GPGI, Inc.

We are seeking the approval of our stockholders of an amendment (the “Second Plan Amendment”) to the CompoSecure, Inc. 2021 Incentive Equity Plan (as amended from time to time, the “Incentive Equity Plan”) to (i) increase the number of shares of Class A Common Stock authorized for issuance to 30,754,854 shares (the “Share Reserve”), an increase of 4,678,503 shares, (ii) increase the level of the annual increase in the number of shares of Class A Common Stock added to the Share Reserve to 6% of all shares of Class A Common Stock outstanding as of the last day of the prior calendar year (the “Evergreen”), increased from 4% and (iii) extend the term of the Incentive Equity Plan, which currently expires on December 27, 2031, for a total of 10 years, which is an increase by approximately three and a half years, with a new expiration date of May 27, 2035. The Second Plan Amendment was recommended by the Compensation Committee and approved by the Board of Directors on February 8, 2025, subject to stockholder approval at the Annual Meeting. The Board previously approved the First Amendment to the Incentive Equity Plan (the “First Plan Amendment”), which modified the Incentive Equity Plan’s provisions pertaining to the Committee’s (as defined below) authority to delegate all or a part of its authority to the CEO or other person or body, as it deems appropriate, with respect to making certain equity awards; provided that such delegation is in compliance with applicable law and stock exchange requirements.

As of March 21, 2025, there were 26,076,351 shares of Class A Common Stock reserved for issuance under our Incentive Equity Plan, of which 8,498,789 shares remained available for future awards and 10,602,238 shares were subject to outstanding awards. After giving effect to the Second Plan Amendment, there will be 13,177,292 shares available for future awards under the Incentive Equity Plan, representing approximately 12.9% of our Class A Common Stock (on a fully diluted basis) as of April 3, 2025. The closing price of our Class A Common Stock as of April 3, 2025 was $10.62 per share, as reported by Nasdaq.

Our Board encourages shareholders to approve the Second Plan Amendment because the Board believes that equity compensation plays an important role in our compensation program. As set forth in the “Executive Compensation” section above, the Company has designed its compensation programs to: (i) provide compensation opportunities that will allow the Company to attract and retain talented executive officers who are essential to the Company’s success; (ii) provide compensation that motivates the executive officers to achieve corporate strategic objectives; (iii) reward superior financial and operational performance in a given year, over a sustained period and expectations for the future; (iv) place compensation at risk if performance goals are not achieved; and (v) align the interests of executive officers with the long-term interests of stockholders through stock-based awards.

Our Board believes that the proposed Share Reserve and Evergreen will provide a sufficient number of available shares of Class A Common Stock for future granting needs to help our Company achieve the purposes of the Incentive Equity Plan. Our Board reviewed our historical and prospective usage of equity to determine the number of shares we will most likely require for future compensation purposes. This review took into account shares remaining in the Incentive Equity Plan, potential shares that may become issuable in the future based on performance, including year-to-date accruals under our current programs, and the effect of new hires. Our Board also considered our prospective equity usage relative to our peers. If our stockholders approve the Second Plan Amendment, the increase in share limits and the extension of the term of the Incentive Equity Plan will be effective as of May 28, 2025. If our stockholders do not approve the Second Plan Amendment, the Incentive Equity Plan will remain in effect with the current reserve share limitation and the term of the Incentive Equity Plan will remain unchanged. The Company has not approved any awards that are conditioned upon stockholder approval of the Second Plan Amendment.

If the proposed Second Plan Amendment is approved, we will have the flexibility to continue to provide long-term incentive awards as a key component of our overall compensation program, which will improve our means of attracting and retaining executives and aligning the interests of key personnel with the interests of our stockholders.

Summary of the Incentive Equity Plan

The following is a summary of the material features of the Incentive Equity Plan, as amended by the First Plan Amendment and the Second Plan Amendment. This summary is qualified in its entirety by the full text of the Incentive Equity Plan. The full text of the Incentive Equity Plan is attached to this Proxy Statement as Annex 2, the First Plan Amendment is attached to this Proxy Statement as Annex 3 and the Second Plan Amendment is attached to this Proxy Statement as Annex 4.

