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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Airgain, Inc.
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3611 Valley Centre Drive, Suite 150
San Diego, CA 92130
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
Dear Stockholder:
The 2020 annual meeting of stockholders of Airgain, Inc. will be held at the offices of Latham & Watkins LLP, located at 12670 High Bluff Drive, San Diego, CA 92130 on Thursday, June 27, 201925, 2020, at 9:00 a.m., local time,Pacific Time, via a live webcast for the following purposes:purposes, as more fully described in the accompanying proxy statement:
| 1. | To elect |
| 2. | To consider and vote upon the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the |
| 3. | To transact such other business as may be properly brought before the meeting or any adjournment or postponement thereof. |
As noted above, due to the COVID-19 pandemic for the safety of all of employees and stockholders and taking into account recent federal, state and local guidance that has been issued, our annual meeting will be a virtual meeting of stockholders, which will be conducted solely by remote communication via a live webcast. There will not be a physical meeting location, and stockholders will not be able to attend the annual meeting in person. This means that you can attend the annual meeting online, vote your shares during the online meeting, and submit questions for consideration at the online meeting. To be admitted to the annual meeting's live webcast, you must register at www.proxydocs.com/AIRG by 5:00 p.m. Eastern Time on Tuesday, June 23, 2020, or the Registration Deadline, as described in the proxy materials or your proxy card. As part of the registration process, you must enter the Control Number shown on your proxy card. After completion of your registration by the Registration Deadline, further instructions, including a unique link to access the annual meeting, will be emailed to you.
The foregoing items of business are more fully described in the attachedaccompanying proxy statement, which forms a part of this notice and is incorporated herein by reference. Our board of directors has fixed the close of business on April 29, 201927, 2020, as the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting or any adjournment or postponement thereof.
Accompanying this notice is a proxy card. Whether or not you expect to attend our annual meeting, please complete, sign, and date the enclosed proxy card and return it promptly, or complete and submit your proxy via phone or the internetInternet in accordance with the instructions provided on the enclosed proxy card. If you plan to attend our annual meeting via live webcast and wish to vote your shares personally, you may do so at any time before the proxy is voted.
All stockholders are cordially invited to attend the meeting.meeting via a live webcast. We appreciate your continued support of the Company.
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| /s/ James K. Sims |
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| James K. Sims |
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San Diego, California
May 6, 2019April 29, 2020
Your vote is important. Please vote your shares whether or not you plan to attend the meeting.
i
3611 Valley Centre Drive, Suite 150
San Diego, CA 92130
PROXY STATEMENT FOR THE 20192020 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JUNE 27, 201925, 2020
The board of directors of Airgain, Inc. is soliciting the enclosed proxy for use at the annual meeting of stockholders to be held at the offices of Latham & Watkins LLP, located at 12670 High Bluff Drive, San Diego, CA 92130, on Thursday, June 27, 201925, 2020, at 9:00 a.m., local time. If you need directionsPacific Time. The annual meeting will be a completely virtual meeting, which will be conducted via a live webcast. Prior registration to the location ofattend the annual meeting please contact us at (760) 579-0200.www.proxydocs.com/AIRG is required by 5:00 p.m. Eastern Time on Tuesday, June 23, 2020, or the Registration Deadline.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on June 27, 201925, 2020:
This proxy statement and our Annual Report on Form 10-K are available electronically at www.proxydocs.com/proxydocs.com/AIRG.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why did you send me this proxy statement?
We sent you this proxy statement and the enclosed proxy card because our board of directors is soliciting your proxy to vote at the 20192020 annual meeting of stockholders. This proxy statement summarizes information related to your vote at the annual meeting. All stockholders who find it convenient to do so are cordially invited to attend the annual meeting in person.via live webcast. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign, and return the enclosed proxy card or complete and submit your proxy via phone or the internetInternet in accordance with the instructions provided on the enclosed proxy card.
We intend to begin mailing this proxy statement, the attached notice of annual meeting, and the enclosed proxy card on or about May 31, 2019,22, 2020, to all stockholders of record entitled to vote at the annual meeting.
How can I attend the annual meeting?
This year's annual meeting will be accessible through the Internet via a live webcast. Prior registration to attend the annual meeting by the Registration Deadline at www.proxydocs.com/AIRG is required. We adopted a virtual format for our annual meeting in light of the on-going developments related to the COVID-19 pandemic and governmental decrees that in-person gatherings be postponed or canceled, and in the best interests of public health and the health and safety of our stockholders, directors, and employees.
You are entitled to participate in the annual meeting if you were a stockholder as of the close of business on our record date of April 27, 2020, or hold a valid proxy for the meeting. To be admitted to the annual meeting's live webcast, you must register at www.proxydocs.com/AIRG by the Registration Deadline as described in these proxy materials. As part of the registration process you must enter the Control Number shown on your proxy card. After completion of your registration by the Registration Deadline, further instructions, including a unique link to access the annual meeting, will be emailed to you.
This year's stockholders’ question and answer session will include questions submitted electronically during the annual meeting. Our virtual meeting will be governed by our Rules of Conduct and Procedures that will be available on the meeting portal when activated prior to the meeting start time and for duration of the meeting. The Rules of Conduct and Procedures will address the ability of stockholders to ask questions during the meeting including rules on permissible topics and rules for how questions and comments will be recognized and disclosed to meeting participants.
Who can vote at the annual meeting?
Only stockholders of record at the close of business on the record date for the 20192020 annual meeting, April 29, 2019,27, 2020, are entitled to vote at the annual meeting. At the close of business on this record date, there were 10,061,5229,696,557 shares of our common stock outstanding. Common stock is our only class of stock entitled to vote.
Stockholders of Record: Shares Registered in Your Name
If, on the record date, your shares were registered directly in your name with the transfer agent for our common stock, American Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote in person at the annual meeting if you attend online or vote by proxy. Whether or not you plan to attend the annual meeting online, we encourage you to vote by proxy via the Internet, by telephone, or by mail, as instructed below to ensure your vote is counted.
Beneficial Owners: Shares Registered in the Name of a Broker or Bank
If, on the record date, your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner you have the right to direct your broker or other agent on how to vote the shares in your account. YouAs discussed above, if you are also a street name stockholder, you are invited to attend and vote your shares at the annual meeting.meeting online so long as you register at www.proxydocs.com/AIRG by the Registration Deadline. However, since you are not the stockholder of record, you may not vote your shares in persononline at the annual meeting unless you request and obtain a valid proxy from your broker, bank, or other agent.
What am I voting on?
There are two proposals scheduled for a vote:
Proposal 1: To elect one directortwo directors to serve as a Class III directorI directors for a three-year term to expire at the 20222023 annual meeting of stockholders.
Proposal 2: To consider and vote upon the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.2020.
How many votes do I have?
Each share of our common stock that you own as of April 29, 201927, 2020, entitles you to one vote.
How do I vote?
With respect to the election of directors, you may either vote “For” the nomineenominees to the board of directors or you may “Withhold” your vote for theany nominee to the board of directors.directors that you specify. With respect to the ratification of the appointment of KPMG LLP as our independent registered public accounting firm, you may vote “For”, “Against” or “Abstain” from voting.
Stockholders of Record: Shares Registered in Your Name
If you are a stockholder of record, there are several ways for you to vote your shares. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure that your vote is counted.
Via the Internet: You may vote at www.proxypush.com/AIRG, 24 hours a day, seven days a week. Have your proxy card available when you access the website and use the Control Number shown on your proxy card. Votes submitted via the Internet must be received by 11:59 p.m., Eastern Time, on June 26, 2019.
By Telephone: You may vote using a touch-tone telephone by calling (866) 829-5171, 24 hours a day, seven days a week. Have your proxy card available when you call and use the Control Number shown on your proxy card. Votes submitted by telephone must be received by 11:59 p.m., Eastern Time, on June 26, 2019.
By MailAt the Meeting: You may vote using your proxy card by completing, signing, dating, and returningduring the proxy card in the self-addressed, postage-paid envelope provided. If you properly complete your proxy card and send it to us in time to vote, your proxy (one of the individuals named on your proxy card) will vote your shares as you have directed.
In Personvirtual annual meeting through : You may still attend the meeting and vote in person even if you have already voted by proxy.www.proxydocs.com/AIRG. To vote in person, comebe admitted to the annual meeting and we will give vote your shares, you a ballot atmust register to attend the annual meeting.meeting at www.proxydocs.com/AIRG by the Registration Deadline at 5:00 p.m. Eastern Time on Tuesday, June 23, 2020, and provide the Control Number shown on your proxy card. After completion of your registration by the Registration Deadline, further instructions, including a unique link to access the annual meeting, will be emailed to you.
Beneficial Owners: Shares Registered in the Name of a Broker, Bank, or BankOther Agent
If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than directly from us. Please check with your bank, broker, or other agent and follow the voting instructions they provide to vote your shares. Generally you have three options for returning your proxy.
By Method Listed on Voting Instruction Card: Please refer to your voting instruction card or other information provided by your broker, bank, broker or other agent to determine whether you may vote by telephone or electronically on the Internet and follow the instructions on the voting instruction card or other information provided by your broker, bank, or other agent. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank, broker, or other agent does not offer Internet or telephone voting information, please follow the other voting instructions they provide to vote your shares.
By Mail: You may vote by signing, dating, and returning your voting instruction card in the pre-addressed envelope provided by your broker, bank, or other agent.
