accrued to
Participant for services rendered;
(d)
by tender of property acceptable to the
Board;
(e)
with respect only to purchases upon exercise
of an Option, and provided that a public market for the Companys stock then
exists:
(1)
through a same day sale commitment from
Participant and a broker-dealer that is a member of the National Association of
Securities Dealers (a NASD Dealer) whereby Participant irrevocably elects to
exercise the Option and to sell a portion of the Stock so purchased to pay for
the exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Stock to forward the exercise price directly to the Company;
(2)
through a margin commitment from
Participant and a NASD Dealer whereby Participant irrevocably elects to
exercise the Option and to pledge the Stock so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Stock to forward the exercise price directly to the Company; or
(3)
through any other cashless exercise
procedure approved by the Board; or
(f)
by any combination of the foregoing, or any
other method of payment acceptable to the Board in its sole discretion.
11.2
Loans
. To the extent permitted under applicable law and the rules and
regulations of any listing organization for the Stock, the Board may, in its
discretion, help the Participant pay for Shares purchased under the Plan by
authorizing (a) a guarantee by the Company of a third-party loan to the
Participant, or (b) payment of the purchase price of part or all of the
Shares by tender of a full recourse promissory note having such terms as may be
approved by the Board and bearing interest at a rate at least sufficient to
avoid imputation of income under Section 183 and 1274 of the Code;
provided, however,
that Participants who
are not employees or directors of the Company will not be entitled to purchase
Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares;
provided,
further,
that the portion of the purchase price equal to the par
value of the Shares, if any, must be paid in cash.
11.3
Tax Withholding
. The Company or any Subsidiary shall
have the authority and the right to deduct or withhold, or require a Participant
to remit to the Company, an amount sufficient to satisfy federal, state, and
local taxes (including the Participants FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of this
Plan. Whenever, under the Plan, payments in satisfaction of Awards are to
be made in cash, such payment shall be net of an amount sufficient to satisfy
federal, state, and local withholding tax requirements. With respect to
withholding required upon any taxable event relating to the issuance of Stock
under the Plan, Participants may elect (the Election), on or prior to the
date of such taxable event, to satisfy the withholding requirement, in whole or
in part, by having the Company or any Subsidiary withhold shares of Stock having
a Fair Market Value on the date of withholding equal to the amount to be
withheld for tax purposes. The Board may disapprove any Election or may
suspend or terminate the right to make Elections. An Election is
irrevocable. The Board may, at the time any Award is granted, require
that any and all applicable tax withholding requirements be satisfied by the
withholding of shares of Stock as set forth above.
11.4
Reload Options
. Award Agreements may contain a
provision pursuant to which a Participant who pays all or a portion of the
exercise price of an Option or the tax required to be withheld pursuant to an
exercise of an Option by surrendering shares of Stock pursuant to
Sections 11.1 or 11.3, respectively, shall be automatically granted an Option
for the purchase of Stock equal to the number of shares surrendered (a Reload
Option). The grant of the Reload Option shall be effective on the date
the Participant surrenders the shares of Stock in respect of which the Reload
Option is granted (the Reload Date). The Reload Option shall have an
exercise price equal to the Fair Market Value of the Stock on the Reload Date,
and shall have a term which is no longer, and which shall lapse no later, than
the original term of the underlying option. If stock otherwise available
under an Incentive Stock Option is withheld pursuant to Section 11.3, any
Reload Option granted in connection with the withholding shall be treated as a
new Incentive Stock Option, subject to the rules set forth in Section 6.2.
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ARTICLE
12.
PROVISIONS APPLICABLE TO AWARDS
12.1
Stand-Alone, Tandem, and Substitute Awards
. Awards granted under the Plan may, in
the discretion of the Board, be granted either alone or in addition to, in tandem
with, or in substitution for, any other Award granted under the Plan.
Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.
12.2
Modification or Assumption of Awards
. Within the limitations of the Plan,
the Board may modify, extend or assume outstanding Awards or may accept the
cancellation of outstanding Awards (whether granted by the Company or by
another issuer) in return for the grant of new Awards for the same or a
different number of shares and at the same or a different exercise price.
