☒ |
Preliminary Proxy Statement
|
☐ |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
☐ |
Definitive Proxy Statement
|
☐ |
Definitive Additional Materials
|
☐ |
Soliciting Material under §240.14a-12
|
☒ |
No fee required
|
☐ |
Fee paid previously with preliminary materials
|
☐ |
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
|
THIS PROXY STATEMENT AND THE COMPANY’S ANNUAL REPORT TO STOCKHOLDERS
ARE AVAILABLE AT: www.edocumentview.com/BYFC
|
1. |
To elect the three directors named in the proxy statement to serve until the Annual Meeting to be held in the year 2026 or until their successors are elected and have been qualified;
|
2. |
To ratify the appointment of Moss Adams LLP as the independent registered public accounting firm for the Company for its fiscal year ending December 31, 2023;
|
3. |
To cast an advisory (non-binding) vote to approve executive compensation;
|
4. |
To amend and restate the Broadway Financial Corporation 2018 Long-Term Incentive Plan to increase the number of shares reserved for issuance by 3,900,000 shares;
|
5. |
To approve an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of the Company’s common stock with no change to the number of authorized shares of
the Company’s common stock; and
|
6. |
To consider such other business as may properly come before and be voted upon by the stockholders at the Annual Meeting, or any postponement or adjournment thereof.
|
Q: |
How can I attend the Annual Meeting?
|
A: |
The Annual Meeting will be conducted solely online by live webcast. You will be entitled to participate in the Annual Meeting, including asking questions and voting your shares, only if
you were a stockholder of the Company of record as of the close of business on the Record Date for the Annual Meeting, or if you hold a valid proxy for the Annual Meeting received from a stockholder of record on that date and follow the
instructions below.
|
Q: |
What if I have trouble accessing the Annual Meeting virtually?
|
A: |
On the day of the Annual Meeting, if you experience technical difficulties either during the check-in process or during the Annual Meeting, please call 1-888-724-2416 for assistance.
Stockholders may submit questions during the Annual Meeting on the Annual Meeting website. More information regarding the question and answer process, including the number and types of questions permitted, and how questions will be
recognized and answered, will be available in the meeting rules of conduct, which will be posted on the Annual Meeting website.
|
Q: |
Who may vote at the Annual Meeting?
|
A: |
The Board of Directors has selected April 24, 2023 as the Record Date for the Annual Meeting. Only those stockholders of record at the close of business on that date will be entitled to a
notice of and to vote at the Annual Meeting or any postponement or adjournment thereof.
|
Q: |
What is the difference between holding shares as a “stockholder of record” and as a beneficial owner of shares held in “street name”?
|
A: |
If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. (“Computershare”), you are considered the “stockholder of record” with
respect to those shares, and the Notice was sent directly to you.
|
Q: |
How do I register to attend the Annual Meeting?
|
A: |
If you are a stockholder of record, our transfer agent, Computershare, will already have that information and you will not need to register to attend and participate in the Annual Meeting
webcast. Instead, you may simply follow the instructions to access the meeting website on the Notice or proxy card that you received.
|
Q: |
How can I vote my shares without participating in the online Annual Meeting?
|
A: |
Whether you are a stockholder of record or hold your shares in street name, you may vote your shares or direct how your shares will be voted without participating in the online Annual
Meeting.
|
Q: |
How can I vote my shares during the Annual Meeting?
|
A: |
Whether you are a stockholder of record or hold your shares in street name, you may vote online at the Annual Meeting. You will need to enter your control number (included in your Notice,
your proxy card, or the voting instructions that accompanied your proxy materials) to vote your shares at the Annual Meeting. Even if you plan to participate in the Annual Meeting, however, we encourage you to vote over the Internet, by
telephone, or by returning a proxy card if you have requested printed proxy materials. This will ensure that your vote will be counted if you are unable to, or later decide not to, participate in the Annual Meeting.
|
Q: |
May I revoke my voting instructions or proxy and change my vote?
|
A: |
You may revoke your proxy and change your vote on a matter at any time before the voting on the matter at the Annual Meeting is completed. You may revoke your voting instructions or proxy
over the Internet or by telephone by following the instructions included in your proxy materials or by submitting a written notice of revocation to Broadway Financial Corporation 4601 Wilshire Blvd., Suite 150, Los Angeles, CA 90010, Attn:
Audrey A. Phillips. You may also revoke a previously submitted proxy by voting again on a later date over the Internet, by telephone, or by signing and returning a new proxy card by mail (only your latest proxy submitted prior to the Annual
Meeting will be counted), or by voting at the Annual Meeting. Your participation at the Annual Meeting will not revoke your proxy unless you vote again electronically during the Annual Meeting. Any revocation of or change in your vote on a
matter must be received by the Company prior to completion of the vote on the matter to be effective.