In PersonAt the Meeting: To vote in person atonline during the virtual annual meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker, bank, or bankother agent included with these proxy materials or contact your broker, bank, or bankother agent to request the proxy form authorizing you to vote the shares. You will needmust register to bring with you toattend the annual meeting at www.proxydocs.com/AIRG by the legalRegistration Deadline and provide the Control Number shown on your proxy form fromcard. After completion of your broker, bank or other agent authorizing youregistration by the Registration Deadline, further instructions, including a unique link to voteaccess the shares as well as proof of identity.annual meeting, will be emailed to you.
May I revoke my proxy?
If you give us your proxy you may revoke it at any time before it is exercised. You may revoke your proxy in any one of the three following ways:
you may send in another signed proxy with a later date,
you may authorize a proxy again on a later date on the Internet (only the latest Internet proxy submitted prior to the annual meeting will be counted), or
you may notify our corporate secretary, Anil Doradla,David B. Lyle, in writing before the annual meeting that you have revoked your proxy, after which notification you are entitled to submit a new proxy or, so long as you register prior to the Registration Deadline, vote in person at the meeting.meeting, or
What constitutes a quorum?
The presence at the annual meeting—in person,meeting, whether by attendance or by proxy—proxy, of holders representing a majority of our outstanding common stock as of April 29, 2019,27, 2020, or 5,030,7624,848,279 shares, constitutes a quorum at the meeting, permitting us to conduct our business.
What vote is required to approve each proposal?
Proposal 1: Election of Director.Directors. The nomineetwo nominees who receivesreceive the most “For” votes (among votes properly cast in personat the annual meeting or by proxy) will be elected. Only votes “For” or “Withhold” will affect the outcome.
Proposal 2: Ratification of Independent Registered Public Accounting Firm. The ratification of the appointment of KPMG LLP must receive “For” votes from the holders of a majority in voting power of the votes cast affirmatively or negatively on the proposal. Only votes “For” or “Against” will affect the outcome.
Voting results will be tabulated and certified by the inspector of election appointed for the annual meeting.
How will my shares be voted if I do not specify how they should be voted?
If you are a stockholder of record and you indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board, then your shares will be voted at the annual meeting in accordance with the Board’s recommendation on all matters presented for a vote at the annual meeting. Similarly, if you sign and return a proxy card but do not indicate how you want to vote your shares for a particular proposal or for all of the proposals, then for any proposal for which you do not so indicate, your shares will be voted in accordance with the Board’s recommendation.
If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then, the organization that holds your shares may generally vote your shares in their discretion on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on that matter with respect to your shares. This is generally referred to as a “broker non-vote.”
What is the effect of withheld votes, abstentions, and broker non-votes?
Shares of common stock held by persons attending the virtual annual meeting but not voting and shares represented by proxies that reflect withheld votes or abstentions as to a particular proposal will be counted as present for purposes of determining the presence of a quorum. Abstentions are not an affirmative or negative vote on a proposal, so abstaining does not count as a vote cast and has no effect for purposes of determining whether our stockholders have ratified the appointment of KPMG LLP, our independent registered public accounting firm. The election of directors is determined by a plurality of votes cast, so a “Withhold” vote will not be counted in determining the outcome of such proposal.
Shares represented by proxies that reflect a “broker non-vote” will be counted as present for purposes of determining the presence of a quorum exists. As discussed above, a “broker non-vote” occurs when a nominee holding shares for a beneficial owner has not received instructions from the beneficial owner and does not have discretionary authority to vote the shares for certain non-routine matters. With regard to the election of directors, which is considered a non-routine matter, broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote. However, ratification of the appointment of KPMG LLP is considered a routine matter on which a broker or other nominee has discretionary authority to vote. Accordingly, no broker non-votes will likely result from this proposal.
How does the Board recommend that I vote?
The Board recommends that you vote:
“For” the nomineenominees for election as a director;directors; and
“For” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.2020.
If you vote via the Internet, by telephone, or sign and return the proxy card by mail but do not make specific choices, your shares, as permitted, will be voted as recommended by our board of directors. If any other matter is presented at the annual meeting, your proxy will vote in accordance with his or her best judgment. As of the date of this proxy statement we know of no matters that needed to be acted on at the annual meeting, other than those discussed in this proxy statement.
Who is paying the costs of soliciting these proxies?
We will pay all of the costs of soliciting these proxies. Our directors, officers, and other employees may solicit proxies in person or by mail, telephone, fax, or email. We will not pay our directors, officers, and other employees any additional compensation for these services. We will ask banks, brokers and other institutions, nominees, and
fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their expenses. Our costs for forwarding proxy materials will not be significant.
How do I obtain an Annual Report on Form 10-K?
If you would like a copy of our Annual Report on Form 10-K for the year ended December 31, 20182019, that we filed with the Securities and Exchange Commission, or the SEC, on March 15, 2019,February 28, 2020, we will send you one without charge. Please write to:
Airgain, Inc.
3611 Valley Centre Drive, Suite 150
San Diego, CA 92130
Attn: Corporate Secretary
All of our SEC filings are also available free of charge in the “Investors—SEC Filings” section of our website at www.airgain.com.www.airgain.com.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the annual meeting. Final voting results will be published in our current report on Form 8-K to be filed with the SEC within four business days after the annual meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
ELECTION OF DIRECTORDIRECTORS
Our board of directors is divided into three classes, with one class of our directors standing for election each year, generally for a three-year term. Directors for each class are elected at the annual meeting of stockholders held in the year in which the term for their class expires and hold office until the third annual meeting following election and until such director’s successor is elected and qualified, or until such director’s earlier death, resignation, or removal. As detailed in the section below, the current composition of our board of directors is as follows: Class I consists of Tzau-Jin Chung and James K. Sims; Class II consists of Joan H. Gillman and Arthur M. Toscanini; and Class III consists of Thomas A. Munro and Jacob Suen.
At this meeting one nomineetwo nominees for director isare to be elected as a Class III directorI directors for a three-year term expiring at our 20222023 annual meeting of stockholders and until his successor istheir successors are duly elected and qualified. The nominee,nominees, who waswere recommended for nomination by the nominating and corporate governance committee of our board of directors, is Thomas A. Munro. Frances Kordyback, a current Class III director who was not recommended for nomination by our board of directors, will continue to serve as a director until the date of the 2019 annual meeting, at which time her term will expire. As a result, as of the annual meeting, our board of directors will consist of only one Class III director, two Class I directorsare Tzau-Jin Chung and two Class II directors. Our board of directors determined that upon the expiration of Ms. Kordyback’s term at the annual meeting, the size of the board of directors will automatically be reduced from six to five directors.James K. Sims. The Class III directors have one year remaining on their terms of office and the Class IIIII directors have two years remaining on their terms of office.
If no contrary indication is made, proxies in the accompanying form are to be voted for Mr. MunroChung and Mr. Sims or in the event that Mr. MunroChung or Mr. Sims is not a candidate or is unable to serve as a director at the time of the election (which is not currently expected), for any nominee who is designated by our board of directors to fill the vacancy. Each of Mr. MunroChung and Mr. Sims is currently a member of our board of directors.
All of our directors bring to the board of directors significant leadership experience derived from their professional experience and service as executives or board members of other corporations and/or private equity and venture capital firms. The process undertaken by the nominating and corporate governance committee in recommending qualified director candidates is described below under “Director Nomination Process.” Certain individual qualifications and skills of our directors that contribute to the board of directors’ effectiveness as a whole are described in the following paragraphs.
Information Regarding Directors
The information set forth below as to the directors and nomineenominees for director has been furnished to us by the directors and nomineenominees for director:
NomineeNominees for Election to the Board of Directors
For a Three-Year Term Expiring at the
2022 Annual Meeting of Stockholders (Class III)
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Thomas A. Munro has served on our board of directors since 2004. Mr. Munro is the Chief Executive Officer of Verimatrix, Inc., an internet security technology company, a position he has held since April 2005. Prior to Verimatrix, Mr. Munro was the President of Wireless Facilities from 2001 to 2003 and Chief Financial Officer from 1997 to 2001. Previously he was the Chief Financial Officer of Precision Digital Images from 1994 to 1995 and MetLife Capital Corporation from 1992 to 1994. Mr. Munro currently serves on the board of directors of BandwidthX, Inc., a private company, and previously served on the board of directors of private companies Kineticom, Inc. and CommNexus. Mr. Munro holds a B.A. in business and an M.B.A. from the University of Washington. Mr. Munro’s extensive knowledge of our business and history and experience in the wireless technology industry contributed to our board of directors’ conclusion that he should serve as a director of our company.
Members of the Board of Directors Continuing in Office
Term Expiring at the
20202023 Annual Meeting of Stockholders (Class I)
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Name | Age | Present position with Airgain, Inc. | ||||
James K. Sims | 73 | Chairman of the Board of Directors | ||||
Tzau-Jin (TJ) Chung |
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James K. Sims has served as our chairman of the board of directors since November 2003 and2003. He served as our Chief Executive Officer sincefrom March 2019. Mr. Sims previously served2019 to August 2019 and as our interim Chief Executive Officer from May 2018 to March 2019 and as our Executive Chairman from October 2018 to March 2019. Mr. Sims has served as the Chairman and Chief Executive Officer of GEN3 Partners, a consulting company that specializes in science-based technology development since 1999 and as Managing Partner of its affiliated private equity investment fund, GEN3 Capital, LLP, since 2005. In 2017 Mr. Sims was the founding partner of Silicon Valley Data Capital. Mr. Sims founded Silicon Valley Data Science (SVDS) in 2012 where he is currently the Chairman. Mr. Sims also founded Cambridge Technology Partners in 1991 where he held the position of Chief Executive Officer. Prior to Cambridge Technology Partners, Mr. Sims also founded Concurrent Computer Corporation. Mr. Sims currently serves on the board of directors of various private companies including EPAY Systems, Inc., where he is currently the Chairman of the Board,board, Connections 365, Inc. and Bright Volt, Inc. andHe has previously served on the boardboards of directors of public companies including Cambridge Technology Partners, RSA Security, Inc., where he was the Chairman, and Electronic Data Systems Corporation. Mr. Sims’ extensive experience as a director of numerous public and private companies, as well as his extensive experience as a founder and venture capital investor in the technology industry, contributed to our board of directors’ conclusion that he should serve as a director of our company.
