WIDEPOINT CORP
10-Ks and 10-Qs
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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No.______)
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Filed
by the Registrant ☒
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Filed
by a Party other than the Registrant ☐
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Check
the appropriate box:
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☐
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Preliminary
Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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☐
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Soliciting
Material Pursuant to §240.14a-12
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WidePoint Corporation
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(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
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of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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(4)
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☐ Fee paid previously with preliminary
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WIDEPOINT CORPORATION
11250 Waples Mill Road, South Tower, Suite 210
Fairfax, Virginia 22030
April
24, 2020
To Our Stockholders:
You are
cordially invited to attend the Annual Meeting of Stockholders of
WidePoint Corporation, which will be held at 10:00 a.m., EST, on
Thursday, June 18, 2020. Due to the public health impact of the
coronavirus pandemic (i.e., COVID-19) and to support the health and
well-being of our stockholders and other stakeholders, we have
decided that this year's annual meeting will be a completely
virtual meeting of stockholders, which will be conducted solely
online via live webcast. You will be able to participate in the
annual meeting online, vote your shares electronically and submit
your questions prior to and during the meeting by visiting:
www.virtualshareholdermeeting.com/WYY2020. You must enter the
control number found on your proxy card, voting instruction form or
notice you previously received. There is no physical location for
the annual meeting. As we have done in the past, we are taking
advantage of the Securities and Exchange Commission's rule that
allows companies to provide proxy materials for the annual meeting
via the Internet to registered stockholders. The accompanying
notice of meeting and proxy statement describe the matters to be
voted on at the meeting.
YOUR VOTE IS IMPORTANT.
We encourage you to read the proxy
statement and vote your shares as soon as possible. We ask that you
vote your shares via the Internet or by telephone, as instructed on
the Notice of Internet Availability of Proxy Materials or as
instructed on the accompanying proxy. If you received or requested
a copy of the proxy card by mail, you may submit your vote by
completing, signing, dating and returning the proxy card by mail.
You may also participate in the annual meeting online and vote your
shares electronically. We encourage you to vote via the Internet or
by telephone. These methods save us significant postage and
processing charges. Please vote your shares as soon as possible.
This is your Annual Meeting and your participation is
important.
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Sincerely,
Jin Kang
Chief Executive Officer
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1 |
Page
WIDEPOINT CORPORATION
11250 Waples Mill Road, South Tower, Suite 210
Fairfax, Virginia 22030
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of WidePoint
Corporation will be held at 10:00 a.m., EST, on Thursday, June 18,
2020. Due to the public health impact of the coronavirus pandemic
(i.e., COVID-19) and to support the health and well-being of our
stockholders and other stakeholders, we have decided that this
year's annual meeting will be a completely virtual meeting of
stockholders, which will be conducted solely online via live
webcast. You will be able to participate in the annual meeting
online, vote your shares electronically and submit your questions
prior to and during the meeting by visiting:
www.virtualshareholdermeeting.com/WYY2020. You must enter the
control number found on your proxy card, voting instruction form or
notice you previously received.
There
is no physical location for the annual meeting. The accompanying
notice of meeting and proxy statement describe the following
matters described in the accompanying proxy
statement:
●
To
elect the one director nominee named in the attached proxy
statement as Class II director to serve for a three-year period
until the Annual Meeting of Stockholders in the year
2023;
●
To
ratify the selection of Moss Adams LLP as the Company’s
independent accountants; and
●
To
transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business
on
April 20, 2020
are entitled
to receive notice of, and to vote at, the Annual
Meeting.
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By
order of the Board of Directors,
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Jin Kang
Chief Executive Officer
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April 24, 2020
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TABLE OF CONTENTS
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Notice of Electronic Availability of Proxy Materials
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2
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Voting Procedures and Securities
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4
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Proposal One – Election of Directors
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6
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Board Meetings – Committees of the Board
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9
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Director Independence
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10
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Identification and Evaluation of Director Candidates
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11
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Process for Communicating with Board Member
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12
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Director Attendance at Annual Meetings
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12
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Board Leadership Structure and Role in Risk Oversight
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12
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Director Compensation
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13
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Section 16(A) Beneficial Ownership Reporting
Compliance
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14
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Executive Officers
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14
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Principal Stockholders
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15
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Executive Compensation
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17
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Certain Related Person Transactions
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23
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Proposal Two – Independent Accountants
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24
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Audit Committee Report
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25
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Independent Registered Certified Public Accounting Firm Fees and
Services
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25
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Other Information
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26
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Stockholder Proposals for 2020 Annual Meeting
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26
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Other Matters
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3 |
Page
WIDEPOINT CORPORATION
11250 Waples Mill Road, South Tower, Suite 210
Fairfax, Virginia 22030
PROXY STATEMENT
This Proxy Statement is furnished in connection
with the solicitation by the Board of Directors of WidePoint
Corporation, a Delaware corporation (referred to herein as
“WidePoint,” the “Company,”
“we” or “our”), of proxies of stockholders
to be voted at the 2020 WidePoint Annual Meeting of Stockholders to
be held at 10:00 a.m., EST, on Thursday, June 18, 2020 and any and
all adjournments thereof. Due to the public health impact of the
coronavirus pandemic (i.e., COVID-19) and to support the health and
well-being of our stockholders and other stakeholders, we have
decided that this year's annual meeting will be a completely
virtual meeting of stockholders, which will be conducted solely
online via live webcast. You will be able to participate in the
annual meeting online, vote your shares electronically and submit
your questions prior to and during the meeting by visiting:
www.virtualshareholdermeeting.com/WYY2020. You must enter the
control number found on your proxy card, voting instruction form or
notice you previously received.
There
is no physical location for the annual meeting. Any stockholder
executing a proxy retains the right to revoke it at any time prior
to its being exercised by giving written notice to the Secretary of
the Company.
This
Proxy Statement and the accompanying proxy are first being sent to
stockholders of the Company on or about April 24,
2020.
NOTICE OF ELECTRONIC AVAILABILITY OF PROXY MATERIALS
In
accordance with regulations adopted by the Securities and Exchange
Commission, instead of mailing a printed copy of our proxy
materials, including our annual report to stockholders, to each
stockholder of record, we may now furnish these materials by mail
or e-mail. On or about April 24, 2020, we mailed to our
stockholders who have not previously requested to receive these
materials by mail or e-mail a Notice of Internet Availability of
Proxy Materials containing instructions on how to access this proxy
statement and our annual report and to vote online. The Notice
instructs you as to how you may access and review all of the
important information contained in the proxy materials. The Notice
also instructs you as to how you may submit your proxy on the
Internet or by telephone. If you received the Notice by mail, you
will not automatically receive a printed copy of our proxy
materials or annual report unless you follow the instructions for
requesting these materials included in the Notice.
VOTING PROCEDURES AND SECURITIES
Your Vote is Very Important
Whether
or not you plan to attend the meeting, please take the time to vote
your shares as soon as possible. You may submit your vote by
completing, signing, dating and returning the proxy card by mail.
We encourage you to vote via the Internet or by telephone. These
methods save us significant postage and processing
charges.
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Page
Vote Required, Abstentions and Broker Non-Votes
Shares
of WidePoint common stock represented by proxy will be voted
according to the instructions, if any, given in the proxy. Unless
otherwise instructed, the person or persons named in the proxy will
vote (1) FOR the election of the nominee for director listed herein
(or a substitute in the event a nominee is unavailable for
election); (2) FOR the ratification of the selection of Moss Adams
LLP as the independent accountants for the Company for the current
fiscal year; and (3) in their discretion, with respect to such
other business as may properly come before the meeting. The Board
of Directors has designated Jin Kang and Jason Holloway, and each
or any of them, as proxies to vote the shares of common stock
solicited on its behalf.
Votes
cast by proxy or in person at the Annual Meeting will be tabulated
by an inspector of election appointed by the Company for the
meeting. A quorum of stockholders is necessary to hold a valid
meeting. A quorum will be present if at least a majority of the
outstanding shares of common stock of the Company entitled to vote
are present at the Annual Meeting in person or by proxy. A director
is elected by a plurality of the votes cast at the Annual Meeting,
which means that the nominee who receives the highest number of
properly executed votes will be elected as a director, even if the
nominee did not receive a majority of the votes cast. The approval
of the ratification of the appointment of Moss Adams LLP as the
Company’s independent accountants require the affirmative
vote of the majority of the votes present, in person or by proxy,
and voting at the Annual Meeting.
The inspector of election will treat abstentions
as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but as unvoted for purposes
of determining the approval of any matter submitted to the
stockholders for a vote. Your broker, bank or other nominee is
permitted to vote your shares on the ratification of the
appointment of
Moss Adams LLP
as our independent auditor without receiving
voting instructions from you. All other items are
"non-discretionary" items. This means brokerage firms that have not
received voting instructions from their clients on any proposal
other than the appointment of Moss Adams LLP will not be permitted
to vote such shares for any other matters at the Annual Meeting.
These "broker non-votes" will be included in the calculation of the
number of votes considered to be present at the Annual Meeting for
purposes of determining a quorum, but will not be considered in
determining the number of votes necessary for approval and will
have no effect on the outcome of any of the proposals because in
tabulating the voting results, shares that constitute broker
non-votes are not considered votes cast on that
proposal.
