UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
Filed by the Registrant  x	Filed by a Party other than the Registrant  ¨	
 
Check the appropriate box:
 
	x	Preliminary Proxy Statement	
	¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))	
	¨	Definitive Proxy Statement	
	¨	Definitive Additional Materials	
	¨	Soliciting Material under § 240.14a-12	
 
EVINE Live Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
	x	No fee required.	
 
	¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11	
 
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	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):	
 
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	¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.	
 
	(1)	Amount Previously Paid:	
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EVINE LIVE INC.
6740 Shady Oak Road
Eden Prairie, MN 55344-3433
 
May 31, 2019
 
Dear Shareholders:
 
You are cordially invited to attend the Annual Meeting of Shareholders (the “Annual Meeting”) of EVINE Live Inc., a Minnesota corporation (the “Company”), to be held at our offices located at 6690 Shady Oak Road (Human Resources Entrance), Eden Prairie, Minnesota, on July 12, 2019 at 9:00 a.m. CT.
 
This year we are again taking advantage of a Securities and Exchange Commission rule allowing us to furnish our proxy materials over the Internet. You will receive a Notice Regarding Availability of Proxy Materials that will tell you how you can access our proxy materials which describe the matters to come before the meeting. It also will tell you how to request a paper or e-mail copy of our proxy materials.
 
We hope that you will be able to attend the meeting in person and we look forward to seeing you. Whether or not you plan to attend the Annual Meeting, please take the time to vote. Please vote your shares as instructed in the Notice Regarding Availability of Proxy Materials, or on your proxy card if you requested paper materials, and send your proxy through the Internet, telephone or mail as soon as possible so that your proxy is received prior to the Annual Meeting. This will assure that your shares will be represented at the meeting and voted in accordance with your wishes. Please vote as quickly as possible, even if you plan to attend the Annual Meeting. You may revoke the proxy and vote in person at the meeting if you so desire.
 
Your vote is extremely important regardless of the number of shares you own.
 
Sincerely,	 	
	 	
Timothy A. Peterman	 	
Chief Executive Officer	 	

 

EVINE LIVE INC.
6740 Shady Oak Road
Eden Prairie, MN 55344-3433
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 12, 2019
 
To the Shareholders of EVINE Live Inc.:
 
The Annual Meeting of Shareholders (the “Annual Meeting”) of EVINE Live Inc., a Minnesota corporation (the “Company”), will be held at our offices located at 6690 Shady Oak Road (Human Resources Entrance), Eden Prairie, Minnesota on July 12, 2019 at 9:00 a.m. CT, or at any adjournments or postponements thereof. The Annual Meeting is being held for the purpose of considering and taking action with respect to the following:
 
	1.	To elect eight persons to serve as directors on our Board of Directors until the next Annual Meeting of Shareholders or until their successors have been duly elected and qualified;	
 
	2.	To approve, on an advisory basis, the 2018 compensation of the Company’s named executive officers as disclosed in the accompanying proxy statement;	
 
	3.	To re-approve our Shareholder Rights Plan;	
 
	4.	To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2020; and	
 
	5.	To transact such other business as may properly come before the Annual Meeting, or any adjournments or postponements thereof.	
 
Only Company shareholders of record as of the close of business on May 17, 2019 will be entitled to receive notice of and to vote at the Annual Meeting or any adjournments or postponements thereof.
 
Your vote is extremely important. Even if you own only a few shares, and whether or not you plan to attend the meeting in person, you are requested to vote your proxy either (1) through the Internet at the address listed on the Notice Regarding Availability of Proxy Materials or the proxy card, (2) by calling a toll-free telephone number listed on the proxy card or (3) by marking, signing and dating the proxy card and mailing it in the envelope provided. The proxy may be revoked by you at any time prior to being exercised. Voting your proxy by telephone or through the Internet or by returning your proxy card will not affect your right to vote in person if you attend the meeting and revoke the proxy. If you attend the Annual Meeting and wish to change your proxy, you may do so automatically by voting in person at the Annual Meeting. You may also revoke any previously returned proxy by sending another later-dated proxy for the Annual Meeting.   Only your latest-dated proxy counts.
 
By Order of the Board of Directors
	 	
Andrea M. Fike	 	
Executive Vice President, General Counsel and Secretary	 	
 	 	
May 31, 2019	 	
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice & Proxy Statement and Form 10-K are available at www.proxyvote.com

 

TABLE OF CONTENTS
 
PROPOSAL NO. 1: ELECTION OF DIRECTORS	2	
 	 	
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE	5	
Shareholder Communications with the Board of Directors	5	
Attendance at Shareholder Meetings	5	
Composition of the Board	5	
Board Leadership Structure and Risk Oversight	5	
Director Independence	6	
Committees of the Board of Directors	6	
Director Qualifications, Board Diversity and Shareholder Nominations for Directors	9	
Business Ethics Policies	9	
Attendance and Meetings of the Board of Directors and Its Committees	9	
Compensation Committee Interlocks and Insider Participation	9	
 	 	
EXECUTIVE COMPENSATION	10	
Executive Summary	10	
Compensation Discussion and Analysis	11	
Compensation Committee Report	17	
Summary Compensation Table	18	
Grants of Plan-Based Awards in Fiscal 201 8	20	
Outstanding Equity Awards at Fiscal 2018 Year-End	22	
Option Exercises and Stock Vested	24	
All Other Compensation	24	
Severance Agreements and Severance Plan	24	
Potential Payments upon Termination, Non-Change in Control and After Change of Control	26	
Additional Potential Payments for Accelerated Equity Awards Upon Change in Control	27	
CEO Pay Ratio	27	
 	 	
PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION	28	
 	 	
DIRECTOR COMPENSATION FOR FISCAL 201 8	28	
 	 	
PROPOSAL NO. 3: RE-APPROVAL OF SHAREHOLDER RIGHTS PLAN 	30	
Description of Shareholder Rights Plan	30	
Certain Considerations Relating to the Shareholder Rights Plan	33	
Effect of Proposal	34	
 	 	
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	34	
Director/Officer Relationship s	34	
Related Person Transactions Approval Policy	35	
 	 	
AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	36	
Report of the Audit Committee	36	
Fees Billed by Deloitte & Touche LLP	37	
Approval of Independent Registered Public Accounting Firm Services and Fees	38	
 	 	
PROPOSAL NO. 4: RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	38	
 	 	
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING	39	
 	 	
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT	44	

 	   i 	 	

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	45	
 	 	
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 2020 ANNUAL MEETING	45	
 	 	
ANNUAL REPORT AND AVAILABLE INFORMATION	46	
 	 	
HOUSEHOLDING OF PROXY MATERIALS	46	
 	 	
OTHER MATTERS	47	
 	 	
SHAREHOLDER RIGHTS PLAN	Appendix A	

 	   ii 	 	

EVINE Live Inc.
 
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 12, 2019
 
The enclosed proxy is being furnished to holders of shares of common stock of EVINE Live Inc., a Minnesota corporation (the “Company” or “EVINE”), in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use in connection with our Annual Meeting of Shareholders (the “Annual Meeting”) to be held on July 12, 2019 at 9:00 a.m. CT, or at any adjournments or postponements thereof, for the purposes set forth herein. The Annual Meeting will be held at our offices located at 6690 Shady Oak Road (Human Resources entrance), Eden Prairie, Minnesota. The mailing of the Notice Regarding Availability of Proxy Materials, and the mailing of this proxy statement to shareholders who requested paper materials, will commence on or about May 31, 2019.
 
This proxy statement contains important information to consider when deciding how to vote on the matters set forth in the Notice of Annual Meeting of Shareholders. In this proxy statement, the terms “EVINE,” the “Company,” “we,” “our,” “ours,” and “us” refer to EVINE Live Inc. Our principal executive offices are located at 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433 and our main telephone number is (952) 943-6000.
 
Voting Matters and Voting Recommendations
 
The following proposals are included in this proxy statement and are scheduled to be voted on at the meeting. The Board recommends that you vote your shares as indicated below.
 
PROPOSALS:	 	THE BOARD’S
 VOTING
 RECOMMENDATIONS:	 	RATIONALE FOR SUPPORT:	 	FOR
FURTHER
 DETAILS:	
1.	 Elect the eight directors identified in this proxy statement, each for a term of one year.	 	“FOR” each nominee to the Board	 	Our nominees are distinguished leaders who bring a mix of skills and qualifications to the Board and can represent the interests of all shareholders.	 	Page 2	
 	 	 	 	 	
2.	Approve the compensation of our named executive officers on an advisory basis.	 	“FOR”	 	Our executive compensation program is designed to attract and retain exceptional leaders and enable them to behave like owners.	 	Page 28	
 	 	 	 	 	
3.	Re-approve the Company’s Shareholder Rights Plan.  	 	“FOR”	 	The Board believes that it is in the best interests of the Company and its shareholders to re-approve the Shareholder Rights Plan in order to continue to provide for the protection of certain tax benefits.  	 	Page 30	
 	 	 	 	 	 	 	 	
4.	Ratify the selection of Deloitte & Touche LLP as the Company’s independent auditor for the fiscal year ending February 1, 2020.  	 	“FOR”	 	The Audit Committee of the Board believes that it is in the best interests of the Company and its shareholders to retain Deloitte & Touche LLP.  	 	Page 38	

 	1 	 	

PROPOSAL NO. 1:
ELECTION OF DIRECTORS
 
Proposal No. 1 is a proposal to elect eight persons to serve as directors on our Board of Directors. Each director will hold office until the next Annual Meeting of Shareholders and until his or her successor is elected and qualified, or his or her earlier resignation or removal. All of the Board’s director nominees have consented to be named in this proxy statement and to serve as a director, if elected.
 
On May 2, 2019, Thomas Beers and Mark Holdsworth resigned as members of the Board and Michael Friedman and Eyal Lalo were elected as members. The number of directors currently serving on the Board is eight. Fred Siegel and Alex Spiro will not be standing for re-election at our Annual Meeting. On May 16, 2019, we entered into a Cooperation Agreement (the “Cooperation Agreement”) with our shareholders Cruiser Capital Advisor, LLC, Cruiser Capital Master Fund LP and Metamorphosis IV LLC (the “Investors”), pursuant to which we agreed, among other things, to nominate, recommend to shareholders and support Benoît Jamar and Aaron P. Reitkopf for election to the Board at the Annual Meeting. The Cooperation Agreement, including certain standstill commitments made by the Investors, is described in a Form 8-K filed with the Securities and Exchange Commission (“SEC”) on May 21, 2019.
 
Our Corporate Governance and Nominating Committee reviewed the makeup of the Board and recommended that each person named below be nominated for election as directors. All of the nominees named below were elected to serve as directors at our 2018 Annual Meeting of Shareholders, except for Michael Friedman and Eyal Lalo, who were appointed to the Board on May 2, 2019, and Messrs. Jamar and Reitkopf who were recommended for nomination to the Board by the Investors as described above.
 
Based upon the recommendation of our Corporate Governance and Nominating Committee (the “Governance Committee”), the Board unanimously nominated the individuals recommended by the Governance Committee for election as directors. We did not retain any third party to assist in identifying or evaluating the nominees. Assuming shareholders elect all the director nominees named in this proxy statement at the Annual Meeting, we will have eight directors. The Board has authority under our By-Laws to fill vacancies and to increase or, upon the occurrence of a vacancy, decrease the Board’s size between annual meetings. Your proxy holder will vote your shares for the Board’s nominees unless you instruct otherwise.
 
If prior to the Annual Meeting the Board should learn that any of its nominees will be unable to serve for any reason, the proxies that otherwise would have been voted for such nominee will be voted for a substitute nominee as selected by the Board. Alternatively, the proxies, at the Board’s discretion, may be voted for that fewer number of nominees as results from the inability of any nominee to serve. However, in the event that Messrs. Jamar and Reitkopf are unable or unwilling to serve prior to the end of their terms, the Investors have a right to propose replacement directors. The Board has no reason to believe that any of its nominees will be unable to serve. There are no family relationships between any director, executive officer, or person nominated to become a director.
 
Directors are elected by a plurality of the shares of common stock present in person or by proxy at the Annual Meeting and entitled to vote. Shareholders do not have the right to cumulate their votes in the election of directors or with respect to any other proposal or matter. Assuming a quorum is present, the eight validly nominated individuals receiving the highest number of votes cast at the Annual Meeting will be elected directors.
 
Summarized below is certain information concerning the persons who are nominated by the Board for election to the Board. The Board recommends that shareholders vote FOR each of the eight director nominees named below to constitute the Board:
 
Michael Friedman has been an owner and officer of Sterling Time, LLC, which is the exclusive distributor of Invicta Watch Company of America, Inc. watches and watch accessories for television home shopping and our long-time vendor, since 2005. Sterling Time, LLC has served as a vendor to the Company for over 20 years. We agreed pursuant to the common stock and warrant purchase agreement described under “Certain Relationships and Related Transactions” below to appoint Mr. Friedman to the Board. Mr. Friedman also serves on the Board of Trustees of Beth Medrash Govoha which is the world’s foremost Rabbinical College. Mr. Friedman brings to the Board both financial and operational expertise.

 	2 	 	

Neal S. Grabell is currently a Visiting Professor of Economics and Independent College Programs at Haverford College where he has taught since 2006. Mr. Grabell served as Of Counsel to the Saul Ewing, LLP law firm from 2008 to 2015 where he practiced corporate and commercial law for domestic and foreign retailing, licensing, and manufacturing clients. From 1987 to 2008, Mr. Grabell served as the General Counsel of QVC, Inc. where he was responsible for the company’s securities offerings and filings, commercial transactions, acquisitions, litigation, regulatory and ethical compliance, corporate structure, and government relations. Mr. Grabell also oversaw the affiliate sales and marketing department, and operations of other departments of the company, forming and managing the internal audit department and leading the facilities department operations in the company’s numerous sites. Mr. Grabell was a director of QVC (UK), a Managing Director of QVC Deutschland GmbH, and a Director of QVC Japan, Inc. from their respective formations until 2009. He was also a director of most of QVC’s domestic subsidiaries. Mr. Grabell is the President of the foundations of Golden Slipper Club & Charities, a Governor of the Golden Slipper Club & Charities, and chair and trustee of the Abramson Senior Care Foundation. Mr. Grabell’s experience with QVC, and his legal and business background, provides him with a unique perspective with respect to television retailing and the legal/regulatory issues it faces.
 
Landel C. Hobbs has served as the Company’s Chairman of the Board since August 2016 and prior to that time served as Vice Chair since 2015. He is the founder and has been Chief Executive Officer of LCH Enterprises LLC, a consulting and investment firm that operates in the broader telecommunications and media space, since 2010. Mr. Hobbs previously served as Chief Operating Officer of Time Warner Cable (“TWC”) from 2005 until the end of 2010 and was Chief Financial Officer of TWC from 2001 until 2005. He served as Vice President of Financial Analysis and Operations Support for all divisions of AOL Time Warner from September 2000 until October 2001. Mr. Hobbs also served in various positions, including Senior Vice President, Controller and Chief Accounting Officer, of Turner Broadcasting System, Inc. from 1993 until 2000. Before joining Turner in 1993, he served as Senior Vice President and Audit Director of Banc One Illinois Corporation and as a Senior Manager with KPMG Peat Marwick. He is currently Chairman of the National 4H Council. He was previously the Chairman of The Dyslexia Resource Trust, Lead Director of Allconnect, Chair and a Director of CSPAN, a Trustee of Women in Cable Television, and a Broadcasting and Cable Hall of Fame Member. Mr. Hobbs brings to the Board significant cable and broadcast television expertise which is invaluable to the Company and management when assessing and structuring both cable and satellite distribution and other carriage deals. Mr. Hobbs also has an extensive finance and operations background which benefits the Board with analyzing financial transactions, financial reporting as well as accounting oversight.
 
Benoît Jamar , age 64, has been an investor since 2000 and since December 2017, has served as a director of SunEdison, a formerly public alternative energy company that emerged from Chapter 11 as a privately held company. From April 2014 to January 2016, Mr. Jamar served as managing partner of investment bank Jacob Securities, and from September 2009 through April 2014 he served as managing partner of OBX Partners LLC, an investment banking firm. He was a partner at Vik Brothers International from March 2004 to September 2009, and from March 2001 to March 2004 served as managing director of Sheffield Merchant Banking Group, the investment banking arm of CRT Capital. From 1989 to 2001 Mr. Jamar served as managing director of Donaldson, Lufkin & Jenrette, from 1986 to 1989 he served as a vice president at Lehman Brothers, and from 1982 to 1986 he was an assistant vice president for Citibank. Mr. Jamar brings to the Board significant experience working with companies on financial restructurings and sophisticated financial transactions.
 
Eyal Lalo has been owner, Chief Executive officer and member of the board of directors of Invicta Watch Company of America, Inc. (“IWCA”), a designer and manufacturer of Invicta-branded watches and watch accessories, since December 1996. Under Mr. Lalo’s leadership, IWCA has been recognized for its vast amount of design and product innovations targeted to all demographics and age groups, and a strong following from collectors worldwide. For over 20 years Mr. Lalo has worked very closely with the Company to develop fundamental strategies to drive sales growth benefiting Invicta and the Company. Through his service on the Board, his experience may now be applied to all product categories within our portfolio. Mr. Lalo has served as Vice Chair of the Company’s Board of Directors since May 2, 2019 and was appointed to the Board in accordance with the terms of the common stock and warrant purchase agreement described under “Certain Relationships and Related Transactions.” Mr. Lalo brings to the Board experience in consumer product design, sales, development and manufacturing, as well as operational expertise.

 	3 	 	

Lisa A. Letizio has served as a strategic advisor to LivingHR, Inc., a culture first consulting and search group, since 2014. From 2015 to 2018, Ms. Letizio served as an independent consultant to Allison James Estate & Homes, Inc., a real estate brokerage firm. She served as the Chief Human Resources Officer at HSN, Inc. from 1998 to 2014. In that role, Ms. Letizio oversaw the Human Resources teams for all of HSNi, a retail portfolio that encompassed HSN, a leading interactive multichannel retailer, and Cornerstone, a multichannel retailer of lifestyle brands including Frontgate, Garnet Hill and Ballard Designs. Ms. Letizio’s responsibilities at HSNi included talent acquisition and assessment, leadership development, compensation, employee engagement, benefits/wellness, work life programs and community affairs. Prior to joining HSNi, Ms. Letizio was Vice President of Human Resources of The Timberland Company from 1992 to 1998. During her tenure at The Timberland Company, Ms. Letizio built the company’s global human resources function, establishing world-wide pay and benefits systems as well as recruiting top leadership talent across Europe, the Dominican Republic and Puerto Rico. Ms. Letizio is founding board member of the St. Petersburg Arts Alliance. Ms. Letizio provides the Board with valuable talent acquisition and assessment, leadership development, and compensation experience obtained over her more than 20-year career in the consumer goods and home shopping industries. Her deep experience in these areas provides the Board with strategic and operational leadership and critical insights into human resources and executive compensation issues.
 
Aaron P. Reitkopf , age 52, has served as the Global Chairman of MullenLowe Profero, a global, experience-led transformation agency that is part of the MullenLowe Group. MullenLowe Group is an integrated marketing communications network consisting of specialized agencies in communications, media, CRM, public relations and experience-led transformation. Since 2018 Mr. Reitkopf has also served as one of eight members of the global executive committee responsible for the strategic direction and performance of the MullenLowe Group. Mr. Reitkopf has also served on the board of Amref, the largest healthcare NGO in Africa, since 2017. From 1996 to 2010, Mr. Reitkopf served as Chief Executive Officer and President of KBS+, a marketing communications company. Prior to that Mr. Reitkopf worked in various positions for different advertising agencies, as well as being a trader on Wall Street. Mr. Reitkopf brings to the Board deep contemporary integrated marketing communications expertise across all channels with deep expertise in multiple business-to-business and business-to-consumer industries.
 
Robert J. Rosenblatt joined the Company in June 2014 as Chairman of the Board and served in that role until August 2016. In February 2016, he was appointed Interim Chief Executive Officer, and he served as permanent Chief Executive Officer from August 2016 through May 2, 2019. Previously, Mr. Rosenblatt served as Chief Executive Officer of Rosenblatt Consulting, LLC, a private company he formed in 2006, which specializes in helping investment firms determine value in both public and private consumer companies as well as helping retail firms bring their products to market. From 2012 to 2013, Mr. Rosenblatt served as the interim President of ideeli Inc., a members-only e-retailer that sells women's fashion and décor items during limited-time sales. From 2004 to 2006, he was Group President and Chief Operating Officer of Tommy Hilfiger Corp. (then a public company), a worldwide apparel and retail company. He co-managed the process that culminated in the successful sale of Tommy Hilfiger Corp. to Apax Partners in 2006. From 1997 to 2004, Mr. Rosenblatt was an executive at HSN, Inc., a multi-channel retailer and television network specializing in home shopping. He served as Chief Financial Officer from 1997 to 1999, Chief Operating Officer from 2000 to 2001 and President from 2001 to 2004. Previously, from 1983 to 1996, he was an executive at Bloomingdale’s, an upscale chain of department stores owned by Macy's Inc., and served as Chief Financial Officer and Vice President of Stores. He currently serves on the board of RetailNext, a provider of technology and analytics solutions to the retail industry. Mr. Rosenblatt also served on the board of directors of Newgistics, Inc., I.Predictus, debShops, PepBoys and the Electronic Retailing Association, and was an adjunct professor at Fashion Institute of Technology where he taught entrepreneurial studies. Mr. Rosenblatt provides the Board with substantial home shopping and retail perspectives from his time at HSN and Bloomingdales. In addition, his prior executive management and board experience in publicly-held companies provides the Board with public company accounting and financial reporting expertise, operational expertise and a top-level perspective in organizational management.

 	4 	 	

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
 
Shareholder Communications with the Board of Directors
 
Persons interested in communicating with the Board are encouraged to contact the Chair of the Board, all outside directors as a group, or an individual director by submitting a letter or letters to the desired recipients in an envelope labeled with “Chair of the Board” or the names of specified directors. This letter should be placed in an envelope and mailed to EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Corporate Secretary. The Corporate Secretary will forward the communication to the designated recipient(s) or the Chair of the Board.
 
Attendance at Shareholder Meetings
 
The directors are encouraged, but not required, to attend all meetings of our shareholders. All eight of our directors who stood for election in 2018 attended our 2018 Annual Meeting of Shareholders.
 
Composition of the Board
 
Certain information about our current directors is set forth below (ages are as of May 17, 2019).
 
Name	 	Age	 	Director Since	 	Positions Currently Held with the
Company	
Landel C. Hobbs	 	56	 	2014	 	Chair of the Board	
Michael Friedman	 	48	 	2019	 	Director	
Neal S. Grabell	 	63	 	2016	 	Director	
Eyal Lalo	 	44	 	2019	 	Vice Chair of the Board	
Lisa A. Letizio	 	56	 	2015	 	Director	
Robert J. Rosenblatt	 	61	 	2014	 	Director	
Fred R. Siegel	 	65	 	2014	 	Director	
Alexander B. Spiro	 	36	 	2018	 	Director	
 
Board Leadership Structure and Risk Oversight
 
Landel C. Hobbs was appointed Chair of the Board in August 2016, and Eyal Lalo was appointed Vice Chair of the Board on May 2, 2019. The Chair of the Board and the Chief Executive Officer are currently separate offices. The Board believes that having separate positions and having an independent director serve as Chair of the Board is the appropriate leadership structure for us and demonstrates our commitment to good corporate governance. The Board retains the right to exercise its discretion in combining or separating the offices of Chair of the Board and Chief Executive Officer if it believes it is in the best interest of the Company and its shareholders, in light of all circumstances at any particular time.
 
The Company’s management is responsible for risk management on a day-to-day basis and engages annually in a formal Enterprise Risk Management (“ERM”) process. ERM is a process applied in a strategy setting across the Company and is designed to identify and manage potential events or risks that may affect the Company and to provide reasonable assurance regarding the achievement of Company objectives. The Company develops an assessment of major risks facing the Company and mitigation plans as part of its annual strategic planning process, incorporating any new risk treatment strategies into normal business activities. Input gathered from the Board is analyzed and incorporated into the process.
 
The Board oversees the risk management activities of management directly and through the committees of the Board by discussing with management the policies and practices utilized by management in assessing and managing risks and by providing input on those policies and practices. In general, the Board oversees risk management activities relating to business strategy, strategic transactions, capital allocation, legal and regulatory risk, and operational risks; the Audit and Finance Committees oversee risk management activities related to certain financial risks and the Audit Committee oversees the ERM process; the Human Resources and Compensation Committee (the “HR and Compensation Committee”) oversees risk management activities relating to the Company’s compensation policies and practices and organizational risk; and the Governance Committee oversees risk management activities relating to Board composition and function. Each committee reports to the full Board on a regular basis, including reports with respect to the respective committee’s risk oversight activities as appropriate. Certain key risks and related mitigation plans are also reviewed more in depth throughout the year either by the Board or its committees. Management and the Board regularly review and discuss appropriate strategies to monitor and assess the effectiveness of risk treatment for long-term success.

 	5 	 	

Director Independence
 
Ms. Letizio and Messrs. Grabell, Hobbs, Siegel and Spiro, constituting a majority of the Board, have been determined to be independent as that term is used in Section 10A of the Exchange Act of 1934 and as that term is defined in Rule 5605(a)(2) of the Nasdaq Stock Market Rules. The Board has determined that neither Mr. Rosenblatt, as our former Chief Executive Officer, nor Messrs. Friedman or Lalo are independent as that term is defined in Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
 
Committees of the Board of Directors
 
On-going committees established and maintained by the Board include the Audit Committee, the HR and Compensation Committee, the Governance Committee, and the Finance Committee.
 
The following table sets forth the membership of each of our standing committees as of May 17, 2019:
 
Director	 	Audit Committee	 	HR and 
Compensation Committee	 	Governance
Committee	 	Finance
Committee	
Michael Friedman	 	—	 	—	 	—	 	—	
Neal S. Grabell	 	Chair	 	Member	 	—	 	—	
Landel C. Hobbs	 	Member	 	—	 	—	 	Chair	
Eyal Lalo	 	—	 	—	 	—	 	—	
Lisa A. Letizio	 	Member	 	Chair	 	Member	 	—	
Robert J. Rosenblatt	 	—	 	—	 	—	 	—	
Fred R. Siegel	 	—	 	Member	 	Member	 	—	
Alexander B. Spiro	 	—	 	—	 	Chair	 	Member	
 
Audit Committee
 
The Audit Committee consists of Messrs. Grabell (Chair) and Hobbs and Ms. Letizio. Mr. Holdsworth served as a member of the Audit Committee until he resigned from the board on May 2, 2019. All members of the Audit Committee are independent as that term is used in Section 10A of the Securities Exchange Act of 1934, as that term is defined in Rule 5605(a)(2) of the Nasdaq Stock Market Rules and as that term is defined by Section 301 of the Sarbanes-Oxley Act of 2002. The Board has determined that all members of the Audit Committee comply with Nasdaq’s financial-literacy requirements and that Messrs. Grabell and Hobbs each qualifies as an Audit Committee financial expert as defined by the SEC’s regulations.
 
The Audit Committee is established by the Board for the primary purpose of assisting the Board in overseeing:
 
	•	management’s process for ensuring the integrity of the Company’s financial statements and the Company’s accounting and financial reporting processes and financial statement audits;	
 
	•	the Company’s compliance with legal and regulatory requirements;	
 
	•	the registered public accounting firm’s (independent auditor’s) qualifications and independence;	
 
	•	the performance of the Company’s independent auditor and internal audit function, if applicable; and	
 
	•	the Company’s systems of disclosure controls and procedures and internal controls over financial reporting.	

 	6 	 	

The Audit Committee assists the Board in carrying out its oversight responsibilities for our financial reporting process, audit process and internal controls. The role of the Audit Committee is described above and in the Audit Committee charter, which is reviewed annually and can be found on our website at http://investors.evine.com/governance/governance-documents/default.aspx. The Audit Committee charter complies with the standards set forth in SEC and applicable stock exchange regulations.
 
HR and Compensation Committee
 
The HR and Compensation Committee consists of Ms. Letizio (Chair) and Messrs. Grabell and Siegel. All members of the HR and Compensation Committ ee are independent directors as that term is defined in Rule 5605(a)(2) of the Nasdaq Stock Market Rules and are non-employee directors as defined by Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The HR and Compensation Committee charter complies with the standards set forth in SEC and applicable stock exchange regulations.
 
The responsibilities of the HR and Compensation Committee are set forth in the HR and Compensation Committee charter, which is reviewed annually and can be found on our website at http://investors.evine.com/governance/governance-documents/default.aspx.
 
Among other duties, the HR and Compensation Committee has the responsibility to:
 
	•	establish executive compensation strategy, including base salary, incentive compensation and any other compensation elements and evaluate the strategy in light of the Company’s non-binding advisory say on pay vote;	
 
	•	ensure that all executive officers are compensated in a manner consistent with such strategy, internal considerations, competitive practices and the requirements of regulatory agencies, and that they are not incentivized to take an undue amount of risk;	
 
	•	oversee our stock-based incentive plans and approve all grants to executive officers made in connection with those plans;	
 
	•	review and approve (i) the components of and total cash compensation for our Chief Executive Officer, and (ii) stock-based grants to our Chief Executive Officer;	
 
	•	review and approve any employment agreements or severance arrangements for the Chief Executive Officer or other members of senior management, including change-in-control provisions, plans or agreements;	
 
	•	monitor our employee benefit plans and discharge the duties imposed on the committee by the terms of those plans;	
 
	•	oversee succession planning for the Chief Executive Officer and other members of the senior executive team;	
 
	•	annually review and recommend to the Board cash and equity compensation for members of the Board and its Committees;	
 
	•	review and discuss with Company management the Compensation Discussion & Analysis;	
 
	•	annually evaluate the performance of the committee and the adequacy of the committee’s charter, and report the evaluation to the Board; and	
 
	•	perform other duties or functions deemed appropriate by the Board.	

