BIMINI CAPITAL MANAGEMENT, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ⌧
Filed by a Party other than the Registrant □
Check the appropriate box:
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Preliminary Proxy Statement
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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 Pursuant to §240.14a-12
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BIMINI CAPITAL MANAGEMENT, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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3305 Flamingo Drive, Vero Beach, Florida, 32963
April 21, 2021
Dear Stockholder,
You are cordially invited to attend the 2021 Annual Meeting of Stockholders of Bimini Capital Management, Inc. to be held at 11:00 a.m., local time, on June 15, 2021, at the office of Bimini Capital Management, Inc.,
3305 Flamingo Drive, Vero Beach, Florida 32963. We look forward to greeting personally those stockholders who are able to attend.
The following pages include a formal Notice of Annual Meeting of Stockholders and the Proxy Statement describing the matters expected to be acted upon at the meeting. We urge you to review these materials carefully
and to take part in the affairs of the company by voting on the matters described in the Proxy Statement.
We intend to hold our annual meeting in person in accordance with the requirements, suggestions and protocols that federal, state and local governments have in effect at the time of the meeting regarding the COVID-19
pandemic. However, if the Board of Directors decides that it is not possible or advisable to hold our annual meeting in person, then we may convert the annual meeting to a virtual meeting. Should that occur, we will issue a press release as promptly
as practicable giving notice of the conversion to a virtual meeting and explain the means of remote communication and the place at which a requesting stockholder may access the meeting.
Your vote is important. Whether you plan to attend the meeting in person or not, we hope you will grant a proxy to vote your shares as soon as possible. Instructions for voting your shares are on the enclosed proxy
card or vote instruction form. This will ensure representation of your shares if you are unable to attend. If you attend the meeting, you may continue to have your shares voted as instructed in the proxy or you may withdraw your proxy at the
meeting and vote your shares in person.
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Sincerely,
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Robert E. Cauley
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Chairman of the Board and Chief Executive Officer
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BIMINI CAPITAL MANAGEMENT, INC.
3305 Flamingo Drive
Vero Beach, Florida 32963
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON JUNE 15, 2021
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To Our Stockholders:
We will hold the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Bimini Capital Management, Inc., a Maryland corporation (the “Company”), at the Company’s office located at 3305 Flamingo Drive, Vero
Beach, Florida 32963, on June 15, 2021, at 11:00 a.m., local time, for the following purposes:
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To elect one Class III director to serve until the 2024 Annual Meeting of Stockholders and until his successor is duly elected and qualified;
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To ratify the selection of BDO USA, LLP as our independent registered public accounting firm for the year ending December 31, 2021; and
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To consider and vote upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
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The Board of Directors has fixed the close of business on April 15, 2021, as the record date for the Annual Meeting. Only holders of record of the Company’s Class A Common Stock and Class B Common Stock as of that date
are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. A list of stockholders entitled to vote at the Annual Meeting will be available at the Annual Meeting.
Admission to the Annual Meeting will be by admission ticket only. If you are a stockholder of record and plan to attend, tear off the admission ticket from the top half of your proxy card and bring it and a photo ID
with you so that you may gain admission to the meeting.
If your shares are held through a broker, please contact your broker and request that the broker obtain an admission ticket for you or provide you with evidence of your share ownership, which will gain you admission to
the Annual Meeting.
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By Order of the Board of Directors,
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Robert E. Cauley
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Chairman of the Board and CEO
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Vero Beach, Florida
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April 21, 2021
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BIMINI CAPITAL MANAGEMENT, INC.
3305 Flamingo Drive
Vero Beach, Florida 32963
(772) 231-1400
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON JUNE 15, 2021
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This Proxy Statement is being furnished to the holders of Class A Common Stock and Class B Common Stock of Bimini Capital Management, Inc., a Maryland corporation (the “Company”), in connection with the solicitation by
the Company’s Board of Directors of proxies to be voted at the 2021 Annual Meeting of Stockholders of the Company (the “Annual Meeting”) to be held at the office of Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963, on
June 15, 2021, at 11:00 a.m., local time, or at any postponement or adjournment of the meeting, for the purposes set forth in the accompanying Notice of Annual Meeting. Unless the context requires otherwise, references in this Proxy Statement to
“we,” “us” and the “Company” refer to Bimini Capital Management, Inc.
This Proxy Statement, the enclosed proxy card and our annual report to stockholders, which includes our annual report on Form 10-K with audited financial statements for the year ended December 31, 2020 (together, our
“2020 Annual Report”), are being mailed to stockholders on or about April 21, 2021. If the enclosed proxy card or vote instruction form is executed and returned, it nevertheless may be revoked by the stockholder at any time prior to its use by
filing with the Secretary of the Company a written revocation or a duly executed proxy bearing a later date or by submitting revised instructions to us by telephone or via the Internet, in accordance with the instructions on the enclosed proxy card
or vote instruction form, as to how you would like your shares voted. A stockholder who attends the Annual Meeting in person may revoke his or her proxy at that time and vote in person if so desired.
If you are a stockholder of record and you plan to attend the Annual Meeting in person, then bring your proxy card and a photo ID with you so that you may be admitted to the meeting. If you hold your shares in the
name of your broker or other agent and you plan to attend in person, please contact your broker or other agent and request that they provide you with a legal proxy giving you the right to vote your shares. Bring the legal proxy and a photo ID to be
admitted to the Annual Meeting.
Unless revoked or unless contrary instructions are given, each proxy that is properly signed, dated and returned or authorized by telephone or Internet in accordance with the instructions on the enclosed proxy card or
vote instruction form prior to the start of the Annual Meeting, will be voted as indicated on the proxy card or via telephone or the Internet and if no indication is made, each such proxy will be deemed to grant authority to vote, as applicable:
Proposal 1:
FOR
the election of the Class III director nominee to serve until the 2024 Annual Meeting of Stockholders and until his successor is duly elected and qualified (the
“Class III Director Election Proposal”); and
Proposal 2:
FOR
the ratification of BDO USA, LLP as our independent registered public accounting firm for the year ending December 31, 2021 (the “Auditor Proposal”).
At the discretion of the persons named in the enclosed Proxy Card, on any other matter that may properly come before the Annual Meeting or any adjournment or postponement of the meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE NOMINEE LISTED UNDER THE CLASS III DIRECTOR ELECTION PROPOSAL AND “FOR” THE AUDITOR PROPOSAL.
TABLE OF CONTENTS
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Page
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Frequently Asked Questions
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3
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Matters to be Considered at the Annual Meeting
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Corporate Governance
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Audit Committee Report
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Compensation of Directors
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Compensation of Executive Officers
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Analysis of Executive Compensation
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Potential Payouts Upon Termination or a Change of Control
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Certain Relationships and Related Transactions
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Other Information
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2
FREQUENTLY ASKED QUESTIONS
When and where is the Annual Meeting?
The Annual Meeting will be held at the office of Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963, on Tuesday, June 15, 2021, at 11:00 a.m., local time.
Why am I receiving these proxy materials?
You are receiving these proxy materials in connection with the solicitation by our Board of Directors of proxies to be voted at the 2021 Annual Meeting of Stockholders.
If your shares were registered directly in your name with our transfer agent, Broadridge Financial Solutions, Inc., as of the close of business on April 15, 2021, you are considered a stockholder of record, and we have
sent you this Notice of Annual Meeting and Proxy Statement, together with the enclosed proxy card and our 2020 Annual Report.
If your shares were held in the name of a bank, brokerage account or other nominee as of the close of business on April 15, 2021, you are considered a beneficial owner of the shares held in street name. Your bank,
broker or other nominee has sent you this Notice of Annual Meeting and Proxy Statement, together with the enclosed vote instruction form and our 2020 Annual Report.
You have the right to direct your bank, broker or other nominee on how to vote your shares by completing and returning the vote instruction form or by instructing your bank, broker or other nominee by following the
telephone or Internet voting instructions provided.
What am I voting on?
