REKOR SYSTEMS, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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[
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to Rule Sec.240.14a-12
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Novume Solutions,
Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant
Payment
of Filing Fee (Check the appropriate box):
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[X]
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No fee
required
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[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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[ ]
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Fee
paid previously with preliminary materials:
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[ ]
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
previously paid:
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Form,
Schedule or Registration Statement No.:
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Filing
Party:
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(4)
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Date
Filed:
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June
26, 2018
Dear
Shareholder,
You are
cordially invited to attend the 2018 Annual Meeting of Shareholders
(the “Annual Meeting”) of Novume Solutions, Inc. to be
held at 10:00 a.m. EDT on August 9, 2018, at 14420 Albemarle Point
Place, Suite 200, Chantilly, VA 20151. The attached notice of
Annual Meeting and proxy statement describe the matters to be
presented at the Annual Meeting and provide information about us
that you should consider when you vote your shares.
The
principal business of the meeting will be (i) to elect as
directors the nominees named in this proxy statement to serve until
the 2019 Annual Meeting of Shareholders and until their successors
are duly elected and qualified or until the earlier of their
resignation or removal, (ii) to ratify the appointment of BD &
Company, Inc. as our independent public accountant for the fiscal
year ending December 31, 2018, (iii) to advise us as to whether you
approve the compensation of our named executive officers
(Say-on-Pay), (iv) to advise us as to whether you prefer a vote to
advise us on the compensation of our named executive officers every
year, every two years or every three years (Say-on-Pay Frequency),
and (v) to transact such other business as may be properly brought
before the Annual Meeting and any adjournments
thereof.
We hope
you will be able to attend the Annual Meeting. Whether you plan to
attend the Annual Meeting or not, it is important that your shares
are represented. Therefore, when you have finished reading the
proxy statement, you are urged to complete, sign, date and return
the enclosed proxy card, or respond via Internet or telephone,
promptly in accordance with the instructions set forth on the card.
This will ensure your proper representation at the Annual Meeting,
whether or not you can attend.
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Sincerely,
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James
K. McCarthy
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Chairman
of the Board
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YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
14420
Albemarle Point Place, Suite 200, Chantilly, VA 20151
703-953-3838
14420
Albemarle Point Place, Suite 200,
Chantilly, VA
20151
703-953-3838
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held August 9, 2018
To the
Shareholders of Novume Solutions, Inc.:
NOTICE
IS HEREBY GIVEN that the 2018 Annual Meeting of Shareholders (the
“Annual Meeting”) of Novume Solutions, Inc., a Delaware
corporation (the “Company”), will be held at 10:00 a.m.
EDT on August 9, 2018, or such later date or dates as such Annual
Meeting date may be adjourned, at 14420 Albemarle Point Place,
Suite 200, Chantilly, VA 20151, for the purpose of considering and
taking action on the following proposals:
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1.
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Elect
as directors the nominees named in the proxy
statement;
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2.
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To ratify the appointment of
BD & Company, Inc.
as our independent public
accountant for the fiscal year ending December 31,
2018;
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3.
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To advise us as to whether you approve the compensation of our
named executive officers (Say-on-Pay);
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4.
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To
advise us as to whether you prefer a vote to advise us on the
compensation of our named executive officers every year, every two
years or every three years (Say-on-Pay Frequency); and
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5.
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To transact such other business as may be properly brought before
the Annual Meeting and any adjournments thereof.
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The
foregoing
business items are more fully described
in the following pages, which are made part of this
notice.
The
Board recommends that you vote as follows:
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“
FOR
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for the election of the Board nominees as directors;
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“
FOR
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ratification of the selection of
BD & Company, Inc.
as our independent public
accountant for the fiscal year ending December 31,
2018;
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“
FOR
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the compensation of our named executive officers as set forth in
this proxy statement; and
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“
FOR
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a frequency of voting every three years on the compensation of our
named executive officers.
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You may
vote if you were the record owner of the Company’s common
stock at the close of business on June 25, 2018. The Board of
Directors of the Company has fixed the close of business on June
25, 2018 as the record date (the “Record Date”) for the
determination of shareholders entitled to notice of and to vote at
the Annual Meeting and at any adjournments thereof.
As of
the Record Date there were 14,535,695 shares of common stock
outstanding and entitled to vote at the Annual Meeting and 240,861
shares of Series B Convertible Preferred Stock (“Series B
Preferred Stock”) outstanding,
of which
481,722
shares of
underlying common stock are entitled to vote at the Annual
Meeting
. Holders of the shares of common stock are entitled
to one vote for each share of common stock held.
Each holder of Series B
Preferred Stock is entitled to a
number
of votes equal to the
number of shares of common stock issuable upon conversion of such
holder’s Series B Preferred Stock, but only for the election
of members of the Board of Directors.
A list of shareholders
of record will be available at the Annual Meeting and, during the
10 days prior to the Annual Meeting, at the office of the Secretary
of the Company at 14420 Albemarle Point Place, Suite 200,
Chantilly, VA 20151.
We are pleased to take advantage of the Securities and Exchange
Commission (the “SEC”) rules that allow us to furnish
these proxy materials (including an electronic proxy card for the
meeting and our 2017 Annual Report which is our Annual Report on
Form 10-K for the year ended December 31, 2017) to shareholders via
the Internet. On or about June 28, 2018, we will mail to our
shareholders a Notice of Internet Availability of Proxy Materials
containing instructions on how to access our proxy statement and
2017 Annual Report to Shareholders and how to vote. Taking
advantage of these rules allows us to lower the cost of delivering
annual meeting materials to our shareholders and reduce the
environmental impact of printing and mailing these
materials.
All
shareholders are cordially invited to attend the Annual Meeting.
Whether you plan to attend the Annual Meeting or not, you are
requested to complete, sign, date and return the enclosed proxy
card, or respond via Internet or telephone, as soon as possible in
accordance with the instructions on the proxy card. A
pre-addressed, postage prepaid return envelope is enclosed for your
convenience.
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Dated: June 26, 2018
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By Order of the
Board of Directors
of Novume
Solutions, Inc.
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Sincerely,
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James
K. McCarthy
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Chairman
of the Board
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YOUR VOTE AT THE ANNUAL MEETING IS IMPORTANT
Your
vote is important. Please vote as promptly as possible even if you
plan to attend the Annual Meeting.
For
information on how to vote your shares, please see the instruction
from your broker or other fiduciary, as applicable, as well as
“General Information About the Annual Meeting” in the
proxy statement accompanying this notice.
We
encourage you to vote by completing, signing, and dating the proxy
card, and returning it in the enclosed envelope.
If you
have questions about voting your shares, please contact our
Corporate Secretary at Novume Solutions, Inc., at 14420 Albemarle
Point Place, Suite 200, Chantilly, VA 20151, telephone number
703-953-3838.
If you
decide to change your vote, you may revoke your proxy in the manner
described in the attached proxy statement at any time before it is
voted.
We urge
you to review the accompanying materials carefully and to vote as
promptly as possible.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 9, 2018 AT
10:00 A.M. EDT.
The Notice of Annual Meeting of Shareholders, our Proxy Statement
and 2017 Annual Report are available at:
https://www.iproxydirect.com/nvmm
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REFERENCES TO ADDITIONAL INFORMATION
This
proxy statement incorporates important business and financial
information about Novume Solutions, Inc. that is not included in or
delivered with this document. You may obtain this information
without charge through the Securities and Exchange Commission
(“SEC”) website (www.sec.gov) or upon your written or
oral request by contacting the Chief Executive Officer of Novume
Solutions, Inc., 14420 Albemarle Point Place, Suite 200, Chantilly,
VA 20151, telephone number 703-953-3838.
To ensure timely delivery of these documents, any request should be
made and received by the Company no later than July 27, 2018 to
receive them before the Annual Meeting.
Table of Contents
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Page
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GENERAL
INFORMATION ABOUT THE ANNUAL MEETING
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1
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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6
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PROPOSAL
NO. 1 -
ELECTION OF
DIRECTORS
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7
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INFORMATION
ABOUT THE BOARD OF DIRECTORS, COMMITTEES AND CORPORATE
GOVERNANCE
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EXECUTIVE OFFICERS
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EXECUTIVE COMPENSATION
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COMPENSATION OF NOVUME DIRECTORS
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
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PROPOSAL NO. 2 -
RATIFICATION
OF THE APPOINTMENT OF BD & COMPANY, INC. AS INDEPENDENT PUBLIC
ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31,
2018
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PROPOSAL
NO. 3 -
ADVISORY VOTE TO APPROVE THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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PROPOSAL
NO. 4 -
ADVISORY VOTE ON THE FREQUENCY
OF HOLDING FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS
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26
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OTHER
MATTERS
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14420
Albemarle Point Place, Suite 200,
Chantilly,
VA 20151
703-953-3838
FOR NOVUME SOLUTIONS, INC.
2018 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 9,
2018
This
proxy statement, along with the accompanying notice of the 2018
Annual Meeting of Shareholders, contains information about the 2018
Annual Meeting of Shareholders of Novume Solutions, Inc., including
any adjournments or postponements thereof (referred to herein as
the “Annual Meeting”). We are holding the Annual
Meeting at 10:00 a.m. EDT on August 9, 2018, at 14420 Albemarle
Point Place, Suite 200, Chantilly, VA 20151, or such later date or
dates as such Annual Meeting date may be adjourned. For directions
to the meeting, please call 703-953-3838.
In accordance with the rules of the SEC, instead of mailing a
printed copy of our proxy materials to each shareholder of record,
we are furnishing proxy materials, including the notice, this proxy
statement, our 2017 Annual Report to shareholder, including
financial statements, and a proxy card for the meeting, by
providing access to them on the Internet to save printing costs and
benefit the environment. These materials will first be available on
the Internet on or about June 28, 2018. We will mail a Notice of
Internet Availability of Proxy Materials on or about June 28, 2018
to our shareholders of record and beneficial owners as of June 25,
2018, the record date for the meeting. This proxy statement and the
Notice of Internet Availability of Proxy Materials contain
instructions for accessing and reviewing our proxy materials on the
Internet and for voting by proxy over the Internet. If you prefer
to receive printed copies of our proxy materials, the Notice of
Internet Availability of Proxy Materials contains instructions on
how to request the materials by mail. You will not receive printed
copies of the proxy materials unless you request them. If you elect
to receive the materials by mail, you may also vote by proxy on the
proxy card or voter instruction card that you will receive in
response to your request.
In this
proxy statement, we refer to Novume Solutions, Inc. as
“Novume,” the “Company,” “we,”
“us” or “our.”
Why Did You Send Me This Proxy Statement?
The
Board of Directors of the Company (referred to herein as the
“Board of Directors” or the “Board”) is
soliciting proxies, in the accompanying form, to be used at the
Annual Meeting and any adjournments thereof. This proxy statement,
along with the accompanying Notice of Annual Meeting of
Shareholders, summarizes the purposes of the Annual Meeting and the
information you need to know to vote at the Annual
Meeting.
Important Notice Regarding the Availability of Proxy Materials for
the Shareholder Meeting to Be Held on August 9, 2018: The Notice of
Annual Meeting of Shareholders, our Proxy Statement and 2017 Annual
Report are
available
at
www.iproxydirect.com/nvmm
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The
following documents are being made available to all shareholders
entitled to notice of and to vote at the Annual
Meeting:
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1)
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This
proxy statement.
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2)
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The
accompanying proxy.
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3)
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Our
2017 Annual Report.
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The
2017 Annual Report includes our financial statements for the fiscal
year ended December 31, 2017, but is not a part of this proxy
statement. You can also find a copy of our 2017 Annual Report on
Form 10-K on the Internet through the Securities and Exchange
Commission’s electronic data system called EDGAR at
www.sec.gov
or
through the “Investors” section of our website at
www.novume.com
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Who Can Vote?