 	7 	 	

Compensation decisions for the named executive officers (other than the Chief Executive Officer) and the other corporate officers directly reporting to the Chief Executive Officer are made by the HR and Compensation Committee, upon the recommendation of our Chief Executive Officer. For the Chief Executive Officer, the compensation decisions are made by the HR and Compensation Committee. Under its charter, the HR and Compensation Committee has the authority to engage, review and approve the payment of fees to or terminate advisors and consultants as it deems necessary to assist in the fulfillment of its responsibilities.
 
The HR and Compensation Committee’s meeting agendas are determined by its Chair, with the assistance of the EVP of Human Resources and the Corporate Secretary. The HR and Compensation Committee reports on its actions regarding executive compensation to the Board.
 
The HR and Compensation Committee is supported by our human resources and legal departments upon request. In addition, the HR and Compensation Committee engaged Frederic W. Cook & Co., Inc. (“Consultant”) in 2018. Consultant is a global human resources consulting firm, hired to assist the HR and Compensation Committee in discharging its responsibilities, which include conducting periodic reviews of the Company’s total compensation program for executive officers. Under a policy established by the HR and Compensation Committee, Consultant only performs work for the HR and Compensation Committee, the Board and other committees of the Board, and has not been retained by or performed work on behalf of our management for other benefits, compensation or recruiting services, or any other purposes. In assessing Consultant’s independence, the HR and Compensation Committee has considered a number of important factors including: the relationships that the Consultant has with the Company, the members of the HR and Compensation Committee and our executive officers, as well as the policies that the Consultant has in place to maintain its independence and objectivity, and has determined that the work performed by Consultant has raised no conflicts of interest.
 
Governance Committee
 
The Governance Committee consists of Mr. Spiro (Chair), Ms. Letizio and Mr. Siegel. Mr. Holdsworth served as a member of the Governance Committee until he resigned from the board on May 2, 2019. All members of the Governance Committee are independent directors as that term is defined in Rule 5605(a)(2) of the Nasdaq Stock Market Rules. The Governance Committee advises and makes recommendations to the Board on all matters concerning the selection of candidates as nominees for election as directors, corporate governance and other matters as specified in the Governance Committee’s charter or as directed by the Board. The responsibilities of the Governance Committee are set forth in the Governance Committee charter, which is reviewed regularly in light of SEC and applicable stock exchange regulations and is available on our website at http://investors.evine.com/governance/governance-documents/default.aspx.
 
Finance Committee
 
The Finance Committee consists of Messrs. Hobbs (Chair) and Spiro. Messrs. Beers and Holdsworth served as members of the Finance Committee until they resigned from the board on May 2, 2019. The Finance Committee assists the Board with its responsibilities and monitors and provides advice to senior management of the Company with regard to capital raising strategies and activities and exercises such other authority that may be granted to the Finance Committee by the Board on a transaction by transaction basis. The responsibilities of the Finance Committee are set forth in the Finance Committee charter, which is available on our website at http://investors.evine.com/governance/governance-documents/default.aspx .

 	8 	 	

Director Qualifications, Board Diversity and Shareholder Nominations for Directors
 
The Governance Committee charter describes the attributes we seek in considering director candidates. The Governance Committee will consider persons recommended by shareholders in selecting nominees for election to the Board. The Governance Committee recommends qualified individuals who, if added to the Board, will provide the mix of director characteristics and diverse experiences, perspectives and skills appropriate for the Company. We have determined that a majority of our directors should be independent directors. While the Governance Committee does not have a formal diversity policy, diversity is one of the factors set forth in the Governance Committee’s charter in analyzing the qualifications for directors.
 
In evaluating potential nominees, the Board considers the person’s integrity, judgment, skill, experience with entities in related industries ( i.e. , consumer retailing, TV home shopping, TV programming, media, fulfillment, direct response marketing, e-commerce, technology, finance, mergers and acquisitions, and corporate law), public company experience, and commitment to devote the time and attention necessary to fulfill his or her responsibilities to the Company. It also considers the diversity of experience, race, ethnicity, gender and age of the nominees to complement and enhance the other members’ experiences and backgrounds.
 
Shareholders who wish to suggest qualified candidates should write to: EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Corporate Governance and Nominating Committee, c/o Corporate Secretary. All recommendations should state in detail the qualifications of the person for consideration by the Governance Committee and should be accompanied by an indication of the person’s willingness to serve.
 
Business Ethics Policies
 
We have adopted a business ethics policy applicable to all of our directors and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller and other employees performing similar functions. A copy of this business ethics policy is available on our website at http://investors.evine.com/governance/governance-documents/default.aspx. In addition, we have adopted a code of ethics for our Chief Executive Officer and senior financial management; this policy also is available on our website at http://investors.evine.com/governance/governance-documents/default.aspx.
 
Attendance and Meetings of the Board of Directors and Its Committees
 
Our business and affairs are managed by the Board, which held six meetings during fiscal 2018. During fiscal 2018, the Audit Committee held nine meetings; the HR and Compensation Committee held five meetings; the Governance Committee held five meetings; and, the Finance Committee held nine meetings. During fiscal 2018, none of our current directors attended fewer than 75% of the aggregate number of meetings of the Board and the various committees on which he or she served during fiscal 2018.
 
Compensation Committee Interlocks and Insider Participation
 
No member of the HR and Compensation Committee is now, or was during the last fiscal year, an officer or employee of the Company or of any of our subsidiaries. None of our executive officers has served on the Board or on the HR and Compensation Committee of any other entity, any of whose executive officers served either on the Board or on our HR and Compensation Committee.

 	9 	 	

EXECUTIVE COMPENSATION
 
Executive Summary
 
Business Overview
 
EVINE Live Inc. is a multiplatform interactive video and digital commerce company that offers a mix of proprietary, exclusive and name brand merchandise directly to customers in an engaging and informative shopping experience through TV, online and on mobile devices. The Company operates a 24-hour television shopping network, Evine, which is distributed primarily on cable and satellite systems, through which it offers proprietary, exclusive and name brand merchandise in the categories of jewelry & watches; home & consumer electronics; beauty; and fashion & accessories.
 
2018 Performance
 
Our compensation structure is based on pay for performance. The following metrics outline our performance in fiscal 2018:
 
	•	Net sales of $596.6 million, a decrease of 8.0% from 2017 fiscal year	
	•	Gross profit of $206.8 million, a decrease of 12% from 2017 fiscal year	
	•	Gross profit as a percentage of sales was 34.7% during fiscal 2018 compared to 36.3% for fiscal 2017	
	•	Net loss was $22.2 million for fiscal 2018 versus net income of $0.1 million for fiscal 2017	
	•	EPS of ($0.34) compared to $0.00 for fiscal 2017	
	•	Adjusted EBITDA 1 of ($2.4) million for fiscal 2018 compared to $18.0 million for fiscal 2017	
 
Based on the foregoing results, no cash awards were earned under our annual incentive program for fiscal 2018, and no annual merit increases were made to the base salaries of our named executive officers.
 
Prior Year Say-on-Pay Results
 
The Board values the opinions of our shareholders and carefully reviews and considers the outcome of our Say-on-Pay vote, along with other relevant factors, in evaluating the compensation program for the NEOs. In 2018, more than 91% of the votes cast were in favor of our executive compensation. The HR and Compensation Committee devotes time and resources to understanding shareholder feedback and analyzing the executive compensation programs with the assistance of its independent compensation consultant. In evaluating potential changes, the HR and Compensation Committee also takes into consideration market practices and the Company’s overarching compensation philosophy of attracting and retaining exceptional leaders and enabling them to behave like owners. Our current programs are materially the same as the programs approved at our 2018 Annual Meeting. We believe our programs effectively align with the interests of our shareholders.
 
2019 Chief Executive Officer Change
 
On May 2, 2019, the Board appointed Timothy A. Peterman to serve as our Chief Executive Officer. Mr. Peterman initially joined the Company as Chief Financial Officer in March 2015, and was promoted to Chief Operating Officer and Chief Financial Officer in June 2017. He served in these roles until April 2018 and served as a non-officer employee of the Company through June 1, 2018. On May 2, 2019, Robert J. Rosenblatt, was terminated without cause from his position as our Chief Executive Officer in connection with Invicta Media Investments, LLC’s equity investment that occurred on such date. See “Certain Relationships and Related Transactions” below for more information. Mr. Rosenblatt continues to serve as a member of the Board.

 
1 Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined and reconciled to net income on page 24 and 25 of our Annual Report on Form 10-K for fiscal 2018 filed with the SEC on March 29, 2019.

 	10 	 	

Compensation Discussion and Analysis
 
This compensation discussion and analysis is intended to provide an overview of the compensation awarded to, earned by, or paid to our named executive officers for 2018, including the material elements of the compensation paid to our named executive officers as outlined in the compensation tables included in this proxy statement. Our “named executive officers” or “NEOs” for 2018 are:
 
Name	 	Title	
Robert J. Rosenblatt(1)	 	Former Chief Executive Officer	
Diana G. Purcel	 	EVP, Chief Financial Officer	
Andrea M. Fike	 	EVP, General Counsel	
Lori A. Riley(2)	 	Former EVP, Chief Human Resources Officer & Chief Information Officer	
Nicholas J. Vassallo	 	SVP, Chief Accounting Officer	
Nicole R. Ostoya(3)	 	EVP, Managing Director of Brand Development	
Anne E. Martin-Vachon(4)	 	Former EVP, President	
Timothy A. Peterman(5)	 	Former EVP, Chief Operations Officer & Chief Financial Officer	
 
	(1)	Mr. Rosenblatt ceased serving as our Chief Executive Officer effective May 2, 2019.	
	(2)	Ms. Riley resigned from the company effective May 17, 2019.	
	(3)	Due to changes in our management reporting structure, Ms. Ostoya was no longer considered an executive officer under the SEC’s rules beginning in October 2018.	
	(4)	Ms. Martin-Vachon’s employment with the Company terminated on January 2, 2019.	
	(5)	Mr. Peterman ceased serving as an executive officer on April 16, 2018. Subsequently, since May 2, 2019, Mr. Peterman has been serving as our Chief Executive Officer.	
 
Compensation Objectives and Philosophy
 
The primary objective of our executive compensation program is to attract and retain exceptional leaders and enable them to behave like owners. When setting executive compensation, we apply a consistent approach for all executive officers and intend that the combination of compensation elements closely aligns the executives’ financial interests with those of our shareholders. The program is primarily designed to:
 
	•	Attract, motivate and retain a highly capable and performance-focused executive team;	
 
	•	Promote a culture of employee owners whose financial interests are aligned with those of our shareholders;	
 
	•	Pay for performance such that total compensation reflects the individual performance of executives and the Company’s absolute and relative performance;	
 
	•	Promote a focus on equity value by tying executive compensation to the long-term enhancement of shareholder value;	
 
	•	Permit the HR and Compensation Committee to exercise independent judgment and approval authority with respect to establishing executive compensation programs, performance measures, and awards; and	
 
	•	Consider the potential stock dilution, cash flow, tax and reported earnings implications of executive compensation, consistent with the other objectives of the program.	
 
Target total compensation is comprised of an appropriate balance of cash and equity and divided into three core elements: base salary, annual cash incentive compensation, and long-term incentive compensation. In support of our emphasis on significant ownership by executives, the HR and Compensation Committee offers long-term incentive opportunities that encourage stock ownership. Generally, the amount of compensation realizable from prior compensation does not directly impact the level at which future pay opportunities are set. However, when granting equity awards, the HR and Compensation Committee reviews and considers the number of outstanding and previously granted equity awards. In addition to promoting share ownership, our executive compensation objectives and philosophy focus on rewarding performance. This means that shareholder returns along with corporate, operating unit, and individual performance, both short-term and long-term, determine the largest portion of the executives’ pay opportunity.

 	11 	 	

Role of the HR and Compensation Committee and Executive Compensation Consultant
 
The HR and Compensation Committee oversees the administration of the executive compensation program and determines the compensation of our executive officers. The HR and Compensation Committee is solely composed of non-management directors, all of whom meet the independence requirements of applicable Nasdaq rules. To assist the HR and Compensation Committee in discharging its responsibilities, the HR and Compensation Committee engages a consultant. The consultant’s role is to develop analyses and competitive information and to provide independent advice to the HR and Compensation Committee related to executive compensation programs.
 
Process for Determining Executive Compensation
 
The HR and Compensation Committee reviews executive total compensation levels, including equity grants, during the first quarter of each fiscal year. Our CEO’s target total compensation package is set by the HR and Compensation Committee during an executive session, where the CEO is not present, based on the HR and Compensation Committee’s review of the competitive information prepared by the consultant and assessment of the CEO’s individual performance in conjunction with the Company’s financial and operating performance. Target total compensation recommendations for other executive officers are made by the CEO and the head of human resources who work closely with the HR and Compensation Committee, after reviewing the executive’s and the Company’s performance in conjunction with the executive’s responsibilities and experience when compared to the competitive information prepared by the consultant. The HR and Compensation Committee then determines the compensation of these executive officers.
 
Market Data Review
 
To gain an understanding of current compensation practices and competitive pay levels, we perform a “market check” which reviews each executive officer’s target total compensation in relation to comparably-sized companies based on general industry data derived from several published survey sources. For our most senior executives, we also take into account competitive compensation data for comparable positions from the proxy statements of a selected group of retail, e-commerce, media, and mail order catalog companies. In 2018, the HR and Compensation Committee engaged Frederic W. Cook & Co., Inc. (“Consultant”) to assist in reviewing our peer group. The companies included in our peer group for 2018 are set forth below.
 
2018 Peer Group
 
1-800-FLOWERS.COM, Inc.	Big 5 Sporting Goods Corporation	Build-A-Bear Workshop, Inc.	
The Cato Corporation	Christopher & Banks Corporation	Etsy, Inc.	
FTD Companies, Inc.	Lands’ End, Inc.	Liquidity Services, Inc.	
New York & Company, Inc.	Nutrisystem, Inc.	Shopify Inc.	
Sleep Number Corporation	Trans World Entertainment Corporation	Tuesday Morning Corporation	
 
We use this information as a reference point and to gain a better and more current understanding of prevailing compensation practices. Although the practices of other companies represent useful guidelines, the HR and Compensation Committee does not rely solely on the peer group data in making its individual compensation determinations, nor is this data a material factor in any such determination made by the HR and Compensation Committee. Rather, the HR and Compensation Committee takes into account various other factors such as individual performance, an individual’s primary duties and responsibilities, internal equity and affordability in setting individual executive compensation packages.

 	12 	 	

Risk Assessment
 
The HR and Compensation Committee has reviewed the concept of risk as it relates to our compensation programs and does not believe our compensation programs encourage excessive or inappropriate risk. Overall, our internal risk assessment confirmed that our compensation arrangements are low in risk and do not foster undue risk taking because they focus on performance of Company-wide annual goals, including Adjusted EBITDA, that are aligned with the long-term interests of our shareholders and have strong governance and control mechanisms.
 
Our Executive Compensation Program and Fiscal 2018 Performance
 
The primary elements of our executive compensation program are designed to be consistent with the compensation objectives described above. These key compensation elements are divided into three main categories which are outlined in the following table. The purpose of each element is provided to demonstrate how each component fits with the overall compensation objectives established by the HR and Compensation Committee, specifically, stock ownership and pay for performance. The fiscal 2018 performance outcomes column describes the result of each element.
 
Elements	 	Form	 	Purpose	 	Performance
Measures	 	Fiscal 2018 
Performance
Outcomes	
Base Compensation	 	Base salary paid in the form of cash compensation	 	Provide a fixed element of pay based on individual’s primary duties and responsibilities	 	Company and individual performance, experience level and contribution on primary duties and responsibilities	 	NEOs did not receive annual merit base pay increases	
 	 	 	 	 	 	 	 	 	
Annual Incentive Plan	 	Performance based cash compensation	 	Designed to reward achievement of specified annual corporate goals	 	Results to be measured against Adjusted EBITDA, and individual performance	 	NEOs did not receive payouts based on fiscal 2018 results, as described under the caption “Annual Incentive Plan” below	
 	 	 	 	 	 	 	 	 	
Long-Term Incentive Plan	 	Stock Options, Restricted Stock Units and Performance Share Units	 	Designed to encourage and reward shareholder value creation and to attract and retain talent	 	Individual’s level of responsibility and the Company’s performance	 	A long-term incentive award was granted as described under the caption “Long-Term Incentive Plan” below	
 
Base Salary
 
The Summary Compensation Table sets forth the actual base salary earned by each of our NEOs during fiscal 2018. The level of base salary takes into account job responsibilities, Company and individual performance, experience level and market competitiveness. Base salaries are generally reviewed annually in March, with any changes becoming effective in May. Annual adjustments are based on individual performance, performance of the area of responsibility, the Company’s performance, competitiveness versus the external market and budget availability for internal merit increases. No annual merit increases were made to the base salaries of our NEOs for fiscal 2018 due to the failure to meet our internal Company targets for 2017.
 
Annual Incentive Plan
 
An annual incentive opportunity is provided to encourage and reward the NEOs for making decisions that improve performance as measured by annual performance measures selected by the Committee. The annual incentive plan is designed to produce sustained shareholder value by establishing a direct link between these performance measures and the incentive compensation. The annual incentive opportunity is established each year as a percentage of an executive’s annual base salary and is targeted at the estimated median of our competitive market with the opportunity to earn more for above-target performance or less for below target performance. The HR and Compensation Committee administers the annual incentive plan in which the NEOs participate.

 	13 	 	

 
An annual incentive award is designed to reward achievement of annual financial and individual performance goals in the form of cash bonuses. The Company’s and the NEO’s performance determine the amount, if any, of awards earned. Such awards are based on performance relative to the established target. Targets are established annually for the Company as a whole and are based on our prior and anticipated future performance. For a given year, a payout at 100% of target annual incentive compensation is achieved when Company performance achieves the stated goals. The plan is designed to motivate continuous improvement in order to achieve payouts at or above target over time. Actual incentive payments could range from 50 to 200 percent of the targeted incentive opportunity based on corporate performance and individual performance goals. Performance below a threshold goal level results in no payout under the plan.
 
For 2018, the HR and Compensation Committee determined that the annual performance bonus for our NEOs would be based on the Company achieving a goal with respect to the Company’s Adjusted EBITDA (the “Pre-Bonus Adjusted EBITDA”). The performance bonus of the NEOs (other than the CEO) were weighted 80%-90% on the Company achieving the Pre-Bonus Adjusted EBITDA threshold of $21.0 million and 10%-20% on individual performance and the Company achieving the Pre-Bonus Adjusted EBITDA threshold of $14.7 million. If threshold performance of the Pre-Bonus Adjusted EBITDA goal was not achieved, no bonuses would be payable. For our CEO, the annual performance bonus was based entirely on the Company achieving the Pre-Bonus Adjusted EBITDA goal. The HR and Compensation Committee selected the Pre-Bonus Adjusted EBITDA as the financial metric since most executives possess the ability to impact the Pre-Bonus Adjusted EBITDA, and the metric provides a balanced focus on sales and profitability. The target incentive opportunities (expressed as a percentage of base salary) for the NEOs for fiscal 2018 were as follows:
 
Name	 	Target Annual Short
Term Incentive as a
Percent of Base Salary
for Fiscal 2018	
Robert J. Rosenblatt	 	100%	
Anne E. Martin-Vachon	 	80%	
Diana G. Purcel	 	60%	
Nicole R. Ostoya	 	60%	
Andrea M. Fike	 	40%	
Lori A. Riley	 	40%	
Nicholas J. Vassallo	 	40%	
 
Mr. Peterman did not participate in the annual incentive plan in fiscal 2018. Included below are the goals at Threshold, Target and Maximum and our actual result for fiscal 2018, reflected in millions of dollars. Because the Company did not meet the threshold goal for fiscal 2018, our NEOs did not receive any payout under the annual incentive plan.
 
Performance Measure	 	Threshold	 	 	Target	 	 	Maximum	 	 	Actual	 	
Pre-Bonus Adjusted EBITDA – Company Performance	 	$	21.0	 	 	$	24.6	 	 	$	38.5	 	 	$	(2.4	)	
Pre-Bonus Adjusted EBITDA – Individual Performance	 	$	14.7	 	 	$	24.6	 	 	$	38.5	 	 	$	(2.4	)	
 
Long-Term Incentive Plan
 
A key component of an executive officer’s compensation is long-term equity incentive awards, which are critical to focusing our executives on the Company’s long-term growth and creating shareholder value. The long-term equity incentive plan is designed to attract and retain exceptional leaders and enable them to behave like owners. The following is a general description of the vehicles we used in 2018.

 	14 	 	

 
Stock Option. A stock option allows the recipient to buy a certain number of shares of our common stock at a pre-determined “exercise price.” The exercise price is equal to the fair market value on the grant date. Stock options have a ten-year term and vest in three equal annual installments beginning on the first anniversary of the grant date, subject to certain post termination and change of control provisions. Unvested options are generally forfeited upon termination of employment. As a result, options are intended to retain key employees, including the NEOs, and align their interests with shareholders.
 
Restricted Stock Unit (“RSU”). An RSU is a promise to issue shares of our common stock in the future, provided the recipient remains employed with us through the award’s vesting period. The RSUs vest in three equal annual installments beginning on the first anniversary of the grant date, and unvested RSUs are generally forfeited upon termination of employment. As a result, RSUs are intended to retain key employees, including the NEOs, and align their interests with shareholders.
 
Performance Share Unit (“PSU”). A PSU is a promise to issue shares of our common stock in the future provided the recipient remains employed with us through the award’s vesting period and certain performance conditions are achieved. The PSUs granted in fiscal 2018 vest at the end of a three-year period, if at all, based on the Company’s Relative Total Shareholder Return (“TSR”) versus companies listed in the GICS 255020 - Internet & Catalog Retail Index. The number of shares that may be earned upon vesting of the PSUs ranges from 0% to 150% of the target number of PSUs, based upon the following table:
 
Performance Goal	 	Number of PSUs That Vest(1)	
Relative TSR 100 th Percentile	 	150% (Maximum)	
Relative TSR 50 th Percentile	 	100% (Target)	
Relative TSR 33 rd Percentile	 	50% (Threshold)	
Relative TSR Less than 33 rd Percentile	 	0%	

(1) Vesting percentages for performance between Performance Goal data points are based on a linear interpolation.
 
Grant levels of each component of the long-term incentive program may vary from year to year and by participant, based on a variety of factors. The HR and Compensation Committee determines the award opportunity level for each executive officer based upon the individual’s responsibility level and potential within the Company, competitive practices, the number of shares available for grant, the individual’s and Company’s performance and the market price for our common stock.
 
The Company uses a combination of options, RSUs and PSUs for the long-term incentive (“LTI”) grant. In 2018, the award opportunity levels for each NEO and the mix of options, RSUs and PSUs granted to each NEO are as set forth below.

Name	 	Long Term
Incentive
(% of Salary)	 	Stock Options
(% of LTI)	 	RSUs
(% of LTI)	 	PSUs
(% of LTI)	
Robert J. Rosenblatt	 	150	 	50	 	—	 	50	
Anne E. Martin-Vachon	 	100	 	50	 	50	 	—	
Diana G. Purcel	 	85	 	50	 	50	 	—	
Nicole R. Ostoya	 	85	 	50	 	—	 	50	
Andrea M. Fike	 	45	 	50	 	50	 	—	
Lori A. Riley	 	45	 	50	 	50	 	—	
Nicholas J. Vassallo	 	45	 	50	 	50	 	—	
 
Mr. Peterman did not receive an LTI grant for fiscal 2018.
 
The PSUs granted in fiscal 2016 for the fiscal 2016-2018 performance period did not vest and were forfeited since the TSR goals for such performance period were not achieved.

 	15 	 	

 
Employment Agreement with Robert J. Rosenblatt
 
On August 18, 2016, the Company entered into an employment agreement with Robert J. Rosenblatt (“Employment Agreement”) that provides for a two-year initial term, followed by automatic one-year renewals. As noted above, Mr. Rosenblatt ceased serving as our Chief Executive Officer as of May 2, 2019. Pursuant to the Employment Agreement, Mr. Rosenblatt’s base salary was set at $750,000 per year, and, provided that if certain annual performance goals are met, a cash bonus of $750,000 was payable upon completion of the fiscal year ending January 28, 2017. Thereafter, Mr. Rosenblatt would be entitled to cash bonuses of at least 100% of his base salary if the target performance goals established by the Board were achieved. Mr. Rosenblatt was eligible to participate in the Company’s annual cash incentive plans and programs as are generally provided to the senior executives of the Company and as are in effect from time to time. Pursuant to the Employment Agreement, Mr. Rosenblatt received a long-term incentive equity grant valued at 150% of his base salary, comprised of 50% stock options and 50% PSUs. Specifically, Mr. Rosenblatt was granted options to purchase 375,855 shares of Company common stock, which vest in annual one-third increments starting on March 28, 2017 at an exercise price of $1.60, and 231,799 PSUs which shall be issuable in shares of Company common stock depending on the achievement of certain relative TSR performance goals. Mr. Rosenblatt was also granted 625,000 shares of restricted stock with a fair value of approximately $1,000,000 which vests as follows: one third on the effective date of the Employment Agreement and the other two thirds to vest in two equal parts upon the achievement of certain specified performance goals relating to (i) an increase in stock price and (ii) length-of-employment requirements. The vesting of the equity grants to Mr. Rosenblatt pursuant to the Employment Agreement would have been accelerated upon Mr. Rosenblatt’s termination of employment with good reason or the Company’s termination of Mr. Rosenblatt without cause within 12 months of a change of control. To assist with Mr. Rosenblatt’s commute to the Company’s headquarters in Eden Prairie, Minnesota, the Employment Agreement also provided that the Company would reimburse Mr. Rosenblatt for his commuting, temporary housing and transportation costs, and would pay an additional amount to make Mr. Rosenblatt whole for taxes on such reimbursement amounts.
 
In the event of a termination of Mr. Rosenblatt’s employment by the Company without cause or by Mr. Rosenblatt with good reason during the term of the Employment Agreement, Mr. Rosenblatt would receive severance benefits consisting of a cash severance payment equal to one and one-half times the sum of Mr. Rosenblatt’s base salary during the 12-month period immediately preceding the termination plus one times his target annual incentive bonus, to be determined based on such base salary. In the event of a termination due to a change in control, the multiple would be increased to two times Mr. Rosenblatt’s base salary during the 12-month period immediately preceding the termination plus two times the greater of the target annual incentive bonus he received for the immediately preceding fiscal year or the target annual incentive bonus determined based on his base salary. The severance is paid in equal installments or, following a change in control, in a lump sum, subject in each case to a six-month delay to the extent required for compliance with Section 409A of the Internal Revenue Code of 1986, as amended. In addition to severance, Mr. Rosenblatt would also receive: (i) a pro-rated annual cash incentive award for the year of termination to the extent the performance goals are achieved, if the Company does not renew the Employment Agreement or if Mr. Rosenblatt’s employment with the Company terminates as a result of a change of control, (ii) continued group health, dental and life insurance benefits for 18 months (24 months following a change in control) at no cost to Mr. Rosenblatt and (iii) pro-rata vesting of any long-term incentive awards, subject to the achievement of any performance goals.
 
Clawback Policy
 
The Company has implemented an executive compensation recovery, or clawback, policy, which covers all officers, providing for recoupment of certain compensation in the event the Company is required to restate its financial statements due to material non-compliance, as a result of misconduct of an executive officer or officers, with any financial reporting requirement under the securities laws. The policy complies with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 	16 	 	

 
Anti-Hedging Policy
 
The Company has implemented an anti-hedging and pledging policy, which covers all officers and directors, restricting such officers and directors from:
 
	•	Purchasing any financial instrument, or entering into any transaction, that is designed to hedge or offset a decrease in the market value of Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or exchange funds); or	
 
	•	Pledging, hypothecating, or otherwise encumbering shares of Company stock as collateral for indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account.	
 
Stock Ownership Guidelines for Directors and Executive Officers
 
Consistent with our ownership philosophy, the Board has established stock ownership guidelines for non-management members of the Board and executive officers. Under the guidelines, non-management directors are required to own equity at a level equal to four times the amount of their annual cash retainer within five years of becoming subject to the guidelines. The guidelines also require that within five years of becoming subject to the guidelines, each executive officer must own equity at a level equal to a specified multiple of his or her annual base salary. The minimum equity ownership levels are four times the annual base salary for our CEO and two times the annual base salary for the other executive officers. Progress toward the stock ownership guidelines is measured once each year at the time of the March Board meeting. Ownership levels are calculated using the market value of our stock each March multiplied by the number of restricted shares and unrestricted shares, plus the value of vested in-the-money options. All director nominees and officers who have been subject to the ownership guidelines for at least five years comply with the guidelines, and the director nominees and officers who have been subject to the ownership guidelines for less than five years are continuing to make progress to achieve their stock ownership requirements.
 
Accounting and Tax Considerations
 
When establishing pay elements or associated programs, the HR and Compensation Committee reviews projections of the estimated pro forma expense and tax impact of all material elements of the Company’s executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular pay element, which in many cases is equal to the performance period, and the Company realizes a tax deduction upon payment to and/or realization by the executive.
 
Compensation Committee Report
 
The HR and Compensation Committee has discussed and reviewed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the HR and Compensation Committee recommended to the Board that this Compensation Discussion and Analysis be included in this proxy statement.
 
 	THE HUMAN RESOURCES AND	
 	COMPENSATION COMMITTEE	
 	LISA A. LETIZIO (CHAIR)	
 	NEAL S. GRABELL	
 	FRED R. SIEGEL	

 	17 	 	

Summary Compensation Table
 
The table below shows all elements of compensation for our NEOs for each of our last three completed fiscal years.
  
