| Item 1. | | | To elect two Class III directors to serve a three-year term expiring in 2025 and to elect two Class II directors to serve for the remainder of the three-year term applicable to Class II directors expiring in 2024; | |
| Item 2. | | | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022; | |
| Item 3. | | | To approve, by non-binding advisory vote, the compensation of our named executive officers, as disclosed in this proxy statement; | |
| Item 4. | | | To approve an amendment to the 2019 Equity Incentive Plan to increase the number of shares issuable under the Plan; and | |
| Item 5. | | | To transact such other business that is properly presented at the annual meeting and any adjournments or postponements thereof. | |
|
Time and Date:
|
| |
11:00 a.m. May 18, 2022
|
|
| PLACE: | | |
STK Denver, 1550 Market St., Denver, CO 80202
|
|
| Record Date: | | |
April 1, 2022
|
|
|
Proposal
|
| | | | |
Board Recommendation
|
| |
Page No.
|
|
| Item 1 | | | Election of two Class III directors and two Class II directors | | |
FOR the nominees
|
| | | |
| Item 2 | | | Ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022 | | |
FOR
|
| | | |
| Item 3 | | | Approval, by non-binding advisory vote, of the compensation of our named executive officers | | |
FOR
|
| | | |
| Item 4 | | | Approval of an amendment to the 2019 Equity Incentive Plan to increase the number of shares issuable under the Plan | | |
FOR
|
| | |
|
Proposal 1: Elect Directors
|
| | The nominees for director who receive the most votes (also known as a“plurality” of the votes cast) will be elected. You may vote either FOR all of the nominees or WITHHOLD your vote from any one or more of the nominees. Abstentions are not included in the vote tally for the election of the directors. | |
|
Proposal 2: Ratify Selection of Independent Registered Public Accounting Firm
|
| | A majority of the votes present at the meeting, in person or by proxy, and entitled to vote must be cast “for” ratification of the selection of our independent registered public accounting firm. Abstentions count as a “no” vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2022, our Audit Committee of our Board of Directors will reconsider its selection. | |
|
Proposal 3: Approve the Compensation of our Named Executive Officers
|
| | A majority of the votes present at the meeting, in person or by proxy, and entitled to vote must be cast “for” approval of the compensation of our named executive officers. Abstentions count as a “no” vote. Although the vote is advisory and non-binding, the Compensation Committee and the Board will review the voting results (including the number of abstentions) and take them into consideration when making future decisions regarding executive compensation. | |
| Proposal 4: Approve an amendment to the 2019 Equity Incentive Plan to increase the number of shares issuable under the Plan | | |
A majority of the votes present at the meeting, in person or by proxy, and entitled to vote must be cast “for” approval of the amendment to the 2019 Equity Incentive Plan. Abstentions count as a “no” vote.
|
|
| |
Board Diversity Matrix (As of April 8, 2022)
|
| | ||||||||||||||||
| | | | | |
Male
|
| | |
Female
|
| | |
Non-
Binary |
| | |
Did not
Disclose Gender |
| |
| | Total Number of Directors | | | |
7
|
| | ||||||||||||
| | Part 1: Gender Identity | | | | | | | | | | | | | | | | | | |
| | Directors | | | |
5
|
| | |
2
|
| | |
0
|
| | |
0
|
| |
| | Part II: Demographic Background | | | | | | | | | | | | | | | | | | |
| | African American or Black | | | |
0
|
| | |
0
|
| | |
0
|
| | |
0
|
| |
| | Alaskan Native or Native American | | | |
0
|
| | |
0
|
| | |
0
|
| | |
0
|
| |
| | Asian (other than South Asian) | | | |
0
|
| | |
0
|
| | |
0
|
| | |
0
|
| |
| | South Asian | | | |
0
|
| | |
0
|
| | |
0
|
| | |
0
|
| |
| | Hispanic or Latinx | | | |
0
|
| | |
1
|
| | |
0
|
| | |
0
|
| |
| | Native Hawaiian or Pacific Islander | | | |
0
|
| | |
0
|
| | |
0
|
| | |
0
|
| |
| | White | | | |
5
|
| | |
1
|
| | |
0
|
