UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment
No. __)
Filed
by the Registrant ☑
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☑ Preliminary Proxy Statement
☐ Confidential, For
Use of the Commission Only (As Permitted by Rule
14a-6(e)(2))
☐ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under Rule 14a-12
|
BK Technologies Corporation
|
|
(Name of Registrant as Specified In Its Charter)
|
|
|
|
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
|
Payment
of Filing Fee (Check the appropriate box):
☑ No fee required
☐ Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction
applies:
(2)
Aggregate number of securities to which transaction
applies:
(3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:
☐ Fee paid previously with preliminary
materials.
☐ Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form or
schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:
BK Technologies Corporation
7100 Technology Drive
West Melbourne, Florida 32904
[●],
2021
Dear
Stockholder:
You are
cordially invited to attend the 2021 annual meeting of stockholders
of BK Technologies Corporation, which
we will
hold on Friday, December 17, 2021, at 9:00 a.m., Eastern Time,
virtually via webcast from the offices of the Company at 7100
Technology Drive, West Melbourne, Florida 32904.
Due to
the public health impact of the coronavirus outbreak (COVID-19) and
to support the health and well-being of our management and
stockholders, the annual meeting will be held solely through
virtual participation via webcast at
https://agm.issuerdirect.com/bkti. Please monitor our annual
meeting website at www.bktechnologies.com, under the tab
“Investor Relations,” for updated information. As
always, we encourage you to vote your shares prior to the annual
meeting.
We are
pleased to take advantage of Securities and Exchange Commission
rules that allow issuers to furnish proxy materials to their
stockholders on the Internet. We believe these rules allow us to
provide our stockholders with the information they need, while
lowering the costs of delivery and reducing the environmental
impact of our annual meeting. On or about [●], 2021, we
expect to begin mailing a Notice of Internet Availability of Proxy
Materials, or E-proxy notice, to our stockholders of record as of
the close of business on October 25, 2021. The E-proxy notice
contains instructions for your use of this process, including how
to access our proxy statement, proxy card and annual report and how
to vote on the Internet. In addition, the E-proxy notice contains
instructions on how you may receive a paper copy of the proxy
statement, proxy card and annual report or elect to receive your
proxy statement, proxy card and annual report over the
Internet.
If you
are unable to attend the meeting virtually, it is very important
that your shares be represented and voted at the annual meeting.
You may vote your shares over the Internet as described in the
E-proxy notice. Alternatively, if you received a paper copy of the
proxy card by mail, please complete, sign, date and promptly return
the proxy card in the self-addressed stamped envelope provided. You
may also vote by telephone as described in your proxy card. Voting
by telephone, over the Internet or by mailing a proxy card will not
limit your right to attend the virtual annual meeting and vote your
shares during the meeting.
We look
forward to participating with you at the meeting.
|
|
Sincerely,
|
|
|
|
|
|
|
|
/s/ E. Gray Payne
|
|
|
|
E. Gray Payne
|
|
|
|
Chairman of the Board of Directors
|
|
BK TECHNOLOGIES CORPORATION
7100 Technology Drive
West Melbourne, Florida 32904
NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 17, 2021
To the
stockholders of BK Technologies Corporation:
The
2021 annual meeting of stockholders of BK Technologies Corporation
will be held on December 17,
2021, at 9:00 a.m., Eastern Time. Due to the public health impact
of the coronavirus outbreak (COVID-19), in order to support the
health and well-being of our management and
stockholders, and to
provide access to our stockholders regardless of geographic
location, the meeting will be held solely through virtual
participation via webcast (at https://agm.issuerdirect.com/bkti)
for the following purposes:
1.
To elect seven
directors named in the proxy statement to serve on our Board of
Directors until the next annual meeting of stockholders and until
their respective successors are duly elected and
qualified;
2.
To ratify the
appointment of MSL, P.A. as our independent registered public
accounting firm for fiscal year 2021;
3.
To consider and
vote upon a proposal to approve an amendment to the Company’s
Articles of Incorporation to increase the number of our authorized
common stock from 20,000,000 to 50,000,000 and to make a
corresponding change to the number of authorized shares of capital
stock;
4.
To consider and vote upon a proposal to
approve an amendment to the
Company’s 2017 Incentive Compensation Plan (the “2017
Plan”) to increase the number of authorized shares
under the 2017 Plan from 1,000,000 shares to 3,000,000
shares;
5.
To transact such
other business properly brought before the meeting and any
adjournment or postponement of the meeting.
Stockholders will
not be able to attend the meeting in person; however, stockholders
of record will be able to vote and submit questions electronically
prior to the meeting by visiting www.iproxydirect.com/BKTI, and
during the meeting by visiting https://agm.issuerdirect.com/bkti.
You will also be able to dial-in via telephone to ask questions
during the meeting. Specific instructions for accessing the meeting
are provided in the accompanying proxy card or voting instruction
form you received.
Only
stockholders of record at the close of business on October 25,
2021, are entitled to notice of, and to vote at, the annual meeting
and any adjournment or postponement of the meeting. Each share of
common stock is entitled to one vote. A list of stockholders
entitled to vote at the annual meeting will be available for
inspection by our stockholders, for any purpose germane to the
meeting, during the annual meeting and during ordinary business
hours beginning 10 days prior to the date of the annual meeting, at
our principal executive offices at 7100 Technology Drive, West
Melbourne, Florida 32904.
Whether
or not you plan to attend the meeting virtually, please vote your
shares over the Internet, as described in the Notice of Internet
Availability of Proxy Materials, or E-proxy notice. Alternatively,
if you received a paper copy of the proxy card by mail, please
complete, sign, date and promptly return the proxy card in the
self-addressed stamped envelope provided. You may also vote your
shares by telephone as described in your proxy card. Voting by
telephone, over the Internet or by mailing a proxy card will not
limit your right to attend the virtual annual meeting and vote your
shares during the meeting.
All
stockholders are cordially invited to attend the annual
meeting.
|
|
By
Order of the Board of Directors,
|
|
|
|
|
|
|
|
/s/ William P. Kelly
|
|
|
|
William P. Kelly, Secretary
|
|
West
Melbourne, Florida
[●],
2021
Important Notice Regarding the Availability of Proxy Materials for
the Annual Stockholder Meeting to be held on December 17,
2021: Our proxy statement, proxy card and annual report on
Form 10-K (as amended by Form 10-K/A) for the year ended December
31, 2020, are available at www.iproxydirect.com/BKTI.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL
MEETING, PLEASE VOTE YOUR PROXY TODAY. YOU CAN VOTE BY INTERNET, BY
TELEPHONE OR BY MAIL USING THE INSTRUCTIONS INCLUDED ON THE NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS OR PROXY
CARD.
BK TECHNOLOGIES CORPORATION
________________________________________________________
2021 ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 17, 2021
________________________________________________________
PROXY STATEMENT
________________________________________________________
This
proxy statement contains information related to the 2021 annual
meeting of stockholders of BK Technologies Corporation, a Nevada
corporation (together with its wholly owned subsidiaries, the
“Company,” “we,” “our” or “us”), to be held virtually on the
Internet at https://agm.issuerdirect.com/bkti, on December 17, 2021, at 9:00 a.m., Eastern
Time, and at any adjournments or postponements thereof. We are
using the Securities and Exchange Commission rules that allow
issuers to furnish proxy materials to their stockholders on the
Internet. On or about [●],
2021, we expect to begin mailing a Notice of Internet Availability
of Proxy Materials, which is referred to herein as the “E-proxy notice,” to each holder of record of our
common stock as of the close of business on October 25, 2021, the
record date (the “Record Date”) for the meeting. The
E-proxy notice and this proxy statement summarize the information
you need to know to vote by proxy or during the virtual annual
meeting. You do not need to attend the virtual annual meeting in
order to vote.
Holding Company Reorganization. On
March 11, 2019, BK Technologies, Inc. (the “Predecessor
Company,” formerly known as RELM Wireless Corporation)
announced that its board of directors had approved the
implementation of a holding company reorganization (the
“Reorganization”). On March 28, 2019, the Predecessor
Company implemented the Reorganization, which resulted in us
becoming the direct parent company of, and the successor issuer to,
the Predecessor Company. At the effective time of the
Reorganization, each share of common stock of the Predecessor
Company issued and outstanding immediately prior such time
automatically converted into an equivalent corresponding share of
our common stock. Our common stock continues to be listed on the
NYSE American under the ticker symbol “BKTI.” In
addition, our directors and executive officers immediately
following the Reorganization were the same individuals who were
directors and executive officers, respectively, of the Predecessor
Company immediately prior to the Reorganization.
For the
purpose of this proxy statement, references to the Company, the
Board of Directors or any committee thereof, or our management or
business at any period prior to the Reorganization refer to those
of the Predecessor Company and thereafter to those of us, except as
otherwise specified or to the extent the context otherwise
indicates.
________________________________________________________
TABLE OF CONTENTS
|
1
|
|
|
6
|
|
|
7
|
|
|
12
|
|
|
18
|
|
|
19
|
|
|
20
|
|
|
28
|
|
|
29
|
|
|
30
|
|
|
31
|
|
|
32
|
|
|
34
|
|
|
37
|
|
|
38
|
|
|
A-1
|
|
|
B-1
|
|
|
C-1
|
ABOUT THE ANNUAL
MEETING
What is the purpose of the annual meeting?
At the
annual meeting, we are asking stockholders:
1.
To elect seven
directors named in this proxy statement to our Board of Directors
until the next annual meeting of stockholders and until their
respective successors are duly elected and qualified;
2.
To ratify the
appointment of MSL, P.A. (“MSL”) as our independent registered
public accounting firm for the fiscal year ending December 31, 2021
(“fiscal 2021”);
3.
To
consider and vote upon a proposal to approve an amendment to the
Company’s Articles of Incorporation to increase the number of
our authorized common stock from 20,000,000 to 50,000,000 and to
make a corresponding change to the number of authorized shares of
capital stock;
4.
To consider and vote upon a proposal to approve an
amendment to the Company’s 2017 Incentive Compensation Plan
(the “2017 Plan”) from to increase the number of
authorized shares from 1,000,000 shares to 3,000,000
shares; and
5.
To transact such
other business properly brought before the meeting and any
adjournment or postponement of the meeting.
Why did I receive a Notice of Internet Availability of Proxy
Materials?
The
rules of the Securities and Exchange Commission (the
“SEC”) permit us to make our proxy materials available
to beneficial owners of our common stock electronically over the
Internet without having to mail printed copies of the proxy
materials. Accordingly, on or about [●],
2021, we are sending a Notice of Internet Availability of Proxy
Materials, which is referred to herein as the “E-proxy notice,” to our beneficial owners. All
beneficial owners will have the ability to access the proxy
materials, including this proxy statement, the form of proxy card
and our annual report for the fiscal year ended December 31, 2020
(“fiscal 2020”), on the website referred to in the
E-proxy notice or to request a printed set of the proxy materials.
Instructions on how to access the proxy materials over the Internet
or to request a printed copy may be found in the E-proxy notice. In
addition, beneficial owners may request to receive proxy materials
in printed form by mail or electronically by email on an ongoing
basis.
On or
about [●],
2021,we will begin mailing paper copies of our proxy materials to
stockholders who have requested them. Those stockholders who do not
receive the E-proxy notice, including stockholders who have
previously requested to receive paper copies of proxy materials,
will receive a copy of this proxy statement, the proxy card and our
annual report for fiscal 2020 by mail.
Who is entitled to notice of, and to vote at, the annual
meeting?
You are
entitled to notice of the annual meeting and to vote, either during
the meeting or by proxy, at the annual meeting if you owned shares
of our common stock as of the close of business (5:00 p.m. EDT) on
the Record Date (October 25, 2021) of the annual meeting. On the
Record Date, [●]
shares of our common stock were issued and outstanding and held by
[●]
holders of record, including Cede & Co., which holds shares on
behalf of the beneficial owners of the Company’s common
stock. The number of outstanding shares and the number of holders
of record as of the record date are provided on pre-reverse stock
split basis. Holders of record of our common stock on the record
date are entitled to one vote per share at the annual
meeting.
1
Who can attend the meeting, and
what are the rules for admission or voting at the
meeting?
All
stockholders as of the record date, or their duly appointed
proxies, may attend. Please note that if you hold shares in
“street name” (that is, through a broker or other
nominee), you will need to bring a copy of a brokerage statement
reflecting your stock ownership as of the record date. If you want
to vote shares that you hold in street name at the annual meeting,
you must bring a legal proxy in your name from the broker or other
nominee that holds your shares.
Due to
the public health impact of the coronavirus outbreak (COVID-19),
and to support the health and well-being of our management and
stockholders, the annual meeting will be held by virtual meeting
only. Our virtual Annual Meeting will be conducted on the internet
via webcast. Stockholders will be able to attend and participate
online and submit questions during the annual meeting by visiting
https://agm.issuerdirect.com/bkti and then clicking on the document
entitled “Virtual Meeting Instructions” which includes
additional instructions necessary to access the meeting
room. Stockholders
will be able to vote their shares electronically during the annual
meeting.
Virtual Meeting
We are
sensitive to the public health and travel concerns our stockholders
may have and recommendations that public health officials have
issued in light of the continued COVID-19 pandemic. As a result,
our 2021 annual meeting will be a virtual meeting, which will be
conducted via live webcast.
To
participate in the annual meeting virtually via the Internet,
please visit https://agm.issuerdirect.com/bkti. You will need the
8-digit control number included on your Notice, your proxy card or
the instructions that accompanied your proxy
materials.
Instructions should
also be provided on the voting instruction card provided by your
bank or brokerage firm. If you do not have your 8-digit control
number and attend the meeting online, you will be able to listen to
the meeting only – you will not be able to vote or submit
questions during the meeting.
Technical Assistance for the Virtual Meeting
We will
have technicians ready to assist you with any technical
difficulties you may have accessing the virtual meeting website. If
you encounter any difficulties accessing the virtual meeting
website during the check-in or meeting time, please call the
technical support number that will be posted on the annual meeting
login page.
The
virtual annual meeting platform is fully supported across browsers
(Internet Explorer, Firefox, Chrome, and Safari) and devices
(desktops, laptops, tablets, and cell phones) running the most
updated version of applicable software and plugins. Stockholders
should ensure that they have a strong internet connection if they
intend to attend and/or participate virtually in the annual
meeting. Attendees should allow plenty of time to log in and ensure
that they can hear streaming audio prior to the start of the annual
meeting.
We may
also announce changes to the procedures for voting your shares at
the annual meeting. Any such changes will be announced via press
release and the filing of additional proxy materials with the
SEC.
What constitutes a quorum?
If a
majority of the shares of our common stock outstanding on the
record date is represented either in person (virtually) or by proxy
at the annual meeting, a quorum will be present at the annual
meeting. Shares held by persons attending the annual meeting but
not voting, shares represented in person (virtually) or by proxy
and for which the holder has abstained from voting, and broker
“non-votes” will be counted as present at the
annual meeting for purposes of determining the presence or absence
of a quorum.
2
What are broker “non-votes”?
A
broker non-vote occurs when a brokerage firm or other nominee
holding shares for a beneficial owner does not vote on a particular
proposal because the brokerage firm or other nominee did not
receive voting instructions from the beneficial owner and does not
have authority to vote on that particular proposal. Brokers and
other nominees are subject to the rules of the New York Stock
Exchange (the “NYSE”). The NYSE rules direct that
certain matters submitted to a vote of stockholders are considered
“routine” proposals. Brokers or other
nominees generally may vote on such proposals on behalf of
beneficial owners who have not furnished voting instructions,
subject to the rules of the NYSE concerning transmission of proxy
materials to beneficial owners, and subject to any proxy voting
policies and procedures of those brokerage firms or other nominees.
For “non-routine” proposals, brokers or other
nominees may not vote on such proposals unless they have received
voting instructions from the beneficial owner, and, to the extent
that they have not received voting instructions, brokers or other
nominees report such number of shares as “non-votes.”
Under
NYSE rules, the election of directors (Proposal 1), and the
approval of an amendment to the
Company’s Articles of Incorporation to increase the number of
our authorized common stock (Proposal 3), and the amendment
to the 2017 Plan to increase the number of authorized shares under
the 2017 Plan (Proposal 4) are considered “non-routine” matters. This means that brokers or
other nominees who have not been furnished voting instructions from
their clients will not be authorized to vote in their discretion on
these proposals. The ratification of the appointment of an
independent registered public accounting firm (Proposal 2) is
considered a “routine” matter. This means that brokers or
other nominees who have not been furnished voting instructions from
their clients will be authorized to exercise discretionary voting
authority to vote your shares on Proposal 2. For beneficial
stockholders, if you do not give your broker or other nominee
specific instructions, your shares will not be voted on Proposals
1, 3, or 4, but may be voted by the brokerage firm or other nominee
on Proposal 2.
Broker
non-votes, to the extent applicable, will have the effect of a vote
AGAINST the ratification of the appointment of an independent
registered public accounting firm (Proposal 2);the approval of an
amendment to the Company’s
Articles of Incorporation to increase the number of our authorized
common stock (Proposal 3); and the amendment to the 2017
Plan to increase the number of authorized shares under the 2017
Plan (Proposal 4). Broker non-votes will have no effect on the
outcome of the election of directors (Proposal 1). Because your
broker will have discretionary voting authority with respect to
Proposal 2, a broker non-vote would only arise in the event that
your broker does not receive your voting instructions and chooses
not to exercise its discretionary voting authority with respect to
such matter. We understand that certain brokers have a policy not
to exercise discretionary voting authority. Therefore, we encourage
you to instruct your broker how to vote your shares.
How will abstentions be counted?
Because the
election of directors requires only a plurality vote, abstentions
will have no impact upon the election of directors. Abstentions
will also have no impact on the outcome of Proposal 2 (ratification
of the independent registered public accounting firm). Because the
approval of Proposals 3 (approval of an amendment to the Company’s Articles of Incorporation
to increase the number of our authorized common stock), and
4 (amendment to the 2017 Plan to increase the number of authorized
shares under the 2017 Plan) require the affirmative vote of the
holders of a majority of the outstanding stock entitled to vote, an
abstention will have the effect of a vote AGAINST Proposals 3 and
4.
How do I vote?
Whether
or not you plan to attend the virtual annual meeting, we urge you
to vote your shares over the Internet as described in the E-proxy
notice. Alternatively, if you received a paper copy of the proxy
card by mail, please complete, sign, date and promptly return the
proxy card in the self-addressed stamped envelope provided. You may
also vote your shares by telephone as described in your proxy card.
Authorizing your proxy over the Internet, by mailing a proxy card
or by telephone will not limit your right to attend the virtual
annual meeting and vote your shares during the meeting. Your proxy
(one of the individuals named in your proxy card) will vote your
shares per your instructions. If you fail to provide instructions
on a proxy properly submitted via the Internet, mail or telephone,
your proxy will vote, as recommended by the Board of Directors
(sometimes referred to herein as the “Board”), (1) to
elect to our Board of Directors the seven director nominees named
in this proxy statement; (2) to ratify the appointment of MSL as
our independent registered public accounting firm for fiscal 2021;
(3) to approve the amendment to the
Company’s Articles of Incorporation to increase the number of
our authorized common stock; and (4) to approve the amendment to
the 2017 Plan to increase the number of authorized shares under the
2017 Plan.
If you
have shares held by a broker or other nominee, you may instruct
your broker or nominee to vote your shares by following the
instructions that the broker or nominee provides to you. Most
brokers and nominees allow you to vote by mail, telephone and on
the Internet. As indicated above, under NYSE rules, Proposals 1
(the election of directors), 3 (the approval of an amendment
to the Company’s Articles of
Incorporation to increase the number of our authorized common
stock), and 4 (amendment to the 2017 Plan to increase
the number of authorized shares under the 2017 Plan) are
“non-routine” matters, meaning that brokers or
other nominees who have not been furnished voting instructions from
their clients will not be authorized to vote in their discretion on
these proposals. The ratification of the appointment of MSL as our
independent registered public accounting firm for fiscal 2021
(Proposal 2) is considered a “routine” matter, meaning
that brokers or nominees who have not been furnished voting
instructions from their clients will be authorized to vote on that
proposal.
3
Can I change my vote after I have voted?
Yes.
Voting by telephone, over the Internet or by mailing a proxy card
does not preclude a stockholder from voting during the virtual
annual meeting. A stockholder may revoke a proxy, whether submitted
via telephone, the Internet or mailed, at any time prior to its
exercise by filing with our Corporate Secretary a duly executed
revocation of proxy, by properly submitting, either by telephone,
mail or Internet, a proxy to our Corporate Secretary bearing a
later date or by attending the annual meeting and voting during the
meeting. Attendance at the virtual annual meeting will not itself
constitute revocation of a proxy.
What are the Board’s recommendations?
The
Board unanimously recommends a vote “FOR”:
●
election to our
Board of each of the seven director nominees named in this proxy
statement;
●
ratification of the
appointment of MSL as our independent registered public accounting
firm for fiscal 2021;
●
approval of an
amendment to the Company’s
Articles of Incorporation to increase the number of our authorized
common stock; and
●
approval of an
amendment to the 2017 Plan to increase then number of authorized
shares under the 2017 Plan.
We do
not expect that any other matters will be brought before the annual
meeting. If, however, other matters are properly presented, the
persons named as proxies will vote the shares represented by
properly executed proxies in accordance with their judgment with
respect to those matters, including any proposal to adjourn or
postpone the annual meeting.
What vote is required to approve the proposals?
Proposal 1: Election of
Directors. Directors will be elected by a plurality of the
votes cast, either in person (virtually) or by proxy, at the annual
meeting (meaning that the seven director nominees who receive the
highest number of shares voted “for” their election are elected). You
may vote “for” or “withhold” authority to vote for each of the
director nominees. If you “withhold” authority to vote with respect to
one or more director nominees, your vote will have no effect on the
election of such nominees. Broker non-votes will also have no
effect on the election of the director nominees.
Proposal 2: Ratification of
Appointment of MSL. The number of votes cast “for” the ratification of the appointment
of MSL as our independent registered public accounting firm for
fiscal 2021, either in person (virtually) or by proxy, at the
annual meeting must exceed the number of votes cast “against” ratification. Abstentions and
broker non-votes will have no effect on the outcome of the
vote.
Proposal 3: Approval of an amendment to the
Company’s Articles of Incorporation to increase the number of
our authorized common stock. The approval of
an increase in our authorized shares of common
stock from 20,000,000 to 50,000,000 requires the affirmative vote
of a majority of the votes outstanding and entitled to vote at the
meeting. As this is a “non-routine” matter under the
NYSE rules, abstentions and broker non-votes will count as votes
“AGAINST” this Proposal.
Proposal 4: Approval of an amendment to the
2017 Plan to increase the number of authorized shares under the
2017 Plan. The approval of an amendment to the 2017
Plan to increase the number of authorized shares under the from
1,000,000 shares to 3,000,000 shares requires the affirmative vote
of a majority of the votes outstanding and entitled to vote at the
meeting. As this is a “non-routine” matter under the
NYSE rules, abstentions and broker non-votes will count as votes
“AGAINST” this Proposal.
4
Other Items. In the
event that other items are properly brought before the annual
meeting, under Nevada law, each matter other than the election of
directors will be approved if the number of votes cast in favor of
the item by the stockholders entitled to vote exceeds the number of
votes cast in opposition to the matter. A properly executed proxy
marked “abstain” with respect to any such matter
will not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention
will not be counted as a vote cast on the matter and therefore will
not affect the outcome of the matter.
As of the Record
Date, our directors and executive officers and their affiliates
owned and were entitled to vote approximately [●]
shares of our common stock, which represented approximately
[●]% of
our common stock outstanding on that date. We currently anticipate
that all of these persons will vote their and their
affiliates’ shares in
favor of the director nominees, in favor of ratification of the
appointment of MSL, in favor of an amendment to the Company’s
articles of incorporation to increase the number of authorized
shares, and in favor of the amendment to the 2017 Plan to increase
the number of authorized shares under the 2017
Plan.
Who pays for the preparation of the proxy and soliciting
proxies?
We are
making this solicitation of proxies and have paid the entire
expense of preparing, printing and mailing the E-proxy notice and,
to the extent requested by our stockholders, this proxy statement
and any additional materials furnished to stockholders. We have
retained Alliance Advisors LLC to assist in the solicitation of
proxies for the annual meeting and will pay Alliance Advisors a fee
of approximately $12,500, including reimbursement of reasonable
out-of-pocket expenses and disbursements incurred in connection
with the proxy solicitation. It is anticipated that Alliance
Advisors LLC will employ approximately 25 persons to solicit
stockholders of the Company for the annual meeting. We have also
agreed to indemnify Alliance Advisors LLC against certain losses,
costs and expenses. In addition, our directors, officers and
employees may solicit proxies from stockholders by telephone,
e-mail or other electronic means, or in person. These persons will
not receive additional compensation for soliciting proxies.