Name and Principal 
Position	 	Year	 	 	Salary
($)(1)	 	 	Bonus
($)	 	 	Stock Awards
($)	 	 	Option
Awards
($)(2)	 	 	All Other
Compensation
($)	 	 	Total
($)	 	
Robert J. Rosenblatt	 	 	2018	 	 	 	750,000	 	 	 	—	 	 	 	523,187	(3)	 	 	557,212	 	 	 	199,492	(4)	 	 	2,029,891	 	
Former CEO	 	 	2017	 	 	 	778,846	 	 	 	—	 	 	 	562,390	 	 	 	561,314	 	 	 	251,804	 	 	 	2,154,354	 	
 	 	 	2016	 	 	 	640,385	 	 	 	—	 	 	 	1,428,561	 	 	 	420,894	 	 	 	238,837	 	 	 	2,728,677	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diana G. Purcel	 	 	2018	 	 	 	275,962	 	 	 	—	 	 	 	42,500	(5)	 	 	27,748	 	 	 	7,673	(6)	 	 	353,883	 	
EVP & CFO	 	 	2017	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	2016	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Andrea M. Fike	 	 	2018	 	 	 	322,500	 	 	 	—	 	 	 	141,909	(7)	 	 	87,656	 	 	 	6,296	(6)	 	 	588,361	 	
EVP, General Counsel	 	 	2017	 	 	 	229,471	 	 	 	—	 	 	 	63,000	 	 	 	43,986	 	 	 	6,326	 	 	 	342,783	 	
& Corporate	 	 	2016	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Secretary	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lori A. Riley	 	 	2018	 	 	 	315,000	 	 	 	—	 	 	 	139,934	(7)	 	 	85,618	 	 	 	9,450	(6)	 	 	550,002	 	
Former EVP, Chief HR	 	 	2017	 	 	 	327,115	 	 	 	—	 	 	 	70,874	 	 	 	70,726	 	 	 	9,813	 	 	 	478,528	 	
Officer & Chief	 	 	2016	 	 	 	37,558	 	 	 	75,000	 	 	 	—	 	 	 	134,374	 	 	 	363	 	 	 	247,295	 	
Information Officer	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nicholas J. Vassallo	 	 	2018	 	 	 	270,000	 	 	 	—	 	 	 	99,583	(7)	 	 	73,387	 	 	 	8,100	(6)	 	 	451,070	 	
SVP & Chief	 	 	2017	 	 	 	280,385	 	 	 	—	 	 	 	60,750	 	 	 	60,622	 	 	 	8,250	 	 	 	410,007	 	
  Accounting Officer	 	 	2016	 	 	 	270,000	 	 	 	—	 	 	 	45,563	 	 	 	48,531	 	 	 	7,939	 	 	 	372,033	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nicole R. Ostoya	 	 	2018	 	 	 	350,000	 	 	 	—	 	 	 	168,094	(3)	 	 	179,693	 	 	 	98,679	(8)	 	 	796,466	 	
EVP, Managing	 	 	2017	 	 	 	363,461	 	 	 	—	 	 	 	148,721	 	 	 	148,436	 	 	 	121,976	 	 	 	782,594	 	
Director of Brand	 	 	2016	 	 	 	303,300	 	 	 	—	 	 	 	111,563	 	 	 	218,391	 	 	 	73,579	 	 	 	706,833	 	
Development	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anne E. Martin-Vachon	 	 	2018	 	 	 	275,000	 	 	 	25,000	(10)	 	 	142,000	(5)	 	 	92,636	 	 	 	162,934	(11)	 	 	697,570	 	
Former President (9)	 	 	2017	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	2016	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Timothy A. Peterman	 	 	2018	 	 	 	135,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	491,550	(13)	 	 	626,550	 	
Former EVP, COO	 	 	2017	 	 	 	389,923	 	 	 	—	 	 	 	148,721	 	 	 	148,436	 	 	 	112,020	 	 	 	799,100	 	
& CFO (12)	 	 	2016	 	 	 	350,000	 	 	 	—	 	 	 	112,008	 	 	 	118,830	 	 	 	35,831	 	 	 	616,669	 	

	(1)	Represents base salary paid during fiscal 2016, fiscal 2017, and fiscal 2018, as described above in the section entitled “Compensation Discussion & Analysis.”	
	(2)	Each amount represents the grant date fair value of the stock option award made to each individual during the fiscal year as determined pursuant to FASB ASC Topic 718. The assumptions used to calculate the value of the option awards granted in fiscal 2018 are set forth in Note 9, Shareholders’ Equity — Stock-Based Compensation, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal 2018 filed with the SEC on March 29, 2019. Amounts do not reflect compensation actually realized by the NEO.	
	(3)	Amounts shown represent the grant date fair value of market-based PSUs granted in fiscal 2018 as part of the Company’s long-term incentive program. The number of PSUs earned is based on the Company’s TSR relative to a group of industry peers over a three-year performance measurement period as described in footnote 5 to the Outstanding Equity Awards at Fiscal 2018 Year-End table below. Grant date fair values were determined using a Monte Carlo simulation methodology and are based on the probable outcome of the performance measure and are consistent with the estimate of aggregate compensation cost to be recognized over the performance period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used to calculate the value of the PSUs are set forth in Note 9, Shareholders Equity — Stock-Based Compensation, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal 2018 filed with the SEC on March 29, 2019. At grant date, the value of the 2018 awards, assuming maximum performance, would be $784,781 and $252,141 for Mr. Rosenblatt and Ms. Ostoya, respectively.	

 	18 	 	

 
	(4)	Represents $187,242 of commuting expense and $12,250 of 401(k) company match paid during fiscal 2018.	
	(5)	Amounts shown represents the grant date fair value of RSUs awarded on April 16, 2018 for Ms. Purcel and August 1, 2018 for Ms. Martin-Vachon in connection with the hiring of each executive. The per share grant date fair value was determined in accordance with FASB ASC Topic 718 and equaled the closing price of a share of our common stock on the date of grant. The dollar amounts shown do not reflect the value of the restricted shares on the day they vest.	
	(6)	Represents 401(k) company match paid during fiscal 2018.	
	(7)	Amounts shown represents the grant date fair value of (a) RSUs awarded on March 26, 2018 as part of the Company’s long-term compensation program and (b) RSUs awarded on December 3, 2018. The per share grant date fair value was determined in accordance with FASB ASC Topic 718 and equaled the closing price of the share of our common stock on the date of grant. The dollar amounts shown do not reflect the value of the restricted shares on the day they vest.	
	(8)	Represents $94,391 of commuting expense and $4,288 of 401(k) company match paid during fiscal 2018.	
	(9)	Ms. Martin-Vachon’s employment with the Company terminated on January 1, 2019.	
	(10)	Represents a new hire signing bonus pursuant to Ms. Martin-Vachon joining the Company in August 2018.	
	(11)	Represents severance of $55,408 paid during fiscal 2018 in connection with Ms. Martin-Vachon’s employment termination and separation agreement, $100,626 of relocation expense and $6,900 of 401(k) company match paid during fiscal 2018. The severance payments and relocation payments made to Ms. Martin-Vachon in 2018 in connection with the termination of her employment were below the total payments to which Ms. Martin-Vachon would have otherwise been entitled pursuant to the agreements in place between the Company and Ms. Martin-Vachon at the time of termination.	
	(12)	Mr. Peterman’s employment with the Company as Chief Operating Officer and Chief Financial Officer terminated on June 1, 2018.	
	(13)	Represents severance of $487,500 paid in fiscal 2018 in connection with Mr. Peterman’s employment termination and separation agreement and $4,050 of 401(k) company match paid during fiscal 2018.	

 	19 	 	

Grants of Plan-Based Awards in Fiscal 2018
 
The following table sets forth certain information concerning plan-based awards granted to our NEOs during fiscal 2018.
  
 	 	 	 	Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)	 	 	Estimated Future Payouts
Under Equity
Incentive Plan Awards(2)	 	 	All Other
Stock
Awards:
Number of
Shares of	 	 	All Other
Option
Awards:
Number of
Securities	 	 	Exercise
Price or
Price of
Option	 	 	Grant
Date Fair
Value of
Stock and
Option	 	
Name	 	Grant
Date	 	Threshold
($)	 	 	Target
($)	 	 	Maximum
($)	 	 	Threshold
(#)	 	 	Target
(#)	 	 	Maximum
(#)	 	 	Stock or
Units (#)	 	 	Underlying
Options (#)	 	 	Awards
($/Share)	 	 	Awards
($)(3)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Robert J. Rosenblatt	 	 	 	 	375,000	 	 	 	750,000	 	 	 	1,500,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	853,437	(4)	 	 	1.00	 	 	 	557,212	 	
 	 	3/26/18(5)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	244,480	 	 	 	488,960	 	 	 	733,440	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	523,187	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diana G. Purcel	 	 	 	 	105,000	 	 	 	210,000	 	 	 	420,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	4/16/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	50,000	(6)	 	 	0.85	 	 	 	27,748	 	
 	 	4/16/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	50,000	(6)	 	 	—	 	 	 	—	 	 	 	42,500	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Andrea M. Fike	 	 	 	 	64,500	 	 	 	129,000	 	 	 	258,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	110,093	(4)	 	 	1.00	 	 	 	87,656	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	72,563	(7)	 	 	—	 	 	 	—	 	 	 	84,899	 	
 	 	12/3/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100,000	(8)	 	 	—	 	 	 	—	 	 	 	57,010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lori A. Riley	 	 	 	 	63,000	 	 	 	126,000	 	 	 	252,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	107,533	(4)	 	 	1.00	 	 	 	85,618	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	70,875	(7)	 	 	—	 	 	 	—	 	 	 	82,924	 	
 	 	12/3/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100,000	(8)	 	 	—	 	 	 	—	 	 	 	57,010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nicholas J. Vassallo	 	 	 	 	54,000	 	 	 	108,000	 	 	 	216,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	92,750	(4)	 	 	1.00	 	 	 	73,387	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	60,750	(7)	 	 	—	 	 	 	—	 	 	 	71,078	 	
 	 	12/3/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	50,000	(8)	 	 	—	 	 	 	—	 	 	 	28,505	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nicole R. Ostoya	 	 	 	 	105,000	 	 	 	210,000	 	 	 	420,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	225,687	(4)	 	 	1.00	 	 	 	179,693	 	
 	 	3/26/18(5)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	64,652	 	 	 	129,303	 	 	 	193,955	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	168,094	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anne E. Martin-Vachon (9)	 	 	 	 	260,000	 	 	 	520,000	 	 	 	1,040,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	8/1/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100,000	 	 	 	1.42	 	 	 	92,636	 	
 	 	8/1/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100,000	 	 	 	—	 	 	 	—	 	 	 	142,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Timothy A. Peterman(10)	 	 	 	 	117,000	 	 	 	234,000	 	 	 	468,000	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	

 

 	20 	 	

 
	(1)	SEC rules require that we disclose the applicable range of estimated payouts denominated in dollars (with the threshold referring to the minimum amount payable for a certain level of performance, the target referring to the amount payable if the specific performance targets are reached and the maximum referring to the maximum payout possible) upon satisfaction of the conditions in question under our non-equity annual incentive plan granted in the fiscal year. Accordingly, the amounts in the columns above reflect possible payouts under awards made to our NEOs under our annual incentive plan described in this proxy statement under “Compensation, Discussion & Analysis.”  The actual payouts for fiscal 2018 were based on the Company achieving an Adjusted EBITDA target, and there were no payouts made to our NEOs for the fiscal 2018 non-equity annual incentive plan.	
	(2)	SEC rules require that we disclose the applicable range of estimated payouts denominated in shares (with the threshold referring to the minimum amount of payable for a certain level of performance, the target referring to the amount payable if the specific performance targets are reached and the maximum referring to the maximum payout possible) upon satisfaction of the conditions in question under the Company's long-term equity incentive plan granted in the fiscal year. Accordingly, the amounts in the columns above reflect possible share payouts under awards made to our NEOs under our long-term equity incentive plan described in this proxy statement under “Compensation, Discussion & Analysis.”	
	(3)	Amounts shown equal the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718. For PSUs, the grant date fair values are based on the probable outcome of the performance measure and are consistent with the estimate of aggregate compensation cost to be recognized over the performance period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.	
	(4)	Stock options contingently granted on March 26, 2018 under the Company’s 2011 Omnibus Incentive Plan (the “2011 Plan”) with an exercise price of $1.00 per share in connection with the Company's annual long-term executive compensation program were approved for issuance by shareholders on June 13, 2018. Mr. Rosenblatt’s 2018 option grant was not contingently granted.	
All stock option awards granted on March 26, 2018 vest in equal annual installments over a three-year period beginning on the first anniversary date of grant.
	(5)	PSUs granted on March 26, 2018 under the 2011 Plan in connection with the Company’s annual long-term executive compensation program. The number of PSUs earned is based on the Company’s total shareholder return relative to a group of industry peers over a three-year performance measurement period as described in footnote 5 to the Outstanding Equity Awards at Fiscal 2018 Year-End table below.	
	(6)	Stock options and RSUs granted on April 16, 2018 were made in conjunction with the hiring and appointment of Ms. Purcel as CFO on April 16, 2018. These awards vest in equal annual installments over a three-year period beginning on the first anniversary date of grant.	
	(7)	RSUs contingently granted on March 26, 2018 under the 2011 Plan in connection with the Company’s annual long-term executive compensation program was approved for issuance by shareholders on June 13, 2018. These awards vest in equal annual installments over a three-year period beginning on the first anniversary date of grant.	
	(8)	RSU’s granted on December 3, 2018 vest in equal annual installments over a three-year period beginning on the first anniversary date of grant.	
	(9)	Employment with the Company was terminated on January 1, 2019. All stock options and restricted stock units were unvested and forfeited upon termination.	
	(10)	Employment with the Company was terminated on June 1, 2018. All unvested stock options and restricted stock units were forfeited upon termination.	

 	21 	 	

Outstanding Equity Awards at Fiscal 2018 Year-End
 
The following table presents information regarding the outstanding equity awards held at the end of fiscal 2018 by our NEOs. Neither Ms. Martin-Vachon nor Mr. Peterman had any equity awards outstanding at such time.

 	 	 	 	OPTION AWARDS	 	 	STOCK AWARDS	 	
 	 	 	 	Number of Securities	 	 		 	 		 	 		 	 	Equity Incentive Plan
Awards: Unearned Shares,	 	
 	 	 	 	Underlying Unexercised	 	 	Option	 	 		 	 	Shares or Units of Stock	 	 	Units or Other Rights That	 	
 	 	 	 	Options	 	 	Exercise	 	 	Option	 	 	That Have Not Vested	 	 	Have Not Vested	 	
Name	 	Grant
Date	 	Exercisable
(#)	 	 	Unexercisable
(#)	 	 	Price
($/Share)	 	 	Expiration
Date	 	 	Number	 	 	Market
Value($)(1)	 	 	Number	 	 	Market or Payout
Value($)(1)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Robert J. Rosenblatt	 	6/23/14	 	 	50,000	(2)	 	 	—	 	 	 	4.98	 	 	 	6/23/24	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 8/18/16	 	 	250,570	(3)	 	 	125,285	(3)	 	 	1.60	 	 	 	8/18/26	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 8/18/16	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	416,667	(4)	 	 	233,334	 	
 	 	3/27/17	 	 	201,626	(3)	 	 	403,254	(3)	 	 	1.33	 	 	 	3/27/27	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/27/17	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	183,788	(5)	 	 	102,921	 	
 	 	 3/26/18	 	 	—	 	 	 	853,437	(3)	 	 	1.00	 	 	 	3/26/28	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	244,480	(5)	 	 	136,909	 	
Diana G. Purcel	 	4/18/18	 	 	—	 	 	 	50,000	(3)	 	 	0.85	 	 	 	4/18/28	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 4/18/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	50,000	(3)	 	 	28,000	 	 	 	—	 	 	 	—	 	
Andrea M. Fike	 	 5/31/17	 	 	16,666	(3)	 	 	33,334	(3)	 	 	1.26	 	 	 	5/31/27	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 5/31/17	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	33,333	(3)	 	 	18,666	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	110,093	(3)	 	 	1.00	 	 	 	3/26/28	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	72,563	(3)	 	 	40,635	 	 	 	—	 	 	 	—	 	
 	 	 12/3/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100,00	(3)	 	 	56,000	 	 	 	—	 	 	 	—	 	
Lori A. Riley	 	 12/2/16	 	 	76,666	(3)	 	 	38,334	(3)	 	 	1.67	 	 	 	12/2/26	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/27/17	 	 	25,405	(3)	 	 	50,810	(3)	 	 	1.33	 	 	 	3/27/27	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/27/17	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	35,526	(3)	 	 	19,895	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	107,533	(3)	 	 	1.00	 	 	 	3/26/28	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	70,875	(3)	 	 	39,690	 	 	 	—	 	 	 	—	 	
 	 	 12/3/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100,000	(3)	 	 	56,000	 	 	 	—	 	 	 	—	 	
Nicholas J. Vassallo	 	10/3/12	 	 	55,000	(7)	 	 	—	 	 	 	4.00	 	 	 	10/3/22	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 11/25/13	 	 	17,000	(3)	 	 	—	 	 	 	5.57	 	 	 	11/25/23	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/20/15	 	 	11,709	(3)	 	 	—	 	 	 	6.10	 	 	 	3/20/25	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/28/16	 	 	45,773	(3)	 	 	22,887	(3)	 	 	0.99	 	 	 	3/28/26	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/27/17	 	 	21,776	(3)	 	 	43,551	(3)	 	 	1.33	 	 	 	3/27/27	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	92,171	(3)	 	 	1.00	 	 	 	3/26/28	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/28/16	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	15,341	(3)	 	 	8,591	 	 	 	—	 	 	 	—	 	
 	 	 3/27/17	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	30,451	(3)	 	 	17,053	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	60,750	(3)	 	 	34,020	 	 	 	—	 	 	 	—	 	
 	 	 12/3/18	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	50,000	(3)	 	 	28,000	 	 	 	—	 	 	 	—	 	
Nicole R. Ostoya	 	4/18/16	 	 	69,280	(3)	 	 	34,641	(3)	 	 	1.50	 	 	 	4/18/26	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 4/18/16	 	 	100,000	(8)	 	 	—	 	 	 	1.50	 	 	 	4/18/26	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/27/17	 	 	53,319	(3)	 	 	106,638	(3)	 	 	1.33	 	 	 	3/27/27	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 3/27/17	 	 	—	 	 	 	—	 	 	 	—	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	48,602	(5)	 	 	27,217	 	
 	 	3/26/18(6)	 	 	—	 	 	 	225,687	(3)	 	 	1.00	 	 	 	3/26/28	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	3/26/18(6)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	64,652	(5)	 	 	36,205	 	

 

 	22 	 	

	(1)	Market value of unvested or unearned shares is based on the $0.56 closing price of our stock on February 1, 2019, the last trading day prior to the completion of our 2018 fiscal year.	
	(2)	Amount represents the options granted to Mr. Rosenblatt on June 23, 2014 while holding the position of chairman of the Board. The options vested in full on the date of grant.	
	(3)	Options and RSUs vest in three equal annual installments beginning on the first anniversary of the date of grant.	
	(4)	On August 18, 2016, the Company granted market-based PSUs to Mr. Rosenblatt in connection with his appointment as chief executive officer of the Company. The PSUs vest in three tranches. Tranche 1 (one-third of the shares subject to the award) vested on the date of grant. Tranche 2 (one-third) will vest on the date the Company’s average closing stock price for 20 consecutive trading days equals or exceeds $4.00 per share. Tranche 3 (one-third) will vest on the date the Company’s average closing stock price for 20 consecutive trading days equals or exceeds $6.00 per share and the executive has been continuously employed at least two years. The vesting of the second and third tranches can occur any time on or before the tenth anniversary of the date of grant if the executive has been continuously employed through the vesting date.	
	(5)	The Company granted market-based PSUs to certain executive officers as part of the Company's long-term executive compensation program. The number of PSUs earned will be based on the Company's TSR relative to a group of industry peers over a three-year performance measurement period. The percent of the target number of PSUs that will be earned based on the Company’s TSR percentile rank relative to the peer group is as follows: percentile rank below 33%, 0% vests; percentile rank of 33%, 50% vests; percentile rank of 50%, 100% vests and percentile rank of 100%, 150% vests. Vesting percentages for performance between performance goal data points will be based on a linear interpolation. The number of PSUs reported in the table reflects the threshold number of PSUs granted.	
	(6)	Awards were granted on March 26,2018 contingent upon shareholder approval of an increase in the number of shares of common stock authorized under the Company’s 2011 Plan, which occurred on June 13, 2018.	
	(7)	On October 3, 2012, the Company granted non-qualified market-based stock options to its executive officers as part of the Company's long-term executive compensation program. The options were granted with an exercise price of $4.00 and each option would become exercisable in three tranches, as follows, on the dates when the Company's average closing stock price for 20 consecutive trading days equals or exceeds the following prices: Tranche 1 (50% of the shares) at $6.00 per share; Tranche 2 (25%) at $8.00 per share; and Tranche 3 (25%) at $10.00 per share. On August 14, 2013, 50% of this stock option grant (Tranche 1) vested. The second and third tranches expired unvested on October 3, 2017 and were forfeited.	
	(8)	Options granted on April 18, 2016 in connection with the hiring of Ms. Ostoya. These options vested on the date of grant.	

 	23 	 	

Option Exercises and Stock Vested
 
The table below shows information regarding stock options exercised and restricted stock vested during fiscal 2018.
 
 	 	Option Awards	 	 	Stock Awards	 	
Name	 	Number of Shares
Acquired on Exercise (#)	 	 	Value Realized
on Exercise ($)(1)	 	 	Number of Shares
Acquired on
Vesting (#)	 	 	Value Realized
on Vesting ($)(2)	 	
Robert J. Rosenblatt	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Diana G. Purcel	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Andrea M. Fike	 	 	—	 	 	 	—	 	 	 	16,667	 	 	 	19,667	 	
Lori A. Riley	 	 	—	 	 	 	—	 	 	 	17,763	 	 	 	17,230	 	
Nicholas J. Vassallo	 	 	—	 	 	 	—	 	 	 	33,361	 	 	 	32,988	 	
Nicole R. Ostoya	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Anne E. Martin-Vachon	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Timothy A. Peterman	 	 	165,397	 	 	 	28,037	 	 	 	—	 	 	 	—	 	
 
	(1)	Represents the aggregate dollar amount realized upon exercise equal to the difference between the market price of the underlying securities at exercise and the exercise price of the options.	
	(2)	Represents the market value of the common stock on the date of vesting.	
 
All Other Compensation
 
Retirement Benefits
 
The Company’s NEOs may voluntarily elect to participate in the Company’s 401(k) plan. The Company currently provides a contribution match of $0.50 for every $1.00 contributed by eligible participants up to a maximum of 6% of eligible compensation. Matching contributions are contributed to the plan on a per pay period basis.
 
We do not provide a defined benefit plan to our NEOs or any of our other executive officers.
 
Nonqualified Deferred Compensation
 
We currently do not provide any nonqualified deferred compensation plans to our NEOs or other executive officers.
 
Health Benefits and Other Perquisites
 
We provide several benefit plan options, such as medical insurance, dental insurance, life insurance, short term disability insurance and long-term disability insurance. All full-time team members, including NEOs, are eligible for these benefits plans. These benefits are provided to enable us to attract and retain talent and are comparable to those provided by the companies in our peer group. All benefits plans are reviewed periodically with the HR and Compensation Committee.
 
In fiscal 2018, commuting and relocation perquisites were offered to certain NEOs. The perquisites offered were generally consistent with our policy for eligible relocating and commuting expenses, which are perquisites that were also offered to other eligible team members.
 
Severance Agreements and Severance Plan
 
Employment Agreement with Robert J. Rosenblatt
 
Under the terms of Mr. Rosenblatt’s Executive Employment Agreement (“Employment Agreement”), if Mr. Rosenblatt’s employment terminates during the term of the Employment Agreement by the Company without cause or by Mr. Rosenblatt with good reason, Mr. Rosenblatt will receive severance benefits consisting of a cash severance payment equal to one and one-half times the sum of his base salary during the 12-month period immediately preceding the termination plus one times his target annual incentive bonus, to be determined based on such base salary. In the event of a termination due to a change in control, the multiple will be increased to two times Mr. Rosenblatt’s base salary during the 12-month period immediately preceding the termination plus two times the greater of the target annual incentive bonus he received for the immediately preceding fiscal year or the target annual incentive bonus determined based on his base salary. In addition to severance, Mr. Rosenblatt will also receive: (i) a pro-rated annual cash incentive award to the extent the performance goals are achieved, if the Company does not renew the Employment Agreement or if Mr. Rosenblatt’s employment with the Company terminates as a result of a change of control, (ii) continued group health, dental and life insurance benefits for 18 months (24 months following a change in control) at no cost to Mr. Rosenblatt and (iii) pro-rata vesting of any long-term incentive awards, subject to the achievement of any performance goals.

 	24 	 	

 
Executives’ Severance Benefit Plan
 
The Company has also adopted the EVINE Live Inc. Executives’ Severance Benefit Plan (“Plan”) to provide certain severance benefits to executive officers and designated employees (“Executives”). Because Mr. Rosenblatt has a separate agreement providing for severance benefits as described under “Employment Agreement with Robert J. Rosenblatt” above, Mr. Rosenblatt is not entitled to benefits under the Plan. Under the terms of the Plan, if an Executive’s employment is terminated by the Company without “Cause” or by the Executive for “Good Reason” and no Change in Control has occurred, the Executive will receive the following:
 
 	Executive Level	 	Cash Severance Amount	
 	Tier I Executive
(Executive Vice Presidents)	 	An amount equal to 1 ¼ times the Executive’s highest base salary.	
 	Tier II Executive
(Senior Vice Presidents)	 	1 times the Executive’s highest annual rate of base salary during the 12-month period immediately preceding the date that the Executive separates from the Company.	
 
If within a one-year period (the “Benefit Period”) commencing on the date of a Change in Control (as defined in the Plan), Executive’s employment is terminated by the Company without “Cause” or by the Executive for “Good Reason,” the Executive will be entitled to benefits under the Plan as set forth in the table below. In addition, an Executive who was a participant in the Plan on the date of the Change in Control will be entitled to benefits under the Plan if the Executive’s employment is terminated by the Company during the Benefit Period or the immediately preceding six months.
  
 	Executive Level	 	Cash Severance Amount	
 	Tier I Executive
(Executive Vice Presidents)	 	The sum of:
• 1 ½ times the Executive’s highest annual rate of base salary during the 12-month period immediately preceding the date that the Executive separates from service; and
• 1 ½ times the target annual incentive bonus determined from such base salary.	
 	Tier II Executive
(Senior Vice Presidents)	 	The sum of:
• 1 ¼ times the Executive’s highest annual rate of base salary during the 12-month period immediately preceding the date that the Executive separates from service; and
• 1 ¼ times the target annual incentive bonus determined from such base salary.	
 
The Executive will also be entitled to reimbursement for a portion of the premium amount for COBRA coverage equal to the amount paid by other similarly situated Executives who have not been terminated and who receive similar group, health, dental and life insurance benefits. The Company shall provide such reimbursement for a period of eighteen months for Tier 1 Executives and fifteen months for Tier II Executives after the Executive’s employment terminates, subject to the Executive’s timely payment of his or her share of the applicable premiums. All severance pay or benefits are conditioned upon the applicable Executive’s execution of an effective release and his or her compliance with applicable covenants under the Plan (including non-solicitation, non-disparagement, confidentiality and non-use covenants).

 	25 	 	

 
The Plan defines “Cause” as what the term is expressly defined to mean in a then-effective written agreement between an Executive and the Company or, in the absence of any such then-effective agreement or definition, as (i) a material act of fraud which results in or is intended to result in an Executive’s personal enrichment at the expense of Company, including theft or embezzlement from the Company; (ii) public conduct by an Executive that is materially detrimental to the reputation of the Company; (iii) a material violation by an Executive of any written Company policy, regulation or practice; (iv) the willful or grossly negligent failure to adequately perform the duties of an Executive’s position to the material detriment of the Company; (v) the commission of conduct constituting a felony; (vi) a material breach by an Executive of any of the terms and conditions of an agreement with the Company; or (vii) the Executive continues to materially fail to perform the duties associated with Executive’s employment after being notified of such failure and given a reasonable opportunity to cure such failure.
 
“Good Reason” is defined in the Plan as, without an Executive’s written consent, (i) an adverse and material change in the Executive’s status, position or responsibilities as compared to the Executive’s status, position or responsibilities as in effect prior to such change; (ii) a material reduction in the amount of either the Executive’s annual base salary or target annual incentive program opportunity as in effect on the date she or he became a participant in the Plan, or as the same may be increased from time to time during the term of the Executive’s participation in this Plan; (iii) the failure to provide or continue in effect materially similar compensation and benefits, in accordance with the plans, practices, policies and programs of the Company in effect for the Executive at any time during the 120-day period immediately preceding the Change in Control or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company; (iv) the failure of any successor or assign of the Company to assume and expressly agree to perform the obligations under the Plan; (v) any purported termination of the Executive’s employment which is not effected in accordance with the applicable provisions of the Plan; and (vi) any request by the Company that the Executive participate in an unlawful act.
 
Potential Payments upon Termination, Non-Change in Control and After Change of Control
 
In the event an NEO’s employment terminated on February 2, 2019 (the last day of our last completed fiscal year) and the NEO was entitled to a severance payment, the named executive would have realized the payments set forth below.
 
