ACACIA RESEARCH CORP
10-Ks and 10-Qs
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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 (Amendment No. )
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Filed by the Registrant
x
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Filed by a Party other than the Registrant
o
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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ACACIA RESEARCH CORPORATION
(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 all boxes that apply):
| x | No fee required. | ||||
| o | Fee paid previously with preliminary materials: | ||||
| o | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | ||||
April 19, 2024
Dear Stockholders,
We are very pleased to invite you to the virtual 2024 Annual Meeting of Stockholders of Acacia Research Corporation, which will be held on Tuesday, May 21, 2024, at 11:30 a.m., Eastern Time.
The Annual Meeting will be held virtually via webcast at
www.virtualshareholdermeeting.com/ACTG2024
.
Your vote is very important. Whether or not you plan to attend the virtual Annual Meeting, it is important that your shares be represented and voted at the virtual Annual Meeting. Therefore, we urge you to read the enclosed proxy materials and then promptly vote via the internet or telephone or by completing, signing, and returning by mail the enclosed proxy card, even if you plan to attend the virtual Annual Meeting.
As a representative of your Board of Directors, it is my pleasure to work closely with the other members of the Board who are similarly committed to our stockholders and providing effective oversight and guidance to management. We deeply value your support.
| Very truly yours, | ||||||||
| /s/ Gavin Molinelli | ||||||||
| Gavin Molinelli | ||||||||
| Chairman of the Board of Directors | ||||||||
The proxy materials related to the Annual Meeting are first being mailed on or about April 19, 2024.
If you have any questions or require any assistance with respect to voting your shares, please contact our proxy solicitor at the contact listed below:
Saratoga Proxy Consulting LLC
520 8th Avenue, 14th Floor
New York, NY 10018
(212) 257-1311
Stockholders Call Toll Free at: (888) 368-0379
Banks & Brokers may call: (212) 257-1311
Email:
info@saratogaproxy.com
ACACIA RESEARCH CORPORATION
767 THIRD AVENUE, 6th FLOOR
NEW YORK, NY 10017
NOTICE OF VIRTUAL ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 2024
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the virtual 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Acacia Research Corporation (the “Company”) will be held on Tuesday, May 21, 2024, at 11:30 a.m., Eastern Time, via a live webcast, which can be accessed by visiting
www.virtualshareholdermeeting.com/ACTG2024
.
To access the virtual Annual Meeting, you will need a 16-digit control number. The control number is provided on your proxy card or through your broker or other nominee if you hold your shares in “street name.”
Stockholders will be able to attend, vote and submit questions virtually during the Annual Meeting.
We are holding the Annual Meeting to consider and vote on the following proposals, as more fully described in the Proxy Statement accompanying this Notice of Annual Meeting:
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To elect seven directors to serve on our Board of Directors until the 2025 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified;
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To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;
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To approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in the Proxy Statement;
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To approve the 2024 Acacia Research Corporation Stock Incentive Plan, which authorizes the issuance of a variety of equity awards, including stock options, restricted stock units, performance stock units and stock awards; and
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| 5 | To transact such other business as may properly come before the Annual Meeting or at any postponement or adjournment thereof. | |||||||
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 21, 2024: The Proxy Statement, proxy card and Annual Report on Form 10-K for the fiscal year ended December 31, 2023 are available at https://www.acaciaresearch.com/proxy-materials.
Our Board of Directors has established the close of business on April 1, 2024, as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the virtual Annual Meeting and at any postponement or adjournment thereof. Only stockholders of record at the close of business on the Record Date are entitled to receive notice of and to vote at the virtual Annual Meeting and any adjournment or postponement thereof.
Your vote is very important. Whether or not you plan to attend the virtual Annual Meeting, it is important that your shares be represented and voted at the virtual Annual Meeting. Therefore, we urge you to read the enclosed proxy materials and then promptly vote via the internet or telephone or, by completing, signing and returning by mail the enclosed proxy card , even if you plan to attend the virtual Annual Meeting. Voting via the internet or telephone or returning your completed proxy will ensure your representation at the virtual Annual Meeting. If you decide to attend the virtual Annual Meeting and wish to change your proxy vote, you may do so automatically by voting at the virtual Annual Meeting if your shares are held directly in your name as the stockholder of record.
| Sincerely, | ||||||||
| /s/ Jennifer Graff | ||||||||
| Jennifer Graff | ||||||||
| Secretary | ||||||||
New York, New York
April 19, 2024
If you have any questions or require any assistance with respect to voting your shares, please contact our proxy solicitor at the contact listed below:
Saratoga Proxy Consulting LLC
520 8th Avenue, 14th Floor
New York, NY 10018
(212) 257-1311
Stockholders Call Toll Free at: (888) 368-0379
Banks & Brokers may call: (212) 257-1311
Email:
info@saratogaproxy.com
ACACIA RESEARCH CORPORATION
767 Third Avenue, 6th Floor, New York, NY 10017
_______________________________
PROXY STATEMENT
FOR THE VIRTUAL ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 2024
_______________________________
General
The enclosed proxy is solicited on behalf of the Board of Directors (the “Board”) of Acacia Research Corporation (referred to herein as “we,” “us,” “our,” “Acacia” and the “Company”) for use at our 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Tuesday, May 21, 2024, at 11:30 a.m., Eastern Time, and at any adjournment or postponement thereof. The Annual Meeting will be held via a live webcast, which can be accessed visiting
www.virtualshareholdermeeting.com/ACTG2024
, where you will be able to attend the Annual Meeting, submit questions and vote your shares electronically.
Please refer to the section of this Proxy Statement entitled “
Questions and Answers Regarding the Annual Meeting
” for additional information regarding how to attend the virtual Annual Meeting and vote your shares.
Only stockholders of record at the close of business on April 1, 2024 (the “Record Date”) are entitled to receive notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. These proxy solicitation materials and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report on Form 10-K"), including audited financial statements, were mailed on or about April 19, 2024, to all stockholders entitled to receive notice of and vote at the Annual Meeting. In addition, these proxy solicitation materials and our Annual Report on Form 10-K, are available at https://www.acaciaresearch.com/proxy-materials.
Meet Our Board
Qualifications of Our Board
Our Board nominees are comprised of actively engaged individuals with diverse skills, experiences and backgrounds that we believe will contribute to the effective oversight of our Company. The Board believes these varied qualifications help to inform and better oversee decisions regarding the Company’s long-term strategic growth.
The presentation below is a high-level summary of our Board’s skills. For further information about each director nominee, please see the section of this Proxy Statement entitled “
Proposal No. 1―Nominees for Director―Information Regarding the Director Nominees
” below.
1
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Acquisition and Structured Transaction Expertise
Breadth and depth of experience in the Company's business
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Diverse Characteristics
Gender Diversity
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Executive Experience
Executive experience, including serving as senior executive within a complex organization
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Financial Reporting
Experience overseeing the presentation of financial results as well as internal controls
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Marketing & Media
Experience overseeing internal and external communications and engagement with stakeholders
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Public Company Experience
Experience as a board member of other publicly traded companies
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Risk Management
Experience overseeing complex risk management matters, including Cybersecurity
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Strategic Planning
Experience driving the strategic direction and growth of an organization
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| Audit Committee | Compensation Committee |
Nominating
Governance & Sustainability Committee |
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Gavin Molinelli
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Isaac T. Kohlberg
(Independent) |
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Maureen O’Connell
(Independent)
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Geoff Ribar
(Independent)
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Ajay Sundar
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Katharine Wolanyk
(Independent)
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| Audit Committee | Compensation Committee |
Nominating
Governance & Sustainability Committee |
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| Gavin Molinelli | ||||||||||||||||||||||||||||||||||||||||||||
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Michelle Felman
(Independent) |
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Isaac T. Kohlberg
(Independent) |
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| Martin D. McNulty, Jr. | ||||||||||||||||||||||||||||||||||||||||||||
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Maureen O’Connell
(Independent)
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Geoff Ribar
(Independent)
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Ajay Sundar
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A:
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Stockholders will consider and vote by internet, mail, telephone, or virtually at the Annual Meeting, upon the following matters:
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•
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Proposal No. 1:
To elect seven directors to serve on our Board until the 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”) or until their respective successors are duly elected and qualified (which we also refer to as the “Director Election Proposal”);
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Proposal No. 2:
To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (which we also refer to as the “Auditors Ratification Proposal”);
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•
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Proposal No. 3:
To approve, on a non-binding, advisory basis, the compensation of our named executive officers, as disclosed in this Proxy Statement (which we also refer to as the “Say-on-Pay Proposal”); and
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Proposal No. 4:
To approve the 2024 Acacia Research Corporation Stock Incentive Plan, which authorizes the issuance of a variety of equity awards, including stock options, restricted stock units, performance stock units and stock awards (which we also refer to as the “Incentive Plan Proposal”).
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Stockholders may also be asked to consider and vote upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Q.
How does the Board of Directors recommend that I vote on the proposals?
A:
The Board recommends that our stockholders vote “FOR” each of the directors nominees in Proposal No.1 and “FOR” each of Proposals No.2, No. 3, and No.4 by voting via the internet or by telephone or using the enclosed proxy card.
