HIREQUEST, INC.
10-Ks and 10-Qs
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. 1)
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 Rule 14a-12
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COMMAND CENTER, 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):
☒ No
fee required
☐ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction
applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule
0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
☐ Fee
paid previously with preliminary materials.
☐ 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.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
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COMMAND
CENTER, INC.
3609
S. Wadsworth Boulevard, Suite 250
Lakewood,
Colorado 80235
Telephone:
866-464-5844
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
July
5, 2018
Fellow Command
Center Shareholders:
The Annual Meeting
of Shareholders, or the Annual Meeting, of Command Center, Inc., a
Washington corporation, will be held at Woolley’s Classic
Suites, 16450 East 40
th
Circle, Aurora, CO
80011, on Thursday, July 5, 2018, at 3:30 p.m. Mountain Daylight
Time for the following purposes:
1.
to elect seven
directors to serve until the next annual meeting of shareholders,
or until their respective successors are elected and
qualified;
2.
to ratify the
selection of EKS&H LLLP as the Company’s independent
auditors for the fiscal year ending December 28, 2018;
3.
to approve, on a
non-binding advisory vote, the compensation paid to the
Company’s Named Executive Officers as disclosed in the
attached Proxy Statement (commonly known as
“Say-on-Pay”); and
4.
to transact such
other business as may properly come before the
meeting.
Whether or not you will attend the meeting, we
hope that your shares are represented and voted. In advance of the
Annual Meeting on July 5, 2018, please cast your vote through the
Internet, by telephone or by mail as described in your proxy card.
Instructions on how to vote are found in the section
entitled
How to Cast Your Vote
on page 4.
Only shareholders
of record at the close of business on May 7, 2018, will be entitled
to notice of, and to vote at, the Annual Meeting and any
adjournments thereof. Interested parties are encouraged to visit
the Company’s website at
www.
commandonline
.com
for additional
information.
By Order of the
Board of Directors,
/s/ Brendan Simaytis
Brendan Simaytis,
Secretary
Lakewood,
Colorado
May 24,
2018
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REVIEW
THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
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VIA
THE INTERNET
Visit the website
provided on your proxy card, voting instruction form, or
notice.
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BY
TELEPHONE
Call the telephone
number on your
proxy card,
voting instruction form, or notice.
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BY
MAIL
Sign, date, and
return the enclosed proxy card or voting instruction
form.
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IN
PERSON
Attend the Annual
Meeting. Please note that if you hold your shares through a bank or
broker, you must obtain a “legal proxy” from your bank
or broker to vote your shares at the meeting.
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This
Notice of Annual Meeting, the Proxy Statement, and the Annual
Report are or will be available at www.proxyvote.com.
COMMAND
CENTER, INC.
PROXY
STATEMENT FOR
ANNUAL
MEETING OF SHAREHOLDERS
to
be held: July 5, 2018
Table
of Contents
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Proxy
Summary
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3
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VOTING
AT THE ANNUAL MEETING
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4
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Voting
matters and board recommendations
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5
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General
Information
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6
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PROPOSAL
1—ELECTION OF DIRECTORS
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8
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PROPOSAL
2—RATIFICATION OF SELECTION OF EKS&H LLLP
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21
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PROPOSAL
3—ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION
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24
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OTHER
MATTERS
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33
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Security
Ownership of Certain Beneficial Owners and Management
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33
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SHAREHOLDER
PROPOSALS, HOUSEHOLDING AND OTHER MATTERS
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35
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COMMAND
CENTER, INC.
PROXY
STATEMENT FOR
ANNUAL
MEETING OF SHAREHOLDERS
to
be held
July
5, 2018
Our Board of
Directors is soliciting proxies from our shareholders to vote their
shares of common stock at the Command Center, Inc. Annual
Meeting of Shareholders to be held on July 5, 2018, at the location
and for the purposes set forth in the Notice of Annual Meeting, and
at any adjournment thereof. Command Center, Inc. is referred
to in this document as “we,” “us,”
“our,” and the “Company.”
The cost of this
solicitation of proxies will be borne by the Company. Solicitations
may be made by personal interview, mail, telephone, facsimile,
email, other electronic channels of communication, or otherwise by
directors, officers, and other employees of the Company, but the
Company will not compensate its directors, officers, or other
employees for these services other than their normal compensation.
The Company will pay the entire cost of preparing, assembling,
printing, mailing, and distributing these proxy materials. The
Company will provide copies of these proxy materials to banks,
brokerage houses, fiduciaries, and custodians holding in their
names shares of our common stock beneficially owned by others so
that they may forward these proxy materials to the beneficial
owners.
Any shareholder
giving a proxy may revoke it any time prior to its use at the
Annual Meeting by giving written notice of such revocation to the
Secretary or any one of our other officers or by filing a later
dated written proxy with one of our officers. Personal attendance
at the Annual Meeting is not, by itself, sufficient to revoke a
proxy unless written notice of the revocation or a later dated
proxy is delivered to an officer before the revoked or superseded
proxy is used at the Annual Meeting. Proxies will be voted as
directed therein. Proxies which are signed by shareholders, but
which lack specific instruction with respect to any proposal, will
be voted in favor of the number and slate of directors proposed by
the Board of Directors and listed herein, for the say-on-pay
approval, and for the ratification of our independent registered
accounting firm.
The presence at the
Annual Meeting in person or by proxy of the holders of a majority
of our outstanding shares of Common Stock entitled to vote shall
constitute a quorum for the transaction of business. If a broker
returns a “non-vote” proxy, indicating a lack of voting
instructions by the beneficial holder of the shares and a lack of
discretionary authority on the part of the broker to vote on a
particular matter, then the shares covered by such non-vote proxy
shall be deemed present at the meeting for purposes of determining
a quorum but shall not be deemed to be represented at the meeting
for purposes of calculating the vote required for approval of such
matter. If a shareholder abstains from voting as to any matter,
then the shares held by such shareholder shall be deemed present at
the meeting for purposes of determining a quorum but shall
otherwise not be deemed to have been voted on such matter. As a
result, an abstention on any proposal will have no effect on the
outcome of any proposal.
The mailing address
of the principal executive office of Command Center is 3609 South
Wadsworth Boulevard, Suite 250, Lakewood, CO 80235. We expect that
the Notice and Access cards detailing the availability of this
Proxy Statement, the related Form of Proxy, and Notice of Annual
Meeting will first be mailed to shareholders on or about May 25,
2018.
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Proxy
Summary
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Below is a summary
of the information included in this Proxy Statement. Please refer
to the complete Proxy Statement for full information before you
vote.
Meeting
Information
Time:
3:30 p.m. Mountain
Daylight Time
Date:
July 5,
2018
Place:
Woolley’s
Classic Suites – 16450 East 40
th
Circle, Aurora, CO
80011
Record
Date:
May 7,
2018
Voting Eligibility:
Shareholders as of
the record date are entitled to vote, and each share of common
stock is entitled to one vote on all matters to be voted on. As of
the record date for the Annual Meeting, there were 4,971,211 shares
of common stock outstanding and expected to be entitled to vote at
the Annual Meeting. There are no other securities outstanding and
entitled to vote at the Annual Meeting.
Admission:
Only shareholders and
authorized guests may attend the meeting and all attendees will be
required to show a valid form of ID (such as a government-issued
form of photo identification). If you hold your shares in street
name (i.e., through a bank or broker), you must also provide proof
of share ownership, such as a letter from your bank or broker or a
recent brokerage statement, and you must show a valid form of ID
(such as a government-issued form of photo
identification).
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VOTING
AT THE ANNUAL MEETING
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General
. The close
of business on May 7, 2018, has been fixed as the record date for
determination of the shareholders entitled to notice of, and right
to vote at the Annual Meeting, or the Record Date. As of the Record
Date, there were issued and outstanding 4,971,211 shares of common
stock entitled to vote. A majority of such shares will constitute a
quorum for the transaction of business at the Annual Meeting. The
holders of record on the Record Date of the shares entitled to be
voted at the Annual Meeting are entitled to cast one vote per share
on each matter submitted to a vote at the Annual Meeting. The
affirmative vote of a plurality of the votes cast is required for
the election of each of the nominees. All other actions proposed
herein may be taken upon a favorable vote of the holders of a
majority of such shares of common stock casting votes at the Annual
Meeting, provided a quorum is present at the meeting in person or
by proxy.
Availability of Proxy
Materials and Voting.
On or about May 25, 2018, we will mail
the Notice and Access cards detailing the availability of all proxy
materials to all of our shareholders. You may also find all proxy
materials at www.proxyvote.com. The Proxy Statement contains
instructions about how to access our proxy materials and vote
online or by telephone. If you previously chose to receive our
proxy materials electronically, you will continue to receive access
to these materials via e-mail unless you elect
otherwise.
Voting.
Even if you
plan to attend the Annual Meeting in person on July 5, 2018, please
vote as soon as possible.
HOW
TO CAST YOUR VOTE
YOUR VOTE IS IMPORTANT!
Please cast your
vote using the enclosed proxy card today.
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Shareholders of
record, who hold shares registered in their own name, can vote by
signing, dating and returning the enclosed proxy card in the
postage-paid return envelope, or by telephone or via the Internet,
following the easy instructions shown on the enclosed proxy
card.
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Beneficial owners,
who own shares through a bank, brokerage firm or other financial
institution, can vote by returning the enclosed voting instruction
form, or by following the instructions for voting via telephone or
the Internet, as provided by the bank, broker or other
organization. If you own shares in different accounts or in more
than one name, you may receive different voting instructions for
each type of ownership. Please vote all your shares.
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●
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If you are a
shareholder of record or a beneficial owner who has a legal proxy
to vote the shares, you may choose to vote in person at the Annual
Meeting. Even if you plan to attend the Annual Meeting in person,
please cast your vote as soon as possible by using the proxy
card.
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VOTING
MATTERS AND BOARD RECOMMENDATIONS
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Shareholders are
being asked to vote on the following matters at the Annual
Meeting:
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Proposal
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Recommendation
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PROPOSAL
1: Election of Directors
This proposal is
for the election of seven director nominees; Steven
Bathgate, Richard K. Coleman, Jr., Lawrence F. Hagenbuch, R.
Rimmy Malhotra, Steven P. Oman, JD Smith and Galen Vetter. The
Board believes that each of the nominees’ knowledge, skills,
and abilities will positively contribute to the functioning of the
Board as a whole. Accordingly, your proxy holder will vote your
shares FOR the election of the Board’s nominees unless you
instruct otherwise.
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FOR
Each
Nominee
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PROPOSAL
2: Ratification of the Appointment of Independent Registered
Accounting Firm
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EKS&H LLLP has
been appointed as the Company’s independent registered public
accounting firm. The Audit Committee and the Board believe that
retention of the firm is in the best interests of the Company and
its shareholders. Accordingly, your proxy holder will vote your
shares FOR the ratification of the appointment of EKS&H LLLP as
our independent registered public accounting firm unless you
instruct otherwise.
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FOR
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PROPOSAL
3: Advisory Approval of Executive Compensation
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The Say-on-Pay
Proposal is to approve, on an advisory basis, the compensation paid
to our Named Executive Officers for the year ended December 29,
2017. The Company has designed its compensation programs to reward
and motivate employees to continue to enhance shareholder value of
the Company. The Compensation Committee and the Board of Directors
take shareholder views seriously and will take into account the
advisory vote in future executive compensation decisions.
Accordingly, your proxy holder will vote your shares FOR the
approval of the executive compensation paid to our Named Executive
Officers unless you instruct otherwise.
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FOR
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GENERAL
INFORMATION
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Record
Date
.
Shareholders
of record at the close of business on May 7, 2018, are entitled to
vote at the Annual Meeting. On May 7, 2018, the Company had
4,971,211 shares of common stock issued and outstanding. Each share
of common stock entitles the holder thereof to one
vote.
Availability of Proxy
Materials
.
On or
about May 25, 2018, we will mail the Notice and Access cards
detailing the availability of all proxy materials to all of our
shareholders. You may also find all proxy materials at
www.proxyvote.com. We will arrange with brokerage firms and other
custodians, nominees and fiduciaries to forward proxy solicitation
material to the beneficial owners of the common stock as of the
record date and will reimburse such brokerage firms, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses that
they incur as a result of forwarding the proxy materials. Your
cooperation in promptly voting your shares and submitting your
proxy will help avoid additional expense.
Shareholders of Record and
Beneficial Owners.
Shareholders whose shares are
registered directly in their name with Command Center’s
transfer agent, Continental Stock Transfer and Trust Company, are
considered, with respect to those shares,
shareholders of record
. Each
shareholder of record will receive a Notice and Access card
regarding his Proxy Statement, the 2017 Annual Report and the proxy
card directly from the Company.
Shareholders whose
shares are held in a brokerage account or by a bank or other
nominee, are considered the beneficial owner of those shares of
common stock. The Proxy Statement and the 2017 Annual Report will
be forwarded to beneficial owners by their respective broker, bank
or nominee who is considered, with respect to those shares, the
shareholder of record. As the beneficial owner, you have the right
to direct your broker, bank or nominee how to vote your shares by
using the voting instruction form included in the proxy
materials.
Revocation of
Proxies
.
A
shareholder who has executed and returned a proxy may revoke it at
any time before it is voted at the Annual Meeting:
–
by timely executing
and returning, by Internet, mail, or in person at the Annual
Meeting, a proxy bearing a later date; or
–
by giving written
notice of revocation to the Secretary of the Company at 3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235, prior to
the Annual Meeting; or
–
by attending the
Annual Meeting and voting in person.
