UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On April 14, 2023, the Board of Directors (the “Board”) of Climb Global Solutions, Inc. (“Climb”), upon the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), approved the Climb Global Solutions, Inc. Executive Severance and Change in Control Plan (the “Severance Plan”) to more closely align the Company’s executive officer severance practices with market practices, including changing “change in control” equity award vesting from single trigger to double trigger for all outstanding and future equity awards. The Severance Plan supersedes and replaces all other severance arrangements between the Company and its executive officers, which previously had been governed by separate legacy employment agreements and offer letters.
The Severance Plan provides severance benefits upon a qualifying termination of employment (“Covered Termination”) of eligible participants, who will consist of Climb’s and its affiliates’ (together, the “Company”) executives who have been designated to participate in the Severance Plan (“Eligible Executive”). The Severance Plan provides for three tiers of severance benefits in the event of a Covered Termination, with relative benefits tied to the individual’s seniority.
Severance Benefits of Eligible Executive Following Covered Termination Outside Change in Control Period
If an Eligible Executive experiences a Covered Termination outside of the Change in Control Period (as such term is defined in the Severance Plan), subject to execution of a release of claims, she or he will be eligible to receive:
| (i) | 18 months of Base Salary (as such term is defined in the Severance Plan) continuation for Tier 1 participants, 12 months of Base Salary continuation for Tier 2 participants, or 6 months of Base Salary continuation for Tier 3 participants, each to be in paid in accordance with the Company’s normal payroll schedule; |
| (ii) | Company-paid COBRA premiums payments (or an equivalent cash payment) for the Eligible Executive and her or his covered dependents for a period not exceeding the relevant Severance Period (as such term is defined in the Severance Plan) for each tier; and |
| (iii) | a lump sum cash payment equal to a pro-rated portion of the Eligible Executive’s annual bonus for the year in which the Covered Termination occurs, which will be based on the Eligible Executive’s actual performance with respect to the relevant performance metrics for the portion of such year. The proration calculation will be based on the number of days that such Eligible Executive was employed during such calendar year through the date of such termination, to be paid in cash when annual bonuses are otherwise paid. |
Severance Benefits of Eligible Executive Following Covered Termination Within Change in Control Period
If a Covered Termination occurs, however, during a Change in Control Period, an Eligible Executive will be eligible to receive:
| (i) | an amount equal to: 24 months of Base Salary for Tier 1 participants, and 18 months of Base Salary for Tier 2 and 3 participants, to be paid in a single, lump sum payment no later than the second payroll cycle following the later of the effective date of the release of claims or the change in control; |
| (ii) | Company-paid COBRA premium payments for the Eligible Executive and her or his covered dependents for a period not exceeding the relevant Change in Control Severance Period for each tier; |
| (iii) | a lump sum cash payment equal to the Eligible Executive’s target annual bonus amount for the calendar year in which the Covered Termination occurs; and |
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| (iv) | double trigger equity acceleration, specifically, full acceleration of any outstanding, unvested Equity Awards (as such term is defined in the Severance Plan) held by the Eligible Executive, as of the effective date of the Covered Termination, or equity awards issued in substitution therefor. |
Further, amounts or severance benefits provided to an Eligible Executive under the Severance Plan will be subject to recoupment by the Company in accordance with any clawback policy of the Company, as in effect from time to time.
The Eligible Executive’s right to receive the payments and benefits provided under the Severance Plan are subject to each Eligible Executive’s execution and delivery of a release of claims, and each Eligible Executive’s compliance with non-competition, non-disparagement, non-solicitation and confidentiality covenants set forth in the Severance Plan. The non-disparagement and confidentiality covenants each have an indefinite term, and the non-competition and non-solicitation covenants each has a term of one year following the Eligible Executive’s date of termination, or if longer, the Severance Period or Change in Control Period. Additionally, the Severance Plan provides that if an Eligible Executive would be subject to an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended, then the payments and benefits the Eligible Executive receives will be reduced so that the excise tax does not apply; however, such reduction will only occur if it results in the receipt by the Eligible Executive of a greater after-tax amount than would otherwise have been received if the full payment had been provided and the excise tax applied.
In order to be eligible to receive benefits under the Severance Plan, the Company’s executive officers must execute and return to the Company a participation agreement (a “Participation Agreement”). Upon the execution of a Participation Agreement, the executive’s prior employment agreement terminates, and the continued employment of such executive will be on an at-will basis. On April 20, 2023, Messrs. Dale Foster, Andrew Clark, Charles Bass, and Vito Legrottaglie, the Company’s Chief Executive Officer, Chief Financial Officer, Chief Marking Officer and Chief Information Officer, respectively (collectively, the “Named Executive Officers”), became participants in the Severance Plan upon their delivery to the Company of executed Participation Agreements, pursuant to which the Named Executive Officers agreed to terminate the existing employment agreements between them and the Company, effective immediately, and the terms of the Severance Plan and respective Participation Agreements supersede any rights or entitlements to severance benefits under any employment agreement so terminated or other severance arrangements. The Severance Plan does not affect Named Executive Officers’ eligibility to their base salary, subject to increase at the discretion of the Board, or the Compensation Committee, and to participate in any and all other standard benefit plans, programs and policies of the Company. In connection with the Named Executive Officers’ execution of the Participation Agreements, Messrs. Mr. Foster has been designated as a “Tier 1” Participant under the Severance Plan, and Messrs. Clark, Bass and Legrottaglie have been designated as “Tier 2” Participants under the Severance Plan.
In connection with the adoption of the Severance Plan, the Board approved new forms of Cash-Based Award Agreement, Restricted Stock Unit Award Agreement and Performance-Based Restricted Award Unit Agreement (the “Award Agreements”) under the Company’s 2021 Omnibus Incentive Plan (the “Plan”). The form of Cash Based Award Agreement governs the grants of annual cash bonuses upon the satisfaction of performance goals set by the Board or the Compensation Committee. The form of Restricted Stock Unit Award Agreement provides for the grants of time-based restricted stock units (“RSUs”) that will vest based on the grantee continuedly remaining in a Service Relationship (as such term is defined in the Plan) with the Company or a subsidiary thereof through an applicable vesting date(s) to be set by the Board, or the Compensation Committee. Vested RSUs will be settled into shares of Company common stock within 30 days following each vesting date. The form of Performance-Based Restricted Award Unit Agreement provides for the grants of performance-based restricted stock units (“PSUs”) that will vest based upon the satisfaction of performance goals over a performance cycle set by the Board, or the Compensation Committee, and the grantee continuedly remaining in a Service Relationship with the Company or a subsidiary thereof through the first January 1 following the last day of the performance cycle. Vested PSUs will be settled into shares of Company common stock within 30 days following the vesting date.
