A-MARK PRECIOUS METALS, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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Preliminary Proxy Statement
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[ ]
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive Proxy Statement
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[ ]
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Definitive Additional Materials
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[ ]
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Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
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A-Mark Precious Metals, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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[X]
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No fee required.
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[ ]
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ]
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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A-Mark Precious Metals, Inc.
429 Santa Monica Blvd., Suite 230
Santa Monica, California 90401
December 30, 2016
To Our Stockholders:
You are cordially invited to attend the
2017 Annual Meeting of Stockholders
of A-Mark Precious Metals, Inc. ("Annual Meeting"), which will be held at
Hotel Casa Del Mar
located at 1910 Ocean Way, Santa Monica, CA 90405, on
January 26, 2017
, starting at
9:00 a.m. PST
.
The Notice of Annual Meeting and proxy statement covering the formal business to be conducted at the Annual Meeting follow this letter.
We hope that you will attend the Annual Meeting in person. Whether or not you plan to attend, to ensure that your shares are represented at the meeting, please complete, sign, date and return the enclosed proxy card promptly in the accompanying reply envelope or follow the instructions for internet voting in the attached proxy statement.
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Sincerely,
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/s/ Carol Meltzer
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Carol Meltzer
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Secretary
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A-Mark Precious Metals, Inc.
429 Santa Monica Blvd., Suite 230
Santa Monica, California 90401
NOTICE OF
2017 ANNUAL MEETING OF STOCKHOLDERS
The
2017 Annual Meeting of Stockholders
of A-Mark Precious Metals, Inc. (the “Annual Meeting”) will be held at
Hotel Casa Del Mar
, located at 1910 Ocean Way, Santa Monica, CA 90405, on
January 26, 2017
, starting at
9:00 a.m. PST
, for the following purposes:
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•
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to elect eight directors to serve for a term of one year (until the
2018 Annual Meeting of Stockholders
) and until their respective successors have been duly elected and qualified;
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•
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to vote, on an advisory basis, to approve the fiscal year 2016 compensation of named executive officers of A-Mark Precious Metals, Inc. (the “Company”), as disclosed in this Proxy Statement;
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•
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to vote to ratify the appointment of Grant Thornton LLP as the Company's independent registered public accountants for the fiscal year ending
June 30, 2017
; and
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•
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to transact such other business as may be properly brought before the meeting and any adjournment or postponement thereof.
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Stockholders of record at the close of business on
December 19, 2016
, are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement. Whether or not you plan to attend the Annual Meeting, please complete, sign, date and return the enclosed proxy card in the reply envelope provided, which requires no postage if mailed in the United States. Stockholders attending the Annual Meeting may vote in person even if they have returned a proxy card. By promptly returning your proxy card, you will greatly assist us in preparing for the Annual Meeting.
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By order of the Board of Directors,
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/s/ Carol Meltzer
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CAROL MELTZER
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Secretary
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Santa Monica, California
December 30, 2016
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IMPORTANT:
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Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to Be Held on January 26, 2017:
The Proxy Materials for the Annual Meeting, including the Annual Report and the Proxy Statement, are available free of charge at http://www.amark.com
* * * * * * Information on our website, other than this Proxy Statement, is not part of this Proxy Statement. |
A-Mark Precious Metals, Inc.
PROXY STATEMENT FOR
2017 ANNUAL MEETING OF STOCKHOLDERS
To be held on
January 26, 2017
Commencing on or about
December 30, 2016
, this proxy statement and the enclosed form of proxy card are being mailed to stockholders of A-Mark Precious Metals, Inc., a Delaware corporation (“A-Mark” or the “Company” or “we” or “us”), in connection with the Company’s Board of Directors’ solicitation of proxies for use at the Annual Meeting of A-Mark stockholders and at any adjournment or postponement. The Annual Meeting is being held at the
Hotel Casa Del Mar
, located at
1910 Ocean Way, Santa Monica, CA 90405
, on
January 26, 2017
, starting at
9:00 a.m. PST
, for the purposes described in this proxy statement.
A-Mark’s annual report is included with this proxy statement. It contains A-Mark’s audited consolidated financial statements for
fiscal year 2016
and other information concerning the Company.
If you are unable to attend the Annual Meeting, you may vote by proxy on any matter to come before the meeting. The Company's Board of Directors ("Board of Directors" or "Board") is, by means of this proxy statement, soliciting your proxy. Any proxy given pursuant to this solicitation and received in time for the Annual Meeting will be voted as specified on the proxy card. If no instructions are given, proxies will be voted (1) FOR election of the eight nominees named below under the caption “
Election of Directors
,”; (2) FOR approval, on an advisory basis, of the compensation of named executive officers for
fiscal year 2016
; (3) FOR ratification of the appointment of Grant Thornton LLP as A-Mark’s independent registered public accountants for the fiscal year ending
June 30, 2017
, and (4) in the discretion of the proxies named on the proxy card with respect to any other matters properly brought before the Annual Meeting.
As a registered holder of A-Mark common stock, you may vote over the internet, by mail and in person, as described in these proxy materials, including the proxy card. Attendance in person at the Annual Meeting will not of itself revoke a proxy, but any stockholder who does attend the Annual Meeting may revoke a proxy orally and vote in person. Proxies may be revoked at any time before they are voted by submitting a properly executed proxy with a later date or by delivery of a written notice of revocation to A-Mark’s corporate secretary at A-Mark’s principal executive offices.
Instructions for INTERNET VOTING
:
Access “www.voteproxy.com” and follow the on-screen instructions. Have your proxy card available when you access the web page. Enter your control number as directed. (The control number is the eleven digit number located beneath the company name and account number on the upper-right side of the proxy material sent to you. If you received an email notification, the control number can be found in the body of the email.) Once you have entered the control number, you may proceed to make your selections on the online ballot. Once completed, you should then click “Submit” to receive a confirmation page as acknowledgment of the successful completion of the voting process. You may vote online until 11:59 PM EST the day before the meeting.
Holders in street name will receive a voting instruction form directly from your bank, broker or other intermediary containing instructions on how you can direct your record holder to vote your shares.
The holders of a majority of the outstanding shares of the Company’s common stock entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and shares held of record by a broker or its nominee (“Broker Shares”) that are voted in any manner are included in determining the number of votes present and for purposes of determining whether a quorum is present.
In order to be elected, a nominee for director must receive a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. The affirmative vote of the holders of a majority of the issued and outstanding shares of common stock present in person or by proxy and voting on the matter is required to approve each Proposal other than the election of directors. A withheld vote on a director nominee will have no direct effect on the election. An abstention on Proposal 2 or 3, and broker shares that are not voted on either of those Proposals, will constitute shares not voted on the Proposal, and therefore will have no effect on the outcome of the vote on that Proposal.
Each person we list in this Proxy Statement as a nominee for election as a director has agreed to serve if elected. Although we expect that all the nominees will be able to serve if elected, if a nominee becomes unable to serve between now and the meeting date, we will vote any shares for which we have received proxies in favor of a substitute nominee recommended by our Board of Directors.
The Company has appointed an inspector who will determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and will receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all
1
stockholders. On request of the person presiding at the meeting or any stockholder entitled to vote at the meeting, the inspector will make a report in writing of any challenge, question or matter determined by the inspector and execute a certificate of any fact found by the inspector. Any report or certificate made by the inspector will be
prima facie
evidence of the facts stated and of the vote as certified by them.
Only stockholders of record at the close of business on
December 19, 2016
are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement. As of the close of business on
December 19, 2016
, there were
7,031,450
shares of A-Mark common stock outstanding. Each share of common stock entitles the record holder to one vote on all matters properly brought before the Annual Meeting and any adjournment or postponement, with no cumulative voting.
If your A-Mark shares are held for you in a brokerage, bank or other institutional account, you must obtain a proxy from that entity and bring it with you to hand in with your ballot in order to be able to attend the Annual Meeting and vote your shares at the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership of Principal Stockholders
The following table shows certain information for any person who reported being a “beneficial owner” of more than 5% of A-Mark’s common stock. Persons and groups that beneficially own in excess of 5% of the Company’s common stock are required to file certain reports with the Company and with the Securities and Exchange Commission (the “SEC”) regarding such beneficial ownership. For purposes of the table below and the table set forth under “Beneficial Ownership of Management,” a person is deemed to be the beneficial owner of any shares of common stock (1) over which the person has or shares, directly or indirectly, voting or investment power, or (2) of which the person has a right to acquire beneficial ownership at any time within 60 days after
December 26, 2016
. Beneficial ownership information is presented as of
December 26, 2016
, except that where beneficial ownership information is as of earlier dates derived from SEC filings, that fact is indicated in the footnotes to the table. “Voting Power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares. Persons and groups identified in the table have sole voting power and sole investment power over the shares, except as otherwise stated in footnotes to the table. We obtained the information provided in the following table from filings with the SEC and from representations made by the persons listed below.
2
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Name of Beneficial Owner
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Amount of Beneficial Ownership
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Percent of Outstanding
Common Stock
(1)
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Joel R. Anderson
(2)
Charles C. Anderson
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648,391
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9.2
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%
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Jeffrey D. Benjamin
(3)
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813,303
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11.4
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%
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William A. Richardson
(4)
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1,012,728
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14.4
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%
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Gregory N. Roberts
(5)
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917,610
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12.9
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%
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_________________________________
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(1)
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All percentages have been calculated based on 7,031,450 shares of A-Mark common stock outstanding at December 26,2016.
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(2)
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Beneficial ownership of Joel R. Anderson and Charles C. Anderson is based on their Schedule 13D with the SEC reporting their beneficial ownership of our outstanding common stock, as a group, at March 20, 2014 and additional information provided to A-Mark by the original signatories to that Schedule 13D. Based on such information, the group’s beneficial ownership of A-Mark common stock totaled 648,931 shares at December 26, 2016, of which Joel R. Anderson had beneficial ownership of 304,553 shares, Charles C. Anderson had beneficial ownership of 343,838 shares. The address of Joel R. and Charles C. Anderson is 202 North Court Street, Florence, Alabama 35630.
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(3)
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Beneficial ownership of Jeffrey D. Benjamin is based on his amended Schedule 13D filed with the SEC reporting beneficial ownership of shares of A-Mark common stock at March 21, 2014 and additional information provided to the Company. At December 26, 2016, his beneficial ownership of A-Mark common stock totaled 813,303 shares, including 95,885 shares issuable to Mr. Benjamin upon exercise of stock options that are currently exercisable or will become exercisable within 60 days. The reported beneficial ownership also includes 250,000 shares held in a family trust as to which Mr. Benjamin neither has nor shares voting or dispositive power, as to which shares he disclaims beneficial ownership. Such beneficial ownership excludes 23,971 stock options that are not currently exercisable and will not become exercisable within 60 days. The address of Mr. Benjamin is 429 Santa Monica Blvd. Suite 230, Santa Monica, CA 90401.