The
cost of soliciting proxies will be borne by the Company. Certain of
our officers and other employees may, without compensation other
than their regular compensation, solicit proxies by further mailing
or personal conversations, or by telephone, facsimile or other
electronic means. We will also, upon request, reimburse brokers and
other persons holding stock in their names, or in the names of
nominees, for their reasonable out-of-pocket expenses for
forwarding proxy materials to the beneficial owners of our stock
and to obtain proxies.
Shares Outstanding
As
of April 20, 2020, the record date for determining stockholders
entitled to vote at the Annual Meeting, a total of 83,837,289
shares of common stock of the Company, par value $.001 per share,
which is the only class of voting securities of the Company, were
issued and outstanding. All holders of record of the common stock
as of the close of business on April 20, 2020 are entitled to one
vote for each share held when voting at the Annual Meeting, or any
adjournment thereof, upon the matters listed in the Notice of
Annual Meeting. Cumulative voting is not permitted.
Other Business
The
Board knows of no other matters to be presented for stockholder
action at the meeting. If other matters are properly brought before
the meeting, the persons named as proxies in the accompanying proxy
card intend to vote the shares represented by them in accordance
with their best judgment.
5 |
Page
PROPOSAL ONE – ELECTION OF DIRECTORS
The Company’s Board is classified into three
classes of directors, with one class of directors being elected at
each annual meeting of stockholders of the Company to serve for a
term of three years or until the earlier expiration of the term of
their class of directors or until their successors are elected and
take office as provided below. To maintain the staggered terms of
election of directors, stockholders of the Company are voting upon
the election of
one director
nominee as a Class II director to serve for a three-year period
until the Annual Meeting of Stockholders in the year
2023
.
The
Bylaws of the Company provide that the Board will determine the
number of directors to serve on the Board. The Company’s
Board presently consists of five members (two Class I and III
directors and one Class II director) with no vacancies. The Board
did not re-nominate Philip Richter for director as a result of his
desire to retire from the Board. Accordingly, Mr. Richter’s
term will expire at this Annual Meeting of Stockholders. Mr.
Richter has been a valuable member of the Company’s Board of
Directors and the Company wishes him the best in his future
endeavors. Our Class II director nominee, Phillip Garfinkle, is not
currently, and has never been, a member of the Board.
On
July 3, 2018, we entered into an appointment and standstill
agreement with our significant stockholder, Nokomis Capital, L.L.C.
(“Nokomis”). The appointment and standstill agreement,
among other things, provided that (i) Nokomis shall be entitled to
appoint one qualified independent individual as a Class III
director and as a member of the Corporate Governance and Nominating
Committee and the Compensation Committee of the Board and we shall
nominate such appointee for election at the 2019 Annual Meeting of
Stockholders and (ii) we and Nokomis shall mutually select a
qualified independent individual to serve as a Class III director
and as a member of the Corporate Governance and Nominating
Committee and the Compensation Committee of the Board and we shall
nominate such appointee for election at the 2019 Annual Meeting of
Stockholders. On February 7, 2019 and in accordance with the terms
of the appointment and standstill agreement, the Board appointed
Richard L. Todaro and Julia A. Bowen as Class III directors of the
Company, with Mr. Todaro as the appointee by Nokomis and Ms. Bowen
as the mutual appointee. As part of the agreement, Nokomis, among
other things, agreed to customary standstill commitments during the
term of the Agreement and to vote its shares in favor of the
Board's recommendations regarding director elections and other
matters to be submitted to a vote at the 2018 and 2019 Annual
Meetings of Stockholders. The term of the agreement expired on the
date that was thirty days prior to the deadline related to
nominations by stockholders of directors for election at this 2020
Annual Meeting of Stockholders.
Previously,
on July 20, 2017, the Company entered into a prior appointment and
standstill agreement with Nokomis pursuant to which, among other
things, the Company agreed to appoint Alan Howe and Philip Richter
as Class II directors of the Company and as members of the
Corporate Governance and Nominating Committee and the Compensation
Committee of the Board and to nominate them for re-election at the
Company’s 2017 Annual Meeting of Stockholders.
Proxies
will be voted at the Annual Meeting, unless authority is withheld,
FOR the election of the person named below. The Company does not
contemplate that the person named below will be unable or will
decline to serve; however, if the nominee is unable or declines to
serve, the persons named in the accompanying proxy will vote for a
substitute, or substitutes, in their discretion.
Class II Director Nominee For a Term That Will Expire at the 2023
Annual Meeting of Stockholders:
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Name
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Age
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Position
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Philip Garfinkle
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59
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Director Nominee
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P
hilip
Garfinkle
is a nominee for
director. Mr. Garfinkle is a successful technology visionary,
bringing a wealth of experience as an entrepreneur, inventor, CEO,
and deal maker, with a focus on emerging technologies. He is a
five-time successful entrepreneur and has been the senior operating
manager in many successful organizations. Mr. Garfinkle is
currently Managing Director of Navig8 USA, Senior Managing Partner
at Planet Cotton, and President and CEO of NewSight Reality. He
also serves as an Economic Evaluator for the MIPS program in the
state of Maryland. He possesses a unique blend of technological and
business acumen to guide business on a path to success. He was a
co-founder of Yazam, an Israeli / global Venture Capital / Merchant
Banking organization, which he sold to US Technologies. He also
founded PhotoNet Japan, which went public in 2002, PictureVision
(Chairman, CEO, and President), which he led the sale to Kodak,
where he also served as a Senior Executive. PictureVision pioneered
online photo processing, sharing, and printing services. He
established alliances with AOL for “You’ve Got
Pictures,” Sony’s ImageStation, Adobe, and many other
major product lines. PictureVision was known for its excellence in
engineering which he multi-located globally. Mr. Garfinkle has also
served as Chairman of Johns Hopkins Technology Advisory Board,
focused on technology transfer from academia to the commercial
sector. Mr. Garfinkle brings to the Board extensive knowledge of
technology and entrepreneurial experience. This experience, as well
as his independence from the Company, led the Board to conclude
that he should serve as a director of the
Company.
6 |
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF THE ABOVE NOMINEE AS
A DIRECTOR OF THE COMPANY.
Directors Not Being Elected in 2020:
The
directors whose terms are not expiring this year are listed below.
They will continue to serve as directors for the remainder of their
terms or until their respective successors are elected and
qualified, or until their earlier death, resignation or removal.
Information regarding each of such directors is provided
below.
Class I Directors With a Term That Will Expire at the 2022 Annual
Meeting of Stockholders:
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Name
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Age
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Position
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Jin Kang
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55
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Director and Chief Executive Officer
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Julia A. Bowen
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54
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Director
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Jin Kang
has served as a director and as our Chief
Executive Officer and President since his appointment on July 5,
2017. Prior to his appointment as Chief Executive Officer and
President of the Company, Mr. Kang served as Executive Vice
President and Chief Operations Officer of WidePoint since June 30,
2012. Mr. Kang has also served as the Chief Executive Officer and
President of WidePoint Integrated Solutions Corp., a wholly-owned
subsidiary of the Company, since our acquisition of WidePoint
Integrated Solutions Corp. formerly, iSYS, LLC on January 4, 2008.
Mr. Kang founded WidePoint Integrated Solutions Corp. in 1999 and
has managed the company since its inception. Mr. Kang has over 34
years of professional experience in both public and private
sectors. Prior to founding, iSYS, LLC (now WidePoint Integrated
Solutions Corp.), Mr. Kang held various senior management positions
at large technology companies to include, Northrop Grumman, Science
Applications International Corporation (SAIC), ManTech, and
Atlantic Research Corporation. Mr. Kang managed marquee contracts
for the federal government such as the Combined DNA Index System
(CODIS) for the Federal Bureau of Investigation and Defense Medical
Information Systems/Systems Integration, Design Development,
Operations and Maintenance Services (D/SIDDOMS) Mr. Kang received a
Bachelor and Master’s Degrees in Computer Science and
Computer Systems Management from the University of
Maryland.
Mr. Kang brings to the Board years of experience in the Federal
Government Information Technology Services field. This experience,
as well as his experience with the Company, led the Board to
conclude that he should serve as a director of the
Company.
Julia A. Bowen
has served
as a director since her appointment on February 9, 2019 pursuant to
an appointment and standstill agreement with Nokomis. Ms. Bowen is
currently senior vice president of strategic alliances, general
counsel and corporate secretary of The MITRE Corporation, where she
advises on all legal matters, including cybersecurity, contracting,
international and global presence, intellectual property, HR, and
national security. Previously, Bowen held several senior positions
in the private sector, including chief legal counsel of DHL Global
Mail, vice president, general counsel and secretary of QuadraMed
Corporation, and vice president, general counsel and secretary of
TREEV. Bowen is an active member of industry, academic and
professional groups, including the Board of Visitors of The
Catholic University of America’s Columbus School of Law and
the Association of Corporate Counsel. She also serves on the
Advisory Board of Manetu, Inc. Ms. Bowen graduated from The
Catholic University of America, where she received her
bachelor’s and law degrees. She is admitted to the bars of
Maryland, the District of Columbia and
Virginia.
