DEF 14A 1 d64940ddef14a.htm DEF 14A DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.                 )

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

 

 

LOGO

CalAmp Corp.

(Name of Registrant as Specified In Its Charter)

 

    

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  1)  

Title of each class of securities to which transaction applies:

 

     

  2)  

Aggregate number of securities to which transaction applies:

 

     

  3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  4)  

Proposed maximum aggregate value of transaction:

 

     

  5)  

Total fee paid:

 

     

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  1)  

Amount Previously Paid:

 

     

  2)  

Form, Schedule or Registration Statement No.:

 

     

  3)  

Filing Party:

 

     

  4)  

Date Filed:

 

     

 

 

 


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LOGO


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LOGO      LOGO

Dear Fellow Stockholders,

Fiscal 2021 was a year of solid progress for the CalAmp team especially considering the challenges experienced by all businesses across the globe due to the COVID-19 pandemic. Since my appointment as President and CEO in July 2020, my top priority in addition to the safety and well-being of our employees has been to accelerate our transformation towards becoming a global software solutions provider, while improving growth and profitability across our business. We have made several important strategic decisions to streamline our operations, including exiting the low-margin Automotive Vehicle Finance business earlier in the year, and then more recently, selling the LoJack North America business. Both of these actions support CalAmp’s strategic decision to focus on advancing our global software-as-a-service (SaaS) initiatives.

As a global connected intelligence company helping people and businesses track, monitor and recover their most vital assets, we are uniquely positioned to help our customers improve operating efficiencies, manage workflows and leverage data analytics to make timely and critical decisions for their businesses. A key driver to our growth this year has been our ability to work closely with our customers to accelerate their transition to new 4G technologies as carriers phase-out older and less robust 3G technologies. This strategic customer engagement with our largest customer, Caterpillar, enabled us to achieve record revenue levels with them during the year. We’ve also continued to advance our product development efforts with new software offerings, including our advanced iOnTM telematics integrated solution for fleet and asset management with an enhanced data-enriched user interface. These customer and operational initiatives were bolstered by a number of key appointments to our management team and Board of Directors, each of whom offers deep domain expertise in SaaS and software solutions.

The collective efforts of our team resulted in our SaaS revenue representing 40% of consolidated revenue from continuing operations in fiscal 2021. Our long-term target is to increase this percentage to 50% of total revenue by introducing powerful new telematics software solutions and applications that will increase the value we add to every customer engagement. Additionally, a higher concentration of recurring SaaS revenue provides the potential to further increase the predictability and quality of our operating fundamentals going forward. Our objective is to enhance these operating fundamentals across our global enterprise as we expand our international revenue in geographic markets including the EMEA, Latin America and APAC regions.

In summary, CalAmp is well positioned for continued success as we enter the new year with a near-record customer order backlog supported by strong demand across our end markets and geographies. We have a highly experienced management team focused on executing our strategic objectives, further complemented by an experienced Board of Directors who are committed to best practices in corporate governance, sustainability and environmental protection.

In closing, I would like to take this opportunity to thank our employees, customers and partners for their ongoing contributions to our current and future success, and I would also like to thank all of you, our fellow stockholders, for your continued support and confidence in CalAmp.

Sincerely,

 

 

LOGO

Jeffery R. Gardner

President and CEO

 

/ CalAmp 2021 Proxy Statement

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To our Stockholders

 

We are pleased to invite you to attend the virtual annual

meeting of stockholders of CalAmp Corp. on

 

Wednesday, July 28, 2021 at 10:00 a.m., Pacific Time

 

This year, we will again hold the Annual Meeting virtually over the Internet, which provides the opportunity for participation by a broader group of our stockholders and enables stockholders to participate fully, and equally, from any location around the world, at no cost. We also believe that a virtual meeting is particularly important this year in light of the evolving public health and safety considerations posed by the coronavirus, or COVID-19 pandemic.

 

We are acting under a U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet rather than in paper form. Consequently, stockholders will not receive paper copies of our proxy materials unless they specifically request them. We believe that this delivery process will reduce our environmental impact and lower the costs of printing and distributing our proxy materials. We also believe that we can achieve these benefits with no impact on our stockholders’ timely access to this important information.

 

You can attend the meeting at www.virtualshareholdermeeting.com/
CAMP2021
, where you will be able to submit questions during the meeting.

 

    

   

Details regarding the business to be conducted at the Annual Meeting are more fully described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.

 

The Company intends to commence mailing to all stockholders of record entitled to vote at the Annual Meeting, the Notice of Internet Availability of Proxy Materials on or about June 18, 2021.

 

We encourage you to carefully read these materials, as well as our Annual Report to Stockholders.

 

Your Vote is Important

 

 

    

   

Your vote is important. Whether or not you expect to attend the Annual Meeting, please vote by telephone or the Internet according to the instructions on your proxy card or in the Notice of Internet Availability of Proxy Materials (the “Notice”) or request a proxy card from us by email at ir@calamp.com and complete, date, sign, and return your proxy card in the envelope provided, in each such case, as soon as possible to ensure that your shares will be represented and voted at the Annual Meeting.

 

Even if you have voted by proxy, you may still change your vote by voting through our virtual web conference if you attend the Annual Meeting.

 

On behalf of our Board of Directors, thank you for your ongoing support of, and continued interest in, CalAmp.

 

Sincerely,

 

Jeffery Gardner

President and CEO


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Notice of 2021 Annual Meeting of Stockholders

 

This notice of the 2021 Annual Meeting of Stockholder and Proxy Statement for CalAmp Corp. (“CalAmp” or the “Company”) and the accompanying proxy card are being first mailed to our stockholders on or about June 18, 2021.

 

LOGO   Time and Date

 

10:00 a.m., Pacific Time, on Wednesday,

July 28, 2021

 

LOGO   Virtual Meeting Site

www.virtualshareholdermeeting.com/CAMP2021

 

Record Date

 

June 1, 2021

 

The Board of Directors has fixed June 1, 2021 as the record date for determining stockholders entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Only stockholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.

 

By Order of the Board of Directors

 

 

LOGO

Kurtis Binder

Secretary

 

Irvine, California

June 1, 2021

 

Important Notice Regarding the Availability of Proxy Materials for the CalAmp Corp. 2021 Annual Meeting of Stockholders to be Held on July 28, 2021. The Proxy Statement and our 2021 Annual Report are available at www.proxyvote.com.

 

            

 

 

 

 

 

 

 

 

 

 

Items of Business

 

Management Proposals

 

  Items of Business:   

Our Board of Directors

Recommends You Vote:

 

 

·   Proposal 1. To elect the eight directors named in the Proxy Statement to serve until the next Annual Meeting of Stockholders or until their respective successors are elected and qualified

 

  

 

LOGO  FORthe election of each director nominee

    
 

 

·   Proposal 2. To ratify the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year ending February 28, 2022

 

  

 

LOGO  FORthe ratification of the appointment

 

    

  
 

 

·   Proposal 3. To approve, on an advisory basis, our executive compensation

 

  

 

LOGO  FORapproval, on an advisory basis

 

    

  
 

 

·   Proposal 4. To approve a proposed amendment of the Company’s Amended and Restated 2004 Incentive Stock Plan to increase the number of shares of common stock that can be issued thereunder by 750,000 shares

 

  

 

LOGO  FORapproval of the amendment to the 2004 Incentive Stock Plan

 

    

 

 

 

 

  

 


Table of Contents

Table of Contents

 

     Page  

Letter to Stockholders

     1  

Invitation to Stockholders

     2  

Notice of 2021 Annual Meeting of Stockholders

     3  

Proxy Statement

     1  

Annual Meeting Information

     1  

General

     1  

Outstanding Securities and Quorum

     1  

Internet Availability of Proxy Materials

     1  

Proxy Voting

     2  

Voting Standards

     3  

Revocation

     3  

Participating in the Annual Meeting

     3  

Virtual Meeting Admission

     4  

Technical Assistance

     5  

Business Overview

     6  

Our People Strategy – Focus on our Greatest Asset

     11  

Our Commitment To Corporate Sustainability

     14  

PROPOSAL 1–ELECTION OF DIRECTORS

     15  

Board of Directors Information

     16  

THE CALAMP BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

     21  

Limit on Number of Other Public Directorships

     21  

Director Stock Ownership

     21  

Changes in Director Occupation or Status

     22  

Board Leadership Structure

     22  

Board Oversight of Risk

     23  

Director Independence

     23  

Process of Identifying and Evaluating Nominees for Directors

     24  

Board Meetings and Committees

     24  

Contacting the Board

     26  

Corporate Governance Documents

     26  

Shareholder Engagement

     26  

Committees of the Board

     27  

Audit Committee

     27  

Human Capital Committee

     28  

Cybersecurity and Data Privacy Committee

     29  

Governance and Nominating Committee

     30  

Our Commitment To Corporate Sustainability

     32  

COMPENSATION OF DIRECTORS

     34  

PROPOSAL 2–RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS

     35  

Report of the Audit Committee

     36  

PROPOSAL 3–ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION (“Say-on-Pay”)

     38  

PROPOSAL 4–APPROVAL OF AN AMENDMENT TO THE CALAMP CORP. AMENDED AND RESTATED 2004 INCENTIVE STOCK PLAN

     39  

Ownership of Securities

     48  

Executive Compensation and Related Information

     50  

Compensation Discussion and Analysis

     52  

Questions and Answers About Our 2021 Annual Meeting And Voting

     75  


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CalAmp Corp.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

To Be Held on Wednesday, July 28, 2021

ANNUAL MEETING INFORMATION

General

The enclosed proxy is solicited by the Board of Directors of CalAmp Corp. (“CalAmp” or the “Company”) for the Annual Meeting of Stockholders to be held at 10:00 a.m., Pacific Time, on Wednesday, July 28, 2021, and any adjournment or postponement thereof. We will conduct a virtual online Annual Meeting this year, so our stockholders can participate from any geographic location with Internet connectivity. We believe this is an important step to enhancing accessibility to our Annual Meeting for all of our stockholders and reducing the carbon footprint of our activities, and is particularly important for our stockholders, employees, and community this year in light of evolving public health and safety considerations posed by the spread of COVID-19. Stockholders may view a live webcast of the Annual Meeting at www.virtualshareholdermeeting.com/CAMP2021 and may submit questions during the Annual Meeting. Our principal offices are located at 15635 Alton Parkway, Suite 250, Irvine, California 92618. This Proxy Statement is first being made available to our stockholders on or about June 18, 2021.

Outstanding Securities and Quorum

Only holders of record of our common stock, par value $0.01 per share, at the close of business on June 1, 2021, the record date, will be entitled to notice of, and to vote at, the Annual Meeting. On that date, we had 35,285,117 shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each other item to be voted on at the Annual Meeting. The holders of a majority in voting power of the shares of common stock entitled to vote, present (in person, by remote communication or by proxy), constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes will be included in determining the presence of a quorum for the Annual Meeting.

Internet Availability of Proxy Materials

We are furnishing proxy materials to some of our stockholders via the Internet by mailing a Notice of Internet Availability of Proxy Materials, instead of mailing or e-mailing copies of those materials. The Notice of Internet Availability of Proxy Materials directs stockholders to a website where they can access our proxy materials, including our proxy statement and our annual report, and view instructions on how to vote via the Internet, mobile device, or by telephone. If you received a Notice of Internet Availability of Proxy Materials and would prefer to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to receive our proxy materials via e-mail, you will continue to receive access to those materials electronically unless you elect otherwise. We encourage you to register to receive all future shareholder communications electronically, instead of in print. This means that access to the annual report, proxy statement, and other correspondence will be delivered to you via e-mail.

 

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Proxy Voting

Shares that are properly voted via the Internet, mobile device, or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual Meeting in accordance with the directions given or, in the absence of directions, will be voted in accordance with the Board’s recommendations as follows: “FOR” the election of each of the nominees to the Board named herein; “FOR” the ratification of the appointment of our independent auditors; “FOR” approval, on an advisory basis, of our executive compensation as described in this Proxy Statement; and “FOR” the increase of shares of common stock that can be issued under the Amended and Restated 2004 Incentive Stock Plan by 750,000 shares. It is not expected that any additional matters will be brought before the Annual Meeting, but if other matters are properly presented, the persons named as proxies in the proxy card or their substitutes will vote in their discretion on such matters.

Voting via the Internet, mobile device, or by telephone helps save money by reducing postage and proxy tabulation costs, as well as mitigating COVID-19 risks. To vote by any of these methods, read this Proxy Statement, have your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form in hand, and follow the instructions below for your preferred method of voting. Each of these voting methods is available 24 hours per day, seven days per week.

We encourage you to cast your vote by one of the following methods:

 

LOGO   

LOGO

   LOGO

VOTE BY INTERNET

Prior to the meeting please visit

http://www.proxyvote.com

 

During the meeting please visit

www.virtualshareholdermeeting.com/CAMP2021

  

VOTE BY MAIL

Return your

proxy card to

Vote Processing,

c/o Broadridge

51 Mercedes Way

Edgewood, NY 11717

  

VOTE BY TELEPHONE

Dial +1 800-690-6903

The manner in which your shares may be voted depends on how your shares are held. If you own shares of record, meaning that your shares are represented by certificates or book entries in your name so that you appear as a shareholder on the records of American Stock Transfer & Trust Company, LLC, our stock transfer agent, you may vote by proxy, meaning you authorize individuals named in the proxy card to vote your shares. You may provide this authorization by voting via the Internet, mobile device, by telephone, or (if you have received paper copies of our proxy materials) by returning a proxy card. You also may participate in and vote during the Annual Meeting. If you own common stock of record and you do not vote by proxy or at the Annual Meeting, your shares will not be voted.

If you own shares in street name, meaning that your shares are held by a bank, brokerage firm, or other nominee, you may instruct that institution on how to vote your shares. You may provide these instructions by voting via the Internet, mobile device, by telephone, or (if you have received paper copies of proxy materials through your bank, brokerage firm, or other nominee) by returning a voting instruction form received from that institution. You also may participate in and vote during the Annual Meeting. If you own common stock in street name and do not either provide voting instructions or vote during the Annual Meeting, the institution that holds your shares may nevertheless vote your shares on your behalf with respect to the ratification of the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year ending February 28, 2022, but cannot vote your shares on any other matters being considered at the meeting.

 

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Voting Standards

 

  ·  

Proposal 1—Election of directors. The nominees for director are elected by a majority of the votes cast. A “majority of the votes cast” means that the number of votes cast “FOR” a nominee must exceed the number of votes cast “AGAINST” such nominee’s election. Abstentions and broker non-votes will have no effect on the outcome of the director vote. Any director who is not elected by a majority of the votes cast is expected to tender his or her resignation to the Governance and Nominating Committee. The Governance and Nominating Committee will recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. In determining whether to recommend that the Board of Directors accept any resignation offer, the Governance and Nominating Committee may consider all factors that the Committee’s members believe are relevant. The Board will act on the Governance and Nominating Committee’s recommendation within 90 days following certification of the election results.

 

  ·  

Proposal 2—Ratification of the appointment of Deloitte & Touche, LLP. To ratify the appointment of Deloitte & Touche, LLP as our independent auditing firm for the fiscal year ending February 28, 2022, the affirmative vote of a majority in voting power of the shares of common stock present (in person, by remote communication or by proxy), at the Annual Meeting and entitled to vote on this proposal is required. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on this proposal. If you abstain from voting on this matter, your shares will be counted as present and entitled to vote on the matter for purposes of establishing a quorum, and the abstention will have the same effect as a vote against this proposal.

 

  ·  

Proposal 3—Say-on-Pay. To approve, on an advisory basis, the compensation of our named executive officers, the affirmative vote of the holders of a majority in voting power of the shares of common stock present (in person, by remote communication, or by proxy) at the Annual Meeting and entitled to vote on the proposal is required. Because your vote on the Say-on-Pay proposal is advisory, it will not be binding on the Board, the Human Capital Committee of the Board, or CalAmp. However, the Board will review the voting results and take them into consideration when making future decisions about executive compensation. Abstentions have the same effect as a vote against this proposal. Broker non-votes will have no effect on the outcome of this proposal.

 

  ·  

Proposal 4—Amendment to the 2004 Incentive Stock Plan. The affirmative vote of the holders of a majority in voting power of the shares of common stock present (in person, by remote communication, or by proxy) at the Annual Meeting and entitled to vote on this proposal is necessary to approve the increase in the number of common stock shares that can be issued. Abstentions have the same effect as a vote against this proposal. Broker non-votes will have no effect on the outcome of this proposal.

Revocation

If you own common stock of record, you may revoke your proxy or change your voting instructions at any time before your shares are voted at the Annual Meeting by delivering to the Secretary of CalAmp Corp. a written notice of revocation, authorizing another duly executed proxy via the Internet, mobile device, or telephone (your most recent telephone or Internet authorization will be used) or by returning a proxy card bearing a later date, or by participating in and voting during the Annual Meeting. A stockholder owning common stock in street name may revoke or change voting instructions by contacting the bank, brokerage firm, or other nominee holding the shares or by participating in and voting during the Annual Meeting.

Participating in the Annual Meeting

This year’s Annual Meeting will be accessible only through the Internet. We are conducting a virtual online Annual Meeting so our stockholders can participate from any geographic location with Internet connectivity. We believe this is an important step to enhancing accessibility to our Annual Meeting for all of our stockholders and enhancing our ESG efforts by reducing the carbon footprint of our activities. A virtual meeting is particularly important for our stockholders,

 

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employees, and community this year in light of evolving public health and safety considerations posed by the spread of the novel coronavirus, or COVID-19. We have worked to offer the same participation opportunities as were provided at the in-person portion of our past meetings, while providing an online experience available to all stockholders regardless of their location. The accompanying proxy materials include instructions on how to participate in the meeting and how you may vote your shares.

You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on June 1, 2021, the record date, or hold a valid proxy for the meeting. To participate in the Annual Meeting, including to vote and to view the list of registered stockholders as of the record date during the meeting, you must access the meeting website at www.virtualshareholdermeeting.com/CAMP2021 and enter the 16-digit control number found on the Notice of Internet Availability of Proxy Materials or on the proxy card or voting instruction form provided to you with this Proxy Statement, or that is set forth within the body of the email sent to you with the link to this Proxy Statement.

Regardless of whether you plan to participate in the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Accordingly, we encourage you to log on to www.proxyvote.com and vote in advance of the Annual Meeting.

Stockholders are able to submit questions for the Annual Meeting’s question and answer session during the meeting through www.virtualshareholdermeeting.com/CAMP2021. We will post answers to shareholder questions received regarding our Company on our investor relations website at www.calamp.com after the meeting. We also will post a replay of the Annual Meeting on our investor relations website, which will be available following the meeting. Additional information regarding the rules and procedures for participating in the Annual Meeting will be set forth in our meeting rules of conduct, which stockholders can view during the meeting at the meeting website or during the ten days prior to the meeting at www.proxyvote.com.

Your vote is very important. Regardless of whether you plan to virtually attend the Annual Meeting or not, we recommend that you vote as soon as possible. You may vote your shares over the Internet or via the toll-free telephone number above. If you received a paper copy of a proxy or voting instruction card by mail, you may submit your proxy or voting instruction card for the Annual Meeting by completing, signing, dating and returning your proxy or voting instruction card in the pre-addressed envelope provided. Stockholders of record and beneficial owners will be able to vote their shares electronically at the Annual Meeting. For specific instructions on how to vote your shares, please refer to the section entitled Questions and Answers about the 2021 Annual Meeting and Voting beginning on page 75 of the Proxy Statement.

Virtual Meeting Admission

Stockholders of record as of June 1, 2021 will be able to participate in the Annual Meeting by visiting our Annual Meeting website at www.virtualshareholdermeeting.com/CAMP2021. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. Stockholders can also access copies of our Proxy Statement and annual report on Form 10-K for the year ended February 28, 2021, including any exhibits thereto (the “Annual Report”) at the Annual Meeting website. As part of the Annual Meeting, we will hold a Q&A session, during which we intend to answer all questions submitted by stockholders which are pertinent to the Company and the meeting matters, as time permits. Answers to any such questions that are not addressed during the meeting will be published following the meeting on the Company’s website at www.calamp.com. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once.

The Annual Meeting will begin promptly at 10:00 a.m. Pacific Time on Wednesday, July 28, 2021. Online check-in will begin at 9:45 a.m. Pacific Time, and you should allow approximately 5 minutes for the online check-in procedures.

 

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Technical Assistance

Beginning a few minutes before and during the virtual Annual Meeting, we will have a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, you should call our support team at:

 

  ·  

1-800-586-1548 (U.S. Domestic Toll Free)

 

  ·  

1-303-562-9288 (International)

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 28, 2021:

Pursuant to rules promulgated by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials by notifying you of the availability of our proxy materials on the Internet. The Notice of Annual Meeting, Proxy Statement, and Annual Report are available from Broadridge Financial Solutions at: www.proxyvote.com. Broadridge does not use “cookies” or other tracking software that identifies visitors accessing this web site.

 

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Business Overview

CalAmp is a global leader in connected intelligence helping people and businesses work smarter

 

 

LOGO

  

Track, monitor and recover vital assets with real-time

visibility and actionable insights

 

LOGO

  

Installed base of more than 20M devices monitoring mobile

assets around the world

 

LOGO

  

Global operations with a flexible and diversified

outsourced manufacturing model

 

LOGO

  

Telematics leader with 30+ years of experience and

strong intellectual property

 

LOGO

  

Secure and scalable Telematics Platform to collect and

analyze data for all customers

 

LOGO

  

Innovative and configurable software applications and

solutions for key market verticals

 

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We solve your most complex problems

CalAmp Leadership Reflected in Top Enterprise Wins in core Market Verticals

 

LOGO   

 

Transportation & Logistics

 

· Environmental sensing

 

· Cargo loss prevention

 

· Real-time analytics

   LOGO   

 

Government

 

· Mixed fleet management

 

· Operational cost reductions

 

· Driver safety using AI

LOGO   

 

Industrial Equipment

 

· Equipment monitoring

 

· Asset utilization/recovery

   LOGO   

 

Connected Car

 

· Rental fleet management

 

· Stolen vehicle recovery*

 

· Crash detection

We are a global connected intelligence company helping people and business work smarter. We partner with transportation and logistics, government, industrial equipment and automotive industries to track, monitor and recover vital assets with real-time visibility and insights that allow people and businesses everywhere to thrive. We combine Software-as-a-Service (“SaaS”) applications, telematics services, our CalAmp Telematics Cloud(“CTC”) platform and intelligent edge computing products to deliver a comprehensive view of vehicles, equipment, drivers, assets and cargo in real time. Our unified Internet of Things (IoT) ecosystem generates actionable insights that help businesses make better decisions that reduce costs, increase revenue, maximize productivity, optimize operations and improve safety of their services and operations.

Our CTC platform offers valuable telematics services that help companies more efficiently manage their vital assets including fleet video intelligence, remote asset tracking, real-time crash response and driver behavior scoring, among others. Our programmable telematics devices enable computing at the edge that captures business-critical data from mobile assets, their passengers and contents anywhere in the world at any time. We deliver connected intelligence that enables the efficient transport of life-saving pharmaceuticals, optimizes equipment utilization that builds our communities and infrastructure, provides greater public works visibility to citizens, and transports students safely to the classroom.

Our company culture is driven by four core values:

 

·  

Customer Success—we are driven to establish, develop, and build strong relationships with our customers. We are focused on understanding their respective organizations and helping them meet and surpass their goals while facilitating the successful implementation of our services and our products.

 

·  

Innovation—we are committed to transforming ideas into new and improved products and processes. We respond resourcefully to demands and challenges in order to advance, compete and differentiate ourselves successfully in the marketplace and bring value to our customers as well as our teams.

 

·  

Execution—we seek to understand, anticipate and respond to our customers’ needs by working hard to achieve measurable results. We achieve total customer satisfaction by understanding what the customer wants and delivering it flawlessly. Satisfied customers are essential to our success.