|
8 | |
8
|
|
9
|
|
9 | |
10 | |
11
|
|
11
|
|
15
|
|
15
|
|
16 | |
17
|
|
18
|
|
20
|
|
21
|
|
22
|
|
23
|
|
23
|
|
31 | |
32
|
|
32
|
|
33
|
|
33
|
|
34
|
|
35
|
|
42
|
|
51
|
|
52
|
Beneficial Owner
|
Number of
Shares of
Voting
Common
Stock
Beneficially
Owned
|
Percent of
Voting
Common
Stock
|
Number of
Shares of
Non-Voting
Common
Stock,
Class B
Beneficially
Owned(1)
|
Number of
Shares of
Non-Voting
Common
Stock,
Class C
Beneficially
Owned(2)
|
Percent of
Total Common
Stock
Outstanding(3)
|
|||||||||||||||
5% Beneficial Owners:
|
||||||||||||||||||||
City First Enterprises(4)
|
6,622,236
|
13.59
|
%
|
—
|
—
|
9.01
|
%
|
|||||||||||||
Cedars-Sinai Medical Center(6)
|
2,808,989
|
5.77
|
%
|
—
|
—
|
3.82
|
%
|
|||||||||||||
EJF Capital LLC(5)
|
2,652,000
|
5.44
|
%
|
—
|
—
|
3.61
|
%
|
|||||||||||||
Directors and Executive Officers(7):
|
||||||||||||||||||||
Brian E. Argrett
|
181,778
|
*
|
—
|
—
|
*
|
|||||||||||||||
Wayne-Kent A. Bradshaw(8)
|
285,946
|
*
|
—
|
—
|
*
|
|||||||||||||||
Robert C. Davidson(9)
|
104,561
|
*
|
—
|
—
|
*
|
|||||||||||||||
Mary Ann Donovan
|
17,333
|
*
|
—
|
—
|
*
|
|||||||||||||||
John M. Driver
|
9,230
|
*
|
—
|
—
|
*
|
|||||||||||||||
Marie C. Johns
|
17,333
|
*
|
—
|
—
|
*
|
|||||||||||||||
William A. Longbrake
|
77,333
|
*
|
—
|
—
|
*
|
|||||||||||||||
David J. McGrady
|
17,333
|
*
|
—
|
—
|
*
|
|||||||||||||||
Dutch C. Ross III
|
48,043
|
*
|
—
|
—
|
*
|
|||||||||||||||
Brenda J. Battey(10)
|
255,184
|
*
|
—
|
—
|
*
|
|||||||||||||||
Ruth McCloud(11)
|
190,106
|
*
|
—
|
—
|
*
|
|||||||||||||||
Tom A. Nida
|
40,604
|
*
|
—
|
—
|
*
|
|||||||||||||||
John F. Tellenbach
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
LaShanya D. Washington
|
6,633
|
*
|
—
|
—
|
*
|
|||||||||||||||
Sonja S. Wells
|
48,039
|
*
|
—
|
—
|
*
|
|||||||||||||||
All current directors and executive officers as a group (15 persons)
|
1,299,458
|
2.66
|
%
|
—
|
—
|
1.77
|
%
|
* |
Less than 1%.
|
(1) |
The Class B non-voting common stock may not be converted to Voting Common Stock.
|
(2) |
The Class C non-voting common stock may be converted to Voting Common Stock only upon the occurrence of certain prescribed forms of sales to third parties that are not affiliated with
the holders thereof.
|
(3) |
The total number of outstanding common shares as of March 31, 2023 was 73,506,357, which includes all outstanding shares of Class A voting common stock, Class B non-voting common stock,
and Class C non-voting common stock.
|
(4) |
The address for City First Enterprises is 1 Thomas Circle, NW, Suite 700, Washington, D.C. 20005.
|
(5) |
The address for Cedars-Sinai Medical Center is 8700 Beverly Boulevard, TRES 6500, Los Angeles, CA 90048.
|
(6) |
The address for EJF Capital LLC and each of such entities is 2107 Wilson Boulevard, Suite 410, Arlington, VA 22201.