Ms. Bowen brings to the Board extensive knowledge of legal and
corporate governance experience. This experience, as well as her
independence from the Company, led the Board to conclude that she
should serve as a director of the Company.
7 |
Page
Class III Directors With a Term That Will Expire at the 2021 Annual
Meeting of Stockholders:
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Name
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Age
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Position
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Otto
Guenther
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78
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Chairman
of the Board of Directors
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Richard
L. Todaro
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47
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Director
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Lieutenant General (Ret.) Otto J. Guenther
has served as a director since his
appointment on August 15, 2007 and is currently the Chairman of the
Board of Directors. He joined the Board after a distinguished
34-year military career, including serving as the Army’s
first chief information officer, followed by nearly a decade of
exceptional leadership within the federal information technology
industry. His key assignments included the following: commanding
general for Fort Monmouth, NJ, and the Communications Electronics
Command; program executive officer for the Army’s tactical
communications equipment; project manager for the Tactical
Automated Data Distribution System; and director for the Defense
Federal Acquisition Regulatory Council. General Guenther retired
from Northrop Grumman Mission Systems, where he served as the
Sector Vice President and General Manager of Tactical Systems
Division. While there, he oversaw battlefield digitization, command
and control, and system engineering activities for the U.S. Army.
Under his leadership, the division grew to approximately 1,650
employees across several locations and completed over $700 million
in acquisitions. Previously General Guenther was general manager of
Computer Associates International’s Federal Systems Group, a
$300 million operation providing IT products and services to the
federal market area. General Guenther was awarded several honors by
the U.S. Army, including the Distinguished Service Medal, Legion of
Merit (Oak Leaf Cluster), Defense Superior Service Medal (Oak Leaf
Cluster), Joint Service Medal, and Army Commendation Medal.
Recognized for his work within the industry, he also received
several Armed Forces Communications and Electronics Association
awards and was inducted into the Government Computer News Hall of
Fame. Since 2006 has been an active trustee at McDaniel College and
in June 2019 he became the Chairman of the Board of Trustees at the
College. General Guenther received a Bachelor of Science Degree in
Economics from Western Maryland College, now called McDaniel
College, and a Master’s Degree in Procurement and Contracting
from the Florida Institute of Technology.
General Guenther brings to the Board extensive knowledge of the
federal marketplace as a result of a career that has spanned both
military and informational technology industries, as well as over
30 years of acquisition and procurement experience. In addition,
General Guenther’s knowledge of federal infrastructure as
well as experience in successful business development and board
service is particularly valuable to the Company. This experience,
as well as his independence from the Company and his prior
performance as a Board member, led the Board to conclude that he
should continue to serve as a director of the Company.
Richard L. Todaro
has
served as a director since his appointment on February 9, 2019
pursuant to an appointment and standstill agreement with Nokomis.
Mr. Todaro spent 20 years at Kennedy Capital Management, a St.
Louis-based, boutique investment firm with more than $5 billion of
assets under management, where he held several positions, including
portfolio manager and a member of its board of directors. Prior to
Kennedy Capital Management, Todaro served as an advisory board
member of the University of Missouri – St. Louis Finance
Department as well as Gateway Greening. He has also served as a
director on public company boards, including Telenav (Nasdaq: TNAV)
from 2015 to 2016 and B. Riley Financial (Nasdaq: RILY) from 2014
to 2018. Todaro served in the Air National Guard as a staff
sergeant from 1992 to 1998. Todaro received a BSBA in Finance from
the University of Missouri – St. Louis and a Master of
Finance from Saint Louis University. Todaro is a Chartered
Financial Analyst (CFA), and passed the Uniform Investment Advisor
Law examination.
Mr. Todaro brings to the board financial and capital market
expertise. This experience, as well as his independence from the
Company, led the Board to conclude that he should continue to serve
as a director of the Company.
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Page
BOARD MEETINGS – COMMITTEES OF THE BOARD
The
Board of Directors held eight (8) meetings during 2019. During this
period, all of the directors attended or participated in more than
75% of the aggregate of the total number of meetings of the Board
of Directors and the total number of meetings held by all
Committees of the Board of Directors on which each such director
served.
The
Board currently has the following standing Committees: Audit;
Corporate Governance and Nominating, Mergers and Acquisitions; and
Compensation. The current composition of the Board of directors and
standing committees of the Board of Directors is summarized
below:
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Name
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Board Class
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Term End
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Board of Directors
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Audit Committee
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Corporate Governance and Nominating Committee
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Compensation Committee
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Otto J. Guenther
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III
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2021
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X*
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X
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X
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X
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Julia A. Bowen
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I
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2022
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X
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X
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X
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X
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Richard L. Todaro
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III
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2021
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X
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X
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Philip Richter
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II
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2020
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X
|
|
X
|
X
|
|
|
Philip Garfinkle (assuming appointment)
|
II
|
2023
|
X
|
|
X
|
X
|
|
|
Jin Kang**
|
I
|
2022
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Individual holds the chairman position.
**Individual is not an independent member of the board of
director.
The
Audit, Corporate Governance and Nominating, and Compensation
Committees consist entirely of independent, non-employee directors
in accordance with the listing standards of the NYSE American.
Membership and principal responsibilities of the Board’s
Committees are described below. Each Committee of the Board has
adopted a charter and each such charter is available free of charge
on our website, www.widepoint.com, or by writing to WidePoint
Corporation, 11250 Waples Mill Road, South Tower, Suite 210,
Fairfax, Virginia 22030, c/o Corporate Secretary.
Audit Committee
The
Audit Committee met four (4) times in 2020. The Audit Committee has
been established in accordance with Section 3(a)(58)(A) of the
Securities and Exchange Act of 1934. The primary functions of the
Audit Committee are to: appoint (subject to stockholder approval),
and be directly responsible for the compensation, retention and
oversight of, the firm that will serve as the Company’s
independent accountants to audit our financial statements and to
perform services related to the audit (including the resolution of
disagreements between management and the independent accountants
regarding financial reporting); review the scope and results of the
audit with the independent accountants; review with management and
the independent accountants, prior to the filing thereof, the
annual and interim financial results (including Management’s
Discussion and Analysis) to be included in our Forms 10-K and 10-Q,
respectively; consider the adequacy and effectiveness of our
internal accounting controls and auditing procedures; review,
approve and thereby establish procedures for the receipt, retention
and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and
for the confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters; review and
approve related person transactions in accordance with the policies
and procedures of the Company; and consider the accountants’
independence and establish policies and procedures for pre-approval
of all audit and non-audit services provided to WidePoint by the
independent accountants who audit its financial statements. At each
meeting, Audit Committee members may meet privately with
representatives of Moss Adams LLP, our independent accountants, and
with the Company’s Chief Financial Officer.
The
Board has determined that each member of the Audit Committee meet
the definition of "independent director" for purposes of serving on
an audit committee under applicable rules of the Securities and
Exchange Commission and the listing standards of the NYSE American.
In addition, the Board has determined that Mr. Todaro satisfies the
“financially sophisticated” requirements set forth in
the NYSE American Company Guide, and has designated Mr. Todaro as
the “audit committee financial expert,” as such term is
defined in the rules and regulations of the SEC.
9 |
Page
Corporate Governance and Nominating
Committee
The
Corporate Governance and Nominating Committee met one (1) time in
2019. The primary functions of this Committee are to: identify
individuals qualified to become Board members and recommend to the
Board the nominees for election to the Board at the next Annual
Meeting of Stockholders; review annually and recommend changes to
the Company’s Corporate Governance Guidelines; lead the Board
in its annual review of the performance of the Board and its
committees; review policies and make recommendations to the Board
concerning the size and composition of the Board, the
qualifications and criteria for election to the Board, retirement
from the Board, compensation and benefits of non-employee
directors, the conduct of business between WidePoint and any person
or entity affiliated with a director, and the structure and
composition of the Board’s Committees; review the
Company’s policies and programs relating to compliance with
its Code of Business Conduct and such other matters as may be
brought to the attention of the Committee regarding
WidePoint’s role as a responsible corporate citizen. See
“Identification and Evaluation of Director Candidates”
and “Director Compensation” in this proxy
statement.
Compensation Committee
The
Compensation Committee met two (2) times in 2019. The primary
functions of the Compensation Committee are to: evaluate and
approve executive compensation plans, policies and programs,
including review of relevant corporate and individual goals and
objectives, as submitted by the Chief Executive Officer; evaluate
the Chief Executive Officer’s performance relative to
established goals and objectives and, together with the other
independent directors, determine and approve the Chief Executive
Officer’s compensation level based on this evaluation; review
and approve the annual salary and other remuneration of all other
officers; review the management development program, including
executive succession plans; review with management, prior to the
filing thereof, the executive compensation disclosure included in
this proxy statement; recommend individuals for election as
officers; and review or take such other action as may be required
in connection with the bonus, stock and other benefit plans of
WidePoint and its subsidiaries.
DIRECTOR INDEPENDENCE
The
listing standards of the NYSE American require that our Board be
comprised of a majority of "independent directors" and that the
Audit Committee, Compensation Committee and Corporate Governance
and Nominating Committee each be comprised solely of "independent
directors," as defined under
the
listing standards of the NYSE American
.
