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United States
Securities and Exchange Commission
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant☒
Filed by a Party other than the Registrant☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Under Rule 14a-12 |
AQUA METALS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee paid previously with preliminary materials: |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
April 15, 2024
Dear Stockholder:
You are cordially invited to attend the 2024 Annual Meeting of Stockholders (which we refer to as the “Annual Meeting”) of Aqua Metals, Inc., a Delaware corporation (which we refer to as “we,” “us,” “our,” or the “Company”), to be held at 9:00 a.m. local time, on Thursday, May 23, 2024.
At the Annual Meeting, you will be asked to consider and vote upon the following proposals to: (1) elect four(4) directors to serve for the ensuing year as members of the Board of Directors of the Company; (2)approve an amendment to our 2019 Stock Incentive Plan to increase the number of shares of common stock reserved under the plan; (3)amend the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000; (4)ratify the appointment of Forvis LLP as our independent registered public accounting firm for the fiscal year ending December31, 2024; (5)approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the accompanying Proxy Statement; and (6) transact such other business as may properly come before the Annual Meeting or at any continuation, postponement or adjournment thereof. The accompanying Proxy Statement describe these matters in more detail. We urge you to read this information carefully.
The Board of Directors recommends a vote: FOR each of the four(4) nominees for director named in the Proxy Statement, FOR the approval an amendment to our 2019 Stock Incentive Plan to increase the number of shares of common stock reserved under the plan, FOR the approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000 , FOR the ratification of the appointment of Forvis LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024, and FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers, as disclosed in the accompanying Proxy Statement.
Whether or not you attend the Annual Meeting, and regardless of the number of shares of Aqua Metals, Inc. that you own, it is important that your shares be represented and voted at the Annual Meeting. Therefore, I urge you to vote your shares of common stock via the Internet at www.proxyvote.com, by phone at 1-800-690-6903 or by promptly marking, dating, signing, and returning the proxy card via mail. Voting over the Internet, or by written proxy, will ensure that your shares are represented at the Annual Meeting.
On behalf of the Board of Directors of Aqua Metals, Inc., we thank you for your participation.
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Sincerely, |
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Vincent L. DiVito |
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Chairman of the Board |
AQUA METALS, INC.
5370 Kietzke Lane, #201
Reno, Nevada 89511
(775) 446-4418
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON May 23, 2024
The 2024 Annual Meeting of Stockholders (which we refer to as the “Annual Meeting”) of Aqua Metals, Inc., a Delaware corporation (which we refer to as “we,” “us,” “our,” or the “Company”), will be at 9:00a.m. local time, on Thursday, May 23, 2024.
This year’s meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at www.virtualshareholdermeeting.com/AQMS2024. Stockholders will be able to attend and listen to the Annual Meeting live, submit questions and vote their shares electronically at the Annual Meeting from virtually any location around the world. In order to attend and vote at the Annual Meeting, please follow the instructions in the section titled “Voting of Shares” on page 1. We will consider and act on the following items of business at the Annual Meeting:
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To elect four (4) directors to serve as members of the Board of Directors of the Company (which we refer to as our “Board”) until the next annual meeting of stockholders and until their successors are duly elected and qualified. The director nominees named in the Proxy Statement for election to our Board are: VincentL. DiVito, Stephen Cotton, Molly Zhang and Edward Smith; |
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To approve an amendment to our 2019 Stock Incentive Plan to increase the number of shares of common stock reserved under the plan; |
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To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000; |
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To ratify the appointment of Forvis LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024; |
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To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the accompanying Proxy Statement; and |
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To transact such other business as may properly come before the Annual Meeting or at any continuation, postponement or adjournment thereof. |
The accompanying Proxy Statement describes each of these items of business in detail. Only stockholders of record at the close of business on April 5, 2024 are entitled to notice of, to attend, and to vote at, the Annual Meeting or any continuation, postponement or adjournment thereof.
To ensure your representation at the Annual Meeting, you are urged to vote your shares of common stock via the Internet at www.proxyvote.com, by phone at 1-800-690-6903 or by promptly marking, dating, signing, and returning the proxy card via mail. Voting instructions are provided on your proxy card. Any stockholder attending the Annual Meeting may vote in person even if he or she previously submitted a proxy. If your shares of common stock are held by a bank, broker or other agent, please follow the instructions from your bank, broker or other agent to have your shares voted.
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Sincerely, |
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Vincent L. DiVito |
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Chairman of the Board |
Reno, Nevada
April 15, 2024
AQUA METALS, INC.
5370 Kietzke Lane, #201
Reno, Nevada, 89511
(775) 446-4418
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2024
INFORMATION ABOUT THE ANNUAL MEETING
Your proxy is solicited on behalf of the Board of Directors (which we refer to as our “Board”) of Aqua Metals, Inc., a Delaware corporation (which we refer to as “we,” “us,” “our,” or the “Company”), for use at our 2024Annual Meeting of Stockholders (which we refer to as the “Annual Meeting”) to be held on Thursday, May23, 2024, at 9:00a.m. local time, or at any continuation, postponement or adjournment thereof, for the purposes discussed in this Proxy Statement. Proxies are solicited to give all stockholders of record an opportunity to vote on matters properly presented at the Annual Meeting.
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Important Notice Regarding the Availability of Proxy Materials for the Stockholders ’ Meeting to Be Held Via the Internet at www.virtualshareholdermeeting.com/AQMS2024 on Thursday, May 23, 2024, at 9:00 a.m. local time. The Annual Report, Notice of Meeting, and Proxy Statement are available at –www.proxyvote.com |
We intend to mail this Proxy Statement, the proxy card and the Notice of Annual Meeting on or about April 19, 2024 to all stockholders of record entitled to vote at the Annual Meeting. If you would like a hard copy of the Annual Report, Notice of Meeting, Proxy Statement and Proxy Card for this Annual Meeting, or any future stockholder meetings, mailed or emailed to you, please contact us at the above address or at our web page https://www.aquametals.com/contact-us/ or email us at AQMS@fnkir.com or telephone us at (646) 878-9204.
You are entitled to attend and participate in the Annual Meeting if you were a stockholder as of the close of business on April 5, 2024, the record date, or hold a valid proxy for the meeting. To attend the Annual Meeting, you must access the meeting website at www.virtualshareholdermeeting.com/AQMS2024and a 16 digit control number is needed to enter the meeting. In order to participate in the virtual meeting, including to vote, ask questions and to view the list of registered stockholders as of the record date during the meeting, you must access the meeting website at www.virtualshareholdermeeting.com/AQMS2024and have the 16 digit control number found on yourproxy card. The meeting webcast will begin promptly at 9:00 a.m. local time. Online check-in will begin approximately 15minutes before then and we encourage you to allow ample time for check-in procedures.
Who Can Vote, Outstanding Shares
Record holders of our common stock as of the close of business on April 5, 2024, the record date for the Annual Meeting, are entitled to vote at the Annual Meeting on all matters to be voted upon. As of the record date, there were 113,179,410shares of our common stock outstanding, each entitled to one vote.
You may vote by attending the Annual Meeting or you may vote prior to the Annual Meeting through the Internet or by submitting a proxy. The method of voting differs for shares held as a record holder and shares held in “street name.”
If you are a stockholder of record, which means your shares are in your name, you may vote your shares as follows:
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To vote in person, attend the Annual Meeting and the16 digit control number found on yourproxy card to register and vote. |
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To vote through the Internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number on the proxy card delivered to you. Your Internet vote must be received by 11:59 p.m., Eastern Time on May 22, 2024 to be counted. |
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To vote using the proxy card delivered to you, simply complete, sign, and date the proxy card and return it promptly in the envelope provided or use a touch-tone telephone to transmit your voting instructions by calling 1-800-690-6903. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. |
If you hold your shares of common stock in street name, which means that your shares are held of record by a broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee on how to vote your shares by either (i) attending the Annual Meeting and voting in person; (ii) through the Internet; or (iii)otherwise instructing the broker, bank or other nominee on how to vote your shares. Please note that if you hold your shares of common stock in street name, in order to vote your shares in person at the Annual Meeting, you will need to obtain from your broker, bank or other nominee, a valid legal proxy from your broker, bank or other nominee authorizing you to vote your shares at the Annual Meeting.After obtaining a valid legal proxy from your broker, bank or other agent, to then register to vote at the Annual Meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address and mail to:
VOTE BY MAIL
Vote Processing, c/o Broadridge,
51 Mercedes Way
Edgewood, NY 11717
Additional information regarding the rules and procedures for participating in the Annual Meeting will be provided at the meeting website.
YOUR VOTE IS VERY IMPORTANT. You should submit your proxy or vote through the Internet even if you plan to attend the Annual Meeting. If you properly give your proxy or vote through the Internet, one of the individuals named as your proxy will vote your shares as you have directed. Any stockholder attending the Annual Meeting may vote in person even if he or she previously submitted a proxy or voted through the Internet prior to the Annual Meeting.
All shares entitled to vote and represented by properly submitted proxies (including those submitted electronically and in writing) received before the polls are closed at the Annual Meeting, and not revoked or superseded, will be voted at the Annual Meeting in accordance with the instructions indicated on those proxies. If no direction is indicated on a proxy, your shares will be voted as follows:
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FOR each of the four (4) nominees for director named in the Proxy Statement; |
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FOR the approval of an amendment to our 2019 Stock Incentive Plan to increase the number of shares of common stock reserved under the plan; |
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FOR the approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000; |
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FOR the ratification of the appointment of Forvis LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;and |
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FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers, as disclosed in this Proxy Statement. |
With respect to any other matter that properly comes before the Annual Meeting or any continuation, postponement or adjournment thereof, the proxy holders will vote as recommended by our Board, or if no recommendation is given, in their own discretion.
If you are a stockholder of record, you may revoke your proxy at any time before your proxy is voted at the Annual Meeting by taking any of the following actions:
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delivering to our corporate secretary a signed written notice of revocation, bearing a date later than the date of the proxy, stating that the proxy is revoked; |
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signing and delivering a new proxy card, relating to the same shares and bearing a later date than the original proxy card; |
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submitting another proxy over the Internet (your latest Internet voting instructions are followed); or |
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attending the Annual Meeting and voting in person, although attendance at the Annual Meeting will not, by itself, revoke a proxy. |
Written notices of revocation and other communications with respect to the revocation of Company proxies should be addressed to:
Aqua Metals, Inc.
5370 Kietzke Lane, #201
Reno, Nevada 89511
Attention: Corporate Secretary
If your shares are held in “street name,” you may change your vote by submitting new voting instructions to your broker, bank or other nominee. You must contact your broker, bank or other nominee to find out how to do so.
The inspector of elections appointed for the Annual Meeting will tabulate votes cast by proxy or in person at the Annual Meeting. The inspector of elections will also determine whether a quorum is present. In order to constitute a quorum for the conduct of business at the Annual Meeting, a majority in voting power of all of the shares of the stock entitled to vote at the Annual Meeting must be present in person or represented by proxy at the Annual Meeting. Shares that abstain from voting on any proposal, or that are represented by broker non-votes (as defined below), will be treated as shares that are present and entitled to vote at the Annual Meeting for purposes of determining whether a quorum is present. However, our Third Amended and Restated Bylaws provide that “votes cast” shall exclude abstentions and broker non-votes.