| | |
0
|
| |
| | Two or More Races or Ethnicities | | | |
0
|
| | |
0
|
| | |
0
|
| | |
0
|
| |
| | LGBTQ+ | | | |
0
|
| | ||||||||||||
| | Persons with Disabilities | | | |
0
|
| |
| | | | | |
Emanuel
Hilario |
| | |
Jonathan
Segal |
| | |
Dimitrios
Angelis |
| | |
Eugene
Bullis |
| | |
Susan
Lintonsmith |
| | |
Haydee
Olinger |
| | |
Michael
Serruya |
| |
| | Director Since | | | |
2017
|
| | |
2013
|
| | |
2018
|
| | |
2014
|
| | |
2021
|
| | |
2021
|
| | |
2013
|
| |
| | Age | | | |
54
|
| | |
61
|
| | |
52
|
| | |
76
|
| | |
57
|
| | |
63
|
| | |
58
|
| |
| | Gender | | | |
M
|
| | |
M
|
| | |
M
|
| | |
M
|
| | |
F
|
| | |
F
|
| | |
M
|
| |
| | Senior Operating Executive Expertise | | | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| | Senior Financial Executive Expertise | | | |
✓
|
| | | | | | | | | | |
✓
|
| | |
✓
|
| | | | | | | | | |
| |
Senior Marketing/Sales Executive Expertise
|
| | |
✓
|
| | | | | | | | | | | | | | |
✓
|
| | | | | | | | | |
| |
Senior HR / Compensation / Talent Development Expertise
|
| | |
✓
|
| | | | | | |
✓
|
| | |
✓
|
| | | | | | | | | | |
✓
|
| |
| | Hospitality | | | |
✓
|
| | |
✓
|
| | | | | | | | | | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| |
Operating Knowledge of Company’s Industry
|
| | |
✓
|
| | |
✓
|
| | | | | | | | | | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| |
Public Company Directorship Experience
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| |
Enterprise Level Information Technology Expertise
|
| | |
✓
|
| | | | | | |
✓
|
| | |
✓
|
| | | | | | | | | | | | | |
| |
Domestic and International Market Development Expertise
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| |
Corporate Strategy Development Expertise
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| | Corporate Governance Expertise | | | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| | |
✓
|
| |
| | Risk Management Expertise | | | |
✓
|
| | | | | | |
✓
|
| | |
✓
|
| | | | | | |
✓
|
| | |
✓
|
| |
Name
|
| |
Age
|
| |
Positions
|
|
Tyler Loy | | |
42
|
| | Chief Financial Officer | |
| Audit Committee | | | ||
| Members | | |
This committee currently has five members, Messrs. Bullis (Chair), Angelis and Serruya and Ms. Lintonsmith and Ms. Olinger. All members of the Audit Committee satisfy the current independence standards promulgated by the SEC and by NASDAQ, as such standards apply specifically to members of audit committees. The Board has determined that Mr. Bullis is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K. A copy of the Audit Committee’s written charter is publicly available on our website at www.togrp.com.
|
|
| Number of Meetings Last Year | | | Five | |
| Primary Functions | | |
Our Audit Committee’s role and responsibilities are set forth in the Committee’s written charter and include the authority to retain and terminate the services of our independent registered public accounting firm. In addition, the Audit Committee reviews annual financial statements, considers matters relating to accounting policy and internal controls and reviews the scope of annual audits.
|
|
| Compensation Committee. | | | | |
| Members | | |
This committee currently has three members, Messrs. Angelis (Chair), Bullis and Serruya. All members of the Compensation Committee qualify as independent under the definition promulgated by NASDAQ.
|
|
| Number of Meetings Last Year | | | Two | |
| Primary Functions | | |
Our Compensation Committee’s role and responsibilities are set forth in the Compensation Committee’s written charter and include reviewing, approving and making recommendations
|
|
| | | |
regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of the Board are carried out and that such policies, practices and procedures contribute to our success. Our Compensation Committee also administers our 2019 Equity Incentive Plan. The Compensation Committee is responsible for the determination of the compensation of our Chief Executive Officer, and his compensation without the Chief Executive Officer present.
