UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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
(Amendment No. )
| Filed by the Registrant ☒ | ||||||||
| Filed by a Party other than the Registrant ☐ | ||||||||
| Check the appropriate box: | ||||||||
| ☐ | Preliminary Proxy Statement | |||||||
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||||
| ☒ | Definitive Proxy Statement | |||||||
| ☐ | Definitive Additional Materials | |||||||
| ☐ | Soliciting Material under §240.14a-12 | |||||||
Brilliant Earth Group, Inc.
(Name of Registrant as Specified in its Charter)
Not applicable.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
| Payment of Filing Fee (Check all boxes that apply): | ||||||||
| ☒ | No fee required | |||||||
| ☐ | Fee paid previously with preliminary materials | |||||||
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | |||||||
April 28, 2025
To Our Stockholders:
You are cordially invited to attend the 2025 Annual Meeting of Stockholders (the "Annual Meeting") of Brilliant Earth Group, Inc. (the “Company”) to be held on Wednesday, June 18, 2025 at 9:00 a.m., Pacific Time. Our Annual Meeting will be a completely virtual meeting, which will be conducted via live webcast. You will be able to attend the virtual Annual Meeting, vote your shares electronically and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/BRLT2025. Utilizing a virtual meeting format will allow stockholders to participate from any location and we expect will lead to increased attendance, improved communications and cost savings for our stockholders and the Company.
The Notice of Meeting and Proxy Statement on the following pages describe the matters to be presented at the Annual Meeting. Details regarding how to attend the meeting online and the business to be conducted at the Annual Meeting are more fully described in the Notice of Annual Meeting and Proxy Statement.
Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Therefore, we urge you to promptly vote and submit your proxy by phone, via the Internet, or, if you received paper copies of these materials, by signing, dating, and returning the enclosed proxy card in the enclosed envelope, which requires no postage if mailed in the United States. If you have previously received our Notice of Internet Availability of Proxy Materials, then instructions regarding how you can vote are contained in that notice. If you have received a proxy card, then instructions regarding how you can vote are contained on the proxy card. If you decide to attend the Annual Meeting, you will be able to vote your shares electronically, even if you have previously submitted your proxy.
Thank you for your support.
Sincerely,
Beth Gerstein
Beth Gerstein
Chief Executive Officer and Director
Eric Grossberg
Eric Grossberg
Executive Chairman
BRILLIANT EARTH GROUP, INC.
300 GRANT AVENUE
THIRD FLOOR
SAN FRANCISCO, CA 94108
Notice of Annual Meeting of Stockholders To be Held on Wednesday, June 18, 2025
The Annual Meeting of Stockholders (the “Annual Meeting”) of Brilliant Earth Group, Inc., a Delaware corporation (the “Company”), will be held at 9:00 a.m., Pacific Time, on Wednesday, June 18, 2025. The Annual Meeting will be a completely virtual meeting, which will be conducted via live webcast. You will be able to attend the Annual Meeting electronically and submit your questions by visiting www.virtualshareholdermeeting.com/BRLT2025 and entering your 16-digit control number included in your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials. The Annual Meeting is called for the following purposes:
| MATTER | |||||
| ➊ |
To elect Beth Gerstein and Ian M. Bickley, as Class I Directors to serve until the 2028 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified;
|
||||
| ➋ |
To ratify the appointment of BDO USA, P.C. as our independent registered public accounting firm for the fiscal year ending December 31, 2025; and
|
||||
| ➌ |
To transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment of the Annual Meeting.
|
||||
Holders of record of our outstanding shares of capital stock, composed of Class A common stock, par value $0.0001 per share, Class B common stock, par value $0.0001 per share, Class C common stock, par value $0.0001 per share, and Class D common stock, par value $0.0001 per share, at the close of business on April 22, 2025, are entitled to notice of and to vote at the Annual Meeting, or any continuation, postponement or adjournment of the Annual Meeting. A complete list of these stockholders will be available for examination by any stockholder for a period of ten days prior to the Annual Meeting for a purpose relevant to the meeting by sending an email to legal@brilliantearth.com stating the purpose of the request and providing proof of ownership of Company stock. This list of stockholders will also be available on the bottom panel of your screen during the Annual Meeting after entering the 16-digit control number included on the Notice of Internet Availability of Proxy Materials or any proxy card that you received, or on the materials provided by your bank or broker. The Annual Meeting may be continued or adjourned from time to time without notice other than by announcement at the Annual Meeting.
It is important that your shares be represented regardless of the number of shares you may hold. Whether or not you plan to attend the Annual Meeting we urge you to vote your shares via the toll-free telephone number or over the Internet, as described in the enclosed materials. If you received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the enclosed return envelope. Promptly voting your shares will ensure the presence of a quorum at the Annual Meeting and will save us the expense of further solicitation. Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is revocable at your option.
By Order of the Board of Directors
Beth Gerstein
Beth Gerstein
Chief Executive Officer and Director
Eric Grossberg
Eric Grossberg
Executive Chairman
San Francisco, California
April 28, 2025
TABLE OF CONTENTS
| PROXY STATEMENT | |||||
| INFORMATION ABOUT THIS PROXY STATEMENT | |||||
| QUESTIONS AND ANSWERS ABOUT THE 2025 ANNUAL MEETING OF STOCKHOLDERS | |||||
| PROPOSAL 1: Election of Directors | |||||
| PROPOSAL 2: Ratification of Appointment of Independent Registered Public Accounting Firm | |||||
| REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | |||||
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND OTHER MATTERS | |||||
| EXECUTIVE OFFICERS | |||||
| CORPORATE GOVERNANCE | |||||
| EXECUTIVE COMPENSATION | |||||
| BOARD COMPENSATION | |||||
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |||||
| CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | |||||
| OTHER MATTERS | |||||
ii
PROXY STATEMENT
BRILLIANT EARTH GROUP, INC.
