VOTING PROCEDURES
The shares represented by
For purposes of determining the proxies received, properly dated and executed or authenticated, in the case of voting by telephone, and not revoked will be voted at the Annual Meeting in accordance with the instructions of the stockholders.
The affirmative vote of the holderspresence of a majority of the shares of common stock voting on the matter is required for amending the 2007 Stock Incentive Planquorum, abstentions, and with respect to increase the shares reserved for issuance thereunder (Proposal 1). The affirmative vote of the holders of a majority of the shares of common stock outstanding is required for authorizing an amendment to our certificate of incorporation to effect the Reverse Split (Proposal 2). The affirmative vote of the holders of a plurality of the shares of common stock voting on the matter is required for the election of directors, (Proposal 3). The affirmative vote of the holders of a majority of the shares of common stock voting on the matter is required for the ratification of the selection by the Audit Committee of Amper, Politziner & Mattia, LLP as our Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2010 (Proposal 4).
Abstentions and broker “non-votes”“withhold” votes, will be treated as shares that are present and entitled to vote, for purposes of determining the presence of a quorum.while broker “non-votes” will be treated only as shares that are present. An abstention is the voluntary act of not voting by a stockholder who is present in person or by proxy at a meetingthe Annual Meeting and entitled to vote. A broker “non-vote” occurs when a broker nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary power for that particular item and has not received instructions from the beneficial owner.
Voting Procedures
Proposal 1:
Stockholders have the option to vote by telephone, internet or mail by following the instructions on the attached proxy card. WE ENCOURAGE YOU TO RECORD YOUR VOTE BY TELEPHONE OR INTERNET. These voting methods are convenient and save significant postage and processing costs. In addition, when you vote by telephone or internet prior to the meeting date, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted.
Internet. Vote over the internet at www.proxyvote.com, the website for internet voting. Simply follow the instructions on your proxy card, and you can confirm that your vote has been properly recorded. If you vote on the internet, you can request electronic delivery of future proxy materials. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
Telephone. Vote by telephone by following the instructions on your proxy card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your vote has been properly recorded. Telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the pre-addressed, postage-paid envelope provided. If you vote by mail and your proxy card is returned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to vote, then your proxy will be voted as recommended by the Board of Directors. If mailed, your completed and signed proxy card must be received by December 29, 2022.
Meeting. Please see “Questions and Answers about the Oblong Annual Meeting - How can I vote my shares in person at the Annual Meeting?” for more information regarding voting at the Annual Meeting.
Shares Held in “Street Name”
If your shares are held in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the Annual Meeting in order to vote.
If you are the beneficial owner of shares held in the name of a broker, bank or other nominee and do not provide that broker, bank or other nominee with voting instructions in the proxy card, your broker may vote your shares only with respect to certain matters considered routine. For any matters that are not routine for which you do not provide voting instructions in the proxy card, your shares will constitute “broker non-votes” and are not considered entitled to vote on that proposal. With respect to the matters being voted on at the Annual Meeting, your broker has discretionary authority to vote your shares in the absence of instructions from you only on the ratification of the selection of the Company’s independent registered public accounting firm. As a result, broker non-votes should not exist with respect to this proposal. Your broker does not have discretionary authority to vote your shares in the election of directors, the amendment to the Company's charter to effect a reverse split, or the advisory approval of executive compensation if you do not furnish instructions on such matter. Thus, assuming that a quorum is obtained, any broker non-votes will not affect the outcome of these proposals.
Voting Requirements for Approval
Item One—Election of Directors: Pursuant to our Amended & Restated Bylaws (the “bylaws”), a plurality of the votes duly cast at the Annual Meeting is required for the election of directors. You may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The votepersons receiving the highest number of holders“FOR” votes at the Annual Meeting will be elected. Broker non-votes and withheld votes, if any, are not counted as votes cast and will have no effect on the outcome of this election.
Item Two—Ratification of Appointment of Independent Registered Public Accounting Firm: To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the voting power held by stockholders presenttotal number of votes of our capital stock represented in person or represented by proxy is required for approval of amendingand entitled to vote at the 2007 Stock Incentive Plan to increaseAnnual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares reserved for issuance thereunder.voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the Proposal. Accordingly, an abstention will have the effect of a vote against the Proposal. Additionally, the approval of the amendment to our 2007 Stock Incentive Plan is not a matter on which a broker or other nominee is generally empowered to vote, and therefore, broker non-votes may exist in connection with Proposal 1.
