OBLONG, INC.
| 25587 Conifer Road, Suite 105-231, | ||
| Conifer, Colorado 80433 | ||
November 24, 2020
Dear Stockholder:
We are pleased to invite you to the 20162020 Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) of Glowpoint,Oblong, Inc. (the “Company”), which will be held at 9:10:00 a.m. MDTAM MST on May 26, 2016,December 22, 2020, at ourthe offices of Arnold & Porter Kaye Scholer LLP, located at 1776 Lincoln1144 Fifteenth Street, Suite 1300,3100, Denver, Colorado 80203.
80202.
At the Annual Meeting, you will be asked to: (i)
(1)elect fivethree members of ourthe Company’s Board of Directors to serve until ourthe Company’s next annual meeting of stockholders, or until their respective successors are duly elected and qualified; (ii)
(2)ratify the appointment of EisnerAmper LLP as ourthe Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016; (iii) approve, on an advisory basis, the compensation of our named executive officers;2020; and (iv)
(3)transact other business as may properly come before the meeting.
Annual Meeting.
The enclosed Notice and Proxy Statement contain complete information about the matters to be considered at the Annual Meeting. We are also enclosing our 20152019 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on March 17, 2016.May 15, 2020, as amended by the amendment to our 2019 Annual Report on Form 10-K filed with the SEC on May 28, 2020. Copies of these materials are also available for review at www.glowpoint.com/www.oblong.com/company/investor-relations or may be mailed to you free of charge by requesting a copy from us at 303-640-3838 or mailing a request to the GlowpointOblong Investor Relations department located at Glowpoint,Oblong, Inc., 1776 Lincoln Street,25587 Conifer Road, Suite 1300, Denver,105-231, Conifer, Colorado 80203. This80433. The Proxy Statement and our 20152019 Annual Report on Form 10-K are also available for viewing, printing and downloading at http://www.astproxyportal.com/ast/16839/.www.proxyvote.com.
Sincerely,
/s/ Peter Holst
Peter Holst
Chairman of the Board, President, and Chief Executive Officer of Oblong, Inc.
Chairman of the Board, President, and Chief Executive Officer of Oblong, Inc.
This proxy statement is dated November 24, 2020, and is first being mailed to stockholders of the Company on or about November 24, 2020.
OBLONG, INC.
 | |||
NOTICE OF THE 20162020 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 2016
DECEMBER 22, 2020
To our Stockholders:
The 20162020 Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) of Glowpoint,Oblong, Inc. (the “Company”, “Oblong”, “we” or “our”), will be held at 9:10:00 a.m. MDTAM MST on May 26, 2016,December 22, 2020, at Glowpoint Inc.’sthe offices of Arnold & Porter Kaye Scholer LLP, located at 1776 Lincoln1144 Fifteenth Street, Suite 1300,3100, Denver, Colorado 80203,80202, for the following purposes:
(1)to elect three members of the Company’s Board of Directors to serve until the Company’s next annual meeting of stockholders, or until their respective successors are duly elected and qualified;
(2)to ratify the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; and
(3)to transact other business as may properly come before the Annual Meeting.
WHO MAY VOTE:
Stockholders of record of our Common Stock, $0.0001 par value per share, and of our Series A-2 Convertible Preferred Stock, par value $0.0001 per share,and our Series C Convertible Preferred Stock, as of the close of business on April 21, 2016November 17, 2020, the record date for the Annual Meeting, are entitled to vote at the Annual Meeting, or any adjournment or postponement thereof. Stockholders of record of our Series D Convertible Preferred Stock and Series E Convertible Preferred Stock will not be eligible to vote at the Annual Meeting pursuant to the terms of such securities. A list of stockholders will be available at the Annual Meeting and during the 10 days prior to the Annual Meeting at our principal executive offices located at 1776 Lincoln Street,25587 Conifer Road, Suite 1300, Denver CO 80203.
105-231, Conifer, Colorado 80433. All stockholders are cordially invited to attend the Annual Meeting. Whether you plan to attend the Annual Meeting or not, we urge you to vote and submit your proxy by internet, telephone or mail to ensure the presence of a quorum. You may change or revoke your proxy at any time before it is voted at the Annual Meeting.
To ensure your representation at the Annual Meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the internet. Please submit your proxy promptly, whether or not you expect to attend the Annual Meeting. Submitting a proxy now will not prevent you from being able to vote in person at the Annual Meeting.
In light of the COVID-19 pandemic, it could become necessary to change the date, time, location, and/or means of holding the Annual Meeting (including by means of remote communication). If such a
 | |
The Oblong Board of Directors recommends that you vote “FOR” the election of each of the Board’s nominees for director and "FOR” Proposal No. 2 to ratify the appointment of EisnerAmper, LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2020.
By order of the Board of Directors,
/s/ David Clark
David Clark
Chief Financial Officer, Treasurer, and Corporate Secretary of Oblong, Inc.
Chief Financial Officer, Treasurer, and Corporate Secretary of Oblong, Inc.
YOUR PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
WE URGE YOU TO COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY CARD OR TO VOTE BY TELEPHONE OR INTERNETINTERNET.
TABLE OF CONTENTS
| Page | |||||
| QUESTIONS AND ANSWERS ABOUT THE OBLONG ANNUAL MEETING | |||||
| PROPOSAL NO. 1 -- ELECTION OF DIRECTORS | |||||
| INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | |||||
| REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | |||||
| PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |||||
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |||||
| SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | |||||
| EXECUTIVE OFFICERS | |||||
| EXECUTIVE COMPENSATION | |||||
| DIRECTOR COMPENSATION | |||||
| EQUITY COMPENSATION PLAN INFORMATION | |||||
| TRANSACTIONS WITH RELATED PERSONS | |||||
| CODE OF CONDUCT AND ETHICS | |||||
| STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR | |||||
| HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS | |||||
| WHERE YOU CAN FIND MORE INFORMATION | |||||
| OTHER MATTERS | |||||
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OBLONG, INC.
| 25587 CONIFER ROAD, SUITE 105-231, | ||
| CONIFER, COLORADO 80433 | ||
PROXY STATEMENT
FOR THE 20162020 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement (this "Proxy Statement"“Proxy Statement”), along with the accompanying Notice of the 20162020 Annual Meeting of Stockholders (the “Notice”), contains information about the 20162020 Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) of Glowpoint,Oblong, Inc., including any adjournments or postponements of the Annual Meeting. We are holding the Annual Meeting at 9:10:00 a.m. MDTAM MST on May 26, 2016,December 22, 2020, at Glowpoint, Inc.'sthe offices of Arnold & Porter Kaye Scholer LLP, located at 1776 Lincoln1144 Fifteenth Street, Suite 1300,3100, Denver, Colorado 80203.80202. Directions to the Annual Meeting can be obtained by telephoning us at 303-640-3838. In this Proxy Statement, we refer to Glowpoint,Oblong, Inc. as “we,” “our,” “us”“us,” “Oblong” or the “Company.“the Company.”
This Proxy Statement relates to the solicitation of proxies by our Board of Directors (the "Board“Board of Directors"Directors” or the "Board"“Board”) for use at the Annual Meeting.
On or about April 28, 2016,November 24, 2020, we will send this Proxy Statement, the attached Notice and the enclosed proxy card to all stockholders entitled to vote at the Annual Meeting. Although not part of the Proxy Statement, we will also send along with this Proxy Statement our 20152019 Annual Report on Form 10-K, as amended, which includes our financial statements for the fiscal year ended December 31, 2015.
2019.
Important Notice Regarding the Availability of Proxy Materials for Our
Annual Meeting to Be Held on May 26, 2016
December 22, 2020:
This Proxy Statement and our 20152019 Annual Report on Form 10-K, as amended, are available for viewing, printing and downloading at http://www.astproxyportal.com/ast/16839/.www.proxyvote.com. We are providing a copy of our Annual Report on Form 10-K for the year ended December 31, 20152019, as amended, with the accompanying proxy materials. Additionally, you can find a copy of our Annual Report on Form 10-K, as amended, which includes our financial statements for the fiscal year ended December 31, 2015,2019, on the website of the Securities and Exchange Commission (the "SEC"“SEC”) at http://www.sec.gov or on our website at http://www.glowpoint.com/www.oblong.com/company/investor-relations.
Record Date and Voting Securities
Only holders of record of our Common Stock $0.0001 par value per share ("(“Common Stock"Stock”), and our Series A-2 Convertible Preferred Stock par value $0.0001 per share ("(“Series A-2 Preferred Stock"Stock”), and our Series C Convertible Preferred Stock (“Series C Preferred Stock”) as of the close of business on April 21, 2016November 17, 2020 (the "Record Date"“Record Date”) are entitled to vote at the Annual Meeting. As of the Record Date, 35,855,0006,357,839 shares of Common Stock were issued and outstanding, and 3245 shares of Series A-2 Preferred Stock were issued and outstanding, and 250 shares of Series C Preferred Stock were issued and outstanding. Stockholders of record of our Series D Convertible Preferred Stock (“Series D Preferred Stock”) and Series E Convertible Preferred Stock (“Series E Preferred Stock”) will not be eligible to vote at the Annual Meeting pursuant to the terms of such securities.
•Each holder of Common Stock is entitled to cast one vote per share of Common Stock held by such holder on each matter to be presented at the Annual Meeting.
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•Each holder of Series A-2 Preferred Stock is entitled to vote on each matter to be presented at the Annual Meeting on an as converted basis upequal to 4.99%the number of (i) theshares of Common Stock issuable upon conversion of the Series A-2 Preferred Stock held by such holder in accordance with the termsbased on a conversion price of the Certificate of Designations, Preferences and Rights of the Series A-2 Preferred Stock (the “Certificate of Designations”), plus (ii) all other shares of Common Stock beneficially owned by such holder, unless such holder has waived such holder’s right to vote with respect to any or all of such holder’s Series A-2 Preferred Stock in accordance with the Certificate of Designations, in which case such holder is not entitled to vote such Series A-2 Preferred Stock in respect of any matter to be presented at the Annual Meeting.$18.49 per share. As of the Record Date, each share of Series A-2 Preferred Stock was convertible into 2,514406 shares of Common Stock.Stock (for a total of 18,270 shares of Common Stock).
•Each holder of Series C Preferred Stock is entitled to vote on each matter to be presented at the Annual Meeting on an as converted basis equal to the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock held by such holder based on a conversion price (for voting purposes) of $3.30 per share. As of the Record Date, each share of Series C Preferred Stock was convertible into 303 shares of Common Stock for voting purposes (for a total of 75,750 shares of Common Stock).