If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank, or other agent how to vote your shares, your broker, bank, or other agent may still be able to vote your shares at its discretion. In this regard, under the rules of the New York Stock Exchange, or NYSE, brokers, banks, and other securities intermediaries that are subject to NYSE rules may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine” under NYSE rules, but not with respect to “non-routine” matters. When a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.”
We believe that the election of directors (Proposal 1), the amendment to our 2019 Stock Incentive Plan to increase the number of shares of common stock reserved under the plan (Proposal 2) and the advisory vote on compensation (Proposal 5) will be considered non-routine matters and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote. We believe that the amendment to the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000(Proposal3) and the ratification of the appointment of Forvis LLP as our independent registered public accounting firm (Proposal4) will be considered to be routine matters on which a broker, bank or other agent has discretionary authority to vote.
Proposal No. 1 : Election of Directors. A plurality of the votes cast by the holders of shares entitled to vote in the election of directors at the Annual Meeting is required for the election of directors. Accordingly, the four(4) director nominees receiving the highest number of votes will be elected. Abstentions and broker non-votes are not treated as votes cast and, therefore, will not have any effect on the outcome of the election of directors.
Proposal No. 2 : Approval of an Amendment to our 2019 Stock Incentive Plan. The affirmative vote of the holders of a majority of the votes cast and entitled to vote at the Annual Meeting is required for the approval of an amendment to our 2019 Stock Incentive Plan to increase the number of shares reserved under the plan. In the event of any broker non-votes or abstentions in connection with Proposal No. 2, such broker non-votes and abstentions will be counted as not present and these shares will be deducted from the total shares of which a majority is required.
Proposal No. 3 : Approval of an Amendment to the Company ’ s Amended and Restated Certificate of Incorporation . The affirmative vote of the holders of a majority of the votes cast and entitled to vote at the Annual Meeting is required for the approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000. In the event of any broker non-votes or abstentions in connection with Proposal No. 3, such broker non-votes and abstentions will be counted as not present and these shares will be deducted from the total shares of which a majority is required. In the case of shares held by a broker, bank or other agent for a beneficial owner who has not provided instructions to such broker, bank or other agent, we believe the broker, bank or other agent will have discretionary authority to vote the shares for approval of Proposal No. 3.
Proposal No. 4 : Ratification of Independent Registered Public Accounting Firm. The affirmative vote of the holders of a majority of the votes cast and entitled to vote at the Annual Meeting is required for the ratification of the appointment of Forvis LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Abstentions will not be counted either for or against this proposal. Brokers generally have discretionary authority to vote on the ratification of our independent registered public accounting firm and, therefore, broker non-votes are generally not expected to result from the vote on Proposal No. 4. However, in the event of any broker non-votes in connection with Proposal No. 4, such broker non-votes will be counted as not present and these shares will be deducted from the total shares of which a majority is required.
Proposal No. 5 : Approval, on an Advisory Basis, of the Compensation of the Company ’ s Named Executive Officers . The affirmative vote of the holders of a majority of the votes cast and entitled to vote at the Annual Meeting is required for the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement. In the event of any broker non-votes or abstentions in connection with Proposal No. 5, such broker non-votes and abstentions will be counted as not present and these shares will be deducted from the total shares of which a majority is required.
We will also consider any other business that properly comes before the Annual Meeting, or any adjournment or postponement thereof. As of the record date, we are not aware of any other matters to be submitted for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named as your proxy will vote the shares as recommended by our Board, or if no recommendation is given, in their own discretion.
Our Board is soliciting proxies for the Annual Meeting from our stockholders. We will bear the entire cost of soliciting proxies from our stockholders. In addition to the solicitation of proxies by delivery of this Proxy Statement through the Internet or by mail, we will request that brokers, banks and other nominees that hold shares of our common stock, which are beneficially owned by our stockholders, forward proxies and proxy materials to those beneficial owners and secure those beneficial owners’ voting instructions. We will reimburse those record holders for their reasonable expenses. We may use several of our regular employees, who will not be specially compensated, to solicit proxies from our stockholders, either personally or by Internet, facsimile or special delivery letter.
We have retained Morrow Sodali, LLC, a proxy solicitation firm, to perform various solicitation services via phone and email in connection with the Annual Meeting. We will pay Morrow Sodali a fee not to exceed $5,500, plus phone and other related expenses, in connection with its solicitation services.
A list of stockholders eligible to vote at the Annual Meeting will be available for inspection, for any purpose germane to the Annual Meeting, at the Annual Meeting and at principal executive office of the Company during regular business hours for a period of no less than ten (10) days prior to the Annual Meeting.
This Proxy Statement contains “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995). These statements are based on our current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding actions to be taken by us. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those mentioned in the risk factors in Item 1A of our 2023 Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.
ELECTION OF DIRECTORS
Our Board currently consists of five (5) members, three (3) of whom are independent under the listing standards for independence of the NASDAQ and under Rule 10A-3 under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”). However, one of our current directors, Sung Yi, has elected not to stand for reelection and following this Annual Meeting our Board will consist of four(4) members. During 2023, David Kanen resigned from our Board in July2023. Based upon the recommendation of the Nominating and Corporate Governance Committee of our Board, our Board determined to nominate each of the Company’s current directors, other than Mr. Yi,for re-election at the Annual Meeting.
Our Board and the Nominating and Corporate Governance Committee believe the directors nominated collectively have the experience, qualifications, attributes and skills to effectively oversee the management of the Company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing the Company, a willingness to devote the necessary time to Board duties, a commitment to representing the best interests of the Company and our stockholders and a dedication to enhancing stockholder value.
Each director elected at the Annual Meeting will serve a one (1) year term until the Company’s next annual meeting and until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. Unless otherwise instructed, the proxy-holders will vote the proxies received by them for the four(4) nominees named below. If any of the nominees is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by the present Board to fill the vacancy. It is not presently expected that any of the nominees named below will be unable or will decline to serve as a director. If additional persons are nominated for election as directors, the proxy-holders intend to vote all proxies received by them in a manner to assure the election of as many of the nominees listed below as possible. In such event, the specific nominees to be voted for will be determined by the proxy-holders.
Set forth below are the names, ages and positions of our director nominees as of the date of this Proxy Statement:
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Stephen Cotton |
57 |
President and Chief Executive Officer |
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Vincent L. DiVito (a), (b), (c) |
64 |
Chairman of the Board and Independent Director |
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Molly Zhang (a), (b), (c) |
62 |
Independent Director |
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Edward Smith (a), (b), (c) |
61 |
Independent Director |
(a) Member of the Audit Committee of our Board.
(b) Member of the Compensation Committee of our Board.
(c) Member of the Nominating and Corporate Governance Committee of our Board.
OUR BOARD RECOMMENDS A VOTE
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FOR
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EACH OF THE FOUR (4) NOMINEES
FOR DIRECTOR NAMED IN THIS PROXY STATEMENT.
Vacancies on our Board, including any vacancy created by an increase in the size of our Board, may be filled by a majority of the directors remaining in office (even though less than a quorum of our Board) or a sole remaining director, or by the stockholders. A director elected by our Board to fill a vacancy will serve until the next annual meeting of stockholders and until such director’s successor is elected and qualified, or until such director’s earlier retirement, resignation, disqualification, removal or death.
If any nominee should become unavailable for election prior to the Annual Meeting, an event that currently is not anticipated by our Board, the proxies will be voted in favor of the election of a substitute nominee or nominees proposed by our Board. Each nominee has agreed to serve if elected and our Board has no reason to believe that any nominee will be unable to serve.
Information about Director Nominees
Set forth below is biographical information for each director nominee and a summary of the specific qualifications, attributes, skills and experiences which led our Board to conclude that each nominee should serve on our Board at this time. There are no family relationships among any of the directors or executive officers of the Company.
Vincent L. DiVito has served as a member of our Board since May 2015 and has served as our non-executive Chairman of the Board since June 2022. Since April 2010, Mr. DiVito has served as the owner and chief executive officer of Vincent L. DiVito, Inc., a financial and management consulting firm. From January 2008 to April 2010, Mr. DiVito served as president of Lonza America, Inc., a global life sciences chemical business headquartered in Allendale, New Jersey, and also served as chief financial officer and treasurer of Lonza America, Inc. from September 2000 to April 2010. Lonza America, Inc. is part of Lonza Group, whose stock is traded on the Swiss Stock Exchange. From 1990 to September 2000, Mr. DiVito was employed by Algroup Wheaton, a global pharmaceutical and cosmetics packaging company, first as its director of business development and later as its vice president and chief financial officer. Mr. DiVito is a certified public accountant, certified management accountant and holds an MBA in Finance. Mr. DiVito is a National Association of Corporate Directors Board Leadership Fellow. He served on the board of directors and chairman of the audit committee of Entertainment Gaming Asia Inc., a Nasdaq listed gaming company, from October 2005 until its acquisition in July 2017, and also served as a member of the board of directors of Riviera Holdings Corporation, formerly an AMEX listed gaming and resort company, from July 2002 until the consummation of a change in control of the corporation in March 2011.
Mr. DiVito has extensive knowledge of accounting and corporate governance issues from his experience serving on various corporate boards of directors and has extensive operational knowledge as a result of his experience as a senior executive officer of major corporations. As a result of these and other professional experiences, our Board has concluded that Mr. DiVito is qualified to serve as a director.
Stephen Cotton has served as President of the Company since May 2, 2018 and was promoted by the Board of Directors to President and CEO joining the Board as an Executive Director in January, 2019. Steve also served as Chief Commercial Officer of the Company from January 2015 to June, 2017. Previously, Steve co-founded Canara, Inc. (formerly Data Power Monitoring and IntelliBatt) in December 2001 and served as its Chief Executive Officer through the sale of the company to a private equity firm in June 2012, after which he served as Founder and Executive Chairman until April 2014. Canara (now part of CPG Data Center Innovators) is a global provider of stationary battery systems with integrated monitoring systems and cloud-based monitoring services to many of the largest data center operators. Prior to Canara, Steve led a team to commercialize Sendmail (the Worlds' most commonly used Internet email open source software) from free open source to a paid for commercial offering for Internet service providers and cloud offerings requiring mass email volume management including DoubleClick's standardization (acquired by Google). Steve's career began in the early days of voice messaging systems, including Octel Communications (through its $1.1B exit to Lucent Technologies in 1997 and now part of Avaya). From International Product Manager, to Product Manager for Multimedia, Steve then became the top market development person on a staff of 100+ for 2 years running while managing the ATT Wireless account, then developing new wireless and local exchange carrier markets. His decision to convince ATT Wireless (and ultimately other operators which followed) to offer voice messaging for free vs. charge, resulted in multi-million dollar sales of Octel equipment to each region. From April 2014 to January 2015 and June 2017 to April 2018, Steve managed his private investments.
Mr. Cotton has extensive managerial, operational and financial experience. As a result of these and other professional experiences, our Board has concluded that Mr.Cotton is qualified to serve as a director.
