globalscape-def14a040214.htm

Proxy Statement

For

Annual Meeting of Stockholders

To Be Held Wednesday May 14, 2014

Table of Contents

	Page

PROXY STATEMENT	3
Date, Time, Place of Annual Meeting	3
Record Date, Shares Entitled to Vote, Quorum	3
Attendance and Voting by Proxy	4
Revocation of Proxy	5
Quorum; Vote Requirements	5
Solicitation of Proxies	6
PROPOSAL ONE ELECTION OF DIRECTORS	7
Directors with Terms Expiring in 2015 and 2016	8
Executive Officers	9
Board Meetings and Attendance	10
Board Leadership Structure	10
Board Independence	10
Committees of the Board of Directors	10
Risk Management	11
Code of Ethics	11
Stockholder Communications with Board	12
Nominations	12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	14
Equity Compensation Plan Information	15
Section 16(a) Beneficial Ownership Reporting Compliance	15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	15
Transactions in 2011	15
Policy Related to Related-Person Transactions	15
EXECUTIVE COMPENSATION	17
Compensation Discussion & Analysis	17
Our Compensation Committee	17
Compensation Philosophy and Objectives	17
Elements of Executive Compensation	18
Compensation Committee Report	21
Summary Compensation Table	22

Table of Contents

Relationship of Salary and Annual Incentive Compensation to Total Compensation	23
Employment Agreements and Potential Payments Upon Termination or Change in Control	23
Outstanding Equity Awards at Fiscal-Year End	26
Pension Benefits	26
Non-Qualified Deferred Compensation	27
Compensation of Directors	27
PROPOSAL TWO RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	29
PRINCIPAL AUDITOR FEES AND SERVICES	29
AUDIT COMMITTEE PRE-APPROVAL POLICY	30
AUDIT COMMITTEE REPORT	30
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING	31
AVAILABLE INFORMATION	31
OTHER MATTERS	32

Table of Contents

PROXY STATEMENT

General

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of GlobalSCAPE, Inc. (“GlobalSCAPE” or the “Company”) of proxies from the stockholders of GlobalSCAPE to be used at GlobalSCAPE’s 2014 Annual Meeting of Stockholders. In accordance with Securities and Exchange Commission rules, instead of mailing a printed copy of our Proxy Statement, annual report and other materials relating to the Annual Meeting to stockholders, we intend to mail a Notice of Internet Availability of Proxy Materials, which advises that the proxy materials are available on the Internet to stockholders. We intend to commence distribution of the Notice of Internet Availability on or about April 3, 2014. Stockholders receiving a Notice of Internet Availability by mail will not receive a printed copy of proxy materials unless they so request. Instead, the Notice of Internet Availability will instruct stockholders as to how they may access and review proxy materials on the Internet. Stockholders who receive a Notice of Internet Availability by mail who prefer to receive a printed copy of our proxy materials, including a proxy card or voting instruction card, should follow the instructions for requesting these materials included in the Notice of Internet Availability.

This process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. If you previously elected to receive our proxy materials electronically, you will continue to receive these materials by e-mail unless you elect otherwise. However, if you prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability.

Date, Time, Place of Annual Meeting

GlobalSCAPE’s 2014 Annual Meeting of Stockholders will be held at 9:00 a.m., Central Daylight Time, on May 14, 2014, at GlobalSCAPE’s office at 4500 Lockhill-Selma Road, Suite 150, San Antonio, Texas 78249. Please call us at (210) 308-8267, ext. 100, if you need assistance with directions to our office.

Record Date, Shares Entitled to Vote, Quorum

GlobalSCAPE’s Board of Directors has fixed the close of business on March 21, 2014 as the record date for GlobalSCAPE stockholders entitled to notice of and to vote at the annual meeting. As of the record date, there were 20,048,817 shares of GlobalSCAPE common stock outstanding, which were held by approximately 1,901 holders of record. Stockholders are entitled to one vote for each share of GlobalSCAPE common stock held as of the record date.

The holders of a majority of the outstanding shares of GlobalSCAPE common stock issued and entitled to vote at the annual meeting must be present in person or by proxy to establish a quorum for business to be conducted at the annual meeting. Whether you attend the meeting in person, sign and return the proxy card or vote via the Internet or telephone, your shares will be counted as present at the meeting. Abstentions and broker non-votes are included for purposes of determining whether a quorum is present at the annual meeting. If you own shares through a bank or broker in street name, you may instruct your bank or broker how to vote your shares. A “broker non-vote” occurs when you fail to provide your bank or broker with voting instructions and the bank or broker does not have the discretionary authority to vote your shares on a particular proposal because the proposal is not a routine matter under the New York Stock Exchange rules. Please consider the following voting matters specific to each proposal on the ballot:

Proposal 1 (election of directors) is not considered a routine matter under current New York Stock Exchange rules. Your bank or broker will not have discretionary authority to vote your shares held in street name on this item. A broker non-vote may also occur if your broker fails to vote your shares for any reason.

·	Proposal 2 (ratification of the appointment of our independent registered public accounting firm) is considered a routine matter under the New York Stock Exchange rules. Your bank or broker will have discretionary authority to vote your shares held in street name on that Proposal.

Table of Contents

If sufficient votes for approval of the matters to be considered at the annual meeting have not been received prior to the meeting date, GlobalSCAPE may postpone or adjourn the annual meeting in order to solicit additional votes. The form of proxy being solicited by this Proxy Statement provides the authority for the proxy holders, in their discretion, to vote the stockholders’ shares with respect to a postponement or adjournment of the annual meeting. At any postponed or adjourned meeting, proxies received pursuant to this Proxy Statement will be voted in the same manner described in this Proxy Statement with respect to the original meeting.

Stockholders of Record and Beneficial Owners

Many of our stockholders hold their shares through a stockbroker, bank, or other agent rather than directly in their own names. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholder of Record. If your shares are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, LLC, you are considered the stockholder of record with respect to those shares. Access to our proxy materials is being provided directly to you by us. As a stockholder of record, you have the right to grant your voting proxy directly to us or to vote in person at the meeting.

Beneficial Owner. If your shares are held in a stock brokerage account or by a bank, you are considered the beneficial owner of the shares held in “street name.” Access to these proxy materials is being provided by your broker who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker on how to vote and are also invited to attend the meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the meeting. Your broker or nominee has enclosed a voting instruction card for your use.

Attendance and Voting by Proxy

If you are a stockholder whose shares are registered in your name, you may vote your shares by one of the following four methods:

·	Vote in person, by attending the Annual Meeting. We can give you a proxy card or a ballot when you arrive, if requested.

·	Vote by Internet, by going to the web address, http://www.proxypush.com/gsb, and following the instructions for Internet voting.

·	Vote by Telephone, by calling 866-390-5419

·	Vote by Mail, by completing, signing, dating, and mailing the proxy card mailed to you in the envelope provided. If you vote by Internet, please do not mail your proxy card.

The deadline for voting electronically on the Internet is 11:59 p.m., Eastern Time, on May 13, 2014. If you vote by mail, your signed proxy card must be received before the annual meeting to be counted at the annual meeting.

If your shares are held in “street name” (through a broker, bank, or other agent), you should have received a separate voting instruction form or you may vote by telephone or on the Internet as instructed by your broker or bank.

PLEASE NOTE THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER AGENT AND YOU WANT TO VOTE AT THE MEETING, YOU MUST FIRST OBTAIN A LEGAL PROXY ISSUED IN YOUR NAME FROM THE RECORD HOLDER. YOU WILL NOT BE PERMITTED TO VOTE IN PERSON AT THE MEETING WITHOUT THE LEGAL PROXY.

The proxies identified on the back of the proxy card will vote the shares of which you are stockholder of record in accordance with your instructions. If you sign and return your proxy card without giving specific voting instructions, the proxies will vote your shares as follows:

·	“FOR” the nominated slate of directors.

·	“FOR” the ratification of the selection of Grant Thornton LLP as GlobalSCAPE’s independent registered public accounting firm for the fiscal year ending December 31, 2014.

Table of Contents

The giving of a proxy will not affect your right to vote in person if you decide to attend the meeting.

If any matters other than those addressed on the proxy card are properly presented for action at the Annual Meeting, the persons named in the proxy card will have the discretion to vote on those matters in their best judgment unless authorization is withheld.

Revocation of Proxy

Whether you vote by Internet, by telephone, or by mail, you may change or revoke your proxy before it is voted at the meeting by:

·	Submitting a new proxy card bearing a later date.

·	Voting again by the Internet at a later time.

·	Giving written notice before the meeting to our Secretary at the address set forth on the cover of this Proxy Statement stating that you are revoking your proxy.

·	Attending the meeting and voting your shares in person.

Please note that your attendance at the meeting will not alone serve to revoke your proxy.

Quorum; Vote Requirements

Election of Directors

Directors are elected by a plurality of the votes of the holders of shares of common stock present in person or by proxy and entitled to vote on the election of directors. Under Delaware law, votes that are withheld from a director’s election will be counted toward a quorum but will not affect the outcome of the vote on the election of a director. Abstentions and broker non-votes will not be taken into account in determining the outcome of the election. Unless otherwise instructed or unless authority to vote is withheld, the proxy card accompanying these materials will be voted FOR election of each of the director nominees

Ratification of Appointment of Independent Registered Public Accounting Firm

With respect to Proposal Two, the ratification of the appointment of the Company’s independent registered public accounting firm, an abstention is treated as entitled to vote and, therefore, has the same effect as voting “against” the proposal. Since this proposal is considered a “routine” matter, brokers will be permitted to vote on behalf of their clients if no voting instructions are furnished. Unless otherwise instructed or unless authority to vote is withheld, the proxy card accompanying these materials will be voted FOR the ratification of Grant Thornton LLP as the Company’s independent registered public accounting firm for fiscal year 2014.

Other Matters

The required vote to approve any matter other than the election of directors is the affirmative vote by the holders of a majority of the total number of shares of common stock present in person or by proxy and entitled to vote on the matter.

Table of Contents

Important Note Regarding NYSE Rules

If a broker does not receive instructions from the beneficial owner of shares held in street name for certain types of proposals, the broker must indicate on the proxy that it does not have authority to vote such shares (a “broker non-vote”) as to such proposals. Under the rules of the New York Stock Exchange, if your broker does not receive instructions from you, your broker will not be able to vote your shares in the election of directors. Therefore, it is important that you provide voting instructions to your broker.

Solicitation of Proxies

Proxies will be solicited by mail and the Internet. Proxies may also be solicited personally, or by telephone, fax, or other means by the directors, officers, and employees of GlobalSCAPE. Directors, officers, and employees soliciting proxies will receive no extra compensation but may be reimbursed for related out-of-pocket expenses. GlobalSCAPE will make arrangements with brokerage houses and other custodians, nominees, and fiduciaries to send the proxy materials to beneficial owners. GlobalSCAPE will, upon request, reimburse these brokerage houses, custodians, and other persons for their reasonable out-of-pocket expenses in doing so. GlobalSCAPE will pay the cost of solicitation of proxies.