Quorum
A quorum is present at the Annual Meeting if a majority of the shares of our capital stock issued and outstanding and entitled to vote on the Record Date are represented in person or by proxy. If a quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is obtained.
For purposes of determining the presence of a quorum, abstentions, and with respect to the election of directors, “withhold” votes, will be treated as shares that are present and entitled to vote, while broker “non-votes” will be treated only as shares that are present. An abstention is the voluntary act of not voting by a stockholder who is present in person or by proxy at the Annual Meeting and entitled to vote. A broker “non-vote” occurs when a broker nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary power for that particular item and has not received instructions from the beneficial owner.
Internet. Vote over the Internet at www.proxyvote.com, the Annual Meeting in accordance withwebsite for Internet voting. Simply follow the instructions on your proxy card, and you can confirm that your vote has been properly recorded. If you vote on the Internet, you can request electronic delivery of the stockholders.
Telephone. Vote by telephone by following the instructions on your proxy card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your vote has been properly recorded. Telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 21, 2020.
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Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the pre-addressed, postage-paid envelope provided. If you vote by mail and your proxy card is returned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to vote, then your proxy will be voted as recommended by the Board of Directors. If mailed, your completed and signed proxy card must be received by December 21, 2020.
Meeting. Please see “Questions and Answers about the Oblong Annual Meeting--How can I vote my shares in person at the Annual Meeting?” for more information regarding voting at the Annual Meeting.
Shares Held in “Street Name”
If your shares are held in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the Annual Meeting in order to vote.
Voting Requirements for that particular item and has not received instructions from the beneficial owner.
Approval
4
as present and entitled to vote for purposes of the Proposal.proposal. Accordingly, an abstention will have the effect of a vote against the Proposal. For ratification of the selection of the Company’s independent registered public accounting firm,proposal. On this proposal, brokers will have discretionary authority to vote in the absence of timely instructions from their customers.
Revocation
After you have submitted a proxy, you may change your vote at any time before the proxy is exercised by submitting a notice of revocation or a proxy bearing a later date. Regardless of whether you voted using a traditional proxy card or by telephone or internet, you may use any of these methods to change your vote. You may change your vote either by submitting a proxy card prior to the date of the Annual Meeting or by voting again prior to the time at which the telephone and internet voting facilities close by following the procedures applicable to those methods of voting. In each event, the later submitted vote will be recorded and the earlier vote revoked. You may also revoke a proxy by voting in person at the Annual Meeting. Your attendance at the Annual Meeting will not by itself constitute revocation of a proxy.
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QUESTIONS AND MANAGEMENTANSWERS ABOUT THE OBLONG ANNUAL MEETING
A. Holders of record of our capital stockCommon Stock, Series A-2 Preferred Stock and Series C Preferred Stock at the close of business on November 17, 2020, which we refer to as of April 21, 2016 by eachthe “Record Date,” are entitled to vote at the Annual Meeting. As of the following:
Q. What is the purpose of the Annual Meeting?
A. At the Annual Meeting, stockholders will consider and vote upon the following matters:
(1)to elect three members of the Company’s Board of Directors to serve until the Company’s next annual meeting of stockholders, or until their respective successors are duly elected and qualified;
(2)to ratify the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; and
(3)to transact other business as may properly come before the Annual Meeting.
Q. How can I access the proxy materials over the Internet?
A. Your proxy card will contain instructions on how to view our proxy materials on the Internet. Our proxy materials are also available on our website at: www.Oblong.com.
Q. How can I vote my shares?
A. You may vote by any of the following four methods:
(1) Internet. Vote over the Internet at www.proxyvote.com, the website for Internet voting. Simply follow the instructions on your proxy card, and you can confirm that your vote has been properly recorded. If you vote on the Internet, you can request electronic delivery of future proxy materials. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 21, 2020.
(2) Telephone. Vote by telephone by following the instructions on your proxy card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your vote has been properly recorded. Telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 21, 2020.
(3) Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the pre-addressed, postage-paid envelope provided. If you vote by mail and
6
your proxy card is returned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to vote, then your proxy will be voted as recommended by the Board of Directors. If mailed, your completed and signed proxy card must be received by December 21, 2020.
(4) Meeting. If you are a stockholder of record as of November 17, 2020, you may attend and vote at the Annual Meeting on December 22, 2020.
If you hold your Company shares in a brokerage account, your ability to vote over the Internet or by telephone depends on your broker’s voting process. Please follow the directions on your proxy card or the voting instruction card from your broker carefully.
The Board of Directors recommends that you vote using one of the first three methods discussed above, as it is not practical for most stockholders to attend and vote at the Annual Meeting. Using one of the first three methods discussed above to vote will not limit your right to vote at the Annual Meeting if you later decide to attend in person.
Q. How can I vote my shares in person at the Annual Meeting?
A. Stockholders of Record. If your shares are registered directly in your name with the American Stock Transfer & Trust Company, LLC (“AST”), our “transfer agent,” you are considered the stockholder of record with respect to those shares, and the proxy materials are being mailed to you. As the stockholder of record, you have the right to vote in person at the Annual Meeting. If you choose to do so, you can bring the proxy card or vote using the ballot provided at the Annual Meeting. Even if you plan to attend the Annual Meeting, we recommend that you vote your shares in advance as described above so that your vote will be counted if you decide later not to attend the Annual Meeting.
B. Beneficial Owners. Most of our Series A-2 Preferred Stockstockholders hold their shares in street name through a broker, bank or other nominee rather than directly in their own name. In that case, you are held by David Robinson, who holds 31.6 shares or 100% of the class. As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. A person is considered the beneficial owner of securitiesshares held in street name, and the proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the Annual Meeting. Because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank or nominee that canholds your shares, giving you the right to vote the shares at the Annual Meeting. You will need to contact your broker, bank or nominee to obtain a legal proxy, and you will need to bring it to the Annual Meeting in order to vote in person.
In light of the COVID-19 pandemic, it could become necessary to change the date, time, location, and/or means of holding the Annual Meeting (including by means of remote communication). If such a change is made, we will announce the change in advance, and details on how to participate will be acquired within 60 daysissued by press release, posted on our website, and filed as additional proxy materials.
Q. How does the Board of such date throughDirectors recommend that I vote?
A. Our Board of Directors recommends that you vote:
(1)“FOR” the exerciseelection of three members of the Company’s Board of Directors to serve until the Company’s next annual meeting of stockholders, or conversionuntil their respective successors are duly elected and qualified and
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(2)“FOR” the ratification of the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
Q. What is the voting requirement to approve each of the items?
A.
Item One—Election of Directors : Pursuant to our bylaws, a plurality of the votes duly cast at the Annual Meeting is required for the election of directors. You may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The persons receiving the highest number of “FOR” votes at the Annual Meeting will be elected. Abstentions, broker non-votes and withheld votes, if any, are not counted as votes cast and will have no effect on the outcome of this election.
Item Two—Ratification of Appointment of Independent Registered Public Accounting Firm: To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will have discretionary authority to vote in the absence of timely instructions from their customers. As a result, we do not expect any broker non-votes to occur with respect to this proposal. However, any broker non-votes will have the same effect as a vote against this proposal.
Q. What happens if additional matters are presented at the Annual Meeting?
A. Other than the items of business described in this Proxy Statement, we are not aware of any option, warrantother business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxies will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting.
Q. What happens if I do not give specific voting instructions?
A. If you are a stockholder of record, and vote without giving specific voting instructions, the proxyholders will vote your shares in the manner recommended by our Board of Directors on all matters presented in this Proxy Statement, and, with respect to any other matters that may properly come before the Annual Meeting, as the proxyholders may determine in their discretion.
If you are the beneficial owner of shares held in the name of a broker, bank or other derivative security. Shares of Common Stock subject to options, warrantsnominee and do not provide that broker, bank or other derivative securitiesnominee with voting instructions in the proxy card, your broker may vote your shares only with respect to certain matters considered routine. For any matters that are not routine for which are currently exercisable, convertible or exercisable or convertible within such 60 days are considered outstanding for computingyou do not provide voting instructions in the ownership percentage of the person holding such options, warrants or other derivative security, butproxy card, your shares will constitute “broker non-votes” and are not considered outstandingentitled to vote on that proposal. With respect to the matters being voted on at the Annual Meeting, your broker has discretionary authority to vote your shares in the absence of instructions from you only on the ratification of the selection of the Company’s independent registered public accounting firm. As a result, we do not expect any broker non-votes to occur with respect to this proposal. However, because broker non-votes will be treated as shares that are “present” for computingpurposes of establishing a quorum, they will have the ownership percentagesame effect as a vote “against” this proposal. Your broker does not have discretionary authority to vote your shares in the election of any other person.
directors if you do
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| Common Stock | |||||||
Name and Address of Beneficial Owners(1) | Amount and Nature of Beneficial Ownership(2) | Percent of Class | |||||
| Executive Officers and Directors: | |||||||
| Peter Holst | 1,809,974 | (3) | 5.0 | % | |||
| David Clark | 234,795 | (4) | * | ||||
| Gary Iles | 0 | (5) | * | ||||
| Kenneth Archer | 225,158 | (6) | * | ||||
| David Giangano | 62,013 | (7) | * | ||||
| Patrick J. Lombardi | 119,681 | (8) | * | ||||
| James S. Lusk | 262,033 | (9) | * | ||||
| Scott Zumbahlen | 0 | (10) | * | ||||
All directors and executive officers as a group (8 people) | 2,713,654 | 7.6 | % | ||||
| �� | |||||||
| Greater than 5% Owners: | |||||||
Main Street Capital Corporation 1300 Post Oak Boulevard, Houston, TX 77056 | 7,711,517 | (11) | 21.5 | % | |||
| Sandra and Norman Pessin JTWROS | 7,035,059 | (12) | 19.6 | % | |||
Jason T. Adelman Cipher Capital Partners LLC, c/o Rothschild 1251 Avenue of the Americas, Suite 936, New York, NY 10020 | 3,420,200 | (13) | 9.5 | % | |||
•are present and vote at the Annual Meeting; or
•properly submit a proxy card or vote over the Internet or by telephone.
For purposes of determining the presence of a quorum, abstentions, and with respect to the election of directors, “withhold” votes, will be treated as shares that are present and entitled to vote, while broker “non-votes” will be treated only as shares that are present. If a quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is obtained.
Q. How can I change my vote after I return my proxy card?
A. If you are a stockholder of record, there are three ways you can change your vote or revoke your proxy after you have sent in your proxy card.