Shareholders
who owned common stock or Series B Preferred Stock at the close of
business on June 25, 2018 (the “Record Date”), are
entitled to vote at the Annual Meeting. On the Record Date, there
were 14,535,695 shares of common stock outstanding and entitled to
vote. There were also 240,861 shares of Series B Preferred Stock
outstanding entitled to vote the equivalent of 481,722
shares of underlying
common stock, but only for the election of members of the Board of
Directors.
1
You do
not need to attend the Annual Meeting to vote your shares. Shares
represented by valid proxies, received in time for the Annual
Meeting and not revoked prior to the Annual Meeting, will be voted
at the Annual Meeting. A shareholder may revoke a proxy before the
proxy is voted by delivering to our Secretary a signed statement of
revocation or a duly executed proxy card bearing a later date. Any
shareholder who has executed a proxy card but attends the Annual
Meeting in person may revoke the proxy and vote at the Annual
Meeting.
How Many Votes Do I Have?
Each
share of common stock that you own entitles you to one vote.
Each holder
of Series B Preferred Stock is entitled
to
the number of votes
equal to the number of shares of common stock issuable upon
conversion of such holder’s Series B Preferred Stock;
provided, however, that a holder is only entitled to vote shares of
common stock underlying the Series B Preferred Stock in the case of
a vote to be taken for the election of members of the Board of
Directors.
How Do I Vote?
Whether
you plan to attend the Annual Meeting or not, we urge you to vote
by proxy. All shares represented by valid proxies that we receive
through this solicitation, and that are not revoked, will be voted
in accordance with your instructions on the proxy card or as
instructed via Internet or telephone. You may specify whether your
shares should be voted for or withheld for each nominee for
director, and how your shares should be voted with respect to each
of the other proposals. Except as set forth below, if you properly
submit a proxy without giving specific voting instructions, your
shares will be voted in accordance with the Board’s
recommendations as noted below. Voting by proxy will not affect
your right to attend the Annual Meeting. If your shares are
registered directly in your name through our stock transfer agent,
Issuer Direct Corporation, or you have stock certificates, you may
vote:
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By mail.
Complete
and mail the proxy card in the enclosed postage prepaid envelope.
Your proxy will be voted in accordance with your instructions. If
you sign the proxy card, but do not specify how you want your
shares voted, they will be voted as recommended by the
Board.
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By fax.
Complete and fax the proxy card
to 202-521-3464.
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By Internet.
At
www.iproxydirect.com/nvmm
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In person at the meeting.
If you attend the meeting, you may
deliver your completed proxy card in person or you may vote by
completing a ballot, which will be available at the Annual
Meeting.
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If your shares are held in “street name” (held in the
name of a bank, broker or other nominee), you must provide the
bank, broker or other nominee with instructions on how to vote your
shares and can do so as follows:
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By Internet or by telephone.
Follow the instructions you
receive from your broker to vote by Internet or
telephone.
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By mail.
You will
receive instructions from your broker or other nominee explaining
how to vote your shares.
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In person at the meeting.
Contact the broker or other
nominee who holds your shares to obtain a broker’s proxy card
and bring it with you to the meeting. You will not be able to
attend the Annual Meeting unless you have a proxy card from your
broker.
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2
How Does the Board Recommend That I Vote On the
Proposals?
The
Board recommends that you vote as follows:
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“
FOR
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for the election of the Board nominees as directors;
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“
FOR
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ratification of the selection of
BD & Company, Inc.
as our independent public
accountant for the fiscal year ending December 31,
2018;
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“
FOR
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the compensation of our named executive officers as set forth in
this proxy statement; and
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“
FOR
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a frequency of voting every three years on the compensation of our
named executive officers.
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If any other matter is presented, the proxy card provides that your
shares will be voted by the proxy holder listed on
the
proxy card in accordance
with his or her best judgment. As of the date of this proxy
statement, we knew of no matters that needed to be acted on at the
Annual Meeting, other than those discussed in this proxy
statement.
May I Change or Revoke My Proxy?
If you
give us your proxy, you may change or revoke it at any time before
the Annual Meeting. You may change or revoke your proxy in any one
of the following ways:
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signing
a new proxy card and submitting it as instructed
above;
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if your
shares are held in street name, re-voting by Internet or by
telephone as instructed above – only your latest Internet or
telephone vote will be counted;
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if your
shares are registered in your name, notifying the Company’s
Secretary in writing before the Annual Meeting that you have
revoked your proxy; or
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attending
the Annual Meeting in person and voting in person. Attending the
Annual Meeting in person will not in and of itself revoke a
previously submitted proxy unless you specifically request
it.
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What If I Receive More Than One Proxy Card?
You may
receive more than one proxy card or voting instruction form if you
hold shares of our common stock in more than one account, which may
be in registered form or held in street name. Please vote in the
manner described above under “How Do I Vote?” or under
"Voting Instructions" on the proxy card for each account to ensure
that all of your shares are voted.
3
Will My Shares Be Voted If I Do Not Return My Proxy
Card?
If your
shares are registered in your name or if you have stock
certificates, they will not be voted if you do not return your
proxy card by mail, fax or vote at the Annual Meeting as described
above under “How Do I Vote?” If your broker cannot vote
your shares on a particular matter because it has not received
instructions from you and does not have discretionary voting
authority on that matter, or because your broker chooses not to
vote on a matter for which it does have discretionary voting
authority, this is referred to as a “broker non-vote.”
The New York Stock Exchange (“NYSE”) has rules that
govern brokers who have record ownership of listed company stock
(including stock such as ours that is listed on The Nasdaq Capital
Market) held in brokerage accounts for their clients who
beneficially own the shares. Under these rules, brokers who do not
receive voting instructions from their clients have the discretion
to vote uninstructed shares on certain matters (“routine
matters”), but do not have the discretion to vote
uninstructed shares as to certain other matters (“non-routine
matters”). Under NYSE interpretations, Proposal 1 (election
of directors), Proposal 3 (advisory vote to approve executive
compensation), and
Proposal 4 (advisory
vote on frequency to advise us on the compensation of our named
executive officers every year, every two years or every three
years),
are considered non-routine matters, and Proposal 2
(the ratification of our independent public accountant) is
considered a routine matter. If your shares are held in street name
and you do not provide voting instructions to the bank, broker or
other nominee that holds your shares as described above under
“How Do I Vote?,” the bank, broker or other nominee has
the authority, even if it does not receive instructions from you,
to vote your unvoted shares for Proposal 2 (the ratification of our
independent public accountant), but does not have authority to vote
your unvoted shares for Proposal 1 (election of directors),
Proposal 3 (advisory vote to approve executive compensation), and
Proposal 4
(advisory vote on frequency to advise us on the compensation of our
named executive officers every year, every two years or every three
years)
. We encourage you to provide voting instructions.
This ensures your shares will be voted at the Annual Meeting in the
manner you desire.
What Vote is Required to Approve Each Proposal and How are Votes
Counted?
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Proposal 1:
Election of Directors
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The
nominees for director who receive the greatest number of votes FOR
election (also known as a plurality) will be elected as directors.
You may vote either FOR all of the nominees, WITHHOLD your vote
from all of the nominees or WITHHOLD your vote from any one or more
of the nominees. Votes that are withheld will not be included in
the vote tally for the election of directors. Brokerage firms do
not have authority to vote customers’ unvoted shares held by
the firms in street name for the election of directors. As a
result, any shares not voted by a beneficial owner will be treated
as a broker non-vote. Such broker non-votes will have no effect on
the results of this vote.
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Proposal 2:
Ratification of the Appointment of BD & Company, Inc.
as our Independent Public
Accountant for the Fiscal Year Ending December 31,
2018
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The
affirmative vote of a majority of the votes cast for this proposal
is required to ratify the appointment of the Company’s
independent public accountant. Abstentions will be counted towards
the tabulation of votes cast on this proposal and will have the
same effect as a negative vote. Brokerage firms have authority to
vote customers’ unvoted shares held by the firms in street
name on this proposal. If a broker does not exercise this
authority, such broker non-votes will have no effect on the results
of this vote. We are not required to obtain the approval of our
shareholders to appoint the Company’s independent accountant.
However, if our shareholders do not ratify the appointment of BD
& Company, Inc. as the Company’s independent public
accountant for the fiscal year ending December 31, 2018, the Audit
Committee of the Board may reconsider its appointment.
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Proposal 3:
Advisory Vote to Approve the Compensation of our Named Executive
Officers (Say-on-Pay)
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The
advisory vote to approve the compensation of our executive officers
will be approved if the votes cast in favor of the proposal exceed
the votes cast against the proposal (Say-on-Pay). Abstentions and
broker non-votes will not be counted as either votes cast for or
against this proposal. While the results of this advisory vote are
non-binding, the Compensation Committee of the Board and the Board
values the opinions of our shareholders and will consider the
outcome of the vote, along with other relevant factors, in deciding
whether any actions are necessary to address the concerns raised by
the vote and when making future compensation decisions for
executive officers.
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Proposal 4:
Advisory Vote on Frequency of Voting on Compensation of our Named
Executive Officers
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The frequency (one year, two years or three years) that receives
the greatest number of votes cast by the shareholders will be
deemed the frequency for the advisory Say-on-Pay vote preferred by
the shareholders. The proxy card provides shareholders with the
opportunity to choose among four options (holding the vote every
one, two or three years, or abstaining) and, therefore,
shareholders will not be voting to approve or disapprove the
recommendation of the Board. While the results of this advisory
vote are non-binding, the Board values the opinions of our
shareholders and will review and consider the outcome of the vote,
along with other relevant factors, in evaluating the frequency of
future advisory votes on executive compensation. Brokerage firms do
not have authority to vote customers’ unvoted shares held by
the firms in street name for this proposal. As a result, any shares
not voted by a beneficial owner will be treated as a broker
non-vote. Such broker non-votes will have no effect on the results
of this vote.
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4
What Constitutes a Quorum for the Annual Meeting?
The
presence, in person or by proxy, of the holders of a majority of
the shares entitled to vote at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. Votes of shareholders of
record who are present at the Annual Meeting in person or by proxy,
abstentions, and broker non-votes are counted for purposes of
determining whether a quorum exists.
Householding of Annual Disclosure Documents
The
Securities and Exchange Commission (the “SEC”)
previously adopted a rule concerning the delivery of annual
disclosure documents. The rule allows us or brokers holding our
shares on your behalf to send a single set of our annual report and
proxy statement to any household at which two or more of our
shareholders reside, if either we or the brokers believe that the
shareholders are members of the same family. This practice,
referred to as “householding,” benefits both
shareholders and us. It reduces the volume of duplicate information
received by you and helps to reduce our expenses. The rule applies
to our annual reports, proxy statements and information statements.
Once shareholders receive notice from their brokers or from us that
communications to their addresses will be
“householded,” the practice will continue until
shareholders are otherwise notified or until they revoke their
consent to the practice. Each shareholder will continue to receive
a separate proxy card or voting instruction card.
Those
shareholders who either (i) do not wish to participate in
“householding” and would like to receive their own sets
of our annual disclosure documents in future years or (ii) who
share an address with another one of our shareholders and who would
like to receive only a single set of our annual disclosure
documents should follow the instructions described
below:
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Shareholders whose shares are registered in their own name should
contact our transfer agent,
Issuer Direct
Corporation, and inform them of their
request by calling them at 919-744-2722 or writing them at 500
Perimeter Park Drive, Suite D, Morrisville, NC
27560.
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Shareholders whose shares are held by a broker or other nominee
should contact such broker or other nominee directly and inform
them of their request, shareholders should be sure to include their
name, the name of their brokerage firm and their account
number.
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Who is paying for this proxy solicitation?
In
addition to mailed proxy materials, our directors, officers and
employees may also solicit proxies in person, by telephone, or by
other means of communication. We will not pay our directors,
officers and employees any additional compensation for soliciting
proxies. We may reimburse brokerage firms, banks and other agents
for the cost of forwarding proxy materials to beneficial
owners.
When are shareholder proposals due for next year’s annual
meeting?