300 GRANT AVENUE
THIRD FLOOR
SAN FRANCISCO, CA 94108
This proxy statement is furnished in connection with the solicitation by the Board of Directors (the "Board") of Brilliant Earth Group, Inc. of proxies to be voted at our Annual Meeting of Stockholders to be held on Wednesday, June 18, 2025 (the “Annual Meeting”), at 9:00 a.m., Pacific Time, and at any continuation, postponement, or adjournment of the Annual Meeting. The Annual Meeting will be a completely virtual meeting, which will be conducted via live webcast. You will be able to attend the Annual Meeting and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/BRLT2025 and entering your 16-digit control number included in your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials.
Holders of record of outstanding shares of capital stock, composed of Class A common stock, par value $0.0001 per share, Class B common stock, par value $0.0001 per share, Class C common stock, par value $0.0001 per share, and Class D common stock, par value $0.0001 per share, (collectively, “Common Stock”), at the close of business on April 22, 2025 (the “Record Date”), will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement, or adjournment of the Annual Meeting, and will vote together as a single class on all matters presented at the Annual Meeting. Each share of our Class A common stock and our Class B common stock entitles its holders to one vote per share on all matters presented to our stockholders generally, and each share of Class C common stock and Class D common stock entitles its holders to ten votes per share on all matters presented to our stockholders generally. At the close of business on the Record Date, there were 14,372,498 shares of Class A common stock, 35,839,403 shares of Class B common stock, and 49,119,976 shares of Class C common stock issued and outstanding and entitled to vote at the Annual Meeting, representing 2.7%, 6.6%, and 90.7% of the voting power of our Common Stock, respectively. As of the Record Date, there were no shares of Class D common stock issued and outstanding and entitled to vote at the Annual Meeting.
This proxy statement and the Company’s Annual Report to Stockholders for the fiscal year ended December 31, 2024 (the “2024 Annual Report”) will be released on or about April 28, 2025 to our stockholders as of the Record Date.
In this proxy statement, unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refer to Brilliant Earth Group, Inc., and, unless otherwise stated, all of its subsidiaries.
1
IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON WEDNESDAY, JUNE 18, 2025
This Proxy Statement and our 2024 Annual Report to Stockholders are available at www.proxyvote.com.
Proposals and Recommendations of the Board
This section summarizes and highlights certain information contained in this proxy statement, but does not contain all the information that you should consider when casting your vote. Please review the entire proxy statement as well as the 2024 Annual Report carefully before voting.
The Board recommends that you vote your shares as indicated below. If you return a properly completed proxy card, or vote your shares by telephone or Internet, your shares of Common Stock will be voted on your behalf as you direct. If not otherwise specified, the shares of Common Stock represented by the proxies will be voted as indicated below.
|
Proposal 1
|
Board Recommendation and Page Number
|
||||
|
Election of two Class I Directors for a three- year term ending at the 2028 Annual Meeting of Stockholders
|
The Board recommends a vote “FOR” Beth Gerstein and Ian M. Bickley.
See “Proposal One — Election of Directors” beginning on page 9 of this proxy statement.
|
||||
|
Proposal 2
|
Board Recommendation and Page Number
|
||||
|
Ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm for the fiscal year ending December 31, 2025
|
The Board recommends a vote “FOR” the ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm for the year ending December 31, 2025.
See “Proposal Two — Ratification of Appointment of Independent Registered Public Accounting Firm” beginning on page 14 of this proxy statement
|
||||
We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.
2
INFORMATION ABOUT THIS PROXY STATEMENT
Why you received this proxy statement.
You are viewing or have received these proxy materials because the Company’s Board is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement includes information that we are required to provide to you under the rules of the Securities and Exchange Commission (the “SEC”) and that is designed to assist you in voting your shares.
Notice of Internet Availability of Proxy Materials.
As permitted by SEC rules, the Company is making this proxy statement and its 2024 Annual Report available to its stockholders electronically via the Internet. On or about April 28, 2025, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) containing instructions on how to access this proxy statement and our 2024 Annual Report and vote online. If you received an Internet Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you specifically request them. The Internet Notice instructs you on how to access and review the important information contained in this proxy statement and 2024 Annual Report. The Internet Notice also instructs you on how you may submit your proxy over the Internet. If you received an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained in the Internet Notice.
Printed Copies of Our Proxy Materials.
If you received printed copies of our proxy materials, then instructions regarding how you can vote are contained on the proxy card included in the materials.
Householding.
The SEC’s rules permit us to deliver a single set of proxy materials to one address shared by two or more of our stockholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one set of proxy materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate set of proxy materials, as requested, to any stockholder at the shared address to which a single set of those documents was delivered. If you prefer to receive separate copies of the proxy materials, contact Broadridge Financial Solutions, Inc. at 1-866-540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
If you are currently a stockholder sharing an address with another stockholder and wish to receive only one set of future proxy materials for your household, please contact Broadridge at the above phone number or address.
3
QUESTIONS AND ANSWERS ABOUT THE 2025 ANNUAL MEETING OF STOCKHOLDERS
Who is entitled to vote at the Annual Meeting?
The Record Date for the Annual Meeting is April 22, 2025. You are entitled to vote at the Annual Meeting only if you were a stockholder of record at the close of business on the Record Date, or if you hold a valid proxy for the Annual Meeting. You will need to obtain your own Internet access if you choose to attend the Annual Meeting and/or vote over the Internet. Each share of our Class A common stock and our Class B common stock entitles its holders to one vote per share on all matters presented to our stockholders generally, and each share of Class C common stock and Class D common stock entitles its holders to ten votes per share on all matters presented to our stockholders generally. Holders of our Common Stock will vote together as a single class on all matters presented at the Annual Meeting. At the close of business on the Record Date, there were 14,372,498 shares of Class A common stock, 35,839,403 shares of Class B common stock, and 49,119,976 shares of Class C common stock issued and outstanding and entitled to vote at the Annual Meeting, representing 2.7%, 6.6%, and 90.7% of the voting power of our Common Stock, respectively. As of the Record Date, there were no shares of Class D common stock issued and outstanding and entitled to vote at the Annual Meeting.
What is the difference between being a "record holder" and holding shares in "street name"?
A record holder holds shares in his or her name. Shares held in “street name” means shares that are held in the name of a bank or broker on a person’s behalf.
Am I entitled to vote if my shares are held in "street name"?