Table of Contents

PROPOSAL ONE

ELECTION OF DIRECTORS

GlobalSCAPE’s Articles of Incorporation divide the Board of Directors into three classes of directors serving staggered three-year terms, with one class to be elected at each annual meeting of stockholders. At this year’s meeting, two Class II directors are to be elected for a term of three years, to hold office until the expiration of their term in 2017, or until a successor shall have been elected and shall have qualified. The nominees are David L. Mann and James L. Bindseil. Mr. Mann and Mr. Bindseil are currently Class II directors. Mr. Mann is not an officer of GlobalSCAPE. Mr. Bindseil is President and Chief Executive Officer of GlobalSCAPE.

Assuming the presence of a quorum, the nominees for director who receive the most votes will be elected. The enclosed form of proxy provides a means for stockholders to vote for or to withhold authority to vote for the nominees for director. If a stockholder executes and returns a proxy, but does not specify how the shares represented by such stockholder’s proxy are to be voted, such shares will be voted FOR the election of the nominee for director. In determining whether this item has received the requisite number of affirmative votes, abstentions, and broker non-votes will not be counted and will have no effect.

The Board of Directors recommends a vote “FOR” the election of the nominees to the Board of Directors.

The following table sets forth the name and age of the nominee as of the mailing date of this Proxy Statement, the principal occupation of the nominee during at least the past five years, and the year each began serving as a director of GlobalSCAPE:

Name	Age
David L. Mann	64	Mr. Mann has been in the real estate development and home building business since his graduation from Southern Methodist University in 1975 where he earned a B.B.A. For the past twenty years, he has worked exclusively in the San Antonio, Texas market. Mr. Mann currently serves as a member of the Board of Directors of GlobalSCAPE and has served in such capacity since June 2002. Mr. Mann has broad business and finance experience and is our second largest stockholder. Mr. Mann’s term as a director of GlobalSCAPE expires in 2014.
James L. Bindseil	49	Mr. Bindseil was named to the Board of Directors in December 2013 to fill the vacancy left after the passing of Craig Robinson. His term as a director expires in 2014. For more information about Mr. Bindseil, see below under “Executive Officers.”

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE INDIVIDUALS NOMINATED ABOVE AS DIRECTORS.

Table of Contents

Directors with Terms Expiring in 2015 and 2016

The following table sets forth the name and age of each director as of the mailing date of this Proxy Statement, the principal occupation of each director during at least the past five years and the year each began serving as a director of GlobalSCAPE.

Name	Age

Thomas W. Brown	70	Mr. Brown has been an independent stockbroker and investment advisor in San Antonio since 1995. He entered the securities brokerage business in 1967 after receiving an M.B.A. from Southern Methodist University. In recent years, he has also been involved in the real estate development business in San Antonio in addition to managing stock and bond investments. Mr. Brown currently serves as a member and Chairman of the Board of Directors of the Company and has served in such capacity since June 2002. Mr. Brown is an experienced investor and our largest stockholder. Mr. Brown’s term as a director of GlobalSCAPE expires in 2015.
Phillip M. Renfro	68	Mr. Renfro is a retired partner of the law firm of Fulbright and Jaworski, L.L.P., where from 1983 to 2005, he was division head of the Corporate, Business, and Banking Section in the firm’s San Antonio, Texas office. Prior to his career in corporate law, from 1980 to 1983, he was President and CEO of Resco International, Inc., an oil field service Company. From 2004 to 2009, Mr. Renfro served on the board of Enzon Pharmaceuticals, Inc., a publicly-traded biotech company, where he was also a member of the Audit Committee and the Governance and Nominating Committee. The Company believes that Mr. Renfro’s legal, financial and business experience, including a diversified background of managing and directing companies, give him the qualifications and skills to serve as a director. In addition, as a former member of Enzon’s audit committee and as a corporate and securities attorney, Mr. Renfro has extensive financial reporting and corporate governance experience. Mr. Renfro’s term as director of GlobalSCAPE expires in 2016.
Frank M. Morgan	65	Mr. Morgan is currently Executive Director, Cyber Security, for ManTech International’s MCTS Group. From 2005 to 2010, Mr. Morgan served as the Vice President and General Manager of the Information Systems Business Unit and Intelligence Solutions Division, of L-3 Communications Services Group, managing offices in Reston, Virginia, Colorado Springs, Colorado, and San Antonio, Texas. He held a similar position with Titan Corporation from 2001 to 2005 before its acquisition by L-3. From 1996 to 2001, Mr. Morgan worked for BTG, Inc. (acquired by Titan Corp.), a publicly traded software development Company and computer security product value-added reseller. As Vice President of federal sales, Mr. Morgan was responsible for marketing security products across the federal government. Mr. Morgan spent 30 years in the Air Force, retiring in 1996 as a Colonel. His assignments included three tours at the Pentagon in both operations and acquisitions. He holds a B.S. in Aeronautical Engineering from the Air Force Academy, a M.S. in Human Resources Management from the University of Utah, and a M.A. in National Security and Strategic Studies from the Naval War College. Mr. Morgan’s business experience, particularly his experience in the software industry and in government sales, provides valuable insight to our board. Mr. Morgan’s term as director of GlobalSCAPE expires in 2016.

Table of Contents

Executive Officers

The following table sets forth the name, age, and position of each of our executive officers as of the mailing date of this Proxy Statement and the principal occupation of each executive officer during the past five years. Throughout this Proxy Statement, we refer to these persons collectively as our named executive officers, or NEOs.

Name	Age	Position

James L. Bindseil	49	President and Chief Executive Officer	Mr. Bindseil is GlobalSCAPE’s President and Chief Executive Officer. He became Interim President in September 2013 and was appointed to his current position in December 2013. He is responsible for integrating and enhancing GlobalSCAPE’s business and technical operations across all functions and markets. Mr. Bindseil has more than 20 years of experience leading and delivering IT professional services and support for all sizes of both domestic and international businesses. Prior to joining GlobalSCAPE, from January 2009 to July 2010, Mr. Bindseil served as Vice President of Solutions Engineering and Marketing for Enterprise Business Services at Fujitsu America. Previously, from July 1999 to December 2008, he was Senior Global Technical Director for the Security Services line of business at Symantec. He also served honorably in the United States Marine Corps. Mr. Bindseil graduated with honors from the University of Phoenix with a Bachelor of Arts degree in Management and has an Associate of Arts degree in Mathematics. He also has professional certifications from Hewlett Packard, Cisco Systems, and Microsoft, and is a Certified Information Systems Security Professional (CISSP).
James W. Albrecht, Jr.	59	Chief Financial Officer	Mr. Albrecht has served as GlobalSCAPE’s Chief Financial Officer since July 2012. He is responsible for our finance, accounting and treasury activities. Before joining GlobalSCAPE, from 2008 to 2012, Mr. Albrecht was Chief Executive Officer and Chief Financial Officer of Photoreflect.com, an Internet-based company that provided an online display and selling portal for professional photographers. From 1995 to 2008, Mr. Albrecht was Chief Financial Officer of Introgen Therapeutics, Inc., a biotechnology company developing gene therapies for the treatment of cancer, where he was part of the team that managed that company’s initial public offering in 2000 and subsequent trading and reporting as a public company listed on NASDAQ. He began his career at Arthur Andersen LLP where he served clients for eleven years. Mr. Albrecht regularly lectures as a faculty member at The University of Texas at Austin where he received a B.B.A. in Accounting.
Matthew C. Goulet	41	Vice President of Sales	Mr. Goulet has served as GlobalSCAPE’s Vice President of Sales since October 2013. He has more than 16 years of experience in the security, networking, and storage industries. From 2008 to September 2013, he was at Kaspersky Labs, an information technologies security company, most recently as the Vice President of SME sales and operations, where he helped build Kaspersky’s reseller channel.

Table of Contents

Board Meetings and Attendance

During the fiscal year ended December 31, 2013, the Board of Directors held ten meetings. Separate from the full Board of Directors’ meetings, there were two Audit Committee meetings, one Compensation Committee meeting and two Nominating and Governance Committee meetings. During 2013, each director attended at least 75% of all Board and applicable Committee meetings. During 2013, our directors, received compensation for service to GlobalSCAPE as a director. See “Executive Compensation – Compensation of Directors.” GlobalSCAPE encourages, but does not require, directors to attend the annual meeting of stockholders. At GlobalSCAPE’s 2013 Annual Meeting, all members of the Board were present.

Board Leadership Structure

The Board believes it is in the best interests of the Company to separate the roles of Chief Executive Officer and Chairman of the Board. This structure ensures a greater role for the directors in the oversight of management and the Company and promotes active participation of the directors in setting meeting agendas and establishing Board priorities and procedures. Further, this structure permits the chief executive officer to focus on the management of the Company's day-to-day operations.

Board Independence

A majority of the Board has determined that Messrs. Mann, Morgan and Renfro are independent as determined in accordance with the listing standards of the NYSE MKT LLC and the Exchange Act3. All members of the Audit and Compensation Committees are “independent,” as currently defined by the Securities and Exchange Commission and the listing standards of the NYSE MKT LLC.

Committees of the Board of Directors

GlobalSCAPE has standing Audit and Compensation Committees. In 2014, GlobalSCAPE assigned the responsibilities of the Nominating and Governance Committee to the Board of Directors as a whole and disbanded that committee.

The Audit Committee is a separately-designated audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee consisted of Messrs. Mann, Morgan and Renfro in 2013 and Messrs. Mann and Morgan beginning in January 2014. Mr. Renfro served as the Audit Committee Chairman from 2006 to December 2013. Mr. Mann began service as Audit Committee Chairman in January 2014. This committee met two times during 2013. The Board has determined that Mr. Mann is an audit committee financial expert as defined by SEC rules. The Audit Committee aids management in the establishment and supervision of our financial controls, evaluates the scope of the annual audit, reviews audit results, makes recommendations to our Board regarding the selection of our independent registered public accounting firm, consults with management and our independent registered public accounting firm prior to the production of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of our financial affairs. The Audit Committee Report, which appears in a subsequent section of this document, more fully describes the activities and responsibilities of the Audit Committee.

The Compensation Committee consisted of Messrs. Mann, Morgan and Renfro in 2013 and Messrs. Mann and Morgan beginning in January 2014. Mr. Morgan began service as Compensation Committee Chairman in January 2014. This committee met one time during 2013. The Compensation Committee’s role is to establish and oversee GlobalSCAPE’s compensation and benefit plans and policies, administer its stock option plans, and review and approve annually all compensation decisions relating to GlobalSCAPE’s executive officers. At least annually, our President and Chief Executive Officer submits to the Compensation Committee his recommendations as to base salary, bonus and equity incentives awards for each executive officer, except himself, for the following fiscal year based upon his subjective evaluation of their individual performance. The Compensation Committee reviews and discusses the recommendations and has the sole authority to determine the base salary, bonus, and equity incentives for the President and Chief Executive Officer.

Table of Contents

The agenda for meetings of the Compensation Committee is determined by its Chairman. At each meeting, the Compensation Committee meets in executive session. The Compensation Committee’s Chairman reports the Committee’s recommendations on executive compensation to the Board. The Company’s personnel support the Compensation Committee in its duties and, along with the President and Chief Executive Officer, may be delegated authority to fulfill certain administrative duties regarding the compensation programs. The Compensation Committee has authority under its charter to retain, approve fees for and terminate advisors, consultants, and agents as it deems necessary to assist in the fulfillment of its responsibilities.