At our
annual meeting each year, our Board of Directors submits to
shareholders its nominees for election as directors. In addition,
the Board of Directors may submit other matters to the shareholders
for action at the annual meeting.
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
shareholders may present proper proposals for inclusion in the
Company’s proxy statement for consideration at the 2019
annual meeting of shareholders by submitting
their
proposals to the Company in
a timely manner.
These proposals must meet the shareholders
eligibility and other requirements of the SEC. To be considered for
inclusion in next year’s proxy materials, you must submit
your proposal in writing by February 28, 2019 to our Corporate
Secretary, 14420 Albemarle Point Place, Suite 200, Chantilly, VA
20151.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information, as of the Record
Date, with respect to the beneficial ownership of the outstanding
Common Stock by (i) any holder of more than five (5%) percent; (ii)
each of the Company’s executive officers and directors; and
(iii) the Company’s directors and executive officers as a
group. Except as otherwise indicated, each of the shareholders
listed below has sole voting and investment power over the shares
beneficially owned.
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Name and Address of Beneficial Owner (1)
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Number of Shares Beneficially Owned (2)
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Percent of Class
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Directors and Named Executive Officers
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Robert A. Berman
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4,440,104
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(3)
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30.5%
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James McCarthy
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5,451,671
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37.5%
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Richard Nathan
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3,207,045
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(4)
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22.0%
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Harry Rhulen
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564,842
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(5)
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3.8%
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Suzanne Loughlin
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564,842
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(5)
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3.8%
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Paul de Bary
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48,499
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(6)
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*
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Glenn Goord
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48,499
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(6)
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*
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Christine Harada
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48,499
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(6)
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*
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Marta Tienda
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48,499
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(6)
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*
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Riaz Latifullah (7)
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116,397
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(8)
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*
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All current Directors and named executive officers as a group (10
persons)
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14,538,897
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66.5%
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5% or Greater Shareholders
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C.B. Brechin
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743,333
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5.1%
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Scott Rutherford
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748,226
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5.2%
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Paul Milligan
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781,722
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(9)
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5.2%
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* Less than 1%
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(1)
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The address of those listed is c/o Novume Solutions, Inc., 14420
Albemarle Point Place, Suite 200, Chantilly, VA, 20151. Unless
otherwise indicated, all shares are owned directly by the
beneficial owner.
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(2)
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Based on 14,535,695 shares of our common stock issued and
outstanding as of the June 25, 2018.
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(3)
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Consists of: (i) options to purchase 4,318,857 outstanding
shares of our common stock in the aggregate from Mr. James
McCarthy (2,725,836 shares) and Dr. Richard Nathan (1,593,021
shares) granted by Mr. McCarthy and Dr. Nathan to
Avon Road Partners L.P. (“Avon Road”) (the "Avon Road
Options"), and (ii) 121,247 shares of our common stock issued to
Avon Road. Mr. Berman is the general partner of Avon Road, and
therefore may be deemed to share beneficial ownership with Avon
Road of the shares reported herein. The 4,318,857 shares underlying
the Avon Road Options are already outstanding as they are held by
Mr. James McCarthy and Dr. Richard Nathan and are
therefore included in the beneficial ownership calculation for all
persons including Mr. Berman.
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(4)
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Consists of: (i) 3,186,041 shares of our common stock, (ii) a Unit
Warrant to purchase 4,849 shares of our common stock at a $1.031
exercise price and (iii) 16,155 shares of our common stock
acquirable through the conversion of 10,000 shares of Novume Series
A Preferred Stock at a $6.19 conversion price.
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(5)
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Consists of: (i) 315,625 shares of our common stock,
(ii) a warrant to purchase 105,209 shares of our common stock
at a $2.5774 exercise price, (iii) a warrant to purchase
105,209 shares of our common stock at a $3.6083 exercise price and
(iv) options to purchase 38,799 shares of our common stock that are
exercisable within 60 days of June 25, 2018.
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(6)
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Consists of options to purchase 48,499 shares of our common
stock.
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(7)
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Mr. Latifullah served as our Chief Financial Officer until August
28, 2017 when he began serving as our Executive Vice President of
Corporate Development. He also serves as our Principal Financial
and Accounting Officer.
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(8)
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Consists of options to purchase 116,397 shares of our common stock
that are exercisable within 60 days of June 25, 2018.
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(9)
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Consists of: (i) 300,000 shares of our common stock and (ii)
481,722 shares of our common stock acquirable through the
conversion of 240,861 shares of our Series B Preferred Stock at a
$2.00 conversion price.
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6
Our
Board currently consists of seven members. The Governance Committee
and Board have unanimously approved the recommended slate of seven
directors.
The
following table shows the Company’s nominees for election to
the Board. Each nominee, if elected, will serve until the next
annual meeting of shareholders and until a successor is named and
qualified, or until his earlier resignation or removal. All
nominees are members of the present Board of Directors. We have no
reason to believe that any of the nominees is unable or will
decline to serve as a director if elected. Unless otherwise
indicated by the shareholder, the accompanying proxy will be voted
for the election of the seven persons named under the heading
“Nominees for Directors.” Although the Company knows of
no reason why any nominee could not serve as a director, if any
nominee shall be unable to serve, the accompanying proxy will be
voted for a substitute nominee.
Nominees for Director
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Name of Nominee
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Age
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Principal Position
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Director Since
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James
K. McCarthy
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66
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Chairman
of the Board
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2016
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Robert
Berman
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58
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Chief
Executive Officer and Director
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2016
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Dr.
Richard Nathan
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73
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Director
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2016
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Glenn
Goord
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66
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Director
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2016
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Paul A.
de Bary
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71
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Director
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2017
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Christine
J. Harada
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45
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Director
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2017
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Marta
Tienda
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67
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Director
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2017
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The
Governance Committee and the Board seek, and the Board is comprised
of, individuals whose characteristics, skills, expertise, and
experience complement those of other Board members. We have set out
below biographical and professional information about each of the
nominees, along with a brief discussion of the experience,
qualifications, and skills that the Board considered important in
concluding that the individual should serve as a current director
and as a nominee for re-election as a member of our
Board.
Nominees Biographies
James K. McCarthy, Chairman
James K. McCarthy serves as our Chairman of the Board of
Directors. Mr. McCarthy served as our Chief Strategy Officer
through March 2017, and from April 2017 through March 2018 he was
the host of
The Bridge
, a weekly 30-minute broadcast television program
produced by us devoted exclusively to bridging the gap between
today's government and the private
sector. Mr. McCarthy’s career spans over 30 years
of marketing strategy creation, proposal development, and oral
presentation coaching to contractors seeking to expand their market
shares or to enter the government
contracts
market sector. As a founder and the Technical
Director of AOC Key Solutions, he built an organization that, over
the last five years, has played a part in winning an average of
$9 billion per year in federal contract awards for its
clients. Mr. McCarthy has worked at AOC Key Solutions since
1983. Mr. McCarthy has served in an advisory role with the
George Washington University, Virginia Science and Technology
Campus, Technology Accelerator and has been a frequent speaker with
the George Mason University Procurement and Technical Assistance
Center. Mr. McCarthy has also served on the board of Coalition
for Government Procurement and on the Veterans Institute for
Procurement GovCon Council. In February 2016, Mr. McCarthy was
named to Executive Mosaic’s Washington 100 as one of the
top-100 most influential leaders in the government contracting
arena. He was the founder and host of Government Contracting
Weekly, a television show dedicated to supporting contractors in
their quest for government business. Mr. McCarthy holds a BA in
Political Science and Government and an MA in Public Policy and
Government from Ohio University.
Director Qualifications
Mr. McCarthy holds over 35% of the voting power of the Company,
directly aligning his interests with those of our shareholders. He
is a well-respected and acknowledged thought leader in the
government contracting environment. He
has
extensive executive leadership and management
experience and continues to lead the development and execution of
our businesses. We believe that his entrepreneurial background
building Novume’s first acquisition, AOC Key Solutions,
combined with his leadership experience and his industry reputation
and visibility, allow him to be a qualified member of our Board of
Directors and to serve as Chairman.
7
Robert A. Berman, Chief Executive Officer and Director
Robert
Berman
is our Chief
Executive Officer and is a member of the Board of Directors and has
served in such capacities since March 16, 2016. Since January 2000,
Mr. Berman has served as the General Partner of Avon Road Partners,
L.P., a limited partnership investing in real estate and the
broadcast media industry. From 2006 through March 2015, Mr. Berman
held the office of Chairman and Chief Executive Officer at Cinium
Financial Services Corporation, a privately-held specialty finance
company, and its predecessor, Upper Hudson Holdings, LLC. Prior to
Cinium, Mr. Berman was Chief Executive Officer of Empire Resorts,
Inc., a Nasdaq-listed gaming company, from
2002-2005.
In the late 1990’s, Mr. Berman led a special advisory
committee of large shareholders who worked to identify a new
strategic direction for Executone Information Systems, Inc. a
publicly-traded telecom company. Following the
committee’s
recommendations
, the company was restructured in 1998, and Mr.
Berman was appointed to Executone’s Board of Directors. After
the restructuring, the company’s market capitalization
increased by more than $500 million. From 1997 until 1999, Mr.
Berman was Chairman and Chief Executive Officer of Hospitality
Worldwide Services (“HWS”), a publicly-traded company
that became the premiere service provider to the hospitality
industry. Under Mr. Berman’s leadership HWS grew from a small
company with under $25 million in net revenues in 1996 to more than
$229 million in net revenues in 1998 with offices on several
continents and 3,000 employees. While at HWS, Mr. Berman executed a
successful acquisition strategy that resulted in multiple operating
divisions that provided a one-stop shop to serve the needs of the
hotel industry. Mr. Berman was also instrumental in forging
partnerships with institutional investors including ING and Apollo
RE leading to the acquisition, re-positioning, and sale of more
than $100 million of hotel properties.
Director Qualifications
Mr. Berman has extensive experience in the private equity and
public company markets. We believe his strong understanding of the
financial markets and the M&A process, and his previous senior
executive roles with public companies make him a qualified member
of our Board of Directors and to serve as our Chief Executive
Officer.
Richard Nathan, PhD, Director
Dr. Richard Nathan served as our Chief Operating Officer until his
retirement on February 28, 2018 and is a member of the Board of
Directors. He brings over 45 years of corporate management, program
management and business and proposal development experience and has
had responsibility for large management and operation contracts
valued at hundreds of millions of dollars and managed service and
technical contracts for DOE, DoD, DHS, NASA, EPA, and state
governments. Dr. Nathan has directed and grown the
environmental and energy business for a large corporation, and
served as a corporate officer and held management and technical
positions at Battelle Memorial Institute and Mason &
Hanger. Dr. Nathan worked at AOC Key Solutions and its
predecessor company American Operations Corporation, for over 17
years and most recently as AOC Key Solutions’ Chief Executive
Officer. Dr. Nathan holds a BS in Chemistry from the Massachusetts
Institute of Technology and a PhD in Chemistry from the Polytechnic
Institute of Brooklyn.
Director Qualifications
Dr. Nathan has a strong technical background and understanding of
the government contracting, aviation, and aerospace world from
where the majority of Novume’s revenue is derived. We believe
this expertise, when combined with his
entrepreneurial
background having built strong
operating companies, makes him a qualified member of our Board of
Directors.
Glenn Goord, Director
Mr. Goord is a 32-year veteran of the New York State
Department of Correctional Services and served as Commissioner from
1996 until 2006. As Commissioner, he oversaw the nation’s
fourth largest state prison system, administering an
operating
budget of $2.3 billion
in state and federal funds, plus $245 million in capital
expenditures. Mr. Goord’s outstanding contributions to
furthering excellence in corrections earned him the Carl Robison
Award, the highest honor bestowed by the Middle Atlantic States
Correctional Association. In 1998, he earned the Charles Evans
Hughes Award for public service from the Albany based Capital Area
Chapter for the American Society for Public Administration (ASPA).