|
(7) |
The address for each of the directors and named executive officers is 4601 Wilshire Boulevard, Suite 150, Los Angeles, CA 90010.
|
(8) |
Includes 41,703 allocated shares under the City First Bank, National Association Employee Stock Ownership Plan (“ESOP”).
|
(9) |
Includes 70,000 shares that are held by the Robert and Alice Davidson Trust, dated August 11, 1982. Robert Davidson and Alice Davidson share investment and voting power with respect to
the shares held by the Robert and Alice Davidson Trust in their capacities as trustees of the trust.
|
(10) |
Includes 31,589 allocated shares under the ESOP and 150,000 shares subject to options granted under the LTIP, which options are all currently exercisable.
|
(11) |
Includes 27,436 allocated shares under the ESOP and 100,000 shares subject to options granted under the LTIP, which options are all currently exercisable.
|
Name
|
|
|
Age as of
March 31,
2023
|
|
|
Director
Since
|
|
|
Current
Term
Expires
|
|
|
Positions Currently Held with the
Company and the Bank
|
NOMINEES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian E. Argrett1
|
|
|
59
|
|
|
2011*
|
|
|
2023
|
|
|
Chair of the Board, President and Chief Executive Officer
|
Mary Ann Donovan
|
|
|
58
|
|
|
2020*
|
|
|
2023
|
|
|
Director
|
William A. Longbrake
|
|
|
80
|
|
|
2011*
|
|
|
2023
|
|
|
Director
|
CONTINUING DIRECTORS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Wayne-Kent A. Bradshaw
|
|
|
76
|
|
|
2012
|
|
|
2024
|
|
|
Director, Vice Chair
|
Marie C. Johns
|
|
|
71
|
|
|
2014*
|
|
|
2024
|
|
|
Lead Independent Director
|
David J. McGrady
|
|
|
67
|
|
|
1997*
|
|
|
2024
|
|
|
Director
|
Robert C. Davidson, Jr.
|
|
|
77
|
|
|
2003
|
|
|
2025
|
|
|
Director
|
Dutch C. Ross III
|
|
|
76
|
|
|
2016
|
|
|
2025
|
|
|
Director
|
John M. Driver1
|
|
|
58
|
|
|
2022
|
|
|
2025
|
|
|
Director
|
* |
Including service as a director of CFBanc prior to the Merger.
|
1 |
Mr. Argrett was elected as Chair of the Board, effective April 1, 2023.
|
THE BOARD UNANIMOUSLY RECOMMENDS
THAT YOU VOTE “FOR” THE ABOVE NOMINEES.
|
|
Board Diversity Matrix (As of December 31, 2022)
|
|
||||||||||||
|
Total Number of Directors
|
|
|
9
|
|
|||||||||
|
|
|
Female
|
|
|
Male
|
|
|
Non-Binary
|
|
|
Did Not
Disclose Gender
|
|
|
|
Part I: Gender Identity
|
|
|
|
|
|
|
|
|
|
||||
|
Directors
|
|
|
2
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
Part II: Demographic Background:
|
|
|
|
|
|
|
|
|
|
||||
|
African American or Black
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
Alaskan Native or Native American
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Asian
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Hispanic or Latinx
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Native Hawaiian or Pacific Islander
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
White
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
Two or More Races or Ethnicities
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
LGBTQ+
|
|
|
—
|
|
|||||||||
|
Did Not Disclose Demographic Background
|
|
|
—
|
|
Audit Committee
|
|
Dr. William A. Longbrake, Chair
|
|
Ms. Mary Ann Donovan
|
|
Mr. John M. Driver
|
|
Ms. Marie C. Johns
|
Name
|
|
Age(1)
|
|
Principal Occupation during the Past Five Years
|
Brenda J. Battey
|
|
65
|
|
Executive Vice President and Chief Financial Officer of the Company since June 2013 and the Bank(2) since April 2013. Senior Vice President and Senior Controller of the Bank of
Manhattan from September 2011 to June 2012.
|
Ruth McCloud
|
|
74
|
|
Executive Vice President and Chief Operating Officer of the Company and Bank since April 2021. Previously Executive Vice President of the Company, and Executive Vice President and Chief
Retail Banking Officer of the Bank(2) since July 2014.
|
Tom Nida
|
|
73
|
|
Executive Vice President and Market Executive of the Company since April 2021, and of the Bank since January 2019. Senior Vice President and D.C. Regional Executive at John Marshall Bank
from October 2017 to January 2019. Executive Vice President and Managing Director of Community Development and Non-Profit Banking, as well as an Executive Vice President and D.C. Market President at United Bank from April 2004 to September
2016.