•First, you may send a written notice to Oblong, Inc., c/o Corporate Secretary, 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433 stating that you would like to revoke your proxy.
•Second, you may complete and submit another valid proxy by mail, telephone or over the Internet that is later dated and if mailed, is properly signed, or if submitted by telephone or over the Internet is received by 11:59 p.m. (Eastern Time) on December 21, 2020. Any earlier proxies will be revoked automatically.
•Third, you may attend the Annual Meeting and vote in person. Any earlier proxy will be revoked. However, attending the Annual Meeting without voting in person will not revoke your proxy.
If you hold your shares through a broker, bank or other nominee and you have instructed the broker, bank or other nominee to vote your shares, you must follow directions from your broker, bank or other nominee to change your vote.
Q. Who will tabulate the votes?
A. David Clark, our Chief Financial Officer, Treasurer and Corporate Secretary, will certify the tabulated vote and act as the inspector of elections for the Annual Meeting. Mr. Clark will be responsible for (i) determining the presence of a quorum at the Annual Meeting, (ii) receiving all votes and ballots, whether by proxy or in person, with regard to all matters voted upon at the Annual Meeting, (iii) counting and tabulating all such votes and ballots and (iv) determining and reporting the results with regard to all such matters voted upon at the Annual Meeting.
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Q. Where can I find the voting results of the Annual Meeting?
A. We intend to announce preliminary voting results at the Annual Meeting and publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days following the Annual Meeting.
Q. Who pays for the cost of this proxy solicitation?
A. Oblong will bear the cost of the solicitation of proxies from its stockholders, including the cost of preparing, assembling and mailing the proxy solicitation materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone or other electronic means or in person, but no such person will be specifically compensated for such services. We will cause brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons. We will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in doing so. We have engaged Broadridge Financial Solutions to aid in the distribution of the proxy materials and will reimburse their related reasonable out-of-pocket expenses.
Q. Is there a list of stockholders entitled to vote at the Annual Meeting?
A. The names of stockholders of record entitled to vote at the Annual Meeting will be available at the Annual Meeting and for 10 days prior to the Annual Meeting at our principal executive offices between the hours of 9:00 a.m. and 5:00 p.m. Mountain Time for any purpose relevant to the Annual Meeting. To arrange to view this list during the times specified above, please contact the Corporate Secretary of the Company at Oblong, Inc., c/o Corporate Secretary, 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433 or call 303-640-3838.
THIS QUESTION AND ANSWER SECTION IS ONLY MEANT TO GIVE AN OVERVIEW OF THE PROXY STATEMENT. FOR MORE INFORMATION, PLEASE REFER TO THE MATERIAL CONTAINED IN THE SUBSEQUENT PAGES.
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PROPOSAL NO. 1
-- ELECTION OF DIRECTORS
Directors to be elected are to serve until the next annual meeting of stockholders or until their respective successors are duly elected and qualified. The number of directors is determined from time to time, and may be increased or decreased, by our Board of Directors, and is currently fivefour members. The nominees who will stand for election are Kenneth Archer, David Giangano,Jason Adelman, Peter Holst, Patrick J. Lombardi and James S. Lusk, all of whom are currently members of our Board of Directors. Richard Ramlall will not stand for re-election at our Annual Meeting but will continue to serve as a director until the expiration of his term at the Annual Meeting. The fivesize of our Board of Directors will be reduced to three (3) as of the Annual Meeting. The three nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee, the Board of Directors may select a substitute nominee. If a substitute nominee is selected, proxies will be voted in favor of such nominee. Our Board of Directors has no reason to believe that any of the named nominees will be unable or unwilling to serve as a nominee or as a director if elected. Proxies cannot be voted for a greater number of persons than the number of nominees named.
Director Nominees
The following table sets forth information with respect to our director nominees.
| Name | Age | Position with Company | ||||||||||||
| Director, Chairman of the Compensation Committee, Chairman of the Nominating Committee | ||||||||||||||
| Peter Holst | ||||||||||||||
James | Director, Chairman of the Audit Committee, | |||||||||||||
___________________
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Nominating Committee.
Nominee Biographies
In considering Mr. ArcherAdelman as a director of the Company, the Board reviewed, among other qualifications, his specialized experience and extensive knowledgeexpertise in sales and marketing (specifically in building and establishing a channel sales program and strategy) in the communications and networking industries, and also his leadership experience as a chief executive.
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Peter Holst, Chairman of the Board, President and Chief Executive Officer and Director. Prior to being named President and CEO in January 2013, Mr. Holst had served as the Company’s Senior Vice President for Business Development since October 1, 2012. Mr. Holst has served as a director of the Company since January 2013 and as the Chairman of the Board since July 2019. Prior to joining the Company, Mr. Holst served as the Chief Executive Officer of Affinity VideoNet, Inc. (“Affinity”), a leading provider of public videoconferencing rooms and managed videoconferencing services, from June 1, 2008 until October 1, 2012, when the Company acquired Affinity. Prior to joining Affinity, Mr. Holst served as the President and Chief Operating Officer of Raindance Communications. Mr. Holst holds a degree in Business Administration from the University of Ottawa.
In considering Mr. Holst as a director of the Company, the Board reviewed his extensive knowledge and expertise in the communications as a servicecommunication services industry, and the leadership he has shown in his positions with prior companies.
James S. Lusk, Director. Director. Mr. Lusk joined our Board of Directors in February 2007.2007 and has served as the Lead Independent Director of the Board since July 2019. Mr. Lusk is currently the Chief Financial Officer of Sutherland Global Services, a global provider of business process transformation and technology management services. Mr. Lusk joined Sutherland in July 2015. From 2007 until July 2015, Mr. Lusk was Executive Vice President of ABM Industries Incorporated (NYSE:ABM), a leading provider of facility solutions, and served as ABM’s Chief Financial Officer from 2007 until April 2015. Prior to joining ABM, he served as Vice President, Business Services and Chief Operating Officer for the Europe, Middle East and Africa region for Avaya from 2005 to 2007. Mr. Lusk has also served as Chief Financial Officer and Treasurer of BioScrip/MIM, President of Lucent Technologies’ Business Services division, and interim Chief Financial Officer and Corporate Controller of Lucent Technologies. Mr. Lusk earned his B.S. (Economics), cum laude, from the Wharton School, University of Pennsylvania, and his M.B.A (Finance) from Seton Hall University. He is a CPAcertified public accountant and was inducted into the AICPA Business and Industry Leadership Hall of Fame in 1999.
In considering Mr. Lusk as a director of the Company, the Board reviewed his extensive expertise and knowledge regarding finance and accounting matters, as well as compensation, risk assessment and corporate governance. Mr. Lusk qualifies as an “audit committee financial expert” under the applicable SEC rules and accordingly contributes to the Board of Directors his understanding of generally accepted accounting principles and his skills in auditing, as well as in analyzing and evaluating financial statements.
Vote Required For Approval
Pursuant to our bylaws, a plurality of the votes duly cast at the Annual Meeting is required for the election of directors. You may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The persons receiving the highest number of “FOR” votes at the Annual Meeting will be elected. Abstentions, broker non-votes and withheld votes, if any, are not counted as votes cast and will have no effect on the outcome of this election.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH NOMINEE FOR DIRECTOR TO SERVE UNTIL OUR NEXT
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ANNUAL MEETING OF STOCKHOLDERS, OR UNTIL HIS SUCCESSOR IS DULY ELECTED AND QUALIFIED.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Board of Directors
Our Board of Directors currently consists of fivefour directors. The current Board members include fourthree independent directors, and our chief executive officer. The core responsibility of our Board of Directors is to exercise its business judgment to act in what it reasonably believes to be in the best interests of the Company and its stockholders. Further, members of the Board fulfill their responsibilities consistent with their fiduciary duty to the stockholders, and in compliance with all applicable laws and regulations. The primary responsibilities of the Board include:
Our Board of Directors met six12 times during the year ended December 31, 2015.2019. During this period, each director attended 75% or more of the aggregate of (i) the total number of meetings of the Board of Directors held during the period for which he was a director and (ii) the total number of meetings of committees of the Board of Directors on which he served, held during the period for which he served. The Company does not have a policy with regard to directors’ attendance at our annual meetings of stockholders. All of our then-serving directors attended the 20152019 annual meeting of stockholders.
Our Board of Directors conducts its business through meetings of the Board and through activities of the standing committees, as further described below. The Board and each of the standing committees meet throughout the year on a set schedule and also holds special meetings and acts by written consent from time to time, as appropriate. Board agendas include regularly scheduled executive sessions of the independent directors to meet without the presence of management. The Board has delegated various responsibilities and authority to different committees of the Board, as described below. Members of the Board have access to all of our members of management outside of Board meetings.
Director Independence
Our Board of Directors has determined that each of our current directors, other than Mr. Holst qualifies as “independent” in accordance with the rules of the NYSE MKT.American. Because Mr. Holst is our president and chief executive officer and an employee of the Company, he does not qualify as independent.
The NYSE MKTAmerican independence definition includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with the Company. In addition, as further required by the NYSE MKTAmerican rules, the Board has made a subjective determination as to each independent director that no relationship exists which, in the opinion
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of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the directors reviewed and discussed information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management.
management, including each of the matters set forth under “Transactions with Related Persons” below.
Board Committees
The Board has an audit committee, a compensation committee and a nominating committee.committee, and may form special committees as is required from time to time. Each of the committees regularly report on their activities and actions to the full Board. The charters for the audit committee, the compensation committee,
and the nominating committee are available on the Company’s website at www.glowpoint.com/www.oblong.com/company/investor-relations. The contents of our website are not incorporated by reference into this document for any purpose.
Audit Committee
The audit committee currently consists of James S. Lusk (chair), David Giangano and Patrick J. Lombardi.Richard Ramlall. Our Board of Directors has determined that all members of the audit committee are “independent” within the meaning of the listing standards of NYSE MKTAmerican and the SEC rules governing audit committees.committees and “financially literate” for purposes of applicable NYSE American listing standards. In addition, our Board of Directors has determined that each of Messrs. Lusk and LombardiRamlall has the accounting and related financial management expertise to satisfy the requirements of an “audit committee financial expert,” as determined pursuant to the rules and regulations of the SEC. The audit committee consults and meets with our independent registered public accounting firm, Chief Financial Officer and accounting personnel, reviews potential conflict of interest situations where appropriate, and reports and makes recommendations to the full Board of Directors regarding such matters. The audit committee met four4 times during the year ended December 31, 2015.2019. Mr. Ramlall will not stand for re-election at the Annual Meeting and the Company expects that his seat on the audit committee will be filled by Mr. Adelman.