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(4)
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Beneficial ownership of William A. Richardson is based on his amended Schedule 13D filed with the SEC reporting beneficial ownership of A-Mark common stock at March 21, 2014. His beneficial ownership of A-Mark common stock totaled 1,012,728 shares at March 21, 2014, including 778,938 shares owned directly by Silver Bow Ventures LLC (11.1% of the currently outstanding class) as to which Mr. Richardson shares voting and dispositive power with Gregory N. Roberts. The address of Mr. Richardson and Silver Bow Ventures LLC is 429 Santa Monica Blvd. Suite 230, Santa Monica, CA 90401.
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(5)
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Beneficial ownership of Gregory N. Roberts is based on his amended Schedule 13D filed with the SEC reporting beneficial ownership of A-Mark common stock at March 21, 2014 and additional information provided to the Company. At December 26, 2016, his beneficial ownership of A-Mark common stock totaled 917,610 shares, including 10,000 shares as to which Mr. Roberts has sole voting and dispositive power, 56,756 shares as to which Mr. Roberts shares voting and dispositive power with his wife and 778,938 shares owned directly by Silver Bow Ventures LLC (11.1% of the outstanding class) as to which Mr. Roberts shares voting and dispositive power with William Richardson, and including shares issuable to Mr. Roberts upon exercise of 71,916 options to acquire A-Mark common stock (as to which Mr. Roberts has sole voting and sole dispositive power). Such beneficial ownership excludes 300,000 stock options that are not currently exercisable and will not become exercisable within 60 days. The address of Mr. Roberts is 429 Santa Monica Blvd. Suite 230, Santa Monica, CA 90401.
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Beneficial Ownership of Management
The following table shows the number of shares of common stock beneficially owned as of
December 26, 2016
, by each director then serving in office, nominee for director, and executive officer named in the
Summary Compensation Table
, and by our current directors and executive officers as a group. Except as otherwise indicated in the footnotes below, each named person had sole voting and sole investment power with respect to the shares shown as beneficially owned by that person.
3
Beneficial Ownership of Management
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Name of Beneficial Owner
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Amount and Nature
Of Beneficial Ownership
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Percent of Outstanding
Common Stock
(1)
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Joel R. Anderson
(2)
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648,391
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9.2
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%
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Jeffrey D. Benjamin
(3)
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813,303
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11.4
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%
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Ellis Landau
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179,025
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2.5
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%
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Beverley Lepine
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2,000
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(4)
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*
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William Montgomery
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198,662
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(5)
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2.8
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%
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John U. Moorhead
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18,272
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*
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Jess M. Ravich
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257,226
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3.7
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%
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Gregory N. Roberts
(6)
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917,610
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12.9
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%
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Thor G. Gjerdrum
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8,585
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*
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David W.G. Madge
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—
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*
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All current directors and executive officers as a group (12 persons)
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3,100,840
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(7)
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43.0
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%
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_________________________________
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*
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Less than 1%.
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(1)
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See footnote (1) to the table under the caption “Beneficial Ownership of Principal Stockholders” above.
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(2)
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See footnote (2) to the table under the caption “Beneficial Ownership of Principal Stockholders” above.
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(3)
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See footnote (3) to the table under the caption “Beneficial Ownership of Principal Stockholders” above.
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(4)
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Includes 2,000 shares issuable upon exercise of stock options that are currently exercisable or will become exercisable within 60 days.
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(5)
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Includes 177,745 shares that would be held in a trust as to which Mr. Montgomery has no voting power and limited dispositive power, and as to which shares Mr. Montgomery disclaims beneficial ownership.
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(6)
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See footnote (5) to the table under the caption “Beneficial Ownership of Principal Stockholders” above.
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(7)
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Includes 184,184 shares issuable upon exercise of stock options that are currently exercisable or will become exercisable within 60 days.
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4
INFORMATION ABOUT OUR RELATIONSHIP WITH OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Grant Thornton LLP audited the Company's
consolidated
financial statements for the fiscal
years ended June 30, 2016 and 2015
, and has served as our independent registered public accounting firm since June 12, 2015.
Fees to Independent Registered Public Accounting Firm for
Fiscal Years 2016 and 2015
The following table sets forth by fee category the aggregate fees for professional services rendered by Grant Thornton LLP.
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in thousands
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Grant Thornton LLP
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Years Ended June 30,
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2016
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2015
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Fee Category:
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Audit fees
(1)
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$
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598
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$
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515
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Audit-related fees
(2)
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—
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—
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Tax fees
(3)
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—
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—
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All other fees
(4)
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—
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—
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Total
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$
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598
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$
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515
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_________________________________
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(1)
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Audit fees consisted of services rendered by the principal accountant for the audit and reviews of our annual and quarterly condensed consolidated financial statements.
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(2)
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Audit-related fees includes the aggregate fees for assurance and related services provided that are reasonably related to the performance of the audits or reviews of the financial statements and which are not reported above under “Audit fees.”
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(3)
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Tax fees consists of professional services rendered for tax compliance, tax planning, tax advice, and value added tax process review. The services for the fees disclosed under this category include tax return preparation, research and technical tax advice.
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(4)
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All other fees includes the aggregate fees for products and services provided that are not reported above under “Audit fees,” “Audit-related fees” or “Tax fees.”
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5
Audit Committee Report
The following Audit Committee Report is provided in accordance with the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, this report shall not be deemed “soliciting materials,” filed with the SEC, subject to Regulation 14A or 14C under the Securities Exchange Act or 1934 or subject to the liabilities of section 18 of the Securities Exchange Act of 1934, as amended.
A-Mark’s Audit Committee has reviewed and discussed the audited consolidated financial statements of the Company for the fiscal year ended
June 30, 2016
with management. A-Mark’s Audit Committee has discussed the matters required by Auditing Standard No. 16 (
Communications with Audit Committees
) and other authoritative guidance with its independent registered public accounting firm. The Audit Committee has also received the written disclosures and the letter from such firm required by the Securities Acts administered by the Securities and Exchange Commission and in compliance with Rule 3520 (
Auditor Independence
) of the Public Company Accounting Oversight Board (“PCAOB”), and has discussed with such firm its independence from A-Mark and its management, and has considered whether the provision of non-audit services by such firm is compatible with maintaining the auditor’s independence.
Based on the review and the discussions noted above, A-Mark’s Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in its Annual Report on Form 10-K for the fiscal year ended
June 30, 2016
, as filed with the Securities and Exchange Commission.
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Audit Committee
of A-Mark Precious Metals, Inc. |
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Ellis Landau (Chairman)
Beverley Lepine
William Montgomery
John U. Moorhead
Jess M. Ravich
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6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the
years ended June 30, 2016 and 2015
, the Company made sales and purchases to various companies that have been deemed to be related parties under applicable accounting rules. One of these companies, Spectrum Group International, Inc. ("SGI" or the "Former Parent"), was the parent company of A-Mark prior to the spin-off of A-Mark in 2014. The Former Parent was and is a "related person" under Item 404 of Regulation S-K due to the service by two executive officers of A-Mark as executive officers of the Former Parent (as discussed below), and because each of the following persons who are directors and/or principal stockholders of A-Mark are owners of more than five percent of the equity securities of the Former Parent: Jeffrey D. Benjamin, Joel R. Anderson, William A. Richardson and Gregory N. Roberts (Mr. Roberts also is A-Mark's CEO). Information is also provided below regarding an equity investee of A-Mark, which investee is considered a related party under applicable accounting rules but which is not a "related person" under Item 404 of Regulation S-K.
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in thousands
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Years Ended June 30,
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2016
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2015
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Sales
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Purchases
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Sales
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Purchases
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Former Parent
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$
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30,544
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$
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42,264
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$
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7,521
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$
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9,201
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Equity method investee
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717,309
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6,867
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—
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—
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$
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747,853
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$
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49,131
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$
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7,521
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$
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9,201
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Balances with Related Party Companies
As of
June 30, 2016
and
June 30, 2015
, the Company had related party receivables and payables balances as set forth below:
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in thousands
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|||||||||||||||||
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June 30, 2016
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June 30, 2015
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||||||||||||||||
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Receivables
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Payable
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Receivables
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Payable
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||||||||||||||
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Former Parent
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$
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1,913
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$
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138
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$
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1,097
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$
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10
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|||||
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Equity method investee
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2,396
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—
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279
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—
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|||||||||
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$
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4,309
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$
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138
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$
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1,376
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$
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10
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||||||
Secured Loans Made to Related Party Companies
On October 9, 2014, a subsidiary of A-Mark entered into a loan agreement with the Former Parent providing a secured line of credit to the Former Parent in the maximum principal amount of up to $16.0 million, bearing interest at a competitive rate per annum. Advances under the line of credit were secured by numismatic and semi-numismatic products. This secured loan was paid off in full, plus accrued interest, on April 15, 2015. As of June†30, 2016 and June†30, 2015, the aggregate carrying value of this loan was $0.0 million.
On July 23, 2015, a subsidiary of A-Mark entered into a loan agreement with Former Parent providing a secured line of credit to the Former Parent in the maximum principal amount of up to
$2.5 million
, bearing interest at a competitive rate per annum. The loan is secured by numismatic and semi-numismatic products. As of
June 30, 2016
, the aggregate carrying value of this loan was
$1.4 million
.
Interest Income Earned from Related Party Companies
During the
years ended June 30, 2016 and 2015
, the Company earned interest income related to loans made to Former Parent and related to financing products sold to Former Parent and to the equity method investee, as set forth below:
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in thousands
|
|||||||||
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Years Ended June 30,
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2016
|
2015
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|||||||
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Interest income from loan receivables
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$
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65
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$
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229
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|
|||
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Interest income from finance products
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2,302
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890
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|||||
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$
|
2,367
|
|
$
|
1,119
|
|
||||
7
Other Income Earned from Equity Method Investee
During the
years ended June 30, 2016 and 2015
, the Company recorded its proportional share of its equity method investee's net income as other income that total
$701,000
and
$0
, respectively. As of
June 30, 2016
and
June 30, 2015
the carrying balance of the equity method investment was
$7.3 million
and
$2.0 million
, respectively.