TJ Chung has served on our board of directors since October 2018. Mr. Chung is currently a Senior Partner at Core Industrial Partners LLC, a private equity firm investing in North American lower middle-market industrial and manufacturing businesses, a position he has held since July 2017. From January 2013 until his retirement in May
2016, Mr. Chung served as Chief Executive Officer of Teletrac Navman, a leading global Saas provider of commercial telematics solutions. From July 2007 to December 2012 Mr. Chung was Chief Executive Officer of Navman Wireless. Previously Mr. Chung served as President of the New Technologies Division of Brunswick Corporation from 2002 to 2007. Prior to that he served as Chief Strategy Officer of Brunswick Corporation and Senior Vice President of Brunswick Corporation’s Mercury Marine Division. Before joining Brunswick Corporation Mr. Chung was an executive at Emerson Electric. Mr. Chung currently serves on the boardboards of directors of Littelfuse, Inc. and the board of directors of MCBC Holdings, Inc. Mr. Chung earned his bachelor’s degreeBS in science, electrical, and computer engineering from the University of Texas at Austin. He also holds aan MS in computer science from North Carolina State University and an MBA from the Fuqua School of Business at Duke University. Mr. Chung’s extensive experience as an operating executive in the telecommunication, wireless, and technology industries contributed to our board of directorsdirectors' conclusion that he should serve as a director of our company.
Term Expiring
Members of the Board of Directors Continuing in Office
The biography of James K. Simsfor Mr. Suen can be found under “Proposal"Proposal 1—Election of Directors.”"
Jacob Suen has served as our President Since January 2019 and previously served as our Senior Vice President, Worldwide sales from May 2017 through January 2019. He has been with the company since April 2006 as the Vice President of Asia Pacific Sales. Previously, Mr. Suen served as the Director of Business Development from 1998 to 2005 at Paradyne Corporation. Prior to Paradyne, Mr. Suen was a Development Engineer at GVN Technologies in 1998. From 1997 to 1998, Mr. Suen was a Software Development Engineer for Motorola Incorporation. Mr. Suen holds a Master of Science in Electrical Engineering with a concentration in Communication Systems and a minor in Engineering Management from the University of South Florida. Mr. Suen also has his Master of Business Administration with a focus on International Business and Entrepreneurship from the University of Colorado.
Anil Doradla David B. Lyle has served as our Chief Financial Officer since February 2018. From June 2008 to February 2018, Mr. Doradla served as a Senior Equity Research Analyst at William Blair. From June 2007 to June 2008, Mr. Doradla served as Senior Vice President at Caris and Company.January 2020. Prior to that Mr. Doradla was a Research Associate at Deutsche BankLyle served as the Chief Financial Officer of Sunniva, Inc. from April 2006 to June 2007. From November 1998 to April 2006, Mr. Doradla was a Principal Technical Member of Staff at AT&T Labs. From 19942019 to November 1998,2019. Prior to Sunniva he was Chief Financial Officer at Maxwell Technologies, Inc. from May 2015 to May 2019, which was acquired by Tesla in 2019. Mr. DoradlaLyle served as the Chief Financial Officer of Entropic Communications, Inc. from 2007 to 2015, which was acquired in 2015 by MaxLinear, Inc. Prior to Entropic he served as the Chief Financial Officer of RF Magic Inc., acquired by Entropic in 2007, Zyray Wireless Inc., acquired by Broadcom Corporation in 2004, and Mobilian Corporation, acquired by Intel Corporation in 2003. Mr. Lyle holds a Senior Engineer at LCC International. Mr. Doradla holdsBS in business administration from University of Southern California, a Master of Science in Electrical Engineering from Virginia Tech and a Master of Business AdministrationInternational Management from the McCombsThunderbird School of Business at the University of Texas at Austin.Global Management, and an MBA from Arizona State University.
Kevin Thill has served as our Senior Vice President, Engineering since January 2019. He has been with the company since April 2017 as the Vice President, Antenna-Plus. Prior to that Mr. Thill founded Antenna Plus, LLC in 1991 and was the owner until its acquisition by us in 2017. Prior to Antenna Plus Mr. Thill was a Senior Antenna Design Engineer at Motorola. Prior to Motorola Mr. Thill was an Antenna Engineer at Northrop and prior to that he was an Antenna Engineer at McDonald Douglass. Mr. Thill received a Bachelor of ScienceBS in Electrical Engineering from Arizona State University.
Overview
This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2018,2019 our “named executive officers” and their positions were as follows:
• | James K. Sims | Chairman and former Chief Executive | |
• | Jacob Suen | Chief Executive Officer and President(2) | |
• | Kevin M. Thill | Senior Vice President, Engineering(3) | |
• | Anil K. Doradla | Former Chief Financial Officer |
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(2) | Mr. Suen was appointed President effective January 16, 2019 and Chief Executive |
(3) | Mr. Thill was appointed Senior Vice President, Engineering effective January 16, 2019. |
(4) | Mr. Doradla served as our Chief Financial Officer until his resignation on November 30, 2019. |
On May 2, 2018, Charles Myers, former Chief Executive Officer, President and member of our board of directors, resigned from all positions with us, effective immediately, to pursue other opportunities. Also effective May 2, 2018, our board of directors appointed our Chairman, James K. Sims, as interim Chief Executive Officer. Mr. Sims was appointed Chief Executive Officer effective March 13, 2019.
Mr. Suen was appointed President effective January 16, 2019, and served as our Senior Vice President, Worldwide Sales prior to his promotion.
Effective February 5, 2018, the board of directors appointed Anil Doradla as our Chief Financial Officer. Mr. Johnson, our previous Chief Financial Officer, continued to serve as our principal financial and accounting officer for our public filings with the SEC until March 15, 2018 and continues to serve as an employee in a non-executive role. Effective March 16, 2018, Mr. Doradla began serving as our principal financial and accounting officer, replacing Mr. Johnson in such capacities.
This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations, and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion.
Summary Compensation Table
Summary Compensation Table
The following table presents information regarding compensation earned by or awards to our named executive officers during 20182019 and 2017:2018:
Name and Principal Position |
| Year |
| Salary($) |
|
| Bonus($)(1) |
|
| Option Awards($)(2) |
|
| All Other Compensation($)(3) |
|
| Total($) |
| |||||
James K. Sims, Executive Chairman and Chief Executive Officer |
| 2018 |
|
| 267,397 |
|
|
| 437,404 |
|
|
| 681,524 |
|
|
| 34,858 |
|
|
| 1,421,183 |
|
Jacob Suen, President |
| 2018 |
|
| 310,000 |
|
|
| 334,800 |
|
|
| 281,288 |
|
|
| 8,618 |
|
|
| 934,706 |
|
|
| 2017 |
|
| 310,000 |
|
|
| 195,000 |
|
|
| 156,900 |
|
|
| — |
|
|
| 661,900 |
|
Anil Doradla, Chief Financial Officer and Secretary (4) |
| 2018 |
|
| 298,205 |
|
|
| 234,000 |
|
|
| 267,220 |
|
|
| — |
|
|
| 799,425 |
|
Charles Myers, Former President, Chief |
| 2018 |
|
| 200,847 |
|
|
| — |
|
|
| 2,010,365 |
|
|
| 537,788 |
|
|
| 2,749,000 |
|
Executive Officer and Director (5) |
| 2017 |
|
| 400,000 |
|
|
| 250,000 |
|
|
| 627,600 |
|
|
| 20,000 |
|
|
| 1,297,600 |
|
Name and principal position | Year |
| Salary |
|
| Bonus(1) |
|
| Stock awards(2) |
|
| Option awards(2) |
|
| Non-equity incentive plan awards(3) |
|
| All other compensation(4) |
|
| Total |
| |||||||
James K. Sims, Executive Chairman and | 2019 |
| $ | 388,082 |
| (5) | $ | — |
|
| $ | 232,936 |
|
| $ | 246,845 |
|
| $ | 244,800 |
|
| $ | 13,340 |
|
| $ | 1,126,003 |
|
former Chief Executive Officer | 2018 |
|
| 267,400 |
|
|
| 437,400 |
|
|
| — |
|
|
| 681,500 |
|
|
| — |
|
|
| 34,900 |
|
|
| 1,421,200 |
|
Jacob Suen, Chief Executive | 2019 |
|
| 839,143 |
|
|
| — |
|
|
| 407,632 |
|
|
| 1,665,404 |
|
|
| 212,670 |
|
|
| — |
|
|
| 3,124,849 |
|
Officer and President | 2018 |
|
| 310,000 |
|
|
| 334,800 |
|
|
| — |
|
|
| 281,300 |
|
|
| — |
|
|
| 8,600 |
|
|
| 934,700 |
|
Kevin M. Thill, Vice President Engineering | 2019 |
|
| 433,635 |
|
|
| — |
|
|
| 116,468 |
|
|
| 123,423 |
|
|
| 112,200 |
|
|
| — |
|
|
| 785,725 |
|
Anil K. Doradla, former Chief | 2019 |
|
| 524,250 |
|
|
| — |
|
|
| 174,696 |
|
|
| 707,155 |
|
|
| — |
|
|
| 39,375 |
|
|
| — |
|
Financial Officer(6) | 2018 |
|
| 298,200 |
|
|
| 234,000 |
|
|
| — |
|
|
| 267,200 |
|
|
| — |
|
|
| — |
|
|
| 799,400 |
|
(1) | Represents discretionary annual bonuses earned by the named executive officers for performance during |
(2) | Amounts reflect the full grant-date fair value of stock |
February 28, 2020. For Mr. Sims, |
(3) |
|
| For Mr. Sims |
For Mr. |
(5) | For Mr. |
| Mr. Doradla |
|
|
Narrative Disclosure to Summary Compensation Table
Employment and Consulting Agreements
We have entered into employment agreements with each of our executive officers.