Molly Zhang (also known as Peifang Zhang) has served as a member of our board since March 2021. Prior to her transition to board services, Ms. Zhang served in various global leadership positions with Orica (ASX: ORI), a global mining services company, from 2011 to 2016, most recently as Vice President of Asset Management from 2015 to 2016. Ms. Zhang also served in various senior leadership positions with Dow Inc. ( NYSE: DOW) from 1989 to 2009, most recently as Managing Director, SCG-Dow Group from 2009 to 2011 and as Business Vice President for Dow's Global Technology Licensing and Catalyst business from 2006 to 2009. Ms. Zhang is currently on the boards of GatesIndustrial Corporation ( NYSE: GTES), and Arch Resources(NYSE: Arch).
Ms. Zhang has extensive international business, operational and financial management experience, as well as services on various corporate boards of directors. As a result of these and other professional experience, our Board has concluded that Ms. Zhang is qualified as a director.
Edward Smith has served as a member of our Board since March 2021. Mr. Smith has served as President and Chief Executive Officer, and as a member of the board of directors, of SMTC Corporation (NASDAQ: SMTX) since February 2017. Mr. Smith has extensive experience in the electronic manufacturing services, or EMS, industry and the electronic components distribution industry. He served as a member of the board of advisors of Zivelo, Inc., a position he held from 2015 to 2019. Most recently, Mr. Smith served as Senior Vice President of Global Embedded Solutions at Avnet, Inc. during 2016 and as President of Avnet Electronics Marketing Americas from February 2009 to March 2016. Mr. Smith worked in many positions during his tenure at Avnet, Inc., which began in 1994. From 2002 to 2004, Mr. Smith served as President and Chief Executive Officer of SMTEK International, Inc., a tier II manufacturer in the EMS industry. From 2009 to 2017, Mr. Smith served as a board member of the Electronic Components Industry Association. Mr. Smith is also the founder and Chief Executive Officer of We Will Never Forget Foundation, Inc., a nonprofit organization that supports first responders through gifts to other charitable organizations.
Mr. Smith has extensive managerial, operational and financial experience, as well as service on various corporate boards of directors. As a result of these and other professional experiences, our Board has concluded that Mr.Smith is qualified to serve as a director.
Our Board may establish the authorized number of directors from time to time by resolution. Our Board currently consists of five (5) authorized members, however, at the conclusion of the Annual Meeting, our Board will consist of four (4) authorized members. During the year ended December 31, 2023, our Board met sixtimes. All of our Board members attended at least 75% of the aggregate of all Board meetings and all meetings of the Board committees upon which they served while they were on the Board during fiscal 2023. Our Board does not have a policy regarding Board members’ attendance at meetings of our stockholders and 5members of our Board attended our prior year’s annual meeting of stockholders.
Generally, under the listing requirements and rules of the Nasdaq Stock Market, independent directors must comprise a majority of a listed company’s board of directors. Our Board has undertaken a review of its composition, the composition of its committees and the independence of each director. Our Board has determined that, other than Mr. Cotton, by virtue of his executive officer position, and Mr. Yi, by virtue of his affiliation with Yulho Co., Ltd., none of our current directors ordirector nominees has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of the Nasdaq Stock Market. In making this determination, our Board considered the current and prior relationships that each nonemployee director nominee has with our Company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each nonemployee director nominee. Accordingly, a majority of our directors are independent, as required under applicable Nasdaq Stock Market rules, as of the date of this Proxy Statement.
On September 21, 2018, the Board adopted the Director Resignation Policy, whereby, commencing with respect to our 2020 annual meeting (and at each subsequent annual meeting of the Company’s stockholders at which directors of the Company are to be elected), any director who fails to receive a majority of the votes cast by the Company’s stockholders at such meeting “for” his or her election as a Company director immediately shall (after the final tabulation and certification by the Company’s inspector of elections of voting results), tender his or her resignation to the Nominating and Corporate Governance Committee or Nominating Committee, for its consideration and acceptance or rejection.
The Board adopted the Director Resignation Policy to address the situation in which a nominee for the Board is elected to the Board in an uncontested election despite receiving more votes “withheld” from or “against” his or her election than votes “for” his or her election (a “majority withheld vote”). For purposes of the policy, an “uncontested election” is any election of Company directors in respect of which the number of directornominees for election is less than or equal to the number of directors to be elected.
By accepting a nomination for election and agreeing to serve as a director of the Company in any uncontested election of Company directors, each nominee agrees that if he or she receives a majority withheld vote in any such election, such director promptly shall tender to the Board an offer of his or her resignation as a Company director following certification of the stockholder vote by the inspector(s) of election at the meeting for such uncontested election. Any director who offers his or her resignation pursuant to this policy will not participate in any discussions, deliberations or actions by either the Nominating Committee or the full Board with respect to his or her own resignation offer, but will otherwise continue to serve as a director unless and until such resignation is accepted and effective.
The Nominating Committee will duly consider and recommend to the full Board whether to accept or reject the resignation offer received from each director who received a majority withhold vote. Following the recommendation of the Nominating Committee, the independent members of the Board will make a determination of the action to take with respect to the offer of resignation, not later than the 90th day immediately succeeding the date of the written certification of the shareholder vote by said inspector(s) of election. The Nominating Committee and the Board will evaluate any such tendered offer of resignation, in accordance with their fiduciary duties to, and in furtherance of the best interests of, the Company and its stockholders. The Board may accept or reject the offer of resignation, or it may decide to pursue additional actions, including, without limitation, the following:
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allow the director to remain on the Board and continue to serve but not be nominated for re-election to the Board at the next election of directors; |
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defer the acceptance of the resignation until the director vacancy the resignation will create can be filled by the Board with a replacement/successordirector meeting all the necessary qualifications and criteria for Company directors and/or satisfying other legal and regulatory requirements with respect to the composition of the Board (for purposes of illustration, such as “independence”requirements established by Securities and Exchange Commission regulations or securities exchange listing requirements); or |
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defer the acceptance of the resignation if it is determined that the underlying cause of the majority withheld vote can be cured by the director or otherwise within a specified period of time (for purposes of illustration, if the majority withhold vote was due to the relevant director receiving such vote serving on the board of directors of another entity, by resigning from such other board). |
The Board’s decision will be disclosed in a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission within four business days after the decision. If the Board has decided to reject the tendered resignation, or to pursue any additional action other than accepting the tendered resignation (as described above or otherwise), then the Current Report on Form 8-K will fully disclose the Board’s reasons for doing so.
Committees of the Board of Directors
Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Our Board may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our Board. Each of our committees operates under a written charter, a copy of which is available at our investor relations websitelocated at https://ir.aquametals.com .
Our Audit Committee currently consists of consists of Vincent L. DiVito,Edward Smith and Molly Zhang, with Mr. DiVito serving as Chairperson. The composition of our Audit Committee meets the requirements for independence under current Nasdaq Stock Market listing standards and SEC rules and regulations. Each member of our Audit Committee meets the financial literacy requirements of the Nasdaq Stock Market listing standards. Mr. DiVito is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act. Pursuant to its charter, our Audit Committee will, among other things:
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select a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; |
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discuss the scope and results of the audit with the independent registered public accounting firm, and review, with management and the independent registered public accounting firm, our interim and year-end operating results; |
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develop procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
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review our policies on risk assessment and risk management; |
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review related-party transactions; and |
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approve (or, as permitted, pre-approve) all audit and all permissible nonaudit services, other than de minimis nonaudit services, to be performed by the independent registered public accounting firm. |
Our Audit Committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market. During the year ended December 31, 2023, our Audit Committee met fourtimes.
Our Compensation Committee currently consists of Edward Smith, Vincent L. DiVito and Molly Zhang, with Mr. Smith serving as Chairperson. The composition of our Compensation Committee meets the requirements for independence under the Nasdaq Stock Market listing standards and SEC rules and regulations. Each member of the Compensation Committee is also a nonemployee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, as amended. The purpose of our Compensation Committee is to discharge the responsibilities of our Board relating to compensation of our executive officers. Pursuant to its charter, our Compensation Committee will, among other things:
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review, approve and determine the compensation of our executive officers; |
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administer our stock and equity incentive plans; |
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make recommendations to our Board regarding director compensation and the establishment and terms of incentive compensation and equity plans; and |
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establish and review general policies relating to compensation and benefits of our employees. |
Our chief executive officer may, from time to time, provide input and recommendation to our Compensation Committee concerning the compensation of our other executive officers. Our chief executive officer may also, from to time, attend Compensation Committee meetings, but he is not present during the Committee’s deliberations regarding executive officer compensation. From time to time, our Compensation Committee may use an independent consultant in considering compensation policies and programs for executive officers. During 2023 our Compensation Committee engaged Pay Governance LLC, a compensation consulting firm, to review and make recommendations concerning the overall compensation of our named executive officers, including severance benefits, along with the structure and terms of our Amended and Restated 2022 Employee Stock Purchase Plan and terms of the Company's short term incentive plan and long term incentive plan. Our Compensation Committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market. During the year ended December 31, 2023, our Compensation Committee met fivetimes.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Molly Zhang, Vincent L. DiVito, and Edward Smith, with Ms. Zhangserving as Chairperson. The composition of our Nominating and Corporate Governance Committee meets the requirements for independence under Nasdaq Stock Market listing standards and SEC rules and regulations. Pursuant to its charter, our Nominating and Corporate Governance Committee will, among other things:
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identify, evaluate and make recommendations to our Board regarding nominees for election to our board of directors and its committees; |
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evaluate the performance of our Board and of individual directors; |
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consider and make recommendations to our Board regarding the composition of our Board and its committees; |
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review developments in corporate governance practices; |
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evaluate the adequacy of our corporate governance practices and reporting; |
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assist in the development of our executive officers; |
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develop and oversee a plan for succession to the position of Chief Executive Officer and other senior management positions; and |
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develop and make recommendations to our Board regarding corporate governance guidelines and matters. |
Our Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21years of age, and having the highest personal integrity and ethics. The committee also considers such factors as diversity, an individual’s business experience and skills, independence, judgment, integrity and ability to commit sufficient time and attention to the activities of the Board, as well as the absence of any potential conflicts with our Company’s interests. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of our company, and the long-term interests of our stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills, and such other factors as it deems appropriate, given the current needs of the Board and our Company, to maintain a balance of knowledge, experience, and capability. Our Nominating and Corporate Governance Committee conducts an annual assessment of the Committee’s charter and the performance of the committee under the charter and the above standards.
Our Nominating and Corporate Governance Committee will consider for directorship candidates nominated by third parties, including stockholders. However, at this time, our Nominating and Corporate Governance Committee does not have a policy with regard to the consideration of director candidates recommended by stockholders. The Nominating and Corporate Governance committee believes that it is in the best position to identify, review, evaluate, and select qualified candidates for Board membership, based on the comprehensive criteria for Board membership approved by the Board. For a third party to suggest a candidate, one should provide our corporate secretary, Judd Merrill, with the name of the candidate, together with a brief biographical sketch and a document indicating the candidate’s willingness to serve if elected.
The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable listing requirements and rules of the Nasdaq Stock Market. During the year ended December 31, 2023, our Nominating and Corporate Governance Committee met fivetimes.
The following Board Diversity Matrix presents our Board diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors. As we pursue future Board recruitment efforts, our Nominating and Corporate Governance Committee will continue to seek out candidates who can contribute to the diversity of views and perspectives of our Board.