The foregoing summary of certain of the terms of the Severance Plan and the Award Agreements does not purport to be complete and is qualified in its entirety by reference to the full text thereof, copies of which are filed as Exhibits 10.1., 10.2, 10.3 and 10.4 to this Form 8-K and is incorporated by reference into this Item 5.02.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description of Exhibit | |
10.1 | Climb Global Solutions, Inc., Executive Severance and Change in Control Plan | |
10.2 | ||
10.3 | ||
10.4 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CLIMB GLOBAL SOLUTIONS, INC. | |||
Date: April 20, 2023 | By: | /s/ Andrew Clark | |
Name: | Andrew Clark | ||
Title: | Chief Financial Officer | ||
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CLIMB GLOBAL SOLUTIONS, INC.
Executive Severance And Change In Control Plan
The Climb Global Solutions, Inc. Executive Severance and Change in Control Plan (the “Plan”) is hereby established by the Board of Directors of Climb Global Solutions, Inc. (the “Company”) effective as of April 20, 2023. The purpose of the Plan is to provide for the payment of severance and/or Change in Control (as defined below) benefits to eligible executives of the Company. The Plan is intended to be (i) an employee welfare benefit plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and (ii) a “top hat” plan within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. As such, the Plan is exempt from ERISA reporting and disclosure requirements to the extent set forth in ERISA Regulation Section 2520.104-24.
For purposes of the Plan, the following terms are defined as follows:
“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act of 1933. The Committee will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition. In addition, for purposes of the definition of “Change in Control,” Affiliate includes an entity that is under common control with the Company under Sections 414(b) or (c) of the Code and the regulations thereunder.
“Base Salary” means base pay (excluding incentive pay, premium pay, commissions, bonuses and other forms of variable compensation) as in effect immediately prior to the relevant Covered Termination and, if applicable, any reduction in base pay that gave rise to an Eligible Executive’s right to a resignation for Good Reason.
“Business” means the distribution of software, hardware and related information technology services to corporate resellers, value added resellers, consultants and system integrators or any other business in which the Company may be engaged.
“Cause” means, with respect to an Eligible Executive, (a) an act of personal dishonesty in connection with the grantee’s responsibilities as a service provider of the Company, excluding any unintentional, good faith errors such as a good faith error with respect to business expense reimbursements; (b) a plea of guilty or nolo contendere to, conviction of, or an indictment for a felony or other crime involving theft, fraud or moral turpitude, in each case in which the Plan Administrator reasonably believes that it has had or will have a material detrimental effect on the Company’s reputation or business; (c) a breach of any fiduciary duty owed to the Company that has, or is reasonably expected to have, a material detrimental effect on the Company’s reputation or business (except in the case of a personal disability) as determined in good faith by the Plan Administrator; (d) serious neglect or misconduct in the performance of the grantee’s duties for the Company or willful or repeated failure or refusal to perform such duties, provided that, if such behavior is curable, the Eligible Executive is provided with written notice describing in reasonable detail the alleged conduct and stating the Company’s belief that it would constitute Cause to terminate the Eligible Executive’s service with the Company and the Eligible Executive fails to cure such behavior within 30 days after receipt of such written notice; or (e) the material breach by the grantee of any restrictive covenants (for example, relating to non-competition, non-solicitation or confidentiality. The employment of an Eligible Executive will be deemed to have been terminated for Cause if the Plan Administrator determines within thirty (30) days of the termination of employment (whether such termination was voluntary or involuntary) that termination for Cause was warranted.
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“Change in Control” means any of the following events: (i) the sale, transfer or other disposition of all or substantially all of the assets of the Company to one or more persons or entities that are not, immediately prior to such sale, transfer or other disposition, an Affiliate; (ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the beneficial owner, directly or indirectly, of more than 50% of the voting power of the stock of the Company (other than the Company or any Affiliate; or any employee benefit plan sponsored or maintained by the Company or any Affiliate); (iii) the merger or consolidation of the Company, as a result of which persons who were stockholders of the Company immediately prior to such merger or consolidation, do not, immediately thereafter, own, directly or indirectly, a majority of the combined voting power entitled to vote generally in the election of directors of the merged or consolidated company; (iv) the liquidation or dissolution of the Company, other than a liquidation or dissolution for the purposes of effecting a corporate restructuring or reorganization as a result of which persons who were stockholders of the Company immediately prior to such liquidation or dissolution continue to own immediately thereafter, directly or indirectly, a majority of the combined voting power entitled to vote generally in the election of directors of the entity that owns, directly or indirectly, substantially all of the assets of the Company following such transaction; or (v) a majority of the members of the Board of Directors of the Company are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board of Directors of the Company before the date of such appointment or election. Notwithstanding the foregoing, an event shall not be a Change in Control unless the event qualifies as a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company, each within the meaning of Section 409A.
“Change in Control Date” means the closing date of a Change in Control.
“Change in Control Period” means the period commencing sixty (60) days prior to the Change in Control Date and ending 12 months following such date.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Board of Directors of the Company or the Compensation Committee of such Board of Directors.
“Common Stock” means the common stock of the Company, par value $0.01 per share, of the Company.
“Company” means Climb Global Solutions, Inc., and shall include its Affiliates unless the context clearly indicates otherwise.
“Company Interest” means any business of the Company or any product, service, Invention or Intellectual Property Right that is used or under consideration or development by the Company.
“Covered Termination” means, with respect to an Eligible Executive, a Separation from Service that is due to (i) involuntary termination by the Company without Cause (and other than as a result of death or Disability) or (ii) a resignation by the Eligible Executive for Good Reason.
“Disability” means that the Eligible Executive is determined to be disabled under Company-provided long-term disability coverage, or if none, “Disability” means the determination by the Committee or its designee, that, because of a medically determinable disease, condition, injury or other physical or mental disability, the Eligible Executive is unable to substantially perform the duties of the grantee for the Company, and that such disability is determined or reasonably expected to last for a period of one hundred eighty (180) days (which need not be consecutive) within any twelve (12) month period. This definition
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shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law.