The foregoing notwithstanding, no modification of an Award shall, without the
consent of the Participant, alter or impair his or her rights or obligations
under such Award.
12.3
Exchange Provisions
. The Board may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award, based on the terms and conditions the Board determines and
communicates to the Participant at the time the offer is made.
12.4
Escrow; Pledge of Shares
. To enforce any restrictions on a
Participants Shares, the Board may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Board, appropriately endorsed in blank,
with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Board may cause a legend
or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory
note as partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or part of the
Shares so purchased as collateral to secure the payment of Participants
obligation to the Company under the promissory note;
provided, however
, that the Board may require or accept
other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company will have full recourse against the
Participant under the promissory note notwithstanding any pledge of the
Participants Shares or other collateral. In connection with any pledge
of the Shares, Participant will be required to execute and deliver a written
pledge agreement in such form as the Board will from time to time
approve. The Shares purchased with the promissory note may be released
from the pledge on a
pro rata
basis as the promissory note is paid.
12.5
Form of Payment for Awards
. Subject to the terms of the Plan and
any applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in
such forms as the Board determines at or after the time of grant, including
without limitation, cash, Stock, other Awards, or other property, or any
combination, and may be made in a single payment or transfer, in installments,
or on a deferred basis, in each case determined in accordance with rules adopted
by, and at the discretion of, the Board.
12.6
Limits on Transfer
. No right or interest of a Participant
in any Award may be pledged, encumbered, or hypothecated to or in favor of any
party other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided below, no Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution or, except in the case of an Incentive Stock
Option, pursuant to a domestic relations order as defined in the Code or
Title I of the Employee Retirement Income Security Act, or the rules thereunder.
In the Award Agreement for any Award other than an Award that includes an
Incentive Stock Option, the Board may allow a Participant to assign or
otherwise transfer all or a portion of the rights represented by the Award to
specified individuals or classes of individuals, or to a trust or other entity
benefiting such individuals or classes of individuals, subject to such
restrictions, limitations, or conditions as the Board deems appropriate.
At the discretion of the Board, the Company may reserve to itself or its assignees
in any Award (a) a right of first refusal to purchase any Stock which a
Participant may propose to transfer to a third party and/or (b) a right to
repurchase any and all Stock held by a Participant upon the Participants
termination of employment or other relationship with the Company or its Parent
or Subsidiary for any reason, including Death or Disability, at a price for
such Stock as determined by the Board.
12.7
Market Standoff
. In connection with any underwritten
public offering by the Company of its equity securities pursuant to an
effective registration statement filed under the Securities Act, a Participant
shall not sell, make any short sale of, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to,
any Stock issued pursuant to an Award granted under the Plan without the prior
written consent of the Company or its underwriters. Such limitations shall
be in effect for a period of 180 days, or such period of time as may be
requested in writing by the Company and such underwriters. The
limitations of this subsection shall apply only to the Companys initial
underwritten public offering registered under the
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Securities Act that results in the Stock being traded, or quoted, as
applicable, on a national securities exchange, over the counter on NASDAQ, or
through the NASDs National Market System.
In
the event of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the Companys outstanding
Stock effected as a class without the Companys receipt of consideration, then
any new, substituted or additional securities distributed with respect to the
purchased Stock shall be immediately subject to the provisions of this
subsection, to the same extent the purchased Stock is at such time covered by
such provisions.
In
order to enforce the limitations of this subsection, the Company may impose
stop-transfer instructions with respect to the purchased Stock until the end of
the applicable standoff period.
12.8
Stock Certificates
. All Stock certificates delivered
under the Plan are subject to any stop-transfer orders and other restrictions
as the Board deems necessary or advisable to comply with federal or state
securities laws, rules, and regulations and the rules of any national
securities exchange or automated quotation system on which the Stock is listed,
quoted, or traded. The Board may place legends on any Stock certificate
to reference restrictions applicable to the Stock.