The Nominating and Governance Committee, which consisted of Messrs. Mann, Morgan, and Renfro met two times during 2013. The primary function of the Nominating and Governance Committee was to assist the Board in identifying, screening, and recruiting qualified individuals to become Board members and determining the composition of the Board and its committees, including recommending nominees for annual stockholders meetings or to fill vacancies on the Board. In January 2014, the Board of Directors determined that the activities and responsibilities of the Nominating and Governance Committee could be effectively executed and managed by the Board of Directors as a whole. Accordingly, the Nominating and Governance Committee was disbanded at that time.

Each of the Board’s committees has a written charter. Copies of the charters are available for review on the Company’s website at www.globalscape.com on the Investor Relations page.

Risk Management

The Company has a risk management program overseen by its president and chief executive officer and the chief financial officer. Material risks are identified and prioritized by management. Each prioritized risk is referred to a Board committee or the full Board for oversight.

The Board reviews information regarding the Company's credit, liquidity, and operations, as well as the risks associated with each. The Board also reviews and approves the annual operating budget of the Company. Because we rely on cash on hand and cash flows from operations to fund our operations, the Board as a whole devotes significant time to reviewing and approving our levels of indebtedness, contractual obligations and research and development spending. While each committee is responsible for specific risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks. In addition, the Compensation Committee periodically reviews the most important risks to the Company to ensure that compensation programs do not encourage excessive risk taking.

Compensation Committee Interlocks and Insider Participation

Messrs. Mann, Morgan and Renfro served on the Compensation Committee during 2013. No member of the Compensation Committee was at any time during 2013, or any other time, an officer or employee of GlobalScape or had any relationship with GlobalScape requiring disclosure as a related-party transaction in the section “Certain Relationships and Related Transactions” of this proxy statement. No executive officer of GlobalScape has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board of Directors or the Compensation Committee during 2013.

Code of Ethics

GlobalSCAPE has adopted a Code of Ethics that applies to all of its employees, including the president and chief executive officer and its chief financial officer. This Code is a statement of GlobalSCAPE’s high standards for ethical behavior, legal compliance, and financial disclosure. It is applicable to all directors, officers, and employees. A copy of the Code of Ethics can be found in its entirety on GlobalSCAPE’s website at www.globalscape.com. Should there be any changes to, or waivers from, GlobalSCAPE’s Code of Ethics, those changes or waivers will be posted immediately on our website at the address noted above.

Table of Contents

Stockholder Communications with Board

The Board of Directors has a process by which stockholders may communicate with the Board of Directors. Any stockholder desiring to communicate with the Board of Directors may do so in writing by sending a letter addressed to The Board of Directors, c/o The Corporate Secretary. The Corporate Secretary has been instructed by the Board to promptly forward communications so received to the members of the Board of Directors.

Nominations

The Board of Directors is responsible for determining the slate of director nominees for election by stockholders. All director nominees are approved by the Board prior to annual proxy material preparation and are required to stand for election by stockholders at the next annual meeting. For positions on the Board created by a director’s leaving the Board prior to the expiration of his current term, whether due to death, resignation, or other inability to serve, Article III of the Company’s Amended and Restated Bylaws provides that a director elected by the Board to fill a vacancy shall be elected for the unexpired term of his predecessor in office. In December 2013, the Board elected Mr. Bindseil to fill the Board vacancy resulting from the untimely and unexpected death of Craig A. Robinson. Mr. Bindseil’s term on the Board expires in 2014.

The Board of Directors does not currently use any third-party search firm to assist in the identification or evaluation of Board member candidates. The Board of Directors may engage a third party to provide such services in the future, as it deems necessary or appropriate at the time in question.

The Board of Directors determines the required selection criteria and qualifications of director nominees based upon the needs of the Company at the time nominees are considered. A candidate must possess the ability to apply good business judgment and must be in a position to properly exercise his duties of loyalty and care. Candidates should also exhibit proven leadership capabilities, high integrity, experience with a high level of responsibility within their chosen fields, and have the ability to quickly understand complex principles of, but not limited to, business and finance. Candidates with potential conflicts of interest or who do not meet this criteria will be identified and disqualified. The Board of Directors will consider these criteria for nominees identified by the Board, by stockholders, or through some other source. When current Board members are considered for nomination for reelection, the Board of Directors also takes into consideration the member’s prior Board contributions, performance, and meeting attendance records.

The Board of Directors will consider qualified candidates for possible nomination that are recommended by stockholders, for possible nomination. Stockholders wishing to make such a recommendation may do so by sending the following information to the Board of Directors, c/o Corporate Secretary, at the address listed above: (1) name of the candidate with brief biographical information and résumé; (2) contact information for the candidate and a document evidencing the candidate’s willingness to serve as a director if elected; and (3) a signed statement as to the submitting stockholder’s current status as a stockholder and the number of shares currently held. Any such nomination must comply with the advance notice provisions of our Amended and Restated Bylaws. These provisions are summarized under “Stockholder Proposals to be Presented at Next Annual Meeting” in a subsequent section of this document.

The Board of Directors conducts a process of making a preliminary assessment of each proposed nominee based upon the résumé and biographical information, an indication of the individual’s willingness to serve and other background information. This information is evaluated against the criteria set forth above as well as the specific needs of the Company at that time. Based upon a preliminary assessment of the candidate(s), those who appear best suited to meet the needs of the Company may be invited to participate in a series of interviews, which are used for further evaluation. The Board of Directors uses the same process for evaluating all nominees, regardless of the original source of the information. The Company does not have a formal policy with regard to the consideration of diversity in identifying director nominees, but the Board of Directors strives to nominate directors with a variety of complementary skills so that, as a group, the Board will possess the appropriate talent, skills, and expertise to oversee the Company's businesses.

No candidates for director nominations were submitted to the Board of Directors by any stockholder in connection with the 2014 Annual Meeting.

Table of Contents

Composition of the Board of Directors

The Company believes that its Board as a whole should encompass a range of talent, skill, diversity, experience and expertise enabling it to provide sound guidance with respect to the Company’s operations and business goals. In addition to considering a candidate’s background and accomplishments, candidates are reviewed in the context of the current composition of the Board and the evolving needs of the Company. The Company’s policy is to have at least a majority of its directors qualify as “independent” as determined in accordance with the listing standards of the NYSE MKT LLC and Rule 10A-3 of the Exchange Act. The Board of Directors identifies candidates for election to the Board of Directors and reviews their skills, characteristics and experience.

The Board of Directors seeks directors with strong reputations, high integrity and experience in areas relevant to the strategy and operations of the Company, particularly in the high technology industry and complex business and financial dealings. The Board of Directors also believes that each nominee and current director has other key attributes that are important to an effective board including the ability to engage management in a constructive and collaborative fashion and a diversity of background, experience and thought.

Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding ownership of our common stock as of March 21, 2014 by (i) each person known by GlobalSCAPE to be the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each director of GlobalSCAPE, (iii) the President and Chief Executive Officer, (iv) each of the named executive officers of GlobalSCAPE, and (v) all executive officers and directors of GlobalSCAPE as a group. Unless otherwise indicated in the footnotes below, each of the named persons has sole voting and investment power with respect to the shares shown as beneficially owned.

Applicable percentage ownership is based on 20,048,817 shares of common stock outstanding at March 21, 2014. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of common stock subject to options or restricted stock held by that person that are currently exercisable or will vest or are exercisable within 60 days of March 21, 2014.

The address of each beneficial owner listed in the table below is c/o GlobalSCAPE, Inc., 4500 Lockhill-Selma Rd, Suite 150, San Antonio, Texas, 78249.

Shares Beneficially Owned
								Additional
				Common Shares				Common Shares
	Common			That May Be				That May Be
	Shares			Acquired By				Acquired within		Total
	Currently			Exercise of		Total Common		60 Days of		Beneficial		Percentage
	Owned			Stock Options		Shares Held		March 21, 2014		Ownership		of
Name of Beneficial Owner	(# of shares)			(# of shares)		(# of shares)		(# of shares)		(# of shares)		Class
Thomas W. Brown		5,748,103	(1) (2)		40,000		5,788,103		-		5,788,103		28.81	%
David L. Mann		1,797,243	(2)		40,000		1,837,243		-		1,837,243		9.15	%
Phillip M. Renfro		94,520	(2)		40,000		134,520		-		134,520		0.67	%
Frank M. Morgan		74,520	(2)		40,000		114,520		-		114,520		0.57	%
James L. Bindseil		-			94,800		94,800		-		94,800		0.47	%
James W. Albrecht, Jr.		-			49,500		49,500		-		49,500		0.25	%
Matthew C. Goulet		-			-		-		-		-		0.00	%

All directors and executive officers as a group (6 persons)							8,018,686		-		8,018,686		39.40	%

(1) Includes 650 shares owned by Mr. Brown’s spouse. Mr. Brown disclaims beneficial ownership of the shares owned by his spouse.

(2) Includes 20,000 shares of restricted common stock.

Table of Contents

Equity Compensation Plan Information

The following table provides aggregate information regarding grants under all equity compensation plans of GlobalSCAPE through December 31, 2013.

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 Available for Future Issuance under Equity Compensation Plans (Excluding securities Reflected in Column (A))

(A)

(B)

(C)

Equity compensation plans approved by security holders

3,117,745

1.92

1,745,040

Section 16(a) Beneficial Ownership Reporting Compliance

GlobalSCAPE believes, based solely on its review of the copies of Section 16(a) forms furnished to it and written representations from executive officers and directors (and its ten percent stockholders), that all Section 16(a) filing requirements were fulfilled on a timely basis except that Mr. Mann reported the sale under Rule 144 of 100,000 shares in December 2013 on a Form 5 filed on February 14, 2014 that should have been reported on a Form 4.

In making this disclosure, GlobalSCAPE has relied solely on written representations of its directors and executive officers (and its ten percent stockholders) and copies of the reports that they have filed with the SEC.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions in 2013

Robert Langenbahn, an Enterprise Sales Manager, earned $278,660 in base salary and commissions in 2013. Mr. Langenbahn is the son-in-law of Thomas W. Brown, our Chairman of the Board. Mr. Langenbahn’s compensation plan is comparable to and consistent with other GlobalSCAPE employees who hold a similar position.

Policy Related to Related-Person Transactions

Our Board of Directors has adopted a formal, written related-person transaction approval policy, setting forth GlobalSCAPE’s policies and procedures for the review, approval, or ratification of “related-person transactions.” For these purposes, a “related person” is a director, nominee for director, executive officer, or holder of more than 5% of our common stock, or any immediate family member of any of the foregoing. This policy applies to any financial transaction, arrangement, or relationship or any series of similar financial transactions, arrangements, or relationships in which GlobalSCAPE is a participant and in which a related person has a direct or indirect interest, other than the following:

·	Payment of compensation by GlobalSCAPE to a related person for the related person’s service in the capacity or capacities that give rise to the person’s status as a “related person”.

·	Transactions available to all employees or all stockholders on the same terms.

·	Purchases of supplies from GlobalSCAPE in the ordinary course of business at the same price and on the same terms as offered to our other customers, regardless of whether the transactions are required to be reported in GlobalSCAPE’s filings with the SEC.

·	Transactions, which when aggregated with the amount of all other transactions between the related person and GlobalSCAPE, involve less than $5,000 in a fiscal year.

Table of Contents

Our Audit Committee is required to approve any related person transaction subject to this policy before commencement of the related-person transaction, provided that if the related person transaction is identified after it commences, it shall be brought to the Audit Committee for ratification, amendment, or rescission. The Chairman of our Audit Committee has the authority to approve or take other actions with respect to any related-person transaction that arises, or first becomes known, between meetings of the Audit Committee, provided that any action by the Chairman must be reported to our Audit Committee at its next regularly scheduled meeting.