Q:
What is the difference between holding shares as a Stockholder of Record and as a Beneficial Owner, and how does this affect my options for voting my shares at the Annual Meeting?
A:
Most of our stockholders hold their shares beneficially in “street name” through a broker, bank, or other nominee (“Beneficial Owner”) rather than directly in their own name (“Stockholder of Record”). There are some distinctions between shares held of record and shares owned beneficially, specifically:
Stockholder of Record
: If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A, you are considered the Stockholder of Record with respect to those shares, and these proxy materials are being sent directly to you.
As a Stockholder of Record, you have the right to vote by proxy or to vote electronically via live webcast at the Annual Meeting. You may vote in advance via the internet or telephone or, by completing, signing and returning by mail the enclosed proxy card, as described in further detail below. Even if you plan to attend the virtual Annual Meeting, we recommend that you vote via the internet or by telephone in advance as described below so that your vote will be counted if you later decide not to attend the virtual Annual Meeting.
Beneficial Owner
: If your shares are held in a stock brokerage account or by a broker, bank, or other nominee, you are considered the Beneficial Owner of shares held in street name, and these proxy materials are being forwarded to you by your broker, bank, or other nominee, which is considered the Stockholder of Record with respect to those shares.
As a Beneficial Owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares in your account, and you are also invited to attend the virtual Annual Meeting. However, because you are not the Stockholder of Record, you may not vote these shares at the virtual Annual Meeting unless you request and obtain a valid
4
“legal proxy” or obtain a 16-digit control number from your broker, bank, or other nominee. Please refer to the voting instructions provided to you by your broker, bank, or other nominee for instructions on the voting methods they offer.
Q.
How can I vote my shares at the Annual Meeting?
A:
Shares held directly in your name as the Stockholder of Record may be voted by internet, mail, telephone, or at the Annual Meeting virtually by live webcast. To vote at the Annual Meeting virtually by live webcast you must visit the following website:
www.virtualshareholdermeeting.com/ACTG2024
. You will need the 16-digit control number included on your proxy card. However, even if you plan to attend the Annual Meeting virtually, we recommend that you vote via the internet or by telephone in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting.
If you are the Beneficial Owner of your shares, you may vote your shares at the virtual Annual Meeting only if you request and obtain a valid “legal proxy” or obtain a 16-digit control number from your broker, bank, or other nominee.
Q.
How can I vote my shares without attending the Annual Meeting?
A:
Whether or not you plan to attend the virtual Annual Meeting, it is important that your shares be represented and voted at the virtual Annual Meeting. Whether you are a Stockholder of Record or a Beneficial Owner, you may vote by proxy or submit a voting instruction form without attending the Annual Meeting.
Stockholder of Record
: If you are a Stockholder of Record, you may vote by proxy using the options below.
To vote by internet
, you will need the 16-digit control number included on the enclosed proxy card. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 20, 2024 by visiting www.proxyvote.com and following the instructions.
To vote by telephone
, you will need the 16-digit control number included on the enclosed proxy card. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 20, 2024 by calling 1 (800) 690-6903 and following the instructions.
To vote by mail
, complete, sign, date and promptly return the enclosed proxy card in the enclosed postage-paid envelope. In order to be effective, completed proxy cards must be received by 11:59 p.m. Eastern Time on May 20, 2024.
Beneficial Owner.
If you are a Beneficial Owner, please refer to the voting instructions provided to you by your broker, bank or other nominee for details on how to submit a voting instruction form.
Q.
How can I submit a question at the Annual Meeting?
A:
This year’s question and answer session for stockholders will include questions submitted live during the virtual Annual Meeting.
As part of the Annual Meeting, we will hold a live question and answer session during which we intend to answer questions submitted during the meeting in accordance with the Annual Meeting procedures which are pertinent to the Company and the meeting matters, as time permits. Questions may be submitted during the Annual Meeting through
www.virtualshareholdermeeting.com/ACTG2024
. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once.
Q.
What if I need technical assistance?
A.
We encourage you to access the Annual Meeting before it begins. Online check-in will start shortly before the meeting on May 21, 2024. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.
Q.
Can I change my vote or revoke my proxy?
A:
Stockholder of Record:
If you are the Stockholder of Record, you may change or revoke your proxy in any one of four ways:
•
You may vote again by internet or by telephone at a later time (prior to the deadline for internet or telephone voting);
5
•
You may submit a properly completed proxy card with a later date (prior to the deadline to vote by mail);
•
You may send a written notice that you are revoking your proxy to Acacia Research Corporation, 767 Third Avenue, 6th Floor, New York, New York 10017, Attention: Secretary; or
•
You may attend the virtual Annual Meeting and vote electronically via live webcast. However, attending the virtual Annual Meeting will not, by itself, revoke your proxy or change your vote.
Beneficial Owner
: If you are a Beneficial Owner, you may revoke your proxy by following the voting instructions provided to you by your broker, bank or other nominee or you may attend the virtual Annual Meeting and vote electronically via live webcast by obtaining a 16-digit control number from your broker, bank, or other nominee.
If you have any questions or need assistance voting your shares, please call Saratoga Proxy Consulting LLC at (212) 257-1311 or toll free at (888) 368-0379.
Q.
Who will count the votes?
A:
A representative of Broadridge Financial Solutions, Inc. will count the votes and act as the inspector of election.
Q.
What does it mean if I get more than one proxy card or voting instruction form?
A:
Stockholder of Record
: If you are a Stockholder of Record with shares registered under different names, you will receive more than one set of proxy materials and more than one proxy card. Please complete, sign, date and promptly return each proxy card in the enclosed postage-paid envelope provided or vote by internet or by telephone using the 16-digit control number on each enclosed proxy card to ensure that all of your shares are voted. If you would like all of your shares to be registered in the same name and under the same address, please contact our transfer agent, Computershare Trust Company, N.A. at (800) 962-4284.
Beneficial Owner
: If you are a Beneficial Owner with shares held in more than one account, you will receive more than one voting instruction form from your broker, bank or other nominee. Please refer to the voting instructions provided to you by your broker, bank or other nominee for details on how to submit a voting instruction form for each account in which your shares are held. If you would like all of your shares to be held in the same account and under the same address, please contact your broker, bank or other nominee.
Q.
Who is entitled to vote at the Annual Meeting?
A:
Only Stockholders of Record on the Record Date are entitled to receive notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. If you are the Beneficial Owner of your shares, you may vote your shares at the virtual Annual Meeting only if you request and obtain a valid “legal proxy” or obtain a 16-digit control number from your broker, bank, or other nominee.
Q.
How many shares am I entitled to vote?
A:
As a Stockholder of Record, you may vote all of the shares owned by you as of the Record Date. If you are a Beneficial Owner of your shares, you have the right to direct your broker, bank, or other nominee on how to vote the shares in your account as of the Record Date.
Q.
How many votes may be cast?
A:
Each outstanding share of our common stock as of the Record Date will be entitled to one vote on all matters brought before the Annual Meeting. As of the Record Date, 100,021,951 shares of our common stock were issued and outstanding and eligible to vote at the Annual Meeting.
Q.
What constitutes a “quorum” at the Annual Meeting?
A.
The presence at the Annual Meeting, in person (even if not voting) or by proxy, of the holders of a majority in voting power of the outstanding shares of our capital stock entitled to vote at the meeting as of the Record Date will constitute a “quorum.” Virtual attendance at the Annual Meeting constitutes presence in person for purposes of a quorum. Abstentions and broker non-votes are each included for the purpose of determining whether a quorum is present.
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Q.
What vote is required to elect the directors and approve each of the other proposals?
A.
The election of each director in connection with the Director Election Proposal, in an uncontested election of directors, requires that a nominee for director must be elected by the affirmative vote of the majority of the votes cast with respect to such director by the shares of our capital stock present in person or represented by proxy and entitled to vote on this proposal at the Annual Meeting. A “majority of votes cast” means that the number of shares cast “FOR” a director nominee exceeds the number of votes cast “AGAINST” that director nominee. Virtual attendance at the Annual Meeting constitutes presence in person.
The approval of each of the Auditors Ratification Proposal. Say-on-Pay Proposal and Incentive Plan Proposal require the affirmative vote of the holders of a majority of the voting power of the shares of our capital stock present in person or by proxy at the Annual Meeting and entitled to vote on these proposals at the Annual Meeting. Virtual attendance at the Annual Meeting constitutes presence in person.
Q:
What is the effect of an abstention on a particular proposal?
A:
Shares held by persons attending the virtual Annual Meeting but not voting, and shares represented by proxies that reflect abstentions as to a particular proposal, will be counted as present at the virtual Annual Meeting for purposes of determining the presence of a quorum but will “abstain” from voting on such proposal.
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For the Director Election Proposal, abstentions are not counted as votes “FOR” or “AGAINST” a director nominee and will have
no effect
in determining the outcome of the election of directors.
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For each of the other proposals, abstentions will have
the same effect as a vote “AGAINST”
such proposal.
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Q:
What is the effect of a broker non-vote on a particular proposal?