ARTICLE
13.
CHANGES IN CAPITAL STRUCTURE
13.1
General; Adjustments
. In the event of a subdivision of the
outstanding Stock, a declaration of a dividend payable in Stock, a declaration
of a dividend payable in a form other than Stock in an amount that has a
material effect on the price of the Stock, a combination or consolidation of
the outstanding Stock (by classification or otherwise) into a lesser number of
shares of Stock, a recapitalization, a spin-off or a similar occurrence, or the
assumption and conversion of outstanding grants of a company acquired by the
Company or its Subsidiary, the Board shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of (a) the number of
shares of Stock available for future Awards under Article 3, (b) the
limitations set forth in Article 3, (c) the number and kind of shares
of Stock covered by each outstanding Award or (d) the exercise price under
each outstanding Option and other Award in the nature of rights that may be
exercised. Except as provided in this Article 13, a Participant
shall have no rights by reason of any issue by the Company of stock of any
class or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class.
13.2
Dissolution or Liquidation
. To the extent not previously exercised,
Awards shall terminate immediately prior to the dissolution or liquidation of
the Company.
13.3
Reorganizations
. In the event that the Company is a
party to a merger, consolidation or other reorganization, outstanding Awards
shall be subject to the agreement of merger, consolidation or reorganization (Reorganization
Agreement), which shall be binding on all Participants. The Board may
cause such Reorganization Agreement to provide, without limitation and without
any Participants consent, for any one or combination of the following:
(a)
for the continuation of outstanding Awards by
the Company (if the Company is a surviving corporation);
(b)
for assumption of outstanding Awards by the
surviving corporation or its parent or subsidiary;
(c)
for the substitution by the surviving
corporation or its parent or subsidiary of its own awards for outstanding
Awards;
(d)
for accelerated vesting and/or lapse of
restrictions on outstanding Awards;
(e)
for termination in its entirety, without
payment of any consideration, of any Award that is not exercised in accordance
with its terms upon or prior to consummation of the transactions contemplated
by the Reorganization Agreement within a time specified by the Board for such
exercise, whether or not such Award is then fully exercisable;
(f)
for termination of any Award consisting of an
Option or any other exercisable right after payment to the Participant of an
amount in cash or cash equivalents equal to (1) the per share Fair Market
Value immediately prior to consummation of the transactions contemplated by the
Reorganization Agreement of the Stock subject to such Award (to the extent then
vested), minus (2) the exercise price per share pursuant to such Award; or
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(g)
for termination, without payment of any
consideration, of any Award consisting of an Option or other exercisable right,
if the exercise price per share pursuant to such Award exceeds the Fair Market
Value of the Stock immediately prior to consummation of the transactions
contemplated by the Reorganization Agreement, as determined by the Board in
good faith.
The
Board shall have the discretion to cause any such Reorganization Agreement to
provide for different terms and conditions for different Awards and shall have
no obligation to treat Awards or classes of Awards in an identical fashion
under any such Reorganization Agreement.
13.4
Effect of Change of Control
. The Board may determine and specify
in any Award Agreement, at the time of granting an Award or thereafter, that
any or all outstanding rights that may be exercised under Awards shall become
fully exercisable and/or that any or all restrictions on Awards shall lapse,
upon the effectiveness of a change of control of the Company as defined in such
Award Agreement, or upon termination of a Participants employment, contractual
or other relationship with the Company or its successor following a specified
period after such change of control; provided that, in the case of an Incentive
Stock Option, the acceleration of exercisability shall not occur without the
Participants written consent.
ARTICLE
14.
AMENDMENT, MODIFICATION, AND TERMINATION
14.1
Amendment, Modification, and Termination
. With the approval of the Board, at
any time and from time to time, the Board may terminate, amend, or modify the
Plan. An amendment or modification of the Plan shall be subject to the
approval of the stockholders of the Company only to the extent required by
applicable laws, regulations and rules.
14.2
Awards Previously Granted
. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant.