A proxy is not
revoked by the death or incompetence of the maker unless, before
the authority granted thereunder is exercised, written notice of
such death or incompetence is received by the Company from the
executor or administrator of the estate or from a fiduciary having
control of the shares represented by such proxy. Your right to
revoke your proxy is not limited by or subject to compliance with a
specified formal procedure, but you should follow one of the
methods listed above so that the number of shares represented by
proxy can be recomputed. Attendance at the meeting, in and of
itself, will not constitute a revocation of a proxy.
Inspector of
Elections.
Proxies and ballots will be received and
tabulated by Cory Smith, our inspector of elections for the Annual
Meeting.
Quorum
.
A quorum is necessary to hold a valid
meeting. If shareholders entitled to cast at least a majority of
all the votes entitled to be cast at the Annual Meeting are present
in person or by proxy, a quorum will exist. Shares represented by
proxies containing an abstention as to any matter will be treated
as shares that are present and entitled to vote for purposes of
determining a quorum. Similarly, shares held by brokers or nominees
for the accounts of others as to which voting instructions have not
been given for that matter and for which the broker does not have
discretionary voting authority for that matter, or Broker
Non-Votes, will be treated as shares that are present and entitled
to vote for purposes of determining a quorum.
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Effect of Abstentions,
Voting Requirements, Withheld Votes and Broker
Non-Votes
.
Voting
for director nominees is by plurality. That means that the seven
nominees who receive the most votes will be elected. Approval of
the independent registered accounting firm requires the affirmative
vote of a majority of shares cast at the Annual Meeting, assuming a
quorum is present. That means that the shares voted
“for” a proposal must exceed the numbers voted
“against” that proposal. Because the
“say-on-pay” proposal asks for a non-binding, advisory
vote, there is no required vote that would constitute approval.
Abstentions and broker non-votes, if any, will not have any impact
on this advisory vote. The indication of an abstention on a proxy
or the failure to vote either by proxy or in person will be treated
as neither a vote “for” nor “against” a
nominee or proposal and will have no effect on the outcome of the
vote. The shares of a shareholder whose ballot on any or all
proposals is marked as “abstain” will be included in
the number of shares present at the Annual Meeting for the purpose
of determining the presence of a quorum.
Broker Non-Votes
(shares held by brokers or custodians for the accounts of others as
to which voting instructions have not been given) will be treated
as shares that are present for determining a quorum, but will not
be counted for purposes of determining the number of votes cast
with respect to a proposal. If you are the beneficial owner of
shares held by a broker or other custodian, you may instruct your
broker how you would like your shares voted through the voting
instruction form sent to you by your broker.
If you wish to vote
the shares you own beneficially through a broker or custodian at
the Annual Meeting, you must first request and obtain a
“legal proxy” from your broker or other custodian. If
you choose not to provide instructions or a “legal
proxy” your shares are referred to as “uninstructed
shares.” Brokers may exercise discretion to vote uninstructed
shares as to which instructions are not given only with respect to
Proposal No. 2 regarding the ratification of the selection of the
independent registered accounting firm.
Brokers and custodians can no longer vote
uninstructed shares on your behalf in director elections or
advisory votes on executive compensation. For your vote to be
counted, you must submit your voting instruction form to your
broker or custodian. The following table shows how abstentions and
Broker Non-Votes will be treated with respect to each voting
matter:
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Proposal Number
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Item
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Votes Required for Approval
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Abstentions
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Uninstructed Shares / Broker Non-Votes
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1
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Election of
Directors
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Plurality of
votes cast
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Not counted
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Not
counted
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2
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Ratification of
Independent Auditors
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Majority of
votes cast
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Not
counted
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Discretionary
vote
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3
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Advisory vote on
Executive Compensation
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Majority of
votes cast
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Not
counted
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Not
counted
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Required Vote for Proposals to Pass.
Proposal No. 1—Election of
Directors
: Our Board of Directors recommends a vote FOR each
of the Board’s seven Director nominees. The affirmative vote
of a plurality of the votes cast is required for the election of
each of the nominees. Withheld votes or Broker Non-Votes with
respect to this proposal will have no effect on this
vote.
Proposal No. 2—Ratification of the
Selection of our Independent Registered Public Accounting
Firm
: The affirmative vote of the holders of a majority of
shares cast is required to ratify our selection of EKS&H LLLP
as our independent registered public accounting firm for the year
ending December 28, 2018. A properly executed proxy marked
“ABSTAIN” with respect to this proposal will not be
voted and will have no effect on this vote. Because Proposal No. 2
is a routine proposal, if you do not give instructions to your
broker or other nominee, your broker or other nominee will be able
to vote your shares for Proposal No. 2 using his or her
discretion.
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Proposal No. 3—Say-on-Pay
: Because
this proposal asks for a non-binding, advisory vote, there is no
required vote that would constitute approval. We value the opinions
expressed by our shareholders in this advisory vote, and our
Compensation Committee, which is responsible for overseeing and
administering our executive compensation programs, will consider
the outcome of the vote when designing our compensation programs
and making future compensation decisions for our Named Executive
Officers. Abstentions and Broker Non-Votes, if any, will not have
any impact on this advisory vote.
No Cumulative
Voting.
Shareholders may not cumulate votes in the election
of directors, which means that each shareholder may vote only the
number of shares he or she owns for a single director
candidate.
Discretionary
Authority
.
If any
nominee for director is unable to serve or for good cause will not
serve, or if any matters not specified in this proxy statement come
before the meeting, eligible shares will be voted as specified by
the named proxies pursuant to discretionary authority granted in
the proxy. At the time this proxy statement was printed, the Board
of Directors was not aware of any other matters to be voted
on.
Solicitation of
Proxies
.
Proxies may
be solicited by officers, directors and regular supervisory and
executive employees of the Company, none of whom will receive any
additional compensation for their services. We will bear the
expense of preparing, printing and mailing this Proxy Statement and
the proxies we solicit. Proxies will be solicited by mail and may
also be solicited by directors, officers and employees in person.
We agreed to reimburse Mr. Ephraim Fields and affiliates in an
amount not to exceed $100,000 for their actual out-of-pocket
expenses incurred in connection with their nomination of director
candidates and related matters. As of May 7, 2018, the amount
incurred has not been identified or paid. Please see the section
entitled “
Settlement
Agreement with Mr. Ephraim Fields and Appointment of Mr. Hagenbuch
to the Board
” below for more information.
Executive
Offices
.
The
principal executive office of the Company is located at 3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235. The
mailing address of the principal executive office is also 3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235. The
telephone number for principal executive office of the Company is
(866) 464-5844.
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PROPOSAL
1
—
ELECTION
OF DIRECTORS
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The Board of
Directors believes that the nominees’ knowledge, skills, and
abilities would positively contribute to the function of the Board
as a whole. Accordingly, we strongly recommend that you vote your
shares FOR the election of the Board’s nominees named below.
The Board of Directors knows of no reason why its nominees will be
unable to accept election or unwilling to serve as a director.
However, if a nominee becomes unable to accept election, the Board
will either reduce the number of directors to be elected or select
a substitute nominee. If a substitute nominee is selected, proxies
will be voted in favor of such nominee.
Under the current
Bylaws of the Company, the proposed term of office for which each
nominee will be elected is until the next annual meeting of
shareholders or until his successor shall have been elected and
shall have qualified.
The affirmative
vote of a plurality of votes cast is required for the election of
each of the director nominees.
Our Board of
Directors currently consists of eight directors. Seven of our
current directors have been nominated by the Board for election to
a new term at this Annual Meeting:
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Name
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Position with the Company
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Director since
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JD Smith, age
47
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Chairman of the
Board
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2012
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Steven Bathgate,
age 63
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Director
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2016
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Richard K.
Coleman, Jr., age 61
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Chief Executive
Officer, President and Director
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2018
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Lawrence F.
Hagenbuch, age 51
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Director
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2018
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R. Rimmy
Malhotra, age 41
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Director
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2016
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Steven P. Oman,
age 69
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Director
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2018
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Galen Vetter,
age 66
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Director
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2018
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Page
Settlement Agreement with Mr. Ephraim Fields and Appointment of Mr.
Hagenbuch to the Board
On March 2, 2017
and September 4, 2017, we received notice from Ephraim Fields of
his intention to nominate an alternate slate of directors for
election to the Board at the Annual Meeting and solicit proxies
from shareholders in support of their nominees. On November 29,
2017, Mr. Fields and his affiliates filed a preliminary proxy
statement nominating Messrs. Keith Rosenbloom, Lawrence F.
Hagenbuch, Randall Bort and Sean Gelston in opposition to the slate
of nominees proposed by us on November 24, 2017.
On April 16, 2018,
we entered into a settlement agreement with Ephraim Fields, Echo
Lake Capital, Keith Rosenbloom, Lawrence F. Hagenbuch, Randall
Bort, and Sean Gelston to settle the proxy contest pertaining to
the election of directors to our Board of Directors. Pursuant to
the settlement agreement, the Board appointed Mr. Hagenbuch to the
Board effective April 16, 2018 and agreed to nominate Mr. Hagenbuch
for election to the Board at the Annual Meeting. If Mr. Hagenbuch
is unable to serve on the Board by reason of death or disability or
resigns from the Board, Mr. Fields is entitled to designate a
reasonably qualified replacement director.
Pursuant to the
settlement agreement, Mr. Fields has withdrawn his nomination of
the other candidates for election to the Board at the Annual
Meeting and agreed to immediately cease all efforts related to his
own proxy solicitation. Mr. Fields has also agreed to vote all
shares of common stock beneficially owned by him in favor of the
Board’s director nominees at the Annual Meeting. In addition,
Mr. Fields has also agreed to certain normal and customary
standstill provisions, which expire on the date of the earlier of
either a breach of any of our commitments or obligations set forth
in the settlement agreement that has not been cured within five
business days after notice to us or the date that is 30 days prior
to the first date that a shareholder may properly notify us that it
intends to submit a shareholder proposal under Rule 14a-8 or
nominate a candidate for election as director at the 2019 annual
meeting.
We agreed to
reimburse Mr. Fields and affiliates in an amount not to exceed
$100,000 for their actual out-of-pocket expenses incurred in
connection with their nomination of director candidates and related
matters. Additionally, we incurred approximately $356,000 in costs
associated with the now-settled proxy contest, including
attorneys’ fees, public relations, solicitors’ fees and
other costs incidental to the solicitation.
The foregoing is
not a complete description of the terms of the settlement
agreement. For a further description of the terms of the settlement
agreement, including a copy of the settlement agreement, please see
our Current Report on Form 8-K that we filed with the SEC on April
17, 2018.
Nominees’ Biographies and Qualifications
Seven directors
will be elected at the Annual Meeting, each to serve a one-year
term until the next annual meeting of shareholders, and thereafter
until each director’s successor is elected and qualified or
until his earlier resignation, removal from office, or death. The
names of the directors who are our nominees at this Annual Meeting,
their principal occupations or employment and other qualifications,
are hereinafter set forth:
JD
Smith
, age
47, has been
a member of our Board of Directors since December 10, 2012, and
currently serves as Chairman. Mr. Smith has worked in real estate
investment, construction and development since 1982. Currently, Mr.
Smith is the owner of Real Estate Investment Consultants, LLC, a
turnkey investment service firm serving all sectors of real estate
and investment and development businesses. He also serves on the
Board of Directors of iCoreConnect Inc., a publicly-held New York
based company and provider of comprehensive healthcare
communications solutions. From 2008 until 2012 he was Director of
Development for CP Financial, a venture capital firm based in
Scottsdale, Arizona. From 1993 until 2008 he developed over two
dozen projects in the Phoenix Metro Area, acting through his
companies JD Investments, Inc., The High Sonoran Group, Inc., and
JD Smith Development, LLC. In 1990 he formed his first operating
company to buy and maintain residential rental properties and
obtained his real estate license. In 1993 he graduated from Arizona
State University with a Bachelor of Science degree in Real
Estate.
Steven
Bathgate,
age 63, was appointed
to our Board of Directors in April 2016. He has over 35 years of
security industry experience, particularly with microcap companies.
In 1995 he founded GVC Capital LLC and he is the Senior Managing
Partner of that firm. GVC Capital is an investment banking firm
located in Denver, Colorado, focusing primarily on providing
comprehensive investment banking services to undervalued microcap
companies. Prior to founding GVC Capital, Previously, Mr.
Bathgate has served as CEO of securities firm Cohig &
Associates in Denver and as Managing Partner, Equity Trading, at
Wall Street West. He was a director for Global Healthcare REIT from
June 2012 to January 2016. Mr. Bathgate received a Bachelor of
Science in Finance from the University of
Colorado.
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Richard K.
Coleman, Jr.
, 61, was appointed
as our President, Chief Executive Officer, and Director on April 1,
2018. Mr. Coleman has deep experience serving in senior executive
positions and on various public company boards, and has gained
extensive expertise in business development and operations. He is
also currently Chairman of Hudson Global Inc., a global talent
solutions company, and has been a director of Hudson since May
2014. Previously, Mr. Coleman served as Principal Executive Officer
of Crossroads Systems, Inc., a global provider of data archive
solutions, from August 2017 to March 2018, and as the
company’s President and CEO from May 2013 to July 2017. Mr.
Coleman has served in a variety of senior operational roles,
including CEO of Vroom Technologies, Inc., Chief Operating Officer
of MetroNet Communications, and President of US West Long Distance.
He also has held significant officer-level positions with Frontier
Communications, Centex Telemanagement, and Sprint Communications.