 

·  

Inclusion—we believe in the integrity, honesty and trust of our employees. These are key ingredients to collaboration and inclusion. We listen to what others have to say, valuing their opinion, and speaking the truth in a positive manner. We take personal responsibility for our actions and are committed to building diverse teams with fairness and respect for all.

 

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The successful execution of this approach, in combination with our core values, will help customers to succeed and thus drive our growth.

We have approximately one million software and service subscribers today within our core businesses, and more than 20 million of our systems’ devices have been installed globally in multiple market verticals including automotive, insurance, transportation and logistics, government and industrial equipment. Our Here Comes The Bus® school bus tracking mobile app serves over 300 school districts across North America and has more than two million users. In April 2020, we made the strategic decision to transition out of the Automotive Vehicle Finance business and thus it is excluded from our core businesses. We believe our combined installed base represents a significant recurring revenue opportunity as we strive to deliver additional over-the-top services and data monetization opportunities to subscribers in collaboration with our customers and partners.

 

LOGO   LOGO

Growth Strategy – Capitalize on $30B Total Available Market (“TAM”)

 

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Over the past several years, we have been focused on growing our subscription-based business to deliver a higher level of recurring and predictable revenue stream. We intend to grow this core business and expand into new markets and geographic regions in the years ahead. Our business operates at the nexus of several large market opportunities, such as the fleet, transportation and logistics, supply chain and connected-vehicle ecosystems, which includes tracking monitoring and recovering high-value vehicles, equipment, cargo and other vital assets in the markets around the world. We believe these market opportunities constitute a total addressable market (“TAM”) of approximately $30 billion. In order to capitalize on this TAM, our growth strategy includes the following key elements:

 

·  

Drive Ongoing Transformation to SaaS Business Model. We are relentlessly pursuing our goal to grow our software and subscription services business. To accomplish this goal, our team is focused on continual innovation across our proprietary software stack. We believe that by leveraging our existing brand presence and customer base in four market verticals, including transportation & logistics, industrial equipment, government, and connected car, we can drive growth in our SaaS applications. And as we steadily grow our base of SaaS subscribers, we’ll continue to migrate to a pure-play solution provider of subscription services by combining our broad portfolio of SaaS applications, proprietary cloud-based platform and programmable telematics systems devices.

 

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Increase Subscriber Base to Drive Recurring Revenue. A key driver of our recurring revenue is the number of customers who are on a subscription basis for our software solutions and services. The more subscribers we are able to secure, the higher our recurring revenue will be. We currently have approximately 1.0 million subscribers within our core businesses, with significant opportunities to expand that number by transitioning existing customers to our software solutions and securing new customers with our expanded SaaS offerings.

 

·  

Capitalize on Transition from 3G to 4G. There is currently a major technology shift taking place in which wireless carriers are required to gradually shut down older generation networks, known as the 3G network sunset. Since the transportation industry relies on near-constant network connectivity with the back office for their day-to-day operations, the 3G network sunset will be a significant challenge as fleets will need to replace equipment to ensure they can continue operating safely and efficiently. This transition has presented a significant growth opportunity for CalAmp as we assist our customers in making this transition to newer 4G LTE networks and equipment prior to the mandated 3G shut-down dates for carriers. We believe this transition could provide sustained demand for our solutions and services well into fiscal 2022.

 

·  

Launch New Innovative Software Solutions in the Emerging Connected Vehicle Market Worldwide. We have established a highly recognizable brand as well as strong and unique relationships with insurance companies, rental car agencies, regional and global transportation and logistics providers, and heavy equipment original equipment manufacturers (OEMs). We continue to develop innovative telematics applications for the connected vehicle market such as our award-winning Here Comes the Bus and iOn Suite of advanced tracking software applications.

 

·  

Expand in Key Verticals and Target Geographies. We are leveraging our existing customer relationships, international subscribers and recent acquisitions to further expand into global markets including Latin America, Europe, Middle East & Africa, and Asia Pacific. Our global expansion strategy is focused on countries with anticipated demand for our full stack of SaaS applications and services, cloud platform and telematics devices.

 

·  

Expand Presence in Industrial IoT. We believe that our current distribution footprint covers a significant portion of the global industrial IoT market due to our strong relationships with large enterprise accounts such as Caterpillar. We intend to leverage our core competencies of working with these global enterprises while expanding our presence with other industrial equipment OEMs.

 

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Our Platform

CalAmp’s unified IoT ecosystem includes our SaaS-based applications, CalAmp Telematics Services, CalAmp Telematics Cloud Platform and intelligent edge computing products. Companies of all sizes leverage our integrated suite of IoT services and devices into their operational infrastructure to reliably and securely transmit business-critical data points from high-valued mobile assets to address the most complex operational challenges. This tight integration of IoT technology provides greater visibility to help meet customer expectations in the on-demand economy.

 

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Our People Strategy—Focus on our Greatest Asset

People are our greatest asset, and we are committed to being an employer of choice in our industry. Our employees engage in meaningful work with access to cutting-edge tools and technologies to develop solutions that are leveraged across entire industries. We proudly offer the security of an established publicly traded technology company, yet nurture and embody an entrepreneurial spirit. We give our employees a comprehensive compensation package and robust benefits that support the whole person.

CalAmp’s strategic leadership comes from a solid base of worldwide experience in technology, from connected vehicles to networking to public safety to energy and beyond. The executive team has years of expertise in both start-up and enterprise environments designing software and hardware for a wide variety of applications.

As of April 21, 2021, we had 949 employees globally and from time to time we also hire contract workers. None of our employees or contract workers are represented by a labor union. The contracted workers are generally engaged through independent temporary employment agencies.

Our HR Mission

Our HR mission is to create a winning culture that fosters innovation, collaboration, exceptional performance, and personal accountability with balanced attention to work and personal life issues.

Our Core Values—We believe celebrating employees and their achievements is key to building a winning culture. We define and measure our winning culture by how quickly we innovate, how effectively we execute, how inclusive our environment is, and our willingness to place customer success at the forefront of everything we do.

 

 

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Our Core Values support the company vision and embrace the culture and experience we want our employees and customers to have. Sharing these common values will help guide us and build internal cohesion towards our Winning culture.

Diversity & Inclusion—CalAmp continually strives to be a deeply inclusive employer with diversity reflected in our teams. We encourage employees to be truly themselves and thrive in an environment where their voices matter, differences are understood and valued, and where they are supported to express their unique ideas openly. We aim to foster a highly engaged and energized workplace—where everyone is treated with dignity and respect and is excited to achieve more.

In addition to incorporating Inclusion into our Core Values and performance review process, CalAmp is also diversifying interview teams by adding employees from under-represented groups into the decision-making process. Training on bridging diversity gaps will be provided to employees to further drive an inclusive culture and build upon employee engagement.

 

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As of April 2021, CalAmp’s Global employee base is 31% female and new hires are 40% female.

 

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In the US, the national employee base is 47% BIPOC (Black, Indigenous, and People of Color). Breaking down that BIPOC representation further: 6% Black, 11% Hispanic/Latino, 25% Asian, 4% Multiracial, 1% Other.

 

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Compensation & Benefits—CalAmp’s benefits are centered around our greatest strength: our people. We strive to care for the whole employee. We aim to continually offer an inclusive benefits program that empowers our people to choose benefits according to their needs. This includes offering a robust package of rich benefits that expand from healthcare to an employee stock purchase program. We not only care about the current state of our employees but their futures as well. That is why we offer a company match of up to 4% towards their retirement. Our employees enjoy a generous PTO plan—whether salaried or hourly—they get the time they need to be with family, friends, or to take a mental health day. CalAmp is dedicated to taking care of our employees and their families every step of the way. We will continue to seek out innovative benefit programs, vendors, and solutions that improve the health of our employees and their families—while anticipating and adapting ahead of market trends to control costs for the benefit of our employees and the company.

Wellness—We carefully plan our wellness programs annually to offer an array of opportunities for employees to engage in financial, emotional, and physical activities. We believe our employees benefit the most using this well-rounded approach to target the multiple factors of their overall well-being. Our wellness program includes educational

 

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seminars, an employee assistance program for employees and their families, walking challenges, healthy selfie competitions, cooking classes, health fairs, eye exams, virtual yoga classes and chair massages. Wellness incentives are also offered to motivate our employees and their spouses to complete their preventative exams each year in a proactive manner, ensuring their health is top-of-mind.

Talent Development—Providing employees with opportunities to increase knowledge and develop skills makes them feel valued. It gives them a sense of being invested in and recognition of their potential. CalAmp invests in our employees’ professional development by offering a variety of training programs. CalAmp has developed an Educational & Training Reimbursement program which provides an annual fund of training dollars to employees who are motivated for self-development. Employees can seek out job-related degrees or other types of training for job enhancement, personal enrichment, and growth. Further, CalAmp offers a variety of on-site and virtual training programs throughout the year that support leadership development. Courses range from fundamentals such as PowerPoint and Presentation skills, to Advanced Communications, Negotiations, and Developing High Performance Teams. Through our programs, employees are given the tools which set them up for success and allow them to approach their work with a greater level of self-assurance and confidence.

COVID-19 Support—As of March 2020, measures were put in place to support virtual work arrangements globally. We are actively monitoring COVID-19 and taking measures to adjust policies & procedures that will help protect our customers, employees, and business.

A Road to Re-Entry process was created and COVID-19 work procedures and positive test results protocol were put in place. We also ordered and shipped Personal Protect Equipment to remote employees working in the field and to our five locations. We supplied employees with home-office supplies—such as sit-to-stand desks & chairs. To keep employees connected, we held bi-weekly All-Hands meetings globally, distributed weekly COVID–19 updates to employees, and provided COVID-19 on-line training for prevention and general hygiene. We closely monitored COVID cases and assisted employees with tests and/or treatment.

CalAmp Cares—Here at CalAmp we pride ourselves on our people. They are hardworking, dedicated, talented, and passionate. However, as humans we all come to moments in our lives where we need extra support. With this in mind, we launched CalAmp Cares in 2019 to ensure our employees understand we are here for them. CalAmp Cares has since expanded globally as of 2020, reaching our employees in Mexico, Italy, and the UK. We are overwhelmed with immense pride and honor that our employees have made this program their own, coming together like family to support each other in times of need.

Community Care—CalAmp provides opportunities for our employees to stay involved in the communities around them. We know the importance of caring for our communities is essential to our employees’ well-being. We love to be a part of the solution and seeing our communities flourish. We know we can’t solve world hunger but we can join the battle to fight the hunger around us. That is why we hold annual food drives across all our locations to provide meals for those that need our support.

CalAmp recently introduced Paid Volunteer Hours. Our employees get to choose a cause, a date and a time that works for them. We aim to support our communities and our employees’ journeys to do the same. This means giving our employees the freedom to care for their communities in ways they are most passionate about.

Employee Engagement—CalAmp has implemented tools to encourage, foster, track and improve employee engagement. Over the past year we implemented a global internal communication portal, full scale intranet with organizational charts, employee recognition and service awards, as well as tools for setting both individual and team goals. Various pulse surveys have been used to track and measure employee wellbeing. Employee engagement is an indicator of employee well-being and commitment to our values, purpose, and strategies.

 

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Our Commitment to Corporate Sustainability

We continually seek to improve and enhance our governance programs. This year, we are pleased to share with our shareholders an update on our Environmental, Sustainability and Governance (“ESG”) efforts. We believe that responsible and sustainable business practices support our long-term success as a company. While those practices help keep our communities and our environment vibrant and healthy, they also lead us to more efficient, resilient, and profitable business operations. They also help us help our customers meet their ESG targets. We believe that being an industry leader is not just about having talented employees or innovative products, but it is also about doing business the right way, every day. That is why our commitment to sound corporate social responsibility (or “CSR”), is deeply rooted in all aspects of our business.

Information regarding our ESG activities is available in our corporate social responsibility report entitled “2021 Corporate Sustainability Report”, available on the ESG tab of our website at www.calamp.com (which is not incorporated by reference herein). Our Governance and Nominating Committee oversees our ESG and CSR policies and programs. Below are some highlights from our 2021 Corporate Sustainability Report:

 

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Sustainable Products

We take responsibility for how our products impact the environment and communities. We believe transparency enhances accountability, helping us improve the long-term sustainability of our products and business.

  

Responsible Supply Chain

The need for greater transparency and reliability are driving behavioral change in corporate supply chains, especially as a result of the COVID-19 pandemic. We embrace and facilitate this change with our forward-thinking, responsible supply chain program, based on a commitment to collaborate with suppliers and key stakeholders to ensure that our value chain is reliable, socially responsible, and sustainable.

 

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Ethical Business Practices

Integrity is a core value of our company culture—one that we work hard to maintain and enhance our efforts to earn the trust of our customers and business partners, to inspire our employees, and to deliver value for our stockholders and improve our communities.

  

Advancing a Better Environment

As we look to the future, CalAmp recognizes that environmental stewardship is critical to the long-term success of our company, our customers and other stakeholders. We are fully committed to responsible use of the earth’s natural resources and we strive to minimize any impact on climate change as we work together to create a better future.

 

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Enhancing Vibrant Communities

We believe that corporate sustainability should go beyond environmental and labor considerations to provide a positive social impact on the local communities in which we operate across the globe.

  

 

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PROPOSAL 1—ELECTION OF DIRECTORS

The Board of Directors (the “Board”), based on the recommendation of the Governance and Nominating Committee, proposes that the following eight nominees be elected at the Annual Meeting, each of whom will hold office until the next Annual Meeting of Stockholders or until his or her successor shall have been elected and qualified:

 

  ·  

Amal Johnson

 

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Jeffery Gardner

 

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Scott Arnold

 

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Jason Cohenour

 

  ·  

Henry Maier (*)

 

  ·  

Roxanne Oulman

 

  ·  

Jorge Titinger

 

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Kirsten Wolberg (*)

 

(*)

Board member is standing for election for the first time effective July 28, 2021.

In summary, a board of eight directors is standing for election at the 2021 Annual Meeting. Six of these directors were recommended by the Governance and Nominating Committee and elected to the Board of Directors at last year’s annual meeting. Two new members were appointed by the Board within the past year; Kirsten Wolberg (on September 1, 2020) and Henry Maier (on June 1, 2021). A.J. “Bert” Moyer, a director since 2004, and Larry Wolfe, a director since 2008, have chosen not to stand for reelection at the 2021 Annual Meeting.

Mr. Moyer ceased to be the Chair of the Board effective July 29, 2020, and Amal Johnson was appointed as the Chair of the Board as of the same date. Upon Ms. Johnson’s appointment, she ceased to be the Chair of the Compensation Committee and Jorge Titinger was appointed as the Chair of this committee as of the same date. Effective September 22, 2020, our Board of Directors changed the name of the Compensation Committee to the Human Capital Committee and updated the charter to reflect the broader scope of the committee.

Additionally, Mr. Wolfe ceased to be the Chair of the Audit Committee effective December 31, 2020 and Ms. Oulman was appointed as the Chair of this committee as of the same date.

Effective June 8, 2021, our Board of Directors formed a new committee called the Cybersecurity and Data Privacy Committee (the “Cybersecurity Committee”) and appointed Ms. Wolberg, Ms. Johnson, and Mr. Titinger as members of the committee to be governed by a charter which was ratified by the Board of Directors on the effective date and is now published on our website at www.calamp.com.

Due to the changes in our Board of Directors and the formation of the Cybersecurity Committee, there were several changes made to committee memberships during fiscal 2021, which become effective July 28, 2021 and are summarized in the section entitled “Committees of the Board” on page 27. The biographical on each nominee and related information including the committee memberships that each Board member held during fiscal 2021 is set forth below.

Although the Board expects that the eight nominees will be available to serve as directors, if any of them should be unwilling or unable to serve, the Board may decrease the size of the Board or may designate substitute nominees, and the proxies will be voted in favor of any such substitute nominees.

 

 

The Board of Directors recommends a vote “FOR” each nominee.

 

 

 

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Board of Directors Information

In evaluating the nominees for the Board of Directors, the Board and the Governance and Nominating Committee took into account the qualities they seek for directors, and the directors’ individual qualifications, skills, and background that enable the directors to effectively and productively contribute to the Board’s oversight of CalAmp Corp., as discussed below in each biography and under “Biographical Information.” When evaluating re-nomination of existing directors, the Committee also considers the nominees’ past and ongoing effectiveness on the Board and, with the exception of Mr. Gardner, who is an employee, their independence. All of the Board committee memberships indicated within the section entitled “Biographical Information” represent those membership held by the respective Board member during fiscal 2021. The committee memberships as assigned by the Governance and Nominating Committee to be effective July 28, 2021 are provided in the table on page 27 under the section entitled “Committees of the Board.”

Biographical Information

 

Amal Johnson

 

Former Director and Executive Chairwoman of the Board, Author-it Software Corporation

 

Independent

  

Background

 

From March 2012 to December 2017, Ms. Johnson was a member of the Board of Directors and from March 2012 to October 2016, the Executive Chair of Author-it Software Corporation, a privately held SaaS company that provides a platform for creating, maintaining and distributing single-sourced technical content. Prior to joining Author-it Software, Ms. Johnson led MarketTools, Inc., another SaaS company, as Chief Executive Officer from 2005 to 2008, and then as Chair of the Board until the company was acquired in January 2012. Prior to MarketTools, Ms. Johnson was a general partner at Lightspeed Venture Partners, focusing on enterprise software and infrastructure, from 1999 to 2004. Previously, Ms. Johnson was President of Baan Supply Chain Solutions, Baan Affiliates, and Baan Americas, from 1994 to 1999. Prior to that, Ms. Johnson served as President of ASK Manufacturing Systems from 1993 to 1994 and held executive positions at IBM from 1977 to 1993. Ms. Johnson holds a BA degree in Mathematics from Montclair State University and studied Computer Science at Stevens Institute of Technology graduate school of engineering.

 

Qualifications and Skills

 

Ms. Johnson was chosen to serve on our Board because of her executive management and board leadership experience with software services companies, as well as her current service on the board of various other public companies.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

68

  

December 2013

  

Governance and Nominating

  

Intuitive Surgical, Inc. (Nasdaq: ISRG);

Essex Property Trust, Inc. (NYSE: ESS)

 

 

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Jeffery R. Gardner

 

President and CEO

  

Background

 

Mr. Gardner has been President and CEO of CalAmp since July 25, 2020, and has been a Director of CalAmp since January 2015. He served as the president and CEO of Brinks Home Security from 2015 until February 2020. From 2005 until 2015, he was a member of the board of directors of Windstream Holdings, Inc., a leading provider of advanced network communications and technology solutions, including cloud computing and managed services to businesses nationwide. From 2005 to 2014, Gardner also served as the president and chief executive officer of Windstream. Before joining Windstream, he served as executive vice president and chief financial officer of Alltel Corp. Earlier, he held a variety of senior management positions at 360 Communications, which merged with Alltel in 1998.

 

Gardner received a bachelor of arts degree in finance from Purdue University and a master’s degree in business administration from The College of William and Mary. He is currently an NACD Board Leadership Fellow and NACD Governance Fellow, and he previously served on several national associations including the Business Roundtable and the United States Telecom Association.

 

Qualifications and Skills

 

Mr. Gardner’s individual qualifications and skills as a director include his wealth of leadership experiences as a CEO at highly successful technology companies, and financial expertise.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

61

  

January 2015

   None   

Qorvo, Inc. (Nasdaq: QRVO)

 

Scott Arnold

 

President and CEO,

AuditBoard

Independent

  

Background

 

Mr. Arnold serves as the President and CEO of AuditBoard, a leading cloud-based solutions provider of audit, risk and compliance services. Prior to this role, Mr. Arnold was the President of Shutterfly Enterprise that was acquired in 2019 by Apollo Global Management. He served from May 2013 to April 2016 as president and CEO at AppSense, a leading provider of user environment management solutions enabling a productive, secure workspace. Prior to joining AppSense, from July 2007 to August 2012, Arnold held the roles of COO and then president and CEO of MarketTools, Inc., a Software as a Service (SaaS) market research company. From November 2003 to November 2005, he was COO and Interim CEO of Borland Software, a software company that facilitates software development projects.

 

Prior to his operating roles, Arnold was a partner at McKinsey & Company where he served clients across technology and telecom industries and helped build the Firm’s practice in Silicon Valley. Arnold currently serves on Duke University’s Pratt School of Engineering Board of Visitors, and holds a BS degree in Electrical Engineering from Duke and an MBA degree from the Stanford Graduate School of Business.

 

Qualifications and Skills

 

Mr. Arnold brings an extensive background in SaaS and enterprise software, along with a passion for optimizing customer experiences and driving product innovation.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

57

  

June 2019

  

Audit

Human Capital

  

None

 

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Jason Cohenour

 

Former President, CEO and Director, Sierra Wireless, Inc.

Independent

  

Background

 

Mr. Cohenour served as the President, CEO and director of Sierra Wireless, Inc. from 2005 until June 2018, and held other senior management positions with Sierra Wireless, including COO, from 1996 until 2005. Mr. Cohenour also served as a director of Ikanos Communications, Inc. from 2014 until August 2015, when that company was acquired by Qualcomm, and Epic Data International, Inc. from 2004 to 2010. Mr. Cohenour has a BS degree in Business Administration from the University of Rhode Island.

 

Qualifications and Skills

 

Mr. Cohenour was chosen to serve on our Board because of his many years of experience in technology, with a concentration in the mobile wireless communications and Internet of Things (“IoT”) markets, including leading numerous equity financing and M&A transactions.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

60

  

June 2019

  

Governance and Nominating (Chair)

Audit

  

None

 

Henry Maier

 

Former President and CEO

FedEx Ground

(NYSE: FDX)

Independent

  

Background

 

Mr. Maier was appointed a director of CalAmp in June 2021. In June 2021, he retired as president and CEO of FedEx Ground—a position he had held since June 2013. He also served on the Strategic Management Committee of FedEx Corp., which sets the strategic direction for the FedEx enterprise. Originally from Texas, Mr. Maier graduated from the University of Michigan with a bachelor’s degree in economics. In addition to the CalAmp Board, he also holds board positions with non-profit organizations like the United Way of Southwestern Pennsylvania and the Allegheny Conference on Community Development, as well as transportation holding company Kansas City Southern.

 

Qualifications and Skills

 

Mr. Maier has over 40 years of experience in the transportation industry, including more than 30 years at FedEx companies. His FedEx career includes various leadership positions in logistics, sales, marketing and communications. He was the President and CEO of FedEx Ground and responsible for all the company’s strategic planning, contractor relations and corporate communications programs.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

67

  

June 2021

   Not Applicable   

Kansas City Southern. (Nasdaq: KSU)

 

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Roxanne Oulman

 

EVP & CFO Medallia, Inc.

(NYSE: MDLA)

Independent

  

Background

 

Ms. Oulman currently serves as the EVP and CFO of Medallia, Inc., a public SaaS company that she joined in November 2018. Previously, she served as CFO of CallidusCloud, a publicly held SaaS company, from November 2016 until September 2018. From May 2013 to November 2016, Ms. Oulman held leadership positions at CallidusCloud, which was acquired by SAP in April 2018. From 2011 to 2013, Ms. Oulman served as an Interim Chief Financial Officer at Thoratec Corporation, a biomedical device company, and from 2004 to 2011, she held several other financial leadership positions at Thoratec Corporation. From 1999 to 2004, Ms. Oulman was a General Manager and Western Regional Controller at Zomax, Inc., a logistics and supply chain company. Ms. Oulman has a BS degree in Accounting from Minnesota State University, Mankato and an MBA degree from University of the Pacific—Eberhardt School of Business.