Arrangements also will be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of stock held of
record by these persons, and we will reimburse them for reasonable
out-of-pocket expenses.
5
The
table below sets forth information regarding the beneficial
ownership of our common stock as of the Record Date, October 25,
2021, by the following individuals or groups:
●
each person who is
known by us to own beneficially more than 5% of our common
stock;
●
each of our
directors and nominees for director;
●
each of our named
executive officers identified in the “Summary Compensation Table For
2019-2020” appearing in
this proxy statement (the “Named Executive Officers”);
and
●
all of our current
directors and executive officers as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to
securities. Shares of our common stock that are subject to our
stock options that are presently exercisable or exercisable within
sixty (60) days of October 25, 2021, as well as shares of common
stock issuable within sixty (60) days of October 25, 2021, upon
vesting of restricted stock units (“RSUs”), are deemed
to be outstanding and beneficially owned by the person holding the
stock options or RSUs, as applicable, for the purpose of computing
the percentage of ownership of that person, but are not treated as
outstanding for the purpose of computing the percentage of any
other person.
Unless
indicated otherwise below, the address of our directors, director
nominees and executive officers is c/o BK Technologies Corporation,
7100 Technology Drive, West Melbourne, Florida 32904. Except as
indicated below, the persons
named
in the table have sole voting and investment power with respect to
all shares of common stock beneficially owned by them. As of
October 25, 2021, we had outstanding [●]
shares of our common stock.
|
|
|
Shares of Common
Stock Beneficially Owned
|
||
|
Name and Address
of Beneficial Owner
|
|
Number of
Shares
|
|
Percent of
Class
|
|
Beneficial Owners of More Than 5% of Our Common Stock:
|
|
|
|
|
|
Fundamental
Global GP, LLC
|
|
[●]
|
|
[●]%
|
|
D. Kyle
Cerminara, Director
|
|
[●]
|
|
[●]%
|
|
Benchmark
Capital Advisors
|
|
[●]
|
|
[●]%
|
|
AIGH
Capital Management, LLC
|
|
[●]
|
|
[●]%
|
|
Donald
F.U. Goebert
|
|
[●]
|
|
[●]%
|
|
|
|
|
|
|
|
Directors, Director Nominees and Named Executive Officers (not
otherwise included above):
|
|
|
|
|
|
John M.
Suzuki, Chief Executive Officer and Director
|
|
[●]
|
|
[●]%
|
|
Timothy
A. Vitou, President
|
|
[●]
|
|
[●]%
|
|
William
P. Kelly, Executive Vice President and Chief Financial
Officer
|
|
[●]
|
|
[●]%
|
|
Randy
Willis, Chief Operating Officer
|
|
[●]
|
|
[●]%
|
|
Branko
Avanic, Chief Technology Officer
|
|
[●]
|
|
[●]%
|
|
Michael
R. Dill, Director
|
|
[●]
|
|
[●]%
|
|
Charles
T. Lanktree, Director
|
|
[●]
|
|
[●]%
|
|
E. Gray
Payne, Chairman of the Board
|
|
[●]
|
|
[●]%
|
|
John W.
Struble, Director
|
|
[●]
|
|
[●]%
|
|
R. Joseph Jackson, Director Nominee
|
|
|
|
|
|
Inez Tenenbaum, Director Nominee
|
|
[●]
|
|
[●]%
|
|
|
|
|
|
|
|
All current directors (and nominees) and executive officers as a
group (13 persons)
|
|
[●]
|
|
[●]%
|
______________
*Less
than 1%
6
PROPOSAL 1: ELECTION OF
DIRECTORS
General
At the
annual meeting, seven nominees will be elected as directors. Our
Board of Directors currently consists of six members, all of whom
are standing for re-election at the annual meeting, with the
exception of John W. Struble. At the 2020 annual meeting, our
stockholders elected D. Kyle Cerminara, Michael R. Dill, Lewis M.
Johnson, Charles T. Lanktree, John W. Struble and E. Gray Payne as
directors. On March 2, 2021, Lewis M. Johnson resigned from the
Board, effective immediately. On the same day, the Board reduced
the size of the Board to five directors. The Board later
increased the size of the Board back to six directors and appointed
John M. Suzuki, the newly appointed Chief Executive Officer of the
Company, to the Board. Our Board of Directors, based on the
recommendation of the Nominating and Governance Committee, has
increased the size of the Board to seven seats, nominated five of
our current directors to stand for re-election at the annual
meeting, and nominated three new candidates for the remaining three
seats. Our Board of Directors, based on the recommendation of the
Nominating and Governance Committee, has nominated, R. Joseph
Jackson and Inez Tenenbaum to fill the sixth and, seventh seats on
the Board of Directors. We expect each nominee for director to be
able to serve if elected. If any nominee is not able to serve,
proxies will be voted in favor of the remainder of those nominated
and may be voted for substitute nominees, unless our Board of
Directors chooses to reduce the number of directors serving on the
Board.
The
directors elected at the annual meeting will serve until the next
annual meeting of stockholders and until their respective
successors are duly elected and qualified.
We are
of the view that the continuing service of qualified incumbent
directors promotes stability and continuity in the function of the
Board of Directors, contributing to the Board’s ability to work as a collective
body, while giving us the benefit of the familiarity and insight
into our affairs that our directors have accumulated during their
tenure. When analyzing whether directors and nominees have the
desired experience, qualifications, attributes and skills,
individually and taken as a whole, the Nominating and Governance
Committee and the Board of Directors focus on the information as
summarized in each of the directors’ individual biographies set forth
below. In particular, the Board selected General Payne, the current
Chairman of the Board, to serve as a director because he brings
extensive strategic, operational and leadership experience and
valuable insight into the military sector, having over 40 years of
military operational and strategic expertise. Mr. Cerminara brings
his extensive experience in the financial industry, including
investing, capital allocation, finance and financial analysis of
public companies, and operational experience as the Chief Executive
Officer of a publicly-traded company. He also brings the
perspective of one of our most significant stockholders. Mr. Dill
brings over 20 years of extensive leadership and operational
experience to the Board, including experience in developing and
implementing strategic plans. Mr. Lanktree brings extensive
operational and leadership experience, wireless communications
industry experience and public company experience to the Board,
including experience as a Chief Executive Officer. Mr. Suzuki
brings extensive experience in the land mobile radio industry and
executive leadership in the industry. And Ms. Tenenbaum brings
valuable experience as a practicing lawyer and industry-specific
experience as the former Chair of the US Consumer Product Safety
Commission.
Vote Required
The
affirmative vote of a plurality of the votes cast, either in person
or by proxy, at the annual meeting is required for the election of
these nominees as directors.
Recommendation of the Board
Our
Board of Directors unanimously recommends that stockholders vote
“FOR” the election of the seven nominees
named in this proxy statement as directors.
4817-5791-7153
7
Nominees for Election as Directors
The
following table sets forth the nominees to be elected at the annual
meeting, the year each nominee was first elected as a director and
each nominee’s age as of
September 30, 2021:
|
Name and Year First Elected
|
|
Age
|
|
Position
|
|
E. Gray
Payne (2017)
|
|
73
|
|
Director
(Chair)
|
|
D. Kyle
Cerminara (2015)
|
|
43
|
|
Director
|
|
Michael
R. Dill (2017)
|
|
56
|
|
Director
|
|
R.
Joseph Jackson (N/A)
|
|
55
|
|
Director
|
|
Charles
T. Lanktree (2017)
|
|
72
|
|
Director
|
|
John M.
Suzuki (2021)
|
|
57
|
|
Director
|
|
Inez
Tenenbaum (N/A)
|
|
70
|
|
Director
|
The
business experience of each nominee for director is set forth below
as of September 30, 2021.
E. Gray
Payne was appointed to the
Board of Directors in January 2017 and has served as Chairman of
the Board since July 2021. He served as Senior Vice President of
The Columbia Group (“TCG”) from September 2010 to September 2017,
where he was responsible for managing the Marine Corps and Navy
Programs Divisions. TCG is a federal consulting firm working with
the Department of Defense, the Department of Homeland Security, the
National Oceanic and Atmospheric Administration, and private
clients. TCG consults in the areas of logistics, acquisitions,
program management, information technology, training, marine
architecture and engineering, and command and control systems.
Since December 2011, General Payne has also provided consulting
services to and served on the Advisory Council of Marstel-Day, LLC,
located in Fredericksburg, Virginia, which consults in the areas of
conservation, environmental compliance, and encroachment. Prior to
September 2010, General Payne was on active duty with the Marine
Corps for 10 years, retiring as a Major General. His three commands
as a General Officer included the Marine Corps Mobilization
Command, the Marine Corps Logistics Command, and the
4th Marine
Logistics Group. In his last tour with the Marine Corps, he served
as Assistant Deputy Commandant for Facilities, where he was
responsible for 28 installations and an annual budget exceeding
$5.5 billion. Prior to March 2001, he worked with a number of
companies in various capacities, including as a management
consultant, Chief Financial Officer, Chief Operating Officer, and
Chief Executive Officer of
companies ranging in size from $2.5 million to $100 million.
General Payne currently serves on the board of directors of FG
Financial Group, Inc. (Nasdaq: FGF), a publicly traded reinsurance
and financial services company (since May 2018), VetCV (since
December 2017), and National Wildlife Refuge Association (since
June 2018). He is a prior chairman of the board of the Marine Corps
Association and Foundation and served on the Advisory Council of
Marstel-Day, LLC. He received a B.S. in Economics from North
Carolina State University and a M.S. in Strategic Studies from U.S.
Army War College.A member of the National Association of Corporate
Directors, he has also earned the Professional Director designation
from the American College of Corporate
Directors.
D. Kyle
Cerminara was appointed to the
Board of Directors in July 2015 and served as Chairman from March
2017 until April 2020. Mr. Cerminara has over 20 years’
experience as an institutional investor, asset manager, director,
chief executive, founder and operator of multiple financial
services and technology businesses. Mr. Cerminara co-founded
Fundamental Global in 2012, which is the largest stockholder of the
Company, and serves as its Chief Executive
Officer.
Mr.
Cerminara is a member of the board of directors of a number of
companies focused in the reinsurance, investment management,
technology and communication sectors. These include FG Financial
Group, Inc. (Nasdaq: FGF) (formerly known as 1347 Property
Insurance Holdings, Inc.), which operates as a diversified
reinsurance and investment management company, since December 2016;
Aldel Financial Inc. (NYSE: ADF), a special purpose acquisition
company co-sponsored by Fundamental Global, which has entered into
a definitive business combination agreement with Hagerty, a leading
specialty insurance provider focused on the global automotive
enthusiast market, since April 2021; Ballantyne Strong, Inc. (NYSE
American: BTN), a holding company with diverse business activities
focused on serving the entertainment and retail markets, since
February 2015; and Firefly Systems Inc., a venture- backed digital
advertising company, since August 2020. He has also served as
President of FG New America Acquisition II Corp., a special purpose
acquisition company in the process of going public and focused on
merging with a company in the InsureTech, FinTech, broader
financial services and insurance sectors since February
2021.
From July 2020 to July 2021,
Mr. Cerminara served as Director and President of FG New
America Acquisition Corp. (NYSE: FGNA), a special purpose
acquisition company, which merged with OppFi Inc. (NYSE: OPFI), a
leading financial technology platform that powers banks to help
everyday consumers gain access to credit. Mr. Cerminara was appointed Chairman of FG
Financial Group, Inc. in May 2018. He was also appointed Chairman
of GreenFirst Forest Products Inc. (TSXV: GFP) (formerly Itasca
Capital Ltd.), from June 2018 to June 2021, and served as a member
of its board of directors from June 2016 to October 2021. Mr.
Cerminara has served as the Chairman of Ballantyne Strong, Inc.
since May 2015. He also previously served as its Chief Executive
Officer from November 2015 to April 2020. He also served on the
board of directors of Limbach Holdings, Inc. (Nasdaq: LMB), a
company which provides building infrastructure services, from March
2019 to March 2020; Iteris, Inc. (Nasdaq: ITI), a publicly-traded,
applied informatics company, from August 2016 to November 2017;
Magnetek, Inc., a publicly-traded manufacturer, in 2015; and
blueharbor bank, a community bank, from October 2013 to January
2020. He served as a Trusteeand President of StrongVest ETF Trust,
which was an open-end management investment company, from July 2016
to March 2021. Previously, Mr. Cerminara served as the Co-Chief
Investment Officer of CWA Asset Management Group, LLC, a position
he held from January 2013 to December 2020.
8
Prior
to these roles, Mr. Cerminara was a portfolio manager at Sigma
Capital Management, an independent financial adviser, from 2011 to
2012, a director and sector head of the Financials Industry at
Highside Capital Management from 2009 to 2011, and a portfolio
manager and director at CR Intrinsic Investors from 2007 to 2009.
Before joining CR Intrinsic Investors, Mr. Cerminara was a vice
president, associate portfolio manager and analyst at T. Rowe Price
(Nasdaq: TROW) from 2001 to 2007, where he was named amongst
Institutional Investor’s Best of the Buy Side Analysts in
November 2006, and an analyst at Legg Mason from 2000 to
2001.
Mr.
Cerminara received an MBA degree from the Darden Graduate School of
Business at the University of Virginia and a B.S. in Finance and
Accounting from the Smith School of Business at the University of
Maryland, where he was a member of Omicron Delta Kappa, an NCAA
Academic All American and Co-Captain of the men’s varsity
tennis team. He also completed a China Executive Residency at the
Cheung Kong Graduate School of Business in Beijing, China. Mr.
Cerminara holds the Chartered Financial Analyst (CFA)
designation.
Michael R.
Dill was appointed to the Board
of Directors in March 2017. Mr. Dill has served as President,
Americas West, and previously as Vice President and General
Manager, of GKN Aerospace Engine Systems North America, a designer
and manufacturer of aerospace engine components, since April 2017.
Mr. Dill previously served as President of the Aerospace, Power
Generation and General Industrial divisions at AFGlobal
Corporation, a privately-held, integrated technology and
manufacturing company, from August 2014 to April 2017. Prior to
joining AFGlobal, Mr. Dill held various positions in the Aerospace
and Defense division of CIRCOR International (NYSE: CIR), a
publicly-traded global manufacturer of highly engineered
environment products, including serving as Group Vice President
from 2009 to 2014, Vice President of Business Development and
Strategy from 2010 to 2011 and Director of Continuous Improvement
from 2009 to 2011. From 2007 to 2009, he served as a Business Unit
Director and Facility Leader within the aerospace group of Parker
Hannifin Corporation (NYSE: PH), a publicly-traded diversified
manufacturer of motion and control technologies and systems. Before
joining Parker Hannifin Corporation, he held various positions with
Shaw Aero Devices, Inc., a producer of aerospace components and
equipment, from 1996 to 2007, and Milliken and Company, a
manufacturing company, from 1988 to 1996. Mr. Dill received a B.S.
in Management from the Georgia Institute of
Technology.
R. Joseph
Jackson was nominated to the
Board of Directors for the 2021 Annual Meeting. Mr. Jackson
currently serves as the Managing Partner of Metrolina Capital, a
firm that is in the business of providing private lending,
structured equity, and making real estate investments. Mr. Jackson
founded Metrolina Capital, which is the evolution of various
Metrolina entities that started in 1996, and has served as Managing
Partner since its inception. His background and experience include
commercial real estate investments, private lending, structured
equity, analytics, development, and consulting.
Mr.
Jackson completed his Bachelor of Arts degree in Economics and a
Master of Business Administration degree from the University of
North Carolina at Charlotte. He has been a licensed Real Estate
Broker since 1984 (NC Broker #93412/SC Broker #59906) and has been
a State Certified General Real Estate Appraiser since 1990 (NC
#A3241/SC #CG1838).
Mr.
Jackson earned the MAI (#41604) membership designation from the
Appraisal Institute, which is held by professionals who can provide
a wide range of services relating to all types of real property,
such as providing opinions of value, evaluations, reviews, and
consulting regarding investment decisions. He also holds the CCIM
(Certified Commercial Investment Member) designation, a globally
recognized designation with members across North America and in
more than 30 countries. His CCIM designation number is #19213. In
addition, Mr. Jackson also holds an MRICS (#6208909) designation.
The Royal Institution of Chartered Surveyors (RICS) is a
professional body promoting and enforcing the highest international
standards in the valuation, management and development of land,
real estate, construction and infrastructure.
Mr.
Jackson currently serves on the following boards: 1) Carolinas
Business Capital, a regional Small Business Administration
Certified Development Corporation, for over 20 years and has served
as board chair for the last 4 years; 2) Community First
Bancorporation and Community First Bank in South Carolina; 3)
SeaTrust Mortgage, a subsidiary of Community First Bancorporation,
where he is currently board chair; 4) the UNC Charlotte Athletic
Foundation; and 5) Camino Community Center, a non-profit
organization serving the Latino community. He also serves on the
finance committee of First Baptist Church in Blowing Rock, North
Carolina, and is an investment manager for a private
REIT.
9
Charles T.
Lanktree was appointed to the
Board of Directors in March 2017. Mr. Lanktree has served as Chief
Executive Officer of Eggland’s Best, LLC, a joint venture
between Eggland’s Best, Inc. and Land O’Lakes, Inc.
distributing nationally branded eggs, since 2012 and also served as
its President from 2012 to 2018. Since 1997, Mr. Lanktree has
served as President and Chief Executive Officer of Eggland’s
Best, Inc., a franchise-driven consumer egg business, where he
previously served as the President and Chief Operating Officer from
1995 to 1996 and Executive Vice President and Chief Operating
Officer from 1990 to 1994. Mr. Lanktree currently serves on the
board of directors of Eggland’s Best, Inc. and several of its
affiliates and on the board of directors of Ballantyne Strong, Inc.
(NYSE American: BTN), a holding company with diverse business
activities focused on serving the cinema, retail, financial and
government markets. From 2010 to 2013, he served on the board of
directors of Eurofresh Foods, Inc., a privately-held company, and,
from 2004 to 2013, he was on the board of directors of
Nature’s Harmony Foods, Inc. Prior to joining Eggland’s
Best, Inc., Mr. Lanktree served as the President and Chief
Executive Officer of American Mobile Communications, Inc. from 1987
to 1990 and as the President and Chief Operating Officer of
Precision Target Marketing, Inc. from 1985 to 1987. From 1976 to
1985, he held various executive-level marketing positions with The
Grand Union Company and BeechNut Foods Corporation. Mr. Lanktree
received an MBA from the University of Notre Dame and a B.S. in
Food Marketing from St. Joseph’s College. He also served in
the U.S. Army and U.S. Army Reserves from 1971 to
1977.
John M.
Suzuki was appointed to the
Board of Directors in July 2021. From May 2019 until accepting the
position of Chief Executive Officer of the Company, Mr. Suzuki
served as Chief Strategy Officer of Imperium Leadership, where he
has overseen the development and growth of the business. From May
2015 through May 2019, he served as President and CEO of EFJohnson
Technologies, a two-way radio manufacturer. From 2011 through
2015, Mr. Suzuki served in a variety of leadership positions,
including as Senior Vice President of Sales for AVTEC Incorporated,
and Vice President of Sales and Marketing for 3eTechnologies
International, a subsidiary of UltraElectronics. From 2004 through
2011, Mr. Suzuki served as Senior Vice President, Sales of
EFJohnson Technologies. Mr. Suzuki has a broad background in
general management, strategy, product development, sales,
marketing, supply chain, operations and engineering, and mergers
and acquisitions. He is a strategic thinker with extensive
experience in developing and growing new business opportunities.
Mr. Suzuki holds a bachelor’s degree in electrical
engineering from the University of Ottawa and an MBA from Duke
University.
Inez
Tenenbaum was nominated to the
Board of Directors for the 2021 Annual Meeting. Ms. Tenenbaum
practices law with Wyche, P.A. in Greenville, South Carolina,
following her tenure as Chairman of the U.S. Consumer Product
Safety Commission (CPSC). She practices in the area of consumer
product safety and advises clients on matters involving the CPSC
including consumer product testing and certification, internal
compliance programs, risk assessment and management, product
reporting and recalls, litigation, and corporate responsibility.
Ms. Tenenbaum also has provided consulting services on education
policy for state and regional organizations whose mission is to
improve the quality of public education.
Ms.
Tenenbaum was nominated Chairman of the U. S. Consumer Product
Safety Commission by President Barack Obama on May 5, 2009, and was
confirmed unanimously by the United States Senate on June 19, 2009.
She began her term on June 22, 2009, and served until November 30,
2013, the end of her term. She chose not to be reappointed to the
position. At the beginning of her tenure, Ms. Tenenbaum established
a leadership philosophy aimed at making the agency more accessible
and transparent; making education and advocacy a priority; and
being firm, but fair, in enforcing safety laws and working to keep
unsafe products out of the hands of consumers.
During
her tenure, she fulfilled a key promise to the Congress and
consumers by working closely with agency staff, consumer
stakeholders, and industry to complete all the major safety rules
required by the Consumer Product Safety Improvement Act of 2008
(CPSIA), a law that reformed and empowered the CPSC.
Ms.
Tenenbaum’s term has been recognized as one of the most
transformative in the history of the CPSC. Her leadership resulted
in the creation of the first CPSC public database,
www.saferproducts.gov, that provides consumer and manufacturers
with unprecedented access to information about the safety of
consumer product hazards. During her tenure, the CPSC opened its
first oversees office, located at the U.S. Embassy in Beijing. In
2011, the CPSC opened the new National Product Testing and
Evaluation Center, testing products for defects and establishing
test methods to determine compliance with safety standards. Also,
in 2011, the CPSC implemented a Risk Assessment Methodology (RAM)
pilot project to analyze data available in Customs and Border
Protection’s International Trade Data System (ITDS) to target
potential unsafe products from coming into the
country.
Prior to serving as Chairman for the CPSC, Ms.
Tenenbaum was elected South Carolina’s State Superintendent
of Education in 1998, and again in 2002. During her tenure, student
achievement improved at the fastest rate in the nation, with scores
increasing on every state, national, and international test
administered. At the end of her tenure, South Carolina was a leader
in the nation in education improvement. Education Week,
a distinguished national publication,
ranked South Carolina highest in the country for the quality of its
academic standards, assessment, and accountability system. Standard
& Poor’s identified South Carolina as an
“outperformer” on NAEP for consistently achieving above
the statistical expectations, and the state’s SAT scores
increased 34 points over the eight years, the largest such gain in
the nation.
In
2001, the Center for Creative Leadership, a nonprofit leadership
institute in Greensboro, North Carolina, named Ms. Tenenbaum the
recipient of its third annual Distinguished Alumni Award for
“making leadership a fundamental requirement for school
reform as part of South Carolina’s strategic plan for
education.”
Ms.
Tenenbaum received her Bachelor of Science in 1972 and Master of
Education degrees in 1974 from the University of Georgia and her
law degree from the University of South Carolina in 1986. She is
the recipient of numerous honorary degrees and has been recognized
by national, state, and community organizations for her civic work
on consumer product safety, education leadership, civil rights,
women’s empowerment, and child and family
advocacy.
Ms.
Tenenbaum’s awards include the Outstanding Service Award from
the University of Georgia Mary Francis Early College of Education;
The Order of the Palmetto (South Carolina’s highest civilian
award); Women of Vision Award from South Carolina Education
Television and Public Radio; Global Vision Award from the Columbia
World Affairs Council; Kids in Danger’s Best Friend Award;
Advocate of the Year from the South Carolina Appleseed Justice
Center; Great Friend of Kids Award from EdVenture Children’s
Museum; Woman of Achievement from the South Carolina Commission on
Women; J. Waites Waring Humanitarian Award from the United Black
Fund of the Midlands; Whitney M. Young Award from the Boy Scouts of
America, Indian Waters Council; and Woman of Distinction from the
Congaree Girls Scouts.
10
Information about our Executive Officers
The
following table presents information with respect to our executive
officers as of September 30, 2021.
|
Name
|
Age
|
Position
|
|
John
M. Suzuki
|
57
|
Chief
Executive Officer
|
|
Timothy A.
Vitou
|
64
|
President
|
|
William P.
Kelly
|
64
|
Executive Vice
President, Chief Financial Officer and Secretary
|
|
Henry R. (Randy)
Willis
|
62
|
Chief Operating
Officer
|
|
Branko Avanic,
Ph.D.
|
60
|
Chief Technology
Officer
|
John M.
Suzuki was appointed as our
Chief Executive Officer on July 19, 2021. From May 2019 until
accepting the position of Chief Executive Officer of the Company,
Mr. Suzuki served as Chief Strategy Officer of Imperium Leadership,
where he has overseen the development and growth of the business.