He formerly served as a director of: Ciber, Inc. from April 2014 to
December 2017, a leading global information technology company;
Crossroads Systems, Inc. from April 2013 to July 2017, a global
provider of data archive solutions; NTS, Inc. from December 2012 to
June 2014, a broadband services and telecommunications company;
Aetrium Incorporated from January 2013 to April 2014, a recognized
world leader in the global semiconductor industry; and On Track
Innovations Ltd. From December 2012 to April 2014, one of the
pioneers of cashless payment technology. Mr. Coleman has served as
an Adjunct Professor of Leadership and Management for Regis
University, and is a guest lecturer on leadership and ethics for
Denver University. Mr. Coleman has a Master of Business
Administration degree from Golden Gate University and is a graduate
of the United States Air Force Communications System Officer
School. He has a Bachelor of Science degree from the United States
Air Force Academy and has also completed leadership, technology,
and marketing programs at Kansas University, UCLA, and Harvard
Business School.
Lawrence F.
Hagenbuch
, age 51, was
appointed to our Board of Directors in April 2018. He brings
extensive operations and board experience to Command Center, along
with expertise in the creation of innovative marketing and planning
strategies. Mr. Hagenbuch is currently the Chief Operating Officer
and Chief Financial Officer for J. Hilburn, Inc., a custom clothier
for men. Mr. Hagenbuch has been with J. Hilburn since May
2010. Mr. Hagenbuch served on the board of directors and the
audit and compensation committees of the publicly traded firm Remy
International from 2008 until the sale of the company in
2015. He currently serves on the board of directors of the
publicly traded company Arotech Corp. Mr. Hagenbuch has served in
senior management positions for Suntx Capital partners, Alix
Partners, GE / GE capital, and American National Can. Mr.
Hagenbuch began his professional career in the United States
Navy. Mr. Hagenbuch earned an undergraduate in engineering
degree from Vanderbilt University on a full Navy ROTC
scholarship. He later earned an MBA from the Wharton School
of the University of Pennsylvania. Mr. Hagenbuch currently
serves as a founding board member of the veteran’s service
charity, Soldiers Who Salsa.
R. Rimmy
Malhotra
, age 41, was appointed
to our Board of Directors on April 6, 2016. From 2013 to the
present, Mr. Malhotra has served as the Managing Member and
Portfolio Manager for the Nicoya Fund LP, a private investment
partnership. Previously, from 2008-2013 he served as portfolio
manager of the Gratio Values Fund, a mutual fund registered under
the Investment Act of 1940. Prior to this, he was an investment
analyst at a New York based hedge fund. He earned an MBA in Finance
from The Wharton School and a Master’s degree in
International Relations from the University of Pennsylvania where
he was a Lauder Fellow. Mr. Malhotra holds undergraduate degrees in
Computer Science and Economics from Johns Hopkins
University.
Steven P.
Oman
, age 69, was appointed to
our Board of Directors in March 2018. He is currently a partner in
the law firm Provident Law, PLLC, located in Scottsdale, Arizona,
and has held this position since June of 2015. Mr. Oman has been a
practicing attorney for over 40 years, primarily in areas of
business, real estate and estate planning. Prior to his work at
Provident Law, he was a sole practitioner for many years in
Scottsdale, Arizona, for the Law Office of Steven P. Oman. Since
December 15, 2016, Mr. Oman has also served as a director,
president and CEO of Alanco Technologies, Inc., a publicly-held
company that provided various services and products over the years,
including satellite-based technology, but which most recently
focused on water disposal facilities receiving and disposing of
produced water generated from oil and natural gas production. Mr.
Oman received his Bachelor of Mechanical Engineering degree in 1970
from the University of Minnesota, Institute of Technology, and his
J.D. from William Mitchell College of Law, St. Paul, Minnesota in
1975. Mr. Oman is a member of the State Bar of Arizona and the
Maricopa County Bar Association.
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Galen Vetter
, age
66, was appointed to our Board of Directors in April 2018. He
brings significant senior executive management and board experience
to Command Center, along with accounting and financial expertise.
Mr. Vetter served as president of Rust Consulting, Inc. from
December 2008 to May 2012, as global chief financial officer of
Franklin Templeton Investment Funds from April 2004 to November
2008 and in numerous roles at RSM LLP from June 1973 to March 2004.
Since January 2009 Mr. Vetter has served as a member on the
Advisory Board of Directors of Land O’Lakes, Inc. Since 2013
he has served as a director of ATRM Holdings, Inc. and Alerus
Financial, Inc. Mr. Vetter is a licensed certified public
accountant (inactive). He is also a member of the National
Association of Corporate Directors, including being Board
Leadership Fellow certified. He received his Bachelor of
Science degree from the University of Northern Iowa. Mr.
Vetter has had extensive exposure to the analysis of financial
statements and financial reporting matters and qualifies as an
“audit committee financial expert” under SEC
guidelines.
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” ALL
SEVEN NOMINEES FOR THE BOARD OF DIRECTORS.
|
11 |
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|
CORPORATE
GOVERNANCE
|
Our corporate
governance documents described below are available on our website
at
www.commandonline.com
.
Meetings and Committees of the Board of Directors
The
Board of Directors
Our Board of
Directors currently consists of eight directors. On April 16, 2018,
we temporarily expanded the number of directors on our Board from
seven to eight. We expect that the size of the Board will return to
seven directors on the date of our Annual Meeting and for that
reason we have nominated seven candidates for election. Our Board
is now composed of seven outside directors and Richard K. Coleman,
Jr., President and Chief Executive Officer of the
Company.
Each director is
expected to devote sufficient time, energy and attention to ensure
diligent performance of his duties and to attend all Board,
committee and shareholders’ meetings. Meetings and actions of
the Board include regular meetings, special meetings and actions by
unanimous written consent.
During 2017, our
Board held 12 meetings and acted by unanimous written consent on
four additional occasions. Each member attended at least 75% of the
meetings of the Board and committees on which he served during his
or her term of office. Absent unusual circumstances, Directors are
expected to attend the Company’s meetings of stockholders,
either in person or telephonically. All of our then-serving
directors attended our last annual meeting of stockholders in
November 2016.
Committees
of the Board of Directors
Our Board of
Directors has established three standing committees and two special
committees to facilitate and assist the Board in the execution of
its responsibilities. The committees are the Audit Committee, the
Compensation Committee, the Nominating and Governance Committee,
the Strategic Alternatives Committee and the Executive Committee.
The composition and function of each of our committees complies
with the rules of the SEC that are currently applicable to us and
we intend to comply with additional exchange listing requirements
to the extent that they become applicable to us in the future. The
Board has also adopted charters for the Audit Committee,
Compensation Committee, Nominating and Governance Committee and the
Executive Committee. Charters for these committees are available on
our website at www.commandonline.com. The charter of each
committee is also available in print to any stockholder upon
request at no charge. Requests should be directed to Secretary,
Command Center, Inc., 3609 S. Wadsworth Blvd., Suite 250, Lakewood
CO 80235. The table below shows current membership for each of the
standing Board committees and the special Board
committee.
|
Audit
Committee
|
Compensation
Committee
|
Nominating and
Governance
Committee
|
Strategic
Alternatives
Committee
|
Executive
Committee
|
|
Galen Vetter
(Chair)
|
John Schneller
(Chair)
|
JD Smith
(Chair)
|
R. Rimmy
Malhotra (Chair)
|
JD Smith
(Chair)
|
|
Steven
Bathgate
|
R. Rimmy
Malhotra
|
Steven
Bathgate
|
Steven
Bathgate
|
R. Rimmy
Malhotra
|
|
R. Rimmy
Malhotra
|
JD
Smith
|
R. Rimmy
Malhotra
|
John
Schneller
|
Steven P.
Oman
|
|
Steven P.
Oman
|
|
|
JD
Smith
|
|
|
JD
Smith
|
|
|
|
|
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The Committees are
described in further detail below:
Audit
Committee
.
Galen Vetter (Chairman), Steven Bathgate, R. Rimmy
Malhotra, Steven P. Oman, and JD Smith currently serve on the Audit
Committee. During 2017, John Stewart served as the Chairman and
Richard Finlay and R. Rimmy Malhotra served as members of the Audit
Committee. The Audit Committee held four meetings in 2017 and
reviewed our quarterly filings and our annual filing and audit.
Additional discussions among committee members outside of meetings
were held to discuss the audit process and the preparation and
review the consolidated financial statements.
Our
Board of Directors has determined that R. Rimmy Malhotra and Galen
Vetter qualify as “audit committee financial experts”
as defined under the Securities Exchange Act of 1934 and the
applicable rules of the Nasdaq Capital Market. All the members of
the Audit Committee are financially literate pursuant to the Nasdaq
Listing Rules. Each of the members of the Audit Committee met and
meets the independence standards for independent directors under
the Nasdaq Listing Rules.
The
Audit Committee’s responsibilities include:
●
appointing,
determining funding for, evaluating, and replacing of, and
assessing the independence of our independent registered public
accounting firm;
●
reviewing
and discussing with management and the independent registered
public accounting firm our annual and quarterly financial
statements and related disclosures;
●
pre-approving
auditing and permissible non-audit services, and the terms of such
services, to be provided by our independent registered public
accounting firm;
●
coordinating
the oversight and reviewing the adequacy of our internal controls
over financial reporting;
●
establishing
policies and procedures for the receipt and retention of accounting
related complaints and concerns;
●
preparing
the audit committee report required by Securities and Exchange
Commission rules to be included in our annual proxy statement;
and
●
monitoring compliance with our Code of
Ethics
.
For the fiscal year
ended December 29, 2017, the audit of our financial statements was
reviewed by the Board of Directors and the Audit Committee. The
Company’s auditors also held a teleconference with the Audit
Committee. During the telephone conference, the Audit Committee
reviewed and discussed with the auditors, among other
things:
●
the status of any
significant issues arising during the quarterly reviews and annual
audit of the Company’s financial statements;
●
the Company’s
annual audit plan for 2017 and the internal and external staffing
resources necessary to carry out the Company’s audit
plans;
●
the Company’s
significant accounting policies and estimates;
●
the Company’s
progress toward documenting internal controls pursuant to Section
404 of the Sarbanes-Oxley Act of 2002;
●
the impact of new
accounting pronouncements;
●
current tax matters
affecting the Company; and
●
the Company’s
management information systems.
Policy on Audit Committee Pre-Approval Procedures
The
Audit Committee will pre-approve all audit and non-audit services
provided by the independent registered public accounting firm prior
to the engagement of the independent accountants with respect to
such services. The Company’s independent accountants may be
engaged to provide non-audit services only after the Audit
Committee has first considered the proposed engagement and has
determined in each instance that the proposed services are not
prohibited by applicable regulations, and that the
accountants’ independence will not be materially impaired as
a result of having provided such services. In making this
determination, the Audit Committee takes into consideration whether
a reasonable investor, knowing all relevant facts and circumstances
would conclude that the accountants’ exercise of objective
and impartial judgment on all issues encompassed within the
accountants’ engagement would be materially impaired. The
Audit Committee may delegate its approval authority to pre-approve
services provided by the independent accountants to one or more of
the members of the Audit Committee, provided that any such
approvals are presented to the Audit Committee at its next
scheduled meeting.
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Compensation
Committee
.
John Schneller (Chairman), R. Rimmy
Malhotra and JD Smith currently serve on the Compensation
Committee. The Compensation Committee met on six occasions in
2017. The Compensation Committee is comprised of three
independent directors. The independent directors have been
determined by the Board to be independent pursuant to Rule 10A-3 of
the Exchange Act and the Nasdaq Listing Rules.
The
Compensation Committee oversees our executive compensation program,
establishes our compensation philosophy and policies, and
administers our compensation plans. The Compensation
Committee generally reviews the compensation programs applicable to
executive officers on an annual basis. In setting
compensation levels for a particular executive, the Committee takes
into consideration the proposed compensation package as a whole and
each element individually, as well as the executive's past and
expected future contributions to our business.
The Committee has the authority to engage its own
independent advisors to assist in carrying out its
responsibilities.
No such advisors are currently engaged.
The Compensation Committee did not use
an advisor to assist it in determining executive compensation for
our 2017 fiscal year.
Executive management of the
Company is actively involved in determining appropriate
compensation and making recommendations to the Compensation
Committee for its consideration.
Nominating
and Governance Committee.
JD
Smith (Chairman), Steven Bathgate, and R. Rimmy Malhotra currently
serve on the Nominating and Governance Committee. The Nominating
and Governance Committee met on three occasions in 2017. Each of
the members of the Nominating and Governance Committee meets the
independence standards for independent directors under the Nasdaq
Listing Rules.
The Nominating and
Governance Committee Charter grants such Committee the authority to
determine the skills and qualifications required of directors and
to develop criteria to be considered in selecting potential
candidates for Board membership. Neither the Committee nor the
Board has established any minimum qualifications for nominees, but
the Board does consider the composition of the Board as a whole,
the requisite characteristics (including independence, diversity,
experience in industry, finance, administration and operations) of
each candidate, and the skills and expertise of its current
members, while taking into account the overall operating efficiency
of the Board and its committees.
The
Nominating and Governance Committee’s responsibilities
include, but are not limited to:
●
developing
and recommending to the Board criteria for Board and committee
membership;
●
establishing
procedures for identifying and evaluating director candidates
including nominees recommended by shareholders;
●
identifying
individuals qualified to become Board members;
●
recommending
to the Board the persons to be nominated for election as directors
and to each of the Board’s committees; and
●
overseeing
the evaluation of the effectiveness of the organization of the
Board, including its committees, and the Board’s
performance.
Strategic Alternatives
Committee:
In February 2017, our Board established the
Strategic Alternatives Committee as a special committee and
appointed Steven Bathgate, Rimmy Malhotra, JD Smith and John
Schneller to serve on the committee. Subsequently, the Strategic
Alternatives Committee appointed Rimmy Malhotra as chair. The
Committee is empowered to identify and evaluate strategic
opportunities available to the Company, which may include a sale,
acquisition, or other value maximizing transaction. The Committee
has engaged the services of an investment banking firm to assist
the Committee in fulfilling this assignment. Each of the members of
the Strategic Alternatives Committee meets the independence
standards for independent directors under Nasdaq Listing
Rules.