You are voting on the proposals summarized below. Further details of each proposal are included in the next section entitled “Matters to Be Considered at the Annual Meeting.”
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Proposal 1: To elect one Class III director (nominee Robert J. Dwyer) to serve until the 2024 Annual Meeting of Stockholders and until his successor is duly elected and qualified; and
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Proposal 2: To ratify the selection of BDO USA, LLP as our independent registered public accounting firm for the year ending December 31, 2021.
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What are the recommendations of the Board of Directors on how I should vote my shares?
The Board recommends that you vote your shares as follows:
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Proposal 1:
FOR
the election of the Class III director nominee to serve until the 2024 Annual Meeting of Stockholders and until his successor is duly elected and
qualified; and
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Proposal 2: FOR the ratification of BDO USA, LLP as our independent registered public accounting firm for the year ending December 31, 2021.
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What are my choices when voting?
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Proposal 1: You may cast your vote in favor of the election of the Class III director nominee, against the election of the Class III director nominee, or you may elect to abstain from voting your shares.
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Proposal 2: You may cast your vote in favor of the ratification of BDO USA, LLP, against the ratification of BDO USA, LLP, or you may elect to abstain from voting your shares.
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How will my shares be voted if I do not specify how they should be voted?
The Board of Directors is asking for your proxy. Giving your proxy means that you authorize us to vote your shares at the meeting in the manner you direct. If you sign and return the enclosed proxy card, but do not
specify how to vote, your shares will be voted as follows:
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Proposal 1:
FOR
the election of the Class III director nominee to serve until the 2024 Annual Meeting of Stockholders and until his successor is duly elected and
qualified; and
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Proposal 2:
FOR
the ratification of BDO USA, LLP as our independent registered public accounting firm for the year ending December 31, 2021.
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How do I vote?
You may grant a proxy to vote your shares by any one of the following methods:
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By mail: Mark your votes, sign and return the proxy card or vote instruction form in the postage paid envelope provided.
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By Internet: Log onto the website indicated on your proxy card or vote instruction form and follow the instructions provided.
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By telephone: Call the toll-free number shown on your proxy card or vote instruction form and follow the voice prompts.
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Alternatively, you may attend the Annual Meeting in person and use a ballot to cast your vote. If you grant a proxy by the Internet or by telephone to vote your shares, you do not need to send in the proxy card or
vote instruction form. The deadline for Internet and telephone proxy authorization will be 6:00 p.m., Eastern Time, on June 14, 2021. If your shares are held in the name of a bank, broker or other nominee, and you wish to vote your shares at the
Annual Meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must bring with you to the meeting to exchange for a ballot.
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What vote is needed for the proposals to be adopted?
As of the close of business on the record date, April 15, 2021, there were 11,608,555 shares of the Company’s Class A Common Stock and 31,938 shares of the Company’s Class B Common Stock issued and outstanding,
representing the only classes of voting stock of the Company issued and outstanding as of such date. Each holder of Class A Common Stock and each holder of Class B Common Stock is entitled to cast one vote per share of Class A Common Stock or Class
B Common Stock held on each matter that properly comes before the Annual Meeting. Holders of shares of Class A Common Stock and Class B Common Stock vote together as one class in all matters, except that matters that would adversely affect the
rights and preferences of only one class must be separately approved by the holders of the adversely affected class.
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Quorum: In order to conduct the Annual Meeting, the presence, in person or by proxy, of stockholders entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting is required. This
is referred to as a quorum. Pursuant to Maryland law, abstentions and “broker non-votes” are counted as present in determining the presence of a quorum. A broker non-vote occurs when a broker or other nominee holding shares on behalf of a
customer votes the shares on certain routine matters for which voting instructions are not required, but does not vote the shares on non-routine matters as to which the customer has not provided instructions. If you submit a properly
executed proxy card or authorize a proxy by telephone or by Internet, you will be treated as present at the Annual Meeting for purposes of determining the presence of a quorum. Proxy cards marked as abstaining and broker non-votes on any
proposal to be acted on by stockholders will be treated as present at the Annual Meeting for purposes of determining the presence of a quorum.
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Proposals: The vote of a plurality of all of the votes cast at a meeting at which a quorum is present is necessary for the election of the Class III director. Plurality means that the director nominee who
receives the greatest number of “for” votes from shares entitled to vote will be elected. For purposes of the election of directors, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result
of the vote. The affirmative vote of a majority of all of the votes cast at a meeting at which a quorum is present is required to ratify the appointment of BDO USA, LLP. For purposes of the ratification BDO USA, LLP, abstentions and broker
non-votes will not be counted as votes cast and will have no effect on the results of that vote.
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Who will count and certify the votes?
Representatives of Broadridge Financial Solutions, Inc. and the inspector of elections will count the votes and certify the election results. The inspector of elections is our Controller and Vice President, Jerry
Sintes. The results will be published in a current report on Form 8-K to be filed after the Annual Meeting.
What does it mean if I receive more than one proxy card?
It means you have multiple accounts registered with our transfer agent or with brokers or other nominees. Please complete and provide your voting instructions for all proxy cards and vote instruction forms that you
receive.
Will my shares be voted if I do not sign and return my proxy card?
Possibly. If your shares are held in street name and you do not instruct your broker or other nominee how to vote your shares, your broker or nominee may either use its discretion to vote your shares on “routine
matters” considered at the meeting, such as the ratification of BDO USA, LLP as our independent registered public accounting firm, or leave your shares unvoted. For any “non-routine matter” considered at the meeting, such as the election of our
Class III director, your broker or other nominee would not be able to vote. We encourage you to provide instructions to your nominee by completing the vote instruction form or proxy card that you have received. This will ensure that your shares are
voted at the Annual Meeting as you direct.
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How can I change my vote?
You have the right to revoke your proxy at any time before the Annual Meeting. If you are a holder of record, you may contact our corporate secretary and request that another proxy card be sent to you. Alternatively,
you may use the Internet or the telephone to authorize a new proxy and revoke your old proxy, even if you previously mailed in a proxy card. The latest-dated, properly completed proxy that you submit, whether through the Internet, by telephone or by
mail will count as your vote. Please note that if you submit a later proxy authorization by mail, your re-authorization will not be effective unless it is received by our corporate secretary prior to the start of the Annual Meeting. If your shares
are held in street name, you must contact your bank, broker or other nominee and follow their procedures for changing your vote instructions.
How can I attend the Annual Meeting?
Admission to the Annual Meeting is limited to stockholders who are entitled to vote or their authorized representatives. If you are a holder of record and wish to attend the Annual Meeting, bring your proxy card and a
photo ID with you to be admitted to the meeting.
If your shares are held in the name of a bank, broker or other nominee, and you wish to attend the Annual Meeting, you must bring other proof of ownership, such as a legal proxy obtained from your bank, broker or other
nominee. You must also bring a photo ID. Alternatively, you may obtain an admission ticket by sending your request and a copy of your proof of ownership to our corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach,
Florida 32963 provided that your request is received by the Company before the meeting.
No cameras, recording equipment, cell phones, electronic devices, large bags, backpacks, briefcases or packages will be permitted in the meeting room or adjacent areas. All items will be subject to search.
Can I view or receive these materials electronically?
This Proxy Statement and our 2020 Annual Report are available online at https://ir.biminicapital.com. From the home page, select the “Financial Information” tab to view or download the materials.
If you hold your shares in street name, you must contact your bank, broker or other nominee to consent to electronic delivery of our Proxy Statement and Annual Report. By choosing to access your proxy materials
electronically in the future, you will save the company the cost of printing and mailing these documents to you and help conserve natural resources.
How do I obtain a copy of materials related to corporate governance?
Our Corporate Governance Guidelines, the charters of each standing committee of our Board of Directors, our Code of Business Conduct and Ethics, our Code of Ethics for Senior Financial Officers and other materials
related to our corporate governance are published on the Governance section of our website at https://ir.biminicapital.com. In addition, this information is available in print to any stockholder who requests it by contacting our corporate secretary
at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963.