The
Company’s Corporate Governance and Nominating Committee
conducts an annual review of the independence of the members of the
Board and its Committees and reports its findings to the full Board
of Directors. Based on the report and recommendation of the
Corporate Governance Committee, the Board has determined that each
of the Company’s non-employee directors and the director
nominee each satisfy the independence criteria set forth in
the listing standards of the NYSE
American
and Securities and Exchange Commission
rules.
10 |
Page
IDENTIFICATION AND EVALUATION OF DIRECTOR CANDIDATES
The
Corporate Governance and Nominating Committee is charged with
seeking individuals qualified to become directors and recommending
candidates for all directorships to the full Board of Directors.
The Committee considers director candidates in anticipation of
upcoming director elections and other potential or expected Board
vacancies.
The
Committee considers director candidates suggested by members of the
Committee, other directors, senior management and
stockholders.
Director candidates
are reviewed by the Committee based on the needs of the Board and
the Company’s various constituencies, their relative skills,
characteristics and age, and against the following qualities and
skills that are considered desirable for Board membership:
exemplification of the highest standards of personal and
professional integrity; independence from management under
applicable securities laws, listing standards, and the
Company’s Corporate Governance Principles; experience and
industry and educational background; potential contribution to the
composition, diversity and culture of the Board; and ability and
willingness to constructively challenge management through active
participation in Board and committee meetings and to otherwise
devote sufficient time to Board duties.
The
Committee’s charter includes diversity as one of the criteria
used to evaluate director candidates. The Corporate Governance and
Nominating Committee may consider diversity in its broadest sense
when evaluating candidates. Though we do not have a formal policy
regarding how diversity will be considered in identifying potential
director nominees, our Corporate Governance Guidelines direct that
the evaluation of nominees should include (but not be limited to)
an assessment of whether a nominee would provide the Board with a
diversity of viewpoints, backgrounds, experiences, and other
demographics.
In
evaluating the needs of the Board, the Committee considers the
qualifications of sitting directors and consults with other members
of the Board, the Chief Executive Officer and other members of
senior management. All recommended candidates must possess the
requisite personal and professional integrity, meet any required
independence standards, and be willing and able to constructively
participate in, and contribute to, Board and committee meetings.
Additionally, the Committee conducts regular reviews of current
directors whose terms are nearing expiration, but who may be
proposed for re-election, in light of the considerations described
above and their past contributions to the Board.
The
Corporate Governance and Nominating Committee has adopted a policy
pursuant to which a stockholder who has owned at least 5% of the
Company’s outstanding shares of common stock for at least two
years may recommend a director candidate that the Committee will
consider when there is a vacancy on the Board either as a result of
a director resignation or an increase in the size of the Board.
Such recommendation must be made in writing addressed to the
Chairman of the Corporate Governance and Nominating Committee at
the Company’s principal executive offices and must be
received by the Chairman at least 120 days prior to the anniversary
date of the release of the prior year’s proxy
statement.
Although the
Committee has not formulated any specific minimum qualifications
that the Committee believes must be met by a nominee that the
Committee recommends to the Board, the factors it will take into
account will include strength of character, mature judgment, career
specialization, relevant technical skills or financial acumen,
diversity of viewpoint and industry knowledge. There will be no
differences between the manner in which the Committee evaluates a
nominee recommended by a stockholder and the manner in which the
Committee evaluates nominees recommended by other
persons.
The
Company did not receive in a timely manner, in accordance with the
Securities and Exchange Commission’s requirements, any
recommendation of a director candidate from a stockholder, or group
of stockholders that beneficially owned more than 5% of the
Company’s common stock for at least two years as of the date
of recommendation other than the appointment and standstill
agreements with Nokomis.
11 |
Page
PROCESS FOR COMMUNICATING WITH BOARD MEMBERS
Interested parties
may communicate directly with the Board, or the presiding director
for an upcoming meeting or the non-employee directors as a group,
by writing to WidePoint Corporation, 11250 Waples Mill Road, South
Tower, Suite 210, Fairfax, Virginia 22030, c/o Corporate Secretary.
Communications may also be sent to individual directors at the
above address.
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS
The
Company has adopted a policy that each director should attempt to
attend and/or be available via online access or phone for each
Annual Meeting of Stockholders. All members of the Board attended
last year’s Annual Meeting of Stockholders.
BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT
Our
Board of Directors does not have a policy on whether or not the
roles of Chief Executive Officer and Chairman should be separate.
Our board reserves the right to assign the responsibilities of the
Chief Executive Officer and Chairman in different individuals or in
the same individual if, in the Board’s judgment, a combined
Chief Executive Officer and Chairman position is determined to be
in the best interest of our Company. In the circumstance where the
responsibilities of the Chief Executive Officer and Chairman are
vested in the same individual or in other circumstances when deemed
appropriate, the Board will designate a lead independent director
from among the independent directors to preside at the meetings of
the non-employee director executive sessions.
The
positions of Chief Executive Officer and Chairman have been
separate since Steve L. Komar retired as our Chief Executive
Officer in January 2017. In connection with the retirement of Steve
L. Komar from our Board of Directors, the Board selected Otto J.
Guenther as the non-executive Chairman of the Board in October
2017. Our Board retains the authority to modify this structure to
best address our Company’s unique circumstances as and when
appropriate.
Non-management
members of the Board of Directors conduct at least two regularly
scheduled meetings per year without members of management being
present. Following an executive session of non-employee directors,
the Presiding Independent Director may act as a liaison between the
non-employee directors and the Chairman, provide the Chairman with
input regarding agenda items for Board of Directors and Committee
meetings, and coordinate with the Chairman regarding information to
be provided to the non-employee directors in performing their
duties.
The
Board oversees the management of the risks inherent in the
operation of the Company’s business. This is accomplished
principally through the Audit Committee. Additionally, the
Compensation Committee is responsible for overseeing the assessment
of risks associated with the Company’s compensation policies
and programs. Each of these committees receives and discusses
reports regularly with members of management who are responsible
for applicable day-to-day risk management functions of the Company,
and reports regularly to the Board. The Board’s, the Audit
Committee’s and the Compensation Committee’s respective
roles in our risk oversight process have not affected our Board
leadership structure.
12 |
Page
DIRECTOR COMPENSATION
In
December 2017, the Compensation Committee of the Board of Directors
authorized a board member compensation study by Compensia, an
independent compensation consultant, to evaluate whether the
current annual retainer reflects market compensation for directors
of similarly-sized organizations. In order to attract and retain
qualified directors, the Compensation Committee of the Board of
Directors recommended, and the full Board of Directors approved, an
increase in the annual retainer per board member commencing in 2018
to include $20,000 in cash and $50,000 in restricted stock ($70,000
in restricted stock for Board Chairman) that vests at the annual
meeting of stockholders. In April 2019, the Board of Directors
approved a partial year grant of restricted stock to each
non-employee director in the amount of $16,700 in order to align
the vesting period to end in June to coincide with the Annual
Meeting of Stockholders, which was held on June 11, 2019. The
director compensation program was unchanged for 2019, although the
annual restricted stock grants of $50,000 ($70,000) for Board
Chairman were made in April 2020 and vest at this Annual Meeting of
Stockholders. The following table sets forth non-employee director
compensation for the year ended December 31, 2019:
|
Director Name
|
Fees Earned or
Paid
(1)
|
Stock Awards ($) (2)
|
All Other Compensation ($)
|
Total Annual Board Retainer
|
|
Otto
J. Guenther (3)
|
$
20,000
|
$
16,700
|
$
-
|
$
36,700
|
|
Julia
Bowen
|
20,000
|
16,700
|
-
|
36,700
|
|
Richard
Todaro
|
20,000
|
16,700
|
-
|
36,700
|
|
Philip
Richter
|
20,000
|
16,700
|
-
|
36,700
|
|
Alan
B. Howe (former director) (4)
|
30,000
|
16,700
|
-
|
46,700
|
|
Morton
S. Taubman (former director) (5)
|
15,000
|
16,700
|
-
|
31,700
|
(1)
Represents the meeting retainers and annual payments earned in
2019. Each director receives an annual payment of $20,000 paid in
arrears in quarterly installments.
(2)
Amount represents the grant date fair value calculated pursuant to
ASC Topic 718. Additional information about the assumptions used
when valuing equity awards is set forth in the notes the
consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2019, filed with the SEC
on March 24, 2020.
(3) Mr.
Howe served on the Board until April 30, 2019 and received payments
for Q4 2018, Q1 2019 and one year of annual payment.
(4) Mr.
Taubman served on the Board until June 11, 2019 and received
payments for Q4 2018, Q1 2019 and Q2 2019.
(5) As
Chairman, Mr. Guenther was entitled to receive $23,380 of
restricted stock award, but received $16,700. The difference will
be paid in June of 2020.
13 |
Page
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company’s officers and directors, and persons who own
more than 10% of a registered class of the Company’s equity
securities, to file reports of securities ownership and changes in
such ownership with the Securities and Exchange Commission.
Statements of Changes in Beneficial Ownership of Securities on Form
4 are generally required to be filed before the end of the second
business day following the day on which the change in beneficial
ownership occurred. Based on the Company's review of Forms 3 and 4
filed during 2019, all such Forms 3 and Forms 4 were filed on a
timely basis.