Secondment Agreement Fees and Reimbursements
In connection with the Distribution, the Former Parent and A-Mark entered into a secondment agreement (the "Secondment Agreement"). Under the terms of the Secondment Agreement, A-Mark agreed to make Gregory N. Roberts, our Chief Executive Officer, and Carol Meltzer, our Executive Vice President, General Counsel and Secretary, available to the Former Parent for the performance of specified management and professional services following the spinoff in exchange for an annual secondment fee of
$150,000
and reimbursement of certain bonus payments. The Secondment Agreement terminated on June 30, 2016. Gregory N. Roberts has continued since July 1, 2016 serving as Chief Executive Officer and a Director of the Former Parent.
The Company recorded the accrual of secondment fees as a reduction to selling, general and administration expense. During the
years ended June 30, 2016 and 2015
, the Company recognized approximately
$150,000
and
$150,000
, respectively, of secondment fees. As of
June 30, 2016
and
June 30, 2015
the outstanding balance of secondment fees due from SGI was
$0
and
$0
, respectively.
Income Tax Sharing Obligations
The amount receivable under the Company's income tax sharing obligation due from our Former Parent, totaled
$0.2 million
, and
$1.1 million
as of
June 30, 2016
and
June 30, 2015
, respectively, and is shown on the face of the
consolidated
balance sheets as "income taxes receivable from Former Parent" (see
Note 12
.)
Transaction with Affiliate of Board Member
In February 2015, A-M Global Logistics, LLC ("Logistics"), a wholly owned subsidiary of the Company that was formed to operate the Company's logistics fulfillment center in Las Vegas, Nevada, entered into various agreements with W. A. Richardson Builders, LLC ("WAR"), for the buildout of and improvements to the Las Vegas premises. The spouse of the Chairman of the Company's Audit Committee, Ellis Landau, is an owner and a managing member of WAR. The agreements were amended in January 2016. The amounts involved under the WAR contract, as amended, were approximately
$1.5 million
. WAR is entitled to a fee equal to
5.0%
of the contract work.
Policy and Procedures Governing Related Party Transactions
Our Board of Directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our “Statement of Policy Regarding Transactions with Related Persons.” Our policy requires that a “related person” (as defined in paragraph (a) of Item 404 of Regulation S-K) must promptly disclose to our general counsel any proposed “related person transaction” (defined as any transaction or series of related transactions that is reportable by us under Item 404(a) of Regulation S-K in which we are or will be a participant and the amount involved exceeds $120,000) in which such related person has or will have a direct or indirect material interest, together with all material facts with respect thereto. The general counsel must promptly communicate such information to our Audit Committee (references in this paragraph to the Audit Committee include any other independent body of our Board of Directors, which may act instead of the Audit Committee). No related-person transaction will be entered into without the approval or ratification of our Audit Committee. It is our policy that directors interested in a related-person transaction will recuse themselves from any such vote. Our policy does not specify the standards to be applied by our Audit Committee in determining whether or not to approve or ratify a related-person transaction, and we accordingly anticipate that these determinations will be made in accordance with principles of Delaware law generally applicable to directors of a Delaware corporation.
8
Executive Compensation
The table below sets forth the compensation of the Company's named executive officers ("NEOs") for fiscal 2016 and 2015.
|
Summary Compensation Table - Fiscal 2016 and 2015
|
||||||||||||||||||||||||||||||
|
Name and Principal Position
|
Year
|
Salary
(1)
($)
|
Bonus($)
|
Stock Awards
($)
|
Option Awards
(2)
($)
|
Non-Equity Incentive Plan
Compensation
(3)
($)
|
All Other
Compensation
(4)
($)
|
Total
($)
|
||||||||||||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
||||||||||||||||||||||
|
Gregory Roberts
|
2016
|
$
|
525,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,941,283
|
|
$
|
1,489,122
|
|
$
|
27,639
|
|
$
|
3,983,044
|
|
||||||||
|
Chief Executive Officer and Director
|
2015
|
$
|
525,000
|
|
$
|
400,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
19,776
|
|
$
|
944,776
|
|
||||||||
|
David W. G. Madge
|
2016
|
$
|
430,000
|
|
$
|
265,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
30,768
|
|
$
|
725,768
|
|
||||||||
|
Chief Marketing Officer (formerly President)
|
2015
|
$
|
425,000
|
|
$
|
700,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
25,503
|
|
$
|
1,150,503
|
|
||||||||
|
Thor Gjerdrum
|
2016
|
$
|
424,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
373,001
|
|
$
|
5,534
|
|
$
|
802,535
|
|
||||||||
|
President (formerly Executive Vice President and Chief Operating Officer )
|
2015
|
$
|
404,000
|
|
$
|
17,040
|
|
$
|
—
|
|
$
|
—
|
|
$
|
182,960
|
|
$
|
2,424
|
|
$
|
606,424
|
|
||||||||
|
_________________________________
|
|||
|
(1)
|
Salary amounts represent salary paid for services performed in the fiscal year. Salary payments received may vary due to the timing of pay periods that start in one fiscal year and end in the next.
|
||
|
(2)
|
The value of the option award shown in this column is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used and the resulting fair value of stock options granted during fiscal 2016 is summarized in Note 16 to our consolidated financial statements, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2016.
|
||
|
(3)
|
Awards in this column for fiscal 2016 resulted from performance-based bonus opportunities granted to the CEO and COO, which constituted non-equity incentive plan awards. The fiscal 2016 award paid to the CEO includes a portion, valued at $171,700, paid by issuance of 10,000 shares of unrestricted Company common stock. Non-equity incentive plan compensation for these NEOs are described in greater detail below in “Narrative Discussion of Executive Compensation.”
|
||
|
(4)
|
Amounts in this column, for fiscal 2016, are as follows:
•
Mr. Roberts received $9,000 as a car allowance, $5,766 as a 401(k) matching contribution and $12,873 as a cash payment in lieu of vacation time.
•
Mr. Madge received $7,200 as a 401(k) matching contribution and $23,568 as a cash payment in lieu of vacation time.
•
Mr. Gjerdrum received $5,534 as a 401(k) matching contribution.
|
||
Narrative Discussion of Executive Compensation
In fiscal 2016 and 2015, Mr. Roberts, our CEO, was employed by A-Mark and all compensation was paid by A-Mark. During that time, under the Secondment Agreement between A-Mark and SGI, Mr. Roberts also provided services to SGI as its Chief Executive Officer, President and a Director of SGI, for which SGI paid A-Mark. Since March 2014, SGI has been a business entity separate from A-Mark, and SGI's financial results have no effect on A-Mark apart from the Secondment Agreement. Messrs. Madge and Gjerdrum were employed and compensated directly by A-Mark and its subsidiaries during fiscal 2016 and 2015 for their full-time service to A-Mark.
The Compensation Committee's approach to executive compensation has focused on providing total cash compensation at levels sufficient to attract and retain senior-level executives within our industry. Performance-based annual incentive awards, as part of the cash compensation opportunity, are a key element of the compensation of Mr. Roberts, our CEO, and Mr. Gjerdrum, now our President but who served as Executive Vice President and COO in fiscal 2016. These are the NEOs who are most directly responsible for our business results. The Committee generally has not issued equity awards to NEOs as part of annual compensation, but, in connection with Mr. Roberts and Mr. Gjerdrum entering into new employment agreements, granted stock options to those NEOs in the latter half of fiscal 2016 and early in fiscal 2017, respectively (as further described below). Equity awards granted by SGI before the March 2014 spin-off of A-Mark by SGI were, at that time, assumed and adjusted to become equity awards of A-Mark. The Committee may consider granting equity-based compensation in the future to act as additional incentive that is aligned with the interests of stockholders and to promote retention of the executive and long-term service.
9
We have chosen to formalize significant terms of employment of some of our NEOs by entering into employment agreements with them. This practice has helped us to attract and retain key executives and employees. In our financial services industry, there is a high degree of competition for talented executives and employees. Hiring often involves substantial negotiations regarding employment terms, which generally must be reflected in an employment agreement. Employment agreements offer us several advantages, particularly by fixing employment terms for specified time periods and thereby limiting renegotiations, and also by including provisions for the protection of our business.
During fiscal 2016, Mr. Roberts’ employment was governed by an employment agreement we entered into with him on March 14, 2014, providing for an employment term extending until June 30, 2016. The employment agreement of Mr. Gjerdrum, our COO, was entered into on February 28, 2013 and substantially amended on February 28, 2014, providing for an employment term extending until June 30, 2016. We had an employment agreement with Mr. Madge, our President, entered into as of November 1, 2011, that expired June 30, 2015. Our employment of Mr. Madge has continued after the expiration of the term of his employment agreement.
Under the terms of the employment agreements in effect for fiscal 2016, our CEO and then COO had the opportunity to earn a performance bonus based on achievement of a pre-specified level of pre-tax profit of A-Mark and, in the case of Mr. Roberts, SGI (included because A-Mark has agreed, under the Secondment Agreement, to provide Mr. Roberts' services to SGI). Such performance bonuses are intended to provide performance-based cash compensation that rewards those NEOs for their contribution to our financial performance. We view pre-tax profit as a key financial metric for purposes of our business planning, and one that does not distort the incentives to management or promote undue risk and that substantially reflects the quality of the execution of our business plan by our management team.
For purposes of the employment agreements, “pre-tax profits” is defined as A-Mark’s (or SGI’s, where relevant to Mr. Roberts) net income, as determined under Generally Accepted Accounting Principles or GAAP, for the given fiscal year, adjusted to eliminate the positive or negative effects of income taxes (in accordance with GAAP) and foreign currency exchange and, in the case of Mr. Roberts, adjusted to eliminate certain expenses incurred in connection with specified litigation affecting SGI and expenses of the spinoff.
The annual incentive formula specified for Mr. Roberts in his employment agreement, for fiscal 2016, was as follows:
|
If A-Mark and SGI pre-tax profits combined were at least $5 million, then the annual incentive would equal:
|
||
|
•
|
|
12% of pre-tax profits up to $8 million of pre-tax profits; plus
|
|
|
|
|
|
•
|
|
15% of pre-tax profits in excess of $8 million, up to $10 million of pre-tax profits; plus
|
|
|
|
|
|
•
|
|
18% of pre-tax profits in excess of $10 million of pre-tax profits.
|
|
|
|
|
If such combined pre-tax profits were less than $5.0 million, the Committee retained discretion to determine whether to pay any performance bonus and the amount thereof, up to a maximum for this discretionary amount of $600,000. In addition, the Committee retained discretion to reduce the amount of any performance bonus payable under the above formula to an amount not less than $3.0 million.