Please see "Report“Report of the Audit Committee of the Board of Directors"Directors” below for additional information regarding the audit committee and the report of its members for the year ended December 31, 2015.
2019.
Compensation Committee
Our compensation committee currently consists of Jason Adelman (chair) and James S. Lusk (chair), Kenneth Archer, and David Giangano.Lusk. Each member of the compensation committee meets the applicable independence requirements of the NYSE MKT.American. The compensation committee met three2 times during the year ended December 31, 2015.
2019.
The compensation committee is responsible for establishing and administering our executive compensation policies. The role of the compensation committee is to (i) formulate, evaluate and approve compensation of the Company’s directors, executive officers and key employees, (ii) oversee all compensation programs involving the use of the Company’s stock and (iii) produce, if required under applicable securities laws, a report on executive compensation for inclusion in the Company’s proxy statement for its annual meeting of stockholders. The duties and responsibilities of the compensation committee under its charter include:
•annually reviewing and making recommendations to the Board with respect to compensation of directors, executive officers and key employees of the Company;
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•annually reviewing and approving corporate goals and objectives relevant to Chief Executive Officer compensation, evaluating the Chief Executive Officer’s performance in light of those goals and objectives, and recommending to the Board the Chief Executive Officer’s compensation levels based on this evaluation;
•reviewing competitive practices and trends to determine the adequacy of the executive compensation program;
•approving and overseeing compensation programs for executive officers involving the use of the Company’s stock;
•approving and administering cash incentives for executives, including oversight of achievement of performance objectives, and funding for executive incentive plans;
•annually performing a self-evaluation on the performance of the compensation committee; and
•making regular reports to the Board concerning the activities of the compensation committee.
When appropriate, the compensation committee may, in carrying out its responsibilities, form and delegate authority to subcommittees. The Chief Executive Officer plays a role in determining the compensation of our other executive officers by
evaluating the performance of those executive officers. The Chief Executive Officer’s evaluations are then reviewed by the compensation committee. This process leads to a recommendation for any changes in salary, bonus terms and equity awards, if any, based on performance, which recommendations are then reviewed and approved by the compensation committee.
Nominating Committee
Our nominating committee currently consists of Kenneth ArcherJason Adelman (chair) and James S. Lusk.Richard Ramlall. Each member of the nominating committee meets the independence requirements of the NYSE.NYSE American. The nominating committee is responsible for assessing the performance of our Board of Directors and making recommendations to our Board regarding nominees for the Board. The nominating committee met two2 times during the year ended December 31, 2015.2019. Mr. Ramlall will not stand for re-election at the Annual Meeting and the Company expects that his seat on the nominating committee will be filled by Mr. Lusk.
The nominating committee considers qualified candidates to serve as a member of our Board of Directors that are suggested by our stockholders. Nominees recommended by stockholders will be given appropriate consideration and evaluated in the same manner as other nominees. Stockholders can suggest qualified candidates for director by writing to our Corporate Secretary at 1776 Lincoln Street,25587 Conifer Road, Suite 1300, Denver,105-231, Conifer, Colorado 80203.80433. Stockholder submissions that are received in accordance with our by-lawsbylaws and that meet the criteria outlined in the nominating committee charter are forwarded to the members of the nominating committee for review. Stockholder submissions must include the following information:
•a statement that the writer is our stockholder and is proposing a candidate for our Board of Directors for consideration by the nominating committee;
•the name of and contact information for the candidate;
•a statement of the candidate’s business and educational experience;
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•information regarding each of the factors set forth in the nominating committee charter sufficient to enable the nominating committee to evaluate the candidate;
•a statement detailing any relationship between the candidate and any of our customers, suppliers or competitors;
•detailed information about any relationship or understanding between the proposing stockholder and the candidate; and
•a statement that the candidate is willing to be considered and willing to serve as our director if nominated and elected.
In considering potential new directors, the nominating committee will review individuals from various disciplines and backgrounds. Among the qualifications to be considered in the selection of candidates are broad experience in business, finance or administration; familiarity with national and international business matters; familiarity with our industry; and prominence and reputation. While there is no formal policy with regard to consideration of diversity in identifying director nominees, the nominating committee will consider diversity in business experience, professional expertise, gender and ethnic background, along with various other factors when evaluating director nominees. The nominating committee will also consider whether the individual has the time available to devote to the work of our Board of Directors and one or more of its committees.
The nominating committee will also review the activities and associations of each candidate to ensure that there is no legal impediment, conflict of interest or other consideration that might hinder or prevent service on our Board of Directors. In making its selection, the nominating committee will bear in mind that the foremost responsibility of a director of a corporation is to represent the interests of the stockholders as a whole. The nominating committee will periodically review and reassess the adequacy of its charter and propose any changes to the Board of Directors for approval.
Contacting the Board of Directors
Any stockholder who desires to contact our Board of Directors, committees of the Board of Directors and individual directors may do so by writing to: Glowpoint,Oblong, Inc., 1776 Lincoln Street,25587 Conifer Road, Suite 1300, Denver,105-231, Conifer, Colorado 80203,80433, Attention: David Clark, Corporate Secretary. Mr. Clark will direct such communication to the appropriate persons.
Board Leadership Structure and Role in Risk Oversight
The Board believes itthe combined role of Chairman and Chief Executive Officer promotes unified leadership and direction for the Company, which allows for a single, clear focus for management to execute the Company's strategy and business plans. As Chief Executive Officer, the Chairman is inbest
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suited to ensure that critical business issues are brought before the best interestsBoard, which enhances the Board’s ability to develop and implement business strategies.
To ensure a strong and independent Board, as discussed herein, the Board has affirmatively determined that all directors of the Company, to make that determination based onother than Mr. Holst, are independent within the position and directionmeaning of the Company,NYSE American listing standards currently in effect. Our Corporate Governance Guidelines provide that non-management directors shall meet in regular executive session without management present, and alsothat Mr. Lusk, who serves as our lead independent director, shall act as the membershipChairman of the Board. This structure facilitates a greater role for thesuch meetings. Additionally, Mr. Lusk actively participates in establishing and setting Board of Directors in the oversight of the Company, and allows the chief executive officer to focus on the management of the Company’s day-to-day operations. Currently, Patrick J. Lombardi holds the position of chairman of our Board of Directors.
meeting agendas.
The Board has an active role, directly and through its committees, in the oversight of the Company’s risk management efforts. The Board carries out this oversight role through several levels of review. The Board regularly reviews and discusses with members of management information regarding the management of risks inherent in the operation of the Company’s business and the implementation of the Company’s strategic plan, including the Company’s risk mitigation efforts.
Each of the Board’s committees also oversees the management of the Company’s risks that are under each committee’s areas of responsibility. For example, the audit committee oversees management of accounting, auditing, external reporting, internal controls and cash investment risks. The nominating committee oversees and assesses the performance of the Board and makes recommendations to the Board from time to time regarding nominees for the Board. The compensation committee oversees risks arising from compensation practices and policies. While each committee has specific responsibilities for oversight of risk, the Board is regularly informed by each committee about such risks. In this manner the Board is able to coordinate its risk oversight.
Family Relationships
There are no family relationships between the officers and directors of the Company.
Legal Proceedings
During the past ten years none of our directors or executive officers was involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee is composed of two members. Each member is a director who meets the current independence standards under the applicable SEC and NYSE American rules. The audit committee operates under a written audit committee charter. As described more fully in its charter, the purpose of the audit committee is to assist the Board in its general oversight of the Company’s financial reporting, internal controls and audit functions. Management is responsible for: the preparation, presentation and integrity of Company’s financial statements; accounting and financial reporting principles; internal controls; and procedures designed to reasonably assure compliance with accounting standards, applicable laws and regulations. EisnerAmper LLP (“EisnerAmper”), our independent registered public accounting firm, is responsible for performing an independent audit of the consolidated financial statements in accordance with the Standards of the Public Company Accounting Oversight Board (United States). In accordance with applicable law, the audit committee has ultimate authority and responsibility to select, compensate, evaluate and, when appropriate, replace our independent registered public accounting firm. The audit committee has the authority to engage its own outside advisers, including experts in particular areas of accounting, as it determines appropriate, apart from counsel or advisers hired by management.
The audit committee members need not be professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and EisnerAmper, nor can the audit committee certify that EisnerAmper is “independent” under applicable rules. The audit committee serves a Board-level oversight role, in which it provides advice, counsel and direction to management and EisnerAmper on the basis of the information it receives, discussions with management and EisnerAmper, and the experience of the audit committee’s members in business, financial and accounting matters. Two members of the audit committee have been determined by the Board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules. Stockholders should understand that this designation is an SEC disclosure requirement related to these directors’ experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on these directors any duties, obligations or liability that are greater than are generally imposed on them as a member of the audit committee and the Board, and their designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the audit committee or the Board.
In accordance with law, the audit committee is responsible for establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, including the confidential, anonymous submission by our employees received through established procedures, of concerns regarding questionable accounting or auditing matters. Among other matters, the audit committee monitors the activities and performance of EisnerAmper, including the audit scope, external audit fees, independence matters and the extent to which the firm may be retained to perform non-audit services.
In accordance with audit committee policy and applicable legal requirements, all services to be provided by EisnerAmper are pre-approved by the audit committee. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from EisnerAmper. We obtain these services from other service providers as needed.
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The audit committee has reviewed our audited financial statements and met and held discussions with management regarding the audited financial statements. Management has represented to the audit committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The audit committee has discussed with EisnerAmper the matters required to be discussed by the statement on Auditing Standards No. 1301, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board. These discussions have included a review as to the quality, not just the acceptability, of our accounting principles.
The audit committee has received the written disclosures and the letter from EisnerAmper required by applicable requirements of the Public Company Accounting Oversight Board regarding EisnerAmper’s communications with the audit committee concerning independence, and the audit committee has discussed with EisnerAmper its independence from management and the Company. The audit committee has also considered the compatibility of non-audit services with EisnerAmper’s independence.
Based on the audit committee’s review and discussions described in this report, the audit committee recommended to the Board of Directors that our audited consolidated financial statements for the year ended December 31, 2019 be included in the Company’s Annual Report on Form 10-K for filing with the SEC.