Board Diversity Matrix as of March 15, 2024
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Part I: Gender Identity |
Female |
Male |
Non-Binary |
Decline to Disclose |
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Directors (4total) |
1 |
4 |
-- |
-- | ||||||||||||
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Part II: Demographic Background |
Female |
Male |
Non-Binary |
Decline to Disclose |
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African American or Black |
-- |
-- |
-- |
-- |
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Alaskan Native or Native American |
-- |
-- |
-- |
-- |
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Asian |
1 |
1 |
-- |
-- |
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Hispanic or Latinx |
-- |
-- |
-- |
-- |
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Native Hawaiian or Pacific Islander |
-- |
-- |
-- |
-- |
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White |
-- |
3 |
-- |
-- |
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Two or More Races or Ethnicities |
-- |
-- |
-- |
-- |
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LGBTQ+ |
-- |
-- |
-- |
-- |
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Did Not Disclose Demographic Background |
-- |
-- |
-- |
-- |
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Board Leadership Structure and Role in Risk Oversight
We have adopted a formal policy pursuant to which the chairman and chief executive officer positions shall be separate in order to effectively separate the roles of chairman and chief executive officer. Vincent L. DiVito currently serves as our non-executive Chairman and the lead independent director of the Board. Our Board has an active role in overseeing our areas of risk. While the full Board has overall responsibility for risk oversight, the Board has assigned certain areas of risk primarily to designated committees, which report back to the full Board.
Process for Stockholders to Send Communications to our Board of Directors
Because we have always maintained open channels of communication with our stockholders, we do not have a formal policy that provides a process for stockholders to send communications to our Board. However, if a stockholder would like to send a communication to our Board, please address the letter to the attention of our corporate secretary, Judd Merrill, and it will be distributed to each director.
Employee, Officer and Director Hedging
We have adopted a policy that no director, officer, employee or consultant of the Company may engage in any short term or speculative transactions involving securities of the Company. These prohibited speculative transactions include short sales, publicly traded options, hedging transactions, margin accounts and pledged securities, and standing and limit orders.
We have adopted a code of conduct for all employees, including the chief executive officer, principal financial officer and principal accounting officer or controller, and/or persons performing similar functions, which is available on our website, under the link entitled “Code of Conduct”.
Limitation of Liability of Directors and Indemnification of Directors and Officers
The Delaware General Corporation Law provides that corporations may include a provision in their certificate of incorporation relieving directors of monetary liability for breach of their fiduciary duty as directors, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payment of a dividend or unlawful stock purchase or redemption, or (iv) for any transaction from which the director derived an improper personal benefit. Our First Amended and Restated Certificate of Incorporation provides that directors are not liable to us or our stockholders for monetary damages for breach of their fiduciary duty as directors to the fullest extent permitted by Delaware law. In addition to the foregoing, our Third Amended and Restated Bylaws provide that we may indemnify directors, officers, employees or agents to the fullest extent permitted by law and we have agreed to provide such indemnification to each of our directors.
The above provisions in our First Amended and Restated Certificate of Incorporation and Third Amended and Restated Bylaws and in the written indemnity agreements may have the effect of reducing the likelihood of derivative litigation against directors and may discourage or deter stockholders or management from bringing a lawsuit against directors for breach of their fiduciary duty, even though such an action, if successful, might otherwise have benefited us and our stockholders. However, we believe that the foregoing provisions are necessary to attract and retain qualified persons as directors.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
AUTHORIZE AND APPROVE AN AMENDMENT
TO OUR 2019 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF
SHARES OF COMMON STOCK RESERVED UNDER THE PLAN
Rule 5635(c) of the Nasdaq Listing Rules requires stockholder approval for the establishment or material amendment of any equity compensation arrangement, with limited exceptions. We are seeking the approval of our stockholders in accordance with Rule 5635(c) of the Nasdaq Listing Rules for of an amendment to our 2019 Stock Incentive Plan (the “2019 Plan”) to increase the number of shares under the 2019 Plan. Our Board has approved the amendment to the 2019 Plan and recommends the approval of the amendment to the 2019 Plan by our stockholders.
The 2019 Plan was originally adopted by our stockholders on March 27, 2019 and, at that time, we initially reserved 4,500,000 shares of our common stock under the 2019 Plan. At our Annual Meeting of stockholders held on May 19, 2020, our stockholders approved an increase in the shares reserved under the 2019 Plan by 7,000,000 shares, from 4,500,000 shares to 11,500,000 shares, and at our Annual Meeting of stockholders held on June 7, 2022, our stockholders approved an increase in the shares reserved under the 2019 Plan by 7,000,000 shares, from 11,500,000 shares to 18,500,000 shares. As of March 28, 2024, we have issued a total of 17,576,087shares of common stock and options to purchase shares of common stock under the 2019 Plan.
Our Board has reviewed the 2019 Plan and the lack of available shares thereunder and determined that the 2019 Plan requires additional shares to provide the flexibility with respect to stock-based compensation that our Board believes is necessary to establish appropriate long-term incentives to achieve our objectives. Our Board believes that it is advisable to increase the share limit in the 2019 Plan by 9,500,000shares, from 18,500,000 shares to 28,000,000shares, in order to attract and compensate employees, officers, directors and others upon whose judgment, initiative and effort we depend. The issuance of common shares and stock options to eligible participants is designed to align the interests of such participants with those of our stockholders.
Proposal 2 increases the number of shares of common stock that may be issued under the 2019 Plan by 9,500,000shares, or approximately 8.4% of the 112,674,915shares of common stock outstanding on March 28, 2024. The closing price per-share of our common stock on March 28, 2024 was $0.54. The major features of the 2019 Plan are summarized below. This summary is qualified in its entirety by reference to the full text of the 2019 Plan, as amended by way of this Proposal No. 2, a copy of which is attached to this Proxy Statement as APPENDIX A .
OUR BOARD RECOMMENDS A VOTE
“
FOR
”
AN AMENDMENT
TO OUR 2019 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF
SHARES OF COMMON STOCK RESERVED UNDER THE PLAN
The 2019 Plan is intended to advance the interests of the Company and our stockholders by enabling us to attract and retain qualified individuals through opportunities for equity participation, and to reward those individuals who contribute to the achievement of our economic objectives. The 2019 Plan allows us to award eligible recipients incentive awards, consisting of:
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options to purchase shares of our common stock, which may be “incentive options”that qualify as “incentive stock options”within the meaning of Section 422 of the Internal Revenue Code; |
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“non-statutory stock options”that do not qualify as incentive options; |
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“restricted stock awards”which are shares of common stock that are subject to certain forfeiture and transferability restrictions; |
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“restricted stock units,”which are contractual obligations to issue shares of common stock to participants once vesting criteria are satisfied; and |
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“performance stock awards”which are shares of common stock or cash that may be subject to the future achievement of certain performance criteria or be free of any performance or vesting. |
All of our employees and any subsidiary employees (including officers and directors who are also employees), as well as all of our non-employee directors and other consultants, advisors and other persons with whom we have a relationship will be eligible to receive incentive awards under the Plan. As of March 28, 2024, there were approximately 63employees, threenon-employee directors and an indeterminate number of consultants, advisors or other persons with whom we have a relationship eligible to participate in the Plan.
Shares that are issued under the 2019 Plan or that are subject to outstanding incentive awards reduce the number of shares remaining available under the Plan. Any shares subject to an incentive award that lapses, expires, is forfeited, terminates unexercised or unvested, or is settled or paid in cash or other consideration will automatically again become available for issuance under the Plan.
If the exercise price of any option or any associated tax withholding obligations are paid by a participant’s tender or attestation as to ownership of shares (as described below), or if tax withholding obligations are satisfied by the Company withholding shares otherwise issuable upon exercise of an option, only the net number of shares issued will reduce the number of shares remaining available under the Plan.
In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off) or any other similar change in the corporate structure or shares of the Company, appropriate adjustment will be made to:
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the number and kind of securities available for issuance under the Plan; |
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the limits on the numbers of shares that may be granted to a participant within any fiscal year or that may be granted as restricted stock awards under the Plan; and |
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in order to prevent dilution or enlargement of the rights of participants, the number, kind and, where applicable, the exercise price of securities subject to outstanding incentive awards. |
The 2019 Plan isadministered by our Compensation Committee. We refer to the Compensation Committee administering the 2019 Plan as the “Committee.”
The Committee has the authority to determine all necessary or desirable provisions of incentive awards, including, the eligible recipients who will be granted one or more incentive awards under the Plan, the nature and extent of the incentive awards to be made to each participant, the time or times when incentive awards will be granted, the duration of each incentive award, and payment or vesting restrictions and other conditions. The Committee has the authority to amend or modify the terms of outstanding incentive awardsso long as the amended or modified terms are permitted under the 2019 Plan and any affected participant has consented to the amendment or modification.
The 2019 Plan became effective on February 12, 2019 and, unless terminated earlier, the 2019 Plan will terminate at midnight on February 12, 2029. Incentive awards outstanding at the time the 2019 Plan is terminated may continue to be exercised, or become free of restriction, according to their terms. The Board may suspend or terminate the 2019 Plan or any portion of the 2019 Plan at any time, and may amend the 2019 Plan from time to time to conform incentive awards to any change in applicable laws or regulations or in any other respect that the board may deem to be in our best interests. However, no amendments to the 2019 Plan will be effective without stockholder approval if it is required under Section 422 of the Internal Revenue Code or the Listing Rules of the Nasdaq.
Termination, suspension or amendment of the 2019 Plan will not adversely affect any outstanding incentive award without the consent of the affected participant, except for adjustments in the event of changes in capitalization or a “change in control,” discussed below.
In general, no right or interest in any incentive award may be assigned or transferred by a participant, except by will or the laws of descent and distribution, or subjected to any lien or encumbrance. However, the Committee may permit a participant to transfer of all or a portion of a non-statutory stock option, other than for value, to certain family members or related family trusts, foundations or partnerships. Any permitted transferee of a non-statutory stock option will remain subject to all the terms and conditions of the incentive award applicable to the participant.
The exercise price of an incentive stock option may not be less than 100% of the fair market value of a share of our common stock on the option grant date (or 110% if the participant beneficially owns more than 10% of our outstanding stock). Under the Plan, “fair market value” means the average of the reported high and low sale prices of a share of our common stock during the regular daily trading session on the Nasdaq Stock Market.
In general, the 2019 Plan requires a participant to pay an option’s exercise price in cash. The Committee may, however, allow exercise payments to be made, in whole or in part, by delivery of a broker exercise notice (pursuant to which a broker or dealer is irrevocably instructed to sell enough shares or loan the optionee enough money to pay the exercise price and to remit such sums to the company), by tender or attestation as to ownership of shares of common stock that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, or by a combination of such methods. Any shares of common stock tendered or covered by an attestation will be valued at their fair market value on the exercise date.
The aggregate fair market value of shares of common stock with respect to which incentive stock options may become exercisable by a participant for the first time during any calendar year (and under all “incentive stock option” plans of the company or any subsidiary) may not exceed $100,000. Any incentive stock options in excess of this amount will be treated as non-statutory stock options. Options may be exercised in whole or in installments, as determined by the Committee, and the Committee may impose conditions or restrictions to the exercisability of an option, including that the participant remain continuously employed by the Company or a subsidiary for a certain period. An option may not remain exercisable after 10 years from its date of grant (or five years from its date of grant if the participant beneficially owns more than 10% of our outstanding stock).