Yes. If your shares are held by a bank or a brokerage firm, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, our proxy materials are being provided to you by your bank or brokerage firm, along with a voting instruction card if you received printed copies of our proxy materials. As the beneficial owner, you have the right to direct your bank or brokerage firm how to vote your shares, and the bank or brokerage firm is required to vote your shares in accordance with your instructions. If you haven’t received a 16-digit control number, you should contact your bank or broker to obtain your control number or otherwise vote through the bank or broker.
How many shares must be present to hold the Annual Meeting?
A quorum must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting, electronically or by proxy, of the holders of a majority in voting power of Common Stock issued and outstanding and entitled to vote on the Record Date will constitute a quorum at the Annual Meeting for the transaction of business.
Who can attend the Annual Meeting?
Stockholders may attend the Annual Meeting by visiting the following website: www.virtualshareholdermeeting.com/BRLT2025. The Annual Meeting will be held entirely online to allow greater participation. You will be able to attend the Annual Meeting and submit your questions by visiting the following website: You will also be able to vote your shares electronically at the Annual Meeting if you were a stockholder of record as of the Record Date or if you hold a valid proxy for the Annual Meeting.
4
To participate in the Annual Meeting, you will need the 16-digit control number included in your Internet Notice, on your proxy card or on the instructions that accompanied your proxy materials. The meeting webcast will begin promptly at 9:00 a.m., Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:45 a.m., Pacific Time, and you should allow ample time for check-in procedures. If you hold your shares in “street name” through a bank or broker, instructions should also be provided on the voting instruction card provided by your bank or brokerage firm. If you lose your 16-digit control number, you may join the Annual Meeting as a “Guest,” but you will not be able to vote, ask questions, or access the list of stockholders as of the Record Date.
Why hold a virtual meeting?
We are excited to embrace the latest technology to provide expanded access, improved communication and cost savings for us and our stockholders. We believe the virtual meeting will enable increased stockholder attendance and participation because stockholders can participate from any location.
What if during the check-in time or during the Annual Meeting I have technical difficulties or trouble accessing the virtual meeting?
We will have technicians ready to assist you with any technical difficulties you may have while accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, the information for assistance will be located at www.virtualshareholdermeeting.com/BRLT2025.
What if a quorum is not present at the Annual Meeting?
If a quorum is not present at the scheduled time of the Annual Meeting, the person presiding over the Annual Meeting may adjourn the Annual Meeting until a quorum is present or represented.
What does it mean if I receive more than one internet notice or more than one set of proxy materials?
It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each Internet Notice or set of proxy materials, please submit your proxy by phone, via the Internet, or, if you received printed copies of the proxy materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope.
How do I vote?
We recommend that stockholders vote by proxy even if they plan to participate in the Annual Meeting and vote electronically during the meeting. If you are a stockholder of record, you may vote:
•
by Internet—You can vote over the internet at www.proxyvote.com by following the instructions on the Internet Notice or proxy card;
•
by Telephone—You can vote by telephone by calling 1-800-690-6903 and following the instructions on the proxy card;
•
by Mail—You can vote by mail by signing, dating and mailing the proxy card, which you may have received by mail; or
•
Electronically at the Meeting—If you attend the Annual Meeting online, you will need the 16-digit control number included in your Internet Notice, on your proxy card or on the instructions that accompanied your proxy materials to vote electronically during the meeting.
5
Internet and telephone voting facilities for stockholders of record will be of record will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on June 17, 2025. Stockholders may vote at the Annual Meeting by visiting www.virtualshareholdermeeting.com/BRLT2025 and entering the 16-digit control number included on their Internet Notice, proxy card or the instructions that accompanied their proxy materials. The Annual Meeting webcast will begin promptly at 9:00 a.m., Pacific Time, on June 18, 2025.
If your shares are held in street name through a bank or broker, you will receive instructions on how to vote from the bank or broker. You must follow their instructions for your shares to be voted. Internet and telephone voting also may be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you would like to vote your shares online at the Annual Meeting, you should contact your bank or broker to obtain your 16-digit control number or otherwise vote through the bank or broker. You may visit www.virtualshareholdermeeting.com/BRLT2025 and enter the 16-digit control number included in the voting instruction card provided to you by your bank or brokerage firm.
Can I change my vote after I submit my proxy?
Yes. If you are a registered stockholder, you may revoke your proxy and change your vote:
•
by submitting a duly executed proxy bearing a later date;
•
by granting a subsequent proxy through the Internet or telephone;
•
by giving written notice of revocation to the Secretary of Brilliant Earth Group, Inc. prior to the Annual Meeting; or
•
by voting electronically at the Annual Meeting.
Your most recent proxy card or Internet or telephone proxy is the one that is counted. Your virtual attendance at the Annual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you vote electronically during the Annual Meeting.
If your shares are held in street name, you may change or revoke your voting instructions by following the specific directions provided to you by your bank or broker, or you may vote electronically during the Annual Meeting.
Who will count the votes?
A representative of Broadridge Financial Solutions, Inc., our inspector of election, will tabulate and certify the votes.
What if I do not specify how my shares are to be voted?
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are indicated on page 2 of this proxy statement, as well as with the description of each proposal in this proxy statement.
Will any other business be conducted at the Annual Meeting?
We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.
6
How many votes are required for the approval of the proposals to be voted upon and how will abstentions and broker non-votes be treated?
|
Proposal 1
: Election of Directors
|
The plurality of the votes cast. This means that the two (2) nominees receiving the highest number of affirmative “FOR” votes will be elected as Class I Directors.
|
Votes withheld and broker non-votes will have no effect.
|
||||||
|
Proposal 2
:
Ratification of Appointment of Independent Registered Public Accounting Firm
|
The affirmative vote of the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such matter.
|
Abstentions and broker non-votes, if any, will have no effect. We do not expect any broker non-votes on this proposal.
|
||||||
What is a “vote withheld” and an “abstention” and do they count for determining a quorum?
A “vote withheld,” in the case of the proposal regarding the election of directors, or an “abstention,” in the case of the proposal regarding the ratification of the appointment of BDO USA, P.C. as our independent registered accounting firm, represents a stockholder’s affirmative choice to decline to vote on a proposal. Votes withheld and abstentions are counted as present and entitled to vote for purposes of determining a quorum.