Respectfully submitted,
James Lusk, Chairman
Richard Ramlall
Richard Ramlall
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PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee, composed entirely of independent, non-employee members of the Board of Directors, has appointed the firm of EisnerAmper LLP (“EisnerAmper”) as the independent registered public accounting firm to audit the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 2020 and is asking the stockholders for ratification of the appointment. If the stockholders do not approve the selection of EisnerAmper, the audit committee will reconsider the appointment, but may conclude that it is in the best interests of the Company to retain EisnerAmper for the current fiscal year. Even if the appointment is ratified, the audit committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the audit committee determines that such a change would be in the best interests of the Company.
As our independent registered public accounting firm, EisnerAmper would audit our consolidated financial statements for the fiscal year ending December 31, 2020, review the related interim quarters, and perform audit-related services and consultation in connection with various accounting and financial reporting matters. EisnerAmper may also perform certain non-audit services for our Company. The audit committee has determined that the provision of the services provided by EisnerAmper as set forth herein are compatible with maintaining EisnerAmper’s independence and the prohibitions on performing non-audit services set forth in the Sarbanes-Oxley Act and relevant SEC rules.
Representatives of EisnerAmper are not expected to be present at the Annual Meeting, but will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
Audit Fees
EisnerAmper, our principal accountant, billed us approximately $344,480 for professional services for the audit of our annual consolidated financial statements for the 2019 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2019 fiscal year. EisnerAmper billed us $191,200 for professional services for the audit of our annual consolidated financial statements for the 2018 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2018 fiscal year.
Audit-Related Fees
EisnerAmper billed us $16,640 in the 2018 fiscal year for certain due diligence services related to the Company’s review of strategic opportunities. EisnerAmper did not bill us in 2019 for any professional services rendered for audit-related items.
Tax Fees
EisnerAmper did not bill us in the 2019 and 2018 fiscal years for any professional services rendered for tax compliance, tax advice or tax planning.
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All Other Fees
EisnerAmper did not bill us in the 2019 and 2018 fiscal years for any other products or services other than the audit and audit-related fees described above.
Audit Committee Pre-Approval Policy
The audit committee is required to pre-approve the engagement of EisnerAmper to perform audit and other services for the Company. Our procedures for the pre-approval by the audit committee of all services provided by EisnerAmper comply with SEC regulations regarding pre-approval of services. Services subject to these SEC requirements include audit services, audit-related services, tax services and other services. The audit engagement is specifically approved, and the auditors are retained by the audit committee. The audit committee also has adopted policies and procedures for pre-approving all non-audit work performed by EisnerAmper. In accordance with audit committee policy and the requirements of law, all services provided by EisnerAmper in the 2019 and 2018 fiscal years were pre-approved by the audit committee and all services to be provided by EisnerAmper will be pre-approved. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from its auditing firm. We obtain these services from other service providers as needed.
Vote Required For Approval
To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will have discretionary authority to vote in the absence of timely instructions from their customers. As a result, we do not expect any broker non-votes to occur with respect to this proposal. However, any broker non-votes will have the same effect as a vote against this proposal.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 2, TO RATIFY THE SELECTION OF EISNERAMPER LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of our capital stock as of November 17, 2020 by each of the following:
•each person (or group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) known by us to own beneficially more than 5% of any class of our voting securities;
•the named executive officers set forth in the Summary Compensation Table under “Executive Compensation” below;
•each of our former and current directors serving during 2020 and director nominees; and
•all of our directors and executive officers as a group.
The amounts and percentages in the table below are based on shares issued and outstanding as of November 17, 2020, including (i) 6,357,839 shares of Common Stock, (ii) 45 shares of Series A-2 Preferred Stock (18,270 shares of Common Stock on an as-converted basis), and (iii) 250 shares of Series C Preferred Stock (83,333 shares of Common Stock on an as-converted basis for economic purposes), but exclude the (y) 1,702,010 issued and outstanding shares of Series D Preferred Stock (17,020,100 shares of Common Stock on an as converted basis), and (z) 131,579 issued and outstanding shares of Series E Preferred Stock (1,315,790 shares of Common Stock on an as converted basis) the conversion of which is, in the case of each of clauses (y) and (z), subject to certain approvals by the NYSE American.
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. A person is considered the beneficial owner of securities that can be acquired within 60 days of such date through the exercise or conversion of any option, warrant or other derivative security. Shares of Common Stock subject to options, restricted stock units (“RSUs”), warrants or other derivative securities which are currently exercisable or convertible or are exercisable or convertible within such 60 days are considered outstanding for computing the ownership percentage of the person holding such options, RSUs, warrants or other derivative security, but are not considered outstanding for computing the ownership percentage of any other person.
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| Common Stock | |||||||||||||||||||||||
| Name and Address of Beneficial Owners (1) | Amount and Nature of Beneficial Ownership (2) | Percent of Class | |||||||||||||||||||||
| Named Executive Officers and Directors (Including 2020 Director Nominees): | |||||||||||||||||||||||
| Peter Holst | 413,491 | (3) | 6 | % | |||||||||||||||||||
| David Clark | 58,933 | (4) | 1 | % | |||||||||||||||||||
| Jason Adelman | 496,000 | (5) | 8 | % | |||||||||||||||||||
| James Lusk | 43,406 | (6) | 1 | % | |||||||||||||||||||
| Richard Ramlall | 632 | (7) | * | % | |||||||||||||||||||
| John Underkoffler | — | (8) | --- | % | |||||||||||||||||||
| All directors, director nominees and executive officers as a group (5 persons) | 1,012,462 | (9) | 16 | % | |||||||||||||||||||
| Greater than 5% Owners: | |||||||||||||||||||||||
| Norman H. Pessin 500 Fifth Ave, Suite 2240 New York, NY 10110 | 402,004 | (10) | 6 | % | |||||||||||||||||||
| Sandra F. Pessin 500 Fifth Ave, Suite 2240 New York, NY 10110 | 250,453 | (11) | 4 | % | |||||||||||||||||||
_________________________
(1) Unless otherwise noted, the address of each person listed is c/o Oblong, Inc., 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433.
(2) Unless otherwise indicated by footnote, the named persons have sole voting and investment power with respect to the shares of Common Stock beneficially owned by them.
(3) Includes 325,991 shares of Common Stock and 87,500 shares of Common Stock subject to stock options presently exercisable.
(4) Includes 48,933 shares of Common Stock and 10,000 shares of Common Stock subject to stock options presently exercisable.
(5) Based on ownership information from the Form 4 filed by Mr. Adelman with the SEC on April 23, 2020. Mr. Adelman beneficially owns 496,000 shares of Common Stock, of which 419,500 shares are held directly by Mr. Adelman and 76,500 shares are held in a retirement plan.
(6) Based on ownership information from the Form 4 filed by Mr. Lusk with the SEC on May 31, 2018. Amount includes 10,000 shares of Common Stock subject to stock options presently exercisable and 28,904 shares of Common Stock issuable from vested RSUs (for which the shares of Common Stock have not yet been delivered in accordance with the terms of these RSUs).
(7) Based on ownership information from the Form 3 filed by Mr. Ramlall with the SEC on July 26, 2019.
(8) Excludes 1,024,030 shares of Common Stock issuable upon the conversion of 102,403 shares of Series D Preferred Stock held by Mr. Underkoffler (constituting 6.0% of such class of Series D Preferred
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Stock and 4.0% of our Common Stock assuming the conversion of the Series D Preferred Stock and Series E Preferred Stock upon NYSE American approval of a new listing application for the combined company resulting from the Company's previously announced acquisition of Oblong Industries, Inc. on October 1, 2019). Mr. Underkoffler resigned as Chief Technology Officer of the Company effective as of May 1, 2020 and as a director of the Company effective as of November 9, 2020.
(9) Excludes Mr. Underkoffler as he ceased to be a member of the Board and an officer prior to November 9, 2020.
(10) Based on ownership information from an amendment to Schedule 13D filed on September 23, 2019.
(11) Based on ownership information from an amendment to Schedule 13D filed on September 23, 2019.
Change of Control
As discussed under "Note 13 - Preferred Stock" to the Company's consolidated financial statements included in the Annual Report, the Company's (i) 1,702,010 issued and outstanding shares of Series D Preferred Stock are convertible into 17,020,100 shares of our Common Stock, and (ii) 131,579, issued and outstanding shares of Series E Preferred Stock are convertible into 1,315,790 shares of our Common Stock, in each case following receipt of all required authorizations and approvals from the NYSE American (or any such other exchange upon which the Company's securities are then listed for trading) for the listing of the Common Stock underlying such preferred stock and the continued listing of the Company following such conversion. The 18,335,890 total shares of Common Stock issuable upon conversion of the Series D and Series E Preferred Stock will constitute approximately 74% of our issued and outstanding shares of Common Stock following such conversion, and may therefore be deemed to constitute a change in control of the Company for certain purposes, including under the NYSE American Company Guide. Notwithstanding the above, the Company does not expect to incur any payments under any of its outstanding employment agreements as a result of any such change of control.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires executive officers and directors and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Executive Officersofficers, directors and greater than 10% stockholders are required by regulations of the SEC to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of reports we received, or written representations that no such reports were required for those persons, we believe that, for the year ended December 31, 2019, all statements of beneficial ownership required to be filed with the SEC were filed on a timely basis with the exception of the following:
•Patrick Lombardi, a former director of the Company, failed to file on a timely basis a single Form 4 to report a single withholding transaction. The Form 4 was subsequently filed, and the Company is not aware of any failure by Mr. Lombardi to file a required form under Section 16 of the Exchange Act during 2019.
•Kenneth Archer, a former director of the Company, failed to file on a timely basis a single Form 4 to report a single withholding transaction. The Form 4 was subsequently filed, and the Company is not aware of any failure by Mr. Archer to file a required form under Section 16 of the Exchange Act during 2019.
•David Giangano, a former director of the Company, failed to file on a timely basis a single Form 4 to report a grant of restricted stock units and a related withholding transaction. The Form 4 was subsequently filed, and the Company is not aware of any failure by Mr. Giangano to file a required form under Section 16 of the Exchange Act during 2019.
•John Underkoffler, a former director of the Company, failed to file on a timely basis a Form 3. The Form 3 was subsequently filed, and the Company is not aware of any failure by Mr. Underkoffler to file a required form under Section 16 of the Exchange Act during 2019.
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EXECUTIVE OFFICERS
The following table sets forth certain information regarding our current executive officers.
| Name | Age | Position | ||||||||||||
| Peter Holst | Chairman of the Board, President, and Chief Executive Officer | |||||||||||||
| David Clark | Chief Financial Officer, Treasurer, and Corporate Secretary | |||||||||||||
Biographies
Peter Holst, Chairman of the Board, President, and Chief Executive Officer. See “Nominee“Proposal No. 1 - Election of Directors — Nominee Biographies” above for Mr. Holst’s biography.