Our Audit Committee will analyze the following factors, in addition to any other factors the members of the Audit Committee deem appropriate, in determining whether to approve a related-person transaction:

·	Whether the terms are fair to GlobalSCAPE.

·	Whether the transaction is material to GlobalSCAPE.

·	The role the related person has played in arranging the related-person transaction.

·	The structure of the related-person transaction.

·	The interest of all related persons in the related-person transaction.

Our Audit Committee may, in its sole discretion, approve or deny any related-person transaction. Approval of a related-person transaction may be conditioned upon GlobalSCAPE and the related person following certain procedures designated by the Audit Committee.

Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion & Analysis

We compensate our management through a combination of base salary, incentive bonuses and long-term equity based awards in the form of stock options and stock awards. This compensation is designed to be competitive with those of a group of companies which we have selected for comparative purposes in order to attract and retain our executive officers while also creating incentives which will align executive performance with the long-term interests of our stockholders.

This section discusses the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. It provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our executive officers named in the Summary Compensation Table below, whom we sometimes refer to as our named executive officers, or NEOs, and places in perspective the data presented in the tables and narrative that follow.

Our Compensation Committee

Our Compensation Committee approves, implements, and monitors all compensation and awards to executive officers including the president and chief executive officer, chief financial officer, and the other NEOs. The Committee’s membership is determined by the Board of Directors and is composed of two non-management directors. The Committee has the authority to delegate any of its responsibilities to subcommittees as the Committee may deem appropriate in its sole discretion. During 2013, the Committee did not delegate any of its responsibilities.

The Committee periodically approves and adopts, or makes recommendations to the Board for, GlobalSCAPE’s compensation decisions (including the approval of grants of stock options to our NEOs). At least annually, our President and Chief Executive Officer submits to the Compensation Committee his recommendations as to base salary, bonus and equity incentive awards for each executive officer, except himself, for the following fiscal year based upon his subjective evaluation of their individual performance. The Compensation Committee reviews and discusses the recommendations and has the sole authority to determine the base salary, bonus, and equity incentives for the President and Chief Executive Officer.

The Compensation Committee reviewed all components of compensation for our executive officers, including salary, bonuses, long-term equity incentives, the dollar value to the executive, and cost to GlobalSCAPE of all perquisites and all severance and change of control arrangements. Based on this review, the Compensation Committee determined that the compensation paid to our executive officers reflected our compensation philosophy and objectives.

Compensation Philosophy and Objectives

Our underlying philosophy in the development and administration of GlobalSCAPE’s annual, incentive, and long-term compensation plans is that our compensation system should be designed to attract and retain talented executives while also creating incentives that reward performance and align the interests of our NEOs with those of GlobalSCAPE’s stockholders. Key elements of this philosophy are:

·	Establishing base salaries that are competitive with the companies in our comparative group, within GlobalSCAPE’s budgetary constraints and commensurate with GlobalSCAPE’s salary structure.

Rewarding our NEOs for outstanding Company-wide performance as reflected by financial measures, such as sales revenue or net income, or other goals, such as the consummation of an acquisition and product delivery as well as customer and employee satisfaction and compliance with regulatory requirements.

·	Providing equity-based incentives for our NEOs to ensure that they are motivated over the long term to respond to GlobalSCAPE’s business challenges and opportunities as owners rather than just as employees.

Table of Contents

Attracting and Retaining Executive Talent.

As a small company, we recognize salary is one component in successfully attracting and retaining talented executives who will help the Company grow. Being mindful of our budgetary responsibilities, we generally set our base salaries at levels we believe are competitive relative to comparable companies in our industry that are in our general geographic area. We use third-party services that gather and report base salary, incentives, equity, and total compensation information for multiple companies. The services we use include Equilar Executive Compensation Survey, Salary.com Small Business Compensation Solutions and Kenexa CompAnalyst. We use these services because we believe they provide information relevant to the industry and geographic areas in which our personnel work. This comparison allows us to create competitive total compensation packages for our executive team. Annual adjustments are considered and based on the Company’s ability to achieve pre-established revenue and profitability goals.

Rewarding Performance.

We reward outstanding performance with cash bonuses that are based on financial measures, such as sales revenue or net income, or other goals, such as the consummation of an acquisition or product delivery. For more information on our bonus program, refer to “Elements of Executive Compensation—Incentive Compensation.”

Aligning Executive and Stockholder Interests.

We believe that equity-based compensation provides an incentive to our NEOs to build value for our Company over the long term and aligns the interests of our NEOs and stockholders. We use stock options because we believe such options will generate value to the recipient only if our stock price increases during the term of the option. The stock options granted to our NEOs vest solely based on the passage of time, other than in the event of a change of control. We believe that time-vested equity awards encourage long-term value creation and executive retention because executives can realize value from such rewards only if they remain employed by us until the awards vest.

Elements of Executive Compensation

The compensation currently paid to GlobalSCAPE’s executive officers consists of four core elements:

·	Base salary.

·	Bonuses under a performance-based, non-equity incentive plan.

·	Stock option awards granted pursuant to our 2010 Employee Long-Term Equity Incentive Plan, which we refer to as the 2010 Employee Plan.

·	Other employee benefits available to all employees of GlobalSCAPE.

We believe these elements support our underlying philosophy of attracting and retaining talented executives while remaining within our budgetary constraints, creating cash incentives that reward Company-wide and individual performance, and aligning the interests of our NEOs with those of GlobalSCAPE’s stockholders by providing the NEOs with equity-based incentives to ensure motivation over the long term. We view the four core elements of compensation as related but individually distinct. Although we review total compensation, we do not believe that significant compensation derived from one component should increase or reduce compensation from another component. We determine the appropriate level for each component of compensation separately. We have not adopted any formal or informal policies or guidelines for allocating compensation among long-term incentives and annual base salary and bonuses, between cash and non-cash compensation, or among different forms of non-cash compensation. We consider the experience, tenure, and seniority of each named executive officer in making compensation decisions.

GlobalSCAPE does not have any deferred compensation programs or supplemental executive retirement plans. No perquisites are provided to GlobalSCAPE’s executive officers that are not otherwise available to all employees of GlobalSCAPE. No perquisites are valued in excess of $10,000 per employee.

Table of Contents

Base Salary. Being mindful of our budgetary responsibilities, the base salary for all GlobalSCAPE NEOs are targeted at levels we believe are competitive relative to a comparative group of the companies in our general industry and geographic region. This approach enables us to attract and retain the necessary talent a small competitive company needs to grow. This salary structure is reviewed at least annually, and more frequently if warranted, to ensure its competitiveness within our peer group. Adjustments are determined initially by our President and Chief Executive Officer with final approval by the Compensation Committee before being implemented. The composite average increase in base salaries for all Company employees, including NEOs, during 2013 was 3.0%.

Incentive Compensation. The Compensation Committee believes that paying incentive compensation in the form of bonuses or commissions helps create financial incentives for our NEOs that are tied directly to goals that best reflect their respective duties and responsibilities or the achievement of certain goals. The Compensation Committee approves the plans under which bonuses and commissions are paid and may, at its discretion, modify the goals and objectives upon which these payments are based, pay bonuses if such goals are not met, or increase or decrease the amounts paid..

If certain target levels of revenue and net income were achieved for 2013, Mr. Bindseil and Mr. Robinson’s estate were eligible for annual bonuses equal to 40% of their base salaries and Mr. Albrecht was eligible for an annual bonus equal to 35% of his base salary. If actual revenue and net income fall below the target levels, the base bonuses are reduced on a sliding scale by specified percentages to a point where if less than 85% of the target levels of revenue and net income are achieved, no bonus is earned. If actual revenue and net income exceed the target levels, the base bonuses are increased on a sliding scale by specified percentages of up to 200%. The bonus eligibility for Messrs. Robinson and Albrecht was specified in their employment agreements. The bonus for Mr. Bindseil was not specified in his employment agreements. The bonuses paid to Mr. Bindseil and Mr. Robinson’s estate were prorated in accordance with the respective period of time they served as our President and Chief Executive Officer. For 2013, the Company did not achieve 85% of the net income target and achieved 84.9% of the revenue target. In light of these results, the Compensation Committee exercised its discretion and made a bonus payment of $16,861 to Mr. Bindseil, $10,200 to Mr. Robinson’s estate and $16,861 to Mr. Albrecht.

Mr. Goulet is paid a sales commission each month at a base rate ranging from 1.1% to 1.4% of sales invoiced. These rates can increase or decrease based on actual sales results relative to stated sales quotas.

Long-Term Equity Incentive Plan. GlobalSCAPE’s 2010 Employee Long Term Equity Incentive Plan, or 2010 Employee Plan, was approved by our stockholders in 2010. This plan authorizes us to grant incentive stock options, non-qualified stock options, and shares of restricted stock to our NEOs, as well as to all employees of GlobalSCAPE. A total of 3,000,000 shares of common stock are reserved for issuance under this plan. We use stock options as a form of long-term compensation because we believe that stock options motivate our NEOs to exert their best efforts on behalf of our stockholders and align the interests of our NEOs with our stockholders. Vesting is accelerated in certain events described under “Employment Agreements and Potential Payments Upon Termination or Change in Control.”

The purpose of the 2010 Employee Plan is to employ and retain qualified and competent personnel and to promote the growth and success of GlobalSCAPE, which can be accomplished by aligning the long-term interests of the NEOs with those of the stockholders by providing the NEOs an opportunity to acquire an equity interest in GlobalSCAPE. All grants are made with an exercise price equal to the closing price of our common stock on the date of grant. On their date of hire and generally each year thereafter, our NEOs are granted options to purchase shares. These options generally vest ratably over three years from the option grant date. Options granted on the date of hire and each year thereafter generally may each be for the purchase of up to an additional 100,000 shares of our common stock with the exact number determined at the discretion of the Compensation Committee and Board of Directors based upon input from our President and Chief Executive Officer. We do not time stock option grants in coordination with the release of material non-public information.

Other Employee Benefits. GlobalSCAPE’s NEOs are eligible to participate in all of our employee benefit plans, such as medical, dental, group life, and long-term disability insurance on the same basis as other employees. GlobalSCAPE’s NEOs are eligible to participate in our 401(k) plan on the same basis as other employees. GlobalSCAPE’s Board of Directors, at its sole discretion, may authorize GlobalSCAPE to make matching cash contributions (in part or in whole) each year to the 401(k) on behalf of our employees.

Table of Contents

Compensation Policies and Practices

The Compensation Committee has conducted an in-depth risk assessment of the Company’s compensation policies and practices in response to public and regulatory concerns about the link between incentive compensation and excessive risk taking by companies. The Compensation Committee concluded that our compensation policy does not motivate imprudent risk taking. In this regard, the Compensation Committee believes that:

·	The Company’s annual incentive compensation is based on performance metrics that promote a disciplined approach towards the long-term goals of the Company;

·	The Company does not offer significant short-term incentives that might drive high-risk investments at the expense of the long-term value of the Company;

·	The Company’s compensation programs are weighted towards offering long-term incentives that reward sustainable performance, especially when considering the company’s stock ownership guidelines for executive officers;

·	The Company’s compensation awards are capped at reasonable levels, as determined by a review of the Company’s financial position and prospects, as well as the compensation offered by companies in our industry; and

·	The Board’s high level of involvement in approving our operating budget, material investments and capital expenditures help avoid imprudent risk taking.