 

Qualifications and Skills

 

Ms. Oulman was chosen to serve on our Board because of her background as a proven public SaaS company CFO with experience in leading profitable, innovative companies, as well as her customer experience skills and skills relating to financial statement and accounting matters.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

50

  

August 2018

   Audit (Chair)   

None

 

Jorge Titinger

 

Former President, CEO and Director of Silicon Graphics International Corporation

Independent

  

Background

 

Mr. Titinger is the principal of Titinger Consulting, a private consulting and advisory services firm that he founded in 2016. Mr. Titinger served as President, Chief Executive Officer and a member of the board of Silicon Graphics International (SGI) from February 2012 until November 2016, when SGI was acquired by Hewlett Packard Enterprise. Previous to SGI, from June 2008 to July 2011, Mr. Titinger held several executive positions at Verigy Ltd., a company in the semiconductor automated test equipment industry, culminating as President, Chief Executive Officer and member of the board. Prior to Verigy, Mr. Titinger was Senior Vice President and General Manager of Product Business Groups at Form Factor, Inc., a company in the probe card technology business, from November 2007 to June 2008. Mr. Titinger previously held executive and general management positions at KLA-Tencor Corporation and Applied Materials, Inc., both companies in the semiconductor equipment industry, MIPS Computer Systems, Inc., a company in the graphics computing industry, and Hewlett-Packard Company. Mr. Titinger holds BS and MS degrees in Electrical Engineering and an MS degree in Engineering Management, all from Stanford University

 

Qualifications and Skills

 

Mr. Titinger was chosen to serve on our Board because of his board and executive level experience with publicly held technology companies.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

60

  

June 2015

  

Human Capital (Chair)

Governance and Nominating

  

Cohu, Inc. (Nasdaq: COHU)

Axcelis Technologies Inc. (Nasdaq: ACLS)

 

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Kirsten Wolberg

 

Former Chief Technology and Operations Officer of DocuSign, Inc.

(NASDAQ: DOCU)

Independent

  

Background

 

Ms. Wolberg served as the Chief Technology and Operations Officer for DocuSign, Inc. (NASDAQ: DOCU) from October 2017 to May 2021. From January 2012 to October 2017, Ms. Wolberg was a Vice President at PayPal, Inc., a subsidiary of PayPal Holdings, Inc. (NASDAQ: PYPL), where she served in various executive roles including as Vice President, Technology from 2012 to 2015. Prior to that, Ms. Wolberg was Chief Information Officer for Salesforce (NYSE: CRM) from May 2008 to September 2011. In addition, Ms. Wolberg serves on the board of directors of lender Sallie Mae (NASDAQ: SLM), enterprise technology companies Dynatrace (NYSE: DT), and DUCO, and two nonprofit organizations in the workforce development space, Year Up, and Jewish Vocational Services (JVS). Ms. Wolberg holds a B.S. in Business Administration with a concentration in Finance from the University of Southern California and an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University.

 

Qualifications and Skills

 

Ms. Wolberg’s extensive experience in technology for SaaS-based companies, including Salesforce.com, PayPal and DocuSign, allows her to provide valuable insight to the Board of Directors in the areas of information technology, cyber security and business operations.

 

     Age:    Director since:    Board committees:    Other current public company boards:
 

53

  

September 2020

  

Human Capital

  

Sallie Mae (NASDAQ: SLM);

Dynatrace (NYSE: DT)

 

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THE CALAMP BOARD OF DIRECTORS AND

CORPORATE GOVERNANCE

Our Board has adopted Corporate Governance Guidelines that provide the framework for the governance of CalAmp and represent the Board’s current views with respect to selected corporate governance issues considered to be of significance to stockholders. The current version of our Corporate Governance Guidelines is available in the Corporate Governance section of the Company’s website at www.calamp.com. We are in compliance with the current corporate governance requirements prescribed by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Nasdaq.

 

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Diversity. The Governance and Nominating Committee considers and evaluates director candidates in the context of an assessment of the anticipated needs of our Board as a whole in order to achieve a diversity of occupational and personal backgrounds and a variety of complementary skills so that, as a group, our Board will possess the appropriate talent, skills and expertise to oversee CalAmp’s business. When considering candidates as potential Board members, the Board and the Governance and Nominating Committee evaluate the candidates’ ability to contribute to such diversity. The Board assesses its effectiveness in this regard as part of its annual Board and director evaluation process.

 

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Board Refreshment. Our Board’s composition also represents a balanced approach to director tenure, allowing the Board to benefit from the experience of longer-serving directors combined with fresh perspectives from newer directors (with five new directors on-boarding and three directors leaving in the last four years). Most recently, two new members were appointed by the Board including Kirsten Wolberg effective September 1, 2020 and Henry Maier effective June 1, 2021. A.J. “Bert” Moyer and Larry Wolfe have chosen not to stand for reelection at the 2021 Annual Meeting.

As of July 28, 2021, the composition of our Board of Directors by gender, age and tenure will be as follows:

 

 

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Limit on Number of Other Public Directorships

We have a policy that limits the number of other public company boards on which our directors may serve. Under this policy, CalAmp directors who also serve as CEOs or in equivalent positions should not serve on more than two other public company boards in addition to our Board, and other directors should not serve on more than four other public company boards in addition to our Board.

Director Stock Ownership

We have established stock ownership guidelines for non-employee directors and executive officers. Pursuant to these guidelines, non-employee directors are expected to own shares of our common stock with an aggregate acquisition date market value of at least three times the amount of the annual base retainer of $60,000. The stock ownership guidelines for executive officers are described on page 62.

 

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Communication with Management

We have devoted significant effort in recent years to enhancing communication between our Board and management and have adopted the following practices to promote clear, timely and regular communication between directors and management:

 

  ·  

Business Updates. In between Board meetings, management provides our Board with updates on our business performance on at least a quarterly basis and more often when there is a significant or unusual events impacting the business.

 

  ·  

Meeting Agendas and Presentations. Our Chair of the Board and committee Chairs regularly communicate with management to discuss relevant meeting topics and the development of the agendas and presentation materials.

 

  ·  

Developing Matters. In between Board meetings, directors receive prompt updates from management on developing matters affecting our company and our business. For instance, these updates occurred on average, every other week in the initial months of the COVID-19 pandemic in order to facilitate increased communication and oversight in the dynamic environment created by COVID-19.

 

  ·  

Reference Materials. Directors also regularly receive quarterly strategy updates, securities analysts’ reports, investor communications, company publications, news articles and other reference materials.

Director Orientation and Education

All new directors participate in an extensive director orientation program. New directors engage with members of the executive team and senior management to review, among other things, our historical business and go-forward strategy, technology, finance matters (tax, treasury and accounting), internal audit and enterprise risk matters, human resources matters, corporate governance policies and practices, Global Code of Conduct and legal matters. We provide new directors with written materials to supplement the management meetings to permit them to further understand our business, industry and product portfolio. We have also implemented a mentorship program to pair new directors with longer tenured directors to facilitate a smooth transition onto our Board of Directors. Based on input from our directors, we believe our director orientation program, coupled with participation in regular Board and committee meetings, provides new directors with a strong foundation in our business, connects directors with members of management with whom they will interact and accelerates their effectiveness to engage fully in Board deliberations. Directors are provided additional orientation and educational opportunities upon acceptance of new or additional responsibilities on our Board and in committees that focus on those specific responsibilities.

Changes in Director Occupation or Status

We have a policy that requires a director to tender a letter of resignation to the Chair of the Governance and Nominating Committee in the event that the director’s principal occupation or business association changes substantially from the position he or she held when the director originally joined our Board. The Governance and Nominating Committee will review whether the new occupation, or retirement, of the director is consistent with the specific rationale for originally selecting that individual and the guidelines for Board membership, and will recommend action to be taken by the Board, if any, regarding the resignation based on the circumstances of the new position or retirement.

Board Leadership Structure

Our Board does not have a formal policy with respect to whether the roles of the Chair of the Board (“Chair”) and the Chief Executive Officer should be separate and, if they are to be separate, whether the Chair should be selected from the non-employee directors or be an employee. However, our Corporate Governance Guidelines provide that if the Chair is not an independent director, then the Board shall designate one independent, non-employee director to serve as a lead director. If so designated, the lead director would act as a liaison between the independent directors and management and

 

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would be responsible for assisting the Chair in establishing the agenda for Board meetings, for coordinating the agenda for, and chairing executive sessions of the non-employee directors, and for performing such other duties as may be specified by the Board from time to time.

We currently separate the roles of Chief Executive Officer and Chair. The current Chair is an independent, non-employee director. Our Board believes this is the appropriate leadership for CalAmp at this time because it permits our Chief Executive Officer to focus on setting our strategic direction, day-to-day leadership, and operating performance, while permitting the Chair to focus on providing guidance to the Chief Executive Officer and setting the agenda for Board meetings. Our Board also believes that the separation of the Chief Executive Officer and Chair roles assists the Board in providing robust discussion and evaluation of strategic goals and objectives. However, our Board acknowledges that no single leadership model is ideal for all companies at all times. As such, our Board periodically reviews its leadership structure and may, depending on the circumstances, choose a different leadership structure in the future.

Board Oversight of Risk

Our Board seeks to understand and oversee the most critical risks relating to our business, allocate responsibilities for the oversight of risks among the full Board and its committees, and see that management has in place effective systems and processes for managing risks facing us. Overseeing risk is an ongoing process and risk is inherently tied to our strategic decisions. Accordingly, the Board considers risk throughout the year and with respect to specific proposed actions. While the Board is responsible for oversight and direction, management is charged with identifying risk and establishing appropriate internal processes and an effective internal control environment to identify, manage and mitigate risks and to communicate information about risk to our Board. Committees of the Board also play an important role in risk oversight.

 

  ·  

The Audit Committee is responsible for overseeing management of risks related to our financial statements and financial reporting process, business continuity and operational risks; the qualifications, independence, and performance of our independent auditors; the performance of our internal audit function, legal and regulatory matters; and our compliance policies and procedures. In fulfilling its duties, the Audit Committee considers information from our independent registered public accounting firm, Deloitte & Touche LLP.

 

  ·  

The Human Capital Committee is responsible for overseeing management of risks related to compensation for our executive officers and our overall compensation program, including our equity-based compensation plans, as well as risks related to other human capital management matters.

 

  ·  

The Cybersecurity and Data Privacy Committee is responsible for overseeing management of information technology infrastructure and utilization, enterprise applications, cybersecurity and data privacy risks and related programs, including, but not limited to, enterprise cybersecurity, privacy, data collection and protection and compliance with information security and data protection laws.

Director Independence

Proposal One is for the election of eight directors, seven of whom are independent. A director’s independence is determined by our Board pursuant to the rules of Nasdaq and applicable SEC rules and regulations. Our Board has determined that each director nominee is independent, with the exception of Jeffery Gardner, who serves as the Company’s President and Chief Executive Officer.

 

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Process of Identifying and Evaluating Nominees for Directors

 

 1

   

2

   

3

   

4

 

 

Assess

Thoughtful process to develop criteria sought in directors guided by the Governance and Nominating Committee

 

    

 

 

Identify

Potential nominees identified

 

    

 

 

Evaluate

Governance and Nominating Committee reviews available information on prospective nominees

 

    

 

 

Nominate

Board nominates directors for election by stockholders

 

    

1—Assess

 

 

Our Board, led by the Governance and Nominating Committee, evaluates the size and composition of our Board at least annually, giving consideration to evolving skills, perspectives, and experiences needed on our Board to perform its governance and oversight role as the business evolves and transforms, and the underlying risks change over time. Among other factors, the Governance and Nominating Committee considers our strategy and needs, as well as our directors’ skills, expertise, experiences, gender, race, ethnicity, tenure, and age. As part of the process, our Board assesses the skills and expertise of our current directors to then develop criteria for potential candidates to be additive and complementary to the overall composition of our Board. Specific director criteria evolve over time to reflect our strategic and business needs and the changing composition of our Board.

2—Identify

 

The Governance and Nominating Committee is authorized to use any methods it deems appropriate for identifying candidates for membership on our Board of Directors, including considering recommendations from stockholders and engaging the services of an outside search firm to identify suitable potential director candidates.

3—Evaluate

 

The Governance and Nominating Committee has established a process for evaluating director candidates that it follows regardless of who recommends a candidate for consideration. Through this process, the Governance and Nominating Committee considers a candidate’s skills and experience and other available information regarding each candidate. Following the evaluation, the Governance and Nominating Committee recommends nominees to our Board.

4—Nominate

 

Our Board of Directors considers the Governance and Nominating Committee’s recommended nominees, analyzes their independence and qualifications and selects nominees to be presented to our stockholders for election to our Board.

Board Meetings and Committees

The Board meets regularly during the year, and holds special meetings and acts by unanimous written consent whenever circumstances require. The policy of our Board is that all directors are expected to attend the annual meeting of stockholders. All of the Company’s directors attended last year’s annual meeting. In fiscal 2021, the table below shows the number of meetings and executive sessions. All directors attended more than 75% of the aggregate meetings of the Board and committees on which the directors served.

 

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Fiscal 2021 Board and Committee Meeting Director Attendance

 

    Number of
      Meetings      
  Number of
Executive
      Sessions      

Board of Directors

   

 

16

   

 

7

Audit Committee

   

 

6

   

 

3

Human Capital Committee

   

 

8

   

 

4

Governance & Nominating Committee

   

 

5

   

 

0

The independent, non-employee directors of our Board and its committees meet in executive sessions routinely and regularly. During the executive sessions, the independent, non-employee directors have access to the Chief Executive Officer and other members of senior management. In addition, our Audit Committee meets periodically with our independent registered public accounting firm without management present at such times as the Audit Committee deems appropriate. The Chair of the applicable Board committee, as applicable, presides over these executive sessions.

Board Evaluation

Our Board of Directors believes that it is important to assess the performance of our Board, its committees and individual directors and to solicit and act upon the feedback received. Accordingly, the Governance and Nominating Committee oversees an annual performance evaluation process. In fiscal 2021, our Board evaluation was conducted by an external advisor selected by the Governance and Nominating Committee to evaluate corporate governance and board effectiveness. This third-party facilitator met with our Chair of the Board and Chair of the Governance and Nominating Committee to develop evaluation topics and process to help guide, facilitate and report on the results from the anonymous survey.

Third-party facilitator discussed evaluation results with Board leadership

The third-party facilitator discussed the feedback regarding each Board committee with the respective committee chair and discussed the overall Board evaluation results with our Chair of the Board and Chair of the Governance and Nominating Committee.

Results discussed with the full Board and each committee

The third-party facilitator led discussions with the full Board, and each committee chair held discussions with the respective committees regarding the evaluation results.

Our Board of Directors utilizes the results of our Board and committee evaluations in making decisions on the structure of our Board, Board and committee responsibilities, agendas and meeting schedules for our Board and its committees, changes in the performance or functioning of our Board and continued service of individual directors on our Board. As a result of our annual performance evaluation process this year, enhancements have been made and are continuing to be made to Board processes and procedures, including streamlining Board presentations and materials to facilitate more effective and efficient meetings and establishing comprehensive annual Board and committee agendas to improve visibility into upcoming meeting topics throughout the year.

 

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Contacting the Board

Our stockholders who are interested in communicating directly with our Board, any Committee of our Board, the Chair or the non-employee directors as a group may do so by sending a letter to the CalAmp Board of Directors, c/o Corporate Secretary, CalAmp Corp., 15635 Alton Parkway, Suite 250, Irvine, California, 92618. The Corporate Secretary will review the correspondence and forward it to the Chair, Chair of the Governance and Nominating Committee, the Audit Committee, the Cybersecurity Committee or the Human Capital Committee, or to any individual director or group of directors of the Board to whom the communication is directed, as applicable, if the communication is relevant to CalAmp’s business and financial operations, policies and corporate philosophies.

Corporate Governance Documents

Please visit our Governance tab of our website at www.calamp.com for additional information on our corporate governance, including:

 

  ·  

the Charters approved by the Board for the Audit Committee, the Human Capital Committee, the Cybersecurity Committee and the Governance and Nominating Committees;

 

  ·  

the Corporate Governance Guidelines; and

 

  ·  

the Code of Business Conduct and Ethics.

 

   

Our Code of Business Conduct and Ethics (the “Code”) applies to all of our directors, officers and employees. Section 15 of the Code contains a Financial Management Code of Ethics that applies specifically to our Chief Executive Officer and all finance and accounting employees, including our senior financial officers, in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC promulgated thereunder. In the event that the Company makes changes in, or provides waivers from, the provisions of this Code that are required to be disclosed by SEC regulations, we will disclose these events on our website.

Shareholder Engagement

We believe that effective corporate governance includes year-round engagement with our stockholders. We meet regularly with our stockholders, including both large and small investors, to discuss business strategy, performance, compensation philosophy, corporate governance, and environmental and social topics. In a typical year, we will engage with stockholders at least two to three times a year. We find it beneficial to have ongoing dialogue with our stockholders throughout the year on a full range of investor priorities (instead of engaging with stockholders only prior to our annual meeting on issues to be voted on in the proxy statement). Our direct engagement with stockholders helps us better understand our stockholders’ priorities, perspectives, and issues of concern, while giving us an opportunity to elaborate on our many initiatives and practices and to address the extent to which various aspects of these matters are (or are not) significant given the scope and nature of our operations and our existing practices. We take insights from this feedback into consideration and share them with our Board as we review and evolve our practices and disclosures.

 

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Committees of the Board

Our Board has delegated certain of its authority to four committees: the Audit, Human Capital, Cybersecurity and Governance and Nominating Committees. These Board committees operate under written charters defining their functions and responsibilities. Each committee has the authority, pursuant to its charter, to obtain advice and assistance from, and receive appropriate funding from CalAmp for, outside legal, accounting or other advisors as the committee deems necessary to assist it in the performance of its functions. The charters of these committees are available at the Governance tab on our website at www.calamp.com. The following table provides current membership for each of our Board committees as of July 28, 2021:

 

  Board Director    Audit    Human Capital    Cybersecurity    Governance and
Nominating
           

  Amal Johnson LOGO

         LOGO    LOGO
           

  Scott Arnold

   LOGO    LOGO      
           

  Jason Cohenour

   LOGO          LOGO
           

  Jeffery Gardner

           
           

  Henry Maier

   LOGO    LOGO      
           

  Roxanne Oulman

   LOGO         
           

  Jorge Titinger

      LOGO    LOGO   
           

  Kirsten Wolberg

         LOGO    LOGO
           

 

LOGO   Chair

     LOGO   Member      LOGO   Chair of the Board               

Audit Committee

 

    Committee Members

  

 

Roxanne Oulman

Chair

   Scott
Arnold
   Jason
Cohenour
   Henry
Maier

 

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We have an Audit Committee established in accordance with the requirements of the Securities Exchange Act of 1934. Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the regulations of the SEC. Our Board has also determined that each member of the Audit Committee is independent as defined in the rules of Nasdaq and the SEC. See also “Report of the Audit Committee” beginning on page 36. The Audit Committee represents and assists the Board in fulfilling its responsibilities for overseeing our financial reporting processes and the audit of our financial statements. Specific duties and responsibilities of the Audit Committee include, among other things:

 

Independent Registered Public
Accounting Firm
 

 

·  appointing, overseeing the work of, evaluating, compensating and retaining the independent registered public accounting firm;

 

 

·  discussing with the independent registered public accounting firm its relationships with CalAmp and its independence, and periodically considering whether there should be a regular rotation of the accounting firm in order to assure continuing independence; and

 

 

·  determining whether to retain or, if appropriate, terminate the independent registered public accounting firm.

Audit & Non-Audit Services;
Financial Statements;
Audit Report
 

 

·  reviewing and approving the scope of the annual independent audit, the audit fee, and other audit services;

 

 

·  preparing the Audit Committee report for inclusion in the annual proxy statement; and

 

 

·  overseeing our accounting and financial reporting processes and the audit of our financial statements, including the integrity of our financial statements.

Disclosure Controls; Internal
Controls & Procedures; Legal
Compliance
 

 

·  reviewing our disclosure controls and procedures, internal controls, internal audit function, and corporate policies with respect to financial information and earnings guidance; and

 

 

·  overseeing compliance with legal and regulatory requirements.

Risk Oversight  

 

·  reviewing the Company’s practices with respect to risk assessment and risk management; and

 

 

·  discussing policies with respect to risk assessment and risk management, including the Company’s programs, policies, practices and safeguards for information technology, cybersecurity and data security.

Related Party Transactions  

 

·  overseeing relevant related party transactions governed by applicable accounting standards (other than related-person transactions addressed by the Governance and Nominating Committee).

Annual Review/Evaluation  

 

·  annually reviewing the Audit Committee’s charter and performance.

Human Capital Committee

 

    Committee Members

  

 

Jorge Titinger

Chair

   Scott Arnold    Henry Maier

The primary duties and responsibilities of our Human Capital Committee, as set forth in its charter, are to review and make recommendations to our Board with respect to the compensation of our executive officers and non-employee directors, and to administer our equity-based compensation plan. Our Board has determined that each member of the

 

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Human Capital Committee is independent as defined in the rules of Nasdaq and the SEC. See also “Compensation Discussion and Analysis” beginning on page 52. The Human Capital Committee discharges the Board’s responsibilities related to the compensation of our executives and Directors and provides general oversight of our compensation structure, including our equity compensation plans. Specific duties and responsibilities of the Human Capital Committee include, among other things:

 

Executive Compensation,
Stock Ownership &
Performance Reviews
 

 

·  recommending the CEO’s compensation to the independent members of the Board for their review and approval;

 

 

·  reviewing and approving objectives relevant to other executive officer compensation (base salaries, incentive compensation and perquisites) and evaluating performance and determining the compensation of other executive officers in accordance with those objectives;

 

 

·  conducting performance evaluation of CEO;

 

 

·  reviewing performance feedback on executive team members;

 

 

·  review and recommend severance arrangements and other applicable agreements and policies for executive officers; and

 

 

·  monitoring compliance with stock ownership guidelines for executive officers.

Director Compensation &
Stock Ownership
 

 

·  reviewing and making recommendations to the Board regarding director compensation; and

 

 

·  monitoring compliance with stock ownership guidelines for directors.

Compensation
Consultants
 

 

·  engaging compensation consultants, outside counsel and other advisors to assist the Human Capital Committee in the full performance of its functions; and

 

 

·  assessing the independence of all advisors (whether retained by the Human Capital Committee or management) that provide advice to the Human Capital Committee, in accordance with Nasdaq listing standards.

Risk Assessment; Other
Disclosure
 

 

·  overseeing CalAmp’s compensation structure, policies and programs for executive officers, and assessing whether these establish appropriate incentives for executive management; and

 

 

·  reviewing and discussing with management the Compensation Discussion and Analysis and performing other reviews and analyses and making additional disclosures as required of Committees by the rules of the SEC or applicable exchange listing requirements.

Annual Review/
Evaluation
 

 

·  reviewing and approving objectives relevant to other executive officer compensation (base salaries, incentive compensation and perquisites) and evaluating performance and determining the compensation of other executive officers in accordance with those objectives; conducting performance evaluation of CEO.

Cybersecurity and Data Privacy Committee

 

    Committee Members

  

 

Kirsten
Wolberg

Chair

   Amal
Johnson
   Jorge
Titinger

 

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The primary duties and responsibilities of our Cybersecurity and Data Privacy Committee (the “Cybersecurity Committee”) is to act on behalf of the Board in fulfilling the Board’s oversight responsibility with respect to our information technology use, cybersecurity and data privacy programs and risks, including, but not limited to, enterprise cybersecurity, privacy, data collection and protection and compliance with information security and data protection laws. Our Cybersecurity Committee serves the Board and is subject to its control and direction. Specific duties and responsibilities of the Cybersecurity Committee include, among other things:

 

Technical Safeguards and Incident Responses   

 

·  overseeing our systems, controls and procedures and business partners engaged by us to collect, create, use, maintain, process and protect personal information and/or any information or assets of our customers, employees and business partners;

  

 

·  overseeing policies, procedures, plans and execution intended to provide security, confidentiality, availability and integrity of Company Information Assets;

  

 

·  overseeing the quality and effectiveness of our cybersecurity and data privacy programs and its practices for identifying, assessing and mitigating cybersecurity risks across all business functions that handle electronic information, intellectual property, data, and across connected products and the connected ecosystem, including third parties, joint ventures and dealers;

 

·  overseeing our policies and procedures to protect, detect and respond to cyber-attacks or information or data breaches involving electronic information, intellectual property, data, connected products and the connected ecosystem; and

  

 

·  periodically reviewing with management our crisis preparedness, incident response plan and disaster recovery capabilities.