“Eligible Executive” means an executive of the Company who meets the requirements to be eligible to receive Plan benefits as set forth in Section 2.
“Good Reason” for an Eligible Executive’s resignation means the occurrence of any of the following that is undertaken by the Company without the Eligible Executive’s prior written consent:
(1)a material violation by the Company of any material agreement with the Eligible Executive;
(2)a reduction in such Eligible Executive’s base salary to an annual rate that is more than 5% lower than the highest annual rate at which base salary has been paid at any time to the Eligible Executive during their service with the Company (unless pursuant to a proportional reduction of not more than 10% that is applicable generally to similarly situated executives of the Company);
(3)any assignment of duties to the Eligible Executive that would require an unreasonable amount of the Eligible Executive's work time and that are duties which customarily would be discharged by persons junior or subordinate in status to the Eligible Executive within the Company as determined in good faith by the Eligible Executive and taking into consideration trends and customs in the market and industry in which the Company operates;
(4)a material diminution in the Eligible Executive’s role, title or responsibilities;
(5)a relocation of such Eligible Executive’s principal place of employment with the Company (or Successor Entity, if applicable) to a place that increases the Eligible Executive’s commute from Eligible Executive’s principal residence by more than fifty (50) miles; or
(6)a failure of a Successor Entity to assume this Plan.
Notwithstanding the foregoing, in order for the Eligible Executive’s resignation to be deemed to have been for Good Reason, the Eligible Executive must provide written notice to the Company, as applicable, of such Eligible Executive’s intent to resign for Good Reason within 30 days after the Eligible Executive first has actual knowledge of the event giving rise to Good Reason, which notice shall describe the event(s) the Eligible Executive believes give rise to Good Reason; allow the Company 30 days from receipt of the written notice to cure the event (such period, the “Cure Period”); and if the event is not reasonably cured within the Cure Period, the Eligible Executive’s resignation from all positions held with the Company is effective not later than 30 days after the expiration of the Cure Period.
“Intellectual Property Rights” means any and all intellectual property rights and other similar proprietary rights in any jurisdiction, whether registered or unregistered, and whether owned or held for use under license with any third party, including all rights and interests pertaining to or deriving from: (a) patents and patent applications, reexaminations, extensions and counterparts claiming property therefrom; inventions, invention disclosures, discoveries and improvements, whether or not patentable; (b) computer software and firmware, including data files, source code, object code and software-related specifications and documentation; (c) works of authorship, whether or not copyrightable; (d) trade secrets (including those trade secrets defined in the Uniform Trade Secrets Act and under corresponding statutory law and common law), business, technical and know-how information, non-public information, and confidential information and rights to limit the use of disclosure thereof by any person; (e) trademarks, trade names, service marks, certification marks, service names, brands, trade dress and logos and the goodwill associated therewith; (f)
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proprietary databases and data compilations and all documentation relating to the foregoing, including manuals, memoranda and record; (g) domain names; and (h) licenses of any of the foregoing; including in each case any registrations of, applications to register, and renewals and extensions of, any of the foregoing with or by any governmental authority in any jurisdiction.
“Invention” means any products, process, ideas, improvements, discoveries, inventions, designs, algorithms, financial models, writings, works of authorship, content, graphics, data, software, specifications, instructions, text, images, photographs, illustration, audio clips, trade secrets and other works, material and information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative work thereof).
“Participation Agreement” means the agreement described in Section 2(a) below and attached to the Plan as Exhibit 1.
“Plan Administrator” means the Committee.
“Plan Tier” means the tier to which an Eligible Executive is assigned for purposes of participation in the Plan, as determined by the Plan Administrator, as set forth in the Eligible Executive’s Participation Agreement.
“Section 409A” means Section 409A of the Code and the Treasury Regulations and other guidance thereunder and any state law of similar effect.
“Separation from Service” means a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h).
“Successor Entity” means a successor entity to the Company resulting from a Change in Control.
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Upon the termination of an Eligible Executive’s employment for any reason, the Eligible Executive will be entitled to receive (i) any earned but unpaid base salary and (ii) any vested employee benefits in accordance with the terms of the applicable employee benefit plan or program (the “Accrued Benefits”). In addition, in the event of a Covered Termination, the Eligible Executive may be eligible to receive additional payments and benefits, as set forth in Section 4 or Section 5 below, as applicable.
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| (i) | Tier 1: 18 months |
| (ii) | Tier 2: 12 months |
| (iii) | Tier 3: 6 months |
The cash severance payment shall be paid in the form of salary continuation over the course of the Severance Period, on the regular payroll dates of the Company, subject to deductions and withholdings; provided, however, that no payment will be paid prior to the effective date of the Release.
| (i) | Tier 1: 24 months |
| (ii) | Tiers 2 and 3: 18 months |
Except as otherwise provided in an Eligible Executive’s Participation Agreement, such cash severance benefit shall be paid in a single lump payment no later than the second payroll cycle following the later of
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(i) the effective date of the Release or (ii) the Change in Control Date, but in any event not later than March 15 of the calendar year following the calendar year in which the Covered Termination occurs.
Notwithstanding the foregoing, in the event of a Covered Termination that occurs within the sixty (60) day period prior to the Change in Control Date, the amount payable pursuant to this Section 5(a)(1) shall be paid pursuant to the timing provisions set forth in Section 4(a)(1) above.
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Notwithstanding any provision of the Plan to the contrary, if any payment or benefit the Eligible Executive would receive from the Company pursuant to this Plan or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this Section 6, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (as defined below). The “Reduced Amount” will be either (1) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (2) the entire Payment, whichever amount after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in the Executive’s receipt, on an after-tax basis, of the greatest amount of the Payment. If a reduction in the Payment is to be made, the reduction in payments and/or benefits will occur in the following order: (1) reduction of benefits (other than cash) paid to the Eligible Executive; and (2) reduction of cash payments. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Eligible Executive’s equity awards.
All payments under the Plan will be subject to applicable withholding for federal, state, foreign, and local taxes.