Executive Committee:
On April 9, 2018, our Board established the Executive Committee as
a special committee and appointed JD Smith, R. Rimmy Malhotra and
Steven P. Oman to serve on the committee and also adopted a charter
for the Executive Committee. As provided in the Charter, the
Executive Committee is authorized to exercise all of the powers and
authority of the Board of Directors in the management of the
business and affairs of the Company prior to the election of
directors at the 2018 Annual Meeting. The authority granted is
subject to the limitations enumerated in the Charter. The Charter
and the authority of the Executive Committee automatically expire
immediately following the election of directors at the 2018 Annual
Meeting.
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Director Nominations
The Board of
Directors nominates directors for election at each annual meeting
of stockholders and appoints new directors to fill vacancies when
they arise. The Nominating and Governance Committee has the
responsibility to identify, evaluate, recruit and recommend
qualified candidates to the Board of Directors for nomination or
election. The Executive Committee, acting pursuant to the authority
granted by the Board of Directors is presently authorized to
nominate directors for election at the 2018 Annual
Meeting.
One of the Board of
Directors’ objectives in evaluating director nominations is
to ensure that its membership is composed of experienced and
dedicated individuals with a diversity of backgrounds, perspectives
and skills. The Nominating and Governance Committee will select
nominees for director based on their character, judgment, diversity
of experience, business acumen, and ability to act on behalf of all
stockholders. We do not have a formal diversity policy. However,
the Nominating and Governance Committee endeavors to have a Board
representing diverse viewpoints as well as diverse expertise at
policy-making levels in many areas, including business, accounting
and finance, marketing and sales, legal, government affairs,
regulatory affairs, business development, technology and in
other areas that are relevant to our activities.
The Nominating and
Governance Committee believes that nominees for director should
have experience, such as those mentioned above, that may be useful
to Command Center and the Board of Directors, high personal and
professional ethics and the willingness and ability to devote
sufficient time to carry out effectively their duties as directors.
The Nominating and Governance Committee believes it appropriate for
at least one, and, preferably, multiple, members of the Board of
Directors to meet the criteria for an “audit committee
financial expert” as defined by rules of the SEC, and for a
majority of the members of the Board of Directors to meet the
definition of “independent director” as defined by the
Nasdaq Listing Rules. The Nominating and Governance Committee also
believes it appropriate for key members of our management to
participate as members of the Board of Directors. Prior to each
annual meeting of stockholders, the Nominating and Governance
Committee identifies nominees first by evaluating the current
directors whose terms will expire at the annual meeting and who are
willing to continue in service. These candidates are evaluated
based on the criteria described above, including as demonstrated by
the candidate’s prior service as a director, and the needs of
the Board of Directors with respect to the particular talents and
experience of its directors. In the event that a director does not
wish to continue in service, the Nominating and Governance
Committee determines not to re-nominate the director, a vacancy is
created on the Board of Directors as a result of a resignation, an
increase in the size of the Board or other event, the Committee
will consider various candidates for Board membership, including
those suggested by the Committee members, by other Board members,
by any executive search firm engaged by the Committee or by
stockholders.
A stockholder who
wishes to suggest a prospective nominee for the Board of Directors
should notify Command Center’s Secretary in writing and
include any supporting material the stockholder considers
appropriate. Information to be in the notice includes (i) the name,
age, business address and residence address for the nominee, (ii)
the principal occupation or employment of each such nominee, (iii)
the number of shares of capital stock of the Company which are
owned of record and beneficially by each such nominee (if any),
(iv), such other information concerning each such nominee as would
be required to be disclosed in a proxy statement soliciting proxies
for the election of such nominee as a director in an election
contest (even if an election contest is not involved) or that is
otherwise required to be disclosed, under Section 14(a) of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, or the Exchange Act, (v) the
consent of the nominee to being named in the proxy statement as a
nominee and to serve as a director if elected, and (vi) as to the
proposing stockholder: (A) the name and address of the proposing
stockholder as they appear on the Company’s books and of the
beneficial owner, if any, on whose behalf the nomination is being
made, (B) the class and number of shares of the Company which are
owned by the proposing stockholder (beneficially and of record) and
owned by the beneficial owner, if any, on whose behalf the
nomination is being made, as of the date of the proposing
stockholder’s notice, and a representation that the proposing
stockholder will notify the Company in writing of the class and
number of such shares owned of record and beneficially as of the
record date for the meeting promptly following the later of the
record date or the date notice of the record date is first publicly
disclosed, (C) a description of any agreement, arrangement or
understanding with respect to such nomination between or among the
proposing stockholder and any of its affiliates or associates, and
any others (including their names) acting in concert with any of
the foregoing, and a representation that the proposing stockholder
will notify the Company in writing of any such agreement,
arrangement or understanding in effect as of the record date for
the meeting promptly following the later of the record date or the
date notice of the record date is first publicly disclosed, (D) a
description of any agreement, arrangement or understanding
(including any derivative or short positions, profit interests,
options, hedging transactions, and borrowed or loaned shares) that
has been entered into as of the date of the proposing
stockholder’s notice by, or on behalf of, the proposing
stockholder or any of its affiliates or associates, the effect or
intent of which is to mitigate loss to, manage risk or benefit of
share price changes for, or increase or decrease the voting power
of the proposing stockholder or any of its affiliates or associates
with respect to shares of stock of the corporation, and a
representation that the proposing stockholder will notify the
Corporation in writing of any such agreement, arrangement or
understanding in effect as of the record date for the meeting
promptly following the later of the record date or the date notice
of the record date is first publicly disclosed, (E) a
representation that the proposing stockholder is a holder of record
of shares of the corporation entitled to vote at the meeting and
intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice, and (F) a
representation whether the proposing stockholder intends to deliver
a proxy statement and/or form of proxy to holders of at least the
percentage of the Company’s outstanding capital stock
required to approve the nomination and/or otherwise to solicit
proxies from stockholders in support of the nomination. Submission
of a prospective nominee must comply with the requirements set
forth in the Company’s Bylaws.
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Page
Stockholder
nominations must be made in accordance with the procedures outlined
in, and must include the information required by, our Bylaws and
must be addressed to: Secretary, Command Center, Inc., 3609 S.
Wadsworth, Suite 250, Lakewood, CO 80235. You can obtain a copy of
our Bylaws by writing to the Secretary at this
address.
Stockholder Communications with the Board of Directors
If you wish to
communicate with the Board of Directors, you may send your
communication in writing to: Secretary, Command Center, Inc., 3609
S. Wadsworth, Suite 250, Lakewood, CO 80235. Please include your
name and address in the written communication and indicate whether
you are a stockholder of Command Center. The Secretary will review
any communication received from a stockholder, and all material
communications from stockholders will be forwarded to the
appropriate director or directors or Committee of the Board of
Directors based on the subject matter.
Board Leadership Structure
We have separate
individuals serving as Chairman of the Board of Directors and as
our Principal Executive Officer. Mr. Coleman began serving as our
Chief Executive Officer on April 1, 2018 when he succeeded Mr.
Frederick Sandford who had been serving in this role from February
2013 to March 2018. As Chief Executive Officer, Mr. Coleman manages
the day-to-day affairs of the Company. The Board appointed JD Smith
to serve as the Chairman on April 9, 2018. Previously, our
independent director, Mr. John Stewart, served as the Chairman from
December 2014 to January 2018.
The principal role
of the Chairperson of the Board is to manage and to provide
leadership to the Board of Directors of the Company. The
Chairperson is accountable to the Board and acts as a direct
liaison between the Board and the management of the Company,
through the Chief Executive Officer. The Chairperson acts as the
communicator for Board decisions where appropriate.
The Chairperson is
selected by the Board annually from among its members and serves
for a period of one year or until his successor is elected.
Understanding that separation of the roles of Chairperson and CEO
is an important element of strong corporate governance, the Board
is committed to appointing a Chairperson who is not also
CEO.
Furthermore, the
Board believes that the Chairperson should be independent from
management and free from any interest and any business or other
relationships which could interfere with the Chairperson’s
independent judgment other than interests resulting from being a
shareholder and Director of the Company. Consequently, the
Chairperson should be independent, based upon the standards for
determining independence as adopted by the Board in the Corporate
Governance Guidelines.
The duties and
responsibilities of the Chairperson include the
following:
–
To act
as a liaison between management and the Board;
–
To
provide independent advice and counsel to the CEO;
–
To keep
abreast generally of the activities of the Company and
management;
–
To
ensure that the Directors are properly informed and that sufficient
information is provided to the Directors;
–
In
concert with the CEO, to develop and set the agendas for meetings
of the Board;
–
To act
as chair at meetings of the Board;
–
To
recommend an annual schedule of the date, time and location of
Board and Committee meetings;
16 |
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–
To sit
on other Committees of the Board where appropriate as determined by
the Board;
–
To call
special meetings of the Board if and when necessary;
–
In
concert with the CEO, to determine the date, time and location of
the annual meeting of shareholders and to develop the agenda for
the meeting;
–
To
recommend to the Board, after consultation with the Directors and
management, the appointment of members of the Committees of the
Board;
–
To
assess and make recommendations to the Board annually regarding the
effectiveness of the Board as a whole, the Committees of the Board
and individual Directors;
–
To
ensure that regularly, upon completion of the ordinary business of
a meeting of the Board, the Directors hold discussions without
management present; and
–
To
perform all duties as set forth in the Bylaws.
The Board believes
that this structure is currently serving our Company well, and
intends to maintain it where appropriate and practicable in the
future. We have had varying board leadership models over our
history. In past years, one person filled the positions of
Chairperson and Chief Executive Officer. Since December 2014, we
have separated these positions. The Board believes that the right
structure should be based on the needs and circumstances of our
Company, the Board, and our stockholders, and we believe having an
independent director lead the Board best serves these
interests.
The Board’s Role in Risk Oversight
The Board has a
comprehensive enterprise risk management process in which
management is responsible for managing the Company’s risks.
The Board and its committees provide review and oversight in
connection with these efforts. The Board recognizes that it is
neither possible nor prudent to eliminate all risk. Purposeful and
appropriate risk taking is essential for the Company to be
competitive and to achieve its strategic objectives.
The Board
implements its risk oversight function both as a whole and through
committees, which play a significant role in carrying out risk
oversight. The risk oversight responsibility is enabled by
management reporting processes that are designed to provide
visibility to the Board about the identification, assessment and
management of critical risks and management’s risk mitigation
strategies. These areas of focus include competitive, economic,
operational, financial, legal, regulatory, compliance, safety,
environmental, and political risks. While the Audit Committee is
responsible for oversight of management’s risk management
policies, oversight responsibility for particular areas of risk is
allocated among the Board committees according to the
committee’s area of responsibility as reflected in the
committee charters.
In
particular:
●
The full Board
oversees strategic, financial and execution risks and exposures
associated with the annual plan and other current matters that may
present material risk to the Company’s operations, plans,
prospects or reputation, in addition to acquisitions and executive
management succession planning.
●
The Audit Committee
oversees risks associated with financial matters, particularly
financial reporting, tax, accounting, disclosure, internal control
over financial reporting, financial policies, credit and liquidity
matters and compliance with legal and regulatory matters including
environmental matters.
17 |
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●
The Compensation
Committee oversees risks and rewards associated with the
Company’s attraction and retention of talent, management
development, executive management succession plans, and
compensation philosophy and programs, including a periodic review
of such compensation programs to ensure that they do not encourage
excessive risk-taking.
●
The Nominating and
Governance Committee oversees risks associated with company
governance, director succession planning, and the structure and
performance of the Board and its committees.
The Company
believes that its leadership structure, discussed in detail above,
supports the risk oversight function of the Board because a strong
director chairs each of the various committees involved in risk
oversight. Additionally, there is open communication between
management and directors, and all directors are involved in the
risk oversight function.
Board Compensation
The following table
summarizes the cash, equity awards, and all other compensation
earned by each of our non-employee directors during the year ended
December 29, 2017. The compensation paid or earned by our former
director and CEO, Mr. Sandford, is disclosed in the Summary
Executive Compensation table below.
|
Name
|
Cash Fees Earned ($)
|
Stock Awards ($) (1)
|
Total ($)
|
|
JD Smith
|
32,500
|
8,000
|
40,500
|
|
John Schneller
|
32,500
|
8,000
|
40,500
|
|
R. Rimmy Malhotra
|
31,000
|
8,000
|
39,000
|
|
Steven Bathgate
|
27,500
|
8,000
|
35,500
|
|
John Stewart
(2)
|
41,500
|
8,000
|
49,500
|
|
Richard Finlay
(3)
|
28,500
|
8,000
|
36,500
|
(1)
This column
represents the grant date fair value of shares awarded to each
non-employee director in 2017 in accordance with U.S. GAAP. This
amount represents shares awarded for service in 2016. The amounts
were calculated using the closing price of our stock on the grant
date.
(2)
Director and
Chairman of the Board until January 16, 2018.
(3)
Director until
January 22, 2018.
Narrative to Director Compensation Table
The Compensation
Committee recommends and the Board of Directors determines the
compensation for the Company’s directors, based on industry
standards and the Company’s financial situation. During 2017,
we paid each of our independent directors a base amount of $25,000
as an annual retainer, paid on a quarterly basis, and granted each
independent director 20,000 shares of our common stock. In
addition, the Chairman of the Board receives an additional $10,000
annual retainer, the Chairman of the Audit Committee receives an
additional $6,500 annual retainer, and each Chairman of the
Compensation Committee and the Nominating and Governance Committee
receives an additional $5,000 annual retainer. Non-chairman members
of the Audit committee receive an additional $3,500 annual
retainer, and non-chairman members of all other committees receive
an additional $2,500 annual retainer. All monetary payments are
tendered quarterly in arrears and stock and options grants are
awarded on an annual basis in arrears.