Compliance & Internal Audits   

 

·  overseeing our compliance with applicable information security and data protection laws and industry standards, and shall oversee any internal audits of our information technology systems and processes.

Annual Review/Evaluation   

 

·  annually reviewing the Cybersecurity Committee charter and performance.

Governance and Nominating Committee

 

    Committee Members

  

 

Jason
Cohenour

Chair

  

Amal

Johnson

  

Kirsten

Wolberg

The primary duties and responsibilities of our Governance and Nominating Committee are to review and make recommendations on the composition of our Board and its committees, to evaluate and recommend candidates for election to our Board, and to review and make recommendations to the Board on elections and corporate governance matters. Our Board has determined that each member of the Governance and Nominating Committee is independent as defined in the rules of Nasdaq.

Our bylaws permit stockholders to nominate director candidates to stand for election to our Board at an annual meeting of stockholders. Nominations may be made by our Board or by any stockholder. Under our bylaws, a stockholder may nominate a person for election as a director at a particular stockholder meeting only if written notice has been given to us not later than 90 days or earlier than 120 days in advance of the first anniversary of the preceding year’s annual meeting. If the date of the annual meeting is more than 30 days before or more than 30 days after the anniversary of the

 

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Company’s annual meeting for the prior year, then the notice by the stockholder must be delivered to us no earlier than the close of business on the 120th day prior to the annual meeting, and not later than the close of business on the later of the 90th day prior to the meeting or the 10th day after we first make a public announcement of the annual meeting date. Any stockholder nominations proposed for consideration by our Governance and Nominating Committee should include the nominee’s name and qualifications for Board membership and should be addressed to the Governance and Nominating Committee, c/o Corporate Secretary, CalAmp Corp., 15635 Alton Parkway, Suite 250, Irvine, California 92618.

The policy of our Governance and Nominating Committee is to consider properly made stockholder nominations for directors as described above. In evaluating such nominations, like all nominations, the Board’s criteria will include business experience and skills, independence, judgment, integrity, the ability to commit sufficient time and attention to Board activities and the absence of potential conflicts with CalAmp’s interests.

Our Governance and Nominating Committee from time to time reviews the appropriate skills and characteristics required of our Board members, including factors that it seeks in Board members such as diversity of business experience, viewpoints and personal background, and diversity of skills in technology, finance, marketing, international business, financial reporting and other areas that are expected to contribute to an effective Board. In evaluating potential candidates for the Board, our Governance and Nominating Committee considers these factors in the light of the specific needs of our Board at that time. Specific duties and responsibilities of the Governance and Nominating Committee include, among other things:

 

Board Matters  

·  developing and recommending to the Board the criteria for identifying and evaluating Director candidates and periodically reviewing these criteria;

 

 

·  identifying and recommending candidates to be nominated for election as Directors at our annual meeting, consistent with criteria approved by the Board;

 

·  making recommendations to the Board concerning the structure, composition and functioning of the Board and its committees;

 

 

·  identifying and recruiting new Directors, establishing procedures for the consideration of Director candidates recommended by stockholders; and

 

 

·  assessing the contributions and independence of Directors in determining whether to recommend them for election or reelection to the Board.

CalAmp Governing Documents 
& Corporate Governance
Guidelines & Other Policies
 

 

·  annually reviewing and making an affirmative determination regarding the independence of each director, and reporting such determinations to the Board;

 

 

·  developing corporate governance principles, including our Corporate Governance Guidelines;

Annual Review/Evaluation

 

 

·  annually reviewing the Governance and Nominating Committee’s charter and performance; and

 

 

·  overseeing the periodic self-evaluation of the Board and its committees, including an assessment of the contributions and independence of each of the incumbent directors.

 

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Our Commitment to Corporate Sustainability

We continually seek to improve and enhance our governance programs. Accordingly, we are pleased to share an update on our Environmental, Sustainability and Governance (“ESG”) efforts. We believe that responsible and sustainable business practices support our long-term success as a company. While those practices help keep our communities and our environment vibrant and healthy, they also lead us to more efficient, resilient, and profitable business operations. We believe that being an industry leader is not just about having talented employees or innovative products, but it is also about doing business the right way, every day. That is why our commitment to sound corporate social responsibility (or “CSR”), is deeply rooted in all aspects of our business.

Information regarding our ESG activities is available in our corporate social responsibility report entitled “2021 Corporate Sustainability Report”, available on the ESG section of our website at https://www.calamp.com/environmental-social-governance/ (which is not incorporated by reference herein). Below are some highlights from our 2021 Corporate Sustainability Report:

We believe there is a fundamental link between and among our telematics solutions supporting the mobile connected economy, the people of CalAmp, our partners, the communities in which we work and live, and the planet that is home to us all.

 

LOGO

 

 

Our Telematics Solutions

  

·  Leveraging our telematics cloud, we deliver an array of SaaS applications, telematics subscription services and edge computing products that can minimize waste and dramatically improve driver and vehicle safety.

 

·  By enabling load and route optimization, our CalAmp iOn Suite of Telematics Services and smart devices directly lead to fuel savings, lower greenhouse gas emissions and extended, more efficient service life for monitored vehicles.

 

 

LOGO

 

 

Our People

  

 

·  Our concern is for the overall health and wellness of every employee. CalAmp provides exceptional health benefits to employees, but we have taken further steps to actively promote well-being and lifelong health.

  

 

·  We believe that CalAmp strongly reflects society in all of its diversity. We recognize that we have much to do to ensure opportunity for everyone, regardless of gender, age, sexual orientation, race or ethnicity.

 

 

LOGO

 

 

Our Partners

  

 

·  All of our contract manufacturers are ISO 14000 certified.

 

·  We have actively transitioned our supply chain to Tier 1 manufacturers that are geographically closer to our markets. For example, by moving manufacturing to Mexico from China, we reduced the quantity and frequency of air freight and cargo shipments, which has less of a carbon impact on the environment.

 

·  We comply with Dodd-Frank conflict minerals and work to eliminate suspicious smelters from our supply chain. We also comply with UK’s Modern Slavery Act and California’s Transparency in Supply Chains Act.

 

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LOGO

 

 

Our Communities

  

 

·  CalAmp is helping to build safer communities through initiatives like Here Comes The Bus®, our award-winning school bus location solution built with our subsidiary, Synovia Solutions, that lets parents know when school buses are arriving at their nearest stop. One county in North Carolina transformed their use of Here Comes The Bus to ensure the delivery of hot breakfasts and lunches to children who were kept out of school by the COVID-19 pandemic.

 

·  We have taken an active role in Together for Safer Roads, a partnership that crosses industry boundaries to address the most challenging road safety issues in five categories: road safety management, safer roads and mobility, safer vehicles, safer road users, and post-crash response.

 

·  Across all of our global offices, CalAmp promotes charitable giving and volunteering, with programs such as Adopt-a-Highway, which clearly fits our mission, but also through regular volunteering by employees at local food banks as well as donations to clothing and food drives across all our offices.

 

 

LOGO

 

 

Our Planet

  

 

·  Our connected vehicle solutions not only reduce costs for fleet operators, but they also result in safer roads and less fuel consumption, which results in fewer greenhouse gases being produced.

 

·  We have taken a number of steps to improve our groundbreaking technologies, leading to even greater efficiencies and environmental benefits which include:

 

Over The Air Updates—rather than requiring vehicles to travel to a central location for software or firmware updates, we can provide these improvements remotely for many of our systems.

 

Low Power Batteries—by taking advantage of newer technologies and engineering approaches, our IoT solutions are moving towards a future where batteries can last much longer, with less waste and fewer service calls to replace batteries.

 

Electric Vehicle Support—our solutions support the constant monitoring of battery health for electric and hybrid vehicles.

 

Compliant Designs—all CalAmp designs for the past 10 years are ROHS and REACH compliant.

 

Water Conservation—by design, our products require no water during the production process and generate no effluent.

 

Landfill Reduction—To reduce the amount of waste going to landfill, we focus on scrap reduction and reuse of materials where possible.

 

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COMPENSATION OF DIRECTORS

The following table shows all compensation earned by, or awarded or paid to, each of our non-employee directors in fiscal 2021.

 

                 Stock Awards              
     Fees Earned           Restricted            Restricted              
     or Paid           Stock            Stock Units              

Name

       in Cash (A)                           (B)                                  (B)(C)                             Total          

Amal Johnson

  

$

        92,500

 

   

$

100,736

 

    

$

-

 

   

$

        193,236

 

Scott Arnold

  

 

60,000

 

 

 

(C

 

 

-

 

    

 

        100,736

 

   

 

160,736

 

Jason Cohenour

  

 

69,167

 

   

 

        100,736

 

    

 

-

 

   

 

169,903

 

Jeffery Gardner

  

 

-

 

 

 

(D

 

 

-

 

    

 

-

 

   

 

-

 

A.J. "Bert" Moyer

  

 

78,750

 

   

 

-

 

    

 

100,736

 

   

 

179,486

 

Roxanne Oulman

  

 

64,167

 

   

 

-

 

    

 

100,736

 

   

 

164,903

 

Jorge Titinger

  

 

68,750

 

   

 

-

 

    

 

100,736

 

   

 

169,486

 

Kirsten Wolberg

  

 

30,000

 

 

 

(C

 

 

-

 

    

 

245,323

 

 

 

(E

 

 

275,323

 

Larry Wolfe

  

 

80,833

 

         

 

100,736

 

          

 

-

 

         

 

181,569

 

 

(A)

Under our director cash compensation plan adopted effective August 1, 2012 and subsequently amended from time to time, our non-employee directors are each paid an annual retainer of $60,000. Also our Board and committee chairs were paid supplemental annual retainers during fiscal 2021 as follows:

 

Board Chair

  

$

            45,000

 

Audit Chair

  

$

            25,000

 

Human Capital Chair

  

$

            15,000

 

Governance and Nominating Chair

  

$

            10,000

 

 

(B)

On July 29, 2020, each non-employee director received a grant of 12,800 restricted stock shares or restricted stock units that had a grant date fair value of $100,736. It is customary that each non-employee director receive an annual grant with a fair value of $128,000; however, our directors voluntarily agreed to accept an annual grant with a fair value of $100,736 due to the impact of the COVID-19 global pandemic on the Company’s stock price. Annual equity awards granted to our non-employee directors generally vest on the earlier of the one-year anniversary of the date of grant or the date of our next annual stockholder meeting at which directors are elected. Under our 2004 Incentive Stock Plan, on the day of each annual stockholders meeting at which directors are elected, each non-employee director is eligible to receive an equity award. In fiscal 2020, we amended our 2004 Incentive Stock Plan to provide that the total aggregate value of cash compensation and equity-based awards for any non-employee director for such director’s service during any fiscal year is not to exceed $500,000.

(C)

Mr. Arnold and Ms. Wolberg elected to defer $60,000 and $30,000 of their fiscal 2021 director cash compensation into the Company’s non-qualified deferred compensation plan, respectively. Ms. Oulman, Ms. Wolberg and Messrs. Moyer, Arnold and Titinger have elected to defer their fiscal 2021 annual equity awards into our non-qualified deferred compensation plan.

(D)

Board fees paid to Mr. Gardner with respect to his service as a director prior to being appointed as the Company’s Chief Executive Officer are included within the Summary Compensation Table on page 66.

(E)

Upon joining the Board on September 1, 2020, Ms. Wolberg received an initial grant of 29,380 restricted stock units with a grant date value of $245,323, of which 14,051 units vest on the first anniversary of the grant date and the remaining 15,329 units vest on the third anniversary of the grant date.

 

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PROPOSAL 2—RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE
LLP AS INDEPENDENT AUDITORS

Under the rules and regulations of the SEC and Nasdaq, the Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent auditors. In addition, the Audit Committee considers the independence of our independent auditors and participates in the selection of the independent auditor’s lead engagement partner. The Audit Committee has appointed, and, as a matter of good corporate governance, is requesting ratification by the stockholders of the appointment of, the registered public accounting firm of Deloitte & Touche LLP (“Deloitte”) to serve as independent auditors for the fiscal year ending February 28, 2022. Deloitte has served as our independent auditor since our 2018 fiscal year. The Audit Committee considered a number of factors in determining whether to re-engage Deloitte as the Company’s independent registered public accounting firm, including the length of time the firm has served in this role, professional qualifications and resources, past performance, and capabilities in handling the breadth and complexity of our business, as well as the potential impact of changing independent auditors.

The Board of Directors and the Audit Committee believe that the continued retention of Deloitte as our independent auditor is in the best interests of the Company and its stockholders. If stockholders do not ratify the selection of Deloitte, the Audit Committee will evaluate the stockholder vote when considering the selection of a registered public accounting firm for the audit engagement for our 2022 fiscal year. In addition, if stockholders ratify the selection of Deloitte as independent auditors, the Audit Committee may nevertheless periodically request proposals from the major registered public accounting firms and as a result of such process may select Deloitte or another registered public accounting firm as our independent auditors.

 

 

The Board of Directors recommends a vote “FOR” ratification of the

appointment of Deloitte & Touche LLP as our independent

auditors for the fiscal year ending February 28, 2022.

 

 

Representatives of Deloitte & Touche LLP are expected to participate in the Annual Meeting, will have an opportunity to make a statement at the meeting if they desire to do so, and will be available to respond to appropriate questions.

AUDIT MATTERS

Fees

Fees billed for professional services rendered by Deloitte for fiscal 2021 and 2020 are summarized below:

 

     Fiscal 2021      Fiscal 2020  
     Fees      Fees  

 Audit fees (1)

  

$

            1,428,628

 

  

$

            1,621,250

 

 Audit-related fees

  

$

-    

 

  

$

-    

 

 Tax fees (2)

  

$

86,927

 

  

$

283,440

 

 All other fees

  

$

-    

 

  

$

-    

 

 

  (1)

Audit fees were principally for audit work performed on the consolidated financial statements and internal control over financial reporting, as well as quarterly reviews and statutory audits.

  (2)

Tax fees were principally for services related to tax compliance and tax planning services.

 

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Our Audit Committee pre-approved all of the foregoing services and fees in accordance with our Audit Committee’s pre-approval policy described below.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Registered Public Accounting Firm

Under its charter, our Audit Committee’s policy is to pre-approve all audit and non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our Audit Committee may delegate pre-approval authority to one or more of its members, and the member or members to whom such authority is delegated must report any pre-approval decision to the Audit Committee at its next scheduled meeting. Our Audit Committee cannot delegate its responsibilities to pre-approve services performed by the independent registered public accounting firm to management. Our Audit Committee’s pre-approval policy includes a list of prohibited non-audit services, such as financial information systems design and implementation that the independent registered public accounting firm cannot perform for us under any circumstances.

Determination of Independence

Our Audit Committee has determined that the nature of all services provided by Deloitte are compatible with their maintenance of auditor independence.

Report of The Audit Committee

The following Audit Committee Report (“Report”) does not constitute “soliciting material” and shall not be deemed “filed” or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this Report by reference therein.

The members of our Audit Committee have been appointed by our Board of Directors (the “Board”). Our Audit Committee operates under a written charter that was adopted by our Board in 2001. The Audit Committee charter is reviewed annually and was last amended in April 2020. A copy of the charter is available in the Governance tab on our website at www.calamp.com.

Duties of our Audit Committee during the period covered by this Report included the following:

 

  ·  

overseeing our internal accounting and operational controls, as well as our financial and regulatory reporting;

 

  ·  

overseeing the work and performance of our internal audit function;

 

  ·  

selecting our independent registered public accounting firm and assessing their performance on an ongoing basis;

 

  ·  

reviewing our interim and year-end financial statements and audit findings with management and our independent registered public accounting firm, and taking any action considered appropriate by the Audit Committee and our Board;

 

  ·  

reviewing our general policies and procedures regarding audits, accounting and financial controls, the scope and results of the auditing engagement, and the extent to which we have implemented changes suggested by our independent registered public accounting firm;

 

  ·  

reviewing the results of each audit by our independent registered public accounting firm and discussing with them any factors, including, without limitation, the provision of any non-audit services, that may affect their independence;

 

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  ·  

performing other oversight functions as requested by our full Board; and

 

  ·  

reporting activities performed to our full Board.

Management is responsible for preparing our financial statements and for maintaining effective internal controls over financial reporting. Our independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

In this context, our Audit Committee reviewed our audited financial statements for the fiscal year ended February 28, 2021 and discussed these financial statements with both our management and Deloitte, our independent registered public accounting firm, including discussing with Deloitte those matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the PCAOB. Our Audit Committee also received and reviewed the written disclosures and the letter from Deloitte required by the rules of the PCAOB, and our Audit Committee has discussed with Deloitte its independence from CalAmp and its management.

Based on the review and discussions as described above, and in reliance thereon, our Audit Committee recommended to our Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021.

During fiscal 2021, management, assisted by our internal auditors, evaluated our system of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and related regulations. Our Audit Committee was kept apprised of the progress of the evaluation and provided oversight and advice to management and the internal auditor during the process. In connection with this oversight, our Audit Committee received periodic updates from management and the internal auditor at its meetings. Once the documentation, testing and evaluation were completed, our Audit Committee reviewed and discussed with management and the internal auditor the assessment and report on the effectiveness of our internal control over financial reporting as of February 28, 2021.

Also during fiscal 2021, our Audit Committee met with Deloitte, with and without management present, to discuss the results of its quarterly reviews and annual audit and its observations and recommendations regarding our internal control over financial reporting. Our Audit Committee also reviewed and discussed with Deloitte its review and report on our internal control over financial reporting. We filed this report with the U.S. Securities and Exchange Commission in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021.

AUDIT COMMITTEE

Roxanne Oulman, Chair

Scott Arnold

Jason Cohenour

 

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PROPOSAL 3—ADVISORY VOTE TO APPROVE

EXECUTIVE COMPENSATION (“Say-on-Pay”)

We are asking stockholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and narrative.

As described in the “Compensation Discussion and Analysis” section of this Proxy Statement beginning on page 52, the Human Capital Committee has structured our executive compensation program to tie total compensation to long-term performance that supports shareholder value, as reflected primarily in our stock price. We urge stockholders to read the “Compensation Discussion and Analysis,” as well as the Summary Compensation Table and related compensation tables and narrative, which provide detailed information on the compensation of our named executive officers. The Human Capital Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals especially our pay-for-performance objectives and incentives based on stock price appreciation coupled with the compensation of our named executive officers that support and contribute to our success.

This item is being presented pursuant to Section 14A of the Securities Exchange Act of 1934, as amended. After the 2021 Annual Meeting, our next advisory vote on executive compensation will occur at our 2022 Annual Meeting of Stockholders. Although this advisory vote is not binding, the Human Capital Committee will consider the voting results when evaluating our executive compensation program.

 

 

The Board of Directors recommends a vote “FOR” approval, on an

advisory basis, of our executive compensation as described in this proxy

statement.

 

 

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PROPOSAL 4—APPROVAL OF AN AMENDMENT TO THE CALAMP
CORP. AMENDED AND RESTATED 2004
INCENTIVE STOCK PLAN

In fiscal 2021, we continued to make great progress in accelerating our transformation to a global SaaS solutions provider. Notably, our Software and Subscription Services revenue increased to approximately $130 million, or 40% of total revenue from continuing operations, primarily driven by growth in overall subscribers within our government and municipalities end markets as well in the international connected car market particularly in the EMEA region. For the full year, our total subscriber count from core businesses grew by approximately 8% to approximately 954,000. These successes offer clear evidence of our commitment to transforming CalAmp into a leading global SaaS solutions provider.

We are now focused on executing on our critical fiscal 2022 strategic initiatives with our exceptional team, a team that was recently enhanced with several new members joining our senior management team from SaaS companies. Atop our list of strategic initiatives is our commitment to delivering outstanding products and SaaS-based solutions to our world-class customer base. CalAmp is poised to build lasting shareholder value as we aggressively expand our SaaS offerings and enter new markets with the objective of generating increasing profitability and cash flow in the years ahead. Our top priority is consistently executing on our strategic plan of SaaS transformation to deliver compelling value for our stockholders.

At CalAmp, we recognize that our most valuable asset is our global workforce and we acknowledge that being able to offer contemporary compensation and equity award programs is vitally important for us to win in the highly competitive SaaS marketplace. All technology companies in transformation realize the critical need to acquire talent with differentiated technical expertise and unique skills, who expect and demand equity-heavy compensation, as it is a major compensation component leveraged by other technology, software and SaaS businesses. Therefore, we believe an equity compensation program is critical for us to attract and retain qualified talent with direct SaaS experience, which is the key to unlock the door to CalAmp’s succeeding in its SaaS transformation and delivering the growth and value that our stockholders deserve and expect.

On June 8, 2021, our Board adopted an amendment (the “Amendment”) to the CalAmp Corp. Amended and Restated 2004 Incentive Stock Plan (the “Plan”), which makes the following changes to the existing Plan (as amended by the Amendment, the “Amended Plan”); (1) increases the number of shares of common stock (“shares”) available by 750,000 shares to a total of 11,850,000 shares, and therefore increases the number of shares which may be granted as incentive stock options under the Amended Plan, by 750,000 shares to a total of 11,850,000 shares and (2) increases the limit on the number of shares which may be granted as “full value” stock-based awards (i.e. awards other than stock options and stock appreciation rights) under the Amended Plan from 3,800,000 shares to 4,550,000 shares. If the Amendment is approved by our stockholders, the Amendment will become effective on the date of this Annual Meeting.

A copy of the Amended Plan is attached as Exhibit A to this Proxy Statement.

Stockholder Approval

This Proposal 4 is seeking approval of the Amendment. In general, stockholder approval of the Amendment is necessary in order for us to meet the stockholder approval requirements of the principal securities market on which shares of our common stock are traded, and to grant stock options that qualify as incentive stock options, as defined under Section 422 of the Code.

If stockholders do not approve this Proposal 4, the proposed additional shares will not become available for issuance under the Plan, and therefore the number of shares which may be granted as incentive stock options under the Plan shall remain 11,100,000, and the number of shares which may be granted as “full value” stock-based awards under the Plan shall remain 3,800,000.

 

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Proposed Share Reserve Increase

We are asking our stockholders to approve the Amendment because we believe the availability of an adequate reserve of shares under the Amended Plan is important to our continued growth and success. The purpose of the Amended Plan is to provide a flexible framework that will permit the Board to develop and implement a variety of stock-based programs based on changing needs of the Company, its competitive market, and regulatory climate. We believe it is in the best interest of our stockholders for officers, employees, and members of the Board to own stock in the Company and that such ownership will enhance our ability to attract highly qualified personnel, to strengthen our retention capabilities, to enhance our long-term performance and that of our subsidiaries, and to vest in participants a proprietary interest in the success of the Company and its subsidiaries. If the Amendment is not approved, we believe our recruitment and retention capabilities will be adversely affected.

Background of Reasons for and the Determination of Shares Under the Amendment

In its determination to approve the Amendment, the Board was primarily motivated by a desire to ensure the Company has an available pool of shares from which to grant long-term equity incentive awards, which we believe is a primary incentive and retention mechanism for our employees, directors and consultants. In determining the number of shares by which to increase the share reserve under the Plan, the Board reviewed the recommendations of the Human Capital Committee of the Board (the “Human Capital Committee”), which were based on an analysis prepared by and recommendations of Pay Governance, our independent outside compensation consultant.