From May 2015 through May 2019, he served as President and CEO of
EFJohnson Technologies, a two-way radio manufacturer. From
2011 through 2015, Mr. Suzuki served in a variety of leadership
positions, including as Senior Vice President of Sales for AVTEC
Incorporated, and Vice President of Sales and Marketing for
3eTechnologies International, a subsidiary of UltraElectronics.
From 2004 through 2011, Mr. Suzuki served as Senior Vice President,
Sales of EFJohnson Technologies. Mr. Suzuki has a broad background
in general management, strategy, product development, sales,
marketing, supply chain, operations and engineering, and mergers
and acquisitions. He is a strategic thinker with extensive
experience in developing and growing new business opportunities.
Mr. Suzuki holds a bachelor’s degree in electrical
engineering from the University of Ottawa and an MBA from Duke
University.
Timothy A.
Vitou has been our President
since January 17, 2017. He previously served as the Company’s
Senior Vice President of Sales and Marketing since May 2008. Prior
to that, he served as Vice President of Sales for Mobility
Electronics, Inc., from August 2006 to May 2007, Senior Director of
Global Go-To-Market, for Motorola Solutions, Inc., from April 2002
to April 2006, and General Manager, Americas Region, for Motorola
Solutions, from April 2000 to April 2002.
William P.
Kelly has been our Executive
Vice President and Chief Financial Officer since July 1997, and
Secretary since June 2000. From October 1995 to June 1997, he was
Vice President and Chief Financial Officer of our subsidiary, RELM
Communications, Inc. From January 1993 to October 1995, he was the
Financial Director of Harris Corp. Semiconductor
Sector.
Henry R.
(Randy) Willis has been our
Chief Operating Officer since March 14, 2018. He previously served
as the Company’s Vice President of Operations since August
2017, overseeing all aspects of manufacturing and quality. Prior to
joining the Company, he held leadership positions in manufacturing,
operations, quality, supply chain, industrial engineering and
program management, including founding and serving as President of
Target Velocity Consulting, Inc., a “Lean/Six Sigma”
firm specializing in operational improvements, from December 2009
to August 2017 and Vice President, Continuous Improvement, for
CIRCOR International, Inc. (NYSE: CIR), from August 2007 to
December 2009. He also served in leadership positions for
Parker-Hannifin Corporation (NYSE: PH) from January 2005 to August
2007 and Honeywell International Inc. (NYSE: HON) from June 1998 to
January 2005. Mr. Willis holds certifications as a Lean Master and
Six Sigma Black Belt and B.S. and M.S. degrees in Industrial
Technology from East Carolina University.
Branko
Avanic, Ph.D., has been our
Chief Technology Officer since October 30, 2019. Dr. Avanic
previously served as Senior Vice President of Engineering of BK
Technologies, Inc., our wholly-owned subsidiary, since August 13,
2019. Prior to joining the Company, he served in a number of roles
at Motorola Solutions, Inc. (NYSE: MSI), including Director, Head
Architect – Devices Engineering for several different
projects from 2015 through June 2019 and a variety of other roles
from 1999 to 2015. Dr. Avanic also serves as President of Ph.D.
Research Group Inc. Dr. Avanic has previously served as an adjunct
professor at the University of Miami and Florida Atlantic
University. He received a B.S., M.S. and Ph.D. in Electrical
Engineering from the University of Miami.
11
CORPORATE GOVERNANCE
The Board of Directors is committed to good business practices,
transparency in financial reporting and the highest level of
corporate governance. The Board of Directors, which is elected by
the stockholders, is our ultimate decision-making body, except with
respect to those matters reserved to our stockholders. The Board
selects the senior management team, which is charged with the
conduct of our business. Having selected the senior management
team, the Board of Directors acts as an advisor and counselor to
senior management and ultimately monitors its
performance.
Board of Directors Independence
The
NYSE American corporate governance listing standards provide
that the Company, as a smaller reporting company, may have a board
of directors consisting of at least fifty percent (50%) independent
directors. Our Board of Directors reviews the relationships that
each director has with us and other parties. Only those directors
who do not have any of the categorical relationships that preclude
them from being independent within the independence requirements of
the NYSE American corporate governance listing standards and who
the Board of Directors affirmatively determines have no
relationships that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director are
considered to be independent directors. The Board of Directors
reviews a number of factors to evaluate the independence of each of
its members. These factors include its members’ current and
historic relationships with us and our subsidiaries; their
relationships with management and other directors; the
relationships their current and former employers have with us and
our subsidiaries; and the relationships between us and other
companies of which our Board members are directors or executive
officers. The Board of Directors reviewed the various factors
described above in April 2021, including an evaluation of the
holdings of Fundamental Global, one of our most significant
stockholders, and Mr. Cerminara’s positions as its Chief
Executive Officer, Co-Founder and Partner, and our investment
in FG Financial Group, Inc. (Nasdaq:
FGF), through our investment in FGI 1347 Holdings, LP, a
consolidated variable interest entity of which we are the sole
limited partner. Pursuant to such evaluation, the Board of
Directors determined that Messrs. Dill, Lanktree, and General Payne
were “independent” directors within the
independence requirements of the NYSE American corporate governance
listing standards and all applicable rules and regulations of the
SEC. All Board committee members during 2020 were, and all current
Board committee members are, independent for the purpose of the
committees on which they served or serve.
Stockholder Communications
Our
Board of Directors believes that it is important for our
stockholders and other interested parties to have a process to send
communications to the Board. Accordingly, stockholders and other
interested parties desiring to send a communication to the Board of
Directors or to a specific director may do so by delivering a
letter to our Corporate Secretary at 7100 Technology Drive, West
Melbourne, Florida 32904. The mailing envelope must contain a clear
notation indicating that the enclosed letter is a
“stockholder-board communication” or
“stockholder-director communication” (or
“interested party-board communication” or
“interested party-director communication,” as
appropriate). All such letters must identify the author as the
stockholder or interested party and clearly state whether the
intended recipients of the letter are all members of our Board of
Directors or certain specified individual directors. The secretary
will open such communications and make copies, and then circulate
them to the appropriate director or directors and such other
individuals in accordance with our corporate governance
policies.
Policy Concerning Director Attendance at Annual Stockholders’
Meetings
While
we encourage all members of our Board of Directors to attend our
annual stockholders’ meetings, there is no formal policy as
to their attendance at annual stockholders’ meetings. All six
of our directors serving at the time of the 2020 annual
stockholders’ meeting attended such meeting.
12
Codes of Ethics
Our
Board of Directors has adopted the Code of Business Conduct and
Ethics (the “Code of Conduct”) that applies to all of
our directors, officers and employees, including our principal
executive officer, principal financial officer and principal
accounting officer, and the Code of Ethics for the CEO and Senior
Financial Officers (the “Code of Ethics”) containing
additional specific policies. The Code of Conduct and the Code of
Ethics are posted on our Internet website at
www.bktechnologies.com/investor-relations and are available free of
charge, upon request to Corporate Secretary, 7100 Technology Drive,
West Melbourne, Florida 32904; telephone number: (321)
984-1414.
Any
amendment to, or waiver from, a provision of the codes of ethics
applicable to our directors and executive officers will be
disclosed in a current report on Form 8-K within four business days
following the date of the amendment or waiver, unless the rules of
the NYSE American then permit website posting of such amendments
and waivers, in which case we would post such disclosures on our
Internet website.
Hedging and Pledging Policy
Our
insider trading policy prohibits our officers, other employees and
directors from hedging or pledging our shares.
Legal Proceedings
No
director or executive officer has been involved in any legal
proceeding during the past ten years that is material to an
evaluation of his or her ability or integrity.
Family Relationships
There
are no family relationships among any of our directors, director
nominees or executive officers.
Meetings and Committees of the Board of Directors
The
Board of Directors held 11 meetings during 2020, and each of the
directors attended at least seventy-five percent (75%) of the total
number of meetings of the Board of Directors held during the period
for which he was a director and the total number of meetings held
by all committees of the Board of Directors on which he served
during the periods that he was a member of that
committee.
The
Board of Directors has a standing Audit Committee, Compensation
Committee and Nominating and Governance Committee. As of October
25, 2021, the members of the committees of the Board of Directors
were as follows:
|
Director
|
|
Audit Committee
|
|
Compensation Committee
|
|
Nominating and Governance Committee
|
|
E. Gray
Payne(1)
|
|
Chair
|
|
X
|
|
Chair
|
|
D. Kyle
Cerminara
|
|
|
|
|
|
|
|
Michael
R. Dill
|
|
X
|
|
Chair
|
|
X
|
|
Charles
T. Lanktree
|
|
X
|
|
X
|
|
X
|
|
John M.
Suzuki
|
|
|
|
|
|
|
|
John W.
Struble
|
|
|
|
|
|
|
(1)
Chairman of the
Board.
13
Audit
Committee.
The Audit Committee has a written charter, which is available at
our website at www.bktechnologies.com/investor-relations. The Audit
Committee Charter requires that the Audit Committee consist of two
or more members of the Board of Directors, each of whom are
independent, as defined by the corporate governance listing
standards of the NYSE American.
The
Board of Directors has determined that each member of the Audit
Committee is, and was during 2020, independent, as defined by Rule
10A-3 of the Exchange Act, and the corporate governance listing
standards of the NYSE American. The Board of Directors also has
determined that General Payne is an “audit committee
financial expert,” as defined in Item 407(d)(5) of Regulation
S-K.
The
Audit Committee has oversight responsibility for the quality and
integrity of our consolidated financial statements and is directly
responsible for the appointment, compensation, retention and
oversight of our independent registered public accounting firm. The
committee meets privately with members of our independent
registered public accounting firm, which has unrestricted access
and reports directly to the committee, and annually reviews their
performance and independence from management in deciding whether to
continue to retain the accounting firm or engage a different
accounting firm. The Audit Committee also evaluates the lead
partner designated by the independent auditor. As required by the
SEC’s rules, the committee is directly involved in the review
and selection of the audit partners serving on the auditor’s
engagement team during mandated five-year partner rotations. The
Audit Committee also oversees audit fee negotiations associated
with our retention of the independent auditor and has the sole
authority to approve such fees. The Audit Committee met five times
during 2020. The primary functions of the Audit Committee are to
oversee: (i) the audit of our consolidated financial statements
provided to the SEC and our stockholders; (ii) our internal
financial and accounting processes; (iii) the independent audit
process; and (iv) compliance with our Code of Conduct and Code of
Ethics, as well as conflicts of interest and related party
transactions. Additionally, the Audit Committee has
responsibilities and authority necessary to comply with Rules
10A-3(b)(2), (3), (4), and (5) of the Exchange Act, concerning the
responsibilities relating to: (a) registered public accounting
firms, (b) complaints relating to accounting, internal accounting
controls or auditing matters, (c) authority to engage advisors, and
(d) funding. These and other aspects of the Audit Committee’s
authority are more particularly described in the Audit Committee
Charter.
The
Audit Committee has adopted a formal policy concerning approval of
audit and non-audit services to be provided to us by our
independent registered public accounting firm, MSL. The policy
requires that all services to be provided by MSL, including audit
services and permitted audit-related and non-audit services, must
be pre-approved by the audit committee. The Audit Committee
approved all audit services provided by MSL to us during 2020. MSL
did not provide any audit-related or non-audit services to us
during 2020.
Compensation
Committee. All members of the
Compensation Committee are, and were during fiscal 2020,
independent under the corporate governance listing standards of the
NYSE American and applicable SEC rules and regulations. The
Compensation Committee has a written charter, which is available at
our website at www.bktechnologies.com/investor-relations. The
functions performed by the Compensation Committee include reviewing
and approving all compensation arrangements for our executive
officers and administering our equity incentive plans and programs.
The Compensation Committee makes all final compensation decisions
for our executive officers, including equity grants. The
Compensation Committee reviews the performance of our executive
officers, including the principal executive officer. Our principal
executive officer annually reviews the performance of each of our
executive officers and other officers, and makes recommendations
regarding our executive officers and other officers and managers to
the Compensation Committee for its consideration and approval. The
Compensation Committee can exercise its discretion in modifying any
of our principal executive officer’s recommendations. In
performing its functions, the Compensation Committee may retain and
terminate outside counsel, compensation and benefits consultants or
other experts. During 2020, the Compensation Committee met four
times.
Nominating
and Governance Committee. All members of the
Nominating and Governance Committee are, and were during fiscal
2020, independent under the corporate governance listing standards
of the NYSE American. The Nominating and Governance Committee has a
written charter, which is available at our website at
www.bktechnologies.com/investor-relations. During 2020, the
Nominating and Governance Committee met two times.
The
functions of the Nominating and Governance Committee include
determining and recommending to the Board of Directors the slate of
director nominees for election to the Board of Directors at each
annual stockholders’ meeting and identifying and recommending
director candidates to fill vacancies occurring between annual
stockholders’ meetings. In addition, the Nominating and
Governance Committee reviews, evaluates and recommends changes to
our corporate governance policies and monitors our compliance with
these corporate policies.
14
Board Leadership and Board’s Role in Risk
Oversight
During
2020, we had a separate Chairman of the Board and Principal
Executive Officer. Our Board of Directors believed this Board
leadership structure was best for the Company and our stockholders
at the time. Mr. Struble served as our Chairman of the Board until
July 8, 2021, at which time the Board appointed General Payne as
the Chairman of the Board. Our Principal Executive Officer was our
President, Timothy A. Vitou, until the appointment of John M.
Suzuki as our Chief Executive Officer on July 19, 2021. The Board
believed it was in the Company’s best interest to have a
separate Chairman of the Board and Principal Executive Officer so
that the Principal Executive Officer could devote his time and
energy on the day-to-day management of the business, while the
Chairman of the Board could focus on providing advice and oversight
of management. Because our Chairman is appointed annually by our
non-management directors, such directors are able to evaluate the
leadership and performance of our Chairman each year. The Board
believes that it remains in the Company’s best interests to
have a separate Chairman of the Board and Principal Executive
Officer at this time for the reasons described above, and the
Chairman will continue to be appointed annually by our
non-management directors. The Board does not believe that one
particular leadership structure is appropriate at all times and
will continue to evaluate the Board’s leadership structure
from time to time.
The
Board of Directors has not named a lead independent director, as it
receives strong leadership from all of its members. Our Board
committees consist of only independent members, and our independent
directors meet at least annually in executive session without the
presence of non-independent directors and management. In addition,
our directors take active and substantial roles in the activities
of our Board of Directors at the full Board meetings. Our Board
believes that this open structure, as compared to a system in which
there is a designated lead independent director, facilitates a
greater sense of responsibility among our directors and facilitates
active and effective oversight by the independent directors of the
Company’s operations and strategic initiatives, including any
risks.
Our Board of Directors, both as a whole and
through its three standing committees, has an advisory role in the
Company’s risk management process. The Board of Directors
does not have a standing risk management committee. The Board
typically reviews and discusses with management at each of its
regular quarterly meetings,
information presented by management relating to our operational
results and outlook, including information regarding risks related
to our business and operations, as well as risks associated with
the markets we serve. In particular, the Board is responsible for
monitoring and assessing strategic and operational risk exposure,
which may include financial, legal and regulatory, human capital,
environmental, information technology, security and reputational
risks. In addition, management and the Board of Directors have
recently focused on risks relating to, and impact on the Company
from, the COVID-19 pandemic, and will continue to do so while the
situation remains in flux. Our management team maintains primary
responsibility for the Company’s risk management, and the
Board and its committees rely on the representations of management,
the external audit of our financial and operating results, our
systems of internal controls and our historically conservative
practices when assessing the Company’s risks. The Audit
Committee considers and discusses financial risk exposures and the
steps management has taken to monitor and control these exposures,
and also provides oversight of the performance of the internal
audit function. The Nominating and Governance Committee monitors
the effectiveness of our corporate governance policies and the
selection of prospective Board members and their qualifications, as
well as environmental, social and governance
(“ESG”)-related risks. The Compensation Committee, in
conjunction with the Audit Committee, assesses and monitors whether
any of the Company’s compensation policies and programs have
the potential to encourage excessive risk-taking. In addition, the
Compensation Committee reviews and monitors matters related to
human capital management, including diversity and inclusion
initiatives and management of human capital risks. Each committee
must report findings regarding material risk exposures to the Board
as quickly as possible. The Board believes that its role in risk
oversight does not affect the Board’s leadership
structure.
Like
all businesses, we also face threats to the Company’s
cybersecurity, as the Company is reliant upon information systems
and the Internet to conduct its business activities. In light of
the pervasive and increasing threat from cyberattacks, the Board
and the Audit Committee, with input from management, assess the
Company’s cybersecurity threats and the measures implemented
by the Company to mitigate and prevent cyberattacks. The Audit
Committee consults with management regarding ongoing cybersecurity
initiatives, and requests management to report to the Audit
Committee or the full Board regularly on their assessment of the
Company’s cybersecurity program and risks. With input from
management, the Audit Committee assesses the Company’s
cybersecurity risks and the measures implemented by the Company to
mitigate and prevent cyberattacks and respond to data breaches, and
periodically reports on the Company’s cybersecurity program
to the Board of Directors.
15
Director Nomination Process
In
accordance with the Nominating and Governance Committee’s
written charter, the Nominating and Governance Committee has
established policies and procedures for the nomination of director
candidates to the Board of Directors. The committee determines the
required selection criteria and qualifications of director
candidates based upon our needs at the time director candidates are
considered. Minimum qualifications for director candidates are set
forth in the committee’s “Policy Regarding Minimum
Qualifications of Director Candidates” and include threshold
criteria, such as integrity, absence of conflicts of interest that
would materially impair a director’s ability to exercise
independent judgment or otherwise discharge the fiduciary duties
owed as a director to the Company and our stockholders, ability to
represent fairly and equally all stockholders, demonstrated
achievement in one or more fields of business, professional,
governmental, communal, scientific or educational endeavors, sound
judgment, as a result of management or policy-making experience,
that demonstrates an ability to function effectively in an
oversight role, general appreciation regarding major issues facing
public companies of a size and operational scope similar to the
Company, and adequate time to serve. The Nominating and Governance
Committee does not have a formal diversity policy. However, as
noted in the committee’s “Policy Regarding Minimum
Qualifications of Director Candidates”, the committee, as one
of its considerations, considers the extent to which the membership
of the candidate on the Board will promote diversity among the
directors, and seeks to promote through the nominations process an
appropriate diversity on the Board of professional background,
experience, expertise, perspective, age, gender, ethnicity and
country of citizenship. The committee also considers the overall
composition of the Board and its committees, compliance with the
NYSE American listing standards, and the contributions that a
candidate can be expected to make to the collective functioning of
the Board based upon the totality of the candidate’s
credentials, experience and expertise, the composition of the Board
at the time, and other relevant circumstances.
We
are of the view that the continuing service of qualified incumbent
directors promotes stability and continuity in the function of the
Board of Directors, contributing to the Board’s ability to
work as a collective body, while giving us the benefit of the
familiarity and insight into our affairs that our directors have
accumulated during their tenure.
The
Nominating and Governance Committee has adopted procedures
consistent with the practice of re-nominating incumbent directors
who continue to satisfy the committee’s criteria for
membership on the Board, who the committee believes continue to
make important contributions to the Board and who consent to
continue their service on the Board. These procedures are set forth
in the committee’s “Procedures for Identifying and
Evaluating Director Candidates” policy. When evaluating the
qualifications and performance of the incumbent directors that
desire to continue their service on our Board, the committee will
(i) consider whether the director continues to satisfy the minimum
qualifications for director candidates adopted by the committee,
(ii) review the assessments of the performance of the director
during the preceding term made by the committee, and (iii)
determine whether there exist any special, countervailing
considerations against re-nomination of the director. When there is
no qualified and available incumbent, the committee will also
solicit recommendations for nominees from persons that the
committee believes are likely to be familiar with qualified
candidates. These persons may include members of our Board of
Directors and management of the Company. The committee may also
determine to engage a professional search firm to assist in
identifying candidates. As to each recommended candidate that the
committee believes merits consideration, the committee will
consider, among other things, whether the candidate possesses any
of the specific qualities or skills that under the
committee’s policies must be possessed by one or more members
of the Board, the contribution that the candidate can be expected
to make to the overall functioning of the Board and the extent to
which the membership of the candidate on the Board will promote
diversity among the directors.
The
Nominating and Governance Committee has adopted a policy with
regard to the consideration of director candidates submitted by
stockholders. This policy is set forth in the committee’s
“Policy Regarding Director Candidate Recommendations
Submitted by Stockholders.” The committee will only consider
director candidates submitted by stockholders who satisfy the
minimum qualifications prescribed by the committee for director
candidates, including that a director must represent the interests
of all stockholders and not serve for the purpose of favoring or
advancing the interests of any particular stockholder group or
other constituency.
16
In
accordance with this policy, the Nominating and Governance
Committee will consider director candidates recommended by
stockholders only where the committee has determined to not
re-nominate an incumbent director. In addition, the committee will
not consider any recommendation by a stockholder or an affiliated
group of stockholders unless such stockholder or group of
stockholders has owned at least five percent (5%) of our common
stock for at least one year as of the date the recommendation is
made. Any eligible stockholder (or affiliated group of
stockholders) who desires to recommend a director candidate for
consideration by the Nominating and Governance Committee generally
must ensure that it is received by the Company no later than 120
days prior to the first anniversary of the date of the proxy
statement for the prior annual meeting of stockholders. In the
event that the date of the annual meeting of stockholders for the
current year is more than 30 days following the first anniversary
date of the annual meeting of stockholders for the prior year, the
submission of a recommendation will be considered timely if it is
submitted a reasonable time in advance of the mailing of the
Company’s proxy statement for the annual meeting of
stockholders for the current year. Any eligible stockholder (or
affiliated group of stockholders) who desires to recommend a
director candidate for consideration by the Nominating and
Governance Committee for the 2022 annual meeting of stockholders is
required to do so prior to [●].
Any
such eligible stockholder (or affiliated group of stockholders) is
required to submit complete information about itself and the
recommended director candidate as specified in the
committee’s “Procedures for Stockholders Submitting
Director Candidate Recommendations” policy and as set forth
in the advance notice provisions in our bylaws. Such information
must include, among other things, (i) the number of our common
shares beneficially owned by the recommending stockholder and the
length of time such shares have been held, (ii) the name, age and
experience of the director candidate, (iii) whether the director
candidate owns any of our securities, (iv) whether the director
candidate has a direct or indirect material interest in any
transaction in which we are a participant, (v) a description of all
relationships between the director candidate and the recommending
stockholder, and (vi) a statement setting forth the director
candidate’s qualifications. Submissions should be addressed
to the Nominating and Governance Committee care of our Corporate
Secretary at our principal headquarters, 7100 Technology Drive,
West Melbourne, Florida 32904. Submissions must be made by mail,
courier or personal delivery. E-mail submissions will not be
considered.
Copies
of the policies of the Nominating and Governance Committee are
available on our website at
www.bktechnologies.com/investor-relations.
The
Nominating and Governance Committee evaluated General Payne,
Messrs. Cerminara, Dill, Jackson, Lanktree, Suzuki and Ms.
Tenenbaum, of whom General Payne and Messrs. Cerminara, Dill,
Lanktree and Suzuki are incumbent directors, and recommended their
nomination to the Board of Directors. The Board, in turn, nominated
these seven persons for election as directors at the annual
meeting.
17
DIRECTOR COMPENSATION FOR
2020
Director Compensation Program
On
September 6, 2018, the Board, upon the recommendation of the
Compensation Committee, adopted a new director compensation program
for all non-employee directors, effective as of September 1, 2018.
The program was adopted to remain competitive in attracting and
retaining qualified Board members and to better align director
compensation to other public companies of comparable size to the
Company.
Under
the program, each non-employee director receives an annual retainer
fee of $50,000, payable in quarterly cash installments. Each
non-employee director also receives an annual grant of RSUs with a
value of $40,000 pursuant to the 2017 Plan. Each RSU represents a
contingent right to receive one share of our common stock. The RSUs
vest in five equal annual installments, beginning with the first
anniversary of the grant date, subject to the recipient’s
continued service as a director of the Company through such date,
provided that, if the director makes himself available and consents
to be nominated by the Company for continued service as a director
of the Company, but is not nominated for the Board of Directors for
election by stockholders, other than for good reason, as determined
by the Board in its discretion, then the RSUs will vest in full as
of the director’s last date of service as a director of the
Company.
In
addition, the director compensation program provides for an
additional annual cash retainer of $3,000, payable in quarterly
cash installments, for each Board committee served on, or an
additional annual cash retainer of $10,000, payable in quarterly
cash installments, per committee for service as committee chairman.