Proposal 2: The vote of holders of a majority of our common stock outstanding is required for authorizing an amendment to our certificate of incorporation to effect the Reverse Split. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the Proposal.proposal and establishing a quorum. Accordingly, an abstention will have the effect of a vote against the Proposal. Additionally,proposal. On this proposal, brokers will have discretionary authority to vote in the approvalabsence of timely instructions from their customers. As a result, broker non-votes should not exist with respect to this proposal.
Item Three—Amendment to Company Charter to Effect a Reverse Stock Split: To be approved by the stockholders, this item must receive the “FOR” vote of a Reverse Splitmajority of the total number of votes of our capital stock represented in person or by proxy and the corresponding amendment to our certificate of incorporation is not a matter on which a broker or other nominee is generally empoweredentitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and therefore, broker non-votes may exist in connection with Proposal 2.
Proposal 3: A pluralityentitled to vote for purposes of the votes duly cast is required forproposal. Accordingly, an abstention will have the electioneffect of directors. This means thata vote against the nominees receivingproposal. On this proposal, brokers will not have discretionary authority to vote in the highest numberabsence of affirmative votes will be elected to fill the director positions available. Accordingly, votes withheldtimely instructions from their customers. Broker non-votes will have no effect in determining which director receiveson the highest numberproposal because they are not "entitled to vote" on the matter.
Item Four—Advisory Approval of votes. Additionally,Executive Compensation: Pursuant to our by-laws, the electionvote of directors is not a matter on which a broker or other nominee is generally empowered to vote, and therefore broker non-votes may exist in connection with Proposal 3.
Proposal 4: The vote ofthe holders of a majority of voting power held by the stockholders presenttotal number of votes of our capital stock represented in person or represented by proxy and entitled to vote at the Annual Meeting, voting as a single class, is required for the ratificationapproval, on an advisory and non-binding basis, of the selection of Amper, Politziner & Mattia, LLPexecutive compensation as our Independent Registered Public Accounting Firm fordescribed in this Proxy Statement. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this Proposal. To be approved, the fiscal year ending December 31, 2010.shares voted
“FOR” the proposal must exceed the number voted “AGAINST” the Proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the Proposal. Accordingly, an abstention will have the effect of a vote against the Proposal. Additionally,Broker non-votes will have no effect on the ratificationoutcome of the appointment of the Independent Registered Public Accounting Firm for 2010 is a matter on which a broker or other nominee is generally empoweredthis proposal. On this proposal, brokers will not have discretionary authority to vote and therefore, no brokerin the absence of timely instructions from their customers. Broker non-votes will exist in connection with Proposal 4.
have no effect on the proposal because they are not "entitled to vote" on the matter.
Properly executed or authenticated proxies that do not contain voting instructions will be voted (1) FOR amending the 2007 Stock Incentive Plan to increase the shares reserved for issuance thereunder, (2) FOR amending our certificate of incorporation to effect the Reverse Split of the Company’s issued
Solicitation and outstanding shares of common stock without further approval or authorization of its stockholders at any time prior the next annual meeting of stockholders of the Company, (3) FOR each of the nominees named below for election as directors, (4) FOR ratification of Amper, Politziner & Mattia, LLP as our Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2010, and (5) with respect to other matters that may come before the Annual Meeting, at the discretion of the proxy holders.
Revocation
Stockholders have the option to vote by telephone. WE ENCOURAGE YOU TO RECORD YOUR VOTE BY TELEPHONE
. It is convenient, and it saves significant postage and processing costs. In addition, when you vote by phone prior to the meeting date, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted.
After you have submitted a proxy, you may change your vote at any time before the proxy is exercised by submitting a notice of revocation or a proxy bearing a later date. Regardless of whether you voted using a traditional proxy card or by telephone or internet, you may use eitherany of these methods to change your vote. You may change your vote either by submitting a proxy card prior to the date of the Annual Meeting or by voting again prior to the time at which the telephone and internet voting facilities close by following the procedures applicable to those methods of voting. In each event, the later submitted vote will be recorded and the earlier vote revoked. You may also revoke a proxy by voting in person at the Annual Meeting. Your attendance at the Annual Meeting will not by itself constitute revocation of a proxy.