In determining whether to approve the Amendment, our Board considered the following:

 

  ·  

The shares to be reserved for issuance under the Amended Plan represents an increase of 750,000 shares from the aggregate number of shares reserved for issuance under the Plan and the total aggregate of additional authorized shares being requested under the Amended Plan (above the shares remaining available for issuance under the Plan) represents 2% of our outstanding common stock on May 28, 2021.

 

  ·  

The remaining reserve for future awards under the Plan as of February 28, 2021 was 854,578 shares or 2% of common shares outstanding as of such date, of which 690,243 shares were available for issuance as full value awards. At the end of fiscal years 2019, 2020, and 2021, our total overhang rate attributable to the number of shares subject to equity compensation awards outstanding (calculated by dividing (1) the sum of the number of shares subject to equity awards outstanding at the end of the fiscal year plus shares remaining available for issuance for future awards at the end of the fiscal year by (2) the number of shares outstanding at the end of the fiscal year), was approximately 13%, 10%, and 12%, respectively, and as of May 28, 2021, it was approximately 13%.

 

  ·  

If approved, the issuance of the shares to be reserved under the Amended Plan would increase the overhang by approximately 2% of common shares outstanding (determined as of May 28, 2021), and total overhang (including outstanding awards and shares available for future grants under the Amended Plan) at the end of fiscal 2021 would be approximately 15%.

Other factors that stockholders may consider in evaluating the proposal to approve the Amendment include:

 

  ·  

In fiscal years 2021, 2020, and 2019, equity awards representing a total of approximately 1,885,450, 1,767,977 shares, and 926,218 shares, respectively, were granted under the Plan, for an annual equity burn rate of 5%, 5%, and 3%, respectively. This level of equity awards represents a 3-year average burn rate of 4% of common shares outstanding. Annual equity burn rate is calculated by dividing the number of shares subject to equity awards granted during the fiscal year by the number of shares outstanding at the end of the fiscal year.

 

  ·  

If we exhaust current share reserves under the Plan without approval of the Amendment, we would lose an important compensation tool aligned with stockholder interests to attract, motivate and retain highly qualified talent.

 

  ·  

If the Amendment is approved, we estimate that the proposed aggregate share reserve under the Amended Plan would be sufficient for approximately one to two years of awards, assuming we continue to grant awards consistent with our current practices and historical usage, as reflected in our historical burn rate, and projections and noting that future circumstances may require us to change our equity grant practices.

 

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  ·  

Our employees are our most valuable assets. We strive to provide them with compensation packages that are competitive, but that also incentivize personal performance, help meet our retention needs and reinforce their incentives to manage our business as owners, thereby aligning their interests with those of our stockholders. To achieve these objectives, we historically have provided a significant portion of key employees’ total compensation in the form of equity awards, the value of which depends on our Company’s financial performance. Our goal is for long-term equity awards to continue to represent a significant portion of our employees’ total compensation.

In light of the factors described above, and the fact that the ability to continue to grant equity compensation is vital to our ability to continue to attract and retain employees in the competitive labor markets in which we compete, the Board has determined that the size of the share reserve under the Amended Plan is reasonable and appropriate at this time.

 

 

The Board of Directors recommends a vote “FOR” approval of the

CalAmp Corp. Amended and Restated 2004 Incentive Stock Plan.

 

Summary of the Amended Plan

The following sets forth a description of the material features and terms of the Amended Plan. The following summary is qualified in its entirety by reference to the full text of the Amended Plan, which is attached as Exhibit A to this Proxy Statement.

Purpose. The purpose of the Amended Plan is to provide a flexible framework that enables the Board to use a variety of equity-based awards based on changing needs of the Company, its competitive market, and regulatory climate. The Board and senior management believe that these equity-based awards enhance the Company’s ability to attract highly qualified personnel and strengthen its retention capabilities, and that it is in the best interest of the Company’s stockholders for officers, employees and directors to own stock in the Company and that such ownership will instill in the participants a proprietary interest in the success of the Company.

Eligibility. All employees, non-employee directors, and consultants of the Company and its subsidiaries are eligible to participate in the Amended Plan. As of May 28, 2021, approximately 973 individuals were eligible to participate in the Amended Plan, consisting of 8 non-employee directors, 965 employees and zero consultants.

Administration. The Amended Plan is administered by the Human Capital Committee (the “Plan Committee”). The Plan Committee at all times must consist of two or more persons, each of whom is a member of the Board. To the extent required for transactions under the Amended Plan to qualify for the exemptions of Rule 16b-3 under the Exchange Act (“Rule 16b-3”), members of the Plan Committee (or any subcommittee thereof) shall be “non-employee directors” within the meaning of Rule 16b-3. The Plan Committee has full authority to administer the Amended Plan, including authority to interpret and construe any provision of the Amended Plan and the terms of any award issued under it and to adopt such rules and regulations for administering the Amended Plan as it may deem necessary or appropriate. Notwithstanding the foregoing, the Board may, in its sole discretion, at any time and from time to time, administer the Amended Plan.

Award Types and Limits.

The Amended Plan permits the grant of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”) phantom stock and stock bonuses, each of which is described below. The maximum number of shares as to which stock options and stock awards may be granted under the Amended Plan would be increased from 11,100,000 shares to 11,850,000 shares if the Amendment is approved by stockholders. As of February 28, 2021, 854,578 shares remained available for future grants under the Plan, which represents approximately 2% of common shares outstanding as of such date.

 

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The Amended Plan provides that 4,550,000 shares may be granted as “full value” awards (i.e., awards other than stock options and stock appreciation rights), which represents an increase from 3,800,000 shares that may be so-granted under the Plan. In the event that any shares subject to currently outstanding full value awards cease to be subject to such awards, such shares shall again be available for full value awards without regard to this full value share sublimit.

No single employee can be granted more than 300,000 shares in any fiscal year of any type of equity award issuable under the Amended Plan (options, SARs, restricted stock, RSUs, phantom stock or bonus stock).

The shares to be delivered under the Amended Plan will be made available from authorized but unissued shares of CalAmp common stock. Shares underlying equity awards made under the Amended Plan that are forfeited or cancelled, as well as any shares withheld by the Company in payment of the tax withholding obligation incurred in connection with the vesting of full value equity awards (restricted stock and RSUs), are returned to the pool and will be available for future equity awards and, if such shares were originally granted pursuant to a full value award, shall also be returned or added to the shares available for future grants of full value awards.

Stock Options. Under the terms of the Amended Plan, the exercise price for stock options must equal the fair market value of the Company’s common stock on the date of grant and the term of any option may not exceed 10 years. Otherwise, the Plan Committee has discretion to determine any other terms and conditions otherwise consistent with the Amended Plan, including the vesting period, provided that stock options are subject to a minimum vesting period of one year except with respect to up to five percent of the shares available for grant under the Amended Plan, which are not subject to any minimum vesting requirements. Options granted under the Amended Plan may be either incentive stock options qualifying under Section 422 of the Code or options that are not intended to qualify as incentive stock options. The exercise price of an option may be paid through various means acceptable to the Plan Committee as described in the Amended Plan.

Stock Appreciation Rights. A stock appreciation right provides the right to the monetary equivalent of the increase in the value of a specified number of the Company’s shares over a specified period of time after the right is granted. Stock appreciation rights may be paid in stock, cash or a combination thereof. Stock appreciation rights may be granted either in tandem with or as a component of other awards granted under the Amended Plan or not in conjunction with other awards and may, but need not, relate to a specific option. Stock appreciation rights may not have a term of more than 10 years and are generally subject to the same terms and limitations as options or, when granted in tandem with other awards, to the same terms as those other awards.

Restricted Stock and Restricted Stock Units. Restricted stock is an award of shares, the grant, issuance, retention and/or vesting of which is subject to such performance and other conditions as specified by the Plan Committee. RSUs are awards denominated in units of shares of common stock under which the issuance of shares is subject to such performance and other conditions as specified by the Plan Committee. Participants receiving restricted stock awards are entitled to the voting rights of the shares of common stock underlying the awards.

Phantom Stock. Phantom stock awards are rights to receive in cash per share of phantom stock granted, within 30 days of the date on which such share vests, an amount equal to (i) the fair market value of a share of common stock as of the date on which such share of phantom stock vests, plus (ii) the aggregate dollar amount of cash dividends paid with respect to a share of common stock during the period commencing on the date on which the share of phantom stock was granted and terminating on the date on which such share vests. For avoidance of doubt, no cash dividends will be paid with respect to an award of phantom stock unless and until the underlying award vests.

Stock Bonuses. In the event that the Plan Committee grants a stock bonus, a certificate for the shares of common stock comprising such stock bonus will be issued in the name of the participant to whom such grant was made and delivered to such participant as soon as practicable after the date on which such stock bonus is payable.

Dividends/Dividend Equivalents. Any dividends declared on shares of restricted stock shall be held in escrow and shall not be paid until all restrictions on such shares have lapsed. Dividend equivalents represent the right to receive the

 

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equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents will only be paid to the extent that the vesting conditions of the underlying award are satisfied.

Non-Employee Director Awards. Each year, on the day of the annual meeting of stockholders at which directors of the Company are elected, each non-employee director is entitled to receive an equity award. Under the provisions of the Amended Plan, the total aggregate value of cash compensation and equity-based awards for any non-employee director for such director’s service as a non-employee director during any fiscal year is $500,000. Annual equity awards to non-employee directors are granted on the day of the annual stockholders meeting and generally vest one year from the date of grant or the date of the following year’s annual stockholders meeting, whichever is sooner.

Restriction on Repricing. Absent stockholder approval, neither the Plan Committee nor the Board has the authority, with or without the consent of the affected holders of stock options or SARs, to “reprice” any stock option or SAR after the date of its initial grant with a lower exercise price in substitution for the original exercise price. In this context, “repricing” means canceling an option or SAR to issue a replacement option or SAR to the holder at a lower exercise price, reducing the exercise price of an option or SAR, canceling an option or SAR in exchange for cash or another type of equity award, or taking any other action that is treated as a “repricing” under GAAP.

Exercise Price and Manner of Exercise. The exercise price per share of stock options and SARs is determined by the Plan Committee but in no event will it be less than the fair market value of a share of common stock on the date the option or SAR is granted. Payment for shares of common stock purchased upon exercise of an option shall be made on the effective date of such exercise by one or a combination of the following means: (i) in cash, by certified check, bank cashier’s check or wire transfer; (ii) through a broker-assisted transaction whereby a broker selected and engaged by the participant sells shares in an open market transaction and remits from the sales proceeds the option exercise price and required taxes, (iii) subject to the approval of the Plan Committee, through shares retained by the Company in an amount whose fair market value is equal on the date of exercise to the exercise price, (iv) subject to the approval of the Plan Committee, in shares of common stock owned by the participant; or (v) subject to the approval of the Plan Committee, by such other provision as the Plan Committee may from time to time authorize.

Nontransferability. Upon the death of an optionee, outstanding equity awards granted to such optionee may be exercised only by the executor or administrator of the participant’s estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution.

Vesting and Period of Exercisability. Unless the applicable award agreement provides otherwise, and subject to a minimum one year vesting period (except that up to five percent of the shares available for grant under the Amended Plan may be granted without regard to any minimum vesting requirements), options and SARs granted under the Amended Plan become cumulatively exercisable as to 25% of the shares covered thereby on each of the first, second, third and fourth anniversaries of the date of grant. The Plan Committee shall determine the expiration date of each option and SAR; provided, however, that no options or SARs shall be exercisable more than 10 years after the date of grant. At the time of the grant of restricted stock, RSUs and phantom stock, the Plan Committee will establish a vesting schedule for the shares covered by the award subject to a one year minimum vesting period, except that up to five percent of the shares available for grant under the Amended Plan may be granted without regard to any minimum vesting requirements. This minimum vesting condition shall not apply in connection with a Participant’s death or disability, or in the event of a change of control.

Certain Transactions. In connection with certain transactions and events affecting our common stock, including by reason of a stock dividend or distribution, stock split-up, recapitalization, combination or exchange of shares, by reason of any extraordinary cash dividend, or by reason of any merger, consolidation, spinoff or other corporate reorganization in which the Company is the surviving corporation, the number of shares available for issuance both in the aggregate and with respect to each outstanding award, the price per share under each outstanding award, the full value award limit, and annual individual award limit, shall be proportionately adjusted by the Plan Committee. The Amended Plan provides that, in the event of a “change of control” (as defined in the Amended Plan), to the extent that the surviving entity declines to continue, convert, assume or replace outstanding awards, then all such awards will become fully vested (and

 

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for performance-based awards, vested at target, unless provided otherwise in an individual agreement between the Company and a participant) and exercisable in connection with the transaction.

Amendment or Termination of Plan. The Board may, at any time, suspend or terminate the Amended or revise or amend it in any respect whatsoever; provided, however, that stockholder approval will be required if and to the extent the Board determines that such approval is appropriate for purposes of satisfying Section 422 of the Code, Rule 16b-3 or any comparable or successor exemption under which it is appropriate for the Amended Plan to qualify, or the rules of the Nasdaq Global Select Market. No action may reduce the participant’s rights under any outstanding equity award without the consent of the participant. Unless earlier terminated by the Board, the right to grant awards under the Amended Plan will terminate on the tenth anniversary of the date the Amended Plan is approved by our Board.

Clawback. All awards are subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with applicable laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as and to the extent set forth in such claw-back policy or the award agreement.

Qualifying Performance Criteria. The performance criteria for any performance-based equity award may consist of any one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or subsidiary, either individually, alternatively or in any combination, and measured either annually (or over such shorter period) or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Plan Committee: revenue; gross profit; earnings before interest, taxes, depreciation and amortization stock compensation, equity in net income (losses) of affiliates, non-cash cost of sales on fair value write-ups of inventory, acquisition and integration expenses, and litigation provisions (Adjusted EBITDA); operating income; pre-or after-tax income; earnings per share, net cash flow; net cash flow per share; net income; return on sales; return on equity; return on total capital; return on assets; return on net assets employed; economic value added; share price performance; total shareholder return; cash; cash net of debt; improvement in or attainment of specified cost and expense levels; or improvement in or attainment of specified working capital levels.

Federal Income Tax Consequences

The U.S. federal income tax consequences of the Amended Plan under current federal law, which is subject to change, are summarized in the following discussion of the general tax principles applicable to the Amended Plan. This summary is not intended to be exhaustive and, among other considerations, does not describe state, local, or foreign tax consequences. Tax considerations may vary from locality to locality and depending on individual circumstances.

Non-Qualified Stock Options. If a participant is granted a nonqualified stock option under the Amended Plan, the participant should not have taxable income on the grant of the option. Generally, the participant should recognize ordinary income at the time of exercise in an amount equal to the fair market value of the shares acquired on the date of exercise, less the exercise price paid for the shares. The participant’s basis in the common stock for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our common stock on the date the participant exercises such option. Any subsequent gain or loss will be taxable as a long-term or short-term capital gain or loss. We generally should be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes ordinary income.

Incentive Stock Options. A participant receiving incentive stock options should not recognize taxable income upon grant. Additionally, if applicable holding period requirements are met, the participant should not recognize taxable income at the time of exercise. However, the excess of the fair market value of the shares of our common stock received over the option exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If stock acquired upon exercise of an incentive stock option is held for a minimum of two years from the date of grant and one year from the date of exercise and otherwise satisfies the incentive stock option requirements, the gain or loss (in an amount equal to the difference between the fair market value on the date of disposition and the exercise price) upon

 

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disposition of the stock will be treated as a long-term capital gain or loss, and we will not be entitled to any deduction. If the holding period requirements are not met, the incentive stock option will be treated as one that does not meet the requirements of the Code for incentive stock options and the participant will recognize ordinary income at the time of the disposition equal to the excess of the amount realized over the exercise price, but not more than the excess of the fair market value of the shares on the date the incentive stock option is exercised over the exercise price, with any remaining gain or loss being treated as capital gain or capital loss. We are not entitled to a tax deduction upon either the exercise of an incentive stock option or upon disposition of the shares acquired pursuant to such exercise, except to the extent that the participant recognizes ordinary income on disposition of the shares.

Other Awards. The current federal income tax consequences of other awards authorized under the Amended Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as nonqualified stock options; nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant through a Section 83(b) election); restricted stock units, dividend equivalents, phantom stock and stock bonuses are generally subject to tax at the time of payment.

Excess Parachute Payments. Section 280G of the Code limits the deduction that the employer may take for otherwise deductible compensation payable to certain individuals if the compensation constitutes an “excess parachute payment.” Excess parachute payments arise from payments made to disqualified individuals that are in the nature of compensation and are contingent on changes in ownership or control of the employer or certain affiliates. Accelerated vesting or payment of awards under the Amended Plan upon a change in ownership or control of the employer or its affiliates could result in excess parachute payments. In addition to the deduction limitation applicable to the employer, a disqualified individual receiving an excess parachute payment is subject to a 20% excise tax on the amount thereof. The Amended Plan does not provide for any excise tax gross-ups.

Application of Section 409A of the Code. Section 409A of the Code imposes an additional 20% tax and interest on an individual receiving non-qualified deferred compensation under a plan that fails to satisfy certain requirements. For purposes of Section 409A, “non-qualified deferred compensation” includes equity-based incentive programs, including some stock options, stock appreciation rights and restricted stock unit programs. Generally speaking, Section 409A does not apply to incentive stock options, non-discounted non-qualified stock options and appreciation rights if no deferral is provided beyond exercise, or restricted stock. The awards made pursuant to the Amended Plan are expected to be designed in a manner intended to comply with the requirements of Section 409A of the Code to the extent the awards granted under the Amended Plan are not exempt from coverage. However, if the Amended Plan fails to comply with Section 409A in operation, a participant could be subject to the additional taxes and interest.

 

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New Plan Benefits

In 2021, our non-employee directors will each receive a grant of restricted stock or restricted stock units valued at approximately $128,000. Except with respect to these awards, the number of awards that our named executive officers, directors, other executive officers and other employees may receive under the Amended Plan will be determined in the discretion of our compensation committee in the future, and our compensation committee has not made any determination to make future grants to any persons under the Amended Plan as of the date of this Proxy Statement. Therefore, it is not possible to determine the benefits that will be received in the future by participants in the Amended Plan or the benefits that would have been received by such participants if the Amended Plan had been in effect in the fiscal year ended February 28, 2021.

 

Name and Position

   Dollar Value
($)
     Number of
Shares/Units Covered
by Awards (1)
 

Jeffery Gardner, President and CEO

   $ -         

Kurtis Binder, Executive VP and CFO

   $ -         

Arym Diamond, Senior VP and CRO

   $ -         

Anand Rau, Senior VP and CTO

   $ -         

Michael Burdiek, Former President and CEO

   $ -         

All current directors who are not executives as a group

   $             896,000        63,636   

All employees excluding executive officers as a group

   $ -         

 

  (1)

The number of shares/units covered by awards was determined using a stock price of $14.08 which was the Company’s stock price as of June 1, 2021.

 

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Plan Benefits

The table below sets forth summary information concerning the number of shares of our common stock subject to stock options, restricted stock units and restricted stock awards granted to certain persons under the Plan since its inception through May 28, 2021.

Certain awards set forth in this table for the named executive officers were granted in fiscal year 2021 and therefore also are included in the Summary Compensation Table and in the Grants of Plan-Based Awards Table set forth in this Proxy Statement and are not additional awards. Certain awards set forth in this table for the non-employee directors were granted in fiscal year 2021 and therefore also are included in the Director Compensation Table set forth in this Proxy Statement and are not additional awards.

 

Name and Position

  Stock Option
Grants
(#)
    Restricted
Stock
Awards
(#)
    Restricted
Stock Units
(#)
    Performance-
based Stock
Units (PSUs)
(#)(1)
 

Jeffery Gardner, President & CEO

    -           100,000       23,692       100,000  

Kurtis Binder, Executive VP and CFO

    157,774       106,173       -           70,026  

Arym Diamond, SVP & Chief Revenue Officer

    -           30,000       50,000       30,000  

Anand Rau, SVP, Engineering

    -           30,000       29,615       37,451  

Michael Burdiek, Former President & CEO

    539,103       110,909       -           -      
 

 

 

   

 

 

   

 

 

   

 

 

 

All current named executive officers as a group

    696,877       377,082       103,307       237,477  
       

All current directors who are not named executive officers as a group

    -           -           -           -      
       

Current director nominees:

       

Amal Johnson

    -           12,800       -           -      

Scott Arnold

    -           -           38,782       -      

Jason Cohenour

    -           25,398       -           -      

Roxanne Oulman

    -           -           35,583       -      

Jorge Titinger

    -           -           51,483       -      

Kirsten Wolberg

    -           -           29,380       -      

Henry Maier

    -           -           -           -      
       

Each associate of any such directors, named executive officers or nominees

    -           -           -           -      
       

Each other person who received or are to receive 5% of such options or rights

    -           -           -           -      
       

All employees, excluding named executive officers, as a group

    80,700       12,800       2,036,350       90,805  

 

  (1)

PSUs are reported assuming payout at target award levels

Market Price of the Common Stock

As of June 1, 2021, the fair market value of the common stock was $14.08 per share, based on the closing price of the common stock as reported by Nasdaq.

 

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Ownership of Securities

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of our common stock as of June 1, 2021 by (i) each person or entity known by us to own beneficially more than 5% of our common stock, (ii) each director and nominee for director, (iii) each individual appearing in the Summary Compensation Table appearing elsewhere in this Proxy Statement, and (iv) all directors and executive officers as a group. We know of no agreements among our stockholders that relate to voting or investment power over our common stock.

 

Name and Address of Beneficial Owner (1)

   Shares
Beneficially
    Owned (2)    
    Ownership
    Percent (3)    
 

BlackRock, Inc. and Subsidiaries

  

 

5,332,915

 (4) 

 

 

15.1%

 

Aristotle Capital Boston, LLC

  

 

2,851,205

 (5) 

 

 

8.1%

 

The Vanguard Group

  

 

2,462,612

 (6) 

 

 

7.0%

 

Trigran Investments

  

 

1,978,840

 (7) 

 

 

5.6%

 

Dimensional Fund Advisors LP

  

 

1,460,195

 (8) 

 

 

4.1%

 

Amal Johnson, Chair of the Board

  

 

97,049

 

 

 

*

 

Scott Arnold, Director

  

 

-

 

 

 

*

 

Jason Cohenour, Director

  

 

38,782

 

 

 

*

 

Henry Maier, Director

  

 

10,605

 

 

 

*

 

Roxanne Oulman, Director

  

 

-

 

 

 

*

 

Jorge Titinger, Director

  

 

6,364

 

 

 

*

 

Kirsten Wolberg, Director

  

 

-

 

 

 

*

 

Jeffery Gardner, Director, President and Chief Executive Officer

  

 

158,201

 

 

 

*

 

Kurtis Binder, Executive Vice President and CFO

  

 

222,937

 

 

 

*

 

Arym Diamond, SVP and Chief Revenue Officer

  

 

42,027

 

 

 

*

 

Anand Rau, SVP and Chief Technology Officer

  

 

59,090

 

 

 

*

 

All directors and executive officers as a group (12 persons)

  

 

635,055

 

 

 

1.8%

 

*Less than 1.0% ownership

 

(1)

The address of each NEO and director is CalAmp., c/o Corporate Secretary, 15635 Alton Parkway, Suite 250, Irvine, California, 92618.

(2)

Amounts include shares purchasable upon exercise of stock options that were exercisable as of June 1, 2021 or within 60 days thereafter, ignoring the withholding of shares of common stock to cover applicable taxes, from Mr. Binder for 79,547 shares.

(3)

For the purposes of determining the percentage of outstanding common stock held by the individual NEOs and directors set forth in the table and by all NEOs and directors as a group, the number of shares is divided by the sum of the number of outstanding shares of our common stock on June 1, 2021 (35,285,117 shares) and the number of shares of common stock subject to options currently exercisable or exercisable within 60 days of June 1, 2021 and shares issuable upon the vesting of restricted stock units (RSUs) within 60 days of June 1, 2021 by such persons or by the NEO and director group as a whole, as applicable.