Type of Awards. The Incentive Equity Plan provides for incentive compensation in the form of stock options (including non-statutory stock options and incentive stock options), stock appreciation rights (“SARs”), restricted stock awards, and restricted stock units, all of which may be granted to employees, including officers, non-employee directors, consultants and advisors of the Company and its affiliates.

Administration. The Incentive Equity Plan will be administered by the Compensation Committee or another committee appointed by the Board to administer the Incentive Equity Plan (and to the extent the Board does not appoint a committee, the Board can serve as the committee); provided that any grants to members of the Board must be authorized by a majority of the Board (counting all the Board members for purposes of a quorum, but only non-interested Board members for purposes of such majority approval). The Compensation Committee may delegate authority under the Incentive Equity Plan to one or more subcommittees as it deems appropriate. Subject to compliance with applicable law and stock exchange requirements, including Section 157(c) of the Delaware General Corporation Law, the Compensation Committee may delegate all or part of its authority to the Chief Executive Officer or other person or body, as it deems appropriate, with respect to grants to employees or key advisors. To the extent that the Board, a subcommittee, the CEO or other person or body administers the Incentive Equity Plan, references to the “Compensation Committee” herein and in the Incentive Equity Plan will be deemed to refer to the Board, such subcommittee, the CEO or such person or body, as applicable.

The Compensation Committee will have full power and express discretionary authority to administer and interpret the Incentive Equity Plan, to make factual determinations, and to adopt or amend such rules, regulations, agreements, and instruments for implementing the Incentive Equity Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion.

Shares Subject to the Plan. Subject to adjustment, the Incentive Equity Plan authorizes the issuance or transfer of up to 30,754,854 shares of the Class A Common Stock, plus the number of shares of Class A Common Stock underlying grants issued under the CompoSecure, L.L.C. Amended and Restated Incentive Equity Plan or under the Incentive Equity Plan that expire, terminate or are otherwise forfeited without being exercised. The Incentive Equity Plan contains an evergreen provision, pursuant to which, commencing with the first business day of each calendar year beginning in 2026, the aggregate number of shares of Class A Common Stock that may be issued or transferred under the Incentive Equity Plan shall be increased by 6% of the number of shares of Class A Common Stock outstanding as of the last day of the immediately preceding calendar year, or such lesser number of shares of Class A Common Stock as to be determined by the Compensation Committee.

If any options or SARs expire or are canceled, forfeited, exchanged, or surrendered without having been exercised, or if any stock awards, stock units, or other stock-based awards are forfeited, terminated, or otherwise not paid in full, the shares of Class A Common Stock subject to such awards will again be available for purposes of the Incentive Equity Plan. If shares of Class A Common Stock are surrendered in payment of the exercise price of an option, the number of shares of Class A Common Stock available for issuance under the Incentive Equity Plan will be reduced only by the net number of shares actually issued by the Company upon such exercise and not by the gross number of shares as to which such option is exercised. Upon the exercise of any SAR under the Incentive Equity Plan, the number of shares of Class A Common Stock available for issuance will be reduced only by the net number of shares actually issued by the Company upon such exercise.

If shares of Class A Common Stock are withheld by the Company in satisfaction of the withholding taxes incurred in connection with the issuance, vesting or exercise of any grant or the issuance of Class A Common Stock under the Incentive Equity Plan, the number of shares of Class A Common Stock available for issuance will be reduced by the net number of shares issued, vested, or exercised under such grant, calculated in each instance after payment of such share withholding. If any awards are paid in cash, and not in shares of Class A

Common Stock, any shares of Class A Common Stock subject to such awards will also be available for future awards. If the Company repurchases shares of Class A Common Stock on the open market with the proceeds from the exercise price the Company receives from options, the repurchased shares will not be available for issuance under the Incentive Equity Plan.

Individual Limits for Non-Employee Directors. The maximum aggregate grant date value of shares of Class A Common Stock granted to any non-employee director in any one calendar year, taken together with any cash fees earned by such non-employee director for services rendered during the calendar year, shall not exceed $350,000 in total value; provided, however, that with respect to the year during which a non-employee director is first appointed or elected to the Board, the maximum aggregate grant date value of shares of Class A Common Stock granted to such non-employee director, taken together with any cash fees earned by such non-employee director for services rendered during such period, shall not exceed $750,000 in total value during the initial annual period.