On April 27, 2020, the Compensation Committee approved an
additional cash retainer of $75,000 for the Chairman of the Board,
payable in quarterly cash installments. All non-employee
directors are entitled to reimbursement of reasonable out-of-pocket
expenses incurred by them in connection with their attendance at
meetings of the Board and any committee thereof on which they
serve. If a non-employee director does not serve on the Board or a
Board committee, or as Chairman or as a Board committee chairman,
for the full year, the Board and any applicable Board committee,
Board Chairman, and any Board committee chairman retainers are
prorated for the portion of the year served. If a non-employee
director joins the Board after the grant of RSUs for that year, the
non-employee director’s grant of RSUs will be prorated for
the portion of the year to be served.
Our
2017 Plan provides that the aggregate grant date fair value of all
awards granted to any single non-employee director during any
single calendar year (determined as of the applicable grant date(s)
under applicable financial accounting rules), taken together with
any cash fees paid to the non-employee director during the same
calendar year, may not exceed $200,000.
The
following table shows the compensation paid to our non-employee
directors for fiscal 2020:
|
Name
|
Fees Earned or Paid in Cash ($)
|
Stock Awards ($)(1)
|
Total ($)
|
|
John W.
Struble(2)
|
111,000
|
40,000
|
151,000
|
|
D. Kyle
Cerminara(2)
|
68,750
|
40,000
|
108,750
|
|
Michael R.
Dill(2)
|
66,750
|
40,000
|
106,750
|
|
Charles T.
Lanktree(2)(3)
|
70,750
|
40,000
|
110,750
|
|
E. Gray
Payne(2)(3)
|
87,750
|
40,000
|
127,750
|
|
Lewis M.
Johnson(2)(4)
|
68,750
|
40,000
|
108,750
|
|
Ryan R.K.
Turner(2)(5)
|
14,000
|
—
|
14,000
|
_________________
(1)
Stock awards
represent the aggregate grant date fair value of 13,157 RSUs
granted on August 24, 2020, to each of the non-employee directors
(excluding Mr. Turner who resigned from the Board on April 24,
2020). The RSUs were granted pursuant to the 2017 Plan and
represent a portion of the compensation payable to our non-employee
directors, as described above. Each RSU represents a contingent
right to receive one share of our common stock. The RSUs vest in
full in five equal annual installments, beginning on the first
anniversary of the grant date, subject to the director’s
continued service as a director of the Company through such date,
provided that, if the director makes himself available and consents
to be nominated by the Company for continued service as a director
of the Company, but is not nominated for the Board for election by
stockholders, other than for good reason, as determined by the
Board in its discretion, then the RSUs shall vest in full as of the
director’s last date of service as a director of the Company.
In addition, the 2017 Plan and the RSU award agreements grant the
Compensation Committee the discretion to accelerate vesting of the
RSUs upon the occurrence of a “change in control” (as
defined under the 2017 Plan) or in connection with the termination
of the director’s service for any reason prior to the vesting
date.
The
amounts shown represent the aggregate grant date fair value
computed in accordance with FASB Accounting Standards Codification
(ASC) Topic 718 “Compensation-Stock Compensation”
(“FASB ASC Topic 718”). For a discussion of valuation
assumptions, see Note 1 (Summary of Significant Accounting
Policies) and Note 10 (Share-Based Employee Compensation) of our
consolidated financial statements included in our Annual Report on
Form 10-K for fiscal 2020 (as amended by Form 10-K/A).
(2)
The aggregate
number of option and stock awards outstanding (including exercised
and unexercised stock options and unvested RSUs) as of December 31,
2020, for each non-employee director was as follows:
|
Name
|
|
Option Awards (#)
|
|
Stock Awards (#)
|
|
John W.
Struble
|
|
—
|
|
24,505RSUs
|
|
D. Kyle Cerminara
|
|
5,000 (all exercisable)
|
|
24,505 RSUs
|
|
Michael
R. Dill
|
|
—
|
|
24,505 RSUs
|
|
Charles
T. Lanktree
|
|
—
|
|
24,505 RSUs
|
|
E. Gray
Payne
|
|
5,000 (all exercisable)
|
|
24,505 RSUs
|
|
Lewis
M. Johnson
|
|
5,000 (all exercisable)
|
|
24,505 RSUs
|
|
Ryan
R.K. Turner
|
|
—
|
|
—
|
The
24,506 RSUs outstanding for each director listed above as of
December 31, 2020 include 3,037 RSUs remaining pursuant to a grant
made on September 6, 2018 (not including 2,026 RSUs that vested
prior to December 31, 2020), 8,311 RSUs granted on September 6,
2019 (not including 2,078 RSUs that vested prior to December 31,
2020) and 13,157 RSUs remaining pursuant to a grant made on August
24, 2020. Such RSUs vest in full in five equal annual installments,
beginning on the first anniversary of the respective grant date, in
each case subject to the director’s continued service as a
director of the Company through such date, provided that, if the
director makes himself available and consents to be nominated by
the Company for continued service as a director of the Company, but
is not nominated for the Board of Directors for election by
stockholders, other than for good reason, as determined by the
Board in its discretion, then the RSUs will vest in full as of the
director’s last date of service as a director of the Company.
See footnote 1 above for more information.
(3)
Amount includes
fees ($13,250 for Mr. Lanktree and $16,500 for General Payne)
earned for Board and committee service in the fourth quarter of
fiscal 2019 that were paid in January 2020.
(4)
On March 2, 2021,
Lewis M. Johnson resigned from the Board, effective immediately.
On the same day, the Compensation
Committee approved the accelerated vesting of all of his
outstanding RSUs as of that date.
(5)
On April 24, 2020,
Mr. Turner resigned from the Board, effective immediately.
On the same day, the Compensation
Committee approved the accelerated vesting of all of his
outstanding RSUs as of that date.
18
REPORT OF THE AUDIT
COMMITTEE
The following report of the Audit Committee does not constitute
soliciting material and should not be deemed filed with the
Securities and Exchange Commission nor shall this report be
incorporated by reference into any of our filings under the
Securities Act of 1933 or the Securities Exchange Act of
1934.
The
Audit Committee oversees our financial reporting process on behalf
of the Board of Directors. Management has the primary
responsibility for the consolidated financial statements and the
reporting process, including the systems of internal controls. In
fulfilling its oversight responsibilities, the Audit Committee has
reviewed and discussed the audited consolidated financial
statements included in our Annual Report on Form 10-K, as amended
by Form 10-K/A, for the fiscal year ended December 31, 2020, with
management, including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the
consolidated financial statements.
The
Audit Committee also has reviewed and discussed with our
independent registered public accounting firm, MSL, P.A., which is
responsible for expressing an opinion on the conformity of those
consolidated financial statements with accounting principles
generally accepted in the United States, its judgments as to the
quality, not just the acceptability, of our accounting principles
and such other matters as are required to be discussed with the
committee by applicable requirements of the Public Company
Accounting Oversight Board and the Securities and Exchange
Commission. In addition, the Audit Committee has received the
written disclosures and the letter from MSL, P.A. required by the
applicable requirements of the Public Company Accounting Oversight
Board regarding the independent accountant’s communications
with the Audit Committee concerning independence, and has discussed
with MSL, P.A. its independence.
Based
on the considerations and discussions referred to above, the Audit
Committee recommended to our Board of Directors (and the Board
approved) that the audited consolidated financial statements for
2020 be included in our Annual Report on Form 10-K for the year
ended December 31, 2020, as filed with the Securities and Exchange
Commission.
This
report is provided by the following independent directors, who
comprise the Audit Committee:
|
|
E. Gray
Payne (Chair)
|
|
|
Michael
R. Dill
|
|
|
Charles
T. Lanktree
|
19
EXECUTIVE COMPENSATION
SUMMARY EXECUTIVE COMPENSATION TABLE FOR 2019-2020
The
following table provides certain summary information concerning the
compensation of our named executive officers for the last two
completed fiscal years ended December 31, 2020:
|
|
Year
|
Salary
($)
|
Bonus
($)(2)
|
Stock Awards ($)
|
Option Awards ($)(3)
|
Non-Equity Incentive Plan Compensation ($)
|
All Other Compensation ($)
|
Total
($)
|
|
Timothy
A. Vitou
|
2020
|
275,000
|
45,000
|
—
|
—
|
—
|
21,980(4)
|
341,980
|
|
President
|
2019
|
270,096
|
—
|
—
|
51,480
|
—
|
15,870(4)
|
337,446
|
|
|
|
|
|
|
|
|
|
|
|
William
P. Kelly
|
2020
|
215,000
|
30,000
|
—
|
—
|
—
|
28,367(5)
|
273,367
|
|
Executive Vice
President, Chief Financial Officer and Secretary
|
2019
|
212,058
|
—
|
—
|
34,320
|
—
|
15,480(5)
|
261,858
|
|
|
|
|
|
|
|
|
|
|
|
Randy
Willis
|
2020
|
215,000
|
60,000
|
—
|
—
|
—
|
7,985(6)
|
282,985
|
|
Chief Operating
Officer
|
2019
|
212,058
|
—
|
—
|
34,320
|
—
|
41,415(6)
|
287,793
|
|
|
|
|
|
|
|
|
|
|
|
Branko Avanic(1)
|
2020
|
235,000
|
75,000
|
—
|
—
|
—
|
11,477(7)
|
321,477
|
|
Chief Technology
Officer
|
2019
|
82,808
|
—
|
—
|
38,070
|
—
|
853(7)
|
121,731
|
_____________
(1)
Effective October
30, 2019, Dr. Avanic, then Senior Vice President of Engineering of
BK Technologies, Inc., was appointed as Chief Technology Officer of
the Company, effective immediately. Dr. Avanic’s compensation
for 2019 includes $48,462 in compensation received from August 13,
2019, through October 30, 2019, in his role as Senior Vice
President of Engineering of BK Technologies, Inc.
(2)
On March 16, 2021,
the Compensation Committee approved payment of cash bonuses of
$45,000 to Mr. Vitou, $30,000 to Mr.
Kelly, $60,000 to Mr. Willis, and $75,000 to Dr.
Avanic.
(3)
The amounts in this
column represent the aggregate grant date fair value of stock
options granted to the Named Executive Officer computed in
accordance with FASB ASC Topic 718. The value ultimately realized
by the Named Executive Officer upon the actual exercise of the
stock options may or may not be equal to the FASB ASC Topic 718
computed value. For a discussion of valuation assumptions, see Note
1 (Summary of Significant Accounting Policies) and Note 10
(Share-Based Employee Compensation) of our consolidated financial
statements included in our Annual Report on Form 10-K for fiscal
2020.
On March 5, 2019, the Compensation Committee
granted non-qualified stock options to Messrs. Vitou, Kelly and
Willis to purchase 30,000, 20,000 and 20,000 shares, respectively,
of the Company’s common stock, at an exercise price of $4.07
per share. On October 30, 2019, in connection with Dr.
Avanic’s appointment as Chief Technology Officer, the
Compensation Committee granted non-qualified stock options to Dr.
Avanic to purchase 30,000 shares of the Company’s common
stock, at an exercise price of $3.61 per share. Additional
information about the stock option awards can be found below under
“—Stock Option
Awards.”
(4)
The amounts in this
column for Mr. Vitou represent the Company’s matching
contributions for fiscal 2020 and fiscal 2019 of $2,909 and $6,752,
respectively, to Mr. Vitou’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and fiscal 2019 of $8,495 and $9,118, respectively, for
long-term disability, life and health insurance premiums for the
benefit of Mr. Vitou; and the Company’s payment for fiscal
2020 of $10,576 for accrued unused vacation time.
(5)
The amounts in this
column for Mr. Kelly represent the Company’s matching
contributions for fiscal 2020 and fiscal 2019 of $2,729 and $6,362,
respectively, to Mr. Kelly’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and fiscal 2019 of $8,495 and $9,118, respectively, for
long-term disability, life and health insurance premiums for the
benefit of Mr. Kelly; and the Company’s payment for fiscal
2020 of $17,144 for accrued unused vacation time.
20
(6)
The amounts in this
column for Mr. Willis represent the Company’s matching
contribution for fiscal 2020 and fiscal 2019 of $2,729 and of
$5,900, respectively, to Mr. Willis’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and fiscal 2019 of $5,256 and $5,515 for long-term
disability, life and health insurance premiums for the benefit of
Mr. Willis. The amounts in this column also include the
Company’s payment to Mr. Willis during fiscal 2019 of a
one-time cash payment of $30,000 to offset potential losses
incurred by Mr. Willis in connection with the sale of his house
located in Charlotte, North Carolina. Mr. Willis relocated from
Charlotte, North Carolina, to Brevard County, Florida, in order to
be closer to the Company’s principal executive offices. The
payment was made pursuant to a retention agreement entered into
between the Company and Mr. Willis. See “—Named
Executive Officer Appointments and Agreements—Retention
Agreement” below for more information about this
agreement.
(7)
The amount in this
column for Dr. Avanic represents the Company’s matching
contributions for fiscal 2020 and fiscal 2019 of $2,982 and $27,
respectively, to Dr. Avanic’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and 2019 of $8,495 and $582 for long-term disability,
life and health insurance premiums for the benefit of Dr.
Avanic.
Except as disclosed above, Mr. Vitou, Mr. Kelly, Mr. Willis and Dr.
Avanic did not receive any other compensation during fiscal 2020 or
fiscal 2019, except for perquisites and other personal benefits, of
which the total aggregate value for each of them did not exceed
$10,000.
Named Executive Officer Appointments and Agreements
Appointment of Chief Executive Officer
On
July 19, 2021, the Board of Directors appointed John M. Suzuki as
the Chief Executive Officer of the Company. In connection with Mr.
Suzuki’s appointment, the Company and Mr. Suzuki entered into
an employment agreement (the “Suzuki Employment
Agreement”) , which is described below under
“Employment Agreements.”
Mr.
Suzuki previously served as Chief Strategy Officer of Imperium
Leadership from May 2019 until his appointment as Chief Executive
Officer of the Company. From May 2015 through May 2019, he served
as President and CEO of EFJohnson Technologies, a two-way radio
manufacturer. From 2011 through 2015, Mr. Suzuki served in a
variety of leadership positions, including as Senior Vice President
of Sales for AVTEC Incorporated, and Vice President of Sales and
Marketing for 3eTechnologies International, a subsidiary of
UltraElectronics. From 2004 through 2011, Mr. Suzuki served as
Senior Vice President, Sales of EFJohnson Technologies. Mr. Suzuki
has a broad background in general management, strategy, product
development, sales, marketing, supply chain, operations and
engineering, and mergers and acquisitions. He is a strategic
thinker with extensive experience in developing and growing new
business opportunities. Mr. Suzuki holds a bachelor’s degree
in electrical engineering from the University of Ottawa and an MBA
from Duke University.
Appointment of Chief Technology Officer
On
October 30, 2019, the Board of Directors appointed Dr. Avanic as
Chief Technology Officer of the Company, effective immediately. In
connection with such appointment, BK Technologies, Inc. entered
into an employment agreement with Dr. Avanic, executed November 5,
2019 (the “Avanic Employment Agreement”), which is
described below under “Employment
Agreements.”
Dr.
Avanic previously served as Senior Vice President of Engineering of
BK Technologies, Inc., since August 2019, pursuant to an offer
letter, dated July 15, 2019 (the “Avanic Offer
Letter”). The Avanic Offer Letter provided for an annual base
salary of $225,000 and the opportunity to earn a bonus of up to 30%
of his annual base salary, as well as eligibility to participate in
the Company’s benefit plans. For his service in such role,
Dr. Avanic received payments equal to $48,462. The Avanic Offer
Letter also provided Dr. Avanic the opportunity to receive a
stock-based grant of 20,000 shares. On October 30, 2019, as
contemplated under the Avanic Offer Letter and in connection with
his appointment as Chief Technology Officer, the Compensation
Committee granted to Dr. Avanic non-qualified stock options to
purchase 30,000 shares of the Company’s common stock at an
exercise price of $3.61 per share under the 2017 Plan. The options
have a ten-year term and will become exercisable in five equal
annual installments, beginning on the first anniversary of the
grant date.
Employment Agreements
On
July 19, 2021, the Company and Mr. Suzuki entered into the Suzuki
Employment Agreement. The Suzuki Employment Agreement provides for
an annual base salary of $350,000.
21
On
March 20, 2019, the Company entered into employment agreements with
each of the following (collectively, as amended, the “March
2019 Employment Agreements” and, collectively with the Suzuki
Employment Agreement and the Avanic Employment Agreement, the
“Employment Agreements”): (i) Timothy A. Vitou,
President; (ii) William P. Kelly, Executive Vice President, Chief
Financial Officer and Secretary; and (iii) Randy Willis, Chief
Operating Officer. Following the Reorganization, the March 2019
Employment Agreements are with BK Technologies, Inc., our
wholly-owned subsidiary. The March 2019 Employment Agreements
provide for an annual base salary of $275,000 for Mr. Vitou and
$215,000 for each of Messrs. Kelly and Willis. The Avanic
Employment Agreement provides for an annual base salary of $235,000
for Dr. Avanic.
Each
Named Executive Officer is eligible for performance-based
compensation in the form of an annual bonus, payable in cash or
through equity in the Company, as determined by the Compensation
Committee, and subject to the achievement of performance metrics
and other criteria as determined by the Compensation
Committee.
The
Employment Agreements provide for severance payments in the event
the Named Executive Officer’s employment is terminated by the
Company without “cause.” Each Named Executive Officer
will be entitled to an amount equal to six months (twelve months
for Messrs. Suzuki and Vitou) of his base salary in effect at the
time of termination or the original base salary set forth in his
respective Employment Agreement, whichever is greater.
Additionally, the Suzuki Employment Agreement provides that if his
employment is terminated by the Company without
“cause,” (i) the Company will pay Mr. Suzuki’s
COBRA premiums for a 12-month period following termination if Mr.
Suzuki elects in a proper and timely manner, and (ii) all unvested
stock options then held by Mr. Suzuki will become fully vested and
exercisable, subject to certain conditions.
Any
severance payable to a Named Executive Officer under his Employment
Agreement will be paid by the Company over a twelve-month period in
accordance with the Company’s normal payroll practices and
subject to applicable law. None of the Named Executive Officers
will be entitled to severance payments in the event he is
terminated for “cause.” For purposes of the Employment
Agreements, “cause” will exist if the Named Executive
Officer (i) acts dishonestly or incompetently or engages in willful
misconduct in performance of his executive duties, (ii) breaches
the Named Executive Officer’s fiduciary duties owed to the
Company, (iii) intentionally fails to perform duties assigned to
him, (iv) is convicted or enters a plea of guilty or nolo
contendere with respect to any felony crime involving dishonesty or
moral turpitude, and/or (v) breaches his obligations under his
Employment Agreement.
The
Named Executive Officers are also eligible to participate in the
Company’s benefit plans. The Employment Agreements contain
customary non-competition and non-solicitation
covenants.
Retention Agreement
On
December 31, 2018, we entered into a retention agreement with Mr.
Willis in connection with his relocation from Charlotte, North
Carolina, to Brevard County, Florida, in order to be near the
Company’s principal executive offices. The agreement provided
for a one-time cash payment of $30,000 from us to Mr. Willis to
offset potential losses incurred by Mr. Willis in connection with
the sale of his house located in Charlotte, North Carolina, which
we paid to Mr. Willis in January 2019.
Pursuant
to the retention agreement, if Mr. Willis’s employment with
us is terminated either by Mr. Willis voluntarily (other than for
“good reason”) or by us for “cause” during:
(i) December 31, 2018 through August 1, 2019 (the second
anniversary of August 1, 2017, his employment date), the entire
relocation allowance ($30,000) provided under the agreement will be
immediately repayable to us; (ii) August 2, 2019 through August 1,
2020, two-thirds of the relocation allowance ($20,000) will be
immediately repayable to us; and (iii) August 2, 2020 through
August 1, 2021, one-third of the relocation allowance ($10,000)
will be immediately repayable to us. Any such amounts that are
repayable to us may also be deducted from any amounts otherwise
payable to Mr. Willis by us upon his termination. For purposes of
the retention agreement, “cause” and “good
reason” have the meanings set forth in the 2017
Plan.
Compensation Consultant
In
2018, the Compensation Committee engaged Pay Governance LLC as an
independent compensation consultant to assist the committee with
the review and design of our executive compensation program,
including providing the committee with pay data regarding the
direct compensation program for our President, Chief Operating
Officer, Chief Financial Officer and Chief Technology Officer. In
connection with the committee’s engagement of the consultant,
the committee solicited information from Pay Governance LLC
regarding any actual or perceived conflicts of interest and to
evaluate the firm’s independence. Based on the information
received from the consultant, the Compensation Committee believes
that the work Pay Governance LLC performed in 2018 did not raise a
conflict of interest and that it was independent.
Base Salaries
On March 5, 2019, the Compensation Committee
approved base salaries of $275,000, $215,000 and $215,000 to
Messrs. Vitou, Kelly and Willis, respectively. On October 30, 2019,
the Board of Directors approved a base salary for 2019 of $235,000
to Dr. Avanic. On July 19, 2021, in connection with Mr.
Suzuki’s appointment as Chief Executive officer and the Suzuki Employment
agreement, the Board of Directors approved a base salary of
$350,000 for Mr. Suzuki.
22
Bonus Payments
2020 Discretionary Cash Bonuses
On
March 16, 2021, based on management’s recommendations and the
Named Executive Officers’ 2020 performance, the Compensation
Committee approved the payment of cash bonuses of $45,000 to Mr.
Vitou, $30,000 to Mr. Kelly, $60,000 to Mr. Willis, and $75,000 to
Dr. Avanic.
Stock Option Awards
2019 Awards
On
March 5, 2019, the Compensation Committee granted non-qualified
stock options to Messrs. Vitou, Kelly and Willis to purchase
30,000, 20,000 and 20,000 shares, respectively, of the
Company’s common stock, at an exercise price of $4.07 per
share. On October 30, 2019, the Compensation Committee granted
non-qualified stock options to Dr. Avanic to purchase 30,000 shares
of the Company’s common stock, at an exercise price of $3.61
per share. The stock options have ten-year terms and become
exercisable in five equal annual installments, beginning on the
first anniversary of the respeective grant date. All such
awards were granted pursuant to the 2017 Plan.
2017 Incentive Compensation Plan
The
Company’s stockholders approved the 2017 Plan at the
Company’s 2017 annual meeting of stockholders held on June
15, 2017. The 2017 Plan replaced the 2007 Incentive Compensation
Plan (the “2007 Plan” and, together with the 2017 Plan,
the “Equity Plans”), which had been approved by the
stockholders in 2007. No new awards will be granted under the 2007
Plan.
In
connection with the Reorganization, we assumed the Equity Plans and
all of the outstanding equity awards under such Equity Plans
pursuant to the Omnibus Amendment to Incentive Compensation Plans,
dated as of March 28, 2019 (the “Omnibus Amendment”).
Each outstanding equity award assumed by us is issuable upon the
same terms and conditions as were in effect immediately prior to
the completion of the Reorganization, except that all such equity
awards now entitle the holder thereof to acquire our common
stock.
The
objective of the 2017 Plan is to provide incentives to attract and
retain key employees, non-employee directors and consultants and
align their interests with those of the Company’s
stockholders. The 2017 Plan is administered by the Compensation
Committee and has a term of ten years. All non-employee directors
of the Company and employees and consultants of the Company and its
subsidiaries designated by the committee are eligible to
participate in the 2017 Plan and to receive awards, including stock
options (which may be incentive stock options or non-qualified
stock options), stock appreciation rights, restricted shares, RSUs,
or other share-based awards and cash-based awards.
23
OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-END
The
following table provides information with respect to outstanding
stock option awards for our shares of common stock classified as
exercisable and unexercisable as of December 31, 2020, for the
Named Executive Officers.
|
Name
|
Number of Securities Underlying Unexercised
Options (#) Exercisable(8)
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
|
Timothy A.
Vitou
|
5,000(1)
|
—
|
2.23
|
3/12/23
|
|
|
15,000(2)
|
10,000
|
5.10
|
3/17/27
|
|
|
6,000(3)
|
4,000
|
4.20
|
8/30/27
|
|
|
12,000(4)
|
18,000
|
3.75
|
3/14/28
|
|
|
6,000(6)
|
24,000
|
4.07
|
3/05/29
|
|
|
|
|
|
|
|
William P.
Kelly
|
15,000(1)
|
—
|
2.23
|
3/12/23
|
|
|
8,000(5)
|
2,000
|
3.83
|
2/24/26
|
|
|
15,000(2)
|
10,000
|
5.10
|
3/17/27
|
|
|
6,000(3)
|
4,000
|
4.20
|
8/30/27
|
|
|
8,000(4)
|
12,000
|
3.75
|
3/14/28
|
|
|
4,000(6)
|
16,000
|
4.07
|
3/05/29
|
|
|
|
|
|
|
|
Randy
Willis
|
15,000(3)
|
10,000
|
4.20
|
8/30/27
|
|
|
8,000(4)
|
12,000
|
3.75
|
3/14/28
|
|
|
4,000(6)
|
16,000
|
4.07
|
3/05/29
|
|
|
|
|
|
|
|
Branko
Avanic
|
6,000(7)
|
24,000
|
3.61
|
10/30/29
|
___________
(1)
The options were
granted on March 12, 2013, and are fully vested and
exercisable.