(4)

Shares owned are as of December 31, 2020 according to a Schedule 13G/A filed with the SEC on January 26, 2021 by BlackRock, Inc. and certain related entities (collectively, “BlackRock”). The Schedule 13G/A indicates that BlackRock has sole dispositive power as to all 5,332,915 shares and sole voting power as to 5,309,521 shares. BlackRock’s address is 55 East 52nd Street, New York, New York 10055.

(5)

Shares owned are as of December 31, 2020 according to a Schedule 13G/A filed with the SEC on February 2, 2021 by Aristotle Capital Boston, LLC. and certain related entities (collectively, “Aristotle”). The Schedule 13G/A

 

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indicates that Aristotle has sole dispositive power as to all 2,851,205 shares and sole voting power as to 1,819,725 shares. Aristotle’s address is One Federal Street, 36th Floor, Boston, Massachusetts 02110.

(6)

Shares owned are as of December 31, 2020 according to a Schedule 13G/A filed with the SEC on February 10, 2021 by The Vanguard Group and certain related entities (collectively, “Vanguard”). The Schedule 13G/A indicates that Vanguard has sole dispositive power as to 2,399,653 shares, shared dispositive power as to 62,959 shares and shared voting power as to 52,920 shares. Vanguard’s address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(7)

Shares owned are as of December 31, 2020 according to a Schedule 13G filed with the SEC on February 11, 2021 by Trigran Investments, Inc. and certain related entities (collectively, “Trigran”). The Schedule 13G indicates that Trigran has shared dispositive power as to all 1,978,840 shares and shared voting power as to 1,978,840 shares. Trigran’s address is 630 Dundee Road, Suite 230, Northbrook, IL 60062.

(8)

Shares owned are as of December 31, 2020 according to a Schedule 13G/A filed with the SEC on February 12, 2021 by Dimensional Fund Advisors LP. and certain related entities (collectively, “Dimensional”). The Schedule 13G/A indicates that Dimensional has sole dispositive power as to all 1,460,195 shares and sole voting power as to 1,372,378 shares. Dimensional’s address is Building One, 6300 Bee Cave Road, Austin, Texas 78746.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY

COMPENSATION PLANS

As of the end of fiscal 2021, we maintained one equity compensation plan, the Amended and Restated 2004 Incentive Stock Plan (the “2004 Incentive Stock Plan”) and an employee stock purchase plan, the 2018 Employee Stock Purchase Plan (the “ESPP”), each of which was approved by our stockholders. Under the 2004 Incentive Stock Plan, various types of equity awards can be made, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock awards, phantom stock and bonus stock.

The following table sets forth information regarding securities authorized for issuance under the 2004 Incentive Stock Plan as of February 28, 2021:

 

Plan Category

   Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
          Weighted-average
exercise price of
outstanding
options, warrants
and rights
          Number of securities 
remaining available for
future issuance under
equity compensation
plans
       

Equity compensation plans approved by stockholders

                  3,400,744        (1   $                    16.01        (2                             2,230,771        (3
  

 

 

     

 

 

     

 

 

   

 

  (1)

Consists of 777,577 outstanding stock options, 2,294,885 outstanding restricted stock units and 328,282 outstanding performance-based stock units. This table excludes 428,080 shares of restricted stock issued and outstanding at February 28, 2021.

  (2)

Represents the weighted-average exercise price of the 777,577 outstanding stock options.

  (3)

Consists of 854,578 shares available for issuance under the 2004 Incentive Stock Plan and 1,376,193 shares reserved for issuance under the ESPP.

 

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Executive Compensation and Related Information

Overview

Alignment with Stockholders and Compensation Best Practices

 

LOGO

 

    

LOGO

 

Pay-for-Performance

    

Corporate Governance

·  The majority of target total direct compensation for executives is performance-based as well as equity-based to align executives’ rewards with stockholder value.

 

·  Total direct compensation is targeted at or near the median of peers to ensure that it is appropriate and competitive.

 

·  Actual realized total direct compensation and pay positioning are designed to fluctuate with, and be commensurate with, actual annual and long-term performance, recognizing company-wide, business, and individual results.

 

·  Incentive awards are heavily dependent upon our stock performance and are measured against objective financial metrics that we believe link either directly or indirectly to the creation of value for our stockholders.

 

·  We balance growth, cash flow, revenue and profit objectives, as well as short- and long-term objectives to reward for overall performance that does not over-emphasize a singular focus on a particular metric or time period.

 

·  A significant portion of our long-term incentives are delivered in the form of performance-based stock units (PSUs) which vest upon the achievement of performance metrics which are directly aligned with shareholder value creation

 

·  We use an industry and size appropriate peer group to help inform our compensation decisions.

 

·  While we have not funded the bonus plan at maximum for 10 years, the maximum payouts under annual incentive awards are capped at 200% of bonus target.

    

·  We devote significant time to management succession planning and leadership development efforts.

 

·  We maintain a consistent market-aligned severance policy for executives and a change in control policy which requires a double trigger for execution.

 

·  The Human Capital Committee engages an independent compensation consultant.

 

·  We have clawback provisions that provide the Board with discretion to recoup cash and equity compensation in the event of a material financial restatement or misconduct that results in material reputational harm to the Company, which mitigates compensation-related risk.

 

·  We maintain strong stock ownership guidelines for executive officers and non-employee directors.

 

·  We prohibit all employees, including our executive officers, and also non-employee directors, from engaging in any form of hedging transaction involving CalAmp securities, holding CalAmp securities in margin accounts and pledging stock as collateral for loans in a manner that could create compensation-related risk for CalAmp.

 

·  We conduct a robust stockholder outreach program throughout the year and use that input to inform our executive compensation program decisions and pay practices.

 

·  We disclose our corporate performance goals and achievements relative to these goals.

 

·  We do not provide excessive perquisites to our employees, including our executive officers.

 

·  We do not allow our executives to participate in the determination of their own compensation.

 

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Components of Compensation

Our executive compensation program is primarily comprised of performance-based components. The table below shows each pay component, the role and factors for determining the amount. Percentages are the averages of pay components at target for the NEOs, including the CEO.

 

  Pay Component    Role    Determination Factors

  Base Salary

  

·  Provides a fixed portion of annual cash income

  

·  Value of role in competitive marketplace

 

·  Value of role to the Company

 

·  Skills, experience and performance of individual compared to the market as well as others in the Company

  Annual Incentive

  

·  Provides a variable and performance-based portion of annual cash income

 

·  Focuses executives on annual objectives that support the long-term strategy and creation of value

  

·  Target awards based on competitive marketplace, level of position, skills and performance of executive

 

·  Actual awards based on achievement against annual corporate, business unit, and individual goals as set and approved by the Human Capital Committee

  Long-term Incentives

 

 Restricted Stock Units

      (“RSUs”)

 

 Performance Stock Units

      (“PSUs”)

  

·  Supports need for long-term sustained performance

 

·  Aligns interests of executives and stockholders, reflecting the time-horizon and risk to investors

 

·  Focuses executives on critical long-term performance goals

 

·  Encourages equity ownership and stockholder alignment

 

·  Retains key employees

  

·  Target awards based on competitive marketplace, level of position, skills and performance of the executive

 

·  Actual earned values for PSUs based on defined performance metrics that drive shareholder value

 

  All others:

 

 Benefits

 

 Limited perquisites

 

 Severance protection

  

·  Supports the health and security of our executives and their ability to save on a tax-deferred basis

 

·  Enhances executive productivity

  

·  Competitive market practices for similar roles

 

·  Level of executive’s position

 

·  Standards of best-in-class governance

 

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides information regarding the fiscal 2021 compensation program for our principal executive officers, which we refer to collectively in this Proxy Statement as the “NEOs” (Named Executive Officers). For fiscal 2021, these individuals are:

 

  ·  

Jeffery Gardner, President and Chief Executive Officer (“CEO”);

 

  ·  

Kurtis Binder, Executive Vice President, Chief Financial Officer (“CFO”);

 

  ·  

Arym Diamond, Senior Vice President, Chief Revenue Officer (“CRO”);

 

  ·  

Anand Rau, Senior Vice President, Chief Technology Officer (“CTO”); and

 

  ·  

Michael Burdiek, Former President and CEO

Effective March 25, 2020, Michael Burdiek announced his retirement as President, CEO, and as a member of our Board of Directors (“Board”). A current member of the Board, Jeffery Gardner, became our interim President and CEO at that time, and then our President and CEO effective in July 2020. In order to effect a seamless transition, Mr. Burdiek remained a senior advisor to the CEO through May 31, 2021. The transition plan and related compensation program are discussed on page 62.

This Compensation Discussion and Analysis describes the material elements of our compensation program for the NEOs during fiscal 2021 as administered by the Human Capital Committee. It also provides an overview of our executive compensation philosophy, including our principal compensation policies and practices with respect to our NEOs. Additionally, it summarizes the approach used and key factors considered by the Human Capital Committee to arrive at the specific compensation decisions for our NEOs in fiscal 2021.

Fiscal 2021 Business Overview

Our 2021 fiscal year was transformational as we hired several new executives with extensive experience with global enterprise transformation and software and SaaS operational expertise; and executed on various strategic business initiatives. In addition to the addition of a new CEO, we added three new executives including a CRO, SVP—Product Management, and SVP—Global Supply Chain and Operations. These important hires happened while we finalized the wind-down of our Vehicle Finance business and more recently completed the sale of our LoJack U.S. Stolen Vehicle Recovery (“SVR”) business. Further, our business was impacted by the emergence of the global pandemic prompted by the COVID-19 virus at the beginning of our fiscal year. In response, we adopted several measures to ensure the safety and well-being of our global work force and to sustain operations in this unprecedented time. Through this period of change and uncertainty, we remained intensely focused on expanding our technology leadership and leveraging our software and solutions portfolio for more predictable and sustained growth in new and existing global markets.

During the past year, we made solid progress on our Software-as-a-Service (“SaaS”) transformation with record Software and Subscription Services revenue of approximately $130 million, reflecting aggregate growth of 5% year-over-year. In the fourth quarter, SaaS revenue reached $35 million or 42% of consolidated revenue, driven by recurring revenue growth from the fleet management, transportation and logistics, industrial machines, and consumer telematics end markets. More than ever, we believe CalAmp is well- positioned with the scale, financial strength, and technology leadership to become a leading telematics solutions provider on the global stage.

Our strategic objective to grow subscription service revenues extends beyond our end-to-end SaaS applications, as we continue to focus on opportunities to generate recurring revenue from our telematics device installed customer base. Although we experienced lower demand for certain Telematics Systems products in fiscal 2021 due to the global pandemic, we are experiencing increased market demand and emerging catalysts driven by the 3G-to-4G technology transition that will enable us to take steps to transition certain CalAmp products to a more predictable recurring revenue subscription model.

 

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In summary, our strategic growth initiatives, coupled with our strong executive leadership team, have put us on course to grow our consolidated revenue and achieve our new long-term annual Software and Subscription Services revenue target of 50% of consolidated revenue. Progress towards these milestones will create a growing base of predictable recurring revenue and enable us to reach our target operating model of 50% gross margin and 20% EBITDA margin. We believe these financial achievements, coupled with a proven ability to execute on our long-term growth strategy, create a compelling backdrop for increased shareholder value into fiscal 2022 and beyond.

Significant Executive Compensation Actions

Our Human Capital Committee, which consists entirely of independent directors, sets the compensation of our NEOs, subject to ratification by the full Board. For fiscal 2021, the Human Capital Committee took the following actions with respect to the compensation of our NEOs:

 

   

Reviewed and updated the peer group of comparable public companies in cooperation with our independent consultant and giving consideration to our ongoing transformation to a global SaaS enterprise;

 

   

Discussed the considerations and concurred with the CEO’s recommendation to increase the base salaries of the NEOs by an amount over the prior year consistent with market factors and aligned with our peer group of similar public companies;

 

   

Approved cash incentive awards based on 2021 financial metrics and MBO performance targets established for two 6-month performance periods and capped payments at 95% of target to account for the uncertain macroeconomic factors created by the COVID-19 global pandemic;

 

   

Approved equity-based incentive compensation denominated 50% in restricted stock awards and 50% in performance-based equity awards for the management team and NEOs to (i) align the interests of our leaders with those of our stockholders, (ii) support ongoing retention in a highly competitive market for talent and (iii) align realizable pay and performance;

 

   

Approved all equity-based awards for the annual grant to employees and non-employee directors based on an assumed share price of $10.00, (or the average share price for the 90-day trailing period of our common stock prior to February 28, 2020) to account for the decline in market capitalization attributed to the impact of COVID-19 on the stock market. (As of July 30, 2020, the fair market value of our common stock was $7.66 per share, based on the closing price of the common stock as reported by Nasdaq.); and

 

   

Established financial performance targets for all performance-based equity awards to drive revenue and gross margin growth within our Software & Subscriptions Services business and align incentives around shareholder value creation and then capped the share vesting threshold for over-performance during the year.    

Effective April 21, 2020, our Board of Directors established the target bonuses and performance goals under our fiscal 2021 executive officer incentive compensation program after considering the Company’s expected financial performance for the year and the uncertainty created by the global pandemic. The individuals covered by the fiscal 2021 executive officer incentive compensation plan were Messrs. Gardner, Binder, Diamond and Rau – who prior to the implementation of the 95% cap on bonus payments for fiscal 2021, were eligible for target bonuses of up to 100%, 75%, 100% and 50%, respectively, of their annual salaries. The target bonus amounts for our executive officers are based on attaining certain levels of revenue, gross margin, Adjusted EBITDA and individual performance targets for the first and second six month periods in fiscal 2021. A more comprehensive discussion of the plan is provided below in the section entitled Determination of Executive Compensation for Fiscal 2021.

Executive Compensation and Pay-for-Performance Outcomes

Our executive compensation program is highly sensitive to company performance and aligns the actual or “realizable” pay of our executives with actual financial performance. Since the appointment of our new CEO effective July 25, 2020, the Company’s stock price has increased 50% to $11.17 on February 28, 2021. As presented in the chart below, our CEO’s realizable pay for fiscal 2021 represented approximately 125% of target total direct compensation as a result of

 

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the stock appreciation experienced in fiscal 2021. This reflects our continued focus on aligning pay-for-performance as described in more detail as follows:

 

 

The payout to our CEO under our cash bonus plan for fiscal 2021 was 95% of target;

 

 

The value of the time-based restricted stock granted to our CEO in fiscal 2021 has increased from the date of grant; and

 

 

The value of the performance-based restricted stock granted to our CEO in fiscal 2021 has also increased from the date of grant and the first performance goal was attained.

CEO Target vs. Realizable Pay – Fiscal 2021

 

 

LOGO

Target Pay = base salary + target bonus + fair value at grant of LTI awards during fiscal 2021

Realizable Pay = base salary + actual bonus paid + value of 2021 LTI awards at fiscal year-end 2021 stock price of $11.17

Compensation Philosophy and Programs

Our executive compensation programs are designed to attract, motivate and retain executives who will contribute significantly to the long-term success of CalAmp and the enhancement of stockholder value. Consistent with this philosophy, the following goals provide a framework for the Human Capital Committee’s administration of the executive compensation program:

 

   

Targeted executive compensation levels should generally be proximate to the median compensation level of comparable companies to allow us to attract and retain talented management;

 

   

Annual variable compensation should reward the executives for achieving specific results on performance metrics or specific objectives that are intended to increase stockholder value over time;

 

   

Total compensation opportunity for each executive should be related to overall Company performance as well as individual performance;

 

   

The compensation program should align the interests of the executives with those of its stockholders; and

 

   

Supplemental benefits that reward executives without regard to performance should be minimal.

 

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Elements of Compensation

In order to achieve the above goals, the total compensation package of the NEOs includes salary, bonuses and equity-based incentive awards. Salary is set at a competitive level to attract and retain qualified candidates. Bonuses are tied specifically to performance of the Company or a specific business unit and/or individual contributions. Equity-based incentive awards are granted in amounts that the Human Capital Committee believes are necessary to provide incentives for future performance, taking into account competitive long-term incentive practices of peer companies, responsibilities and duties of each officer, and individual performance.

The Human Capital Committee’s longstanding practice has been to grant equity awards to our NEOs that vest over a multi-year period. In addition, since fiscal year 2015, the Human Capital Committee has granted equity awards to our NEOs that are 100% at-risk based on the attainment of performance requirements. The Human Capital Committee and the Board believe that the use of a combination of time and performance-based equity awards help to drive long-term performance, align the interests of the NEOs with those of our stockholders, and provide a retention factor through long-term vesting. We also provide our NEOs with employee benefits that are generally available to all regular full-time employees of CalAmp. Consistent with our compensation philosophy and our focus on pay for performance, we do not provide our NEOs with any material perquisites or supplemental benefits.

Compensation-Setting Process

Role of the Human Capital Committee

The members of the Human Capital Committee have been appointed by the Board. The Human Capital Committee currently consists of four directors, all of whom are “independent directors” as defined in the listing standards of the Nasdaq Marketplace Rules. During fiscal 2021, the members of the Human Capital Committee were Jorge Titinger, who served as Chair, Scott Arnold, A.J. “Bert” Moyer and Kirsten Wolberg.

The Human Capital Committee operates under a written charter that was originally adopted by the Board in 2002 and which has subsequently been amended from time to time, most recently in 2021. The charter of the Human Capital Committee is posted on our website at www.calamp.com.

The Human Capital Committee’s responsibilities include assisting the Board with discharging its responsibilities relating to the compensation of our executives and directors and to provide general oversight of our compensation structure, including our equity compensation plans and benefits programs. The Board is responsible for the final approval of NEO compensation, though it relies heavily on the advice and recommendations of the Human Capital Committee.

Role of Management

The Human Capital Committee periodically meets with the CEO, CFO and SVP Human Resources to obtain information with respect to compensation programs. The CEO makes recommendations to the Human Capital Committee on the base salaries, incentive targets and measures, and equity compensation for the NEOs (other than the CEO) and other senior management. The Human Capital Committee considers, but is not bound by nor does it always accept, the CEO’s recommendations with respect to NEO compensation. Each year the Human Capital Committee also seeks input from its independent compensation consultant prior to making any final determinations. The CEO, CFO and SVP Human Resources attend most of the Human Capital Committee’s meetings, but the Human Capital Committee also regularly holds executive sessions not attended by any members of management. The Human Capital Committee discusses the CEO compensation package with him, but the Committee’s charter specifies that the CEO may not be present during the deliberations or voting on the CEO compensation. The Human Capital Committee has not delegated any of its authority with respect to compensation of NEOs to any member of management.

Role of the Compensation Consultant

The Human Capital Committee has the authority in its sole discretion to engage its own compensation consultants and other independent advisors to assist in creating and administering the executive compensation policies. Each year the

 

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Human Capital Committee retains the services of an independent compensation consulting firm to conduct various compensation-related studies and analyses. The independent consulting firm does not provide any other services to the Company and has received no compensation other than with respect to services provided to the Human Capital Committee. In January 2020, the compensation consultant Pay Governance was engaged to assist the Human Capital Committee in the determination of NEO compensation for fiscal 2021. The process of determining fiscal 2021 NEO compensation is described below. Pursuant to the factors set forth in Item 407 of Regulation S-K, the Human Capital Committee has reviewed the independence of Pay Governance and conducted a conflicts of interest assessment, and has concluded that Pay Governance is independent and that its work for the Human Capital Committee has not raised any conflicts of interest.

Determination of Executive Officer Compensation for Fiscal 2021

Comparative Analysis

The Human Capital Committee engaged Pay Governance to assist the Committee in the evaluation of appropriate cash and equity compensation for the NEOs in fiscal 2021. Pay Governance, in consultation with management, prepared a competitive compensation analysis that compared the cash and equity-based compensation of the NEOs with market compensation data. Market data for the NEO consists of compensation data of a public company peer group (the “Peer Group”) as reported in proxy statements and other public filings. This Peer Group was selected using the criteria provided below with an emphasis on technology companies operating on subscription-based revenue models. The Peer Group, which is reviewed and updated each fiscal year, consists of technology companies that are similar to CalAmp in terms of industry focus and scope, revenue size and market capitalization. Our process for determining the Peer Group for fiscal 2021 is summarized as follows.

Pay Governance began with the list of companies included in the prior year’s Peer Group and then identified other peers with similar financial, industry and size characteristics to CalAmp. Based on a review of current financial metrics, business focus and recent transactions involving peer companies, Pay Governance in collaboration with the Human Capital Committee then removed any company that had either been acquired or whose characteristics were no longer relevant to CalAmp. At the time the Peer Group was established, CalAmp’s consolidated revenue, net income and market capitalization for the trailing 12 months were at the 50th, 57th and 38th percentiles of the Peer Group, respectively.

As shown below, because SaaS solutions are increasingly becoming an integral element of our business, the resulting peer group of 21 companies included a balance of software industry companies and communications equipment related/other hardware companies.

 

Communications/Other Technology Hardware

       Software

* Applied Optoelectronics

  

* Digi International

    

* 8x8, Inc.

  

* Cornerstone OnDemand

* Arlo Technologies

  

* FARO Technologies

    

* A10 Networks

  

* i3 Verticals

* Aviat Networks

  

* Harmonic

    

* Bottomline Technologies

  

* PROS Holdings

* Avid Technology

  

* Inseego Corp.

    

* comScore

  

* Synchronoss Technologies

* Calix

  

* ORBCOMM

       

* Casa Systems

  

* Ribbon Communications

       

* Comtech Telecomm

          

The competitive compensation analysis for fiscal 2021 was presented by Pay Governance to the Human Capital Committee during a meeting on April 21, 2020. At this meeting, Pay Governance also presented its assessment of the Company’s executive compensation elements relative to market practices and trends.

 

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Base Salary

Base salaries for NEOs, including that of the CEO, are set according to the responsibilities of the position, the specific skills and experience of the individual and the competitive market for executive talent. The Human Capital Committee reviews base salaries annually and makes recommendations to the Board to adjust them as appropriate to reflect changes in market conditions, individual performance and responsibilities, and the Company’s financial position. In deliberating on proposed salary adjustments and recommending changes to the Board, the Human Capital Committee considers the position relative to the market of each NEO’s proposed base salary amount, and generally targets the 50th percentile of salaries at Peer Group companies. For fiscal 2021, the base salaries of the NEOs were increased from the prior two years as a result of the Committee’s consideration of the competitive market base salary information. The aggregate base salaries of the NEOs in fiscal 2021 were at or around the 50th percentile of market compensation as represented by the Peer Group. Base salary amounts earned during fiscal 2021 for the NEOs are shown in the Summary Compensation Table on page 66.

Bonus Plan

The bonus plan for NEOs reflects the Human Capital Committee’s belief that a meaningful component of executive compensation should be contingent on the financial performance of the Company. The aggregate value of target total cash compensation (base salary and target bonus) for our NEOs is generally set to approximate the 50th percentile of the total cash compensation opportunity for Peer Group companies, with the intent that superior performance under the bonus plan would enable each NEO to elevate total cash compensation to a level that is above the 50th percentile. Similarly, if performance results are below expectations, the structure of the bonus plan would result in the NEOs receiving total cash compensation below the 50th percentile. As a result of CalAmp meeting the fiscal 2021 performance targets for revenue, gross margin and Adjusted EBITDA, the aggregate total cash compensation for fiscal 2021 was at the 50th percentile of total cash compensation opportunity as represented by the Peer Group.