Arrangements with Mr. Sims
On
From May 8, 2018, our board of directors, upon the recommendation of the compensation committee, approved the compensation arrangements forthrough March 13, 2019, Mr. Sims in his roleserved as our non-employee interim Chief Executive Officer. In consideration of his service as interim Chief Executive Officer, Mr. Sims received a monthly retainer of $33,333.33, which equated to an annual retainer of $400,000. On May 8, 2018, Mr. Sims was also granted stock options to purchase 175,000 shares of our common stock, which will vest in equal quarterly installments over the two years following his commencement of service as interim Chief Executive Officer, subject to his continued service in that role or as a member of our board of directors on each vesting date. The stock options will also vest in full upon a change in control. Mr. Sims was also eligible to be awarded a discretionary bonus by our board of directors in connection with his service as interim Chief Executive Officer.
During his service as interim Chief Executive Officer or Chief Executive Officer, Mr. Sims will not be entitled to any additional fees or other compensation for serving as Chairman of the Board or as a member of our board of directors, including any fees or equity grants in accordance with our non-employee director compensation policy, although the equity awards previously granted to him in connection with his service as a member of our board of directors will continue to vest based on his service as Chief Executive Officer. Following his return to status as a
non-employee director, Mr. Sims will again be eligible to receive fees and equity grants in accordance with our non-employee director compensation policy.Original Employment Agreement
On October 25, 2018, the Board approved the entry by us into an employment agreement with Mr. Sims, which agreement was designed to cover his future service as Executive Chairman.Chairman and interim Chief Executive Officer. The employment agreement with Mr. Sims became effective on February 16, 2019, at which time Mr. Sims became an employee of the company and Executive Chairman in addition to interim Chief Executive Officer.
Effective March 13, 2019, Mr. Sims was appointed Chairman andChief Executive Officer in addition to his role as Executive Chairman. Mr. Sims served in these roles until Mr. Suen's appointment as Chief Executive Officer effective August 8, 2019. On that date Mr. Sims resigned as Chief Executive Officer and was appointed as Advisor to the employment agreement with Mr. Sims was amendedChief Executive Officer in addition to reflect Mr. Sims’ appointment to this role. Mr. Sims also continues in his role as Chairman of the boardBoard of directors. Directors, and we executed an amended
Pursuant to the employment agreement with him as described below. On February 9, 2020, Mr. Sims’ employment ceased and he continues as our non-employee Chairman of the Board of Directors.
During the term of his employment under his employment agreement, Mr. Sims Mr. Sims receivesreceived an annual base salary of $400,000. Mr. Sims iswas also eligible to receive an annual incentive bonus in the discretion of our board of directors (with a target bonus of 90% of his base salary). Mr. Sims willwas also be entitled to participate in all employee benefit plans, programs and arrangements maintained by us and made available to employees generally and to receive reimbursement for all reasonable and necessary business expenses incurred by him. Mr. Sims, who doesdid not participate in the company's healthcare plans, iswas also provided with a monthly reimbursement of his healthcare premiums under his individually obtained health coverage.
During his employment, Mr. Sims will not be entitled to any additional fees or other compensation for serving as a member of the Board, including any fees or equity grants in accordance with our non-employee director compensation program. Following cessation of Mr. Sims' employment under his employment agreement, subject to his remaining as a member of our board of directors thereafter, he will again be eligible to receive fees or other compensation for serving as a member of our board of directors.
Pursuant to his employment agreement in effect prior to the August amendment and his role conversion, if we terminateterminated Mr. Sim’sSims’ employment without cause (as defined in the employment agreement) or he resignsresigned for good reason (as defined in the employment agreement), in addition to the payment of his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled, he will bewould have been entitled to the following severance and benefits, subject to his execution of a release of claims against us: (1) a lump sum cash payment in an amount equal to (A) if his employment iswere terminated prior to December 31, 2020, his base salary as in effect immediately prior to the date of his termination for a period of up to 18 months (which severance period will be prorated between 18 months and 6 months depending on his length of service following February 16, 2018 through December 31, 2020), or (C)(B) six months of his annual base salary as in effect immediately prior to the date of this termination if his employment iswere terminated on or after December 31, 2020; (2) a lump sum cash payment in an amount equal to his full target bonus for the calendar year during which such date of termination occurs; and (3) the continuation of his health and dental coverage pursuant to COBRA at our expense for the applicable severance period of 6 months following the date of termination.termination; and (4) full acceleration of his outstanding equity awards. In addition, all of Mr. Sims’ equity awards will vest in the event of a change in control, without regard to his termination of employment. Notwithstanding the foregoing, no severance will bewas payable in the event Mr. Sims'Sims’ termination without cause or resignation for good reason occursoccurred after February 16, 2021.
If Mr. Sims isSims’ employment were terminated as a result of his death or following his permanent disability, in addition to the payment of his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled, he or his estate, as applicable, ishe was entitled to a lump sum cash payment in an amount equal to his "earned" bonus for the calendar year during which his date of termination occursoccurred calculated as of the date of termination (wherein “earned” means that he has met the applicable bonus metrics as of date of such termination, as determined by the board of directors), prorated for such portion of the calendar year during which such termination occursoccurred that has elapsed through the date of termination.
August 2019 Amended Employment Agreement
Effective August 8, 2019, Mr. Sims’ employment agreement was amended and restated to reflect his new role as Advisor to the Chief Executive Officer and chairman of the board of directors. The amended employment agreement with Mr. Sims provided for a fixed term, which expired on February 9, 2020, unless earlier terminated by us or Mr. Sims, and the same annual base salary, target bonus and additional employee benefits and medical reimbursements as were in place under his original employment agreement described above.
If Mr. Sims’ employment under his amended employment agreement were terminated prior to the expiration of the term by us without cause or by him for good reason, in addition to the payment of his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled, he would have been entitled to the following severance and benefits, subject to his execution of a release of claims against us: (1) a lump sum cash payment equal to his base salary through the last day of the term of the agreement; (2) a lump sum cash payment equal to his target annual bonus (if such termination occurred prior to December 31, 2019; (3) the continuation of his health and dental coverage pursuant to COBRA at our expense through the last day of the term of the agreement; and (4) full acceleration of his outstanding equity awards. His benefits upon a termination for death or disability during the term of the amended employment agreement were the same as those under his original employment agreement described above.
Interaction of Employment Agreement with Non-Employee Director Compensation Policy
Following his appointment as interim Chief Executive Officer in May 2018, Mr. Sims was generally not entitled to any additional fees or other compensation for serving as a member of the board. Commencing February 1, 2020, Mr. Sims again became eligible to receive equity grants in accordance with our non-employee director compensation policy. After the end of his employment term on February 9, 2020, subject to his remaining as a member of our board of directors, Mr. Simswill receive a cash retainer for his service as the non-employee chairman of the board of directors for the remainder of 2020, based on an annualized rate of $240,000 per year. His annual cash retainer thereafter will be determined in accordance with our non-employee director compensation policy.
Mr. Sims was not present for the deliberations or decision by our board of directors when it approved his compensation arrangements.arrangements during his service as Executive Chairman, Chief Executive Officer, or Advisor to the Chief Executive Officer.
Employment Agreements with Mr. Suen, Mr. Doradla,Thill, and Mr. ThillDoradla
Effective January 16, 2019, we entered into amended and restated employment agreements with each of Jacob Suen, our President, Anil Doradla, our Chief Financial Officer and Secretary, and Kevin Thill, our Senior Vice President, Engineering. Mr. Doradla resigned effective November 30, 2019. Mr. Suen's agreement was amended in connection with his promotion to Chief Executive Officer in August 2019 to reflect his increased base salary, as described above. In addition, we further amended the employment agreements with Mr. Suen and Mr. Thill in April 2020 to increase the severance payable in the event of a termination without cause (as defined below) or a resignation for good reason (as defined below), other than in connection with a change in control, from 6 months to 12 months, as described below.
The amended and restated employment agreements provide for an indefinite term and for at-will employment. The agreements also set forth each executive's annual base salary and target bonus opportunity and provide that each executive will be entitled to the benefits provided to employees generally.
Pursuant to the amended and restated employment agreements, if we terminate an executive's employment without cause (as defined below) or he resigns for good reason (as defined below), he is entitled to the following payments and benefits: (1) his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled; (2) a lump sum cash payment in an amount equal to 612 months of his base salary as in effect immediately prior to the date of termination plus an amount equal to his target bonus for the calendar year during which his date of termination occurs, prorated for such portion of the calendar year during which such termination occurs that has elapsed through the date of termination; and (3) continuation of health benefits at our expense for a period of 6 months following the date of termination. Prior to the amendment and restatement of his employment agreement, Mr. Suen was entitled to three months' severance in the event of such a termination and no prorated target bonus. Prior to the amendment and restatement of their employment agreements, Mr. Doradla and Mr. Thill were not entitled to a prorated target bonus in the event of such a termination.