(2)
The options were
granted on March 17, 2017, and vest in five equal annual
installments, beginning on March 17, 2018.
(3)
The options were
granted on August 30, 2017, and vest in five equal annual
installments, beginning on August 30, 2018.
(4)
The options were
granted on March 14, 2018, and vest in five equal annual
installments, beginning on March 14, 2019.
(5)
The options were
granted on February 24, 2016, and vest in five equal annual
installments, beginning on February 24, 2017.
(6)
The options were
granted on March 5, 2019, and vest in five equal annual
installments, beginning on March 5, 2020.
(7)
The options were
granted on October 30, 2019, and vest in five equal annual
installments, beginning on October 30, 2020.
(8)
None of the Named
Executive Officers exercised any options during fiscal
2020.
24
RETIREMENT BENEFITS FOR 2020
We
do not have a defined benefit plan for the Named Executive Officers
or other employees. The only retirement plan available to the Named
Executive Officers in 2020 was the qualified 401(k) retirement
plan, which is available to all employees.
POTENTIAL PAYMENTS UPON TERMINATION OR IN CONNECTION WITH A CHANGE
OF CONTROL
Employment Agreements
On
March 20, 2019, the Company entered into the March 2019 Employment
Agreements, which, following the Reorganization, are with BK
Technologies, Inc., our wholly-owned subsidiary. In addition, BK
Technologies, Inc. entered into the Avanic Employment Agreement,
executed November 5, 2019, and into the Suzuki Employment Agreement
on July 19, 2021. The Employment Agreements provide for
severance payments in the event the Named Executive Officer’s
employment is terminated by the Company without
“cause.” Each Named Executive Officer will be entitled
to an amount equal to six months (twelve months for Messrs. Suzuki
and Vitou) of his base salary in effect at the time of termination
or the original base salary set forth in his respective Employment
Agreement, whichever is greater. Additionally, the Suzuki
Employment Agreement provides that if his employment is terminated
by the Company without “cause,” (i) the Company will
pay Mr. Suzuki’s COBRA premiums for a 12-month period
following termination if Mr. Suzuki elects in a proper and timely
manner, and (ii) all unvested stock options then held by Mr. Suzuki
will become fully vested and exercisable, subject to certain
conditions.
Any
severance payable to a Named Executive Officer under his Employment
Agreement will be paid by the Company over a twelve-month period in
accordance with the Company’s normal payroll practices and
subject to applicable law. None of the Named Executive Officers
will be entitled to severance payments in the event he is
terminated for “cause.” For purposes of the Employment
Agreements, “cause” will exist if the Named Executive
Officer (i) acts dishonestly or incompetently or engages in willful
misconduct in performance of his executive duties, (ii) breaches
the Named Executive Officer’s fiduciary duties owed to the
Company, (iii) intentionally fails to perform duties assigned to
him, (iv) is convicted or enters a plea of guilty or nolo
contendere with respect to any felony crime involving dishonesty or
moral turpitude, and/or (v) breaches his obligations under his
Employment Agreement.
Equity Plans and Award Agreements
The
Company’s Equity Plans and award agreements entered into with
its Named Executive Officers include change in control
provisions.
2017 Incentive Compensation Plan – Change in Control
Provisions
Our
2017 Plan generally provides for “double-trigger”
vesting of equity awards in connection with a change in control of
the Company, as described below.
To
the extent that outstanding awards granted under the 2017 Plan are
assumed in connection with a change in control, then, except as
otherwise provided in the applicable award agreement or in another
written agreement with the participant, all outstanding awards will
continue to vest and become exercisable (as applicable) based on
continued service during the remaining vesting period, with
performance-based awards being converted to service-based awards at
the “target” level. Vesting and exercisability (as
applicable) of awards that are assumed in connection with a change
in control generally would be accelerated in full on a
“double-trigger” basis, if, within two years after the
change in control, the participant’s employment is
involuntarily terminated without cause, or by the participant for
“good reason.” Any stock options or stock appreciation
rights (“SARs”) that become vested on a
“double-trigger” basis generally would remain
exercisable for the full duration of the term of the applicable
award.
To
the extent outstanding awards granted under the 2017 Plan are not
assumed in connection with a change in control, then such awards
generally would become vested in full on a
“single-trigger” basis, effective immediately prior to
the change in control, with performance-based awards becoming
vested at the “target” level. Any stock options or SARs
that become vested on a “single-trigger” basis
generally would remain exercisable for the full duration of the
term of the applicable award.
The
Compensation Committee has the discretion to determine whether or
not any outstanding awards granted under the 2017 Plan will be
assumed by the resulting entity in connection with a change in
control, and the Compensation Committee has the authority to make
appropriate adjustments in connection with the assumption of any
awards. The Compensation Committee also has the right to cancel any
outstanding awards in connection with a change in control, in
exchange for a payment in cash or other property (including shares
of the resulting entity) in an amount equal to the excess of the
fair market value of the shares subject to the award over any
exercise price related to the award, including the right to cancel
any “underwater” stock options and SARs without payment
therefor.
25
For
purposes of the 2017 Plan, subject to exceptions set forth in the
2017 Plan, a “change in control” generally includes (a)
the acquisition of more than 50% of the Company’s common
stock; (b) the incumbent board of directors ceasing to constitute a
majority of the board of directors; (c) a reorganization, merger,
consolidation or similar transaction, or a sale of substantially
all of the Company’s assets; and (d) the complete liquidation
or dissolution of the Company. The full definition of “change
in control” is set forth in the 2017 Plan.
Whether
a participant’s employment has been terminated for
“cause” will be determined by the Compensation
Committee. Unless otherwise provided in the applicable award
agreement or in another written agreement with the participant,
“cause,” as a reason for termination of a
participant’s employment, generally includes (a) the
participant’s failure to perform, in a reasonable manner, his
or her assigned duties; (b) the participant’s violation or
breach of his or her employment agreement, consulting agreement or
other similar agreement; (c) the participant’s violation or
breach of any non-competition, non-solicitation, non-disclosure
and/or other similar agreement; (d) any act of dishonesty or bad
faith by the participant with respect to the Company or a
subsidiary; (e) the participant’s breach of fiduciary duties
owed to the Company; (f) the use of alcohol, drugs or other similar
substances in a manner that adversely affects the
participant’s work performance; or (g) the
participant’s commission of any act, misdemeanor, or crime
reflecting unfavorably upon the participant or the Company or any
subsidiary.
For
purposes of the 2017 Plan, unless otherwise provided in the
applicable award agreement or in another written agreement with the
participant, “good reason” generally includes (a) the
assignment to the participant of any duties that are inconsistent
in any material respect with his or her duties or responsibilities
as previously assigned by the Company or a subsidiary, or any other
action by the Company or a subsidiary that results in a material
diminution of the participant’s duties or responsibilities,
other than any action that is remedied by the Company or a
subsidiary promptly after receipt of notice from the participant;
or (b) any material failure by the Company or a subsidiary to
comply with its obligations to the participant as agreed upon,
other than an isolated, insubstantial and inadvertent failure which
is remedied by the Company or subsidiary promptly after receipt of
notice from the participant.
Except
as described above with respect to a change in control,
unexercisable stock options generally become forfeited upon
termination of employment. The stock options that are exercisable
at the time of termination of employment expire (a) twelve months
after the termination of employment by reason of death or
disability or (b) three months after the termination of employment
for other reasons. With respect to unvested restricted shares and
RSUs, unless otherwise provided in the applicable award agreement,
the Compensation Committee, in its sole discretion, may provide for
the full or partial acceleration of vesting of the restricted
shares or RSUs, as applicable, in connection with the termination
of the grantee’s employment for any reason prior to a vesting
date, including, but not limited to, termination of employment as a
result of the grantee’s death or disability. Unless action is
otherwise taken by the Compensation Committee, any restricted
shares or RSUs that have not yet vested will be forfeited
automatically in the event of the termination of the
grantee’s employment for any reason prior to a vesting
date.
The
Company’s Named Executive Officers, other employees and
directors are prohibited from hedging or pledging the
Company’s securities. Awards granted under the 2017 Plan also
may be subject to forfeiture or recoupment, as provided pursuant to
any compensation recovery (or “clawback”) policy that
the Company may adopt or maintain from time to time.
2007 Incentive Compensation Plan – Change in Control
Provisions
Our
2007 Plan, under which some equity awards remain outstanding, also
contains provisions providing for the vesting of equity awards in
connection with a change in control of the Company, as described
below.
To
the extent that outstanding awards granted under the 2007 Plan are
assumed in connection with a change in control, then, except as
otherwise provided in the applicable award agreement, all
outstanding awards will continue to vest and become exercisable (as
applicable) based on continued service during the remaining vesting
period.
26
To
the extent outstanding awards granted under the 2007 Plan are not
assumed in connection with a change in control, then such awards
generally would become vested in full on a
“single-trigger” basis in connection with the change in
control. With respect to any outstanding performance-based awards
subject to achievement of performance goals and conditions, the
Compensation Committee may, in its discretion, deem such
performance goals and conditions as having been met as of the date
of the change in control. Any stock options or SARs that become
vested on a “single-trigger” basis generally would
remain exercisable for the full duration of the term of the
applicable award.
The
Compensation Committee has the discretion to determine whether or
not any outstanding awards granted under the 2007 Plan will be
assumed by the resulting entity in connection with a change in
control, and the committee has the authority to make appropriate
adjustments in connection with the assumption of any awards. The
committee also has the right to cancel any outstanding awards in
connection with a change in control, in exchange for a payment in
cash or other property (including shares of the resulting entity)
in an amount equal to the excess of the fair market value of the
shares subject to the award over any exercise price related to the
award, including the right to cancel any “underwater”
stock options and SARs without payment therefor.
For purposes of the 2007 Plan, subject to exceptions set forth in
the 2007 Plan, a “change in control” generally
includes: (a) the acquisition of more than 50% of the
Company’s common stock; (b) the incumbent board of directors
ceasing to constitute a majority of the board of directors; (c) a
reorganization, merger, consolidation or similar transaction, or a
sale of substantially all of the Company’s assets; and (d)
the complete liquidation or dissolution of the Company. The full
definition of “change in control” is set forth in the
2007 Plan.
Compensation Committee Interlocks and Insider
Participation
The
Compensation Committee of the Board of Directors consists of
Messrs. Dill (Chair), Lanktree, and General Payne, none of whom has
been at any time an executive officer or employee of the Company,
or has any relationship requiring disclosure under Item 404 of
Regulation S-K. None of our executive officers serves, or in the
past has served, on the board of directors, or as a member of the
Compensation Committee (or other committee performing an equivalent
function) of the board of directors of any entity that has one or
more executive officers who serve as members of our Board of
Directors or Compensation Committee.
Compensation Committee Report
The following report of the Compensation Committee shall not be
deemed to be “soliciting material” or to be
“filed” with the Securities and Exchange Commission,
nor shall this report be incorporated by reference into any filing
made by the Company under the Securities Act of 1933, as amended,
or the Exchange Act.
The
Compensation Committee has reviewed and discussed the executive
compensation, as disclosed above, with management. Based on this
review and those discussions, the Compensation Committee
recommended that the executive compensation be included in this
report.
Compensation
Committee
Michael
R. Dill (Chair)
Charles
T. Lanktree
E.
Gray Payne
27
TRANSACTIONS WITH RELATED
PERSONS
Any
transaction with a related person is subject to our written policy
for transactions with related persons, which is available on our
website at www.bktechnologies.com/investor-relations. The Audit
Committee is responsible for applying this policy. As set forth in
the policy, the Audit Committee reviews the material facts of the
transaction and considers, among other factors it deems
appropriate, whether the transaction is on terms no less favorable
than terms generally available to an unaffiliated third-party under
the same or similar circumstances and the extent of the related
person’s interest in the transaction. The policy also
prohibits our directors from participating in any discussion or
approval of any interested transaction for which he is a related
person, except that the director is required to provide all
material information concerning the transaction to the
committee.
If
a transaction with a related party will be ongoing, the Audit
Committee will establish guidelines for our management to follow in
our ongoing relationships with the related person, will review and
assess ongoing relationships with the related person to determine
if such relationships are in compliance with the Audit
Committee’s guidelines, and, based on all the relevant facts
and circumstances, will determine if it is in the best interests of
us and our stockholders to continue, modify or terminate any such
interested transaction.
The
policy provides exceptions for certain transactions, including (i)
those involving compensation paid to a director or executive
officer required to be reported in the Company’s proxy
statement, (ii) transactions with another company at which a
related person’s only relationship is as an employee (other
than an executive officer), director or beneficial owner of less
than 10% of that company’s shares, if the aggregate amount
involved does not exceed the greater of $500,000 or two percent
(2%) of that company’s total annual revenues, (iii) certain
charitable contributions, (iv) transactions where all of our
stockholders receive proportional benefits, (v) transactions
involving competitive bids, (vi) certain regulated transactions,
and (vii) certain banking-related services.
Except
as set forth below, during 2020 and 2019, we did not have any
transactions with related persons that were reportable under Item
404 of Regulation S-K, and we do not have any transactions with
related persons currently proposed for 2020 that are reportable
under Item 404 of Regulation S-K.
Fundamental Global GP, LLC
Fundamental Global GP, LLC (“Fundamental Global”),
together with its affiliates, is the largest stockholder of the
Company. Mr. Cerminara, a member of our Board of Directors, is
Chief Executive Officer, Co-Founder and Partner of Fundamental
Global. We have an investment in a limited partnership, FGI 1347
Holdings, LP, of which we are the sole limited partner. FGI 1347
Holdings, LP was established for the purpose of investing in
securities using a portion of the proceeds from our previously
successful investment in Iteris, Inc. (Nasdaq: ITI), which was
liquidated for a substantial gain. Affiliates of Fundamental Global
serve as the general partner and investment manager of FGI 1347
Holdings, LP. Fundamental Global has not received any management
fees or performance fees for its services to the limited
partnership. Principals of Fundamental Global serve on the board of
directors of portfolio companies and receive compensation for their
service.
Indemnification Agreements
On
July 22, 2020, the Company entered into indemnification agreements
with each of its directors and executive officers. Under the terms
of the indemnification agreements, subject to certain exceptions
specified in the indemnification agreements, the Company will,
among other things, indemnify its directors and executive officers
to the fullest extent permitted by law in the event such director
or executive officer becomes subject to or a participant in certain
claims or proceedings as a result of his service as a director or
officer. The Company will also, subject to certain exceptions and
repayment conditions, advance to such director or executive officer
specified indemnifiable expenses incurred in connection with such
claims or proceedings.
The
funds managed by Fundamental Global, including the funds that
directly own shares of our common stock, have agreed to indemnify
Fundamental Global and its principals, including Mr. Cerminara, or
any other person designated by Fundamental Global, for claims
arising from Mr. Cerminara’s service on our Board of
Directors, provided that a fund’s indemnity obligations are
secondary to any obligations we may have with respect to Mr.
Cerminara’s service on our Board of Directors.
28
RELATIONSHIP WITH OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MSL,
an independent registered public accounting firm, audited our
financial statements for fiscal 2020 and fiscal 2019. We had no
disagreements with MSL on accounting and financial disclosures.
MSL’s work on our audit for fiscal 2020 was performed by full
time, permanent employees and partners of MSL.
MSL,
which has served as our independent registered public accounting
firm since November 2015, has been reappointed to serve as our
independent registered public accounting firm for fiscal 2021. The
Audit Committee, in discussing the reappointment of MSL, considered
the qualifications, experience, independence, compliance with
regulations, quality control, candor, objectivity, and professional
skepticism of MSL and the effectiveness of the firm’s
processes, including its timeliness and responsiveness and
communication and interaction with management. The Audit Committee
also considered the tenure of MSL as our independent registered
public accounting firm and its related depth of understanding of
our businesses, operations and systems. The Audit Committee and the
Board of Directors believe that the continued retention of MSL as
our independent registered public accounting firm is in the best
interests of the Company and our stockholders.
29
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
Our
Audit Committee has appointed MSL to serve as our independent
registered public accounting firm for fiscal 2021. Representatives
of MSL are not expected to be present at the annual meeting. If any
stockholder desires to ask MSL a question, management will ensure
that the question is sent to MSL and that an appropriate response
is made directly to the stockholder.
Although applicable
law does not require stockholder ratification of the appointment of
MSL to serve as our independent registered public accounting firm,
our Board has decided to ascertain the position of our stockholders
on the appointment. If our stockholders do not ratify the
appointment of MSL, our Audit Committee will reconsider the
appointment. Even if the selection is ratified, our Audit Committee
in its discretion may appoint a different independent registered
public accounting firm at any time during the year if it determines
that such a change would be in our best interests and in the best
interests of our stockholders.
Vote Required
This
proposal will be approved if the number of votes cast “for” the ratification of MSL as our
independent registered public accounting firm exceed the number of
votes cast “against” ratification. Abstentions and
broker non-votes will have no effect on the outcome of the vote.
Shares represented by properly executed proxies will be voted, if
specific instructions are not otherwise given, in favor of this
proposal.
Recommendation of the Board
Our
Board of Directors unanimously recommends that stockholders vote
“FOR” the ratification of the appointment
of MSL as our independent registered public accounting
firm.
30
FEES PAID TO OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
MSL,
an independent registered public accounting firm, audited our
financial statements for fiscal 2020 and fiscal 2019. We had no
disagreements with MSL on accounting and financial disclosures.
MSL’s work on our audit for fiscal 2020 was performed by full
time, permanent employees and partners of MSL.
MSL has served as our independent registered
public accounting firm since November 2015. The rules of the
SEC require us to disclose fees billed by our independent
registered public accounting firm for services rendered to us for
each of the years ended December 31, 2020 and 2019. The following
table represents aggregate fees billed for the fiscal years ended
December 31, 2020 and 2019 by MSL.
|
Fees(1)(2)(3)(4)
|
2020
|
2019
|
|
Audit
Fees
|
$152,500
|
$142,040
|
|
Audited-Related
Fees
|
—
|
—
|
|
Tax
Fees
|
—
|
—
|
|
All
Other Fees
|
—
|
—
|
|
Total
|
$152,500
|
$142,040
|
(1)
For
2020 and 2019, includes fees paid to MSL for professional services
rendered for the audit of our annual financial statements for the
years ended December 31, 2020 and 2019 and for reviews of the
financial statements included in our Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, June 30 and September 30 in
each of those years. For 2020, also includes fees related to
services rendered in connection with issuance of a consent related
to our registration statement on Form S-3 filed in December 2020.
For 2019, also includes fees related to services rendered in
connection with issuance of a consent related to our registration
statements on Form S-8.
(2)
No
audit-related services were performed for us by MSL in 2020 or
2019. Audit-related services include assurance and related services
that are related to the performance of the audit or review of our
financial statements.
(3)
No
tax services were performed for us by MSL in 2020 or 2019. Tax
services include tax compliance, tax advice and tax
planning.
(4)
No
other services were performed for us by MSL in 2020 or
2019.
The
Audit Committee has adopted a formal policy concerning approval of
audit and non-audit services to be provided to us by our
independent registered public accounting firm, MSL. The policy
requires that all services to be provided by MSL, including audit
services and permitted audit-related and non-audit services, must
be pre-approved by the Audit Committee. The Audit Committee
approved all audit services provided by MSL to us during 2020. MSL
did not provide any audit-related or non-audit services to us
during 2020. The Audit Committee has determined that the provision
of the services by MSL reported hereunder had no impact on its
independence.
31
PROPOSAL 3: APPROVAL OF AN AMENDMENT TO THE
COMPANY’S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
OUR AUTHORIZED COMMON STOCK
On October 14,
2021, subject to stockholder approval, our Board
unanimously approved an amendment to our Articles of Incorporation
to increase the number of shares of common stock authorized for
potential future issuance from 20,000,000 to 50,000,000 by
filing articles of Amendment to the Articles of
Incorporation (referred to herein as
the “the “Amendment”). Our stockholders are being asked to approve the
Amendment in the form attached hereto as Appendix
A.
Purpose of the Amendment to Increase our Total Number of Authorized
Shares
On October 25,
2021, we had [●] shares
of common stock issued and outstanding, and [●]
shares reserved for future issuance,
consisting of (i) [●] shares issuable upon exercise of outstanding
warrants/options/convertible securities, and (ii) [●]
shares issuable upon exercise of
outstanding stock options or reserved for future stock option
grants under our stock option plans.
The
Board believes that the availability of additional authorized
shares of common stock will provide the Company with necessary
flexibility to issue common stock for a variety of corporate
finance and general corporate purposes as the Board may determine
from time to time in the future to be desirable including, without
limitation, raising operating capital for research and development
and general corporate purposes in connection with registered public
offerings and/or private placement transactions with accredited
investors, future financing activities related to strategic
partnering transactions, investment in product development and
technology licensing, and acquisition opportunities or other
distributions to advance our corporate objectives intended to
generate value for our stockholders.
Without
the proposed increase in the number of authorized shares of common
stock, the Board believes that number of remaining common shares
currently authorized under our Articles of Incorporation may be
insufficient to accomplish our corporate objectives intended to
generate value for our stockholders, when and if the Board
determines it is advisable and in the best interests of the
Company’s stockholders to do so. We believe that having the
additional authorized shares available to the Company for issuance,
upon approval of the Board, will be beneficial to us and our
stockholders by allowing us the opportunity to accomplish our
corporate objectives and to promptly consider and respond to future
business opportunities as they may arise, including in relation to
capital raising activities to fund our ongoing clinical trials and
implementation of the business plan. The delay involved in calling
and holding a stockholders' meeting at a later time to approve an
increase in authorized shares at the time a business opportunity
presents itself may prevent us from timely pursuing and realizing
that opportunity, and may significantly adversely affect the
economic or strategic value of that opportunity to the Company and
our stockholders.
The
Board has not authorized the Company to take any action with
respect to any of the additional shares of common stock that would
be authorized under this Proposal, and the Company currently does
not have any definitive plan, arrangement or understanding with
respect to the issuance of any of the additional shares of common
stock that would be authorized by the proposed
Amendment.
Anti-Takeover Effects
The
proposed Amendment could, under certain circumstances, have an
anti-takeover effect or delay or prevent a change in control of the
Company by providing the Company the capability to engage in
actions that would be dilutive to a potential acquirer, to pursue
alternative transactions, or to otherwise increase the potential
cost to acquire control of the Company. Thus, while the Company
currently has no intent to employ the additional unissued
authorized shares as an anti-takeover device, the proposed
Amendment may have the effect of discouraging future unsolicited
takeover attempts. The Board is not aware of any such attempt to
take control of the Company, and would act in the best interest of
stockholders if any attempt was made. The proposed amendment has
been prompted by business and financial
considerations.
Effect of Amendment
The
proposed increase in the number of authorized shares of the
Company's common stock pursuant to the Amendment will not change
the number of shares of the Company’s common stock
outstanding, nor will it have any immediate dilutive effect or
change the rights of current holders of the Company's common stock.
However, the issuance of additional shares of common stock
authorized by the Amendment may occur at times or under
circumstances in the future so as to have a dilutive effect on
earnings per share, book value per share or the percentage voting
or ownership interest of the present holders of the Company's
common stock.
If
this Proposal is approved, no further action by the stockholders
will be necessary prior to the issuance of additional shares of
common stock unless required by law or the rules of any stock
exchange or national securities association on which the common
stock is then listed or quoted. Under the proposed Amendment, each
of the newly authorized shares of common stock will have the same
rights and privileges as currently authorized common stock.
Adoption of the Amendment will not affect the rights of the holders
of currently outstanding common stock of the Company nor will it
change the par value of the common stock, which will remain $0.60
per share. If the proposed Amendment is adopted, it will become
effective upon filing of an amendment to the Company's Articles of
Incorporation with the Nevada Secretary of State.
32
Vote Required and Recommendation
The affirmative vote of a majority of the
outstanding shares of our common stock entitled to vote as of the
Record Date is required to approve this Proposal to increase the
number of shares of common stock authorized under our Articles of
Incorporation from 20,000,000 shares to
50,000,000.
Dissenter’s Rights
Under the Nevada Revised Statutes, our stockholders are not
entitled to dissenter’s rights in connection with this
Proposal.
Recommendation of the Board
The Board unanimously recommends that stockholders vote
“FOR” approval of the amendment to the Articles
of Incorporation to increase the number of common shares authorized
under the company’s articles of incorporation from 20,000,000
shares to 50,000,000 shares.