At the Human Capital Committee’s April 21, 2020 meeting, the CEO presented the proposed parameters of the NEO bonus plan for fiscal 2021, including weighting factors, target incentive amounts as a percentage of base salary and quantitative goals. The quantitative goals proposed for the fiscal 2021 bonus plan were consolidated revenue and consolidated Adjusted EBITDA amounts as set forth in the fiscal 2021 Annual Operating Plan (“AOP”) for two performance periods—the six month period ended August 31, 2020 and the six month period ended February 28, 2021. The following table summarizes the financial targets compared to the actual results for the respective performance periods ($ in millions):

 

Description   Target     Actual (1)     Variance  

 Performance target for the six months ended August 31, 2020:

     

 Consolidated Revenue

  $         154.2     $         163.8     $         9.6   

 Consolidated Adjusted EBITDA

  $ 6.9     $ 12.0     $ 5.1   

 Performance target for the six months ended February 28, 2021:

     

 Consolidated Revenue

  $ 167.7     $ 170.0     $ 2.3   

 Consolidated Adjusted EBITDA

  $ 16.2     $ 18.7     $ 2.5   

 

  (1)

Full year Consolidated Revenue and Adjusted EBITDA will not agree to reported Consolidated Revenue and Adjusted EBITDA due to the inclusion and exclusion of certain businesses, such as the U.S. SVR business that was sold, in establishing these financial targets.

In addition to the aforementioned performance targets for our NEOs and management team, Mr. Arym Diamond, our SVP and Chief Revenue Officer, was incentivized based on annual revenue targets for Telematics Systems device sales and Fleet Management Software sales along with global product margin targets. These financial performance targets also included certain accelerators for the addition of new customer logos. Upon the appointment of Mr. Diamond effective March 1, 2020, the Board of Directors agreed to a $50,000 sign-on bonus and granted him an award of 50,000 shares of

 

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restricted stock with a fair value of $481,000. These restricted shares vest in four consecutive annual installments from the grant date subject to his continued employment through each annual vesting date. Additionally, Mr. Diamond received a guarantee on the first three quarters of fiscal 2021 such that he would receive incentive payments of at least $75,000 per quarter regardless of achieving the aforementioned financial performance targets. His incentive payments were paid in conjunction with the payments made to the other NEOs for the two performance periods defined above.

Additionally, there were qualitative goals proposed for fiscal 2021 by the CEO for each of his direct reports, which were provided in an effort to align management objectives with the Company’s transformation to a SaaS enterprise. The weighting of the cash incentive payout amount for each performance goal was established by the Human Capital Committee for each executive and included 40% for each of the two quantitative goals defined above and 20% for the qualitative management objective goals. The multi period approach to determining the performance targets and bonus payout was proposed to increase the level of engagement and immediate attention of management towards executing on near term financial metrics as well to address the uncertainty in macroeconomic factors created due the global pandemic by providing a means for the Human Capital Committee to determine the financial goals for the second half of fiscal 2021. Both the financial measures and performance periods were believed to best reflect the need for management focus on the short-term performance of the Company, as they are directly influenced by immediate actions. In executive session, with no members of management present, the Human Capital Committee deliberated on the proposed NEO bonus plan for fiscal 2021, after which it was approved. The fiscal 2021 bonus plan for purposes of the first performance was ratified by the Board at a meeting that was held on April 21, 2020 whereas the financial targets for the second performance period was ratified by the Board at a meeting that was held on September 22, 2020. Generally the fiscal year bonus plan consists of the following payout percentages for the NEOs at the Threshold, Target and Maximum performance levels:

 

        Incentive Amounts as a % of Base Salary      
        Threshold     Target     Maximum      

  President and CEO

    0     100     200%   

  Executive VP and CFO

    0     75     150%   

  SVP and CRO

    0     100     150%   

  SVP and CTO

    0     50     100%   

 

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In fiscal 2021, the maximum payout for the incentive plan was capped at 95% of Target by the Human Capital Committee to address the uncertainty in macroeconomic factors created by the COVID-19 global pandemic. The Human Capital Committee believes that the bonus plan structure rewards the NEOs for achievement of quantitative goals and provides limited downside protection in the event of performance that is close to, but below, the Target level. For fiscal 2021, the quantitative goals at the Target level were set equal to consolidated revenue and consolidated Adjusted EBITDA as shown in the fiscal 2021 AOP, which is explained above and is generally consistent with the methodology used for the bonus plans of previous years. Quantitative goals at the Threshold and Maximum performance levels were determined by varying the goal amounts up or down from the projected revenue and Adjusted EBITDA amounts shown in the fiscal 2021 AOP for the respective performance periods. The AOP is typically established by management and approved by the Board at the beginning of each fiscal year, and reflects performance levels that the Board feels are challenging but achievable with significant effort. This year the fiscal 2021 AOP was approved in April 2020 and then updated in September 2020 as a result of the macroeconomic factors created due to the global pandemic. Additionally, the Human Capital Committee placed a 95% cap on all cash incentive payouts at target or better performance levels. As a general matter of practice, Maximum levels for each measure are generally set as to represent both extremely challenging performance goals and outstanding achievement. As a frame of reference, in the 10-year period through fiscal 2021, the consolidated revenue Maximum levels in the NEOs’ bonus plans were not exceeded in any year, and the consolidated Adjusted EBITDA Maximum levels were exceeded only twice, in fiscal years 2012 and 2013. Payouts are prorated on a straight-line basis for achievement between the Threshold and Target levels or the Target and Maximum levels. If the Company does not achieve above the Threshold performance level for a measure, no payout is made for that measure. The fiscal 2021 quantitative goals were as follows (in millions):

 

Performance target for the six months ended August 31, 2020:

 

 
Description   Threshold     Target  

 Consolidated Revenue

  $             137.2     $             154.2  

 Consolidated Adjusted EBITDA

  $ 6.2     $ 6.9  

 

Performance target for the six months ended February 28, 2021:

 

 
Description   Threshold     Target  

 Consolidated Revenue

  $             142.5     $             167.7  

 Consolidated Adjusted EBITDA

  $ 13.7     $ 16.2  

For fiscal 2021, the Human Capital Committee established weighting factors for all of the NEOs (except as described above for Mr. Diamond) of 50% for each of consolidated revenue and for consolidated Adjusted EBITDA. For the six month period ended August 31, 2020 and the six month period ended February 28, 2021, the Company exceeded the targets for actual consolidated revenue and Adjusted EBITDA. The actual bonus plan payouts to the NEOs were at approximately 95% of target incentive amounts for our CEO, CFO, Chief Revenue Officer and Chief Technology Officer as shown in the “Non-Equity Incentive Plan (Bonus Plan)” column of the Summary Compensation Table on page 66. During the fiscal year, there were no adjustments to any of the performance metrics as approved by the Human Capital Committee subsequent to each 6-month performance period as a result of COVID-19 or other related macroeconomic factors.

Equity Awards

The Human Capital Committee believes that equity compensation plans are essential tools to (i) align the long-term interests of our stockholders and employees particularly members of executive management, (ii) serve to motivate the NEOs to make decisions that will provide the best long-term returns to stockholders, and (iii) provide the NEOs with a strong incentive to remain with CalAmp over time. The Human Capital Committee also believes that equity awards remain an essential element of a competitive compensation package, given that such plans are offered currently by most public and private technology companies that we compete against for both executive and non-executive talent.

In determining the size of the equity awards to be granted to NEOs, the Human Capital Committee first establishes the total fair value of equity awards for each NEO by reference to prevailing market compensation levels for comparable

 

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positions and other factors as discussed in the following paragraph. The Human Capital Committee next considers the apportionment of the total equity award value between restricted shares, options and performance-based awards. For the past two fiscal years, the Committee used a value allocation for time vested restricted stock and performance-based equity awards of 50% and 50%, respectively. The time vested restricted stock is valued based on the Company’s stock price on the grant date and vest over a period of four years or the passage of time.

On July 24, 2019, the Company granted performance-based equity awards pursuant to a three-year Relative Total Shareholder Return (TSR) plan, in which our stock price performance is benchmarked against the Russell 2000 Index (^RUT). The awards have 3 measurement periods that run concurrently whereby the TSR performance at or greater than benchmark TSR earns all target awards allocated to such period(s), while underperformance is subject to downside scaling to the extent that the Company’s TSR is below benchmark TRS at the end of the measurement period. Notwithstanding the fair value allocation noted above, the Human Capital Committee may alter this ratio in the future in response to evolving compensation objectives.

At a meeting of the Human Capital Committee held on July 29, 2020, the CEO presented proposed equity award allocations for the NEOs. During this meeting, the Human Capital Committee considered the information on total direct compensation (total cash and equity compensation) and long-term incentive practices contained in the fiscal 2021 competitive compensation assessment described above that compared the compensation of the Company’s NEOs with compensation data from the Peer Group companies. In evaluating the proposed executive officer equity awards for fiscal 2021, the Human Capital Committee also considered factors such as the ratio of proposed equity awards for NEOs and non-executive officer employees, the prevailing stock price, estimates of stock compensation expense, longevity projections of the equity award plan pool of available units, equity award ‘burn rate’ estimates, and the Human Capital Committee’s assessment of progress on important strategic initiatives such as those described on page 52 under the heading “Fiscal 2021 Business Overview.” The fiscal 2021 equity awards granted to Messrs. Gardner, Binder, Diamond and Rau in July 2020, combined with fiscal 2021 base salaries and bonus amounts at Target, resulted in aggregate target total direct compensation for these NEOs that was at or near the 55th percentile of market compensation as represented by the Peer Group.

Contemporaneous with the proposed equity award allocation on July 29, 2020, the Company granted performance-based restricted stock awards pursuant to which the restricted shares vest upon achievement of pre-determined financial metrics including organic revenue growth for our Software & Subscription Services and Telematics Devices as well as gross margin improvement. The proposed performance share allocation percentage or weighting, financial metrics and performance periods are summarized as follows:

 

          Target Metrics—PSU Vesting Provisions  
  Performance
Share
Weighting
   

Six months

ended
February 28, 2021

    Twelve months ended     Cumulative Three
Year period ended
February 28, 2024
 
  February 28,
2022
    February 28,
2023
 

 S&SS revenue growth rate

    60     7     10     12     42

 Telematics device revenue growth rate

    20     0     1     2     6

 Gross margin percentage

    20     38.5     40.0     42.0     44.0

The performance-based restricted stock awards granted to each NEO are allocated or weighted based on the relative importance of each performance metric towards stock price appreciation or shareholder value creation as determined by the Human Capital Committee. The awards have three measurement periods consisting of the six month period ended February 28, 2021, the twelve month period ending February 28, 2022, and the twelve month period ending February 28, 2023 with a final measurement period defined as the three year period ending February 28, 2024 to reward the NEOs for sustained, longer term performance. All equity awards that remain unvested after the final cumulative performance period are deemed forfeited by the executive. Additionally, the restricted shares eligible for vesting during each of the first three performance periods are subject to downside and upside scaling based on the Company’s actual financial performance against the pre-determined performance metric during the period. Accordingly, the number of vested restricted shares can decrease to a minimum threshold of 0% and increase to a maximum threshold of 120% based on the under or over-performance of actuals to the pre-determined performance metric.

 

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Following the Human Capital Committee’s review and deliberation at this meeting, the Committee approved equity awards for Messrs. Gardner, Binder, Diamond and Rau, and these awards were ratified by the full Board of Directors. These equity awards are detailed in the Grants of Plan-Based Awards for Fiscal 2021 table on page 68.

Equity Award Practices

The Human Capital Committee or the Board approves all equity awards granted to NEOs and other employees in accordance with our Practices for Employee and Director Equity Awards Policy Statement. Time-based equity awards, typically consisting of restricted stock are generally granted when a key employee, including an NEO, joins the Company, and on an annual basis thereafter. These NEO and key employee equity awards typically vest over a four-year period. In addition, the Human Capital Committee introduced the use of performance-based equity awards for the NEOs in fiscal 2015 and has continued to use performance-based awards each year since that time. The Company does not schedule the granting of equity awards to coincide with any favorable or unfavorable news regarding CalAmp. For more than 10 years, it has been a practice to make annual equity award grants to NEOs and key employees on the day of the annual meeting of stockholders, at the same time that equity awards are made to non-employee directors pursuant to the provisions of the 2004 Incentive Stock Plan. The annual meeting of stockholders is typically held during the last week of July on a date established at least three months in advance. For new hires in key positions, it is our practice to grant equity awards as of the date of hire in accordance with the Practices for Employee and Director Equity Awards Policy Statement.

The Human Capital Committee has delegated to the CEO and CFO the authority to approve equity awards for newly hired employees, newly promoted employees, and annual equity awards for employees other than NEOs and senior management, provided that such awards do not exceed the fair value range indicated in this policy statement. Equity awards approved by the CEO or CFO pursuant to this delegation of authority are reported to the Committee at its quarterly meetings.

The size of an initial equity award to an NEO is based upon the position, responsibilities and expected contribution of the individual, with subsequent grants also taking into account the individual’s performance and potential contributions. In establishing the amount and type of equity awards to the NEOs, the Human Capital Committee takes into consideration each NEO’s duties and responsibilities, individual performance and the competitive compensation analysis in which the NEO’s total direct compensation is benchmarked against market data. The Human Capital Committee also takes into consideration the equity award burn rate in relation to industry benchmarks published by Institutional Shareholder Services and the financial statement impact of proposed equity awards.

Compensation Risk Assessment

The Human Capital Committee monitors the risks associated with our compensation programs, policies and practices with respect to executive compensation, executive recruitment and retention. In establishing and reviewing our executive compensation program, the Human Capital Committee consults with its independent compensation consultant and seeks to structure the program so as to not encourage unnecessary or excessive risk taking. Our executive compensation program utilizes a mix of base salary, bonus and equity-based incentive awards designed to align the NEOs’ compensation with our success, particularly with respect to financial performance and increasing stockholder value. The Human Capital Committee sets the amount of our NEOs’ base salaries at the beginning of each fiscal year, and the NEOs’ annual bonus opportunities are tied to overall Company financial performance and other specific objectives. Furthermore, the target total direct compensation opportunities of our NEOs include a substantial portion in the form of equity-based incentive awards that help align their interests with those of our stockholders over the longer term. The Human Capital Committee believes that the annual bonus opportunities and long-term equity awards provide an effective and appropriate mix of incentives to help ensure our performance is focused on long-term stockholder value creation and do not encourage short-term risk taking at the expense of long-term results, and has concluded that our executive compensation program does not encourage unnecessary or excessive risk. Our Human Capital Committee has also reviewed the compensation programs for other senior managers and employees generally, and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on CalAmp.

 

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Fiscal 2020 “Say-on-Pay” Advisory Vote on Executive Compensation

At last year’s annual meeting of stockholders, approximately 93.1% of the votes cast in the “Say-on-Pay” advisory vote were “FOR” approval of the Company’s Say-on-Pay proposal. The Human Capital Committee evaluated the results of the fiscal 2020 advisory vote together with the other factors and data discussed in this Compensation Discussion and Analysis in determining executive compensation policies and decisions. The Human Capital Committee is committed to continuing the best pay practices and pay-for-performance approach to executive compensation that has resulted in consistently high stockholder support. To that end, the Human Capital Committee considered the vote results and did not make changes to the Company’s executive compensation policies and decisions as a result of the fiscal 2020 advisory vote.

Executive Officer Stock Ownership Guidelines and Equity Holding Period

The Human Capital Committee has adopted minimum stock ownership guidelines for NEOs. For the CEO, the guideline stock ownership amount is 2.5 times annual base salary, and for the other NEOs the guideline stock ownership amount is 1.5 times annual base salary. The market value of the stock on the date of acquisition serves as the basis for determining compliance with the guidelines. At the end of fiscal 2021, all NEOs were in compliance with these stock ownership guidelines.

The Company does not currently have a policy that specifies a minimum holding period for stock acquired by the NEOs as a result of equity awards. The Board believes that the NEO stock ownership guidelines are competitive and support the objective of ensuring that the NEOs maintain a meaningful ownership interest in CalAmp and are aligned with our stockholders over the long term.

Retirement Benefits / Deferred Compensation

The Company does not provide retirement benefits to any of its employees, including the NEOs, other than a 401(k) plan that is open to all regular, full-time U.S. employees and a non-qualified deferred compensation plan in which the NEOs, certain other management employees and non-employee directors are eligible to participate. The 401(k) plan is a tax-qualified retirement savings plan pursuant to which all U.S. employees, including the NEOs, are permitted to contribute up to the limit prescribed by the Internal Revenue Service on a before-tax basis. We match dollar-for-dollar of the first 3% of pay contributed and one-half of the next 2% of pay contributed to the 401(k) plan each year. The nonqualified deferred compensation plan is described under “Nonqualified Deferred Compensation” on page 71.

Compensation Recovery Policy

We maintain a compensation recovery policy (claw-back policy) allowing us to require the repayment or forfeiture of any cash or equity incentive compensation paid or granted to an NEO where the payment, grant or vesting of such compensation or award was based on the achievement of financial results that were subsequently the subject of a financial restatement and where that NEO was found to have engaged in fraud or willful misconduct which caused, or materially contributed to, the need for such restatement. In addition to the foregoing, our CEO and CFO are subject to the compensation recovery provisions of Section 304 of the Sarbanes-Oxley Act.

Severance and Change in Control Payments

The Company’s Board has provided the NEOs with severance and change in control arrangements in order to promote stability and continuity, and to mitigate a potential disincentive for the executives to pursue and execute an acquisition of the Company, particularly where the services of these NEOs may not be required by the acquirer. For a more detailed description of the severance and change in control benefits provided to our NEOs, please see the discussion under “Employment Contracts and Change-In-Control Arrangements” beginning on page 71.

On March 23, 2020, after discussions with Michael Burdiek, the Company elected not to renew Mr. Burdiek’s employment agreement, which, by its terms, constituted a termination without cause as defined in the agreement,

 

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resulting to his retirement as President and Chief Executive Officer as well as a member of our Board effective March 25, 2020. Mr. Burdiek continued his employment with the Company as a Senior Advisor during a transition period from March 25, 2020 through May 31, 2021 and, in connection with the termination without cause provision of his employment agreement, the Senior Advisor role and in exchange for a release of claims, he received: (i) aggregate continued annual base salary of $515,000, (ii) continued vesting of his outstanding equity awards (other than any performance stock unit awards) and (iii) for a twelve-month period following the retirement date, the Company paid the premiums in connection with Mr. Burdiek’s participation in the Company’s health, dental and vision plans. In addition, upon the completion of his Senior Advisor transition period, Mr. Burdiek’s then-unvested equity awards (other than any performance-based stock awards) vested. Mr. Burdiek’s outstanding stock options also remain exercisable for up to two years following the end of the transition period.

Other Compensation

Other elements of executive compensation include life insurance, long-term disability insurance and health benefits. These benefits are also available to all regular, full-time U.S. employees, except that the Company pays the entire disability and health insurance premiums for the NEOs. The NEOs are also covered by a supplemental medical insurance program that reimburses the NEO for out-of-pocket eligible medical costs up to an annual limit of $100,000 per NEO, which is offered in order to provide market-competitive compensation to the NEOs. The Company payments for the NEOs pursuant to these other elements of compensation in fiscal 2021 are included in the “All Other Compensation” column in the Summary Compensation Table on page 66.

Tax and Accounting Considerations

Deductibility of Executive Compensation

Section 162(m) of the Code generally disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1.0 million in any taxable year to its “covered employees.” Prior to the Tax Cuts and Jobs Act of 2017, covered employees generally consisted of a corporation’s chief executive officer and each of its other three highest compensated officers, other than its chief financial officer, and remuneration that qualified as “performance-based compensation” within the meaning of the Code was exempt from this $1.0 million deduction limitation. As part of the Tax Cuts and Jobs Act of 2017, the ability to rely on this exemption was, with certain limited exceptions with respect to grandfathered awards, eliminated; while the determination of the covered employees was generally expanded. As a result of the repeal of the performance-based compensation exception to Section 162(m) of the Code, other than with respect to grandfathered awards, we may not be able to take a deduction for any compensation in excess of $1.0 million that is paid to a covered employee.

Taxation of Nonqualified Deferred Compensation

Section 409A of the Code requires that amounts that qualify as “nonqualified deferred compensation” satisfy requirements with respect to the timing of deferral elections, timing of payments, and certain other matters. Generally, the Human Capital Committee intends to administer our executive compensation program and design individual compensation components, as well as the compensation plans and arrangements for our employees, so that they are either exempt from, or satisfy the requirements of Section 409A.

Taxation of “Parachute” Payments

Sections 280G and 4999 of the Code provide that executive officers, individuals who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control that exceeds certain prescribed limits, and that the payor may forfeit a deduction on the amounts subject to this additional tax. We are not obligated to provide any NEO with a “gross-up” or other reimbursement payment for any tax liability that he or she may owe as a result of the application of Sections 280G or 4999 in the event of a change in control of CalAmp.

 

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Accounting for Stock-Based Compensation

The Human Capital Committee takes accounting considerations into account in designing compensation plans and arrangements for our NEOs and other employees. The principal guidance regarding stock-based compensation is Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), the standard which governs the accounting treatment of stock-based compensation awards.

ASC Topic 718 requires us to recognize in our financial statements all share-based payment awards to employees, including grants of options to purchase shares of our common stock and restricted stock awards that may be settled for shares of our common stock to our NEOs, based on their fair values. For certain performance-based stock awards, we also must apply judgment in determining the periods when and if, the achievement of the related performance targets becomes probable. ASC Topic 718 also requires us to recognize the compensation cost of our share-based payment awards in our income statement over the period that an employee, including our NEOs, is required to render service in exchange for the award (which, generally, will correspond to the award’s vesting schedule).

Hedging and Pledging Practices

The Company prohibits short sales and transactions in derivatives of our securities, including any form of hedging transactions involving CalAmp securities, for all employees, including our NEOs, and non-employee directors. In addition, NEOs and directors are strongly discouraged from holding CalAmp securities in margin accounts or pledging CalAmp securities as collateral for loans in a manner that could create compensation-related risk for CalAmp.

 

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HUMAN CAPITAL COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The following Human Capital Committee Report does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this Human Capital Committee Report by reference therein.

The Human Capital Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on the Human Capital Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, the Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and be incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2021.

HUMAN CAPITAL COMMITTEE

Jorge Titinger, Chair

Scott Arnold

A.J. “Bert” Moyer

Kirsten Wolberg

HUMAN CAPITAL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 2021, the Human Capital Committee was comprised of Ms. Wolberg and Messrs. Arnold, Moyer and Titinger. There are no interlocks between the Company and other entities involving the Company’s officers and directors who serve as executive officers or directors of other entities.

 

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SUMMARY COMPENSATION TABLE

The table below sets forth the compensation awarded to, earned by, or paid to each of our NEOs for the last three fiscal years.

 

                          Equity Award Grant
Date Fair Value (1)
    Non-Equity
Incentive Plan
                 

Name and

Principal Position

  Fiscal
Year
    Salary         Bonus (2)     Stock
Awards (3)
    Option
Awards
    Compensation
(Bonus Plan)
    All Other
Compensation
        Total  

   Jeffery Gardner

 

 

2021

 

 

$

481,327

 

   

$

-  

 

 

$

1,632,050

 

 

$

-  

 

 

$

      494,400

 

 

$

417,422

 

 

(4)

 

$

    3,025,199

 

   President and CEO

                   
                   

   Kurtis Binder

 

 

2021

 

 

$

367,692

 

   

$

-  

 

 

$

787,000

 

 

$

-  

 

 

$

267,095

 

 

$

        37,904

 

 

(5)

 

$

1,459,691

 

   Executive VP and CFO

 

 

2020

 

 

 

350,000

 

   

 

-  

 

 

 

814,421

 

 

 

271,337

 

 

 

59,653

 

 

 

37,477

 

   

 

1,532,888

 

 

 

2019

 

 

 

350,000

 

   

 

-  

 

 

 

572,384

 

 

 

568,068

 

 

 

22,926

 

 

 

32,500

 

   

 

1,545,878

 

                   

   Arym Diamond

 

 

2021

 

 

$

297,115

 

   

$

50,000

 

 

$

953,200

 

 

$

-  

 

 

$

336,150

 

 

$

39,068

 

 

(6)

 

$

1,675,533

 

   SVP and Chief Revenue Officer

                   
                   

   Anand Rau

 

 

2021

 

 

$

296,232

 

   

$

-  

 

 

$

472,200

 

 

$

-  

 

 

$

144,375

 

 

$

36,740

 

 

(7)

 

$

949,547

 

   SVP and Chief Technology Officer

                   
                   

   Michael Burdiek

 

 

2021

 

 

$

515,000

 

 

(8)

 

$

-  

 

 

$

765,435

 

 

$

109,978

 

 

$

-  

 

 

$

45,970

 

 

(9)

 

$

1,436,383

 

   Former President and CEO

 

 

2020

 

 

 

515,000

 

   

 

-  

 

 

 

1,659,152

 

 

 

552,772

 

 

 

34,906

 

 

 

46,398

 

   

 

2,808,228

 

   

 

2019

 

 

 

515,000

 

     

 

-  

 

 

 

1,117,072

 

 

 

1,098,464

 

 

 

48,192

 

 

 

35,015

 

     

 

2,813,743

 

(1)    The grant date fair value of equity awards is calculated in accordance with ASC Topic 718 for stock-based compensation and excludes the impact of estimated forfeitures related to service-based vesting conditions. With respect to Mr. Burdiek, 2021 amounts represent incremental fair value associated with modifications to accelerate vesting on certain equity awards in connection with his retirement and transition to his role as senior advisor to Mr. Gardner. The assumptions used with respect to the valuation of equity awards are set forth in Note 15 to the consolidated financial statements included in our Annual Report on Form 10-K, filed with the SEC on April 22, 2021. The actual amounts realized by the NEOs may be higher or lower than the equity award fair values shown in this table.