|
John Tellenbach
|
56
|
Executive Vice President, West Commercial Regional Executive of the Company since February of 2023. Senior Vice President and Chief Credit Officer of Malaga Bank beginning in 2015.
|
||
Sonja S. Wells
|
|
68
|
|
Executive Vice President, East Commercial Regional Executive of the Company, and of the Bank since April 2023. Executive Vice President and Chief Lending Officer, Commercial Banking, of
the Company and the Bank since April 2021. Previously Executive Vice President and Chief Lending Officer of the Bank since January of 2021. Senior Vice President and Interim Chief Lending Officer of the Bank from May 2020 to January 2021
and prior to that Senior Vice President and Relationship Manager of the Bank from July 2015.
|
LaShanya Washington
|
49
|
Executive Vice President, Chief Credit Officer of the Company since April 2023 and Senior Vice President, Deputy Chief Credit Officer since August 2022. Senior Vice President and Senior Credit
Officer of the Bank since April 2022 and Credit Risk Officer since February 2019. Senior Credit Analyst at United Bank from November 2018 to February 2019, and Manager for Loan Servicing and Accounting for Capital Impact Partners from
November 2015 until August 2018.
|
(1) |
As of March 31, 2023.
|
(2) |
Refers to Broadway Federal until April 1, 2021, the date on which Broadway Federal merged with and into City First, and to City First from and after that date.
|
Name and
Principal Position
|
Year
|
Salary
|
Stock
Awards(1)
|
Non-Equity
Incentive Plan
Compensation(2)
|
All Other
Compensation(3)
|
Total
($)
|
|
Brian E. Argrett,
Chief Executive Officer(4)
|
2022
2021
|
$550,000
$502,500
|
$210,000
$200,000
|
$206,250
$160,000
|
$66,463
$42,734
|
$1,032,713
$905,234
|
|
Brenda J. Battey
Chief Financial Officer
|
2022
2021
|
$265,000
$247,231
|
$61,900
$-
|
$75,287
$61,808
|
$40,206
$64,407
|
$442,393
$373,446
|
|
Ruth McCloud
Chief Operating Officer
|
2022
2021
|
$260,000
$210,656
|
$52,700
$-
|
$73,736
$52,700
|
$26,270
$47,595
|
$412,706
$310,952
|
(1) |
This column reports the grant date fair value of restricted stock granted during each year reported. The amounts reported in this column have been calculated in accordance with FASB ASC
Topic 718. A description of the methodologies and assumptions we use to value equity awards and the manner in which we recognize the related expense are described in Note 17 to our consolidated financial statements, Stock-Based
Compensation.
|
(2) |
The amounts shown represent the cash incentive compensation awards earned by each NEO under the Bank’s Incentive Plan for Management (“Incentive Plan”), based on the objective criteria
established by the Board at the beginning of each year. The Company’s achievement of such objective criteria is determined by the Board’s compensation and benefits committee (“Compensation Committee”). The Compensation Committee evaluates
the performance results at the beginning of the following year and approves the amounts of bonuses to be paid.
|
(3) |
Includes amounts paid by the Company to the 401(k) account of the NEO and allocations under the City First Bank, National Association Employee Stock Ownership Plan. Also includes
perquisites and other benefits consisting of automobile and telephone allowances, health benefits and life insurance premiums.
|
(4) |
Mr. Argrett became the President and Chief Executive Officer on April 1, 2021.
|
• |
Net Earnings
|
• |
Capital
|
• |
Compliance
|
• |
Net Loan Growth
|
• |
Asset Quality
|
• |
Core Deposit Growth
|
|
Option Awards
|
Restricted Stock Awards
|
|||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
(Exercisable)
|
Number of
Securities
Underlying
Unexercised
Options (#)
(Unexercisable)(1)
|
Option
Exercise
Price ($)(2)
|
Option
Expiration
Date(3)
|
Number
of Shares
That Have
Not Vested
(#)
|
|
|
Market
Value of
Shares
That Have
Not Vested
($)
|
|||||||||||||||||
Brian E. Argrett
|
—
|
—
|
—
|
—
|
137,254
|
(4)
|
|
$
|
138,627
|
||||||||||||||||
Brenda J. Battey
|
150,000
|
—
|
1.62
|
02/24/2026
|
—
|
|
|
—
|
|||||||||||||||||
—
|
—
|
—
|
—
|
40,457
|
(5)
|
|
$
|
40,862
|
|||||||||||||||||
Ruth McCloud
|
100,000
|
—
|
1.62
|
02/24/2026
|
—
|
|
|
—
|
|||||||||||||||||
34,444
|
(5)
|
|
$
|
34,788
|
(1) |
Options vest in equal annual installments on each anniversary date over a period of five years commencing on the date of grant.