The Company’s compensation policies and practices were evaluated to ensure that they do not foster risk taking above the level of risk associated with the Company’s business. The Company and the Compensation Committee concluded that the Company has a balanced pay and performance program and that the risks arising from its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

Impact of Regulatory Requirements

Deductibility of Executive Compensation. Federal income tax laws limit the deductions a publicly-held company is allowed for compensation paid to the chief executive officer and to the four most highly compensated executive officers other than the chief executive officer. Generally, amounts paid in excess of $1.0 million to a covered executive, other than performance-based compensation, cannot be deducted. In order to constitute performance-based compensation for purposes of the tax law, stockholders must approve the performance measures. Since GlobalSCAPE does not anticipate that the compensation for any executive officer will exceed the $1.0 million threshold in the near term, stockholder approval necessary to maintain the tax deductibility of compensation at or above that level is not being requested. We will reconsider this matter if compensation levels approach this threshold in light of the tax laws then in effect. We will consider ways to maximize the deductibility of executive compensation, while retaining the discretion necessary to compensate executive officers in a manner commensurate with performance and the competitive environment for executive talent.

Policy on Recovery of Compensation. Our President and Chief Executive Officer and Chief Financial Officer are required to repay certain bonuses and stock-based compensation they receive if we are required to restate our financial statements as a result of misconduct as required by Section 304 of the Sarbanes-Oxley Act of 2002.

Table of Contents

Risk Considerations in our Compensation Program

The Compensation Committee has reviewed the Company’s compensation policies and practices in response to current public and regulatory concern about the link between incentive compensation and excessive risk-taking by corporations. The Committee concluded that the Company’s compensation program does not motivate imprudent risk taking and that any risks taken resulting from compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, the Committee determined the following:

·	The Company’s annual incentive compensation is based on balanced performance metrics that promote progress towards longer-term Company goals.

·	The Company’s compensation programs are capped at reasonable levels, as determined by a review of the Company’s budgetary constraints, economic position and prospects, as well as the compensation offered by comparable companies.

·	The oversight of the Compensation Committee in the operation of incentive plans and the high level of board involvement in approving material use of Company resources adequately mitigates imprudent risk-taking.

Compensation Committee Report

The Compensation Committee of GlobalSCAPE reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Accordingly, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

This report is submitted by the members of the Compensation Committee, which consists of the following directors:

· ·	Frank M. Morgan (Chairman of the Compensation Committee) David L. Mann

Table of Contents

Summary Compensation Table

The following table summarizes compensation that GlobalSCAPE paid to our Chief Executive Officers and the next two, most highly compensated NEOs for the fiscal years ended December 31, 2013 and 2012.

Name & Principal Position	Year	Salary		Bonus		Option Awards (1)		Non-Equity Incentive Plan Compensation		All Other Compensation (4)			Total

James Bindseil	2013	$	225,802	$	16,861	$	65,095	$	-	$	18,222		$	325,980
President and Chief Executive Officer (2)	2012		172,534		9,450		41,575		5,003		19,269			247,831

Craig Robinson	2013		212,826		-		-		10,200		85,002			308,028
Former President and Chief Executive Officer (2)	2012		250,000		-		-		36,300		24,986			311,286

James W. Albrecht, Jr. (3)	2013		224,269		16,861		-		-		15,341			256,471
Chief Financial Officer	2012		94,269		-		166,893		13,657		5,604			280,423

Doug Conyers	2013		179,230		25,200		-		-		188,860	(5)		393,290
Former Senior Vice President of Engineering	2012		170,000		23,800		-		12,599		15,824			222,223

Chris Hopen	2013		206,354		-		-		-		117,940	(5)		324,294
Former President, TappIn, Inc.	2012		200,000		-		-		-		17,101			217,101

(1)

These amounts represent the aggregate grant date fair value of stock option awards for fiscal years 2013 and 2012 calculated as described in our accounting policy for stock-based compensation in footnote 2 to our Consolidated Financial Statements included in our Form 10-K as of December 31, 2013, and for the year then ended filed with the Securities and Exchange Commission. These amounts do not necessarily represent the actual amounts paid to or realized by the named executive officer for these awards during fiscal years 2013 or 2012. These amounts are recognized as an expense in our financial statements over the period of service required for the grant to become vested which is generally three years.

(2)

Mr. Robinson was our President and Chief Operating Officer until January 2013 at which time our Board of Directors appointed him President and Chief Executive Officer, the position he held until his untimely and unexpected death in September 2013. Mr. Bindseil was appointed our President and Chief Executive Officer in October 2013.

(3)	Mr. Albrecht’s salary in 2012 is the amount he was paid from his July 10, 2012 date of hire.

(4)	Primarily 401k matching contributions and group health plan premiums.

(5)	For Messers Conyers and Hopen, all other compensation includes a severance payment made in connection with their separation of service from the Company.

Table of Contents

Relationship of Salary and Annual Incentive Compensation to Total Compensation

The following table sets forth the relationship of salary and annual incentive compensation to total compensation for our NEOs for 2013.

Executive	Percentage of Salary to Total Compensation			Percentage of Annual Cash Incentive Payment to Total Compensation
James L. Bindseil		73.4	%		5.5	%
Craig A. Robinson		72.8	%		3.5	%
James W. Albrecht, Jr.		93.0	%		7.0	%
Doug Conyers		46.6	%		6.6	%
Chris Hopen		67.4	%		0.0	%

Employment Agreements and Potential Payments Upon Termination or Change in Control

GlobalSCAPE has entered into employment agreements with each of our named executive officers pursuant to which each will receive compensation as determined from time to time by the Board of Directors in its sole discretion.

The employment agreements for Messers Bindseil and Goulet do not provide for any minimum term of employment and does not provide for any payment to them in the event of termination, except that if his employment is terminated in connection with a Change in Control, the Company will pay them a lump sum equal to their annual base salary. In the event there is a Change in Control but they are not terminated in connection with that event, a one year employment term commences as of the date of the Change in Control and is automatically renewed on each subsequent annual anniversary date for an additional one year period unless the agreement is cancelled by the Company at least 90 days prior to the end of any such one year term.

The employment agreement for Mr. Albrecht provides that the Company will employ him through December 31, 2014 and, among other terms and conditions, provides for the following payments if his employment with the Company terminates under certain circumstances prior to that date:

·	In the absence of termination for cause and before a Change in Control, as both are defined in the employment agreement, the Company will pay him an amount equal to his base salary in effect at the date of termination for twelve months following the date of termination.

·	In the absence of termination for cause and after a Change in Control, as both are defined in the employment agreement, the Company will pay him a lump sum on the date of termination equal to 1.5 times his base annual salary.

A Change in Control occurs under these employment agreements when:

Any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner, directly or indirectly, of securities representing 50% or more of the combined voting power of the Company’s then outstanding securities.

·	Any person or group makes a tender offer or an exchange offer for 50% or more of the combined voting power of the Company’s then outstanding securities.

·	At any time during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company cease for any reason to constitute a majority of the board.

The Company consolidates, merges or exchanges securities with any other entity where the stockholders of the Company immediately before the effective time of such transaction do not beneficially own, immediately after the effective time of such transaction, shares or other equity interests entitling such stockholders to a majority of all votes.

Table of Contents

·	Any person or group acquires all or substantially all of the Company’s assets.

All of our employment agreements provide for termination without any further payments due if the termination is for “cause”, with that term defined to include any one of the following events:

The continued failure by employee to substantially perform his duties with the Company (other than any such failure resulting from his incapacity due to disability or any such actual or anticipated failure resulting from termination by employee for Good Reason as defined below) after a written demand for substantial performance is delivered to employee by the Board, which specifically identifies the manner in which the Board believes that employee has not substantially performed his duties.

·	Employee engages in conduct which is demonstrably and materially injurious to the Company or any of its affiliates, monetarily or otherwise.

·	Employee commits fraud, bribery, embezzlement or other material dishonesty with respect to the business of the Company or any of its affiliates, or the Company discovers that employee has committed any such act in the past with respect to a previous employer.

·	Employee is indicted for any felony or any criminal act involving moral turpitude, or the Company discovers that employee has been convicted of any such act in the past.

·	Employee commits a breach of any of the covenants, representations, terms or provisions of the employment agreement.

·	Employee violates any instructions or policies of the Company with respect to the operation of its business or affairs.

·	Employee uses illegal drugs.

“Good Reason,” as used above, means, without the officer’s express written consent, any of the following:

·	The material failure by the Company, without employee’s consent, to pay to employee any portion of his current compensation within ten (10) days of the date any such compensation payment is due.

Employer commits a material breach of any of the covenants, representations, terms or provisions hereof, and such breach is not cured within thirty (30) days after written notice thereof to the Company, which notice shall identify in reasonable detail the nature of the breach and gives Company an opportunity to respond, excluding, however, failure to pay salary within ten (10) days as further provided in preceding bullet point.

·	Any material diminution of employee’s title, function, duties, authority or responsibilities, including reporting requirements (this provision does not apply to Mr. Bindseil).

·	A reduction in employee’s salary as in effect on the date of this Agreement or as may be increased from time to time (this provision does not apply to Messrs. Albrecht and Bindseil).

·	A material reduction in the benefits that are in effect from time to time for employee.

·	A relocation of the employee’s principal place of employment to a location which is beyond a 50 mile radius from San Antonio, Texas (this provision does not apply to Messrs. Albrecht and Buie).

If any lump sum payment to a named executive officer would individually or together with any other amounts paid or payable constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder, the amounts to be paid will be increased so that each named executive officer, as the case may be, will be entitled to receive the amount of compensation provided in his contract after payment of the tax imposed by Section 280G.

In the event of a Change in Control, unvested options to purchase our common stock that have been awarded to our NEOs will become fully vest.

Table of Contents

The table below contains information concerning termination and change in control payments to each of our named executive officers as if the event occurred on December 31, 2013.

Name & Principal Position	Benefit		Before Change in Control Termination Without Cause or for Good Reason		After Change in Control Termination Without Cause or for Good Reason

James Bindseil	Severance		$	-	$	240,000
President and Chief Executive Officer	Option Acceleration	(1)	Not applicable			82,250

James W. Albrecht, Jr.	Severance			230,000		345,000
Chief Financial Officer	Option Acceleration	(1)	Not applicable			34,500

Matthew C. Goulet	Severance			-		150,000
Vice President of Sales	Option Acceleration	(1)	Not applicable			58,500

(1)

The option acceleration amount is the intrinsic value of equity awards minus the exercise price. This intrinsic value is based upon the closing price for a share of our common stock of $2.33 on December 31, 2013, minus the exercise price. If the number in this column is zero, the option exercise price of all options held by that NEO is greater than the closing price of our common stock used in determining this amount.

GRANTS OF PLAN-BASED AWARDS

The following table provides information with regard to grants of non-equity incentive compensation and all other stock awards to our named executive officers in 2013. We do not have an equity incentive plan; therefore, these columns have been omitted from the following table.