A:
A broker non-vote occurs when a bank, broker or other nominee holding shares for a Beneficial Owner has not received instructions from the Beneficial Owner regarding the voting of the shares and does not have discretionary authority to vote the shares for certain non-routine matters. Shares represented by proxies that reflect a broker non-vote will be counted for purposes of determining the presence of a quorum.
Each of the Director Election Proposal, Say-on-Pay Proposal and Incentive Plan Proposal is considered a non-routine matter. As a result, a bank, broker or other nominee may not vote on these proposals without instructions from the Beneficial Owner. As a result, there may be broker non-votes in connection with these proposals. Broker non-votes, if any, will have
no effect
on the result of the vote on these proposals.
The Auditors Ratification Proposal is considered a routine matter on which a bank, broker or other nominee may generally vote without instructions from the Beneficial Owner. Thus,
we do not expect any broker non-votes
in connection with this proposal.
Q.
How will voting on any other matters be conducted?
A:
Although we do not know of any matters to be considered at the Annual Meeting other than the proposals described in this Proxy Statement, if any other matters are properly presented at the Annual Meeting, your properly submitted proxy gives authority to the proxy holders, Jennifer Graff, Robert Rasamny and Jason Soncini, to vote on such matters at their discretion.
Q.
Who are the largest principal stockholders?
A:
For information regarding holders of more than 5% of the outstanding shares of our common stock, see the section of this Proxy Statement entitled “
Security Ownership of Certain Beneficial Owners and Management
”.
Q.
Who will bear the cost of this solicitation?
A:
We will bear the entire cost of this solicitation. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in sending proxies and proxy solicitation materials to our stockholders. Proxies may also be solicited in person, by telephone, by email or by facsimile by our directors, officers and certain of our regular employees, without additional compensation. We have retained Saratoga Proxy Consulting, LLC,
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a proxy solicitation firm, to perform various solicitation services. We will pay Saratoga Proxy Consulting, LLC a fee of $10,000 plus phone and other related expenses, in connection with their solicitation services.
Q.
Where can I find the voting results of the Annual Meeting?
A:
We will announce preliminary voting results at the Annual Meeting and will publish final results in a Current Report on Form 8-K that we expect to file with the Securities and Exchange Commission (the "SEC") within four business days of the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K with the SEC within four business days after the Annual Meeting, we intend to file a Form 8-K to disclose preliminary voting results and, within four business days after the final results are known, we will file an additional Form 8-K with the SEC to disclose the final voting results.
Q.
Who can answer my questions?
A:
Your vote at this year's Annual Meeting is important, no matter how many or how few shares you own. Please complete, sign, date and promptly return the enclosed proxy card in the enclosed postage-paid envelope promptly or vote by internet or telephone as set forth above. If you have any questions, require assistance in submitting a proxy for your shares, or would like to request a copy of the proxy materials, please call Saratoga Proxy Consulting, LLC, the proxy solicitation firm assisting us in the solicitation of proxies:
Saratoga Proxy Consulting LLC
520 8th Avenue, 14th Floor
New York, NY 10018
(212) 257-1311
Stockholders Call Toll Free at: (888) 368-0379
Banks & Brokers may call: (212) 257-1311
Email:
info@saratogaproxy.com
8
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may relate to our future financial performance, business operations, and executive compensation decisions, or other future events. You can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue,” or the negative of such terms, or other comparable terminology. Forward-looking statements include the assumptions underlying or relating to such statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, results of operations and financial condition.
The outcomes of the events described in these forward-looking statements are subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in our Annual Report on Form 10-K, as well as in other filings we make with the SEC from time to time. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results could materially differ from those expressed or implied in the forward-looking statements. The forward-looking statements made in this Proxy Statement relate only to events as of the date of this Proxy Statement. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.
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MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1:
TO ELECT SEVEN DIRECTORS TO SERVE ON OUR BOARD OF DIRECTORS UNTIL THE 2025 ANNUAL MEETING OF STOCKHOLDERS OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFIED
General
Our Bylaws provide that the number of directors shall be set by the Board, but in any case, shall not be less than five and not more than nine. The Board has set the current number of directors at seven. We currently have seven members of our Board and no vacancies.
At each Annual Meeting of Stockholders, the successors of each of our directors are elected to hold office for a term expiring at the next Annual Meeting of Stockholders or until his or her successor is duly elected and qualified.
The Board, on the recommendation of our Nominating, Governance and Sustainability Committee, has nominated Gavin Molinelli, Michelle Felman, Isaac T. Kohlberg, Martin D. McNulty, Jr., Maureen O'Conne
ll
, Geoff Ribar and Ajay Sundar for election or reelection at the Annual Meeting to serve as directors for a term of office expiring at our 2025 Annual Meeting. Each of the director nominees, except for Michelle Felman, is currently a member of the Board and has been nominated for reelection. Katharine Wolanyk, a current member of the Board, will not stand for re-election for the Board at the end of her term, and Michelle Felman has been nominated to fill the resulting vacancy.
Each of the nominees above has agreed to serve on the Board if elected, and management has no reason to believe that any of them will be unavailable for service. If any of them are unable or decline to serve as directors at the time of the Annual Meeting, the proxies will be voted for such other nominees as may be designated by the present Board.
Majority Vote Standard
In uncontested elections such as this one, our Bylaws require that each director be elected by the affirmative vote of a majority of the votes cast with respect to such director by the shares of our capital stock present in person or represented by proxy and entitled to vote on this proposal at the Annual Meeting, such that a director may be elected if the number of shares cast “FOR” that nominee's election exceeds the number of votes cast “AGAINST” that nominee. In a contested election, the standard for election of directors is the affirmative vote of a plurality of the votes cast. A contested election is one in which the Board has determined that the number of nominees exceeds the number of directors to be elected at the meeting.
In accordance with our Bylaws, and in uncontested elections such as this one, a nominee who does not receive the affirmative vote of a majority of the votes cast shall tender a written offer to resign to the Board within five business days of the certification of the stockholder vote. The Nominating, Governance and Sustainability Committee shall promptly consider the resignation offer and recommend to the full Board whether to accept the resignation. The Board will act on the Nominating, Governance and Sustainability Committee's recommendation within 90 calendar days following certification of the stockholder vote. Thereafter, the Board will promptly disclose its decision whether to accept the director's resignation offer and the reasons for rejecting the resignation offer, if applicable, in a Current Report on Form 8-K to be filed with the SEC within four business days of the Board's determination. Any director who tenders his or her resignation pursuant to these requirements shall not participate in the Nominating, Governance and Sustainability Committee’s recommendation or Board action regarding whether to accept the resignation offer.
Required Vote
If a quorum is present, each nominee for director for whom the number of shares cast “FOR” such nominee's election exceeds the number of votes cast “AGAINST” that nominee will be elected to the Board. This proposal is considered a non-routine matter.
As a result, a bank, broker, or other nominee may not vote without instructions from the Beneficial Owner on this matter and there may be broker non-votes in connection with this proposal. Broker non-votes, if any, will have no effect on the result of the vote on this proposal.
Abstentions will have no effect on this proposal.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” EACH OF THE SEVEN DIRECTOR NOMINEES NAMED HEREIN.
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Nominees for Director
The following table sets forth information as to the persons recommended by our Nominating, Governance and Sustainability Committee, and nominated by our Board, to be elected or re-elected as directors.
| Name | Age | Director Since | Positions with the Company | |||||||||||||||||
| Gavin Molinelli | 40 | 2022 | Chairman & Director | |||||||||||||||||
| Michelle Felman | 61 | Nominee | None | |||||||||||||||||
|
Isaac T. Kohlberg
*+^
|
72 | 2019 | Director | |||||||||||||||||
| Martin D. McNulty, Jr. | 46 | 2024 | Director & Chief Executive Officer | |||||||||||||||||
|
Maureen O'Connell
*+
|
62 | 2019 | Lead Independent Director | |||||||||||||||||
|
Geoff Ribar
^
|
65 | 2023 | Director | |||||||||||||||||
|
Ajay Sundar
|
32 | 2024 | Director | |||||||||||||||||
____________________
* Member of the Audit Committee
+ Member of the Compensation Committee
^ Member of the Nominating, Governance and Sustainability Committee
Directors are to be elected at the Annual Meeting. Biographical information regarding the nominees for election or reelection as a director is set forth below.
Information Regarding the Director Nominees
Gavin T. Molinelli
has served as Chairman of the Board and a director since October 2022. Currently, Mr. Molinelli is a Senior Partner and Co-Portfolio Manager of Starboard Value LP (together with certain funds and accounts affiliated with, or managed by, Starboard Value LP, “Starboard”), a New York-based investment adviser with a focused and fundamental approach to investing primarily in publicly traded U.S. companies and the Company’s controlling shareholder. Prior to Starboard’s formation in 2011, Mr. Molinelli was a Director and an Investment Analyst at Ramius LLC for the funds that comprised the Value and Opportunity investment platform. Prior to joining Ramius LLC in October 2006, Mr. Molinelli was a member of the Technology Investment Banking group at Banc of America Securities LLC. Mr. Molinelli previously served on the Board of Directors of each of Forest City Realty Trust, Inc. (formerly NYSE: FCEA), a real estate investment trust, from April 2018 until its acquisition by Brookfield Asset Management Inc. (NYSE: BAM) in December 2018, Depomed, Inc. (n/k/a Assertio Therapeutics, Inc. (NASDAQ: ASRT)), a specialty pharmaceutical company, from March 2017 to August 2017 and Wausau Paper Corp. (formerly NYSE: WPP), a then leading provider of away from home towel and tissue products, from July 2014 until it was acquired by SCA Tissue North America LLC in January 2016. Mr. Molinelli also previously served on the Board of Directors of Actel Corporation (formerly NASDAQ: ACTL), a semiconductor company. Mr. Molinelli received a B.A. in Economics from Washington and Lee University.