David Clark, Chief Financial Officer.Officer, Treasurer, and Corporate Secretary. Mr. Clark joined the Company in March 2013 as Chief Financial Officer and leads our financial operations and investor relations, including financial planning and reporting, accounting, tax and treasury. Mr. Clark has more than 2025 years of experience in finance and accounting. Prior to joining the Company, Mr. Clark spent over eight years with Allos Therapeutics, a publicly traded biopharmaceutical company, serving from 2007 to 2012 as Vice President of Finance, Treasurer and acting CFO. While at Allos, Mr. Clark was responsible for oversight and management of all financial activities, including equity financings, strategic financial planning, and investor relations. Prior to Allos, Mr. Clark spent nearly four years with Seurat Company (formerly XOR Inc.), an e-commerce managed services company, serving most recently as CFO.
Mr. Clark started his career and spent over seven years in the audit practice of PricewaterhouseCoopers LLP. Mr. Clark is an active Certified Public Accountant and received a Master of Accountancy and a B.S. in Accounting from the University of Denver.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth for the years ended December 31, 20152019 and 20142018 the compensation awarded to, paid to, or earned byby: Peter Holst, Chairman of the Board, President, and Chief Executive Officer; David Clark, Chief Financial Officer, Treasurer, and our other executive officers, including ourCorporate Secretary; and John Underkoffler, as a former Senior Vice President, Sales who leftDirector and Chief Technology Officer of the Company in 2015 (the ““named executive officers”), as follows:
| Name and Principal Positions | Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||
| Peter Holst | 2019 | 199,875 | 212,500 | 43,668 | (2) | 10,970 | (3) | 467,013 | ||||||||||||||||||||||||||||||||||||
| Chairman of the Board, President, and Chief Executive Officer | 2018 | 199,875 | 171,602 | 463,238 | (4) | 10,770 | (3) | 845,485 | ||||||||||||||||||||||||||||||||||||
| David Clark | 2019 | 225,133 | 119,295 | 13,974 | (5) | 10,790 | (6) | 369,192 | ||||||||||||||||||||||||||||||||||||
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Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | All Other Compensation | Total | |||||||||||||||||||
Peter Holst Chief Executive Officer and President | 2015 | $ | 199,875 | — | $ | 1,300,000 | (4) | $ | 4,537 | (5) | $ | 1,504,412 | |||||||||||||
| 2014 | $ | 199,062 | $ | 49,092 | (6) | — | $ | 129,680 | (7) | $ | 377,834 | ||||||||||||||
David Clark Chief Financial Officer | 2015 | $ | 225,133 | — | $ | 416,000 | (8) | $ | 6,731 | (9) | $ | 647,864 | |||||||||||||
| 2014 | $ | 224,277 | $ | 27,655 | (10) | — | 7,380 | (11) | $ | 259,312 | |||||||||||||||
Gary Iles Senior Vice President, Sales and Marketing(2) | 2015 | $ | 159,519 | — | $ | 208,000 | (12) | 5,162 | (13) | $ | 372,681 | ||||||||||||||
| 2014 | — | — | — | — | — | ||||||||||||||||||||
Scott Zumbahlen Former Senior Vice President, Sales(3) | 2015 | $ | 21,763 | — | — | $ | 29,748 | (14) | $ | 51,511 | |||||||||||||||
| 2014 | $ | 175,000 | $ | 43,269 | $ | 106,551 | $ | 6,169 | (15) | $ | 330,989 | ||||||||||||||
| Chief Financial Officer, Treasurer, and Corporate Secretary | 2018 | 225,133 | 63,500 | 137,968 | (7) | 10,152 | (6) | 436,753 | ||||||||||||||||||||||||||||||||||||
| John Underkoffler | 2019 | 75,000 | (8) | — | — | 250 | 75,250 | |||||||||||||||||||||||||||||||||||||
| Director and CTO | 2018 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| _____________________________ (1) These amounts represent the aggregate grant date fair value for awards of RSUs for 2018 and 2019, computed in accordance with FASB ASC Topic 718. | ||||||||||||||||||||||||||||||||||||||||||||
| (2) Represents the grant date fair value of 33,334 performance-vested awards granted on January 28, 2019. These awards terminated without vesting on June 1, 2019 pursuant to their terms. | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Represents a matching contribution under the Company’s 401(k) Plan of $8,400 and $8,250 for 2019 and 2018, respectively, and $2,390 and $2,520 of parking reimbursement for 2019 and 2018, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) Represents the sum of the grant date fair values of the following awards: (i) 33,333 performance-vested RSUs granted on April 13, 2018 (the “April 2018 PVRSUs”), the terms of which are described below under “Grants of Performance-Vested Restricted Stock Units,” and (iii) 231,316 performance-vested RSUs granted on November 19, 2018 (the “November 2018 PVRSUs”), the terms of which are described below under “Grants of Performance-Vested Restricted Stock Units.” The grant date fair value of the April 2018 PVRSUs and the November 2018 PVRSUs is based upon achievement of 100% of the target performance. The number of RSUs shown herein have been adjusted for the 1-for-10 reverse stock split of the Company’s issued and outstanding shares of Common Stock effective as of April 17, 2019 (the “2019 Reverse Stock Split”). | ||||||||||||||||||||||||||||||||||||||||||||
| (5) Represents the grant date fair value of 10,667 performance-vested awards granted on January 28, 2019. These awards terminated without vesting on June 1, 2019 pursuant to their terms. | ||||||||||||||||||||||||||||||||||||||||||||
| (6) Represents a matching contribution under the Company’s 401(k) Plan of $8,400 and $7,632 for 2019 and 2018, respectively, and $2,390 and $2,520 of parking reimbursement for 2019 and 2018, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
| (7) Represents the sum of the grant date fair value of the following awards: (i) 34,000 April 2018 PVRSUs, (ii) 11,667 time-based RSUs granted on April 13, 2018 with vesting scheduled for April 13, 2020 and (iii) 24,746 November 2018 PVRSUs. The grant date fair value of the April 2018 PVRSUs and the November 2018 PVRSUs is based upon achievement of 100% of the target performance. The number of RSUs shown herein have been adjusted for the 2019 Reverse Stock Split. | ||||||||||||||||||||||||||||||||||||||||||||
| (8) Mr. Underkoffler joined the Company on October 1, 2019 and therefore the salary shown herein represents salary earned from October 1, 2019 through December 31, 2019. Mr. Underkoffler resigned as Chief Technology Officer of the Company effective as of May 1, 2020 and as a director of the Company effective as of November 9, 2020. | ||||||||||||||||||||||||||||||||||||||||||||
Grants of Performance-Vested Restricted Stock Units (“PVRSUs”)
April 2018 PVRSUs.The compensation committee of the Oblong board of directors granted April 2018 PVRSUs under the Company’s 2014 Equity Incentive Plan to Mr. Holst and Mr. Clark on April 13, 2018. Each PVRSU represented the right to receive a share of common stock if certain performance goals were achieved in a specified time period. Any earned PVRSUs were to vest at the end of the applicable measurement period. The performance measures for the April 2018 PVRSUs were Adjusted EBITDA
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(“AEBITDA”) and Revenue. AEBITDA is a non-GAAP financial measure that is reconciled to the most comparable GAAP financial measure for the relevant fiscal year in Item 7 of the Company’s Annual Report on Form 10-K on the year ended 2017. For the April 2018 PVRSUs granted to Mr. Holst, AEBITDA was weighted at 37.5% and Revenue was weighted at 62.5% for each of the measuring periods. For the April 2018 PVRSUs granted to Mr. Clark, AEBITDA was weighted at 62.5% and Revenue was weighted at 37.5% for each of the measuring periods. The April 2018 PVRSUs have a measuring period of calendar year 2018 for Mr. Holst and a measuring period of calendar year 2018 for 66% of Mr. Clark’s PVRSUs with the other 34% having a measuring period of calendar year 2019. The table below sets forth the threshold, target and maximum payout percentages that could have been earned by each named executive officer based on the threshold, target and maximum levels of AEBITDA and Revenue performance for each fiscal year as set forth below. The AEBITDA and Revenue performance for the measuring period of calendar year 2018 was determined to be achieved at 100% of Target and vesting for the April 2018 PVRSUs occurred during 2019.
Adjusted EBITDA For Calendar Years 2018 & 2019 | Revenue Calendar Years 2018 & 2019 | ||||||||||||||||
| Threshold | 80% | 95% of Target Amount | 95% of Target Amount | ||||||||||||||
| Target | 100% | Projected Calendar Year Adjusted EBITDA as set forth in the | Projected Calendar Year Revenue as set forth in the Annual Operating Plan | ||||||||||||||
| Maximum | 120% | 120% of | 120% of | ||||||||||||||
November 2018 PVRSUs. On November 19, 2018, the compensation committee of the Board of Directors granted additional RSUs to certain officers, including the named executive officers, representing in the aggregate the right to receive up to 346,841 shares (adjusted for the 2019 Reverse Stock Split) of Common Stock (the “November 2018 PVRSUs”). The November 2018 PVRSUs held by the named executive officers terminated without vesting on June 1, 2019 pursuant to their terms.
Outstanding Equity Awards at 2019 Fiscal Year-End
The table set forth below presents the number and values of exercisable stock option awards and unvested RSUs held by the named executive officers at December 31, 2019:
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| Option Awards | RSU Awards | |||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | ||||||||||||||||||||||||||||||||||||
| Peter Holst | 1/13/2013 | 87,500 | $19.80 | 1/13/2023 | ||||||||||||||||||||||||||||||||||||||||
| David Clark | 3/25/2013 | 10,000 | $15.10 | 3/25/2023 | ||||||||||||||||||||||||||||||||||||||||
| 4/13/2018 | 11,667 | (2) | $16,217 | |||||||||||||||||||||||||||||||||||||||||
| 4/13/2018 | 11,667 | (3) | $16,217 | |||||||||||||||||||||||||||||||||||||||||
(1) The market value of the | |||
| (2) Represents the number of April 2018 PVRSUs which vested on June 4, 2020, under the terms of these awards based upon achievement of 100% of | |||
| the target performance. | |||
| (3) | |||
| Represents an award of |
401(k) Plan
The Company maintains a tax-qualified 401(k) plan on behalf of its eligible employees, including its named executive officers. Pursuant to the terms of the plan, for fiscal years 2018 and 2019 eligible employees may defer up to 80% of their salary each year, and the Company matched 50% of an employee’s contributions on the first 4% of the employee’s salary for 2017 and through February 28, 2018. Effective March 1, 2018, the Company matched 50% of an employee’s contributions on the first 6% of the employee’s salary. This matching contribution vests over four years.