In the event an executive's termination without cause or resignation for good reason occurs within 12 months following a change in control, he is entitled to the following payments and benefits: (1) his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled; (2) a lump sum cash payment in an amount equal to 12 months of his base salary as in effect immediately prior to the date of termination; (3) a lump sum cash payment in an amount equal to his target bonus for the year in which the termination of his employment occurs; and (4) continuation of health benefits at our expense for a period of 18 months following the date of termination. All of an executive's outstanding equity awards will become fully vested and exercisable in the event of a termination without cause or resignation for good reason at any time following a change in control. Prior to the amendment and restatement of his employment agreement, Mr. Suen was entitled to 6 months' severance, 50% of his target bonus and continuation of health benefits at our expense for a period of 12 months in the event of such a termination and no prorated target bonus.
If an executive's employment is terminated as a result of his death or following his permanent disability, he or his estate, as applicable, is entitled to the following payments and benefits: (1) his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled; and (2) a lump sum cash payment in an amount equal to his “earned” bonus for the calendar year during which his date of termination occurs calculated as of the date of termination (wherein “earned” means that he has met the applicable bonus metrics as of date of such termination, as determined by the board of directors), prorated for such portion of the calendar year during which such termination occurs that has elapsed through the date of termination.
Mr. Suen is not present for the deliberations or decision by our board of directors when it approves his compensation arrangements.
Defined Terms Applicable to Executive Employment Agreements
For purposes of the executive employment agreements, “cause” generally means an executive officer’s (1) material breach of his employment agreement, his confidentiality and inventions assignment agreement or the definitive agreements relating to his stock option awards; (2) continued substantial and material failure or refusal to perform according to, or to comply with, the policies, procedures or practices established by us; (3) appropriation (or attempted appropriation) of a material business opportunity of the company, including attempting to secure or securing any personal profit in connection with any transaction entered into on our behalf; (4) misappropriation (or attempted appropriation) of any of our funds or property of any kind; (5) willful gross misconduct; or (6) conviction of a felony involving moral turpitude that is likely to inflict or has inflicted material injury on our business; provided, however, that except for Cause being the result of item (6) above, we will provide written notice to the executive officer, which notice specifically identifies the nature of the alleged cause claimed by us with enough specificity for the executive officer to be able to cure, and the executive officer will have 15 days to cure the purported ground(s) for cause.
For purposes of the executive employment agreements, “good reason” generally means (1) a material reduction in the executive officer’s authority, duties or responsibilities relative to the executive officer’s authority, duties or responsibilities in effect immediately prior to such reduction; as set forth in his employment agreement (provided that for Mr. Sims, his cessation of service as Chief Executive Officer will not constitute good reason if he continues in the role of Executive Chairman);agreement; (2) a material reduction in the executive officer’s annual base salary; (3) other
than for Mr. Sims, a relocation of the executive officer’s or our principal executive offices to a location outside of San Diego County, if the executive officer’s principal office is at such offices;by more than 25 miles, or (4) any material breach by us or any successor or affiliate of obligations to the executive officer under the employment agreement.
For purposes of the employment agreements, “change in control” generally means (1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (other than us, any of our subsidiaries, or any existing stockholder) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of our securities representing 50% or more of the total voting power represented by our then outstanding voting securities, (2) during any period of two consecutive years, individuals who, at the beginning of such period, constitute our board together with any new directors whose election by the board or nomination for election was approved by aa vote of at least 2/3 of the then-current board members who were directors at the beginning of the period or whose election or appointment was so approved, cease for any reason to constitute a majority of the board of directors, or (3) the consummation of the sale liquidation or disposition by us of all or substantially all of our assets, or (3) the consummation of a merger, consolidation, reorganization business combination, or other similar transaction involving us,acquisition of assets or stock of another entity, in each case in which our voting securities outstanding immediately prior thereto do not continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50%a majority of the combined voting power represented by our voting securities orof such surviving entity or its parent outstanding immediately after such transaction.transaction and no “person” owns 50% or more of the surviving entity or its parent.
Separation Arrangements
Consulting Agreement with Mr. MyersDoradla
On May 2, 2018, Charles Myers, former
Following his resignation in November 2019, Mr. Doradla entered into a consulting agreement with us pursuant to which he agreed to provide transition services to us through February 2020. Mr. Doradla received a monthly retainer of $5,000 for such service, and his outstanding stock options continued to vest during the term of his consulting services (with the exception of his August 2019 stock option award, which was forfeited as he was unable to meet the initial vesting requirement). His unvested restricted stock units, however, were forfeited upon his resignation of employment.
Annual Base Salary
In general, base salaries for our named executive officers are initially established through arm’s length negotiation at the time the executive is hired, taking into account such executive’s qualifications, experience and prior salary. Base salaries of our named executive officers are approved and reviewed annually by our compensation committee or board of directors and adjustments to base salaries are based on the scope of an executive’s responsibilities, individual contribution, prior experience and sustained performance. Decisions regarding salary increases may take into account an executive officer’s current salary, equity ownership, and the amounts paid to an executive officer’s peers inside our company by conducting an internal analysis, which compares the pay of an executive officer to
other members of the management team. Base salaries are also reviewed in the case of promotions or other significant changes in responsibility. Base salaries are not automatically increased if the compensation committee or the board of directors believes that other elements of the named executive officer’s compensation are more appropriate in light of our stated objectives. This strategy is consistent with our intent of offering compensation that is cost-effective, competitive and contingent on the achievement of performance objectives.
Mr. Sims was compensated at the annual rate of $400,000 for his service during 2019 in the various capacities described above. Mr. Suen's annual base salary for 2019 was $310,000. In connection with appointment as Chief Executive Officer President and member ofin August 2019, our board of directors resignedincreased Mr. Suen's annual salary to $400,000. Mr. Thill's annual base salary was increased from all positions with us,$230,000 to $275,000 effective immediately, to pursue other opportunities. In connection with his resignation, Mr. Myers received the following severance benefits pursuant to a general release of claims as set forth in his employment agreement: a lump sum cash payment in the amount of $484,000; the reimbursement of business expenses in accordance with our policies; the acceleration of all of his unvested options exercisable for a total of 282,944 shares; a lump sum payment of twelve months of monthly premiums for disability insurance under our disability insurance plan; a cash payment in the amount of $20,000, in lieu of provision of certain other employment benefits; and the continuation of his health coverage pursuant to COBRA at our expense for a period of twelve months following his last day of employment. In addition, all of Mr. Myers' outstanding stock options vestedJanuary 1, 2019 in connection with his termination of employment.
Transition Agreement withpromotion to Senior Vice President, Engineering. Mr. Johnson
Effective February 5, 2018, the board of directors appointed Mr. Doradla as our Chief Financial Officer. Mr. Johnson, our previous Chief Financial Officer, continued to serve as our principal financial and accounting officer for our public filings with the SEC until March 15, 2018, and he continues to serve as an employee in a non-executive role. Effective with his transition to a non-executive role in March 2018, hisDoradla's annual base salary for 2019 was reduced to $75,000.$325,000.
In March 2018, we entered into an employment transition agreement with Mr. Johnson. Pursuant to the transition agreement, Mr. Johnson will remain employed by us in a non-executive role through September 20, 2019. His base salary will remain at $75,000 and he will not be eligible for an annual bonus. Pursuant to the transition agreement, if Mr. Johnson’s employment is terminated for any reason other than his voluntary resignation, he is entitled to the following payments and benefits, subject to his execution of a general release of claims: (1) his fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he is entitled; (2) a lump sum cash payment in an amount equal to the base salary he would have received had he remained employed through September 30, 2019; (3) continuation of health benefits at our expense through September 30, 2019; and (4) accelerated vesting of all of his outstanding stock options.
Annual Cash Bonus
For 2018, Mr. Sims, Mr. Suen and Mr. Doradla were eligible for target bonuses equal to 90%, 90% and 60% of their respective base salaries. The executives’ bonuses for 2018 were determined in the discretion of our board of directors based on its subjective assessment of both our corporate performance and their individual performance. Based on this assessment, our board of directors determined to award our named executive officers the following 2018 bonuses: Mr. Sims, $437,404; Mr. Suen, $334,800; and Mr. Doradla, $234,000.
The compensation committee has also adopted a 2019 annual bonus program for our named executive officers. Pursuant to his employment agreement, Mr. Sims’ annual bonus was in the discretion of the board of directors, although he had a target bonus equal to 90% of his base salary. The target bonus as a percentage of annual base salary was 90% for Mr. Suen and 60% for each of Messrs. Thill and Doradla. Mr. Doradla was not eligible for a 2019 annual bonus as a result of his resignation in November 2019.
Under the 2019 annual bonus program 90% of aneach executive’s annual bonus will bewas tied to corporate revenue and (weighted at 40%) and adjusted EBITDA performance (weighted at 50%), with “threshold,” “target” and “maximum” performance levels corresponding to the payout levels for the corporate
component of each executive’s target annual bonus payout (with target performance representing a 100% payout level for each financial measure and maximum or greater performance representing a 150% payout level for each financial measure). The other 10% of an executive’s annual bonus will continuewas to be determined in the discretion of the board of directors or the compensation committee based on the executive’s individual performance and such other factors as the board of directors or the compensation committee deems appropriate, with a maximum payout level of 150%. Pursuant
Our compensation committee and board of directors, determined that, based on our sales and adjusted EBITDA performance for 2019, our executive annual bonuses would be paid at 68% of target based on our sales of $55.739 million and our adjusted EBITDA of $3.732 million for 2019. Adjusted EBITDA is a non-GAAP measure that our compensation committee and board of directors determined to his employment agreement, Mr. Sims'use in connection with the annual bonus remainsprogram because, by excluding certain non-cash expense, adjusted EBITDA allows for meaningful comparisons between our core business operating results and those of other companies, as well as providing us with an important tool for financial and operational decision making and for evaluating our own core business operating results over different periods of time. Management considers these types of expenses and adjustments, to a great extent, to be unpredictable and dependent on a significant number of factors that are outside of our control and are not necessarily reflective of operational performance during a period. For purposes of our 2019 annual bonus program, adjusted EBITDA represents our earnings before interest, taxes, depreciation, amortization, and also excluding stock-based compensation expense, which represents non-cash charges for the fair value of stock awards, and includes other income, which includes interest income and gain on deferred purchase price liability offset by interest expense. Based on this assessment our board of directors determined to award our named executive officers the following 2019 bonuses: Mr. Sims, $244,800; Mr. Suen, $212,670; and Mr. Thill, $112,200. Although Mr. Sims’ annual bonus was in the discretion of the board of directors, although he has a targethis annual bonus equal to 90% of his base salary.payout was determined based on the same percentage payout as our other executives for 2019.