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What proxy solicitation expenses will be incurred in connection with this meeting?
Our Board of Directors is asking for your proxy and we will pay all of the costs of asking for stockholder proxies. We can ask for proxies through the mail or personally by telephone or the Internet. Our directors,
officers and employees of the Company may solicit proxies. These people do not receive additional compensation for these services. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding solicitation material to the beneficial owners of the Company’s common stock held of record by them. Broadridge Financial Solutions, Inc. assists us with certain administrative functions related to the distribution of the
proxy, but is not acting as a solicitor.
How can I submit a proposal for consideration at the 2022 Annual Meeting?
To be considered for the 2022 Annual Meeting of Stockholders, stockholder proposals must be submitted in writing to our corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida
32963. No proposal can be included in our proxy statement for the 2022 Annual Meeting of Stockholders unless it is received by our corporate secretary no later than December 22, 2021 (120 days prior to the anniversary date of our proxy statement for
our 2021 Annual Meeting). The proposal must also meet the other requirements of the rules of the Securities and Exchange Commission relating to stockholder proposals.
Any stockholder whose proposal is not included in our proxy statement relating to the 2022 Annual Meeting of Stockholders and who intends to present a matter for consideration at such meeting, including any proposal
relating to the nomination of a director, must give notice to our corporate secretary in accordance with Section 1.11 of our Amended and Restated Bylaws and such matter must otherwise be a proper matter for stockholder action. For our 2022 Annual
Meeting of Stockholders, any such notice must be received by our corporate secretary no later than April 16, 2022, and no earlier than March 17, 2022 (not less than 60 days, or more than 90 days prior to the anniversary date of our 2021 Annual
Meeting).
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MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL 1: TO ELECT ONE CLASS III DIRECTOR TO SERVE UNTIL
THE 2023 ANNUAL MEETING OF STOCKHOLDERS AND
UNTIL HIS SUCCESSOR IS DULY ELECTED AND QUALIFIED.
One director is nominated for election as a Class III director to serve until the 2024 Annual Meeting of Stockholders and until his successor has been duly elected and qualified, or until his earlier retirement,
death or resignation. It is intended that the shares represented by each proxy for which no voting instructions have been given will be voted for the nominee for director set forth below who is an incumbent director, or for any substitute nominee
designated by our Board of Directors in the event the nominee becomes unavailable for election. The principal occupation of, and certain other information regarding, the Class III director nominee and our continuing directors, as of April 15,
2021, is set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE ELECTION OF THE CLASS III DIRECTOR NOMINEE.
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Class III Director Nominee — Term Expires in 2024
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ROBERT J. DWYER, 77
Director Since 2007
Robert J. Dwyer retired from Morgan Stanley Dean Witter in 1999 as Executive Vice President-National Sales Director, having served in that role from 1990 until his retirement. Prior to that, Mr. Dwyer was Director of Taxable Fixed Income for
Morgan Stanley Dean Witter. He currently serves on the Board of Directors of the Bank of New York Optima Fund, and he has served as a member of the Board of Directors of MasTec, Inc. since October 2004. Mr. Dwyer has over 30 years of experience in
financial markets, capital markets, and mergers and acquisitions. Mr. Dwyer has numerous charitable and civic interests. He currently serves on the investment committee for the Vincentian Order. He also is Chairman of the Dwyer Family Foundation,
which supports a number of health and social programs. He has previously served as Chairman of the Board of Trustees for Niagara University.Mr. Dwyer provides our Board with significant experience in investment banking and corporate finance matters.
Mr. Dwyer’s service on the boards and investment committees of other entities also allows him to provide insight on corporate governance matters and financing transactions.
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Continuing Class I Director — Term Expires in 2022
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FRANK E. JAUMOT, 64
Director Since 2009
Frank E. Jaumot has been the Director of Accounting and Auditing for the certified public accounting firm of Ahearn, Jasco & Company, P.A. since 1991, and is a shareholder in that firm. From 1979 to 1991, Mr.
Jaumot was associated with Deloitte & Touche LLP. Mr. Jaumot is a certified public accountant in Florida and Ohio and is a member of the American Institute of Certified Public Accountants and the Florida Institute of Certified Public
Accountants. He served on the Board of Directors of MasTec, Inc. from September 2004 to May 2016. He served on the Board of Directors of Vapor Corp. from April 2014 to July 2015. Mr. Jaumot is also on the Board of Directors for Junior Achievement
of South Florida, Inc., a not-for-profit entity. Mr. Jaumot previously served on the Board of Directors of PPOA Holding, Inc.As an accountant with approximately 40 years of experience, Mr. Jaumot provides our Board with significant accounting,
financial reporting and tax expertise. His experience enhances the Board’s ability to identify and evaluate accounting and tax issues. Mr. Jaumot also has corporate governance experience from serving on other boards of publicly held companies.
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Continuing Class II Director — Term Expires in 2023
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ROBERT E. CAULEY, 62
Director Since 2003
Robert E Cauley has served as Chairman of the Board and Chief Executive Officer of the Company since 2008 and is one of the Company’s founders. He served as Chief Financial Officer and Chief Investment Officer of the
Company from 2003 to 2008. He has also served as Chairman, President and Chief Executive Officer of Orchid Island Capital, Inc. ("Orchid") since its formation in August 2010. Orchid invests in residential mortgage backed securities, and it is
externally managed and advised by a wholly-owned subsidiary of the Company. Prior to co-founding the Company, he was Vice President, Portfolio Manager at Federated Investment Management Company in Pittsburgh, Pennsylvania, where, from 1996 until
September 2003, he served as a lead portfolio manager, co-manager, or assistant portfolio manager of $4.25 billion (base capital, unlevered amount) in mortgage and asset backed securities funds. From 1994 to 1996, he was an associate at Lehman
Brothers in the asset-backed structuring group. From 1992 to 1994, he was a credit analyst in the highly levered firms group and the aerospace group at Barclay’s Bank. Mr. Cauley has invested in, researched, or structured almost every type of
mortgage-backed security. Mr. Cauley, who is a CFA and a CPA, received his MSIA in finance and economics from Carnegie Mellon University and his BA in accounting from California State University, Fullerton. Mr. Cauley served in the United States
Marine Corps for four years.Mr. Cauley brings to our Board in-depth knowledge of investing in fixed income securities, particularly mortgage-backed securities. Sixteen years of his fixed income investing experience has been within the context of a
REIT. Mr. Cauley has experience in significant leadership positions within the Company, including as the current CEO and as the former CFO and CIO, which allows him to provide the Board with strategic insights. Mr. Cauley also has an in-depth
understanding of accounting issues, as well as experience in the mortgage-backed securities field prior to joining the Company.
9
PROPOSAL 2: TO RATIFY THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Our Audit Committee has selected the accounting firm of BDO USA, LLP to serve as our independent registered public accounting firm for the year ending December 31, 2021, subject to ratification of this appointment by
our stockholders. Action by stockholders is not required by law in the appointment of an independent registered public accounting firm, but this appointment is submitted by the Board of Directors in order to give the stockholders a voice in the
designation of auditors. If the appointment is not ratified by the stockholders, the Board of Directors will reconsider its choice of BDO USA, LLP as our independent registered public accounting firm. BDO USA, LLP has advised us that neither it
nor any member thereof has any financial interest, direct or indirect, in our company or any of our subsidiaries in any capacity. BDO USA, LLP has served as our independent registered public accounting firm since April 17, 2008 and audited our
consolidated financial statements for the years ended December 31, 2008 through 2020.
The Company anticipates that a representative of BDO USA, LLP will be present at the annual meeting, will be given the opportunity to make a statement if he or she so desires and will be available to respond to
appropriate questions.