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		Discretionary Bonus		All Other Stock Awards: Number of Shares of Stock (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/share)		Grant Date Fair Value of Stock and Option Awards ($) (3)
Craig Robinson	7/19/2013		-		85,000		106,250		-		-		-		-		-
James Bindseil	7/19/2013		-		31,631		39,539		13,596		-		-		-		-
James Bindseil	6/10/2013		-		-		-		-		-		75,000		1.65		65,095
James Albrecht	7/19/2013		-		77,875		97,344		7,516		-		-		-		-
Douglas Conyers	7/19/2013		-		63,000		78,750		-		-		-		-		-
Chris Hopen	7/19/2013		-		-		-		-		-		-		-		-

_________________

(1)

Awards potentially payable under our annual bonus plan. The annual bonus plan does not provide for a threshold level as the bonuses under the plan can range from zero to the maximum, which equals 125% of the named executive officers base salary. Please see the discussion under “Compensation Discussion and Analysis – Elements of Executive Compensation – Incentive Compensation” for more information.

Table of Contents

Outstanding Equity Awards at Fiscal-Year End

The table below contains certain information concerning outstanding option awards at December 31, 2013 for our named executive officers

	OPTION AWARDS
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price Per Share ($)		Option Expiration Date

James L. Bindseil
President and Chief Operating Officer		75,000		-	$	2.38	8/16/2020
		6,600		3,400	$	2.10	1/3/2021
		13,200		26,800	$	1.70	1/3/2022
		-		75,000	$	1.65	6/10/2023

Craig Robinson		300,000		-	$	1.15	10/6/2018
Former President and Chief Executive Officer		100,000		-	$	1.83	10/1/2019
		160,000		-	$	1.91	12/5/2021

James W. Albrecht, Jr.
Chief Financial Officer		49,500		100,500	$	2.10	7/10/2022

Matthew C. Goulet
Vice President of Sales		-		75,000	$	1.55	9/9/2023

Doug Conyers
Former Senior Vice President of Engineering		100,000		-	$	3.00	4/9/2017
		45,000		-	$	0.85	1/8/2019
		15,000		-	$	1.47	12/4/2019
		20,000		-	$	2.10	1/3/2021
		70,000		-	$	2.60	3/30/2021
		50,000		-	$	1.91	12/5/2021

Chris Hopen
Former President, TappIn, Inc.		82,500		-	$	1.91	12/5/2021

Subsequent to December 31, 2013, Messrs. Conyers and Hopen exercised all of their exercisable options listed above. Upon Mr. Robinson’s passing, the Board extended the expiration date of his options until December 31, 2014.

Pension Benefits

GlobalSCAPE does not sponsor any pension benefit plans. None of the NEOs contribute to such a plan.

Table of Contents

Non-Qualified Deferred Compensation

GlobalSCAPE does not sponsor any non-qualified defined compensation plans or other non-qualified deferred compensation plans.

Compensation of Directors

The Board of Directors has the authority to determine the amount of compensation to be paid to its members for their services as directors and committee members and to reimburse directors for their expenses incurred in attending meetings.

During 2013, each director received a monthly fee of $4,000. Mr. Brown received an additional fee of $1,000 per month for serving as Chairman of the Board of Directors. Employee directors are not compensated for their service as directors. In March 2014, the Board, upon the recommendation of the Compensation Committee, changed the structure of the Board’s compensation for members other than Mr. Brown in order to encourage attendance at Board and committee meetings as well as to compensate committee chairmen. Effective April 2014, members of the Board will receive the following cash compensation:

·	Monthly retainer --$2,000

·	Committee Chairs --$1,000/month

·	Attendance at Committee/Board meetings-$1,000 each meeting

We also provide stock-based compensation to our directors under the GlobalSCAPE, Inc. 2006 Non-Employee Directors Long-Term Equity Incentive Plan, or the 2006 Directors Plan. Under this plan, a maximum of 500,000 shares of GlobalSCAPE common stock may be awarded. As of March 24, 2014, options to purchase a total of 240,000 shares were outstanding of which 160,000 were vested. As of March 24, 2014, 80,000 shares of restricted common stock were issued and outstanding for which the restrictions lapse in June 2014 provided the owner of those restricted shares meets the continuing service requirement at that time.

The 2006 Directors Plan is administered by the Compensation Committee of the Board of Directors which sets the exercise price, term, and other conditions applicable to each stock option granted under the Plan. Stock options awarded under this plan shall have an exercise share price of no less than 100% of the fair market value on the date of the award while the option terms and vesting schedules are at the discretion of the Compensation Committee. The 2006 Directors Plan provides that each year, at the first regular meeting of the Board of Directors immediately following GlobalSCAPE’s annual stockholder’s meeting, each non-employee director shall be granted or issued maximum awards of either (1) a grant of an option to purchase 20,000 shares of our common stock or (2) be issued 20,000 shares of restricted common stock for participation in Board and Committee meetings during the previous calendar year. In 2013, the Compensation Committee granted 20,000 shares of restricted stock to each director except for Mr. Robinson, who received no such shares as a result of him being an employee at that time. The restrictions on this restricted stock lapse in June 2014 provided the owner of those restricted shares meets the continuing service requirement at that time

Table of Contents

The following table sets forth a summary of compensation for the fiscal year ended December 31, 2013 that GlobalSCAPE paid to each director. GlobalSCAPE does not sponsor a pension benefits plan, a non-qualified deferred compensation plan or a non-equity incentive plan for our directors and, accordingly, these columns have been omitted from the following table:

Name	Fees Earned or Paid in Cash		Stock Awards (1)		All Other Compensation (2)		Total
Thomas W. Brown	$	60,000	$	33,000	$	12,819	$	105,819
David L. Mann	$	48,000	$	33,000	$	12,819	$	93,819
Frank M. Morgan	$	48,000	$	33,000	$	1,032	$	82,032
Phillip M. Renfro	$	48,000	$	33,000	$	11,360	$	92,360

(1)	The aggregate grant date fair value of restricted awards calculated as described in our accounting policy for stock-based compensation in footnote 2 to our Consolidated Financial Statements included in our Form 10-K as of December 31, 2013, and for the year then ended.

(2)	Health and dental insurance premiums.

As of December 31, 2013, stock options issued to our directors that had not been exercised and restricted stock awards for which the restriction had not yet lapsed as of that date are as follows:

Name	Outstanding Stock Options Not Exercised		Restricted Stock Awards
Thomas W. Brown		40,000		20,000
David L. Mann		40,000		20,000
Frank M. Morgan		40,000		20,000
Phillip M. Renfro		40,000		20,000

Table of Contents

PROPOSAL TWO

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

GlobalSCAPE’s Audit Committee has selected Grant Thornton LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2014. Although stockholder ratification is not required, the Board of Directors has directed that the selection of Grant Thornton LLP be submitted to the stockholders for ratification at the annual meeting.. A representative of Grant Thornton LLP will not be present at the annual meeting.

The affirmative vote of the holders of a majority of the votes cast is required to ratify the selection of Grant Thornton LLP. In the event the stockholders fail to ratify the appointment, the Board may reconsider its appointment for this year. Even if the appointment is ratified, the Board, in its discretion, may, if circumstances dictate, direct the appointment of a different independent registered public accounting firm at any time during the year, if the Board determines that such a change would be in the Company’s and its stockholders’ best interests.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF GRANT THORNTON LLP AS GLOBALSCAPE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2014.

PRINCIPAL AUDITOR FEES AND SERVICES

Audit Fees. The aggregate fees billed for professional services rendered by Grant Thornton in connection with their audits of our consolidated financial statements and reviews of the condensed financial statements included in our Quarterly Reports on Form 10-Q and services that were provided in connection with statutory and regulatory filings or engagements were $204,905 and $220,258 in 2013 and 2012, respectively.

Audit-Related Fees. There were no fees paid to Grant Thornton in 2013 or 2012 for services other than the audit or review of GlobalSCAPE’s financial statements.

Tax Fees. There were no tax fees paid to Grant Thornton in 2013 or 2012.

All Other Fees. There were no aggregate fees billed for other services, exclusive of the fees disclosed above relating to financial statement audit services, rendered by Grant Thornton during the years ended December 31, 2013 or December 31, 2012.

Consideration of Non-Audit Services Provided by the Independent Auditors. The Audit Committee has considered whether the services provided for non-audit services are compatible with maintaining Grant Thornton’s independence and has concluded that the independence of such firm has been maintained.

Table of Contents

AUDIT COMMITTEE PRE-APPROVAL POLICY

The Audit Committee’s policy is to pre-approve all audit, audit-related and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other services. The Audit Committee may also pre-approve particular services on a case-by-case basis. The independent auditors are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditors in accordance with such pre-approval. The Audit Committee may also delegate pre-approval authority to one or more of its members. Such member(s) must report any decisions to the Audit Committee at the next scheduled meeting.

AUDIT COMMITTEE REPORT

The Audit Committee reviews GlobalSCAPE’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. The Audit Committee is responsible for engaging independent auditors to perform an independent audit of GlobalSCAPE’s consolidated financial statements in accordance with generally accepted accounting principles and to issue reports thereon. The Committee reviews and oversees these processes, including oversight of (i) the integrity of GlobalSCAPE’s financial statements, (ii) GlobalSCAPE’s independent auditors’ qualifications and independence, (iii) the performance of GlobalSCAPE’s independent auditors, and (iv) GlobalSCAPE’s compliance with legal and regulatory requirements.

In this context, the Committee hereby reports as follows:

1.	The Audit Committee has reviewed and discussed the audited financial statements with GlobalSCAPE’s management.

The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T.

The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence.

Based on the review and discussions referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in GlobalSCAPE’s Annual Report on Form 10-K for the year ended December 31, 2013, for filing with the Securities and Exchange Commission.

This report is submitted by the members of the Audit Committee.

David L. Mann (Chairman of the Audit Committee)

Frank M. Morgan

Table of Contents

STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING

You may submit proposals for consideration at future stockholder meetings. For a stockholder proposal to be considered for inclusion in our Proxy Statement for the annual meeting next year, the Corporate Secretary must receive the written proposal at our principal executive offices no later than December 4, 2014. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in Company-sponsored proxy materials. Proposals should be addressed to:

GlobalSCAPE, Inc.

Attn: Corporate Secretary

4500 Lockhill-Selma Rd, Suite 150

San Antonio, TX 78249

For a stockholder proposal that is not intended to be included in our Proxy Statement under Rule 14a-8, the stockholder must provide the information required by our Bylaws and give timely notice to the Corporate Secretary in accordance with our Bylaws, which, in general require that the notice be received by the Corporate Secretary:

·	Not earlier than the close of business on February 2, 2015; and

·	Not later than the close of business on March 4, 2015.

If the date of the stockholder meeting is moved more than 30 days after the anniversary of our annual meeting for the prior year, then notice of a stockholder proposal that is not intended to be included in our Proxy Statement under Rule 14a-8 must be received no later than the 10th day following the date on which a notice of the date of the annual meeting is mailed or the date of the meeting is publicly announced.

AVAILABLE INFORMATION

We are a reporting company under the Securities Exchange Act of 1934, as amended, and file annual, quarterly, and special reports and other information with the SEC. You may read and copy any material that we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain more information about the SEC’s Public Reference Room by calling 1-800-SEC-0330. The SEC also maintains an Internet site that contains all of these reports and other information regarding our Company and other issuers that file electronically with the SEC at http://www.sec.gov. We also post links to our SEC filings at our web site at http://www.globalscape.com.