Equity Compensation
We primarily offer stock options to our named executive officers as the long-term incentive component of our compensation program. Our stock options allow employees to purchase shares of our common stock at a price per share equal to the fair market value of our common stock on the date of grant and may or may not be intended to qualify as “incentive stock options” for U.S. federal income tax purposes. Generally, the stock options we grant vest over four years, subject to the employee’s continued employment with us on the vesting date. We also, when appropriate, grant restricted stock or restricted stock units to our executives.executives, as we did in 2019.
Our board of directors has adopted, and our stockholders have approved, the 2016 Plan, in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants
of our company and certain of its affiliates and to enable our company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success.
In
On January 2018, each of16, 2019, Mr. MyersSims, Mr. Suen, Mr. Thill, and Mr. SuenDoradla received stock option awardsoptions to purchase 175,00050,000 shares, 87,500 shares, 25,000 shares and 45,00037,500 shares, respectively. The options were granted with an exercise price per share equal to the closing stock price on the grant date. The options have a term of ten years from the date of grant. The stock options vest over four years, with 25% of the shares subject to the option vesting on the first anniversary of the date of grantJanuary 1, 2020, and the remainder vesting in equal monthly installments over a period of three years thereafter, subject to their continued employment or service with us on each vesting date.
On January 16, 2019, Mr. Sims, Mr. Suen, Mr. Thill, and Mr. Doradla received 20,326 restricted stock units, 35,570 restricted stock units, 10,163 restricted stock units, and 15,244 restricted stock units, respectively, which awards vest in four equal installments beginning on March 1, 2020, and each of the following three years, subject to continued employment with us on each vesting date. The options granted to Mr. Myers were eligible to vest on an accelerated basis in the event of a change in control (as defined in his employment agreement), or in the event of Mr. Myers’ termination of employment by us without cause (as defined in his employment agreement), his resignation for good reason (as defined in his employment agreement), his death or his termination of employment by reason of his disability (as defined in his employment agreement). Mr. Myers' options were accelerated pursuant to his employment agreement
On August 12, 2019, in connection with his resignation in May 2018.
In February 2018, in connection with his commencement of employment,appointment as Chief Executive Officer, Mr. Suen was granted stock options to purchase 250,000 shares. On that same date Mr. Doradla received awas granted stock option awardoptions to purchase 50,000100,000 shares. The options were granted with an exercise price per share equal to the closing stock price on the grant date. The options have a term of ten years from the date of grant. The stockIn each case the options vest over four years, with 25% of the shares subject to the option vesting on the first anniversary of the date of grantAugust 8, 2020, and the remainder vesting in equal monthly installments over a period of three years thereafter, subject to his continued employment or service with us on each vesting date.
On May 8, 2018, in connection with his appointment as interim Chief Executive Officer, Mr. Sims was granted stock options to purchase 175,000 shares of our common stock, which will vest in equal quarterly installments over the two years following his commencement of service as interim Chief Executive Officer, subject to his continued service in that role or as a member of our board of directors on each vesting date. The stock options will also vest in full upon a change in control or in the event of Mr. Sims' termination without cause or resignation for good reason prior to February 16, 2021.
On May 16, 2018, each of Mr. Suen and Mr. Doradla received stock option awards to purchase 25,000 shares of our common stock, which will vest in equal quarterly installments over the two years following his commencement of service as interim Chief Executive Officer, subject to his continued service in that role or as a member of our board of directors on each vesting date. The stock options will also vest in full upon a change in control.
The options granted to each of Messrs. Suen and Doradla Thill will vest on an accelerated basis in the event of their termination of employment by us without cause (as defined in their employment agreements) or their resignation for good reason, (as defined in their employment agreements), in each case following a change in control.
Stock awards granted to our named executive officers may be subject to accelerated vesting in certain circumstances. For additional discussion, see “-Change in Control Benefits” below“—Employment and “Outstanding Equity Awards at the End of 2018” below.Consulting Agreements” above.
Other Elements of Compensation
Retirement Plans
We currently maintain a 401(k) retirement savings plan that allows eligible employees to defer a portion of their compensation, within limits prescribed by the Internal Revenue Code, or the Code, on a pre-tax basis through contributions to the plan. Our named executive officers are eligible to participate in the 401(k) plan. We may make discretionary matching contributions under the 401(k) plan, but we have not done so to date. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our named executive officers in accordance with our compensation policies.
Employee Benefits and Perquisites
Our named executive officers are eligible to participate in our health and welfare plans. In addition pursuant to his employment agreement, Mr. Myers was entitled to receive the following additional benefits with an aggregate annual cost not to exceed $20,000: (1) annual executive medical program; (2) health club dues/personal trainer; and (3) reimbursement of monthly vehicle payment, plus the costs of maintenance and operation of such vehicle. Mr. Sims, who doesdid not participate in the company's healthcare plans isduring his service as interim Chief Executive Officer, Chief Executive Officer, and Advisor to the Chief Executive Officer, was provided with a monthly reimbursement of his healthcare premiums under his individually obtained health coverage. We do not provide our named executive officers with any other significant perquisites or other personal benefits.
Termination or Change in Control Benefits
Our named executive officers may become entitled to certain benefits or enhanced benefits in connection with a change in controlcertain terminations of our company. Each of our named executive officers’ employment agreements entitles them to accelerated vesting of all outstanding equity awards, as well as certain other benefits, uponor a change in control of our company. For additional discussion, please see “—Narrative Disclosure to Summary Compensation Table”Employment and Consulting Agreements” above.
Outstanding Equity Awards at the End of 20182019
The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2018.
2019:
|
|
|
| Option Awards |
|
|
| Option Awards |
| Stock Awards |
| |||||||||||||||||||||||||||||
Name |
| Grant Date |
| Number of Securities Underlying Unexercised Options Exercisable (1) |
|
| Number of Securities Underlying Unexercised Options Unexercisable (1) |
|
| Option Exercise Price ($) |
|
| Option Expiration Date |
| Grant date |
| Number of securities underlying unexercised options exercisable(1) |
|
| Number of securities underlying unexercised options unexercisable(1) |
|
| Option exercise price |
|
| Expiration date |
| Number of shares or units of stock that have not vested(2) |
|
| Market value of shares or units of stock that have not vested(3) |
| ||||||||
James K. Sims |
| 3/17/2009 |
|
| 4,000 |
| (3) |
| — |
|
|
| 2.60 |
|
| 3/16/2019 |
| 1/19/2011 |
|
| 4,000 |
| (4) |
|
|
|
| $ | 2.60 |
|
| 1/18/2021 |
|
|
|
|
| $ — |
| |
|
| 12/3/2009 |
|
| 4,000 |
| (3) |
| — |
|
|
| 2.60 |
|
| 12/2/2019 |
| 6/12/2013 |
|
| 8,000 |
| (4) |
|
|
|
|
| 2.30 |
|
| 6/12/2023 |
|
|
|
|
|
|
|
|
|
| 1/19/2011 |
|
| 4,000 |
| (3) |
| — |
|
|
| 2.60 |
|
| 1/18/2021 |
| 5/13/2014 |
|
| 4,000 |
| (4) |
|
|
|
|
| 3.10 |
|
| 5/12/2024 |
|
|
|
|
|
|
|
|
|
| 6/12/2013 |
|
| 8,000 |
| (3) |
| — |
|
|
| 2.30 |
|
| 6/11/2023 |
| 6/11/2015 |
|
| 32,370 |
| (4) |
|
|
|
|
| 1.60 |
|
| 6/11/2025 |
|
|
|
|
|
|
|
|
|
| 5/13/2014 |
|
| 4,000 |
| (3) |
| — |
|
|
| 3.10 |
|
| 5/12/2024 |
| 5/24/2016 |
|
| 9,510 |
| (4) |
|
|
|
|
| 1.90 |
|
| 5/23/2026 |
|
|
|
|
|
|
|
|
|
| 6/11/2015 |
|
| 32,370 |
| (3) |
| — |
|
|
| 1.60 |
|
| 6/10/2025 |
| 6/15/2017 |
|
| 7,500 |
| (4) |
|
|
|
|
| 14.09 |
|
| 6/14/2027 |
|
|
|
|
|
|
|
|
|
| 5/24/2016 |
|
| 9,510 |
| (3) |
| — |
|
|
| 1.90 |
|
| 5/23/2026 |
| 1/19/2018 |
|
| 22,500 |
| (4) |
|
|
|
|
| 10.94 |
|