The annual incentive formula for Mr. Gjerdrum in his employment agreement, for fiscal 2016, was as follows:
|
If A-Mark has pre-tax profits of at least $5 million, a portion of the performance bonus will equal:
|
||
|
•
|
|
2.0% of such pre-tax profits up to $10 million; plus
|
|
|
|
|
|
•
|
|
2.5% of such pre-tax profits in excess of $10 million, up to $20 million; plus
|
|
|
|
|
|
•
|
|
3.0% of pre-tax profits in excess of $20 million.
|
|
|
|
|
The Committee could award discretionary bonus amounts in excess of the amounts determined under the above formula.
For fiscal 2016, the annual incentive amounts earned by our CEO and COO under the applicable pre-set performance formulas were as follows:
10
|
Named Executive Officer
|
|
Earned Annual
Incentive
Fiscal 2016
|
||||
|
Gregory N. Roberts
|
|
$
|
1,489,122
|
|||
|
Thor Gjerdrum
|
|
$
|
373,001
|
|||
A-Mark earned fiscal 2016 GAAP net income before provision for income taxes of $15.6 million, an increase of 70% over fiscal 2015. To calculate "pre-tax profit," as the basis to determine the annual incentive payout to Mr. Roberts, this net income figure is adjusted as described above. In the case of Mr. Roberts, the adjustment to reflect SGI's performance substantially reduced the pre-tax profit figure, due to SGI's pre-tax loss for fiscal 2016 (SGI's financial results have no direct effect on A-Mark, as SGI is an entirely separate entity in which A-Mark has no financial interest). Including all such adjustments, the fiscal 2016 pre-tax profit used to calculate the annual incentive to our CEO was $11.3 million. The annual incentive payout to Mr. Roberts shown in the table above was the amount calculated under his annual incentive formula (described above) with no further adjustments. In the case of Mr. Gjerdrum, the adjustments to GAAP net income before provision for income taxes for fiscal 2016 eliminated the expense of the CEO's annual incentive, which (together with other adjustments described above) resulted in pre-tax profit of $16.8 million. This amount was used to calculate the COO's annual incentive shown in the table above applying the pre-set formula (described above) with no further adjustments. The Committee makes its determinations based on preliminary calculations of financial results, retaining discretion to adjust awards for final financial results.
In the case of the CEO's fiscal 2016 annual incentive, the Compensation Committee determined to pay a portion of the award by means of a grant of 10,000 shares of our common stock. For this purpose, the shares were valued at 100% of their fair market value on September 14, 2016, the payout date of the award. The shares are fully vested, meaning that no future service is required as a condition of the grant. The balance of the CEO's award, and the full amount of the COO's award, were paid in cash (less tax withholdings).
As in past years, the Committee awarded discretionary bonuses to certain officers, including Mr. Madge, for fiscal 2016 performance. In determining to award a discretionary bonus, the Committee considered the satisfactory overall performance of Mr. Madge and his contribution to our success in fiscal 2016. The bonus amount awarded to Mr. Madge (as set forth in the Summary Compensation Table above) was viewed by the Committee as appropriate and well aligned with our operating results.
The employment agreements of our CEO and COO in effect in fiscal 2016 provide for certain payments and benefits in the event of termination of the executive due to death, total disability, by the employer not for cause or by the executive for “Good Reason.” In addition, the terms of an executive’s equity awards may be affected by a termination of employment.
Under those employment agreements, severance payments to the executive are payable if, during the term of the employment agreement, the executive’s employment is terminated by us without cause or is terminated by the executive for “Good Reason.” Severance for a termination in fiscal 2016 would have been payable as follows:
|
•
|
|
For Mr. Roberts, a lump-sum amount equal to the greater of 75% of “Annualized Pay,” which is the annual average of salary and performance bonuses paid for the previous three years, but in any event this severance amount would be not less than $1,500,000.
|
|
|
|
|
|
•
|
|
For Mr. Gjerdrum, continued payments of base salary for one year at the rates specified in the employment agreement.
|
|
|
||
In addition, the CEO or COO would have been entitled to the following:
|
•
|
|
Payment of compensation accrued as of the date of termination, consisting of salary, performance bonus earned in any fiscal year completed before termination but not yet paid, unreimbursed business expenses reimbursable under the employer’s expense policies and payment in lieu of accrued but unused vacation.
|
|
|
|
|
|
•
|
|
Payment of the pro rata portion of the performance bonus for the fiscal year of termination (based on the portion of the fiscal year worked), payable if and when such bonus would have been paid if employment had continued.
|
|
|
|
|
|
•
|
|
In the case of Mr. Roberts, continued health benefits paid by the employer for six months.
|
|
|
|
|
Good Reason would have arisen if the employer materially decreased or failed to pay the executive’s base salary or performance bonus, or materially changed the executive’s job description or duties in a way adverse to the executive, or relocated the executive’s job site by more than a specified distance without his consent, and in each case the employer failed to cure the circumstances after notice from the executive. Other material breaches of the employment agreement may constitute “Good Reason” in some instances.
11
In the event of termination of the CEO's or COO's employment during fiscal 2016 in other circumstances, the termination payments and benefits would have been as follows:
|
•
|
|
For all terminations, the compensation accrued as of the date of termination (as summarized above) would have been paid.
|
|
|
|
|
|
•
|
|
In the event of termination due to death or total disability, each executive would have received the pro rata performance bonus for the fiscal year of termination.
|
|
|
|
|
|
•
|
|
Mr. Roberts would have received the same severance and health benefits payable in the event of a termination by the employer not for cause, except that benefits would be reduced by the amount of any disability or death benefit received under employer plans.
|
|
|
|
|
Under the employment agreements (including the CEO's new employment agreement described below) and equity award agreements, the executive’s rights are not enhanced based upon a change in control of A-Mark. The agreements have provided, however, that certain payments under the agreements may be reduced if, following a change in control, the executive would be subject to the “golden parachute” excise tax and the reduction in payments would result in the executive realizing a greater after-tax amount.
The employment agreements provide that the executives will be entitled to receive medical insurance, group health, disability insurance and other benefits made generally available to employees, with some of the agreements providing assurance that the level of health benefits will not be diminished during the term of the agreement. The employment agreements also provided for indemnification to the executives for liabilities arising out of the executive’s employment. Mr. Roberts’ employment agreement also has provided a motor vehicle allowance of $750 per month. The employment agreements obligate the executives not to solicit employees to terminate employment with us or to become employees of another entity for one year following a termination for cause.
On February 19, 2016, A-Mark entered into a new employment agreement with Mr. Roberts, our CEO. The new agreement became effective July 1, 2016, immediately following the expiration of the previous employment agreement, except that we granted to the CEO stock options, as described below, effective upon the signing of the new employment agreement.
Key terms of our CEO's new employment agreement are as follows:
•
The CEO is employed in that capacity from July 1, 2016 through June 30, 2020.
|
•
|
The CEO is permitted to continue to serve in executive capacities at SGI, for up to 20% of his working time. The Secondment Agreement between A-Mark and SGI, under which the CEO’s services were provided to SGI in fiscal 2016 and 2015, ended on June 30, 2016. Accordingly, in fiscal 2017 and thereafter, SGI will pay compensation directly to Mr. Roberts for any services he may perform for SGI.
|
|
•
|
A-Mark will pay salary to the CEO in fiscal 2017, assuming he devotes 80% or more of his working time to A-Mark (but less than all of his working time due to service to SGI) at an annual rate of $520,000.
|
|
•
|
The CEO will have, in each fiscal year of the employment term, an annual incentive opportunity to earn an amount equal to 100% of salary by achieving target performance, and with the opportunity to earn 80% of salary at threshold performance levels and up to 150% of salary for above-target performance levels.
|
|
•
|
The new agreement provides for increasing salary levels (with target annual incentive at 100% of salary) for the second and third years of the employment term. In addition, the CEO’s salary level will be adjusted upward by 25% at such time as he ceases to provide services to SGI and devotes 100% of his working time to A-Mark.
|
|
•
|
Performance goals for the annual incentive will be based 75% on achievement of annual goals tied to the level of pre-tax profits (as defined) and 25% based on achievement of other qualitative and quantitative goals as determined by the Compensation Committee each year. The annual incentive award will permit the A-Mark compensation committee to exercise discretion in determining the final payout in certain cases, but only if a “gate-keeper” performance goal is met so that the award potentially can qualify for tax deductibility under Internal Revenue Code Section 162(m).
|
|
•
|
Upon the CEO signing the new employment agreement in February, 2016, we granted to him stock options covering 300,000 shares of A-Mark common stock. The options are non-qualified stock options with a maximum term of ten years. One-third of the stock options have an exercise price of $19.80 per share, the closing price on February 19, 2016. These options will vest 33.3% at the end of fiscal 2017 and for each completed fiscal year thereafter, subject to accelerated vesting in specified circumstances. Two-thirds of the stock options have premium prices, with options for 100,000 shares exercisable at $23.80 and options for 100,000 shares exercisable at $25.50. The premium priced options vest 25% for each completed fiscal year of employment, beginning with fiscal 2017, subject to accelerated vesting in specified circumstances.
|
12
|
•
|
Benefits under the new agreement are similar to those under the former employment agreement, except that A-Mark will reimburse the CEO for the cost of term life insurance based on the cost of a five-year, $1 million policy. A provision in the former employment agreement providing for a severance payment upon death is eliminated in the new employment agreement.
|
|
•
|
Payments and benefits upon termination of employment are similar to those provided under the old agreement, except that severance payable upon a termination by A-Mark not for Cause or termination by the CEO for Good Reason will be governed by a new (initially lower) payment formula. The new formula provides for a lump sum severance payment equal to the annualized level of salary paid from July 1, 2016 (that is, paid under the new agreement) plus the average annual incentive paid for fiscal years under the new agreement, but in any case not less than $1 million.
|
Except as described in the bulleted points above, the new employment agreement carries over the terms of the prior employment agreement.
On September 7, 2016, our Board appointed Thor Gjerdrum to the position of President. At that time, our Board also appointed David Madge, who had served as our President since 2011, to the position of Chief Marketing Officer.