WeOblong will bear the cost of the solicitation of proxies from ourits stockholders, including the cost of preparing, assembling and mailing the proxy solicitation materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone or other electronic means or in person, but no such person will be specifically compensated for such services. We will cause brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons. We will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in doing so. We have engaged American Stock Transfer and Trust CompanyBroadridge Financial Solutions to aid in the distribution of the proxy materials and will reimburse thetheir related reasonable out-of-pocket expenses.
Any stockholder who intends
QUESTIONS AND ANSWERS ABOUT THE OBLONG ANNUAL MEETING
Q. Who is entitled to present a proposalvote at the 2011 Annual MeetingMeeting?
A. Holders of Stockholders, currently expected to occur in May 2011, must deliver the proposal to the Corporate Secretary, Glowpoint, Inc., 225 Long Avenue, Hillside, New Jersey 07205, no later than December 31, 2010 if such proposal is to be considered for inclusion inrecord of our proxy materials for that meeting.
In addition, our by-laws provide that, in order for a stockholder to propose business for considerationCommon Stock at an annual meeting of stockholders, the stockholder must give written notice to our Corporate Secretary at our principal executive offices not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided however, that in the event the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be received not later than the close of business on November 17, 2022, which we refer to as the 10th day following“Record Date,” are entitled to cast one vote per share of Common Stock held by such holder on each matter to be presented at the day on which such noticeAnnual Meeting. As of the dateRecord Date, 30,816,048 shares of Common Stock were issued and outstanding.
Q. What is the purpose of the Annual Meeting?
A. At the Annual Meeting, stockholders will consider and vote upon the following matters:
(1)to elect five members of the Company’s Board of Directors to serve until the Company’s next annual meeting was mailedof stockholders, or suchuntil their respective successors are duly elected and qualified;
(2)to ratify the appointment of EisnerAmper LLP as the Company’s independent registered public disclosure ofaccounting firm for the date the annual meeting was made, whichever occurs first.
PROPOSAL NO. 1 —
APPROVE AN AMENDMENT TO THE 2007 STOCK INCENTIVE PLAN TO INCREASE
THE SHARES RESERVED FOR ISSUANCE THEREUNDER TO 5,500,000
fiscal year ending December 31, 2022; The stockholders are being asked
(3)to approve an amendment to our 2007 Stock Incentive Plan (the "2007 Plan") to increase the maximum aggregate number of shares which may be issued pursuant to all awards to 5,500,000 shares of common stock from 3,000,000 shares of common stock (the “Plan Amendment”). The 2007 Plan was adopted at our Annual Meeting of Stockholders on August 14, 2007. Under the 2007 Plan, options and other equity rights, including stock appreciation rights ("SARs"), and sales, bonuses and other grants of restricted stock, or any combination of these, may be issued from time to time to employees, directors and consultants who contribute to the management, growth and financial successArticle FOURTH of the Company. The purposeCompany's Amended & Restated Certificate of Incorporation to effect a reverse stock split of the 2007 Plan is to attract and retain the best available personnel, to provide additional incentive to our directors, officers, employees and consultants and to promote the success of our business.
As of April 16, 2010, 2,282,400 stock options and 705,457 shares of restricted stock wereCompany's issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15;
(4)to approve, on an advisory and options non-binding basis, executive compensation as described in this proxy statement; and
(5)to acquire 11,667transact other business as may properly come before the Annual Meeting.
Q. How can I access the proxy materials over the internet?
A. Your proxy card will contain instructions on how to view our proxy materials on the internet. Our proxy materials are also available on our website at: www.Oblong.com.
Q. How can I vote my shares?
A. You may vote by any of the following four methods:
(1) Internet. Vote over the internet at www.proxyvote.com, the website for internet voting. Simply follow the instructions on your proxy card, and you can confirm that your vote has been properly recorded. If you vote on the internet, you can request electronic delivery of future proxy materials. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
(2) Telephone. Vote by telephone by following the instructions on your proxy card. Easy-to-follow voice prompts allow you to vote your shares were exercised, from the 3,000,000 originally reservedand confirm that your vote has been
properly recorded. Telephone voting facilities for issuance thereunder. This leaves only 476 sharesstockholders of record will be available for future issuance under the 2007 Plan. The Board believes that our ability to continue providing non-cash compensation24 hours a day and incentiveswill close at 11:59 p.m. (Eastern Time) on December 29, 2022.