What are broker non-votes and do they count for determining a quorum?
Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because the broker (1) has not received voting instructions from the beneficial owner and (2) lacks discretionary voting power to vote those shares. A broker is entitled to vote shares held for a beneficial owner on routine matters, such as the ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm, without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on non-routine matters, such as the election of directors. Broker non- votes count for purposes of determining whether a quorum is present.
Where will I be able to find the voting results of the Annual Meeting?
We plan to announce preliminary voting results at the Annual Meeting and we will report the final results in a Current Report on Form 8-K, which we intend to file with the SEC shortly after the Annual Meeting.
Will there be a question and answer session during the Annual Meeting?
As part of the Annual Meeting, we will hold a live Q&A session, during which we intend to answer appropriate questions submitted by stockholders during the meeting that are pertinent to the Company and the meeting matters, for up to 15 minutes after the completion of the Annual Meeting. Only stockholders that have accessed the Annual Meeting as a stockholder (rather than a “Guest”) by following the procedures outlined above in “Who can attend at the Annual Meeting?” will be permitted to submit questions during the Annual Meeting. Each stockholder is limited to no more than two questions. Questions should be succinct and only cover a single topic.
7
We will not address questions that are, among other things:
•
irrelevant to the business of the Company or to the business of the Annual Meeting;
•
related to material non-public information of the Company, including the status or results of our business since our most recent Quarterly Report on Form 10-Q;
•
related to any pending, threatened or ongoing litigation;
•
related to personal grievances;
•
derogatory references to individuals or that are otherwise in bad taste;
•
substantially repetitious of questions already made by another stockholder;
•
in excess of the two-question limit;
•
in furtherance of the stockholder’s personal or business interests; or
•
out of order or not otherwise suitable for the conduct of the Annual Meeting as determined by the Chair or Corporate Secretary in their reasonable judgment.
Additional information regarding the Q&A session will be available in the “Rules of Conduct” available on the Annual Meeting webpage for stockholders that have accessed the Annual Meeting as a stockholder (rather than a “Guest”) by following the procedures outlined above in “Who can attend at the Annual Meeting?”
8
PROPOSAL 1: Election of Directors
At the Annual Meeting, two (2) Class I Directors are to be elected to hold office until the Annual Meeting of Stockholders to be held in 2028 and until each such director’s respective successor is elected and qualified or until such director’s earlier death, resignation or removal.
We currently have seven (7) directors on our Board. The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the two nominees receiving the highest number of affirmative “FOR” votes will be elected as Class I Directors. Votes withheld and broker non-votes will have no effect on the outcome of the vote on this proposal.
Our Board is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successor to each director whose term then expires will be elected to serve from the time of election and qualification until the third annual meeting of stockholders following election or such director’s death, resignation or removal, whichever is earliest to occur. The current class structure is as follows: Class I, whose current term expires at the Annual Meeting and, if elected at the Annual Meeting, whose subsequent term will expire at the 2028 Annual Meeting of Stockholders; Class II, whose current term will expire at the 2026 Annual Meeting of Stockholders; and Class III, whose current term will expire at the 2027 Annual Meeting of Stockholders. The current Class I Directors are Ian M. Bickley and Beth Gerstein; the current Class II Directors are Eric Grossberg, Attica A. Jaques, and Gavin M. Turner; and the current Class III Directors are Jennifer N. Harris and Beth J. Kaplan.
In connection with the initial public offering (“IPO”) of our Class A common stock in September 2021 we entered into a Stockholders Agreement (the “Stockholders Agreement”) by and among the Company, Just Rocks, Inc., a Delaware corporation (“Just Rocks’), an entity jointly owned and controlled by our co-founders Beth Gerstein and Eric Grossberg, and Mainsail (as defined below). Pursuant to the terms of the Stockholders Agreement, each of Mainsail and Just Rocks have been granted certain Board designation rights so long as each maintains a specified percentage of ownership of our outstanding Common Stock. Beth Gerstein and Eric Grossberg have been designated by Just Rocks as a Class I and a Class II director, respectively. Gavin M. Turner and Beth J. Kaplan have been designated by Mainsail as a Class II and a Class III director, respectively. In addition, pursuant to the terms of the Stockholders Agreement, each of Mainsail and Just Rocks have agreed to vote, or cause to vote, all of their outstanding shares of our Common Stock at any annual or special meeting of stockholders at which directors are elected and to take all necessary action to cause the election of the Mainsail designated directors and Just Rocks designated directors. As a result of the Stockholders Agreement and the aggregate voting power of the parties to the agreement, we expect that the parties to the agreement acting in conjunction will control the election of directors of the Company. For more information, see “Corporate Governance—Stockholders Agreement” and “—Controlled Company.”
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of Common Stock represented by the proxy for the election as Class I Directors the nominees whose names and biographies appear below. All of the nominees whose names and biographies appear below are currently serving as our directors. In the event any of the nominees should become unable to serve or for good cause will not serve as a director, it is intended that votes will be cast for a substitute nominee designated by the Board or the Board may elect to reduce its size. The Board has no reason to believe that the nominees named below will be unable to serve if elected. Each of the nominees has consented to being named in this proxy statement and to serve if elected.
9
RECOMMENDATION OF THE BOARD OF DIRECTORS
|
The Board of Directors unanimously recommends a vote FOR the election of the below listed Class I directors.
|
||
NOMINEES FOR CLASS I DIRECTORS (CURRENT TERMS TO EXPIRE AT THE 2025 ANNUAL MEETING)
The current members of the Board who are also nominees for election to the Board as Class I Directors are as follows:
|
Name
|
Age
|
Director Since
|
Position with
the Company
|
||||||||
| Beth Gerstein |
49
|
2021
|
Chief Executive Officer and Director | ||||||||
| Ian M. Bickley |
61
|
2021
|
Director | ||||||||
The principal occupations and business experience, for at least the past five years, of each Class I Director nominee are as follows:
Beth Gerstein
Ms. Gerstein has served as Brilliant Earth Group, Inc.’s Chief Executive Officer and a member of its Board since its formation. She co-founded Brilliant Earth, LLC in 2005, serving as its co-Chief Executive Officer until March 2021 and a member of its board of managers from its founding until September 2021, and has served as Brilliant Earth, LLC’s Chief Executive Officer since March 2021. Ms. Gerstein received a Bachelor of Science in Biomedical and Electrical Engineering from Duke University, a Master of Science in Electrical Engineering from Massachusetts Institute of Technology, and an MBA from the Stanford University Graduate School of Business. We believe Ms. Gerstein is qualified to serve as a member of our Board because of the perspective and the executive leadership experience she brings as our co-founder and Chief Executive Officer.