|
(2) |
Based upon the fair market value of a share of Company common stock on the date of grant.
|
(3) |
Terms of outstanding stock options are for a period of ten years from the date the option is granted.
|
(4) |
This restricted stock award vested 33% on March 16, 2023 and vests ratably thereafter over the following twenty-four (24) months.
|
(5) |
These restricted stock awards vest in five equal annual installments on each anniversary of March 16, 2022.
|
Year (a)
|
Summary
Compensation
Table Total for
PEO (Argrett)
(1) (b)
|
Summary
Compensation
Table Total for PEO (Bradshaw) (1) (b)
|
Compensation
Actually Paid
to PEO
(Argrett)
(2) (c)
|
Compensation Actually Paid
to PEO
(Bradshaw)
(2) (c)
|
Average
Summary Compensation
Table Total
for Non-PEO
NEOs
(3) (d)
|
Average Compensation Actually Paid
to Non-PEO
NEOs
(4) (e)
|
Value of
Initial Fixed
$100
Investment Based On
Total
Shareholder
Return
(5) (f)
|
Net Income
(6) (g)
|
2022
|
$1,032,713
|
—
|
$961,340
|
—
|
$427,550
|
$408,075
|
$55
|
$ 5,636,000
|
2021
|
$ 905,234
|
$358,623
|
$905,234
|
$839,602
|
$338,637
|
$450,978
|
$125
|
$(4,050,000)
|
Compensation Actually Paid to PEO
|
2022
|
2021
|
||||||||||
|
Argrett
|
Bradshaw
|
||||||||||
Summary Compensation Table Total
|
$
|
1,032,713
|
$
|
905,234
|
$
|
358,623
|
||||||
Less, value of “Stock Awards” and “Option Awards” reported in Summary Compensation Table
|
$
|
(210,000
|
)
|
$
|
(200,000
|
)
|
—
|
|||||
Plus, year-end fair value of outstanding and unvested equity awards granted in the year
|
$
|
138,627
|
—
|
—
|
||||||||
Plus, fair value as of vesting date of equity awards granted and vested in the year
|
—
|
$
|
200,000
|
—
|
||||||||
Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years
|
—
|
—
|
—
|
|||||||||
Plus (less), year over year change in fair value of equity awards granted in prior years that vested in the year
|
—
|
—
|
$
|
480,979
|
||||||||
Less, prior year-end fair value for any equity awards forfeited in the year
|
—
|
—
|
—
|
|||||||||
Plus, dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the SCT Total for the covered fiscal year
|
—
|
—
|
—
|
|||||||||
Compensation Actually Paid to PEO
|
$
|
961,340
|
$
|
905,234
|
$
|
839,602
|
Average Compensation Actually Paid to Non-PEO NEOs
|
2022
|
2021
|
||||||
Average Summary Compensation Table Total
|
$
|
427,550
|
$
|
338,637
|
||||
Less, average value of Stock Awards reported in Summary Compensation Table
|
$
|
(57,300
|
)
|
—
|
||||
Plus, average year-end fair value of outstanding and unvested equity awards granted in the year
|
$
|
37,825
|
—
|
|||||
Plus, average fair value as of vesting date of equity awards granted and vested in the year
|
—
|
—
|
||||||
Plus (less), average year over year change in fair value of outstanding and unvested equity awards granted in prior years
|
—
|
—
|
||||||
Plus (less), average year over year change in fair value of equity awards granted in prior years that vested in the year
|
—
|
$
|
112,341
|
|||||
Less, prior year-end fair value for any equity awards forfeited in the year
|
—
|
—
|
||||||
Plus, dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the SCT Total for the covered fiscal year
|
—
|
—
|
||||||
Average Compensation Actually Paid to Non-PEO NEOs
|
$
|
408,075
|
$
|
450,978
|
Name
|
Fees Earned
or Paid in Cash(1)
|
Stock
Awards(2)
|
Total
|
|||||||||
Wayne-Kent A. Bradshaw
|
$
|
66,000
|
$
|
12,000
|
$
|
78,000
|
||||||
Robert C. Davidson
|
$
|
56,000
|
$
|
12,000
|
$
|
68,000
|
||||||
Mary Ann Donovan
|
$
|
50,000
|
$
|
12,000
|
$
|
62,000
|
||||||
John Driver3
|
$
|
37,500
|
-
|
$
|
37,500
|
|||||||
Marie C. Johns
|
$
|
62,000
|
$
|
12,000
|
$
|
74,000
|
||||||
William A. Longbrake
|
$
|
56,000
|
$
|
12,000
|
$
|
68,000
|
||||||
David J. McGrady
|
$
|
56,000
|
$
|
12,000
|
$
|
68,000
|
||||||
Dutch C. Ross III
|
$
|
56,000
|
$
|
12,000
|
$
|
68,000
|
(1) |
Includes payments of annual retainer fees, and retainer fees paid to chairs of Board committees.