Name	 	Non-Change of
Control &
Qualifying
Termination	 	 	Change of
Control &
Qualifying
Termination	 	
Robert J. Rosenblatt	 	$	1,875,000	 	 	$	3,000,000	 	
Timothy A. Peterman(1)	 	$	487,500	 	 	$	—	 	
Diana G. Purcel	 	$	437,500	 	 	$	840,000	 	
Nicole R. Ostoya	 	$	437,500	 	 	$	840,000	 	
Andrea M. Fike	 	$	322,500	 	 	$	564,375	 	
Lori A. Riley	 	$	315,000	 	 	$	551,250	 	
Nicholas J. Vassallo	 	$	270,000	 	 	$	472,500	 	
Anne E. Martin-Vachon(1)	 	$	55,408	 	 	$	—	 	
 
(1)       Reflects the actual severance received upon termination of employment during fiscal 2018.

 	26 	 	

 
Additional Potential Payments for Accelerated Equity Awards Upon Change in Control
 
Under the terms of our 2011 Plan, equity awards will accelerate in full upon a change in control involving a corporate transaction (as defined in the 2011 Plan) if: (1) such awards are not continued, assumed or replaced or (2) such awards are continued, assumed or replaced and the individual’s employment with the Company is terminated without cause within one year of the corporate transaction. For a change in control not involving a corporate transaction, the 2011 Plan provides the HR and Compensation Committee with discretion to accelerate vesting of outstanding equity awards. Pursuant to the terms of the PSU award agreements, in the event of either type of change of control, the number of units that will accelerate will be based on actual performance through the date of the change in control or termination of employment, as applicable. Under our 2004 Omnibus Stock Plan, accelerated vesting of equity awards is mandatory upon a change in control of the Board that is not approved by the then-current Board.
 
If any such accelerated vesting had occurred on February 2, 2019 (the last day of our fiscal year), then each of our NEOs serving on such date would have had RSUs accelerate having the values set forth in the table below. No other equity awards held by our NEOs as of such date would have had any value upon acceleration.
 
Name	 	Value of
Accelerated
RSUs ($)	 	
Robert J. Rosenblatt	 	—	 	
Diana G. Purcel	 	 	28,000	 	
Andrea M. Fike	 	 	115,302	 	
Lori A. Riley	 	 	115,585	 	
Nicholas J. Vassallo	 	 	87,664	 	
Nicole R. Ostoya	 	 	—	 	
 
The value of the accelerated RSUs set forth in the table is based on the $0.56 closing price of our stock on February 1, 2019, the last day markets were open during our 2018 fiscal year.
 
CEO Pay Ratio
 
We are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Robert J. Rosenblatt, our CEO during 2018. For 2018, our last completed fiscal year:
 
	•	the median of the annual total compensation of all employees of the Company (other than our CEO) was $26,322; and	
 
	•	the annual total compensation of our CEO, as reported in the Summary Compensation Table included on page 18 of this proxy statement, was $2,029,891.	
 
Based on this information for fiscal 2018, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 77:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K.
 
For fiscal 2018, we used the same median employee that was identified in fiscal 2017. We identified our median employee in fiscal 2017 based on the total compensation actually paid during fiscal 2017 to all 1,248 members of our workforce (including full-time, part-time and temporary employees as well as certain independent contractors) other than our CEO who were employed on January 3, 2018. For purposes of determining the total compensation actually paid, we included: the amount of base salary the employee received during the year, and the amount of any cash incentives paid to the employee in the year (which include annual cash incentives that are generally paid in April for performance during the prior fiscal year) and the value of any equity grants that vested during the year based on the value of the shares on the date of vesting. We did not include any adjustments for the annualization of pay for any employees who were employed by us for only part of the year.

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We determined that we could use in our fiscal 2018 CEO pay ratio analysis the same median employee that we identified last year because there has been no change in either our employee population or our employee compensation arrangements that we believe would significantly impact our fiscal 2018 pay ratio disclosure. Similarly, there has been no change in our median employee’s circumstances that we reasonably believe would result in a significant change to our fiscal 2018 pay ratio disclosure.
 
We determined our median employee’s total compensation, including any perquisites and other benefits, in the same manner that we determine the total compensation of our NEOs for purposes of the Summary Compensation Table disclosed above.
 
 PROPOSAL NO. 2:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
 
Proposal No. 2 is a proposal to approve, on an advisory basis, the 2018 compensation of the Company’s named executive officers as disclosed in this proxy statement.
 
In accordance with Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Section 14A of the Exchange Act, we are providing our shareholders the opportunity to vote on a non-binding, advisory resolution to approve the 2018 compensation of our named executive officers.
 
Our compensation philosophy is described in the Compensation Discussion and Analysis contained in this proxy statement. Shareholders are urged to read the Compensation Discussion and Analysis which also discusses how our compensation policies and procedures implement our compensation philosophy, as well as the Summary Compensation Table and other related tables and narrative disclosures which describe the compensation of our named executive officers set forth under the caption “Executive Compensation” above. The HR and Compensation Committee and the Board believe the policies and procedures articulated in the Compensation Discussion and Analysis are effective in implementing our compensation philosophy and in achieving its goals and that the compensation of our executive officers in 2018 reflects and supports these compensation policies and procedures.
 
Shareholders are being asked to vote on the following resolution:
 
RESOLVED, that the shareholders of EVINE Live Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers as described in the Compensation Discussion and Analysis, compensation tables, and related disclosures contained in the section of the proxy statement for the 2019 Annual Meeting of Shareholders captioned “Executive Compensation.”
 
Although this advisory vote is not binding on the Board, the Board and the HR and Compensation Committee will take into account the results of the vote when structuring our executive compensation programs. We currently intend to hold an annual non-binding advisory vote to approve our named executive officer compensation. Our next advisory vote will occur at our 2020 Annual Meeting of Shareholders.
 
The Board unanimously recommends that you vote FOR Proposal No. 2 to approve, on an advisory basis, the 2018 compensation of our named executive officers as disclosed in this proxy statement.
 
 DIRECTOR COMPENSATION FOR FISCAL 2018
 
We use a combination of cash and stock-based compensation to attract and retain qualified Board members. In setting director compensation, we consider the significant amount of time that directors spend in fulfilling their duties as directors, committee members and chairs. The HR and Compensation Committee has in the past received proxy and survey data and analysis completed by its consultant relative to director compensation and will continue to review and update this information as appropriate in the future. The HR and Compensation Committee generally makes recommendations to the Board as to director compensation issues at its Board meeting held following the Annual Meeting of Shareholders.

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In determining the director compensation structure to be utilized in 2018, the HR and Compensation Committee was advised on director compensation design matters by Frederic W. Cook & Co., Inc. In particular, the HR and Compensation Committee sought recommendations regarding mechanisms to achieve certain design goals, including administrative simplicity, equity across board membership, recognition of leadership on the Board and Board Committees and similar objectives. Additionally, the HR and Compensation Committee sought input on how to achieve these objectives without incremental cost to the Company. After analysis of design alternatives, the HR and Compensation Committee recommended and the Board approved amendments to the director compensation structure that lowered the overall compensation provided to directors and streamlined the compensation approach.
 
The following table highlights the material elements of our non-employee director compensation program.
 
Annual Compensation Element(1)	 	Compensation Value $	 	
Cash Retainer	 	 	65,000	 	
Chair Supplemental Cash Retainer	 	 	65,000	(2)	
Vice Chair Supplemental Cash Retainer (if applicable)	 	 	40,000	(2)	
Audit Committee Chair Cash Retainer	 	 	20,000	 	
HR and Compensation Committee Chair Cash Retainer	 	 	15,000	 	
Governance Committee Chair Cash Retainer	 	 	12,000	 	
Finance Committee Chair Cash Retainer	 	 	20,000	 	
Audit Committee Member Retainer	 	 	10,000	 	
Finance Committee Member Retainer	 	 	10,000	 	
Equity Award	 	 	65,000	(3)	

	(1)	Cash retainers are payable on a quarterly basis in arrears promptly following the end of each fiscal quarter, and subject to pro rata adjustment if the director did not serve the entire quarter.	
	(2)	Effective on June 14, 2017, the supplemental annual retainer fees for the Chair and Vice Chair were deemed to be in lieu of any additional committee retainer fees.	
	(3)	Annual equity award vests in full one-year after the grant date (typically the annual meeting date).	
 
All directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with their service, including those incurred in attending meetings of the Board and committees. Directors who serve on special committees of the Board which are established from time to time may receive additional compensation as determined by the Board.
 
The following table shows information concerning compensation provided to each of our non-employee directors for services provided as a director during fiscal 2018. Mr. Rosenblatt was not a non-employee director during fiscal 2018, and Messrs. Friedman and Lalo did not begin serving on the Board until May 2019.
 
Current Board Members:	 	Fees Earned or
Paid in Cash ($)	 	 	Stock Awards ($)(1)	 	 	Option
Awards ($)	 	 	Total ($)	 	
Neal S. Grabell	 	 	81,304	 	 	 	65,000	 	 	 	—	 	 	 	146,304	 	
Landel C. Hobbs	 	 	130,000	 	 	 	65,000	 	 	 	—	 	 	 	195,000	 	
Lisa A. Letizio	 	 	81,652	 	 	 	65,000	 	 	 	—	 	 	 	146,652	 	
Fred R. Siegel	 	 	65,000	 	 	 	65,000	 	 	 	—	 	 	 	130,000	 	
Alex B. Spiro	 	 	72,706	 	 	 	79,930	 	 	 	—	 	 	 	152,636	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Former Board Members:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Scott R. Arnold (2)	 	 	27,717	 	 	 	—	 	 	 	—	 	 	 	27,717	 	
Thomas D. Beers(3)	 	 	75,000	 	 	 	65,000	 	 	 	—	 	 	 	140,000	 	
Mark K. Holdsworth(3)	 	 	81,304	 	 	 	65,000	 	 	 	—	 	 	 	146,304	 	
Lowell W. Robinson (2)	 	 	35,109	 	 	 	—	 	 	 	—	 	 	 	35,109	 	
 
	(1)	Amounts reported represent 100% of the grant date fair value of the restricted stock grant of 55,555 shares given to each of the directors. The valuation of these awards, in accordance with FASB Topic 718, is based on the closing price of our common stock on June 13, 2018, the date of grant. These shares are restricted and vest in full on the day before our 2019 Annual Meeting, currently expected to be June 19, 2019. For Mr. Spiro, the amount also includes 100% of the grant date fair value of 14,930 RSUs granted to him upon his appointment as director on March 22, 2018, which vested in full on June 13, 2018.	
	(2)	Ceased serving as directors on June 13, 2018, the date of our 2018 Annual Meeting of Shareholders.	
	(3)	Resigned from the Board effective May 2, 2019.	

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 PROPOSAL NO. 3:
RE-APPROVAL OF SHAREHOLDER RIGHTS PLAN
 
Proposal No. 3 is a proposal to re-approve our Shareholder Rights Plan (“Rights Plan”) that was approved by the Board on July 10, 2015 and approved by our shareholders on June 22, 2016. The Board approved and adopted the Rights Plan to help preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”). Our ability to use these Tax Benefits would be substantially limited if we were to experience an “ownership change” as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an ownership change would occur if there is a greater than 50% change in ownership of securities by shareholders owning (or deemed to own under Section 382 of the Code) 5% or more of a corporation’s securities over a rolling three-year period. The Rights Plan reduces the likelihood that changes in our investor base have the unintended effect of limiting our use of the Tax Benefits. The Board believes it is in the best interest of the Company and our shareholders that we provide for the protection of the Tax Benefits by continuing the Rights Plan.
 
The Rights Plan is intended to act as a deterrent to any person acquiring shares of our securities equal to or exceeding 4.99% of our common stock without the approval of the Board. This would protect the Tax Benefits because changes in ownership by a person owning less than 4.99% of our common stock generally are not included in the calculation of “ownership change” for purposes of Section 382 of the Code. We will consider requests to exempt certain acquisitions of our securities from the Rights Plan if we determine that doing so would not limit or impair the availability of the Tax Benefits or is otherwise in the best interests of the Company.
 
The Rights Plan will expire as of July 12, 2019 if our shareholders do not re-approve the Rights Plan at the Annual Meeting. Therefore, shareholders are being asked to re-approve the Rights Plan. If our shareholders re-approve the Rights Plan, the Rights Plan will expire on the close of business on the date of the third annual meeting of shareholders following this 2019 Annual Meeting, unless the Rights Plan is re-approved by shareholders at that third annual meeting of shareholders.
 
 Description of Shareholder Rights Plan
 
The following is a summary of the terms of the Rights Plan. The summary does not purport to be complete and is qualified in its entirety by reference to the Rights Plan, a copy of which is attached as Appendix A to this proxy statement.
 
Distribution and Transfer of Rights; Rights Certificates
 
The Board has declared a dividend of one purchase right (a “Right”) for each outstanding share of common stock to the shareholders of record as of July 23, 2015 (the “Record Date”). Prior to the earlier of the Distribution Date, the Expiration Date or the Final Expiration Date, as such terms are defined below:
 
	·	the Rights will be evidenced by and trade with the certificates for our common stock (“common stock certificates”) (or, with respect to any uncertificated common stock registered in book entry form, by notation in book entry), and no separate rights certificates will be distributed;	
 
	·	common stock certificates issued after the Record Date will contain a legend incorporating the Rights Plan by reference (for uncertificated common stock registered in book entry form, this legend will be contained in a notation in book entry); and	

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	·	the surrender for transfer of any common stock certificates (or the surrender for transfer of any uncertificated common stock registered in book entry form) will also constitute the transfer of the Rights associated with such common stock.	
 
Rights accompany shares of common stock that have been or are issued after the Record Date.
 
Distribution Date
 
Subject to certain exceptions specified in the Rights Plan, the Rights will separate from the common stock and become exercisable following (i) the tenth calendar day after the day on which a public announcement or filing that a person or group of affiliated or associated persons has become an “Acquiring Person,” which is defined as a person who, at any time after the announcement of the adoption of the Rights Plan, has acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of our common stock then outstanding, subject to certain exceptions, or (ii) the tenth calendar day (or such later date as may be determined by the Board) after the commencement of a tender or exchange offer, the consummation of which would result in a person becoming an Acquiring Person.
 
The date on which the Rights separate from the common stock and become exercisable is referred to as the “Distribution Date.”
 
After the Distribution Date, the Rights Agent will, if requested to do so by the Company, mail separate certificates evidencing the Rights (“Rights Certificates”) to our shareholders as of the close of business on the Distribution Date and the Rights will become transferable apart from the common shares. Thereafter, such Rights Certificates alone will represent the Rights.
 
Preferred Stock Purchasable Upon Exercise of Rights
 
After the Distribution Date, each Right will entitle the holder to purchase, for $9.00 (the “Purchase Price”), one one-thousandth of a share of our Series A Junior Participating Cumulative Preferred Stock, $0.01 par value (“Preferred Stock”) having economic and other terms similar to that of one share of common stock. This portion of Preferred Stock is intended to give the shareholder approximately the same dividend, voting and liquidation rights as would one share of common stock, and should approximate the value of one share of common stock.
 
Not Deemed an Acquiring Person
 
Each of the following persons will not be deemed to be an Acquiring Person, even if they have acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the common stock then outstanding: (i) the Company, (ii) any subsidiary of the Company; (iii), any employee benefit plan or employee stock plan of the Company or any subsidiary of the Company and any person holding shares of common stock for or pursuant to the terms of any such plan; (iv) any “direct public group” within the meaning of Treasury Regulations Section 1.382-2T(j)(2)(ii), (v) any person who the Board determines prior to the time the person would otherwise be an Acquiring Person, should be exempted from being an Acquiring Person; (vi) any person who would otherwise be an Acquiring Person upon the first public announcement by the Company of the adoption of the Rights Plan, unless and until such person, or any affiliate of such person, acquires beneficial ownership of any additional shares of common stock after the first public announcement by the Company of the adoption of the Rights Plan; (vii) any person who as the result of an acquisition of shares of our common stock which, by reducing the number of shares of common stock outstanding, increases the proportionate number of shares of common stock beneficially owned by the person to 4.99% or more of the shares of common stock then outstanding; (viii) any person who inadvertently becomes an Acquiring Person, so long as the person promptly enters into, and delivers to the Company, an irrevocable commitment to promptly divest, and thereafter promptly divests beneficial ownership of sufficient shares of common stock so that the person ceases to be an Acquiring Person. In addition, no person shall be an Acquiring Person if the Board shall have affirmatively determined in light of the intent and purposes of the Rights Plan or other circumstances facing the Company, that such person should not be deemed an Acquiring Person.

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Redemption of the Rights
 
At any time until close of business on the tenth calendar day after the day a public announcement or a filing is made indicating that a person has become an Acquiring Person, or thereafter under certain circumstances, we may redeem the Rights in whole, but not in part, at a price of $0.001 per Right.
 
Exchange Provision
 
At any time after a person becomes an Acquiring Person, the Board may exchange all or part of the outstanding Rights (other than those held by an Acquiring Person) for shares of common stock at an exchange rate of one share of common stock (and, in certain circumstances, a Unit) for each Right. We will promptly give public notice of any exchange (although failure to give notice will not affect the validity of the exchange).
 
Expiration of the Rights
 
The Rights will expire upon the earliest of (i) the date on which all of the Rights are redeemed, (ii) the date on which the Rights are exchanged, (iii) the consummation of a reorganization transaction entered into by the Company resulting in the imposition of stock transfer restrictions that the Board determines will provide protection for our Tax Benefits similar to that provided by the Rights Plan, (iv) the close of business on the effective date of the repeal of Section 382, or any other change, if the Board determines that the Rights Plan is no longer necessary or desirable for the preservation of our Tax Benefits, (v) the date on which the Board determines that our Tax Benefits have been applied within the meaning of Section 382 and that the Rights Plan is no longer necessary to preserve those Tax Benefits, (vi) the beginning of our taxable year to which the Board determines that none of our Tax Benefits may be carried forward, (vii) the close of business on the earlier of the first anniversary of the date of the Rights Plan or the date of our 2016 annual meeting of shareholders, if the Rights Plan shall not have been approved by our shareholders, (viii) the close of business on the date of the third annual meeting of shareholders following the last annual meeting of our shareholders at which the Rights Plan was most recently approved by shareholders, unless the Rights Plan is re-approved by shareholders at that third annual meeting of shareholders, and (ix) the close of business on the tenth anniversary of the date of the Rights Plan (the “Final Expiration Date”).
 
Amendment of Terms of Plan and Rights
 
Until the close of business on the tenth calendar day after the day a public announcement or a filing is made indicating that a person has become an Acquiring Person, we may amend the Rights in any manner. We may also amend the Rights Plan after the close of business on the tenth calendar day after the day a public announcement or filing is made indicating that a person has become an Acquiring Person, to cure ambiguities, to correct defective or inconsistent provisions, to shorten or lengthen time periods under the Rights Plan or in any other manner that does not adversely affect the interests of holders of the Rights. Notwithstanding the foregoing, no amendment of the Rights Plan may extend its expiration date.
 
Voting Rights; Other Shareholder Rights
 
The Rights will not have any voting rights. Until a Right is exercised, the holder thereof, as such, will have no separate rights as our shareholder.
 
Anti-Dilution Provisions
 
The Purchase Price and the number and kind of securities or property issuable upon exercise of the Rights, are subject to adjustment from time to time to prevent dilution in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock. The Purchase Price is also subject to adjustment from time to time in the event of a common stock dividend on, or a subdivision or combination of, the shares of common stock.

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Taxes
 
The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption of the Rights, shareholders, depending on then-existing circumstances, may recognize taxable income.
 
 Certain Considerations Relating to the Shareholder Rights Plan
 
The Board believes that attempting to protect the Tax Benefits described above is in our and the shareholders’ best interests. Nonetheless, we cannot eliminate the possibility that an “ownership change” will occur even if the Rights Plan is re-approved. You should consider the factors below when making your decision.
 
Future Use and Amount of the Tax Benefits is Uncertain. Our use of the Tax Benefits depends on our ability to generate taxable income in the future. We cannot assure you whether we will have taxable income in any applicable period or, if we do, whether such income or the Tax Benefits at such time will exceed any potential Section 382 limitation.
 
Potential Challenge to the Tax Benefits. The amount of the Tax Benefits has not been audited or otherwise validated by the Internal Revenue Service (the “IRS”). The IRS could challenge the amount of the Tax Benefits, which could result in an increase in our liability in the future for income taxes. In addition, determining whether an “ownership change” has occurred is subject to uncertainty, both because of the complexity and ambiguity of the Section 382 provisions and because of limitations on the knowledge that any publicly traded company can have about the ownership of, and transactions in, its securities on a timely basis. Therefore, we cannot assure you that the IRS or other taxing authority will not claim that we experienced an “ownership change” and attempt to reduce the benefit of the Tax Benefits even if the Rights Plan is in place.
 
Continued Risk of Ownership Change. Although the Rights Plan is intended to diminish the likelihood of an “ownership change,” we cannot assure you that it will be effective. The amount by which an ownership interest may change in the future could, for example, be affected by purchases and sales of shares by shareholders having beneficial ownership of 5% or more of the outstanding shares of our common stock, over which we have no control, and new issuances of shares by us, should we choose to do so.
 
Potential Effects on Liquidity. The Rights Plan is intended to deter persons or groups of persons from acquiring beneficial ownership of our common stock in excess of the specified limitations. A shareholder’s ability to dispose of our common stock or warrants may be limited if the Rights Plan reduces the number of persons willing to acquire beneficial ownership of our common stock or the amount they are willing to acquire. A shareholder may become an Acquiring Person upon actions taken by persons related to, or affiliated with, them. Shareholders are advised to carefully monitor their beneficial ownership of our common stock and consult their own legal advisors and/or us to determine whether their beneficial ownership of the shares approaches the proscribed level.
 
Potential Impact on Value. The Rights Plan could negatively impact the value of our common stock by deterring persons or groups of persons from acquiring beneficial ownership of our common stock, including in acquisitions for which some shareholders might receive a premium above market value.
 
Anti-Takeover Effect. The Board adopted the Rights Plan to diminish the risk that our ability to use the Tax Benefits to reduce potential federal income tax obligations becomes limited. Nonetheless, the Rights Plan may have an “anti-takeover effect” because it may deter a person or group of persons from acquiring beneficial ownership of 4.99% or more of our common stock or, in the case of a person or group of persons that already own 4.99% or more of the outstanding shares of our common stock, from acquiring any additional shares of our common stock. The Rights Plan could discourage or prevent a merger, tender offer, proxy contest or accumulations of substantial blocks of shares.

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 Effect of Proposal
 
If shareholder approval is not obtained, the Rights Plan will expire on the date of the Annual Meeting.
 
The Board unanimously recommends that you vote FOR Proposal No. 3 to re-approve our shareholder rights plan.
 
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Director/Officer Relationships
 
On May 2, 2019 (the “Effective Date”), we entered into a common stock and warrant purchase agreement (“Purchase Agreement”) with certain individuals and entities, pursuant to which we issued and sold 8,000,000 shares of our common stock and warrants to purchase 3,500,000 shares of our common stock in a private placement, for an aggregate cash purchase price of $6,000,000. The closing under the Purchase Agreement occurred on the Effective Date. We agreed in the Purchase Agreement to appoint Timothy Peterman as our chief executive officer, Eyal Lalo, an owner of Invicta Watch Company of America, Inc. (“IWCA”), as Vice Chair of the Board, and Michael Friedman to the Board.
 
The purchasers consisted of the following: Invicta Media Investments, LLC, Michael Friedman and Leah Friedman, Timothy Peterman and certain other private investors. Invicta Media Investments, LLC is owned by IWCA, which is the designer and manufacturer of Invicta-branded watches and watch accessories, one of our largest and longest tenured brands. Michael Friedman and Leah Friedman are owners and officers of Sterling Time, LLC (“Vendor”), which is the exclusive distributor of IWCA’s watches and watch accessories for television home shopping (the “Products”) and our long-time vendor. Under the Purchase Agreement, the purchasers agreed to customary standstill provisions related to the Company for a period of two years, as well as to vote their shares in favor of matters recommended by the Board for approval by our shareholders.
 
The warrants have an exercise price per share of $1.50 and are exercisable at any time and from time to time until May 2, 2024. The warrants provide that until May 2, 2020, the holders thereof will not acquire ownership of any of our assets, businesses or voting stock or propose to influence or control our management or policies or solicit proxies or consents with respect to our securities, subject to certain exceptions.
 
In connection with the closing under the Purchase Agreement, we entered into certain other agreements with IWCA, Vendor and the purchasers, including:
 
	·	a vendor exclusivity agreement between the Company and Vendor, whereby	
 
	o	during the period beginning with the Effective Date and ending on the fifth anniversary of the Effective Date (or on the earlier termination of the Vendor Exclusivity Agreement) (the “Non-Competition Period”), Vendor and its affiliates and any spokesperson for the Products will not provide any rights to certain parties engaged in television shopping to use the trademarks associated with the Products or market, promote or sell the Products or any similar or competitive goods or services;	
 
	o	during the Non-Competition Period, Vendor grants the Company the right to market, promote and sell, through live or taped direct response video retail programming in the U.S. and Canada, the Products and any similar or competitive goods or services; and	
 
	o	the vendor exclusivity agreement is terminable by either party one year following a change in control of the Company.	
 
	·	a vendor agreement between the Company and Vendor, whereby Vendor grants the Company a license to the trademarks related to the Products and agrees to take other actions to assist us in marketing the Products, for a five-year term;	

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	·	a letter agreement between the Company and IWCA (the “IWCA Letter Agreement”), whereby IWCA agrees to take, or refrain from taking as applicable, actions in support of the arrangements between the Company and Vendor;	
 
	·	a merchandise letter agreement between the Company and Vendor (the “Vendor Letter Agreement”), whereby Vendor commits to purchase Products from IWCA in an amount no less than $25 million for offer to the Company for the fall season of 2019; and	
 
	·	a clawback agreement from each purchaser, whereby each purchaser agrees that in the event of an uncured breach of any of the IWCA Letter Agreement or Vendor Exclusivity Agreement, the warrants will be immediately cancelled and, for the shares purchased by Invicta Media Investments, LLC, Michael and Leah Friedman and Timothy Peterman, we will have the right to repurchase the shares of common stock issued pursuant to the Purchase Agreement at a price of $0.373 per share or, if such shares have already been sold, we will be entitled to a cash payment equal to $0.377 per share.	
 
Pursuant to the Purchase Agreement, on the Effective Date, Mr. Peterman purchased 166,667 shares of our common stock and a warrant to purchase 72,917 shares of our common stock for an aggregate purchase price of $125,000. Mr. Lalo is the owner of IWCA, which is the sole owner of Invicta Media Investments, LLC. Mr. Friedman is an owner of Vendor. Pursuant to the Purchase Agreement, on the Effective Date, Invicta Media Investments, LLC purchased 4,000,000 shares of our common stock and a warrant to purchase 2,526,562 shares of our common stock for an aggregate purchase price of $3,000,000. Pursuant to the Purchase Agreement, on the Effective Date, Michael and Leah Friedman purchased 1,800,000 shares of our common stock and a warrant to purchase 842,188 shares of our common stock for an aggregate purchase price of $1,350,000.
 
In our fiscal year ended February 2, 2019 and our current fiscal year through April 30, 2019, we purchased products, net of customary promotional funding and markdowns, from Vendor, an affiliate of Mr. Friedman, in the aggregate amount of $54.8 million and $13.3 million, respectively. We purchased goods from Vendor on standard commercial terms and Vendor provides us with a customary, non-interest bearing, trade payable credit line. In our current fiscal year, we paid Vendor $730,000 to subsidize the cost of a promotional cruise for Invicta branded and other vendors’ products. As of the end of our fiscal year ended February 2, 2019 and as of April 30, 2019, we had a net trade payable balance owed to Vendor of $3.2 million and $1.1 million, respectively.
 
Under the Purchase Agreement, we agreed to recommend that our shareholders vote to re-elect each of Eyal Lalo and Michael Friedman as a director of the Company at the 2019 annual meeting of shareholders for a term of office expiring at the 2020 annual meeting of shareholders, and to reflect such recommendation in the proxy statement for the 2019 annual meeting and solicit proxies in favor thereof.
 
 Related Person Transactions Approval Policy
 
The Board adopted a written related person transaction approval policy, which sets forth the Company’s policies and procedures for the review, approval or ratification of any transaction required to be reported in our filings with the SEC. This policy applies to any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which we are a participant and in which a related person has a direct or indirect interest where such person’s interest in the transaction(s) involves at least $120,000 in value. In order for the transaction, arrangement or relationship to be subject to this policy, there must be a financial aspect to the transaction, which may, for example, involve payments between us and the related person or otherwise provides value to one of the parties.
 
Under the policy, a related person is any (1) person who is or was since the beginning of the last fiscal year an executive officer, director or nominee for election as a director of the Company; (2) greater than 5% beneficial owner of our common stock; or (3) immediate family member of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers-and fathers-in-law, sons- and daughters-in law, and brothers- and sisters-in-law and anyone residing in such person’s home, except for tenants or employees.

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Prior to entering into any related person transaction, the Audit Committee must be presented with the relevant information about the proposed transaction in order for the committee to assess whether the related person transaction is beneficial to the Company and the proposed terms are fair to us. The committee is authorized to approve, deny, or approve subject to specified conditions, any related party transaction in its sole discretion. The policy also outlines certain factors that the Audit Committee may take into account in considering a related person transaction and itemizes certain routine transactions which are exempt from the policy.
 