ARTICLE
15.
GENERAL PROVISIONS
15.1
No Rights to Awards
. No Participant or employee shall have
any claim to be granted any Award under the Plan, and neither the Company nor
the Board is obligated to treat Participants and employees uniformly.
15.2
No Stockholders Rights
. No Award gives the Participant any of
the rights of a stockholder of the Company unless and until shares of Stock are
in fact issued to such person in connection with such Award.
15.3
No Right to Employment
. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the at-will nature of any
Participants employment or other relationship with the Company or any
Subsidiary, nor confer upon any Participant any right to continue in the
employment or any other relationship of the Company or any Subsidiary, and the
Company and each Subsidiary reserve the right to terminate any Participants
employment or other relationship with the Company or any Subsidiary at any time
and for any reason or no reason, with or without Cause.
15.4
Unfunded Status of Awards
. The Plan is intended to be an unfunded
plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Company or any Subsidiary.
15.5
Relationship to Other Benefits
. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
15.6
Expenses
. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.
15.7
Titles and Headings
. The titles and headings of the
Articles and Sections in the Plan are for convenience of reference only, and in
the event of any conflict, the text of the Plan, rather than such titles or
headings, shall control.
15.8
Fractional Shares
. No fractional shares of stock shall
be issued and the Board shall determine, in its discretion, whether cash shall
be given in lieu of fractional shares or whether such fractional shares shall
be eliminated by rounding up.
15.9
Securities Law Compliance
. With respect to any person who is, on
the relevant date, obligated to file reports under Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with all
applicable
A-10
conditions
of Section 16 or its successors under the Exchange Act. To the
extent any provision of the Plan or any Award Agreement or any action by the
Board fails to so comply, it shall be void to the extent permitted by law and
voidable as deemed advisable by the Board.
15.10
Government and Other Regulations
. The obligation of the Company to make
payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register
under the Securities Act, any of the shares of Stock paid under the Plan.
If the shares of Stock paid under the Plan may in certain circumstances be
exempt from registration under the Securities Act, the Company may restrict the
transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption. As a condition to the exercise of an
Option or any other receipt of Stock pursuant to an Award under the Plan, the
Company may require the Participant to represent and warrant at the time of any
such exercise or receipt that such Stock is being purchased or received only
for the Participants own account and without any present intention to sell or
distribute such Stock if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned
laws. At the option of the company, a stop-transfer order against any
such Stock may be placed on the official stock books and records of the
Company, and a legend indicating that such Stock may not be pledged, sold or
otherwise transferred, unless an opinion of counsel is provided (concurred in
by counsel for the Company) stating that such transfer is not in violation of
any applicable law or regulation, may be stamped on stock certificates to
ensure exemption from registration. The Board may also require such other
action or agreement by the Participant as may from time to time be necessary to
comply with federal and state securities laws.
15.11
Governing Law
. The Plan and all Award Agreements
shall be construed in accordance with and governed by the laws of the State of
Arizona without regard to its conflicts of laws provisions.
15.12
Nonexclusivity of the Plan
. Neither the adoption of the Plan nor
the submission of the Plan to the stockholders of the Company for approval
shall be construed as creating any limitations upon the right and authority of
the Board to adopt such other incentive compensation arrangements (which
arrangements may be applicable either generally to a class or classes of
individuals or specifically to a particular individual or individuals) as the
Board in its discretion determines desirable, including, without limitation,
the granting of stock options or other rights otherwise than under the Plan.
ARTICLE
16.
DEFINITIONS
16.1
Definitions
. The following words and phrases shall have the following
meanings for purposes of this Plan:
(a)
Award means any Option, Stock Appreciation
Right, Restricted Stock Award, Performance Unit, Stock-Reference Award or any
other right or interest relating to Stock, cash or property, granted to a
Participant under the Plan.
(b)
Award Agreement means any written
agreement, contract, or other instrument or document evidencing an Award.
(c)
Board means the Board of Directors of the
Company or, if the context so requires, a Committee thereof appointed pursuant
to Article 5.