Adjustments. In connection with stock splits, stock dividends, recapitalizations, and certain other events affecting Class A Common Stock, the Compensation Committee will make adjustments as it deems appropriate in: the maximum number of shares of Class A Common Stock reserved for issuance as grants; the maximum amount of awards that may be granted to any individual non-employee director in any year; the number and kind of shares covered by outstanding grants; the number and kind of shares that may be issued under the Incentive Equity Plan; the price per share or market value of any outstanding grants; the exercise price of options; the base amount of SARs; and the performance goals or other terms and conditions as the Compensation Committee deems appropriate.

Eligibility and Vesting. All employees and non-employee directors of the Company will be eligible to receive grants under the Incentive Equity Plan. In addition, consultants and advisors who perform services for the Company may receive grants under the Incentive Equity Plan. The Compensation Committee will (i) select the employees, non-employee directors, consultants and advisors to receive grants, and (ii) determine the number of shares of Class A Common Stock subject to a particular grant and the vesting and exercisability terms of awards granted under the Incentive Equity Plan. As of March 21, 2025, approximately 1,000 employees, 6 non-employee directors and approximately 7 consultants and advisors were eligible to participate in the Incentive Equity Plan.

Options. Under the Incentive Equity Plan, the Compensation Committee will determine the exercise price of the options granted and may grant options to purchase shares of Class A Common Stock in such amounts, as it determines. The Compensation Committee may grant options that are intended to qualify as incentive stock options under Section 422 of the Code, or non-qualified stock options, which are not intended to so qualify. Incentive stock options may only be granted to employees. Anyone eligible to participate in the Incentive Equity Plan may receive a grant of non-qualified stock options. The exercise price of a stock option granted under the Incentive Equity Plan cannot be less than the fair market value of a share of Class A Common Stock on the date the option is granted. If an incentive stock option is granted to a 10% stockholder of the total combined voting power of all classes of stock, the exercise price cannot be less than 110% of the fair market value of a share of Class A Common Stock on the date the option is granted. The aggregate number of shares of Class A Common Stock that may be issued or transferred under the Incentive Equity Plan pursuant to incentive stock options under Section 422 of the Code may not exceed 26,076,351 shares of Class A Common Stock.

The exercise price for any option is generally payable in cash. In certain circumstances as permitted by the Compensation Committee, the exercise price may be paid: by the surrender of shares of Class A Common Stock with an aggregate fair market value; on the date the option is exercised equal to the exercise price by payment through a broker in accordance with procedures established by the Federal Reserve Board; by withholding shares of Class A Common Stock subject to the exercisable option that have a fair market value on the date of exercise equal to the aggregate exercise price; or by such other method as the Compensation Committee approves.

The term of an option cannot exceed ten years from the date of grant, except that if an incentive stock option is granted to a 10% stockholder of the total combined voting power of all classes of the Company’s stock, the term cannot exceed five years from the date of grant. In the event that on the last day of the term of a non-qualified stock option, the exercise is prohibited by applicable law, including a prohibition on purchases or sales of Class A Common Stock under the applicable insider trading policy, the term of the nonqualified option will be extended for a period of 30 days following the end of the legal prohibition, unless the Compensation Committee determines otherwise.

Except as provided in the grant instrument, an option may only be exercised while a participant is employed by or providing service to us. The Compensation Committee will determine in the grant instrument under what circumstances and during what time periods a participant may exercise an option after termination of employment.

Stock Awards. Under the Incentive Equity Plan, the Compensation Committee may grant stock awards. A stock award is an award of Class A Common Stock that may be subject to restrictions as the Compensation Committee determines. The restrictions, if any, may lapse over a specified period of employment or based on the satisfaction of preestablished criteria, in installments or otherwise, as the Compensation Committee may determine, including, but not limited to, restrictions based on the achievement of performance goals. Except to the extent restricted under the grant instrument relating to the stock award, a participant will have all the rights of a stockholder as to those shares, including the right to vote and the right to receive dividends or distributions on the shares. Dividends with respect to stock awards that vest based on performance shall vest if and to the extent that the underlying stock award vests, as determined by the Compensation Committee. All unvested stock awards are forfeited if the participant’s employment or service is terminated for any reason, unless the Compensation Committee determines otherwise.