The types of routine transactions that are exempt from the Company’s related person transaction policy consist of:
 
	•	any employment by the Company of an executive officer of the Company if (a) the related compensation is required to be reported in the Company’s proxy statement under Item 402 of Regulation S-K or (b) the executive officer is not an immediate family member of another executive officer, director or 5% or greater shareholder of the Company, the related compensation would be reported in the Company’s proxy statement under Item 402 of Regulation S-K if the executive officer was a “named executive officer,” and the Company’s Compensation Committee approved (or recommended that the Board approve) the compensation;	
 
	•	any compensation paid to a director if the compensation is required to be reported in the Company’s proxy statement under Item 402 of Regulation S-K;	
 
	•	any transaction in which the related person’s interest arises solely from the ownership of the Company’s common stock and all holders of the Company’s common stock received the same benefit on a pro rata basis (e.g., dividends);	
 
	•	any transaction with another company at which a related person’s only relationship is as an employee (other than executive officer), director or beneficial owner of less than 10% of that company’s shares, if the aggregate amount does not exceed the greater of $1,000,000 or 2% of that company’s total annual revenues; and	
 
	•	any transaction with a related person involving services as a bank depositary of funds, transfer agent, registration, trustee under a trust indenture, or similar services.	
 
All of the transactions described in this section titled “Certain Relationships and Related Transactions” were approved or ratified by the Audit Committee.
 
 AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Report of the Audit Committee
 
The Audit Committee is composed of three independent directors listed below and is responsible for overseeing our management and independent registered public accounting firm in respect of our accounting and financial reporting. In performing our oversight function, we rely upon advice and information received in our discussions with management and the independent registered public accounting firm.
 
We have (a) reviewed and discussed the Company’s audited consolidated financial statements for the fiscal year ended February 2, 2019 with management; (b) discussed with Deloitte & Touche LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by the Statement on Auditing Standard No. 1301, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3526; and (c) received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche LLP’s communications with the Audit Committee concerning their independence, and discussed with Deloitte & Touche LLP their independence.

 	36 	 	

Based on the review and discussions with management and the Company’s independent registered public accounting firm referred to above, we recommended to the Board that our audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019 for filing with the Securities and Exchange Commission.
  
 	THE AUDIT COMMITTEE*	
 	 	
 	NEAL S. GRABELL (CHAIR)	
 	LANDEL C. HOBBS	
 	MARK K. HOLDSWORTH	
 
*Mr. Holdworth was serving on the Audit Committee at the time this Report of the Audit Committee was approved and Ms. Letizio was not.
 
 Fees Billed by Deloitte & Touche LLP
 
Deloitte & Touche LLP has been our independent registered public accounting firm since fiscal 2002. In addition to reimbursement for certain out-of-pocket expenses, the following table presents the aggregate fees billed for professional services by Deloitte & Touche LLP for fiscal 2018 and 2017.
 
Description of Fees	 	Fiscal 2018
Amount	 	 	Fiscal 2017
Amount	 	
Audit Fees	 	$	457,000	 	 	$	435,000	 	
Audit-Related Fees	 	 	62,600	 	 	 	47,300	 	
Total Audit and Audit-Related Fees	 	 	519,600	 	 	 	482,300	 	
Tax Compliance Fees	 	 	84,200	 	 	 	97,300	 	
Tax Consultation and Advice Fees	 	 	60,100	 	 	 	75,200	 	
Total Tax Fees	 	 	144,300	 	 	 	172,500	 	
All Other Fees	 	 	—	 	 	 	—	 	
Total	 	$	663,900	 	 	$	654,800	 	
 
The following is a description of the above services:
 
Audit Fees. The audit fees set forth above for fiscal 2018 and fiscal 2017 consist of fees billed by Deloitte & Touche LLP for audit services in connection with their review of our interim financial statements for the first three quarters of each fiscal year and for the audit of our fiscal year-end financial statements and the effectiveness of internal controls over financial reporting, including agreed-upon procedure compliance letters.
 
Audit-Related Fees . The audit-related fees set forth above for fiscal 2018 and fiscal 2017 consist of fees billed by Deloitte & Touche LLP for consultation regarding other accounting matters and audit services that normally are provided by an independent registered public accounting firm in connection with filings or engagements, such as comfort letters, consents related to SEC registration statements and other services related to SEC matters for the fiscal year.
 
Tax Fees. The tax compliance fees set forth above consist solely of fees billed by Deloitte & Touche LLP for preparation of federal, state and local income tax returns and Internal Revenue Service audit assistance. The tax consultation and advice fees set forth above for fiscal 2018 and fiscal 2017 primarily consist of fees billed for consultation and assistance in connection with IRS section 382 and net operating loss matters, including change-in-control analysis, state sales tax nexus, preparation for tax planning regarding various federal and state income tax matters, as well as assistance with employee compensation tax matters.
 
All Other Fees. We were not billed any amounts by Deloitte & Touche LLP for other products and services during fiscal 2018 or fiscal 2017.

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 Approval of Independent Registered Public Accounting Firm Services and Fees
 
The Audit Committee charter requires that our Audit Committee approve the retention of our independent registered public accounting firm for any non-audit service and consider whether the provision of these non-audit services by our independent registered public accounting firm is compatible with maintaining our independent auditor’s independence, prior to engagement for these services. All such services performed in fiscal 2018 and fiscal 2017 were approved by our Audit Committee. Our Audit Committee actively monitors the relationship between audit and non-audit services provided. All of the services listed under the headings Audit-Related Fees and Tax Fees were pre-approved by our Audit Committee.
 
 PROPOSAL NO. 4:
RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Proposal No. 4 is a proposal to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2020.
 
Deloitte & Touche LLP has been our independent registered public accounting firm since fiscal 2002. Upon recommendation from our Audit Committee, the Board selected Deloitte & Touche LLP to serve as our independent registered public accounting firm for our fiscal year ending February 1, 2020, subject to ratification by our shareholders. While it is not required to do so, the Board is submitting the selection of this firm for ratification in order to ascertain the view of our shareholders. If the selection is not ratified, our Audit Committee will reconsider its selection. Proxies solicited by the Board will, unless otherwise directed, be voted to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending February 1, 2020.
 
A representative of Deloitte & Touche LLP will be present at the Annual Meeting and will be afforded an opportunity to make a statement if the representative so desires and will be available to respond to appropriate questions during the meeting.
 
The Board unanimously recommends that you vote FOR Proposal No. 4 to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2020.

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 QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
 
The following questions and answers are intended to address briefly some commonly asked questions regarding the matters to be considered at the Annual Meeting, or at any adjournments or postponements thereof. We urge you to read the entire proxy statement carefully because the information in this section does not provide all information that might be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement and the documents referred to in this proxy statement, which you should read carefully.
 
Q: What is the purpose of the Annual Meeting?
 
A: The Annual Meeting is being held for the purpose of considering and taking action with respect to the following:
 
	1.	To elect eight persons to serve as directors on the Board until the next Annual Meeting of Shareholders or until their successors have been duly elected and qualified;	
 
	2.	To approve, on an advisory basis, the 2018 compensation of the Company’s named executive officers as disclosed in the accompanying proxy statement;	
 
	3.	To re-approve our Shareholder Rights Plan;	
 
	4.	To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2020; and	
 
	5.	To transact such other business as may properly come before the Annual Meeting, or any adjournments or postponements thereof.	
 
Q: Who is entitled to vote at the Annual Meeting?
 
A: Only Company shareholders of record as of the close of business on May 17, 2019 will be entitled to notice of, and to vote at, the Annual Meeting. Our common stock is our only authorized and issued voting security. Every share is entitled to one vote on each matter that comes before the Annual Meeting. At the close of business on the record date, we had [•] shares of our common stock outstanding and entitled to vote.
 
Q: Who is entitled to attend the Annual Meeting?
 
A: All Company shareholders of record as of the record date, or their duly appointed proxies, may attend the Annual Meeting in person. Registration will begin at 8:30 a.m. CT. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting.
 
Please also note that if you hold your shares in “street name” (that is, through a broker or other nominee), and you wish to vote your shares at the Annual Meeting, instead of by proxy, you will need to bring a legal proxy issued to you by your broker or other nominee entitling you to vote in person.
 
Q: What constitutes a quorum for the Annual Meeting?
 
A: The presence at the Annual Meeting, in person or represented by proxy, of the holders of a majority of the outstanding shares of our common stock as of the record date entitled to vote will constitute a quorum for the transaction of business at the Annual Meeting. Shares represented by proxies marked “Abstain” or “Withheld” and “broker non-votes” are counted in determining whether a quorum is present for the transaction of business at the Annual Meeting. A “broker non-vote” is a proxy submitted by a broker that does not indicate a vote for some or all of the proposals because the broker does not have discretionary voting authority on certain types of proposals and has not received instructions from its client as to how to vote on a particular proposal.

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Q: What are my choices when voting on each proposal?
 
A: For Proposal No. 1, you may either vote FOR or WITHHOLD authority to vote for each nominee for the Board. You may vote FOR, AGAINST, or ABSTAIN on the other proposals included in this proxy statement.
 
Q: What vote is required to approve each proposal?
 
A: With respect to Proposal No. 1, directors are elected by a plurality of the shares of common stock present in person or by proxy at the Annual Meeting and entitled to vote on the proposal, which means that the eight nominees receiving the most votes will be elected. Shareholders do not have the right to cumulate their votes in the election of directors or with respect to any other proposal or matter.
 
For Proposal No. 2, the advisory vote to approve our named executive officers’ 2018 compensation as disclosed in this proxy statement is not binding on us. We will consider our shareholders to have approved Proposal No. 2 if the number of votes cast FOR this proposal exceeds the number of votes cast AGAINST this proposal.
 
For Proposal No. 3 and Proposal No. 4, the affirmative vote of the holders of a majority of the shares of common stock present in person or by proxy at the meeting and entitled to vote on the proposals (provided that the number of shares voted in favor of such proposals constitutes more than 25% of the outstanding shares of our common stock) is required for approval of these proposals.
 
Q: How will votes to withhold authority, abstentions and “broker non-votes” be treated at the Annual Meeting?
 
A: Shares of our common stock represented at the Annual Meeting for which proxies have been received but with respect to which shareholders have withheld authority or abstained will be treated as present at the Annual Meeting for purposes of determining whether a quorum exists.
 
We will not count WITHHOLD authority as either for or against a director nominee, so WITHHOLD authority has no effect on the election of a director. Abstentions will have no effect on the advisory approval of Proposal No. 2. An abstention on Proposal No. 3 and Proposal No. 4 will have the same effect as an AGAINST vote on the proposal.
 
Under the rules that govern brokers who have record ownership of shares that they hold in “street name” for their clients who are the beneficial owners of the shares, brokers have the discretion to vote such shares on discretionary, or routine, matters but not on non-discretionary, or non-routine, matters. Broker non-votes generally occur when shares held by a broker nominee for a beneficial owner are not voted with respect to a proposal because the broker nominee has not received voting instructions from the beneficial owner and lacks discretionary authority to vote the shares. Brokers normally have discretion to vote on routine matters, such as ratification of independent registered public accounting firms (our Proposal No. 4), but not on non-routine matters such as the election of directors (our Proposal No. 1), the advisory vote on our 2018 executive compensation (our Proposal No. 2), the re-approval of a shareholder rights plan (our Proposal No. 3) or shareholder proposals. Accordingly, we urge you to direct your broker or nominee to vote your shares by following the instructions provided on the voting instruction card that you receive from your broker.
 
Consistent with our historical practice, if a broker submits a proxy which indicates that the broker does not have discretionary authority as to certain shares to vote on proposals at the Annual Meeting, such “broker non-votes” will be counted for purposes of determining the presence of a quorum at the Annual Meeting, but will not be considered as present in person or by proxy and entitled to vote for purposes of determining the approval or disapproval of any proposal that requires the affirmative vote of the holders of a majority of the number of shares of common stock present in person or by proxy at the Annual Meeting and entitled to vote. Therefore, except to the extent such broker non-votes could cause the affirmative vote total to be 25% or less of the number of our outstanding shares with respect to Proposal No. 3, broker non-votes will have no effect on the outcome of Proposal No. 1, Proposal No. 2 or Proposal No. 3.

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Q: What is the Board’s recommendation with regard to each proposal?
 
A: The Board makes the following recommendation with regarding to each proposal:

	•	The Board recommends a vote FOR all eight of the director nominees.	
 
	•	The Board recommends a vote FOR approval, on an advisory basis, of the 2018 compensation of the Company’s named executive officers as disclosed in this proxy statement.	
 
	•	The Board recommends a vote FOR re-approval of our Shareholder Rights Plan.	
 
	•	The Board recommends a vote FOR ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending February 1, 2020.	
 
Q: What if I do not specify a choice for a proposal when returning a proxy?
 
A: Shareholders should specify their choice for each proposal in the matter described in the Notice Regarding Availability of Proxy Materials or in their proxy card. If no specific instructions are given, proxies that are signed and returned will be voted:

	•	FOR the election of all eight of the director nominees;	
 
	•	FOR the advisory approval of the 2018 compensation of the Company’s named executive officers;	
 
	•	FOR re-approval of our Shareholder Rights Plan; and	
 
	•	FOR ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm.	
 
Q: How can I vote at the Annual Meeting?
 
A: You may vote shares by proxy or in person using one of the following methods:

	•	Voting by Internet. You can vote over the Internet using the procedures and instructions described on the Notice Regarding Availability of Proxy Materials or proxy card. If you received a proxy card and vote over the Internet, you need not return your proxy card.	
 
	•	Voting by Telephone. You can vote by telephone using the directions on your proxy card by calling the toll-free number printed on the card. If you received a proxy card and vote by telephone, you need not return your proxy card.	
 
	•	Voting by Proxy Card. You can vote by completing and returning your signed proxy card. To vote using your proxy card, please mark, date and sign the card and return it by mail in the accompanying postage-paid envelope. You should mail your signed proxy card sufficiently in advance for it to be received by July 12, 2019.	
 
	•	Voting in Person. You can vote in person at the Annual Meeting if you are the record owner of the shares to be voted. If you hold your shares in “street name” (that is, through a broker or other nominee) and you wish to vote your shares at the Annual Meeting instead of by proxy, you will need to bring a legal proxy issued to you by your broker or other nominee entitling you to vote in person.	
 
Q: What do I need to do if I plan to attend the Annual Meeting in person?
 
A: If you plan to attend the Annual Meeting in person, you must provide proof of your ownership of Company shares (such as a brokerage account statement or the voting instruction form provided by your broker) and a form of government-issued personal identification (such as a driver’s license or passport) for admission to the meeting. If you wish to vote at the Annual Meeting you will have to provide evidence that you owned Company shares as of May 17, 2019, the record date for the Annual Meeting. If you own your shares in the name of a bank or broker, and you wish to be able to vote at the Annual Meeting, you must obtain a proxy, executed in your favor, from the bank or broker, indicating that you owned Company shares as of the record date.

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Failure to provide adequate proof that you were a shareholder on the record date may prevent you from being admitted to the Annual Meeting.
 
Q: Can I vote my shares without attending the Annual Meeting?
 
A: Yes. Whether you hold shares directly as a shareholder of record or beneficially in street name, you may vote without attending the Annual Meeting. If you are a shareholder of record, you may vote without attending the Annual Meeting only by submitting a proxy by telephone, by Internet or by signing and returning a proxy card. If you hold your shares in street name you may vote by submitting voting instructions to your broker or other nominee, following the directions provided by such broker or other nominee.
 
Q: How do I access the proxy materials?
 
A: Under rules of the SEC, we are furnishing proxy materials to our shareholders on the Internet, rather than mailing printed copies to these shareholders. We are mailing copies of our proxy materials to shareholders who request printed copies. If you received a Notice Regarding Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless you request one as instructed in that notice. Instead, the Notice Regarding Availability of Proxy Materials will instruct you as to how you may access and review the proxy materials on the Internet. If you received a Notice Regarding Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice Regarding Availability of Proxy Materials.
 
Q: Can I change my vote after I return my proxy?
 
A: Yes. You may revoke any proxy and change your vote at any time before the vote at the Annual Meeting. You may do this by:
 
	•	signing and delivering to our Corporate Secretary a new proxy or a notice stating that your proxy is being revoked prior to the Annual Meeting;	
 
	•	if you have voted by telephone or through the Internet, you may change your vote by calling the toll-free number again and following the instructions, or by accessing the web site printed on your Notice Regarding Availability of Proxy Materials or proxy card and following the instructions; or	
 
	•	attending the Annual Meeting and voting in person.	
 
Attending the Annual Meeting alone will not revoke your proxy unless you specifically request it.
 
Q: May the Annual Meeting be adjourned?
 
A: If a quorum is not present to transact business at the meeting or if we do not receive sufficient votes in favor of the proposals by the date of the meeting, the persons named as proxies may propose one or more adjournments of the meeting. Any adjournment would require the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting.
 
Q: Who solicits proxies and who pays the expenses incurred in connection with the solicitation of proxies?
 
A: We pay for preparing, printing and mailing this Proxy Statement and the Notice of Internet Availability of Proxy Materials. We have engaged Morrow Sodali LLC, to assist in the solicitation of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements that are not expected to exceed $20,000 in total. In addition, certain directors, officers and regular employees may solicit proxies by telephone, the Internet, email or personal interview, and may request brokerage firms and custodians, nominees and other record holders to forward soliciting materials to the beneficial owners of our shares. We will reimburse them for their reasonable out-of-pocket expenses in forwarding these materials.

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Q: How may I obtain additional copies of the annual report and/or proxy statement?
 
A: Our annual report on Form 10-K for our fiscal year ended February 2, 2019 including audited financial statements and the proxy statement for our 2019 Annual Meeting are available online at http://investors.evine.com/financials/annual-reports-and-proxies/default.aspx. Please follow the instructions on the Notice Regarding the Availability of Proxy Materials to request a paper copy of the materials. For additional printed copies, which are available without charge, please contact our corporate secretary by mail at EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Corporate Secretary.
 
Q: What is the deadline for submitting a shareholder proposal, including director nominations, for inclusion in the proxy statement for our 2020 annual meeting?
 
A: We must receive shareholder proposals intended to be presented at our 2020 annual meeting of shareholders that are requested to be included in the proxy statement for that meeting at our principal executive office no later than February 1, 2020. The inclusion of any shareholder proposals in those proxy materials will be subject to the requirements of the proxy rules adopted under the Exchange Act, including Rule 14a-8. Written copies of all shareholder proposals should be sent to EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Corporate Secretary. Under Sections 3.2 and 4.3 of our By-Laws, we must receive notice of any other shareholder proposal intended to be presented at our 2020 annual meeting of shareholders on or before April 13, 2020 but not earlier than March 14, 2020.
 
Q: What happens if other matters come up at the Annual Meeting?
 
A: The matters described in this proxy statement are the only matters we know of that will be voted on at the Annual Meeting. If other matters are properly presented at the Annual Meeting, the appointed proxies will vote your shares in accordance with their discretion.

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 SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
 
The following table sets forth certain information regarding the beneficial ownership of our securities as of May 4, 2019 based on a total of 76,230,985 shares of common stock outstanding as of that date by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each director, (iii) our Chief Executive Officer and our other NEOs, and (iv) all directors and executive officers as a group. Shareholders listed below possess sole voting and investment power with respect to their shares and have a mailing address of 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, unless otherwise indicated.
 
Name and Address of Beneficial Owner	 	Title of
Class	 	Amount and Nature of
Beneficial Ownership  	 	 	Percent of
Class	 	
Non-Employee Directors and Director Nominees:	 	 	 	 	 	 	 	 	 	 	
Landel C. Hobbs(1)	 	Common	 	 	422,220	 	 	 	*	 	
Michael Friedman(2)	 	Common	 	 	3,362,624	 	 	 	4.36	%	
Neal S. Grabell(3)	 	Common	 	 	160,164	 	 	 	*	 	
Benoît Jamar	 	Common	 	 	-	 	 	 	*	 	
Eyal Lalo(4)	 	Common	 	 	6,546,998	 	 	 	8.31	%	
Lisa A. Letizio(5)	 	Common	 	 	237,237	 	 	 	*	 	
Aaron P. Reitkopf	 	Common	 	 	-	 	 	 	*	 	
Robert J. Rosenblatt(6)	 	Common	 	 	1,760,141	 	 	 	2.28	%	
Fred R. Siegel(7)	 	Common	 	 	247,041	 	 	 	*	 	
Alexander B. Spiro(8)	 	Common	 	 	80,485	 	 	 	*	 	
 	 	 	 	 	 	 	 	 	 	 	
Named Executive Officers:	 	 	 	 	 	 	 	 	 	 	
Diana G. Purcel(9)	 	Common	 	 	38,334	 	 	 	*	 	
Andrea M. Fike(10)	 	Common	 	 	127,553	 	 	 	*	 	
Lori A. Riley(11)	 	Common	 	 	222,472	 	 	 	*	 	
Nicholas J. Vassallo(12)	 	Common	 	 	376,602	 	 	 	*	 	
Nicole R. Ostoya(13)	 	Common	 	 	385,788	 	 	 	*	 	
Anne E. Martin-Vachon	 	Common	 	 	-	 	 	 	*	 	
Timothy A. Peterman(14)	 	Common	 	 	401,584	 	 	 	*	 	
 	 	 	 	 	 	 	 	 	 	 	
All directors and executive officers as a group (13 persons)(15)	 	Common	 	 	13,983,455	 	 	 	17.15	%	
 	 	 	 	 	 	 	 	 	 	 	
5% or Greater Shareholders:	 	 	 	 	 	 	 	 	 	 	
Invicta Media Investments, LLC (16)	 	Common	 	 	6,526,562	 	 	 	8.29	%	
3069 Taft Street	 	 	 	 	 	 	 	 	 	 	
Hollywood, Florida 33021	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Cove Street Capital, LLC(17)	 	Common	 	 	5,404,184	 	 	 	7.09	%	
2101 East El Segundo Boulevard	 	 	 	 	 	 	 	 	 	 	
Suite 302	 	 	 	 	 	 	 	 	 	 	
El Segundo, California 90245	 	 	 	 	 	 	 	 	 	 	
 
*Represents less than 1% ownership.
 
(1)	 	Includes options to purchase and unvested restricted stock units granted totaling 85,555 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(2)	 	Includes unvested restricted stock units granted totaling 20,436 and warrants to purchase 842,188 shares of common stock that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(3)	 	Includes unvested restricted stock units granted totaling 55,555 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(4)	 	Includes 4,000,000 shares held by Invicta Media Investments, LLC, a subsidiary of IWCA owned by Mr. Lalo. Also includes unvested restricted stock units granted totaling 20,436 and warrants to purchase 2,526,562 shares of common stock that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	

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(5)	 	Includes unvested restricted stock units granted totaling 55,555 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(6)	 	Includes options to purchase shares totaling 988,302 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(7)	 	Includes options to purchase and unvested restricted stock units granted totaling 85,555 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(8)	 	Includes unvested restricted stock units granted totaling 55,555 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(9)	 	Includes options to purchase shares totaling 16,667 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(10)	 	Includes options to purchase and unvested restricted stock units granted totaling 86,699 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(11)	 	Includes options to purchase shares totaling 163,321 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(12)	 	Includes options to purchase shares totaling 226,645 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(13)	 	Includes options to purchase shares totaling 385,788 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(14)	 	Includes warrants to purchase 72,917 shares of common stock that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(15)	 	Includes options and warrants to purchase shares and unvested restricted stock units granted totaling 5,301,948 that are presently exercisable or may become exercisable or vest within 60 days of May 4, 2019.	
(16)	 	We have relied upon the information provided in a joint Schedule 13D filed on May 10, 2019 reporting information as of May 2, 2019. The joint Schedule 13D filing was filed by Invicta Media Investments, LLC (“Invicta Media”), Invicta Watch Company of America, Inc. (“IWCA”), Eyal Lalo, Michael Friedman, Leah Friedman, Retailing Enterprises, LLC, ZWI Group LLC and Timothy A. Peterman. Invicta Media, IWCA and Eyal Lalo reported having shared voting and investment power with respect to 6,526,562 shares. In addition, Eyal Lalo and Michael Friedman each reported having sole voting and investment power with respect to 20,436 shares, Michael and Leah Friedman reported having shared voting and investment power with respect to 3,342,188 shares, Retailing Enterprises, LLC reported having sole voting and investment power with respect to 1,600,000 shares, ZWI Group LLP reported having sole voting and investment power with respect to 300,000 shares, and Timothy Peterman reported having sole voting and investment power with respect to 401,584 shares. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported in the Schedule 13D filing that it or he does not directly own.	
(17)	 	Information with respect to Cove Street Capital, LLC is provided in reliance upon information included in a Schedule 13G filed on February 13, 2019.	
 
 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
Section 16(a) of the Securities Exchange Act of 1934 and the regulations promulgated thereunder require directors and certain officers and persons who own more than ten percent of any class of our voting securities to file reports of their ownership of our common stock and changes in their ownership with the SEC. Based on a review of reports filed by these reporting persons and written representations by our directors and executive officers, we believe that all of our directors, executive officers and persons who own more than ten percent of any class of our voting securities complied with all filing requirements applicable to them except that: (1) Ms. Riley filed a late Form 3 report, (2) Ms. Ostoya filed one late Form 4 reporting stock option and PSU awards, (3) Mr. Arnold filed one late Form 4 reporting the purchase of shares, and (4) Mr. Spiro filed one late Form 4 reporting the purchase of shares.
 
 DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 2020 ANNUAL MEETING
 
The deadline for our receipt of any shareholder proposals intended to be presented at our 2020 Annual Meeting of Shareholders and included in the proxy statement for that meeting is February 1, 2020.   The inclusion of any shareholder proposals in those proxy materials is subject to the requirements of the proxy rules adopted under the Exchange Act, including Rule 14a-8.

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In addition, Sections 3.2 and 4.3 of the Company’s By-Laws contain advance notice provisions requiring that, if a shareholder wants to present a proposal (other than pursuant to Rule 14a-8) or nominate directors at our 2020 Annual Meeting of Shareholders (whether or not to be included in the proxy statement), the shareholder must provide timely written notice thereof in accordance with the By-Laws. In order to be timely, the notice must be delivered to, or mailed and received at, the principal executive offices of the Company not later than April 13, 2020 nor earlier than March 14, 2020. The By-Laws set forth detailed information that must be submitted with any shareholder proposal or director nomination. In the event that the date of the 2020 Annual Meeting is more than 30 days before or more than 60 days after the one-year anniversary date of the 2019 Annual Meeting, however, notice by the shareholder must be delivered, or mailed and received, not later than the 90th day prior to the 2020 Annual Meeting or, if later, the 10th day following the day on which public disclosure of the date of the 2020 Annual Meeting is first made. A copy of the full text of the By-Laws may be obtained by writing to the attention of our Corporate Secretary at the address below. Written copies of all shareholder proposals should be sent to EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Corporate Secretary.
 
 ANNUAL REPORT AND AVAILABLE INFORMATION
 
Our annual report containing audited financial statements for our fiscal years ended February 2, 2019 and February 3, 2018 accompanies this proxy statement. Such report is not incorporated herein and is not deemed to be a part of this proxy solicitation material. Our Internet website address is www.evine.com. We make our periodic and current reports, together with amendments to these reports, available on our Internet website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. You may access such filings under the “Investor Relations” button on our website. Members of the public may also read and copy any materials we file with, or furnish to, the SEC at its Public Reference Room at 100 F Street, NE, Washington, DC 20549. To obtain information on the operation of the Public Reference Room, please call the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains the reports, proxy statements and other information that we file electronically with the SEC. The information on our Internet website is not incorporated by reference into this proxy statement. Our common stock trades on the Nasdaq Stock Market under the symbol “EVLV.”
 
Shareholders may obtain free of charge a copy of our latest annual report (without exhibits) as filed with the SEC by writing to: EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Corporate Secretary or calling (952) 943-6000. In addition, all of our public filings, including our annual report, can be found free of charge on the SEC’s website at www.sec.gov.
 
 HOUSEHOLDING OF PROXY MATERIALS
 
The SEC has adopted rules that permit companies and intermediaries to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “Householding,” potentially means extra convenience for shareholders and cost savings for companies.
 
Broadridge Financial Solutions, Inc. may be Householding our proxy materials. A single proxy statement may be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Householding will continue until you are notified otherwise or until you notify Broadridge or us that you no longer wish to participate in Householding.
 
If, at any time, you no longer wish to participate in Householding and would prefer to receive a separate proxy statement and annual report, you may (1) notify Broadridge, (2) direct your written request to: EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention: Investor Relations or (3) contact our Investor Relations department by telephone at (952) 943-6000. Shareholders who currently receive multiple copies of the proxy statement at their address and would like to request Householding of their communications should contact Broadridge. In addition, we will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the annual report and proxy statement to a shareholder at a shared address to which a single copy of the documents was delivered.

 	46 	 	

 OTHER MATTERS
 
As of the date of this proxy statement, the Board knows of no matters that will be presented for consideration at the Annual Meeting other than as described in this proxy statement. If other matters are properly presented at the Annual Meeting and you are a shareholder of record and have submitted a completed proxy card or voting instruction form, the persons named as proxies in such proxy card or voting instruction form will vote your shares in accordance with their discretion.
 
No appraisal or dissenters’ rights will be available to Company shareholders in connection with the proposals to be considered at the Annual Meeting.