We believe that Mr. Molinelli’s extensive public company board experience and financial expertise, together with his experience serving in various managerial roles make him well qualified to serve on the Board.
Michelle Felman
has been nominated for election to the Board at the Annual Meeting and has not previously served as a director. Ms. Felman is an accomplished executive with more than 30 years of experience in the financial, real estate and investment industries. Ms. Felman has served on the Board of Directors of Cushman & Wakefield (NYSE: CWK) where she chairs the Nominating and Governance Committee and is a member of the Compensation Committee, since November 2023. Ms. Felman is the founder of JAM Holdings, an investment and advisory firm. Ms. Felman serves on the board of several privately held companies including the Advisory Board of Turner Impact Capital, a for-profit social impact platform that focuses on education, health care and workforce housing. She served on the board of the Cumming Corporation, a global project management company and Reonomy, a real estate technology company. Both companies were sold year-end 2021. In addition, she recently completed her term as an Advisory Director in the real estate group of Investcorp, a leading provider and manager of alternative investment products. Ms. Felman served as a Trustee of The Partners Group (PGHN: SIX), a global private equity firm, where she was Chair of the Investment Oversight Committee as well as a member of both the Audit Committee and the Compensation and Governance Committee. She also served as a Director of Forest City Enterprise (NYSE: FCE) where she was a member of the Compensation Committee, until the sale to Brookfield Asset Management. She served as a Trustee of Choice Properties Real Estate Investment Trust (TSX:CHP),
11
where she was a member of the Compensation, Governance and Nominating Committee, from its IPO in 2013 until May 2018 when it merged with Canadian Real Estate Trust. From 1997-2010, Ms. Felman was the Executive Vice President – Co-Head of Acquisitions and Capital Markets for Vornado Realty Trust (NYSE: VNO), where she oversaw all of the firm's asset and corporate acquisition activity and mezzanine debt activity. She remained a consultant to VNO through December 2012, serving as a board member of LNR Property LLC, the largest special servicer in the United States until the sale to Starwood Capital in 2013. Ms. Felman began her career at Morgan Stanley in the Investment Banking Division after graduating with an M.B.A. from Wharton. She later joined GE Capital as a Managing Director of Business Development, where she acquired billions of dollars in real estate and non-performing loans from the Resolution Trust Corporation (RTC), banks and insurance companies in the United States, Canada, the United Kingdom and France. Ms. Felman served as an adjunct professor at the Wharton School at the University of Pennsylvania from 2010-2014 and served on the Executive Committee of The Zell-Lurie Center for over 10 years. She is a former trustee of Big Brothers Big Sisters of New York. Ms. Felman also served as a judge for the Echoing Green Fellowship Grants. She is currently teaching her eighth year at the Columbia Business School. Ms. Felman received her B.A. from The University of California, Berkeley and her M.B.A. from The Wharton School at The University of Pennsylvania.
We believe that Ms. Felman’s extensive financial background and experience make her well qualified to serve on the Board. In addition, she brings strong corporate governance experience having served on several public and private company boards, among them Cushman & Wakefield and Choice Properties Real Estate Investment Trust.
Isaac T. Kohlberg
has served as a director since May 2019. Mr. Kohlberg has had a distinguished career in advancing entrepreneurship and innovation and protecting and commercializing IP through corporate deals and startup formation. He has served as a Senior Associate Provost and Chief Technology Development Officer at Harvard University, where he is responsible for the strategic management and commercial development of all technologies and IP arising from Harvard's research enterprise, since 2005. Mr. Kohlberg's role at Harvard University includes industry liaising and outreach, IP Management, business development, technology commercialization and the formation of startup companies and new ventures around Harvard R&D platforms. In tandem, he is also responsible for generating, structuring, and negotiating research alliances and collaborations with industry and generating industry-sponsored research funding for Harvard faculty. Prior to joining Harvard in 2005, Mr. Kohlberg was the CEO of Tel Aviv University's Economic Corporation and head of Ramot, its technology transfer organization. Prior to his role at Ramot, Mr. Kohlberg held various roles at New York University ("NYU"), including Vice Provost, Vice President for Industrial Liaison (NYU's technology transfer program) and headed the Office of Science and Technology Administration at NYU School of Medicine. During his time at NYU, the institution entered into a major licensing agreement to develop Remicade, a humanized monoclonal antibody used in treatment of Crohn's Disease and other autoimmune diseases, which led to one of the largest royalty revenue streams generated by any university worldwide. Before joining NYU in 1989, Mr. Kohlberg was the CEO of YEDA, the commercial arm of the Weizmann Institute of Science in Israel. While at YEDA, Mr. Kohlberg negotiated and concluded major royalty-bearing license agreements. A few examples are an agreement with Teva Pharmaceutical Industries Ltd regarding Copaxone, which Teva Pharmaceuticals markets as a proprietary treatment for relapsing/remitting multiple sclerosis, and an agreement with the broadcasting encryption company NDS Group. Mr. Kohlberg served as a Director at Arix Bioscience PLC (LON: ARIX), a biotechnology investment company, from May 2021 through January 2024. Additionally, Mr. Kohlberg has served as a Director at Anchiano Therapeutics Ltd (TLV: ANCN, NASDAQ: ANCN), a pivotal-stage biopharmaceutical company, from February 2017 through March 2021. and as a Director at Clal Biotechnology Industries Ltd. (TLV: CBI), a life sciences investment company, from February 2015 through May 2020. Mr. Kohlberg also served as a Director of Elicio Therapeutics, a clinical stage biotechnology company, from February 2014 through April 2021. Mr. Kohlberg received his MBA from INSEAD and LLB from Tel Aviv University. He also received a diploma in French culture and historical studies from the University of Strasbourg.
We believe Mr. Kohlberg’s long-term experience in the development of innovations and commercialization makes him well qualified to serve on the Board.
Martin D. McNulty, Jr.
has served as a director and the Company’s Chief Executive Officer since February 2024, and as its Chief Operating Officer and Head of M&A since March 2022. He previously served as the Company’s Interim Chief Executive Officer from November 2022 through February 2024. Prior to joining Acacia, Mr. McNulty served as a Managing Director at Starboard Value, and the Chief Executive Officer and a member of the Board of Directors of Starboard Value Acquisition Corp (NASDAQ: SVACU) from June 2020 until the completion of its merger with Cyxtera Technologies Inc. (NASDAQ: CYXT) in February 2021. From September 2013 until May 2020, Mr. McNulty was a Managing Director at Starr Investment Holdings LLC, an investment adviser investing in software and tech-enabled services businesses, where he was responsible for identifying, evaluating, executing, and managing control-oriented private investments. Mr. McNulty previously served as Vice President at Metalmark Capital Holdings, LLC, a growth equity investment firm providing capital and strategic support to business owners and executives, and Vice President at Citigroup Venture Capital Ltd., a US based private equity firm. Mr. McNulty holds a B.B.A. in Finance and Accounting from the University of Iowa Tippie College of Business.
12
We believe that Mr. McNulty’s extensive financial background and leadership, business and acquisition experience makes him well qualified to serve on the Board.
Maureen O’Connell
has served as a director since January 2019. Prior to joining Acacia, Ms. O'Connell briefly provided consulting services to the Company from September 2018 to November 2018. Ms. O’Connell is a global business executive, CFO and board director recognized for significant value creation through strategic thinking and action at numerous public companies. She has held executive leadership and board positions in a variety of industries including media, education, digital, retail, technology, professional services, biotech, pharma, homebuilding, real estate and insurance. She has chaired the Audit Committee, served on the Transaction and Nominating Committees, and served as the designated financial expert for Fortune 500 and high growth public companies listed on NYSE and NASDAQ. In addition, Ms. O’Connell is a certified public accountant and has been in good standing since 1987. Ms. O’Connell is also recognized for her extensive M&A experience and her strength in operations and technology. Ms. O’Connell was appointed to the Board of REV Group, Inc. (NYSE: REVG) in August 2023 where she currently serves as chair of the Audit Committee. Ms. O’Connell was also appointed to the board of Northwest Healthcare Properties REIT (TSX: NWHUF) in May 2023 and currently serves as chair of the Audit Committee. Ms. O’Connell was appointed to the Board of Arix Bioscience PLC, a life sciences investment company, in May 2021 and served as a director until January 2024 and Ms. O’Connell served on the board of Harte Hanks (NYSE: HHS) from June 2018 to August 2020. Ms. O’Connell was also a member of the Audit Committee and Compensation Committee of Harte Hanks. Ms. O’Connell served on the board of Sucampo Pharmaceuticals Inc. (NASDAQ: SCMP), a fast growth biotech company, from 2013 to 2018. She played a key role in its sale to Mallinckrodt Plc for $1.2 billion in February 2018. From 2007 to 2017, Ms. O'Connell served as Executive Vice President, Chief Administrative Officer and Chief Financial Officer of Scholastic, Inc., a well-known publisher and distributor of children's books and a leading company in educational technology and children's media. From 2002 to 2007, Ms. O’Connell served on the board of Beazer Homes (NYSE: BZH), a Fortune 500 homebuilder. Initially, Ms. O’Connell served on the Audit and Compensation Committees of Beazer Homes and in 2003 was named Audit Chair. Ms. O’Connell is a NACD certified Director and received a Carnegie Melon Cybersecurity Oversight certificate in March 2023.