|
|
| | | |
In establishing compensation amounts for executives, the Compensation Committee seeks to provide compensation that is competitive in light of current market conditions and industry practices. Accordingly, the Compensation Committee annually reviews market data comprising proxy-disclosed data from peer companies and information from nationally recognized published surveys for the restaurant industry, adjusted for size. The market data helps the committee gain perspective on the compensation levels and practices at the peer companies and to assess the relative competitiveness of the compensation paid to the Company’s executives. The market data guides the Compensation Committee in its efforts to set executive compensation levels and program targets at competitive levels for comparable roles in the marketplace. The Compensation Committee then takes into account other factors, such as the importance of each executive officer’s role to the Company, individual expertise, experience, and performance, retention concerns and relevant compensation trends, in making its final compensation determinations.
|
|
| | | |
The Compensation Committee’s independent compensation consultant during fiscal year 2021 was Frederic W. Cook & Co. (“FW Cook”). FW Cook was previously engaged by, and reported directly to, the Compensation Committee, which has the sole authority to hire or fire FW Cook and to approve fee arrangements for work performed. FW Cook assisted the Compensation Committee in fulfilling its responsibilities under its charter, including advising on equity incentive compensation grants to employees, including officers and to directors. The Compensation Committee authorized FW Cook to interact with management on behalf of the Compensation Committee, as needed in connection with advising the Compensation Committee, and FW Cook was included in discussions with management.
|
|
| | | |
In 2021, our Compensation Committee conducted, with the assistance of FW Cook, a comprehensive review of the compensation of Mr. Hilario, our Chief Executive Officer, and recommended to the Board of Directors that Mr. Hilario receive compensation targeted at the 75th percentile of chief executive officer compensation in the Company’s selected peer group, which the Board believed was critical to reflect Mr. Hilario’s efforts in successfully navigating the Company through the COVID-19 crisis, and to reflect Company performance under his leadership in 2020 and 2021, which generally well exceeded the performance of Company peers. The Board also recognized retention risk, and wanted to ensure Mr. Hilario had incentives to stay at the Company and to continue to accelerate Company growth and superior shareholder returns. Among other things, the Company
|
|
| | | |
awarded Mr. Hilario 400,000 time-based RSUs on September 24, 2021 to reflect the Company’s performance and total shareholder returns.
|
|
| | | |
It is the Compensation Committee’s policy that the Chair of the Compensation Committee or the full Compensation Committee pre-approve any additional services provided to management by an independent compensation consultant.
|
|
| | | |
The Compensation Committee reviews the performance of each named executive officer in light of the above factors and determines whether the named executive officer should receive any increase in base salary or receive a discretionary equity award based on such evaluation. During 2021, the Compensation Committee utilized industry benchmarks and the work performed by FW Cook to determine the appropriate levels of compensation for our named executive officers.
|
|
| | | |
A copy of the Compensation Committee’s written charter is publicly available on our website at www.togrp.com.
|
|
| Nominating and Governance Committee. | | | ||
| Members | | |
Our Nominating and Governance Committee currently has four members, Messrs. Serruya (Chair) and Bullis and Ms. Lintonsmith and Ms. Olinger. The Nominating and Governance Committee’s role and responsibilities are set forth in the Nominating and Governance Committee’s written charter and include evaluating and making recommendations to the full Board as to the size and composition of the Board and its committees, evaluating and making recommendations as to potential candidates for election to the Board, and evaluating current Board members’ performance. All members of the Nominating and Governance Committee qualify as independent under the definition promulgated by NASDAQ.
|
|
| Number of meetings Last Year: | | | Two | |
| Primary Functions | | |
If a stockholder wishes to nominate a candidate for director who is not to be included in our proxy statement, it must follow the procedures described in “Stockholder Proposals and Nominations For Director” at the end of this proxy statement.
|
|
| | | |
In addition, under our current corporate governance policies, the Nominating and Governance Committee may consider candidates recommended by stockholders as well as from other sources such as other directors and officers, third party search firms or other appropriate sources. For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of the industry in which we operate, possible conflicts of interest, diversity, the extent to which the candidate would fill a present need on the Board, and concern for the long-term interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to
|
|
| | | |
propose a candidate for consideration as a nominee by the Nominating and Governance Committee under our corporate governance policies, it should submit such recommendation in writing to: The ONE Group Hospitality, Inc., c/o Corporate Secretary, Nominating and Governance Committee, 1624 Market St., Suite 311, Denver, CO 80202.
|
|
| | | |
The Nominating and Governance Committee considers issues of diversity among its members in identifying and considering nominees for director, and strives where appropriate to achieve a diverse balance of backgrounds, perspectives, experience, age, gender, ethnicity and country of citizenship on the Board and its committees.
