WRAP TECHNOLOGIES, 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]
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Preliminary
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Confidential,
for Use of the SEC Only (as permitted by
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[X]
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Definitive
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Definitive
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Soliciting
Material Pursuant to 14a-12
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WRAP TECHNOLOGIES, INC.
(Name of
Registrant as Specified in Its Charter)
_________________________________
(Name of
Person(s) Filing Proxy Statement, if other than the
Registrant)
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Filing Fee (Check the appropriate box):
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Aggregate
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identify the filing for which the offsetting fee was paid
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Filed:
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Tom
Smith
CEO and President
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April 30,
2021
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Dear Valued
Stockholders:
We are just
getting started. When WRAP was founded in 2016, we felt our
innovative public safety
technologies and services
could help a broad range of
enforcement and apprehension personnel. This included police,
military, private security, and general control situations, such as
a bouncer at a bar or professionals in an education facility. From
day one, we recognized this was a global market. To ultimately
deliver to all markets, we began with the police. The law
enforcement market alone is massive. In the U.S., there are over
18,000 agencies with 900,000 full-time sworn local, state, and
federal officers. Internationally, the market is 12x larger. Our
expectation is bold – every single officer will benefit from
our technology platform.
With our first
product, we believe we have filled a critical gap in how police
handle situations in conflict. After verbal commands, other options
available to an officer included some use of force relying on
varying degrees of pain for compliance. Moreover, the industry was
in desperate need of innovation. The
BolaWrap® Remote Restraint device
was the first
advancement in police tools since conducted
electrical weapons (CEW’s) were introduced over 25 years
ago.
There was no
way to predict back in 2016 the significant events that occurred in
2020. A global pandemic, protests, riots, and calls for police
reform and even to defund the police. These unfortunate events
triggered unprecedented levels of community outcry, global media
attention, and government call-to-action.
This, combined
with the continued education and significant awareness of how to
handle individuals with mental health issues, or those suffering a
crisis, added to the need for more modern solutions. We believe we
are at the beginning stage of significant police reform that
demands de-escalation and better training for officers. Within
police reform, “de-escalation” is a popular buzz word.
Certainly, de-escalation is important, and we offer tools and
training to do this. However, WRAP is driven by the goal of
avoiding escalation in the first place. To us, outcomes are far
more successful if they end before they escalate and turn volatile
and unpredictable. In policing, unpredictable encounters can turn
catastrophic quickly.
Our growth
strategy of delivering effective and safe devices and robust
training is positioned extremely well to create long-term
shareholder value.
Our near-term
focus is simple in concept:
●
Having already shipped to
41 countries, continue to drive further global adoption and use of
the
BolaWrap® Remote
Restraint device.
●
Bring to market the most
advanced training system in the world.
WRAP Reality, the Company’s
virtual reality training system, is an immersive training simulator
and comprehensive public safety training platform designed to
empower first responders with the necessary knowledge to perform in
the field.
With successful execution of our growth strategy, we will build a
platform for a strong and reliable recurring revenue stream.
Cartridge replacement is one aspect, but the more significant
opportunity is our training system that is intended to allow
officers real-time training for all types of situations any time
they want. We believe the industry is headed in the direction of
continuous education, training and certification.
We intend to maintain our first-mover
advantage. Our team is strong and matches the vision for our
product and service portfolio.
We appreciate your trust and
support. We never take it for granted.
Tom
Smith
CEO and
President
Wrap Technologies, Inc.
1817 W 4th
Street
Tempe, Arizona 85281
(800) 583-2652
NOTICE OF VIRTUAL ANNUAL MEETING OF STOCKHOLDERS
To Be Held on
June 22
,
2021
Dear
Stockholders of Wrap Technologies, Inc.:
It is our
pleasure to invite you to the 2021 Annual Meeting of Stockholders
(the “
Annual
Meeting
”) of Wrap Technologies, Inc., a Delaware
corporation (the “
Company
”). Due to the public
health impact of the coronavirus (“
COVID-19
”) pandemic, and out of
concern for the health and safety of our stockholders, directors,
and members of management, the Annual Meeting will be held
on June 22, 2021 at 9:00 A.M., Pacific
Time
in a virtual meeting format only. There will be no
physical location for stockholders to attend the Annual Meeting.
Stockholders will be able to listen,
vote, and submit questions, regardless of their physical location,
via the internet by registering at a live webcast
http://www.colonialstock.com/wrap2021.
If you plan to participate in the
virtual Annual Meeting, please see the “
Instructions for the Virtual
Annual Meeting”
section
in the attached Proxy Statement. The purpose of the Annual Meeting
is to vote on the following:
1.
to elect
nine directors to our Board of Directors, each to serve until our
next annual meeting of stockholders, or until their respective
successor is duly elected and qualified;
2.
to approve an amendment to
our 2017 Equity Compensation Plan (the “
2017 Plan
”) to increase the
number of shares of Company common stock, par value $0.0001 per
share (“
Common
Stock
”), available for issuance thereunder from 6.0
million shares to
7.5
million
shares (the “
Plan
Amendment
”);
3.
to ratify the appointment
of
Rosenberg Rich Baker Berman,
P.A.
as our independent auditors for the year ending
December 31, 2021; and
4.
to vote upon such other
matters as may properly come before the Annual Meeting and any
adjournment or postponement thereof.
The foregoing
items of business are more fully described in the Proxy Statement
accompanying this Notice. Other detailed information about us
and our operations, including our audited financial statements, are
included in our Annual Report on Form 10-K (the “
Annual Report
”), a copy of which
is enclosed.
This Proxy Statement
and the Annual Report are also available online at:
www.colonialstock.com/wrap2021
.
You will also
have the opportunity to hear what has happened in our business in
the past year and to ask questions.
We have elected to
provide access to our proxy materials primarily over the Internet,
pursuant to the Securities and Exchange Commission’s
“notice and access” rules.
We strongly encourage
you to sign up for electronic delivery of our future annual reports
and proxy materials in order to conserve natural resources and help
us save costs in producing and distributing these materials. For
more information, please see “
Electronic Delivery of Proxy Materials and
Annual Report
” on page 1 of the Proxy Statement.
The Board of
Directors has fixed the close of business on
April 26
, 2021 as the record date for the
determination of stockholders entitled to notice of and to vote at
the Annual Meeting and at any adjournment or postponement thereof.
Stockholders of record present via live webcast at the Annual
Meeting or who have submitted a valid proxy via the Internet, by
telephone or by mail will be deemed to be present, to vote at the
Annual Meeting.
Your vote is
very important to us. Please act as soon as possible to vote your
shares, even if you plan to participate in the virtual annual
meeting.
Regardless of whether
you plan to virtually attend the Annual
Meeting,
please
read this Proxy Statement and vote your shares by Internet,
telephone or e-mail as promptly as possible.
Please
refer to the Notice for instructions on submitting your vote.
Voting promptly will save us additional expense in further
soliciting proxies and will ensure that your shares are represented
at the Annual Meeting
.
By Order of the
Board of Directors,
Scot
Cohen
|
Thomas P.
Smith
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Chair of the
Board
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Chief Executive
Officer
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Tempe,
Arizona
April 30
, 2021
YOUR
VOTE IS IMPORTANT
AS STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING
VIA LIVE WEBCAST.
HOWEVER, TO ENSURE
YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE URGED TO VOTE BY
INTERNET, TELEPHONE OR E-MAIL AS SOON AS POSSIBLE. RETURNING YOUR
PROXY WILL HELP US ASSURE THAT A QUORUM WILL BE PRESENT AT THE
ANNUAL MEETING AND AVOID THE ADDITIONAL EXPENSE OF DUPLICATE PROXY
SOLICITATIONS.
EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY
STILL VOTE VIA LIVE WEBCAST IF YOU ATTEND THE VIRTUAL MEETING.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING,
YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR
NAME.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON
JUNE
22
, 2021: THE ANNUAL REPORT
AND PROXY STATEMENT ARE AVAILABLE ONLINE AT:
www
.colonialstock.com/wrap2021
.
Wrap Technologies, Inc.
1817 W 4th
Street
Tempe, Arizona 85281
(800) 583-2652
PROXY STATEMENT
This Proxy
Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the “
Board
”) of Wrap Technologies,
Inc., a Delaware corporation (the “
Company
”), for use at the
Company’s 2021 Annual Meeting of Stockholders (the
“
Annual
Meeting
”) to be held on June
22
, 2021 at
9:00
A.M., Pacific Time, via virtual
meeting by accessing http://www.colonialstock.com/wrap2021, and any
adjournment or postponement thereof.
Instructions for Virtual Annual Meeting
A virtual meeting format offers the same
participation opportunities as those opportunities available to
stockholders at in-person meetings. Stockholders will be able to
listen, vote, and submit questions. To participate in the Annual
Meeting webcast, you must register at
http://www.colonialstock.com/wrap2021
by 5:00 P.M. (Pacific Time) on June
21, 2021 using your desktop or mobile device.
The Annual
Meeting will begin promptly at 9:00 A.M. (Pacific Time) on June 22,
2021. We encourage you to access the virtual meeting website prior
to the start time. Online check-in will begin 30 minutes prior to
the start of the Annual Meeting. You should allow ample time to
ensure your ability to access the meeting.
We will hold our
question-and-answer session with management immediately following
the conclusion of the Annual Meeting. You may submit a question in
advance of the Annual Meeting during the registration process by
visiting http://www.colonialstock.com/wrap2021. You may also submit
a question at any time during the Annual Meeting by typing the
questions into the questions box on the screen once the virtual
meeting starts. The Chairman of the Annual Meeting has broad
authority to conduct the meeting in an orderly
manner.
Technicians
will be available to assist you if you experience technical
difficulties accessing the virtual meeting website. If you
encounter any difficulties accessing the virtual meeting during the
check-in or meeting time, send an email to
meeting-annualmeeting@colonialstock.com or call (801) 355-5740 for
assistance.
Electronic Delivery of Proxy Materials and Annual
Report
We have elected
to provide access to this year’s proxy materials primarily
over the Internet under the Securities and Exchange
Commission’s (“SEC”) “notice and
access” rules. We intend to mail a Notice of Internet
Availability of Proxy Materials (the “Notice”) on or
about May 1
, 2021 to each of our
stockholders entitled to notice of and to vote at the Annual
Meeting, which will contain instructions for accessing this Proxy
Statement, our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 (“
Annual
Report
”) and voting
instructions. The Notice will also include instructions on how you
can receive a paper copy of your proxy
materials.
This Proxy Statement and the Annual Report can
also be accessed free of charge online as of May 1, 2021 at:
www.colonialstock.com/wrap2021
.
Voting
The specific proposals to
be considered and acted upon at our Annual Meeting are each
described in this Proxy Statement. Only holders of our common
stock, par value $0.0001 per share (“
Common Stock
’’), as of the
close of business on April
26
,
2021 (the “
Record
Date
”) are entitled to notice of and to vote at the
Annual Meeting. On the Record Date, there were
37,948,413
shares of Common Stock
issued and outstanding. Each holder of Common Stock is entitled to
one vote for each share held as of the Record Date.
-1-
Quorum
In order for any business to be conducted at the
Annual Meeting, a quorum must be present. The presence at the
Annual Meeting, either in attendance virtually or by proxy, of
holders of the Company’s Common Stock entitled to vote and
representing at least a majority of the Company’s outstanding
voting power will constitute a quorum for the transaction of
business. If you submit a properly executed proxy, regardless of
whether you abstain from voting on one or more matters, your shares
will be counted as present at the Annual Meeting for the purpose of
establishing a quorum. Shares that constitute broker non-votes will
also be counted as present at the Annual Meeting for the purpose of
establishing a quorum. If a quorum is not present at the scheduled
time of the Annual Meeting, the stockholders who are present may
adjourn the Annual Meeting until a quorum is present. The time and
place of the adjourned Annual Meeting will be announced at the time
the adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be
conducted at the Annual Meeting.
Required Vote for Approval
Proposal No. 1: Election of Directors.
Directors are elected by a plurality
vote.
This means that the nine director nominees who receive
the greatest number of affirmative votes cast at the Annual Meeting
by the shares present, either in attendance virtually or by proxy
and entitled to vote, will be elected.
Abstentions and broker non-votes will have no
effect on the outcome of the election of the
directors.