(3) Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the form of equitypre-addressed, postage-paid envelope provided. If you vote by mail and your proxy card is crucialreturned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to our ability to attract, retain and motivate talented employees, consultants and non-employee directors. The Plan Amendment was adoptedvote, then your proxy will be voted as recommended by the Board of Directors on April 1, 2010.
We also currently maintain the 2000 Stock Incentive Plan, which was adopted when the Company was known as Wire One Technologies (the “2000 Plan”). Under the 2000 Plan, as amended, 4,400,000 shares of common stock have been reserved for issuance thereunder. As of April 16, 2010, 3,165,216 stock optionsDirectors. If mailed, your completed and 592,000 shares of restricted stock were issued and outstanding, and options to acquire 495,606 shares were exercised, from the 2000 Plan. The 2000 Plan is scheduled to automatically terminate on or about June 30, 2010; upon termination all outstanding grants under the 2000 Plan will continue to be governed by the 2000 Plan until such grants are exercised, expire or terminate pursuant to their terms.
The following table provides information regarding the aggregate number of securities to be issued under all of our stock options and equity-based plans upon exercise of outstanding options, warrants and other rights and their weighted-average exercise prices as of December 31, 2009. The securities issued under equity compensation plans not approved by security holders consist entirely of options issued with respect to individual compensation arrangements for officers, directors and consultants.
| | 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 the first column) | |
Equity compensation plans approved by security holders | | | 4,686,051 | | | $ | 0.82 | | | | 1,529,219 | |
Equity compensation plans not approved by security holders | | | 20,000 | | | | 3.94 | | | | — | |
Total | | | 4,706,051 | | | $ | 0.84 | | | | 1,529,219 | |
Summary of 2007 Plan, As Amended
The Board believes that the adoption of the Plan Amendment is necessary in order to have a sufficient reserve of common stock to provide option grants as an equity incentive to attract and retain the services of key individuals essential to the Company's long-term success. A summary of the terms of the 2007 Plan, assuming the approval the Plan Amendment (the “Amended 2007 Plan”), is provided below. The summary, however, is not intended to be a description of all the terms of the Amended 2007 Plan. The full text of the Amended 2007 Plan is attached as Exhibit A to thissigned proxy statement, and incorporated herein by reference.
Available Shares
Subject to adjustment to reflect certain corporate events, such as stock dividends, recapitalizations and business combinations, the maximum aggregate number of shares which may be issued pursuant to all awards under the Amended 2007 Plan is 5,500,000 shares of common stock. Any shares covered by an award, or portion of an award, which are forfeited or canceled, expire or are settled in cash, shall be deemed not to have been issued for purposes of determining the maximum aggregate number of shares which may be issued under the Amended 2007 Plan.
Administration
Under the Amended 2007 Plan, our board of directors, the Compensation Committee or such other committee designated by the Board, administers the granting of stock and options to directors and officers in a way that allows these grants of stock to be exempt from Section 16(b) of the Securities Exchange Act and determines the provisions, terms and conditions of each award. When stock or options are granted to other participants in the Amended 2007 Plan, our Board, the Compensation Committee or such other committee designated by our Board administers these awards and determines the provisions, terms and conditions of each award. Each entity, whether the Board, the Compensation Committee or such other committee designated by the Board, will be referred to herein as the “Administrator,” and such Administrator will have complete discretion (subject to the provisions of the Amended 2007 Plan) to authorize option grants under the Amended 2007 Plan.
Eligibility
All employees, officers, directors and consultants of the Company or any of its affiliates are eligible to participate in the Amended 2007 Plan, although incentive stock options (“ISOs”) may be granted only to employees. As of April 16, 2010, approximately 122 employees and directors were eligible to participate in the Amended 2007 Plan.
Form of Awards
The Amended 2007 Plan permits the grant of options and other equity rights, including stock appreciation rights (“SARs”), bonuses and other grants of restricted stock.