EXECUTIVE OFFICERS
The
Company’s executive officers as of April 20, 2020 are as
follows:
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
Jin
Kang
|
|
55
|
|
Chief
Executive Officer, President and Director
|
|
|
|
|
|
|
|
Jason
Holloway
|
|
52
|
|
Executive
Vice President, Chief Sales and Marketing Officer, and President of
WidePoint Cybersecurity Solutions Corporation
|
|
|
|
|
|
|
|
Kellie
H. Kim
|
|
56
|
|
Executive
Vice President and Chief Financial Officer
|
For information with respect to
Jin
Kang
, please see the information about
the members of our Board of Directors on the preceding pages. There
are no family relationships among any of our executive officers or
directors.
Jason Holloway
has
served as the Chief Executive Officer and President of
WidePoint’s wholly-owned subsidiary, WidePoint Cybersecurity
Solutions Corporation, since July 10, 2017 and has served as the
Company’s Executive Vice President and Chief Sales and
Marketing Officer since May 2016. Mr. Holloway has been in the IT
industry for more than 25 years, holding senior executive positions
in multiple IT organizations, with a primary focus on business
development, sales, and management to profitability. Mr. Holloway
has industry vertical experience in Government, Technology,
Finance, Transportation, Health Care, Entertainment, and
Manufacturing. Mr. Holloway co-founded Nexcentri, an IT provider
for the Credit Union industry, in 2001 and served as president and
CEO until 2013. At Nexcentri, working with key vendor partners
including Microsoft, First Data, and HP, he developed and
implemented three successful financial services software products
and was recognized as the first Credit Union service organization
to successfully conduct business internationally. Prior to
Nexcentri, he was president and CEO of Networked Knowledge Systems
(NKS), a global Linux security managed service company where he
increased annual revenue more than 800% in five years, servicing
clients such as IBM and PwC, and making NKS an Open Source Managed
Security industry leader. In addition, Mr. Holloway has held
several key executive roles within technology start-up companies
that were being positioned for an IPO.
Kellie H. Kim
has
served as Executive Vice President and Chief Financial Officer
since her appointment effective January 2, 2020, replacing interim
Chief Financial Officer Ian Sparling (who remains with the
Company). Ms. Kim has more than 30 years of experience in financial
and business leadership supporting both public and private
companies that operate in a variety of industries, including
telecom, technology, and professional services with government
practice. Ms. Kim has helped organizations through their
transformation and reorganization, implementing best practices,
streamlining their technology and/or process and procedures, and
updating business systems or scaling organically or through
acquisitions. Most recently Ms. Kim served as the Principal of
Clarius Consultants LLC, a consulting firm providing outsourced CFO
services that was founded by Ms. Kim. Prior to that time, she
served as the CFO of various companies, including CFO of Witt
O’Brien’s LLC, a wholly-owned subsidiary of Seacor
Holdings, CFO of Opus Group, LLC and CFO of Astrium Services
Government, Inc., a subsidiary of Airbus Defense & Space. Kim
is an active member of professional groups, including American
Institute of Certified Public Accountants, Virginia Society of
CPAs, Maryland Association of Certified Public Accountants and
Washington Women’s Leadership Initiative. Kim is a Certified
Public Accountant and has a Bachelor of Science in Accounting from
the University of Maryland.
14 |
Page
PRINCIPAL STOCKHOLDERS
Security Ownership of Directors and Executive
Officer
s
In
general, “beneficial ownership” includes those shares a
director or executive officer has the power to vote or transfer,
except as otherwise noted, and shares underlying stock options that
are exercisable currently or within 60 days. The calculation of the
percentage of outstanding shares is based on
83,837,289
shares outstanding as of April
20, 2020. The mailing address for each of our directors, director
nominees and officers is c/o WidePoint Corporation - 11250 Waples
Mill Road, South Tower, Suite 210, Fairfax, Virginia
22030.
The
following tables set forth the number of shares of our common stock
beneficially owned as of April 20, 2020 by each director, director
nominee, executive officer and beneficial owner of more than 5% of
the outstanding shares of the common stock:
|
Directors, Nominees and Executive Officers
|
Direct Common Stock Owned
|
Restricted Stock Owned
|
Stock Options Exercisable (1)
|
Number of Shares of Common Stock (1)
|
Percent of Common Stock Outstanding (1)
|
|
Otto Guenther
(2) (6)
|
595,314
|
196,616
|
50,000
|
645,314
|
*
|
|
Philip Richter
(3) (6)
|
345,651
|
128,206
|
50,000
|
395,651
|
*
|
|
Jin Kang
(4)
|
3,634,323
|
328,979
|
0
|
3,634,323
|
4.3
%
|
|
Jason Holloway
(5)
|
1,229,979
|
328,979
|
500,000
|
1,729,979
|
2.1
%
|
|
Kellie
Kim
|
-
|
-
|
-
|
-
|
*
|
|
Julia Bowen
(6)
|
167,968
|
128,206
|
-
|
167,968
|
*
|
|
Richard Todaro
(6)
|
267,968
|
128,206
|
-
|
267,968
|
*
|
|
Philip
Garfinkle
|
113,722
|
-
|
-
|
113,722
|
|
|
All director
nominees, directors and executive officers as a group (8 persons)
(7)
|
6,354,925
|
1,239,192
|
600,000
|
6,954,925
|
8.3
%
|
_________________________
*Indicates ownership percentage is less than 1.0%.
(1) Assumes in the case of each stockholder listed above that all
options and/or restricted stock held by such stockholder that are
exercisable currently or vesting within 60 days of
April 20, 2020 were fully exercised or
vested by such stockholder, without the exercise or vesting of any
shares of restricted stock or options held by any other
stockholders.
(2)
Includes 50,000 earned and exercisable options to purchase shares
from the Company at a price $0.44 per share.
(3)
Includes 50,000 earned and exercisable options to purchase shares
from the Company at a price $0.45 per share.
(4)
Includes 222,938 shares of unvested restricted stock.
(5) Includes 500,000 earned and exercisable options to purchase
shares from the Company at a price $.70 per share and 222,938
shares of unvested restricted stock.
(6) Includes 128,206 shares to be vested June 18, 2020 for
directors and 196,615 shares to be vested June 18, 2020 for
chairman. These shares were granted for one year service period
ending June 18, 2020.
(7) Includes the shares referred to as included in notes (2)
through (6) above.
15 |
Page
Security Ownership of Certain Beneficial Owners (Greater than 5%
Holders)
The following table sets forth beneficial owners of more than 5%
based on 83,837,289 outstanding shares of Common Stock as of April
20, 2020:
|
|
Number of
Shares
of
|
Percent of
Common
Stock
|
|
Names and Complete Mailing Address
|
Common Stock
|
Outstanding
|
|
|
|
|
|
Nokomis Capital, L.L.C., and
Brett Hendrickson
2305
Cedar Springs Rd., Suite 420
Dallas,
Texas 75201
|
12,774,251
|
15.2
%(1)
|
|
|
|
|
(1)
Based
on information provided in Amendment No. 3 Schedule 13D/A filed on
July 6, 2018, Nokomis Capital, L.L.C. is a Texas limited liability
company and Mr. Brett Hendrickson is the principal of Nokomis
Capital, L.L.C. The Schedule 13D relates to shares purchased by
Nokomis Capital through the accounts of certain private funds and
managed accounts (collectively, the “Nokomis
Accounts”). Nokomis Capital serves as the investment adviser
to the Nokomis Accounts and may direct the vote and dispose of the
shares held by the Nokomis Accounts. As the principal of Nokomis
Capital, Mr. Hendrickson may direct the vote and disposition of the
shares held by the Nokomis Accounts. Pursuant to Rule 16a-1, both
Nokomis Capital and Mr. Hendrickson disclaim such beneficial
ownership.
On
July 3, 2018, we entered into an appointment and standstill
agreement with Nokomis. The appointment and standstill agreement,
among other things, provided that (i) Nokomis shall be entitled to
appoint one qualified independent individual as a Class III
director and as a member of the Corporate Governance and Nominating
Committee and the Compensation Committee of the Board and we shall
nominate such appointee for election at the 2019 Annual Meeting of
Stockholders and (ii) we and Nokomis shall mutually select a
qualified independent individual to serve as a Class III director
and as a member of the Corporate Governance and Nominating
Committee and the Compensation Committee of the Board and we shall
nominate such appointee for election at the 2019 Annual Meeting of
Stockholders. On February 7, 2019 and in accordance with the terms
of the appointment and standstill agreement, the Board appointed
Richard L. Todaro and Julia A. Bowen as Class III directors of the
Company, with Mr. Todaro as the appointee by Nokomis and Ms. Bowen
as the mutual appointee. Also, on July 20, 2017, we previously
entered into an appointment and standstill agreement with Nokomis,
pursuant to which, among other things, the Company agreed to
immediately appoint Alan Howe and Philip Richter as Class II
directors and as members of the Corporate Governance and Nominating
Committee and the Compensation Committee of the Board and to
nominate them for election at the Company’s 2017 Annual
Meeting of Stockholders.