Stock Units. Under the Incentive Equity Plan, the Compensation Committee may grant stock units to anyone eligible to participate in the Incentive Equity Plan. Stock units represent hypothetical shares of Class A Common Stock. Stock units become payable on terms and conditions determined by the Compensation Committee, including specified performance goals, and will be payable in cash, shares of Class A Common Stock, or a combination thereof, as determined by the Compensation Committee. All unvested stock units are forfeited if the participant’s employment or service is terminated for any reason, unless the Compensation Committee determines otherwise.

Stock Appreciation Rights. Under the Incentive Equity Plan, the Compensation Committee may grant SARs, which may be granted separately or in tandem with any option. SARs granted in tandem with a non-qualified stock option may be granted either at the time the non-qualified stock option is granted or any time thereafter while the option remains outstanding. SARs granted in tandem with an incentive stock option may be granted only at the time the grant of the incentive stock option is made. The Compensation Committee will establish the base amount of the SAR at the time the SAR is granted, which will be equal to or greater than the fair market value of a share of Class A Common Stock as of the date of grant.

If an SAR is granted in tandem with an option, the number of SARs that are exercisable during a specified period will not exceed the number of shares of Class A Common Stock that the participant may purchase upon exercising the related option during such period. Upon exercising the related option, the related SARs will terminate, and upon the exercise of an SAR, the related option will terminate to the extent of an equal number of shares of Class A Common Stock. Generally, SARs may only be exercised while the participant is employed by, or providing services to, us. When a participant exercises a SAR, the participant will receive the excess of the fair market value of the underlying Class A Common Stock over the base amount of the SAR. The appreciation of an SAR will be paid in shares of Class A Common Stock, cash, or both.

The term of a SAR cannot exceed ten years from the date of grant. In the event that on the last day of the term of an SAR, the exercise is prohibited by applicable law, including a prohibition on purchases or sales of Class A Common Stock under the applicable insider trading policy, the term of the SAR will be extended for a period of 30 days following the end of the legal prohibition, unless the Compensation Committee determines otherwise.

Other Stock-Based Awards. Under the Incentive Equity Plan, the Compensation Committee may grant other types of awards that are based on, or measured by, Class A Common Stock, and granted to anyone eligible to participate in the Incentive Equity Plan. The Compensation Committee will determine the terms and conditions of such awards. Other stock-based awards may be payable in cash, shares of Class A Common Stock or a combination of the two, as determined by the Compensation Committee.

Dividend Equivalents. Under the Incentive Equity Plan, the Compensation Committee may grant dividend equivalents in connection with grants of stock units or other stock-based awards made under the Incentive Equity Plan. Dividend equivalents entitle the participant to receive amounts equal to ordinary dividends that are paid on the shares underlying a grant while the grant is outstanding. The Compensation Committee will determine whether dividend equivalents will be paid currently or accrued as contingent cash obligations. Dividend equivalents may be paid in cash or shares of Class A Common Stock. The Compensation Committee will determine the terms and conditions of the dividend equivalent grants, including whether the grants are payable upon the achievement of specific performance goals. Dividend equivalents with respect to stock units or other stock-based awards that vest based on performance shall vest and be paid only if and to the extent that the underlying stock units or other stock-based awards vest and are paid as determined by the Compensation Committee.

Change of Control. If certain corporate transactions occur (as more specifically described in the Incentive Equity Plan) that constitute a change-in-control under the Incentive Equity Plan, unless the Compensation Committee determines otherwise, all outstanding grants that are not exercised or paid at the time of the change of control will be assumed by, or replaced with grants (with respect to cash, securities or a combination thereof) that have comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation).