Proposal No. 2:
Plan Amendment, [and Ratification of all Issuances Made Thereunder
to Date].
To approve the
amendment to our 2017
Equity Compensation Plan (the
“
2017 Plan
”)
to increase
the number of shares of Common Stock authorized for issuance
thereunder from 6.0 million shares to
7.5
million shares (the
“
Plan
Amendment
’), and to ratify
all issuances made thereunder to date, the number of votes cast
“FOR” must exceed the number of votes cast
“AGAINST” this Proposal.
A properly executed proxy marked
“ABSTAIN” will not be voted, although it will be
counted as present and entitled to vote for purposes of the
Proposal. Accordingly, an abstention will have the effect of a
vote against this Proposal. A broker or nominee will not have
discretionary authority to vote on this Proposal because it is
considered a non-routine matter. Accordingly, broker non-votes will
have no effect on the outcome of this Proposal.
Proposal No. 3: Ratification of Appointment of
Auditors.
To ratify the
appointment of
Rosenberg Rich
Baker Berman, P.A.
as our independent
auditors for the fiscal year ending December 31, 2021, the number
of votes cast “FOR” must exceed the number of votes
cast “AGAINST” this Proposal.
A properly executed proxy marked
“ABSTAIN” will not be voted, although it will be
counted as present and entitled to vote for purposes of the
Proposal. Accordingly, an abstention will have the effect of a
vote against this Proposal. A broker or other nominee will
generally have discretionary authority to vote on this Proposal
because it is considered a routine matter, and therefore we do not
expect broker non-votes with respect to this Proposal. However, any
broker non-votes received will have no effect on the outcome of
this Proposal.
Broker Non-Votes
A
“broker non-vote” occurs when a nominee (typically a
broker or bank) holding shares for a beneficial owner (typically
referred to as shares being held in “street name”)
submits a proxy for the Annual Meeting, but does not vote on a
particular proposal because the nominee has not received voting
instructions from the beneficial owner and does not have
discretionary authority to vote the shares with respect to that
proposal.
Brokers and other nominees
may vote on “routine” proposals on behalf of beneficial
owners who have not furnished voting instructions, subject to the
rules applicable to broker nominees concerning transmission of
proxy materials to beneficial owners, and subject to any proxy
voting policies and procedures of those firms. The ratification of
the independent registered public accountants, for example, is a
routine proposal. Brokers and other nominees may not vote on
“non-routine” proposals, unless they have received
voting instructions from the beneficial owner. The election of
directors and approval of the Plan Amendment are considered
“non-routine” proposals. This means that brokers and
other firms must obtain voting instructions from the beneficial
owner to vote on these matters;otherwise, they will not be able to
cast a vote for such “non-routine” proposals. If your
shares are held in the name of a broker, bank or other nominee,
please follow their voting instructions so you can instruct your
broker on how to vote your shares.
-2-
Voting and Revocation of Proxies
If your proxy
is properly returned to the Company, the shares represented thereby
will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If you return your proxy without
specifying how the shares represented thereby are to be voted, the
proxy will be voted (i)
FOR
the election of the nine
director nominees named in this Proxy Statement, (ii)
FOR
the Plan Amendment,
(iii)
FOR
ratification of the appointment
of Rosenberg Rich Baker Berman, P.A. as our independent auditors
for the current fiscal year, and (iv) at the discretion of the
proxy holders on any other matter that may properly come before the
Annual Meeting or any adjournment or postponement
thereof.
You may revoke
or change your proxy at any time before the Annual Meeting by (i)
filing, with our Corporate Secretary at our executive offices,
located at 1817 W 4th Street, Tempe, Arizona 85281, a notice of
revocation or another signed proxy with a later date, or (ii) by
voting online at the virtual Annual Meeting. Attendance at the
virtual Annual Meeting by itself will not revoke a proxy. Shares
can be voted at the Annual Meeting only if the holder is present or
represented by proxy. If you are a stockholder whose shares are not
registered in your own name, you will need additional documentation
from your broker or record holder to vote personally at the Annual
Meeting.
No Appraisal Rights
The stockholders of the Company have no dissenter’s or
appraisal rights in connection with any of the proposals described
herein.
Solicitation
We will bear
the entire cost of solicitation, including the preparation,
assembly, printing and mailing of the Notice, as well as the
preparation and posting of this Proxy Statement, the Annual Report
and any additional solicitation materials furnished to
stockholders. Copies of any solicitation materials will be
furnished to brokerage houses, fiduciaries and custodians holding
shares in their names that are beneficially owned by others so that
they may forward this solicitation material to such beneficial
owners. In addition, we may reimburse such persons for their costs
in forwarding the solicitation materials to such beneficial owners.
The original solicitation of proxies may be supplemented by a
solicitation by telephone, e-mail or other means by our directors,
officers or employees. No additional compensation will be paid to
these individuals for any such services. Except as described above,
we do not presently intend to solicit proxies other than by e-mail,
telephone and mail.
-3-
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
Our Bylaws
provide that
that the
number of
directors that constitute the entire Board of Directors (the
“
Board
”)
shall be fixed from time to time by resolution adopted by a
majority of the entire Board, but that in no event shall the number
be less than three. A director elected by the Board to fill a
vacancy shall serve for the remainder of the term of that director
and until the director’s successor is duly elected and
qualified. Our Board currently consists of nine directors, each of
whom has been nominated by our Nominating and Governance Committee
for election at the Annual Meeting. The nine director nominees for
election at the Annual Meeting consist of Messrs. Scot Cohen,
Patrick Kinsella, Michael Parris, Wayne Walker, Thomas Smith,
Kevin Sherman, Thomas J.
Kennedy
and
Jeffrey Kukowski,
and Ms. Kimberly Sentovich
.
Each director nominee, if elected at the Annual
Meeting, will hold office for a one-year term until the next annual
meeting of stockholders or until their successor is duly elected,
unless prior thereto the director resigns, or the director’s
office becomes vacant by reason of death or other cause. If
any such person is unable or unwilling to serve as a director
nominee at the date of the Annual Meeting or any postponement or
adjournment thereof, the proxies may be voted for a substitute
director nominee, designated by the proxy holders or by the present
Board to fill such vacancy, or for the balance of those director
nominees named without nomination of a substitute, and the Board
may be reduced accordingly. The Board has no reason to believe
that any of such director nominees will be unwilling or unable to
serve if elected as a director.
Required Vote and Recommendation
The election of
directors requires the affirmative vote of a plurality of the
voting shares present virtually or represented by proxy and
entitled to vote during the Annual Meeting. The nine nominees
receiving the highest number of affirmative votes will be elected.
Abstentions and broker non-votes will
have no effect on the outcome of the election of the
directors.
Unless otherwise instructed or unless authority
to vote is withheld, shares represented by executed proxies will be
voted “FOR” the election of the director nominees
listed above.
The
Board recommends that the stockholders vote “
FOR
” the election of
Messrs. Cohen, Kinsella, Thomas, Parris, Walker,
Sherman, Kennedy
and
Kukowski, and Ms. Sentovich
.
Director Nominees
The following
section sets forth certain information regarding the nominees for
election as directors of the Company. There are no family
relationships between any of the director nominees and the
Company’s executive officers.
|
Name
|
Age
|
Positions
|
Independent
|
|
Scot
Cohen
|
52
|
Executive Chair
|
|
|
Thomas P.
Smith
|
53
|
Chief Executive Officer and President
|
|
|
Patrick
Kinsella
|
67
|
Director
|
X
|
|
Michael
Parris
|
62
|
Director
|
X
|
|
Wayne
Walker
|
62
|
Lead
Independent Director
|
X
|
|
Kimberly
Sentovich
|
53
|
Director
|
X
|
|
Kevin
Sherman
|
51
|
Director
|
X
|
|
TJ
Kennedy
|
49
|
Director
|
X
|
|
Jeffrey
Kukowski
|
53
|
Director
|
X
|
-4-
|
|
|
Scot
Cohen
cofou
nded
the Company with Messrs. James Barnes and Elwood Norris in March
2016, and currently serves as its Executive Chairman since July
2017. Prior to July 2017, he served as a Manager until the
Company’s incorporation in March 2017 at which time he was
appointed as the Company’s Corporate Secretary until January
2018. Mr. Cohen has over 20 years of experience in institutional
asset management, wealth management, and capital markets. He
currently manages several operating partnerships that actively
invest in the energy sector in addition to maintaining an active
investment portfolio in various public companies, early-stage
private companies, hedge funds and alternative assets including
real estate. Some of these include serving as principal of the
Iroquois Capital Opportunity Fund, a closed end private equity fund
he founded in 2010 which focuses on investments in North American
oil and gas assets; as the Manager of V3 Capital, LLC, an investor
in public and private companies that he founded in 2015, and was
the co-founder of Iroquois Capital Investment Group, LLC. Mr. Cohen
currently sits on the board of directors of Charlie’s
Holding, Inc., and serves as Executive Chair of the Board of Petro
River Oil Corp. since 2012. Mr. Cohen earned his Bachelor of
Science degree from Ohio University.
The Board
believes Mr. Cohen’s success with multiple private investment
firms, his extensive contacts within the investment community and
financial expertise strengthens the Company’s efforts to
raise capital to fund the continued implementation of its business
plan.
|
|
|
|
|
Thomas P. Smith
jo
ined the Company in
March 2019 as President. In October 2020 he was appointed as
Interim Chief Executive Officer and in March 2021 he was appointed
as Chief Executive Officer. As an experienced international and
business savvy executive Mr. Smith serves as the Company’s
primary spokesperson responsible for communicating with various
constituencies including shareholders, investors, media,
governments and customers. Mr. Smith
co-founded TASER International (now Axon
Enterprise, Inc.) in 1993 (“
TASER
”). He served as President of TASER until
October 2006, and as Chairman of the Board of Directors of TASER
from October 2006 until he retired to pursue entrepreneurial
activities in February 2012. Among his most significant roles and
responsibilities at TASER, Mr. Smith managed domestic and
international export sales, significantly expanding the sale and
distribution of TASER’s products, including sales to more
than 17,200 federal, state and local law enforcement agencies in
over 100 countries. He also had roles at TASER managing
manufacturing and operations and served as a key spokesperson. His
prior entrepreneurial activities after TASER included working with
entities engaged in aviation, beverages and law enforcement
products. He co-founded and had management roles with Achilles
Technology Solutions, LLC (2012-January 2020) and its wholly-owned
subsidiary ATS Armor, LLC (2015-2019) and research company ATS MER
(2015-2019). ATS Armor filed a petition for Chapter 7 Bankruptcy in
March 2019, and ATS MER filed a petition for Chapter 7 Bankruptcy
in February 2019. Mr. Smith holds a B.S. degree in Ecology and
Evolutionary Biology from the University of Arizona and a M.B.A.
degree from Northern Arizona
University.
The
Board believes Mr. Smith’s extensive experience in senior
leadership positions with TASER, especially managing domestic and
international sales, together with his executive experience and
experience working with law enforcement and the markets in which
the Company operates, bring valuable experience to the Company and
the Board.
|
|
|
|
|
Patrick Kinsella
was
appointed as a director of the Company in November 2018.
Mr. Kinsella previously served as an adjunct professor at the
USC Marshall School of Business, from August 2011 to December 2019.
In 2014, he was appointed as a director and the Chairman of the
Audit Committee of PennyMac Financial Services, Inc.
(“
PennyMac
”).
Prior to his retirement as a senior audit partner in May 2013,
Mr. Kinsella spent over 37 years at KPMG LLP serving clients
generally concentrated in the financial services sector, including
banks, thrifts, mortgage companies, automotive finance companies,
alternative investment and real estate companies. Mr. Kinsella
received a Bachelor of Science Degree in Accounting from California
State University, Northridge, and is a licensed certified public
accountant in the State of California.
The Board believes that Mr. Kinsella’s extensive
experience in providing professional accounting and auditing
services and his experience serving as Chair of the Audit Committee
of PennyMac contributes to his designation as a financial and
accounting expert, and therefore as an asset to the
Board.
|
|
|
|
|
Michael
Parris
was appointed as a director of the Company in
November 2017.
Mr. Parris has been a
partner at Perry Rogers Partners Inc. (“
Perry
Rogers
”), a sports
management firm, since 1996, where he primarily oversees the SHAQ
Brand and other strategic alliances. His role at Perry Rogers
encompasses business development, worldwide brand management,
marketing and public relations. Prior to joining Perry Rogers, Mr.