|
|
| | | |
A copy of the Nominating and Governance Committee’s written charter is publicly available on the Company’s website at www.togrp.com.
|
|
Name
|
| |
Stock Awards ($)
|
| |
Cash ($)
|
| |
Total
|
| |||||||||
Dimitrios Angelis
|
| | | $ | 110,417 | | | | | $ | 14,583 | | | | | $ | 125,000 | | |
Eugene Bullis
|
| | | $ | 110,417 | | | | | $ | 14,583 | | | | | $ | 125,000 | | |
Susan Lintonsmith(1)
|
| | | $ | 72,940 | | | | | $ | 10,440 | | | | | $ | 83,380 | | |
Haydee Olinger(1)
|
| | | $ | 72,940 | | | | | $ | 10,440 | | | | | $ | 83,380 | | |
Michael Serruya
|
| | | $ | 110,417 | | | | | $ | 14,583 | | | | | $ | 125,000 | | |
| | |
2021
|
| |
2020
|
| ||||||
Audit fees | | | | | | | | | | | | | |
Deloitte & Touche LLP(1)
|
| | | $ | 616,889 | | | | | $ | — | | |
Previous Auditor (Plante & Moran)(2)
|
| | | | 41,060 | | | | | | 290,750 | | |
Audit related fees
|
| | | | — | | | | | | — | | |
Tax fees(3)
|
| | | | 115,500 | | | | | | — | | |
All other fees
|
| | | | — | | | | | | — | | |
Total
|
| | | $ | 773,449 | | | | | $ | 290,750 | | |
Name
|
| |
Number of
Shares |
| |
Number of
Shares Subject to Options within 60 days of April 1, 2022 |
| |
Number of
Shares Subject to RSUs |
| |
Total(1)
|
| |
Percent
|
| ||||||||||||
Jonathan Segal
|
| | | | 4,116,413 | | | | | | 532,358 | | | | | | — | | | | | | 4,648,771 | | | |
14.2%
|
|
Kanen Wealth Management, LLC
|
| | | | 4,518,825(2) | | | | |
|
—
|
| | | | | — | | | | | | 4,518,825 | | | |
14.0%
|
|
Emanuel P.N. Hilario
|
| | | | 686,906 | | | | | | 368,000 | | | | |
|
—
|
| | | | | 1,054,906 | | | |
3.2%
|
|
Tyler Loy
|
| | | | 76,740 | | | | | | — | | | | | | — | | | | | | 76,740 | | | |
*
|
|
Michael Serruya
|
| | | | 358,987 | | | | | | — | | | | | | — | | | | | | 358,987(3) | | | |
1.1%
|
|
Eugene Bullis
|
| | | | 129,769 | | | | | | — | | | | | | — | | | | | | 129,769 | | | |
*
|
|
Dimitrios Angelis
|
| | | | 108,340 | | | | | | — | | | | | | — | | | | | | 108,340 | | | |
*
|
|
Susan Lintonsmith
|
| | | | 8,211 | | | | | | — | | | | | | — | | | | | | 8,211 | | | |
*
|
|
Haydee Olinger
|
| | | | 8,211 | | | | | | — | | | | | | — | | | | | | 8,211 | | | |
*
|
|
All current executive officers and directors
as a group (8 individuals) |
| | |
|
5,493,577
|
| | | |
|
900,358
|
| | | | | — | | | | |
|
6,393,935
|
| | |
19.3%
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary
|
| |
Bonus
|
| |
Stock
Awards(1) |
| |
Option
Awards |
| |
Non Equity
Incentive Plan Compensation |
| |
Other(5)
|
| |
Total
|
| ||||||||||||||||||||||||
Emanuel P. N. Hilario(2)
President and Chief Executive Officer |
| | | | 2021 | | | | | $ | 622,742 | | | | | $ | 0 | | | | | $ | 5,338,503 | | | | | $ | 0 | | | | | $ | 665,000 | | | | | $ | 37,462 | | | | | $ | 6,663,707 | | |
| | | 2020 | | | | | $ | 466,406 | | | | | $ | 0 | | | | | $ | 399,125 | | | | | $ | 0 | | | | | $ | 193,750 | | | | | $ | 9,615 | | | | | $ | 1,068,896 | | | ||
Jonathan Segal(3)
Director of Business Development |
| | | | 2021 | | | | | $ | 350,000 | | | | | $ | 0 | | | | | $ | 131,255 | | | | | $ | 0 | | | | | $ | 123,047 | | | | | $ | 6,730 | | | | | $ | 611,032 | | |
| | | 2020 | | | | | $ | 312,982 | | | | | $ | 0 | | | | | $ | 131,250 | | | | | $ | 0 | | | | | $ | 45,117 | | | | | $ | 6,730 | | | | | $ | 496,079 | | | ||
Tyler Loy(4)
Chief Financial Officer |