(d)
Unless otherwise defined in the applicable
Award Agreement, Cause means (i) an act of fraud, intentional dishonesty
or theft adversely affecting the Company by a Participant, (ii) noncompliance
by a Participant with the reasonable directives of the Board or its designees
(except by reason of death or Disability), (iii) an allegation against a
Participant of discrimination by such Participant based on race, sex, national
origin, religion, handicap or age which is prohibited by applicable law if the
Company has reason to believe any material portion of the allegations after an
investigation conducted in accordance with any applicable Company policy, (iv) material
violation by a Participant of previously published Company policies and
procedures or the Plan or any applicable Award Agreement, or (v) a
Participants conviction of a felony; provided, however, in the case of (ii) or
(iv) above, the Participant shall be provided with thirty (30) days
written notice of such event, and the Participant shall have ten (10) days
to respond and/or propose a cure in writing. If such noncompliance or
material violations are not capable of cure, or if such noncompliance or
material violations have not been cured within fifteen (15) days after the date
of such written proposal by Participant, Cause shall be deemed to exist.
(e)
Code means the Internal Revenue Code of
1986, as amended from time to time.
(f)
Committee means the committee of the Board
described in Article 5.
A-11
(g)
Disability means the following: A
Participant shall be disabled if he or she is unable to perform the duties of
his customary position of employment by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
can be expected to last for a continuous period of not less than 12
months. The Board may require such medical or other evidence as it deems
necessary to judge the nature and permanency of the Participants condition.
(h)
Exchange Act means the Securities Exchange
Act of 1934, as amended.
(i)
Fair Market Value means with respect to
Stock or any other property, the fair market value of such Stock or other
property determined by the Board in good faith using such methods or procedures
as may be established from time to time by the Board. Unless otherwise
determined by the Board, the Fair Market Value of Stock as of any date shall be
the mean between the bid and asked quotations for the Stock on that date as
reported by the National Association of Securities Dealers Automated Quotation
System (NASDAQ) or, if there are no bid or asked quotations on such date, the
mean between the bid and asked quotations on the next preceding date for which
quotations are available. If the Stock is subsequently listed and traded
upon a recognized securities exchange or shall be quoted on a recognized
national market system, the Fair Market Value shall be the closing price on
such date or, if no closing price is so reported for that date, the closing
price on the next preceding date for which a closing price was reported.
(j)
Incentive Stock Option means an Option that
is intended to meet the requirements of Section 422 of the Code or any
successor provision thereto.
(k)
Non-Qualified Stock Option means an Option
that is not intended to be an Incentive Stock Option.
(l)
Option means a right granted to a
Participant under Article 6 of the Plan to purchase Stock at a specified
price during specified time periods. An Option may be either an Incentive
Stock Option or a Non-Qualified Stock Option.
(m)
Participant means a person who, as an
officer, employee, consultant, independent contractor, or adviser of the
Company or any Subsidiary, has been granted an Award under the Plan.
(n)
Performance Unit means a right granted to a
Participant under Article 8 to receive cash, Stock, or other Awards.
(o)
Plan means The Inventure Group, Inc.
Amended and Restated 2005 Equity Incentive Plan, as amended from time to time.
(p)
Restricted Stock Award means Stock granted
to a Participant or offered for sale to a Participant under Article 9.
(q)
Retirement means a Participants
termination of employment with the Company after attaining any normal or early
retirement age specified in any pension, profit sharing, or other retirement
program sponsored by the Company, if any.
(r)
Securities Act means the Securities Act of
1933, as amended.
(s)
Stock means Common Stock ($.01 par value)
of the Company and such other securities of the Company that may be substituted
for Stock pursuant to Article 13.
(t)
Stock Appreciation Right or SAR means a
right granted to a Participant under Article 7 to receive a payment equal
to the difference between the Fair Market Value of a share of Stock as of the
date of exercise of the SAR over the grant price of the SAR, all as determined
pursuant to Article 7.