Ian M. Bickley
Mr. Bickley has served as a member of Brilliant Earth Group, Inc.’s Board since June 2021 and served as a member of the board of managers of Brilliant Earth, LLC from June 2021 until September 2021. Since November 2024, Mr. Bickley has served on the board of directors of Vera Bradley, Inc., a Nasdaq-listed lifestyle brand company. Mr. Bickley has also served on the board of directors of Crocs, Inc., a Nasdaq-listed casual lifestyle footwear and accessories brand, since April 2015, and since August 2021, he has served as a strategic advisor for Mycoworks Inc., a biotechnology company. From April 2019 to April 2023, Mr. Bickley served on the board of directors of Natura & Co. Holding S.A. (“Natura”), a Brazilian global beauty and cosmetics company. From April 2023 until January 2024, Mr. Bickley served as the interim Chief Executive Officer and as a director of The Body Shop International Limited (“TBSI”), the original British natural and ethical beauty brand, which was owned by Natura and later sold to Aurelius Investment Advisory Limited (“Aurelius”), concurrent with which Mr. Bickley departed TBSI. Subsequent to the sale to Aurelius and under its control, in February 2024 TBSI entered into administration. From July 2017 to December 2018, Mr. Bickley served as President, Global Business Development and Strategic Alliances for Tapestry, Inc., a NYSE-listed house of modern luxury lifestyle and accessory brands including Coach, Kate Spade, and Stuart Weitzman. Prior to that, Mr. Bickley held a number of executive roles at Tapestry, Inc. (formerly Coach, Inc.), serving as President, International Group for Coach, Inc. from August 2013 to July 2017; President, Coach International from February 2006 to August 2013; President and Chief Executive Officer of
10
Coach Japan from August 2001 to February 2006; Vice President, Coach Japan from 1997 to 2001; and other successively senior positions since joining in 1993. We believe Mr. Bickley is qualified to serve as a member of our Board because of his extensive experience and insight into the development and transformation of global brands, multi-channel retailing, and emerging market and channel opportunities.
CONTINUING MEMBERS OF THE BOARD OF DIRECTORS: CLASS II DIRECTORS
(TERMS TO EXPIRE AT THE 2026 ANNUAL MEETING)
The current members of the Board who are Class II Directors are as follows:
|
Name
|
Age
|
Director Since
|
Position with the Company
|
||||||||
|
Eric Grossberg
|
48
|
2021
|
Executive Chairman
|
||||||||
|
Attica A. Jaques
|
52
|
2021
|
Director | ||||||||
|
Gavin M. Turner
|
52
|
2021
|
Director | ||||||||
Eric Grossberg
Mr. Grossberg has served as Brilliant Earth Group, Inc.’s Executive Chairman of the Board since its formation, and he co-founded Brilliant Earth, LLC in 2005 and served as its co-Chief Executive Officer from its founding until March 2021 and as a member of its board of managers from its founding to September 2021. Mr. Grossberg received a Bachelor of Arts in Environmental Science & Public Policy from Harvard University and an MBA from the Stanford University Graduate School of Business. We believe Mr. Grossberg is qualified to serve as a member of our Board because of the perspective and experience he brings as our co-founder and former co-Chief Executive Officer.
Attica A. Jaques
Ms. Jaques has served as a member of Brilliant Earth Group, Inc.’s Board since its formation and served as a member of the board of managers of Brilliant Earth, LLC from June 2021 to September 2021. Since August 2024, Ms. Jaques has served as SVP & General Manager, US Marketing for Ancestry.com LLC, a genealogy company. From December 2019 to April 2023, Ms. Jaques served as Head of Global Brand Marketing, Consumer Apps at Google LLC. Prior to joining Google, she was Senior Vice President of Global Brand Management at Under Armour, Inc. from April 2016 to August 2019. Prior to this, Ms. Jaques was the Vice President of Global Marketing at the Gap from February 2013 to January 2016 where she successfully launched the Gap, Banana Republic and Old Navy in international markets and built upon her marketing experience in luxury fashion and public relations at Barney’s New York and Prada. Ms. Jaques has received numerous awards and honors, including the Cannes Lion Award for Marketing Innovation in June 2021, being named one of the most influential women in business by Black Enterprise in February 2019, and being named Advertising Age’s “Women to Watch” in June 2015. Ms. Jaques also serves on the board of directors of Mission Advancement Corp. and was previously on the board of the Smithsonian Museum from 2015 until 2020. Ms. Jaques received a Master’s degree in Strategic Communications from Columbia University and a Bachelor’s degree in Sociology from UCLA. We believe Ms. Jaques is qualified to serve as a member of our Board because of her extensive experience into the development of global brands, multi-channel retailing, and emerging market and channel opportunities.
Gavin M. Turner
Mr. Turner has served as a member of Brilliant Earth Group, Inc.’s Board since its formation and served as a member of the board of managers of Brilliant Earth, LLC from December 2012 to September 2021. Mr. Turner co-founded Mainsail Partners, a growth equity investment firm, in April 2003 and has served as a Managing Partner since the firm’s inception. Prior to founding Mainsail, Mr.
11
Turner held a variety of investment roles at Summit Partners, a global venture capital firm from 1995 to 2002. Altogether Mr. Turner has over 25 years of experience as a growth equity investor in private technology companies, and has served on numerous private company boards. Mr. Turner received a Bachelor of Economics from Stanford University and an MBA from Stanford University Graduate School of Business. We believe Mr. Turner is qualified to serve as a member of our Board because of his extensive experience in the private equity industry, his business and leadership experience, and his experience with scaling technology companies.