THE BOARD RECOMMENDS A VOTE
FOR
THE RATIFICATION OF THE SELECTION OF BDO USA, LLP
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
10
CORPORATE GOVERNANCE
Board Composition
The Company’s business, property and affairs are managed under the direction of the Board of Directors. The Board is currently comprised of three directors divided into three classes, with one director representing
each class. Terms of the classes are staggered, with one class standing for election each year. The Board is elected by stockholders to oversee management of the Company in the long-term interests of all stockholders.
Director Independence
Pursuant to Item 407(a)(1)(ii) of Regulation S-K of the Securities and Exchange Commission, the Board is required to affirmatively determine and disclose the independence of each director, and nominee for election as a
director, based on the director independence standards of a national securities exchange or an inter-dealer quotation system having certain director independence requirements notwithstanding that the Company is not currently listed on any such
exchange and the Company’s securities are not currently quoted in any such inter-dealer quotation system. The Board has determined to use the definition of “independent director” as set forth in the Marketplace Rules of The Nasdaq Stock Market,
LLC. Based on such definition, the Board has affirmatively determined that the following directors are “independent” within the meaning of Rule 5605(a)(2) of the Marketplace Rules and have no relationship with the Company which, in the opinion of
the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director:
Robert J. Dwyer
Frank E. Jaumot
Notwithstanding the determination described above, the Board has determined that Mr. Jaumot is not “independent” under the stricter definition of that term that is contained in Rule 5605(c)(2) of the Marketplace Rules
and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934. That stricter definition of “independent” is applied for purposes of service on the Company’s Audit Committee. Services provided to the Company by Ahearn, Jasco & Company, P.A., a CPA
firm in which Mr. Jaumot is a shareholder, cause Mr. Jaumot to not be “independent” for Audit Committee purposes. In addition, the Board has determined that Robert E. Cauley is not “independent” for purposes of the Marketplace Rules because he is an
officer and employee of the Company.
Board Meetings and Committees
The Board currently has three standing committees: the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee. The charter of each Board committee is available on the
Corporate Governance section of the Company’s website at https://ir.biminicapital.com and will be made available in print to any stockholder upon written request delivered to our corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo
Drive, Vero Beach, Florida 32963. The following table reflects the composition of each of the Board’s standing committees as of March 31, 2020:
|
Audit
|
|
Compensation
|
|
Corporate Governance and
|
|
Committee
|
|
Committee
|
|
Nominating Committee
|
|
Robert J. Dwyer*+
|
|
Robert J Dwyer*
|
|
Robert J. Dwyer*
|
|
|
|
Frank E. Jaumot
|
|
Frank E. Jaumot
|
____________________
|
*
|
Current Committee Chair.
|
|
+
|
Audit Committee Financial Expert.
|
11
During 2020, the Board held 6 meetings, the Audit Committee held 7 meetings, the Corporate Governance and Nominating Committee held 4 meetings and the Compensation Committee held 4 meetings. During 2020, no incumbent
director attended fewer than 75% of the aggregate of the total number of meetings of the Board (held during the period for which such person was a director) and the total number of meetings held by all committees of the Board on which such person
served (during the periods that such person served). It is the Company’s policy for Board members to attend the Annual Meeting of the Stockholders. In 2020, all three Board members attended the Annual Meeting of Stockholders.
Board Structure and Role in Risk Oversight
Board Leadership Structure
The Board has not separated the positions of Chairman of the Board and Chief Executive Officer. Robert E. Cauley holds these positions and he leads the Company’s Board meetings. The Board believes Mr. Cauley’s
extensive experience and knowledge regarding the Company’s business positions him to provide the most effective and competent leadership of the Company and the Board. Given his experience with the Company, Mr. Cauley has the familiarity and expertise
to best understand opportunities and risks facing the Company, and the Board believes that he is in the best position to lead both the Company and the Board. The Company’s lead independent director is Robert J. Dwyer. Mr. Dwyer is the chair of the
Company’s existing Board Committees, and in that capacity, he is able to call meetings, set agendas and direct the attention of those Committees on a wide range of corporate matters. Given the nature and scope of the Company’s current operations,
the Company’s small management team and the limited number of Company employees, the Board believes that the Company’s current leadership structure is appropriate.
Board Role in Risk Oversight
The Board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the relevant Board Committees. The Audit Committee oversees management of financial risks and risks relating
to potential conflicts of interest, the Compensation Committee is responsible for overseeing the management of risks relating to compensation arrangements, and the Nominating and Corporate Governance Committee manages risks associated with the size,
composition and independence of the Board. These Committees provide reports periodically to the full Board. The oversight responsibility of the Board and its Committees is supported by management reporting processes that are designed to provide
visibility to the Board about the identification, assessment, and management of critical risks. These areas of focus include strategic, operational, financial and reporting, compensation, legal and compliance, and other risks. The management
reporting process includes regular reports from the Chief Executive Officer, which are provided with input from the senior management team.
Audit Committee
The Audit Committee’s charter, which may be accessed on the Corporate Governance section of our website at https://ir.biminicapital.com, describes the composition, purposes and responsibilities of the committee. Among
other things, the charter provides that the committee will be comprised of at least one director as appointed by the Board, who shall meet the independence and audit committee composition requirements under applicable law and stock exchange listing
standards as in effect from time to time and shall be free from any relationship that would interfere with the exercise of his or her independent judgment as a member of the Committee.
The functions of the Audit Committee are primarily to review with our independent registered public accounting firm its reports concerning audit findings related to the Company’s annual and quarterly financial
statements, internal controls and procedures and disclosure controls and procedures. The Audit Committee also appoints our independent registered public accounting firm and assists the Board in oversight of our compliance with legal and regulatory
requirements related to financial reporting matters.
12
The Board has determined that the Chair of the Audit Committee, Mr. Robert J. Dwyer, is an “audit committee financial expert” within the meaning of the applicable rules and regulations of the Securities and Exchange
Commission and an Independent Director according to the Marketplace Rules of The Nasdaq Stock Market, LLC. Mr. Dwyer is also independent in accordance with the applicable law and stock exchange listing standards.
Service Fees Paid to the Independent Registered Public Accounting Firm
The Audit Committee has selected BDO USA, LLP as the Company’s independent registered public accounting firm for 2021 and such firm has audited the Company’s annual consolidated financial statements for 2008 through
2020. The Company anticipates that representatives of BDO USA, LLP will be present at the Annual Meeting and, while they do not plan to make a statement (although they will have the opportunity to do so if they desire), they will be available to
respond to appropriate questions from stockholders.
Fee Disclosure
The following table lists the fees for services rendered by BDO USA, LLP, our independent registered public accounting firm, for the years ended December 31, 2020 and 2019:
|
Fee Category
|
2020
|
2019
|
||||||
|
Audit Fees
|
$
|
295,000
|
$
|
295,000
|
||||
|
Audit Related Fees
|
-
|
-
|
||||||
|
Tax Fees
|
-
|
-
|
||||||
|
All Other Fees
|
-
|
-
|
||||||
|
Total Fees
|
$
|
295,000
|
$
|
295,000
|
||||
For purposes of the table above, “Audit Fees” are fees and expenses billed by BDO for the annual audit of our financial statements and review of our quarterly financial statements; “Audit-Related Fees” are fees and expenses for assurance and
related services that are reasonably related to the performance of the audit or review of our financial statements that are not Audit Fees; “Tax Fees” are fees and related expenses billed for professional services for tax compliance, tax advice and
tax planning; and “All Other Fees” are fees and expenses for products and services that are not “Audit Fees,” “Audit-Related Fees” or “Tax Fees.”
Pre-Approval Policies and Procedures of our Audit Committee
Our Audit Committee must pre-approve, to the extent required by applicable law, all audit services and permissible non-audit services provided by our independent registered public accounting firm, except for any de
minimis non-audit services. All of the fees reflected above were approved by our Audit Committee.