A restricted stock award is an award of common stock vesting at such times and in such installments as may be determined by the Committee and, until it vests, that is subject to restrictions on transferability and the possibility of forfeiture. Restricted stock awards may be subject to any restrictions or vesting conditions that the Committee deems appropriate, including that the participant remain continuously employed by the Company or a subsidiary for a certain period.
Unless the Committee determines otherwise, any dividends (other than regular quarterly cash dividends) or distributions paid with respect to shares of common stock subject to the unvested portion of a restricted stock award will be subject to the same restrictions as the shares to which such dividends or distributions relate. Holders of restricted stock awards will have the same voting rights as holders of unrestricted common stock.
A restricted stock unit is an award that represents a promise to issue to the participant shares of common stock once certain criteria specified in the award are satisfied. The criteria may be that the participant remain employed until a specified date or dates or that various performance objectives are satisfied. No stock ownership rights are conferred upon the participant until the restricted stock unit awards are settled upon the satisfaction of the specified criteria.
The 2019 Plan permits the grant of performance-based stock and cash awards. The Committee may structure awards so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period.
The Committee may establish performance goals by selecting from one or more performance criteria set forth in the Plan, including, but not limited to: earnings before interest, taxes, depreciation and amortization; total stockholder return; return on equity or average stockholders’ equity; return on assets, investment, or capital employed; stock price margin (including gross margin); income (before or after taxes); operating income (before or after taxes); pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added; market share; cash flow (including cash flow per share); share price performance; debt reduction; strategic partnerships and transactions; stockholders’ equity; capital expenditures; operating profit or net operating profit; growth of net income or operating income; budget management; plant performance, contribution margin and other measures of performance selected by the Committee.
Change in Control of the Company
In the event a “change in control” of the Company occurs, then, if approved by the Committee (either at the time of the grant of the incentive award or at any time thereafter):
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outstanding options that may become immediately exercisable in full and will remain exercisable in accordance with their terms, |
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outstanding restricted stock awards and restricted stock units may become immediately fully vested and non-forfeitable; and |
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any conditions to the issuance of cash or shares of common stock pursuant to performance awards may lapse. |
The Committee may also determine that some or all participants holding outstanding options will receive shares or a cash payment equal to the excess of the fair market value of the option shares immediately prior to the effective date of the change in control over the exercise price per share of the options (or, in the event that there is no excess, that such options will be terminated).
For purposes of the 2019 Plan a “change in control” of the Company generally occurs if:
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all or substantially all of our assets are sold, leased, exchanged or transferred to any successor; |
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our stockholders approve any plan or proposal to liquidate or dissolve the Company; |
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a person previously unaffiliated with our Company, other than a bona fide underwriter in a securities offering, becomes the beneficial owner of 25% or more, but not 50% or more, of our outstanding securities ordinarily having the right to vote at elections of directors, unless the transaction has been approved in advance by “continuity directors,”who are members of our Board at the time of the Annual Meeting or whose nomination for election meets certain approval requirements related to continuity with our current board; |
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we are a party to a merger or consolidation that results in our stockholders beneficially owning securities representing: |
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50% or more, but less than 80%, of the combined voting power ordinarily having the right to vote at elections of directors of the surviving corporation, unless such merger was approved by our continuity directors; or |
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less than 50% of the combined voting power ordinarily having the right to vote at elections of directors of the surviving corporation (regardless of any approval by the continuity directors); or |
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the continuity directors cease to constitute at least a majority of our Board. |
Effect of Termination of Employment or Other Service
If a participant ceases to be employed by (or provide services to) the Company and all subsidiaries, all of the participant’s incentive awards will terminate as set forth below (unless modified by the Committee in its discretion as described below).
Upon termination due to death or disability, all outstanding options then held by the participant will, to the extent exercisable as of such termination, remain exercisable for a period of six (6) months after such termination (but in no event after the expiration date of any such option), and all restricted stock awards then held by the participant that have not vested as of such termination will be terminated and forfeited; and outstanding performance awards then held by the participant that have not vested as of such termination will be terminated and forfeited.
Upon termination for any reason other than death or disability (including retirement), all outstanding options will remain exercisable to the extent exercisable as of such termination for a period of three months thereafter (but in no event after the expiration date of any such option), all unvested restricted stock awards and performance awards will be terminated. However, if a participant’s termination is due to “cause” (as defined in the Plan) all rights of the participant under the 2019 Plan and any award agreements will immediately terminate without notice of any kind.
In connection with a participant’s termination, the Committee may cause the participant’s options to become or continue to become exercisable and restricted stock awards and performance awards to vest and/or continue to vest or become free of restrictions.
The following description of the federal income tax consequences under the laws of the United States is based on current statutes, regulations and interpretations, all of which are subject to change, possibly with retroactive effect. The description does not include state or local income tax consequences. In addition, the description is not intended to address specific tax consequences applicable to an individual participant who receives an incentive award.
Incentive Stock Option s. There will not be any federal income tax consequences to either the participant or the company as a result of the grant of an incentive option under the Incentive Plan.
A participant’s exercise of an incentive option also will not result in any federal income tax consequences to the company or the participant, except that (i) an amount equal to the excess of the fair market value of the shares acquired upon exercise of the incentive option, determined at the time of exercise, over the amount paid for the shares by the participant will be includable in the participant’s alternative minimum taxable income for purposes of the alternative minimum tax, and (ii) the participant may be subject to an additional excise tax if any amounts are treated as excess parachute payments (as discussed below). Special rules will apply if previously acquired shares of common stock are permitted to be tendered or attested to in payment of an option exercise price.
If a participant disposes of the shares acquired upon exercise of the incentive option, the federal income tax consequences will depend upon how long the participant held the shares. If the participant held the shares for at least two years after the date of grant and at least one year after the date of exercise (the “holding period requirements”), then the participant will recognize a long-term capital gain or loss. The amount of the long-term capital gain or loss will be equal to the difference between (i) the amount the participant realized on disposition of the shares, and (ii) the option price at which the participant acquired the shares. The company is not entitled to any compensation expense deduction under these circumstances.
If the participant does not satisfy both of the above holding period requirements (a “disqualifying disposition”), then the participant will be required to report as ordinary income, in the year the participant disposes of the shares, the amount by which the lesser of (i) the fair market value of the shares at the time of exercise of the incentive option or (ii) the amount realized on the disposition of the shares, exceeds the option price for the shares. The company will be entitled to a compensation expense deduction in an amount equal to the ordinary income includable in the taxable income of the participant. This compensation income may be subject to withholding. The remainder of the gain recognized on the disposition, if any, or any loss recognized on the disposition, will be treated as long-term or short-term capital gain or loss, depending on the holding period.
Non-Statutory Stock Options. Neither the participant nor the company incurs any federal income tax consequences as a result of the grant of a non-statutory option. Upon exercise of a non-statutory option, a participant will recognize ordinary income, subject to withholding, on the date of exercise in an amount equal to the difference between (i) the fair market value of the shares purchased, determined on the date of exercise, and (ii) the consideration paid for the shares. The participant may be subject to an additional excise tax if any amounts are treated as excess parachute payments (see explanation below). Special rules will apply if previously acquired shares of common stock are permitted to be tendered in payment of an option exercise price.
At the time of a subsequent sale or disposition of any shares of common stock obtained upon exercise of a non-statutory option, any gain or loss will be a capital gain or loss. The capital gain or loss will be long-term or short-term capital gain or loss, depending on the holding period.
In general, the company will be entitled to a compensation expense deduction in connection with the exercise of a non-statutory option for any amounts includable in the taxable income of the participant as ordinary income, provided the company complies with any applicable withholding requirements.
Restricted Stock Awards . With respect to shares issued pursuant to a restricted stock award that are subject to a substantial risk of forfeiture, a participant may file an election under Section 83(b) of the Code within 30 days after the shares are transferred to include as ordinary income in the year of transfer an amount equal to the fair market value of the shares received on the date of transfer (determined as if the shares were not subject to any risk of forfeiture). The company will receive a corresponding tax deduction, provided that proper withholding is made. If a Section 83(b) election is made, the participant will not recognize any additional income when the restrictions on the shares issued in connection with the stock award lapse. At the time any such shares are sold or disposed of, any gain or loss will be treated as long-term or short-term capital gain or loss, depending on the holding period from the date of receipt of the restricted stock award.
A participant who does not make a Section 83(b) election within 30 days of the transfer of a restricted stock award that is subject to a substantial risk of forfeiture will recognize ordinary income at the time of the lapse of the restrictions in an amount equal to the then fair market value of the shares, less any amount paid for the shares. The company will receive a corresponding tax deduction, provided that proper withholding is made. At the time of a subsequent sale or disposition of any shares of common stock issued in connection with a restricted stock award as to which the restrictions have lapsed, any gain or loss will be treated as long- term or short-term capital gain or loss, depending on the holding period from the date the restrictions lapse.
Restricted Stock Units. At the time of settlement of a restricted stock unit award, when shares of common stock are transferred to the participant, the participant will recognize ordinary taxable income equal to the fair market value of the shares on the date of transfer. The company will be entitled to a compensation expense deduction in the year of transfer of the shares in an amount equal to the amount recognized by the participant as taxable income.
Performance Awards. The participant recognizes ordinary taxable income in the year in which a performance award is paid. The amount of taxable income is equal to the amount of cash paid to the participant or the fair market value of any shares of common stock transferred to the participant. The company will be entitled to a compensation expense deduction in the year of transfer of the shares in an amount equal to the amount recognized by the participant as taxable income.
Excise Tax on Parachute Payments . The Code imposes a 20% excise tax on the recipient of “excess parachute payments,” as defined in the code, and denies tax deductibility to the company on excess parachute payments. Generally, parachute payments are payments in the nature of compensation to employees of a company who are officers, stockholders, or highly-compensated individuals, which payments are contingent upon a change in ownership or effective control of the company, or in the ownership of a substantial portion of the assets of the company. For example, acceleration of the exercisability of options or the vesting of restricted stock awards upon a change in control of the company may constitute parachute payments, and in certain cases, “excess parachute payments.” Excess parachute payments are generally parachute payments equal to or exceeding the recipient’s average compensation from the company over the preceding five years.
Equity Compensation Plan Information
Please see “Executive Officer Compensation - Equity Compensation Plan Information” for information concerning the number and weighted-average exercise price of securities to be issued upon exercise of outstanding options and warrants, and the number of securities remaining available for future issuance, under our equity compensation plans at December 31, 2023.
APPROVE AND ADOPT AN AMENDMENT TO THE COMPANY
’
S AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION TO EFFECT AN INCREASE IN THE NUMBER
OF SHARES OF COMMON STOCK FROM 200,000,000 TO 300,000,000
Our Board has adopted resolutions setting forth and declaring advisable an amendment to the Company’s Amended and Restated Certificate of Incorporation increasing the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000. The proposed amendment would replace the text of Article Fourth of the Company’s Amended and Restated Certificate of Incorporation with the following language:
“The Corporation is authorized to issue one class of stock. The authorized capital stock of the Corporation shall consist of three hundredmillion (300,000,000) shares which shall be designated as Common Stock, each with a par value of $0.001.”