CONTINUING MEMBERS OF THE BOARD OF DIRECTORS: CLASS III DIRECTORS
(TERMS TO EXPIRE AT THE 2027 ANNUAL MEETING)
The current members of the Board who are Class III Directors are as follows:
|
Name
|
Age
|
Director Since
|
Position with the Company
|
||||||||
|
Jennifer N. Harris
|
57
|
2021
|
Director
|
||||||||
|
Beth J. Kaplan
|
67
|
2021
|
Director
|
||||||||
Jennifer N. Harris
Ms. Harris has served as a member of Brilliant Earth Group, Inc.’s Board since its formation and served as a member of the board of managers of Brilliant Earth, LLC from April until September 2021. Since July 2024, Ms. Harris has served as the Chief Financial Officer of Hapax, Inc., an AI-native platform purpose-built for banks and credit unions. From December 2013 to April 2021, Ms. Harris served as Chief Financial Officer of Q2 Holdings, Inc., a provider of digital transformation solutions for banking and lending, where she previously served as the Vice President and Corporate Controller from March 2013 until November 2013. Prior to her time at Q2 Holdings Inc., Ms. Harris was the Interim Corporate Controller for Blackbaud, Inc., a provider of software solutions to nonprofit organizations and educational institutions, from May 2012 until November 2012. From April 2005 until May 2012, Ms. Harris held various financial positions with Convio, Inc., a provider of SaaS constituent engagement solutions, most recently as Vice President, Controller and Principal Accounting Officer, from October 2010 until May 2012, when Convio was acquired by Blackbaud. Ms. Harris also serves on the boards of directors of Jumio Corporation and Enverus. Ms. Harris received a B.S. in Business from Indiana University. We believe Ms. Harris is qualified to serve as a member of our Board because of her extensive experience in operating, advising and investing in the consumer sector.
Beth J. Kaplan
Ms. Kaplan has served as a member of Brilliant Earth Group, Inc.’s Board since its formation and served as a member of the board of managers of Brilliant Earth, LLC from October 2020 until September 2021. From March 2013 until November 2015, Ms. Kaplan was the President and Chief Operating Officer at Rent the Runway, where she has also served as a member of the board of directors since March 2013. Ms. Kaplan is also currently a Venture Partner at Revolution Venture where she invests in and advises early-stage consumer-oriented companies. Prior to her time at Rent the Runway, she served as President, Chief Merchandising and Marketing Officer, and Director at General Nutrition Centers Inc., during which she played an integral role in the company’s 2011 initial public offering. Ms. Kaplan has held numerous leadership positions at Bath& Body Works, Rite Aid Drugstores, and Procter & Gamble. In addition to her current role as a director of Rent the Runway, Ms. Kaplan also serves on the board of directors of Howard Hughes Holdings, Inc. and Crocs, Inc., and as a director and advisor of Cooper’s Hawk. Ms. Kaplan received both a Bachelor of Science degree and an MBA from the Wharton School of the University of Pennsylvania. We believe Ms. Kaplan is qualified to serve as a member of our Board because of her extensive experience in operating, advising and investing in companies in the consumer sector.
12
We believe that all of our current Board members and nominees for Class I directors possess the professional and personal qualifications necessary for Board service.
13
PROPOSAL 2: Ratification of Appointment of Independent Registered
Public Accounting Firm
Our Audit Committee has appointed BDO USA, P.C. as our independent registered public accounting firm for the fiscal year ending December 31, 2025. Our Board has directed that this appointment be submitted to our stockholders for ratification at the Annual Meeting. Although ratification of our appointment of BDO USA, P.C. is not required, we value the opinions of our stockholders and believe that stockholder ratification of our appointment is a good corporate governance practice.
BDO USA, P.C. served as our independent registered public accounting firm for the fiscal year ended December 31, 2024. Neither BDO USA, P.C. nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as our auditors, providing audit and non-audit related services. A representative of BDO USA, P.C. is expected to attend the Annual Meeting, have an opportunity to make a statement if he or she desires to do so, and be available to respond to appropriate questions from stockholders.
In the event that the appointment of BDO USA, P.C. is not ratified by the stockholders, the Audit Committee will consider this fact when it appoints the independent auditors for the fiscal year ending December 31, 2026. Even if the appointment of BDO USA, P.C. is ratified, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change is in the interests of the Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS
|
The Board of Directors unanimously recommends a vote FOR the ratification of the appointment of
BDO USA, P.C. as our independent registered public accounting firm.
|
||
14
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee has reviewed the Company’s audited financial statements for the fiscal year ended December 31, 2024 and has discussed these financial statements with management and the Company’s independent registered public accounting firm. The Audit Committee has also received from, and discussed with, the Company’s independent registered public accounting firm the matters that they are required to provide to the Audit Committee, including the matters required to be discussed by the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.
The Company’s independent registered public accounting firm also provided the Audit Committee with a formal written statement required by the applicable requirements of the PCAOB describing all relationships between the independent registered public accounting firm and the Company, including the disclosures required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with the independent registered public accounting firm its independence from the Company.
Based on its discussions with management and the independent registered public accounting firm, and its review of the representations and information provided by management and the independent registered public accounting firm, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Jennifer N. Harris (Chair)
Ian M. Bickley
Attica A. Jaques
15
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND OTHER MATTERS
Set forth below are the fees of BDO USA, P.C., our independent registered public accounting firm, billed to us for the fiscal years ended December 31, 2024 and 2023 for audit services and billed to us in each of the last two fiscal years for other services:
| Fee Category |
Year Ended
December 31, 2024 | Year Ended December 31, 2023 | ||||||
| Audit Fees | $795,235 | $833,398 | ||||||
| Audit-Related Fees | $38,767 | $37,371 | ||||||
| Tax Fees | __ | __ | ||||||
| All Other Fees | __ | __ | ||||||
| Total Fees | $834,002 | $870,769 | ||||||
AUDIT FEES
For the year ended December 31, 2024, audit fees consist of fees for the audit of our consolidated financial statements for the year ended December 31, 2024, the review of the unaudited interim financial statements included in our quarterly reports on Form 10-Q, and fees billed in connection with the filing of a registration statements on Form S-8. For the year ended December 31, 2023, audit fees consist of fees for the audit of our consolidated financial statements for the year ended December 31, 2023, the review of the unaudited interim financial statements included in our quarterly reports on Form 10-Q, and fees billed in connection with the filing of a registration statement on Form S-8.