By Order of the Board of Directors 

Andrea M. Fike	 	
Executive Vice President, General Counsel and Secretary	 	

 	47 	 	

 
Appendix A  
 
EVINE LIVE INC.
 
and
 
WELLS FARGO BANK, N.A.
 
as Rights Agent

 
SHAREHOLDER RIGHTS PLAN

 
Dated July 13, 2015

 

Table of Contents
 
 	 	Page	
 	 	 	
Section 1.	Definitions	1	
Section 2.	Appointment of Rights Agent	7	
Section 3.	Issuance of Right Certificates	7	
Section 4.	Form of Right Certificates; Notice to Rights Agent as to Acquiring Person	8	
Section 5.	Countersignature and Registration	9	
Section 6.	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	10	
Section 7.	Exercise of Rights; Purchase Price; Expiration Date of Rights	10	
Section 8.	Cancellation and Destruction of Right Certificates	12	
Section 9.	Reservation and Availability of Shares of Preferred Stock	12	
Section 10.	Securities Issuable Upon Exercise	14	
Section 11.	Adjustments to Number and Kind of Securities or Other Property, Number of Rights or Purchase Price	14	
Section 12.	Certification of Adjustments	20	
Section 13.	Fractional Rights and Fractional Shares	21	
Section 14.	Rights of Action	21	
Section 15.	Agreement of Right Holders	21	
Section 16.	Right Certificate Holder Not Deemed a Shareholder	22	
Section 17.	Concerning the Rights Agent	22	
Section 18.	Merger or Consolidation or Change of Name of Rights Agent	23	
Section 19.	Duties of Rights Agent	24	
Section 20.	Change of Rights Agent	26	
Section 21.	Issuance of New Right Certificates	26	
Section 22.	Redemption	27	
Section 23.	Exchange	28	
Section 24.	Notice of Proposed Actions	29	
Section 25.	Notices	30	
Section 26.	Supplements and Amendments	30	
Section 27.	Successors	31	
Section 28.	Benefits of this Plan	31	
Section 29.	Governing Law	31	
Section 30.	Counterparts	31	
Section 31.	Descriptive Headings	31	
Section 32.	Severability	31	
Section 33.	Determination and Actions by the Board, etc.	32	

Exhibit A – Certificate of Designation, Preferences and Rights
 
Exhibit B – Form of Right Certificate
 
Exhibit C – Form of Summary of Rights

 	   i 	 	

 
SHAREHOLDER RIGHTS PLAN (this “ Plan ”), dated July 13, 2015 , between EVINE Live, Inc., a Minnesota corporation (the “ Company ”), and Wells Fargo Bank, N.A., a national banking association, as Rights Agent (the “ Rights Agent ”).
 
WITNESSETH:
 
WHEREAS, the Company has generated substantial operating losses and other tax attributes in previous years which, under the Internal Revenue Code of 1986, as amended (the “ Code ”) and rules promulgated by the Internal Revenue Service, the Company may in certain circumstances use to offset current and future earnings and thus reduce its future federal income tax liability (subject to certain requirements and restrictions); and
 
WHEREAS, if the Company experiences an Ownership Change, as defined in Section 382 of the Code and the Treasury Regulations thereunder and any successor or replacement provisions (“ Section 382 ”), its ability to use the Tax Attributes (as hereinafter defined) could be substantially limited or lost altogether; and
 
WHEREAS, the Company desires to avoid an Ownership Change and, in furtherance of such objective, the Company wishes to enter into this Plan; and
 
WHEREAS, on July 10, 2015, a duly authorized committee of the Board of Directors of the Company (the “ Board ”) (i) authorized and declared a dividend of one right (a “ Right ”) for each share of the common stock, par value $0.01 per share, of the Company outstanding as of the Close of Business (as defined herein) on July 23, 2015 (the “ Record Date ”), and authorized the issuance of the Rights as of the Record Date, each Right representing the right to purchase one one-thousandth of a share of Series A Junior Participating Cumulative Preferred Stock, par value $0.01 per share, of the Company having the voting powers, designation, preferences and relative rights described in the Certificate of Designation, Preferences and Rights attached hereto as Exhibit A (each one one-thousandth of a share, a “ Unit ”, and such shares of preferred stock, “ Preferred Stock ”), and (ii) further authorized the issuance of one Right with respect to each share of Common Stock of the Company that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (each as defined herein) (or thereafter in accordance with Section 21), all upon the terms and subject to the conditions hereafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
 
 Section 1.           Definitions .
 
For purposes of this Plan, the following terms shall have the meanings indicated:
 
“ Acquiring Person ” means any Person who or which, together with all Affiliates and Associates of such Person, is or becomes the Beneficial Owner of 4.99% or more of the shares of Common Stock of the Company then outstanding, as calculated herein, but shall not include:
 
(i)       the Company;
 
(ii)       any Subsidiary of the Company;

 	1 	 	

(iii)       any employee benefit plan or employee stock plan of the Company or any Subsidiary of the Company, any Person organized, appointed, established or holding shares of Common Stock of the Company for or pursuant to the terms of any such plan;
 
(iv)       any “direct public group” within the meaning of Treasury Regulations Section 1.382-2T(j)(2)(ii);
 
(v)       any Person who the Board determines prior to the time such Person would otherwise be an Acquiring Person, should be permitted to become the Beneficial Owner of up to a number of the shares of Common Stock determined by the Board (the “ Exempted Number ”) and be exempted from being an Acquiring Person, unless and until such Person acquires Beneficial Ownership of shares of Common Stock of the Company in excess of the Exempted Number (other than pursuant to a stock split, stock dividend or similar transaction) in which case such Person shall be an Acquiring Person; provided , however , that the Board may make such exemption subject to such conditions, if any, which the Board may determine;
 
(vi)       any Person who would otherwise be an Acquiring Person upon the first public announcement by the Company of the adoption of this Plan, unless and until such Person, or any Affiliate of such Person, acquires Beneficial Ownership of any additional shares of Common Stock of the Company after the first public announcement by the Company of the adoption of this Plan (other than pursuant to a stock split, stock dividend or similar transaction), in which case such Person shall be an Acquiring Person;
 
(vii)       any Person who as the result of an acquisition of shares of Common Stock by the Company which, by reducing the number of shares of Common Stock of the Company outstanding, increases the proportionate number of shares of Common Stock of the Company Beneficially Owned by such Person to 4.99% or more of the shares of Common Stock of the Company then outstanding; provided , however , that, if a Person shall become the Beneficial Owner of 4.99% or more of the shares of Common Stock of the Company then outstanding by reason of acquisition of shares by the Company and shall, after the first public announcement by the Company of such share acquisitions by the Company, become the Beneficial Owner of any additional shares (other than pursuant to a stock split, stock dividend or similar transaction) of Common Stock of the Company and immediately thereafter be the Beneficial Owner of 4.99% or more of the shares of Common Stock of the Company then outstanding, then such Person shall be an Acquiring Person; or
 
(viii)       any Person who inadvertently becomes an Acquiring Person, so long as such Person promptly enters into, and delivers to the Company, an irrevocable commitment to promptly divest, and thereafter promptly divests Beneficial Ownership of sufficient shares of Common Stock of the Company so that such Person ceases to be an Acquiring Person;
 
provided , however , that no Person shall be an Acquiring Person if the Board shall have affirmatively determined, prior to or after the Distribution Date, in light of the intent and purposes of this Agreement or other circumstances facing the Company, that such Person shall not be deemed an Acquiring Person, unless and until such Person shall again become an Acquiring Person.

 	2 	 	

In determining whether a Person owns 4.99% or more of the shares of Common Stock of the Company then outstanding, for all purposes of this Plan, all of the Common Stock of the Company Beneficially Owned by such Person shall be taken into account in the numerator and only the Common Stock of the Company then outstanding shall be taken into account in the denominator. Without limiting the foregoing, any Person (other than a “direct public group” within the meaning of Treasury Regulations Section 1.382-2T(j)(2(ii)) shall be treated as the Beneficial Owner of 4.99% or more shares of the Common Stock of the Company then outstanding if, in the determination of the Board, that Person would be treated as a “5-percent shareholder” for purposes of Section 382 (substituting “4.99” for “5” each time “five” or “5” is used in or for purposes of Section 382).
 
“ Adjustment Shares ” shall have the meaning set forth in Section 11(a)(ii).
 
“ Affiliate ” and “ Associate ” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Plan, and to the extent not included within the foregoing clause of this Section, shall also include, with respect to any Person, any other Person whose Common Stock would be deemed constructively or otherwise owned by, or otherwise aggregated with shares owned by, such first Person or owned by a single “entity” pursuant to the provisions of Section 382; provided, however, that a Person will not be deemed to be the Affiliate or Associate of another Person solely because either or both Persons are or were directors of the Company.
 
A Person shall be deemed the “ Beneficial Owner ” of, and to “ Beneficially Own ,” any securities:
 
(i)       which such Person or any of such Person’s Affiliates or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement, provided , however , that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own securities (including rights, options or warrants) which are convertible or exchangeable into or exercisable for Common Stock except to the extent the acquisition or transfer of such rights, options or warrants would reasonably be expected to result in the rights, options or warrants being treated as exercised on the date of their acquisition or transfer under Section 382;
 
(ii)       the beneficial ownership of which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants, options or other rights (including, without limitation, within the meaning of Section 382) (in each case, other than upon exercise or exchange of the Rights); provided , however , that a Person will not be deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange;

 	3 	 	

(iii)       of which any other Person is the Beneficial Owner, if such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) with such other Person (or any of such other Person’s Affiliates or Associates) with respect to acquiring, holding, voting or disposing of any securities of the Company; or
 
(iv)       to the extent not included within the foregoing provisions of this Section, a Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” or have “beneficial ownership” of, securities which such Person would be deemed to constructively or otherwise own, or which would otherwise be aggregated with shares owned or beneficially owned by such Person, for purposes of Section 382;
 
provided , however , that (i) a Person will not be deemed the Beneficial Owner of, or to Beneficially Own, any security (A) if such Person has the right to vote such security pursuant to an agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by means of a solicitation statement filed on Schedule 14A, and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report), or (B) if such beneficial ownership arises solely as a result of such Person’s status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; (ii) nothing in this definition will cause a Person engaged in business as an underwriter of securities to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such Person’s participation in good faith in an underwriting syndicate until the expiration of 40 calendar days after the date of such acquisition, or such later date as the Board may determine in any specific case; and (iii) subject to clause (iv), above, a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any securities if (i) such securities would not be deemed constructively or otherwise owned by, or otherwise aggregated with shares owned by, such Person, and (ii) such securities would not be deemed constructively or otherwise owned by a single “entity”, in each case, for purposes of Section 382.
 
“ Board ” shall have the meaning set forth in the recitals.
 
“ Business Day ” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
 
“ Close of Business ” on any given date shall mean 5:00 P.M. New York City time, on such date; provided , however , that if such date is not a Business Day, it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.
 
“ Common Stock ,” when used with reference to the Company, shall mean the common stock (presently $0.01 par value per share) of the Company. “ Common Stock ”, when used with reference to any Person other than the Company, shall mean shares of the capital stock with the greatest voting power of such other Person or, if such other Person is a subsidiary of another Person, the entity which ultimately controls such first-mentioned Person. “ Common Stock ” when used with reference to any Person not organized in corporate form shall mean units of beneficial interest which (x) represent the right to participate generally in the profits and losses of such Person (including without limitation any flow-through tax benefits resulting from an ownership interest in such Person) and (y) are entitled to exercise the greatest voting power of such Person or, in the case of a limited partnership, have the power to remove the general partner or partners.

 	4 	 	

“ Code ” shall have the meaning set forth in the preamble.
 
“ Company ” shall have the meaning set forth in the preamble.
 
“ Current Market Price ” shall have the meaning set forth in Section 11(d).
 
“ Current Value ” shall have the meaning set forth in Section 11(a)(iii).
 
“ Distribution Date ” shall have the meaning set forth in Section 3(a).
 
“ Equivalent Preferred Securities ” shall have the meaning set forth in Section 11(b).
 
“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.
 
“ Expiration Date ” shall mean the earliest of (i) the date on which all of the Rights are redeemed as provided in Section 22, (ii) the date on which the Rights are exchanged as provided in Section 23, (iii) the consummation of a reorganization transaction entered into by the Company resulting in the imposition of stock transfer restrictions that the Board determines will provide protection for the Company’s Tax Attributes similar to that provided by this Plan, (iv) the Close of Business on the effective date of the repeal of Section 382 (but excluding the repeal or withdrawal of any Treasury Regulations thereunder), or any other change, if the Board determines that this Plan is no longer necessary or desirable for the preservation of Tax Attributes, (v) the date on which the Board determines that the Tax Attributes have been applied within the meaning of Section 382 and that this Plan is no longer necessary to preserve the Tax Attributes, (vi) the beginning of a taxable year of the Company to which the Board determines that no Tax Attributes may be carried forward, (vii) the Close of Business on the earlier of the first anniversary of the date of the Plan or the date of the final adjournment of the Company’s 2016 annual meeting of shareholders, if the Plan shall not have been approved by holders of a majority of the shares of Common Stock of the Company present in person or represented by proxy at a meeting of shareholders of the Company, and (viii) the Close of Business on the date of the final adjournment of the third annual meeting of shareholders following the last annual meeting of shareholders of the Company at which this Plan was most recently approved by a holders of a majority of the shares of Common Stock of the Company present in person or represented by proxy at such meeting of shareholders of the Company, unless the Plan is re-approved by holders of a majority of the shares of Common Stock of the Company present in person or represented by proxy at such third annual meeting of shareholders of the Company.
 
“ Final Expiration Date ” shall mean the tenth anniversary of the date of the Plan.
 
“ NASDAQ ” shall mean the NASDAQ Stock Market or any of its listing venues.
 
“ NYSE ” shall mean the New York Stock Exchange.
 
“ Person ” shall mean any individual, firm, corporation, partnership, limited liability company, limited liability partnership, association, trust, syndicate or other entity, and includes without limitation an unincorporated group of individuals who, by formal or informal agreement or arrangement (whether or not in writing), have embarked on a common purpose or act.

 	5 	 	

“ Preferred Stock ” shall have the meaning set forth in the recitals.
 
“ Purchase Price ” shall have the meaning set forth in Section 7(b).
 
“ Record Date ” shall have the meaning set forth in the recitals.
 
“ Redemption Price ” shall have the meaning set forth in Section 22(a).
 
“ Right ” shall have the meaning set forth in the preamble.
 
“ Rights Agent ” shall have the meaning set forth in the preamble.
 
“ Right Certificate ” shall have the meaning set forth in Section 3(a).
 
“ Section 11(a)(ii) Event ” shall have the meaning set forth in Section 11(a)(ii).
 
“ Section 382 ” shall have the meaning set forth in the preamble.
 
“ Securities Act ” shall mean the Securities Act of 1933, as amended.
 
“ Share Equivalents ” shall have the meaning set forth in Section 11(a)(iii).
 
“ Stock Acquisition Date ” shall mean the first date of a public announcement (which, for purposes of this definition, shall include, without limitation, a report filed or amended pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person indicating that an Acquiring Person has become such; provided that, if such Person is determined by the Board not to be or have become an Acquiring Person, then no Stock Acquisition Date shall be deemed to have occurred.
 
“ Subsidiary ” of a Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect or appoint a majority of the board of directors or other persons performing similar functions are beneficially owned, directly or indirectly, by such Person and any corporation or other entity that is otherwise controlled by such Person.
 
“ Substitution Period ” shall have the meaning set forth in Section 11(a)(iii).
 
“ Summary of Rights ” shall have the meaning set forth in Section 3(b).
 
“ Tax Attributes ” shall mean the net operating loss carryforwards, capital loss carryforwards, general business credit carryforwards, alternative minimum tax credit carryforwards and foreign tax credit carryforwards, as well as any loss or deduction attributable to a “net unrealized built-in loss” within the meaning of Section 382, of the Company or its Subsidiaries.
 
“ Trading Day ” shall have the meaning set forth in Section 11(d)(i).
 
“ Triggering Event ” shall mean any Section 11(a)(ii) Event.

 	6 	 	

“ Unit ” shall have the meaning set forth in the recitals.
 
 Section 2.           Appointment of Rights Agent . The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions of this Plan, and the Rights Agent hereby accepts this appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable. In the event the Company appoints one or more co-Rights Agents, the respective duties of the Rights Agents and any co-Rights Agents shall be as the Company shall determine. No Rights Agent shall have a duty to supervise, and in no event shall be liable for, the acts or omissions of any such co-Rights Agent.
 
 Section 3.          Issuance of Right Certificates.
 
(a)       Until the Close of Business on the earlier to occur of (i) the tenth calendar day after the Stock Acquisition Date or (ii) the tenth calendar day (or such later time as determined by the Board but in no event later than the time such Person becomes an Acquiring Person) after the date of the commencement by any Person of a tender or exchange offer, upon the successful consummation of which such Person, together with its Affiliates and Associates, would be an Acquiring Person (irrespective of whether any shares are actually purchased pursuant to such offer), or in the case of clause (ii) such later date specified by the Board which date shall not be later than the date specified in clause (i) (the earliest of such dates being referred to herein as the “ Distribution Date ”), (x) the Rights will be evidenced by the certificates for the shares of Common Stock of the Company registered in the names of the holders of the shares of Common Stock of the Company (which certificates for shares of Common Stock of the Company shall be deemed also to be certificates for Rights) or, with respect to shares of Common Stock of the Company not represented by certificates, the Rights related thereto will be evidenced by the notation on the records of the Company representing these shares, and, in each case, not by separate certificates, (y) the registered holders of shares of Common Stock of the Company shall also be the registered holders of the associated Rights, and (z) the Rights (and the right to receive certificates therefor) will be transferable only in connection with the transfer of the underlying shares of Common Stock of the Company (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will, if requested to do so by the Company and provided with all necessary information, send, by first-class, postage prepaid mail, to each record holder of shares of Common Stock of the Company as of the Close of Business on the Distribution Date, at the address of the holder shown on the records of the Company, a certificate in substantially the form of Exhibit B (the “ Right Certificate ”) evidencing the Rights underlying the shares of Common Stock of the Company so held. As of and after the Distribution Date, the Rights will be evidenced solely by the Right Certificates. The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution Date and, if notification is given orally, the Company shall confirm the same in writing on or prior to the Business Day next following. Until this notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date has not occurred.

 	7 	 	

(b)       Upon request of any holder of record of a Right, the Company will send a copy of this Agreement and a copy of the Summary of the Terms of the Rights, substantially in the form attached hereto as Exhibit C (the “ Summary of Rights ”), by postage prepaid mail, to the holder.
 
(c)       Until the Distribution Date (or, if earlier, the Expiration Date or Final Expiration Date), the surrender for transfer of any certificate for shares of Common Stock of the Company shall also constitute the surrender for transfer of the Rights associated with the shares of Common Stock represented thereby and the transfer of shares of Common Stock on the records of the Company shall also constitute the transfer of the Rights associated with the shares.
 
(d)       Certificates issued for shares of Common Stock of the Company (including, without limitation, certificates issued upon transfer or exchange of shares of Common Stock of the Company) after the Record Date, but prior to the earlier of the Distribution Date, the Expiration Date or the Final Expiration Date, shall have impressed on, printed on, written on or otherwise affixed to them the following legend:
 
This certificate also evidences and entitles the holder to certain Rights as set forth in a Shareholder Rights Plan between EVINE Live Inc., and Wells Fargo Bank, N.A., as Rights Agent, dated July 13, 2015, as from time to time amended, extended or renewed (the “ Plan ”), the terms of which are incorporated herein by reference and a copy of which is on file at the principal executive office of EVINE Live Inc.. Under certain circumstances, as set forth in the Plan, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. EVINE Live Inc. will mail to the holder of record of this certificate a copy of the Plan, without charge, within ten Business Days after receipt of a written request therefor. Under certain circumstances, as provided in the Plan, Rights issued to or beneficially owned by Acquiring Persons or their Associates or Affiliates (as defined in the Plan) or any purported subsequent holder of such Rights will become null and void. The Rights shall not be exercisable, and shall be void so long as held, by a holder in any jurisdiction where the requisite qualification to the issuance to such holder, or the exercise by such holder, of the Rights in such jurisdiction shall not have been obtained or be obtainable.
 
The failure to print the foregoing legend on any such certificate representing shares of Common Stock of the Company or any defect therein shall not affect in any manner whatsoever the application or interpretation of the provisions of Section 7(e) hereof.
 
 Section 4.           Form of Right Certificates; Notice to Rights Agent as to Acquiring Person .
 
(a)       The Right Certificates (and the forms of election to purchase shares and forms of assignment to be printed on the reverse thereof), when, as and if issued, shall be substantially in the form set forth in Exhibit B and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (which do not affect the duties or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Plan, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the terms and conditions hereof, the Right Certificates evidencing the Rights, whenever issued, on their face shall entitle the holders thereof to purchase, for each Right, one Unit, at the Purchase Price, but the number and type of shares or other property holders thereof shall be entitled to purchase and the Purchase Price shall be subject to adjustment as provided in this Plan.

 	8 	 	

(b)       Notwithstanding any other provision of this Plan, any Right Certificate that represents Rights that may be or may have been at any time on or after the Distribution Date beneficially owned by an Acquiring Person or any Affiliate or Associate thereof (or any purported transferee of such Rights) may have impressed on, printed on, written on or otherwise affixed to it the following legend:
 
The beneficial owner of the Rights represented by this Right Certificate may be an Acquiring Person or an Affiliate or Associate (as defined in the Shareholder Rights Plan between EVINE Live Inc., and Wells Fargo Bank, N.A., as Rights Agent, dated July 13, 2015 (the “ Plan ”)) of an Acquiring Person or a subsequent holder of a Right Certificate beneficially owned by such Persons. Accordingly, under certain circumstances as provided in the Plan, this Right Certificate and the Rights represented hereby will be null and void.
 
The provisions of this Plan shall be operative whether or not the foregoing legend is imprinted on any such Right Certificate. The Company shall give notice to the Rights Agent promptly after it becomes aware of the existence of any Acquiring Person.
 
 Section 5.           Countersignature and Registration .
 
(a)       The Right Certificates shall be signed on behalf of the Company by the Chief Executive Officer, Chief Financial Officer, Chief Strategy Officer or any Vice President of the Company, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary, Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, either manually or by facsimile signature. The Right Certificates shall be countersigned by the Rights Agent, manually, or where permitted, in facsimile, and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, the Right Certificates nevertheless may be countersigned by the Rights Agent, issued and delivered with the same force and effect as though the person who signed the Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign the Right Certificate, although at the date of the execution of this Plan any such person was not such an officer.
 
(b)       Following the Distribution Date and receipt by the Rights Agent of notice to that effect and all other relevant information referred to in Section 3(a), the Rights Agent will keep or cause to be kept books for registration and transfer of the Right Certificates issued hereunder. The books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates, the date of each of the Right Certificates, and the certificate numbers for each of the Right Certificates.

 	9 	 	

 Section 6.           Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates .
 
(a)       Subject to the provisions of Sections 4(b), 7(e) and 13(b), at any time after the Close of Business on the Distribution Date and at or prior to the Close of Business on the earlier of the Expiration Date or the Final Expiration Date, any Right Certificate or Right Certificates may be (a) transferred or (b) split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of Units (and/or other securities or property, as the case may be) as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer any Right Certificate shall surrender the Right Certificate at the office of the Rights Agent designated for this purpose with the form of assignment on the reverse side thereof duly endorsed (or enclose with such Right Certificate a written instrument of transfer in a form satisfactory to the Company and the Rights Agent, duly executed by the registered holder thereof or the registered holder’s attorney duly authorized in writing), and with all signatures duly guaranteed. Any registered holder desiring to split up, combine or exchange any Right Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be split up, combined or exchanged at the office of the Rights Agent designated for such purpose. Thereupon the Rights Agent shall countersign (by manual or, where permitted, facsimile signature) and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment from the holder of a Right Certificate of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. The Rights Agent shall have no duty or obligation to take any action under this Section 6 unless and until the Rights Agent is reasonably satisfied that all such taxes and/or charges have been paid.
 
(b)       Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, if requested by the Company, reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will execute and deliver to the Rights Agent a new Right Certificate of like tenor for delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. Without limiting the foregoing, the Company may require the owner of any lost, stolen or destroyed Right Certificate, or his legal representative, to give the Company a bond sufficient to indemnify the Company against any claim that may be made against it on account of the alleged loss, theft or destruction of any such Right Certificate or the issuance of any such new Right Certificate.
 
 Section 7.           Exercise of Rights; Purchase Price; Expiration Date of Rights .
 
(a)       Subject to Section 7(e) or as otherwise provided in this Plan, the registered holder of any Right Certificate may exercise the Rights evidenced thereby in whole at any time or in part from time to time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed (with such signature duly guaranteed), to the Rights Agent at the office of the Rights Agent designated for such purposes together with payment of the Purchase Price (defined below), or portion thereof, as applicable, with respect to each Unit or Units (and/or other securities or property in lieu thereof) as to which the Rights are exercised, subject to adjustment as hereinafter provided, at or prior to the earlier of the Expiration Date and the Final Expiration Date.

 	10 	 	

(b)       The purchase price shall initially be $9.00 for each Unit issuable pursuant to the exercise of a Right. The purchase price and the number of Units (and/or other securities or property, as the case may be) to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Section 11. (The purchase price, after giving effect to any adjustments, shall be referred to as the “ Purchase Price .”) The Purchase Price shall be payable in lawful money of the United States of America, in accordance with Section 7(c).
 
(c)       Except as provided in Sections 7(d) and 7(e), upon receipt of a Right Certificate with the form of election to purchase duly executed, accompanied by payment of the Purchase Price, or the applicable portion thereof, for the Units (and/or other securities or property, as the case may be) to be purchased and an amount equal to any applicable tax or governmental charge, by cash, certified check or official bank check payable to the order of the Company or the Rights Agent, the Rights Agent shall thereupon promptly (i) (A) requisition from the Company or any transfer agent for the Units, certificates for the number of Units so elected to be purchased, and the Company will comply and hereby authorizes and directs the transfer agent to comply with all such requests or (B) if the Company, in its sole discretion, shall have elected to deposit the shares of Preferred Stock underlying the Units issuable upon exercise of the Rights hereunder into a depositary, requisition from the depositary agent depositary receipts representing the number of Units as are to be purchased (in which case certificates for the shares of Preferred Stock underlying the Units represented by the receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 13(b) and (iii) promptly after receipt of the Units certificates or depositary receipts, as the case may be, cause the same to be delivered to or upon the order of the registered holder of the Right Certificate, registered in such name or names as may be designated by such holder, and, when appropriate, after receipt promptly deliver the cash to or upon the order of the registered holder of the Right Certificate. In the event that the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to Section 11(a), the Rights Agent shall promptly take the appropriate actions corresponding to the foregoing clauses (i) through (iii), as applicable, and the Company shall otherwise make all arrangements necessary so that those other securities, cash and/or other property are available for distribution by the Rights Agent, if and when necessary to comply with this Plan. In addition, in the case of an exercise of the Rights by a holder pursuant to Section 11(a)(ii), the Rights Agent shall return the Right Certificate to the registered holder thereof after imprinting, stamping or otherwise indicating thereon that the Rights represented by the Right Certificate no longer include the rights provided by Section 11(a)(ii) and, if less than all the Rights represented by such Right Certificate were so exercised, the Rights Agent shall indicate on the Right Certificate the number of Rights represented thereby which continue to include the rights provided by Section 11(a)(ii). In case the holder of any Rights Certificate shall exercise (except pursuant to Section 11(a)(ii)) less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the registered holder of the Rights Certificate or the holder’s duly authorized assigns, subject to the provisions of Section 13(b).
 
(d)       Notwithstanding anything in this Plan to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless the registered holder shall have (i) properly completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request.

 	11 	 	

(e)       Notwithstanding anything in this Plan to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Affiliate or Associate thereof, (ii) a transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives those Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in the Acquiring Person or to any Person with whom the Acquiring Person has a continuing agreement, arrangement or understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer which the Board has determined is part of an agreement, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of those Rights shall have any rights whatsoever with respect to those Rights, whether under any provision of this Plan or otherwise. The Company shall notify the Rights Agent when this Section 7(e) applies and shall use best efforts to insure that the provisions of this Section 7(e) and Section 4(b) are complied with, but neither the Company nor the Rights Agent shall have any liability to any holder of Right Certificates or other Person as a result of the Company’s failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.
 
 Section 8.           Cancellation and Destruction of Right Certificates .
 
All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Plan. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company, destroy the cancelled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.
 
 Section 9.           Reservation and Availability of Shares of Preferred Stock .
 
(a)       The Company covenants and agrees that, from and after the Distribution Date, it will cause to be reserved and kept available, out of and to the extent of its authorized and unissued shares of Preferred Stock not reserved for another purpose or shares of Preferred Stock not reserved for another purpose held in its treasury, the number of Units that, as provided in this Plan, will be sufficient to permit the exercise in full of all outstanding Rights; provided , however , that the Company shall not be required to reserve and keep available Units sufficient to permit the exercise in full of all outstanding Rights pursuant to the adjustments set forth in Sections 11(a)(ii) or 11(a)(iii) unless, and only to the extent that, the Rights become exercisable pursuant to such adjustments.

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(b)       The Company shall (i) use its best efforts to cause, from and after the Distribution Date, the Rights and all Units (and/or following the occurrence of a Triggering Event, shares of Common Stock of the Company or other securities, as the case may be) issued or reserved for issuance upon exercise thereof to be listed or admitted to trading on the NYSE, NASDAQ or another national securities exchange, and (ii) if then necessary to permit the offer and issuance of such Units, shares of Common Stock of the Company and/or other securities, as the case may be, register and qualify such Units (or shares of Common Stock of the Company or other securities, as the case may be) under the Securities Act and any applicable state securities or “ blue sky ” laws (to the extent exemptions therefrom are not available), cause the related registration statement and qualifications to become effective as soon as possible after filing and keep such registration statement and qualifications effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of the expiration of the 60-day period referred to in Section 11(a)(ii), the Expiration Date or the Final Expiration Date. The Company may temporarily suspend, for a period of time not to exceed 90 days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 9(b) and give the Rights Agent a copy of such announcement. Notwithstanding any provision of this Plan to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained or the exercise thereof shall not otherwise be permitted under applicable law or a registration statement under the Securities Act (if required) shall not have been declared effective.
 