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Related Person Transactions Policy and Procedures
As set forth in the
written charter of the Audit Committee, any related person
transaction involving a Company director or executive officer must
be reviewed and approved by the Audit Committee. Any member of the
Audit Committee who is a related person with respect to a
transaction under review may not participate in the deliberations
or vote on the approval or ratification of the transaction. Related
persons include any director or executive officer, certain
shareholders and any of their “immediate family
members” (as defined by SEC regulations). In addition, the
Board of Directors determines on an annual basis which directors
meet the definition of independent director under the Nasdaq
Listing Rules and reviews any director relationship that would
potentially interfere with his or her exercise of independent
judgment in carrying out the responsibilities of a
director.
Certain
Relationships and Related Party Transactions
There were no
related party transactions during 2017 or 2016.
None of our
executive officers serve as a member of the Board of Directors or
Compensation Committee, or other committee serving an equivalent
function, of any other entity that has one or more of its executive
officers serving as a member of our Board of Directors or
Compensation Committee. None of the current members of our
Compensation Committee, nor any of their family members, have ever
been our employees.
From
time to time, our Audit Committee will review and report to our
Board of Directors on any related party transaction. In considering
related party transactions, the members of our Audit Committee are
guided by the Audit Committee Charter, the Company’s
Standards of Ethics and Business conduct and by their fiduciary
duties to our shareholders.
Indebtedness of Management and Directors
No director or
executive officer or nominee for director, or any member of the
immediate family of such has been indebted to the Company during
the past year.
Officer and Director Legal Proceedings
There are no legal
proceedings involving officers or directors of the
Company.
Director Independence
Our Board of
Directors affirmatively determines the independence of each
director and nominee for election as a director in accordance with
certain criteria, which include all elements of independence set
forth in the related Securities and Exchange Commission Rules and
Regulations and the Nasdaq Listing Rules. As part of the Board
Committee meetings and as they feel necessary or appropriate at
full Board meetings, the independent directors routinely meet in
executive session without management or any non-independent
directors present.
Based on these
standards and information provided by our Board of Directors and
officers, our Board of Directors determined that Steven Bathgate,
Rimmy Malhotra, Galen Vetter, JD Smith, Steven P. Oman, Lawrence F.
Hagenbuch and John Schneller, all non-employee directors or
nominees, are independent and have no material relationship with
the Company, except as directors and as stockholders of the
Company.
In
making their determinations, the Board found no transactions,
relationships or arrangements which might impair the independence
of the respective directors.
19 |
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Indemnification
The Company’s
Bylaws address indemnification of Directors and Officers.
Washington law provides that Washington corporations may include
within their Articles of Incorporation provisions eliminating or
limiting the personal liability of their directors and officers in
shareholder actions brought to obtain damages for alleged breaches
of fiduciary duties, as long as the alleged acts or omissions did
not involve intentional misconduct, fraud, a knowing violation of
law, or payment of dividends in violation of the Washington
statutes. Washington law also allows Washington corporations to
include in their Articles of Incorporation or Bylaws provisions to
the effect that expenses of officers and directors incurred in
defending a civil or criminal action must be paid by the
corporation as they are incurred, subject to an undertaking on
behalf of the officer or director that he or she will repay such
expenses if it is ultimately determined by a court of competent
jurisdiction that such officer or director is not entitled to be
indemnified by the corporation because such officer or director did
not act in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation. The
Company’s Articles of Incorporation provide that a director
or officer is not personally liable to the Company or its
shareholders for damages for any breach of fiduciary duty as a
director or officer, except for liability for (i) acts or omissions
which involve intentional misconduct, fraud or a knowing violation
of law, or (ii) the payment of distribution in violation of
Washington Business Corporation Act.
Code of Ethics
In October 2015,
the Board of Directors adopted the Standards of Ethics and Business
Conduct. The Code of Ethics applies to all directors, officers and
employees of the Company. The Code of Ethics is available on our
website at www.commandonline.com
and in print to
any shareholder upon request to: Secretary, Command Center, Inc.,
3609 S. Wadsworth, Suite 250, Lakewood, CO 80235.
20 |
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|
PROPOSAL
2
—
RATIFICATION
OF SELECTION OF EKS&H LLLP
AS OUR INDEPENDENT AUDITOR
|
The Audit Committee
of the Board of Directors has selected EKS&H LLLP as the
independent registered public accounting firm to audit the
Company’s consolidated financial statements for the fiscal
year ending December 28, 2018. Shareholder ratification of the
selection of EKS&H LLLP as the Company’s independent
auditors is not required by the Bylaws or otherwise. However, the
Board is submitting the selection of EKS&H LLLP to the
shareholders for ratification as a matter of corporate practice. If
the shareholders fail to ratify the selection, the Audit Committee
and the Board will reconsider whether or not to retain that firm.
Even if the selection is ratified, the Board, in its discretion,
may direct the appointment of a different independent accounting
firm at any time during the year if the Audit Committee determines
that such a change would be in the best interests of the Company
and its shareholders.
EKS&H LLLP is
experienced in the field of accounting and is well qualified to act
in the capacity of auditors.
A representative of EKS&H LLLP
will be present at the Annual Meeting to respond to appropriate
questions by shareholders and will have the opportunity to make a
statement if desired.
Ratification of the
appointment of EKS&H LLLP requires the affirmative vote of a
majority of the shares cast at the Annual Meeting in person or by
proxy. That means that the number of shares voted “for”
this Proposal must exceed the number of shares voted
“against” the Proposal. Unless marked to the contrary,
proxies received will be voted “FOR” ratification of
the appointment. A properly executed proxy marked
“ABSTAIN” with respect to this Proposal will not be
voted, although it will be counted for purposes of determining a
quorum. Accordingly, an abstention will be treated as neither a
vote “for” nor “against” this Proposal and
will have no effect on the outcome of the vote. It is important
that you instruct your broker or other nominee how to vote your
shares by following the voting instructions. Because this Proposal
is a routine proposal on which a broker or other nominee is
generally empowered to vote, broker “non-votes” likely
will not result from this Proposal. Thus, if you are a beneficial
owner holding shares through a broker, bank or other holder of
record and you do not vote on this Proposal, your broker may cast a
vote on your behalf for this Proposal. In the event ratification is
not obtained, the Audit Committee and the Board will review its
future selection of our independent registered public accounting
firm but will not be required to select a different independent
registered public accounting firm.
On April 17, 2017,
we dismissed PMB Helin Donovan LLP as our independent registered
public accounting firm. Also effective April 17, 2017, we appointed
EKS&H LLLP based in Denver, Colorado as our new independent
registered public accounting firm. The dismissal of PMB Helin
Donovan and the appointment of EKS&H was approved by our Audit
Committee on April 17, 2017.
PMB Helin Donovan
LLP’s reports on our consolidated financial statements as of
and for the fiscal years ended December 30, 2016 and December 25,
2015 did not contain any adverse opinion or a disclaimer of
opinion, nor were they qualified or modified as to uncertainty,
audit scope or accounting principles. During the fiscal years ended
December 30, 2016 and December 25, 2015 and through April 17, 2017,
we have not had any disagreement with PMB Helin Donovan LLP on any
matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedures, which disagreement, if
not resolved to PMB Helin Donovan LLP’s satisfaction, would
have caused PMB Helin Donovan LLP to make reference to the subject
matter of the disagreement in their reports on our consolidated
financial statements. In addition, during our two most recent
fiscal years ended December 30, 2016 and December 25, 2015 and
through April 17, 2017, there were no “reportable
events” as that term is defined in Item 304(a)(1)(v) of
Regulation S-K.
We have not
consulted EKS&H LLLP on any matter relating to either (i) the
application of accounting principles to a specific transaction,
either completed or contemplated, or the type of audit opinion that
might be rendered on our financial statements or (ii) any matter
that was the subject of a disagreement (as that term is defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions)
or a “reportable event” (as that term is defined in
Item 304(a)(1)(v) of Regulation S-K) for the fiscal years ended
December 29, 2017 and December 30, 2016.
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Page
We provided PMB
Helin Donovan LLP and EKS&H LLLP each with a copy of this
disclosure prior to its filing with the Securities and Exchange
Commission, and requested that PMB Helin Donovan LLP and EKS&H
LLLP review this disclosure for accuracy and
completeness.
Principal Accountant Fees
and Services.
We engaged EKS&H LLLP as our independent
registered public accounting firm on April 17, 2017. Prior to April
17, 2017, we engaged PMB Helin Donovan LLP as our independent
registered accounting firm. The following table summarizes the fees
that EKS&H and PMB Helin Donovan charged us for the listed
services in fiscal years 2017 and 2016. We expect that EKS&H
will serve as our auditors for fiscal year 2018.
|
Type of fee
|
Year ended
December 29, 2017
|
Year ended
December 30, 2016
|
|
Audit fees
(1)
|
$150,799
|
$122,500
|
|
Audit-related
fees (2)
|
-
|
-
|
|
Tax fees
(3)
|
$50,350
|
$35,310
|
|
All Other fees
(4)
|
-
|
-
|
|
|
$201,149
|
$157,810
|
|
(1)
|
Audit fees consist
of fees billed for professional services provided in connection
with the audit of the Company’s consolidated financial
statements and reviews of our quarterly consolidated financial
statements.
|
|
(2)
|
Audit-related fees
consist of assurance and related services that include, but are not
limited to, internal control reviews, attest services not required
by statute or regulation and consultation concerning financial
accounting and reporting standards, and not reported under
“Audit fees.”
|
|
(3)
|
Tax fees consist of
the aggregate fees billed for professional services for tax
compliance, tax advice, and tax planning. These services
include preparation of federal income tax returns.
|
|
(4)
|
All other fees
consist of fees billed for products and services other than the
services reported above.
|
Our Audit Committee
reviewed the audit and tax services rendered by EKS&H and PMB
and concluded that such services were compatible with maintaining
the auditors’ independence. All audit, non-audit, tax
services, and other services performed by our independent
accountants are pre-approved by our Audit Committee to assure that
such services do not impair the auditors’ independence from
us. We do not use EKS&H or PMB for financial information system
design and implementation. These services, which include designing
or implementing a system that aggregates source data underlying the
financial statements or generates information that is significant
to our financial statements, are provided internally. We do not
engage EKS&H or PMB to provide compliance outsourcing
services.
|
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATON
OF EKS&H LLLP AS OUR
INDEPENDENT AUDITORS
FOR
FISCAL YEAR 2018
|
22 |
Page
Audit Committee Report
This report shall not be deemed to be incorporated by reference by
any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, and shall not otherwise be deemed
filed under such acts.
Management has the
primary responsibility for the Company’s internal controls
and financial reporting process. The independent registered public
accounting firm is responsible for performing an independent audit
of the Company’s consolidated financial statements in
accordance with the standards of the Public Company Accounting and
Oversight Board and issuing an opinion thereon. The Audit
Committee’s responsibility is to monitor and oversee these
processes. As part of its ongoing activities, the Audit Committee
has:
●
reviewed and
discussed with management and the independent registered public
accounting firm the Company’s audited consolidated financial
statements for the fiscal year ended December 29,
2017;
●
met
with the Company’s Chief Executive Officer, Chief Financial
Officer, and the independent registered public accounting firm to
discuss the scope and the results of the audits and the overall
quality of the Company’s financial reporting and internal
controls;
●
discussed with the
independent registered public accountants the matters required to
be discussed by Statement on Auditing Standards No. 61,
Communications with Audit Committees, as amended;
●
received the
written disclosures and the letter from the independent registered
public accounting firm required by applicable requirements of the
Public Company Accounting and Oversight Board regarding the
independent registered public accounting firm’s
communications with the Audit Committee concerning independence as
currently in effect, and discussed with the independent registered
public accounting firm its independence from the Company;
and
●
pre-approved all
audit, audit related and other services to be provided by the
independent registered public accounting firm.
Based on the review
and discussions referred to above, the Audit Committee recommended
to the Board of Directors that the audited consolidated financial
statements be included in the Company’s annual report on
Form 10-K for the fiscal year ended December 30, 2016,
for filing with the Securities and Exchange
Commission.
In addition, the
Audit Committee appointed EKS&H LLLP as the Company’s
independent registered public accounting firm for the year ending
December 28, 2018, and any interim periods, subject to the
ratification of this appointment by the shareholders.
Audit Committee
Galen Vetter
(Chair)
Steven
Bathgate
R. Rimmy
Malhotra
Steven P.
Oman
JD
Smith
23 |
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|
PROPOSAL
3
—
ADVISORY
VOTE TO APPROVE EXECUTIVE COMPENSATION
|
We are providing
shareholders with the opportunity to cast an advisory vote on
executive compensation as described below. Pursuant to Section 14A
of the Securities Exchange Act of 1934, as amended, shareholders
are entitled to an advisory (non-binding) vote on compensation
programs for our Named Executive Officers (sometimes referred to as
“say-on-pay”).
Accordingly, we are asking shareholders to
approve, on an advisory basis, the compensation of our named
executive officers disclosed in the section entitled
“Executive Compensation” below.
We believe that
it is appropriate to seek the views of shareholders on the design
and effectiveness of the Company’s executive compensation
program.
As described below
in the section entitled “Executive Compensation” of
this proxy statement, our compensation program is designed to
support our business goals and promote short- and long-term
profitable growth of the Company and align compensation with the
long-term interests of our shareholders.