Parris had a successful career in law enforcement with the Newark
Police Department in Newark, New Jersey, rising to the rank of
Lieutenant. During his career in law enforcement, he worked and
commanded several specialized units, including Homicide, Robbery,
and Internal Affairs. Mr. Parris holds a Bachelor of Science degree
in Business Management from the University of
Phoenix.
The Board believes that
given his
background in law enforcement and
worldwide marketing and brand experience, Mr. Parris’
broad experience and insights into the markets served by the
Company benefits the Board and the Company
.
|
|
-5-
|
|
|
Wayne
Walker
was
appointed as a
director of the Company in November 2018 and Lead Independent
Director in January 2021. Mr. Walker has more than 30 years of
experience in corporate law, governance and corporate
restructuring, including 15 years at the DuPont Company in the
Securities and Bankruptcy Group, where he worked in the Corporate
Secretary’s office and served as Senior Counsel. In 2003, Mr.
Walker founded Walker Nell Partners, Inc.
(“
Walker Nell
”), an international business consulting
firm providing corporate governance and restructuring, fiduciary
services, litigation support, and other services to client
corporations and law firms, where he continues to serve as
President. Mr. Walker currently serves on the board of directors of
Petro Pharmaceuticals, Inc. (NASDAQ: PTPI) and AYRO, Inc. (NASDAQ:
AYRO), as well as Pitcairn Company, a multi-family office wealth
management firm. He is the former Vice President of Board of
Education of the City of Philadelphia, Chairman of the Board of
Trustees of National Philanthropic Trust, a public charity that
holds over $11.0 billion of assets under management, and the Board
of Directors for Humanity International, a global non-profit,
non-governmental housing organization. He holds a Bachelor of Arts
Degree from Loyola University New Orleans and a Juris Doctorate
from Catholic University of America. He also studied finance for
non-financial managers at the University of Chicago’s
Graduate School of Business.
The Board believes that Mr.
Walker’s substantial knowledge and more than 30 years of
experience in corporate governance, restructuring and corporate
litigation enhances the Board’s corporate governance and
related experience.
|
|
|
|
|
Kimberly
Sentovich
was appointed as a
director of the Company in April 2021. Ms. Sentovich is a seasoned
merchandising, operations, IT and supply chain executive with 30
years of experience with multi-billion-dollar profit and loss
responsibility. From 2017 to 2019, Ms. Sentovich served as the
Senior Vice President of Operations for Torrid, an apparel
retailer. From 2015 to 2017, Ms. Sentovich was Executive
Vice President of Stores and Logistics at Gymboree, responsible for
all 1300 company owned stores in North America. Ms.
Sentovich previously spent seven years (2008-2015) at Walmart
rising from Regional Vice President of Operations –
California to Divisional Senior Vice President of Operations
– Pacific Division and fifteen years at The Home Depot
(1993-2008) rising to the level of Regional Vice President of
Operations. Ms. Sentovich has served on the board of directors
of One Stop Systems (NASDAQ: OSS) from 2019 to present, the
Children's Hospital of Orange County from 2016 to present, on which
she serves on the Executive Committee, Compensation Committee,
Nominating Committee, and Finance Committee. Ms. Sentovich obtained
her MBA from The Paul Merage School of Business, University of
California, Irvine and her B.A. in Philosophy and Political Science
with a Minor in economics from Bryn Mawr
College.
Ms.
Sentovich’s extensive executive and operations experience, as
well as her independence, judgment and exceptional leadership
experience makes her a valuable addition to the
Board.
|
|
|
|
|
Kevin
Sherman
was appointed as a director of the Company in
April 2021. Mr. Sherman currently serves as the Interim Chief
Executive Officer, Chief Marketing Officer, and Chief Revenue
Officer of Tractor Beverages, Inc. (“
Tractor
”), where he has served since 2018. Mr.
Sherman has served as a member of the board of directors of Tractor
since 2015. From 2012 to 2017, Mr. Sherman served as a member of
the board of directors, Chief Executive Officer, President, and
Chief Marketing Officer of True Drinks, Inc. Mr. Sherman holds a
Bachelor of Arts in Philosophy from Gordon College and a Master of
Arts in Educational Administration from Loyola Marymount
University.
The Board
believes that Mr. Sherman's extensive experience in marketing
products and driving revenue growth enhances the Board's experience
and makes him a valuable member of the Board and as a resource for
the management team.
|
|
-6-
|
|
|
TJ
Kennedy
was appointed as a
director of the Company in April 2021. Mr. Kennedy has served as
the Chief Executive Officer, president, and member of the board of
directors of Qumu, Inc. (NASDAQ: QUMU) (“
Qumu
”) since July 2020. Qumu provides the tools
to create, manage, secure, distribute and measure the success of
live and on-demand video for enterprises. From January 2019 to July
2020, Mr. Kennedy served as the Chief Executive Officer and member
of the board of directors of Allerio, Inc., and a director of the
Public Safety Network from January 2018 to July 2020. From July
2013 to January 2018, Mr. Kennedy served as the President/Deputy
Executive Director of FirstNet – First Responder Network
Authority. Mr. Kennedy holds a Bachelor of Science in Health
Promotion and Education from the University of Utah, and a Master's
of Business Administration from Johns Hopkins
University.
The Board believes that Mr. Kennedy's extensive experience in the
fields of technology, public safety, manufacturing, and
communications, across both domestic and international markets,
make him a valuable member of the Board.
|
|
|
|
|
Jeff
Kukowski
, was appointed as a
director of the Company in April 2021. Mr. Kukowski is currently
the Chief Executive Officer and a director of Cloudbolt Software,
an enterprise cloud management leader, having served in that
capacity since April 2020. From May 2019 to January 2020, Mr.
Kukowski was the Chief Revenue Officer of Yubico, the leading
provider of hardware authentication security keys. He was the Chief
Executive Officer and a member of the board of directors of
SecureAuth from August 2015 to November 2018. SecureAuth is a
leader in the identity and access management space. Prior to
joining SecureAuth, Mr. Kukowski was the Chief Operating Officer of
Axon (formerly Taser International: Nasdaq: AXON)
(“
Axon
”), from June 2010 to December 2014. Prior
to Axon, Mr. Kukowski was the Chief Executive Officer and a
director of Sellit Social Commerce, from March 2009 to June 1010.
Mr. Kukowski has also served as the Chief Operating Officer and a
director of Destinator Technologies (TSX: ICS), from April 2005 to
October 2008. Mr. Kukowski graduated from the University of Chicago
Booth School of Business with a Master's in Business Administration
and holds a Bachelor of Arts in Economics from Northwestern
University.
The Board believes that Mr. Kukowski’s experience with Axon
and his extensive experience in senior executive roles and as a
director will assist management in managing the Company’s
growth and will contribute to the Company’s corporate
governance and oversight.
|
|
-7-
Director Nominations
The Board
nominates directors for election at each annual meeting of
stockholders, appoints new directors to fill vacancies when they
arise, and has the responsibility to identify, evaluate and recruit
qualified director candidates to the Board for such nomination or
appointment.
The Board
identifies director nominees by first considering those current
members of the Board who are willing to continue service. Current
members of the Board with skills and experience that are relevant
to our business and who are willing to continue service are
considered for re-election, balancing the value of continuity of
service by existing members of the Board with that of obtaining a
new perspective. Director nominees are selected by a majority of
the members of the Board. Although the Company does not have a
formal diversity policy, in considering the suitability of director
nominees, the Board considers such factors as it deems appropriate
to develop a Board that is diverse in nature and comprised of
experienced and seasoned advisors. Factors considered by the Board
include judgment, knowledge, skill, diversity, integrity,
experience with businesses and other organizations of comparable
size, including experience in law enforcement, the use of force
product industry, intellectual property, business, corporate
governance, marketing, finance, administration or public service,
the relevance of a candidate’s experience to our needs and
experience of other Board members, experience with accounting rules
and practices, the desire to balance the considerable benefit of
continuity with the periodic injection of the fresh perspective
provided by new members, and the extent to which a candidate would
be a desirable addition to the Board and any committees of the
Board.
A
stockholder who wishes to suggest a prospective director nominee
for the Board may notify the Corporate Secretary of the Company in
writing with any supporting material the stockholder considers
appropriate. Director nominees suggested by stockholders are
considered in the same way as director nominees recommended by
other sources.
Director Independence
Our Board has reviewed the independence of our
directors based on the listing standards of the Nasdaq Stock Market
(“
Nasdaq
”). Based on this review, the Board of
Directors determined that Messrs. Kinsella, Parris, Walker,
Sherman, Kennedy and Kukowski, and Ms. Sentovich, are independent,
as defined in Rule 5605(a)(2) of the Nasdaq Rules. In making this
determination, our Board considered the relationships that each of
these non-employee directors has with us and all other facts and
circumstances our Board deemed relevant in determining their
independence.
Board Meetings
Directors
hold office until the next annual meeting of the stockholders or
until their successors have been elected or appointed and duly
qualified. Vacancies on the Board that are created by the
retirement, resignation or removal of a director, may be filled by
the vote of the majority of the remaining members of the Board,
with such new director serving the remainder of the term or until
his/her successor shall be elected and qualified.
The Board
is elected by and is accountable to our stockholders. The
Board establishes Company policy and provides strategic direction,
oversight, and control. The Board met sixteen times during the
year ended December 31, 2020 and all incumbent directors attended
at least 75% of the aggregate number of meetings of the Board and
of the committees on which each of the directors served. The Board
also acted by unanimous written consent five times during the year
ended December 31, 2020.
-8-
Committees of the Board of Directors
Our Board
currently has three standing committees which consist of the Audit
Committee, Compensation Committee, and Nominating and Governance
Committee.
Our Board has adopted
written charters for each of the foregoing committees, copies of
which are publicly available on our website at
www.wrap.com
under the “Investors” tab.
Our Board may establish other committees from time to time as it
deems necessary or appropriate. The chart below reflects the
standing committees of our Board and the composition of each
committee as of the date of this Proxy Statement. On April 19,
2021, Messrs. Sherman, Kennedy and Kukowski, and Ms. Sentovich,
were appointed to the Board. On or after the Annual Meeting, the
Board intends to meet to consider the composition of each committee
that will result in different committee composition from the
composition of each committee set forth below:
|
|
Committees
|
||
|
Director Name
|
Audit
|
Compensation
|
Nominating and Governance
|
|
Scot Cohen
|
|
|
|
|
Patrick Kinsella
|
CC
|
X
|
X
|
|
David Norris
(1)
|
|
|
|
|
Michael Parris
|
X
|
X
|
X
|
|
Wayne Walker
|
X
|
CC
|
CC
|
|
Recent appointees and
nominees
:
|
|
|
|
|
Kimberly
Sentovich
|
|
|
|
|
Kevin Sherman
|
|
|
|
|
TJ Kennedy
|
|
|
|
|
Jeff Kukowski
|
|
|
|
CC – Committee Chair
X – Member
(1)
Mr. Norris has been a
director since January 2018 and is not standing for re-election to
the Board at the Annual Meeting.
Audit
Committee
The Audit
Committee assists our Board in fulfilling its legal and fiduciary
obligations in matters involving our accounting, auditing,
financial reporting, internal control and legal compliance
functions by approving the services performed by our independent
accountants and reviewing their reports regarding our accounting
practices and systems of internal accounting controls. The Audit
Committee also oversees the audit efforts of our independent
accountants and takes those actions as it deems necessary to
satisfy that the accountants are independent of management. The
Audit Committee currently consists of Messrs. Kinsella, Parris and
Walker, each of whom is a non-management member of our Board that
we believe meets the criteria for independence under the applicable
Nasdaq Rules and SEC rules and regulations. Mr. Kinsella is also
our designated Audit Committee financial expert, as defined under
SEC rules. We believe that the composition of our Audit
Committee meets the criteria for independence under the applicable
Nasdaq Rules and SEC rules and regulations, and the functioning of
our Audit Committee complies with the applicable Nasdaq Rules and
SEC rules and regulations.
The Audit
Committee met seven times during the year ended December 31, 2020,
with all members of the Audit Committee in attendance. The
Audit Committee met with our Chief Financial Officer and with our
independent registered public accounting firm and evaluated the
responses by the Chief Financial Officer, both to the facts
presented and to the judgments made by our independent registered
public accounting firm.