AUDIT-RELATED FEES
For the years ended December 31, 2024 and December 31, 2023, audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees.”
TAX FEES
Tax fees comprise fees for a variety of permissible professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no tax fees billed for the years ended December 31, 2024 or December 31, 2023.
ALL OTHER FEES
There were no fees billed for “other services” for the years ended December 31, 2024 or December 31, 2023.
AUDIT COMMITTEE PRE-APPROVAL POLICY AND PROCEDURES
The Audit Committee adopted a policy (the “Pre-Approval Policy”) in connection with our IPO, which sets forth the procedures and conditions pursuant to which audit and non-audit services proposed to be performed by the independent auditor may be pre-approved. The Pre-Approval Policy generally
16
provides that we will not engage an independent auditor to render any audit, audit-related, tax or permissible non-audit service unless the service is either (i) explicitly approved by the Audit Committee (“specific pre-approval”) or (ii) entered into pursuant to the pre-approval policies and procedures described in the Pre-Approval Policy (“general pre-approval”). Unless a type of service to be provided by the independent auditor has received general pre-approval by the Audit Committee, it requires specific pre-approval by the Audit Committee.
For both types of pre-approval, the Audit Committee considers whether such services are consistent with the SEC’s rules on auditor independence. The Audit Committee will also consider whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with the Company’s business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the Company’s ability to manage or control risk or improve audit quality. All such factors will be considered as a whole, and no one factor should necessarily be determinative.
In connection with the Pre-Approval Policy, the Audit Committee may periodically review and pre-approve any services (and related fee levels or budgeted amounts) that may be provided by the independent auditor without first obtaining specific preapproval from the Audit Committee or the Chair of the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time, based on subsequent determinations. The above-described services to the Company provided by BDO USA, P.C. for the fiscal years ended December 31, 2024 and 2023 were approved in accordance with the Pre-Approval Policy.
17
EXECUTIVE OFFICERS
The following table identifies our current executive officers:
|
Name
|
Age
|
Position
|
||||||
|
Beth Gerstein
1
|
49
|
Chief Executive Officer
|
||||||
|
Eric Grossberg
2
|
48
|
Executive Chairman
|
||||||
|
Jeffrey Kuo
3
|
49
|
Chief Financial Officer
|
||||||
|
Sharon Dziesietnik
4
|
40
|
Chief Operations Officer
|
||||||
1
See biography on page 10 of this proxy statement.
2
See biography on page 11 of this proxy statement.
3
Mr. Kuo has served as Brilliant Earth Group, Inc.’s Chief Financial Officer since its formation, and he has served as the Chief Financial Officer of Brilliant Earth, LLC since March 2020. Mr. Kuo joined Brilliant Earth, LLC in 2015 and previously served as its Vice President of Technology and Vice President of Finance & Technology until March 2020 when he became the Chief Financial Officer. Before joining Brilliant Earth, LLC, Mr. Kuo founded and served as the President and Manager of Xetum LLC, a wristwatch company. Prior to founding Xetum LLC, Mr. Kuo was a management consultant with Bain & Company. Mr. Kuo received a Bachelor of Arts in Biochemical Sciences from Harvard University and an MBA from the Stanford University Graduate School of Business.
4
Ms. Dziesietnik has served as the Company’s Chief Operations Officer since August 2024. Previously, Ms. Dziesietnik served as the Company’s Senior Vice President, Customer Operations from September 2021 to August 2024. Ms.Dziesietnik joined Brilliant Earth, LLC in 2012 and held several management positions with Brilliant Earth, LLC, including serving as its Vice President of Customer Operations from March 2017 until March 2020 and as its Senior Vice President of Customer Operations from March 2020 to September 2021. Prior to joining Brilliant Earth, LLC, Ms. Dziesietnik held various management roles at Naehas, Inc. a provider of marketing automation and compliance solutions. Ms. Dziesietnik received a Bachelor of Science in Business Administration from Boston University and an MBA from Tulane University.
18
CORPORATE GOVERNANCE
GENERAL
Our Board has adopted Corporate Governance Guidelines, a Code of Business Conduct and Ethics and charters for our Nominating and Corporate Governance Committee, Audit Committee, and Compensation Committee to assist the Board in the exercise of its responsibilities and to serve as a framework for the effective governance of the Company. You can access our current committee charters, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics in the “Governance” section of the “Investor Relations” page of our website located at www.brilliantearth.com or by writing to our offices at 300 Grant Street, Third Floor, San Francisco, CA 94108.
BOARD COMPOSITION
Our Board currently consists of seven (7) members: Ian M. Bickley, Beth Gerstein, Eric Grossberg, Jennifer N. Harris, Attica A. Jaques, Beth J. Kaplan, and Gavin M. Turner. Our Board is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election or such director’s death, resignation or removal, whichever is earliest to occur. Any additional directorships resulting from an increase in the number of directors on the Board will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of the Company.
STOCKHOLDERS AGREEMENT
In connection with our IPO, we entered into a Stockholders Agreement with (i) Mainsail Partners III L.P., a Delaware limited partnership and the Mainsail Holdcos (as defined in the Stockholders Agreement) (collectively, “Mainsail”), and (ii) Just Rocks granting each of Mainsail and Just Rocks certain board designation rights so long as each maintains a specified percentage of ownership of our outstanding common stock.