In connection with the promotion of Mr. Gjerdrum, we entered into a new employment agreement with him, replacing his previous employment agreement that had expired on June 30, 2016. The new employment agreement, effective as of July 1, 2016, contains the following key terms:
|
•
|
The term of the agreement extends from July 1, 2016 through June 30, 2019, with the appointment to the office of President effective at September 7, 2016.
|
|
•
|
First year salary will be $450,000, with annual increases of $25,000 in each of the second and third years.
|
|
•
|
The President will have an annual incentive opportunity to earn an amount equal to 75% of salary by achieving target performance, with the Compensation Committee permitted to pay lesser amounts for achievement of specified threshold performance levels and greater amounts, up to 125% of the target amounts, for above-target performance levels.
|
|
•
|
Performance goals for the annual incentive will be based 50% on achievement of annual goals tied to the level of pre-tax profits (as defined) and 50% based on achievement of other qualitative and quantitative goals as determined by the Compensation Committee each year. The annual incentive award will permit the Compensation Committee to exercise discretion in determining the final payout in certain cases, but only if a “gate-keeper” performance goal is met so that the award potentially can qualify for tax deductibility under Internal Revenue Code Section 162(m).
|
|
•
|
Under the new agreement, upon signing, the President was granted stock options covering 100,000 shares of A-Mark common stock. The options are non-qualified stock options with a maximum term of ten years. One-third of the stock options will be exercisable at $17.67 per share (the closing price per-share on the grant date). Two-thirds of the stock options have a premium exercise price of $20.00 per share. The options will vest 33.3% for each completed fiscal year of employment, subject to accelerated vesting in specified circumstances.
|
|
•
|
Benefits under the new agreement will be similar to those under Mr. Gjerdrum’s previous employment agreement.
|
|
•
|
Payments and benefits upon termination of employment are similar to those provided under the previous employment agreement, as described above. Severance payable upon a termination by A-Mark not for Cause or termination by the President for Good Reason will be one year of salary continuation.
|
In September, 2016, the Compensation Committee and the Board of Directors adopted a recoupment policy (sometimes referred to as a "clawback" policy). This policy requires that an incentive award paid out based on A-Mark's performance will be subject to forfeiture if there occurs a restatement of A-Mark's financial statements and the restated financial information would have resulted in a reduced payout (if the award were paid out within the preceding 36 months). This policy applies even if the executive did not engage in misconduct leading to the restatement. The forfeited amount would be the amount by which the original payment exceeded the payment that would have resulted from the corrected financial information.
13
Outstanding Equity Awards At Fiscal Year-End — Fiscal 2016
|
Outstanding Equity Awards At Fiscal Year-End - Fiscal 2016
|
||||||||||||||||||||||||
|
Options Awards
(1)
|
Stock Awards
|
|||||||||||||||||||||||
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(1)
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of Shares
or Units of Stock
That Have Not
Vested
(#)
|
Market Value of Shares or
Units of Stock That Have Not Vested
($)
|
||||||||||||||||||
|
Gregory N. Roberts
|
23,972
|
|
—
|
|
10.43
|
|
2/15/2023
|
|
—
|
|
—
|
|
||||||||||||
|
23,972
|
|
—
|
|
12.52
|
|
2/15/2023
|
|
—
|
|
—
|
|
|||||||||||||
|
23,972
|
|
—
|
|
14.61
|
|
2/15/2023
|
|
—
|
|
—
|
|
|||||||||||||
|
—
|
|
100,000
|
|
(2)
|
19.8
|
|
2/18/2026
|
|
—
|
|
—
|
|
||||||||||||
|
—
|
|
100,000
|
|
(3)
|
23.8
|
|
2/18/2026
|
|
—
|
|
—
|
|
||||||||||||
|
—
|
|
100,000
|
|
(3)
|
25.5
|
|
2/18/2026
|
|
—
|
|
—
|
|
||||||||||||
|
David W.G. Madge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Thor Gjerdrum
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
(1) All options in this column were fully vested and exercisable at June 30, 2016.
(2) These options, granted February 19, 2016, vest and become exercisable as to one-third of the underlying shares on June 30 in each of 2017, 2018 and 2019.
(3) These options, granted February 19, 2016, vest and become exercisable as to one-fourth of the underlying shares on June 30 in each of 2017, 2018, 2019 and 2020.
Directors' Compensation
The board of directors has adopted a policy providing for cash-based compensation of non-employee directors. Director compensation generally is reviewed by the board of directors annually and from time to time to ensure that compensation levels are fair and appropriate. Since the spin-off in March 2014, equity awards have not been granted to directors except for a grant to a new director shortly following her joining the board of directors. In the future, the board of directors may consider granting equity awards as an element of annual non-employee director compensation. All directors are entitled to reimbursement by the Company for reasonable travel to and from meetings of the board of directors, and reasonable food and lodging expenses incurred in connection therewith and other reasonable expenses.
Under the current Director Compensation Policy, annual compensation of each non-employee director is as follows:
|
(1)
|
Cash retainer -- $60,000 per year;
|
||
|
(2)
|
Cash retainer for service as Chairman of Audit Committee or Chairman of Compensation Committee -- $10,000;
|
||
|
(3)
|
Cash retainer for service as Chairman of Nominating and Governance Committee -- $5,000; and
|
||
|
(4)
|
Cash retainer for service as member (other than Chairman) of Audit Committee or Compensation Committee -- $5,000.
|
||
No meeting fees are paid under the current Director Compensation Policy. Service as a member of a committee other than the Audit Committee or Compensation Committee does not result in additional compensation. Directors who are employees of the Company are not paid additional compensation for service as a director.
The Director Compensation Policy assumes service for a full year; directors who serve for less than the full year are entitled to receive a pro-rated portion of the applicable payment. Each “year”, for purposes of the Director Compensation Policy, will be deemed to begin on the date of our annual meeting of stockholders.
Jeffrey D. Benjamin, the Chairman of the Board, receives no additional cash compensation for service in that capacity under this Policy (he does receive the regular annual retainer for service as a non-employee director, however).
14
The following table sets forth information regarding compensation earned by non-employee directors of the Company during fiscal 2016.
|
Name
|
Fees
Earned or
Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
(1)
($)
|
All Other Compensation
($)
|
Total
($)
|
||||||||||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
||||||||||||||||||||
|
Jeffrey D. Benjamin
|
$
|
60,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
60,000
|
|
||||||||||
|
Joel Anderson
|
$
|
60,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
60,000
|
|
||||||||||
|
Ellis Landau
|
$
|
75,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
75,000
|
|
||||||||||
|
Beverley Lepine
|
$
|
65,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
65,000
|
|
||||||||||
|
William Montgomery
|
$
|
65,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
65,000
|
|
||||||||||
|
John Moorhead
|
$
|
75,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
75,000
|
|
||||||||||
|
Jess M. Ravich
|
$
|
75,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
75,000
|
|
||||||||||
|
_________________________________
|
|||
|
(1)
|
At June 30, 2016, Ms. Lepine and Mr. Benjamin held stock options to purchase A-Mark shares. Ms. Lepine held an option to purchase 3,000 shares, exercisable at $10.08 per share, with one-third of the option then vested and exercisable. This option was granted to Ms. Lepine in 2015, upon her joining the Board. Mr. Benjamin held an option to purchase 119,856 shares at $8.35 per share, which was vested and exercisable as to 71,913 shares and unvested and unexercisable as to 47,943 shares. This option was granted at the time of the spin-off in fiscal 2014, as a replacement and adjustment of an option to purchase 500,000 SGI shares.
|
||
Equity Compensation Plan Information
The following table provides information as of
June 30, 2016
, with respect to the shares of our common stock that may be issued under existing equity compensation plans.
|
Plan category
|
(a)
Number of
securities to be issued upon exercise of outstanding options, warrants and rights
|
(b)
Weighted average
exercise price of outstanding options, warrants and rights
|
(c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||||||||
|
Equity compensation plans approved by security holders
|
581,527
|
|
(1)
|
$
|
17.55
|
|
273,600
|
|
(2)
|
||||
|
Equity compensation plans not approved by security holders
|
—
|
|
—
|
|
—
|
|
|||||||
|
Total
|
581,527
|
|
$
|
17.55
|
|
273,600
|
|
||||||
|
_________________________________
|
|||
|
(1)
|
Consists of stock options granted by A-Mark to replace outstanding SGI stock options in connection with the spinoff and options issued by A-Mark subsequent to the spinoff. The former SGI equity awards had been granted by SGI under its 2012 Stock Award and Incentive Plan ("2012 Plan") and its 1997 Stock Incentive Plan, as amended ("1997 Plan"). The terms of the 2012 Plan and 1997 Plan governing equity awards generally apply to the replacement awards granted by A-Mark, but A-Mark was not and is not authorized to grant equity awards under those Plans other than the equity awards that directly replaced the former SGI equity awards.
|
||
|
(2)
|
These shares are available for future issuance under A-Mark's 2014 Stock Award and Incentive Plan ("2014 Plan"). All 2014 Plan shares are available for awards of stock options, stock appreciation rights, restricted stock units, restricted stock and other "full-value" awards.
|
||
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and executive officers, and persons owning more than 10% of a registered class of the Company's equity securities, to file with the SEC reports of their ownership of, and transactions in, the Company's common stock or other Company equity securities. To the Company's knowledge, based solely on a review of copies of such reports furnished to the Company and representations of directors and executive officers, during the fiscal year ended
June 30, 2016
, all of such persons were in compliance with the applicable Section 16(a) reporting requirements.
15
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company has fixed the number of directors at eight. The Company's directors are elected at the Annual Meeting of stockholders.
The Nominating Committee nominated and the Board of Directors ratified the nomination of the eight nominees set forth below. All of the nominees are currently serving on the Company’s Board of Directors, and all have consented to being named in this proxy statement and to serve if elected.
Unless authority to vote for the election of directors is withheld, the enclosed proxy will be voted FOR the election of the nominees named below.
Joel R. Anderson
Jeffrey D. Benjamin
Ellis Landau
Beverley Lepine
William Montgomery
John U. Moorhead
Jess M. Ravich
Gregory N. Roberts
A-Mark’s restated certificate of incorporation provides that directors may be removed only for cause and that any such removal must be approved by the affirmative vote of at least a majority of the outstanding shares of A-Mark capital stock entitled to vote generally in the election of directors at a meeting of stockholders called for that purpose.
Information Concerning Directors
You will find below background information, specific credentials, experience and other qualifications with respect to the nominees for election, each of whom has been nominated by the Board of Directors to serve until the next annual meeting of stockholders, in 2018, and until their respective successors are duly elected and qualified. See “
Security Ownership of Certain Beneficial Owners and Management
” for information regarding their holdings of A-Mark’s common stock. No other nominations were submitted.
Joel R. Anderson,
age 72, has served as a Director since March 2014. Mr. Anderson retired as the Chairman and Director of Anderson Media Corporation, the country’s largest distributor and merchandiser of pre-recorded music and a major distributor of books, and Anderson Press, a major publisher of children's books and associated products. Mr. Anderson continues to serve in various capacities for a number of affiliated companies. Mr. Anderson is a principal of Stack's LLC, SGI’s joint venture partner in Stack’s Bowers Galleries, a rare coin and currency auction house. Mr. Anderson served as a director of SGI from 2012 through March 2014. Mr. Anderson has been a member of the Board of Trustees of the American Numismatic Society since 2006 and serves on its nominating and governance committee. He is also a lifetime member of the American Numismatic Association. Mr. Anderson studied at the University of North Alabama.
