RCMW GROUP, INC. Item 3.02. Unregistered Sales of
Issuance of 240,000 unregistered restricted common shares to Named Executive Officers
On
The issuance of these shares is related to the Company's 2021 Named Executive
Officers Stock Compensation Plan, that was approved by the Board of Directors
and majority of shareholders, where three Named Executive Officers were
authorized to take restricted common shares in lieu of salary, to help the
Company preserve its cash reserves. The three Named Executive are:
The three shareholders who represent the executive management of the Company agreed the exchange of restricted common shares in lieu of salary is for investment and not for resale or with a view to distribute such shares or any part thereof, and that they have no present intention of distributing or reselling such shares. They understood the ramifications of their actions. The shares of common stock issued contained a legend restricting transferability absent registration or applicable exemption.
The shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act. We believed that Section 4(2) was available because the offer and sale did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale.
Issuance of 80,000 unregistered restricted common shares as a COVID-19 Retention Bonus
On
This shareholder was provided access to all material information, and he was afforded access to our management in connection with this transaction. This shareholder acquired these securities for investment purposes and not with a view toward distribution, acknowledging such intent to us. He understood the ramifications of his actions. The shares of common stock issued contained a legend restricting transferability absent registration or applicable exemption.
The shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act. We believed that Section 4(2) was available because the offer and sale did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale.
2
Issuance of 102,000 unregistered restricted common shares for legal services
On
Legal counsel was provided access to all material information, and he was afforded access to our management in connection with this transaction. The shareholder acquired these securities for investment purposes and not with a view toward distribution, acknowledging such intent to us. He understood the ramifications of his actions. The shares of common stock issued contained a legend restricting transferability absent registration or applicable exemption.
The shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act. We believed that Section 4(2) was available because the offer and sale did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale.
Item 5.02. Compensatory Arrangements of Certain Officers.
2021 Named Executive Officers Stock Compensation Plan
On
At the Company's 2020 Annual Shareholder meeting, held on
As disclosed in the Proxy Statement to the Shareholders, it was stated, "The key components of our executive compensation program are base salary, annual short-term incentive compensation, long-term incentive compensation (restricted stock for achievement of milestones). In this mix of compensation, the achievement of the milestones is a significant portion of total compensation. Base salaries are based the Company's limited cash reserves, and not industry standards."
3
The Company's Board of Directors has implemented an objective criteria and a structured method of determining compensation. Compensation decisions made by the Board of Directors rely on performance, available working capital and individual levels. The Board of Directors reserve the right to modify or discontinue elements of the executive compensation program, and to revise compensation levels after considering qualitative and quantitative facts and circumstances surrounding actual or projected financial results, individual performance, as well as its view of the appropriate balance among base salary, annual short-term incentive compensation, long-term incentive compensation and other benefits.
The Board of Directors has determined that the Company needs to preserve its cash reserves to purchase inventory and run its daily operations. In an effort to preserve these cash reserves, the Board wants to act in the best interests of its shareholders, by establishing a 2021 Named Executive Officers Stock Compensation Plan, whereby the Named Executive Officers can elect to take restricted shares of common stock in lieu of salary.
Any Named Executive Officer of the Company may participate in the Plan and, if they elect to do so. They shall receive restricted shares of the Company's common stock (the "Plan Shares") in lieu of base cash salary payable to such person. The number of shares to be received by any participant shall be computed by dividing the Fair Market Value of the Company's common stock (defined the closing price, as reported by OTC Markets) within five (5) business days of the election date, by the aggregate base cash salary payable to such individual during the election period. Shares issuable under the Plan will be issued to the Named Executive Officer during the Election Period. Any and all elections made pursuant to the Plan are non-revocable.
On
A complete copy of the Plan is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 8.01. Other Events Cancellation of Shares
On or about
Total Shares Outstanding
Prior to the issuance of the 422,000 unregistered restricted common shares, as
disclosed in Item 3.2 above, the Company had approximately 9,896,939 common
shares issued and outstanding. With this issuance of 422,000 common, the Company
will have approximately10,318,939 common shares. Then, with the cancellation of
150,000 common shares, the Company will have approximately 10,168,939 common
shares, par value
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
Exhibit Exhibit Description Filed herewith
10.10 RCMW Group, Inc. 2021 Named X
Executive Officer' Stock
Compensation Plan
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