|
(2) |
The amounts shown reflect the aggregate fair value of stock awards on the grant date, as determined in accordance with FASB ASC Topic 718. For each director, the number of shares of
Common Stock was determined by dividing the grant date value of the award, $12,000, by $1.78, the closing price of the Company’s Common Stock on February 16, 2022, the date of grant. As of December 31, 2022, none of the directors held
any outstanding equity awards.
|
(3) |
Mr. Driver was appointed to the Board on May 13, 2022 to fill a vacancy created when Mr. Jack Thompson resigned from the Board on September 15, 2021.
|
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF MOSS ADAMS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.
|
|
2022
|
2021
|
||||
|
(In thousands)
|
|||||
Audit fees(1)
|
$
|
409
|
$
|
390
|
||
Audit-related fees(2)
|
—
|
—
|
||||
Tax fees
|
—
|
—
|
||||
All other fees
|
—
|
—
|
||||
Total fees
|
$
|
409
|
$
|
390
|
(1)
|
Aggregate fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements included in the Company’s Annual
Report on Form 10-K and for the reviews of the Company’s consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q. The services provided by the independent accounts are for SEC-related filings
only.
|
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS
PROXY STATEMENT.
|
2022
|
2021
|
2020
|
||||||||||
Options granted
|
0
|
0
|
0
|
|||||||||
Options expired
|
(200,000
|
)
|
0
|
0
|
||||||||
Full value awards granted (excluding non-employee directors)
|
495,262
|
64,516
|
140,218
|
|||||||||
Less: shares subject to canceled, terminated or forfeited awards
|
(71,668
|
)
|
0
|
0
|
||||||||
Net shares granted
|
423,594
|
64,516
|
140,218
|
|||||||||
Weighted average basic common shares outstanding
|
72,409,020
|
60,151,556
|
27,163,427
|
|||||||||
Net burn rate(1)(2)
|
0.31
|
%
|
0.13
|
%
|
0.52
|
%
|
(1) |
Net burn rate is equal to (x) divided by (y), where (x) is equal to the sum of total options granted during the fiscal year, plus the total full value awards granted during the fiscal year, minus the
total number of shares subject to stock options and full value awards canceled, terminated or forfeited during the fiscal year without the awards having become vested or paid, as the case may be, and where (y) is equal to our weighted
average basic common shares outstanding for each respective year.
|
(2)
|
For the three-year period ended December 31, 2022, our average annual net burn rate using the methodology described in note (1) above was 0.32%.
|
December 31,
2022
|
March 31,
2023
|
|||||||
Shares subject to unvested full value awards
|
423,594
|
320,574
|
||||||
Shares subject to outstanding stock options
|
250,000
|
250,000
|
||||||
Shares available for new award grants under the 2018 Plan
|
395,309
|
321,469
|
(1)
|
(1)
|
This does not take into account the 3,900,000 shares that would be added to the 2018 Plan if stockholders approve this proposal.
|
• |
The Committee may grant shares of stock that may be in return for previously performed services, or in return for the participant surrendering other compensation that may be owed to the recipient.
|
• |
The Committee may grant shares of stock that are contingent on the achievement of performance or other objectives during a specified period.
|
• |
The Committee may grant shares of stock subject to a risk of forfeiture or other restrictions that lapse upon the achievement of one or more goals relating to completion of service by the recipient, or the achievement of performance
or other objectives.