We believe that Ms. O’Connell’s financial expertise and extensive financial experience at public companies make her qualified to serve on the Board.
Geoff Ribar
has served as a director since May 2023. Mr. Ribar currently serves as a director of MACOM Technology Solutions Holdings, Inc., a designer and manufacturer of semiconductor products for Telecommunications, Industrial and Defense and Data Center industries, a position he has held since March 2017, and as a director of Everspin Technologies, Inc., a developer and manufacturer of discrete and embedded Magnetoresistive RAM (MRAM) and Spin-transfer Torque MRAM (STT-MRAM) technologies, a position he has held since March 2017. Previously Mr. Ribar served as a director of Aquantia Corp., a provider of high-speed communications integrated circuits for Ethernet connectivity, from September 2017 until its acquisition by Marvell Technology in September 2019. Mr. Ribar served as Senior Vice President and Chief Financial Officer of Cadence Design Systems, Inc. (“Cadence”), a provider of system design tools, software, intellectual property and services, from November 2010 to September 2017, and acted as a senior advisor to Cadence until his retirement in March 2018. Previously, he served as Chief Financial Officer for a number of semiconductor companies, including Telegent Systems, Inc., SiRF Technology, Inc., Asyst Technology, Inc., Matrix Semiconductor, Inc. and nVidia Corporation. He received his B.S. degree in chemistry and an M.B.A. from the University of Michigan.
We believe that Mr. Ribar’s significant financial and accounting expertise gained from his experience as a chief financial officer, as well as his extensive public company board experience make him well qualified to serve on the Board.
Ajay Sundar
has served as a director since February 2024. Mr. Sundar is a Managing Director at Starboard Value. Prior to joining Starboard Value in August 2015, Mr. Sundar was an Investment Banking Analyst in Consumer & Retail Group at Citigroup in New York. Mr. Sundar received a B.S. in Commerce from the McIntire School of Commerce at the University of Virginia.
We believe that Mr. Sundar’s extensive financial background and investment experience makes him well qualified to serve on the Board.
Director Independence
Our common stock is listed on The Nasdaq Global Select Market and, therefore, we are subject to the listing requirements of that market. The Board, with the assistance of outside counsel, reviews the professional relationships of potential and current directors, and has determined that Messrs. Kohlberg and Ribar and Mses. O’Connell and Wolanyk, constituting the majority of our current directors, are “independent” as defined in the Listing Rules of the Nasdaq Stock
13
Market (the “Nasdaq Listing Rules”). Further, the Board has determined that Ms. Felman qualifies as independent as defined in the Nasdaq Listing Rules.
Board Leadership Structure
Our Bylaws provide the Board with flexibility to combine or separate the positions of Chairman and Chief Executive Officer in accordance with its determination that utilizing one or the other structure is in the best interests of our Company. Currently, the positions of Chairman and Chief Executive Officer are separate, with Mr. Molinelli serving as our Chairman and Mr. McNulty serving as our Chief Executive Officer. Our Board believes separating these roles promotes effective corporate governance and leadership, allowing our Chief Executive Officer to focus on the management of our day-to-day business, while allowing our Chairman to focus on matters involving our Board and corporate governance.
The Board appointed Ms. O’Connell as Lead Independent Director in July 2023. The Board has determined that this structure is the most effective corporate governance and leadership structure for our Company at this time. The Board has determined that maintaining the independence of a majority of our directors helps maintain the Board’s independent oversight of management. In addition, our Audit, Compensation and Nominating, Governance and Sustainability Committees, which oversee critical matters such as our accounting principles, financial reporting practices and system of disclosure controls and internal controls over financial reporting, our executive compensation program and the selection and evaluation of our directors and director nominees, each consist entirely of independent directors.
Risk Oversight
The Board is actively involved in the oversight of risks, including credit, liquidity, operational, legal and regulatory, information technology, cyber security, data privacy and reputational risks that could affect our business. Environmental, social and governance (“ESG”) matters are also risks that the Board considers in its oversight.
The Board does not have a standing risk management committee but administers this oversight function directly through the Board as a whole, as well as through its Audit Committee, Nominating, Governance and Sustainability Committee and Compensation Committee.
For example, our Audit Committee assists the Board in its risk oversight function by reviewing and discussing with management our accounting principles, financial reporting practices, system of disclosure controls and internal controls over financial reporting, information technology and cyber security. Our Nominating, Governance and Sustainability Committee assists the Board in its risk oversight function by periodically reviewing and discussing with management important corporate environmental, social and governance principles and practices and by considering risks related to our director nominee evaluation process. Our Compensation Committee assists the Board in its risk oversight function by considering risks relating to the design of our executive compensation programs and arrangements. The full Board considers strategic risks and opportunities and receives reports from the committees regarding risk oversight in their areas of responsibility as necessary. We believe our Board leadership structure facilitates the division of risk management oversight responsibilities among the Board committees and enhances the Board’s efficiency in fulfilling its oversight function with respect to different areas of our business risks and our risk mitigation practices.
Board Meetings and Committees
The Board held a total of fourteen meetings and committees of the Board held a total of twenty meetings during the fiscal year ended December 31, 2023. During that period, no incumbent director attended fewer than 75% of the sum of the total number of meetings of the Board and meetings of all committees of the Board on which that director served and, in each case, were held during the period that the director served. The Board has an Audit Committee, a Compensation Committee, and a Nominating, Governance and Sustainability Committee. Charters for the Audit Committee, the Compensation Committee and the Nominating, Governance and Sustainability Committee may be viewed on our website at
https://www.acaciaresearch.com/corporate-governance.
Audit Committee.
The Audit Committee currently consists of Mr. Kohlberg and Mses. O’Connell and Wolanyk, each of whom is independent under the listing standards of the Nasdaq Stock Market. Ms. O’Connell currently serves as the Chairman of the Audit Committee. The Audit Committee held ten meetings during the fiscal year ended December 31, 2023.
The Audit Committee is responsible for retaining, evaluating and, if appropriate, recommending the termination of our independent registered public accounting firm and is primarily responsible for approving the services performed by our independent registered public accounting firm and for reviewing and evaluating our accounting principles, financial reporting practices and system of internal accounting controls. The Audit Committee has oversight responsibility for the policies, processes and risks relating to our information security and technology, including cyber security risks. The Audit Committee is also responsible for maintaining communication between the Board and our independent registered public accounting firm.
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The Board has determined that Ms. O’Connell is an “audit committee financial expert,” as defined by Item 407(d)(5)(ii) of Regulation S-K.
Compensation Committee
.
The Compensation Committee currently consists of Mr. Kohlberg and Mses. O’Connell and Wolanyk, each of whom is independent under the listing standards of the Nasdaq Stock Market. Mr. Kohlberg currently serves as the Chairman of the Compensation Committee. The Compensation Committee held seven meetings during the fiscal year ended December 31, 2023.
Our executive compensation program is administered by the Compensation Committee. The Compensation Committee is responsible for approving the compensation package of each executive officer and recommending the compensation package for the chief executive officer to the Board as well as administering our equity compensation plans. In making decisions regarding executive compensation, the Compensation Committee considers many factors including recommendations from our compensation advisory firm, evaluation of our peer group, the input of our management and other directors. In addition, the Compensation Committee establishes compensation programs that do not encourage excessive risk taking by our named executive officers and we have determined that it is not reasonably likely that our compensation and benefit plans and policies would have a material adverse effect on our company.
For more information on the responsibilities and activities of the Compensation Committee see the section of this Proxy Statement entitled “
Executive Compensation and Related Information.