Pursuant to the terms of the Stockholders Agreement, Mainsail has the right to designate (i) two of our directors for as long as Mainsail directly or indirectly, beneficially owns, in the aggregate, 15% or more of our Class A common stock (assuming that all outstanding common units of Brilliant Earth, LLC ("LLC Interests") are redeemed for shares of our Class A common stock on a one-for- one basis) or (ii) one of our directors for as long as Mainsail directly or indirectly, beneficially owns, in the aggregate, 5% or more of our Class A common stock (assuming that all outstanding LLC Interests in Brilliant Earth, LLC are redeemed for shares of our Class A common stock on a one- for-one basis), and Just Rocks shall have the right to designate (i) two of our directors, for as long as Just Rocks directly or indirectly, beneficially owns, in the aggregate, 15% or more of our Class A common stock and Class D common stock, combined (assuming that all outstanding LLC Interests are redeemed for shares of our Class A common stock or Class D common stock, on a one-for-one basis) or (ii) one of our directors for as long as Just Rocks directly or indirectly, beneficially owns, in the aggregate, 5% or more of our Class A common stock and Class D common stock, combined (assuming that all outstanding LLC Interests are redeemed for shares of our class A common stock or Class D common stock, on a one-for-one basis). Each of Mainsail and Just Rocks have agreed to vote, or cause to vote, all of their outstanding shares of our Common Stock at any annual or special meeting of stockholders at which directors are elected and to take all necessary action to cause the election of the Mainsail designated directors and Just Rocks designated directors. Additionally, pursuant to the Stockholders Agreement, we agreed to take all commercially reasonable actions to, among other things, cause (1) the Board to be comprised of at least seven (7) directors, or such other number of Directors as the Board may determine in accordance with the terms of the Stockholders Agreement and the Company’s organizational documents, (2) the individuals designated in accordance with the terms of the
19
Stockholders Agreement to be included in the slate of nominees to be directors are to be elected at each annual meeting of our stockholders at which a director’s term expires; (3) the individuals designated in accordance with the terms of the Stockholders Agreement to fill the applicable vacancies on the Board; and (4) a Just Rocks designated director to be the Chairperson of the Board. In addition, Mainsail has the right, but not the obligation, to designate one (1) director to our Compensation Committee for so long as the Mainsail has the ability to designate at least one (1) director to the Board. The Stockholders Agreement allows for the Board to reject the nomination, appointment or election of a particular director if such nomination, appointment or election would constitute a breach of the Board’s fiduciary duties to our stockholders or does not otherwise comply with any requirements of our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws or the Securities Act of 1933, as amended (the “Securities Act”) and Exchange Act of 1934, as amended (the “Exchange Act”).
The Stockholders Agreement will terminate upon the earliest to occur of (i) each of Mainsail or Just Rocks ceasing to own our Class A common stock, Class B common stock, Class C common stock or Class D common stock, (ii) each of Mainsail or Just Rocks ceasing to have any director designation rights, or (iii) as agreed unanimously in writing between us, Mainsail and Just Rocks.
As a result of the Stockholders Agreement and the aggregate voting power of the parties thereto, we expect that the parties to the agreement acting in conjunction will control the election of the Company’s directors. Please see “—Controlled Company,” below.
DIRECTOR INDEPENDENCE
Our Board has affirmatively determined that each of Ian M. Bickley, Jennifer N. Harris, Attica A. Jaques, Beth J. Kaplan, and Gavin M. Turner qualifies as an “independent director,” as defined under the applicable Nasdaq Stock Market LLC rules (the “Nasdaq Rules”). The Nasdaq independence definition includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his family members has engaged in various types of business dealings with us. In addition, as required by the Nasdaq Rules, our Board has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In evaluating and determining the independence of the directors, the Board considered that the Company may have certain relationships with its directors. Specifically, the Board considered that certain of our directors are affiliated with significant stockholders of the Company. There are no family relationships among any of our executive officers and directors.
CONTROLLED COMPANY
Mainsail and Just Rocks, in the aggregate, hold more than 50% of the voting power for the election of directors, and, as a result, we are considered a “controlled company” for the purposes of the Nasdaq Rules. As such, we qualify for exemptions from certain corporate governance requirements, including that a majority of our Board consist of “independent directors,” as defined under the Nasdaq Rules. In addition, we are not required to have a nominating and corporate governance committee or compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities or to conduct annual performance evaluations of the nominating and corporate governance and compensation committees.
While currently five of the seven directors on our Board are independent under the Nasdaq Rules, and our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee has each adopted a formal written charter and each consists entirely of independent directors under the Nasdaq Rules, for so long as we remain a “controlled company,” we may avail ourselves of exemptions available to “controlled companies” in the future. Accordingly, our
20
stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Rules.
If at any time we cease to be a “controlled company” under the Nasdaq Rules, our Board intends to take any action that may be necessary to comply with the Nasdaq Rules, subject to a permitted “phase-in” period.
DIRECTOR CANDIDATES
The Nominating and Corporate Governance Committee is responsible for identifying and reviewing the qualifications of potential director candidates and recommending to the Board those candidates to be nominated for election to the Board, subject to any obligations and procedures governing the nomination of directors to the Board that may be included in the Stockholders Agreement. The Nominating and Corporate Governance Committee, in recommending director candidates for election to the Board, and the Board, in nominating director candidates, will consider candidates who have a high level of personal and professional integrity, strong ethics and values and the ability to make mature business judgments. The Board believes that the Board membership should reflect a broad range of work and life experience, qualifications, and skills in order to ensure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure.
The Nominating and Corporate Governance Committee may also consult with outside advisors or retain search firms to assist in the search for qualified candidates, or consider director candidates recommended by our stockholders. Once potential candidates are identified, the Nominating and Corporate Governance Committee reviews the backgrounds of those candidates, evaluates candidates’ independence from us and potential conflicts of interest, and determines if candidates meet the qualifications desired by the Nominating and Corporate Governance Committee of candidates for election as director.
In evaluating director candidates (both new candidates and current Board members), the Nominating and Corporate Governance Committee in recommending candidates for election, and the Board may also consider the following criteria as well as any other factor that they deem to be relevant such as experience in corporate management, such as serving as an officer or former officer of a publicly held company; experience as a board member of another publicly held company; professional and academic experience relevant to the Company’s industry, operations, and target markets; ability to exercise mature business judgment, including, but not limited to, the ability to make independent analytical inquiries; leadership skills; experience in finance and accounting and/or executive compensation practices; whether a candidate has the time required for preparation, participation and attendance at Board meetings and committee meetings, if applicable; and diversity of background and perspective, and experience in substantive matters pertaining to the Company’s business relative to other board members. In addition, the Board will consider whether there are potential conflicts of interest with the candidate’s other personal and professional pursuits.
In determining whether to recommend a director for re-election, the Nominating and Corporate Governance Committee may also consider the director’s past attendance at meetings and participation in and contributions to the activities of the Board.