In 2002, the ASPA awarded Mr. Goord its highest honor, the
Governor Alfred E. Smith Award, for his direction of the
Department’s immediate and expansive efforts to aid New York
City following the September 11, 2001 terrorist attack. Mr.
Goord holds a BA Psychology from Fairleigh Dickinson
University.
Director Qualifications
Mr. Goord has a strong background in government operations and
procurement. His insights into how government operates is a key
skill for board decision making on Novume strategy in certain
industry segments. We believe his operational experience makes him
a qualified member of our Board of Directors and the committees on
which he participates.
8
Paul A. de Bary, Lead Director
Paul A. de Bary has had a varied career as an attorney, investment
banker, financial advisor and corporate executive and director. He
was a managing director at Marquette de Bary Co., Inc., a New York
based broker-dealer, from 1996 to 2015, where he served as a
financial advisor for state and local government agencies, public
and private corporations and non-profit organizations, as well as
general counsel. He previously served as a director of Empire
Resorts, Inc. (Nasdaq: NYNY) from 1996 to 2010, where he served as
chairman of its audit committee as well as, at various times
throughout his tenure as a director, a member of the governance and
compensation committees and various special committees. Since 2008,
Mr. de Bary has also served as Chair of the Board of Ethics for the
Town of Greenwich, Connecticut. Previously, Mr. de Bary
was a managing director in the Public Finance Department of
Prudential Securities from 1994 to 1997 and a partner in the law
firm of Hawkins, Delafield & Wood in New York from 1975 to
1994. Mr. de Bary is a member of the American Bar Association,
the New York State Bar Association and the Association of the Bar
of the City of New York. Mr. de Bary holds a Juris Doctor
degree, an MBA and an AB from Columbia University.
Director Qualifications
Mr. de Bary has a diverse background that includes vast experience
as a lawyer, investment banker and member of several boards of
directors, including
those
of
public companies. We believe these experiences, combined with his
skills and knowledge related to public market decision-making and
audit committee roles and responsibilities, makes him qualified
member of our Board of Directors and the committees on which he
participates.
Christine J. Harada, Director
Christine J. Harada has over 20 years of success in leading
government and management consulting organizations. She previously
served as the Federal Chief Sustainability Officer from November
2015 through January 2017. Prior to that role, Ms. Harada was
the
Acting
Chief of Staff of
the U.S. General Services Administration (“GSA”) from
March 2015 through November 2015. While at the GSA, Ms. Harada also
served as Associate Administrator, Government-wide Policy and Chief
Acquisition Officer for the GSA from June 2014 through February
2015. Ms. Harada’s private sector experience includes serving
as Global Manager, Transformation/Large Scale Change Practice at
the Boston Consulting Group from May 2013 through June 2014, and
her tenure as a principal at Booz Allen Hamilton from January 2004
through April 2013. Ms. Harada holds an MA, International Studies
and an MBA, Finance from the Lauder Institute and the Wharton
School at the University of Pennsylvania, respectively. She also
holds an MS Aeronautics/Astronautics and a BS
Aeronautics/Astronautics from Stanford University and the
Massachusetts Institute of Technology,
respectively.
Director Qualifications
Ms. Harada has in-depth knowledge of the inner workings of the
federal government, as well as detailed background in corporate
best practices. We believe her skills and experiences make her a
qualified member of our Board of Directors and the committees on
which she participates.
Marta Tienda, PhD, Director
Marta Tienda has served as the Maurice P. During ’22
Professor in demographic studies at Princeton University since
1999. She has also been a Professor of Sociology and Public
Affairs, and Research Associate in the Office of Population
Research at Princeton since 1997. Previously she held permanent
positions at the universities of Chicago, where she served as chair
of the sociology department, and Wisconsin-Madison, and visiting
appointments at NYU, Stanford and Brown. She is a member of the
National Academy of Education, the American Academy of Political
and Social Science, and the American Academy of Arts and Sciences.
She is past president of the Population Association of America, and
from 2004 to 2006 chaired the National Research Council’s
Panel on Hispanics. She serves on the board of the Population
Reference Bureau, Robin Hood, and the Jacobs Foundation of
Switzerland. In addition to chairing the Board of Trustees of the
Alfred P. Sloan Foundation, she serves as an independent trustee of
the Board of Trustees of Teachers Insurance Annuity Association
(TIAA). She is emeritus trustee of Brown University, the Federal
Reserve Bank of New York, the W.T. Grant Foundation, The Carnegie
Corporation of New York, the Kaiser Family Foundation, and the
Russell Sage Foundation. Dr. Tienda received honorary doctorates
from Ohio State University, Lehman College and Bank Street College.
She has published over 200 scientific papers and several monographs
and edited books. She has a BA in Spanish (education) from Michigan
State University, and MA and PhD degrees in sociology from the
University of Texas at Austin.
Director Qualifications
Dr. Tienda is a well-respected board member and committee member
for several national organizations. We believe the skills
developed
from these engagements, in
addition to her knowledge of the education community, which is a
part of the Novume customer base, make her a qualified member of
our Board of Directors and the committees on which she
participates.
Unless
authority to vote for the nominees named above is withheld, the
shares represented by the enclosed proxy will be voted FOR the
election of such nominees as directors. In the event that any of
the nominees shall become unable or unwilling to serve, the shares
represented by the enclosed proxy will be voted for the election of
such other person as the Board may recommend in such
nominee’s place. The Board has no reason to believe that any
of the nominees will be unable or unwilling to serve.
9
Family Relationships
Our
President Harry Rhulen is the brother of our Chief Administrative
Officer and General Counsel, Suzanne Loughlin. There are no other
family relationships among our executive officers and
directors.
Involvement in Certain Legal Proceedings
During
the past ten years, none of our directors, executive officers,
promoters, control persons, or nominees has been:
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the
subject of any bankruptcy petition filed by or against any business
of which such person was a general partner or executive officer
either at the time of the bankruptcy or within two years prior to
that time;
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convicted
in a criminal proceeding or is subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
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subject
to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction or any
Federal or State authority, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any
type of business, securities or banking activities;
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found
by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities
law;
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the
subject of, or a party to, any Federal or State judicial or
administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged
violation of (a) any Federal or State securities or commodities law
or regulation; (b) any law or regulation respecting financial
institutions or insurance companies including, but not limited to,
a temporary or permanent injunction, order of disgorgement or
restitution, civil money penalty or temporary or permanent
cease-and-desist order, or removal or prohibition order; or (c) any
law or regulation prohibiting mail or wire fraud or fraud in
connection with any business entity; or
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the
subject of, or a party to, any sanction or order, not subsequently
reversed, suspended or vacated, of any self-regulatory organization
(as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.
78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with
a member.
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Vote Required
The
nominees for director who receive the greatest number of votes FOR
election (also known as a plurality) will be elected as directors.
You may vote either FOR all of the nominees, WITHHOLD your vote
from all of the nominees or WITHHOLD your vote from any one or more
of the nominees. Votes that are withheld will not be included in
the vote tally for the election of directors. Brokerage firms do
not have authority to vote customers’ unvoted shares held by
the firms in street name for the election of directors. As a
result, any shares not voted by a beneficial owner will be treated
as a broker non-vote. Such broker non-votes will have no effect on
the results of this vote.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED ABOVE AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL
BE VOTED IN FAVOR THEREOF UNLESS A SHAREHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.
10
INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES AND CORPORATE
GOVERNANCE
Independence of Directors
Our
Board is currently comprised of seven members, four of whom are
independent directors. Messrs. McCarthy, Nathan and Berman are not
independent directors.
The
Board, upon recommendation of the Governance Committee, unanimously
determined that each of our four non-employee directors is
“independent,” as such term is defined in the Nasdaq
Stock Market Rules (“Stock Market Rules”).
The
definition of “independent director” included in the
Stock Market Rules includes a series of objective tests, such as
that the director is not an employee of the Company, has not
engaged in various types of specified business dealings with the
Company, and does not have an affiliation with an organization that
has had specified business dealings with the Company. Consistent
with the Company’s corporate governance principles, the
Board’s determination of independence is made in accordance
with the Stock Market Rules, as the Board has not adopted
supplemental independence standards. As required by the Stock
Market Rules, the Board also has made a subjective determination
with respect to each director that such director has no material
relationship with the Company (either directly or as a partner,
shareholder or officer of an organization that has a relationship
with the Company), even if the director otherwise satisfies the
objective independence tests included in the definition of an
“independent director” included in the Stock Market
Rules.
In
determining that each individual who served as a member of the
Board is independent, the Board considered that, in the ordinary
course of business, transactions may occur between the Company and
entities with which some of our directors are affiliated. The Board
unanimously determined that the relationships discussed below were
not material. No unusual discounts or terms were
extended.
Board Leadership Structure
Our
Board of Directors is currently led by its Chairman, James
McCarthy. Our Board of Directors recognizes that it is important to
determine an optimal Board leadership structure to ensure the
independent oversight of management as the Company continues to
grow. We separate the roles of Chief Executive Officer and Chairman
of the Board in recognition of the differences between the two
roles. The Chief Executive Officer is responsible for setting the
strategic direction for the Company and the day-to-day leadership
and performance of the Company, while the Chairman of the Board of
Directors provides guidance to the Chief Executive Officer and
presides over meetings of the full Board of Directors. We believe
that this separation of responsibilities provides a balanced
approach to managing the Board of Directors and overseeing the
Company.
Our
organizational guidelines provide for a Lead Director to be elected
whenever the Chair of the Board of Directors is not an independent
director. The responsibilities of the Lead Director are to: 1)
preside at meetings of our stockholders and Board of Directors if
the Chair is absent; 2) call meetings and executive sessions of the
independent directors of the Board; 3) establish the agenda and
preside at all executive sessions and other meetings of the
independent directors of the Board and communicate the results of
meetings of the independent directors to the Chair and other
members of management, as appropriate; 4) communicate with the
independent directors of the Board between meetings as necessary or
appropriate, serve as a liaison between the Chair and the
independent directors and communicate independent director
consensus on important issues to the Chair; 5) approve Board
meeting agendas and schedules for regular meetings of the Board of
Directors to assure there is sufficient time for discussion of all
agenda items and approve meeting materials and other information to
be sent to the Board in advance of regular meetings; 6) evaluate
the quality and timeliness of information sent to the Board by the
Chief Executive Officer and other members of management; 7) oversee
the evaluation of the Chief Executive Officer and assist the Board
Chair on matters of Board succession planning and crisis
management; 8) assist the Chair of the Governance Committee with
individual director evaluations; and 9) be available for
consultation and direct communication at the request of major
stockholders. Mr. de Bary currently serves as Lead
Director.
11
Director Attendance at Board, Committee, and Other
Meetings
Directors
are expected to attend Board meetings and meetings of the
committees on which they serve, with the understanding that on
occasion a director may be unable to attend a meeting. The Board
does not have a policy on director attendance at the
Company’s annual meeting.
The
non-management directors (who also constitute all of the
independent directors) meet in executive sessions in connection
with regularly scheduled Board meetings and at such other times as
the non-management directors deem appropriate. These sessions are
led by the Lead Director.
In
2017, the Board held three regular and special meetings, the
non-management directors held no regular and special executive
sessions, the Audit Committee held one regular and special meeting,
the Compensation Committee held one regular and special meeting,
and the Governance Committee held two regular and special meetings.
Each director attended 100% or more of the regular and special
meetings of the Board and of the committees on which he or she
served that were held during his or her term of
office.
Board Role in Risk Oversight
Our
Board of Directors has responsibility for the oversight of our risk
management processes and, either as a whole or through its
committees, regularly discusses with management our major risk
exposures, their potential impact on our business and the steps we
take to manage them. The risk oversight process includes receiving
regular reports from Board committees and members of senior
management to enable our Board to understand the Company’s
risk identification, risk management and risk mitigation strategies
with respect to areas of potential material risk, including
operations, finance, legal, regulatory, strategic and reputational
risk.
The
Audit Committee reviews information regarding liquidity and
operations, and oversees our management of financial risks.