If there is a change of control and all outstanding grants are not assumed by, or replaced with grants that have comparable terms by, the surviving corporation, the Compensation Committee may (but is not obligated to) make adjustments to the terms and conditions of outstanding grants, including, without limitation, taking any of the following actions (or combination thereof) without the consent of any participant:

In general terms, a change of control under the Incentive Equity Plan occurs if:

Deferrals. The Compensation Committee may permit or require participants to defer receipt of the payment of cash or the delivery of shares of Class A Common Stock that would otherwise be due to the participant in connection with a grant under the Incentive Equity Plan. The Compensation Committee will establish the rules and procedures applicable to any such deferrals, consistent with the requirements of Section 409A of the Code.

Withholding. All grants under the Incentive Equity Plan are subject to applicable U.S. federal (including FICA), state, and local, foreign or other tax withholding requirements. The Compensation Committee may require participants or other persons receiving or exercising grants to pay an amount sufficient to satisfy such tax withholding requirements with respect to such grants, or the Compensation Committee may cause the Company to deduct from other wages and compensation paid to such participants the amount of any withholding taxes due with respect to such grant.

The Compensation Committee may permit or require that tax withholding obligations with respect to grants paid in Class A Common Stock be paid by having shares withheld up to an amount that does not exceed the participant’s applicable withholding tax rate for U.S. federal (including FICA), state, and local tax liabilities, or as otherwise determined by the Compensation Committee. In addition, the Compensation Committee may, in its discretion, and subject to such rules as the Compensation Committee may adopt, allow participants to elect to have such share withholding applied to all or a portion of the tax withholding obligation arising in connection with any particular grant.

Transferability. Except as permitted by the Compensation Committee with respect to non-qualified stock options, only a participant may exercise rights under a grant during the participant’s lifetime. Upon death, the personal representative or other person entitled to succeed to the rights of the participant may exercise such rights. A participant cannot transfer those rights except by will or by the laws of descent and distribution or, with respect to grants other than incentive stock options, pursuant to a domestic relations order. The Compensation Committee may provide in a grant instrument that a participant may transfer non-qualified stock options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with applicable securities laws.

Amendment; Termination. The Board may amend or terminate the Incentive Equity Plan at any time, except that stockholders must approve an amendment if such approval is required in order to comply with the Code, other applicable laws or applicable stock exchange requirements. Unless terminated sooner by the Board or extended with stockholder approval, the Incentive Equity Plan will terminate on the day immediately preceding the tenth anniversary of the effective date of the Second Plan Amendment (i.e., May 27, 2035).

Stockholder Approval. Except in connection with certain corporate transactions, including stock dividends, stock splits, a recapitalization, a change of control, a reorganization, a merger, and a spin-off, stockholder approval is required (i) to reduce the exercise price or base price of outstanding stock options or SARs, (ii) to cancel outstanding stock options or SARs in exchange for the same type of grant with a lower exercise price or base price and (iii) to cancel outstanding stock options or SARs that have an exercise price or base price above the current price of a share of Class A Common Stock, in exchange for cash or other securities, each as applicable.

Establishment of Sub-Plans. The Board may, from time to time, establish one or more sub-plans under the Incentive Equity Plan to satisfy applicable blue sky, securities or tax laws of various jurisdictions. The Board may establish such sub-plans by adopting supplements to the Incentive Equity Plan setting forth limitations on the Compensation Committee’s discretion and such additional terms and conditions not otherwise inconsistent with the Incentive Equity Plan as the Board deems necessary or desirable. All such supplements will be deemed part of the Incentive Equity Plan, but each supplement will only apply to participants within the affected jurisdiction, and will not be required to provide copies of any supplement to unaffected participants.

Clawback. Subject to applicable law, the Compensation Committee may provide in any grant instrument that if a participant breaches any restrictive covenant agreement between the participant and us, or otherwise engages in activities that constitute cause (as defined in the Incentive Equity Plan) either while employed by, or providing services to, the Company or within a specified period of time thereafter, all grants held by the participant will terminate, and the Compensation Committee may rescind any exercise of an option or SAR and the vesting of any other grant and delivery of shares upon such exercise or vesting, as applicable on such terms as the Compensation Committee will determine, including the right to require that in the event of any rescission:

participant transferred the shares by gift or without consideration, then the fair market value of the shares on the date of the breach of the restrictive covenant agreement or activity constituting cause), net of the price originally paid by the participant for the shares.