You may request a copy of GlobalSCAPE’s annual, quarterly, and current reports, Proxy Statements, and other information at no cost, including our annual report on Form 10-K, including financial statements and schedules thereto, for the year ended December 31, 2013, by writing or telephoning GlobalSCAPE at the following address:

GlobalSCAPE, Inc.

Attn: Chief Financial Officer

4500 Lockhill-Selma, Suite 150

San Antonio, Texas 78249

(210) 308-8267

Table of Contents

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors does not know of any other matter that will be brought before the annual meeting. However, if any other matter properly comes before the annual meeting, or any adjournment thereof, the person or persons voting the proxies will vote on such matters in accordance with their best judgment and discretion.

By Order of the Board of Directors,

James Bindseil

President and Chief Executive Officer

April 3, 2014

San Antonio, TX


¨		Preliminary Proxy Statement

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

x		Definitive Proxy Statement

¨		Definitive Additional Materials

¨		Soliciting Material under §240.14a-12

		To our Stockholders,

		I am pleased to report that GlobalSCAPE achieved record revenues in 2013 for the
		fourth consecutive year and earnings per share that tied the highest in Company history.
		These results allowed us to express our appreciation to our stockholders by paying a
		special dividend for the second year in a row. While 2013 was a year of transition in
		many ways, our employees continued our strategic mission that produced both increased
		efficiency and the improved bottom-line results.

		Since GlobalSCAPE’s founding in 1996, we have experienced a number of significant
		organizational evolutions. Early days of the company focused on consumer innovation
		and rapid product releases. This approach enabled us to achieve a great deal of brand
		awareness and a very loyal following. We then added enterprise caliber products
		that moved us into the realm of larger clients where security is more critical and
		product quality must be more stringently monitored and delivered. This phase saw
		GlobalSCAPE grow into a more mature organization with the people, processes, and
James Bindseil		technologies to meet the needs of these larger clients. We are now entering an era during
(President and CEO)		which we believe it time to take GlobalSCAPE’s products and services to a new level.

Moving into 2014, I look forward to a renewed dedication to the innovative spirit built by my predecessors. We have
new and exciting product development programs in place. We are broadening our sales and marketing activities to target
new customers through expanded partner alliances anddemand generation programs to supplement our established
in-house, direct sales team. We are redesigning internal processes to improve our expense control.

I am proud to serve as the President and CEO of GlobalSCAPE. I work with the finest group of people in the industry.
I look forward to making our award-winning solutions even better through innovation and leading GlobalSCAPE to
continually improving financial results.

Thank you for the support you continue to show GlobalSCAPE. I look forward to meeting you at the Annual Meeting
of Stockholders.


Sincerely,

James L. Bindseil
President and Chief Executive Officer

Delaware		74-2785449
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4500 Lockhill-Selma, Suite 150
San Antonio, Texas		78249
(Address of Principal Executive Office)		(Zip Code)

Large Accelerated filer o		Accelerated filer o

Non-Accelerated filer o		Smaller Reporting Company x
(Do not check if a smaller reporting company)

		Page
PART I

Item 1.	Business	2

Item 1A.	Risk Factors	15

Item 1B.	Unresolved Staff Comments	32

Item 2.	Properties	32

Item 3.	Legal Proceedings	32

Item 4.	Mine Safety Disclosures	32

PART II

Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity	33

Item 6.	Selected Financial Data	34

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	36

Item 8.	Financial Statements and Supplementary Data	56

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	79

Item 9A.	Controls and Procedures	79

Item 9B.	Other Information	79

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	80

Item 11.	Executive Compensation	80

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	80

Item 13.	Certain Relationships and Related Transactions, and Director Independence	80

Item 14.	Principal Accountant Fees and Services	80

PART IV

Item 15.	Exhibits, Financial Statement Schedules	81

	Year ending December 31,
	2013		2012		2011
R&D expenditures	$	4,665	$	3,861	$	3,124
R&D expenditures expensed		3,766		3,531		3,124
R&D expenditures capitalized		899		330		-

	Number of
Department	Employees
Management and Administration		12
Engineering		31
Marketing		4
Information Services		9
Professional Services		4
Sales		27
Customer Support		16
Total		103

	2013				2012
	High		Low		High		Low
First Quarter (ending March 31)	$	1.85	$	1.36	$	2.39	$	1.69
Second Quarter (ending June 30)	$	1.75	$	1.40	$	2.15	$	1.77
Third Quarter (ending September 30)	$	1.88	$	1.46	$	2.28	$	1.96
Fourth Quarter (ending December 31)	$	2.45	$	1.52	$	2.15	$	1.40

Annual		2.45		1.36		2.39		1.40

Statement of Operations Data:
($ in thousands)
	2013			2012			2011		2010		2009

Total revenues	$	24,339		$	23,372		$	20,894	$	18,565	$	16,451
Operating expenses:
Cost of revenues		1,011			1,296			1,723		601		336
Selling, general and administrative		14,881			16,761			14,466		12,815		10,798
Research and development		3,766			3,531			3,124		3,016		2,805
Affiliated entity asset impairment		0			3,264			0		0		0
TappIn intangible asset impairment and earnout liability elimination		(128	)		(1,303	)		0		0		0
Depreciation and amortization		908			1,217			790		852		724
Total operating expenses		20,438			24,766			20,103		17,284		14,663
Income (loss) from operations		3,901			(1,394	)		791		1,281		1,788
Net income (loss)	$	3,840		$	(1,800	)	$	635	$	881	$	1,400

Net income (loss) per common share - basic	$	0.21		$	(0.10	)	$	0.04	$	0.05	$	0.08
Net income (loss) per common share - diluted	$	0.20		$	(0.10	)	$	0.03	$	0.05	$	0.08

Balance Sheet Data:
($ in thousands)
	2013		2012		2011		2010		2009

Cash and cash equivalents	$	9,455	$	8,079	$	8,861	$	11,087	$	7,026
Working capital		1,824		73		1,662		8,607		5,540
Total assets		33,092		33,588		38,378		20,547		16,173
Long term debt, less current portion		2,989		4,389		5,667		-		-

	December 31,
	2013		2012
	(thousands)
Amounts we have billed and/or been paid in advance (presented as deferred revenue in our financial statements)	$	10,800	$	9,773
Amounts we will bill and be paid in the future (will appear in our financial statements when we are paid and/or when we provide the products and services)		283		797
Total ACV	$	11,083	$	10,570

	Year Ended December 31,
	2013			2012			2011
	(In 000's except per share amounts)
Non-GAAP Operating Expenses
GAAP total operating expenses	$	20,438		$	24,766		$	20,103
Add: TappIn intangible asset impairment and earnout liability elimination		128			1,343			-
Less: Affiliated entity asset impairment		-			(3,264	)		-
Non-GAAP operating expenses	$	20,566		$	22,845		$	20,103

Non-GAAP Income From Operations
GAAP (loss) income from operations	$	3,901		$	(1,394	)	$	791
Less: TappIn intangible asset impairment and earnout liability elimination	$	(128	)		(1,343	)
Add: Affiliated entity asset impairment		-			3,264			-
Non-GAAP income from operations	$	3,773		$	527		$	791

Non-GAAP Net Income
GAAP net (loss) income	$	3,840		$	(1,800	)	$	635
Less: TappIn intangible asset impairment and earnout liability elimination	$	(1,341	)		(1,343	)
Add: Affiliated entity asset impairment		-			3,264			-
Non-GAAP net income	$	2,499		$	121		$	635

Non-GAAP Earnings Per Share
Non-GAAP net income	$	2,499		$	121		$	635
Weighted average share outstanding:
Basic		18,626			18,358			18,081
Diluted		19,082			19,016			18,747
Non-GAAP net income per common share:
Basic	$	0.13		$	0.01		$	0.04
Diluted	$	0.13		$	0.01		$	0.03

	Year Ended
	December 31,
	2013			2012			2011
Net income (loss)	$	3,840		$	(1,800	)	$	635
Add (subtract) items to determine adjusted EBITDA:
Income tax expense		(104	)		217			169
Other expense		165			189			(13	)
Depreciation and amortization:
Total depreciation and amortization		908			1,217			790
Amortization of capitalized software development costs		(174	)		(87	)		-
Stock-based compensation expense		666			915			1,003
Affliated entity asset impairment		-			3,264			-
TappIn intangible asset impairment and earnout liability elimination		(128	)		(1,303	)		-
Adjusted EBITDA	$	5,173		$	2,612		$	2,584

	Revenue for the Year Ended December 31,
	2013					2012					2011
			Percent of					Percent of					Percent of
	Amount		Total			Amount		Total			Amount		Total
Revenue by Product
EFT Enterprise	$	15,308		62.9	%	$	14,742		63.1	%	$	12,167		58.2	%
EFT Standard		3,946		16.2	%		3,367		14.4	%		3,665		17.5	%
Wide Area File Services/CDP		1,277		5.2	%		1,577		6.7	%		1,533		7.3	%
Professional Services		1,479		6.1	%		1,547		6.6	%		1,772		8.5	%
CuteFTP		1,205		5.0	%		1,059		4.5	%		1,209		5.8	%
Other		1,124		4.6	%		1,080		4.6	%		548		2.6	%
Total Operating Revenues	$	24,339		100.0	%	$	23,372		100.0	%	$	20,894		100.0	%

Maintenance and Support Included in Total Operating Revenue	$	13,650		56	%	$	11,298		48	%	$	9,424		45	%

	Payments Due for the Period
	2014		2015 - 2017		2018 - 2020		2021 and thereafter		Total

Office lease	$	473	$	1,051	$	462	$	-	$	1,986
Long-term debt		1,567		3,135		-		-		4,702
	$	2,040	$	4,186	$	462	$	-	$	6,688

	2013			2012			$ Change
	($ in thousands)
Total revenues	$	24,339		$	23,372		$	967

Cost of revenues		1,011			1,296			(285	)
Selling, general and administrative		14,881			16,761			(1,880	)
Research and development		3,766			3,531			235
Affiliated entity asset impairment		-			3,264			(3,264	)
TappIn intangible asset impairment and earnout liability elimination		(128	)		(1,303	)		1,175
Depreciation and amortization		908			1,217			(309	)
Total operating expenses		20,438			24,766			(4,328	)
Income from operations		3,901			(1,394	)		5,295
Other income, net		(165	)		(189	)		24
Income tax expense		(104	)		217			(321	)
Net Income	$	3,840		$	(1,800	)	$	5,640

	Revenue for the Year Ended December 31,
Product	2013				2012

EFT Enterprise	$	15,308	62.9	%	$	14,742	63.1	%
EFT Standard		3,946	16.2	%		3,367	14.4	%
Wide Area File Services		1,277	5.2	%		1,577	6.7	%
Professional Services		1,479	6.1	%		1,547	6.6	%
CuteFTP		1,205	5.0	%		1,059	4.5	%
Other		1,124	4.6	%		1,080	4.6	%
Total Operating Revenues	$	24,339	100.0		$	23,372	100.0

Maintenance and Support Included in Total Operating Revenue	$	13,650	56.1	%	$	11,298	48.3	%

Report of Independent Registered Public Accounting Firm	57

Consolidated Financial Statements
Consolidated Balance Sheets	58
Consolidated Statements of Operations and Comprehensive Income (Loss)	59
Consolidated Statements of Stockholders’ Equity	60
Consolidated Statements of Cash Flows	61
Notes to Consolidated Financial Statements	62