Periodically, the Audit Committee reviews our policies with respect
to risk assessment, risk management, loss prevention and regulatory
compliance. Oversight by the Audit Committee includes direct
communication with our external auditors, and discussions with
management regarding significant risk exposures and the actions
management has taken to limit, monitor or control such exposures.
The Compensation Committee is responsible for assessing whether any
of our compensation policies or programs has the potential to
encourage excessive risk-taking. The Governance Committee manages
risks associated with the independence of the board, corporate
disclosure practices, and potential conflicts of interest. While
each committee is responsible for evaluating certain risks and
overseeing the management of such risks, the entire Board is
regularly informed through committee reports about such risks.
Matters of significant strategic risk are considered by our Board
as a whole.
Committees of the Board
Our
Board has three standing committees: Audit, Compensation, and
Governance. Each of the committees is solely comprised of and
chaired by independent directors, each of whom the Board has
affirmatively determined is independent pursuant to the Stock
Market Rules. Each of the committees operates pursuant to its
charter. The committee charters are reviewed annually by the
Governance Committee. If appropriate, and in consultation with the
chairs of the other committees, the Governance Committee proposes
revisions to the charters. The responsibilities of each committee
are described in more detail below. The charters for the three
committees are available on the Company’s website at
www.novume.com
by following the link to “Investors” and then to
“Corporate Governance.”
Audit Committee
We have an Audit Committee comprised of directors who are
“independent” within the meaning of Nasdaq Rule
5605(b)(1). The Audit Committee assists our Board in overseeing the
financial reporting process and maintaining the integrity of our
financial statements, and of our financial reporting processes and
systems of internal audit controls, and our compliance with legal
and regulatory requirements. The Audit Committee is responsible for
reviewing the qualifications, independence and performance of our
independent registered public accounting firm and review our
internal controls, financial management practices and investment
functions and compliance with financial legal and regulatory
requirements. The Audit Committee is also responsible for
performing risk and risk management assessments as well as
preparing any report of the Audit Committee that may be required by
the proxy rules of the SEC to be included in the
Corporation’s annual proxy statement. Our Board has
identified and appointed Paul de Bary as its “audit committee
financial expert,” as defined by the SEC in Item 407 of
Regulation S-K. Mr. de Bary serves as the Chair of the Audit
Committee, and is joined on the committee by Ms. Harada and Mr.
Goord.
12
Compensation
Committee
We have a Compensation Committee comprised of members who are
“Non-Employee Directors” within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and “outside directors”
within the meaning of Section 162(m) of the Code. They are
also “independent” directors within the meaning of
Nasdaq Rule 5605(b)(1). The Compensation Committee is responsible
for overseeing the establishment and maintenance of our overall
compensation and incentive programs to discharge the Board’s
responsibilities relating to compensation of our executive officers
and directors, including establishing criteria for evaluating
performance and setting
appropriate
levels of compensation, and to produce an annual
report on executive compensation for inclusion in the
Corporation’s proxy statement in accordance with the rules
and regulations of the SEC. The Compensation Committee advises and
makes recommendations to our Board on all matters concerning
director compensation. Mr. Goord serves as Chair of the
Compensation Committee and is joined by Ms. Harada and Dr.
Tienda.
Compensation
Committee Interlocks and Insider
Participation
None of the members of the Compensation Committee has been, during
2016 or 2017, an officer or employee of Novume or any of its
subsidiaries or predecessor companies, or was formerly an officer
of Novume or any of its subsidiaries or
predecessor
companies or had any relationship
requiring disclosure by us under Item 404 of Regulation S-K.
No interlocking relationship as described in Item 407(e)(4) of
Regulation S-K exists between any of our executive officers or
Compensation Committee members, on the one hand, and the executive
officers or Compensation Committee members of any other entity, on
the other hand, nor has any such interlocking relationship existed
in the past.
Governance Committee
Our Board has a Governance Committee that that (1) reviews and
recommends improvements to our governance guidelines and corporate
policies; (2) monitors compliance with our Code of Conduct; (3)
trains new members of the Board of Directors; (4) reviews the
performance of the Board of Directors and its various committees
and makes recommendations intended to improve that
performance; (5) evaluates and makes recommendations
concerning changes in the charters of the various Committees of the
Board of Directors; (6) evaluates the performance of
the Chief Executive Officer of the Corporation; (7)
oversees the development and implementation of succession planning
for Corporation senior management positions; (8) identifies and
recommends candidates for nomination as members of the Board of
Directors and its committees; and (9) such other matters as may be
required to ensure compliance with
applicable
federal and state laws or the requirements of any
exchange on which the Company maintains a listing for its
securities. The committee is required to be comprised of entirely
“independent” directors within the meaning of Nasdaq
Rule 5605(b)(1). Ms. Harada currently serves as the Chair of
the Governance Committee and is joined on the committee by Dr.
Tienda and Mr. de Bary.
The Chair and members of each committee are summarized in the table
below:
|
Name
|
|
Audit Committee
|
|
Compensation Committee
|
|
Corporate Governance Committee
|
|
Christine
Harada – (Independent)
|
|
Member
|
|
Member
|
|
Chair
|
|
Paul de
Bary – (Independent)
|
|
Chair
|
|
-
|
|
Member
|
|
Glenn
Goord – (Independent)
|
|
Member
|
|
Chair
|
|
-
|
|
Marta
Tienda – (Independent)
|
|
-
|
|
Member
|
|
Member
|
13
Consideration of Director Nominees
We seek
directors with the highest standards of ethics and integrity, sound
business judgment, and the willingness to make a strong commitment
to the Company and its success. The Governance Committee works with
the Board on an annual basis to determine the appropriate and
desirable mix of characteristics, skills, expertise, and experience
for the full Board and each committee, taking into account both
existing directors and all nominees for election as directors, as
well as any diversity considerations and the membership criteria
applied by the Governance Committee. The Governance Committee and
the Board, which do not have a formal diversity policy, consider
diversity in a broad sense when evaluating board composition and
nominations; and they seek to include directors with a diversity of
experience, professions, viewpoints, skills, and backgrounds that
will enable them to make significant contributions to the Board and
the Company, both as individuals and as part of a group of
directors. The Board evaluates each individual in the context of
the full Board, with the objective of recommending a group that can
best contribute to the success of the business and represent
shareholder interests through the exercise of sound judgment. In
determining whether to recommend a director for re-election, the
Governance Committee also considers the director’s attendance
at meetings and participation in and contributions to the
activities of the Board and its committees.
The
Governance Committee will consider director candidates recommended
by shareholders, and its process for considering such
recommendations is no different than its process for screening and
evaluating candidates suggested by directors, management of the
Company, or third parties.
Corporate Governance Matters
We are
committed to maintaining strong corporate governance practices that
benefit the long-term interests of our shareholders by providing
for effective oversight and management of the Company. Our
governance policies, including our Code of Conduct and Committee
Charters can be found on our website at
www.novume.com
by following the link to “Investors” and then to
“Corporate Governance.”
The
Governance Committee regularly reviews our Code of Conduct and
Committee Charters to ensure that they take into account
developments at the Company, changes in regulations and listing
requirements, and the continuing evolution of best practices in the
area of corporate governance.
The
Board conducts an annual self-evaluation in order to assess whether
the directors, the committees, and the Board are functioning
effectively.
Code of Conduct
We have adopted a Code of Conduct, which serves as our Code of
Ethics, which applies to all of our employees, including our Chief
Executive Officer, our Chief Financial Officer and our Principal
Financial and Accounting Officer. Our Code of Conduct is available
on our website at
www.novume.com
by following the link to "Investors"
and then to "Corporate Governance." The Code of Conduct is
presented under "Corporate Policies." If we amend or grant a waiver
of one or more of the provisions of our Code of Conduct, we intend
to satisfy the requirements under Item 5.05 of Item 8-K regarding
the disclosure of amendments to or waivers from provisions of our
Code of Conduct that apply to our Principal Executive and
Principal
Financial and Accounting
Officer by posting the required information on our website at the
above address. Our website is not part of this proxy
statement.
Communications with the Board of Directors
Shareholders
and other parties may communicate directly with the Board of
Directors or the relevant board member by addressing communications
to:
Novume
Solutions, Inc.
c/o
Corporate Secretary
14420
Albemarle Point Place, Suite 200,
Chantilly, VA
20151
14
All
shareholder correspondence will be compiled by our corporate
secretary. Communications will be distributed to the Board of
Directors, or to any individual director or directors as
appropriate, depending on the facts and circumstances outlined in
the communications. Items that are unrelated to the duties and
responsibilities of the Board of Directors may be excluded, such
as:
|
|
●
|
junk
mail and mass mailings;
|
|
|
|
|
|
|
●
|
resumes
and other forms of job inquiries;
|
|
|
|
|
|
|
●
|
surveys;
and
|
|
|
|
|
|
|
●
|
solicitations
and advertisements.
|
In
addition, any material that is unduly hostile, threatening, or
illegal in nature may be excluded, provided that any communication
that is filtered out will be made available to any independent
director upon request.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires the
Company’s directors, executive officers, and shareholders who
own more than 10% of the Company’s stock to file forms with
the SEC to report their ownership of the Company’s stock and
any changes in ownership. The Company assists its directors and
executives by identifying reportable transactions of which it is
aware and preparing and filing the forms on their behalf. All
persons required to file forms with the SEC must also send copies
of the forms to the Company. We have reviewed all forms provided to
us. Based on that review and on written information given to us by
our executive officers and directors, we believe that all Section
16(a) filings during the past fiscal year were filed on a timely
basis and that all directors, executive officers and 10% beneficial
owners have fully complied with such requirements during the past
fiscal year.
The
following persons are our executive officers and hold the offices
set forth opposite their names.
|
Name
|
|
Age
|
|
Principal Occupation
|
|
Officer Since
|
|
James
K. McCarthy
|
|
66
|
|
Chairman
of the Board
|
|
2017
|
|
Robert
A. Berman
|
|
58
|
|
Chief
Executive Officer and Member of the Board
|
|
2017
|
|
Harry
Rhulen
|
|
54
|
|
President
|
|
2017
|
|
Suzanne
Loughlin
|
|
56
|
|
General
Counsel and Chief Administrative Officer
|
|
2017
|
|
Riaz
Latifullah
|
|
61
|
|
Executive
Vice President, Corporate Development and Principal Financial and
Accounting Officer
|
|
2017
|
James K. McCarthy, Chairman of the Board
The
biography
for
James K. McCarthy is contained in the information disclosures
relating to the Company’s nominees for
director.
Robert A. Berman, Chief Executive Officer and Member of the
Board
The
biography
for
Robert A. Berman is contained in the information disclosures
relating to the Company’s nominees for
director.
15
Harry Rhulen, President
Mr. Rhulen is our President. He also is a founder, and served
as CEO, of Firestorm, since its inception in 2005 until our
acquisition of Firestorm in January of 2017. Mr. Rhulen
previously served as an executive and CEO of a public insurance
holding company with U.S. and European operations, commencing 1989
through 2005. Mr. Rhulen has extensive diligence experience
having participated in over thirty M&A transactions. He has led
several public offerings raising
in
excess of $350 million. Mr. Rhulen
worked as a consultant in many industries, using his risk
management, crisis management, and business management skills, as
well as his public company, legal, bankruptcy, and due diligence
experience to help his clients. Mr. Rhulen holds both a Juris
Doctor and Masters of Business Degree from Syracuse University and
graduated Cum Laude from the College of Insurance, New York, New
York.
Suzanne Loughlin, Chief Administrative Officer and General
Counsel
Ms. Loughlin is our Chief Administrative Officer
("CAO") and General Counsel. She is also
a founder of our subsidiary, Firestorm. Ms. Loughlin has
extensive consultative experience in the development of crisis
management and communications, workplace violence, emergency
response, and business continuity plans for clients ranging from
some of the world’s largest global companies to educational
institutions and governmental entities. Her previous career
experience includes serving as a Director and CAO of a public
insurance holding company with U.S. and European operations, where
she was responsible for HR, IT, Corporate Communications,
Facilities, Government Relations and Internal Audit. She was also a
litigator with a major New York City law firm and Managing Attorney
of a law firm with multiple offices throughout the country.