| | | | 2021 | | | | | $ | 278,942 | | | | | $ | 0 | | | | | $ | 121,316 | | | | | $ | 0 | | | | | $ | 82,935 | | | | | $ | 5,481 | | | | | $ | 488,674 | | |
| | | 2020 | | | | | $ | 232,933 | | | | | $ | 0 | | | | | $ | 84,617 | | | | | $ | 0 | | | | | $ | 29,481 | | | | | $ | 4,807 | | | | | $ | 351,838 | | |
| HILARIO AGREEMENT HIGHLIGHTS: | | |||
| Employment Agreement Highlights | | |||
| Date of Agreement: | | | September 24, 2021 | |
| Term of Agreement: | | | Five Years | |
| Base Salary: | | | $700,000 (current) | |
| Bonus Rate: | | | 100% | |
| Separation Highlights: | | |||
|
Accrued Obligations
|
| |||
|
18 Months of Monthly Salary (paid monthly)
|
| |||
|
Bonus Amount paid for 18 months
|
| |||
|
Immediate Vesting of any Equity having vest dates 18 months in the future.
|
| |||
|
Cobra payments for 18 months
|
|
| SEGAL AGREEMENT HIGHLIGHTS: | | |||
| Employment Agreement Highlights | | |||
| Date of Agreement: | | | October 30, 2017 | |
| Term of Agreement: | | | ||
|
Initial
|
| | Three Years | |
|
Renewal Term
|
| | Renewable for one-year terms | |
| Base Salary: | | | $350,000 (current) | |
| Bonus Rate: | | | 75% | |
| Separation Highlights: | | |||
|
Accrued Obligations
|
| |||
|
24 Months of Monthly Salary (paid monthly)
|
| |||
|
Pro Rata Bonus Amount for the Year during which the separation takes place
|
|
| | |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Name
|
| |
Number of
Securities Underlying Unexercised Options Exercisable |
| |
Number of
Securities Underlying Unexercised Options Unexercisable |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options |
| |
Option
Exercise Price |
| |
Option
Exercise Expiration |
| |
Number of
Shares or Units of Stock that Have Not Vested |
| |
Market
Value of Shares or Unites of Stock that Have Not Vested |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
| |||||||||||||||||||||||||||
Emanuel P. N. Hilario
|
| | | | 300,000 | | | | | | — | | | | | | — | | | | | $ | 1.42 | | | | | | 10/30/2027 | | | | | | 903,546(2) | | | | | $ | 11,393,715 | | | | | | — | | | | | | — | | |
| | | | | 45,333(1) | | | | | | 22,667(1) | | | | | | — | | | | | $ | 2.99 | | | | | | 02/18/2029 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jonathan Segal
|
| | | | 397,008 | | | | | | — | | | | | | — | | | | | $ | 5.00 | | | | | | 10/16/2023 | | | | | | 97,612(3) | | | | | $ | 1,230,892 | | | | | | — | | | | | | — | | |
| | | | | 79,402 | | | | | | — | | | | | | — | | | | | $ | 5.00 | | | | | | 10/16/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | 55,942 | | | | | | — | | | | | | — | | | | | $ | 2.73 | | | | | | 04/08/2026 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tyler Loy
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | 70,534(4) | | | | | $ | 889,438 | | | | | | — | | | | | | — | | |
Plan Category
|
| |
Number of
securities to be issued upon exercise of outstanding options, warrants or rights (a) |
| |
Weighted-average
exercise price of outstanding options, warrants and rights (b) |
| |
Number of
securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(1) |
| |||||||||
Equity compensation plans approved by security holders
|
| | | | 2,942,362 | | | | | $ | 4.29 | | | | | | 160,624 | | |
Equity compensation plans not approved by security
holders |
| | | | — | | | | | | — | | | | | | — | | |