Mr. Anderson’s extensive business experience, combined with his personal interest and expertise in numismatics, provide the Board with insight and guidance in matters of business planning and growth strategy.
Jeffrey D. Benjamin
, age 55, has served as Chairman of the Board and a Director since March 2014. Mr. Benjamin has been a Senior Advisor to Cyrus Capital Partners, L.P. since 2008, where he assists with distressed investments. Mr. Benjamin also serves as a consultant to Apollo Management, L.P., a private investment fund, and from September 2002 to June 2008, Mr. Benjamin served as a senior advisor to Apollo Management, where he was responsible for a variety of investments in private equity, high yield and distressed securities. Mr. Benjamin served as non-Executive Chairman of the Board of SGI from 2012 until March 2014 and as a director of SGI from 2009 until March 2014. He is also a member of the boards of directors of American Airlines Group, Inc., Caesars Entertainment Corporation and Chemtura Corporation. Mr. Benjamin is a trustee of the American Numismatic Society and has had a long-standing personal interest in coin collecting. Mr. Benjamin holds an MBA from the Sloan School of Management at M.I.T. and a BA from Tufts University.
With his financial and business background and service as a public company director, including service with SGI when A-Mark was a subsidiary, and his personal involvement in numismatics, Mr. Benjamin contributes to the Board in matters of corporate finance, governance, business development and industry strategy.
Ellis Landau,
age 72, has served as a Director since March 2014, and serves as Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Landau serves as a member of the Board of Managers of Accuity Delivery Systems, LLC, a rapidly growing early stage medical service company. He is a member of its executive committee and serves as chairman of
16
its audit committee. In 2006, Mr. Landau retired as Executive Vice President and Chief Financial Officer of Boyd Gaming Corporation (NYSE: BYD), a position he held since he joined the company in 1990. Mr. Landau previously worked for Ramada Inc., later known as Aztar Corporation, where he served as Vice President and Treasurer, as well as U-Haul International in Phoenix and the Securities and Exchange Commission in Washington, D.C. Mr. Landau served as a director of SGI from 2012 until March 2014. From 2007 to 2011, Mr. Landau was a member of the Board of Directors of Pinnacle Entertainment, Inc. (NYSE:PNK), a leading gaming company, where he served as chairman of the audit committee and as a member of its nominating and governance committee and its compliance committee. Mr. Landau received his Bachelor of Arts in economics from Brandeis University and his M.B.A. in finance from Columbia University Business School.
Mr. Landau brings to the Board substantial finance, accounting and corporate governance experience, including the experience and ability to serve as the Chairman of the Audit Committee.
Beverley Lepine
, age 64, has served a Director since February 2015, and serves as a member of the Audit Committee. Ms. Lepine retired as Chief Operating Officer from the Royal Canadian Mint, a Canadian Federal Crown Corporation, after 27 years in various positions, including Chief Financial Officer and Vice President of Manufacturing. Prior to joining the Royal Canadian Mint, Ms. Lepine worked from 1980 until1987 for the Treasury Board Secretariat of the Government of Canada and Via Rail Canada. Upon graduating with a Bachelor's degree in Business Administration from Bishop's University in 1974, Ms. Lepine worked for Clarkson Gordon from 1974 until1980 where she obtained her Chartered Professional Accountant ("CPA") designation in 1978. She obtained her Institute of Corporate Directors Certificate (ICD.D) in 2011. Ms. Lepine was Chair of the Board of Bruyere Continuing Care, a chronic continuing care hospital in Ottawa from 2008-2010 and is currently Treasurer and member of the Board of the Pallium Foundation.
Ms. Lepine's extensive knowledge of the worldwide minting and coinage industries provide the Board with insight and guidance in matters of business planning and growth strategy. She also brings a strong background in finance and accounting to bear as a member of the Audit Committee and as a director.
William Montgomery
, age 56, has served as a Director since March 2014. Mr. Montgomery is a private investor with a focus on equities and real estate. He was Executive Vice President in charge of principal investments for Libra Securities from 1999-2000. Previously, he was a Managing Director at Salomon Brothers Inc., where he was a member of the fixed income arbitrage group with responsibility for proprietary investments in high yield securities, a distressed debt trader and a member of the investment banking group. Mr. Montgomery served as a director of SGI from 2012 until March 2014. He is a graduate of the University of Virginia and the Columbia University School of Law.
Mr. Montgomery brings to the Board expertise in investments, finance and capital markets, which the Company believes is particularly important as it seeks to grow its market presence.
John (“Jay”) U. Moorhead
, age 64, has served as a Director since March 2014, and serves as Chairman of our Compensation Committee. He has been a managing director of Global Power Partners, an investment banking firm, since August 2015. Prior to that, he was a Managing Director at Ewing Bemiss & Co. from 2009 through July 2015, and served in the same capacity at Westwood Capital from 2005 until 2009 and at MillRock Partners from 2003 until 2005. From 2001 to 2003, Mr. Moorhead was a corporate finance partner at C.E. Unterberg, Towbin. Mr. Moorhead served as a director of SGI from 2012 until March 2014. Mr. Moorhead received his B.A. degree from the University of Vermont, and attended the Program for Management Development at Harvard Business School.
Mr. Moorhead brings to the Board expertise in corporate finance and valuable perspectives on public company growth and global competition. Mr. Moorhead also has experience in the area of executive compensation, which gives him the experience and ability to serve as Chairman of our Compensation Committee.
Jess M. Ravich
,
age 59, has served as a Director since March 2014. Mr. Ravich is group managing director and head of alternative products for The TCW Group, Inc., an international asset-management firm, which he joined in 2012. Prior to joining The TCW Group, Mr. Ravich served as managing director and head of capital markets of Houlihan, Lokey, Howard & Zukin, Inc., an international investment bank. From 1991 through November 2009, Mr. Ravich founded and served as chief executive officer of Libra Securities LLC, an investment banking firm serving the middle market. Prior to founding Libra, Mr. Ravich was an executive vice president of the fixed income department at Jefferies & Company, a Los Angeles-based brokerage firm, and a senior vice president at Drexel Burnham Lambert, where he was also a member of the executive committee of the high yield group. Mr. Ravich served as a director of SGI from 2009 until March 2014. He also serves on the Board of Directors of The Cherokee Group, Inc. (NASDAQ: CHKE), and as Chairman of the Board of ALJ Regional Holdings, Inc. (NASDAQ: ALJJ).
Mr. Ravich is a graduate of the Wharton School at the University of Pennsylvania and Harvard Law School, where he was an editor of the Harvard Law Review.
17
With his extensive background in investment banking and the financial markets, Mr. Ravich provides Board leadership in matters of strategic development and business initiatives, including potential growth through acquisitions.
Gregory N. Roberts
, age 54, has been Chief Executive Officer and a Director of A-Mark since July 2005. Mr. Roberts has served as President and Chief Executive Officer of SGI since March 2008. Mr. Roberts previously served as the President of SGI’s North American coin division, which included A-Mark. He is also a lifetime member of the American Numismatic Association. Through his day-to-day involvement in all aspects of the Company’s operations, Mr. Roberts provides a vital link between junior and senior management personnel and the general oversight and policy-setting responsibilities of the Board. Mr. Roberts is a director of SGI (serving as such since 2000). Mr. Roberts also serves as Chief Executive Officer of SGI.
Mr. Roberts brings to the Board expertise in numismatics and trading, extensive knowledge of the precious metals industry and, in his role as Chief Executive Officer, in-depth knowledge of the Company and its business.
INFORMATION ABOUT OUR BOARD OF DIRECTORS AND MANAGEMENT
The Board of Directors oversees our business and monitors the performance of our management. In accordance with our corporate governance procedures, the Board of Directors does not involve itself in the day-to-day operations of the Company. The Company’s executive officers and management oversee the day-to-day operations of A-Mark. Our directors fulfill their duties and responsibilities by attending regular meetings of the Board of Directors. Our directors also discuss business and other matters with the Chief Executive Officer and the President, other key executives, and our principal external advisers (legal counsel, auditors, financial advisors and other consultants).
The Board of Directors considers and establishes the appropriate leadership structure for the Company. The Board has concluded that the Company and its stockholders are best served by not having a formal policy on whether the same individual should serve as both Chief Executive Officer and Chairman of the Board. The Board believes that it is important to retain the flexibility to make this determination based on the circumstances at the time of the determination, recognizing that no single leadership structure will best serve the Company in all cases. This allows the Board to use its broad experience and knowledge to elect the most qualified director as Chairman of the Board, while maintaining its ability to separate the roles of Chairman and Chief Executive Officer. In making this determination, the Board will consider the advantages that come from having leadership of the Board by a person other than the Chief Executive Officer. Even if a single person were to fill both roles, the Board anticipates that it would appoint a director to serve separately as the presiding or lead non-management director in order to preserve those advantages.
Mr. Benjamin has served as Chairman of the Board since March 2014. The Chairman of the Board has the authority to call special meetings of the Board, sets the agenda for Board meetings, acts as a Board liaison with the Chief Executive Officer, chairs meetings of the Board and communicates the Board of Directors’ feedback to the Chief Executive Officer. The Board believes that Mr. Benjamin’s work experience, education and leadership ability make him the best choice currently to serve as our Chairman of the Board.
In fiscal 2016, the Board of Directors met five times. Each director attended at least 75% of the meetings of the A-Mark Board of Directors and Board committees, if any, of which he was a member during the period of the director's service in fiscal 2016.
Under the Company’s policy, each director of the Company is expected to be present at annual meetings of stockholders, absent exigent circumstances that prevents his attendance. Where a director is unable to attend an annual meeting in person but is able to do so by electronic conferencing, the Company will arrange for the director’s participation by means where the director can hear, and be heard, by those present at the meeting. At our Annual Meeting held in January 2016, all of our directors were in attendance.
The Company’s Board of Directors has determined that all nominees for the Board of Directors other than Greg Roberts qualify as “independent” as that term is currently defined in Rule 5605(a)(2) and (c)(2) of the Nasdaq listing standards.
Committees of the Board
Our Board has established an audit committee, a compensation committee and a nominating and corporate governance committee.