Ms. Loughlin is a licensed attorney in New York. She also
holds an Emergency Management Professional Development Series
Certification from FEMA, and is a member of the Association of
Threat Assessment Professionals. Ms. Loughlin holds a Juris
Doctor degree from New York Law School and a BS in Psychology from
St. Lawrence University.
Riaz Latifullah, Executive Vice President, Corporate
Development
Mr. Latifullah previously served as our Chief Financial Officer and
now serves as Executive Vice President, Corporate Development. On
May 1, 2018, Mr. Latifullah was appointed as our Principal
Financial and Accounting Officer, a role he assumed on an interim
basis upon the resignation of our former Chief Financial Officer.
Prior to joining Novume, Mr. Latifullah served as the Chief
Financial Officer of the American Grandparents Association /
Grandparents.com. Mr. Latifullah spent 13 years with AARP, a
non-profit organization that advocates on behalf of people over age
50. With AARP he served as Vice President, Financial Management,
Senior Director Strategic Markets and Director Brand Operations. As
an in-house entrepreneur with AARP he created and launched five
start-up operations bringing significant changes to the
organization. In other positions before AARP Mr. Latifullah
served as General Manager for TV on the WEB, an internet video
production company, a Government Relations Representative for the
U.S. Merchant Marine Academy Alumni Foundation and an Investment
Banking Associate for Ryan, Lee and Company. Mr. Latifullah holds
an MBA from Stanford University, an MSE in Naval Architecture and
Marine Engineering from the University of Michigan and a BS in
Marine Engineering from the U.S. Merchant Marine
Academy.
16
The
following table sets forth information about the annual paid
compensation of our: Principal Executive Officer, Mr. Berman; two
most highly compensated executive officers other than the Principal
Executive Officer, Messrs. James McCarthy and Latifullah, who
were serving as executive officers as of December 31, 2017; and two
additional individuals, Messrs. Greg McCarthy and Berrigan, for
whom disclosure would have been required but for the fact that the
individual was not serving as an executive officer as of December
31, 2017. While all named executive officers were eligible for
bonuses in 2016 and 2017, due to our startup nature and because the
first closing of the Regulation A Offering did not occur until
December 23, 2016, management elected to only issue bonuses to
Messrs. Gregory McCarthy and Berrigan for AOC Key Solutions and
individual sales performance. The information in this table for the
Company’s most recently completed fiscal year is based on the
information available to the Company as of the date of the
Company’s Annual Report on Form 10-K for the year ended
2017.
|
Name/Capacities in Which Compensation Was Received
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Options
($)
|
|
All Other Compensation
($)
|
|
Total
($)
|
|
Robert Berman
|
|
2017
|
|
395,000
|
|
-
|
|
-
|
|
-
|
|
395,000
|
|
Chief Executive Officer (1)
|
|
2016
|
|
300,000
|
|
-
|
|
-
|
|
-
|
|
300,000
|
|
James K. McCarthy
|
|
2017
|
|
293,231
|
|
-
|
|
-
|
|
8,931
|
(2)
|
302,162
|
|
Chief Strategy Officer (3)
|
|
2016
|
|
298,989
|
|
-
|
|
-
|
|
10,600
|
(2)
|
406,840
|
|
Riaz Latifullah (4)
|
|
2017
|
|
258,333
|
|
-
|
|
97,251
|
(5)
|
-
|
|
355,584
|
|
EVP, Corporate Development, Chief Financial Officer
(6)
|
|
2016
|
|
200,000
|
|
-
|
|
-
|
|
-
|
|
200,000
|
|
Greg McCarthy
|
|
2017
|
|
272,380
|
|
5,381
|
(7)
|
-
|
|
10,800
|
(2)
|
288,561
|
|
Chief Executive Officer of AOC Key Solutions
|
|
2016
|
|
229,800
|
|
42,762
|
(8)
|
-
|
|
9,497
|
(2)
|
282,059
|
|
Kevin Berrigan
|
|
2017
|
|
232,792
|
|
18,500
|
(7)
|
-
|
|
-
|
|
251,292
|
|
SVP and Chief Financial Officer of AOC Key Solutions
|
|
2016
|
|
209,724
|
|
11,641
|
(7)
|
-
|
|
4,461
|
(2)
|
225,826
|
|
(1)
|
Mr. Berman was an independent consultant in 2016 and became an
employee on January 1, 2017.
|
|
(2)
|
Amount represents 401(k) matching contribution.
|
|
(3)
|
Mr. James McCarthy served as: Chief Executive Officer through March
15, 2016; Chief Strategy Officer from March 16, 2016 through March
31, 2017; and Host of
The Bridge
from April 2017 through March
2018.
|
|
(4)
|
Mr. Latifullah served as Chief Financial Officer until August 28,
2017 at which time he transitioned to EVP of Corporate Development.
He currently serves as our Principal Financial and Accounting
Officer.
|
|
(5)
|
Amount represents the fair value of the issuance of 174,595 stock
options to Mr. Latifullah on December 23, 2016.
|
|
(6)
|
Mr. Latifullah was an independent consultant in 2016 and became and
employee on January 1, 2017.
|
|
(7)
|
Amount represents subjective bonus.
|
|
(8)
|
Amount represents commissions on sales and subjective
bonus.
|
17
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information with respect to
unexercised stock options, stock that has not vested, and
equity
incentive
plan awards
held by our named executive officers at December 31,
2017.
|
|
Option Awards
|
Stock Awards
|
||||
|
Name and Principal Position
|
Number of Securities Underlying Unexercised Options -
Exercisable
|
Number of Securities Underlying Unexercised Options -
Unexercisable
|
Option Exercise Price
($)
|
Option Expiration Date
|
Number of Shares of Stock that Have not Vested
|
Market Value of Shares of Stock that Have not Vested
($)
|
|
Robert
Berman (1)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
James
McCarthy
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Riaz
Latifullah (2)
|
72,748
|
101,847
|
1.42
|
12/23/26
|
-
|
-
|
|
Greg
McCarthy
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Kevin
Berrigan
|
-
|
-
|
-
|
-
|
-
|
-
|
|
(1)
|
Mr. Berman has options to purchase 4,318,857 outstanding shares of
our common stock in the aggregate from Mr. James McCarthy
(2,725,836 shares) and Dr. Richard Nathan (1,593,021
shares) granted by Mr. McCarthy and Dr. Nathan to
Avon Road. Mr. Berman is the general partner of Avon Road, and
therefore may be deemed to share beneficial ownership with Avon
Road of the shares reported herein.
|
|
(2)
|
These options were granted on December 23, 2016 and vest in equal
monthly installments over 24 months starting March 1, 2017, based
on continued employment.
|
Compensation Committee Interlocks and Insider
Participation
No member of our Compensation Committee is a current or former
officer or employee of Novume or its subsidiaries. No executive
officer of Novume served as a director or member of the
Compensation Committee of any entity that has one or more executive
officers serving as a member of our Board of Directors or
Compensation Committee.
Employment Agreements
We have entered into employment agreement our executives in
connection with his or her commencement of employment with
us.
Berman Employment Agreement
The Employment Agreement with Robert Berman (the “Berman
Employment Agreement”) provides that Mr. Berman will
serve as our Chief Executive Officer. The agreement has an initial
term, which was effective as of December 23, 2016, of
five
years with automatically renewing one-year terms thereafter.
Mr. Berman’s base salary is $395,000 per annum, and he
is eligible for a bonus as determined by our Compensation
Committee. Mr. Berman is also eligible to receive all such
other benefits as are provided to other management
employees.
In the
event of a “Change of Control”, as defined in the
Berman Employment Agreement, whether during the initial term or
thereafter, we shall have the right to terminate the Berman
Employment Agreement. In the event we exercise the option to
terminate Mr. Berman’s agreement, we will be required to
pay Mr. Berman an amount equal to Mr. Berman’s base
salary per annum multiplied by the number of years and portions
thereof remaining under the Berman Employment Agreement.
Mr. Berman may be terminated by the Company for
“Cause”, as defined in the Berman Employment
Agreement.
18
Mr. Berman
also agreed as consideration for entering into the Berman
Employment Agreement, that for the period during his employment and
for twelve months thereafter, (i) he will not compete with the
Company in the “Geographic Area”, as
defined in the Berman Employment Agreement, and
(ii) he will not solicit any of our existing employees,
suppliers or customers.
Rhulen Employment Agreement
The
employment agreement with Harry Rhulen (the
“Rhulen Employment Agreement”) provides that
Mr. Rhulen will serve as our President for an initial
five-year term that began on January 25, 2017. His base salary
is $275,000 per annum, and he will be eligible for a bonus as
determined by our Compensation Committee. Mr. Rhulen is also
eligible to receive all such other benefits as are provided to
other management employees.
Mr. Rhulen
was previously granted options to purchase 80,000 shares of the
common stock, par value $0.001 per share, of KeyStone at a strike
price of $3.00 per share. These options were converted into options
to purchase 155,195 shares of our common stock at a strike price of
$1.5464 per share. The conversion did not affect their vesting
schedule; the options
were to begin
vesting on the first anniversary of Mr. Rhulen’s initial
employment as President and continue vesting monthly over the
following two years.
We may terminate Mr. Rhulen’s employment agreement for
“Cause,” as defined in the Rhulen Employment Agreement.
If we
terminate Mr. Rhulen’s employment other
than for “Cause,” or Mr. Rhulen terminates his
employment for “Good Reason”, as defined in the Rhulen
Employment Agreement, we will be required to pay Mr. Rhulen an
amount equal to the remaining amount of base salary payable under
the Rhulen Employment Agreement until the end of the initial
five-year term and our contribution to Mr. Rhulen’s
health insurance premiums.
Mr. Rhulen
also agreed that, for the period during his employment and for one
year thereafter, (i) he will not compete with the Company in
the “Restricted Territory”, as defined in Exhibit A to
the Rhulen Employment Agreement, and (ii) he will
not solicit any of our existing employees,
suppliers or customers.
James K. McCarthy Offer Letter
The amended and restated
James K. McCarthy Offer Letter (the “McCarthy Offer
Letter”) provides that Mr. McCarthy will serve as our
Host and Moderator -- The Bridge on TV.
Mr. McCarthy also provides strategic guidance to AOC Key Solutions
and its clients.
His employment is at will, subject to
providing 120-days’
notice
of resignation or termination. We may pay
Mr. McCarthy’s salary in lieu of notice for some or all
of the 120-day notice period. His base salary is $298,989 per
annum, and he is eligible for a bonus as determined by our
Compensation Committee. Mr. McCarthy will also be eligible to
receive all such other benefits as are provided to other management
employees.
Mr. McCarthy also agreed that, for the period during his
employment and for two years thereafter, (i) he will not
compete with the Company in the “Restricted Territory”,
as defined in Exhibit A to the McCarthy Offer Letter, and
(ii) he will not solicit any of our existing employees,
suppliers or customers.
Nathan Employment Agreement
The employment agreement with Richard Nathan (the “Nathan
Employment Agreement”) provided for Dr. Nathan to serve
as our Chief Operating Officer for a term until December 31,
2017, with an option to extend the term. Dr. Nathan retired as
Chief Operating Officer effective February 28, 2018. His base
salary was $225,200 per annum, and he was
eligible
for a bonus as determined by our
Compensation Committee. Dr. Nathan also agreed that, for two
years after his employment: (i) he will not compete with the
Company in the “Restricted Territory”, as defined in
Exhibit A to the Nathan Employment Agreement; and (ii) he will
not solicit any of our existing employees, suppliers or
customers.