(u)
Stock-Reference Award means a right,
granted to a Participant under Article 10.
(v)
Subsidiary means any entity of which a
majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company.
A-12
(w)
Ten Percent Owner means any individual who,
at the date of grant of an Incentive Stock Option, owns stock possessing more
than ten percent of the total combined voting power of all classes of Stock of
the Company or a Subsidiary. For purposes of determining such percentage,
the following rules shall apply:
(1)
The individual with respect to whom such
percentage is being determined shall be considered as owning the Stock owned,
directly or indirectly, by or for his brothers and sisters (whether by the
whole or half blood), spouse, ancestors, and lineal descendants; and
(2)
Stock owned, directly or indirectly, by or
for a corporation, partnership, estate, or trust, shall be considered as being
owned proportionately by or for its stockholders, partners, or beneficiaries.
(x)
Termination Date means the date on which
the employment (or other service or relationship in the case of a Participant
who is not an employee of the Company) of a Participant terminates for any
reason or no reason.
A-13
THE INVENTURE GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The
undersigned hereby appoints Terry McDaniel and Steve Weinberger, and each of
them, with full power of substitution, as proxies of the undersigned to vote
all shares of Common Stock, par value $.01 per share, of The Inventure Group, Inc.
(the Company) held of record by the undersigned on March 26, 2009, at an
Annual Meeting of Stockholders of the Company to be held on May 19, 2009
or any adjournments or postponements thereof (the Annual Meeting), on the
matters set forth on the reverse side of this Proxy, and, in their discretion,
upon all matters incident to the conduct of the Annual Meeting and upon such
other matters as may properly be brought before the Annual Meeting. This Proxy
revokes all prior proxies given by the undersigned.
This proxy, when properly
executed, will be voted in the manner directed herein. If no direction is made, this Proxy will be
voted FOR ALL NOMINEES in the Election of Directors and FOR THE AMENDMENT TO
THE INVENTURE GROUP, INC. 2005 EQUITY INCENTIVE PLAN.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
THE INVENTURE GROUP, INC.
May 19, 2009
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL
:
The Companys Notice of Annual Meeting of
Stockholders, Proxy Statement, Proxy and 2008 Annual Report
are available at www.inventuregroup.net by
choosing Investors and then the Annual Report and Proxy links.
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Please
detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF DIRECTORS
AND FOR THE AMENDMENT TO THE INVENTURE GROUP INC. 2005 EQUITY INCENTIVE PLAN.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS
SHOWN HERE
x
1.
|
Election of Directors:
|
|
|
|
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NOMINEES:
|
o
|
FOR ALL
NOMINEES
|
o
|
Ashton D. Asensio
|
|
|
o
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Macon Bryce Edmonson
|
o
|
WITHHOLD
AUTHORITY
|
o
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Mark S. Howells
|
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FOR ALL
NOMINEES
|
o
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Ronald C. Kesselman
|
|
|
o
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Larry R. Polhill
|
o
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FOR ALL
EXCEPT
|
o
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Itzhak Reichman
|
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(See instructions below)
|
o
|
Terry McDaniel
|
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INSTRUCTIONS:
|
To withhold authority to
vote for any individual nominee(s), mark
FOR
ALL EXCEPT
and fill in the circle next to each nominee you wish
to withhold, as shown here:
x
|
|
|
|
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FOR
|
AGAINST
|
ABSTAIN
|
2.
|
Proposal to approve an
amendment The Inventure Group, Inc. 2005 Equity Plan to increase the
number of shares of Common Stock authorized for issuance by 500,000
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
To change the address on
your account, please check the box at right and indicate your new address in
the address space above. Please note that changes to the registered name(s) on
the account may not be submitted via this method.
|
o
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|
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Signature of Stockholder
|
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Date:
|
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Signature of Stockholder
|
|
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Date:
|
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Note:
|
Please sign exactly as your
name or names appear on this Proxy. When shares are held jointly, each holder
should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title
as such. If signer is a partnership, please sign in partnership name by
authorized person.
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