Compensation Committee
The
Compensation Committee determines our general compensation policies
and the compensation provided to our directors and officers. The
Compensation Committee also reviews and determines bonuses for our
officers and other employees. In addition, the Compensation
Committee reviews and determines equity-based compensation for our
directors, officers, employees and consultants and administers our
2017 Plan. The Compensation Committee currently consists of
Messrs. Kinsella, Parris and Walker, each of whom is a
non-management member of our Board of Directors that we believe
meets the criteria for independence under the applicable Nasdaq
Rules and SEC rules and regulations. We believe that the
composition of our Compensation Committee meets the criteria for
independence under the applicable Nasdaq Rules and SEC rules and
regulations, and the functioning of our Compensation Committee
complies with the applicable Nasdaq Rules and SEC rules and
regulations.
-9-
In March 2019, the Compensation Committee,
retained RCL Compensation Consulting (“
RCL
”) as its independent compensation
consultant in connection with the compensation paid to executive
officers and to review director compensation. RCL does not provide
any material services to management or the Board and has determined
that RCL does not have any business or personal relationships with
any member of the Board or management.
In
determining executive compensation, the Compensation Committee
obtains input and advice from RCL, and reviews recommendations from
our Chief Executive Officer with respect to the performance metrics
or objectives as it pertains to the compensation paid to our other
executive officers. The Board of Directors, upon recommendation
from the Compensation Committee, reviews and approves the
compensation paid to the Company’s Chief Executive Officer
and other executive officers.
The
Compensation Committee, formed in November 2018, met eight times
during the year ended December 31, 2020, with all members of the
Compensation Committee in attendance. The Compensation also acted
by Unanimous Written Consent nine times during the year ended
December 31, 2020.
Nominating and
Governance Committee
The
Nominating and Governance Committee is responsible for making
recommendations to our Board of Directors regarding candidates for
directorships and the size and composition of our Board. In
addition, the Nominating and Governance Committee is responsible
for overseeing our corporate governance guidelines and reporting
and making recommendations to the full Board of Directors
concerning corporate governance matters. The Nominating and
Governance Committee currently consists of Messrs. Kinsella, Parris
and Walker.
The
Nominating and Governance Committee held four meetings during the
year ended December 31, 2020, with all members of the Nominating
and Governance Committee in attendance.
Board Role in Risk Assessment
Management,
in consultation with outside professionals, as applicable,
identifies risks associated with the Company’s operations,
strategies and financial statements. Risk assessment will also be
performed through periodic reports received by the Audit Committee
from management, counsel and the Company’s independent
registered public accountants relating to risk assessment and
management. Audit Committee members meet privately in executive
sessions with representatives of the Company’s independent
registered public accountants. The Board also provides risk
oversight through its periodic reviews of the financial and
operational performance of the Company.
Board Leadership Structure
Currently, Thomas Smith
serves as the Company’s Chief Executive Officer and
President, Scot Cohen serves as the Executive Chair of our Board,
and Wayne Walker serves as Lead Independent Director. Our
Board has determined that it is in the best interests of the Board
and the Company to separate the roles of the Chief Executive
Officer and Chair of the Board, and to appoint a Lead Independent
Director to serve in a lead capacity to coordinate the activities
of the other independent directors and to perform such other duties
and responsibilities as the Board of Directors may determine. Our
Board believes this structure increases the Board’s
independence from management, serves to facilitate independent
Board discussions and governance and, in turn, leads to better
monitoring and oversight of management. Although our Board believes
the Company is currently best served by separating the role of
Chair of the Board of Directors and Chief Executive Officer, and by
appointing a Lead Independent Director, it will review and
consider the continued appropriateness of this structure at least
annually.
Indemnification of Officers and Directors
As
permitted by the Delaware General Corporation Law, the
Company will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action
brought against them on account of their being or
having been Company directors or officers
unless, in any such action, they are adjudged to have acted
with gross negligence or willful misconduct.
-10-
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and
Ethics (the “
Code
”) applicable to all of our employees,
including our principal executive officer, principal financial
officer and principal accounting officer. We will provide any
person, without charge, a copy of our Code upon written request to
Investor Relations, Wrap Technologies, Inc.,
at 1817 W 4th
Street, Tempe, Arizona 85281
. A copy
of the Code is publicly available by visiting our website at
www.wraptechnologies.com
.
Stockholder Communications
If you wish to
communicate with the Board of Directors, you may send your
communication in writing to:
Wrap
Technologies, Inc.
1817 W 4th
Street
Tempe, Arizona 85281
Attn: Corporate
Secretary
You must
include your name and address in the written communication and
indicate whether you are a stockholder of the Company. Our
Corporate Secretary will review any communication received from a
stockholder, and all material and appropriate communications from
stockholders will be forwarded to the appropriate director or
directors or committee of the Board of Directors based on the
subject matter.
Section 16(a) Beneficial Ownership Reporting
Compliances
Section 16(a) of the Securities Exchange Act of
1934, as amended (the “
Exchange
Act
”) requires our
officers, directors, and persons who beneficially own more than 10%
of our Common Stock to file reports of ownership and changes in
ownership with the SEC. Officers, directors, and
greater-than-ten-percent stockholders are also required by the SEC
to furnish us with copies of all Section 16(a) forms that they
file.
Based
solely on a review of copies of such reports furnished to our
Company and representation that no other reports were required
during the year ended December 31, 2020, we believe that
all
persons
subject
to the reporting requirements pursuant to Section 16(a) filed the
required reports on a timely basis with the SEC, other than James
A. Barnes who was late reporting one transaction for the transfer
of shares of Common Stock from his family trust to his individual
name; Marc Thomas who was late reporting his initial Form 3 filing
of no ownership and his initial Form 4 reporting a stock option
grant; David G. Norris who was late reporting the cancellation of
restricted stock units (“
RSUs
”)
issued to Mr. Norris and the grant of director RSUs; and Scot Cohen
who was late reporting the charitable gift of Common
Stock.
-11-
EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
Executive Officers
Our executive
officers are appointed by the Board and serve at the discretion of
the Board, subject to the terms of any employment agreements they
may have with the Company. The following is a brief description of
the present and past business experience of each of the
Company’s current executive officers.
|
Name
|
Age
|
Positions
|
|
Thomas P.
Smith
|
53
|
Chief
Executive Officer and President
|
|
James A.
Barnes
|
66
|
Chief Financial Officer, Corporate
Secretary
and
Treasurer
|
|
Elwood G.
Norris
|
82
|
Chief
Technology Officer
|
|
Scot
Cohen
|
52
|
Executive
Chairman
|
|
|
|
|
Thomas P. Smith
.
Please see Mr.
Smith
’
s
biography under “Director
Nominees
”
above in
this Proxy
Statement.
James A.
Barnes
cofounded the Company
with Messrs. Elwood Norris and Cohen in March 2016, and currently
serves as Chief Financial Officer, Secretary and Treasurer. He
served as Manager until the Company’s incorporation in March
2017 when he was appointed President and Chief Financial Officer.
He served as a member of the Company’s Board of Directors
from March 2017 to November 2018. In January 2018 he was appointed
to the additional positions of Secretary and Treasurer and resigned
as President. He has served as the President of Sunrise Capital,
Inc., a private venture capital and financial and regulatory
consulting firm, since 1984. He was Chief Financial Officer of
Parametric Sound Corporation (now Turtle Beach Corporation) from
2010 to February 2015, and from February 2015 to February 2017
served as Vice President Administration at Turtle Beach
Corporation. Since 1999, he has been Manager of Syzygy Licensing
LLC, a private technology invention and licensing company he owns
with Mr. Elwood Norris. He previously practiced as a certified
public accountant and management consultant with Ernst & Ernst,
Touche Ross & Co., and as a principal in J. McDonald & Co.
Ltd., Phoenix, Arizona. He graduated from the University of
Nebraska with a Bachelor of Arts Degree in Business Administration
in 1976 and is a certified public accountant (status:
inactive).
Elwood G.
Norris
cofounded the Company
with Mr. Barnes and Mr. Cohen in March 2016 and currently serves as
the Company’s Chief Technology Officer. He served as a
director on the Company’s Board of Directors from March 2017
to January 2018. He was previously a director and President of
Parametric Sound Corporation (now Turtle Beach Corporation) from
2010 to February 2015, and from February 2015 to September 2016 he
served as Chief Scientist, a non-executive position, at Turtle
Beach. He was a director of LRAD Corporation (now Genasys Inc.)
from August 1980 to June 2010. He served as Chairman of LRAD
Corporation’s Board of Directors, an executive position, in
which he served in a technical advisory role and acted as a product
spokesman from September 2000 to April 2009. He is an inventor, and
has authored more than 80 U.S. patents, primarily in the fields of
electrical and acoustical engineering, and has been a frequent
speaker on innovation to corporations and government organizations.
He is the inventor of our BolaWrap technology. Mr. Elwood Norris is
a majority owner of Syzygy, but has no employment or management
relationship with Syzygy.
-12-
Scot
Cohen.
Please see Mr.
Cohen’s biography under “
Director
Nominees
” above in this
Proxy Statement.
There are
no arrangements or understandings between our Company and any other
person pursuant to which he was or is to be selected as a director,
executive officer or nominee. David Norris, director, is the son of
Elwood G. Norris, the Company’s Chief Technology Officer and
a former director.
Summary Compensation Table
The following table sets forth information
regarding the compensation awarded to or earned by the current and
former executive officers listed below during the years ended
December 31, 2020 and 2019. As an emerging growth company, we have
opted to comply with the reduced executive compensation disclosure
rules applicable to “smaller reporting companies,” as
such term is defined in the rules promulgated under the Securities
Act of 1933, as amended (the “
Securities
Act
”), which require
compensation disclosure for only our principal executive officers,
the two most highly compensated executive officers other than our
principal executive officer and up to two additional executive
officers during the year. Throughout this document, the six
officers below are referred to as our “named executive
officers”.
|
|
|
|
|
Stock
|
Option
|
All Other
|
|
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Awards (1)
|
Awards (2)
|
Compensation
|
Total
|
|
|
|
|
|
|
|
|
|
|
Thomas P.
Smith (3)
|
2020
|
$
250,000
|
$
463,800
|
$
-
(4)
|
$
199,876
|
$
-
|
$
913,676
|
|
Current Chief Executive Officer and President
|
2019
|
$
197,917
|
$
-
|
$
-
|
$
2,060,088
|
$
10,416
|
$
2,268,421
|
|
|
|
|
|
|
|
|
|
|
Marcel
Thomas (5)
|
2020
|
$
166,667
|
$
-
|
$
-
|
$
1,611,175
|
$
-
|
$
1,777,842
|
|
Former Chief Executive Officer and current Chief Government Affairs
Officer
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Norris (6)
|
2020
|
$
207,500
|
$
133,000
|
|
$
199,876
|
$
-
|
$
540,376
|
|
Former Chief Executive Officer and current Director
|
2019
|
$
180,000
|
$
-
|
$
618,325
|
$
-
|
$
-
|
$
798,325
|
|
|
|
|
|
|
|
|
|
|
James A.
Barnes (7)
|
2020
|
$
180,000
|
$
100,000
|
$
-
|
$
77,951
|
$
-
|
$
357,951
|
|
Chief Financial Officer, Secretary and Treasurer
|
2019
|
$
180,000
|
$
-
|
$
123,666
|
$
-
|
$
-
|
$
303,666
|
|
|
|
|
|
|
|
|
|
|
Scot Cohen
(8)(9)
|
2020
|
$
136,667
|
$
-
|
$
249,995
|
$
-
|
$
265,000
|
$
651,662
|
|
Executive Chairman and Director
|
2019
|
$
120,000
|
$
-
|
$
-
|
$
-
|
$
-
|
$
120,000
|
|
|
|
|
|
|
|
|
|
|
Michael
Rothans (10)
|
2020
|
$
180,000
|
$
70,000
|
$
-
|
$
99,306
|
$
-
|
$
349,306
|
|
Former Chief Operating Officer and current Chief Strategy
Officer
|
2019
|
$
120,000
|
$
-
|
$
173,130
|
$
-
|
$
-
|
$
293,130
|
|
(1)
|
Amounts
reported in this column do not reflect the amounts actually
received by our named executive officers. Instead, these amounts
reflect the aggregate grant date fair value of RSUs granted to the
named executive officers during the fiscal year ended December 31,
2020, as computed in accordance with the Financial Accounting
Standards Board Accounting Standards Codification 718
(“
ASC 718
”).