19
Loughlin Employment Agreement
The employment agreement with Suzanne Loughlin (the “Loughlin
Employment Agreement”) provides that Ms. Loughlin
is
General Counsel and Chief Administrative Officer for an
initial five-year term that began on January 25, 2017. Her
base salary is $225,000 per annum, and she is eligible for a bonus
as determined by our Compensation Committee. Ms. Loughlin is
also eligible to receive all such other benefits as are provided to
other management employees.
Ms. Loughlin
was previously granted options to purchase 80,000 shares of the
common stock, par value $0.001 per share, of KeyStone at a strike
price of $3.00 per share. These options were converted into options
to purchase 155,195 shares of our common stock at a strike price of
$1.5464 per share. The conversion did not affect their vesting
schedule; the options were to begin vesting on the first
anniversary of Ms. Loughlin’s initial employment as General
Counsel and Chief Administrative Officer and continue vesting
monthly over the following two years.
We may
terminate Ms. Loughlin’s employment agreement for
“Cause,” as defined in the Loughlin Employment
Agreement. If we terminate Ms. Loughlin’s employment
other than for “Cause,” or Ms. Loughlin terminates
her employment for “Good Reason”, as defined in the
Loughlin Employment Agreement, we will be required to pay
Ms. Loughlin an amount equal to the remaining amount of base
salary payable under the Loughlin Employment Agreement until the
end of the initial five-year term and our contribution to
Ms. Loughlin’s health insurance premiums.
Ms. Loughlin
also
agreed that, for the period
during her employment and for one year thereafter, (i) she will not
compete with the Company in the “Restricted Territory”,
as defined in Exhibit A to the Loughlin Employment Agreement, and
(ii) she will not solicit any of our existing employees,
suppliers or customers.
Amended Latifullah Agreement
In connection with Mr. Latifullah’s transition to Executive
Vice President, Corporate Development, on August 28, 2017, Mr.
Latifullah and Novume entered into a Restated, Amended and
Supplemental Employment Agreement (the “Amended Latifullah
Agreement”), which amended and restated his original
employment agreement with KeyStone effective as of December 23,
2016, which was assumed by Novume. The Amended Latifullah Agreement
provides that he is Executive Vice President, Corporate Development
for a term that ends on December 23, 2019. His base
salary
is $205,000 per annum, and he will be eligible for a bonus as
determined by our Compensation Committee. On March 29, 2018, Mr.
Latifullah and Novume entered into a Second Restated, Amended and
Supplemental Employment Agreement (the “Second Amended
Latifullah Agreement”) which provides for a base salary of
$285,000. No other terms were changed.
Under
the terms of the Second Amended Latifullah Agreement, Mr.
Latifullah is also eligible to receive all such other benefits as
are provided to other management employees. Mr. Latifullah was
previously granted options to purchase 90,000 shares of the common
stock, par value $0.001 per share, of KeyStone at a strike price of
$2.75 per share. These options were converted into options to
purchase 174,595 shares of our common stock at a strike price of
$1.4176 per share. The conversion did not affect their vesting
schedule; the options began vesting in equal monthly installments
on March 1, 2017 and will continue vesting monthly until March 1,
2019.
The
Second Amended Latifullah Agreement may be terminated with or
without cause, as defined in the agreement. Subject to certain
conditions, the Second Amended Latifullah Agreement provides that,
if Mr. Latifullah is terminated without cause, or if he leaves for
good reason, he will be provided a severance package equal to six
(6) months of base salary a
nd such
percentage of health premiums as would have been paid for by Novume
during the corresponding time period. Additionally, half of all
unvested options issued to Mr. Latifullah under the Second Amended
Latifullah Agreement would vest immediately.
Mr. Latifullah also agreed that, for the period during his
employment and for one year thereafter, (i) he will not
compete with Novume in the “Restricted Territory”, as
defined in Exhibit A to the Latifullah Employment Agreement, and
(ii) he will not solicit any of Novume’s existing
employees, suppliers or customers.
20
Bonus Eligibility
Bonuses for our executive officers may be conditioned on the
achievement of objective goals, which may not be waived after being
set, based on one or more of the following performance measures:
earnings; operating profits (including measures of earnings before
interest, taxes, depreciation and amortization); free cash flow or
adjusted free cash flow; cash from
operating
activities; revenues; net income (before or after
tax); financial return ratios; market performance; stockholder
return and/or value; net profits; earnings per share; profit
returns and margins; stock price; working capital; capital
investments; returns on assets; returns on equity; returns on
capital investments; selling, general and administrative expenses;
discounted cash flows; productivity; expense targets; market share;
cost control measures; strategic initiatives; changes between years
or periods that are determined with respect to any of the
above-listed performance criteria; net present value; sales volume;
cash conversion costs; leverage ratios; maintenance of liquidity;
integration of acquired businesses; operational efficiencies,
including Lean Six Sigma initiatives; regulatory compliance,
including the Sarbanes-Oxley Act of 2002; and economic
profit.
The following table provides the total compensation for each person
who served as a non-employee member of our Board of Directors
during fiscal year 2017, including all compensation awarded to,
earned by or paid to each person who served as a non-employee
director for some portion or all of fiscal year
2017
:
|
Name
|
Fees Earned or Paid in Cash
($)
|
Stock Awards
($)
|
Option Awards
($) (1)
|
Non-Equity Incentive Plan Compensation
($)
|
Nonqualified Deferred Compensation Earnings
($)
|
All Other Compensation
($)
|
Total
($)
|
|
Paul
de Bary (2)
|
54,000
|
-
|
24,874
|
-
|
-
|
-
|
78,874
|
|
Glenn
Goord (3)
|
40,000
|
-
|
26,484
|
-
|
-
|
-
|
66,484
|
|
Christine
Harada (4)
|
16,000
|
-
|
47,523
|
-
|
-
|
-
|
63,523
|
|
Marta
Tienda (5)
|
-
|
-
|
108,900
|
-
|
-
|
-
|
108,900
|
|
(1)
|
The amount shown reflects the aggregate grant date fair value of
option awards computed in accordance with Financial Accounting
Standards Board Accounting Standards Codification 718.
|
|
(2)
|
As of December 31, 2017, Mr. de Bary held fully-vested options to
purchase 48,499 shares of our common stock at a strike price
of $1.5464 per share.
|
|
(3)
|
As of December 31, 2017, Mr. Goord held fully-vested options to
purchase 48,499 shares of our common stock at a strike price
of $1.2887 per share.
|
|
(4)
|
As of December 31, 2017, Ms. Harada held fully-vested options to
purchase 48,499 shares of our common stock at a strike price
of $1.6753 per share.
|
|
(5)
|
As of December 31, 2017, Dr. Tienda held fully-vested options to
purchase 48,499 shares of our common stock at a strike price
of $3.81 per share.
|
Effective August 23, 2017, our non-employee directors are
compensated for their services as follows:
|
|
|
Board
Meeting Fee
|
Committee
Meeting Fee
|
||
|
Position
|
Annual
Fee
($)
(1)
|
In
Person
($)
|
Telephonic
($)
|
In
Person
($)
|
Telephonic
($)
|
|
Board
Member
|
25,000
|
1,000
|
500
|
500
|
250
|
|
Audit
Committee Chair
|
20,000
|
1,500
|
500
|
500
|
250
|
|
Compensation
Committee Chair
|
10,000
|
1,500
|
500
|
500
|
250
|
|
Governance
Committee Chair
|
10,000
|
1,500
|
500
|
500
|
250
|
|
(1)
|
Payments are made on a quarterly basis.
|
Directors who are officers or employees of Novume or its
subsidiaries do not receive any compensation for service on
our
Board
, but employee
directors will be reimbursed for expenses incurred in attending
meetings of our Board or any committees
thereof.
21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
The
Audit Committee has responsibility for reviewing and, if
appropriate, for approving any related party transactions that
would be required to be disclosed pursuant to applicable SEC
rules.
Described
below are any transactions during the fiscal year ended December
31, 2017 and 2016 and any currently proposed transactions to which
the Company was a party in which:
|
|
●
|
The amounts involved exceeded or will exceed the lower of either
$120,000 or 1% of the average of the Company’s total assets
at year-end for the last two completed fiscal years;
and
|
|
|
|
|
|
|
●
|
A director, executive officer, holder of more than 5% of the
outstanding capital stock of the Company, or any member of such
person’s immediate family had or will have a direct or
indirect material interest.
|
Firestorm Acquisition
As part
of the consideration for the acquisition
of Firestorm Solutions, LLC and Firestorm Franchising, LLC in
January 2017, we issued subordinated promissory notes to Harry
Rhulen, our President, and Suzanne Loughlin, our General Counsel
and Chief Administrative Officer. The principal amount of the
promissory note to Mr. Rhulen is $166,666.66 and the principal
amount of the promissory note to Ms. Loughlin is $166,666.67.
Each of the promissory notes bears interest at a rate of 2%. In
connection with the acquisition, we also paid cash of $125,000 to
each of Mr. Rhulen and Ms. Loughlin, issued warrants to
purchase 105,209 shares of our common stock, exercisable over a
period of five years, at an exercise price of $2.58 per share, and
issued warrants to purchase 105,209 shares of our common stock,
exercisable over a period of five years, at an exercise price of
$3.60 per share.
Prior
to the consummation of the Firestorm Acquisition, Mr. Rhulen and
Ms. Loughlin were not officers of the Company.
Avon Road Note Purchase Agreement
On
March 16, 2016, we entered into a Subordinated Note and
Warrant Purchase Agreement pursuant to which we agreed to issue up
to $1,000,000 in subordinated debt and warrants to purchase up to
242,493 shares of our common stock at an exercise price of $1.031
per share to Avon Road Partners, L.P. (the "Avon Road Subordinated
Note Warrants"), an affiliate of Robert Berman, our CEO and a
member of our Board of Directors. Simultaneously with the entry
into the Subordinated Note and Warrant Purchase Agreement we issued
subordinated notes with a face amount of $500,000 and warrants to
purchase 121,247 shares of our common stock to the Avon Road. These
warrants were to expire on March 16, 2019 and were
exercised on December 11, 2017 for proceeds of $125,006. There are
no Avon Road Subordinated Note Warrants outstanding as of December
31, 2017. Simple interest accrues on the unpaid principal of
the note at a rate equal to the lower of (a) 9% per
annum, or (b) the highest rate permitted by applicable
law.
The
foregoing transaction was reviewed and approved by officers and
directors other than Mr. Berman.
Review, Approval, or Ratification of Transactions with Related
Parties
The Charter of our Governance Committee requires that any
transaction with a related person that must be reported under
applicable rules of the SEC must be reviewed and either approved,
disapproved or ratified by our Governance Committee.
Prior to August 2017, we had no formal, written policy or procedure
for the review and approval of related-party
transactions.
Director Independence
Paul de Bary, Glen Goord, Christina Harada and Marta Tienda are
each “independent” within the meaning of Nasdaq Rule
5605(b)(1).
22
PROPOSAL NO. 2 -
RATIFICATION OF THE APPOINTMENT OF BD &
COMPANY, INC. AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2018
The
Audit Committee has appointed BD & Company, Inc. (“BD
& Company”), independent public accountant, to audit our
financial statements for the fiscal year ending December 31, 2018.
A representative of
BD & Company
is
expected to be present in
person at the 2018 Annual Meeting and
will have an opportunity to make a statement if he desires to do
so. It is also expected that such representative will be available
to respond to appropriate questions.
The
Audit Committee retained BD & Company as the Company’s
independent registered public accounting firm to perform the audit
of the Company’s consolidated financial statements for the
fiscal year ending December 31, 2018, and the audit of the
Company’s internal control over financial reporting as of
December 31, 2018.
BD
& Company has served as our principal auditor since May 2017.
They did not provide any services, and no fees were paid to them,
in 2016. CohnReznick LLP (“CohnReznick”) provided
principal auditor services from November 3, 2016 through April 28,
2017, but did not issue an audit report. Ericksen, Krentel &
Laporte, LLP (“Ericksen Krentel”) served as our
principal auditor in 2016 and provided accounting services in
2017.