The Board is asking
shareholders to read the section entitled “Executive
Compensation” of this proxy statement, which describes in
more detail how our executive compensation policies and procedures
operate and are designed to achieve our compensation objectives, as
well as the Summary Compensation Table and other related
compensation tables and narratives, which provide detailed
information on the compensation of our Named Executive Officers.
The Board believes that the policies and procedures articulated in
the Executive Compensation section are effective in achieving our
goals and that the compensation of our Named Executive Officers
reported in this proxy statement has supported and contributed to
the Company’s recent and long-term success.
The Board is asking
shareholders to support this proposal based on the disclosure set
forth in these sections of this proxy statement, which, among other
things,
●
provides
a total compensation package that is competitive with other
companies in the temporary staffing industry, yet is consistent
with our focus on profitability; and
●
emphasizes
incentive and equity compensation for our executive team in order
to promote long-term incentives to increase shareholder value and
align the interests of our officers with those of our
shareholders.
Approval of this
proposal requires the affirmative vote of a majority of the shares
cast at the meeting, in person or represented by proxy, and
entitled to vote. Because the vote is advisory, it will not be
binding upon the Board of Directors, and the Compensation Committee
or the Board of Directors will not be required to take any action
as a result of the outcome of the vote on this proposal. The
Compensation Committee and the Board of Directors will carefully
assess the voting results, and if those results reflect any broadly
held issues or concerns, the Board of Directors will consult
directly with shareholders to better understand their
views.
The frequency of
holding “say-on-pay” advisory votes was determined to
be on a yearly basis by the decision of the shareholders during the
Company’s 2013 Annual Shareholders Meeting.
Because this
proposal asks for a non-binding, advisory vote, there is no
required vote that would constitute approval. We value the opinions
expressed by our shareholders in this advisory vote, and our
Compensation Committee, which is responsible for overseeing and
administering our executive compensation programs, will consider
the outcome of the vote when designing our compensation programs
and making future compensation decisions for our Named Executive
Officers. Abstentions and broker “non-votes,” if any,
will not have any impact on this advisory vote.
The Board of
Directors is asking shareholders to cast a non-binding, advisory
vote
FOR
the
following resolution:
“RESOLVED,
the shareholders of Command Center, Inc. approve on an advisory
basis, the compensation paid to our Named Executive Officers as
disclosed pursuant to the compensation disclosure rules of the SEC,
including the compensation tables and accompanying narrative
disclosure included in this Proxy Statement.”
|
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS.
|
24 |
Page
Executive Officers
The following table
sets forth the names and ages of all executive officers of the
Company as of April 1, 2018; all positions held by such persons;
term of office (1) and the period during which he has served as
such; and any arrangement or understanding between him and any
other person(s) pursuant to which he was elected as an
officer:
|
Name of Officer
|
Age
|
Position
|
Period of Service
|
|
Richard K.
Coleman, Jr.
|
61
|
Chief Executive
Officer, President
|
4/1/18 -
present
|
|
Ronald L. Junck
(2)
|
70
|
Executive Vice
President and General Counsel
|
10/10/06 -
present
|
|
Cory
Smith
|
42
|
Chief Financial
Officer
|
7/31/17 –
present
|
(1)
Executive
officers serve at the pleasure of the Board of Directors. Unless
otherwise set forth in any executive employment agreement (as
discussed below), the term of office for each executive officer is
generally for a period of one year or until his or her successor is
duly appointed.
(2)
On May 11, 2018,
Mr. Junck informed the Company of his intention to retire as an
officer and employee, effective as of May 25, 2018.
Executive Officer Biographies
Richard K. Coleman, Jr.,
age 61, Chief Executive Officer, President and
Director
.
For Mr.
Coleman’s biography, please refer to the section
“Director Biographies and Qualifications” on p.
10.
Ronald L. Junck, age
70
, has been our Executive Vice President and General
Counsel since November 2006. From November 2006 until May 2017, he
also served as our Secretary. From 1974 until 1998, Mr. Junck
practiced law in Phoenix, Arizona, specializing in business law and
commercial transactions, representing a wide variety of business
organizations in their corporate and business affairs, as well as
in court. He has lectured extensively at colleges and universities
on various aspects of business law. From 1998 through 2001, Mr.
Junck served as Executive Vice President and General Counsel of
Labor Ready, Inc., and for several years served as a director of
that company. In 2001, Mr. Junck returned to the private practice
of law. Mr. Junck served as a member of our Board of Directors from
November 2005 until November 2007. Mr. Junck received a Bachelor of
Science in Mechanical Engineering from the University of Illinois
in 1971 and a Juris Doctorate from Valparaiso University in 1974.
He is admitted to practice before all of the state and federal
courts in the State of Arizona, the United States Court of Appeals
for the Ninth Circuit and the U.S. Court of Federal
Claims.
Cory Smith, age 42
,
was appointed as our Chief Financial Officer on July 31, 2017. Mr.
Smith was previously employed by the Company from 2010 through 2015
and served as the Controller during the final 2 years of his
tenure. Between 2015 and 2017, he was employed by WorldWide
Staffing, where he served as the Controller and Vice President of
Finance. Prior to 2010, Mr. Smith worked as a Certified Public
Accountant for several years, primarily performing attestation
work. Mr. Smith received his Bachelor of Science in Business
Administration from Lewis-Clark State College.
25 |
Page
|
EXECUTIVE
COMPENSATION
|
Named Executive Officers
In accordance with
the rules and regulations of the Securities and Exchange Commission
for smaller reporting companies, we determined that the following
officers were our Named Executive Officers, or NEOs, for fiscal
year 2017:
●
Frederick J.
Sandford, Chief Executive Officer (through March 31,
2018);
●
Cory
Smith, Chief Financial Officer (since July 22, 2017);
●
Ronald
L. Junck, Executive Vice President and General Counsel;
and
●
Colette
Pieper, former Chief Financial Officer (through July 31,
2017).
Overview of Compensation Program
We
compete with many other temporary staffing companies in seeking to
attract and retain a skilled work force. Our compensation
philosophy is to offer our employees, including our executive
officers, compensation that is competitive and that meets our goals
of attracting, retaining and motivating highly skilled employees,
but that is also consistent with our financial goals of cost
containment and long-term profitability. Utilizing this philosophy,
our executive compensation policies are designed to:
●
provide
a total compensation package that is competitive with other
companies in the temporary staffing industry, yet is consistent
with our focus on profitability; and
●
emphasize
incentive and equity compensation for our executive team in order
to promote long-term incentives to increase shareholder value and
align the interests of our officers with those of our
shareholders.
General Philosophy and Objectives
In
general, our objectives in structuring compensation programs for
our NEOs is to attract, retain, incentivize, and reward talented
executives who can contribute to our growth and success and thereby
build value for our shareholders over the long term. In the
past, we have focused on cash compensation in the form of base
salary as the primary element of our compensation program for
NEOs.
In
2008, the Board appointed the Compensation Committee and adopted
the Compensation Committee Charter. Subsequently, our Compensation
Committee has reviewed and approved all of our executive
compensation packages and determined the appropriate level of each
compensation component for each NEO based upon available
compensation data. Our Compensation Committee has also relied on
its members’ business judgment and collective experience in
our industry. Although it did not benchmark our executive
compensation program and practices, our Compensation Committee
believes that our executive compensation levels have historically
been at or below compensation levels for comparable executives in
other companies of similar size and stage of development in similar
industries and locations.
Past Say-on-Pay Vote
The Compensation
Committee considered the fact that a majority of the votes approved
FOR
the Say-on-Pay proposal
at the 2016 Annual Meeting. Given the shareholders’
(non-binding) approval of the Say-on-Pay Vote in 2016, the
Compensation Committee determined to continue to apply the same
general approach with respect to compensation policies and
decisions for fiscal year 2016, with modifications as deemed
necessary by the Committee to further the Company’s overall
compensation philosophy.
26 |
Page
The Compensation
Committee will continue to consider the results of the annual
Say-on-Pay votes in their future compensation policies and
decisions. A more detailed analysis of our executive compensation
decisions and policies in 2017 and 2016 is set forth
below.
Summary Compensation Table
The following table
provides a summary of information about compensation paid or
accrued by us during the fiscal years ended December 29, 2017, and
December 30, 2016 for our 2017 NEOs, determined in accordance with
SEC rules. Columns required by SEC rules are omitted where
there is no amount to report.
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($)
|
All Other Compensation ($)
|
Total ($)
|
|
Frederick J.
Sandford,
Former
President, Chief Executive Officer and Director (1)
|
2017
|
275,000
|
-
|
62,251
|
258
(7)
|
337,509
|
|
2016
|
275,000
|
85,000
(5)
|
-
|
258
(7)
|
360,258
|
|
|
Cory Smith,
Chief Financial Officer (2)
|
2017
|
63,462
|
-
|
12,450
|
15,653
(8)
|
91,564
|
|
Ronald L. Junck,
EVP, General Counsel (3)
|
2017
|
206,538
|
-
|
75,391
|
229
(6)
|
282,158
|
|
2016
|
185,000
|
35,000
(5)
|
-
|
228
(6)
|
220,228
|
|
|
Colette
Pieper,
former Chief
Financial Officer (4)
|
2017
|
146,617
|
20,000
(6)
|
-
|
100,231
(9)
|
266,848
|
|
2016
|
60,481
|
-
|
-
|
54,830
(10)
|
115,311
|
(1)
Mr. Sandford served
as our Chief Executive Officer and President through March 31,
2018.
(2)
Mr. Smith was
appointed Chief Financial Officer on July 22, 2017.
(3)
On May 11, 2018,
Mr. Junck informed the Company of his intention to retire as an
officer and employee, effective as of May 25, 2018.
(4)
Our former Chief
Financial Officer, Ms. Pieper, was appointed on September 2, 2016.
Ms. Pieper’s tenure as an officer and employee expired on
September 1, 2017.
(5)
Bonus payments were
awarded based on the successful relocation of the corporate office
from Coeur d'Alene, Idaho to Lakewood, Colorado.
(6)
Bonus payment was
awarded based on parameters in Ms. Pieper’s employment
contract.
(7)
Includes payments
for company sponsored life insurance.
(8)
Mr. Smith’s
other compensation is for reimbursable relocation
expenses.
(9)
Ms. Pieper’s
2017 other compensation includes a $100,000 severance payment
pursuant to the severance agreement dated July 20,
2017.
(10)
Ms. Pieper’s
2016 other compensation is for reimbursable relocation
expenses.
Narrative to Summary Compensation Table
Elements
of Our Compensation Program
The three primary
components of our executive compensation program are: (i) base
salary, (ii) incentive compensation in the form of cash bonuses,
and (iii) equity-based compensation.
Base Salary:
The
compensation of our NEOs includes a base salary. Base salaries for
our executives are established based on the scope of their
responsibilities and individual experience. Subject to any
applicable employment agreements, base salaries will be reviewed
annually, and adjusted from time to time to realign salaries with
market levels after taking into account individual
responsibilities, performance and experience.
27 |
Page
Equity and Other
Compensation:
We offer between $20,000 and $100,000 of
Company paid life insurance to most employees, including officers
depending on position within the Company. With the approval of the
2016 Stock Incentive Plan in November 2016, stock option and share
grants are now awarded pursuant to the 2016 plan.
Perquisites and Other
Personal Benefits:
From a philosophical standpoint, we do
not provide NEOs with perquisites and personal benefits that are
not available to all employees. We make available standard health
benefits packages including medical, dental, and vision coverage,
for the same premium contributions as offered to all full-time
employees of the Company. We believe that the compensation
potential available from its three main components of compensation
detailed herein are sufficiently attractive that the reliance on
other forms of exclusive perquisites and benefits are not necessary
to enable the Company to attract and retain superior employees for
key positions.
Annual Bonus:
NEO
compensation may include annual bonuses based on satisfactory
achievement of performance objectives established by the
Compensation Committee prior to or at the beginning of each fiscal
year. The Compensation Committee’s objectives for 2016 were
based on positive cash flow for the Company. The executive bonus
pool for 2016 was calculated by taking EBITDA above $5.0 million,
multiplied by 35%. This pool is then distributed to the executive
officers based upon their position. In 2016 we did not
achieve the required EBITDA level and no executive bonuses were
awarded, however bonuses of $85,000 and $35,000 were paid to Mr.
Sandford and Mr. Junck, respectively, for their roles in the
successful relocation of the corporate office from Coeur
d’Alene, Idaho to the Denver area.
For 2017, our
Compensation Committee adopted the 2017 Executive Bonus Plan on
September 5, 2017 with input from management. This plan sets out
four goals and incentives for management upon achievement of which
management will be awarded cash or equity. These goals represent
our business focus for the 2017 fiscal year and we strive to align
our business focus with the interests of our shareholders. The
details of the 2017 Executive Bonus Plan are described in more
detail below.
Summary of
the 2017 Executive Bonus Program
:
Pursuant to the 2017 Executive
Bonus Plan a bonus pool was created for fiscal year 2017. Each of
the four goal achievements will contribute to the bonus pool. The
bonus pool was to be distributed among our management as
follows:
|
a)
Chief Executive Officer, Frederick Sandford:
|
50%
|
|
b)
Executive Vice President and General Counsel, Ron
Junck
|
25%
|
|
c)
Chief Financial Officer, Cory Smith:
|
10%
|
|
d)
Associate General Counsel and Secretary, Brendan
Simaytis:
|
15%
|
The
first goal under the 2017 Executive Bonus Plan incentivizes
improving our cash flow based on improving our EBITDA from an
established baseline set by the bonus plan. For any amount in
excess of the EBITDA baseline, 10% in cash will accrue to the bonus
pool to be divided among management. The second goal involves
improving our accounts receivable collections from an established
baseline number of days of sales outstanding set by the bonus plan.