16 |
Page
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This
compensation discussion and analysis describes the material
elements of compensation awarded to, earned by, or paid to each of
our named executive officers, whom we refer to as our
“NEOs,” during 2019 and describes our policies and
decisions made with respect to the information contained in the
following tables, related footnotes and narrative for 2019. The
NEOs are identified below in the table titled “Summary
Compensation Table.” In this compensation discussion and
analysis, we also describe various actions regarding NEO
compensation take before or after 2019 when we believe it enhances
the understanding of our executive compensation
program.
Overview of Our Executive Compensation Philosophy and
Design
We
believe that a skilled, experienced and dedicated executive and
senior management team is essential to the future performance of
our Company and to building stockholder value. We have sought to
establish competitive compensation programs that enable us to
attract and retain executive officers with these qualities. The
other objectives of our compensation programs for our executive
officers are the following:
●
to motivate our
executive officers to achieve strong financial
performance;
●
to attract and
retain executive officers who we believe have the experience,
temperament, talents and convictions to contribute significantly to
our future success; and
●
to align the
economic interests of our executive officers with the interests of
our stockholders.
Setting Executive Compensation
Our
compensation committee has primary responsibility for, among other
things, determining our compensation philosophy, evaluating the
performance of our NEOs, setting the compensation and other
benefits of our NEOs, overseeing the Company’s response to
the outcome of the advisory votes of stockholders on executive
compensation, assessing the relative enterprise risk of our
compensation program and administering our equity compensation
plans. The Company’s compensation planning is done annually
for cash based performance goals and in multi-year periods for
equity based performance goal setting.
It is
our Chief Executive Officer’s (CEO) responsibility to provide
recommendations to the Compensation Committee for most compensation
matters related to executive compensation. The recommendations are
based on a general analysis of market standards and trends and an
evaluation of the contribution of each executive officer to the
Company’s performance. Our Compensation Committee considers,
but retains the right to accept, reject or modify such
recommendations and has the right to obtain independent
compensation advice. Neither the Chief Executive Officer nor any
other members of management is present during executive sessions of
the Compensation Committee. The Chief Executive Officer is not
present when decisions with respect to his compensation are made.
Our Board of Directors appoints the members of our compensation
committee and delegates to the compensation committee the direct
responsibility for overseeing the design and administration of our
executive compensation program.
We have
not historically utilized a compensation consultant to set the
compensation of our NEOs.
17 |
Page
Elements of Executive Compensation
We
believe the most effective compensation package for our NEOs is one
designed to reward achievement of individual and corporate
objectives, provide for short-term, medium-term and long-term
financial and strategic goals and align the interest of management
with those of the stockholders by providing incentives for
improving stockholder value. Compensation for our NEOs consists of
base salary and an annual bonus opportunity, along with multi-year
accelerated vesting goals associated with either stock option
awards and or stock grant awards. Our annual bonus opportunity is
intended to incentivize the achievement of goals that drive annual
and multi-year performance, while our accelerated stock option and
or stock grant vesting goals are intended to incentivize the
achievement of goals that drive multi-year
performance.
Base Salary.
We pay our NEOs a base
salary to compensate them for services rendered and to provide them
with a steady source of income for living expenses throughout the
year. The fiscal 2019 and projected fiscal 2020 salaries of our
named executive officers and the percentage increases over their
2019 base salaries, are as follows:
|
Name
|
Fiscal 2019 Base Salary
|
Fiscal 2020 Base Salary
|
Percentage Increase Over Fiscal 2019 Base Salary
|
|
Jin
Kang
|
$
325,000
|
$
350,000
|
8
%
|
|
Kellie
Kim (1)
|
n/a
|
$
230,000
|
n/a
|
|
Jason
Holloway
|
$
265,000
|
$
265,000
|
0
%
|
(1)
Ms. Kim began
serving as Chief Financial Officer on January 2, 2020. Salary to be
increased to $250,000 on May 1, 2020.
Annual Cash Based Bonus Opportunity.
Our performance-based cash incentive compensation in recent years
has included targets for achieving various levels of revenue,
operating income, and other financial goals and metrics, along with
individual performance assessments that has included goals in
personal professional improvement, team building, and other
individual personal growth goals. The amount of the annual
discretionary cash based bonus award is based on individual
performance assessments along with the financial performance of the
Company.
In
2019, each of our NEOs had a target bonus of 50% of their base
salary with the opportunity to earn a cash bonus of up to 100% of
their base annual salary if they achieved certain financial targets
of cash flows, revenue and adjusted earnings before interest,
taxes, depreciation and amortization (Adjusted EBITDA). In 2019,
our NEOs each earned a $136,000 performance-based bonus due to the
Company achieving certain financial goals. One-half of the bonus
amount was paid in cash and one-half in restricted stock vesting
one year from the date of issuance amounting to 222,938
shares.
In
2020, each of our NEOs have a target bonus of 50% of their base
salary with the opportunity to earn a cash bonus of up to 100% of
their base annual salary if they achieve certain financial targets
of cash flows, revenue and earnings before interest, taxes,
depreciation
and
amortization (EBITDA).
Equity Awards.
The Company has used
equity grants and awards linked to accelerated vesting goals to
reinforce the alignment of interest of our named executive officers
with those of our stockholders, as the value of the awards granted
thereunder is linked to the value of our Common Stock, which, in
turn, is indirectly attributable to the performance of our
executive officers. In January 2018, we awarded Mr. Kang and Mr.
Holloway 100,000 shares and 50,000 shares of restricted common
stock, respectively, subject to time and accelerated vesting
conditions, including the achievement of certain financial targets
of cash flows, revenue and adjusted earnings before interest,
taxes, depreciation and amortization (Adjusted EBITDA). All shares
became fully vested and were issued as of April 2, 2020. The
acceleration of equity awards are generally tied to company
specific performance measures including but not limited to managed
services revenue, Adjusted EBITDA and other triggers that are
deemed to have a significant impact on the financial performance
goals of the Company. In 2019, each NEO was granted 106,041 shares
as one-half of bonus earned in 2018. There were no stock option
awards granted during 2018 or 2019 to our NEOs.
We
believe these cash and equity-based award opportunities reinforce
the alignment of interests of our NEOs with those of our
stockholders as they indirectly influence the performance of the
Company’s common stock. We believe the compensation model
described above for our NEOs motivates our NEOs to expand their
expertise and expand the effectiveness of the Company’s staff
allowing for greater organization efficiencies while improving
Company performance, which drives short-term, medium-term, and
long-term organizational improvement and ultimately value for the
stockholders in the form of better financial and common stock
performance.
Retirement and Other Benefits.
We are
strongly committed to encouraging all employees to save for
retirement. To provide employees with the opportunity to save for
retirement on a tax-deferred basis, we sponsor a defined
contribution 401(k) savings plan. We also provide health, dental,
vision, short term disability insurance and basic life insurance to
our NEOs on the same basis offered to all of our
employees.
18 |
Page
Summary Compensation Table
The
following table summarizes the compensation earned by us in each of
the last two recently completed fiscal years for our
NEOs:
|
Name
|
|
Year
|
Base Salary (1)
|
Bonuses
|
Option Awards
|
Stock Awards (2)
|
Total Compensation
|
|
Jin
Kang
|
|
2019
|
$
325,000
|
$
68,000
(3)
|
$
-
|
$
68,000
(3)
|
$
461,000
|
|
Chief
Executive Officer, President and Director
|
|
2018
|
$
300,000
|
$
62,500
(4)
|
$
-
|
$
130,500
(5)
|
$
493,000
|
|
|
|
|
|
|
|
|
|
|
Kellie Kim
(6)
|
|
2019
|
$
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
Executive Vice
President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason
Holloway
|
|
2019
|
$
265,000
|
$
68,000
(3)
|
$
-
|
$
68,000
(3)
|
$
401,000
|
|
Executive Vice
President, Chief Sales and Marketing
Officer
|
|
2018
|
$
265,000
|
$
62,500
(4)
|
$
-
|
$
96,500
(7)
|
$
424,000
|
|
and
President of WidePoint Cybersecurity Solutions
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kito
Mussa
|
|
2019
|
$
89,000
(7)
|
$
-
|
$
-
|
$
-
|
$
89,000
|
|
Former
Executive Vice President and Chief Financial
Officer
|
|
2018
|
$
200,000
|
$
-
|
$
-
|
$
-
|
$
200,000
|
|
|
|
|
|
|
|
|
|
|
Ian
Sparling
|
|
2019
|
$
223,800
(9)
|
$
68,000
(3)
|
$
-
|
$
68,000
(3)
|
$
359,800
|
|
Former Interim
Chief Financial Officer
|
|
|
|
|
|
|
|
(1) Amount represents annual base salary paid to
executive.
(2) Amount represents the grant date fair value calculated pursuant
to ASC Topic 718. Additional information about the assumptions used
when valuing equity awards is set forth in the notes the
consolidated financial statements included
in our Annual
Report on Form 10-K for the year ended December 31, 2019, filed
with the SEC on March 24, 2020
.
(3) In 2019, our NEOs each earned a $136,000 performance-based
bonus due to the Company achieving certain financial goals.
One-half of the bonus amount was paid in cash and one-half in
restricted stock vesting one year from the date of issuance
amounting to 222,938 shares.
(4) Performance-based discretionary award of $125,000, 50% of which
is paid in cash and 50% is paid in stock.