The
Audit Committee has considered whether the provision of services,
other than services rendered in connection with the audit of our
annual financial statements, is compatible with maintaining BD
& Company’s independence. The Audit Committee has
determined that the rendering of non-audit services by BD &
Company during 2017 was compatible with maintaining the
firm’s independence.
Aggregate
fees billed or incurred related to the following years for
professional services rendered by BD & Company for 2017 and
2016 are set forth below.
|
|
2017
|
2016
|
|
Audit
fees
|
$
241,661
|
$
-
|
|
Audit-related
fees
|
-
|
-
|
|
Tax
fees
|
24,875
|
-
|
|
All
other fees
|
-
|
-
|
|
Total
|
$
266,536
|
$
-
|
Aggregate
fees billed or incurred related to the
following years for professional services rendered by CohnReznick
for 2017 and 2016 are set forth below.
|
|
2017
|
2016
|
|
Audit
fees
|
$
35,850
|
$
14,150
|
|
Audit-related
fees
|
-
|
-
|
|
Tax
fees
|
-
|
-
|
|
All
other fees
|
-
|
-
|
|
Total
|
$
35,850
|
$
14,150
|
Aggregate fees billed or incurred related to the following years
for professional services rendered by Ericksen Krentel for
2017
and 2016 are set forth
below.
|
|
2017
|
2016
|
|
Audit
fees
|
$
-
|
$
28,500
|
|
Audit-related
fees
|
-
|
-
|
|
Tax
fees
|
-
|
2,705
|
|
All
other fees
|
25,128
|
-
|
|
Total
|
$
25,128
|
$
31,205
|
23
Audit Fees for 2017 and 2016 include fees associated with the
audits of the annual financial statements, the quarterly reviews of
the unaudited interim financial statements included in the
Company’s Quarterly Reports on Form 10-Q, and
services
related to other reports filed with
the SEC. Tax Fees for 2017 and 2016 include fees associated with
the preparation and reviews of tax returns, advising on the impact
of local tax laws, and tax planning.
Policy on Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Auditors
Consistent
with SEC policies and guidelines regarding audit independence, the
Audit Committee is responsible for the pre-approval of all audit
and permissible non-audit services provided by our principal
accountants on a case-by-case basis. Our Audit Committee has
established a policy regarding approval of all audit and
permissible non-audit services provided by our principal
accountants. Our Audit Committee pre-approves these services by
category and service. Our Audit Committee has pre-approved all of
the services provided by our principal accountants.
No Appraisal Rights
Under
Delaware law, our shareholders are not entitled to appraisal rights
with respect to our proposed ratification of the appointment of BD
& Company as our independent public accountant, and we will not
independently provide our shareholders with any such
rights.
Vote Required
The
affirmative vote of a majority of the votes cast for this proposal
is required to ratify the appointment of the Company’s
independent public accountant. Abstentions will be counted towards
the tabulation of votes cast on this proposal and will have the
same effect as a negative vote. Brokerage firms have authority to
vote customers’ unvoted shares held by the firms in street
name on this proposal. If a broker does not exercise this
authority, such broker non-votes will have no effect on the results
of this vote. We are not required to obtain the approval of our
shareholders to appoint the Company’s independent accountant.
However, if our shareholders do not ratify the appointment of BD
& Company as the Company’s independent public accountant
for the fiscal year ending December 31, 2018, the Audit Committee
may reconsider its appointment.
THE BOARD RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF BD & COMPANY, INC. AS INDEPENDENT PUBLIC
ACCOUNTANT, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN
FAVOR THEREOF UNLESS A SHAREHOLDER HAS INDICATED OTHERWISE ON THE
PROXY.
24
The
Dodd-Frank Wall Street Reform and Consumer Protection Act (the
“Dodd-Frank Act”) requires the Company’s
shareholders to have the opportunity to cast a non-binding advisory
vote regarding the approval of the compensation disclosed in this
Proxy Statement of the Company’s executive officers who are
named in the Executive Compensation Table (the “Named
Executive Officers”). The Company has disclosed the
compensation of the Named Executive Officers pursuant to rules
adopted by the SEC.
We believe that our compensation policies for the Named
Executive Officers are designed to attract, motivate and retain
talented executive officers and are aligned with the long-term
interests of the Company’s shareholders. This advisory
shareholders vote, commonly referred to as a “say-on-pay
vote,” gives you as a shareholder the opportunity to approve
or not approve the compensation of the Named Executive Officers
that is disclosed in this Proxy Statement by voting for or against
the following resolution (or by abstaining with respect to the
resolution):
RESOLVED, that the
shareholders of the Company approve all of the compensation of the
Company’s executive officers who are named in the Executive
Compensation Table of the Company’s 2018 Proxy Statement, as
such compensation is disclosed in the Company’s 2018 Proxy
Statement pursuant to Item 402 of Regulation S-K, which disclosure
includes the Proxy Statement’s Summary Compensation Table and
other executive compensation tables and related narrative
disclosures.
Because
your vote is advisory, it will not be binding on either the Board
of Directors or the Company. However, the Company’s
Compensation Committee will take into account the outcome of the
shareholder vote on this proposal at the Annual Meeting when
considering future executive compensation arrangements. In
addition, your non-binding advisory votes described in this
Proposal 3 will not be construed: (1) as overruling any decision by
the Board of Directors, any board committee or the Company relating
to the compensation of the Named Executive Officers, or (2) as
creating or changing any fiduciary duties or other duties on the
part of the Board of Directors, any board committee or the
Company.
Vote Required
The
advisory vote to approve the compensation of our executive officers
will be approved if the votes cast in favor of the proposal exceed
the votes cast against the proposal. Abstentions and broker
non-votes will not be counted as either votes cast for or against
this proposal. While the results of this advisory vote are
non-binding, the Compensation Committee of the Board and the Board
values the opinions of our shareholders and will consider the
outcome of the vote, along with other relevant factors, in deciding
whether any actions are necessary to address the concerns raised by
the vote and when making future compensation decisions for
executive officers
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF
THE COMPENSATION OF THE COMPANY’S NAMED EXECUTED OFFICERS, AS
STATED IN THE ABOVE NON-BINDING RESOLUTION, AND PROXIES SOLICITED
BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A SHAREHOLDER
HAS INDICATED OTHERWISE ON THE PROXY.
|
|
25
PROPOSAL NO. 4 -
ADVISORY VOTE ON THE FREQUENCY OF HOLDING FUTURE
ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS
In addition to holding a Say-on-Pay advisory vote, we are seeking
an advisory, non-binding vote regarding the frequency of
future
advisory
Say-on-Pay
votes in accordance with the SEC’s proxy rules, known as a
“Say-on-Pay Frequency” advisory
vote.
Shareholders will be able to vote that we hold this Say-on-Pay
advisory vote every year, two years, or three years, or
shareholders may abstain from voting on this proposal.
After due consideration, the Board has decided to recommend that
this Say-on-Pay advisory vote on executive compensation occur
triennially. While there are valid arguments for annual and
biennial votes, we believe that a triennial vote will allow our
shareholders to provide us with regular direct input on our
compensation philosophy, policies and practices as disclosed in our
proxy statements and will be most useful to the Board. The
Board’s decision was based further on the premise that this
recommendation could be modified in future years if it becomes
apparent that a triennial vote is not meaningful, is burdensome or
is less frequent than that recommended by best corporate governance
practices.
The frequency (one year, two years or three years) that receives
the greatest number of votes cast by the shareholders will be
deemed the frequency for the advisory Say-on-Pay vote preferred by
the shareholders. Because your vote is advisory, the results will
not be binding upon the Company. Although not binding, the Board
values the opinions of our shareholders and will review and
consider the outcome of the vote, along with other relevant
factors, in evaluating the frequency of future advisory votes on
executive compensation.
Vote Required
The frequency (one year, two years or three years) that receives
the greatest number of votes cast by the shareholders will be
deemed the frequency for the advisory Say-on-Pay vote preferred by
the shareholders. Abstentions and broker non-votes will not be
counted as either votes cast for or against this proposal. While
the results of this advisory vote are non-binding, the Compensation
Committee of the Board and the Board values the opinions of our
shareholders and will consider the outcome of the vote, along with
other relevant factors, in deciding whether any actions are
necessary to address the concerns raised by the vote and when
making future compensation decisions for executive
officers
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE OPTION OF
THREE YEARS AS YOUR PREFERENCE FOR THE FREQUENCY OF HOLDING FUTURE
ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS,
AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF
UNLESS A SHAREHOLDER HAS INDICATED OTHERWISE ON THE
PROXY.
As of
the date of this proxy statement, the
Board knows of no other business that will be presented at the
Annual
Meeting
. If any other
business is properly brought before the Annual Meeting, it is
intended that proxies in the enclosed form will be voted in respect
thereof in accordance with the best judgment and in the discretion
of the persons voting the proxies.
26
|
NOVUME SOLUTIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF SHAREHOLDERS – AUGUST 9, 2018 AT 10:00 AM EDT
TIME
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CONTROL ID:
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REQUEST ID:
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The
undersigned hereby appoints Robert Berman, CEO, and Riaz
Latifullah, EVP, Corporate Development and Principal Financial and
Accounting Officer proxy of the undersigned, with power of
substitution, to vote all shares held by the undersigned which are
entitled to be voted at the Annual Meeting of the Shareholders of
Novume Solutions, Inc. (the “Company”) to be held
August 9, 2018, or such later date or dates as such Annual Meeting
date may be adjourned, at 14420 Albemarle Point Place, Suite 200,
Chantilly, VA 20151, for the purpose of considering and taking
action on the following proposals:
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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Important Notice Regarding the Availability of Proxy
Materials
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for the Shareholder Meeting To Be Held on August 9,
2018
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The
Notice of the Meeting, Proxy Statement, Proxy Card, Annual Report
on Form 10-K
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are
available at
https://www.iproxydirect.com/nvmm
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/nvmm
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PHONE:
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1-866-752-VOTE (8683)
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27
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ANNUAL MEETING OF THE SHAREHOLDERS OF NOVUME SOLUTIONS,
INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR ALL
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WITHHOLD
ALL
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FOR ALL
EXCEPT
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Election
of Directors.
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☐
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☐
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James
K. McCarthy
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☐
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CONTROL
ID:
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Robert
Berman
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☐
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REQUEST
ID:
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Dr.
Richard Nathan
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☐
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Glenn
Goord
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☐
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Paul A.
de Bary
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☐
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Christine J.
Harada
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☐
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Marta
Tienda
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☐
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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Ratify
the appointment of BD & Company, Inc. as our independent public
accountant for the fiscal year ending December 31,
2018.
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☐
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☐
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Proposal 3
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FOR
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AGAINST
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ABSTAIN
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Advisory
vote to approve the compensation of our named executive officers
(Say-on-Pay).
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☐
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☐
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☐
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Proposal 4
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1
YEAR
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2
YEARS
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3
YEARS
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ABSTAIN
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Advise
vote on the frequency of holding future advisory votes on the
compensation of our named executive officers every year, every two
years or every three years (Say-on-Pay Frequency).
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☐
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☐
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☐
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☐
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Proposal 5
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FOR
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AGAINST
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ABSTAIN
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To
transact such other business as may be properly brought before the
Annual Meeting and any adjournments thereof.
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
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THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR ALL
PERSONS LISTED IN PROPOSAL 1 AND A VOTE FOR PROPOSALS 2, 3, AND 5,
AND A VOTE FOR THREE YEARS IN PROPOSAL 4.
The
undersigned hereby revokes any proxy or proxies heretofore given to
vote or act with respect to the capital stock of the Company and
hereby ratifies and confirms all that the Proxy, or his
substitutes, or any of them, may lawfully do by virtue
hereof.
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MARK
HERE FOR ADDRESS CHANGE ☐ New Address (if
applicable):
____________________________
____________________________
____________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
Dated:
________________________, 2018
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(Print Name of
Shareholder and/or Joint Tenant)
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(Signature of
Shareholder)
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(Second
Signature if held jointly)
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28
TABLE OF CONTENTS