As noted above under “ Information About the Annual Meeting - Quorum and Votes Required ,” we believe that in the case of shares held by a broker, bank or other agent for a beneficial owner who has not provided instructions to such agent, the broker, bank or other agent will have discretionary authority to vote the shares for approval of the proposal to amend the Company’s Amended and Restated Certificate of Incorporation to effect an increase in the number of authorized shares of the Company’s common stock from 200,000,000 to 300,000,000(Proposal 3).
Our Board believes it is in the best interest of the Company to increase the number of authorized shares of common stock in order to give the Company greater flexibility in considering and planning for future corporate needs, including, but not limited to, stock dividends, grants under equity compensation plans, stock splits, financings, potential strategic transactions, including mergers, acquisitions, and business combinations, as well as other general corporate transactions. Our Board believes that additional authorized shares of common stock will enable the Company to take timely advantage of market conditions and favorable financing and acquisition opportunities that become available to the Company without the delay and expense associated with convening a special meeting of the Company’s stockholders.
Except as otherwise required by law or by a regulation of the NASDAQ Capital Market, the newly authorized shares of common stock will be available for issuance at the discretion of the Board (without further action by our stockholders) for various future corporate needs, including those outlined above. While adoption of Proposal 3 will not have any immediate dilutive effect on the proportionate voting power or other rights of the Company’s existing stockholders, any future issuance of additional authorized shares of the Company’s common stock may, among other things, dilute the earnings per share of the common stock and the equity and voting rights of those holding common stock at the time the additional shares are issued.
In addition to the corporate purposes mentioned above, an increase in the number of authorized shares of the Company’s common stock may make it more difficult to, or discourage an attempt to, obtain control of the Company by means of a takeover bid that our Board determines is not in the best interest of the Company and its stockholders. However, our Board does not intend or view the proposed increase in the number of authorized shares of the Company’s common stock as an anti-takeover measure and is not aware of any attempt or plan to obtain control of the Company.
Any newly authorized shares of the Company’s common stock will be identical to the shares of common stock now authorized and outstanding. The adoption of Proposal 3 will not affect the rights of current holders of the Company’s common stock. Holders of shares of the Company’s common Stock are entitled to one vote per share on all matters to be voted upon by the shareholders generally. Except as otherwise provided by our Amended and Restated Certificate of Incorporation, at all meetings of stockholders for the election of directors at which a quorum is present a plurality of the votes cast shall be sufficient to elect. All other elections and questions presented to the stockholders at a meeting at which a quorum is present shall, unless otherwise provided by our Amended and Restated Certificate of Incorporation, our Third Amended and Restated Bylaws, the rules or regulations of any stock exchange applicable to us, or applicable law, be decided by the affirmative vote of a majority of the votes cast with respect to that matter. Pursuant to our Third Amended and Restated Bylaws, “votes cast” shall exclude “abstentions” and any “broker non-votes” with respect to that election or question to be voted on. Stockholders are entitled to receive such dividends as may be declared from time to time by our Board out of funds legally available therefore, and in the event of liquidation, dissolution or winding up of the Company to share ratably in all assets remaining after payment of liabilities. The holders of shares of our common stock have no preemptive, conversion, subscription rights or cumulative voting rights.
OUR BOARD RECOMMENDS A VOTE
“
FOR
”
THE
APPROVAL AND ADOPTION OF AN AMENDMENT TO THE COMPANY
’
S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT
AN INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK
FROM 200,000,000 TO 300,000,000.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed Forvis LLP (which we refer to as “Forvis”) as our independent registered public accounting firm for the year ending December 31, 2024, and our Board has directed that management submit the appointment of Forvis as our independent registered public accounting firm for ratification by the stockholders at the Annual Meeting.
Armanino LLP, or Armanino, had served as our independent registered public accounting firm from 2015 through September 26, 2023 and last provided an audit of our financial statement for the year ended December 31, 2022. In July 2023, Armanino notified us of its decision to transition away from providing certain financial statement audit services to public companies and its intent to resign as our independent registered public accounting firm, effective just after the filing of our Quarterly Report on Form 10-Q for the interim period ending September 30, 2023. Consequently, we made the decision to appoint Forvis as our independent registered public accounting firm and terminate Armanino effective as of September 26, 2023.
Armanino was not required to and did not seek our consent to its decision to resign as our independent registered public accounting firm. As a result, neither our Board nor our Audit Committee took part in Armanino’s decision to resign. Armanino audited our consolidated financial statements as of and for the fiscal years ended December31, 2022 and 2021. The reports of Armanino on our financial statements for the fiscal years ended December31, 2022 and 2021 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During our fiscal years ended December 31, 2022 and 2021, and through the interim period ended September 26, 2023, there were no disagreements between us and Armanino on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Armanino, would have caused Armanino to make reference to the subject matter of the disagreements in connection with its audit reports on our financial statements. During our two most recent fiscal years ended December31, 2022 and 2021, and the interim period ended September 30, 2023, Armanino did not advise us of any “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K with respect to our Company.
Duringour two most recent fiscal years ended December 31, 2022 and the subsequent period through September 26, 2023, neither we nor anyone on ourbehalf consulted with Forvis with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, or any other matters or reportable events as set forth in Item 304(a)(2) (i) and (ii)of Regulation S-K.
Stockholder ratification of the selection of Forvis as our independent registered public accountants is not required by our Third Amended and Restated Bylaws or otherwise. However, our Board is submitting the appointment of Forvis to the stockholders for ratification as a matter of corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain Forvis. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accountant at any time during the year if the Audit Committee determines that such a change would be in the Company’s and our stockholders’ best interests.
Representatives of Forvis and Armanino are expected to be present at the Annual Meeting and will have an opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions.
OUR BOARD RECOMMENDS A VOTE
“
FOR
”
THE RATIFICATION OF FORVIS LLP
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024
Fees Incurred for Services by Principal Accountant
The following table sets forth the aggregate fees billed to us for services rendered to us for the years ended December31, 2023 and 2022 by our former independent registered public accounting firm, Armanino LLP, and our current independent registered public accounting firm, Forvis LLP, for the audit of our consolidated financial statements for the years ended December 31, 2023 and 2022, and assistance with the reporting requirements thereof, the review of our condensed consolidated financial statements included in our quarterly reports on Form 10-Q, the filing of our Form8-K, and preparation of (Federal and State) Income Tax returns (in thousands).
|
2023 |
2022 |
|||||||
|
Audit Fees |
$ |
292 |
(3) |
$ |
179 |
|||
|
Audit - Related Fees (1) |
46 |
24 |
||||||
|
Tax Fees (2) |
46 |
45 |
||||||
|
$ |
384 |
$ |
248 |
|||||
|
(1) |
Includes fees related to equity offerings |
|
|
(2) |
Includes fees related to annual tax return preparation |
|
| (3) | Armanino LLP audit fees were $160,000. Forvis LLP audit fees were $132,000. |
Pre-Approval Policies and Procedures
The Audit Committee has responsibility for selecting, appointing, evaluating, compensating, retaining and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established policies and procedures in its charter regarding pre-approval of any audit and non-audit service provided to the Company by the independent registered public accounting firm and the fees and terms thereof.
The Audit Committee considered the compatibility of the provision of other services by its registered public accountant with the maintenance of their independence. The Audit Committee approved all audit and non-audit services provided by Forvis and Armanino in 2023 and 2022.
The Audit Committee issued the following report for inclusion in this Proxy Statement and our 2023 Annual Report:
|
● |
The Audit Committee has reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2023 with management of Aqua Metals, Inc. and with Aqua Metals, Inc.’s current independent registered public accounting firm, Forvis LLP. |
|
|
● |
The Audit Committee has discussed with Forvis LLP those matters required by Auditing Standards No. 1301, “Communications with Audit Committees,”as adopted by the Public Company Accounting Oversight Board (“PCAOB”). |
|
|
● |
The Audit Committee has received and reviewed the written disclosures and the letter from Forvis LLP required by the PCAOB regarding Forvis LLP’s communications with the Audit Committee concerning the accountant’s independence, and has discussed with Forvis LLP its independence from Aqua Metals, Inc. and its management. |
Based on the review and discussions referenced to in paragraphs 1 through 3 above, the Audit Committee recommended to our Board that the audited consolidated financial statements for the year ended December 31, 2023 be included in the Annual Report on Form 10-K for that year for filing with the SEC.
|
AUDIT COMMITTEE |
|
|
Vincent L. DiVito |
|
|
Molly Zhang |
|
|
Edward Smith |
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under Section14A of the Exchange Act, the Company’s stockholders are entitled to vote to approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement in accordance with SEC rules, commonly referred to as a “say-on-pay vote.” At our 2021 annual meeting of stockholders, the stockholders indicated their preference that the Company conduct a say-on-pay vote every year. Our Board has adopted a policy that is consistent with this preference.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers disclosed in the “Executive Officers and Compensation” section of this Proxy Statement. The Company believes that its compensation policies and decisions are aligned with our stockholders’ interests, and that the compensation of the Company’s named executive officers is designed to enable the Company to attract and retain talented and experienced executives to lead the Company successfully in a competitive environment.
Accordingly, our Board is asking the stockholders to indicate their support for the compensation of the Company’s named executive officers as described in this Proxy Statement by casting a non-binding advisory vote “FOR” the following resolution:
|
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item402 of Regulation S-K,including the compensation tables and narrative discussion, is hereby APPROVED.” |
Because the vote is advisory, it is not binding on our Board, the Compensation Committee, or the Company. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the Board and, accordingly, the Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
Advisory approval of this proposal requires the vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting. Unless the Board decides to modify its policy regarding the frequency of soliciting say-on-pay votes, the next say-on-pay vote will be at the 2025 annual meeting of stockholders.