13
Transactions with Related Persons
Pursuant to its committee charter, the Audit Committee of the Board of Directors is responsible for reviewing and approving related person transactions. Related person transactions include those transactions required
to be disclosed by Item 404 of Regulation S-K under the Securities Exchange Act of 1934, as amended. As the Company is currently a “smaller reporting company” within the meaning of Regulation S-K, Item 404 requires disclosure of any transaction,
since the beginning of the Company’s fiscal year immediately preceding the Company’s last fiscal year, or any currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or
one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which a related person had or will have a direct or indirect material interest. The term “related person” is defined in Item 404 and
includes the Company’s directors, nominees for director, executive officers and each of their respective immediate family members, as well as any person that beneficially owns more than 5% of any class of the Company’s voting stock and each such
person’s immediate family members, where applicable.
In fulfilling its responsibility, the Audit Committee will review the relevant facts of each related person transaction or series of related transactions and either approve, ratify or disapprove such transaction or
transactions. The Audit Committee will take into account such factors as it deems necessary or appropriate in deciding whether to approve, ratify or disapprove any related person transaction, including any one or more of the following:
|
•
|
The terms of the transaction;
|
|
•
|
The benefits to the Company of the transaction;
|
|
•
|
The availability of other sources for comparable products or services;
|
|
•
|
The terms available to unrelated third parties or to employees generally; and
|
|
•
|
The impact on a director’s independence in the event that such director is a party to the transaction or such director, an immediately family member of such director, or an entity in which such director is an
executive officer or has a direct or indirect material interest is a party to the transaction.
|
No director may participate in any consideration or approval of a related person transaction with respect to which such director or any of such director’s immediate family members is the related person or has a direct
or indirect material interest. Related person transactions will only be approved if they are determined to be in, or not inconsistent with, the best interests of the Company and its stockholders.
The Company solicits information from each of the Company’s directors and executive officers to identify related person transactions. If a related person transaction that has not been previously approved or previously
ratified is identified, the Audit Committee will promptly consider all of the relevant facts. If the transaction is ongoing, the Audit Committee may ratify or request the rescission, amendment or termination of the related person transaction. If
the transaction has been completed, the Audit Committee may seek to rescind the transaction where appropriate and may recommend that the Board or the Company take appropriate disciplinary action where warranted. In addition, the Audit Committee will
generally review any ongoing related person transactions on an annual basis to determine whether to continue, modify or terminate such related person transactions.
Mr. Jaumot is the Director of Accounting and Auditing and a shareholder of the certified public accounting firm Ahearn, Jasco & Company, P.A. Ahearn, Jasco & Company, P.A. has provided tax, accounting, and SEC
consulting services to the Company since its founding in 2003 and is expected to continue providing such services in the future. Mr. Jaumot has been directly involved with services provided by Ahearn, Jasco & Company, P.A. to the
Company. During fiscal years 2020 and 2019, the Company paid Ahearn, Jasco & Company, P.A. approximately $78,000 and $58,000, respectively, and from January 1, 2021 through April 15, 2021, the Company has been billed approximately $19,000 for
services performed in 2021. The Audit Committee has reviewed the engagement of Ahearn, Jasco & Company, P.A. and Mr. Jaumot’s position on the Board of Directors, and determined that the engagement of Ahearn, Jasco & Company, P.A. is in the
best interests of the Company. The Audit Committee will annually review this engagement.
14
Compensation Committee
The Compensation Committee’s charter, which may be accessed on the Corporate Governance section of our website at https://ir.biminicapital.com, describes the composition, purposes and responsibilities of the
committee. Among other things, the charter provides that the committee will be comprised of at least one director as appointed by the Board, each of whom shall meet the independence requirements under applicable law and stock exchange listing
standards as in effect from time to time and shall be free from any relationship that would interfere with the exercise of his or her independent judgment as a member of the committee. The Compensation Committee reviews and establishes or recommends
to the Board the compensation and benefits of all of the Company’s executive officers and independent directors, administers the Company’s incentive compensation plans and establishes and reviews general policies relating to compensation and benefits
of the Company’s employees. Recommendations regarding compensation of other officers are made by our Chief Executive Officer.
The Compensation Committee has the sole authority under its charter to select, retain and terminate a compensation consultant and to approve the consultant’s fees and other retention terms. The Compensation Committee
did not engage any compensation consultants during 2020.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was at any time during 2020 an officer or employee of the Company or any of the Company’s direct or indirect subsidiaries nor is any such person a former officer of the Company
or any of the Company’s direct or indirect subsidiaries. In addition, no executive officer of the Company currently serves as a director or member of the compensation committee of any entity that has one or more executive officers serving as a
director of the Company.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee’s charter, which may be accessed on the Corporate Governance section of our website at https://ir.biminicapital.com, describes the composition, purposes and
responsibilities of the committee. Among other things, the charter provides that the committee shall be comprised of at least one director as appointed by the Board, each of whom shall meet the independence requirements under applicable law and
stock exchange listing standards as in effect from time to time and shall be free from any relationship that would interfere with the exercise of his or her independent judgment as a member of the committee. The charter also provides that the
committee shall identify and recommend to the Board of Directors persons to be nominated by the Board to stand for election as directors at each Annual Meeting of Stockholders and persons to be elected by the Board to fill any vacancy or vacancies in
its number. The committee also recommends to the Board actions to be taken regarding the structure, organization and functioning of the Board, and the persons to serve as members of the standing committees of, and other committees appointed by, the
Board. The charter gives the committee the responsibility to develop and recommend corporate governance guidelines to the Board, and to recommend to the Board the process and criteria to be used in evaluating the performance of the Board and to
oversee the evaluation of the Board.
In identifying potential candidates for Board membership, the Corporate Governance and Nominating Committee may consider candidates proposed by management, but is not required to do so. The committee also relies on
suggestions and recommendations from current directors and stockholders and does not distinguish nominees recommended by stockholders from other nominees. A stockholder who wishes to recommend a candidate for director of the Company may write to
Chair, Corporate Governance and Nominating Committee of the Board of Directors, in care of our corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963.
15
In evaluating candidates for members of the Board, the Corporate Governance and Nominating Committee has not established specific minimum qualification standards, but rather takes into consideration such factors as it
deems appropriate. These factors may include judgment, skill, diversity, experience with businesses and other organizations of comparable size, the interplay of the candidate’s experience with the experience of other Board members, and the extent to
which the candidate would be a desirable addition to the Board and any committees of the Board. We do not have a formal policy concerning diversity, but the Corporate Governance and Nominating Committee does consider certain types of diversity when
nominating director candidates to the Board, including differences of viewpoint, professional experience, education, skill, other personal qualities and attributes, race, gender and national origin. The nominee for the Board of Directors in this
proxy statement was nominated by the Corporate Governance and Nominating Committee.
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines. These guidelines are revised from time to time to better address new or changing needs and regulatory requirements. The Corporate Governance Guidelines may be
accessed at the Corporate Governance section of our website at https://ir.biminicapital.com, and will be made available in print to any stockholder upon written request delivered to our corporate secretary at Bimini Capital Management, Inc., 3305
Flamingo Drive, Vero Beach, Florida 32963.
Corporate Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics that is applicable to all officers, directors and employees of the Company and its subsidiaries. The Company has also adopted a Code of Ethics for Senior
Financial Officers that is applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Company’s Code of Business Conduct and Ethics and the
Company’s Code of Ethics for Senior Financial Officers may be accessed from the Corporate Governance section of our website at https://ir.biminicapital.com, and will be made available in print to any stockholder upon written request delivered to our
corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963. The Company intends to disclose any waivers from, or amendments to, our Code of Business Conduct and Ethics and our Code of Ethics for Senior
Financial Officers required to be disclosed by applicable law or stock exchange listing standards by posting a description of such waiver or amendment on our website at https://ir.biminicapital.com.
Policy on Hedging
The Company has not adopted policies regarding the ability of employees, officers or directors or their designees to purchase financial instruments or otherwise engage in transactions that hedge or offset any decrease
in the market value of the Company’s securities that may be granted to them as part of their compensation or that are otherwise held directly or indirectly by them.