All benefits provided under the Plan are intended to be exempt from the requirements of Section 409A to the maximum extent possible and any ambiguities herein shall be interpreted accordingly; provided, however, that to the extent that any benefits are not so exempt, such benefits are intended to comply with the requirements of Section 409A and any ambiguities herein shall be interpreted accordingly. It is intended that each installment of benefits payable to an Eligible Executive be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i).
If the Company determines that any benefits payable under the Plan constitute “deferred compensation” under Section 409A and the Eligible Executive is a “specified employee” of the Company, as such term is defined in Section 409A, then, to the extent necessary to avoid the imposition of the adverse tax consequences under Section 409A, the timing of such benefit payments shall be delayed until the earlier of (1) the date that is six months and one day after the Eligible Executive’s Separation from Service and (2) the date of the Eligible Executive’s death. In the event of such delayed payment, the Company shall then pay the Eligible Executive a lump sum amount equal to the sum of the severance benefit payments that would otherwise have been paid prior to the delay and pay any remaining amounts of severance benefits in accordance with the applicable payment schedule.
In no event will payment of any benefits under the Plan be made prior to an Eligible Executive’s Separation from Service or prior to the effective date of the Release. If the Company determines that any benefits provided under the Plan constitute “deferred compensation” under Section 409A, and the period for providing a Release set forth at Section 2(b) above spans two calendar years, then regardless of when the Release is returned to the Company and becomes effective, the Release will not be deemed effective, solely for purposes of the timing of payment of benefits under this Plan, until the later of the day that it would become effective under its terms or the first day of the latter calendar year.
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Notwithstanding the foregoing, the Company makes no representation or warranty and will have no liability to the Eligible Executive or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Section 409A but do not satisfy an exemption from, or the conditions of, Section 409A.
The rights and obligations of an Eligible Executive under this Plan may not be transferred or assigned. The Plan shall be binding upon any entity or person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such entity or person actively assumes the obligations hereunder and without regard to whether or not a Change in Control occurs.
By executing a Participation Agreement, Eligible Executive agrees to the following provisions:
(a)General. Eligible Executive agrees to assign, and hereby assigns, to the Company all of Eligible Executive’s rights in any Inventions (including all Intellectual Property Rights) therein or related thereto that are made, conceived or reduced to practice, in whole or in part and whether alone or with others, by Eligible Executive during employment by, or service with, the Company or which arise out of any activity conducted by, for or under the direction of the Company (whether or not conducted at the Company's facilities, working hours or using any of the Company's assets), or which are useful with, or relate directly or indirectly to, any Company Interest. Eligible Executive will promptly and fully disclose and provide all of the Inventions described above (the “Assigned Inventions”) to the Company.
(b)Assurances. Eligible Executive hereby agrees, while employed by the Company and thereafter, to further assist the Company, at the Company’s expense, to evidence, record and perfect the Company’s rights in and ownership of the Assigned Inventions, to perfect, obtain, maintain, enforce and defend any rights specified to be so owned or assigned and to provide and execute all documentation necessary to effect the foregoing.
By executing a Participation Agreement, Eligible Executive agrees to the following provisions:
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All payments and severance benefits provided under the Plan shall be subject to recoupment in accordance with any clawback policy of the Company, as in effect from time to time, that provides for recoupment of compensation on account of the negligence or misconduct of the Eligible Executive or on account of a material breach of this Plan by the Eligible Executive, or recoupment of performance-based compensation on account of a misstatement or miscalculation of performance results under any circumstances (whether or not involving negligence or misconduct).
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The Plan shall not be deemed (i) to give any executive or other person any right to be retained in the employ of the Company or a Successor Entity, as applicable, or (ii) to interfere with the right of the Company or a Successor Entity, as applicable, to discharge any employee or other person at any time, with or without cause, which right is hereby reserved. This Plan does not modify the at-will employment status of any Eligible Executive.
The Plan shall be unfunded, and all payments under the Plan paid only from the general assets of the Company.
This Plan is intended to be governed by and shall be construed in accordance with ERISA and, to the extent not preempted by ERISA, the laws of the State of Delaware.
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Plan Year: The Plan is maintained on a calendar year (January 1 – December 31).
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Plan Administrator: The Committee.
Agent for Service of Legal Process: Chair of the Compensation Committee of the Board of Directors of Climb Global Solutions, Inc.
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EXHIBIT 1
Participation Agreement
Name: __________________________
Title: ___________________________
Reports To: _____________________
Plan Tier: ________________________
You have been designated as eligible to participate in the Climb Global Solutions, Inc. Executive Severance and Change in Control Plan (the “Plan”), a copy of which is attached to this Participation Agreement.
You will receive the benefits set forth in the Plan if you meet all the eligibility requirements set forth in the Plan, including, without limitation, executing the required Release within the applicable time period set forth therein and allowing such Release to become effective in accordance with its terms.
You are party to an employment agreement with the Company (or a predecessor) dated [DATE] (“Former Employment Agreement”). By signing below, you hereby terminate such Former Employment Agreement and irrevocably forfeit any right to benefits set forth therein, and you understand and agree that such Former Employment Agreement shall be of no further force or effect as of the date set forth below, and you shall be an at-will employee hereafter, as described in the Plan. During calendar years 2023, 2024 and 2025, the Plan Administrator may not amend or terminate your rights under the Plan without your prior written consent.
[Notwithstanding Section 3(c) of the Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan, in the event of a Change in Control, if an unvested equity award you hold would (a) terminate upon the consummation of the Change in Control without you having the opportunity to meet the relevant vesting conditions or (b) be cashed out pursuant to Section 3(c) of the 2021 Omnibus Incentive Plan, then such award shall fully vest and, as applicable, become fully exercisable and nonforfeitable as of the date of the Change in Control, and the shares underlying the award shall be treated as fully vested for purposes of determining any amount payable pursuant to a cash out of the award in accordance with such Section 3(c). To the extent not already vested, any and all unvested equity awards held by you will vest in full upon your death while employed by the Company. For the avoidance of doubt, you shall not be required to sign a Release on account of the vesting of any equity award hereunder.]