The Compensation Committee may also provide for clawbacks pursuant to the Company’s Compensation Recoupment Policy. Payment by the participant will be made in such manner and on such terms and conditions as may be required by the Compensation Committee. The Company will be entitled to set off against the amount of any such payment any amounts that the Company otherwise owes to the participant.

Performance Measures

Under the Incentive Equity Plan, the grant, vesting, exercisability or payment of certain awards, or the receipt of shares of Class A Common Stock subject to certain awards, may be made subject to the satisfaction of performance measures. The performance goals applicable to a particular award will be determined by the Compensation Committee at the time of grant. One or more of the following business criteria for the Company may be used by the Compensation Committee in establishing performance measures under the Incentive Equity Plan: cash flow; free cash flow; earnings (including gross margin, earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation, amortization and charges for stock-based compensation, earnings before interest, taxes, depreciation and amortization, adjusted earnings before interest, taxes, depreciation and amortization and net earnings); earnings per share; growth in earnings or earnings per share; book value growth; stock price; return on equity or average stockholder equity; total stockholder return or growth in total stockholder return either directly or in relation to a comparative group; return on capital; return on assets or net assets; revenue, growth in revenue or return on sales; sales; expense reduction or expense control; expense to revenue ratio; income, net income or adjusted net income; operating income, net operating income, adjusted operating income or net operating income after tax; operating profit or net operating profit; operating margin; gross profit margin; return on operating revenue or return on operating profit; regulatory filings; regulatory approvals, litigation and regulatory resolution goals; other operational, regulatory or departmental objectives; budget comparisons; growth in stockholder value relative to established indexes, or another peer group or peer group index; development and implementation of strategic plans and/or organizational restructuring goals; development and implementation of risk and crisis management programs; improvement in workforce diversity; compliance requirements and compliance relief; safety goals; productivity goals; workforce management and succession planning goals; economic value added (including typical adjustments consistently applied from generally accepted accounting principles required to determine economic value added performance measures); measures of customer satisfaction, employee satisfaction or staff development; development or marketing collaborations, formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance the Company’s revenue or profitability or enhance its customer base; merger and acquisitions; and other similar criteria as determined by the Compensation Committee. Performance goals may be established on an absolute or relative basis and may be established on a corporate-wide basis or with respect to one or more business units, divisions, subsidiaries or business segments. Relative performance may be measured against a group of peer companies, a financial market index or other objective and quantifiable indices.

Form S-8

Following the approval of the Second Plan Amendment, we intend to file with the SEC a registration statement on Form S-8 covering the additional shares of Class A Common Stock issuable under the Incentive Equity Plan.

U.S. Federal Income Tax Consequences

The following is a summary of certain U.S. federal income tax consequences of awards under the Incentive Equity Plan. It does not purport to be a complete description of all applicable rules, and those rules (including those summarized here) are subject to change.

Options. An optionee generally will not recognize taxable income upon the grant of a non-statutory option. Rather, at the time of exercise of the option, the optionee will recognize ordinary income for income tax purposes in an amount equal to the excess, if any, of the fair market value of the shares purchased over the exercise price. The Company generally will be entitled to a tax deduction at such time and in the same amount, if any, that the optionee recognizes as ordinary income. The optionee’s tax basis in any shares received upon exercise of an option will be the fair market value of the shares on the date of exercise, and if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the optionee) depending upon the length of time such shares were held by the optionee.

Incentive stock options are eligible for favorable U.S. federal income tax treatment if certain requirements are satisfied. An incentive stock option must have an option price that is not less than the fair market value of the stock at the time the option is granted, and it must be exercisable within ten years from the date of grant. An employee granted an incentive stock option generally does not realize compensation income for U.S. federal income tax purposes upon the grant of the option. At the time of exercise of an incentive stock option, no compensation income is realized by the optionee other than tax preference income for purposes of the federal alternative minimum tax on individual income. If the shares acquired on exercise of an incentive stock option are held for at least two years after grant of the option and one year after exercise, the excess of the amount realized on the sale over the exercise price will be taxed as capital gain. If the shares acquired on exercise of an incentive stock option are disposed of within less than two years after grant or one year of exercise, the optionee will realize taxable compensation income equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the option price or (ii) the excess of the amount realized on the sale over the option price. Any additional amount realized will be taxed as long-term or short-term capital gain (if the shares are a capital asset of the optionee) depending upon the length of time such shares were held by the optionee.