Agreements with Named Executive Officers
Peter Holst Employment AgreementAgreement.
On January 13, 2013, the Board appointed Peter Holst as the Company’s President and Chief Executive Officer, and as a member of the Board. In connection with his appointment, the Company entered into an employment agreement with Mr. Holst, (thewhich was subsequently amended and restated as of January 28, 2016 and as of July 19, 2019 (as amended and restated, the “Holst Employment Agreement”). The initial term of the Holst Employment Agreement, which is terminable at will by either party, expired on December 31, 2014 and renewed for successive one-year terms if not otherwise terminated. Pursuant to the Holst Employment Agreement, Mr. Holst initially receivedreceives an annual base salary of $195,000
$199,875 and is eligible to receive a maximuman annual incentive bonus equal to 100% of his base salary, at the discretion of the compensation committee of the Board based on meeting certain financial and non-financial goals. Effective March 1, 2014,
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Under the Board increased Mr. Holst’s annual base salary to $199,875. On January 28, 2016, the Company entered into an Amended and Restated Employment Agreement (the “Amended and Restated Employment Agreement”) with Mr. Holst that amends certain termination, non-competition, and other provisionsterms of the Holst Employment Agreement. Pursuant toAgreement, if Mr. Holst’s employment is terminated outside of a “change in control” (as defined in the Amended and RestatedHolst Employment Agreement) (i) by the Company without “cause” or by Mr. Holst for “good reason” (as such terms are defined therein) or (ii) as a result of the expiration of the term of the Holst Employment Agreement uponcaused by the Company's election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•12 months’ base salary, payable in equal monthly installments in accordance with the Company’s termination of Mr. Holst without cause, the Company is required to pay severance to Mr. Holst equal to twelve months of his base salary plus normal payroll practices;
•100% of his maximum annual target bonus payable for the calendar year in which such termination occurs. Additionally, pursuantoccurs;
•100% accelerated vesting of Mr. Holst’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Holst and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of 12 months.
In addition to the Amendedabove payments and Restated Employment, ifbenefits, in the event that Mr. HolstHolst’s employment is terminated within eighteen months ofduring the 18-month period following a “change in control” event (as defined in the Amended and Restated Employment Agreement),(i) by the Company must paywithout “cause” or by Mr. Holst for “good reason” or (ii) as a result of the expiration of the term of the Holst Employment Agreement caused by the Company’s election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an amount equal to twenty-four monthseffective general release of hisclaims in favor of the Company:
•24 months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•100% of his maximum annual target bonus payable for the calendar year in which such termination occurs and theoccurs;
•a pro-rated portion of Mr. Holst’shis maximum annual target bonus amount for the calendar year in which the effective date of the termination occurs. The Amendedoccurs;
•80% accelerated vesting of Mr. Holst’s then-unvested shares of restricted stock and RestatedRSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Holst and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of 12 months.
In consideration of the payments and benefits under the Holst Employment Agreement, also increases Mr. Holst’s non-competition agreementHolst is restricted from sixengaging in competitive activities for 12 months to twelve months.
after the termination of his employment, as well as prohibited from soliciting the Company’s clients and employees and from disclosing the Company’s confidential information.
The Holst Employment Agreement contains a “best after-tax benefit” provision, which provides that, to the extent that any amounts payable under the Holst Employment Agreement would be subject to the federal tax levied on certain “excess parachute payments” under Section 4999 of the Code, the Company will either pay Mr. Holst the full amount due under the Holst Employment Agreement or, alternatively, reduce his payments to the extent that no Section 4999 excise tax would be due, whichever provides the highest net after-tax benefit to Mr. Holst.
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David Clark Employment Agreement.
On March 25, 2013, the Company entered into an employment agreement with David Clark (the “Clark Employment Agreement”) in connection with his appointment as Chief Financial Officer of the Company.Company, which was subsequently amended and restated on July 19, 2019 (as amended and restated, the “Clark Employment Agreement”). Pursuant to the Clark Employment Agreement, Mr. Clark initially receivedreceives an annual base salary of $220,000$225,133 and is eligible to receive a maximuman annual incentive bonus equal to 50% of his base salary, at the discretion of the compensation committee of the Board, based on meeting certain financial and non-financial goals. Effective March 1, 2014,
Under the Board increased Mr. Clark’s annual base salary to $225,133. On January 28, 2016, the Company entered into a First Amendment to Employment Agreement (the “Amendment”) with Mr. Clark that modifies certain provisionsterms of the Clark Employment Agreement. Pursuant to the Amendment, upon the Company’s termination of Mr. Clark without cause, the Company is required to pay severance to Mr. Clark in an amount equal to six months of his base salary. Additionally, the Amendment provides thatAgreement, if Mr. ClarkClark’s employment is terminated within eighteen months followingoutside of a “change in control” event (as defined in the Amendment),Clark Employment Agreement) (i) by the Company must pay severance towithout “cause” or by Mr. Clark with or without “good reason” (as such terms are defined therein) or (ii) as a result of the expiration of the term of the Clark Employment Agreement caused by the Company’s election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in an amount equal to eighteen monthsfavor of histhe Company:
•Six months’ base salary, 100%payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•50% of his maximum annual target bonus amountpayable for the calendar year in which thesuch termination occurs and theoccurs;
•a pro-rated portion of his maximum annual target bonus amount for the calendar year in which the effective date of termination occurs.occurs;
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Clark and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of six months.
In addition to the above payments and benefits, in the event that Mr. Clark’s employment is terminated during the 18-month period following a “change in control” by the Company without “cause” or by Mr. Clark for “good reason,” then he will also be entitled to receive (i) increased severance equal to 18 months’ base salary, (ii) 100% of his maximum annual target bonus payable for the calendar year in which such termination occurs, and (iii) extended payment (or reimbursement) of the COBRA premiums for 12 months. In such event, Mr. Clark will be entitled to receive 80% accelerated vesting of his then-unvested shares of restricted stock units held byand RSUs.
In consideration of the Named Executive Officers at December 31, 2015:payments and benefits under the Clark Employment Agreement, Mr. Clark is restricted from engaging in competitive activities for six months after the termination of his employment, as well as prohibited from soliciting the Company’s clients and employees and from disclosing the Company’s confidential information.
| Option Awards | Stock Awards | ||||||||||||||
| Name | Grant Date | Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | ||||||||
| Peter Holst | 1/13/2013 | 638,021 | 236,979 | (2) | $ | 1.98 | 1/13/2023 | ||||||||
| 1/13/2013 | 50,000 | (3) | $ | 25,000 | |||||||||||
| 2/4/2015 | 916,667 | (4) | $ | 458,333 | |||||||||||
| David Clark | 3/25/2013 | 68,750 | 31,250 | (2) | $ | 1.51 | 3/25/2023 | ||||||||
| 3/25/2013 | 50,000 | (5) | $ | 25,000 | |||||||||||
| 2/4/2015 | 293,333 | (6) | $ | 146,667 | |||||||||||
| Gary Iles | 2/4/2015 | 140,000 | (7) | $ | 70,000 | ||||||||||
Potential Payments to Named Executive Officers upon Termination or Change-in-Control
In accordance with the terms of the 2007 Stock Incentive Plan and 2014 Equity Incentive Plan, upon a Change in Control or Corporate Transaction, as each such term is defined in such Plans, all shares of restricted stock, restricted stock units and all unvested options immediately vest. No Named Executive Officer is entitled to accelerated vesting in connection with Voluntary Resignation, retirement, disability or a Termination for Cause.
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See “Agreements with Named Executive Officers” above for a discussion of certain payments the Company could be required to pay severance to Mr. Clark in an amount equal to six months of his base salary. Additionally, the Amendment provides that if Mr. Clark is terminated within eighteen months following a “change in control” event (as defined in the Amendment), the Company must pay severance to Mr. Clark in an amount equal to eighteen months of his base salary, 100% of his maximum annual target bonus amount for the calendar year in whichmake upon the termination occurs and the pro-rated portion of his maximum annual target bonus amount for the calendar year in which the effective date of termination occurs.a Named Executive Officer.
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DIRECTOR COMPENSATION
The Company also pays the chairman of theits Board of Directors an additional cash payment of $20,000 per year, the chairperson of the Company’sits audit committee an additional cash payment of $10,000 per year, the chairpersoneach of the Company’schairpersons of its compensation committee and nominating committee an additional cash payment of $5,000 per year, and each non-chair member of any standing committee will receive an additional cash payment of $3,000 per year, in each case payable in equal quarterly installments in arrears. In addition, the Company may establish special committees of the Board from time to time and provide for additional retainers in connection therewith.
The following table represents compensation for ourthe Company’s non-employee directors during the year ended December 31, 2015.2019. All compensation for Peter Holst, ourthe Company’s Chairman, President and CEO, and John Underkoffler, the Company’s former Chief ExecutiveTechnology Officer, and President, during the year ended December 31, 20152019 is included in the Summary Compensation Table under “Executive Compensation” above.
| Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Total Fees | |||||||||||||||||
| Jason Adelman | $ | 13,375 | None | $ | 13,375 | |||||||||||||||
| Kenneth Archer | $ | 18,178 | None | $ | 18,178 | |||||||||||||||
| David Giangano | $ | 23,250 | $ | 2,500 | $ | 25,750 | ||||||||||||||
| Patrick J. Lombardi | $ | 26,440 | None | $ | 26,440 | |||||||||||||||
| James S. Lusk | $ | 38,399 | None | $ | 38,399 | |||||||||||||||
| Richard Ramlall | $ | 11,592 | None | $ | 11,592 | |||||||||||||||
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| Name | Fees Earned or Paid in Cash | Stock Awards(3) | Total | ||||||||
| Kenneth Archer | $ | 33,259 | $ | 99,208 | $ | 132,467 | |||||
James H. Cohen(1) | $ | 12,917 | $ | 60,099 | $ | 73,016 | |||||
David Giangano(2) | $ | 27,658 | $ | 52,494 | $ | 80,152 | |||||
| Patrick J. Lombardi | $ | 48,000 | $ | 105,349 | $ | 153,349 | |||||
| James S. Lusk | $ | 43,000 | $ | 99,208 | $ | 142,208 | |||||
| (1) | With the exception of Mr. | ||||||||||||||||||||
| 2019. On July 19, 2019, Messrs. Archer and Lombardi resigned from the Board and Messrs. Adelman and Ramlall were appointed to the Board. On October 1, 2019, Mr. Giangano resigned from the Board and Mr. Underkoffler was appointed to the Board. | |||||||||||||||||||||
| (2) | |||||||||||||||||||||
| These amounts represent the aggregate grant date fair value for awards of restricted stock units for fiscal year |
As of December 31, 2015, the aggregate number of2019, Mr. Lusk has 10,000 outstanding vested stock options and 627 unvested shares of restricted stock and restricted stock units for each non-employee director identified above isawards. In addition, as of December 31, 2019, 28,904 vested RSUs issued to Mr. Lusk remain outstanding due to the deferred payment provisions set forth below.
| Name | Options | Restricted Stock | Restricted Stock Units | ||||||
| Kenneth Archer | 100,000 | 6,269 | 106,389 | ||||||
| David Giangano | — | — | 62,013 | ||||||
| Patrick J. Lombardi | — | 7,444 | 112,237 | ||||||
| James S. Lusk | 110,625 | 6,269 | 106,389 | ||||||
remaining non-employee directors.