Assumptions used in the calculation of these amounts are included
in the notes to our financial statements included in our Annual
Report. As required by SEC rules, the amounts shown exclude the
impact of estimated forfeitures related to service-based vesting
conditions.
|
|
(2)
|
Amounts
reported in this column do not reflect the amounts actually
received by our named executive officers. Instead, these amounts
reflect the aggregate grant date fair value of each stock option
granted to the named executive officers during each fiscal year, as
computed in accordance with the Financial Accounting Standards
Board Accounting Standards Codification 718 (“
ASC 718
”). Assumptions used in
the calculation of these amounts are included in the notes to our
financial statements included in our Annual Report. As required by
SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. Our named
executive officers will only realize compensation to the extent the
trading price of our Common Stock is greater than the exercise
price of such stock options.
|
|
(3)
|
Mr. Smith became an employee and was appointed
President in March 2019, Interim Chief Executive Officer in October
2020 and Chief Executive Officer in March 2021. Total cash bonuses
for the year included $150,000 paid in September 2020 for execution
of an
At-Will Employment, Confidential Information,
Non-Compete/ Non-Solicitation, Invention Assignment, and
Arbitration Agreement.
|
|
|
|
|
(4)
|
In the year
ended December 31, 2020, RSUs subject to performance conditions
were granted with an aggregate grant date fair value of $150,000
computed in accordance with ASC 718. This amount represents the
highest level of achievement possible under the terms of the grant.
These RSUs were not vested and were cancelled and settled as part
of cash bonuses paid to Mr. Smith for 2020.
|
-13-
|
(5)
|
Mr. Thomas
served as Chief Executive Officer July 30, 2020 until October 29,
2020.
|
|
(6)
|
Mr. Norris, a
member of the Board of Directors, served as Chief Executive Officer
of the Company until July 30, 2020 and was an employee through
September 15, 2020. The compensation for services solely as a
director after his employment not included in the table above. See
“
Non-Executive Director
Compensation”
below.
|
|
|
|
|
(7)
|
Syzygy, an entity controlled by and partially
owned by Mr. Barnes, receives a royalty as described below in
“
Certain Relationships and
Related Transactions
” in
consideration for the license of certain technology necessary for
the development of BolaWrap 100. Mr. Barnes’ participation in
royalty payments is unrelated to employment, not considered
executive compensation and not included in the table
above.
|
|
(8)
|
A firm
wholly-owned by Mr. Cohen was paid $265,000 for
certain investor, shareholder and marketing
services as described in “
Certain Relationships and
Related Transactions
”.
This amount is included as Other Compensation in the table
above.
|
|
(9)
|
On April 1, 2021 Mr. Cohen
was granted 31,250 RSUs at a grant date value of $173,750 for prior
services as a member of the board of directors. On April 1, 2021 he
was also granted a ten-year stock option on 100,000 shares of
Common Stock exercisable at $5.56 per share with a grant date value
of $254,294 for his services as Executive Chairman. These amounts
are not included in the table above as they were issued in 2021 and
considered compensation for 2021.
|
|
(10)
|
Mr. Rothans
served as Chief Operating Officer until August 1, 2020 when he was
appointed in a new role as Chief Strategy Officer, not considered
an executive officer position.
|
Employment Arrangements
Marcel
Thomas
. On October 29,
2020, the Company
entered into an
employment agreement with Marc Thomas, the Company’s
Chief Government Affairs Officer (the
“
Agreement
”).
The Agreement provides
for an annual base salary of $400,000. In addition, Mr. Thomas
shall be eligible to receive an additional cash bonus (the
“
Annual
Bonus
”) based upon Mr.
Thomas’s attainment of certain goals and objectives to be
established by the Board or Compensation Committee, as defined in
the Agreement, on an annual basis. The Agreement shall continue for
a period of one year from the Effective Date, unless terminated
early or further extended by the parties. The Company may terminate
the Agreement at any time, with or without Cause, as such term is
defined the Agreement. If the Agreement is terminated by the
Company for Cause, Mr. Thomas will be entitled to Termination
Amounts, as defined in the Agreement. If the Agreement is
terminated by the Company without Cause, the Company shall pay Mr.
Thomas: (i) the Termination Amounts; (ii) severance in the form of
continuation of the Base Salary for the remaining term of the
Agreement; (iii) payment of Mr. Thomas’s premiums to cover
COBRA for the remaining term of the term of the Agreement; and (iv)
a prorated annual bonus equal the target Annual Bonus, if any, for
the year of termination multiplied by a fraction, the numerator of
which shall be the number of full and partial months Mr. Thomas
worked for the Company, and the denominator of which shall
be
the number of remaining months through the
term of the Agreement.
Upon entering into the Agreement, a prior employment agreement
between the Company and Mr. Thomas, dated as of July 30, 2020 (the
“
Prior
Agreement
”), was
terminated and is no longer in effect;
however,
Mr.
Thomas’ options to purchase Common Stock dated as of July 30,
2020 issued in connection with the Prior Agreement
continue
in full force in accordance with their original terms and
conditions
.
Thomas Smith.
Mr. Smith and the
Company are parties to an At-Will Employment, Confidential
Information, Non-Compete/Non-Solicitation, Invention Assignment,
and Arbitration Agreement, dated
September 9, 2020 (“
Smith
Agreement
”). Under the
terms of the Smith Agreement, Mr. Smith’s employment by the
Company is at-will, and is for no specified period. The Smith
Agreement also provides for the payment to Mr. Smith of $150,000 in
consideration for Mr. Smith’s agreement to, among other
covenants, not to compete with the Company following his
termination of employment with the Company for a period of 12
months, or solicit customers, employees or others. The $150,000
required to be paid to Mr. Smith under the terms of the Smith
Agreement were paid to Mr. Smith in September
2020.
Outstanding
Equity Awards as of December 31, 2020
The following
table provides information regarding each unexercised stock option
to purchase our Common Stock and unvested shares underlying RSUs
held by our named executive officers as of December 31,
2020.
|
|
Option Awards
|
Stock Awards
|
|||||||
|
|
|
|
|
|
|
|
|
Equity Incentive
|
Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
Awards: Market
|
|
|
|
|
|
|
|
|
|
Number
|
or Payout
|
|
|
|
|
|
|
|
|
|
of
Unearned
|
Value of
Unearned
|
|
|
|
Number of
|
Number of
|
|
|
Number of
|
Market Value
|
Shares,
|
Shares,
|
|
|
|
Securities
|
Securities
|
|
|
Shares of
|
of Shares of
|
Units or
|
Units or
|
|
|
|
Underlying
|
Underlying
|
|
|
Stock That
|
Stock That
|
Other Rights
|
Other Rights
|
|
|
|
Unexercised
|
Unexercised
|
Option
|
Option
|
Have Not
|
Have Not
|
That Have
|
That Have
|
|
|
Grant
|
Options (#)
|
Options (#)
|
Exercise
|
Expiration
|
Vested
|
Vested
|
Not Vested
|
Not Vested
|
|
Name
|
Date
|
Exercisable
|
Unexercisable
|
Price
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
|
|
|
|
|
|
|||||
|
Thomas
Smith
|
4/1/2020
|
-
|
-
|
|
|
-
|
-
|
35,211
(1)
|
$
170,069
|
|
|
4/1/2020
|
|
110,193
(2)
|
$
4.26
|
4/1/2030
|
-
|
-
|
-
|
-
|
|
|
3/18/2019
|
583,334
|
416,666
(3)
|
$
5.41
|
3/18/2024
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcel
Thomas
|
7/30/2020
|
-
|
350,000
(9)
|
$
11.22
|
7/30/2030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Norris
|
9/16/2020
|
-
|
-
|
|
|
7,160
(10)
|
$
34,583
|
|
|
|
|
4/1/2020
|
-
|
110,193
(11)
|
$
4.26
|
4/1/2030
|
-
|
-
|
-
|
-
|
|
|
5/23/2018
|
492,500
|
-
(12)
|
$
1.50
|
5/23/2023
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
James A.
Barnes
|
4/1/2020
|
|
42,975
(4)
|
$
4.26
|
4/1/2030
|
|
|
|
|
|
|
5/23/2019
|
|
|
|
|
8,540
(5)
|
$
41,248
|
|
|
|
|
5/23/2018
|
150,000
|
-
(6)
|
$
1.50
|
5/23/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scot
Cohen
|
1/16/2020
|
-
|
-
|
|
|
43,782
(7)
|
$
211,467
|
|
|
|
|
5/23/2018
|
150,000
|
-
(8)
|
$
1.50
|
5/23/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Rothans
|
12/17/2020
|
|
10,000
(13)
|
5.42
|
12/17/2027
|
|
|
|
|
|
|
4/1/2020
|
|
42,975
(14)
|
$
4.26
|
4/1/2030
|
|
|
|
|
|
|
5/23/2019
|
-
|
-
|
|
|
11,956
(15)
|
$
57,747
|
|
|
|
|
5/23/2018
|
87,083
|
22,917
(16)
|
$
1.50
|
5/23/2023
|
|
|
|
|
-14-
|
(1)
|
A total of 35,211 RSUs were granted on April 1, 2020 vesting based
on meeting performance objectives for the year-ended December 31,
2020, established by and measured at the discretion of the
Company’s Board of Directors. The market value is computed
based on the closing market price of our Common Stock on December
31, 2020 of $4.83 per share. These RSUs were cancelled in March
2021 and settled as part of Mr. Smith’s cash bonus for
2020.
|
|
|
|
|
(2)
|
One-third of the stock options vest on April 1, 2021, and the
remainder in 24 equal monthly installments over the two-year period
thereafter, subject to continued service.
|
|
|
|
|
(3)
|
One-third of these options vested on March 18, 2020 with the
balance vesting ratably each month over the following two-year
period, subject to continued service.
|
|
|
|
|
(4)
|
One-third of the stock options vest on April 1, 2021, and the
remainder in 24 equal monthly installments over the two-year period
thereafter, subject to continued service.
|
|
|
|
|
(5)
|
A total of 17,081 RSUs were granted on May 23, 2019 with one-third
vesting for 5,694 shares on May 23, 2020 and the balance vesting
ratably every six months over the two-year period thereafter,
subject to continued service. The market value is computed based on
the closing market price of our Common Stock on December 31, 2020
of $4.83 per share.
|
|
|
|
|
(6)
|
Options became fully vested on May 23, 2019.
|
|
|
|
|
(7)
|
A total of 43,782 RSUs were granted on January 16, 2020, with
one-third vesting on January 16, 2021, with the balance vesting
ratably each six months over the following two-year period. The
market value is computed based on the closing market price of our
Common Stock on December 31, 2020 of $4.83 per share. See Note 9 on
Page __ for information on 2021 equity awards not included in the
table above.
|
|
|
|
|
(8)
|
Options became fully vested on
May 23, 2019.
|
|
|
|
|
(9)
|
One-fourth of the stock options vest on July 30, 2021, and the
remainder in 36 equal monthly installments over the three-year
period thereafter, subject to continued service.
|
|
|
|
|
(10)
|
A total of 7,160 RSUs were granted on September 16, 2020 for Mr.
Norris services as a non-employee director, with one-third vesting
on September 16, 2021, with the balance vesting ratably each six
months over the following two-year period. The market value is
computed based on the closing market price of our Common Stock on
December 31, 2020 of $4.83 per share.
|
|
|
|
|
(11)
|
One-third of the stock options vest on April 1, 2021, and the
remainder in 36 equal monthly installments over the three-year
period thereafter.
|
|
|
|
|
(12)
|
Options became fully vested on May 23, 2020.
|
|
(13)
|
One-third of the stock options vest on April 1, 2021, and the
remainder in 24 equal monthly installments over the two-year period
thereafter, subject to continued service.
|
|
(14)
|
One-third of the stock options vest on December 17, 2021, and the
remainder in 24 equal monthly installments over the two-year period
thereafter, subject to continued service.
|
|
(15)
|
A total of 23,913 RSUs were granted on May 23, 2019 with one-third
vesting for 7,971 shares on May 23, 2020 and the balance vesting
ratably every six months over the two-year period thereafter,
subject to continued service. The market value is computed based on
the closing market price of our Common Stock on December 31, 2020
of $4.83 per share.
|
|
(16)
|
Options became fully vested on May 23, 2020.
|
-15-
Potential Payments Upon Termination, Death, Disability, or
Retirement
With the
exception of the Mr. Thomas’ Agreement, we have no executive
employee contracts at this time. Every officer and employee are an
at-will employee. The royalties payable to Syzygy, partially owned
by Messrs. Barnes and Elwood G. Norris and controlled by Mr.