Each day of sales outstanding below the baseline will generate
$20,000 for the bonus pool to be divided among management. The
third goal seeks to improve our investor relations, such as filing
quarterly and annual reports timely, meeting with investors, and
publishing an annual letter to shareholders. The bonus plan sets
forth certain criteria which, if all are accomplished, will
generate $60,000 for the bonus pool. Last, $50,000 will be added to
the bonus pool if management secures a $10 million or greater
credit facility. The Board reserves discretion for any awards in
connection with the 2017 Executive Bonus Plan. On April 13, 2018,
the Executive Committee, acting on authority granted by the Board
of Directors, awarded bonuses under the 2017 Executive Bonus Plan
in the amount of $59,407 to Ronald L. Junck and $23,763 to Cory
Smith. No additional bonus was paid to Mr. Sandford beyond his
severance agreement.
On
September 22, 2017, our Compensation Committee awarded stock
options for 16,667 shares of our common stock, $0.001 par value, to
Ronald Junck, Executive Vice President and General Counsel. The
option exercise price is $4.80 per share. The options vest in four
equal tranches with the first one-fourth vested on the grant
date, or September 22, 2017, the second one-fourth vesting on the
first anniversary of the grant date, or September 22, 2018, the
third one-fourth vesting on the second anniversary of the grant
date, or September 22, 2019, and the remaining one-fourth vesting
on the third anniversary of the grant date, or September 22, 2020.
The options expire on September 22, 2027.
28 |
Page
On
September 29, 2017, in connection with the 2017 Executive Bonus
Plan, our Compensation Committee awarded stock options for our
common stock, $0.001 par value, to the executive officers as
follows:
|
a)
Chief Executive Officer, Frederick Sandford:
|
20,834
stock options
|
|
b)
Executive Vice President and General Counsel, Ronald
Junck
|
10,417
stock options
|
|
c)
Chief Financial Officer, Cory Smith
|
4,167
stock options
|
The
option exercise price is $5.40 per share. The options vest in four
equal tranches with the first one-fourth vested on the grant
date, or September 29, 2017, the second one-fourth vesting on the
first anniversary of the grant date, or September 29, 2018, the
third one-fourth vesting on the second anniversary of the grant
date, or September 29, 2019, and the remaining one-fourth vesting
on the third anniversary of the grant date, or September 29, 2020.
The options expire on September 29, 2027.
In connection with
the termination of Mr. Sandford’s employment on March 31,
2018, we entered into a severance agreement pursuant to which we
agreed to pay an amount of approximately $398,000 or equal to 105%
of the value of Mr. Sandford’s unexercised options whether
vested or not. Such unexercised options were terminated and
cancelled as a result.
2018 Bonus Opportunities
for the Chief Executive Officer:
Effective April 1, 2018, we
entered into an employment agreement with our new Chief Executive
Officer, Richard K. Coleman, Jr. Pursuant to the employment
agreement, Mr. Coleman is eligible for a
performance bonus of up to $100,000 as follows:
$50,000 for completion of our annual meeting of stockholders in
2018, $25,000 for uplisting our common stock on Nasdaq, $10,000
upon filing of our annual report for fiscal year 2017 within the
regular or extended filing period, $10,000 for proactive
shareholder outreach to our top 15 shareholders within the first
six months of his employment, and $5,000 for completing a
shareholder letter within the first six months of his employment.
Further, Mr. Coleman is eligible for a performance bonus in the
event of a sale of Command Center in the amount of the greater of
$200,000 or one-half percent of the amount paid for the equity of
our Company at the closing of a sale transaction. Mr. Coleman is
also eligible for a performance bonus relating to Command
Center’s earnings shared by the entire executive team of in
an amount of 15% of our 2018 adjusted EBITDA exceeding $3 million.
Of the total team bonus amount determined by the Compensation
Committee, Mr. Coleman will receive a share of 50%. The sale
performance bonus will be offset by any bonus payment relating to
the adjusted EBITDA.
On
April 1, 2018, Mr. Coleman also received 100,000 incentive stock
options to purchase up to 100,000 shares of common stock pursuant
to our equity incentive plan. The option exercise price is $5.70.
Of the 100,000 options awarded, 25,000 options vested immediately
on the grant date and the remainder of the options will vest
monthly over three years following the grant date. The options
expire on March 31, 2028, or sooner pursuant to the terms of our
equity incentive plan.
In
addition, employment agreements with our executive officers may in
the future provide for certain retirement benefits and potential
payments upon termination of employment for a variety of reasons,
including a change in control of our Company.
Summary
of Executive Employment Agreements
On October 13,
2015, we entered into an executive employment agreement with
Frederick Sandford. Pursuant to the terms of the
employment agreement that ended with his resignation on March 31,
2018, Mr. Sandford was entitled to the following: (i) a base salary
of $275,000, with an annual bonus opportunity under the terms and
conditions of the Executive Bonus Plan, without guarantee of any
annual bonus amount; (ii) if there was a change in control (as
defined in the agreement), Mr. Sandford would have continued to
receive his base salary and annual bonus for 24 months after
termination, together with vesting of all options granted; (iii) in
the event of termination without cause (as defined in the
agreement), Mr. Sandford would have continued to receive his base
salary for the longer of 18 months following termination or the
remainder of the then current term of the agreement; (iv)
noncompetition and confidentiality provisions were applicable under
the agreement; and (v) the effective date of the agreement was July
1, 2015, and the term was specified to be three years after the
effective date unless sooner terminated.
On March 28, 2018, we entered into a severance
agreement with our Chief Executive Officer Frederick (Bubba)
Sandford. Previously, Mr. Sandford had tendered his notice of
termination of his employment effective April 1, 2018. Pursuant to
the severance agreement, we mutually agreed to terminate Mr.
Sandford’s employment as of March 31, 2018, 11:59 p.m. In
addition, Mr. Sandford agreed to resign as a member of our Board of
Directors and from all other positions with Command Center, also
effective at 11:59 p.m. on March 31, 2018. In return, we agreed to
pay Mr. Sandford $275,000 severance, an amount equal to 105% of the
value of Mr. Sandford’s unexercised options whether vested or
not, and $25,000 to cover his legal fees. All unexercised options
were terminated and cancelled as a result. The severance agreement
contains customary mutual releases of claims and non-disparagement
provisions.
29 |
Page
On July 22, 2017,
we entered into an executive employment agreement with Cory Smith.
The key terms of the agreement are as follows: (i) A base
salary of $150,000, with an annual bonus opportunity under the
terms and conditions of the Executive Bonus Plan. There is no
guarantee of any annual bonus. (ii) We will pay certain relocation
expenses, travel and expense reimbursement, professional membership
expenses, education expenses, and vacation. (iii) If there is a
change in control (as defined in the agreement), Mr. Smith will
continue to receive his base salary for the longer of: 6 months
following termination or the remainder of the then current
agreement. In the event of termination without cause (as defined in
the agreement), he would continue to receive his base salary for
the remainder of the then current agreement. (iv) Non-competition
and confidentiality provisions are applicable under the agreement.
(v) The effective date of the agreement is July 22, 2017, and
continues for one year unless sooner terminated. Automatic
extensions apply in certain events.
There are no
present or anticipated executive employment agreements with Ronald
Junck, Executive Vice President and General Counsel. Ronald
Junck receives a base salary of $225,000 per year,
effective July 18, 2017, plus performance-based compensation as set
by the Board. Prior to July 18, 2017, Mr. Junck’s base salary
was $185,000 annually, plus bonus opportunity. On May 11, 2018, Mr.
Junck provided notice of his resignation, which is to be effective
May 25, 2018.
Pursuant to the
executive employment agreement with our former Chief Financial
Officer, Colette Pieper, that ended with her resignation on July
31, 2017, Mrs. Pieper was entitled to base salary of $200,000, with
an annual bonus opportunity under the terms and conditions of the
Executive Bonus Plan. There was no guarantee of any annual bonus.
On July 20, 2017, we entered into a severance agreement with Ms.
Pieper. Pursuant to the severance agreement, we agreed to pay Ms.
Pieper her base salary through the end of her previously entered
executive employment agreement, or September 1, 2017, and paid her
an additional severance payment in the amount of $100,000. In
return, Ms. Pieper resigned from her position as Chief Financial
Officer, and released Command Center of all claims she may have
against Command Center. The severance agreement includes
confidentiality and non-disparagement provisions.
Effective
April 1, 2018, we entered into an employment agreement with Mr.
Coleman. The employment agreement terminates March 31, 2019, unless
terminated earlier. Mr. Coleman will receive an annual base salary
of $325,000. He is eligible for a performance bonus of up to
$100,000 as follows: $50,000 for completion of our annual meeting
of stockholders in 2018, $25,000 for uplisting our common stock on
Nasdaq, $10,000 upon filing of our annual report for fiscal year
2017 within the regular or extended filing period, $10,000 for
proactive shareholder outreach to our top 15 shareholders within
the first six months of his employment, and $5,000 for completing a
shareholder letter within the first six months of his employment.
Further, Mr. Coleman is eligible for a performance bonus in the
event of a sale of Command Center in the amount of the greater of
$200,000 or one-half percent of the amount paid for the equity of
our Company at the closing of a sale transaction. Mr. Coleman is
also eligible for a performance bonus relating to Command
Center’s earnings shared by the entire executive team of in
an amount of 15% of our 2018 adjusted EBITDA exceeding $3 million.
Of the total team bonus amount determined by the Compensation
Committee, Mr. Coleman will receive a share of 50%. The sale
performance bonus will be offset by any bonus payment relating to
the adjusted EBITDA.
On
April 1, 2018, Mr. Coleman received 100,000 incentive stock options
to purchase up to 100,000 shares of common stock pursuant to our
equity incentive plan. The exercise price of the options was
calculated using the fair market value of the common stock at the
close of the market on the grant date. Of the 100,000 options
awarded, 25,000 options vested immediately on the grant date and
the remainder of the options will vest monthly over three years
following the grant date. The options expire on the tenth
anniversary of the grant date or sooner pursuant to the terms of
our equity incentive plan.
We can terminate the employment agreement at any
time for cause or without cause subject to 60 days’ notice.
If the employment is terminated for cause or due to death or
disability, we will pay to Mr. Coleman or his estate any unpaid
base salary, accrued and unpaid performance bonuses, reimbursable
expenses, and continue health care benefits at his expense, and in
case of death or disability, the benefits provided by any
applicable plan. Any unvested option and other equity awards will
be forfeited, and vested equity awards will remain exercisable for
12 months. If the employment is terminated without cause, we will
pay Mr. Coleman any unpaid base salary, accrued and unpaid
performance bonuses, reimbursable expenses, health care benefits at
his expense, as well as the greater of unpaid base salary remaining
in the employment term or 60 days, full performance bonus for a
sale of Command Center if such sale occurs during the employment
term or within six months thereafter, and a pro-rated performance
bonus related to adjusted EBITDA. Additionally, all unvested
options and equity awards will vest and remain exercisable for 12
months. If the employment terminates due to non-renewal of his
agreement, we will pay Mr. Coleman
any unpaid base salary, accrued and unpaid
performance bonuses, reimbursable expenses, health care benefits at
his expense, a full performance bonus for a sale of Command Center
if such sale occurs during the employment term or within six months
thereafter, and a pro-rated performance bonus related to adjusted
EBITDA. Any unvested options and other equity awards will be
forfeited, and vested equity awards will remain exercisable for 12
months.
30 |
Page
Potential Payments upon Termination
The
following tables were prepared as though each of Messrs. Sandford
and Smith had been terminated on December 29, 2017, the last day of
our last completed fiscal year, without cause, as that term is
defined in the agreements with our Company. Mr. Junck does not have
an employment agreement and is not eligible to receive termination
payments. Ms. Pieper left as our Chief Financial Officer on July
31, 2017. Mr. Sandford’s employment as our Chief Executive
Officer ended on March 31, 2018. More information about the payment
of benefits, including duration, is also contained in the
discussion regarding the executive employment agreements above. All
such payments and benefits would be provided by our Company. The
assumptions and valuations are noted in the footnotes.
|
Frederick Sandford,
President and Chief Executive Officer
|
Involuntary termination without
cause
(2)
|
Termination for change in
control
(3)
|
Death
(4)
|
Disability
(4)
|
|
Base
Salary
|
$412,500
|
$550,000
|
$137,500
|
$137,500
|
|
Bonus
(1)
|
-
|
550,000
|
-
|
-
|
|
Total
|
$412,500
|
$1,100,000
|
$137,500
|
$137,500
|
(1)
For
purposes of this table, the annual bonus amount is assumed to be
equal to 100% of base salary.
(2)
Includes base salary for 18 months.
(3)
I
ncludes base salary and bonus for 24
months.
(4)
Includes base salary for six months.
|
Cory Smith,
Chief Financial Officer
|
Involuntary termination without
cause
(2)
|
Termination for change in
control
(3)
|
Death
(4)
|
Disability
(4)
|
|
Base
Salary
|
$75,000
|
$75,000
|
$75,000
|
$75,000
|
|
Bonus
(1)
|
-
|
137,500
|
-
|
-
|
|
Total
|
$75,000
|
$212,500
|
$75,000
|
$75,000
|
(1)
For
purposes of this table, amount is equal to 25% of the President and
CEO’s bonus stated above.
(2)
Includes base salary for 6 months.
(3)
I
ncludes base salary and bonus for 6
months.
(4)
Includes base salary for 6 months.
Payments Made Upon Any
Termination:
Regardless of the manner in which an
NEO’s employment terminates, the executive is entitled to
receive amounts earned during his term of employment. Such amounts
include: earned but unpaid salary through the date of termination;
non-equity incentive compensation earned and payable prior to the
date of termination; option grants received which have already
vested and are exercisable prior to the date of termination
(subject to the terms of the applicable option agreements) and
unused vacation pay.