[Preservation of Severance Installment Payment Form upon a Qualifying Termination During the Change in Control Period: Notwithstanding (a) the preceding paragraph, and (b) that Section 5 of the Plan provides for payment of severance in a lump sum upon a Qualifying Termination on or after the Change in Control Date and during the Change in Control Period, any severance payments due to you under such circumstances, to the extent not in excess of the amount of severance that would have been due to you under the Former Employment Agreement, shall be paid in installments, in accordance with the terms of Section 4 of your former Employment Agreement, if and to the extent necessary to comply with Section 409A requirements.]
You specifically agree to the Assignment of Intellectual Property provisions of Section 10 of the Plan, and Restrictive Covenants (relating to matters such as confidentiality, non-competition and non-solicitation) of Section 11 of the Plan.
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You and the Company mutually agree that any and all claims or controversies arising out of or relating to your employment, the termination thereof, or otherwise arising between you and the Company shall, in lieu of a jury or other civil trial, be settled by final and binding arbitration. This includes all claims arising under Sections 10 and 11 of the Plan. The parties also agree to submit claims to the arbitrator regarding issues of arbitrability, the validity, scope, and enforceability of this Agreement, jurisdictional issues, and any other challenges to the Plan or this Participation Agreement. Nothing in the Plan or this Participation Agreement shall be construed to prevent either party’s use of provisional remedies in aid of arbitration from a court of appropriate jurisdiction including, but not limited to, claims for temporary or preliminary injunctive relief as described in Section 11 of the Plan. The Parties consent to the jurisdiction of Monmouth County Superior Court of New Jersey and if the jurisdictional prerequisites exist, the United States District Court for the District of New Jersey. Such arbitration shall be conducted in accordance with the JAMS Employment Arbitration Rules & Procedures. Any such arbitration will be conducted in Monmouth County, New Jersey. Except as otherwise provided by applicable law, the administrative costs of the arbitration (filing fees, cost for the arbitration site, hearing fees, arbitrator’s fee) shall be divided equally between the parties. In the event that the applicable rules of JAMS, any express statutory provisions, or controlling case law conflicts with this allocation and requires the payment of administrative costs of arbitration by the Company, the administrative costs of arbitration will be paid by the Company. To the extent you have a non-waivable right to file a claim or charge against the Company (such as claims for unemployment benefits, workers’ compensation benefits, or charges of discrimination with the Equal Employment Opportunity Commission), this Agreement shall not be intended to waive such a right to file. If you or the Company arbitrates a claim against the other, neither you nor the Company shall, without written consent of the other party, have the right to participate in a class action in court or in arbitration, either as a class representative or a class member or join or consolidate claims with any other claims asserted by any other person. In the event any portion of the Plan or this Participation Agreement is found to be unenforceable, that portion shall not be effective and the remainder of the Plan or this Participation Agreement shall remain effective.
To accept the terms of this Participation Agreement and participate in the Plan, please sign and date this Participation Agreement in the space provided below and return it to _____________________ no later than _________, ____.
CLIMB GLOBAL SOLUTIONS, INC.
By: ___________________________
[NAME],
Chair, Compensation Committee
Eligible Executive
[NAME]
Date:
16
57762351.11
EXHIBIT 2
[Form of Release]
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (“Agreement”) is hereby entered into this [●] day of [●], 20[●], between Climb Global Solutions, Inc. (“Company”), on behalf of itself and its Affiliates, and [●] (“Executive”), who are collectively referred to herein as the “Parties.” This Agreement is entered into by Executive as a condition for benefit eligibility under the Climb Global Solutions, Inc. Executive Severance and Change in Control Plan (“Plan”), which is incorporated herein by reference. As set forth in more detail below, by signing this Agreement, Executive understands that Executive, among other things, is giving up claims (both known and unknown) Executive might have against the Company, is releasing the Company from all liability, and is agreeing not to file a lawsuit of any kind against the Company. In consideration of the mutual promises contained herein, and other good and valuable consideration as hereinafter recited, the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
(a)Cash severance payment(s) in respect of base salary in the total amount of [●], payable as set forth in Section [4(a)(1)][5(a)(1)] of the Plan (as modified by your Participation Agreement, if applicable).
(b)Payment of COBRA premiums (or amounts in lieu thereof), payable as set forth in Section [4(a)(2)][5(a)(2)] of the Plan.
(c)Cash severance payment(s) in respect of your bonus in the total amount of [●], payable as set forth in Section [4(a)(3)][5(a)(3)] of the Plan (as modified by your Participation Agreement, if applicable).
[(d)Acceleration of your equity awards, as set forth in Section 5(a)(4) of the Plan.]1
1 Applicable only for Qualifying Termination during the Change in Control Period.
17
57762351.11
18
57762351.11
19
57762351.11
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above.
[EXECUTIVE NAME]Date
CLIMB GLOBAL SOLUTIONS, INC.
20
57762351.11
By: [NAME, TITLE]Date
21
57762351.11
Exhibit 10.2
CLIMB GLOBAL SOLUTIONS, INC. 2021 OMNIBUS INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT
Name of Grantee:[●]
Target No. of RSUs:[●]
Grant Date:[●]
Performance Cycle:[●]
Pursuant to the Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan, as amended through the date hereof (the “Plan”), Climb Global Solutions, Inc. (the “Company”) hereby grants an award of the number of Restricted Stock Units set forth above (an “Award”) to the Grantee set forth above under this agreement (the “Agreement”). Each Restricted Stock Unit shall relate to one share of common stock, par value $0.01 per share (the “Stock”), of the Company.
[(b)Acceleration of Vesting in Certain Circumstances.1
(i)Notwithstanding the foregoing, if the Grantee’s Service Relationship terminates due to involuntary termination without Cause or resignation for Good Reason during the period commencing sixty (60) days prior to consummation of a Change in Control and ending 12 months following consummation of a Change in Control and (a) this Award has converted into time-based Restricted Stock Units pursuant to Section 2(a)(ii) of this Agreement, the target number of Restricted Stock Units subject to this Award shall immediately become fully vested or (b) this Award has not converted into time-based Restricted Stock Units pursuant to Section 2(a)(ii) of this Agreement, the Grantee shall immediately become fully vested in the number of Restricted Stock Units determined based on attainment of the performance goals set forth on Exhibit A (as determined in accordance with the last sentence of Section 2(a)(i) of this Agreement), which determination shall occur following the end day of the Performance Cycle.