(c)       The Company covenants and agrees that it will take all such action as may be necessary to insure that all Units (or shares of Common Stock or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Units (or shares of Common Stock of the Company or other securities) subject to payment of the Purchase Price (or the applicable portion thereof) in respect thereof, be duly and validly authorized and issued and fully paid and nonassessable Units (and/or shares of Common Stock and other securities, as the case may be) in accordance with applicable law.
 
(d)       The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and governmental charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Units (or shares of Company Stock of the Company or other securities or property, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates for Units (or shares of Common Stock of the Company or other securities or property, as the case may be) upon exercise of Rights in a name other than that of, the registered holder of the Right Certificate, and the Company shall not be required to issue or deliver a Right Certificate or certificate for Units (and/or shares of Common Stock of the Company or other securities or property, as the case may be) to a Person other than the registered holder until any such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax or charge is due.

 	13 	 	

 Section 10.           Securities Issuable Upon Exercise . Each Person in whose name any certificate for Units (or shares of Common Stock of the Company or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Units (or shares of Common Stock or other securities, as the case may be) represented thereby on, and the certificate shall be dated, the date upon which the Right Certificate evidencing these Rights was duly surrendered and payment of the Purchase Price, or the applicable portion thereof (and any applicable taxes and governmental charges), was made; provided , however , that if the date of such presentation and payment is a date upon which the transfer books for the Units (or shares of Common Stock of the Company or other securities, as the case may be) are closed, such Person shall be deemed to have become the record holder of such Units (or shares of Common Stock of the Company or other securities) on, and such certificate shall be dated, the next succeeding Business Day on which the transfer books for the Units (or shares of Common Stock of the Company or other securities) are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate, as such, shall not be entitled to any rights of a shareholder of the Company with respect to shares for which the Right shall be exercisable, including without limitation the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.
 
 Section 11.           Adjustments to Number and Kind of Securities or Other Property, Number of Rights or Purchase Price .
 
The number and kind of securities or other property subject to purchase upon the exercise of each Right, the number of Rights outstanding and the Purchase Price are subject to adjustment from time to time as provided in this Section 11.
 
(a)       (i) In the event that the Company shall at any time after the date of this Plan (A) declare or pay any dividend on the shares of Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding shares of Preferred Stock into a greater number of shares, (C) combine or consolidate the outstanding shares of Preferred Stock into a smaller number of shares or effect a reverse split of the outstanding shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the shares of Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then except as otherwise provided in this Section 11(a) and Section 7(e), the Purchase Price in effect at the time of the record date for the dividend or of the effective date of the subdivision, split, combination, consolidation or reclassification, and the number of Units and the number and kind of other securities, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number of Units and/or the number and kind of other securities as the case may be, which, if the Right had been exercised immediately prior to such date, whether or not such Right was then exercisable, and at a time when the transfer books for the Preferred Stock (or other capital stock, as the case may be) of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of the dividend, subdivision, split, combination consolidation or reclassification. If an event occurs which would require an adjustment under both Sections 11(a)(i) and 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).

 	14 	 	

(ii) In the event any Person at any time becomes an Acquiring Person (this event being referred to as a “ Section 11(a)(ii) Event ”), then, subject to Sections 22(a) and 23, and except as otherwise provided in Section 7(e), each holder of a Right shall, for a period of sixty days (or such longer period as may be established by the Board) after the later of the occurrence of any such event and the effective date of an appropriate registration statement under the Securities Act pursuant to Section 9, have a right to receive for each Right, upon exercise thereof in accordance with the terms of this Plan and payment of the Purchase Price (or the applicable portion thereof) such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event (whether or not such right was then exercisable), and (y) dividing that product by 50% of the Current Market Price per shares of Common Stock of the Company on the date of such first occurrence (such number of shares of Common Stock is called the “ Adjustment Shares ”); provided , however , that the Purchase Price and the number of Adjustment Shares shall be further adjusted as appropriate to reflect any stock split, stock dividend or similar transaction, or as provided in this Agreement to reflect any other events, occurring after the date of such first occurrence; and provided , further , that in connection with any exercise effected pursuant to this Section 11(a)(ii), the Board may (but shall not be required to) determine that a holder of Rights shall not be entitled to receive shares of Common Stock of the Company that would result in such holder, together with such holder’s Affiliates, becoming the Beneficial Owner of 4.99% or more of the total number of shares of Common Stock of the Company then outstanding. If a holder would, but for the previous clause, be entitled to receive a number of shares of Common Stock of the Company (such shares, the “ Excess Flip-In Shares ”), in lieu of receiving such Excess Flip-In Shares, such holder will be entitled to receive an amount in (1) cash, (2) debt securities of the Company, (3) other assets, or (4) any combination of the foregoing, having an aggregate value equal to the Current Market Price per share of Common Stock of the Company on the date of the occurrence of a Section 11(a)(ii) Event multiplied by the number of Excess Flip-In Shares that would otherwise have been issuable to such holder.
 
(iii) In the event that the number of shares of Common Stock of the Company which are authorized by the Company’s articles of incorporation but not outstanding and which are not reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights for shares of Common Stock of the Company in accordance with Section 11(a)(ii) and the Rights shall become so exercisable, to the extent permitted by applicable laws, each Right shall thereafter represent the right to receive, upon exercise thereof at the Purchase Price, (x) a number of shares of Common Stock of the Company (up to the maximum number of shares of Common Stock of the Company which may be permissibly issued), and (y) a number Units so that, when added together, the numbers in clauses (x) and (y) equal the number of Adjustment Shares. In the event the number of shares of Common Stock and Preferred Stock which are authorized by the Company’s articles of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is insufficient to permit the exercise in full of the Rights in accordance with the prior sentence and the Rights shall become so exercisable, to the extent permitted by applicable law, the Company shall: (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the “ Current Value ”) and that value shall be conclusive for all purposes; and (B) with respect to each Right, upon exercise of such Right, issue shares of Common Stock of the Company and Units to the extent available for the exercise in full of such Right and, to the extent shares of Common Stock or Units are not so available, make adequate provision to substitute for the Adjustment Shares not received upon exercise of such Right: (1) other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which, by virtue of having dividend, voting and liquidation rights substantially comparable to the shares of Common Stock of the Company, are deemed in good faith by the Board to have substantially the same value as one share of Common Stock of the Company (such shares are herein called “ Share Equivalents ”) and whose determination shall be conclusive for all purposes); (2) debt securities of the Company; (3) other assets; (4) cash; or (5) any combination of the foregoing determined by the Board, having a value which, when added to the value of the number of the shares of Common Stock of the Company and Units actually issued upon exercise of such Right, shall have an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally recognized independent investment banking firm selected by the Board; provided , however , if the Company shall not have made adequate provision to deliver shares of Common Stock, Units and Share Equivalents pursuant to Section 11(a)(ii), the prior sentence of this paragraph and clause (B) above within 50 days following the Stock Acquisition Date, then, to the extent permitted by applicable law, the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available), Units or Share Equivalents and then, if necessary, cash, debt securities, or other assets (in that order) which shares, units, cash, debt securities and/or assets have an aggregate value equal to the excess of the Current Value over the Purchase Price, and provided , further , that the Board may (but shall not be required to) determine that a holder of Rights shall not be entitled to receive equity securities under this Section 11(a)(iii) to the extent the Company determines the receipt thereof could limit the Company’s ability to utilize the Tax Attributes. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock, Units or Share Equivalents could be authorized for issuance upon exercise in full of the Rights, the 50 day period set forth above may be extended to the extent necessary, but not more than 120 days after the Stock Acquisition Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or Shares Equivalents (such 50 day period, as it may be extended, is called the “ Substitution Period ”). To the extent that the Company determines that some action need be taken pursuant to the foregoing provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e), that this action shall apply uniformly to all outstanding and exercisable Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to the foregoing provisions of this Section 11(a)(iii) and, if necessary, to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement (with a prompt written notice thereof to the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Unit, each share of Common Stock of Company and the per share or unit value of any Share Equivalent shall be deemed to equal the Current Market Price of a share of Common Stock of the Company thereof as of the Stock Acquisition Date.

 	15 	 	

(b)       In case the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of shares of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after this record date) shares of Preferred Stock and/or securities having the same rights, privileges and preferences as the Preferred Stock (“ Equivalent Preferred Securities ”) or securities convertible into Preferred Stock or Equivalent Preferred Securities at a price per share of Preferred Stock or per unit of Equivalent Preferred Securities (or having a conversion price per share or unit, if a security convertible into Preferred Stock or Equivalent Preferred Securities) less than the Current Market Price per share of Preferred Stock on the record date, the Purchase Price to be in effect after the record date shall be determined by multiplying the Purchase Price in effect immediately prior to the record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or units of Equivalent Preferred Securities (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at that Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or units of Equivalent Preferred Securities to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case the subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of the non-cash consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent. Shares of Preferred Stock and units of Equivalent Preferred Securities owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. This adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if the record date had not been fixed.
 
(c)       In case the Company shall fix a record date for a distribution to all holders of shares of Preferred Stock (including any such distribution made in connection with a consolidation, merger or share exchange in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend), assets (other than a dividend payable in shares of Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to the record date by a fraction, the numerator of which shall be the Current Market Price per share of Preferred Stock on the record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such Current Market Price per share of Preferred Stock; provided , however , that in no event shall the consideration to be paid upon exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise of one Right. These adjustments shall be made successively whenever such a record date is fixed; and in the event that the distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.

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(d)       (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii), and subject to Section 11d(ii), the “ Current Market Price ” per share of stock or unit of other securities on any date shall be deemed to be the average of the daily closing prices per share of such stock or unit of other securities for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided , however , that in the event that the Current Market Price per share of any stock or unit of other securities is determined during a period following the announcement by the issuer of that stock or other security of (i) any dividend or distribution on such stock or other securities (other than a regular quarterly cash dividend and other than the Rights), or (ii) any subdivision, split, combination or reclassification of that stock or other securities, and prior to the expiration of the requisite 30 Trading Day period, the ex-dividend date for the dividend or distribution, or the record date for the subdivision, combination or reclassification occurs, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on that day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to shares of stock or units of securities listed or admitted to trading on the NYSE or NASDAQ or, if the shares of stock or units of any other securities are not listed or admitted to trading on the NYSE or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to shares of stock or units of other securities listed on the principal national securities exchange on which the shares of stock or units of other securities are listed or admitted to trading or, if the shares of stock or units of other security are not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc., Automated Quotations System or any other system then in use, or, if on any such date the shares of such stock or units of such other security are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such stock or other securities selected by the Board; provided , that if such security is not listed or quoted on the NYSE or NASDAQ and the principal market for such securities is a non-U.S. securities exchange, then the closing price for each day shall be determined by using the customary convention for determining the closing price of a security on such exchange as determined by the Board (in which event the exchange rate of the relevant currency into U.S. dollars for each Trading Day (as defined below) shall be determined by the Board). The term “ Trading Day ” shall mean a day on which the principal national securities exchange on which the shares of such stock or units of other securities are listed or admitted to trading is open for the transaction of business or, if the shares of such stock or other units of such security are not listed or admitted to trading on any national securities exchange, a Business Day; provided, that if such security is not listed or quoted on the NYSE or NASDAQ and the principal market for such security is a non-U.S. securities exchange, then “Trading Day” shall mean a day on which such non-U.S. securities exchange is open for the transaction of business. Subject to Section 11(d)(ii) with respect to Units, if such stock or unit of other securities is not publicly held or not so listed, traded or quoted, “ Current Market Price ” per share or other unit of such securities shall mean the fair value per share of stock or other unit of such securities as determined in good faith by the Board whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

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(ii)       For the purpose of any computation hereunder, the “ Current Market Price ” per Unit shall be determined in the same manner as set forth above in paragraph (i) of this Section 11(d) (other than the last sentence thereof). If the Current Market Price per Unit cannot be determined in the manner provided above because the Units are not publicly held, listed or traded or quoted in a manner described in paragraph (i) of this Section 11(d), the “ Current Market Price ” per Unit shall be conclusively deemed to be an amount equal to the Current Market Price per share of the Common Stock of the Company. If neither the shares of Common Stock of the Company nor the Units are listed or traded or quoted as described in Section 11(d)(i), “ Current Market Price ” per share thereof shall mean the fair value per share of Common Stock of the Company as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
 
(e)       Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent in the Purchase Price; provided , however , that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest thousandth of a Unit or share of Common Stock or any other security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which mandates such adjustment, or (ii) the Final Expiration Date.
 
(f)        If as a result of an adjustment made pursuant to Section 11(a)(ii), the holder of any Right thereafter exercised shall become entitled to receive any securities other than Units, thereafter the number of the other securities so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Preferred Stock and/or Units contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10 and 13 with respect to the shares of Preferred Stock and/or Units shall apply on like terms to any such other shares.
 
(g)       All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of Units (and/or other securities) purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
 
(h)       Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of Units (calculated to the nearest one-thousandth) equal to the quotient obtained by (i) multiplying (x) the number of Units covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

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(i)       The Company may elect on or after the date of any adjustment of the Purchase Price or any adjustment to the number of Units for which a Right may be exercised, to adjust the number of Rights, in lieu of any adjustment in the number of Units purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of Units for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement (with prompt notice thereof to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any date thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to the registered holders of Right Certificates on the record date Right Certificates evidencing, subject to Section 13, the additional Rights to which the holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such registered holders in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the registered holders of Right Certificates on the record date specified in the public announcement.
 
(j)        Irrespective of any adjustment or change in the Purchase Price or the number of Units issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price per Unit and the number of Units which were expressed in the initial Right Certificates issued hereunder.
 
(k)       Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, attributable to the Units, shares of Common Stock or other securities issuable upon exercise of the Rights, the Company shall use best efforts to take any corporate action, which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Units, shares of Common Stock or other securities at such adjusted Purchase Price.
 
(l)        In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such event the issuance to the holder of any Right exercised after such record date the Units and/or other securities of the Company, if any, issuable upon such exercise over and above the Units and/or other securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided , however , that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive the additional Units and/or other securities upon the occurrence of the event requiring such adjustment.

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(m)       Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in its good faith judgment the Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock or Common Stock, (ii) issuance wholly for cash of any shares of Preferred Stock or Common Stock at less than the Current Market Price, (iii) issuance wholly for cash of shares of Common Stock, Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock or Common Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Common Stock or Preferred Stock, shall not be taxable to such shareholders.
 
(n)       The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 22, Section 23 or Section 26, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or eliminate the benefits intended to be afforded by the Rights.
 
(o)       Anything in this Plan to the contrary notwithstanding, in the event that at any time after the date of this Plan and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the shares of Common Stock of the Company payable in shares of Common Stock of the Company or (ii) effect a subdivision or split the outstanding shares of Common Stock of the Company into a greater number of shares of Common Stock of the Company or (iii) combine or consolidate the outstanding shares of Common Stock of the Company into a small number of shares or effect a reverse split of the outstanding shares of Common Stock of the Company, then in any such case, each share of Common Stock outstanding following payment of such dividend, such subdivision, split, combination, consolidation or issuance shall continue to have one Right (as adjusted as otherwise provided herein) associated therewith and the Purchase Price following any such event shall be proportionately adjusted to equal the result obtained by multiplying the Purchase Price immediately prior to such event by a fraction, the numerator of which shall be the total number of shares of Common Stock of the Company outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock of the Company outstanding immediately following the occurrence of such event. The adjustment provided for in the preceding sentence shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.
 
 Section 12.        Certification of Adjustments . Whenever an adjustment is made as provided in Section 11, the Company shall (a) promptly prepare a certificate setting forth the adjustment and a brief statement of facts and computations accounting for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the shares of Common Stock and Preferred Stock a copy of the certificate, and (c) if a Distribution Date has occurred, mail or cause the Rights Agent to mail a brief summary thereof to each registered holder of a Right Certificate (or, if prior to the Distribution Date, to each holder of record of shares of Common Stock) in accordance with Section 25. Notwithstanding the foregoing sentence, the failure of the Company to prepare such certificate or statement or make such filings or mailings shall not affect the validity of, or the force or effect of, the requirement for such adjustment. The Rights Agent shall be fully protected in relying on any certificate prepared by the Company pursuant to Section 11 and shall have no duty with respect to any adjustment therein contained. Any adjustment to be made pursuant to Section 11 shall be effective as of the date of the event giving rise to the adjustment.

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 Section 13.         Fractional Rights and Fractional Shares .
 
(a)       The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. Units may, at the election of the Company , be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that the agreement shall provide that the holders of the depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Units represented by the depositary receipts. In lieu of such fractional Rights, there may be paid to the holders of record of the Right Certificates with regard to which the fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of the then Current Market Value of a whole Right.
 
(b)       The Company shall not be required to issue fractions of Units or other securities upon exercise of the Rights or to distribute certificates which evidence fractional Units or other securities. In lieu of issuing fractions of Units or other securities, there may be paid to the registered holders of Right Certificates at the time the Right Certificates are exercised as herein provided an amount in cash equal to the same fraction of the then Current Market Value of a Unit or other securities, as the case may be.
 
(c)       The holder of a Right by the acceptance of a Right expressly waives his right to receive any fractional Right or fractional Unit or other fractional securities (other than the fractional shares of Preferred Stock represented by Units) upon exercise of a Right.
 
 Section 14.         Rights of Action . All rights of action in respect of this Agreement, except those rights of action vested in the Rights Agent pursuant to Sections 17 and 19, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the holders of record of the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, the shares of Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, any shares of Common Stock), may, in its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company or any other Person to enforce, or otherwise act in respect of, its right to exercise the Rights evidenced by the Right Certificate in the manner provided in the Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and, accordingly, that they will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Agreement.
 
 Section 15.         Agreement of Right Holders . Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

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(a)       prior to the Distribution Date, the Rights will not be evidenced by a Rights Certificate and will be transferable only in connection with the transfer of Common Stock of the Company;
 
(b)       from and after the Distribution Date, the Right Certificates will be transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates contained therein duly executed;
 
(c)       subject to Section 6 and Section 7(e), the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent or the transfer agent of the shares of Common Stock) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; and
 
(d)       notwithstanding anything in this Agreement to the contrary, neither the Company, its directors, officers, employees and agents nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree, judgment or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or by reason of any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation.
 
 Section 16.         Right Certificate Holder Not Deemed a Shareholder . No holder of a Right, as such, shall be entitled to vote, receive dividends in respect of or be deemed for any purpose to be the holder of shares of Common Stock, Preferred Stock, Units or any other securities of the Company which may at any time be issuable upon the exercise of the Rights, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in Section 24 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.
 
 Section 17.         Concerning the Rights Agent .
 
(a)       The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, reimbursement of its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the preparation, delivery, amendment, administration and execution of this Plan and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, demand, judgment, fine, penalty, claim, settlement, cost or expense incurred without gross negligence or willful misconduct on the part of the Rights Agent as each must be finally determined by a court of competent jurisdiction, for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance and administration of this Plan, including the costs and expenses of defending against any claim of liability in the premises.

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(b)       The Rights Agent shall be authorized and protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in good faith in connection with its administration of this Plan in reliance upon any Right Certificate, certificate for shares of Common or Preferred Stock, Units or other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document reasonably believed by it to be genuine and to be signed, executed and, where necessary, guaranteed, verified or acknowledged, by the proper person or persons.
 
The indemnity provided herein shall survive the termination of this Agreement and the termination and the expiration of the Rights. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits) (other than by reason of gross negligence or willful misconduct), even if the Rights Agent has been advised of the likelihood of such loss or damage. Any liability of the Rights Agent under this Plan (other than by reason of gross negligence or willful misconduct) will be limited to the amount of fees paid by the Company to the Rights Agent.
 
 Section 18.         Merger or Consolidation or Change of Name of Rights Agent .
 
(a)       Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the shareholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 20. In case at the time such successor Rights Agent shall succeed to the agency created by this Plan, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan.
 
(b)       In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan.

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 Section 19.         Duties of Rights Agent . The Rights Agent undertakes to perform only the duties and obligations expressly imposed by this Plan upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:
 
(a)       The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of, any action taken, suffered or omitted by it in good faith and in accordance with such advice or opinion.
 
(b)       Whenever in the performance of its duties under this Plan the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price) be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the Chief Executive Officer, the Chief Strategy Officer, or any Vice President of the Company and by the Chief Financial Officer, Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted in good faith by it under the provisions of this Plan in reliance upon such certificate.
 
(c)       The Rights Agent shall be liable hereunder only for its own gross negligence or willful misconduct, as each is finally determined by a court of competent jurisdiction.
 
(d)       The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Plan or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.
 
(e)       The Rights Agent shall not have any liability for nor be under any responsibility in respect of the validity of this Plan or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereon); nor shall it be liable nor responsible for any breach by the Company of any covenant or condition contained in this Plan or in any Right Certificate; nor shall it be liable or responsible for any adjustment required under the provisions of Sections 11 or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate describing any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or Common Stock to be issued pursuant to this Plan or any Right Certificate or as to whether any shares of Preferred Stock (or other securities, as the case may be) will, when issued, be validly authorized and issued, fully paid and nonassessable.

 	24 	 	

(f)       The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Plan.
 
(g)       The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the Chief Executive Officer, the Chief Strategy Officer or any Vice President, the Chief Financial Officer, Treasurer, Assistant Treasurer, the Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties, and such advice or instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in good faith in accordance with the advice or instructions of any such officer.
 
(h)       The Rights Agent and any shareholder, Affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights Agent under this Plan. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.
 
(i)        If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 of such certificate, the Rights Agent shall not take any further action with respect to such requested exercise of transfer without first consulting with the Company.
 
(j)       No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder (other than internal costs incurred by the Rights Agent in providing services to the Company in the ordinary course of its business as Rights Agent) or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
 
(k)       The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be liable, answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company, any holder of Rights or any other Person resulting from any such act, default, neglect or misconduct, absent gross negligence or willful misconduct in the selection and continued employment thereof, as each is finally determined by a court of competent jurisdiction.

 	25 	 	

 Section 20.         Change of Rights Agent . The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Plan upon 30 days notice in writing mailed to the Company and to each transfer agent of the shares of Common Stock by registered or certified mail, and to the registered holders of the Right Certificates by mail. The Company may remove the Rights Agent or any successor Rights Agent (with or without cause) upon 30 days notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the shares of Common Stock by registered or certified mail, and to the registered holders of the Right Certificates by mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. Notwithstanding the foregoing provisions of this Section 20, in no event shall the resignation or removal of a Rights Agent be effective until a successor Rights Agent shall have been appointed and have accepted such appointment. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the registered holder of a Right Certificate (who shall, with such notice, submit such holder’s Right Certificate for inspection by the Company), then the incumbent Rights Agent or the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a Person organized and doing business under the laws of the United States or any state of the United States so long as such Person is in good standing, is authorized to do business in such state, is authorized under such laws to exercise shareholder services powers, is subject to supervision or examination by federal or state authority and has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a Person described in clause (a) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and shall execute and deliver, if applicable, any further assurance, conveyance, act or deed necessary for that purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the registered holders of the Right Certificates, if any. Failure to give any notice provided for in this Section 20, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
 
 Section 21.         Issuance of New Right Certificates . Notwithstanding any of the provisions of this Plan or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares of stock or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Plan. In addition, in connection with the issuance or sale of shares of Common Stock of the Company following the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date, the Company (a) shall, with respect to shares of Common Stock of the Company so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, or upon the exercise, conversion or exchange of securities hereafter issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue Right Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided , however , that (i) no such Right Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued, and (ii) no such Right Certificate shall be issued, if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

 	26 	 	

 Section 22.         Redemption .
 
(a)       (i) The Board may, at its option, at any time prior to the earlier of (x) the Close of Business on the tenth calendar day after the Stock Acquisition Date or (y) the Close of Business on the Final Expiration Date, direct the Company to, and if directed, the Company shall, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.001 per Right (the total amount paid to any holder of Rights to be rounded up to the nearest $0.01), as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date (such redemption price being hereinafter referred to as the “ Redemption Price ”).
 
(b)       Immediately upon the action of the Board directing the Company to make the redemption of the Rights, evidence of which shall have been filed with the Rights Agent, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board directing the Company to make such redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and each such holder of the then outstanding Rights by mailing such notice to the Rights Agent and to each such holders at such holder’s last address as it appears upon the registry books of the Rights Agent, or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made, unless such notice is mailed together with such payment.
 
In the case of a redemption permitted under Section 22(a), the Company may, at its option, discharge all of its obligations with respect to the Rights by (i) issuing a press release announcing the manner of redemption of the Rights (with prompt notice thereof to the Rights Agent) and (ii) mailing payment of the Redemption Price to each registered holder of the Rights at each such holder’s last address as it appears on the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent of the Common Stock, and upon such action, all outstanding Rights Certificates shall be null and void without any further action by the Company.

 	27 	 	

 Section 23.         Exchange .
 
(a)       The Board may, at its option, at any time after the later of the Stock Acquisition Date or the Distribution Date, exchange all or part of the then-outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii)) for Common Stock of the Company at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the Record Date (such exchange ratio being hereinafter referred to as the “ Exchange Ratio ”); provided , however , that in connection with any exchange effected pursuant to this Section 23, the Board may (but shall not be required to) determine that a holder of Rights shall not be entitled to receive shares of Common Stock that would result in such holder, together with such holder’s Affiliates, becoming the Beneficial Owner of 4.99% or more of the shares of Common Stock then outstanding. If a holder would, but for the proviso set forth in the previous sentence, be entitled to receive a number of shares under this Section 23 that would otherwise result in such holder, together with such holder’s Affiliates, becoming the Beneficial Owner of 4.99% or more of the shares of Common Stock then outstanding (such shares, the “ Excess Exchange Shares ”), in lieu of receiving such Excess Exchange Shares, such holder will be entitled to receive an amount in (1) cash, (2) debt securities of the Company, (3) other assets, or (4) any combination of the foregoing, having an aggregate value equal to the Current Market Price per share of the Common Stock on the date of the Stock Acquisition Date or Distribution Date, as applicable, multiplied by the number of Excess Exchange Shares that would otherwise have been issuable to such holder. Any such exchange will be effective immediately upon the action of the Board ordering the same, unless such action of the Board expressly provides that such exchange will be effective at a subsequent time or upon the occurrence or nonoccurrence of one or more specified events (in which case such exchange will be effective in accordance with the provisions of such action of the Board). Without limiting the foregoing, prior to effecting an exchange pursuant to this Section 23, the Board may enter into a Trust Agreement in such form and with such terms as the Board shall then approve (the “ Trust Agreement ”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement (the “ Trust ”) all of the Common Stock issuable pursuant to the exchange (or any portion thereof that has not theretofore been issued in connection with the exchange). From and after the time at which such shares are issued to the Trust, all shareholders then entitled to receive shares pursuant to the exchange shall be entitled to receive such shares (and any dividends or distributions made thereon after the date on which such shares are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement. Any shares of Common Stock issued at the direction of the Board in connection herewith shall be validly issued, fully paid and nonassessable Common Stock, and the Company shall be deemed to have received as consideration for such issuance a benefit having a value that is at least equal to the aggregate par value of the shares so issued.
 
(b)       Immediately upon the action of the Board authorizing the exchange of any Rights pursuant to Section 23(a) and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of the holders of such Rights shall be to receive that number of shares of Common Stock (or Units, as applicable) equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided , however , that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each notice of exchange will state the method by which the exchange of shares of Common Stock (or Units, as applicable) for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become null and void pursuant to the provisions of Section 7(e)) held by each holder of Rights.

 	28 	 	

(c)       In any exchange pursuant to this Section 23, the Company, at its option, may, and to the extent there are an insufficient number of authorized shares of Common Stock not reserved for any other purpose to exchange all of the outstanding Rights shall, substitute Units or Share Equivalents for some or all of the shares of Common Stock exchangeable for Rights, at the initial rate of one Unit or Share Equivalent for each share of Common Stock.
 
(d)       The Board shall not authorize any exchange transaction referred to in Section 23(a) unless at the time such exchange is authorized there shall be sufficient shares of Common Stock (and/or Units or Unit Equivalents) issued but not outstanding, or authorized but unissued, to permit the exchange of Rights as contemplated in accordance with this Section 23.
 
 Section 24.         Notice of Proposed Actions .
 
(a)       In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend to the holders of record of its shares of Preferred Stock payable in stock of any class or to make any other distribution to the holders of record of its shares of Preferred Stock (other than a regular periodic cash dividend out of earnings or retained earnings of the Company), (ii) to offer to the holders of record of its shares of Preferred Stock options, warrants, or other rights to subscribe for or to purchase shares of Preferred Stock (including any security convertible into or exchangeable for shares of Preferred Stock) or shares of stock of any class or any other securities, options, warrants, convertible or exchangeable securities or other rights, (iii) to effect any reclassification of its shares of Preferred Stock or any recapitalization or reorganization of the Company, (iv) to effect any consolidation, combination or merger with or into, or any share exchange with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets, earning power or cash flow of the Company and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to the Rights Agent and to each registered holder of a Right Certificate, to the extent feasible and in accordance with Section 25, a notice of such proposed action, which shall specify the record date for the purposes of such dividend or distribution, or the date on which such reclassification, recapitalization, reorganization, consolidation, combination, merger, share exchange, sale or transfer of assets, liquidation, dissolution, or winding up is to take place and the record date for determining participation therein by the holders of record of shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of record of the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of record of the shares of Preferred Stock, whichever shall be the earlier. The failure to give notice required by this Section 24 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action.

 	29 	 	

(b)       In case a Section 11(a)(ii) Event is proposed, then, in any such case, the Company shall, as soon as practicable thereafter, give to the Rights Agent and to each registered holder of Rights, to the extent feasible, in accordance with Section 25, notice of the occurrence of such event or proposal of such transaction which notice shall specify the proposed event and the consequences of the event to holders of Rights under Section 11(a)(ii), upon consummating such transaction, shall similarly give notice thereof to each holder of Rights.
 