THE
BOARD
OF
DIRECTORS
RECOMMENDS
A VOTE
“
FOR
”
THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE
COMPANY
’
S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 28, 2024 by:
|
● |
each person who is known by us to be the beneficial owner of more than five percent (5%) of our issued and outstanding shares of common stock; |
|
|
● |
each of our director nominees and executive officers; and |
|
|
● |
all director nominees and executive officers as a group. |
The beneficial ownership of each person was calculated based on 112,674,915 common shares issued and outstanding as of March 28, 2024. The SEC has defined “beneficial ownership” to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he owns it, but also if he has the power (solely or shared) to vote, sell or otherwise dispose of the share. Beneficial ownership also includes the number of shares that a person has the right to acquire within 60 days, pursuant to the exercise of options or warrants or the conversion of notes, debentures or other indebtedness. Two or more persons might count as beneficial owners of the same share. Unless otherwise indicated, the address for each reporting person is 5370 Kietzke Lane, #201. Reno, Nevada 89511.
|
Name of Executive Officer or Director Nominees |
Number of Shares |
Percentage Owned |
||||
|
Stephen Cotton |
3,229,346 |
(1) |
2.9 |
% |
||
|
Judd Merrill |
864,742 |
(2) |
* |
% |
||
|
Ben Taecker |
276,179 |
(3) |
* |
% |
||
|
David McMurtry |
59,519 |
(4) |
* |
% |
||
|
Vincent L. DiVito |
342,152 |
(5) |
* |
% |
||
|
Molly Zhang |
239,686 |
(6) |
* |
% |
||
|
Edward Smith |
297,686 |
(7) |
* |
% |
||
|
Director nominees and executive officers as a group |
5,309,310 |
4.7 |
% |
|||
* Less than 1%.
| Name and Address of 5% + Holders |
Number of Shares |
Percentage Owned |
||||
| None | ||||||
|
(1) |
Represents 3,229,346 shares of common stock. |
| (2) | Represents 864,742 shares of common stock. |
| (3) | Represents 276,179 shares of common stock. |
|
(4) |
Represents 59,519shares of common stock. |
|
(5) |
Represents 342,152shares of common stock. |
|
(6) |
Represents 239,686shares of common stock. |
| (7) | Represents 297,686shares of common stock. |
EXECUTIVE OFFICERS AND COMPENSATION
The following sets forth information regarding the current executive officers of the Company. Biographical information pertaining to Stephen Cotton, who is both a director and an executive officer of the Company, may be found in the section above entitled “Proposal No. 1, Election of Directors-Information About Director Nominees.”
|
Name |
Age |
Position |
|||
|
Stephen Cotton |
57 |
President, Chief Executive Officer and Director |
|||
|
Judd Merrill |
53 |
Chief Financial Officer |
|||
|
Benjamin Taecker |
42 |
Chief Engineering and Operating Officer |
|||
|
David McMurtry |
58 |
Chief Business Officer |
|||
Judd Merrill has served as our Chief Financial Officer since November 8, 2018. From April 2017 to August 2018, Mr. Merrill served as Director of Finance/Accounting of Klondex Mines Ltd., (NYSE:KLDX), an international mining company acquired by Hecla Mining Company (NYSE:HL) in July 2018. From December 2011 to April 2017, Mr. Merrill served as Chief Financial Officer of Comstock Mining, Inc. (NYSE-MKT: LODE), a Nevada-based mining company. From April 2008 to December 2011, Mr. Merrill served as Controller and Treasurer for Fronteer Gold, Inc. (TSE:FRG), a gold exploration company acquired by Newmont Mining Corp (NYSE:NEM). Mr. Merrill began his career at Deloitte Touche LLP and spent six years working in broader financial accounting, reporting and internal controls. Mr. Merrill holds a Bachelor of Science in accounting from Central Washington University and he received an M.B.A. from the University of Nevada, Reno and is a licensed CPA.
Benjamin Taecker has served as our Chief Engineering and Operating Officer since August 2021 and previously served as our Vice President of Engineering and Operationssince January of 2017. From April 2011to December 2016, Mr. Taecker served in progressive leadership roles, most recently as Plant Superintendent, at Johnson Controls Inc’s JCI Power Systems Division (now known as Clarios) Lead Acid Battery Recycling Center in Florence, South Carolina, where he was involved in the planning, construction, commissioning, and scaling of that facility. Mr. Taecker has over 15years of design management experience including complex design contracts for the U.S. military. Mr. Taecker has a Mechanical Engineering degree from South Dakota State University.
David McMurtry has served as our Chief Business Officer since July 2022. Previous to Aqua Metals,McMurtrywas the CEO of the McMurtry Group, from January 2019 to July 2022, and CEO of the Global Stars Foundation at the Al Dabbagh Group in Jeddah, Saudi Arabia, focused on investing in local sustainable solutions in Asia, Africa, and Latin America from October 2015 to 2019. For the last 25 years, Mr. McMurtryhas held multiple executive positions, including with Intuit Inc, and Habitat for Humanity International, while overseeing different organizations’ global strategic planning, implementation, operations, corporate development and MA. Mr.McMurtry is a Sloan Fellow with a Masters in Business from Stanford University and a Bachelor of Science in Business Administration from California Polytechnic University.
The following table sets forth the compensation awarded to, earned by or paid to those persons who served as our chief executive officer during 2023 and our threeother highest paid executive officers for the years ended December 31, 2023 and 2022 (in thousands).
|
Stock |
All Other |
|||||||||||||||||||||
|
Salary |
Bonus |
Awards (1) |
Compensation |
Total |
||||||||||||||||||
|
Name and Principal Position |
Year |
($) |
($) |
($) |
($) |
($) |
||||||||||||||||
|
Stephen Cotton, |
2023 |
488 |
553 |
1,405 |
17 |
2,463 |
||||||||||||||||
|
President and Chief Executive |
2022 |
472 |
473 |
825 |
12 |
1,782 |
||||||||||||||||
|
Officer |
||||||||||||||||||||||
|
Judd Merrill, |
2023 |
358 |
304 |
564 |
19 |
1,245 |
||||||||||||||||
|
Chief Financial Officer |
2022 |
346 |
260 |
378 |
14 |
998 |
||||||||||||||||
|
Benjamin Taecker, |
2023 |
271 |
154 |
429 |
19 |
873 |
||||||||||||||||
|
Chief Engineering and |
2022 |
262 |
131 |
229 |
10 |
632 |
||||||||||||||||
|
Operating Officer |
||||||||||||||||||||||
|
David McMurtry |
2023 |
325 |
183 |
387 |
15 |
910 |
||||||||||||||||
|
Chief Business Officer |
2022 |
130 |
71 |
225 |
292 |
(2) |
718 |
|||||||||||||||
|
(1) |
Amounts shown in this column do not reflect dollar amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of each restricted common stock award computed in accordance with the provisions of FASB ASC Topic 718 (using the closing price of our common stock on the date of grant). Assumptions used in the calculation of these amounts are included in Note14, Stockholders’Equity, of our audited consolidated financial statements for the year ended December31, 2023. |
|
|
(2) |
Amount includes 290,000 of compensation paid during 2022 to Mr. McMurtry for consulting work performed prior to being hired as the Chief Business Officer. |
Narrative Disclosure to Summary Compensation Table
Cotton Employment Agreement
In May 2018, we entered into an executive employment agreement with our President and Chief Executive Officer, Stephen Cotton, which initially provided for an annual salary of $410,000, eligibility for a performance-based bonus, reasonable and customary health insurance and other benefits, at our expense, and a severance payment in the amount of his annual salary and related benefits in the event of our termination of his employment without cause or his resignation for good reason. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry. On February 25, 2019, we amended the employment agreement with Mr. Cotton, to increase Mr.Cotton’s salary to $450,000 per year, effective as of January 7, 2019. Effective as of January 2, 2022, the Compensation Committee of our Board amended the employment agreement with Mr.Cotton, to increase Mr.Cotton’s salary to $472,500 per year.
Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr.Cotton pursuant to which we agreed to pay Mr. Cotton a base salary of $491,400 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. Cotton will be eligible to receive short-term and long-term incentive bonuses of up to 100% and 200% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr.Cotton with severance of two times his annual salary, a prorated bonus for the year of his termination and two years of health benefits in the event we terminate Mr. Cotton without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include two times his annual salary, two times his annual bonus, two years of health benefits and the immediate vesting of all unvested equity awards. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.
On December 12, 2022, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 1,270,589 RSUs granted under the 2019 Plan. The RSUs wereissued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Cotton will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Cotton’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 1,365,000 RSUs granted under the 2019 Plan. The RSUs wereissued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Cotton will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Cotton’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 420,000 RSUsThe RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: 210,000 RSUs will vest and settle upon achieving $2.50 per share; 105,000 RSUs will vest and settle upon achieving $4.00 per share; and 105,000 RSUs will vest and settle upon achieving $5.00 per share. The RSUs have been granted under the 2019 Planand will expire on the third anniversary of the date of grant andsubject to Mr. Cotton’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. Cotton, to increase Mr. Cotton’s salary to $511,056 per year.
Merrill Employment Agreement
In November 2018, we entered into an executive employment agreement with our Chief Financial Officer, Judd Merrill, which initially provided for an annual salary of $275,000, eligibility for areasonable and customary health insurance and other benefits, at our expense, and a severance payment in the amount of six months of his annual salary and related benefits in the event of our termination of his employment without cause or his resignation for good reason. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.Effective as of January 22, 2021, the Compensation Committee of our Board amended the employment agreement with Mr. Merrill, to increase Mr.Merrill’s salary to $330,000 per year. Effective as of January 2, 2022, the Compensation Committee of our Board amended the employment agreement with Mr. Merrill, to increase Mr.Merrill’s salary to $346,500per year. Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr. Merrill pursuant to which we agreed to pay Mr. Merrill a base salary of $360,500 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. Merrill will be eligible to receive short-term and long-term incentive bonuses of up to 75% and 125% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr. Merrill with severance of 18 months of his annual salary, a prorated bonus for the year of his termination and 18 months of health benefits in the event we terminate Mr.Merrill without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include 18 months times of his annual salary, 150% of his annual bonus, 18 months of health benefits and the immediate vesting of unvested equity awards. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.
On December 12, 2022, the Compensation Committee of our Board approved a bonus to Mr. Merrill in the form of 582,256 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Merrill will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Merrill’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Merrillin the form of 625,624 RSUs granted under the 2019 Plan. The RSUs wereissued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Merrillwill receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Merrill’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Merrill in the form of 50,000RSUsThe RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: 25,000RSUs will vest and settle upon achieving $2.50 per share; 12,500RSUs will vest and settle upon achieving $4.00 per share; and 12,500RSUs will vest and settle upon achieving $5.00 per share. The RSUs have been granted under the 2019 Planand will expire on the third anniversary of the date of grant andsubject to Mr. Merrill’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. Merrill, to increase Mr. Merrill’s salary to $374,775 per year.
Taecker Employment Agreement
In August 2021, we entered executive employment agreement with Mr. Taecker. Pursuant to the employment agreement, we initially agreed to compensate Mr. Taecker at the annual rate of $250,000. Mr. Taecker will be eligible to receive short-term and long-term incentive bonuses of up to 50% and 100% of his base salary, respectively, based on performance criteria approved by the compensation committee of our board of directors. The employment agreement entitles Mr. Taecker to reasonable and customary health insurance and other benefits, at our expense, and severance equal to 150% of his then annual salary and target annual bonus amount in the event of his terminationfor good reason following a change-in-control of the Company.Effective as of January 2, 2022, the Compensation Committee of our Board amended the employment agreement with Mr. Taecker, to increase Mr. Taecker’s salary to $262,500 per year.
Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr. Taecker pursuant to which we agreed to pay Mr. Taecker a base salary of $273,000 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. Tacker will be eligible to receive short-term and long-term incentive bonuses of up to 50% and 100% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr. Taecker with severance of 12months of his annual salary, a prorated bonus for the year of his termination and 12months of health benefits in the event we terminate Mr, Taecker without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include 18 months times of his annual salary, 150% of his annual bonus, 18 months of health benefits and the immediate vesting of unvested equity awards. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.