(5) During fiscal year 2018 Mr. Kang was granted a restricted stock
award of 100,000 shares on January 2, 2018. Also, includes a stock
award of $62,500 earned as a performance-based discretionary
award.
(6) Ms. Kim began serving as Chief Financial Officer on January 2,
2020.
(7) During fiscal year 2018 Mr. Holloway was granted a restricted
stock award of 50,000 shares on January 2, 2018. Also, includes a
stock award of $62,500 earned as a performance-based discretionary
award.
(8) Mr. Mussa resigned in 2019. This amount was paid through May
15, 2019.
(9) Mr. Sparling is paid in Euros. His salary was converted to US
dollars using average foreign exchange rate for 2019
($1.12/1.00
€)
19 |
Page
Grant of Plan Based Awards During 2019
During
the year ended December 31, 2019, NEOs were granted equity awards
as summarized below:
|
Name
|
|
Grant Date
|
|
Date of Committee Action
|
All Other Stock Awards: Number of Shares of Stock (#)
|
All Other Option Awards: Number of Securities Underlying Option
Awards (#)
|
Exercise Price of Option Awards ($/Sh)
|
Grant Date Fair Value of Stock and Option Awards
($)(1)
|
|
Jin
Kang
|
|
5/9/19
|
|
5/9/19
|
106,042
|
-
|
-
|
$
63,500
|
|
Chief
Executive Officer,
|
|
|
|
|
|
|
|
|
|
President and
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Jason
Holloway
|
|
5/9/19
|
|
5/9/19
|
106,042
|
-
|
-
|
$
63,500
|
|
Executive Vice
President,
|
|
|
|
|
|
|
|
|
|
Chief Sales
and Marketing
|
|
|
|
|
|
|
|
|
|
Officer and
President of
|
|
|
|
|
|
|
|
|
|
WidePoint
Cybersecurity
|
|
|
|
|
|
|
|
|
|
Solutions
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ian
Sparling
|
|
5/9/19
|
|
5/9/19
|
106,042
|
-
|
-
|
$
63,500
|
|
Former Interim
Chief
|
|
|
|
|
|
|
|
|
|
Financial
Officer
|
|
|
|
|
|
|
|
|
(1) Amount represents the grant date fair value calculated pursuant
to ASC Topic 718. Additional information about the assumptions used
when valuing equity awards is set forth in the notes the
consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2019, filed with the SEC
on March 24, 2020.
20 |
Page
Outstanding Equity Awards at December 31, 2019
The
following table sets forth information on outstanding equity awards
held by NEOs at December 31, 2019:
|
|
Option Awards
|
Stock
Awards
|
||||||
|
Name
|
Number of Securities Underlying Unexercised Options (#)
Exercisable
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option Exercise Price ($)
|
Option Grant Date
|
|
Option Expiration Date
|
Equity Incentive Plan
Awards:
Unearned
Shares or
other Rights
that have not
Vested (#)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares or Rights that have not Vested ($)
|
|
Jin
Kang
|
170,000
(1)
|
-
|
$
0.57
|
3/21/13
|
|
3/20/20
|
139,375
(3)
|
$
55,750
|
|
Chief
Executive Officer,
|
25,000
(1)
|
-
|
$
1.38
|
5/8/15
|
|
5/8/20
|
|
|
|
President and
Director
|
-
|
750,000
(2)
|
$
0.65
|
9/7/17
|
|
9/27/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason
Holloway
|
500,000
(1)
|
-
|
$
0.70
|
4/26/16
|
|
4/26/21
|
122,707
(3)
|
$
49,083
|
|
Executive Vice
President,
|
|
|
|
|
|
|
|
|
|
Chief Sales
and Marketing
|
|
|
|
|
|
|
|
|
|
Officer and
President of
|
|
|
|
|
|
|
|
|
|
WidePoint
Cybersecurity
|
|
|
|
|
|
|
|
|
|
Solutions
Corporation
|
|
|
|
|
|
|
|
|
(1) All
options are fully vested.
(2) All
options vest on September 27, 2021 provided that executive is
employed by the Company. Options are subject to accelerated vesting
of 250,000 options for each financial performance condition met.
Acceleration provisions will be considered achieved when executive:
i) achieves three consecutive quarters of positive earnings before
interest, taxes, depreciation and amortization; ii) thirty percent
revenue growth excluding carrier services; or iii) positive cash
flow for 12 successive months.
(3)
Includes restricted stock award of 106,041 shares granted May 9,
2019 to vest in one year from the grant date and one-third of
shares granted in January 2, 2018 and fully vested April 2,
2020.
21 |
Page
Option Exercises and Stock Vested for Fiscal 2019
The
following table sets forth information about the exercise of
options by our NEOs and the vesting of their restricted stock
awards in fiscal 2019.
|
|
Option
Awards
|
Restricted Stock
Awards
|
||
|
Name
|
Number of Shares
Acquired on Exercise (#)
|
Value Realized
on Exercise ($)
|
Number of Shares
Acquired on Vesting (#)
|
Value Realized
on Vesting ($)(1)
|
|
|
|
|
|
|
|
Jin
Kang
|
—
|
—
|
66,666
|
$
28,600
|
|
|
|
|
|
|
|
Jason
Holloway
|
—
|
—
|
33,334
|
$
14,300
|
|
|
|
|
|
|
|
Ian
Sparling
|
—
|
—
|
33,334
|
$
14,300
|
|
|
|
|
|
|
|
Kito
Mussa
|
—
|
—
|
0
|
$
0
|
(1) The
amounts in this column have been computed based on the closing
price of our common stock on the vesting date.
Employment Agreements and Compensation Arrangements;
Termination and Change in Control Provisions
The
following describes the terms of employment agreements between the
Company and the named executive officers included in the above
Summary Compensation Table and sets forth information regarding
potential payments upon termination of employment or a change in
control of the Company.
Mr. Kang
. On
December 20, 2017, we entered into an employment agreement with Mr.
Kang for a three year employment agreement, effective January 1,
2018, providing the following: (i) an annual base salary of
$300,000 (increasing $25,000 annually); (ii) an annual target bonus
opportunity equal to 50% of the base salary (with a maximum of 100%
of base salary) based on the Company achieving performance goals
determined by the Compensation Committee of the Board of Directors
(payable one-half in cash and one-half in common stock of the
Company); (iii) a restricted stock grant of 100,000 shares of
common stock effective January 2, 2018 vesting only if certain
performance goals are met, (iv) participation in the
Company’s employee benefit plans and (v) four (4) weeks of
vacation. The employment agreement contains severance provisions
which provide that upon the termination of his employment without
Cause (as described below) or his voluntary resignation for a Good
Reason (as described in below), Mr. Kang will receive severance
compensation payable in a lump-sum of cash equal to twelve (12)
months of base salary and a pro rata bonus amount. The employment
agreement further provides that if within 90 days prior to or two
years after a change in control of the Company there occurs any
termination of Mr. Kang for any reason other than for Cause or a
voluntary resignation without a Good Reason, then the Company will
be required to pay to Mr. Kang a one-time severance payment equal
twelve (12) months base salary and a pro rata bonus.
Mr. Holloway
. On
December 20, 2017, we entered into an employment agreement with Mr.
Holloway. The employment agreement for Mr. Holloway is the same as
Mr. Kang’s, except that it provides for: (i) an annual base
salary of $265,000; (ii) a restricted stock grant of 50,000 shares
of common stock effective January 2, 2018 vesting only if certain
performance goals are met and (iii) the severance compensation
payable upon termination without Cause or For Good Reason is equal
to twelve (12) months of base salary.
A
termination of an executive’s employment by the Company shall
be deemed for “Cause” if, and only if, it is based upon
the following: (i) executive's failure, neglect or refusal to
perform executive’s material duties (in each instance, other
than any such failure resulting from incapacity due to physical or
mental illness); (ii) executive's failure to comply with any valid,
material and legal directive of the Board of Directors; (iii)
executive's engagement in dishonesty, illegal or disloyal conduct,
or willful or grossly negligent misconduct, which is, in each case,
injurious to the interests, reputation or business of the Company
or its Affiliates as determined by the Compensation Committee of
the Board of Directors; (iv) executive's embezzlement,
misappropriation, or fraud, whether or not related to the
Executive's employment with the Company; (v) executive's conviction
of or plea of guilty or nolo contendere to a crime that constitutes
a felony (or state law equivalent) or a crime that constitutes a
misdemeanor involving moral turpitude; (vi) any material failure by
executive to comply with the Company's written policies or rules,
as they may be in effect from time to time during the employment
term; or (vii) executive's material breach of any material
obligation under the agreement or any other written agreement
between executive and the Company.
22 |
Page
A
resignation by executive shall not be deemed to be voluntary and
shall be deemed to be a resignation with “Good Reason”
if it is based upon (i) a material diminution in executive’s
title, duties, responsibilities, authority or salary; (ii) a
material reduction in bonus target or benefits; (iii) a direction
by the Board of Directors that executive report to any person or
group other than the Board of Directors; (iv) a requirement that
the executive relocate; or (v) the Company’s material breach
of the agreement.