”
Nominating, Governance and Sustainability Committee
. The Nominating, Governance and Sustainability Committee currently consists of Ms. Wolanyk and Messrs. Kohlberg and Ribar, each of whom is independent under the listing standards of the Nasdaq Stock Market. Jonathan Sagal also served as a member of the committee during his tenure on our Board and was independent under the listing standards of the Nasdaq Stock Market. Ms. Wolanyk currently serves as the Chairman of the Nominating, Governance and Sustainability Committee. The Nominating, Governance and Sustainability Committee held three meetings during the fiscal year ended December 31, 2023. The Nominating, Governance and Sustainability Committee recommended the director nominees to the Board for election at the Annual Meeting. The charter for the Nominating, Governance and Sustainability Committee provides that, among its specific responsibilities, the Nominating, Governance, and Sustainability Committee shall:
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•
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Establish criteria and qualifications for Board membership, including standards for assessing independence;
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•
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Identify and consider candidates, including those recommended by stockholders and others, to fill positions on the Board, and assess the contributions and independence of incumbent directors in determining whether to recommend them for reelection to the Board;
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•
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Recommend to the Board candidates for election or reelection at each annual meeting of stockholders;
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•
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Annually review our corporate governance processes, and our governance principles, including such issues as the Board’s organization, membership terms, and the structure and frequency of Board meetings, and recommend appropriate changes to the Board;
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•
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Administer our corporate Codes of Conduct and annually review and assess the adequacy of the corporate Codes of Conduct and recommend any proposed changes to the Board. Specifically, the Nominating, Governance and Sustainability Committee shall discuss with management its compliance with the corporate Codes of Conduct, including any insider and affiliated party transactions, and our procedures to monitor compliance throughout the corporate Codes of Conduct;
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•
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Review periodically with our Chief Executive Officer and the Board, the succession plans relating to positions held by senior executives, and make recommendations to the Board regarding the selections of individuals to fill these positions;
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•
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Oversee the continuing education of existing directors and the orientation of new directors;
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•
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Monitor the functions of the Board and its committees, as set forth in their respective charters, and coordinate and oversee annual evaluations of the Board’s performance and procedures, including an evaluation of individual directors, and of the Board’s committees;
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15
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•
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Review and discuss with management disclosure of the Company's corporate governance practices, including information regarding the operations of the Nominating, Governance and Sustainability Committee and other Board committees, director independence and the director nominations process, and recommend that this disclosure be included in the Company's proxy statement or annual report on Form 10-K, as applicable;
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•
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Assess annually the performance of the duties specified in the Nominating, Governance and Sustainability Committee Charter by the Nominating, Governance and Sustainability Committee and its individual members;
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•
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Review and evaluate the Company’s programs, practices and reporting relating to ESG (Environmental, Social and Governance) issues, including the Company’s Human Rights, Environmental, and related policies, and impacts to support the sustainable growth of the Company’s business; and
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•
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Review and evaluate the Company’s programs, practices and reporting relating to climate-related risks and opportunities.
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Director Qualification Standards
There are no specific minimum qualifications that the Nominating, Governance and Sustainability Committee requires a director nominee meet for a position on the Board, nor are there any specific qualities or skills that are necessary for one or more members of our Board to possess, other than as are necessary to meet the requirements of the rules and regulations applicable to us. The Nominating, Governance and Sustainability Committee considers a potential candidate’s experience, areas of expertise, and other factors relative to the overall composition of the Board, including the following characteristics:
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•
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the highest ethical standards and integrity; | |||||||
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a willingness to act on and be accountable for Board decisions; | |||||||
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•
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an ability to provide wise, informed, and thoughtful counsel to top management on a range of issues; | |||||||
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a history of achievement that reflects high standards for the director candidate and others; | |||||||
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loyalty and commitment to driving our success; | |||||||
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the independence requirements imposed by the SEC and the Nasdaq Stock Market; and | |||||||
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a background that provides a range of experience, qualifications, attributes, skills and knowledge commensurate with our needs | |||||||
In addition, our Corporate Governance Guidelines provide that the Nominating, Governance and Sustainability Committee will consider the diversity of business experience or other background characteristics of members of the Board. Examples of this include management experience, financial expertise and educational background. The Nominating, Governance and Sustainability Committee and the Board believe that a diverse board leads to improved performance by encouraging new ideas, expanding the knowledge base available to management and other directors and fostering a culture that promotes innovation and vigorous deliberation. The Nominating, Governance and Sustainability Committee also abides by the Company’s equal opportunity and non-discrimination policy that decisions involving people are made on the basis of job requirements and individual skills, independent of an individual’s race, color, creed, religion, national origin, ancestry, citizenship status, age, sex or gender, gender identity or gender expression (including transgender status), sexual orientation, marital status, military service and veteran status, physical or mental disability, or genetic information, or any other status protected by law.
Diverse Characteristics
:
Gender diversity, sexual orientation diversity and international diversity.
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Board Diversity Matrix as of the date of December 31, 2023:
|
Total Number of Directors
|
5
|
|||||||||||||
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Female
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Male
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Non-Binary
|
Did Not Disclose Gender
|
|||||||||||
|
Part I: Gender Identity
|
||||||||||||||
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Directors
|
2
|
5 |
0
|
0
|
||||||||||
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Part II: Demographic Background
|
||||||||||||||
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African American or Black
|
0
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0
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0
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0
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||||||||||
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Alaskan Native or Native American
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0
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0
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0
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0
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||||||||||
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Asian
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0
|
1 |
0
|
0
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||||||||||
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Hispanic or Latinx
|
0
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0
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0
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0
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||||||||||
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Native Hawaiian or Pacific Islander
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0
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0
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0
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0
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||||||||||
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White
|
2
|
4 |
0
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0
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||||||||||
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Two or More Races or Ethnicities
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0
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0 |
0
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0
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||||||||||
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LGBTQ+
|
2 | |||||||||||||
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Did Not Disclose Demographic Background
|
0
|
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We are continuously working to cultivate an inclusive working environment and believe the diversity of our Board promotes innovation and vigorous deliberation as mentioned above.
The Nominating, Governance and Sustainability Committee will consider candidates for director recommended by any stockholder provided that such recommendation is properly submitted. The Nominating, Governance and Sustainability Committee has the following policy with regard to the consideration of any director candidates recommended by a stockholder:
•
A stockholder wishing to nominate a candidate for election to the Board at the next annual meeting is required to give written notice addressed to the Corporate Secretary in the manner described under “
Stockholder Proposals for the 2025 Annual Meeting
” and in accordance with our Bylaws, in order to be considered for nomination at the next annual meeting.
•
The notice of nomination must include information regarding the recommended candidate relevant to a determination of whether the recommended candidate would be barred from being considered independent under the Nasdaq Stock Market’s Listing Qualifications or, alternatively, a statement that the recommended candidate would not be so barred. A nomination which does not comply with the above requirements will not be considered.
Further, the following information must be provided to the Company with the written nomination:
•
as to each person whom the stockholder proposes to nominate for election as a director, (1) the name, age and business address, (2) the principal occupation or employment of such person (present and for the past five years), (3) the class and number of shares of capital stock of the Company which are owned beneficially and of record by each such nominee, (4) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and Rule 14a-11 thereunder (and such person’s written consent to being named in any proxy statement as a nominee and to serving as a director if elected) and (5) a description of all direct and indirect compensation and other material monetary arrangements, agreements or understandings during the past three years, and any other material relationship, if any, between the stockholder and its respective affiliates or associates, or others with whom they are acting in concert, on the one hand, and the proposed nominee, and his or her respective affiliates or associates, on the other hand; and
•
as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (1) the name and address of such stockholder, as they appear on the Company’s books, and of such beneficial owner, (2) the class and number of shares of capital stock of the Company which are owned beneficially and of record by such stockholder and such beneficial owner, (3) a
17
representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting, will continue to be a stockholder of record of the Company entitled to vote at such meeting through the date of such meeting and intends to appear in person or by proxy at such meeting to propose such business or nomination, (4) a representation that the nominee is not and will not become a party to any agreement, arrangement or understanding (whether written or oral) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the corporation, will act or vote on any issue in question (i) that has not been disclosed to the Company or (ii) that could limit or interfere with such person’s ability to comply, if elected a director of the Company, with such person’s fiduciary duties under applicable law, and (5) a representation whether the stockholder or beneficial owner, if any, intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee in accordance with Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and/or (y) otherwise to solicit proxies from stockholders in support of such proposal or nomination in accordance with Rule 14a-19 under the Exchange Act.
The Company may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Company.
The Nominating, Governance and Sustainability Committee considers director candidates that are suggested by members of the Nominating, Governance and Sustainability Committee and the full Board, as well as management and stockholders. The Nominating, Governance and Sustainability Committee may, in the future, also retain a third-party executive search firm to identify candidates on terms and conditions acceptable to the Nominating, Governance and Sustainability Committee, in its sole discretion. The process by the Nominating, Governance and Sustainability Committee for identifying and evaluating nominees for director, including nominees recommended by stockholders, involves (with or without the assistance of a retained search firm), compiling names of potentially eligible candidates, conducting background and reference checks, conducting interviews with the candidate and others (as schedules permit), meeting to consider and approve the final candidates and, as appropriate, preparing and presenting to the full Board an analysis with regard to particular recommended candidates. The Nominating, Governance and Sustainability Committee endeavors to identify director nominees who have the highest personal and professional integrity, have demonstrated exceptional ability and judgment, and, together with other director nominees and members, are expected to serve the long-term interest of our stockholders and contribute to our overall corporate goals. The new director nominee, Michelle Felman, was suggested to the Nominating, Governance and Sustainability Committee by members of management.
Prior to nominating an incumbent director for re-election at an annual meeting of stockholders, the Nominating, Governance and Sustainability Committee will consider the director’s past attendance at, and participation in, meetings of the Board and its committees and the director’s formal and informal contributions to the various activities conducted by the Board and the Board committees of which such individual is a member.
