Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 726

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 3
Chunk 726
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Accordingly, there are no payments or benefits that are triggered by any termination event (including resignation and severance) other
than in connection with a change of control of the Company.

 62 

Benefits Triggered by Change of Control or
Termination after Change of Control

Our stock option plans provide that each employee
of ours who holds outstanding unexpired options under our stock option may have the right to exercise such options following a change
of control of the Company, without regard to the date such option would first be exercisable. Each of the named executive officers holds
such options. The “acceleration” of options is mandatory following certain changes of control, and subject to the discretion
of the Compensation Committee following certain others. Acceleration is mandatory in the event of (i) the sale, or other disposition
of substantially all of the Company’s assets, or (ii) a merger or similar transaction in which shareholders of the Company hold
less than 50% of the shares of the surviving entity; provided, however, that acceleration following a merger or similar transaction is
mandatory only if the holder suffers a Qualifying Termination (defined below) within one year following the transaction, or if the surviving
entity does not provide the holder with an equivalent award. Acceleration is also mandatory if a holder suffers a Qualifying Termination
within one year following (iii) a change within a three-year period in the membership of a majority of the Board of Directors (excluding
changes recommended by the board), or (iv) a person’s acquisition of outstanding voting securities of the Company, other than directly
from the Company and without approval of the board, resulting in that person’s having beneficial ownership of greater than 25% of
the Company.

Under our stock option plans, the Compensation
Committee may exercise its discretion to provide for acceleration under other circumstances than those described above with respect to
any particular stock option or class of stock options. The committee would expect to exercise its discretion with the intention of preserving
the value of the stock option award. To date, such discretion has not been exercised. A “Qualifying Termination” is a termination
of the holder’s employment by the Company other than for cause, disability or death, or by the holder for “good reason”
(principally relating to a material diminution in the holder’s authority, compensation or responsibilities, or a relocation of greater
than 50 miles). The preceding description applies to options held by officers and employees. Options issued to