Ms. Kim
. In December
2019, we entered into an offer letter with Ms. Kim that provides
that she will earn an initial base salary of $230,000 and be
eligible for a merit bonus equal to 100% of her base salary (50% of
which is payable in cash and 50% of which is payable in shares of
restricted common stock). The Company expects to enter into an
employment agreement with Ms. Kim during 2020.
Compensation Committee Interlocks and Insider
Participation
During
the last fiscal year, no member of the Compensation Committee had a
relationship with us that required disclosure under Item 404 of
Regulation S-K. During the past fiscal year, none of our executive
officers served as a member of the board of directors or
compensation committee, or other committee serving an equivalent
function, of any entity that has one or more executive officers who
served as members of our Board of Directors or our Compensation
Committee. None of the members of our Compensation Committee is an
officer or employee of our Company, nor have they ever been an
officer or employee of our Company.
Compensation Committee Report
Our
Compensation Committee has reviewed and discussed the
“Compensation Discussion and Analysis” contained herein
with management. Based on our Compensation Committee’s review
and discussions with management, our Compensation Committee
recommended to our Board of Directors that the Compensation
Discussion and Analysis be included herein.
Otto J.
Guenther
Julia
Bowen
Philip
Richter
CERTAIN RELATED PERSON TRANSACTIONS
A
related person transaction is a consummated or currently proposed
transaction in which the Company has been, is or will be a
participant and the amount involved exceeds $120,000, and in which
a related person (i.e., any director or executive officer or
nominee for director, or any member of the immediate family of such
person) has or will have a direct or indirect material
interest.
The
Company was not a participant in any related person transactions in
the past two fiscal years and no such transactions are currently
proposed.
Under
the Company’s corporate governance principles (the
“Corporate Governance Principles”), a majority of the
Company’s Board will consist of independent directors. An
“independent” director is a director who meets the NYSE
American definition of independence and other applicable
independence standards under SEC guidelines, as determined by the
Board. The Company’s Corporate Governance and Nominating
Committee conduct an annual review of the independence of the
members of the Board and its Committees and report its findings to
the full Board of Directors. Based on the report and recommendation
of the Corporate and Nominating Governance Committee, the Board has
determined that each of the Company’s non-employee directors
(and the director nominee) satisfies the independence criteria set
forth in the applicable NYSE American listing standards and SEC
rules. Each standing Board Committee consists entirely of
independent, non-employee directors.
Non-management
members of the Board of Directors conduct at least two
regularly-scheduled meetings per year without members of management
being present.
23 |
Page
PROPOSAL TWO – INDEPENDENT ACCOUNTANTS
The
Audit Committee is recommending that stockholders ratify its
appointment of Moss Adams LLP as independent accountants for
WidePoint to audit its consolidated financial statements for the
fiscal year ending December 31, 2020, to perform audit-related
services, including review of our quarterly interim financial
information, periodic reports and registration statements filed
with the Securities and Exchange Commission and consultation in
connection with various accounting and financial reporting matters.
The stockholder vote is not binding on the Audit Committee. If the
appointment of Moss Adams LLP is not ratified by stockholders, the
Audit Committee will evaluate the basis for the stockholders' vote
when determining whether to continue the firm's engagement, but may
ultimately determine to continue the engagement of the firm or
another audit firm without re-submitting the matter to
stockholders. Even if the appointment of Moss Adams LLP is
ratified, the Audit Committee may in its sole discretion terminate
the engagement of the firm and direct the appointment of another
independent auditor at any time during the year if it determines
that such an appointment would be in the best interests of our
Company and our stockholders.
A
resolution will be presented at the Annual Meeting to ratify the
appointment of Moss Adams LLP to serve as the Company’s
independent public accountants for the fiscal year ending December
31, 2020. A representative of Moss Adams LLP will be available
either via phone or in person at the Annual Meeting to answer
appropriate questions concerning the Company’s financial
statements and to make a statement if desired.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR
OF THE RATIFICATION OF THE COMPANY’S AUDITORS.
24 |
Page
AUDIT COMMITTEE REPORT
The
Audit Committee has: (a) reviewed and discussed the audited
financial statements with the management of the Company; (b)
discussed with the Company’s independent auditors, Moss Adams
LLP, the matters required to be discussed by Public Company
Accounting Oversight Board Auditing Standard No. 16 and the
American Institute of Certificated Public Accountants’
Statement on Auditing Standards No. 114; (c) received from the
Company’s independent auditors the written disclosures and
the letter required by applicable requirements of the Public
Company Accounting Oversight Board, and discussed with the
Company’s independent auditors their independence; and (d)
based on the review and discussions referred to in clauses (a), (b)
and (c) above, recommended to the Board that the audited financial
statements be included in the Company’s Annual Report on Form
10-K for fiscal year 2019.
The
foregoing report is submitted by the members of the Audit
Committee:
Otto
J. Guenther
Julia
Bowen
Richard
Todaro
INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM FEES AND
SERVICES
The
following table sets forth fees paid to our principal accountants
in connection with audit and audit-related, tax and other non-audit
fees for the years ended December 31:
|
Service
Type
|
2019
|
2018
|
|
|
|
|
|
Audit and Quarterly
Review Fees (1)
|
$
161,500
|
$
158,900
|
|
|
|
|
|
Audit-Related
Fees
|
-
|
-
|
|
|
|
|
|
Total
|
$
161,500
|
$
158,900
|
(1)
Audit and quarterly review fees for the annual audit and review of
financial statements included in the Company’s quarterly
filings. Excludes
a flat expense
charge, calculated as five percent (5%) of fees for administrative
expense or
reimbursable expenses, such as travel
expense.
Audit Committee Policies and Procedures For Pre-Approval of
Independent Auditor Services
The
following describes the Audit Committee’s policies and
procedures regarding pre-approval of the engagement of the
Company’s independent auditor to perform audit as well as
permissible non-audit services for the Company.
For
audit services and audit-related fees, the independent auditor will
provide the Committee with an engagement letter during the
March-May quarter of each year outlining the scope of the audit
services proposed to be performed in connection with the audit of
the current fiscal year. If agreed to by the Committee, the
engagement letter will be formally accepted by the Committee at an
Audit Committee meeting held as soon as practicable following
receipt of the engagement letter. The independent auditor will
submit to the Committee for approval an audit services fee proposal
after acceptance of the engagement letter.
For
non-audit services and other fees, Company management may submit to
the Committee for approval (during May through September of each
fiscal year) the list of non-audit services that it recommends the
Committee engage the independent auditor to provide for the fiscal
year. The list of services must be detailed as to the particular
service and may not call for broad categorical approvals. Company
management and the independent auditor will each confirm to the
Audit Committee that each non-audit service on the list is
permissible under all applicable legal requirements. In addition to
the list of planned non-audit services, a budget estimating
non-audit service spending for the fiscal year may be provided. The
Committee will consider for approval both the list of permissible
non-audit services and the budget for such services. The Committee
will be informed routinely as to the non-audit services actually
provided by the independent auditor pursuant to this pre-approval
process.
To
ensure prompt handling of unexpected matters, the Audit Committee
delegates to its Chairman the authority to amend or modify the list
of approved permissible non-audit services and fees. The Chairman
will report any action taken pursuant to this delegation to the
Committee at its next meeting.
All
audit and non-audit services provided to the Company are required
to be pre-approved by the Committee. The Chief Financial Officer of
the Company will be responsible for tracking all independent
auditor fees against the budget for such services and report at
least annually to the Audit Committee.
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OTHER INFORMATION
We
maintain an internet website at
http://www.widepoint.com
.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and any amendment to those reports,
are available free of charge on our website immediately after they
are filed with or furnished to the Securities and Exchange
Commission. WidePoint’s Code of Business Conduct, Corporate
Governance Principles and Charters of the Committees of the Board
of Directors are also available free of charge on our website or by
writing to WidePoint Corporation, 11250 Waples Mill Road, South
Tower, Suite 210, Fairfax, Virginia 22030, c/o Corporate Secretary.
WidePoint’s Code of Business Conduct applies to all
directors, officers (including the Chief Executive Officer and
Chief Financial Officer) and employees. Amendments to or waivers of
the Code of Conduct granted to any of the Company’s directors
or executive officers will be published on our website within four
business days of such amendment or waiver.
STOCKHOLDER PROPOSALS FOR 2021 ANNUAL MEETING
Proposals of stockholders intended to be presented
at the 2021 Annual Meeting must be received by the Secretary of the
Company, 11250 Waples Mill Road, South Tower, Suite 210, Fairfax,
Virginia 22030, no later than
December 25, 2020 in order for them to be
considered for inclusion in the 2021 Proxy Statement.
Any
such proposal must comply with Rule 14a-8 of Regulation 14A of the
proxy rules of the Securities and Exchange Commission.
Based on our anticipated meeting date,
a
stockholder desiring to submit a proposal to be voted on at next
year’s Annual Meeting of Stockholders, but not desiring to
have such proposal included in next year’s proxy statement
relating to that meeting, should submit such proposal to the
Company
no later than December 25,
2020
. Failure to comply with that advance notice requirement
will result in the proposal not being placed on the agenda at the
meeting.
OTHER MATTERS
Management
is not aware of any other matters to be considered at the Annual
Meeting. If any other matters properly come before the Annual
Meeting, the persons named in the enclosed Proxy will vote said
Proxy in accordance with their discretion.
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