Barnes, are unrelated to employment or their roles as officers, and
will continue upon any termination, death, disability or
retirement.
Compensation Risks Assessment
As required by
rules adopted by the SEC, management has assessed our compensation
policies and practices with respect to all employees to determine
whether risks arising from those policies and practices are
reasonably likely to have a material adverse effect on us. In doing
so, management considered various features and elements of the
compensation policies and practices that discourage excessive or
unnecessary risk taking. As a result of the assessment, we have
determined that our compensation policies and practices do not
create risks that are reasonably likely to have material adverse
effects.
NON-EXECUTIVE DIRECTOR COMPENSATION
The
following table sets forth the compensation awarded to, earned by,
or paid to each person who served as a director during the fiscal
year ended December 31, 2020, other than a director who also served
as an executive officer:
|
|
Fees
|
|
|
|
|
|
Earned
|
Stock
|
Option
|
|
|
|
or Paid in
|
Awards
|
Awards
|
|
|
Name
|
Cash ($) (1)
|
($) (2)
|
($)
|
Total ($)
|
|
|
|
|
|
|
|
Michael
Parris
|
$
57,500
|
$
57,500
|
$
-
|
$
115,000
|
|
|
|
|
|
|
|
Patrick
Kinsella
|
$
57,500
|
$
57,500
|
$
-
|
$
115,000
|
|
|
|
|
|
|
|
Wayne R.
Walker
|
$
57,500
|
$
57,500
|
$
-
|
$
115,000
|
|
|
|
|
|
|
|
David G.
Norris
|
$
16,771
|
$
57,495
|
$
-
|
$
74,266
|
|
|
|
|
|
|
|
Scot Cohen
(4)
|
$
-
|
$
-
|
$
-
|
$
-
|
|
(1)
|
Each non-employee director was paid $4,792 per month during the
year ended December 31, 2020, which was paid on a quarterly basis,
for their services on the Board. Mr. Norris was paid a pro-rata
non-employee director fee for the period from September 16, 2020 to
December 31, 2020.
|
|
(2)
|
In January 2020
each non-employee director was granted RSUs for 10,070 shares
vesting one third in one year and the balance vesting ratably each
six months over the following two-year period. Mr. Norris was
granted RSUs on September 16, 2020 for 7,160 shares also vesting
one third in one year and the balance vesting ratably each six
months over the following two-year period.
|
|
(3)
|
No option
awards were granted to non-employee directors during the year ended
December 31, 2020. As of December 31, 2020, the aggregate number of
shares of Common Stock underlying outstanding options held by our
non-employee directors were as follows: Mr. Parris, 50,000 shares;
Mr. Walker, 35,000 shares; and Mr. Norris, 602,693
shares.
|
|
(4)
|
Mr. Cohen serves as an employee and Executive Chairman. During the
year ended December 31, 2020, he did not receive any compensation
for his service as a director.
|
-16-
Additional Director Compensation Information
On April 1,
2021 the Board approved a stock award of 31,250 shares of Common
Stock to each of the five directors above for prior services. The
RSUs had a grant date value for each award of $173,750. These
amounts are considered 2021 compensation and not included in the
non-executive director compensation table above.
On April 1,
2021, the Board also approved a new director compensation plan
payable to all non-employee independent directors
(“
Amended Board
Plan
”). As revised, under the terms of the Amended
Board Plan, non-employee independent directors receive $121,000
annually effective January 1, 2021, payable one-half in cash and
one-half in restricted stock units to be settled in shares of the
Company’s Common Stock, with 30% vesting immediately, and the
remaining 70% vesting in monthly installments throughout the
remainder of the year following the date of grant. In addition,
each independent director that chairs a standing committee of the
Board will receive an additional annual cash payment of $10,000,
and any independent director serving as lead independent director
of the Board will receive additional annual cash compensation of
$25,000. In lieu of director compensation, the current Executive
Chairman is paid $121,000 annually, effective January 1, 2021, in
addition to the grant of an option to purchase 100,000 shares of
Common Stock with 30% vesting immediately and the remaining 70%
vesting in equal monthly installments over the twelve months from
the date of grant.
In addition
to annual compensation paid to each member of the Board, each new
director appointed to the Board shall receive an initial grant of
options to purchase 30,000 shares of Common Stock at an exercise
price based the closing price of the Company’s Common Stock
as reported on the Nasdaq Capital Market on the date of grant,
which options shall expire, if not previously exercised, ten years
from the date of grant, and shall vest as follows: (i) 50% on the
one-year anniversary of the date of grant, and (ii) the remaining
50% in four equal quarterly installments over the following
year.
In accordance
with the Amended Board Plan, on April 1, 2021 each of Messrs.
Parris, Kinsella, Walker and Norris each received 10,882 RSUs
vesting during 2021 with a grant date value of $60,500 each. As
Executive Chairman, Mr. Cohen was
granted a ten-year stock option on 100,000 shares
of Common Stock exercisable at $5.56 per share vesting during 2021
with a grant date value of $254,294 for his services as Executive
Chairman.
These amounts are considered 2021 compensation and
not included in the table above.
Upon their
appointment to the Board on April 19, 2021, each of the four new
directors consisting of Ms.
Sentovich
and Messrs. Kennedy, Sherman and
Kukowski received a grant of 8,403 RSUs vesting during the balance
of 2021 with a grant date value of $42,350 each. Each new director
was also granted a ten-year stock option to purchase 30,000 shares
of Common Stock exercisable at $5.23 per share vesting over two
years with a grant date value of $73,063 each.
-17-
PROPOSAL NO. 2
AMENDMENT TO OUR 2017 EQUITY COMPENSATION PLAN AND RATIFICATION OF
ALL ISSUANCES MADE THEREUNDER TO DATE
Background of Plan and Purpose of the Plan Amendment
The 2017 Plan was
adopted by our Board of Directors and approved by a majority of our
stockholders on March 31, 2017. The 2017 Plan reserved 2.0 million
shares of our Common Stock for issuance as one of four types of
equity incentive awards: (i) stock options, (ii) shares of Common
Stock, (iii) restricted stock awards, and (iv) restricted stock
units. The 2017 Plan permits the qualification of awards under the
2017 Plan as “performance-based compensation” within
the meaning of Section 162(m) of the Internal Revenue
Code.
On March 16, 2019, our
Board voted unanimously to adopt a Plan Amendment to provide for an
additional 2.1 million shares for grants under the 2017 Plan, which
increase was approved by the stockholders on May 23, 2019. On April
8, 2020, our Board voted unanimously to adopt a Plan Amendment to
provide for an additional 1.9 million shares for grants under the
2017 Plan, which increase was approved by the stockholders on June
5, 2020. Accordingly, the total shares reserved under the 2017
Plan, as amended, is 6.0 million shares of Common
Stock.
As of
April 23
, 2021, a total
of
4,973,607
shares are
reserved for issuance upon exercise of outstanding options or
reserved for restricted stock awards under the 2017 Plan. As a
result of prior exercises and awards of
841,728
shares, we currently
have
184,665
shares
available for issuance as stock options or other awards under the
2017 Plan prior to the proposed Plan Amendment. The proposed Plan
Amendment will allow the Company to maintain a sufficient pool of
available shares for future grants under the 2017
Plan.
The 2017 Plan provides for the issuance of
stock-based awards to attract and retain the services of
executives, other key employees and certain contractors. Keeping a
proportionate number of shares available for issuance under the
2017 Plan in relation to our issued and outstanding shares of
Common Stock provides the ability and flexibility to present
compensation packages that compare favorably with those offered by
other companies. As only 184,665 shares are currently
available for issuance under the 2017 Plan, on April 23, 2021, our
Board adopted a Plan Amendment to provide for an additional 1.5
million shares for future grants under the 2017 Plan.
Although we do not currently have any
definitive arrangements or agreements, either written or oral,
regarding the issuance of additional awards pursuant to this
increase to the 2017 Plan either prior or subsequent to the
effectiveness of the Plan Amendment, we may issue additional awards
under the 2017 Plan to certain individuals prior to obtaining
stockholder approval of the Plan Amendment. In the event that we do
issue additional awards under the 2017 Plan prior to the
effectiveness of the Plan Amendment, all such issuances will be
conditioned upon stockholder approval of the Plan
Amendment.
Summary Description of the 2017 Plan
The 2017 Plan
is intended to (i) encourage ownership of shares by our employees
and directors and certain consultants to the Company; (ii) induce
them to work for the benefit of the Company; and (iii) provide
additional incentive for such persons to promote the success of the
Company.
Administration
The
Compensation Committee of the Board administers the 2017 Plan,
which permits the granting of equity awards to purchase up to 4.1
million shares of our Common Stock, which number will increase to
6
million shares of our Common
Stock on the day of the Annual Meeting, subject to the receipt of
stockholder approval of the Plan Amendment.
The 2017 Plan
permits the Compensation Committee to grant
one of four types of
equity incentive awards: (i) stock options, (ii) shares of Common
Stock, (iii) restricted stock awards, and (iii) restricted stock
units.
The
Compensation Committee may delegate to a committee of one or more
members of the Board the authority to grant or amend awards to
participants other than senior executives of the Company who are
subject to Section 16 of the Exchange Act, or employees who are
“covered employees” within the meaning of Section
162(m) (“
Section
162(m
)”) of the Internal Revenue Code (the
“
IRS
Code
”). The Compensation
Committee includes at least
two
directors, each of whom qualifies as a non-employee director
pursuant to Rule 16b-3 of the Exchange Act, and an “outside
director” pursuant to Section 162(m).
-18-
The
Compensation Committee, or a committee delegated by the
Compensation Committee, will have the exclusive authority to
administer the 2017 Plan, including the power to determine
eligibility, the types and sizes of awards, the price and timing of
awards and the acceleration or waiver of any vesting restriction,
provided that the Compensation Committee will not have the
authority to accelerate vesting or waive the forfeiture of any
performance-based awards.
Eligibility
Persons
eligible to participate in the 2017 Plan include non-employee
members of the Board, certain consultants to the Company, and all
of the employees of the Company and its subsidiaries, as determined
by the Compensation Committee.
Awards
The 2017 Plan
provides for the grant of (i) stock options, (iii) Common
Stock, (iv) restricted stock awards, and (v) restricted stock
units.
Changes in Capital Structure
In the event of
a dissolution or liquidation of the Company, then all outstanding
Stock Awards (as defined in the 2017 Plan) shall terminate
immediately prior to such event. In the event of (i) a sale,
lease or other disposition of all or substantially all of the
assets of the Company, (ii) a merger or consolidation in which
the Company is not the surviving corporation or (iii) a
reverse merger in which the Company is the surviving corporation
but the shares of Common Stock outstanding immediately preceding
the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise
(individually, a “
Corporate
Transaction
”), then any surviving corporation or
acquiring corporation shall assume any Stock Awards outstanding
under the 2017 Plan or shall substitute similar stock awards
(including an award to acquire the same consideration paid to the
stockholders in the Corporate Transaction) for those outstanding
under the 2017 Plan. In the event any surviving
corporation or acquiring corporation refuses to assume such Stock
Awards or to substitute similar stock awards for those outstanding
under the 2017 Plan, then with respect to Stock Awards held by
Participants whose Continuous Service has not terminated, the
vesting of such Stock Awards (and, if applicable, the time during
which such Stock Awards may be exercised) shall be accelerated in
full, and the Stock Awards shall terminate if not exercised (if
applicable) at or prior to the Corporate Transaction. With
respect to any other Stock Awards outstanding under the 2017 Plan,
such Stock Awards shall terminate if not exercised (if applicable)
prior to the Corporate Transaction. Notwithstanding the foregoing
provisions of this paragraph, Participants shall be allowed not
less than six months to exercise Stock Awards so
vested.