(2)    This column includes a $50,000 sign-on bonus paid to Mr. Diamond upon his hire date on March 1, 2020.

 

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(3)    This column includes performance-based stock units (PSU) awards and time based restricted stock awards granted in fiscal 2021. The fair value of restricted stock awards is calculated as the number of shares awarded multiplied by the closing stock price on the grant date.

 

    Performance-Based Equity Awards     Time-Vested Equity Awards  

Name and

Principal Position

  Grant
Date
    Grant Date
Fair Value
    Grant Date
Award Value
    Grant Date
Maximum
Award Value
    Grant
Date
    Grant Date
Fair Value
    Grant Date
Award Value
 

Jeffery Gardner

 

 

07/29/20

 

 

$

        7.87

 

 

$

      787,000

 

 

$

      944,400

 

 

 

07/29/20

 

 

$

        7.87

 

 

$

    787,000

 

President and CEO

         

 

05/01/20

 

 

$

6.45

 

 

$

58,050

 

             

Kurtis Binder

 

 

07/29/20

 

 

$

7.87

 

 

$

393,500

 

 

$

472,200

 

 

 

07/29/20

 

 

$

7.87

 

 

$

393,500

 

Executive VP and CFO

             
             

Arym Diamond

 

 

07/29/20

 

 

$

7.87

 

 

$

236,100

 

 

$

283,320

 

 

 

07/29/20

 

 

$

7.87

 

 

$

236,100

 

SVP and Chief Revenue Officer

         

 

03/01/20

 

 

$

9.62

 

 

$

481,000

 

             

Anand Rau

 

 

07/29/20

 

 

$

7.87

 

 

$

236,100

 

 

$

283,320

 

 

 

07/29/20

 

 

$

7.87

 

 

$

236,100

 

SVP and Chief Technology Officer

             
             

Michael Burdiek

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

Former President and CEO

                                                       

In fiscal 2021, the executive officers were granted performance-based restricted stock awards pursuant to which the restricted shares vest upon achievement of pre-determined financial metrics including organic revenue growth for our Software & Subscription Services and Telematics Devices as well as gross margin improvement. The performance criteria and vesting provisions are described in the section entitled “Compensation Discussion and Analysis” on page 52.

Upon the appointment of Mr. Gardner as our Interim Chief Executive Officer, the Board of Directors granted him an award of 9,000 shares of restricted stock on May 1, 2020 with a fair value of $58,050. These restricted shares vested in three consecutive monthly installments from the grant date. The final installment of 3,000 shares was forfeited upon his formal appointment as President and CEO in July 2020.

Upon the appointment of Mr. Diamond as our Senior Vice President and Chief Revenue Officer on March 1, 2020, the Board of Directors granted him an award of 50,000 shares of restricted stock with a fair value of $481,000. These restricted shares vest in four consecutive installments from the grant date subject to his continued employment through each annual vesting date.

(4)    Amount consists of $5,833 in fees paid in connection with Mr. Gardner’s service on our Board prior to his appointment as Interim Chief Executive Officer, $14,371 for Company matching contributions under the 401(k) Plan, $10,426 under an executive medical cost reimbursement program, $26,792 for health, disability and life insurance premiums, $60,000 for temporary housing while relocating to our headquarters and $300,000 as a relocation package paid by us for the benefit of Mr. Gardner.

(5)    Amount consists of $10,131 for Company matching contributions under the 401(k) Plan, $10,426 under an executive medical cost reimbursement program, and $17,347 for health, disability and life insurance premiums paid by us for the benefit of Mr. Binder.

(6)    Amount consists of $13,708 for Company matching contributions under the 401(k) Plan, $10,426 under an executive medical cost reimbursement program, $17,347 for health, and disability and life insurance premiums paid by us for the benefit of Mr. Diamond.

(7)    Amount consists of $8,395 for Company matching contributions under the 401(k) Plan, $12,316 under an executive medical cost reimbursement program, and $16,029 for health, disability and life insurance premiums paid by us for the benefit of Mr. Rau.

 

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(8)    Amount includes $480,676 in compensation paid by us following Mr. Burdiek’s retirement and transition to his role as senior advisor to Mr. Gardner. See section entitled “Employment Contracts and Change-in-Control Arrangements” below for additional information.

(9)    Amount consists of $10,970 for Company matching contributions under the 401(k) Plan, $10,392 under an executive medical cost reimbursement program, and $24,608 for health, disability and life insurance premiums.

GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2021

The table below sets forth the grants of plan-based awards made to our NEOs during fiscal 2021. Mr. Burdiek did not receive any such awards and therefore is not included in the table below.

 

    Grant
Date
   

 

Estimated Future Payouts

Under Non-Equity
Incentive Plan Awards (1)

   

 

Estimated Future Payouts

Under Equity Incentive
Plan Awards (#)(2)

    All Other Stock
Awards:
Number of
Shares of

Stock or Units
(#) (3)
    Grant Date
Fair Value of
Stock and
Option Awards
($)(4)
 

Name

  Threshold     Target     Maximum     Threshold     Target     Maximum  

Jeffery Gardner

                 

Incentive cash award

   

$

            -  

 

 

$

515,000

 

 

$

    494,400

 

         

Performance-based stock award

 

 

07/29/20

 

       

 

-  

 

 

 

100,000

 

 

 

120,000

 

   

$

787,000 

 

Time-based restricted stock award

 

 

07/29/20

 

             

 

100,000

 

 

$

787,000 

 

Time-based restricted stock award

 

 

05/01/20

 

             

 

9,000

 

 

$

58,050 

 

                 

Kurtis Binder

                 

Incentive cash award

   

$

-  

 

 

$

277,500

 

 

$

267,094

 

         

Performance-based stock award

 

 

07/29/20

 

       

 

-  

 

 

 

50,000

 

 

 

60,000

 

   

$

393,500 

 

Time-based restricted stock award

 

 

07/29/20

 

             

 

50,000

 

 

$

393,500 

 

                 

Arym Diamond

                 

Incentive cash award

   

$

-  

 

 

$

300,000

 

 

$

337,500

 

         

Performance-based stock award

 

 

07/29/20

 

       

 

-  

 

 

 

30,000

 

 

 

36,000

 

   

$

          236,100 

 

Time-based restricted stock award

 

 

07/29/20

 

             

 

30,000

 

 

$

236,100 

 

Time-based restricted stock award

 

 

03/01/20

 

             

 

50,000

 

 

$

481,000 

 

                 

Anand Rau

                 

Incentive cash award

   

$

-  

 

 

$

150,000

 

 

$

144,375

 

         

Performance-based stock award

 

 

07/29/20

 

       

 

-  

 

 

 

30,000

 

 

 

36,000

 

   

$

236,100 

 

Time-based restricted stock award

 

 

07/29/20

 

             

 

30,000

 

 

$

236,100 

 

(1)    The amounts shown in these columns represent the Threshold, Target and Maximum payout levels under the fiscal 2021 NEO bonus plan. The actual bonus amount paid to each NEO for fiscal 2021 is reported under the “Non-Equity Incentive Plan (Bonus Plan)” column of the Summary Compensation Table on page 66.

(2)    The Company granted performance-based stock units (PSUs) under the 2004 Incentive Stock Plan on July 24, 2020 pursuant to which the shares vest upon achievement of pre-determined financial metrics including organic revenue growth for our Software & Subscription Services and Telematics Devices as well as gross margin improvement. The performance-based stock awards are allocated or weighted based on the relative importance of each performance metric towards stock price appreciation as determined by the Human Capital Committee. The awards have three measurement periods consisting of the six month period ended February 28, 2021, the twelve month period ending February 28, 2022, and the twelve month period ending February 28, 2023 with a final measurement period defined as the three year period ending February 28, 2024 to reward the NEOs for sustained, longer term performance. All equity awards that remain unvested after the final cumulative performance period are deemed forfeited by the executive. Additionally, the shares eligible for vesting during each of the first three performance periods are subject to downside and upside scaling based on actual financial performance against the pre-determined performance metric during the period. The fair value of the target PSUs is $7.87, which was the market close price.

 

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(3)    The restricted stock and stock option awards vest 25% annually on each anniversary of the grant date over four years, subject to continued service on the applicable vesting date except the award of 9,000 shares of restricted stock on May 1, 2020 to Mr. Gardner which vests in three consecutive monthly installments from the grant date.

(4)     The amounts shown represent the grant date fair value calculated in accordance with ASC 718. For the awards which are subject to performance-based conditions, the amounts shown are based on the probable outcome of the performance conditions. The assumptions used with respect to the valuation of these equity awards are set forth in Note 15 to the consolidated financial statements included in our Annual Report on Form 10-K, filed with the SEC on April 22, 2021.

OUTSTANDING EQUITY AWARDS AT THE END OF FISCAL 2021

The following table sets forth the outstanding equity awards of each of our NEOs as of the end of fiscal 2021. All outstanding option awards reported in this table expire 10 years from the date of grant and vest in equal annual installments over four years on each anniversary of the applicable grant date, with the exception of the performance-based option awards shown in the “Equity Incentive Plan Awards” column that are subject to both satisfaction of performance criteria and ratable vesting over four years.

 

          Option Awards     Stock Awards(1)  

Name and

Position

  Grant
Date
    Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
    Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
    Option
Exercise
Price ($)
    Option
Expiration
Date
    Number of
Shares of
Stock That
Have Not
Vested (#)
    Market
Value of
Shares of
Stock That
Have Not
Vested ($)
    Equity
Incentive Plan
Awards:

Number of
Unearned
Shares, Units
or Other Rights
that Have Not
Vested (#)
    Equity Incentive
Plan Awards:
Market or
Payout Value of

Unearned
Shares, Units or
Other Rights
that Have Not
Vested (#)
 

Jeffery Gardner

 

 

07/28/17

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

19.32

 

 

 

07/28/27

 

 

 

6,625

 

 

$

74,001

 

 

 

-  

 

 

$

-   

 

President and CEO

 

 

07/25/18

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

23.08

 

 

 

07/25/28

 

 

 

5,546

 

 

$

61,949

 

 

 

-  

 

 

$

-   

 

 

 

07/24/19

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

11.11

 

 

 

07/24/29

 

 

 

11,521

 

 

$

128,690

 

 

 

-  

 

 

$

-   

 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

-  

 

 

$

-  

 

 

 

80,000

 

 

$

893,600 

(2) 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

100,000

 

 

$

1,117,000

 

 

 

-  

 

 

$

-   

(3) 

                   

Kurtis Binder

 

 

07/17/17

 

 

 

23,025

 

 

 

7,675

 

 

 

23,180

 

 

 

19.30

 

 

 

07/17/27

 

 

 

7,125

 

 

$

79,586

 

 

 

-  

 

 

$

-  

 

Executive VP and CFO

 

 

07/25/18

 

 

 

13,800

 

 

 

13,800

 

 

 

20,000

 

 

 

23.08

 

 

 

07/25/28

 

 

 

12,400

 

 

$

138,508

 

 

 

-  

 

 

$

-  

 

 

 

07/24/19

 

 

 

14,073

 

 

 

42,221

 

 

 

-  

 

 

 

11.11

 

 

 

07/24/29

 

 

 

36,648

 

 

$

409,358

 

 

 

20,026

 

 

$

223,690

 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

-  

 

 

$

-  

 

 

 

40,000

 

 

$

446,800 

(2) 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

50,000

 

 

$

558,500

 

 

 

-  

 

 

$

-   

(3) 

                   

Arym Diamond

 

 

03/01/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

50,000

 

 

$

558,500

 

 

 

-  

 

 

$

-   

 

SVP and Chief Revenue Officer

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

-  

 

 

$

-  

 

 

 

24,000

 

 

$

268,080 

(2) 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

30,000

 

 

$

335,100

 

 

 

-  

 

 

$

-   

(3) 

                   

Anand Rau

 

 

07/28/17

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

1,911

 

 

$

21,346

 

 

 

-  

 

 

$

-   

 

SVP and Chief Technology Officer

 

 

07/25/18

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

3,250

 

 

$

36,303

 

 

 

-  

 

 

$

-   

 

 

 

11/15/18

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

4,000

 

 

$

44,680

 

 

 

-  

 

 

$

-   

 

 

 

07/24/19

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

20,454

 

 

$

228,471

 

 

 

7,451

 

 

$

83,228 

 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

-  

 

 

$

-  

 

 

 

24,000

 

 

$

268,080 

(2) 

 

 

07/29/20

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

N/A

 

 

 

30,000

 

 

$

335,100

 

 

 

-  

 

 

$

-   

(3) 

                   

 

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          Option Awards     Stock Awards(1)  

Name and

Position

  Grant
Date
    Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
    Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
    Option
Exercise
Price ($)
    Option
Expiration
Date
    Number of
Shares of
Stock That
Have Not
Vested (#)
    Market
Value of
Shares of
Stock That
Have Not
Vested ($)
    Equity
Incentive Plan
Awards:

Number of
Unearned
Shares, Units
or Other Rights
that Have Not
Vested (#)
  Equity Incentive
Plan Awards:
Market or
Payout Value of

Unearned
Shares, Units or
Other Rights
that Have Not
Vested (#)
 

Michael Burdiek

 

 

06/01/11

 

 

 

-  

 

 

 

-  

 

 

 

-  

 

 

 

3.22

 

 

 

06/01/21

 

 

 

-  

 

 

$

-  

 

 

-  

 

$

-  

 

Former President and CEO

 

 

07/31/12

 

 

 

33,000

 

 

 

-  

 

 

 

-  

 

 

 

7.53

 

 

 

07/31/22

 

 

 

-  

 

 

$

-  

 

 

-  

 

$

-  

 

 

 

07/25/13

 

 

 

33,200

 

 

 

-  

 

 

 

-  

 

 

 

15.14

 

 

 

07/25/23

 

 

 

-  

 

 

$

-  

 

 

-  

 

$

-  

 

 

 

07/29/14

 

 

 

35,500

 

 

 

-  

 

 

 

-  

 

 

 

17.47

 

 

 

07/29/24

 

 

 

-  

 

 

$

-  

 

 

-  

 

$

-  

 

 

 

07/28/15

 

 

 

49,300

 

 

 

-  

 

 

 

-  

 

 

 

17.54

 

 

 

07/28/25

 

 

 

-  

 

 

$

-  

 

 

-  

 

$

-  

 

 

 

07/26/16

 

 

 

139,000

 

 

 

-  

 

 

 

-  

 

 

 

14.49

 

 

 

07/26/26

 

 

 

-  

 

 

$

-  

 

 

-  

 

$

-  

 

 

 

07/28/17

 

 

 

38,940

 

 

 

12,980

 

 

 

19,600

 

 

 

19.32

 

 

 

07/28/27

 

 

 

12,050

 

 

$

134,599

 

 

-  

 

$

-  

 

 

 

07/25/18

 

 

 

26,600

 

 

 

26,600

 

 

 

9,700

 

 

 

23.08

 

 

 

07/25/28

 

 

 

24,200

 

 

$

270,314

 

 

-  

 

$

-  

 

   

 

07/24/19

 

 

 

28,670

 

 

 

86,013

 

 

 

-  

 

 

 

11.11

 

 

 

07/24/29

 

 

 

74,659

 

 

$

833,941

 

 

-  

 

$

-  

 

 

  (1)

Market value calculated based on the closing price of our common stock of $11.17 on February 26, 2021, the last trading day of our 2021 fiscal year.

 

  (2)

Performance-based stock units (PSUs) under the 2004 Incentive Stock Plan vest over three performance periods upon achieving the applicable financial targets. As of February 28, 2021, approximately 80% of performance-based awards are to be earned based on future performance goals.

 

  (3)

Time-based restricted stock under the 2004 Incentive Stock Plan vest annually on each anniversary of the grant date over four years.

OPTION EXERCISES AND STOCK VESTED IN FISCAL 2021

The following table sets forth the number of shares acquired upon exercise of options or vesting of shares (restricted stock and performance stock units) of each of our NEOs during the fiscal year ended February 28, 2021, and the associated value realized.

 

Name and Position

   Option Awards
Number of
Shares
Acquired On
Exercise (#)
     Value
Realized on
Exercise ($)(1)
     Stock Awards
Number of
Shares
Acquired On
Vesting (#)
     Value
Realized on
Vesting ($)(2)
 

Jeffery Gardner

           

President and CEO

  

 

-  

 

  

$

-  

 

  

 

6,000

 

  

$

47,220

 

           

Kurtis Binder

           

Executive EVP and CFO

  

 

-  

 

  

$

-  

 

  

 

25,540

 

  

$

192,928

 

           

Arym Diamond

           

SVP and Chief Revenue Officer

  

 

-  

 

  

$

-  

 

  

 

-  

 

  

 

-  

 

           

Anand Rau

           

SVP and Chief Technology Officer

  

 

-  

 

  

$

-  

 

  

 

15,029

 

  

$

115,388

 

           

Michael Burdiek

           

Fomer President and CEO

  

 

70,000

 

  

$

          414,100

 

  

 

66,486

 

  

$

          502,750

 

 

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(1)    Represents the aggregate of the market price at exercise, less the exercise price, for each option exercised.

(2)    Represents the value realized based on the closing price of our common stock on the vesting date multiplied by the number of shares vested.

NONQUALIFIED DEFERRED COMPENSATION

During fiscal 2014, we adopted a nonqualified deferred compensation plan (the “Deferred Compensation Plan”) in which our NEOs, certain other management employees and non-employee directors are eligible to participate. NEOs and other eligible employees can defer up to 75% of their base salary and up to 100% of their cash bonus. We do not make any contributions to the accounts of participants under the Deferred Compensation Plan. Amounts deferred under the Deferred Compensation Plan are generally paid upon a participant’s retirement or termination of employment, although distributions can occur earlier if the participant elects to receive his or her deferral on a fixed date prior to his or her retirement.

All of the investment options available under the Deferred Compensation Plan are equity, bond and money market mutual funds similar in nature to the investment choices available under our 401(k) defined contribution plan. Investment gains and losses in a participant’s account under the Deferred Compensation Plan are based solely upon the investment selections made by the participant.

Compensation deferral elections by non-employee directors are described under the heading “Compensation of Directors” on page 34. The following table presents each NEO’s contributions to this nonqualified deferred compensation plan, earnings thereon and fiscal year-end account balances for fiscal 2021. Messrs. Gardner, Binder and Diamond did not participate in the Deferred Compensation Plan in fiscal 2021.

 

    Executive
Contributions
in Last FY (1)
    Company
Contributions
in Last FY
    Aggregate
Earnings
(Losses) in
Last FY (2)
    Aggregate
Withdrawals/
Distributions
    Aggregate
Balance at
Last FYE (3)
 

Anand Rau

 

 

$176,986

 

 

$

                   -  

 

 

$

        158,192

 

 

$

              -   

 

 

$

804,663

 

SVP and Chief Technology Officer

         
         

Michael Burdiek

 

 

$  89,938

 

 

$

                  -  

 

 

$

469,162

 

 

$

(187,661)

 

 

$

   2,080,708

 

Fomer President and CEO

         

(1)    Amounts in this column are included in the Salary and/or Non-Equity Incentive Compensation Plan columns of the Summary Compensation Table on page 66.

(2)    These investment earnings are not included in the compensation amounts reported in the Summary Compensation Table on page 66.

(3)    Amount includes $1,610,088 Mr. Burdiek that were previously reported as salary or bonuses in the Summary Compensation Table of previously filed proxy statements.

EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS

We have entered into change in control and salary continuation agreements with the NEOs that are designed to protect such executives against the loss of their positions as a result of termination without Cause or termination for Good Reason both in conjunction and not in conjunction with a Change in Control, in which:

 

·  

“Cause” is defined as the occurrence or existence of any of the following with respect to the covered executive officer, as determined by a majority of the directors of the Board: (i) unsatisfactory performance of the officer’s duties or responsibilities, after written notice and reasonable opportunity to cure; (ii) willful failure to follow any

 

71


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lawful directive of the Company or Board consistent with the officer’s position and duties, after written notice and reasonable opportunity to cure; (iii) material breach by the officer of his duty not to engage in any transaction that represents, directly or indirectly, self-dealing with the Company or any of its affiliates that has not been approved by a majority of the disinterested directors of the Board; (iv) commission of any willful or intentional act that could reasonably be expected to materially injure the property, reputation, business or business relationships of the Company or its customers; or (v) the conviction or the plea of “no contest” to a felony involving moral turpitude;

 

·  

“Good Reason” is defined as (i) a material change or reduction in the officer’s authority, duties and responsibilities following a Change in Control; (ii) transfer of the officer to another work location that is materially further away from the officer’s current primary residence than the officer’s current work location; or (iii) a material reduction in the officer’s base salary made without the officer’s consent; and

 

·  

“Change in Control” is defined as the first to occur of: (i) the sale or other transfer of all or substantially all of the assets of the Company to any person or group; (ii) the adoption of a plan of liquidation or dissolution of the Company; (iii) the merger or consolidation of the Company with or into another entity, or the merger of another entity into the Company or any subsidiary of the Company, in each case with the effect that immediately after the transaction the stockholders of the Company hold less than 50% of the total voting power of all securities entitled to vote in the election of directors, managers or trustees of the entity surviving such merger or consolidation; or (iv) the acquisition by any person or group of more than 50% of the voting power of all securities of the Company entitled to vote in the election of directors of the Company.

If a NEO is terminated without Cause or terminated with Good Reason not in conjunction with a Change in Control, the NEO is entitled to severance in the form of continuation of payments of base salary for six months and COBRA premiums for 12 months in the case of Messrs. Gardner, Binder, Diamond and Rau. In addition, pursuant to a termination as described in this paragraph, these executives’ unvested equity awards would continue to vest for a period of six months following such termination. For illustrative purposes, if these provisions had been triggered as of the end of fiscal 2021, the value of the continued post-employment salary, COBRA premium benefits and vesting of equity awards for each of these NEOs would have been as follows:

 

Name and Position

   Continuous
Salary
     COBRA
Premium Benefits
     Value of Continued Post -
Employment Vesting
 

Jeffery Gardner, President and CEO

  

$

        257,500

 

  

$

        20,226

 

  

$

                         547,732

 

Kurtis Binder, Executive VP and CFO

  

$

185,000

 

  

$

20,226

 

  

$

424,907

 

Arym Diamond, SVP and Chief Revenue Officer

  

$

150,000

 

  

$

20,226

 

  

$

223,400

 

Anand Rau, SVP and Chief Technology Officer

  

$

150,000