Stock Awards. A participant generally will not be taxed upon the grant of stock awards subject to restrictions, but rather will recognize ordinary income in an amount equal to the fair market value of the shares at the time the shares are no longer subject to a “substantial risk of forfeiture” (within the meaning of the Code). A participant’s tax basis in the shares will equal their fair market value at the time the restrictions lapse, and the participant’s holding period for capital gains purposes will begin at that time. Any cash dividends paid on the restricted stock before the restrictions lapse will be taxable to the participant as additional compensation (and not as dividend income). Under Section 83(b) of the Code, a participant may elect to recognize ordinary income at the time the shares of stock are awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such shares of stock are subject to restrictions and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the shares equal to their fair market value on the date of their award, and the participant’s holding period for capital gains purposes will begin at that time. The Company generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant.

Stock Units. In general, the grant of stock units will not result in income for the participant or in a tax deduction for us. Upon the settlement of such an award in cash or shares, the participant will recognize ordinary income equal to the aggregate value of the payment received, and we generally will be entitled to a tax deduction at the same time and in the same amount.

Stock Appreciation Rights. A participant who is granted an SAR generally will not recognize ordinary income upon receipt of the SAR. Rather, at the time of exercise of such SAR, the participant will recognize ordinary income for U.S. federal income tax purposes in an amount equal to the value of any cash received and the fair market value on the date of exercise of any shares received. The Company generally will be entitled to a tax deduction at such time and in the same amount, if any, that the participant recognizes as ordinary income. The participant’s tax basis in any shares received upon exercise of an SAR will be the fair market value of the shares on the date of exercise, and if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant.

Other Awards. With respect to other stock-based awards granted under the Incentive Equity Plan, generally when the participant receives payment with respect to an award, the amount of cash and/or the fair market value of any shares or other property received will be ordinary income to the participant, and the Company generally will be entitled to a tax deduction at the same time and in the same amount.

Parachute Payments. The vesting of any portion of an award that is accelerated due to the occurrence of a change of control may cause all or a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be nondeductible by the Company, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).

Section 162(m). In general, Section 162(m) of the Code denies a publicly held corporation a deduction for U.S. federal income tax purposes for compensation in excess of $1,000,000 per year per person to certain covered employees designated in Section 162(m) of the Code, including, but not limited to, its chief executive officer, chief financial officer, and the next three highly compensated executives of such corporation whose compensation is required to be disclosed in its proxy statement. Beginning in 2027, the number of individuals subject to the limitations imposed by Section 162(m) based on their annual compensation will expand to include an additional five most highly compensated employees, who may not be executive officers.

New Plan Benefits

The types and amounts of benefits that will be awarded under the Incentive Equity Plan, as amended by the Second Plan Amendment are not currently determinable. Awards granted under the Incentive Equity Plan, as amended by the Second Plan Amendment, are within the discretion of the Compensation Committee, and the Compensation Committee has not determined future awards or who might receive them. For information regarding our recent practices with respect to equity-based compensation under the Incentive Equity Plan, please see the “Executive Compensation—Summary Compensation Table” section, which includes certain information regarding awards granted to our named executive officers during fiscal year 2024, as well as the equity grants to our non-employee directors described under the “Non-Employee Director Compensation—Equity Compensation of Non-Employee Directors” section.

Plan Benefits

The following table sets forth the number of shares of our Class A Common Stock subject to stock options or other rights granted under the Incentive Equity Plan that have been received by or allocated as of March 21, 2025, to the following persons or groups (as adjusted for the February 28, 2025 spin-off):

Equity Compensation Plan Information

The following table summarizes the securities authorized for issuance pursuant to our equity compensation plans as of December 31, 2024.

OUR BOARD UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” THE

APPROVAL OF THE SECOND AMENDMENT TO THE COMPOSECURE, INC. 2021 INCENTIVE

EQUITY PLAN PROPOSAL.