| 1/19/2028 |
|
|
|
|
|
|
|
|
|
| 6/15/2017 |
|
| 7,500 |
| (3) |
| — |
|
|
| 14.09 |
|
| 6/14/2027 |
| 5/8/2018 |
|
| 131,250 |
| (5) |
| 43,750 |
|
|
| 8.15 |
|
| 5/8/2028 |
|
|
|
|
|
|
|
|
|
| 1/19/2018 |
|
| — |
|
|
| 22,500 |
| (3) |
| 10.94 |
|
| 1/18/2028 |
| 1/16/2019 |
|
|
|
|
|
| 50,000 |
|
|
| 11.46 |
|
| 1/16/2029 |
|
|
|
|
|
|
|
|
|
| 5/8/2018 |
|
| 43,750 |
| (2) |
| 131,250 |
|
|
| 8.15 |
|
| 5/7/2028 |
| 1/16/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
| 1/16/2029 |
|
| 20,326 |
|
|
| 217,285 |
|
Jacob Suen |
| 1/22/2014 |
|
| 4,200 |
|
|
| — |
|
|
| 2.20 |
|
| 1/21/2024 |
| 1/22/2014 |
|
| 4,200 |
|
|
|
|
|
|
| 2.20 |
|
| 1/21/2024 |
|
|
|
|
|
|
|
|
|
| 3/18/2015 |
|
| 14,062 |
|
|
| 938 |
|
|
| 2.00 |
|
| 3/17/2025 |
| 3/18/2015 |
|
| 12,102 |
|
|
|
|
|
|
| 2.00 |
|
| 3/18/2025 |
|
|
|
|
|
|
|
|
|
| 5/24/2016 |
|
| 10,123 |
|
|
| 5,552 |
|
|
| 1.90 |
|
| 5/23/2026 |
| 5/24/2016 |
|
| 2,940 |
|
|
| 1,633 |
|
|
| 1.90 |
|
| 5/23/2026 |
|
|
|
|
|
|
|
|
|
| 4/25/2017 |
|
| 5,565 |
|
|
| 14,299 |
|
|
| 15.20 |
|
| 4/24/2027 |
| 4/25/2017 |
|
| 11,530 |
|
|
| 8,334 |
|
|
| 15.20 |
|
| 4/24/2027 |
|
|
|
|
|
|
|
|
|
| 4/25/2017 |
|
| 4,851 |
|
|
| 285 |
|
|
| 15.20 |
|
| 4/24/2027 |
| 4/25/2017 |
|
| 5,136 |
|
|
|
|
|
|
| 15.20 |
|
| 4/24/2027 |
|
|
|
|
|
|
|
|
|
| 1/19/2018 |
|
| — |
|
|
| 45,000 |
|
|
| 10.94 |
|
| 1/18/2028 |
| 1/19/2018 |
|
| 21,562 |
|
|
| 23,438 |
|
|
| 10.94 |
|
| 1/19/2028 |
|
|
|
|
|
|
|
|
|
| 5/16/2018 |
|
| — |
|
|
| 25,000 |
|
|
| 8.17 |
|
| 5/15/2028 |
| 5/16/2018 |
|
| 9,895 |
|
|
| 15,105 |
|
|
| 8.17 |
|
| 5/16/2028 |
|
|
|
|
|
|
|
|
Anil Doradla |
| 2/5/2018 |
|
| — |
|
|
| 50,000 |
|
|
| 9.11 |
|
| 2/4/2028 | ||||||||||||||||||||||||
|
| 5/16/2018 |
|
| — |
|
|
| 25,000 |
|
|
| 8.17 |
|
| 5/15/2028 |
| 1/16/2019 |
|
|
|
|
|
| 87,500 |
|
|
| 11.46 |
|
| 1/16/2029 |
|
|
|
|
|
|
|
|
|
| 1/16/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
| 1/16/2029 |
|
| 35,570 |
|
|
| 380,243 |
| ||||||||||||||||
|
| 8/12/2019 |
|
|
|
|
|
| 250,000 |
| (4) |
| 12.07 |
|
| 8/12/2029 |
|
|
|
|
|
|
|
| ||||||||||||||||
Kevin M. Thill |
| 5/1/2017 |
|
| 6,600 |
|
|
| 3,400 |
|
|
| 14.89 |
|
| 5/1/2027 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 7/19/2017 |
|
| 2,970 |
|
|
| 1,530 |
|
|
| 13.43 |
|
| 7/19/2027 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 7/19/2017 |
|
| 14,190 |
|
|
| 7,310 |
|
|
| 13.43 |
|
| 7/19/2027 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 1/19/2018 |
|
| 9,583 |
|
|
| 10,417 |
|
|
| 10.94 |
|
| 1/19/2028 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 5/16/2018 |
|
| 50,000 |
|
|
| 25,000 |
|
|
| 8.17 |
|
| 5/16/2028 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 1/16/2019 |
|
|
|
|
|
| 25,000 |
|
|
| 11.46 |
|
| 1/16/2029 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 1/16/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
| 1/16/2029 |
|
| 10,163 |
|
|
| 108,642 |
| ||||||||||||||||
Anil K. Doradla |
| 2/5/2018 |
|
| 22,916 |
|
|
| 27,084 |
|
|
| 9.11 |
|
| 5/29/2020 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 5/16/2018 |
|
| 9,895 |
|
|
| 15,105 |
|
|
| 8.17 |
|
| 5/29/2020 |
|
|
|
|
|
|
|
| ||||||||||||||||
|
| 1/16/2019 |
|
|
|
|
|
| 37,500 |
|
|
| 11.46 |
|
|
|
|
|
|
|
|
|
|
|
(1) | Except as specified below, all options have a term of ten years from the date of grant and vest over four years, with 25% of the shares underlying the options vesting on the first anniversary of the vesting commencement date |
The options granted to each of Messrs. Suen and Doradla are also eligible to vest on an accelerated basis in the event of his termination of employment by us without cause (as defined in the executive’s employment agreement) or his resignation for good reason (as defined in the executive’s employment agreement), in each case following a change in control.
(2) | All restricted stock unit awards vest in four equal installments on March 1 of the first four years following the date of grant, subject to the holder’s continuous employment or service. The award granted to Mr. Sims will vest in full upon a change in control. The awards granted to Messrs. Suen and Thill are also eligible to vest on an accelerated basis as provided in their employment agreements described above. |
(3) | Market value is calculated based on the closing price of our common stock of $10.69 per share on December 31, 2019, times the number of shares subject to the restricted stock unit award. |
(4) | Represents stock options granted to Mr. Sims in his capacity as a non-employee director prior to his appointment as interim Chief Executive Officer on May 8, 2018. These stock options vested on the first anniversary of the date of grant and, consistent with all awards granted to our non-employee directors. |
(5) | Represents stock options granted to Mr. Sims upon his appointment as interim Chief Executive |
|
|
Equity Compensation Plan Information
The following table provides information on our equity compensation plans as of December 31, 2018.
As of December 31, 2018,2019, we had four equity compensation plans in place under which equity awards were outstanding or shares of our common stock were authorized for issuance detailed as follows:
Plan Category |
| Number of securities to be issued upon exercise of outstanding options, warrants, and rights |
|
|
| Weighted-average exercise price of outstanding options, warrants and rights |
|
|
| Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) |
|
| |||
|
| (a) |
|
|
| (b) |
|
|
| (c) |
|
| |||
Equity compensation plans approved by security holders |
|
| 1,407,049 |
| (1) |
| $ | 8.73 |
| (2) |
|
| 563,491 |
| (3) |
Equity compensation plans not approved by security holders |
|
| — |
|
|
| $ | — |
|
|
|
| — |
|
|
| Number of securities to be issued upon exercise of outstanding options, warrants, and rights |
| Weighted-average exercise price of outstanding options, warrants and rights |
| Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||
|
| (a) |
|
|
| (b) |
|
|
| (c) |
|
| |||
Equity compensation plans approved by security holders |
|
| 1,600,272 |
| (1) |
| $ | 9.98 |
| (2) |
|
| 586,874 |
| (3) |
Equity compensation plans not approved by security holders |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
| (1) | Includes |
| (2) | Represents the weighted-average exercise price of outstanding options. |
| (3) | Includes |
Additional Narrative Disclosure
For a description of the material terms of our retirement plans and the change-in-control and severance provisions of the employment agreements with our named executive officers, please see above under “Narrative Disclosure to Summary Compensation Table.”
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
We describe below the transactions and series of similar transactions, since January 1, 2018,2019, to which we were a party or will be a party, in which the amounts involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock holders or any member of their immediate family had or will have a direct or indirect material interest.
Investors’ Rights Agreement
We entered into a fourth amended and restated investors’ rights agreement in May 2008 with the holders of our preferred stock, including entities with which certain of our directors are affiliated. This agreement providesprovided for certain registration rights that will terminate three years following the closing of our initial public offering, orand terminated on August 17, 2019, or for any particular holder with registration rights, at such time following this offering when such holder may sell all of such shares pursuant to Rule 144(b)(1) under the Securities Act of 1933, as amended, or the Securities Act.2019.
Director and Executive Officer Compensation
Please see “Proposal 1—Director Compensation” for additional information regarding compensation of our directors. Please see “Executive Compensation and Other Information” for additional information regarding compensation of our executive officers.
Employment Agreements
We have entered into employment agreements with our executive officers. For more information regarding these agreements, see “Executive Compensation and Other Information—Narrative Disclosure to Summary Compensation Table.”
Indemnification
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law. Further, we have entered into indemnification agreements with each of our directors and officers, and we have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.
Stock OptionAward Grants to Executive Officers and Directors
We have granted stock optionsawards to our executive officers and certain of our directors as more fully described in the section entitled “Executive Compensation and Other Information” and “Proposal 1—Director Compensation.”
Policies and Procedures Regarding Related Party Transactions
Our board of directors has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related-person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction. All of the transactions described in this section occurred prior to the adoption of this policy.