33
PROPOSAL 4: APPROVAL OF AN AMENDMENT TO THE
COMPANY’S 2017 INCENTIVE COMPENSATION PLAN TO INCREASE THE
NUMBER OF AUTHORIZED SHARES UNDER THE 2017 PLAN
The
Board has adopted, and proposes that our stockholders approve, an
amendment to our 2017 Plan, to increase the number of authorized
shares of under the 2017 Plan. The Board, the Compensation
Committee, and Company management all believe that the effective
use of stock-based long-term incentive compensation is essential to
maintain a balanced and competitive compensation program, has been
integral to the Company’s success in the past and is vital to
its ability to achieve strong performance in the
future.
A total of 1,000,000 shares of our common stock, par value $0.60
per share, have previously been reserved for awards under the 2017
Plan. On October 14, 2021, subject to stockholder approval, the
Board approved an amendment to the 2017 Plan, effective as of the
date of stockholder approval (such date, the “Effective
Date”), to increase the number of shares of our common stock
authorized for awards under the 2017 Plan by 2,000,000 shares to
3,000,000 shares.
As of October 25, 2021, [●] shares remained available for future awards under
the 2017 Plan. Subject to stockholder approval of the amendment to
the 2017 Plan, on the Effective Date, the Board anticipates that
there will be [●] shares
available for future awards.
Purpose of the Amendment
The
Board of Directors believes that an increase in the number of
shares of our common stock authorized under the 2017 Plan is
advisable to enable the Company to continue to grant equity-based
awards. The Board further believes that the increase is consistent
with market practices and is important to allow us to attract,
motivate, reward and retain the broad-based talent critical to
achieving our business goals.
Stockholder
approval of the amendment to the 2017 Plan is sought to satisfy the
New York Stock Exchange’s requirements with respect to
material revisions of equity compensation plans. In addition,
Section 22 of the 2017 Plan provides that certain amendments
to the 2017 Plan may not be made without the approval of our
stockholders.
The
amendment to the 2017 Plan will be effective on the date of
stockholder approval and after that date will apply to all awards
made under the 2017 Plan before, on or after that date. We intend
to register the additional shares authorized by the amendment to
the 2017 Plan under the Securities Act of 1933. If our stockholders
do not approve the amendment to the 2017 Plan, the present version
of the 2017 Plan will continue as currently in effect.
Proposed Plan Amendment
At our 2021 annual stockholder meeting,
stockholders will be requested to consider and approve the proposed
amendment to the 2017 Plan to increase the number of shares of our
common stock authorized for awards under the 2017 Plan by 2,000,000
shares to 3,000,000 shares.
History and Operation of the 2017 Plan
The
2017 Plan was adopted by the Board of Directors of the Company
effective as of March 27, 2017, subject to approval by our
stockholders. On June 15, 2017, our stockholders approved the 2017
Plan.
The
purpose of the 2017 Plan is to attract, retain, incentivize and
reward directors, officers, key employees and consultants of the
Company and its subsidiaries.
The 2017 Plan provides flexibility to shape
incentive awards that align stockholder interests with those of our
employees and non-employee directors. A summary description of the
material features of the 2017 Plan (as it is proposed to be
amended) follows. This summary is qualified in its entirety by
reference to the terms and conditions of the 2017 Plan, a copy of
which is attached to this Proxy Statement
as Appendix
B, and the proposed amendment
described in this Proposal 4, a copy of which is attached to this
Proxy Statement as Appendix
C.
34
General Description of Awards
There
are six general types of awards that may be granted under the 2017
Plan:
● Stock
options to purchase Shares, which may be either incentive stock
options that are intended to qualify for favorable tax treatment
under Section 422 of the Internal Revenue Code (referred to as
“incentive stock options”) or stock options that are
not intended to so qualify (referred to as “nonqualified
stock options”). Non-employee directors and consultants are
not eligible to receive incentive stock options.
● Stock
appreciation rights (or “SARs”), which represent the
right to receive the appreciation in value of a specified number of
Shares over the fair market value on the date of grant of the
SARs.
● Restricted
shares, which are Shares transferred subject to a substantial risk
of forfeiture and restrictions on transfer during a designated
restriction period or subject to achievement of certain performance
objectives.
● Restricted
share units, which represent the right to receive a specified
number of Shares (or an equivalent amount of cash) after the end of
a restriction period or upon the achievement of certain performance
objectives.
● Other
Share-based awards, which may be payable in, valued in whole or
part by reference to, or otherwise based on Shares.
● Cash-based
awards.
Administration
The
2017 Plan is administered by the Compensation Committee of the
Company’s Board of Directors. The Compensation Committee will
have full and final authority in its discretion to take all actions
it determines to be necessary in the administration of the plan.
For example, the Compensation Committee generally will determine
whether awards will be granted under the plan, which directors,
employees and consultants of the Company and its subsidiaries will
participate in the plan, and the types, amounts, terms and
conditions of any award or combination of awards that it decides to
grant under the plan. All determinations and decisions made by the
Compensation Committee pursuant to the provisions of the plan will
be final, conclusive and binding on all persons.
The
Board of Directors of the Company may reserve to itself any or all
of the authority and responsibility of the Compensation Committee
under the plan (such as, for example, the authority to grant awards
to non-employee directors and to establish the terms and conditions
of those awards) or may act as the administrator of the plan for
any and all purposes. In addition, to the extent permitted by
applicable laws, the Board of Directors or Compensation Committee
may expressly delegate to one or more directors or employees some
or all of the authority of the Board of Directors or Compensation
Committee under the plan.
Participants
The
Board of Directors or the Compensation Committee may select
officers, key employees and consultants of the Company and its
subsidiaries, as well as non-employee members of the Board of
Directors, to receive awards under the plan.
Authorized Shares under the 2017 Plan
Prior to the Amendment, 1,000,000 shares of our
common stock were reserved for issuance of awards under the 2017
Plan. If the stockholders approve the amendment to the 2017 Plan to
increase the number of authorized shares, on the Effective Date,
there will be 3,000,000 total
shares authorized, of which [●] will be available for future
awards.
35
These
shares of stock are subject to adjustment upon the occurrence of
any stock dividend or other distribution, recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation,
spin-off, combination, share repurchase, share exchange,
reclassification or other similar corporate transaction or event.
Any shares of stock that may be granted under the 2017 Plan to any
person pursuant to a stock option or stock appreciation right will
be counted against this limit as one share for every one share
granted. Shares of our common stock that are subject to an award
that is cancelled, expired, terminated, forfeited, surrendered, or
otherwise settled without the issuance of shares of our common
stock (including awards granted prior to the Effective Date) will
be available for awards under the 2017 Plan.
The
following shares subject to an Award will not again be available
for grant, regardless of whether those shares are actually issued
or delivered to a participant under the 2017 Plan: (i) shares
tendered in payment of the exercise price of a stock option; (ii)
shares withheld by the Company or any subsidiary to satisfy a tax
withholding obligation; and (iii) shares that are repurchased by
the Company with stock option proceeds. Without limiting the
foregoing, with respect to any stock appreciation right that is
settled in shares, the full number of shares subject to the award
will count against the number of shares available for awards under
the 2017 Plan regardless of the number of shares used to settle the
stock appreciation right upon exercise.
Additional Information
As of October 25, 2021, the aggregate numbers of
shares of our common stock that are subject to stock options
previously granted to the persons under the 2017 Plan were
[●]. These amounts do not
include [●] shares of our
common stock previously subject to stock options granted under the
2017 Plan that are no longer subject to such stock options because
such stock options have expired or been
exercised.
Because awards under the 2017 Plan are determined
by the Compensation Committee in its sole discretion, the benefits
or amounts that will be received by or allocated to participants in
the future under the 2017 Plan are not currently determinable. The
closing sale price per share of our common stock on the NYSE
American Exchange on October 25, 2021, was
$[●].
Recommendation of the Board
The Board unanimously recommends a vote
“FOR” the approval of the amendment to the 2017
Incentive Compensation Plan to increase the number of shares of
stock authorized for issuance under the plan from 1,000,000 to
3,000,000.
36
EQUITY COMPENSATION PLAN
INFORMATION
The following table provides information as of
December 31, 2020, with respect to our 2017 Plan, under which our
common stock is authorized for issuance, and the 2007 Plan. Our
stockholders approved the 2017 Plan at the 2017 annual
stockholders’ meeting. On December 31, 2020, 388,035 shares
of our common stock were available for issuance under the 2017
Plan.
|
Plan Category
|
(a)
Number of securities to be issued upon exercise of outstanding
options, warrants and rights(1)
|
(b)
Weighted-average exercise price of outstanding options, warrants
and rights
|
(c)
Number of securities remaining available for future issuance under
equity compensation plan (excluding securities reflected in column
(a))(2)(3)
|
|
Equity compensation
plans approved by security holders
|
611,965
|
$3.96
|
271,693
|
|
Equity compensation
plans not approved by security holders
|
—
|
—
|
—
|
|
Total
|
611,965
|
$3.96
|
271,693
|
(1)
Includes
461,965 shares issuable upon the exercise or vesting of awards
(including stock options and restricted stock units) outstanding
under the 2017 Plan and 150,000 shares issuable upon the exercise
of awards outstanding under the 2007 Plan.
(2)
Represents
shares available for issuance under the 2017 Plan.
(3)
Does
not include 116,342 shares that have been issued pursuant to
restricted stock units issued under the 2017 Plan that have
previously vested and settled.
37
MISCELLANEOUS
Delinquent Section 16(a) Reports
Section
16(a) of the Exchange Act requires that our directors and executive
officers, and persons who own more than ten percent (10%) of our
common stock, file with the SEC initial statements of beneficial
ownership of common stock and statements of changes in beneficial
ownership of common stock.
Based
solely on a review of the copies of such reports and
representations that no other reports were required, we believe
that all Section 16 filing requirements applicable to our
directors, executive officers and ten percent (10%) beneficial
owners were timely complied with during fiscal 2020.
Annual
Report on Form 10-K
Copies
of our Annual Report on Form 10-K for fiscal 2020 (as amended by
Form 10-K/A), as filed with the SEC, are available to stockholders
without charge upon written request to our Corporate Secretary at
7100 Technology Drive, West Melbourne, Florida 32904.
Eliminating Duplicative Proxy Materials
A
single Notice of Internet Availability of Proxy Materials or a
single copy of our Annual Report on Form 10-K for fiscal 2020 (as
amended by Form 10-K/A) and this proxy statement will be delivered
to multiple stockholders who live at the same address. If you live
at the same address as another stockholder and would like to
receive your own copy of the Notice of Internet Availability of
Proxy Materials, the 2020 annual report, or this proxy statement,
or would like to receive multiple copies of our proxy materials in
the future, please contact us at 7100 Technology Drive, West
Melbourne, Florida 32904; telephone number: (321) 984-1414. A
separate copy of the Notice of Internet Availability of Proxy
Materials, or of our 2020 annual report and this proxy statement,
will be delivered to you promptly and without charge. If you live
at the same address as another stockholder and are receiving
multiple copies of our proxy materials, please contact us at the
telephone number or address above if you only want to receive one
copy of those materials.
38
Stockholder Proposals
Inclusion of Proposals in our Proxy Statement Pursuant to SEC
Rules
Pursuant to Rule
14a-8 under the Exchange Act, some stockholder proposals may be
eligible for inclusion in our proxy statement for our 2022 annual
meeting of stockholders. To be eligible for inclusion in our 2022
proxy statement, any such proposals must meet the requirements of
Rule 14a-8 under the Exchange Act and be delivered in writing to
our Corporate Secretary no later than [●], unless the date of the 2022
annual meeting of stockholders is more than 30 days from the
anniversary date of the 2021 annual meeting of stockholders, in
which case the proposals must be submitted a reasonable time before
we begin to print and send our proxy materials. The submission of a
stockholder proposal does not guarantee that it will be included in
our proxy statement.
Advance Notice Requirements for Stockholder Submission of
Nominations and Proposals
In
addition, pursuant to the advance notice provisions set forth in
our bylaws, for a stockholder’s proposal or nomination to be
properly presented at the 2022 annual meeting of stockholders, but
not submitted for inclusion in our proxy statement, such
stockholder’s written notice of the intent of such
stockholder to make a nomination of a person for election as a
director or to bring any other matter before the annual meeting
must be received by our Corporate Secretary at our principal
executive offices no less than 120 days nor more than 180 days
prior to the first anniversary of the date on which we first mailed
our proxy materials for the preceding year’s annual meeting
of stockholders. As a result, stockholder nominations of director
candidates for the 2022 annual meeting of stockholders, and
proposals for the 2022 annual meeting of stockholders submitted
outside the provisions of Rule 14a-8, will be considered untimely
if submitted prior to [●]
or after [●]. However, in
the event that the date of the annual meeting is more than 30 days
prior to or after the anniversary date of the previous year’s
annual meeting of stockholders, notice by the stockholder must be
received by our Corporate Secretary at our principal offices not
earlier than the close of business on the 120th day prior to such
annual meeting of stockholders and not later than the close of
business on the later of the 75th day prior to such annual meeting
or the 10th day following the day on which public announcement (as
defined in the bylaws) of the date of such annual meeting is first
made. The bylaws specify the information that must accompany any
such stockholder notices.
Any
proxy granted with respect to the 2022 annual meeting of
stockholders will confer on management discretionary authority to
vote with respect to a stockholder proposal or director nomination
if notice of such proposal or nomination is not received by our
Corporate Secretary within the timeframe provided
above.
Other Matters
As of
the date of this proxy statement, our Board of Directors does not
know of any other matters for consideration at the annual meeting
other than as described in this proxy statement. If, however, any
other matters are properly brought before the annual meeting, the
persons named as proxies will vote in accordance with their best
judgment with respect to such matters.
39
If
you have any questions, require any assistance in voting your
shares in the Company, need any additional copies of the
Company’s proxy materials, or have any other questions,
please call Alliance Advisors LLC, the Company’s proxy
solicitor, at the toll-free telephone number included
below.
|
Alliance Advisors LLC
200
Broadacres Drive, 3rd Floor
Bloomfield,
NJ 07003
Toll-free
number: 844-876-6187
|
40
CERTIFICATE OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
BK TECHNOLOGIES CORPORATION
Pursuant
to section 78.390 of the Nevada Revised Statutes, BK TECHNOLOGIES
CORPORATION, a Nevada corporation, hereinafter referred to as the
“Corporation,” hereby adopts the following Amendment to
its Articles of Incorporation.
1.
The
Corporation’s Articles of Incorporation are hereby amended by
deleting the first sentence of the "FIFTH" article of the Articles
of Incorporation of BK TECHNOLOGIES CORPORATION in its entirety and
inserting in lieu thereof the following:
The aggregate number of shares which the corporation shall have
authority to issue is 50,000,000 shares of common stock, par value
$0.60 per share, and 1,000,000 shares of preferred stock, par value
$1.00 per share.
2.
Except
as specifically provided herein, the Corporation’s Articles
of Incorporation shall remain unmodified and shall continue in full
force and effect.
3.
By
execution hereof, the undersigned officer of the Corporation
certifies that the foregoing Certificate of Amendment to Articles
of Incorporation of BK TECHNOLOGIES CORPORATION was duly authorized
and adopted by the Corporation’s board of directors and was
approved by the Corporation’s stockholders at the
Corporation’s 2021 Annual Meeting of Stockholders by the
affirmative vote of stockholders holding [●]% of the shares
of the Corporation’s common stock, which constituted a
majority of the shares of the Corporation’s common stock that
were issued and outstanding on October 25, 2021, the record date
for the Corporation’s 2021 Annual Meeting of
Stockholders.
Dated
as of [●].
|
|
BK TECHNOLOGIES CORPORATION |
|
|
|
|
|
|
|
|
|
By:
|
/s/
|
|
|
|
|
William P. Kelly
|
|
|
|
|
Chief Financial
Officer |
|
A-1
2017 PLAN
RELM WIRELESS CORPORATION
2017 INCENTIVE COMPENSATION PLAN
1.
Establishment, Purpose,
Duration.
a. Establishment. RELM
Wireless Corporation (the “Company”) hereby establishes
an equity compensation plan to be known as the RELM Wireless
Corporation 2017 Incentive Compensation Plan (the
“Plan”). The Plan is effective as of March
27, 2017 (the “Effective Date”), subject to the
approval of the Plan by the shareholders of the Company (the date
of such shareholder approval being the “Approval
Date”). Definitions of capitalized terms used in
the Plan are contained in Section 2 of the
Plan.
b. Purpose. The
purpose of the Plan is to attract and retain Directors,
Consultants, officers and other key Employees of the Company and
its Subsidiaries and to provide to such persons incentives and
rewards for superior performance.
c. Duration. No
Award may be granted under the Plan after the day immediately
preceding the tenth (10th) anniversary of the Effective Date, or
such earlier date as the Board shall determine. The Plan
will remain in effect with respect to outstanding Awards until no
Awards remain outstanding.
d. Prior
Plans. If the
Company’s shareholders approve the Plan, the RELM Wireless
Corporation 2007 Incentive Compensation Plan (the “Prior
Plan”) will terminate in its entirety effective on the
Approval Date; provided that all outstanding awards under the Prior Plan
as of the Approval Date shall remain outstanding and shall be
administered and settled in accordance with the provisions of the
Prior Plan.
2.
Definitions. As used in the Plan, the following definitions
shall apply.
a. “Applicable
Laws” means the applicable requirements relating to the
administration of equity-based compensation plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code,
the rules of any stock exchange or quotation system on which the
Shares are listed or quoted and the applicable laws of any other
country or jurisdiction where Awards are granted under the
Plan.
b. “Approval
Date” has the meaning given such term in
Section 1(a).
c. “Award”
means an award of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Shares, Restricted
Share Units, Other Share-Based Awards, or Cash-Based Awards granted
pursuant to the terms and conditions of the Plan.
d. “Award
Agreement” means either: (a) an agreement, in written or
electronic format, entered into by the Company and a Participant
setting forth the terms and provisions applicable to an Award
granted under the Plan; or (b) a statement, in written or
electronic format, issued by the Company to a Participant
describing the terms and provisions of such Award, which need not
be signed by the Participant.
e.
"Beneficial
Owner” shall have the meaning ascribed to such term in
Rule 13d-3 under the Exchange Act and any successor to such
Rule.
f. “Board”
means the Board of Directors of the Company.
g. “Business
Combination” has the meaning given such term in
Section 2(j).
B-1
h. “Cash-Based
Award” shall mean a cash Award granted pursuant to Section 11
of the Plan.
i. “Cause”
as a reason for a Participant’s termination of a
Participant’s Continuous Service shall have the meaning
specified in the Award Agreement. In the absence of any definition
in the Award Agreement, “Cause” shall have the
equivalent meaning or the same meaning as “cause” or
“for cause” set forth in any employment, consulting, or
other agreement for the performance of services between the
Participant and the Company or a Subsidiary or, in the absence of
any such agreement or any such definition in such agreement, such
term shall mean (a) the failure by the Participant to perform, in a
reasonable manner, his or her duties as assigned by the Company or
a Subsidiary, (b) any violation or breach by the Participant of his
or her employment, consulting or other similar agreement with the
Company or a Subsidiary, if any, (c) any violation or breach by the
Participant of any non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a
Subsidiary, (d) any act by the Participant of dishonesty or bad
faith with respect to the Company or a Subsidiary, (e) breach of
fiduciary duties owed to the Company, (e) use of alcohol, drugs or
other similar substances in a manner that adversely affects the
Participant’s work performance, or (f) the commission by the
Participant of any act, misdemeanor, or crime reflecting
unfavorably upon the Participant or the Company or any Subsidiary.
The good faith determination by the Committee of whether the
Participant’s Continuous Service was terminated by the
Company for “Cause” shall be final and binding for all
purposes hereunder.
j. “Change
in Control” shall mean, unless otherwise specified in an
Award Agreement, the occurrence of any of the
following:
a. The
acquisition by any Person of Beneficial
Ownership of more than fifty percent (50%) of
either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities) (the foregoing Beneficial Ownership hereinafter being
referred to as a “Controlling Interest”);
provided,
however, that for purposes of
this paragraph, the following acquisitions shall not constitute or
result in a Change in Control: (u) any acquisition directly from
the Company, (v) any acquisition by Fundamental Global Investors,
LLC, Ballantyne Strong, Inc. and their affiliates), (w) any
acquisition by the Company, (x) any acquisition by any Person that
as of the Effective Date owns Beneficial Ownership of a Controlling
Interest, (y) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
Subsidiary, or (z) any acquisition by any entity pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
paragraph (c) below; or
b. Individuals
who constitute the Board on the Effective Date (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided,
however, that any individual
becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
c. Consummation
of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving the Company or any
of its Subsidiaries, or a sale or other disposition of all or
substantially all of the assets of the Company (each a
“Business Combination”), in each case, unless,
following such Business Combination, (i) no Person (other than
Fundamental Global Investors, LLC, Ballantyne Strong, Inc. and
their affiliates, any employee benefit plan (or related trust) of
the Company or such entity resulting from such Business Combination
or any Person that as of the Effective Date owns Beneficial
Ownership of a Controlling Interest) beneficially owns, directly or
indirectly, fifty percent (50%) or more of the value of the
then outstanding equity securities of the entity resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such entity except to the extent
that such ownership existed prior to the Business Combination; and
(ii) at least a majority of the members of the board of directors
or other governing body of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
d. A
complete liquidation or dissolution of the Company.
k. “Code”
means the Internal Revenue Code of 1986, as amended.
l. “Committee”
means the Compensation Committee of the Board or such other
committee or subcommittee of the Board as may be duly appointed to
administer the Plan and having such powers in each instance as
shall be specified by the Board. To the extent required
by Applicable Laws, the Committee shall consist of two or more
members of the Board, each of whom is a “non-employee
director” within the meaning of Rule 16b-3 promulgated under
the Exchange Act, an “outside director” within the
meaning of regulations promulgated under Section 162(m) of the
Code, and an “independent director” within the meaning
of applicable rules of any securities exchange upon which Shares
are listed.
m. “Company”
has the meaning given such term in Section 1(a) and any
successor thereto.
B-2
n. “Consultant”
means an independent contractor that (a) performs services for the
Company or a Subsidiary in a capacity other than as an Employee or
Director and (b) qualifies as a consultant under the applicable
rules of the SEC for registration of shares on a Form S-8
Registration Statement.
o. “Continuous
Service” means the uninterrupted provision of services to the
Company or any Subsidiary in any capacity of Employee, Director,
Consultant or other service provider. Continuous Service
shall not be considered to be interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any
Subsidiaries, or any successor entities, in any capacity of
Employee, Director, Consultant or other service provider, or (iii)
any change in status as long as the individual remains in the
service of the Company or a Subsidiary in any capacity of Employee,
Director, Consultant or other service provider (except as otherwise
provided in the Award Agreement). An approved leave of absence
shall include sick leave, military leave, or any other authorized
personal leave.
p. “Controlling
Interest” has the meaning given such term in
Section 2(j).
q. “Date
of Grant” means the date specified by the Committee on which
the grant of an Award is to be effective. The Date of
Grant shall not be earlier than the date of the resolution and
action therein by the Committee. In no event shall
the Date of Grant be earlier than the Effective Date.
r. “Director”
means any individual who is a member of the Board and who is not an
Employee.
s. “Effective
Date” has the meaning given such term in
Section 1(a).
t. “Employee”
means any employee of the Company or a Subsidiary;
provided, however, that for purposes of determining whether any
person may be a Participant for purposes of any grant of Incentive
Stock Options, the term “Employee” has the meaning
given to such term in Section 3401(c) of the Code, as
interpreted by the regulations thereunder and Applicable
Laws.
u. “Exchange
Act” means the Securities Exchange Act of 1934 and the rules
and regulations thereunder, as such law, rules and regulations may
be amended from time to time.
v. “Fair
Market Value” means the value of one Share on any relevant
date, determined under the following rules: (a) the closing sale
price per Share on that date as reported on the principal exchange
on which Shares are then trading, if any, or if applicable the NYSE
MKT, or if there are no sales on that date, on the next
preceding trading day during which a sale occurred; (b) if the
Shares are not reported on a principal exchange or national market
system, the average of the closing bid and asked prices last quoted
on that date by an established quotation service for
over-the-counter securities; or (c) if neither (a) nor (b) applies,
(i) with respect to Stock Options, Stock Appreciation Rights and
any Award of stock rights that is subject to Section 409A of the
Code, the value as determined by the Committee through the
reasonable application of a reasonable valuation method, taking
into account all information material to the value of the Company,
within the meaning of Section 409A of the Code, and (ii) with
respect to all other Awards, the fair market value as determined by
the Committee in good faith.
w. “Good
Reason” shall, with respect to any Participant, have the
meaning specified in the applicable Award Agreement. In
the absence of any definition in the Award Agreement, “Good
Reason” shall have the equivalent meaning or the same meaning
as “good reason” or “for good reason” set
forth in any employment, consulting or other agreement for the
performance of services between the Participant and the Company or
a Subsidiary or, in the absence of any such agreement or any such
definition in such agreement, such term shall mean (i) the
assignment to the Participant of any duties inconsistent in any
material respect with the Participant's duties or responsibilities
as assigned by the Company or a Subsidiary, or any other action by
the Company or a Subsidiary which results in a material diminution
in such duties or responsibilities, excluding for this purpose any
action which is remedied by the Company or a Subsidiary promptly
after receipt of notice thereof given by the Participant; or (ii)
any material failure by the Company or a Subsidiary to comply with
its obligations to the Participant as agreed upon, other than an
isolated, insubstantial and inadvertent failure which is remedied
by the Company or a Subsidiary promptly after receipt of notice
thereof given by the Participant.
x. “Incentive
Stock Option” or “ISO” means a Stock Option that
is designated as an Incentive Stock Option and that is intended to
meet the requirements of Section 422 of the Code.
y. “Incumbent
Board” has the meaning given such term in
Section 2(j).
z. “Nonqualified
Stock Option” means a Stock Option that is not intended to
meet the requirements of Section 422 of the Code or otherwise
does not meet such requirements.
aa.