Audit Committee
The duties and responsibilities of the Audit Committee are set forth in its written charter, available on our website, www.amark.com, and include the following:
|
•
|
to oversee the quality and integrity of our financial statements and our accounting and financial reporting processes;
|
|
•
|
to prepare the audit committee report required by the SEC in our annual proxy statements;
|
|
•
|
to review and discuss with management and the independent registered public accounting firm our annual and quarterly financial statements;
|
18
|
•
|
to review and discuss with management our earnings press releases;
|
|
•
|
to appoint, compensate and oversee our independent registered public accounting firm, and pre-approve all auditing services and non- audit services to be provided to us by our independent registered public accounting firm;
|
|
•
|
to review the qualifications, performance and independence of our independent registered public accounting firm; and
|
|
•
|
to establish procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.
|
The members of the Audit Committee are Messrs. Landau (Chairman), Montgomery, Moorhead and Ravich. Each of the members is an independent director, as defined under the rules of The NASDAQ Stock Market and our Corporate Governance Guidelines, and meets the criteria for independence under Rule 10A-3(b)(1) under the Securities and Exchange Act of 1934 and otherwise satisfies the conditions of The NASDAQ Stock Market rules for audit committee membership, including the financial literacy requirements. In addition, Mr. Landau qualifies as an "audit committee financial expert," in compliance with the rules and regulations of the SEC and The NASDAQ Stock Market.
Compensation Committee
The duties and responsibilities of the Compensation Committee are set forth in its written charter, available on our website, www.amark.com, and include the following:
|
•
|
to determine, or recommend for determination by our board of directors, the compensation of our chief executive officer and other executive officers;
|
|
•
|
to establish, review and consider employee compensation policies and procedures;
|
|
•
|
to review and approve, or recommend to our board of directors for approval, any employment contracts or similar arrangement between the Company and any executive officer of the Company;
|
|
•
|
to review and discuss with management the Company’s compensation policies and practices and management’s assessment of whether any risks arising from such policies and practices are reasonably likely to have a material adverse effect on the Company;
|
|
•
|
to review, monitor, and make recommendations concerning incentive compensation plans, including the use of stock options and other equity-based plans; and
|
|
•
|
to appoint, compensate and oversee any compensation consultant, legal counsel or other advisor retained by the Compensation Committee in its sole discretion;
|
The members of the Compensation Committee are Messrs. Moorhead (Chairman), Landau and Ravich. Each of the members of the Compensation Committee is an independent director, as defined under the rules of The NASDAQ Stock Market and our Corporate Governance Guidelines, and otherwise satisfies the conditions of The NASDAQ Stock Market rules for compensation committee membership.
Steven Hall & Partners, LLC (“Steven Hall”), an independent executive compensation consulting firm, has been retained by the Compensation Committee to advise and assist it with respect to executive compensation matters. The Committee has the sole authority to set Steven Hall’s compensation and/or to terminate the services of Steven Hall. Steven Hall’s services to A-Mark are generally limited to advising on executive and director compensation, the implementation of our compensation programs, governance policies and disclosure matters that relate to compensation or are affected by compensation arrangements. The Committee has determined that Steven Hall has no conflict of interest and is independent in its role as compensation consultant to the Committee.
The Committee often requests our CEO, General Counsel and other senior executives to be present at meetings where executive compensation and corporate and individual performance are discussed and evaluated by the Committee or the Board of Directors, and to provide information to the Committee and the Board regarding compensation issues. These executives provide insight, suggestions and recommendations, as requested by the Committee, regarding executive compensation matters. The Committee also meets with our CEO to discuss his compensation package and his recommendations for other executives. In this regard, the Committee from time-to-time authorizes the CEO to negotiate on compensation matters and, for non-executive officers, to make determinations regarding compensation. Members of our management team work with Steven Hall to provide it information and develop proposals relating to the structure of executive compensation, to ensure the accuracy of information provided to the Committee and in implementing our compensation programs. Ultimately, the terms of compensation of our CEO and other executive officers are subject to the approval of the Compensation Committee.
19
Nominating and Corporate Governance Committee
The duties and responsibilities of the Nominating and Corporate Governance Committee set forth in its written charter, available on our website, www.amark.com, and include the following:
|
•
|
to recommend to our board of directors proposed nominees for election to the board of directors by the shareholders at annual meetings, including an annual review as to the renominations of incumbents and proposed nominees for election by the board of directors to fill vacancies that occur between shareholder meetings;
|
|
•
|
to make recommendations to the board of directors regarding corporate governance matters and practices; and
|
|
•
|
to recommend members for each committee of the board of directors.
|
The members of the Nominating and Governance Committee are Messrs. Ravich (Chairman), Montgomery and Moorhead. Each of the members is an independent director, as defined under the rules of The NASDAQ Stock Market and our Corporate Governance Guidelines.
Corporate Governance Guidelines
Our Board of Directors has adopted our Corporate Governance Guidelines that sets forth our policies and procedures relating to corporate governance effective as of the distribution. Our Corporate Governance Guidelines is available on our website, www.amark.com.
The Nominating and Corporate Governance Committee works with the Board to determine the appropriate characteristics, skills, and experiences for the Board as a whole and its individual members. The Committee believes that members of the Company’s Board of Directors must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to stockholders, provide effective oversight of the management of the Company and monitor the Company’s adherence to principles of sound corporate governance. These qualities, which are only threshold criteria and are subject to limited exceptions, include integrity, absence of conflict of interest which would impair the ability to serve, fair and equal representation, achievement, oversight, business understanding and available time.
The Company is of the view that the continuing service of qualified incumbents promotes stability and continuity in the board room, contributing to the Board’s ability to work as a collective body, while giving the Company the benefit of the familiarity and insight into the Company’s affairs that its directors have accumulated during their tenure. Accordingly, the process of the Committee for identifying nominees reflects the Company’s practice of re-nominating incumbent directors who continue to satisfy the Committee’s criteria for membership on the Board, whom the Committee believes continue to make important contributions to the Board and who consent to continue their service on the Board.
The Committee will identify and evaluate new candidates for election to the Board where there is no qualified and available incumbent, including for the purpose of filling vacancies arising by reason of the resignation, retirement, removal, death or disability of an incumbent director or a decision of the directors to expand the size of the Board. The Committee will solicit recommendations for nominees from persons that the Committee believes are likely to be familiar with qualified candidates. These persons may include members of the Board, including members of the Committee, and management of the Company. The Committee may also determine to engage a professional search firm to assist in identifying qualified candidates. As to each recommended candidate that the Committee
believes merits consideration, the Committee will cause to be assembled information concerning the background and qualifications of the candidate, including information concerning the candidate required to be disclosed in the Company’s proxy statement under the rules of the SEC and any relationship between the candidate and the person or persons recommending the candidate; determine if the candidate satisfies the minimum qualifications required by the Committee of candidates for election as director; determine if the candidate possesses any of the specific qualities or skills that under the Committee’s policies must be possessed by one or more members of the Board; consider the contribution that the candidate can be expected to make to the overall functioning of the Board; and consider the extent to which the membership of the candidate on the Board will promote diversity among the directors (for this purpose, diversity includes diversity of background, experience, business skills, business relationships and other attributes). In its discretion, the Committee may solicit the views of the Chief Executive Officer, other members of the Company’s senior management and other members of the Board regarding the qualifications and suitability of candidates to be nominated as directors. In its discretion, the Committee may designate one or more of its members (or the entire Committee) to interview any proposed candidate. Based on all available information and relevant considerations, the Committee will select a candidate who, in the view of the Committee, is most suited for membership on the Board. The Committee maintains appropriate records regarding its process of identifying and evaluating candidates for election to the Board.
It is the policy of the Company that the Nominating and Corporate Governance Committee of the Board consider recommendations for the nomination of directors submitted by holders of the Company’s shares entitled to vote generally in the election of directors. The Nominating and Corporate Governance Committee will give consideration to these recommendations for positions on the Board where the Committee has not determined to re-nominate a qualified incumbent director. The Nominating
20
and Corporate Governance Committee will only consider recommendations of nominees who satisfy the minimum qualifications prescribed by the Committee for Board candidates. In considering any recommendation for the nomination of directors, the Nominating and Corporate Governance Committee will take into account the size and duration of a recommending stockholder’s ownership interest in the Company. Only those recommendations whose submission complies with the procedural requirements adopted by the Nominating and Corporate Governance Committee will be considered by the Committee.
Oversight of Risk Management
Our Board recognizes that companies face a variety of risks, including credit risk, liquidity risk, strategic risk, and operational risk. It believes an effective risk management system will (i) timely identify the material risks that we face, (ii) communicate necessary information with respect to material risks to senior executives and, as appropriate, to the Board or relevant Board committee, (iii) implement appropriate and responsive risk management strategies consistent with our risk profile, and (iv) integrate risk management into our decision-making. Our Board encourages and management promotes a corporate culture that incorporates risk management into our corporate strategy and day-to-day business operations. The Board also works, with the input from our executive team, to assess on an on-going basis and analyze the most likely areas of future risk for us.
Code of Ethics
Our board of directors has adopted a Code of Ethics applicable to our directors, officers and employees, including our Chief Executive Officer, Chief Financial Officer and other senior officers, in accordance with applicable rules and regulations of the SEC and The NASDAQ Stock Market. Our code of ethics is available on our website, www.amark.com.
Stockholder Communications to the Board
The Company’s security holders may send communications to the Board of Directors. All communications should be delivered either in writing addressed c/o Legal Department at 429 Santa Monica Blvd., Suite 230, Santa Monica, California 90401 or by e-mail to directors@amark.com. All communications must be accompanied by the following information: a statement of the type and amount of the securities of the Company that the person holds; and any special interest, meaning an interest not in the capacity as a stockholder of the company, of the person in the subject matter of the communication; and the address, telephone number and e-mail address, if any, of the person submitting the communication.
Concerns about accounting, internal accounting controls or auditing matters should be reported pursuant to the procedures outlined on our website at www.amark.com/governancepolicies, under “Policy on Reporting Questionable Accounting or Auditing Matters."
Executive Officers
A-Mark’s executive officers are as follows:
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Age
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Position(s)
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Gregory N. Roberts
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Chief Executive Officer and Director
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Thor G. Gjerdrum
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President
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Cary Dickson
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59
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Executive Vice President and Chief Financial Officer
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Carol Meltzer
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58
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Executive Vice President, General Counsel and Secretary
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See “Information Concerning Directors”, above, for information relating to Mr. Roberts.
Thor G. Gjerdrum
was appointed as President on September 7, 2016. Mr. Gjerdrum served as A-Mark’s Executive Vice President and Chief Operating Officer since July 1, 2013 and as our Chief Financial Officer and Executive Vice President from 2002 to May 2008 and from May 2010 to June 30, 2013. Mr. Gjerdrum was Chief Financial Officer and Executive Vice President of SGI from June 2008 to April 2010. Previously, Mr. Gjerdrum held a variety of positions with two publicly traded telecommunications companies, the last of which was as Vice President of Finance, and worked in public accounting. Mr. Gjerdrum received a Bachelor of Science degree in accounting from Santa Clara University.