Contractual Rights of Starboard to Designate Nominees.
In 2019, the Board began a process to evaluate a wide range of strategic options with the goal of maximizing value for all stockholders and serving the best interests of the Company’s stockholders. As a result of this strategic review, in November 2019, the Company entered into an agreement with Starboard pursuant to which Starboard made a $35 million strategic investment in the Company’s Series A Preferred Stock.
As part of that investment, the Board granted to Starboard certain rights related to the Company’s corporate governance, under a Governance Agreement, dated as of November 18, 2019 and amended on January 7, 2020, by and among the Company and the entities and natural persons set forth on the signature pages thereto (the “Governance Agreement”). Pursuant to the Governance Agreement, the Company agreed to nominate and appoint Jonathan Sagal to the Board. Subject to certain limitations set forth in the Governance Agreement, during the Governance Period (as defined in the Governance Agreement), the Company agreed that (i) Mr. Sagal would be a member of the Nominating, Governance and Sustainability Committee, and (ii) Starboard had the right to designate two additional director nominees to the Board.
Under the Recapitalization Agreement, dated as of October 30, 2022, between the Company and Starboard (the “Recapitalization Agreement”), the parties agreed that for a period from the date of the Recapitalization Agreement until May 12, 2026 (the “
Applicable Period
”), the Board will include at least two directors that are independent of, and not affiliates (as defined in Rule 144 under the Securities Act) of Starboard, with current Board members Maureen O’Connell and Isaac T. Kohlberg satisfying this initial condition. The parties also agreed that Katharine Wolanyk would continue to serve as a director of the Company until at least May 12, 2024 (or such earlier date if Ms. Wolanyk is unwilling or unable to serve as a director for any reason or resigns as a director). Additionally, pursuant to the Recapitalization Agreement, the Company appointed Gavin Molinelli as a Board member and as Chair of the Board. The Company and Starboard also
18
agreed that, until the end of the Applicable Period, the number of directors serving on the Board will not exceed 10 members.
The Governance Agreement was terminated in July 2023 upon completion of the transactions contemplated under the Recapitalization Agreement.
For more information regarding our relationship with Starboard, see “
Certain Relationships and Related Transactions
” below.
Codes of Conduct
The Code of Conduct for Employees and Directors and Corporate Code of Conduct for Chief Executive Officer and Other Senior Financial Officers (together, the “Codes of Conduct”) may be viewed on our website at
https://www.acaciaresearch.com/corporate-governance.
The corporate Code of Conduct for Employees and Directors applies to all of our officers, directors and employees. The Corporate Code of Conduct for Chief Executive Officer and Other Senior Financial Officers is an additional code that specifically applies to our principal executive officer, principal financial officer and accounting officer and controller or persons performing similar functions. Any waiver of the corporate Code of Conduct for Employees and Directors may be made only by the Board and must be promptly disclosed to stockholders in the manner required by applicable law. Any waiver of the Code of Conduct for Chief Executive Officer and Other Senior Financial Officers may be made only by the Audit Committee and must be promptly disclosed to stockholders in the manner required by applicable law. Further, the Company intends to satisfy the disclosure requirement under Item 406 of Regulation S-K regarding amendments to, or waivers from, provisions of the Code of Conduct for Chief Executive Officer and Other Senior Financial Officers by posting such information on the Company’s website at the address specified above.
Environmental, Social, and Governance (ESG) Matters
Acacia is committed to ESG matters and being a responsible corporate citizen.
We are proud of our contribution to the lives of all the people that we deal with, all over the globe. We consider ESG criteria as a critical element of our risk mitigation and business analysis and investment process and thus we incorporate sustainability into the business decision we make. We build durable, scalable programs and processes and set long-term goals for ESG performance, including in the areas of governance, diversity and inclusion, and the environment.
Approach
Acacia’s top priority is to act as responsible stewards of the business for our stockholders and stakeholders, including employees, customers, investors, and the communities where we operate. Our approach to ESG is risk-based and non-concessionary, meaning that we consider ESG criteria as an integral part of the decisions we make and our risk mitigation process without needing to sacrifice business performance over ESG criteria. We do this because we believe that business decisions that are considerate of ESG criteria will result in better risk-adjusted returns over time than those that do not.
•
Culture and Human Capital
―People and culture are at the core of our business. We have an exceptionally talented team working to implement our unique business plan. Our team comes from disparate and diverse backgrounds and brings a range of highly developed individual skills to our common endeavor. We value each individual contribution that advances our common goals. Accordingly, we are committed to maintaining an inclusive team and culture that gives each individual an opportunity to make their greatest individual contribution.
•
Diversity and Inclusion
―We continue to be dedicated to promoting a culture of diversity and acceptance within our Company and Board and with those we do business with. We aim to recruit, retain, and promote a diverse and talented team of employees and leadership. Acacia believes that all current and prospective employees and partners—regardless of religion, sex, race, national origin, gender identity or expression, sexual orientation, age, or disability—should be welcomed and treated with respect and dignity in the workplace. This diversity and inclusion allow us to function better as a team of innovators and benefit both our stakeholders and communities.
•
Safety & Health
―We are proud to offer all of our employees comprehensive health care benefits.
•
Ethics & Compliance
―We maintain Codes of Conduct, which are available on our website, at
https://www.acaciaresearch.com/corporate-governance.
The Codes of Conduct are the foundation of our high-level commitment to ensuring our officers, directors, and employees act at all times in an honest and ethical manner in connection with their service to the Company.
19
•
Environmental and Sustainability
―Our corporate environmental responsibility efforts begin by making decisions and conducting our business in an environmentally sensitive and proactive manner by conserving natural resources, minimizing waste through recycling, and using renewable and cleaner energy sources when possible.
ESG Initiatives
The Nominating, Governance, and Sustainability Committee oversees ESG matters and work under the Six ESG Principles outlined below that were adopted in 2022. The Company’s ESG Advisory Committee aims to provide Company employees with ongoing ESG education and professional development, and the Company continues to work closely with third-party resources and the Board to enhance its ESG efforts.
Six ESG Principles
1.
Incorporate ESG considerations into business analysis and actions;
2.
Be active corporate leaders and incorporate ESG issues into our policies and practices;
3.
Seek appropriate disclosure and assurances on ESG issues by the companies we do business with;
4.
Promote acceptance and implementation of these principles within our industry and peers;
5.
Work with others to enhance our effectiveness in implementing these principles; and
6.
Report on our activities and progress towards implementing sustainable business and social practices
ESG Advisory Committee
―The Company maintains an active and engaged internal ESG Advisory Committee to promote, monitor and measure the Company’s commitment and compliance to responsible investment practices. This committee consists of senior level representatives from executive leadership, legal/compliance, and investor relations. The ESG Advisory Committee regularly meets to review and discuss all responsible investment initiatives, goals, and reporting requirements and will endeavor to provide quarterly updates of its work to the Nominating, Governance, and Sustainability Committee.
ESG Education and Professional Development
―Acacia has a culture of constant improvement in our ESG efforts supported from the top down. This includes encouraging and sponsoring employee’s efforts to participate in ESG-related networking events and continuing education/certification opportunities.
ESG Collaboration and Resources
―Acacia continually assesses and engages with third-party resources to help us evolve our ESG-related initiatives.
Environment
We use technology to lessen our impact on the environment.
We have migrated from legacy technology to the Cloud and continue to promote paperless solutions for accounts payables, payroll and HR to consistently reduce the number of physical mailings. We are committed to a 100% cloud environment providing an efficient technology footprint. We regularly monitor our environmental activity to assess and minimize our environmental impact. Stockholders are encouraged to review our Corporate ESG Report, which can be found on our website at
https://www.acaciaresearch.com/corporate-governance.
Insider Trading Policies
Our Board has adopted a corporate Insider Trading Policy related to trading securities generally, which is designed to prevent and detect the misuse of material, non-public information (“MNPI”), and is intended to complement the Company’s Insider Trading Policy related to Company securities already in place. These Insider Trading Policies may be viewed on our website at
https://acaciaresearch.com/corporate-governance.
The Insider Trading Policies apply to all of our officers, directors and employees, including our principal executive officer, principal financial and accounting officer and controller, or persons performing similar functions.
Insider Trading Policy Relating to Company Securities
Our Insider Trading Policy relating to Company securities applies to all transactions in the Company’s equity securities, including common stock and any other type of securities that the Company may issue, such as preferred stock, notes, bonds, convertible debentures and warrants, and exchange- traded options (including puts and calls) and other derivative securities. The policy outlines, among other things, prohibited behavior relating to Company securities by directors, officers and employees, including named executive officers, consultants, contractors, agents and certain family
20
members of those persons (collectively, “Covered Persons”) including the prohibition on trading in Company securities while in possession of MNPI concerning the Company or its securities, engaging in hedging transactions related to Company securities, such as put or call options, short sales, prepaid variable forward contracts, equity swaps, collars and exchange funds. In addition, our Insider Trading Policy prohibits Covered Persons from holding Acacia securities in a margin account or otherwise pledging Acacia securities as collateral for a loan without prior approval by the Company.