Stockholder Communications
Stockholders and other interested parties may communicate with any director, including the Chairman of the Board and the chairman of any committee of the Board or with the non-management directors as a group, by
sending a letter to the attention of the appropriate person or persons (which may be marked as confidential) addressed in care of our corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963. All
communications received by our corporate secretary will be forwarded to the intended recipient(s). Any such communications may be made anonymously.
16
AUDIT COMMITTEE REPORT
The Audit Committee reports to and acts on behalf of the Board of Directors of the Company by providing oversight of the financial management, independent auditor and financial reporting controls and accounting
policies and procedures of the Company. The Company’s management is responsible for preparing the Company’s financial statements and systems of internal control and the independent auditor is responsible for auditing those financial statements and
expressing its opinion as to whether the financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Company in conformity with generally accepted accounting principles. The Audit
Committee is responsible for overseeing the conduct of these activities by the Company’s management and the independent auditor.
In this context, the Audit Committee has:
|
•
|
Met and held discussions with management and the independent auditor. Management represented to the Audit Committee that the Company’s consolidated financial statements as of and for the year ended December
31, 2020 were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditor.
|
|
•
|
The Audit Committee has discussed with the independent auditor matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange
Commission (including significant accounting policies, alternative accounting treatments and estimates, judgments and uncertainties).
|
|
•
|
The Audit Committee has received the written disclosures and the letter from the independent auditor required by the applicable requirements of the Public Company Accounting Oversight Board regarding the
independent auditor’s communications with the Audit Committee concerning independence, and the Audit Committee and the independent auditor have discussed the auditor’s independence from the Company and its management, including the matters
in those written disclosures.
|
Based upon these reviews and discussions, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020, for filing with the Securities and Exchange Commission.
The Audit Committee:
Robert J. Dwyer (Chair)
Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that incorporate
future filings, including this Proxy Statement, in whole or in part, the foregoing Audit Committee Report shall not be incorporated by reference into any such filings unless and only to the extent the Company specifically incorporates it by
reference.
17
COMPENSATION OF DIRECTORS
Overview
Directors who are not also employees of the Company are paid compensation in exchange for their service as a director. Director compensation is reviewed periodically by the Board to ensure such compensation is
reasonable and appropriate.
Annual Retainer
During 2020, we paid an annual director’s fee equal to $145,000 to each director who is not an officer or employee. Director’s fees are paid in advance on January 1, April 1, July 1 and October 1 of each year. We
also reimburse all directors for costs and expenses for attending these meetings. Directors who are also employees of the Company are not separately compensated for their service as directors. During 2020, non-employee directors had the option to
receive up to one-third of their compensation in the form of shares of the Company’s Class A Common Stock.
Additional Retainers
In addition to the annual retainer described above, non-employee directors were entitled to the following additional retainers during 2020:
|
Nature of Retainer
|
Retainer Amount
|
||||
|
Audit Committee Chair
|
|
$
|
5,000
|
||
|
Corporate Governance and Nominating Committee Chair
|
|
$
|
5,000
|
||
|
Compensation Committee Chair
|
|
$
|
5,000
|
||
During 2020, Mr. Dwyer served as Chair of each of the Committees listed above.
The following table sets forth the compensation paid to non-employee directors during 2020:
|
Director Compensation*
|
||||||||||||||||
|
Fees Earned
|
||||||||||||||||
|
or Paid in
|
Stock
|
All Other
|
||||||||||||||
|
Cash
|
Awards
|
Compensation
|
Total
|
|||||||||||||
|
Name
|
($)
|
($)
|
($)
|
($)
|
||||||||||||
|
Robert J. Dwyer
|
160,000
|
-
|
-
|
160,000
|
||||||||||||
|
Frank E. Jaumot
|
145,000
|
-
|
-
|
145,000
|
||||||||||||
| * |
Columns for “Option Awards,” “Non-Equity Incentive Plan Compensation” and “Nonqualified Deferred Compensation Earnings” have been omitted because they were not applicable.
|
2021 Compensation
The annual retainer to be paid to non-employee directors during 2021 has been increased to $160,000. There is no change to the retainer paid for serving as Chair of our Board Committees.
18
COMPENSATION OF EXECUTIVE OFFICERS
Our executive officers are appointed by the Board of Directors and they serve at the Board’s discretion. None of our executive officers or directors are related. Set forth below is information about our current
executive officers.
ROBERT E. CAULEY, 62,
has been a director of the Company since its inception in 2003. He is currently Chairman of the Board and Chief Executive Officer of the Company and is
one of the Company’s founders. He has served as Chairman of the Board, President and Chief Executive Officer of Orchid Island Capital, Inc. since its formation in August 2010. Prior to co-founding the Company, he was Vice President, Portfolio
Manager at Federated Investment Management Company in Pittsburgh, Pennsylvania, where, from 1996 until September 2003, he served as a lead portfolio manager, co-manager, or assistant portfolio manager of $4.25 billion (base capital, unlevered
amount) in mortgage and asset backed securities funds. From 1994 to 1996, he was an associate at Lehman Brothers in the asset-backed structuring group. From 1992 to 1994, he was a credit analyst in the highly levered firms group and the aerospace
group at Barclay’s Bank. Mr. Cauley has invested in, researched, or structured almost every type of mortgage-backed security. Mr. Cauley, who is a CFA and a CPA, received his MSIA in finance and economics from Carnegie Mellon University and his
BA in accounting from California State University, Fullerton. Mr. Cauley served in the United States Marine Corps for four years.
GEORGE H. HAAS, IV, 44,
has been the President, Chief Investment Officer and Chief Financial Officer of the Company since April 2008. He has served as a director and as the
Chief Financial Officer and Chief Investment Officer of Orchid Island Capital since August 2010. Prior to assuming his current roles with the Company, Mr. Haas was the Company’s Senior Vice President and Head of Research and Trading. Mr. Haas
joined the Company in May 2004 as Vice President and Head of Mortgage Research. He has over 20 years of experience in this industry and has managed trading operations for the portfolio since his arrival in May 2004. Mr. Haas has approximately 13
years of experience as a member of senior management of a public REIT. Prior to joining the Company, Mr. Haas worked in the mortgage industry at both National City Mortgage and Homeside Lending, Inc. Prior to December 2001, Mr. Haas attended
Oklahoma State University, where he received his MS in Economics.
The following table summarizes compensation awarded or paid during the Company’s last two fiscal years to Robert E. Cauley and G. Hunter Haas, IV as the Company’s principal executive officer and principal financial
officer, respectively. Mr. Cauley and Mr. Haas constitute all of the Company’s executive officers and are referred to as the Company’s named executive officers. The table below also includes compensation awarded or paid during the Company’s last
two fiscal years to Mr. Cauley and Mr. Haas by Orchid Island Capital, Inc. (“Orchid”). Orchid is externally managed and advised by Bimini Advisors, LLC (“Bimini Advisors”), which is a wholly-owned subsidiary of the Company. Mr. Cauley and Mr.
Haas serve as executive officers of both Bimini Advisors and Orchid. Bimini Advisors has not paid any compensation to Mr. Cauley or Mr. Haas.