For purposes of this Agreement, “Cause” means, with respect to Grantee, (i) an act of personal dishonesty in connection with the Grantee’s responsibilities as a service provider of the Company, excluding any unintentional, good faith errors such as a good faith error with respect to business expense reimbursements; (ii) a plea of guilty or nolo contendere to, conviction of, or an indictment for a felony or other crime involving theft, fraud or moral turpitude, in each case in which the Administrator reasonably believes that it has had or will have a material detrimental effect on the Company’s reputation or business; (iii) a breach of any fiduciary duty owed to the Company that has, or is reasonably expected to have, a material detrimental effect on the Company’s reputation or business (except in the case of a personal disability) as determined in good faith by the Administrator; (iv) serious neglect or misconduct in the performance of the Grantee’s duties for the Company or willful or repeated failure or refusal to perform such duties, provided that, if such behavior is curable, the Grantee is provided with written notice describing in reasonable detail the alleged conduct and stating the Company’s belief that it would constitute Cause to terminate the Grantee’s service with the Company and the Grantee fails to cure such behavior within 30 days after receipt of such written notice; or (v) the material breach by the Grantee of any restrictive covenants (for example, relating to non-competition, non-solicitation or confidentiality. The employment of a Grantee will be deemed to have been terminated for Cause if the Administrator determines within thirty (30) days of the termination of employment (whether such termination was voluntary or involuntary) that termination for Cause was warranted.
For purposes of this Agreement, “Good Reason” for a Grantee’s resignation means the occurrence of any of the following that is undertaken by the Company without the Grantee’s prior written consent:
(1)a material violation by the Company of any material agreement with the Grantee;
1 Omit for employees not covered by the Executive Severance and Change in Control Plan, and re-letter Section 2 accordingly.
2
(2)a reduction in the Grantee’s base salary to an annual rate that is more than 5% lower than the highest annual rate at which base salary has been paid at any time to the Eligible Executive during their service with the Company (unless pursuant to a proportional reduction of not more than 10% that is applicable generally to similarly situated executives of the Company);
(3)any assignment of duties to the Grantee that would require an unreasonable amount of the Grantee 's work time and that are duties which customarily would be discharged by persons junior or subordinate in status to the Grantee within the Company as determined in good faith by the Grantee and taking into consideration trends and customs in the market and industry in which the Company operates;
(4)a material diminution in the Eligible Executive’s role, title or responsibilities; or
(5)a relocation of such Grantee’s principal place of employment with the Company (or a successor entity, if applicable) to a place that increases the Grantee’s commute from Grantee’s principal residence by more than fifty (50) miles.
Notwithstanding the foregoing, in order for the Grantee’s resignation to be deemed to have been for Good Reason, the Grantee must provide written notice to the Company, as applicable, of such Grantee’s intent to resign for Good Reason within 20 days after the first occurrence of the event giving rise to Good Reason, which notice shall describe the event(s) the Grantee believes give rise to Good Reason; allow the Company 30 days from receipt of the written notice to cure the event (such period, the “Cure Period”); and if the event is not reasonably cured within the Cure Period, the Grantee’s resignation from all positions held with the Company is effective not later than 30 days after the expiration of the Cure Period.]
(ii)Notwithstanding Section 3(c) of the Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan, in the event of a Change in Control, if this Award would (a) terminate upon the consummation of the Change in Control without the Grantee having the opportunity to meet one or more of the vesting conditions set forth in Section 2(a) above or (b) be cashed out pursuant to Section 3(c) of the 2021 Omnibus Incentive Plan, then the target number of Restricted Stock Units subject to the Award shall fully vest as of the date of the Change in Control, and the target number of Shares underlying this Award shall be treated as fully vested for purposes of determining any amount payable pursuant to the cash out of the Award in accordance with such Section 3(c).
(iii)To the extent not already vested, this Award shall vest in full upon the death or Disability of the Grantee while employed by the Company.
(c)Forfeiture of Non-Vested RSUs. If the Grantee’s Service Relationship terminates before the RSUs are vested as set forth in Section 2 above, any Restricted Stock Units that have not vested as of such date shall automatically and without notice terminate and be forfeited, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units.
3
(d)Forfeiture of Vested RSUs. Upon termination for Cause of the Grantee’s Service Relationship, all Restricted Stock Units granted hereunder shall be forfeited, regardless of the length of Grantee’s Service Relationship following the Grant Date, and the Grantee shall have no further rights hereunder.
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(a)In General. Notwithstanding anything to the contrary in this Agreement, this Agreement is expressly made subject to the terms of the clawback and forfeiture provisions set forth below and in the Plan. As a result, the Grantee may be required to forfeit the Restricted Stock Units and/or return to the Company any proceeds received in settlement thereof in the situations described below or in the Plan. The Grantee agrees that the Company may enforce the forfeiture by all legal means available, including, without limitation, by withholding the forfeited amount from other sums owed to the Grantee by the Company.
(b)Restatement of Financial Statements. Subject to applicable law, in the event of a restatement of the Company’s financial results within three years of original reporting to correct a material error, then, if the Administrator determines that all or any portion of the Restricted Stock Units, if the award was made prior to the restatement, would not have been awarded based upon the restated financial results, or that the Grantee derived more economic benefit from the Restricted Stock Units than would have occurred absent the financial statement errors, then the Grantee agrees to forfeit and return to the Company the portion (which may be all) of the Restricted Stock Units and/or any proceeds received in settlement thereof.
(c)Termination for Cause. In the event that (i) the Grantee’s Service Relationship is terminated by the Company for Cause, or (ii) following the termination of the Grantee’s Service Relationship, the Company is or becomes aware that the Grantee committed an act that would have given rise to a termination for Cause, or that Grantee violated a covenant such as one relating to competition, solicitation of employees or clients or confidentiality, then the Grantee agrees to forfeit to the Company all or part of the Restricted Stock Units and/or any proceeds received in settlement thereof, that the Administrator, in its discretion, determines to be appropriate.
(d)Applicable Law or Company Policy. The Restricted Stock Units and/or any proceeds received in settlement thereof shall also be subject to forfeiture to the extent required by applicable law or Company policy.
11.Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.
[SIGNATURES ON FOLLOWING PAGE]
5
Climb Global Solutions, Inc.
By:
Title:
The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Grantee (including through an online acceptance process) is acceptable.