|
Number of Shares
Underlying Options
|
Number of Shares
Underlying
Stock Awards
|
|||||||||||
Name and Position
|
Exercisable
|
Unexercisable
|
||||||||||
Named Executive Officers
|
||||||||||||
Brian E. Argrett
Chief Executive Officer
|
0
|
0
|
201,770
|
|||||||||
Brenda J. Battey
Chief Financial Officer
|
0
|
0
|
94,894
|
|||||||||
Ruth McCloud
Chief Operating Officer
|
0
|
0
|
80,828
|
|||||||||
Total for current executive officers as a group
|
0
|
0
|
472,768
|
|||||||||
Total for current non-employee directors as a group
|
0
|
0
|
372,782
|
|||||||||
Total for each associate of any such directors or executive officers
|
0
|
0
|
0
|
|||||||||
Each other person who has received 5% or more of the options,
warrants or rights under the 2018 Amended Plan
|
0
|
0
|
0
|
|||||||||
All employees, including any current officers who are not executive
officers, as a group
|
0
|
0
|
145,644
|
|||||||||
Total
|
0
|
0
|
991,194
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO APPROVE THE COMPANY’S AMENDED AND RESTATED 2018 LONG-TERM INCENTIVE PLAN. |
1. |
Maintain Nasdaq Listing
|
2. |
Make Class A Common Stock More Attractive to Investors
|
3. |
Provide Flexibility for Future Transactions
|
• |
the historical trading price and trading volume of our Class A common stock;
|
• |
our capitalization (including the number of shares of common stock issued and outstanding);
|
• |
Nasdaq continued listing requirements, and other rules and guidance from Nasdaq;
|
• |
the potential devaluation of our market capitalization as a result of the Reverse Stock Split;
|
• |
the then-prevailing trading price and trading volume of our Class A common stock and the expected impact of the Reverse Stock Split on the trading market for our Class A common stock
in the short- and long-term; and
|
• |
prevailing general market and economic conditions.
|
Status
|
Pre-Reverse
Stock Split
|
Post-Reverse
Stock Split 1:2 |
Post-Reverse
Stock Split 1:5
|
Post-Reverse
Stock Split
1:10
|
||||||||||||
Number of Shares Authorized
|
||||||||||||||||
Class A Common Stock
|
75,000,000
|
75,000,000
|
75,000,000
|
75,000,000
|
||||||||||||
Class B Common Stock
|
15,000,000
|
15,000,000
|
15,000,000
|
15,000,000
|
||||||||||||
Class C Common Stock
|
25,000,000
|
25,000,000
|
25,000,000
|
25,000,000
|
||||||||||||
Number of Shares Authorized but Not Outstanding or Reserved
|
||||||||||||||||
Class A Common Stock
|
12,326,792
|
43,663,397
|
62,465,359
|
68,732,680
|
||||||||||||
Class B Common Stock
|
3,595,382
|
9,297,691
|
12,719,077
|
13,859,539
|
||||||||||||
Class C Common Stock
|
11,619,484
|
18,309,742
|
22,323,897
|
23,661,949
|
||||||||||||
Number of Shares Issued and Outstanding
|
||||||||||||||||
Class A Common Stock
|
48,721,223
|
24,360,611
|
9,744,244
|
4,872,122
|
||||||||||||
Class B Common Stock
|
11,404,618
|
5,702,309
|
2,280,923
|
1,140,461
|
||||||||||||
Class C Common Stock
|
13,380,516
|
6,690,258
|
2,676,103
|
1,338,051
|
||||||||||||
Number of Shares Reserved for Future Issuance
|
||||||||||||||||
Class A Common Stock
|
13,701,985
|
6,850,992
|
2,740,397
|
1,370,198
|
||||||||||||
Class B Common Stock
|
0
|
0
|
0
|
0
|
||||||||||||
Class C Common Stock
|
0
|
0
|
0
|
0
|
||||||||||||
Number of Shares Reserved for Issuance Pursuant to Outstanding Options
|
||||||||||||||||
Class A Common Stock
|
250,000
|
125,000
|
50,000
|
25,000
|
||||||||||||
Class B Common Stock
|
0
|
0
|
0
|
0
|
||||||||||||
Class C Common Stock
|
0
|
0
|
0
|
0
|
||||||||||||
Weighted-Average Exercise Price of Outstanding Options
|
||||||||||||||||
Class A Common Stock
|
$
|
1.62
|
$
|
3.24
|
$
|
8.10
|
$
|
16.20
|
||||||||
Class B Common Stock
|
-
|
-
|
-
|
-
|
||||||||||||
Class C Common Stock
|
-
|
-
|
-
|
-
|
• |
Financial institutions;
|
• |
Insurance companies;
|
• |
Real estate investment trusts;
|
• |
Regulated investment companies;
|
• |
Grantor trusts;
|
• |
Tax-exempt organizations;
|
• |
Governmental organizations;
|
• |
Brokers and dealers in securities, commodities or currencies;
|
• |
Traders in securities that elect to use a mark-to-market method of accounting for their securities;
|
• |
Stockholders deemed to sell shares of Common Stock under the constructive sale provisions of the Code;
|
• |
Stockholders who hold Common Stock as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes or U.S. holders that have a
functional currency other than the U.S. dollar;
|
• |
Stockholders who actually or constructively own 10% or more of our voting stock;
|
• |
Stockholders that acquired our Common Stock through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan;
|
• |
Stockholders that hold Common Stock in an individual retirement account, 401(k) plan or similar tax-favored account; or
|
• |
Certain former citizens or long-term residents of the United States.