19
|
Summary Compensation Table*
|
|||||||||||||||||||||||||
|
Stock
|
All Other
|
||||||||||||||||||||||||
|
Salary
|
Bonus
|
Awards
1
|
Compensation
5
|
Total
|
|||||||||||||||||||||
|
Name
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||
|
Robert E. Cauley
|
2020
|
1,031,310
|
693,000
|
2
|
737,788
|
4
|
28,522
|
2,490,620
|
|||||||||||||||||
|
Chief Executive Officer
|
2019
|
982,200
|
693,000
|
3
|
-
|
27,208
|
1,702,408
|
||||||||||||||||||
|
George H. Haas, IV
|
2020
|
785,925
|
567,000
|
2
|
562,242
|
4
|
18,839
|
1,934,006
|
|||||||||||||||||
|
President and Chief Financial Officer
|
2019
|
748,500
|
567,000
|
3
|
-
|
18,593
|
1,334,093
|
||||||||||||||||||
| * |
Columns for “Option Awards,” “Non-Equity Incentive Plan Compensation” and “Nonqualified Deferred Compensation Earnings” have been omitted because they were not applicable.
|
|
1.
|
Amount represents the grant date fair value computed in accordance with FASB ASC Topic 718.
|
|
2.
|
In January 2021, the Compensation Committee awarded bonuses in respect of 2020 service to the Company in the amounts of $693,000 and $567,000 to Messrs. Cauley and Haas, respectively. These amounts were paid
in January 2021.
|
|
3.
|
In January 2020, the Compensation Committee awarded bonuses in respect of 2019 service to the Company in the amounts of $693,000 and $567,000 to Messrs. Cauley and Haas, respectively. These amounts were paid
in January 2020.
|
|
4.
|
In March 2021, the Compensation Committee of Orchid Island Capital, Inc. (“Orchid”) awarded Messrs. Cauley and Haas performance units and immediately vested common stock in respect of 2020 service to or for
the benefit of Orchid with a grant date fair value of $737,788 and $562,242, respectively.
|
|
5.
|
Amounts in this column consist of payments made with respect to reimbursement of certain life, health, disability, accidental death and dental insurance premiums (exclusive of any tax
gross-up payments) in excess of the percentage of such premiums paid by the Company for salaried employees generally, and matching contributions under the Company’s 401(k) savings plan.
|
Neither Mr. Cauley nor Mr. Haas has an employment agreement with the Company. However, Mr. Cauley and Mr. Haas have entered into agreements with the Company which provide for certain payments upon the termination of
their employment. Such agreements are described in detail below under “Potential Payments Upon Termination or a Change of Control.”
Outstanding Equity Awards at Fiscal Year-End
There were no unexercised stock options or unvested equity awards of any kind issued by the Company and held by executive officers as of December 31, 2020.
20
ANALYSIS OF EXECUTIVE COMPENSATION
Overview of Philosophy
As discussed herein under the caption “Compensation Committee,” the Compensation Committee of the Board of Directors is responsible for reviewing and establishing or recommending to the Board of Directors the
compensation and benefits of the Company’s executive officers, administering the Company’s incentive compensation plans and establishing and reviewing general policies relating to compensation and benefits. At the beginning of each year, the
Compensation Committee sets general performance goals and objectives for the named executive officers. Through-out the year, the Compensation Committee monitors the overall performance of the Company and the success of the executive officers in
achieving the designated goals. At the end of the year, based on the overall performance of the Company, the extent to which it has achieved the designated goals, and information and recommendations provided by the executive officers, the
Compensation Committee’s evaluation of executive compensation and benefit information related to companies that are believed to be similar to the Company, the Compensation Committee makes a determination with respect to the executive officer
salaries and bonuses. The Compensation Committee has not retained compensation consultants in determining the amount or form of executive officer and director compensation.
2019 Executive Compensation Goals
For 2019, the Compensation Committee set the following general corporate goals to measure executive officer performance: (i) completion of additional public offerings by Orchid or the Company, (ii) improvement in net
income, (iii) improvement in book value, (iv) improvement in market price per share (which may be measured against the results of other entities in the Company’s peer group), (v) development of alternative means to increase assets under management
and thereby improve profitability of the Company and Bimini Advisors and (vi) material reduction in year-over-year expenses.
2020 Executive Compensation Goals
For 2020, the Compensation Committee set the following general corporate goals to measure executive officer performance: (i) completion of additional public offerings by Orchid or the Company, (ii) improvement in net
income, (iii) improvement in book value, (iv) development of alternative means to increase assets under management and thereby improve profitability of the Company and Bimini Advisors and (v) taking steps to enhance the Company’s utilization of its
tax operating losses. In making decisions following 2020, the Compensation Committee took into account the market turmoil and related challenges presented by the COVID-19 pandemic, management’s response to those challenges, and the Company’s
overall performance during the year.
2021 Executive Compensation Goals
For 2021, the Compensation Committee set the following general corporate goals to measure executive officer performance: (i) completion of additional public offerings by Orchid or the Company, (ii) improvement in net
income, (iii) improvement in book value, (iv) improvement in market price per share (which may be measured against the results of other entities in the Company’s peer group, (v) development of alternative means to increase assets under management
and thereby improve profitability of the Company and Bimini Advisors and (vi) taking steps to enhance the Company’s utilization of its tax operating losses.
POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE OF CONTROL
Mr. Cauley and Mr. Haas entered into severance agreements with the Company on December 18, 2008. Those agreements were replaced by agreements entered into on June 30, 2009. Mr. Cauley’s agreement and Mr. Haas’
agreement contain substantially the same terms and conditions. The current term of each existing agreement expires June 30, 2023, but is automatically extended by additional twelve month periods each July 1 unless the Company provides written notice
otherwise at least 90 days prior to the renewal date or in the event of a change of control during the term of the agreement.
21
The qualitative and quantitative information below reflects the amount of compensation payable to Mr. Cauley and Mr. Haas under their respective agreements with the Company in the event of termination of such
executive’s employment under several different circumstances. Amounts disclosed assume that such termination is effective as of December 31, 2020, and thus include amounts earned through such time and are estimates of the amounts that would have
been payable to the executives had their employment terminated effective December 31, 2020. The actual amounts, if any, to be paid out under the executive’s respective agreement can only be determined at the time of such executive’s separation from
the Company. Upon expiration of these agreements, the termination payment provisions contained in the agreements, as described below, will automatically terminate and will have no further force or effect.
Potential Payments and Benefits upon Termination without Cause or for Good Reason
Under the agreements, an executive shall be entitled to receive termination benefits if during the term of the agreement (i) the Company terminates executive’s employment with the Company without Cause, (ii) executive
resigns from the employment of the Company and executive has good reason to resign from the Company, (iii) the executive dies or becomes disabled, or (iv) because of a change of control of the Company. No amounts will be payable under this Agreement
unless Executive’s employment with the Company is terminated as described in the preceding sentence. If executive’s employment is terminated in accordance with the above, the executive will be entitled to receive the following payments and benefits
from the Company, subject to the terms and conditions of the severance agreements:
|
•
|
Payment of any accrued but unpaid salary from the Company through the date that employment terminates;
|
|
•
|
Payment of any bonus that has been approved by the Compensation Committee of the Board but which remains unpaid as of termination of employment;
|
|
•
|
Reimbursement for any expenses that the executive incurred on behalf of the Company prior to termination of employment to the extent that such expenses are reimbursable under the Company’s standard
reimbursement policies;
|
|
•
|
Payment for the cost of continued health plan coverage for the executive and his qualified beneficiaries through the term of the agreement;
|
|
•
|
Payment for any benefits or payments that the executive is entitled to receive under any employee benefit plans or other arrangements or agreements that cover executive;
|
|
•
|
Nonvested phantom shares or restricted stock, stock options and other stock-based awards will become automatically vested on the date of the executive’s termination of employment;
|
|
•
|
Indemnification if certain liabilities are incurred by the executive pursuant to Internal Revenue Code Section 4999; and
|
|
•
|
A severance benefit equal to the amount described in either (i) or (ii) below, as applicable:
|
|
(i)
|
If the Company terminates the executive’s employment without Cause within six months before or after a change of control or the executive resigns from the Company within six months after a change of control
with Good Reason, the executive will receive a severance benefit equal to three times his “current cash compensation,” which shall be equal to one year of the executive’s annual base salary from the Company as in effect on the date the
executive’s employment terminates and the average of the annual cash bonuses, excluding extraordinary bonuses, paid to the executive for the Company’s two fiscal years ending before the date the executive’s employment with the Company
terminates; or
|
|
(ii)
|
If the Company terminates the executive’s employment without cause or the executive resigns from the Company with Good Reason, in each case not in connection with a change in control, or if the executive dies
or becomes disabled, the severance benefit payable is equal to the executive’s current cash compensation multiplied by the quotient of (a) the number of days remaining in the term of the agreement and (b) 365.