 Section 25.         Notices . Notices or demands authorized by this Plan to be given or made by the Rights Agent or by the registered holder of any Right Certificate or Right to or on behalf of the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:
 
EVINE Live Inc.
6740 Shady Oak Road
Eden Prairie, Minnesota 55344
Attention: Russell Nuce, Chief Strategy Officer
with a copy (which shall not constitute notice) to: 
Davis & Gilbert LLP
1740 Broadway
New York, New York 10019
Attention: Brad Schwartzberg, Esq.
 
Subject to the provisions of Section 20, any notice or demand authorized by this Plan to be given or made by the Company or by the registered holder of any Right Certificate or Right to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:
 
Wells Fargo Bank, N.A.
1110 Centre Point Curve, Suite 101
Mendota Heights, MN 55120
Attention: Relationship Management
 
Notices or demands authorized by this Plan to be given or made by the Company or the Rights Agent to the registered holder of any Right Certificate or Right shall be sufficiently given or made if sent by mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent.
 
 Section 26.         Supplements and Amendments . Subject to extension by the Board by amendments, prior to the Close of Business on the tenth calendar day after the Stock Acquisition Date, the Company may in its sole and absolute discretion and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement (including without limitation amendments that increase or decrease the Purchase Price or Redemption Price or accelerate or extend the Final Expiration Date or the period in which Rights may be redeemed), without the approval of any holders of the Rights or shares of Common Stock. From and after the Close of Business on the tenth calendar day after the Stock Acquisition Date, the Company may and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable which shall not adversely affect the interests of the holders of Right Certificates (other than any interest an Acquiring Person or an Affiliate or Associate of an Acquiring Person has other than as a holder of Rights). Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights Agent shall execute such supplement or amendment. Prior to the Stock Acquisition Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of shares of Common Stock. Notwithstanding anything contained herein to the contrary, the Rights Agent may, but shall not obligated to, enter into any supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Plan. In addition, notwithstanding anything to the contrary in this Plan, no supplement or amendment to this Plan shall be made that extends the Expiration Date.

 	30 	 	

 Section 27.         Successors . All of the covenants and provisions of this Plan by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.
 
 Section 28.         Benefits of this Plan . Nothing in this Plan shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the shares of Common Stock) any legal or equitable right, remedy or claim under this Plan but this Plan shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the shares of Common Stock).
 
 Section 29.         Governing Law . This Plan and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Minnesota and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.
 
 Section 30.         Counterparts . This Plan may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Plan by facsimile or electronic mail shall be as effective as delivery of a manually executed counterpart of this Rights Agreement.
 
 Section 31.         Descriptive Headings . Descriptive headings of the several sections of this Plan are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions.
 
 Section 32.         Severability . If any term, provision, covenant or restriction of this Plan is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided , however , that notwithstanding anything in this Plan to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this Plan would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 22 hereof shall be reinstated and shall not expire until the Close of Business on the tenth Business Day following the date of such determination by the Board.

 	31 	 	

 Section 33.         Determination and Actions by the Board, etc . The Board shall have the exclusive power and authority to administer this Plan and to exercise all rights and powers specifically granted to the Board, or to the Company, or as may be necessary or advisable in the administration of this Plan, including, without limitation, the right and power to (i) interpret the provisions of this Plan, and (ii) make all determinations or judgments deemed necessary or advisable for the administration of this Plan (including without limitation a determination to redeem or not redeem the Rights or to amend this Plan) or otherwise contemplated by this Plan. All such actions, calculations, interpretations, judgments and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board to any liability to the holders of the Rights Certificates. The Rights Agent is entitled always to assume the Board acted in good faith and shall be fully protected and incur no liability in reliance thereon.
 
[ signature page follows ]

 	32 	 	

  
IN WITNESS WHEREOF, the parties have caused this Plan to be duly executed, all as of the day and year first above written.

 
Attest:	 	EVINE LIVE INC.	
 	 	 	 	 	
By:	/s/ Timothy Peterman	 	By:	/s/ Russell Nuce	
Name:	Timothy Peterman	 	Name:	Russell Nuce	
Title:	Executive Vice President, 	 	Title:	Executive Vice President and	
 	Chief Financial Officer	 	 	Chief Strategy Officer	
 
WELLS FARGO BANK N.A.
 
By:	/s/ Darcie Rummel	 	
Name:	Darcie Rummel	 	
Title:	Officer	 	

[Signature Page to Shareholder Rights Plan]

 		 	

 EXHIBIT A

CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
 
OF SERIES A JUNIOR PARTICIPATING CUMULATIVE PREFERRED STOCK
 
($0.01 PAR VALUE)
 
OF
 
EVINE Live Inc.
 
Pursuant to Section 302A.401 of the Business Corporation Act
 
of the State of Minnesota
 
I, Russell Nuce, Executive Vice President and Chief Strategy Officer of EVINE Live, Inc., a corporation organized and existing under the Business Corporation Act of the State of Minnesota (the " Corporation "), in accordance with the provisions of Section 302A.401 thereof, DO HEREBY CERTIFY:
 
That pursuant to the authority conferred upon the Board of Directors of the Corporation (the " Board of Directors ") by the Amended and Restated Articles of Incorporation of the Corporation (the “ Articles ”), a duly authorized committee of the Board of Directors on July 10, 2015, adopted the following resolution creating a series of four hundred thousand (400,000) shares of preferred stock of the par value of $0.01 per share designated as Series A Junior Participating Cumulative Preferred Stock:
 
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Articles, a series of preferred stock of the Corporation be, and it hereby is, created, and that the designation and amount thereof and the relative rights and preferences of the shares of such series, are as follows:
 
SECTION 1.        DESIGNATION AND AMOUNT . The shares of such series shall be designated as “Series A Junior Participating Cumulative Preferred Stock” (the " Series A Junior Participating Cumulative Preferred Stock ") and shall have a par value per share of $0.01, and the number of shares constituting the Series A Junior Participating Cumulative Preferred Stock shall be four hundred thousand (400,000). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the number of shares of Series A Junior Participating Cumulative Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Junior Participating Cumulative Preferred Stock.

 	A-  1 	 	

 
SECTION 2.        DIVIDENDS AND DISTRIBUTIONS .
 
(A)       Subject to the prior and superior rights of the holders of any shares of any series of preferred stock ranking prior and superior to the shares of Series A Junior Participating Cumulative Preferred Stock with respect to dividends or distributions, the holders of shares of Series A Junior Participating Cumulative Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date, a " Quarterly Dividend Payment Date ") commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Cumulative Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the common stock, par value $0.01 per share, of the Corporation (the “ Common Stock ”) since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Cumulative Preferred Stock. In the event the Corporation shall at any time after July 23, 2015 (the “ Rights Declaration Date ”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a small number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Cumulative Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
 
(B)       The Corporation shall declare a dividend or distribution on the Series A Junior Participating Cumulative Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on the Series A Junior Participating Cumulative Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
 
(C)       Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Cumulative Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Cumulative Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for determination of holders of shares of Series A Junior Participating Cumulative Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Cumulative Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Cumulative Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 45 days prior to the date fixed for the payment thereof.

 	A-  2 	 	

 
SECTION 3.        VOTING RIGHTS . The holders of shares of Series A Junior Participating Cumulative Preferred Stock shall have the following voting rights:
 
(A)       Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Cumulative Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Cumulative Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
 
(B)       Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Cumulative Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation.
 
(C)       (i) If at any time dividends on any Series A Junior Participating Cumulative Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) that shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Cumulative Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all holders of preferred stock (including holders of the Series A Junior Participating Cumulative Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) directors.
 
            (ii) During any default period, such voting right of the holders of Series A Junior Participating Cumulative Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders, provided that neither such voting right nor the right of the holders of any other series of preferred stock, if any, to increase, in certain cases, the authorized number of directors shall be exercised unless the holders of ten percent (10%) in number of shares of preferred stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of preferred stock of such voting right. At any meeting at which the holders of preferred stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) directors or, if such right is exercised at an annual meeting, to elect two (2) directors. If the number that may be so elected at any special meeting does not amount to the required number, the holders of the preferred stock shall have the right to make such increase in the number of directors as shall be necessary to permit the election by them of the required number. After the holders of the preferred stock shall have exercised their right to elect directors in any default period and during the continuance of such period, the number of directors shall not be increased or decreased except by vote of the holders of cumulative preferred stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Cumulative Preferred Stock.

 	A-  3 	 	

            (iii) Unless the holders of preferred stock shall, during an existing default period, have previously exercised their right to elect directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of preferred stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of preferred stock, which meeting shall thereupon be called by the Chief Executive Officer, Chief Financial Officer, Chief Strategy Officer, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of preferred stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of preferred stock by mailing a copy of such notice to such holder at such holder’s last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request, or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of preferred stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the shareholders.
 
            (iv) In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of directors until the holders of preferred stock shall have exercised their right to elect two (2) directors voting as a class, after the exercise of which right (x) the directors so elected by the holders of preferred stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section (3) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock that elected the director whose office shall have become vacant. References in this paragraph (C) to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence.
 
            (v) Immediately upon the expiration of a default period, (x) the right of the holders of preferred stock as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Preferred stock as a class shall terminate, and (z) the number of directors shall be such number as may be provided for in the Articles or the Corporation’s by-laws (the “ By-Laws ”) irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Articles or By-Laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.

 	A-  4 	 	

 
(D)       Except as set forth herein, holders of Series A Junior Participating Cumulative Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
 
SECTION 4.     REACQUIRED SHARES . Any shares of Series A Junior Participating Cumulative Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of preferred stock of the Corporation and may be reissued as part of a new series of preferred stock to be established by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein or as otherwise required by law.
 
SECTION 5.      LIQUIDATION, DISSOLUTION OR WINDING UP .
 
(A)       Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking (either as to dividends or upon liquidation, dissolution or winding up) junior to the Series A Junior Participating Cumulative Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Cumulative Preferred Stock shall have received $10.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “ Series A Liquidation Preference ”). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Cumulative Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “ Common Adjustment ”) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the “ Adjustment Number ”). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Cumulative Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Cumulative Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Cumulative Preferred Stock and Common Stock, on a per share basis, respectively.
 
(B)       In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, that rank on a parity with the Series A Junior Participating Cumulative Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

 	A-  5 	 	

(C)       In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted automatically by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
 
SECTION 6.      CONSOLIDATION, MERGER, ETC . In the event the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Cumulative Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Cumulative Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
 
SECTION 7.       NO REDEMPTION . The shares of Series A Junior Participating Cumulative Preferred Stock shall not be redeemable.
 
SECTION 8.       RANKING . The Series A Junior Participating Cumulative Preferred Stock shall rank junior to all other series of preferred stock as to the payment of dividends and the distribution of assets.
 
SECTION 9.       AMENDMENT . The Articles shall not be further amended in any manner that would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Cumulative Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Cumulative Preferred Stock, voting separately as a class.
 
SECTION 10.     FRACTIONAL SHARES . Series A Junior Participating Cumulative Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Cumulative Preferred Stock.

 	A-  6 	 	

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation, Preferences and Rights and does affirm the foregoing as true under the penalties of perjury this 13 th day of July 2015.

 	EVINE Live Inc.	
 	 	
 	By:	 	
 	Name:	Russell Nuce	
 	Title:	Executive Vice President and 
Chief Strategy Officer	

 

 	A-  7 	 	

EXHIBIT B

[Form of Right Certificate]
 
Certificate No. R-	_________Rights	
 
NOT EXERCISABLE AFTER JULY 13, 2025, SUBJECT TO EARLIER REDEMPTION OR EXPIRATION PURSUANT TO THE SHAREHOLDER RIGHTS PLAN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. THE RIGHTS EVIDENCED BY THIS CERTIFICATE SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE MAY BE AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE (AS DEFINED IN THE SHAREHOLDER RIGHTS PLAN ) OF AN ACQUIRING PERSON OR A SUBSEQUENT HOLDER OF A RIGHT CERTIFICATE BENEFICIALLY OWNED BY SUCH PERSONS. ACCORDINGLY, UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY WILL BE NULL AND VOID.
 
Right Certificate
 
EVINE Live Inc.
 
This certifies that ____________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan, dated July 13, 2015, as amended, restated, renewed or extended from time to time (the “ Plan ”) between EVINE LIVE INC., a Minnesota corporation (“ Company ”), and Wells Fargo Bank, N.A., a national banking association (“ Rights Agent ”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Plan) and prior to 5:00 P.M. New York time on July 13, 2025, at the office or offices of the Rights Agent, or its successors as Rights Agent, designated for such purpose, one one-thousandth of a fully paid, nonassessable share of Series A Junior Participating Cumulative Preferred Stock, par value $0.01 per share, of the Company (a “ Unit ”), at a purchase price of $9.00, as the same may from time to time be adjusted in accordance with the Plan (“ Purchase Price ”), upon presentation and surrender or this Right Certificate with the Form of Election to Purchase and included Certificate duly completed and executed. The number of Rights evidenced by this Right Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of ________, 20___, based on the Units as constituted at such date.
 
As provided in the Plan, the Purchase Price and the number of Units which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events and, upon the happening of certain events, shares of Common Stock or other securities other than Units, or other property, may be acquired upon exercise of the Rights evidenced by this Right Certificate, as provided by the Plan.

 	B-  1 	 	

As more fully set forth in the Plan, from and after the first occurrence of a Section 11(a)(ii) Event (as such term is defined in the Plan), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as such terms are defined in the Plan), (ii) a transferee of such Acquiring Person (or of any such Associate or Affiliate), or (iii) under certain circumstances specified in the Plan, a transferee of such Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with such Acquiring Person becoming such, such Rights shall become null and void without any further action, and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event, whether under the Plan or otherwise.
 
This Right Certificate is subject to all of the terms, provisions and conditions of the Plan, which terms, provisions and conditions are incorporated herein by reference and made a part hereof and to which Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities of the Rights Agent, the Company and the registered holders of the Right Certificates. Copies of the Plan are on file at the principal executive office of the Company and will be mailed to shareholders upon request to the Rights Agent.
 
This Right Certificate, with or without other Right Certificates, upon surrender at the office or offices of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the registered holder to purchase a like aggregate number of Units as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled the holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive, upon surrender hereof, the Right Certificate indicating the remaining Rights represented thereby or another Right Certificate or Right Certificates for the number of Rights not exercised.
 
Subject to the provisions of the Plan, the Rights evidenced by this Certificate may be (x) redeemed by the Company at its option at a redemption price of $0.001 per Right at any time prior to the earlier of the Close of Business on (i) the tenth calendar day after Stock Acquisition Date, and (ii) the Final Expiration Date, or under certain other conditions as specified in the Plan, and (y) exchanged, after any Person becomes an Acquiring Person (as such terms are defined in the Plan), at the option of the Board of Directors of the Company, for one share of Common Stock of the Company as set forth in the Plan.
 
No fractional Units, shares of Common Stock of the Company or other securities (other than fractions of a share of Preferred Stock represented by Units) shall be required to be issued upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof, as provided in the Plan, a holder otherwise entitled to fractions of shares of Common Stock, Units or other securities (other than fractions of a share of Preferred Stock represented by Units) may receive an amount in cash equal to the same fraction of the then current value of a shares of Common Stock or such other securities.

 	B-  2 	 	

No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Units, shares of Preferred Stock, shares of Common Stock or of any other securities of the Company which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Plan or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors, or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting shareholders (except as provided in the Plan) or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Plan.
 
This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
 
[remainder of page intentionally left blank]

 	B-  3 	 	

 
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal, dated as of __________ __, ____.
 
ATTEST:	 	EVINE Live Inc.	
 	 	 	
By:	 	 	By:	 	
 	Title	 	 	Title:	

 
Countersigned:
 
WELLS FARGO BANK, N.A.

Rights Agent	 	
 	 	
By:	 	 	
 	Authorized signature	 	

 	B-  4 	 	

 
[Form of Reverse Side of Right Certificate]
 
FORM OF ASSIGNMENT
 
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
 
FOR VALUE RECEIVED __________________________ hereby sells, assigns and transfers unto

 
 	
(Please print name and address of transferee)	

 
______________ Rights evidenced by this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________ Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
 
Dated: _____________, 20__	 	
 	 	 	
 	Signature	 	
 	 	
 	( Signature must conform in all respects to the name of holder as written upon the face of this Right Certificate, without alteration or enlargement or any change whatsoever. )	
 
Signature Guaranteed:*
 
*	Signature must be guaranteed by an “ Eligible Guarantor Institution ” pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934. 	

 	B-  5 	 	

 
Certificate
 
The undersigned hereby certifies by checking the appropriate boxes that:
 
(1)         the Rights evidenced by this Right Certificate
 
[    ] are
 
[    ] are not
 
being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Plan);
 
(2)         after due inquiry and to the best knowledge of the undersigned, the undersigned
 
[    ] did
 
[    ] did not
 
acquire the Rights evidenced by this Right Certificate from any Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person or any transferee of such Persons.
 
Dated: ______________, 20__
 
Signature:	 	 	
 	 	
( Signature must conform in all respects to the name of holder as written upon the face of this Right Certificate, without alteration or enlargement or any change whatsoever. )	 	
 
Signature Guaranteed:*
 
 	*	Signature must be guaranteed by an “ Eligible Guarantor Institution ” pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.	

 	B-  6 	 	

 
FORM OF ELECTION TO PURCHASE
 
(To be executed if registered holder desires to Exercise the Right Certificate.)
 
To:          EVINE LIVE INC.
 
The undersigned hereby irrevocably elects to exercise ____________ Rights represented by this Right Certificate to purchase the number of one one-thousandths of a share of Preferred Stock, shares of Common Stock or other securities issuable upon the exercise of such Rights and requests that certificates representing such share(s) or other securities be issued in the name of:
 
Please insert social security or other identifying number	 	

(Please print name and address)	
 
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the remaining such Rights shall be registered in the name of and delivered to:
 
Please insert social security or other identifying number	 	

(Please print name and address)	
 
Dated: ________________, 20__

 	Signature	
 	 	
 	( Signature must conform in all respects to the name of holder as written upon the face of the Right Certificate, without alteration or enlargement or any change whatsoever. )	
 
Signature Guaranteed: *
 
*	Signature must be guaranteed by an “ Eligible Guarantor Institution ” pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934. 	

 	B-  7 	 	

 
Certificate
 
The undersigned hereby certifies by checking the appropriate boxes that:
 
(1)        the Rights evidenced by this Right Certificate
 
[   ] are
 
[   ] are not
 
being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Plan);
 
(2)        after due inquiry and to the best knowledge of the undersigned, the undersigned
 
[   ] did
 
[   ] did not
 
acquire the Rights evidenced by this Right Certificate from any Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person or any transferee of such Persons.
 
Dated: ______________, 20__
 
Signature:	 	 	
 	 	
( Signature must conform in all respects to the name of holder as written upon the face of this Right Certificate, without alteration or enlargement or any change whatsoever. )	 	
  
Signature Guaranteed:*
 
*	Signature must be guaranteed by an “ Eligible Guarantor Institution ” pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934. 	

 	B-  8 	 	

 EXHIBIT C

EVINE LIVE INC.
 
SUMMARY OF THE TERMS OF THE RIGHTS TO PURCHASE
 
UNITS OF
 
PREFERRED STOCK
 
On July 10, 2015, a duly authorized committee of the Board of Directors of EVINE Live Inc. (the “ Company ”) declared a dividend distribution of one purchase right (a “ Right ”) for each outstanding share of Common Stock, par value $0.01 per share (“ Common Stock ”), of the Company, payable to shareholders of record on July 23, 2015, and issuable as of that date. Except in the circumstances described below, each Right, when it becomes exercisable, entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Cumulative Preferred Stock, $.01 par value, of the Company (“ Preferred Stock ” and each one one-thousandth of a share of Preferred Stock, a “ Unit ”) at a price of $9.00 per Unit (the “ Purchase Price ”). The rights of a holder of a Unit are substantially equivalent to the rights of a holder of a share of Common Stock. The description and terms of the Rights are set forth in a Shareholder Rights Plan (the “ Plan ”) between the Company and Wells Fargo Bank, N.A., a national banking association (the “ Rights Agent ”).
 
The Company has generated substantial operating losses and other tax attributes in previous years which, under the Internal Revenue Code of 1986 (the “ Code ”), the Company may in certain circumstances use to offset current and future earnings and thus reduce its future federal income tax liability (subject to certain requirements and restrictions. However, if the Company experiences an “Ownership Change,” as defined in Section 382 of the Code and the treasury regulations thereunder (“ Section 382 ”), its ability to use the tax attributes could be substantially limited or lost altogether. In order to seek to avoid an “Ownership Change”, the Board of Directors adopted the Plan.
 
As discussed below, initially the Rights will not be exercisable, certificates will not be sent to shareholders and the Rights will automatically trade with the Common Stock .
 
The Rights will be evidenced by the Common Stock certificates, and Rights relating to shares of Common Stock not represented by certificates will be represented by notation on the records of the Company, until the close of business on the earlier to occur of (i) the tenth calendar day after the day on which a public announcement or filing that a person or group of affiliated or associated persons has become an “ Acquiring Person ”, which is defined as a person who, at any time after the date of the Rights Agreement, has acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the Common Stock of the Company then outstanding , subject to certain exceptions as described below, or (ii) the tenth day (or a later date determined by the Board of Directors of the Company) after the commencement of a tender or exchange offer the consummation of which would result in a person becoming an Acquiring Person (the earlier of these dates is called the “ Distribution Date ”).
 
As soon as practicable following a Distribution Date, the Rights Agent will, if requested to do so by the Company, mail separate certificates evidencing the Rights (“ Right Certificates ”) to holders of record of shares of the Common Stock as of the close of business on the Distribution Date, and those separate certificates alone will evidence the Rights from and after the Distribution Date.

 	C-  1 	 	

Each of the following persons will not be deemed to be an Acquiring Person, even if they have acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the shares of Common Stock of the Company then outstanding: (i) the Company, (ii) any subsidiary of the Company, (iii) any employee benefit plan or employee stock plan of the Company or any subsidiary of the Company; (iv) any “direct public group” within the meaning of Treasury Regulations Section 1.382-2T(j(2(ii); (v) any person who the Board of Directors of the Company determines prior to the time the person would otherwise be an Acquiring Person, should be exempted from being an Acquiring Person; (vi) any person who would otherwise be an Acquiring Person upon the first public announcement by the Company of the adoption of the Plan, unless and until such person, or any affiliate of such person, acquires beneficial ownership of any additional shares of Common Stock after the first public announcement by the Company of the adoption of the Plan; (vii) any person who as the result of an acquisition of shares of Common Stock by the Company which, by reducing the number of shares of Common Stock outstanding, increases the proportionate number of shares of Common Stock beneficially owned by the person to 4.99% or more of the shares of Common Stock then outstanding; or (viii) any person who inadvertently may become an Acquiring Person, so long as the person promptly enters into, and delivers to the Company, an irrevocable commitment to promptly divest, and thereafter promptly divests beneficial ownership of sufficient shares of Common Stock so that the person ceases to be an Acquiring Person. In addition, no person shall be an Acquiring Person if the Board of Directors shall have affirmatively determined in light of the intent and purposes of the Plan or other circumstances facing the Company, that such person should not be deemed an Acquiring Person. A person (other than any “direct public group” within the meaning of Treasury Regulations Section 1.382-2T(j)(2(ii)) will be treated as the beneficial owner of 4.99% or more shares of the Common Stock if, in the determination of the Board of Directors, that person would be treated as a “5-percent shareholder” for purposes of Section 382 (substituting “4.99” for “5” each time “five” or “5” is used in or for purposes of Section 382.
 
The Rights are not exercisable until after the Distribution Date. The Rights will expire upon the earliest of (i) the date on which all of the Rights are redeemed as described below, (ii) the date on which the Rights are exchanged as described below, (iii) the consummation of a reorganization transaction entered into by the Company resulting in the imposition of stock transfer restrictions that the Board of Directors determines will provide protection for the Company’s tax attributes similar to that provided by this Plan, (iv) the close of business on the effective date of the repeal of Section 382, or any other change, if the Board of Directors determines that this Plan is no longer necessary or desirable for the preservation of the Company’s tax attributes, (v) the date on which the Board of Directors determines that the Company’s tax attributes have been applied within the meaning of Section 382 and that this Plan is no longer necessary to preserve those tax attributes, (vi) the beginning of a taxable year of the Company to which the Board of Directors determines that none of the Company’s tax attributes may be carried forward, (vii) the close of business on the earlier of the first anniversary of the date of the Plan or the date of the Company’s 2016 annual meeting of shareholders, if the Plan shall not have been approved by the Company’s shareholders, (viii) the close of business on the date of the third annual meeting of shareholders following the last annual meeting of shareholders of the Company at which this Plan was most recently approved by share holders, unless the Plan is re-approved by shareholders at that third annual meeting of shareholders, and (ix) the close of business on July 13, 2025.

 	C-  2 	 	

The Purchase Price, and the number of Units, shares of Common Stock or other securities or property issuable upon exercise of the Rights, are subject to adjustment from time to time to prevent dilution: (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock; (ii) upon the grant to holders of Preferred Stock of certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock; or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). The Purchase Price is also subject to adjustment from time to time in the event of a Common Stock dividend on, or a subdivision or combination of, the shares of Common Stock.
 
In the event any Person becomes an Acquiring Person, then each holder of record of a Right, other than the Acquiring Person, will thereafter have the right to receive, upon payment of the Purchase Price, that number of shares of Common Stock having a value at the time the person becomes an Acquiring Person equal to twice the Purchase Price. Any Rights that are or were at any time, on or after the Distribution Date, beneficially owned by an Acquiring Person will become null and void. After such an event, to the extent that insufficient shares of Common Stock are available for the exercise in full of the Rights, holders of Rights will receive upon exercise a number of shares of Common Stock to the extent available and then Units or other securities of the Company, assets, or cash, in proportions determined by the Company, so that the aggregate value received is equal to twice the Purchase Price.
 
No fractional shares of Common Stock or Units will be required to be issued upon exercise of the Rights and, in lieu thereof, a payment in cash equal to the fraction of the then current value of a share of Common Stock may be made.
 
At any time after a person becomes an Acquiring Person, the Board may exchange all of part of the outstanding Rights (other than those held by an Acquiring Person) for shares of Common Stock at an exchange rate of one share of Common Stock (and, in certain circumstances, a Unit) for each Right. The Company will promptly give public notice of any exchange (although failure to give notice will not affect the validity of the exchange).
 
At any time until close of business on the tenth calendar day after the day a public announcement or the filing is made indicating that a person has become an Acquiring Person (and prior to the giving of notice of the exchange or redemption, as applicable to the holders of the Rights), or thereafter under certain circumstances, the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right.
 
Immediately upon the action of the Board authorizing exchange or redemption of the Rights, the right to exercise the Rights will terminate, and the only right of the holders of Rights will be to receive (if applicable) the shares of Common Stock of the Company(or Units) issuable in connection with the exchange or the Redemption Price without any interest thereon.

 	C-  3 	 	

Until the close of business on the tenth calendar day after the day a public announcement or a filing is made indicating that a person has become an Acquiring Person, or thereafter under certain circumstances, the Company may amend the Rights in any manner. The Company may also amend the Rights Agreement after the close of business on the tenth calendar day after the day a public announcement or filing is made indicating that a person has become an Acquiring Person, to cure ambiguities, to correct defective or inconsistent provisions or in any manner that does not adversely affect the interests of holders of the Rights.
 
Until a Right is exercised, the holder, as such, will have no rights as a shareholder of the Company, including the right to vote or to receive dividends.
 
The issuance of the Rights is not taxable to the Company or to shareholders under presently existing federal income tax law, and will not change the way in which shareholders can presently trade the Company’s shares of Common Stock. If the Rights should become exercisable, shareholders, depending on then existing circumstances, may recognize taxable income.
 
A copy of the Plan has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-K filed on July 13, 2015. A copy of the Plan is available free of charge from either the Rights Agent by writing to Wells Fargo Bank, N.A., 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120, Attention: Relationship Management, or the Company by writing to EVINE Live Inc., 6740 Shady Oak Road, Eden Prairie, Minnesota 55344, Attention: Russell Nuce, Acting General Counsel. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Plan, which is incorporated in this summary description by reference.

 	C-  4 	 	

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 0 0 0 0 0 0 0 0 0 0 0 0 0000424580_1 R1.0.1.18 For Withhold For All All All Except The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees 01 Michael Friedman 02 Neal S. Grabell 03 Landel C. Hobbs 04 Benoit Jamar 05 Eyal Lalo 06 Lisa A. Letizio 07 Aaron P. Reitkopf 08 Robert J. Rosenblatt EVINE LIVE INC. 6740 SHADY OAK ROAD, EDEN PRAIRIE, MN 55344-3433 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For Against Abstain 2 To approve, on an advisory basis, the 2018 compensation of the Company's named executive officers as disclosed in the proxy statement; and 3 To re-approve the Shareholders Rights Plan; and 4 To ratify the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending February 1, 2020. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

 

0000424580_2 R1.0.1.18 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and Form 10-K are available at www.proxyvote.com EVINE Live Inc. Annual Meeting of Shareholders July 12, 2019 This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Timothy A. Peterman or Andrea M. Fike, and each of them, as proxies, each with the power to appoint (his/her) substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this proxy card, all of the shares of common stock of EVINE Live Inc. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 AM, CDT on July 12, 2019, at the EVINE Live Inc. Corporate Offices, 6690 Shady Oak Road, Eden Prairie, MN 55344, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Notwithstanding the foregoing, if this proxy is to be voted for any nominee named on the reverse side and such nominee is unwilling or unable to serve, this proxy will be voted for a substitute in the discretion of the proxies. Continued and to be signed on reverse side