Options may include non-qualified stock options (“NQSOs”) as well as ISOs, which are intended to qualify for special tax treatment. The term of an option will be determined by the Administrator, provided, however, that the term shall be no more than ten and five years, respectively, for ISOs issued to employees who are less than 10% stockholders and employees who are 10% stockholders.
The exercise price or purchase price, if any, of Amended 2007 Plan awards that are not incentive stock options will not be less than the fair market value of the stock. The exercise price or purchase price, if any, of Amended 2007 Plan awards that are ISOs (a) granted to an employee who, at the time of such grant, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary, shall be not less than 110% of the fair market value of the stock on the date of the grant; or (b) granted to any employee other than an employee described in clause (a) above, shall be not less than 100% of the fair market value of the stock on the date of the grant. The form of payment for the shares of common stock when options are exercised or stock is purchased under an Amended 2007 Plan award will be determined by the Administrator and may include cash, check, shares of common stock, or the assignment of part of the proceeds from the sale of shares acquired upon exercise or purchase of the award.
Where the award agreement permits the exercise or purchase of an award for a period of time following the recipient's termination of service with us, that award will terminate to the extent not exercised or purchased on the last day of the specified period or the last day of the original term of the award, whichever occurs first.
Adjustments to Awards; Change of Control
Subject to any action that may be required by the stockholders of the Company, the Administrator may proportionately adjust the number and price of outstanding awards, and the number of shares authorized for issuance under the Amended 2007 Plan, in the event of a stock dividend, stock split, recapitalization or other corporate action having a similar effect on the capitalization of the Company. Assuming Proposal 2 is adopted and a Reverse Split is subsequently effected, it would have the effect of reducing the number of shares of common stock reserved for issuance under the Amended 2007 Plan, and adjust the number and price of outstanding awards, by the ratio determined by the board of directors. Upon a Change of Control (as defined in the 2007 Plan), all outstanding options and grants of restricted stock generally vest. The Administrator retains the discretion not to accelerate vesting in corporate transactions described in Code Section 424 in which the successor corporation assumes the options or substitutes its own options.
Amendment, Suspension or Termination
Unless terminated sooner, the Amended 2007 Plan will terminate automatically in 2017. The Board has the authority to amend, suspend or terminate the Amended 2007 Plan; however, to the extent necessary to comply with applicable laws, the Company will obtain stockholder approval of any amendment to the Amended 2007 Plan in such manner and to such degree as required.
Transferability
Those who hold ISOs granted under this plan cannot transfer these options other than by a will or the laws of descent upon the death of the option holder. No one is allowed to exercise ISOs except the person to whom the options were first issued while that person is alive. Other awards may be transferred during the lifetime of the grantee by gift or pursuant to a domestic relations order to members of the grantee's immediate family to the extent and in the manner determined by the Administrator.
New Plan Benefits
Because participation and the types of awards granted under the Amended 2007 Plan are subject to the discretion of the Administrator, the benefits or amounts that willcard must be received by participants in the Amended 2007 PlanDecember 29, 2022.
(4) Meeting. If you are not determinable at this time.
Federal Income Tax Consequences
The following descriptiona stockholder of the tax consequencesrecord as of options under the Amended 2007 Plan is based on present Federal tax laws,November 17, 2022, you may attend and does not purport to be a complete description of the tax consequences of the Amended 2007 Plan.
No tax consequences result from the grant of options which are intended to qualify as ISOs within the meaning of Section 422 of the Code. If an option holder acquires stock upon the exercise of an ISO, no income will be recognized by the option holder for ordinary income tax purposes (although the difference between the option exercise price and the fair market value of the stock subject to the option may result in alternative minimum tax liability to the option holder), and the Company will be allowed no deduction as a result of such exercise, provided that the following conditions are met: (a) at all times during the period beginning on the date of grant of the ISO and ending on the day three months before the date of such exercise, the option holder is an employee of the Company or a parent or subsidiary; and (b) the option holder makes no disposition of the stock within two years from the date the ISO was granted nor within one year after the exercise of the ISO. The three-month period in clause (a) in the preceding sentence is extended to one year if the option holder is disabled. If an optionee dies while still employed or within three months after termination of employment, the plan may allow the estate additional time to exercise the option. If the holder of an ISO sells stock after compliance with these conditions, any gain realized over the exercise price of the ISO ordinarily will be treated as long-term capital gain, and any loss will be treated as long-term capital loss, in the year of sale.