On December 12, 2022, the Compensation Committee of our Board approved a bonus to Mr. Taecker in the form of 352,882 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Taecker will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Taecker’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Taeckerin the form of 379,167 RSUs granted under the 2019 Plan. The RSUs wereissued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Taeckerwill receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Taecker’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 2,431 RSUsThe RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: 1,425RSUs will vest and settle upon achieving $2.50 per share; 713 RSUs will vest and settle upon achieving $4.00 per share; and 713RSUs will vest and settle upon achieving $5.00 per share. The RSUs have been granted under the 2019 Planand will expire on the third anniversary of the date of grant and subject to Mr. Taecker’s continuation of service to our Company.
On December 29, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Taeckerin the form of 130,000 RSUs granted under the 2019 Plan. The RSUs were, issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Taeckerwill receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Taecker’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. Taecker, to increase Mr. Taecker’s salary to $300,300 per year.
McMurtry Employment Agreement
In July2022, we entered executive employment agreement with Mr. McMurtry. Pursuant to the employment agreement, we initially agreed to compensate Mr. McMurtryat the annual rate of $320,000. Mr. McMurtrywill be eligible to receive short-term and long-term incentive bonuses of up to 50% and 100% of his base salary, respectively, based on performance criteria approved by the compensation committee of our board of directors. The employment agreement entitles Mr. McMurtryto reasonable and customary health insurance and other benefits, at our expense, and severance equal to 150% of his then annual salary and target annual bonus amount in the event of his terminationfor good reason following a change-in-control of the Company.Concurrent with the execution of his employment agreement, Mr. McMurtrywas granted 119,047 RSUs, with the RSUsvesting over a three-year period from the date of grant. The RSUsare issued subject to the terms and conditions of the Company’s Amended and Restated 2019Stock Incentive Plan.
Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr.McMurtry pursuant to which we agreed to pay Mr. McMurtry a base salary of $325,376 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. McMurtry will be eligible to receive short-term and long-term incentive bonuses of up to 50% and 100% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr. McMurtrywith severance of 12months of his annual salary, a prorated bonus for the year of his termination and 12months of health benefits in the event we terminate Mr, McMurtry without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include 18 months times of his annual salary, 150% of his annual bonus, 18 months of health benefits and the immediate vesting of unvested equity awards. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.
On December 12, 2022, the Compensation Committee of our Board approved a bonus to Mr. McMurtry in the form of 192,108RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. McMurtry will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. McMurtry’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board approved a bonus to Mr. McMurtry in the form of 451,910 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. McMurtry will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. McMurtry’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. McMurtry, to increase Mr. McMurtry’s salary to $338,392 per year.
Potential Payments upon Termination
As noted above, the employment agreements for Mr. Cotton, Merrill, Taecker, and McMurtryentitle each officer to a severance payment and related benefits in the event of our termination of their employment without cause or their resignation for good reason.
If a qualifying involuntary termination had occurred on December 31, 2023, Mr. Cotton, Merrill, Taecker, and McMurtry would have been eligible to receive the following amounts:
|
Health |
||||||||||||||||
|
Base |
Prorated |
Insurance |
||||||||||||||
|
Salary |
Annual Bonus |
Premiums (1) |
Total |
|||||||||||||
|
Name |
($) |
($) |
($) |
($) |
||||||||||||
|
Stephen Cotton |
1,022 |
511 | 51 |
$ |
1,584 | |||||||||||
|
Judd Merrill |
562 | 281 | 42 | $ | 885 | |||||||||||
| Benjamin Taecker | 338 | 150 | 24 | $ | 474 | |||||||||||
| David McMurtry | 300 | 169 | 3 | $ | 511 | |||||||||||
|
(1) |
Calculated using the monthly COBRA amount based on health insurance elections at December 31, 2023. |
Outstanding Equity Awards at December 31, 2023
|
Option Awards |
Stock Awards |
|||||||||||||||||||||||
|
Name |
Number of Securities Underlying Unexercised Options Exercisable |
Number of Securities Underlying Unexercised Options Unexercisable |
Option Exercise Price |
Option Expiration Date |
Number of Units of Stock that have not vested |
Market value of Units of Stock that have not vested |
||||||||||||||||||
| Stephen Cotton |
161,638 |
$ |
122,842 |
(1) |
||||||||||||||||||||
| 361,240 |
$ |
274,542 |
(2) |
|||||||||||||||||||||
|
1,058,825 |
$ |
804,707 | (3) | |||||||||||||||||||||
| 1,365,000 | $ | 1,037,400 | (5) | |||||||||||||||||||||
| 420,000 | $ | 319,200 | (6) | |||||||||||||||||||||
| Judd Merrill |
53,879 |
$ |
40,948 |
(1) |
||||||||||||||||||||
|
165,569 |
$ |
125,832 |
(2) |
|||||||||||||||||||||
|
485,214 |
$ |
368,763 |
(3) |
|||||||||||||||||||||
| 625,624 | $ | 475,474 | (5) | |||||||||||||||||||||
| 50,000 | $ | 38,000 | (6) | |||||||||||||||||||||
| Benjamin Taecker |
21,867 |
$ |
16,619 |
(1) |
||||||||||||||||||||
|
100,345 |
$ |
76,262 |
(2) |
|||||||||||||||||||||
|
294,069 |
$ |
223,492 |
(3) |
|||||||||||||||||||||
| 379,167 | $ | 288,167 | (5) | |||||||||||||||||||||
| 2,851 | $ | 2,167 | (6) | |||||||||||||||||||||
| 130,000 | $ | 98,800 | (7) | |||||||||||||||||||||
|
David McMurtry |
79,365 |
$ |
60,317 |
(4) |
||||||||||||||||||||
|
160,103 |
$ |
121,678 |
(3) |
|||||||||||||||||||||
| 451,910 | $ | 343,452 | (5) | |||||||||||||||||||||
|
(1) |
These RSUs were awarded on December 16, 2020. The RSUs vest in six equal semi-annual installments over a three-year period. |
|
|
(2) |
These RSUs were awarded on December 13, 2021. The RSUs vest in six equal semi-annual installments over a three-year period. |
|
|
(3) |
These RSUs were awarded on December 12, 2022. The RSUs vest in six equal semi-annual installments over a three-year period. |
|
|
(4) |
These RSUs were awarded on July 22, 2022. The RSUs vest in three equal semi-annual installments over a three-year period. |
|
| (5) | These RSUs were awarded on December 12, 2023. The RSUs vest in three equal semi-annual installments over a three-year period. | |
| (6) | These RSUs were awarded on December 12, 2023. The RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: one half of the RSUs will vest and settle upon achieving $2.50 per share; one quarter of the RSUs will vest and settle upon achieving $4.00 per share; and one quarter of the RSUs will vest and settle upon achieving $5.00 per share. | |
| (7) | These RSUs were awarded on December 29, 2023. The RSUs vest in three equal semi-annual installments over a three-year period. |
The following table sets forth compensation information for our chief executive officer, referred to below as our CEO, and our other named executive officers, or NEOs, for purposes of comparing their compensation to the value of our shareholders’ investments and our net income, calculated in accordance with SEC regulations, for fiscal years 2023, 2022 and 2021.
|
Year |
Summary Compensation Table Total for PEO |
Compensation Actually Paid to PEO |
Average Summary Compensation Table Total for Non-PEO NEOs |
Average Compensation Actually Paid toNon-PEO NEOs |
Value of Initial Fixed $100 Investment Based On Total Shareholder Return |
Net Income |
||||||||||||||||||
|
(1) |
(2) |
(3) |
(4) |
(5) |
||||||||||||||||||||
|
2023 |
$ | 2,463,000 | $ | 1,447,590 | $ | 1,009,333 | $ | 725,337 | $ | 24.92 | $ | (23,938,000) | ||||||||||||
|
2022 |
$ |
1,782,375 |
$ |
2,393,412 |
$ |
782,745 |
$ |
994,189 |
$ |
40.98 |
$ |
(15,431,000) |
||||||||||||
|
2021 |
$ |
2,071,000 |
$ |
(1,664,687) |
$ |
905,500 |
$ |
103,847 |
$ |
40.33 |
$ |
(18,191,000) |
||||||||||||
|
1. |
The dollar amounts reported are the amounts of total compensation reported for our CEO, Mr. Cotton, in the Summary Compensation Table for fiscal years 2023, 2022 and 2021. |
|
|
2. |
The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Cottonduring the applicable year, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested, or through the end of the reported fiscal year, and (iii) value of equity awards issued and vested during the reported fiscal year.See Table below for further information. |
|
|
3. |
The dollar amounts reported are the average of the total compensation reported for our NEOs, other than our CEO, namely Mr. Merrill, Mr. Taecker and Mr. McMurtry, in the Summary Compensation Table for fiscal years 2023 and2022.Mr. Merrill and Mr. Taecker were included in 2021. |
|
|
4. |
The dollar amounts reported represent the average amount of “compensation actually paid”, as computed in accordance with SEC rules, for our NEOs, other than our CEO.The dollar amounts reported are the average of the total compensation reported for our NEOs, other than our CEO in the Summary Compensation Table for fiscal years 2023, 2022 and 2021, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested, or through the end of the reported fiscal year, and (iii) value of equity awards issued and vested during the reported fiscal year.See Table below for further information. |
|
|
5. |
Reflects the cumulative shareholder return, computed in accordance with SEC rules, as of the end of each fiscal year assuming (i) an investment of $100 in our common shares at a price per share equal to $3.05, the closing price of our common stock on December 31, 2020 and (ii) the valuation of those shares as of the last trading day in 2021, 2022 and 2023 based on the closing prices for our common stock as of the those dates of $1.23, 1.25 and $0.76, respectively. |
|
PEO Equity Award Adjustment Breakout |
|
Year |
Summary Compensation Table Total for PEO |
Reported Value of Equity Awards for PEO |
Year End Fair Value of Equity Awards Granted in the Year |
Change in Fair Value of Outstanding and Unvested Equity Awards |
Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year |
Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year |
Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year |
Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation |
Compensation Actually Paid to PEO |
|||||||||||||||||||||||||||
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
||||||||||||||||||||||||||||||
|
2023 |
$ | 2,463,000 | $ | (1,405,000 | ) | $ | 1,248,224 | $ | (775,034) | $ | 0 | $ | (83,599 | ) | $ | 0 | $ | 0 | $ | 1,447,590 | ||||||||||||||||
|
2022 |
$ |
1,782,375 |
$ |
(825,375 |
) |
$ |
1,588,236 |
$ |
31,563 |
$ |
0 |
$ |
(183,388 |
) |
$ |
0 |
$ |
0 |
$ |
2,393,412 |
||||||||||||||||
|
2021 |
$ |
2,071,000 |
$ |
(1,058,000 |
) |
$ |
888,471 |
$ |
(3,699,948 |
) |
$ |
0 |
$ |
133,790 |
$ |
0 |
$ |
0 |
$ |
(1,664,687 |
) |
|||||||||||||||
(1) Subtract the grant date fair value of the equity awards to our PEO, as reported in the Summary Compensation Table
(2) Add the fair value as of the end of the covered fiscal year of all awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year;
(3) Add the amount equal to the change as of the end of the covered fiscal year (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year;
(4) Add, for awards that are granted and vest in the same year, the fair value as of the vesting date;
(5) Add the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year;
(6) Subtract, for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year; and
(7) Add the dollar value of any dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year.
|
Non-PEO NEO Equity Award Adjustment Breakout |