|
22
The following table presents the potential post-employment payments our named executive officers would be entitled to under their severance agreements and assumes that the triggering event took place on December 31,
2020.
|
Termination by Company without Cause or by Employee for Good Reason
|
||||||||
|
Not in
|
||||||||
|
In Connection
|
Connection
|
|||||||
|
with a Change
|
with a Change
|
Death or
|
||||||
|
Benefits and
|
in Control
|
in Control
|
Disability
|
|||||
|
Name
|
Payments Upon Termination
|
($)
|
($)
|
($)
|
||||
|
Robert E. Cauley
|
Severance Benefit
|
5,172,930
|
4,303,689
|
4,303,689
|
||||
|
Continuation of Health Insurance
|
87,445
|
87,445
|
87,445
|
|||||
|
Totals
|
5,260,375
|
4,391,134
|
4,391,134
|
|||||
|
George H. Haas, IV
|
Severance Benefit
|
4,058,775
|
3,376,753
|
3,376,753
|
||||
|
Continuation of Health Insurance
|
52,430
|
52,430
|
52,430
|
|||||
|
Totals
|
4,111,205
|
3,429,183
|
3,429,183
|
|||||
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management Agreement
Orchid Island Capital, Inc. (“Orchid”) is externally managed and advised by our wholly-owned subsidiary, Bimini Advisors, LLC (“Bimini Advisors”), pursuant to the terms of a management agreement. Bimini Advisors is responsible for administering
Orchid’s business activities and day-to-day operations, subject to the supervision and oversight of Orchid’s Board of Directors. Orchid pays Bimini Advisors a monthly management fee, payable in arrears, and began reimbursing Bimini Advisors for
certain expenses commencing with the calendar quarter beginning July 1, 2014. Bimini Advisors earns a management fee regardless of the performance of Orchid’s investments.
Under the current management agreement, Orchid paid Bimini Advisors aggregate management fees of $5,280,800 for the year ended December 31, 2020 and $5,527,500 for the year ended December 31, 2019. In addition, during the years ended December
31, 2020 and 2019, Orchid reimbursed Bimini Advisors $1,514,000 and $1,380,000, respectively, which represents an allocation of overhead expenses, including $613,000 and $585,000, respectively, for its allocable share of the Chief Financial
Officer’s salary. The term of the management agreement is automatically renewed on February 20 of each year for an additional one-year term unless terminated by either party. Should Orchid terminate the management agreement without cause, it will
be obligated to pay to Bimini Advisors a termination fee equal to three times the average annual management fee, as defined in the management agreement, before or on the last day of the existing renewal term.
We own shares of Orchid, and Mr. Cauley and Mr. Haas are each a director, executive officer and shareholder of Orchid. As of the date hereof, Mr. Dwyer and Mr. Jaumot also own shares of Orchid.
23
OTHER INFORMATION
Security Ownership of Certain Beneficial Owners
As of the close of business on April 15, 2021, there were 11,672,431 shares of the Company’s common stock issued and outstanding, consisting of 11,608,555 shares of Class A Common Stock, 31,938 shares of Class B Common
Stock and 31,938 shares of Class C Common Stock. The following table sets forth as of April 15, 2021, the voting record date, certain information as to the common stock beneficially owned by (a) each person or entity, including any “group” as that
term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, who or which was known to us to be the beneficial owner of more than 5% of the issued and outstanding common stock, (b) the directors of the Company, (c) the other named
executive officers of the Company named in the Summary Compensation Table; and (d) all directors and executive officers of the Company as a group. Knowledge of the beneficial ownership of our common stock is based on statements filed with the SEC
pursuant to Section 13(d) or 13(g) of the Securities Act of 1934, as amended. The business address of the directors and officers listed below is the address of our principal executive office, 3305 Flamingo Drive, Vero Beach, Florida 32963. Except as
otherwise indicated, to our knowledge each stockholder listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder. Each person’s beneficial ownership includes:
|
•
|
all shares the person actually owns (of record or beneficially);
|
|
•
|
all shares over which the person has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund); and
|
|
•
|
all shares the person has the right to acquire within 60 days after April 15, 2021 (such as upon vesting of outstanding phantom shares that are scheduled to vest within such period).
|
|
Title of Class
|
Name of Beneficial Owner
|
Amount and Nature of Beneficial Ownership
|
Percent of Class
|
|
|
Class A Common Stock
|
Julia L. Johnson
|
712,265
|
6.14%
|
|
|
5169 Latrobe Drive
|
||||
|
Windemere, Florida 34786
|
||||
|
Directors:
|
||||
|
Robert E. Cauley
|
1,208,991
|
10.41%
|
||
|
Robert J. Dwyer
|
1,211,723
|
10.44%
|
||
|
Frank E. Jaumot
|
605,290
|
5.21%
|
||
|
Other Named Executive Officers
:
|
||||
|
George H. Haas, IV
|
1,114,998
|
9.60%
|
||
|
All Directors and Executive Officers as a Group
|
4,141,002
|
35.67%
|
||
|
Class B Common Stock
|
Robert E. Cauley
|
11,178
|
35.00%
|
|
|
All Directors and Executive Officers as a Group
|
11,178
|
35.00%
|
24
Delinquent Section 16(a) Reports
The Company’s directors and executive officers are required to file reports of initial ownership and changes in ownership of the Company’s securities with the Securities and Exchange Commission. To the Company’s
knowledge, based solely on a review of copies of such reports filed with the Securities and Exchange Commission and written representations that no other reports were required, the required filings of all such directors and executive officers were
filed timely.
2020 Annual Report
The Company’s 2020 Annual Report is being mailed to stockholders concurrently with this Proxy Statement. The 2020 Annual Report, however, is not part of the proxy solicitation material. A copy of the Company’s Annual
Report on Form 10-K as filed with the Securities and Exchange Commission, which includes the Company’s consolidated financial statements for the year ended December 31, 2020, is contained in the 2020 Annual Report and is available on the Company’s
website at https://ir.biminicapital.com. You may obtain additional copies of our Annual Report on Form 10-K free of charge by directing your request in writing to our corporate secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero
Beach, Florida 32963.
Important Notice Regarding Delivery of Stockholder Documents
In accordance with a notice sent to certain street name stockholders of the Company’s voting stock who share a single address, only one copy of this Proxy Statement and the Annual Report is being sent to that address
unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,” is designed to reduce the Company’s printing and postage costs. However, if any stockholder residing at such an address wishes to
receive a separate copy of this Proxy Statement or the Annual Report, he, she or it may contact the Company at 3305 Flamingo Drive, Vero Beach, Florida 32963, (772) 231-1400, and the Company will deliver those documents to such stockholder promptly
upon receiving the request. Any such stockholder may also contact the Company at the contact information provided above if he, she or it would like to receive separate proxy statements and annual reports in the future. If you are receiving multiple
copies of the Annual Report and Proxy Statement, you may also request householding in the future by contacting the Company’s corporate secretary.
Other Matters; Adjournments
So far as is known, no matters other than those described herein are expected to come before the 2021 Annual Meeting of Stockholders. It is intended, however, that the proxies solicited hereby will be voted on any
other matters which may properly come before the meeting, or any adjournment or postponement thereof, in the discretion of the person or persons voting such proxies unless the stockholder has indicated on the Proxy Card that the shares represented
thereby are not to be voted on such other matters. Adjournments may be made for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time by approval of the holders of a majority of the shares
present in person or by proxy at the Annual Meeting (whether or not a quorum exists) without further notice other than by an announcement made at the Annual Meeting. If the Annual Meeting is adjourned or postponed for any reason, all proxies will be
voted at the reconvened Annual Meeting in the same manner as such proxies would have been voted at the original convening of the Annual Meeting (except for proxies that have, at that time, effectively been revoked or withdrawn). The Company does not
currently intend to seek an adjournment of the Annual Meeting.
|
|
Vero Beach, Florida
April 21, 2021
|
25
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TABLE OF CONTENTS