“Other Share-Based Award” means an equity-based or
equity-related Award not otherwise described by the terms of the
Plan, granted in accordance with the terms and conditions set forth
in Section 10.
B-3
bb.
“Outstanding Company Common Stock” has the meaning
given such term in Section 2(j).
cc.
“Outstanding Company Voting Securities” has the meaning
given such term in Section 2(j).
dd.
“Participant” means any eligible individual as set
forth in Section 5 who holds one or more outstanding
Awards.
ee.
“Performance-Based Exception” means the
performance-based exception from the tax deductibility limitations
of Section 162(m) of the Code.
ff.
“Performance Objectives” means the performance
objective or objectives established by the Committee with respect
to an Award granted pursuant to the Plan. Any
Performance Objectives may relate to the performance of the Company
or one or more of its Subsidiaries, divisions, departments, units,
functions, partnerships, joint ventures or minority investments,
product lines or products, or the performance of the individual
Participant, and may include, without limitation, the Performance
Objectives set forth in Section 14(b). The Performance Objectives
may be made relative to the performance of a group of comparable
companies, or a published or special index that the Committee, in
its sole discretion, deems appropriate, or the Company may select
Performance Objectives as compared to various stock market indices.
Performance Objectives may be stated as a combination of the listed
factors. Any Performance Objectives that are
financial metrics may be determined in accordance with United
States Generally Accepted Accounting Principles
(“GAAP”), if applicable, or may be adjusted when
established to include or exclude any items otherwise includable or
excludable under GAAP.
gg.
“Person” shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, and shall include a “group” as
defined in Section 13(d) thereof.
hh.
“Plan” means this RELM Wireless Corporation 2017
Incentive Compensation Plan, as amended from time to
time.
ii. “Prior
Plan” has the meaning given such term in
Section 1(d).
jj. “Qualified
Termination” means any termination of a Participant’s
Continuous Service during the two-year period commencing on a
Change in Control (a) by the Company, any of its Subsidiaries or
the resulting entity in connection with a Change in Control other
than for Cause, or (b) by the Participant for Good
Reason.
kk.
“Restricted Shares” means Shares granted or sold
pursuant to Section 8 as to which neither the substantial risk
of forfeiture nor the prohibition on transfers referred to in such
Section 8 has expired.
ll. “Restricted
Share Unit” means a grant or sale of the right to receive
Shares or cash at the end of a specified restricted period made
pursuant to Section 9.
mm.
“SEC” means the United States Securities and Exchange
Commission.
nn.
“Share” means a share of common stock of the Company,
par value $.60 per share, or any security into which such Share may
be changed by reason of any transaction or event of the type
referred to in Section 16.
oo.
“Stock Appreciation Right” means a right granted
pursuant to Section 7.
pp.
“Stock Option” means a right to purchase a Share
granted to a Participant under the Plan in accordance with the
terms and conditions set forth in Section 6. Stock
Options may be either Incentive Stock Options or Nonqualified Stock
Options.
qq.
“Subsidiary” means: (a) with respect to an Incentive
Stock Option, a “subsidiary corporation” as defined
under Section 424(f) of the Code; and (b) for all other purposes
under the Plan, any corporation or other entity in which the
Company owns, directly or indirectly, a proprietary interest of
more than fifty percent (50%) by reason of stock ownership or
otherwise.
rr. “Ten
Percent Shareholder” shall mean any Participant who owns more
than 10% of the combined voting power of all classes of stock of
the Company, within the meaning of Section 422 of the
Code.
B-4
3. Shares
Available Under the Plan.
a. Shares
Available for Awards. The maximum number of Shares that may
be granted pursuant to Awards under the Plan shall be 1,000,000
Shares, reduced by Shares covered by an award granted under the
Prior Plan after December 31, 2016 but prior to the Approval Date,
and increased by Shares covered by an award outstanding under the
Prior Plan after December 31, 2016 that is forfeited, canceled,
surrendered, settled in cash or otherwise terminated without the
issuance of such Share. All of the Shares authorized for
grant under the Plan may be issued pursuant to Incentive Stock
Options. Shares issued or delivered pursuant to an Award may be
authorized but unissued Shares, treasury Shares, including Shares
purchased in the open market, or a combination of the
foregoing. The aggregate number of Shares available for
issuance or delivery under the Plan shall be subject to adjustment
as provided in Section 16.
b. Share
Counting. The
following Shares shall not count against the Share limit in Section
3(a): (i) Shares covered by an Award that expires or is
forfeited, canceled, surrendered, or otherwise terminated without
the issuance of such Shares; (ii) Shares covered by an Award that
is settled only in cash; and (iii) Shares granted through the
assumption of, or in substitution for, outstanding awards granted
by a company to individuals who become Employees, Directors or
Consultants as the result of a merger, consolidation, acquisition
or other corporate transaction involving such company and the
Company or any of its Affiliates (except as may be required by
reason of the rules and regulations of any stock exchange or other
trading market on which the Shares are listed). This
Section 3(b) shall apply to the number of Shares reserved and
available for Incentive Stock Options only to the extent consistent
with applicable Treasury regulations relating to Incentive Stock
Options under the Code.
c. Prohibition
of Share Recycling. The following Shares subject to an
Award shall not again be available for grant as described above,
regardless of whether those Shares are actually issued or delivered
to the Participant: (i) Shares tendered in payment of
the exercise price of a Stock Option; (ii) Shares withheld by the
Company or any Subsidiary to satisfy a tax withholding obligation;
and (iii) Shares that are repurchased by the Company with Stock
Option proceeds. Without limiting the foregoing, with
respect to any Stock Appreciation Right that is settled in Shares,
the full number of Shares subject to the Award shall count against
the number of Shares available for Awards under the Plan regardless
of the number of Shares used to settle the Stock Appreciation Right
upon exercise.
d. Per-Person
Limits. Subject to
adjustment as provided in Section 16 of the Plan, the following
limits shall apply with respect to Awards that are intended to
qualify for the Performance-Based Exception: (i) the maximum
aggregate number of Shares that may be subject to Stock Options or
Stock Appreciation Rights granted in any calendar year to any one
Participant shall be 500,000 Shares; (ii) the maximum aggregate
number of Restricted Shares and Shares issuable or deliverable
under Restricted Share Units and Other Share-Based Awards granted
in any calendar year to any one Participant shall be 500,000
Shares; (iii) the maximum aggregate cash compensation that can be
paid pursuant to Cash-Based Awards or Other Share-Based Awards
granted in any calendar year to any one Participant shall be (x)
$5,000,000 with respect to any 12 month performance period
(pro-rated for any performance period that is less than 12 months
based upon the ratio of the number of days in the performance
period as compared to 365), and (y) with respect to any performance
period that is more than 12 months, $5,000,000 multiplied by the
number of full 12 months periods that are in the performance
period.
e. Director
Limits. Notwithstanding any other provision
of the Plan to the contrary, the aggregate grant date fair value
(determined as of the applicable Date(s) of Grant in accordance
with applicable financial accounting rules) of all Awards granted
to any Director during any single calendar year, taken together
with any cash fees paid to such person during such calendar year,
shall not exceed $200,000.
4. Administration
of the Plan.
a. In
General. The Plan
shall be administered by the Committee. Except as
otherwise provided by the Board, the Committee shall have full and
final authority in its discretion to take all actions determined by
the Committee to be necessary in the administration of the Plan,
including, without limitation, discretion to: select Award
recipients; determine the sizes and types of Awards; determine the
terms and conditions of Awards in a manner consistent with the
Plan; grant waivers of terms, conditions, restrictions and
limitations applicable to any Award, or accelerate the vesting or
exercisability of any Award, in a manner consistent with the Plan;
construe and interpret the Plan and any Award Agreement or other
agreement or instrument entered into under the Plan; establish,
amend, or waive rules and regulations for the Plan’s
administration; and take such other action, not inconsistent with
the terms of the Plan, as the Committee deems
appropriate. To the extent permitted by Applicable Laws,
the Committee may, in its discretion, delegate to one or more
Directors or Employees any of the Committee’s authority under
the Plan. The acts of any such delegates shall be
treated hereunder as acts of the Committee with respect to any
matters so delegated.
b. Determinations. The
Committee shall have no obligation to treat Participants or
eligible Participants uniformly, and the Committee may make
determinations under the Plan selectively among Participants who
receive, or Employees, Directors or Consultants who are eligible to
receive, Awards (whether or not such Participants or eligible
Employees, Directors or Consultants are similarly
situated). All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related
orders and resolutions of the Committee shall be final, conclusive
and binding on all persons, including the Company, its
Subsidiaries, shareholders, Directors, Consultants, Employees,
Participants and their estates and
beneficiaries.
c. Authority
of the Board. The
Board may reserve to itself any or all of the authority or
responsibility of the Committee under the Plan or may act as the
administrator of the Plan for any and all purposes. To
the extent the Board has reserved any such authority or
responsibility or during any time that the Board is acting as
administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee
(other than in this Section 4(c)) shall include the
Board. To the extent that any action of the Board under
the Plan conflicts with any action taken by the Committee, the
action of the Board shall control.
B-5
5. Eligibility
and Participation. Each
Employee, Director and Consultant is eligible to participate in the
Plan. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible
Employees, Directors and Consultants those to whom Awards shall be
granted and shall determine, in its sole discretion, the nature of
any and all terms permissible by Applicable Laws and the amount of
each Award. No Employee, Director or Consultant shall
have the right to be selected to receive an Award under the Plan,
or, having been so selected, to be selected to receive future
Awards.
6. Stock
Options. Subject to the terms
and conditions of the Plan, Stock Options may be granted to
Participants in such number, and upon such terms and conditions, as
shall be determined by the Committee in its sole
discretion.
a. Award
Agreement. Each
Stock Option shall be evidenced by an Award Agreement that shall
specify the exercise price, the term of the Stock Option, the
number of Shares covered by the Stock Option, the conditions upon
which the Stock Option shall become vested and exercisable and such
other terms and conditions as the Committee shall determine and
which are not inconsistent with the terms and conditions of the
Plan (including, but not limited to, the minimum vesting provisions
of Section 12). The Award Agreement also shall specify whether the
Stock Option is intended to be an Incentive Stock Option or a
Nonqualified Stock Option. No dividend equivalents
may be granted with respect to the Shares underlying a Stock
Option.
b. Exercise
Price. The exercise
price per Share of a Stock Option shall be determined by the
Committee at the time the Stock Option is granted and shall be
specified in the related Award Agreement; provided,
however, that in no event
shall the exercise price per Share of any Stock Option be less than
one hundred percent (100%) of the Fair Market Value of a Share on
the Date of Grant.
c. Term. The
term of a Stock Option shall be determined by the Committee and set
forth in the related Award Agreement; provided,
however, that in no event
shall the term of any Stock Option exceed ten (10) years from its
Date of Grant.
d. Exercisability. Stock
Options shall become vested and exercisable at such times and upon
such terms and conditions as shall be determined by the Committee
and set forth in the related Award Agreement. Such terms
and conditions may include, without limitation, the satisfaction of
(a) performance goals based on one or more Performance Objectives,
and (b) time-based vesting requirements.
e. Exercise
of Stock Options. Except as otherwise provided in the
Plan or in a related Award Agreement, a Stock Option may be
exercised for all or any portion of the Shares for which it is then
exercisable. A Stock Option shall be exercised by the delivery of a
notice of exercise to the Company or its designee in a form
specified by the Company which sets forth the number of Shares with
respect to which the Stock Option is to be exercised and full
payment of the exercise price for such Shares. The
exercise price of a Stock Option may be paid, in the discretion of
the Committee and as set forth in the applicable Award Agreement:
(i) in cash or its equivalent; (ii) by tendering (either by actual
delivery or attestation) previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the
aggregate exercise price; (iii) by a cashless exercise (including
by withholding Shares deliverable upon exercise and through a
broker-assisted arrangement to the extent permitted by Applicable
Laws); (iv) by a combination of the methods described in clauses
(i), (ii) and/or (iii); or (v) through any other method approved by
the Committee in its sole discretion. As soon as practicable after
receipt of the notification of exercise and full payment of the
exercise price, the Company shall cause the appropriate number of
Shares to be issued to the Participant.
f. Special
Rules Applicable to Incentive Stock Options. Notwithstanding any other provision
in the Plan to the contrary:
(i) Incentive
Stock Options may be granted only to Employees of the Company and
its Subsidiaries. The terms and conditions of Incentive
Stock Options shall be subject to and comply with the requirements
of Section 422 of the Code.
(ii) To
the extent that the aggregate Fair Market Value of the Shares
(determined as of the Date of Grant) with respect to which an
Incentive Stock Option is exercisable for the first time by any
Participant during any calendar year (under all plans of the
Company and its Subsidiaries) is greater than $100,000 (or such
other amount specified in Section 422 of the Code), as calculated
under Section 422 of the Code, then the Stock Option shall be
treated as a Nonqualified Stock Option.
(iii) No
Incentive Stock Option shall be granted to any Participant who, on
the Date of Grant, is a Ten Percent Shareholder, unless (x) the
exercise price per Share of such Incentive Stock Option is at least
one hundred and ten percent (110%) of the Fair Market Value of a
Share on the Date of Grant, and (y) the term of such Incentive
Stock Option shall not exceed five (5) years from the Date of
Grant.
B-6
7. Stock
Appreciation Rights. Subject to the terms and conditions
of the Plan, Stock Appreciation Rights may be granted to
Participants in such number, and upon such terms and conditions, as
shall be determined by the Committee in its sole
discretion.
a. Award
Agreement. Each
Stock Appreciation Right shall be evidenced by an Award Agreement
that shall specify the exercise price, the term of the Stock
Appreciation Right, the number of Shares covered by the Stock
Appreciation Right, the conditions upon which the Stock
Appreciation Right shall become vested and exercisable and such
other terms and conditions as the Committee shall determine and
which are not inconsistent with the terms and conditions of the
Plan (including, but not limited to, the minimum vesting provisions
of Section 12). No dividend equivalents may be
granted with respect to the Shares underlying a Stock Appreciation
Right.
b. Exercise
Price. The exercise
price per Share of a Stock Appreciation Right shall be determined
by the Committee at the time the Stock Appreciation Right is
granted and shall be specified in the related Award
Agreement; provided,
however, that in no event
shall the exercise price per Share of any Stock Appreciation Right
be less than one hundred percent (100%) of the Fair Market Value of
a Share on the Date of Grant.
c. Term. The
term of a Stock Appreciation Right shall be determined by the
Committee and set forth in the related Award Agreement;
provided,
however, that in no event
shall the term of any Stock Appreciation Right exceed ten (10)
years from its Date of Grant.
d. Exercisability
of Stock Appreciation Rights. A Stock Appreciation Right shall
become vested and exercisable at such times and upon such terms and
conditions as may be determined by the Committee and set forth in
the related Award Agreement. Such terms and conditions
may include, without limitation, the satisfaction of (i)
performance goals based on one or more Performance Objectives, and
(ii) time-based vesting requirements.
e. Exercise
of Stock Appreciation Rights. Except as otherwise provided in the
Plan or in a related Award Agreement, a Stock Appreciation Right
may be exercised for all or any portion of the Shares for which it
is then exercisable. A Stock Appreciation Right shall be exercised
by the delivery of a notice of exercise to the Company or its
designee in a form specified by the Company which sets forth the
number of Shares with respect to which the Stock Appreciation Right
is to be exercised. Upon exercise, a Stock Appreciation Right shall
entitle a Participant to an amount equal to (a) the excess of (i)
the Fair Market Value of a Share on the exercise date over (ii) the
exercise price per Share, multiplied by (b) the number of Shares
with respect to which the Stock Appreciation Right is exercised. A
Stock Appreciation Right may be settled in whole Shares, cash or a
combination thereof, as specified by the Committee in the related
Award Agreement.
8. Restricted
Shares. Subject to
the terms and conditions of the Plan, Restricted Shares may be
granted or sold to Participants in such number, and upon such terms
and conditions, as shall be determined by the Committee in its sole
discretion.
a. Award
Agreement. Each
Restricted Shares Award shall be evidenced by an Award Agreement
that shall specify the number of Restricted Shares, the restricted
period(s) applicable to the Restricted Shares, the conditions upon
which the restrictions on the Restricted Shares will lapse and such
other terms and conditions as the Committee shall determine and
which are not inconsistent with the terms and conditions of the
Plan (including, but not limited to, the minimum vesting provisions
of Section 12).
b. Terms,
Conditions and Restrictions.
The Committee shall impose such other terms, conditions and/or
restrictions on any Restricted Shares as it may deem advisable,
including, without limitation, a requirement that the Participant
pay a purchase price for each Restricted Share, restrictions based
on the achievement of specific Performance Objectives, time-based
restrictions or holding requirements or sale restrictions placed on
the Shares by the Company upon vesting of such Restricted
Shares. Unless otherwise provided in the related Award
Agreement or required by applicable law, the restrictions imposed
on Restricted Shares shall lapse upon the expiration or termination
of the applicable restricted period and the satisfaction of any
other applicable terms and conditions.
c. Custody
of Certificates. To
the extent deemed appropriate by the Committee, the Company may
retain any certificates representing Restricted Shares in the
Company’s possession until such time as all terms, conditions
and/or restrictions applicable to such Shares have been satisfied
or lapse.
d. Rights
Associated with Restricted Shares during Restricted
Period. During any
restricted period applicable to Restricted Shares: (i) the
Restricted Shares may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated; (ii) unless otherwise
provided in the related Award Agreement, the Participant shall be
entitled to exercise full voting rights associated with such
Restricted Shares; and (iii) the Participant shall be entitled to
all dividends and other distributions paid with respect to such
Restricted Shares during the restricted period; provided,
however, that any dividends
with respect to unvested Restricted Shares shall be accumulated or
deemed reinvested in additional Restricted Shares, subject to the
same terms and conditions as the original Award (including
service-based vesting conditions and any Performance Objectives)
until such Award is earned and vested.
B-7
9. Restricted
Share Units. Subject
to the terms and conditions of the Plan, Restricted Share Units may
be granted or sold to Participants in such number, and upon such
terms and conditions, as shall be determined by the Committee in
its sole discretion.
a. Award
Agreement. Each
Restricted Share Unit Award shall be evidenced by an Award
Agreement that shall specify the number of units, the restricted
period(s) applicable to the Restricted Share Units, the conditions
upon which the restrictions on the Restricted Share Units will
lapse, the time and method of payment of the Restricted Share
Units, and such other terms and conditions as the Committee shall
determine and which are not inconsistent with the terms and
conditions of the Plan (including, but not limited to, the minimum
vesting provisions of Section 12).
b. Terms,
Conditions and Restrictions.
The Committee shall impose such other terms, conditions and/or
restrictions on any Restricted Share Units as it may deem
advisable, including, without limitation, a requirement that the
Participant pay a purchase price for each Restricted Share Unit,
restrictions based on the achievement of specific Performance
Objectives or time-based restrictions or holding
requirements.
c. Form
of Settlement. Restricted Share Units may be settled
in whole Shares, cash or a combination thereof, as specified by the
Committee in the related Award Agreement.
d. Dividend
Equivalents. Restricted Share
Units may provide the Participant with dividend equivalents,
payable either in cash or in additional Shares, as determined by
the Committee in its sole discretion and set forth in the related
Award Agreement; provided,
however, that any dividend
equivalents with respect to unvested Restricted Share Units shall
be accumulated or deemed reinvested in additional Restricted Share
Units, subject to the same terms and conditions as the original
Award (including service-based vesting conditions and any
Performance Objectives) until such Award is earned and
vested.
10. Other
Share-Based Awards. Subject to
the terms and conditions of the Plan, Other Share-Based Awards may
be granted to Participants in such number, and upon such terms and
conditions, as shall be determined by the Committee in its sole
discretion. Other Share-Based Awards are Awards that are valued in
whole or in part by reference to, or otherwise based on the Fair
Market Value of, Shares, and shall be in such form as the Committee
shall determine, including without limitation, unrestricted Shares
or time-based or performance-based units that are settled in Shares
and/or cash.
a. Award
Agreement. Each
Other Share-Based Award shall be evidenced by an Award Agreement
that shall specify the terms and conditions upon which the Other
Share-Based Award shall become vested, if applicable, the time and
method of settlement, the form of settlement and such other terms
and conditions as the Committee shall determine and which are not
inconsistent with the terms and conditions of the Plan (including,
but not limited to, the minimum vesting provisions of Section
12).
b. Form
of Settlement. An
Other Share-Based Award may be settled in whole Shares, cash or a
combination thereof, as specified by the Committee in the related
Award Agreement.
c. Dividend
Equivalents. Other
Share-Based Awards may provide the Participant with dividend
equivalents, on payable either in cash or in additional Shares, as
determined by the Committee in its sole discretion and set forth in
the related Award Agreement; provided,
however, that any dividend
equivalents with respect to unvested Other Share-Based Awards shall
be accumulated or deemed reinvested, subject to the same terms and
conditions as the original Award (including service-based vesting
conditions and any Performance Objectives) until such Award is
earned and vested.
11. Cash-Based
Awards. Subject to
the terms and conditions of the Plan, Cash-Based Awards may be
granted to Participants in such amounts and upon such other terms
and conditions as shall be determined by the Committee in its sole
discretion. Each Cash-Based Award shall be evidenced by an Award
Agreement that shall specify the payment amount or payment range,
the time and method of settlement and the other terms and
conditions, as applicable, of such Award which may include, without
limitation, restrictions based on the achievement of specific
Performance Objectives and such other terms and conditions as the
Committee shall determine and which are not inconsistent with the
terms and conditions of the Plan (including, but not limited to,
the minimum vesting provisions of Section 12).
12. Minimum
Vesting Provisions. Subject to Sections 19, 21 and 22(b)
of the Plan, (a) no condition on vesting or exercisability of
an Award, whether based on continued employment or other service or
based upon the achievement of Performance Objectives, shall be
based on service or performance (as applicable) over a period of
less than one year, and (b) upon and after such minimum one-year
period, restrictions on vesting or exercisability may lapse on a
pro-rated, graded, or cliff basis as specified in the Award
Agreement; provided,
however, that Awards covering
up to five percent (5%) of the Shares reserved for issuance
pursuant to Section 3(a) may be granted under the Plan as
unrestricted Shares or otherwise as Awards with a performance
period or vesting period of less than one year.
13. Compliance
with Section 409A. Awards granted under the Plan shall
be designed and administered in such a manner that they are either
exempt from the application of, or comply with, the requirements of
Section 409A of the Code. To the extent that the
Committee determines that any award granted under the Plan is
subject to Section 409A of the Code, the Award Agreement shall
incorporate the terms and conditions necessary to avoid the
imposition of an additional tax under Section 409A of the Code upon
a Participant. Notwithstanding any other provision of
the Plan or any Award Agreement (unless the Award Agreement
provides otherwise with specific reference to this Section
13): (i) an Award shall not be granted, deferred,
accelerated, extended, paid out, settled, substituted or modified
under the Plan in a manner that would result in the imposition of
an additional tax under Section 409A of the Code upon a
Participant; and (ii) if an Award is subject to Section 409A of the
Code, and if the Participant holding the award is a
“specified employee” (as defined in Section 409A of the
Code, with such classification to be determined in accordance with
the methodology established by the Company), then, to the extent
required to avoid the imposition of an additional tax under Section
409A of the Code upon a Participant, No distribution or
payment of any amount shall be made before the date that is six (6)
months following the date of such Participant’s
“separation from service” (as defined in Section 409A
of the Code) or, if earlier, the date of the Participant’s
death. Although the Company intends to administer the Plan so that
Awards will be exempt from, or will comply with, the requirements
of Section 409A of the Code, the Company does not warrant that any
Award under the Plan will qualify for favorable tax treatment under
Section 409A of the Code or any other provision of federal, state,
local, or non-United States law. The Company shall not be liable to
any Participant for any tax, interest, or penalties the Participant
might owe as a result of the grant, holding, vesting, exercise, or
payment of any Award under the Plan.