Cary Dickson
was appointed as Chief Financial Officer on November 9, 2015. Mr. Dickson served in a variety of executive capacities for Mattel Toys from 2002 to 2014, including as Vice President of Finance from 2011 to 2014, and as Chief Financial Officer of Mattel Foundation from 2005 to 2014. Mr. Dickson also served as Vice President of Corporate Responsibility Audit, VP of Internal Audit and Vice President of Tax for Mattel Toys from 2002 to 2011. Prior to Mattel, Mr. Dickson served as a Senior Vice President at Fox Family Worldwide, Inc., and held positions with The Walt Disney Company and Pricewaterhouse. Mr. Dickson, a Certified Public Accountant, holds a Bachelor of Science degree in Marketing from Southern Illinois University and a Masters of Taxation degree from the University of Denver School of Law.
21
Carol Meltzer
has served as our General Counsel, Secretary and Executive Vice President since March 2014, assuming those offices at the time of the spinoff. She served as General Counsel, Secretary and Executive Vice President of SGI and its predecessor companies since 2006, and served in a variety of legal capacities for SGI since 1996. Ms. Meltzer previously practiced law at Stroock & Stroock & Lavan LLP and Kramer Levin Naftalis & Frankel LLP. Ms. Meltzer received B.A. and J.D. degrees from the University of Michigan, Ann Arbor. Ms. Meltzer also serves as General Counsel and Executive Vice President of SGI and serves as a director of SGI.
v v v v v v v
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE ELECTION OF EACH OF THE EIGHT NOMINEES DESCRIBED ABOVE.
v v v v v v v
22
PROPOSAL NO. 2 - PROPOSAL TO APPROVE, ON AN ADVISORY BASIS, COMPENSATION OF THE NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing stockholders with the opportunity to cast an advisory vote on the
fiscal year 2016
compensation of our Named Executive Officers (“NEOs”) as disclosed in this Proxy Statement, including in the compensation tables, the section entitled
“
Narrative Discussion of Executive Compensation
,”
and other executive compensation disclosures.
Stockholders are being asked to vote on the following resolution:
RESOLVED, that the stockholders approve the
fiscal year 2016
compensation of A-Mark’s executive officers named in the
Summary Compensation Table
, as disclosed in A-Mark’s Proxy Statement dated December 30, 2016, including the compensation tables, the section entitled
“
Narrative Discussion of Executive Compensation
”
and other executive compensation disclosures.
Please refer to the sections of this Proxy Statement referenced above for a detailed discussion of our executive compensation practices and the fiscal 2016 compensation of our NEOs.
Our executive compensation program has been designed to strongly promote the success of our business, by attracting and retaining an experienced and capable management team and providing incentives to achieve and exceed our goals and, in doing so, building long-term value for stockholders. The
fiscal year 2016
compensation of our executive officers met the objectives of our program and helped to promote our long-term business success.
In making the decision to approve
fiscal year 2016
compensation, stockholders are urged to consider the following:
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A-Mark earned fiscal 2016 GAAP net income before provision for income taxes of $15.6 million, an increase of 70% over fiscal 2015. Other operational metrics for fiscal 2016 showed substantial improvement over fiscal 2015 results.
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We used an adjusted "pre-tax profit" number that was lower than our GAAP net income before provision for income taxes to determine the annual incentive payout to our CEO. This included an adjustment to reflect SGI's pre-tax loss for fiscal 2016, even though SGI's financial results have no effect on A-Mark (apart from this bonus calculation) because SGI is an entirely separate entity in which A-Mark has no financial interest. Including all adjustments, the fiscal 2016 pre-tax profit used to calculate the annual incentive to our CEO was $11.3 million.
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Our COO was paid an annual incentive based on the adjusted pre-tax profit solely of A-Mark; as adjusted to eliminate the expense of the CEO annual incentive and with other adjustments, this amount was $16.9 million.
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Management's efforts in
fiscal year 2016
resulted in a favorable one-year total shareholder return of 56.8%.
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The Board and the Compensation Committee believe that the level of compensation of our NEOs for
fiscal year 2016
was aligned with our overall results and was appropriate in light of the efforts and accomplishments of management. In particular, the performance-based annual incentives paid to our CEO and COO were based primarily on the level of A-Mark's profitability. In the case of the other NEO, a discretionary bonus for
fiscal year 2016
was paid based on the Compensation Committee's assessment of his contribution to our
fiscal year 2016
results.
As an advisory vote, this proposal is not binding upon A-Mark or the Board. Nevertheless, the Board’s Compensation Committee, which is comprised solely of independent directors and is responsible for making decisions regarding the amount and form of compensation paid to our executive officers, will carefully consider the stockholder vote on this matter, along with other expressions of stockholder views it receives on specific policies and desirable actions. If there are a significant number of unfavorable votes, we will seek to understand the concerns that influenced the vote and address them in making future decisions affecting the executive compensation program.
v v v v v v v
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE PROPOSAL TO APPROVE THE FISCAL 2016 COMPENSATION OF THE NEOs AS DISCLOSED IN THIS PROXY STATEMENT
v v v v v v v
23
PROPOSAL 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed Grant Thornton LLP (“GT LLP”) as the independent registered public accounting firm to audit the Company’s consolidated financial statements for the fiscal year ending
June 30, 2017
.
Stockholder ratification of the selection of GT LLP as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or otherwise. However, the Audit Committee of the Board is submitting the selection of GT LLP to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the selection, the Audit Committee will consider whether to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
A representative of GT LLP is expected to be present at the meeting to respond to appropriate questions of stockholders and will have the opportunity to make a statement if he or she so desires.
This proposal requires the affirmative vote of a majority of the shares of common stock present at the Annual Meeting (or represented by proxy) and voting on the matter.
v v v v v v v
THE BOARD OF DIRECTORS CONSIDERS THE RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2017 TO BE IN THE BEST INTERESTS OF A-MARK AND ITS STOCKHOLDERS AND THEREFORE RECOMMENDS THAT YOU VOTE
FOR
THE APPOINTMENT OF GRANT THORNTON LLP AT THE MEETING.
v v v v v v v
24
OTHER INFORMATION
Although it has entered into no formal agreements to do so, A-Mark will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding proxy-soliciting materials to their principals. The cost of soliciting proxies on behalf of the Board of Directors will be borne by A-Mark. Proxies will be solicited principally through the mail but, if deemed desirable, may also be solicited personally or by telephone, telegraph, facsimile transmission, or special letter by directors, officers and regular employees of A-Mark without additional compensation.
A copy of A-Mark’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (including financial statements and schedules) will be furnished without charge to a stockholder upon written request to: Carol Meltzer, Corporate Secretary, 429 Santa Monica Blvd., Suite 230, Santa Monica, California 90401.
It is important that your stock be represented at the Annual Meeting whether or not you expect to attend. The Board of Directors urges you to complete, date, sign, and return the enclosed proxy card in the enclosed postage-paid reply envelope or follow the instructions for internet voting in this proxy statement.
Your cooperation as a stockholder, regardless of the number of shares of stock you own, will reduce the expenses incident to a follow-up solicitation of proxies.
If you have any questions about voting your shares, please telephone A-Mark at (310) 587-1477.
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Sincerely,
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/s/ Carol Meltzer
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CAROL MELTZER
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Secretary
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Santa Monica, California
December 30, 2016
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STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at next year’s annual meeting of stockholders and included in A-Mark’s proxy materials for that meeting must be received by A-Mark, addressed to the attention of A-Mark’s corporate secretary, at its offices at 2121 Rosecrans Avenue, Suite 6300, El Segundo, California 90245, no later than
September 1, 2017
(120 days prior to the first anniversary of the mailing date of this proxy statement), in order to be included in A-Mark’s proxy statement and proxy card relating to that meeting. Such proposal must comply with all other applicable legal requirements in order to be included in the proxy materials for that meeting. In addition, a stockholder who intends to present an item of business at the
2018 Annual Meeting of Stockholders
, other than a proposal submitted for inclusion in A-Mark’s proxy materials, must provide notice of such business to the Company on or before
September 1, 2017
and must comply with all applicable requirements of the Company’s By-Laws.
OTHER BUSINESS
The Board of Directors has, at the date of this proxy statement, received no notice and otherwise is not aware of any other matter that is to be presented to stockholders for formal action at the Annual Meeting. If, however, any other matter properly comes before the meeting or any adjournment or postponement thereof, it is the intention of the persons named in the enclosed form of proxy card to vote proxies in accordance with their judgment on such matters.
26
A-MARK PRECIOUS METALS, INC.
PROXY
For the Annual Meeting of Stockholders To Be Held on
January 26, 2017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be Held on
January 26, 2017
:
The proxy materials for the Annual Meeting, including the Annual Report and the Proxy Statement, are available at www.amark.com
The undersigned stockholder of A-Mark Precious Metals, Inc. ("A-Mark") hereby appoints Gregory N. Roberts and Carol Meltzer, and each of them, with full powers of substitution, to represent and to vote as proxy, as designated, all shares of A-Mark common stock held of record (on December 19, 2016) by the undersigned, at A-Mark's 2017 Annual Meeting of Stockholders and/or at any adjournment or postponement thereof, upon the matters described in the accompanying Notice of 2017 Annual Meeting of Stockholders and Proxy Statement, dated December 30, 2016, and upon such other matters as may properly come before the Annual Meeting. The undersigned hereby revokes all prior proxies.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE ELECTION OF ALL DIRECTORS AND “FOR” PROPOSALS 2 AND 3. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL DIRECTORS AND “FOR” PROPOSAL 2 AND 3.
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1. Election of Eight Directors:
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Director Nominees:
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01 Joel Anderson
02 Jeffrey D. Benjamin
03 Ellis Landau
04 Beverley Lepine
05 William Montgomery
06 John U. Moorhead
07 Jess M. Ravich
08 Gregory N. Roberts
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(INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark the “For All Except” box above and write the name of the nominee(s) in the space provided below.)
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2.
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Advisory vote on executive compensation.
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Ratification of Grant Thornton LLP as independent registered public accounting firm for fiscal 2017.
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In their discretion the proxies are authorized to vote upon such other business as may properly come before the meeting and any adjournment thereof.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement for the Annual Meeting.
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Mark Here for Address Change or Comments
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Mark Here if You Plan To Attend the Meeting
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Signature
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NOTE: Please sign exactly as your name or names on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
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