Dated:
Grantee’s Signature
Grantee’s name and address:
6
EXHIBIT A
7
CLIMB GLOBAL SOLUTIONS, INC. 2021 OMNIBUS INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT
Name of Grantee:[●]
No. of Restricted Stock Units:[●]
Grant Date:[●]
Vesting Commencement Date:[●]
Pursuant to the Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan, as amended through the date hereof (the “Plan”), Climb Global Solutions, Inc. (the “Company”) hereby grants an award of the number of Restricted Stock Units set forth above (an “Award”) to the Grantee set forth above under this agreement (the “Agreement”). Each Restricted Stock Unit shall relate to one share of common stock, par value $0.01 per share (the “Stock”), of the Company.
Incremental Percentage of | Anniversary of Vesting Commencement Date |
[●] | [●] |
| |
| |
| |
| |
[(b)Acceleration of Vesting in Certain Circumstances.1
1 Omit for employees not covered by the Executive Severance and Change in Control Plan, and re-letter Section 2 accordingly.
58868977 – 4/5/2023
(i)Notwithstanding the foregoing, the Grantee shall become fully vested in any unvested Restricted Stock Units granted hereunder if the Grantee’s Service Relationship terminates due to involuntary termination without Cause or resignation for Good Reason during the period commencing sixty (60) days prior to consummation of a Change in Control and ending 12 months following consummation of a Change in Control.
For purposes of this Agreement, “Cause” means, with respect to Grantee, (i) an act of personal dishonesty in connection with the Grantee’s responsibilities as a service provider of the Company, excluding any unintentional, good faith errors such as a good faith error with respect to business expense reimbursements; (ii) a plea of guilty or nolo contendere to, conviction of, or an indictment for a felony or other crime involving theft, fraud or moral turpitude, in each case in which the Administrator reasonably believes that it has had or will have a material detrimental effect on the Company’s reputation or business; (iii) a breach of any fiduciary duty owed to the Company that has, or is reasonably expected to have, a material detrimental effect on the Company’s reputation or business (except in the case of a personal disability) as determined in good faith by the Administrator; (iv) serious neglect or misconduct in the performance of the Grantee’s duties for the Company or willful or repeated failure or refusal to perform such duties, provided that, if such behavior is curable, the Grantee is provided with written notice describing in reasonable detail the alleged conduct and stating the Company’s belief that it would constitute Cause to terminate the Grantee’s service with the Company and the Grantee fails to cure such behavior within 30 days after receipt of such written notice; or (v) the material breach by the Grantee of any restrictive covenants (for example, relating to non-competition, non-solicitation or confidentiality. The employment of a Grantee will be deemed to have been terminated for Cause if the Administrator determines within thirty (30) days of the termination of employment (whether such termination was voluntary or involuntary) that termination for Cause was warranted.
For purposes of this Agreement, “Good Reason” for a Grantee’s resignation means the occurrence of any of the following that is undertaken by the Company without the Grantee’s prior written consent:
(1)a material violation by the Company of any material agreement with the Grantee;
(2)a reduction in the Grantee’s base salary to an annual rate that is more than 5% lower than the highest annual rate at which base salary has been paid at any time to the Grantee during their service with the Company (unless pursuant to a proportional reduction of not more than 10% that is applicable generally to similarly situated executives of the Company);
(3)any assignment of duties to the Grantee that would require an unreasonable amount of the Grantee 's work time and that are duties which customarily would be discharged by persons junior or subordinate in status to the Grantee within the Company as determined in good faith by the Grantee and taking into consideration trends and customs in the market and industry in which the Company operates;
(4)a material diminution in the Grantee’s role, title or responsibilities; or
(5)a relocation of such Grantee’s principal place of employment
2
with the Company (or a successor entity, if applicable) to a place that increases the Grantee’s commute from Grantee’s principal residence by more than fifty (50) miles.
Notwithstanding the foregoing, in order for the Grantee’s resignation to be deemed to have been for Good Reason, the Grantee must provide written notice to the Company, as applicable, of such Grantee’s intent to resign for Good Reason within 20 days after the first occurrence of the event giving rise to Good Reason, which notice shall describe the event(s) the Grantee believes give rise to Good Reason; allow the Company 30 days from receipt of the written notice to cure the event (such period, the “Cure Period”); and if the event is not reasonably cured within the Cure Period, the Grantee’s resignation from all positions held with the Company is effective not later than 30 days after the expiration of the Cure Period.]
(ii)Notwithstanding Section 3(c) of the Climb Global Solutions 2021 Omnibus Incentive Plan, in the event of a Change in Control, if this Award would (a) terminate upon the consummation of the Change in Control without the Grantee having the opportunity to meet one or more of the vesting conditions set forth in Section 2(a) above or (b) be cashed out pursuant to Section 3(c) of the 2021 Omnibus Incentive Plan, then the Award shall fully vest as of the date of the Change in Control, and the Shares underlying this Award shall be treated as fully vested for purposes of determining any amount payable pursuant to a cash out of the Award in accordance with such Section 3(c).
(iii)To the extent not already vested, this Award shall vest in full upon the death or Disability of the Grantee while employed by the Company.]
(c)Forfeiture of Non-Vested RSUs. If the Grantee’s Service Relationship terminates before the RSUs are fully vested as set forth in Section 2 above, any Restricted Stock Units that have not vested as of such date shall automatically and without notice terminate and be forfeited, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units.
(d)Forfeiture of Vested RSUs. Upon termination for Cause of the Grantee’s Service Relationship, all Restricted Stock Units granted hereunder shall be forfeited, regardless of the length of Grantee’s Service Relationship following the Grant Date, and the Grantee shall have no further rights hereunder.
3
(a)In General. Notwithstanding anything to the contrary in this Agreement, this Agreement is expressly made subject to the terms of the clawback and forfeiture provisions set forth below and in the Plan. As a result, the Grantee may be required to forfeit the Restricted Stock Units and/or return to the Company any proceeds received in settlement thereof in the situations described below or in the Plan. The Grantee agrees that the Company may enforce the
4
forfeiture by all legal means available, including, without limitation, by withholding the forfeited amount from other sums owed to the Grantee by the Company.