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| Name | Shares of Restricted Stock Purchased by Company | Purchase Price Paid for Restricted Stock | ||
| Kenneth Archer | 19,047 | $19,997 | ||
| James H. Cohen | 21,917 | $23,010 | ||
| Patrick J. Lombardi | 21,917 | $23,010 | ||
| James S. Lusk | 19,047 | $19,997 | ||
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information concerning our equity compensation plans as of December 31, 2015.2019.
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Stock Options *(a) | Weighted-Average Exercise Price of Outstanding Stock Options (b) | Number of Securities to be Issued Upon Vesting of Outstanding Restricted Stock Units ** (c) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in columns (a) & (c)) | |||||||||||||||||||||||||||||||
| Equity compensation plans approved by security holders | 215,345 | $ | 12.27 | 23,334 | 3,021,000 | ||||||||||||||||||||||||||||||
___________________
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) | ||||
| Equity compensation plans approved by security holders | 1,269,319 | $1.98 | 2,237,000 | ||||
| Equity compensation plans not approved by security holders | — | 0 | |||||
| Total | 1,269,319 | $1.98 | 2,237,000 | ||||
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TRANSACTIONS WITH RELATED PERSONS
•the amounts involved exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years; and
•any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.
Representations Agreement
On July 19, 2019, the Company provides video collaboration servicesentered into a Representation Agreement (the “Representation Agreement”) with certain stockholders of the Company comprised of Jason Adelman, Cass Adelman and certain of their affiliates (collectively, the “Stockholders”) regarding the nomination of Jason Adelman and Richard Ramlall to ABM Industries, Inc. (“ABM”). James S. Lusk, who serves on the Board of Directors of the Company in July 2019 and related matters. The Representation Agreement provided that, among other things, the Company would recommend, support and solicit proxies at the Company's 2019 Annual Meeting of Stockholders for the re-election of Jason Adelman and Richard Ramlall together with three other directors selected by the Board. The Representation Agreement contained customary covenants of the Company was an officerregarding the nomination of ABM from 2007 until April 2015. Revenues from ABM were $44,000Jason Adelman and $133,000 forRichard Ramlall to the four months ended April 2015Board, which expired concurrently with the Company's 2019 Annual Meeting of Stockholders, and forcustomary standstill obligations of the year ended December 31, 2014, respectively.
This description of the prior stockholders of AffinityRepresentations Agreement is qualified in October 2012. See Note 6its entirety by the complete copy of the NotesRepresentations Agreement attached to Consolidated Financial Statements contained in our 2015 Annualthe Current Report on Form 10-K for a description8-K filed by the Company with the SEC on July 25, 2019.
Oblong Merger Agreement
On October 1, 2019, the Company closed its acquisition of all outstanding equity interests of Oblong Industries, Inc. Under the terms of the SRS Note.
Underkoffler Separation Agreement
On November 9, 2020, the Company entered into a Separation Agreement (the “Separation Agreement”) with John Underkoffler, the former Chief Technology Officer and Director of the NotesCompany, to Consolidated Financial Statements containedaid in our 2015 Annual Report on Form 10-KMr. Underkoffler’s transition from the Company. Pursuant to the Separation Agreement, among
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other things (i) the Company agreed to make certain severance payments to Mr. Underkoffler, consisting of a single cash payment of $100,000 and payment of COBRA premiums for a descriptiontwelve (12) month period, (ii) Mr. Underkoffler executed a customary release of claims and proprietary information and inventions agreement in favor of the Company’s debt.Company, and (iii) Mr. Underkoffler resigned as a director of the Company effective as of November 9, 2020. Mr. Underkoffler’s resignation was not a result of any disagreement with the Company regarding any matter relating to its operations, policies or practices.
Policy on Future Related Party Transactions
Transactions with related parties, including the transactions referred to above, are reviewed and approved by independent members of the Board of Directors of the Company in accordance with the Company’s written Code of Business Conduct and Ethics.
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CODE OF CONDUCT AND ETHICS
We have adopted a code of conduct and ethics, as amended effective October 12, 2015, that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer. The text of the code of conduct and ethics (as amended) is posted on our website at www.glowpoint.com/www.oblong.com/company/investor-relations and will be made available to stockholders without charge, upon request, in writing to the Corporate Secretary at 1776 Lincoln Street,25587 Conifer Road, Suite 1300, Denver,105-231, Conifer, Colorado 80203.80433. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our principal executive officer, principal financial officer, principal accounting officer or controller or person performing similar functions will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, unless website posting of such amendments or waivers is then permitted by the rules of the national securities exchange on which the Company trades.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR
Any stockholder who intends to present a proposal (other than for director nominations) for inclusion in our proxy materials for the Company’s 20172021 annual meeting of stockholders must deliver the proposal to the Corporate Secretary of Glowpoint,Oblong, Inc. at 1776 Lincoln Street,25587 Conifer Road, Suite 1300, Denver,105-231, Conifer, Colorado 80203,80433, no later than December 30, 2016.
July 26, 2021.
In addition, our by-lawsbylaws provide that, in order for a stockholder to timely propose business for consideration at our next annual meeting of stockholders or nominate a person for election to our Board of Directors at our next annual meeting of stockholders, the stockholder must give written notice to our Corporate Secretary at our principal executive offices between February 25, 2017,September 23, 2021, which is 90 days prior to the anniversary of our 20162020 annual meeting of stockholders, and March 27, 2017,October 23, 2021, which is 60 days prior to such anniversary. In the event that our next annual meeting of stockholders is called for a date that is not within 30 days before or after May 26, 2017,December 22, 2021, notice by the stockholder in order to be timely must be received not later than the close of business on the 10th day following the day on which notice of our next annual meeting of stockholders is mailed or public disclosure of our next annual meeting of stockholders is made, whichever occurs first.
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS
The SEC previously adopted a rule concerning the delivery of annual disclosure documents. The rule allows us or brokers holding our shares on your behalf to send a single set of our annual report and proxy statement to any household at which two or more of our stockholders reside, if either we or the brokers believe that the stockholders are members of the same family. This practice, referred to as “householding,” benefits both stockholders and us. It reduces the volume of duplicate information received by you and helps to reduce our expenses. The rule applies to our annual reports, proxy statements and information statements. Once stockholders receive notice from their brokers or from us that communications to their addresses will be “householded,” the practice will continue until stockholders are otherwise notified or until they revoke their consent to the practice. Each stockholder will continue to receive a separate proxy card or voting instruction card.
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Those stockholders who either (i) do not wish to participate in “householding” and would like to receive their own sets of our annual disclosure documents in future years or (ii) who share an address with another one of our stockholders and who would like to receive only a single set of our annual disclosure documents should follow the instructions described below:
•Stockholders whose shares are registered in their own name should contact our transfer agent, American Stock Transfer & Trust Company, LLC, and inform them of their request by calling them at 1-800-937-5449 or writing them at 6201 15th Avenue, 2nd Floor, Brooklyn, NY 11219.
• |
Stockholders whose shares are held by a broker or other nominee should contact such broker or other nominee directly and inform them of their request. Stockholders should be sure to include their name, the name of their brokerage firm and their account number.
We will promptly deliver separate copies of our proxy statement and annual report at the request of any stockholder who is in a household that participates in the householding of the Company’s proxy materials. You may call the Corporate Secretary at 303-640-3838 or send your request to the Corporate Secretary at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public through the Internet at the SEC’s web site at www.sec.gov.
We will mail without charge, upon written request, a copy of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2019, including the financial statements and list of exhibits, and any exhibit specifically requested. Requests should be sent to:
OBLONG, INC.
25587 Conifer Road, Suite 105-231,
Conifer, Colorado 80433
Attention: Corporate Secretary
303-640-3838
OTHER MATTERS
The Board of Directors knows of no other business to be presented for action at the Annual Meeting. If any matters do come before the meeting on which action can properly be taken, the persons named in the enclosed proxy will have the discretion to vote such matters in accordance with their judgment.
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OBLONG, INC. 25587 CONIFER ROAD, SUITE 105-231 CONIFER, COLORADO 80433 | VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on December 21, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on December 21, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your completed and signed proxy card must be received by December 21, 2020. | ||||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| KEEP THIS PORTION FOR YOUR RECORDS | |||||||||||
| DETACH AND RETURN THIS PORTION ONLY | |||||||||||
| OBLONG, INC. | ||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following: 1.Election of Directors Nominees: 01) Jason Adelman 03) James Lusk 02) Peter Holst | For All ☐ | Withhold All ☐ | For All Except ☐ | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) you wish to withhold on the line below. | ||||||||||||||||||||||||||||
| The Board of Directors recommends you vote “FOR” Proposal No. 2. | For | Against | Abstain | |||||||||||||||||||||||||||||
| 2. Ratification of the appointment of EisnerAmper LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2020. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||
The Proxy Statement and 2019 Annual Report are available at www.proxyvote.com.
| OBLONG, INC. | |||||||||||||||||
| Annual Meeting of Stockholders | |||||||||||||||||
| December 22, 2020 10:00 AM MST | |||||||||||||||||
| This proxy is solicited by the Board of Directors | |||||||||||||||||
The stockholder(s) hereby appoint(s) Peter Holst and David Clark, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common and Preferred Stock of OBLONG, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 AM MST on December 22, 2020, at the offices of Arnold & Porter Kaye Scholer LLP, located at 1144 Fifteenth Street, Suite 3100, Denver, Colorado 80202. | |||||||||||||||||
| This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. | |||||||||||||||||
| Continued and to be signed on reverse side | |||||||||||||||||