|
• |
an individual who is a citizen or resident of the United States;
|
• |
a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;
|
• |
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
|
• |
a trust if (1) its administration is subject to the primary supervision of a court within the United States and all of its substantial decisions are subject to the control of one or more “United States persons” (within the meaning of
Section 7701(a)(30) of the Code), or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
|
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL AND ADOPTION OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE COMPANY’S COMMON STOCK WITH NO CHANGE TO THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY’S COMMON STOCK. |
BY ORDER OF THE BOARD OF DIRECTORS
|
|
Audrey A. Phillips | |
Vice President and Corporate Secretary
|
|
May 1, 2023
|
|
Brian E. Argrett |
|
Chief Executive Officer |
(i) |
To the extent any shares of Stock covered by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, such shares shall not be deemed to have been delivered for purposes of the
determination under paragraph (b) above.
|
(ii) |
Subject to the provisions of paragraph (i) above, the total number of shares covered by an Award will be treated as delivered for purposes of this paragraph (ii) to the extent payments or benefits are delivered to the Participant
with respect to such shares. Accordingly (A) if an Award denominated in shares of Stock is settled in cash, the total number of shares with respect to which such payment is made shall be
considered to have been delivered; (B) if shares covered by an Award are used to satisfy the applicable tax withholding obligation, the number of shares held back by the Company to satisfy such
withholding obligation shall be considered to have been delivered; (C) if the exercise price of any Option granted under the Plan is satisfied by tendering shares of Stock to the Company (by
either actual delivery or by attestation), the number of shares tendered to satisfy such exercise price shall be considered to have been delivered; and (D) if cash or shares of Stock are
delivered in settlement of the exercise of an SAR, the total number of shares with respect to which such SAR is exercised shall be deemed delivered.
|
(i) |
The employment relationship or director relationship will be deemed to have ended at the time the Participant and the applicable company reasonably anticipate that a level of bona fide services the Participant would perform for the
Company and the Affiliates after such date would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full
period of service to the Company and the Affiliates if the Participant has performed services for the Company and the Affiliates for less than thirty-six (36) months). In the absence of an expectation that the Participant will perform
at the above-described level, the date of termination of employment or termination as a director will not be delayed solely by reason of the Participant continuing to be on the Company’s and the Affiliates’ payroll after such date.
|
(ii) |
The employment or director relationship will be treated as continuing intact while the Participant is on a bona fide leave of absence (determined in accordance with Treas. Reg. §409A-1(h)).
|
(iii) |
The determination of a Participant’s termination of employment or termination as a director by reason of a sale of assets, sale of stock, spin-off, or other similar transaction of the Company or an Affiliate will be made in
accordance with Treas. Reg. §1.409A-1(h).
|
(iv) |
If a Participant performs services both as an employee of the Company or an Affiliate, and a member of the board of directors of the Company or an Affiliate, the determination of whether termination of employment or termination of
service as a director shall be made in accordance with Treas. Reg. §1.409A-1(h)(5) (relating to dual status service providers).
|
(v) |
The term “Affiliates” means all persons with whom the Company is considered to be a single employer under Section 414(b) of the Code and all persons with whom the Company would be considered a
single employer under Code Section 414(c).
|
(vi) |
The term “Deferred Compensation” means payments or benefits that would be considered to be provided under a nonqualified deferred compensation plan as that term is defined in Treas. Reg.
§1.409A-1.
|
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