B-8
14. Compliance
with Section 162(m).
a. In
General. Notwithstanding anything in the Plan
to the contrary, Awards may be granted in a manner that is intended
to qualify for the Performance-Based Exception. As determined by
the Committee in its sole discretion, the grant, vesting,
exercisability and/or settlement of any Restricted Shares,
Restricted Share Units, Other Share-Based Awards and Cash-Based
Awards intended to qualify for the Performance-Based Exception
shall be conditioned on the attainment of one or more Performance
Objectives during a performance period established by the Committee
and must satisfy the requirements of this Section
14.
b. Performance
Objectives. If an Award is
intended to qualify for the Performance-Based Exception, then the
Performance Objectives shall be based on specified levels of or
growth in one or more of the following criteria: (i) earnings per
share; (ii) revenues or margins; (iii) cash flow; (iv) operating
margin; (v) return on net assets, investment, capital, or equity;
(vi) economic value added; (vii) direct contribution; (viii) net
income; pretax income; earnings before interest and taxes; earnings
before interest, taxes, depreciation and amortization; earnings
after interest expense and before extraordinary or special items;
operating income; income before interest income or expense, unusual
items and income taxes, local, state or federal and excluding
budgeted and actual bonuses which might be paid under any ongoing
bonus plans of the Company; (ix) working capital; (x) management of
fixed costs or variable costs; (xi) identification or consummation
of investment opportunities or completion of specified projects in
accordance with corporate business plans, including strategic
mergers, acquisitions or divestitures; (xii) total shareholder
return; (xiii) debt reduction; (xiv) market share; (xv) entry into
new markets, either geographically or by business unit; (xvi)
customer retention and satisfaction; (xvii) strategic plan
development and implementation, including turnaround plans; and/or
(xviii) the Fair Market Value of a Share.
c. Establishment
of Performance Objectives. With respect to Awards intended to
qualify for the Performance-Based Exception, the Committee shall
establish: (i) the applicable Performance Objectives and
performance period, and (ii) the formula for computing the payout.
Such terms and conditions shall be established in writing while the
outcome of the applicable performance period is substantially
uncertain, but in no event later than the earlier of: (x)
ninety days after the beginning of the applicable performance
period; or (y) the expiration of twenty-five percent (25%) of the
applicable performance period.
d. Certification
of Performance. With
respect to any Award intended to qualify for the Performance-Based
Exception, the Committee shall certify in writing whether the
applicable Performance Objectives and other material terms imposed
on such Award have been satisfied, and, if they have, ascertain the
amount of the payout or vesting of the
Award. Notwithstanding any other provision of the Plan,
payment or vesting of any such Award shall not be made until the
Committee certifies in writing that the applicable Performance
Objectives and any other material terms of such Award were in fact
satisfied in a manner conforming to applicable regulations under
Section 162(m) of the Code.
e. Adjustments. If
the Committee determines that a change in the Company’s
business, operations, corporate structure or capital structure, or
in the manner in which it conducts its business, or other events or
circumstances render the Performance Objectives unsuitable, the
Committee may in its discretion adjust such Performance Objectives
or the related level of achievement, in whole or in part, as the
Committee deems appropriate and equitable, including, without
limitation, to exclude the effects of events that are unusual in
nature or infrequent in occurrence (as determined in accordance
with applicable financial accounting standards), cumulative effects
of tax or accounting changes, discontinued operations,
acquisitions, divestitures and material restructuring or asset
impairment charges; provided,
however, that in no event
will any such adjustment be made that would cause an Award intended
to qualify for the Performance-Based Exception to fail to so
qualify.
f. Negative
Discretion. With respect to any
Award intended to qualify for the Performance-Based Exception,
after the date that the Performance Objectives are required to be
established in writing pursuant to Section 14(c), the Committee
shall not have discretion to increase the amount of compensation
that is payable upon achievement of the designated Performance
Objectives. However, the Committee may, in its sole
discretion, reduce the amount of compensation that is payable upon
achievement of the designated Performance
Objectives.
15. Transferability. Except
as otherwise determined by the Committee, no Award or dividend
equivalents paid with respect to any Award shall be transferable by
the Participant except by will or the laws of descent and
distribution; provided, that if so determined by the Committee, each
Participant may, in a manner established by the Board or the
Committee, designate a beneficiary to exercise the rights of the
Participant with respect to any Award upon the death of the
Participant and to receive Shares or other property issued or
delivered under such Award. Except as otherwise
determined by the Committee, Stock Options and Stock Appreciation
Rights will be exercisable during a Participant’s lifetime
only by the Participant or, in the event of the Participant’s
legal incapacity to do so, by the Participant’s guardian or
legal representative acting on behalf of the Participant in a
fiduciary capacity under state law and/or court
supervision.
16. Adjustments.
In the event of any equity restructuring (within the meaning of
Financial Accounting Standards Board Accounting Standards
Codification Topic 718, or any successor thereto), such as a stock
dividend, stock split, reverse stock split, spinoff, rights
offering, or recapitalization through a large, nonrecurring cash
dividend, the Committee shall cause there to be an equitable
adjustment in the number and kind of Shares specified in Section 3
of the Plan and, with respect to outstanding Awards, in the number
and kind of Shares subject to outstanding Awards and the exercise
price or other price of Shares subject to outstanding Awards, in
each case to prevent dilution or enlargement of the rights of
Participants. In the event of any other change in
corporate capitalization, or in the event of a merger,
consolidation, liquidation, or similar transaction, the Committee
may, in its sole discretion, cause there to be an equitable
adjustment as described in the foregoing sentence, to prevent
dilution or enlargement of rights; provided, however, that, unless otherwise determined by the
Committee, the number of Shares subject to any Award shall always
be rounded down to a whole number. Notwithstanding the
foregoing, the Committee shall not make any adjustment pursuant to
this Section 16 that would (i) cause any Stock Option intended to
qualify as an ISO to fail to so qualify, (ii) cause an Award that
is otherwise exempt from Section 409A of the Code to become subject
to Section 409A, or (iii) cause an Award that is subject to Section
409A of the Code to fail to satisfy the requirements of Section
409A. The determination of the Committee as to the
foregoing adjustments, if any, shall be conclusive and binding on
all Participants and any other persons claiming under or through
any Participant.
17. Fractional
Shares. The Company shall not
be required to issue or deliver any fractional Shares pursuant to
the Plan and, unless otherwise provided by the Committee,
fractional shares shall be settled in cash.
B-9
18. Withholding
Taxes. To the extent required
by Applicable Laws, a Participant shall be required to satisfy, in
a manner satisfactory to the Company or Subsidiary, as applicable,
any withholding tax obligations that arise by reason of the
exercise of a Stock Option or Stock Appreciation Right, the vesting
of or settlement of Shares under an Award, an election pursuant to
Section 83(b) of the Code or otherwise with respect to an
Award. The Company and its Subsidiaries shall not be required to
issue or deliver Shares, make any payment or to recognize the
transfer or disposition of Shares until such obligations are
satisfied. The Committee may permit or require these obligations to
be satisfied by having the Company withhold a portion of the Shares
that otherwise would be issued or delivered to a Participant upon
exercise of a Stock Option or Stock Appreciation Right or upon the
vesting or settlement of an Award, or by tendering Shares
previously acquired, in each case having a Fair Market Value equal
to the amount required to be withheld. Any such elections are
subject to such conditions or procedures as may be established by
the Committee and may be subject to disapproval by the Committee.
In no event will the Fair Market Value of the Shares to be
withheld or tendered pursuant to this Section 18 to satisfy
applicable withholding taxes exceed the amount of taxes required to
be withheld based on the maximum statutory tax rates in the
applicable taxing jurisdictions.
19. Foreign
Participants. Without amending
the Plan, the Committee may grant Awards to Participants who are
foreign nationals, or who are subject to Applicable Laws of one or
more non-United States jurisdictions, on such terms and conditions
different from those specified in the Plan as may in the judgment
of the Committee be necessary or desirable to foster and promote
achievement of the purposes of the Plan, and, in furtherance of
such purposes, the Committee may approve such sub-plans,
supplements to or amendments, modifications, restatements or
alternative versions of this Plan as may be necessary or advisable
to comply with provisions of Applicable Laws of other countries in
which the Company or its Subsidiaries operate or have Employees or
Consultants.
20. Compensation
Recovery Policy. Any
Award granted to a Participant shall be subject to forfeiture or
repayment pursuant to the terms of any applicable compensation
recovery policy maintained by the Company from time to time,
including any such policy that may be maintained to comply with the
Dodd-Frank Wall Street Reform and Consumer Protection Act or any
rules or regulations issued by the SEC or applicable securities
exchange.
21. Change
in Control.
a. Committee
Discretion. The Committee may, in its sole
discretion and without the consent of Participants, either by the
terms of the Award Agreement applicable to any Award or by
resolution adopted prior to the occurrence of the Change in
Control, determine whether and to what extent outstanding Awards
under the Plan shall be assumed, converted or replaced by the
resulting entity in connection with a Change in Control (or, if the
Company is the resulting entity, whether such Awards shall be
continued by the Company), in each case subject to equitable
adjustments in accordance with Section 16 of the
Plan.
b. Awards
that are Assumed. To
the extent outstanding Awards granted under this Plan are assumed,
converted or replaced by the resulting entity in the event of a
Change in Control (or, if the Company is the resulting entity, to
the extent such Awards are continued by the Company) as provided in
Section 21(a) of the Plan, then, except as otherwise provided in
the applicable Award Agreement or in another written agreement with
the Participant, or in a Company severance plan applicable to the
Participant: (i) any outstanding Awards that are subject to
Performance Objectives shall be converted by the resulting entity,
as if “target” performance had been achieved as of the
date of the Change in Control, and shall continue to vest during
the remaining performance period or other period of required
service, and (ii) all other Awards shall continue to vest during
the applicable vesting period, if any. Notwithstanding the
preceding sentence, if a Participant incurs a Qualified
Termination, then upon such termination (A) all outstanding Awards
held by the Participant that may be exercised shall become fully
exercisable and shall remain exercisable for the full duration of
their term, (B) all restrictions with respect to outstanding Awards
shall lapse, with any specified Performance Objectives with respect
to outstanding Awards deemed to be satisfied at the
“target” level, and (C) all outstanding Awards shall
become fully vested.
c. Awards
that are not Assumed. To the extent outstanding
Awards granted under this Plan are not assumed, converted or
replaced by the resulting entity in connection with a Change in
Control (or, if the Company is the resulting entity, to the extent
such Awards are not continued by the Company) in accordance with
Section 21(a) of the Plan, then effective immediately prior to the
Change in Control, except as otherwise provided in the applicable
Award Agreement or in another written agreement with the
Participant, or in a Company severance plan applicable to the
Participant: (i) all outstanding Awards held by the Participant
that may be exercised shall become fully exercisable and shall
remain exercisable for the full duration of their term, (ii) all
restrictions with respect to outstanding Awards shall lapse, with
any specified Performance Objectives with respect to outstanding
Awards deemed to be satisfied at the “target” level,
and (iii) all outstanding Awards shall become fully
vested.
d. Cancellation
Right. The
Committee may, in its sole discretion and without the consent of
Participants, either by the terms of the Award Agreement applicable
to any Award or by resolution adopted prior to the occurrence of
the Change in Control, provide that any outstanding Award (or a
portion thereof) shall, upon the occurrence of such Change in
Control, be cancelled in exchange for a payment in cash or other
property (including shares of the resulting entity in connection
with a Change in Control) in an amount equal to the excess, if any,
of the Fair Market Value of the Shares subject to the Award, over
any exercise price related to the Award, which amount may be zero
if the Fair Market Value of a Share on the date of the Change in
Control does not exceed the exercise price per Share of the
applicable Awards.
B-10
22. Amendment,
Modification and Termination.
a. In
General. The Board
may at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part; provided, however, that no alteration or amendment that
requires shareholder approval in order for the Plan to comply with
any rule promulgated by the SEC or any securities exchange on which
Shares are listed or any other Applicable Laws shall be effective
unless such amendment shall be approved by the requisite vote of
shareholders of the Company entitled to vote thereon within the
time period required under such applicable listing standard or
rule.
b. Adjustments
to Outstanding Awards. The Committee may in its sole
discretion at any time (i) provide that all or a portion of a
Participant’s Stock Options, Stock Appreciation Rights and
other Awards in the nature of rights that may be exercised shall
become fully or partially exercisable; (ii) provide that all or a
part of the time-based vesting restrictions on all or a portion of
the outstanding Awards shall lapse, and/or that any Performance
Objectives or other performance-based criteria with respect to any
Awards shall be deemed to be wholly or partially satisfied; or
(iii) waive any other limitation or requirement under any such
Award, in each case, as of such date as the Committee may, in its
sole discretion, declare. Unless otherwise determined by
the Committee, any such adjustment that is made with respect to an
Award that is intended to qualify for the Performance-Based
Exception shall be made at such times and in such manner as will
not cause such Awards to fail to qualify under the
Performance-Based Exception. Additionally, the Committee shall not
make any adjustment pursuant to this Section 22(b) that would cause
an Award that is otherwise exempt from Section 409A of the Code to
become subject to Section 409A, or that would cause an Award
that is subject to Section 409A of the Code to fail to satisfy
the requirements of Section 409A.
c. Prohibition
on Repricing. Except
for adjustments made pursuant to Sections 16 or 21, the Board or
the Committee will not, without the further approval of the
shareholders of the Company, authorize the amendment of any
outstanding Stock Option or Stock Appreciation Right to reduce the
exercise price. No Stock Option or Stock Appreciation
Right will be cancelled and replaced with an Award having a lower
exercise price, or for another Award, or for cash without further
approval of the shareholders of the Company, except as provided in
Sections 16 or 21. Furthermore, no Stock Option or
Stock Appreciation Right will provide for the payment, at the time
of exercise, of a cash bonus or grant or sale of another Award
without further approval of the shareholders of the Company. This
Section 22(c) is intended to prohibit the repricing of
“underwater” Stock Options or Stock Appreciation Rights
without shareholder approval and will not be construed to prohibit
the adjustments provided for in Sections 16 or
21.
d. Effect
on Outstanding Awards. Notwithstanding any other provision
of the Plan to the contrary (other than Sections 16, 21, 22(b) and
24(d)), no termination, amendment, suspension, or modification
of the Plan or an Award Agreement shall adversely affect in any
material way any Award previously granted under the Plan, without
the written consent of the Participant holding such Award;
provided
that the Committee may modify an ISO
held by a Participant to disqualify such Stock Option from
treatment as an “incentive stock option” under Section
422 of the Code without the Participant’s
consent.
23. Applicable
Laws. The
obligations of the Company with respect to Awards under the Plan
shall be subject to all Applicable Laws and such approvals by any
governmental agencies as the Committee determines may be
required. The Plan and each Award Agreement shall be
governed by the laws of the State of Nevada, excluding any
conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of the Plan to the substantive
law of another jurisdiction.
24. Miscellaneous.
a. Deferral
of Awards. Except
with respect to Stock Options, Stock Appreciation Rights and
Restricted Shares, the Committee may permit Participants to elect
to defer the issuance or delivery of Shares or the settlement of
Awards in cash under the Plan pursuant to such rules, procedures or
programs as it may establish for purposes of the Plan. The
Committee also may provide that deferred issuances and settlements
include the payment or crediting of dividend equivalents or
interest on the deferral amounts. All elections and deferrals
permitted under this provision shall comply with Section 409A
of the Code, including setting forth the time and manner of the
election (including a compliant time and form of payment), the date
on which the election is irrevocable, and whether the election can
be changed until the date it is irrevocable.
b. No
Right of Continued Service. The Plan shall not confer upon any
Participant any right with respect to continuance of employment or
other service with the Company or any Subsidiary, nor shall it
interfere in any way with any right the Company or any Subsidiary
would otherwise have to terminate such Participant’s
employment or other service at any time. Awards granted
under the Plan shall not be considered a part of any
Participant’s normal or expected compensation or salary for
any purposes, including, but not limited to, calculating any
severance, resignation, termination, redundancy, dismissal, end of
service payments, bonuses, long-service awards, pension or
retirement or welfare benefits or similar payments, and in
no event shall any Award be considered as compensation for, or
relating in any way to, past services for the Company or any
Subsidiary or affiliate.
c. Unfunded,
Unsecured Plan. Neither a Participant nor any other
person shall, by reason of participation in the Plan, acquire any
right or title to any assets, funds or property of the Company or
any Subsidiary, including without limitation, any specific funds,
assets or other property which the Company or any Subsidiary may
set aside in anticipation of any liability under the Plan. A
Participant shall have only a contractual right to an Award or the
amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan
shall constitute a guarantee that the assets of the Company or any
Subsidiary shall be sufficient to pay any benefits to any
person.
d. Severability. If
any provision of the Plan is or becomes invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended or limited in scope
to conform to Applicable Laws or, in the discretion of the
Committee, it shall be stricken and the remainder of the Plan shall
remain in full force and effect.
B-11
e. Acceptance
of Plan. By
accepting any benefit under the Plan, each Participant and each
person claiming under or through any such Participant shall be
conclusively deemed to have indicated their acceptance and
ratification of, and consent to, all of the terms and conditions of
the Plan and any action taken under the Plan by the Committee, the
Board or the Company, in any case in accordance with the terms and
conditions of the Plan.
f. Successors. All
obligations of the Company under the Plan and with respect to
Awards shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or other event, or a sale
or disposition of all or substantially all of the business and/or
assets of the Company and references to the “Company”
herein and in any Award Agreements shall be deemed to refer to such
successors.
[END OF DOCUMENT]
B-12
AMENDMENT NO. 1 TO THE
RELM WIRELESS CORPORATION
2017 INCENTIVE COMPENSATION PLAN
WHEREAS, the Board of Directors (the
“Board”)
of BK Technologies Corporation, a Nevada corporation (the
“Company”),
originally adopted the RELM Wireless Corporation 2017 Incentive
Compensation Plan (as amended from time to time, the
“Plan”);
and
WHEREAS,
the Board may, at any time, amend the Plan provided that no
amendment that requires shareholder approval in order for the Plan
to comply with any rule promulgated by the SEC or any securities
exchange on which the Company’s shares are listed or any
other applicable law shall be effective unless such amendment shall
be approved by the requisite vote of shareholders of the Company
entitled to vote thereon within the time period required under such
applicable listing standard or rule; and
WHEREAS, the Board has determined that it is in the best interests of
the Company and its stockholders to amend the Plan to increase the
number of shares available for awards under the Plan from 1,000,000
to 3,000,000.
NOW,
THEREFORE, the Plan is hereby amended as follows:
1. Section 3.a.
of the Plan shall be amended in its entirety to read as
follows:
“a. Shares
Available for Awards. The maximum number of Shares that may
be granted pursuant to Awards under the Plan shall be 3,000,000
Shares, reduced by Shares covered by an award granted under the
Prior Plan after December 31, 2016 but prior to the Approval Date,
and increased by Shares covered by an award outstanding under the
Prior Plan after December 31, 2016 that is forfeited, canceled,
surrendered, settled in cash or otherwise terminated without the
issuance of such Share. All of the Shares authorized for
grant under the Plan may be issued pursuant to Incentive Stock
Options. Shares issued or delivered pursuant to an Award may be
authorized but unissued Shares, treasury Shares, including Shares
purchased in the open market, or a combination of the
foregoing. The aggregate number of Shares available for
issuance or delivery under the Plan shall be subject to adjustment
as provided in Section 16.”
2. Except
as expressly set forth in this Amendment, all other terms and
conditions set forth in the Plan shall remain in full force and
effect. Capitalized terms used and not defined herein shall have
the meanings set forth in the Plan.
This Amendment was adopted by the Board of
Directors of the Company on October 14, 2021 and approved by the
stockholders of the Company on [●].
Name:
Title:
C-1
|
BK TECHNOLOGIES CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS – DECEMBER 17, 2021, AT 9:00
A.M., EASTERN TIME
|
 |
|
|
|
|
|||||||
|
CONTROL ID:
|
|
|
|
|
|
|
|
|||||
|
REQUEST ID:
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
||||||
|
The
undersigned stockholder(s) of BK Technologies Corporation, a Nevada
corporation (the “Company”), hereby revoking any proxy
heretofore given, does hereby appoint John M. Suzuki and William P.
Kelly, and each of them, with full power to act alone, the true and
lawful attorneys-in-fact and proxies of the undersigned, with full
powers of substitution, and hereby authorize(s) them and each of
them, to represent the undersigned and to vote all shares of common
stock of the Company that the undersigned held of record as of the
close of business on October 25, 2021, and is/are entitled to vote
at the 2021 Annual Meeting of Stockholders of the Company to be
held on December 17, 2021, at 9:00 a.m., Eastern Time, online at
https://agm.issuerdirect.com/bkti, and any
and all adjournments and postponements thereof, with all powers the
undersigned would possess if personally present, on the following
proposals, each as described more fully in the accompanying proxy
statement, and any other matters coming before said
meeting.
|
||||||||||||
|
|
|
|||||||||||
|
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
|
||||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
VOTING INSTRUCTIONS
|
|
|
|
|
|
|
||||||
|
If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
 |
MAIL:
|
Please mark, sign, date, and return this Proxy Card promptly using
the enclosed envelope.
|
|
|
|
|
|
|||||
 |
FAX:
|
Complete the reverse portion of this Proxy Card and Fax to
202-521-3464.
|
|
|
|
|
|
|||||
 |
INTERNET:
|
https://www.iproxydirect.com/BKTI
|
|
|
|
|
|
|||||
 |
PHONE:
|
1-866-752-VOTE(8683)
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
ANNUAL MEETING OF THE STOCKHOLDERS
OFBK TECHNOLOGIES CORPORATION
|
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE: ☒
|
|||||||||
|
|
|
|||||||||
|
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|||||||||
|
Proposal 1
|
|
|
FOR
|
|
WITHHOLD
|
|
|
|
|
|
|
|
Election of Directors:
|
|
|
|
|
|
|
|
|
|
|
|
D.
Kyle Cerminara
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
Michael
R. Dill
|
|
☐
|
|
☐
|
|
|
|
CONTROL ID:
|
|
|
|
R.
Joseph Jackson
|
|
☐
|
|
☐
|
|
|
|
REQUEST ID:
|
|
|
|
Charles
T. Lanktree
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
E.
Gray Payne
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
John
M. Suzuki
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
Inez
Tenenbaum
|
|
☐
|
|
☐
|
|
|
|
|
|
|
Proposal 2
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
To ratify the appointment of MSL, P.A. as our independent
registered public accounting firm for fiscal 2021.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
Proposal 3
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
To approve an amendment to the Company’s Articles of
Incorporation to increase the number of our authorized common stock
from 20,000,000 to 50,000,000 and to make a corresponding change to
the number of authorized shares of capital stock.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
Proposal 4
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
To approve an amendment to the Company’s 2017 Incentive
Compensation Plan (the “2017 Plan”) to increase the
number of authorized shares under the 2017 Plan from 1,000,000
shares to 3,000,000 shares.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
Proposal 5
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
To
transact such other business properly brought before the meeting
and any adjournment or postponement of the
meeting.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING: ☐
|
|||||
|
This
proxy will be voted in the manner directed herein by the
undersigned.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE, AND IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED,
“FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR
NAMED IN PROPOSAL 1, “FOR” RATIFICATION OF THE AUDITOR
APPOINTMENT IN PROPOSAL 2, “FOR” APPROVAL OF AN
AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO
INCREASE THE NUMBERS OF AUTHORIZED COMMON STOCK IN PROPOSAL 3,
“FOR” APPROVAL OF AN AMENDMENT TO THE COMPANY’S
2017 INCENTIVE COMPENSATION PLAN (THE “2017 PLAN”) TO
INCREASE THE NUMBER OF AUTHORIZED SHARES UNDER THE 2017 PLAN IN
PROPOSAL 4, AND IN THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW.
|
|
|
|
MARK HERE FOR ADDRESS CHANGE ☐ New
Address (if applicable):
____________________________________________________________________________________
IMPORTANT: Please sign exactly
as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name
by authorized person.
Dated: ________________________, 2021
|
||||||
|
|
||||||||||
|
|
(Print Name of Stockholder and/or Joint Tenant)
|
|||||||||
|
|
||||||||||
|
(Signature of Stockholder)
|
||||||||||
|
|
||||||||||
|
(Second Signature if held jointly)
|
||||||||||