Payments Made Upon
Involuntary Termination Without Cause:
In the case of Mr.
Sandford, he would continue to receive his base salary for the
remainder of the then-current term or 18 months, whichever is
longer. In the case of Mr. Smith, he will continue to receive his
base salary for six months from termination or the remainder of the
then current term, whichever is longer.
Payments Made Upon a Change
in Control:
Mr. Sandford’s and Mr. Smith’s
employment agreements contain change in control provisions. The
benefits, in addition to the items listed under the heading
“Payments Made Upon Any Termination” above include the
vesting of all outstanding stock options.
In the case of Mr.
Sandford, he would continue to receive his base salary and bonus
for 24 months. In the case of Mr. Smith, he will continue to
receive his base salary and bonus for six months.
31 |
Page
Payments Made Upon Death or
Permanent Disability:
In the event of the death or permanent
disability of an NEO, the executive or personal representative or
estate, as applicable, would receive, in addition to the items
listed under the heading “Payments Made Upon Any
Termination” above the vesting of all outstanding stock
options.
Mr. Sandford and
Mr. Smith, or their personal representatives or estates, as
applicable, would continue to receive the executive's base salary
during the six-month period following the date of
termination.
Retirement Benefits
We do not have any
qualified or non-qualified defined benefit plans.
Non-qualified Deferred Compensation
We do not have any
non-qualified defined contribution plans or other deferred
compensation plans.
Outstanding Equity Awards at Fiscal Year-End
The following table
shows grants of options outstanding on December 29, 2017, the last
day of our last completed fiscal year, to each of the NEOs named in
the Summary Compensation Table. As previously disclosed, Mr.
Sandford’s options have been subsequently
retired.
|
Name
|
Grant date
|
Number of securities underlying unexercised options
exercisable
|
Number of securities underlying unexercised options
unexercisable
|
Option exercise price
|
Option expiration date
|
|
Frederick
Sandford
|
2/22/2013
|
125,000
|
-
|
$2.40
|
2/21/2023
|
|
|
10/31/2014
|
18,750
|
6,250 (1)
|
8.04
|
10/31/2021
|
|
|
9/29/2017
|
5,208
|
15,625 (2)
|
5.40
|
9/28/2027
|
|
Ron
Junck
|
9/22/2017
|
4,167
|
12,499 (3)
|
4.80
|
9/21/2027
|
|
|
9/29/2017
|
2,604
|
7,812 (2)
|
5.40
|
9/28/2027
|
|
Cory
Smith
|
9/29/2017
|
1,042
|
3,124 (2)
|
5.40
|
9/28/2027
|
(1)
The stock options
vest in four equal tranches on each anniversary of the grant date,
beginning on October 31, 2015, and becoming fully vested on October
31, 2018.
(2)
The stock options
vest in four equal tranches, with the first one-fourth vested on
the grant date, or September 29, 2017, the second one-fourth
vesting on September 29, 2018, the third one-fourth vesting on
September 29, 2019, and the remainder vesting on September 29,
2020.
(3)
The stock options
vest in four equal tranches with the first one-fourth vested on the
grant date, or September 22, 2017, the second one-fourth vesting on
September 22, 2018, the third one-fourth vesting on September 22,
2019, and the remainder vesting on September 22, 2020.
32 |
Page
|
OTHER
MATTERS
|
As of the date of
this proxy statement, the Board of Directors is not aware of any
additional matters that will be presented for action at the Annual
Meeting other than those described above. Should other business
properly be brought before the Annual Meeting, it is intended that
the accompanying proxy will be voted thereon in the discretion of
the persons named as proxies.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
The following
tables summarize, to our knowledge, (a) the ownership of any
non-management person known to us to own more than five percent of
any class of our voting common stock, and (b) the number and
percentage of our shares of common stock held by each director,
each of the named executive officers and directors and officers as
a group. Percentages of ownership have been calculated based upon
4,971,211 shares of common stock issued and outstanding as of May
7, 2018.
We have determined
beneficial ownership in accordance with the rules of the SEC.
Except as indicated by the footnotes below, we believe, based on
the information furnished to us, that the persons and entities
named in the tables below have sole voting and investment power
with respect to all shares of common stock that they beneficially
own, subject to applicable community property laws.
Security Ownership of Non-Management Owners
|
Name and Address of Beneficial Owner
|
Title of Class
|
Amount of Beneficial Ownership (1)
|
Percent of Class
|
|
|
Jerry Smith
(2)
|
Common
Stock
|
479,725
|
9.6
%
|
|
|
Merle Rydesky
(3)
|
Common
Stock
|
602,917
|
12.1
%
|
|
(1)
Beneficial
ownership is calculated in accordance with Rule 13-d-3(d)(1) of the
Exchange Act, and includes shares held outright, shares held by
entity(s) controlled by NEOs and/or Directors, and shares issuable
upon exercise of options or warrants which are exercisable on or
within 60 days of May 7, 2018.
(2)
The
number of shares comprising Mr. Smith’s beneficial ownership
is based upon the written representations of his legal counsel.
Mr.
Smith’s address is:
10632
N. Scottsdale Road, Suite 208, Scottsdale, Arizona
85254.
(3)
The
number of shares comprising Dr. Rydesky’s beneficial
ownership is based upon the Schedules 13D filed by Merle Rydesky
and Barbara Rydesky on February 11, 2015 and the verbal
representations of Dr. Rydesky. Dr. Rydesky’s address is:
3238 Pine Lake Road, Orchard Lake, Michigan 48234.
33 |
Page
Security Ownership of
Management
|
|
|
|
Amount
of Beneficial Ownership
|
Percentage
of Shares Beneficially
|
||
|
Name
of Beneficial Owner (1) (2)
|
|
Nature
of Beneficial Ownership
|
Shares
Owned
|
Shares
– Rights to Acquire
|
Total
|
Owned
|
|
Richard K. Coleman,
Jr.
|
|
Chief Executive
Officer and Director
|
0
|
31,426
|
31,426
|
*
%
|
|
Ronald Junck
(3)
|
|
EVP and General
Counsel
|
121,685
|
6,770
|
128,455
|
2.6
%
|
|
Cory
Smith
|
|
Chief Financial
Officer
|
1,250
|
1,041
|
2,291
|
*
%
|
|
Steven P.
Oman
|
|
Director
|
0
|
0
|
0
|
*
%
|
|
JD
Smith
|
|
Chairperson
|
19,666
|
12,083
|
31,749
|
*
%
|
|
R. Rimmy Malhotra
(4)
|
|
Director
|
117,410
|
0
|
117,410
|
2.4
%
|
|
Galen
Vetter
|
|
Director
|
0
|
0
|
0
|
*
%
|
|
Lawrence F.
Hagenbuch
|
|
Director
|
0
|
0
|
0
|
*
%
|
|
Steven Bathgate
(5)
|
|
Director
|
97,474
|
0
|
97,474
|
2.0
%
|
|
John
Schneller
|
|
Director
|
23,750
|
3,333
|
27,083
|
*
%
|
|
All
Officers and Directors as a Group
|
381,235
|
54,653
|
435,888
|
8.8
%
|
||
* Indicates
ownership of less than 1.0%.
|
(1)
|
The address of the
NEOs and Directors is: care of Command Center, Inc.,
3609 S Wadsworth Blvd, Suite 250, Lakewood, CO 80235.
|
|
|
|
|
(2)
|
Beneficial
ownership is calculated in accordance with Rule 13-d-3(d)(1) of the
Exchange Act, and includes shares held outright, shares held by
entity(s) controlled by NEOs and/or Directors, and shares issuable
upon exercise of options or warrants which are exercisable on or
within 60 days of May 7, 2018.
|
|
|
|
|
(3)
|
Includes 112,762
shares held directly and 8,923 shares held indirectly through
Inland Empire TSS, LLC. Mr. Junck is a co-owner of Inland
Empire.
|
|
|
|
|
(4)
|
Includes 1,666 shares held outright and 115,744
shares held indirectly through the Nicoya Fund. The shares held by
the Nicoya fund are directly owned by the Nicoya Fund LLC, a
Delaware limited liability company.
Mr. Malhotra is the
managing member and a co-owner of Nicoya Capital LLC, which is the
managing member and owner of the Nicoya Fund.
|
|
|
|
|
(5)
|
Includes
14,558 shares held outright and 82,915 shares held indirectly,
including 66,666 by Mr. Bathgate’s spouse, 7,916 by the
Bathgate Family Partnership and 8,333 by Viva Co.,
LLC.
|
As of May 7, 2018,
there are no arrangements among our beneficial owners, known to
management, which may result in a change of control of our
Company.
34 |
Page
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of
the Securities and Exchange Act of 1934, as amended, requires our
officers, directors, and beneficial owners of more than 10% any of
our equity securities to timely file certain reports regarding
ownership of and transactions in our securities with the Securities
and Exchange Commission. Copies of the required filings must also
be furnished to us. Section 16(a) compliance was required during
the fiscal year ended December 30, 2016. Based solely on a review
of Forms 3, 4 and 5 and amendments thereto furnished to us
pursuant to Rule 16a-3(e) under the Exchange Act during 2016,
we believe that, during 2017, the filing requirements under
Section 16(a) of the Exchange Act were satisfied except
one Form 3 was filed late
by 21 days for one transaction by Mr. Cory
Smith.
|
SHAREHOLDER
PROPOSALS, HOUSEHOLDING AND OTHER MATTERS
|
Shareholder Proposals
There are no
shareholder proposals for this Annual Meeting. The Company’s
next annual meeting is expected to be held in June of 2019. A
shareholder who desires to have a qualified proposal considered for
inclusion in the proxy statement for that meeting must notify the
Secretary of the terms and content of the proposal in the manner
and by the time required by the Company’s Bylaws at
3609 S. Wadsworth Boulevard, Suite
250, Lakewood, Colorado, 80235, Attention: Corporate
Secretary.
The stockholder proponent, or a representative
who is qualified under state law, must appear in person at the next
annual meeting of stockholders to present the proposal. The
Company’s Bylaws outline the procedures including notice
provisions, for shareholder nomination of directors and other
shareholder business to be brought before shareholders at the
Annual Meeting. A copy of the pertinent Bylaw provisions is
available upon written request to
3609
S. Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235,
Attention: Corporate Secretary.
“Householding” of Proxy Materials
The SEC has adopted
rules that permit companies and intermediaries such as brokers to
satisfy delivery requirements for proxy statements with respect to
two or more shareholders sharing the same address by delivering a
single proxy statement addressed to those shareholders. This
process, which is commonly referred to as
“householding,” potentially provides extra convenience
for shareholders and cost savings for us. Under this procedure,
multiple shareholders who share the same last name and address will
receive only one copy of the annual proxy materials, unless they
notify us that they wish to continue receiving multiple copies. We
have undertaken householding to reduce our printing costs and
postage fees.
If you wish to
opt-out of householding and continue to receive multiple copies of
the proxy materials at the same address, you may do so at any time
prior to thirty days before the mailing of the notice of
availability of proxy materials, which will typically be mailed in
May of each year, by notifying us in writing at:
3609 S. Wadsworth Boulevard, Suite 250, Lakewood,
Colorado, 80235, Attention: Corporate Secretary
, or by
contacting us at (866) 464-5844. You also may request additional
copies of the proxy materials by notifying us in writing at the
same address or contacting us at (866) 464-5844, and we will
undertake to deliver such additional copies promptly. If you share
an address with another shareholder and currently are receiving
multiple copies of the proxy materials, you may request
householding by notifying us at the above referenced address or
telephone number.
Form 10-K
Our 2017 Annual Report on Form 10-K is
available at www.proxyvote.com. Any shareholder of record may
obtain a copy of the 2017 Annual Report on Form 10-K for the fiscal
year ended December 29, 2017, this Proxy Statement and Notice of
Annual Meeting without cost, upon written request to the Secretary
of the Company at 3609 S. Wadsworth Boulevard, Suite 250, Lakewood,
Colorado, 80235, Attention: Corporate Secretary, or by contacting
us at (866) 464-5844.
Additionally, the Securities and
Exchange Commission maintains a website that contains reports and
other information at the following address http://www.sec.gov, as
well as links from the Company’s website at
www.commandonline.com.
Upon request by
any shareholder to the Company Secretary at the address listed
above, we will furnish a copy of any or all exhibits to the Form
10-K for 2017.
35 |
Page
FORWARD LOOKING STATEMENTS
This
proxy statement includes statements of judgment and forward-looking
statements that involve risks and uncertainties. These
forward-looking statements are based on our current expectations,
estimates and projections about our industry, our business,
compensation, management's beliefs, and certain assumptions made by
us, all of which are subject to change. Forward-looking statements
can often be identified by words such as "anticipates," "expects,"
"intends," "plans," "predicts," "believes," "seeks," "estimates,"
"may," "will," "should," "would," "could," "potential," "continue,"
"ongoing," or similar expressions, and variations or negatives of
these words and include, but are not limited to, statements
regarding projected performance and compensation. Actual results
could differ significantly from those projected in the
forward-looking statements as a result of certain factors,
including, but not limited to, the risk factors discussed in our
Form 10-K for the year ended December 29, 2017. We assume no
obligation to update the forward-looking statements.
Whether
or not you intend to be present at the Annual Meeting, we urge you
to vote your shares promptly.
By Order of the
Board of Directors,
/s/ Brendan
Simaytis
Brendan Simaytis,
Secretary
May 24,
2018
36 |
Page
THANK
YOU
Thank you for being
a shareowner of Command Center, Inc.
Learn more at
www.commandonline.com
APPENDIX
A
PROXY
CARD
TABLE OF CONTENTS