In addition, in
such a case or in the event of any unusual or nonrecurring
transactions or events affecting the Company or of changes in
applicable laws, the Compensation Committee, may, subject to the
terms of the 2017 Plan, take any of the following actions if it
determines that such action is appropriate in order to prevent the
dilution or enlargement of benefits or potential benefits intended
to be made available under the 2017 Plan or with respect to any
award: (i) provide for either the termination, purchase or
replacement of the awards, (ii) provide that the awards shall be
assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar awards
covering the stock of the successor or survivor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to
the number and kind of shares and prices, (iii) make adjustments in
the number and type of shares of stock (or other securities or
property) subject to outstanding awards and/or in the terms and
conditions of (including the exercise price), and the criteria
included in, outstanding awards which may be granted in the future,
(iv) provide for the acceleration of vesting or exercisability of
the awards and (v) provide that the awards cannot vest or be
exercised after the event that triggers the action.
Amendment and Termination
The
Compensation Committee, subject to approval of the full Board of
Directors, may terminate, amend, or modify the 2017 Plan at any
time;
provided
,
however
, that stockholder
approval must be obtained for any amendment to the extent necessary
or desirable to comply with any applicable law, regulation or stock
exchange rule, to increase the number of shares available under the
2017 Plan, to extend the exercise period for an option beyond ten
years from the date of grant or to allow a material increase in the
benefits or change the eligibility requirements under the 2017
Plan.
In no event may
an award be granted pursuant to the 2017 Plan on or after the tenth
anniversary of the effectiveness of the 2017 Plan.
-19-
U.S. Federal Income Tax Consequences
Under the
2017 Plan, stock options may be granted which are intended to
qualify as Incentive Stock Options under Section 422 of the
Internal Revenue Code of 1986, or which are not intended to qualify
as Incentive Stock Options. In addition, direct grants of stock or
restricted stock may be awarded. Accordingly, the 2017 Plan is, in
part, a qualified plan for Federal income tax purposes. As such,
the Company is entitled to (a) withhold and deduct from future
wages of any participant, or make other arrangements for the
collection of, all legally required amounts necessary to satisfy
any and all federal, state and local withholding and
employment-related tax requirements attributable to an Incentive
Stock Option, including, without limitation, the grant, exercise or
vesting of, or payment of dividends with respect to, an Incentive
Stock Option or a disqualifying disposition of stock received upon
exercise of an Incentive Stock Option, or (b) require the
participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of
Common Stock, with respect to an Incentive Stock
Option.
Awards Granted Under the 2017 Plan
Because
grants under the 2017 Plan are subject to the discretion of the
Compensation Committee, awards under the 2017 Plan that may be made
in the future are not determinable. Future exercise prices for
options granted under the 2017 Plan are also not determinable
because they will be based upon the fair market value of the
Company’s common stock on the date of grant.
The following
table discloses all awards granted to the persons or groups
specified below under the current version of the 2017 Plan during
our most recently completed fiscal year ended December 31,
2020:
|
|
|
All Other
|
All Other
|
|
Grant
|
|
|
|
Stock Awards:
|
Option Awards:
|
Exercise
|
Date Fair
|
|
|
|
Number of
|
Number of
|
Price of
|
Value of
|
|
|
|
Shares of
|
Securities
|
Option
|
Stock and
|
|
|
Grant
|
Stock or
|
Underlying
|
Awards
|
Option Awards
|
|
Name and Position
|
Date
|
Units (#)
|
Options (#)
|
($/Share) (1)
|
($) (2)
|
|
Current Executive Officers
|
|
|
|
|
|
|
Thomas Smith,
President
|
4/1/2020
|
-
|
110,193
|
$
4.26
|
$
199,876
|
|
|
4/1/2020
|
35,211
|
-
|
-
|
$
150,000
|
|
James A.
Barnes
, Chief Financial
Officer, Secretary and Treasurer
|
4/1/2020
|
-
|
42,975
|
$
4.26
|
$
77,951
|
|
Scot Cohen
, Executive Chairman
|
1/16/2020
|
43,782
|
-
|
-
|
$
250,000
|
|
|
|
|
|
|
|
|
Former Executive Officers
|
|
|
|
|
|
|
David Norris
, Former Chief Executive
Officer
|
4/1/2020
|
-
|
110,193
|
$
4.26
|
$
199,876
|
|
|
9/16/2020
|
7,160
|
-
|
-
|
$
57,495
|
|
Marcel Thomas,
Former Chief Executive
Officer
|
7/30/2020
|
-
|
350,000
|
-
|
$
1,793,885
|
|
Michael
Rothans
, Former Chief Operating
Officer
|
4/1/2020
|
-
|
42,975
|
$
4.26
|
$
77,951
|
|
|
12/17/2020
|
-
|
10,000
|
$
5.42
|
$
21,355
|
|
Others
|
|
|
|
|
|
|
Non-Employee Directors
|
1/16/2020
|
30,210
|
-
|
-
|
$
172,500
|
|
Employees and
Consultants
(excluding
executive officers)
|
Various
|
229,722
|
757,500
|
-
|
$
3,143,630
|
|
(1)
|
Each option was granted at an exercise price equal to the fair
market value of our Common Stock on the grant date which was equal
to the closing price of a share of our Common Stock, as reported by
Nasdaq on the date of grant.
|
|
(2)
|
The amounts
reported do not reflect the amounts actually received by the
parties. Instead, these amounts reported reflect the aggregate
grant date fair value of all options and stock awards granted
during fiscal year ended December 31, 2020, as computed in
accordance with ASC 718. Assumptions used in the calculation of
these amounts are included in the notes to our financial statements
included in our Annual Report. As required by SEC rules, the
amounts shown exclude the impact of estimated forfeitures related
to service-based vesting conditions.
|
On March 8,
2021 Mr. Thomas P. Smith, the Company’s Chief Executive
Officer was granted a ten-year option on 400,000 shares of the
Company’s Common Stock, exercisable at $5.22 per share and
vesting over three years. During the period January 1, 2021 through
April
23
, 2021 the Company
granted non-executive employees and consultants options on an
aggregate of 182,500 shares at exercise prices ranging from $4.90
to $5.50 per share and granted 39,500 RSUs at grant date prices
ranging from $4.90 to $5.50.
On
April 1
, 2021, the Board granted to the
Company’s five directors a stock award of shares of Common
Stock under the 2017 Plan for an aggregate of
156,250
shares of Common Stock at a grant
date value of $5.56 per share for an aggregate of $868,750 in
consideration for such directors’ past service on the Board.
Also, on April 1, 2021 the Company granted four non-executive
directors an aggregate of 43,528 RSUs at a grant date price of
$5.56 per share that vested 30% on the date of grant, with the
remainder vesting in eight equal monthly installments, becoming
fully vested on December 1, 2021. In addition, Scot Cohen, in
consideration for his service to the Board as Executive Chairman,
was granted a ten-year option to purchase 100,000 shares of the
Company’s Common Stock, exercisable at $5.56 per share. These
options vested 30% on the date of grant, and the remainder vest in
eight equal monthly installments thereafter, becoming fully vested
on December 1, 2021.
-20-
In April
2021 we issued options to purchase a total of 120,000 shares of
Common Stock and 33,612 RSUs to four new directors for future board
service. We may issue additional awards under the 2017 Plan to
certain individuals prior to obtaining stockholder approval of the
Plan Amendment. In the event that we do issue additional awards
under the 2017 Plan prior to the effectiveness of the Plan
Amendment, any such issuances in excess of those approved by the
stockholders will be conditioned upon stockholder approval of the
Plan Amendment.
A vote in favor
of this item will have the result of ratifying the issuance of the
awards set forth above as well as the approval of the Plan
Amendment.
Equity Compensation Plan Information
The following table sets forth information as of
December 31, 2020, with respect to compensation plans (including
individual compensation arrangements) under which our equity
securities are authorized for issuance, aggregated as
follows:
|
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights
|
Weighted-average exercise price of outstanding options,
warrants and rights
|
Number of securities remaining available for future
issuance under equity compensation plans (excluding securities
reflected in column (a))
|
|
Plan
Category
|
(a)
|
(b)
|
(c)
|
|
|
|
|
|
|
Equity
compensation plans approved by security holders
|
4,359,592
|
$
4.58
|
1,150,055
|
|
Equity
compensation plans not approved by security holders
|
-
|
-
|
-
|
|
Total
|
4,359,592
|
$
4.58
|
1,150,055
|
Vote Required
To approve Plan
Amendment and ratify all issuances made under the 2017 Plan to
date, the number of votes cast “FOR” must exceed the
number of votes cast “AGAINST” this Proposal.
A properly executed proxy marked
“ABSTAIN” will not be voted, although it will be
counted as present and entitled to vote for purposes of the
Proposal. Accordingly, an abstention will have the effect of a
vote against this Proposal. A broker or nominee will not have
discretionary authority to vote on this Proposal because it is
considered a non-routine matter. Accordingly, broker non-votes will
have no effect on the outcome of this Proposal.
Unless
otherwise instructed on the proxy or unless authority to vote is
withheld, shares represented by executed proxies will be voted
“FOR” the adoption of the Plan Amendment.
Board of Directors Recommendation
The Board recommends a vote “FOR” the Plan Amendment
and ratification of all issuances made thereunder to
date.
-21-
PROPOSAL NO. 3
RATIFICATION OF THE APPOINTMENT OF
ROSENBERG RICH BAKER BERMAN, P.A. TO SERVE AS OUR
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL
YEAR
Upon
recommendation of the Audit Committee of the Board of Directors,
the Board appointed Rosenberg Rich Baker Berman, P.A.
(“
RRBB
”) as our
independent registered public accounting firm for the year ending
December 31, 2021, and hereby recommends that the stockholders
ratify such appointment.
The Board may
terminate the appointment of RRBB as the Company’s
independent registered public accounting firm without the approval
of the Company’s stockholders whenever the Board deems such
termination necessary or appropriate.
Representatives
of RRBB will be in attendance during the Annual Meeting or
available telephonically and will have an opportunity to make a
statement if they so desire and to respond to appropriate questions
from stockholders.
Audit Fees
The
following table presents fees billed by RRBB for professional
services rendered for the fiscal years ended December 31, 2020 and
2019:
|
|
2020
|
2019
|
|
Audit fees
(1)
|
$
48,500
|
$
38,000
|
|
Audit related fees
(2)
|
4,500
|
1,600
|
|
Tax fees
(3)
|
|
-
|
|
All other fees
(4)
|
|
-
|
|
Total
|
$
53,000
|
$
39,600
|
(1)
Audit Fees
include fees and expenses for professional services rendered in
connection with the audit of our financial statements for those
years, reviews of the interim financial statements that are
normally provided by the independent registered public accounting
firm in connection with statutory and regulatory filings or
engagements.
(2)
Audit
Related Fees consist of fees billed for assurance related services
that are reasonably related to the performance of the audit or
review of our financial statements and are not reported under
“Audit Fees”. Included in Audit Related Fees are fees
and expenses related to reviews of registration statements and SEC
filings other than annual reports on Form 10-K and quarterly
reports on Form 10-Q.
(3)
Tax Fees
include the aggregate fees billed during the fiscal year indicated
for professional services for tax compliance, tax advice and tax
planning. No such fees were billed by RRBB for 2020 or
2019.
(4)
All Other
Fees consist of fees for products and services other than the
services reported above. No such fees were billed by RRBB for 2020
or 2019.
Audit Committee Pre-Approval Policies and Procedures
All audit and non-audit services are pre-approved
by the Audit Committee, and were pre-approved by the full Board
prior to the formation of the Audit Committee in November 2018,
which considers, among other things, the possible effect of the
performance of such services on the registered public accounting
firm’s independence. The Audit Committee pre-approves the
annual engagement of the principal independent registered public
accounting firm, including the performance of the annual audit and
quarterly reviews for the subsequent fiscal year, and pre-approves
specific engagements for tax services performed by such firm. The
Audit Committee has also established pre-approval policies and
procedures for certain enumerated audit and audit related services
performed pursuant to the annual engagement agreement, including
such firm’s attendance at and participation at Audit
Committee and Board of Director meetings; services of such firm
associated with SEC registration statements, periodic reports and
other documents filed with the SEC or other documents issued in
connection with securities offerings, such as comfort letters and
consents; such firm’s assistance in responding to any SEC
comment letters; and consultations with such firm as to the
accounting or disclosure treatment of transactions or events and/or
the actual or potential impact of final or proposed rules,
standards or interpretations by the SEC, Public Company Accounting
Oversight Board (“
PCAOB
”), Financial Accounting Standards Board
(“
FASB
”), or other regulatory or standard-setting
bodies. The Audit Committee is informed of each service performed
pursuant to its pre-approval policies and
procedures.