DELINQUENT SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
Under Section 16(a) of the Exchange Act, directors, executive officers and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that we have received, or written representations from reporting persons, we believe that during the fiscal year ended December 31, 2018,2019, all executive officers, directors and greater than 10% stockholders complied with all applicable filing requirements, other than a late Form 4 filed on February 12, 2018 by Anil Doradla and a late Form 4 filed on January 24, 2019 by each of GEN3 Capital Partners, LLC, GEN3 Capital I, LP and Gen 3 Partners, Inc. and a late Form 4 filed on July 17, 2019 by James K. Sims.
Proposals of stockholders intended to be presented at our annual meeting of stockholders to be held in 2020,2021, including nominations of any person for election to our board of directors, must be received by us no later than January 17, 2019,22, 2021, which is 120 days prior to the one-year anniversary of the mailing date of the proxy statement for the 20192020 annual meeting, in order to be included in our proxy statement and form of proxy card relating to that meeting, unless the date of the 20202021 annual meeting of stockholders is changed by more than 30 days from the anniversary of our 20192020 annual meeting, in which case the deadline for such proposals will be a reasonable time before we begin to print and send our proxy materials. These proposals must comply with the requirements as to form and substance established by the SEC in Rule 14a-8 of the Exchange Act for such proposals in order to be included in the proxy statement.
In addition, our amended and restated bylaws establish an advance notice procedure with regard to certain matters, including stockholder proposals and nominations of any person for election to our board of directors not included in our proxy statement, to be brought before an annual meeting of stockholders. In general, notice that meets the requirements set forth in our amended and restated bylaws must be received at our principal executive offices not less than 90 calendar days before nor more than 120 calendar days prior to the first anniversary of the preceding year’s annual meeting. Therefore, to be presented at our 20202021 annual meeting of stockholders, such a proposal must
be received by us no earlier than February 28, 201925, 2021, and no later than March 29, 2019.27, 2021. However, if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be received not earlier than the close of business on the 120th day prior to such annual meeting and not later than the 90th calendarlater of the close of business on the 90th day prior to such annual meeting and the close of business on the tenth calendar day following the day on which public disclosure of the date of such annual meeting was first made. If the stockholder fails to give notice by these dates, then the persons named as proxies in the proxies solicited by the board of directors for the 2020 annual meeting may exercise discretionary voting power regarding any such proposal. Stockholders are advised to review our amended and restated bylaws which also specify requirements as to the form and content of a stockholder’s notice.
Our Annual Report on Form 10-K for the year ended December 31, 20182019, will be mailed to stockholders of record on or about May 16, 2018.22, 2020. Our Annual Report on Form 10-K does not constitute, and should not be considered, a part of this proxy solicitation material.
Any person who was a beneficial owner of our common stock on the record date may request a copy of our Annual Report on Form 10-K for the year ended December 31, 2018,2019, and it will be furnished without charge upon receipt of a written request identifying the person so requesting a report as a stockholder of our company at such date. Requests should be directed to Airgain, Inc., 3611 Valley Centre Drive, Suite 150, San Diego, CA 92130, Attention: Corporate Secretary.
STOCKHOLDERS SHARING THE SAME ADDRESS
The rules promulgated by the SEC permit companies, brokers, banks, or other intermediaries to deliver a single copy of a proxy statement and annual report to households at which two or more stockholders reside. This practice, known as “householding,” is designed to reduce duplicate mailings and save significant printing and postage costs as well as natural resources. Stockholders sharing an address who have been previously notified by their broker, bank, or other intermediary and have consented to householding will receive only one copy of our proxy statement and annual report. If you would like to opt out of this practice for future mailings and receive separate proxy statements and annual reports for each stockholder sharing the same address, please contact your broker, bank, or other intermediary. You may also obtain a separate proxy statement or annual report without charge by sending a written request to Airgain, Inc., 3611 Valley Centre Drive, Suite 150, San Diego, CA 92130, Attention: Corporate Secretary or by calling (760) 579-0200. We will promptly send additional copies of the proxy statement or annual report upon receipt of such request. Stockholders sharing an address that are receiving multiple copies of the proxy statement or annual report can request delivery of a single copy of the proxy statement or annual report by contacting their broker, bank, or other intermediary or sending a written request to Airgain, Inc. at the address above or by calling (760) 579-0200.
We do not know of any business other than that described in this proxy statement that will be presented for consideration or action by the stockholders at the annual meeting. If, however, any other business is properly brought before the meeting, shares represented by proxies will be voted in accordance with the best judgment of the persons named in the proxies or their substitutes. All stockholders are urged to complete, sign and return the accompanying proxy card in the enclosed envelope.
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| By Order of the Board of Directors, |
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| /s/ James K. Sims |
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| James K. Sims |
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San Diego, California
May 6, 2019April 29, 2020
PROXY TABULATORANNUAL MEETING OF AIRGAIN, INC. Annual Meeting of Airgain, Inc. to be held on Thursday, June 25, 2020 for Holders as of April 27, 2020 This proxy is being solicited on behalf of the Board of Directors Date: June 25, 2020 Time: 9:00 A.M. (Pacific Time) Place: Annual Meeting to be held live via the Internet - please visit www.proxydocs.com/AIRG for more details Please separate carefully at the perforation and return just this portion in the envelope provided. VOTE BY: Please make your marks like this: Use dark black pencil or pen only INTERNET TELEPHONE Call Board of Directors Recommends a Vote FOR Airgain, INC. P.O. BOX 8016 CARY, NC 27512-9903the director nominees listed in proposal 1 and FOR proposal 2. Go To www.proxypush.com/AIRG • Cast your vote online. • View Meeting Documents. 866-829-5171 • Use any touch-tone telephone. • Have your Proxy Card/Voting Instruction Form ready. • Follow the simple recorded instructions. OR 1: Election of Class I Directors Directors Recommend Withhold For MAIL James K. Sims Tzau-Jin Chung For For • Mark, sign and date your Proxy Card/Voting Instruction Form. • Detach your Proxy Card/Voting Instruction Form. • Return your Proxy Card/Voting Instruction Form in the postage-paid envelope provided. OR For Against Abstain 2: The ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020. For The undersigned hereby appoints James K. Sims and Anil Doradla,David B. Lyle, and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Airgain, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED “FOR” THE ELECTION OF THE DIRECTORDIRECTORS IN PROPOSAL 1 AND “FOR” PROPOSAL 2. IF ANY OTHER BUSINESS IS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF, THIS PROXY CONFERS AUTHORITY TO AND WILL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES. MAIL OR • Mark, sign and date your Proxy Card/Voting Instruction Form. • Detach your Proxy Card/Voting Instruction Form. • Return your Proxy Card/Voting Instruction Form inPROXY TABULATOR FOR AIRGAIN, INC. P.O. BOX 8016 CARY, NC 27512-9903 To attend the postage-paid envelope provided. OR Go To www.proxypush.com/AIRG • Cast your vote online. • View Meeting Documents. • Use any touch-tone telephone. • Have your Proxy Card/Voting Instruction Form ready. • Follow the simple recorded instructions. 866-829-5171 INTERNET TELEPHONE VOTE BY: Annual Meeting of Airgain, Inc. online and/or vote your shares during the Annual Meeting online, please visit www.proxydocs.com/AIRG for virtual meeting registration details. Authorized Signature(s) - This section must be completed for your instructions to be held on Thursday, June 27, 2019 for Holders as of April 29, 2019 This proxy is being solicited on behalf of the Board of Directors Please separate carefully at the perforation and return just this portion in the envelope provided. Date: June 27, 2019 Time: 9:00 A.M. (Local Time) Place: Offices of Latham and Watkins LLP, 12670 High Bluff Drive, San Diego, CA. 92130 Annual Meeting of AIRGAIN, INC.executed. Please Sign Here Please Date Above Please Sign Here Please Date Above Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy. Authorized Signature(s) - This section must be completed for your instructions to be executed. 2: The ratification of the selection of KPMG LLP For as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019. For For Against Abstain Directors Recommend Withhold Please make your marks like this: Use dark black pencil or pen only Thomas A. Munro Board of Directors Recommends a Vote FOR the director nominee listed in proposal 1 and FOR proposal 2. 1: Election of Class III Director For Call
To attend the meeting and vote your shares in person, please mark this box. Proxy — Airgain, inc.Inc. Annual Meeting of Stockholders June 27, 2019,25, 2020, 9:00 a.m. (Local(Pacific Time) This Proxy is Solicited on Behalf of the Board of Directors The undersigned appoints James K. SimsJacob Suen and Anil DoradlaDavid B. Lyle (the “Named Proxies”) and each of them as proxies for the undersigned, with full power of substitution, to vote all the shares of capital stock of Airgain, Inc., a Delaware corporation (the “Company”), the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company to be held, at the offices of Latham and Watkins LLP, 12670 High Bluff Drive, San Diego, CA. 92130, on Thursday, June 27, 201925, 2020, at 9:00 a.m., local time,Pacific Time, via a live webcast, and any adjournments thereof. The purpose of the Annual Meeting is to take action on the following: 1. To elect one directortwo directors to serve as Class III directorI directors for a three-year term to expire at the 20222023 annual meeting of stockholders; 2. To consider and vote upon the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019;2020; and 3. To transact such other business as may be properly brought before the meeting or any adjournment or postponement thereof. The one directortwo directors up for re-election is: Thomas A. Munro.are: James K. Sims and Tzau-Jin Chung. The Board of Directors of the Company recommends a vote “FOR” the nomineenominees for director in proposal 1 and “FOR” each proposal.proposal 2. This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted “FOR” the nominee for director in proposal 1 and “FOR” each proposal.proposal 2. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign and return this card. Please separate carefully at the perforation and return just this portion in the envelope provided.