	For the Year Ended December 31,
	2013			2012			2011

Operating Revenues:
Software licenses	$	8,086		$	9,447		$	9,149
Maintenance and support		13,650			11,298			9,424
Professional services		1,479			1,547			1,772
Other		1,124			1,080			549
Total revenues		24,339			23,372			20,894
Operating Expenses:
Cost of revenues		1,011			1,296			1,723
Selling, general and administrative		14,881			16,761			14,466
Research and development		3,766			3,531			3,124
Affiliated entity asset impairment		-			3,264			-
TappIn intangible asset impairment and earnout liability elimination		(128	)		(1,303	)		-
Depreciation and amortization		908			1,217			790
Total operating expenses		20,438			24,766			20,103
Income (loss) from operations		3,901			(1,394	)		791

Other income (expense):
Interest expense		(227	)		(289	)		(25	)
Interest income		62			100			38
Total other income (expense)		(165	)		(189	)		13
Income (loss) before income taxes		3,736			(1,583	)		804
Provision for income taxes		(104	)		217			169
Net income (loss)	$	3,840		$	(1,800	)	$	635
Comprehensive income (loss)	$	3,840		$	(1,800	)	$	635

Net income (loss) per common share - basic	$	0.21		$	(0.10	)	$	0.04

Net income (loss) per common share - diluted	$	0.20		$	(0.10	)	$	0.03

Weighted average shares outstanding:
Basic		18,626			18,358			18,081

Diluted		19,082			18,358			18,747

					Additional
	Common Stock				Paid-in			Treasury			Retained
	Shares		Amount		Capital			Stock			Earnings			Total


Balance at December 31, 2010		18,346,982	$	18	$	12,137		$	(1,452	)	$	1,456		$	12,159

Shares issued upon exercise of stock options		291,545		1		351			-			-			352

Tax (deficiency) from stock-based compensation		-		-		(13	)		-			-			(13	)

Stock-based compensation expense		-		-		1,003			-			-			1,003

Issuance of vested restricted stock		53,420		-		-			-			-			-

Net income		-		-		-			-			635			635

Balance at December 31, 2011		18,691,947	$	19	$	13,478		$	(1,452	)	$	2,091		$	14,136

Shares issued upon exercise of stock options		74,600		-		70			-			-			70

Tax (deficiency) from stock-based compensation		-		-		(28	)		-			-			(28	)

Stock-based compensation expense		-		-		915			-			-			915

Issuance of vested restricted stock		80,000		-		-			-			-			-

Common stock cash dividends		-		-		-			-			(1,289	)		(1,289	)

Net (loss)		-		-		-			-			(1,800	)		(1,800	)

Balance at December 31, 2012		18,846,547	$	19	$	14,435		$	(1,452	)	$	(998	)	$	12,004

Shares issued upon exercise of stock options		585,570		1		889			-			-			890

Tax (deficiency) from stock-based compensation		-		-		(156	)		-			-			(156	)

Stock-based compensation expense
Stock options		-		-		527			-			-			527
Restricted stock		160,000		-		139			-			-			139

Common stock cash dividends		-		-		-			-			(951	)		(951	)

Net income		-		-		-			-			3,840			3,840

Balance at December 31, 2013		19,592,117	$	20	$	15,834		$	(1,452	)	$	1,891		$	16,293

		Year ended December 31,
		2013		2012 (1)			2011
Numerators
Numerator for basic and diluted earnings per share:
	Net income (loss)	$	3,840	$	(1,800	)	$	635

Denominators
Denominators for basic and diluted earnings per share:
	Weighted average shares outstanding basic		18,626		18,358			18,081

Dilutive potential common shares
Stock options and awards			456		-			666
Denominator for dilutive earnings per share			19,082		18,358			18,747
	Net income (loss) per common share - basic	$	0.21	$	(0.10	)	$	0.04
	Net income (loss) per common share – diluted	$	0.20	$	(0.10	)	$	0.03

	Released		Unreleased
	Products		Products

Gross capitalized amount at December 31, 2013	$	408	$	620

Future amortization expense for the year ending December 31,
2014	$	203
2015		175
2016		30
Total	$	408

			December 31, 2013										December 31, 2012
	Life				Accumulated			Reduction to							Accumulated
	(Years)		Gross		Amortization			Zero			Net		Gross		Amortization			Net

TappIn, Inc.
Customer relationship		10	$	1,863	$	(342	)	$	(1,521	)	$	-	$	1,863	$	(202	)	$	1,661
Developed technology		7		2,771		(726	)		(2,045	)		-		2,771		(429	)		2,342
Availl, Inc.
Software		5		1,775		(1,775	)		-			-		1,775		(1,775	)		0
Customer List		5		180		(180	)		-			-		180		(180	)		-
Patent		18		7		(7	)		-			-		7		(4	)		3
Total			$	6,596	$	(3,030	)	$	(3,566	)	$	-	$	6,596	$	(2,590	)	$	4,006

Reduction of intangible assets:
Customer relationship	$	(1,521	)
Developed technology		(2,045	)
Elimination of earnout liability		3,694
Net TappIn asset impairment and earnout liability elimination before taxes		128
Federal income taxes		1,213
Net TappIn asset impairment and earnout liability elimination after taxes	$	1,341

Year Ending December 31,
2014	$	1,397
2015		1,462
2016		1,527
Total	$	4,386

			Weighted		Weighted Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Terms		Value
					(Years)		(000's)
Outstanding at December 31, 2010		3,260,327	$	1.83		7.63	$	1,480

2011
Granted		1,293,500	$	2.00
Forfeitures		203,962	$	2.28
Exercised		291,545	$	1.21
Outstanding at December 31, 2011		4,058,320	$	1.91		6.39	$	540

2012
Granted		422,000	$	1.93
Forfeitures		755,625	$	4.09
Exercised		74,600	$	0.94
Outstanding at December 31, 2012		3,650,095	$	1.91		6.14	$	300

2013
Granted		424,740	$	1.66
Forfeitures		371,520	$	2.17
Exercised		585,570	$	1.52
Outstanding at December 31, 2013		3,117,745	$	1.92		4.46	$	1,808

Exercisable at December 31, 2013		2,437,135	$	1.96		3.33	$	1,436

As of December 31, 2013
							Options Outstanding				Options Exercisable
							Weighted
							Average		Weighted				Weighted
					Underlying		Remaining		Average		Number of		Average
Range of					Shares		Contractual		Exercise		Underlying		Exercise
Exercise Prices					Outstanding		Life		Price		Shares		Price
$	0.15	-	$	0.33		53,000		1.2	$	0.26		53,000	$	0.26
$	0.85	-	$	1.41		605,040		2.4	$	1.09		605,040	$	1.09
$	1.43	-	$	2.16		1,700,685		5.7	$	1.80		1,084,915	$	1.80
$	2.18	-	$	4.10		759,020		3.6	$	3.02		694,180	$	3.09
Total options						3,117,745						2,437,135

						Total
				Grant Date		Fair Value of
	Number of			Fair Value		Shares That
	Shares			Per Share		Vested
Restricted Shares Outstanding at December 31, 2010		53,420		$	2.01

2011
Shares granted with restrictions		80,000		$	2.16
Shares vested and restrictions removed		(53,420	)	$	2.01	$	107,000
Restricted Shares Outstanding at December 31, 2011		80,000		$	2.16

2012
Shares granted with restrictions		80,000		$	1.97
Shares vested and restrictions removed		(80,000	)	$	2.16	$	158,000
Restricted Shares Outstanding at December 31, 2012		80,000		$	1.97

2013
Shares granted with restrictions		80,000		$	1.65
Shares vested and restrictions removed		(80,000	)	$	1.97	$	133,600
Restricted Shares Outstanding at December 31, 2013		80,000		$	1.65

	As of December 31,
	2013			2012
Deferred tax assets:
Capital loss carryforward	$	1,099		$	1,099
Share-based compensation		1,005			1,017
Deferred revenue		503			470
Net operating loss carryforward		270			386
Compensation and benefits		84			102
Allowance for doubtful accounts		52			58
Other		2			24
Total gross deferred tax assets		3,015			3,156
Valuation allowance		(1,099	)		(1,099	)
Net deferred tax assets		1,916			2,057

Deferred tax liabilities:
Intangible assets		193			1,142
Depreciation		65			203
Total gross deferred tax liabilities		258			1,345

Net deferred tax assets	$	1,658		$	712

	2013		2012
Balance, beginning of year	$	125	$	-
Increases for tax positions related to the current year		-		-
Increases for tax positions related to prior years		-		125
Decreases for tax positions related to prior years		-		-
Reductions due to lapsed statute of limitations		-		-
Balance, end of year	$	125	$	125

Cash paid at acquisition close date:
Sourced from cash on hand	$	2,000
Sourced from note payable to a bank		7,000
Total		9,000
Contingent consideration		6,997
Additional cash paid for net working capital		190
Total purchase price	$	16,187

Accounts receivable	$	169
Current assets		28
Property and equipment, net		20
Intangibles		4,634
Goodwill		11,343
Assumed liabilities		(3	)
Deferred revenue		(4	)
Net assets acquired	$	16,187

	Fiscal Year 2013
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

Total revenues	$	5,879		$	5,925		$	6,337		$	6,197
Total operating expenses	$	5,132		$	5,297		$	4,802		$	5,207
Other income (expense)	$	(47	)	$	(43	)	$	(39	)	$	(35	)
Net income (loss) before provision for income taxes	$	700		$	585		$	1,496		$	955
Net income (loss)	$	517		$	381		$	2,287		$	655

Net income (loss) per share:
Basic	$	0.03		$	0.02		$	0.12		$	0.04
Diluted	$	0.03		$	0.02		$	0.12		$	0.03
Weighted average shares outstanding
Basic		18,444			18,502			18,761			18,873
Diluted		18,982			18,955			19,158			19,461

	Fiscal Year 2012
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

Total revenues	$	5,393		$	5,702		$	6,078		$	6,199
Total operating expenses	$	5,728		$	5,774		$	8,867		$	4,397
Other income (expense)	$	(66	)	$	(61	)	$	(11	)	$	(51	)
Net income (loss) before provision for income taxes	$	(401	)	$	(133	)	$	(2,800	)	$	1,751
Net income (loss)	$	(253	)	$	(140	)	$	(2,714	)	$	1,307

Net income (loss) per share:
Basic	$	(0.01	)	$	(0.01	)	$	(0.15	)	$	0.07
Diluted	$	(0.01	)	$	(0.01	)	$	(0.15	)	$	0.07
Weighted average shares outstanding
Basic		18,288			18,320			18,398			18,421
Diluted		18,288			18,320			18,398			18,959

(a)(1)	Financial Statements and Schedules

	The following financial statements of GlobalSCAPE, Inc. are included in Item 8:

	·	Consolidated Balance Sheets — December 31, 2013 and 2012

	·	Consolidated Statements of Operations — Years ended December 31, 2013, 2012 and 2011

	·	Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2013, 2012 and 2011

	·	Consolidated Statements of Cash Flows — Years ended December 31, 2013, 2012 and 2011

	·	Notes to Consolidated Financial Statements — December 31, 2013 and 2012

(2)	Schedules not listed above have been omitted because they are not applicable or required, or the information required to be set forth therein is included in the Financial Statements or Notes thereto.

(3)	Exhibits