-22-
The Audit
Committee has considered the role of RRBB, in providing services to
us for the year ended December 31, 2020 and has concluded that such
services are acceptable with such firm’s
independence.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in or disagreements
with accountants on accounting and financial
disclosure.
Auditor Independence
Our Audit Committee and our full Board considered
that the work done for us in the years ended December 31, 2020 and
2019, respectively, by
RRBB
was performed while maintaining
the
independence of RRBB.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
Date: April 30
, 2021
The Audit Committee has reviewed and discussed
with management and
Rosenberg Rich Baker Berman,
P.A.
, our independent registered
public accounting firm, the audited consolidated financial
statements in the
Wrap Technologies, Inc.
Annual Report on Form 10-K for the year ended
December 31, 2020.
Rosenberg Rich
Baker Berman, P.A.
also provided the
Audit Committee with the written disclosures and the letter
required by the applicable requirements of the PCAOB regarding the
independent auditor’s communication with the Audit Committee
concerning independence. The Audit Committee has discussed with the
registered public accounting firm their independence from our
Company.
Based on
its discussions with management and the registered public
accounting firm, and its review of the representations and
information provided by management and the registered public
accounting firm, including as set forth above, the Audit Committee
recommended to our Board that the audited financial statements be
included in our Annual Report on Form 10-K for the year ended
December 31, 2020.
|
|
Respectfully Submitted,
Patrick
Kinsella, Committee Chair
Michael
Parris
Wayne
Walker
|
The information contained above under the caption
“
Report of the Audit Committee
of the Board of Directors
” shall not be deemed to be soliciting
material or to be filed with the SEC, nor shall such information be
incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, except to the extent that we specifically
incorporate it by reference into such filing.
Required Vote and Recommendation
Ratification of
the selection of Rosenberg Rich Baker Berman, P.A. as the
Company’s independent auditors for the fiscal year ending
December 31, 2020 requires the affirmative vote of a majority of
the shares present or represented by proxy and entitled to vote at
the Annual Meeting. Unless otherwise instructed on the proxy or
unless authority to vote is withheld, shares represented by
executed proxies will be voted “FOR” the ratification
of Rosenberg Rich Baker Berman, P.A. as the Company’s
independent auditors for the fiscal year ending December 31,
2021.
The
Board recommends that stockholders vote “
FOR
” the ratification of
the selection of Rosenberg Rich Baker Berman, P.A. as our
independent auditors for the fiscal year ending December 31,
2021.
-23-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
As of April
26
, 2021, we had one class of voting stock
outstanding: Common Stock. The following table sets forth
information concerning shares of our Common Stock beneficially
owned as of April
26
, 2021
(unless otherwise noted), by:
●
each person or
entity known by us to be the beneficial owner of 5% or more of the
outstanding shares of Common Stock;
●
each person currently
serving as director; and
●
each of our
named executive officers.
The share amounts in the table below are based
on
37,948,413
shares of Common
Stock issued and outstanding as of the Record Date. To our
knowledge, except as otherwise indicated in the footnotes below,
each person or entity has sole voting and investment power with
respect to the shares of Common Stock set forth opposite such
person’s or entity’s name. Beneficial ownership is
determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to the
securities.
|
|
Name and Address of
|
Amount and Nature of
|
Percent of
|
|
|
Title of Class
|
Beneficial Owner (1)
|
Beneficial Ownership
|
Class
|
|
|
|
|
|
|
|
|
|
Named Executive
Officers and Directors:
|
|
|
|
|
Common
Stock
|
Elwood G.
Norris
|
6,452,457
|
(2)
|
16.9
%
|
|
Common
Stock
|
Scot
Cohen
|
5,013,140
|
(3)
|
13.1
%
|
|
Common
Stock
|
Thomas P.
Smith
|
765,075
|
(4)
|
2.0
%
|
|
Common
Stock
|
James A.
Barnes
|
2,355,537
|
(5)
|
6.2
%
|
|
Common
Stock
|
David
Norris
|
1,978,366
|
(6)
|
5.1
%
|
|
Common
Stock
|
Michael
Rothans
|
142,654
|
(7)
|
*
|
|
Common
Stock
|
Michael
Parris
|
287,775
|
(8)
|
*
|
|
Common
Stock
|
Patrick
Kinsella
|
104,775
|
(9)
|
*
|
|
Common
Stock
|
Wayne R.
Walker
|
74,775
|
(10)
|
*
|
|
|
|
|
|
|
|
|
All
directors and named executive
officers
as
a group
(9 persons)
|
17,174,554
|
|
43.0
%
|
* less than 1%
__________________
(1)
Except as otherwise indicated, the business
address for these beneficial owners is c/o the Company, 1817 W
4th
Street, Tempe, Arizona
85281.
(2)
Includes 850,904 shares held by Mr. Elwood Norris
directly, 5,451,553 shares beneficially owned by Mr. Elwood Norris
through his family trust, and 150,000 shares underlying stock
options that may be exercised within 60 days from April
26
, 2021.
(3)
Includes 4,827,750 shares held by Mr. Cohen and
197,500 shares underlying stock options that may be exercised
within 60 days from April
26
,
2021.
(4)
Includes 765,075 shares underlying stock options
that may be exercised within 60 days from April
26
, 2021.
(5)
Includes 1,814,741 shares beneficially owned by
Mr. Barnes through a family trust; 358,959 shares beneficially
owned by Mr. Barnes through Sunrise Capital, Inc.; 166.711 shares
underlying stock options that may be exercised within 60 days from
April
26
, 2021; and 2,847
shares underlying RSUs issuable within 60 days from April
26
, 2021. Mr. Barnes is the President
of Sunrise Capital, Inc.
-24-
(6)
Includes 1,471,110 shares beneficially owned by
Mr. Norris through a family trust and 505,352 shares underlying
stock options that may be exercised within 60 days from April 26,
2021, and 1,904 shares underlying RSUs issuable within 60 days of
April 26
, 2021
.
(7)
Includes
126,711 shares underlying stock options that may be exercised
within 60 days from April 26, 2021and 3,986 shares underlying RSUs
issuable within 60 days from April 26, 2021.
(8)
Includes 50,000 shares underlying stock options
that may be exercised within 60 days from April
26
, 2021, and 1902 shares underlying
RSUs issuable within 60 days of April
26, 2021
.
(9)
Includes 30,000 shares beneficially held by
personal IRA, and 1904 shares underlying RSUs issuable within 60
days of April
26, 2021
.
(10)
Includes 35,000 shares underlying stock options
that may be exercised within 60 days from April 26, 2021, and 1904
shares underlying RSUs issuable within 60 days of April
26,
2021
.
Certain Relationships and Related Transactions
The Company is obligated to pay royalties and
development and patent costs pursuant to an exclusive Amended and
Restated Intellectual Property License Agreement dated September
30, 2016 with Syzygy, a company owned and controlled by
stockholders and officers of the Company, Mr. Elwood Norris and Mr.
James Barnes. The agreement provides for royalty payments of 4% of
revenue from products employing the licensed ensnarement device
technology up to an aggregate of $1,000,000 in royalties or until
September 30, 2026, whichever occurs earlier. During the years
ended December 31, 2020 and 2019 the Company incurred royalties to
Syzygy of
$143,390
and $23,297,
respectively.
Commencing in October 2017, the Company began
reimbursing Mr. Elwood Norris, an officer and stockholder of the
Company, $1,500 per month on a month-to-month basis for laboratory
facility costs, for an aggregate of
$18,000
during each of the years ended December 31, 2020
and 2019.
For a
director to be considered “independent,” the Board must
affirmatively determine that the director has no material
relationship with the Company (directly or as a partner,
stockholder or officer of an organization that has a relationship
with the Company). In each case, the Board considers all relevant
facts and circumstances. Our Board has affirmatively determined
that Messrs. Kinsella, Parris and Walker are independent
directors.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports,
proxy statements and other information with the SEC. The periodic
reports and other information we have filed with the SEC, may be
inspected and copied at the SEC’s Public Reference Room at
100 F Street, N.E., Washington DC 20549. You may obtain information
as to the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. The SEC also maintains a Web site that contains
reports, proxy statements and other information about issuers, like
the Company, who file electronically with the SEC. The address of
that site is
www.sec.gov
.
Copies of these documents may also be obtained by writing our
secretary at the address specified above.
STOCKHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING OF
STOCKHOLDERS
Pursuant to
Rule 14a-8 under the Exchange Act, stockholder proposals to be
included in our next proxy statement must be received by us at our
executive offices no later than 90 days nor more than 120 days
prior to the first anniversary of the preceding year’s annual
meeting. A stockholder proposal not included in the Company’s
proxy statement for the 2020 Annual Meeting of Stockholders will be
ineligible for presentation at the meeting unless the stockholder
gives timely notice of the proposal in writing to the Corporate
Secretary of the Company at the executive offices of the Company.
To be timely, the Company must have received the
stockholder’s notice not less than 90 days nor more than 120
days in advance of the date the proxy statement was released to
stockholders in connection with the previous year’s annual
meeting of stockholders. However, if the date of the 2021 Annual
Meeting of Stockholders is changed by more than 30 days from the
date of this year’s Annual Meeting, the Company must receive
the stockholder’s notice no later than the close of business
on (i) the 90th day prior to such annual meeting and
(ii) the seventh day following the day on which public
announcement of the date of such meeting is first
made.
We reserve
the right to reject, rule out of order, or take other appropriate
action with respect to any proposal that does not comply with these
and all other applicable requirements.
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HOUSEHOLDING OF PROXY MATERIALS
The SEC has
adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for proxy statements
and annual reports with respect to two or more stockholders sharing
the same address by delivering a single proxy statement and annual
report addressed to those stockholders. This process, which is
commonly referred to as “householding,” potentially
means extra convenience for stockholders and cost savings for
companies.
A number of
brokers with account holders who are stockholders of the Company
will be “householding” the Company’s proxy
materials. A single set of the Company’s proxy materials will
be delivered to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker that
they will be “householding” communications to your
address, “householding” will continue until you are
notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in
“householding” and would prefer to receive a separate
set of the Company’s proxy materials, please notify your
broker or direct a written request to the Company at 1817 W 4th
Street, Tempe, Arizona 85281, or contact us at (800) 583-2652. The
Company undertakes to deliver promptly, upon any such oral or
written request, a separate copy of its proxy materials to a
stockholder at a shared address to which a single copy of these
documents was delivered. Stockholders who currently receive
multiple copies of the Company’s proxy materials at their
address and would like to request “householding” of
their communications should contact their broker, bank or other
nominee, or contact the Company at the above address or phone
number.
OTHER MATTERS
At the date of
this Proxy Statement, the Company knows of no other matters, other
than those described above, that will be presented for
consideration at the Annual Meeting. If any other business should
come before the Annual Meeting, it is intended that the proxy
holders will vote all proxies using their best judgment in the
interest of the Company and the stockholders.
The Notice, which we
intend to mail to stockholders on or about
May 1
, 2021, will contain
instructions on how to access the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2020. The Annual
Report, which includes audited financial statements, does not form
any part of the material for the solicitation of
proxies.
The Board
invites you to attend the Annual Meeting virtually. Whether or not
you expect to attend the Annual Meeting virtually, please submit
your vote by Internet, telephone or e-mail as promptly as
possible
so that your
shares will be represented at the Annual Meeting.
REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING
VIRTUALLY, PLEASE READ THE ACCOMPANYING PROXY STATEMENT AND
THEN VOTE BY INTERNET, TELEPHONE OR E-MAIL AS PROMPTLY AS
POSSIBLE. VOTING PROMPTLY WILL SAVE US ADDITIONAL
EXPENSE IN SOLICITING PROXIES AND WILL ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE ANNUAL MEETING.
By Order of
the Board of Directors,
Scot
Cohen
Chair of the Board
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