(b)Restatement of Financial Statements. Subject to applicable law, in the event of a restatement of the Company’s financial results within three years of original reporting to correct a material error, then, if the Administrator determines that all or any portion of the Restricted Stock Units, if the award was made prior to the restatement, would not have been awarded based upon the restated financial results, or that the Grantee derived more economic benefit from the Restricted Stock Units than would have occurred absent the financial statement errors, then the Grantee agrees to forfeit and return to the Company the portion (which may be all) of the Restricted Stock Units and/or any proceeds received in settlement thereof.
(c)Termination for Cause. In the event that (i) the Grantee’s Service Relationship is terminated by the Company for Cause, or (ii) following the termination of the Grantee’s Service Relationship, the Company is or becomes aware that the Grantee committed an act that would have given rise to a termination for Cause, or that Grantee violated a covenant such as one relating to competition, solicitation of employees or clients or confidentiality, then the Grantee agrees to forfeit to the Company all or part of the Restricted Stock Units and/or any proceeds received in settlement thereof, that the Administrator, in its discretion, determines to be appropriate.
(d)Applicable Law or Company Policy. The Restricted Stock Units and/or any proceeds received in settlement thereof shall also be subject to forfeiture to the extent required by applicable law or Company policy.
11.Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.
[SIGNATURES ON FOLLOWING PAGE]
5
Climb Global Solutions, Inc.
By:
Title:
The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Grantee (including through an online acceptance process) is acceptable.
Dated:
Grantee’s Signature
Grantee’s name and address:
6
Exhibit 10.4
CLIMB GLOBAL SOLUTIONS, INC. 2021 OMNIBUS INCENTIVE PLAN
CASH-BASED AWARD AGREEMENT
(ANNUAL CASH BONUS)
Name of Grantee:[●]
Target Annual Cash Bonus:[●]
Performance Year:[●]
Pursuant to the Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan, as amended through the date hereof (the “Plan”), Climb Global Solutions, Inc. (the “Company”) hereby grants an award of the Target Annual Cash Bonus amount set forth above (an “Award”) to the Grantee set forth above, subject to the terms and conditions of this Agreement (the “Agreement”).
(b)Forfeiture of Annual Bonus. If the Grantee’s Service Relationship terminates before the January 1 first following the last day of the Performance Year, the annual bonus shall be forfeited and shall not become payable.
(a)In General. Notwithstanding anything to the contrary in this Agreement, this Agreement is expressly made subject to the terms of the clawback and forfeiture provisions set forth below and in the Plan. As a result, the Grantee may be required to forfeit the annual cash bonus in the situations described below or in the Plan. The Grantee agrees that the Company may enforce the forfeiture by all legal means available, including, without limitation, by withholding the forfeited amount from other sums owed to the Grantee by the Company.
(b)Restatement of Financial Statements. Subject to applicable law, in the event of a restatement of the Company’s financial results within three years of original reporting to correct a material error, then, if the Administrator determines that all or any portion of the annual cash bonus, if the award was made prior to the restatement, would not have been awarded based upon the restated financial results, then the Grantee agrees to forfeit and return to the Company the portion (which may be all) of the annual cash bonus.
(c)Termination for Cause. In the event that (i) the Grantee’s Service Relationship is terminated by the Company for Cause, or (ii) following the termination of the
2
Grantee’s Service Relationship, the Company is or becomes aware that the Grantee committed an act that would have given rise to a termination for Cause, or that Grantee violated a covenant such as one relating to competition, solicitation of employees or clients or confidentiality, then the Grantee agrees to forfeit to the Company all or part of the annual cash bonus, that the Administrator, in its discretion, determines to be appropriate. For purposes of this Agreement, “Cause” means, with respect to Grantee, (i) an act of personal dishonesty in connection with the Grantee’s responsibilities as a service provider of the Company, excluding any unintentional, good faith errors such as a good faith error with respect to business expense reimbursements; (ii) a plea of guilty or nolo contendere to, conviction of, or an indictment for a felony or other crime involving theft, fraud or moral turpitude, in each case in which the Administrator reasonably believes that it has had or will have a material detrimental effect on the Company’s reputation or business; (iii) a breach of any fiduciary duty owed to the Company that has, or is reasonably expected to have, a material detrimental effect on the Company’s reputation or business (except in the case of a personal disability) as determined in good faith by the Administrator; (iv) serious neglect or misconduct in the performance of the Grantee’s duties for the Company or willful or repeated failure or refusal to perform such duties, provided that, if such behavior is curable, the Grantee is provided with written notice describing in reasonable detail the alleged conduct and stating the Company’s belief that it would constitute Cause to terminate the Grantee’s service with the Company and the Grantee fails to cure such behavior within 30 days after receipt of such written notice; or (v) the material breach by the Grantee of any restrictive covenants (for example, relating to non-competition, non-solicitation or confidentiality. The employment of a Grantee will be deemed to have been terminated for Cause if the Administrator determines within thirty (30) days of the termination of employment (whether such termination was voluntary or involuntary) that termination for Cause was warranted.
(d)Applicable Law or Company Policy. The annual cash bonus shall also be subject to forfeiture to the extent required by applicable law or Company policy.
9.Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.
3
Climb Global Solutions, Inc.
By:
Title:
The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Grantee (including through an online acceptance process) is acceptable.
Dated:
Grantee’s Signature
Grantee’s name and address:
4
EXHIBIT A
5
Document and Entity Information |
Apr. 14, 2023 |
|---|---|
| Document and Entity Information | |
| Document Type | 8-K |
| Document Period End Date | Apr. 14, 2023 |
| Entity Registrant Name | CLIMB GLOBAL SOLUTIONS, INC. |
| Entity File Number | 000-26408 |
| Entity Incorporation, State or Country Code | DE |
| Entity Tax Identification Number | 13-3136104 |
| Entity Address, Address Line One | 4 Industrial Way West, Suite 300 |
| Entity Address, City or Town | Eatontown |
| Entity Address, State or Province | NJ |
| Entity Address, Postal Zip Code | 07724 |
| City Area Code | 732 |
| Local Phone Number | 389-0932 |
| Title of 12(b) Security | Common stock, $.01 par value |
| Trading Symbol | CLMB |
| Security Exchange Name | NASDAQ |
| Entity Central Index Key | 0000945983 |
| Amendment Flag | false |
| Entity Emerging Growth Company | false |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
-8?20$3;8T.P6BP^0"X99K>]9!:G