Insider Trading Policy for all other Securities
Consistent with the Company’s duty to prevent insider trading and to fulfill its obligation to establish, maintain and enforce written policies and procedures to prevent insider trading, Acacia has adopted procedures to prevent and detect the misuse of MNPI. Consistent with the policy, no person to whom the policy applies, which includes officers, directors, employees, and any person serving in a similar capacity (“Covered Persons”), may trade, either personally or on behalf of Acacia or any others (such as family members or others that live in the household of a Covered Person) while in possession of MNPI, nor may any Covered Person communicate MNPI to others in violation of the law. The policy also contains policies covering, among other things, personal trading by Covered Persons.
Stockholder Communications with Directors
Stockholders wishing to communicate with the Board or with a particular member or committee of the Board should address communications to Gavin Molinelli, Chairman, Acacia Research Corporation, c/o Jennifer Graff, Corporate Secretary, 767 Third Avenue, 6th Floor, New York, NY 10017. Our Corporate Secretary will act as agent for the Chairman in facilitating such direct communications to the Board in accordance with our Policy Statement on Corporate Communications to Investors and Media, which can be found on our website at https://acaciaresearch.com/corporate-governance.
Stockholder Engagement
We maintain an open and interactive dialogue with our stockholders. Our relationship with our stockholders, as the owners of our Company, is an important part of our success and our management team believes that active stockholder engagement is an important source of strategic and investment insight. Our stockholders’ views are shared with our Board, and incorporated in discussions of our strategy, operational performance, financial results, corporate governance, compensation programs, and related matters.
Our management team is primarily responsible for investor relations. Direct and open stockholder engagement drives increased corporate accountability, improves decision making, and ultimately creates long-term value. Our management team provides regular updates to our Board regarding stockholder feedback.
During 2023, we proactively conducted outreach to our largest and most engaged institutional investors representing more than approximately 75% of our shares outstanding. This included one-on-one calls or video conferences with 50% of our top-20 largest stockholders to solicit their feedback and hear their views on the Company’s practices and policies as we evolve. Members of our management team participated in each of these conversations. In addition to these conversations, we maintain ongoing dialogue with many of our smaller institutional and retail investors through our investor relations program and have made a concentrated effort to engage with stewardship and governance contacts throughout the year.
Board Member Attendance at Annual Stockholder Meetings
Although we do not have a formal policy regarding director attendance at annual stockholder meetings, directors are expected to attend these meetings absent extenuating circumstances. Five of our directors attended our 2023 annual meeting of stockholders.
21
DIRECTOR COMPENSATION PROGRAM FOR 2023
During 2023, our non-employee directors earned a cash retainer for service on our Board. The Chair of our Board earned an annual retainer for such service in addition to non-Chair director annual retainers and the chair of each committee earned an annual retainer for such service. In addition, each non-Chair member of the Strategic Committee earned an annual retainer for such service, and members of the Special Committee received a per meeting fee. The annual cash retainers for directors and committee members were pro-rated based on the period of time during which service was provided during the year and generally were paid on a quarterly basis in arrears.
Under this director compensation program as described above, the annual fees non-employee directors earned for service on our Board, and for service on each committee of our Board of which the director was a member, during 2023 were as follows:
| Member Annual Retainer ($) |
Chair Additional Annual Retainer ($)
|
Per Meeting Fee($) | |||||||||
| Board of Directors | 80,000 | 75,000 | |||||||||
|
Lead Independent Director
|
— | 25,000 | |||||||||
| Audit Committee | — | 25,000 | |||||||||
| Compensation Committee | — | 20,000 | |||||||||
| Nominating, Governance and Sustainability Committee | — | 15,000 | |||||||||
|
Strategic Committee
1
|
80,000 | 10,000 | |||||||||
|
Special Committee
2
|
2,000 | ||||||||||
| (1) |
The Strategic Committee was disbanded in February 2024.
|
||||
| (2) |
The Special Committee was dissolved simultaneously with the closing of the Recapitalization on July 15, 2023.
|
||||
Beginning in 2023, non-employee directors had the option of receiving cash fees in an equivalent amount of Company stock.
For 2023, each non-employee director who commenced service on our Board was eligible to receive an onboarding award consisting of restricted stock units with an aggregate grant date fair value of $120,000, prorated for a 12-month period. The form of the award was determined by our Board (or a designated committee thereof) at the time of each grant. Initial onboarding grants are anticipated to be issued in the form of restricted stock units, which vest on the date of the Company’s annual meeting following the director’s appointment date, subject to the director’s continued service.
In addition, on the date of the 2023 annual meeting of stockholders, each non-employee director continuing to serve as a director following the annual meeting was granted restricted stock units that vest on the date of our 2024 annual meeting of stockholders and that had an aggregate grant date fair value of $120,000 prorated based on the number of full months of service on our Board since the 2023 annual meeting of stockholders.
The number of restricted stock units each non-employee director received was determined based on the closing price of our common stock on the grant date and resulted in the grant of 30,534 restricted stock units to each of Messrs. Molinelli, Kohlberg, Ribar and Sagal and Mses. O’Connell and Wolanyk. Each of these restricted stock units were granted under the terms of our 2016 Acacia Research Stock Incentive Plan.
22
2023 DIRECTOR COMPENSATION TABLE
The following table provides fiscal year 2023 compensation information for our non-employee directors who served on the Board during 2023:
| Name |
Fees Earned
or
Paid in
Cash
($)
(1)
|
Stock
Awards
($)
(2)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compen-
sation
($)
|
Non-qualified
Deferred Compensa- tion Earnings ($) |
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||||||||||||||
|
Gavin Molinelli
(3)
|
116,250 | 119,999 | — | — | — | — | 236,249 | |||||||||||||||||||||||||||||||||||||
| Isaac T. Kohlberg | 192,000 | 119,999 | — | — | — | — | 311,999 | |||||||||||||||||||||||||||||||||||||
|
Maureen O'Connell
(4)
|
207,417 | 119,999 | — | — | — | — | 327,416 | |||||||||||||||||||||||||||||||||||||
|
Geoff Ribar
|
50,000 | 119,999 | — | — | — | — | 169,999 | |||||||||||||||||||||||||||||||||||||
|
Jonathan Sagal
(5)
|
127,500 | 163,414 | — | — | — | — | 290,914 | |||||||||||||||||||||||||||||||||||||
| Katharine Wolanyk | 95,000 | 119,999 | — | — | — | — | 214,999 | |||||||||||||||||||||||||||||||||||||
| (1) |
Includes annual cash retainers for service on the Board and as a member of the chair of any committee thereof. For Mr. Ribar, includes a prorated annual cash retainer for his service as a director beginning May 16, 2023.
|
||||
| (2) |
Amounts shown represent the aggregate grant date fair value of restricted stock units granted to the directors as determined pursuant to ASC Topic 718, “Compensation – Stock Compensation,” (“ASC Topic 718”). The methodology used to calculate the value of restricted stock units is set forth under Note 2 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 14, 2024. The 30,534 restricted stock units granted to each of Messrs. Molinelli, Kohlberg, Ribar and Sagal and Mses. O’Connell and Wolanyk remained outstanding and unvested at the end of fiscal year 2023.
|
||||
| (3) |
Mr. Molinelli elected to receive his fourth quarter cash fees as equity. These shares have not yet been issued due to trading window considerations.
|
||||
| (4) |
Includes fees for services as Lead Independent Director (“LID”). Ms. O’Connell was appointed LID in July 2023.
|
||||
| (5) |
Mr. Sagal elected to receive his first quarter cash fees as equity and, as a result, on May 26, 2023 was issued 10,814 fully vested shares of common stock. Mr. Sagal resigned from the Board effective February 13, 2024.
|
||||
23
PROPOSAL NO. 2:
TO RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024
General
Grant Thornton LLP, (“GT”), our independent registered public accounting firm for the fiscal year ended December 31, 2023, was recommended by the Audit Committee, and approved by the Board, to act in such capacity for the fiscal year ending December 31, 2024, subject to ratification by the stockholders.
GT has audited our financial statements since October 2022.
If our stockholders do not ratify the selection of GT as our independent registered accounting firm for the fiscal year ending December 31, 2024, or if GT should decline to act or otherwise become incapable of acting as our independent registered public accounting firm, or if our engagement of GT as our independent registered public accounting firm should be discontinued, the Board, on the recommendation of the Audit Committee, will consider whether to appoint a substitute independent registered public accounting firm. A representative of GT is expected to be present at the virtual Annual Meeting, will be given the opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions from stockholders present virtually at the Annual Meeting.
Transition of Audit Firms
BDO USA, LLP, (“BDO”), our former independent registered public accounting firm, audited our consolidated financial statements for the fiscal years ended December 31, 2021 and fiscal quarters ended March 31, 2022 and June 30, 2022. The Audit Committee, with the assistance of management, conducted an auditor review and selection process in order to select a firm to serve as our independent registered public accounting firm for the remainder of the fiscal year ending December 31, 2022. As a result, the Audit Committee recommended to the Board, and the Board approved, the dismissal of BDO on August 30, 2022. On August 31, 2022, the Audit Committee recommended, and the Board approved, the appointment of GT as our independent registered public accounting firm for the remainder of the fiscal year ending December 31, 2022.