No tax consequences result from the grant of NQSOs. An option holder who exercises an NQSO generally will realize compensation taxable as ordinary income in an amount equal to the difference between the option exercise price and the fair market value of the shares on the date of exercise, and the Company will be entitled to a deduction from income in the same amount in the year in which the exercise occurred. The option holder's basis in shares received in an exercise of an NQSO with cash will be the fair market value of the shares on the date income was realized, and when the holder disposes of the shares, he or she will recognize capital gain or loss, either long-term or short-term, depending on the holding period of the shares.
Although it is anticipated that certain awards under the Amended 2007 Plan will, pursuant to Section 162(m) of the Code, meet the requirements to avoid a limit on deductibility, no assurances can be given that all awards will meet such requirements. Specifically, awards of restricted stock will be subject to the limitation on deductibility imposed by Section 162(m) of the Code.
Required Vote and Board Recommendation
An affirmative vote of the holders of a majority of the shares of our common stock present at the Annual Meeting on December 30, 2022.
If you hold your Company shares in a brokerage account, your ability to vote over the internet or by telephone depends on your broker’s voting process. Please follow the directions on your proxy card or the voting instruction card from your broker carefully.
The Board of Directors recommends that you vote using one of the first three methods discussed above, as it is not practical for most stockholders to attend and vote at the Annual Meeting. Using one of the first three methods discussed above to vote will not limit your right to vote at the Annual Meeting if you later decide to attend in person.
Q. How can I vote my shares in person at the Annual Meeting?
A. Stockholders of Record. If your shares are registered directly in your name with the American Stock Transfer & Trust Company, LLC (“AST”), our “transfer agent,” you are considered the stockholder of record with respect to those shares, and the proxy materials are being mailed to you. As the stockholder of record, you have the right to vote in person at the Annual Meeting. If you choose to do so, you can bring the proxy card or byvote using the ballot provided at the Annual Meeting. Even if you plan to attend the Annual Meeting, we recommend that you vote your shares in advance as described above so that your vote will be counted if you decide later not to attend the Annual Meeting.
B. Beneficial Owners. Most of our stockholders hold their shares in street name through a broker, bank or other nominee rather than directly in their own name. In that case, you are considered the beneficial owner of shares held in street name, and the proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the Annual Meeting. Because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting. You will need to contact your broker, bank or nominee to obtain a legal proxy, and entitledyou will need to bring it to the Annual Meeting in order to vote is required for approvalin person.
In light of the Plan Amendment.COVID-19 pandemic, it could become necessary to change the date, time, location, and/or means of holding the Annual Meeting (including by means of remote communication). If such a change is made, we will announce the change in advance, and details on how to participate will be issued by press release, posted on our website, and filed as additional proxy materials.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF ADOPTING THE PLAN AMENDMENT AND INCREASING THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER TO 5,500,000 SHARES OF COMMON STOCK. PROXIES SOLICITED BY GLOWPOINT WILL BE VOTED IN FAVOR OF THIS PROPOSAL UNLESS STOCKHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
PROPOSAL NO. 2 —
APPROVAL OF A REVERSE STOCK SPLIT OF THE COMPANY’S ISSUED AND OUTSTANDING SHARES OF COMMON STOCK WITHOUT FURTHER APPROVAL OR AUTHORIZATION OF ITS STOCKHOLDERS AT ANY TIME PRIOR THE NEXT ANNUAL MEETING OF STOCKHOLDERS OF THE COMPANY
Background
We are seeking your approval authorizingQ. How does the Board of directors, in its discretion, to amendDirectors recommend that I vote?
A. Our Board of Directors recommends that you vote:
(1)“FOR” the election of five members of the Company’s certificateBoard of incorporationDirectors to serve until the Company’s next annual meeting of stockholders, or until their respective successors are duly elected and qualified; and
(2)“FOR” the ratification of the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.
(3)“FOR” the approval of an amendment to Article FOURTH of the Company’s Amended & Restated Certificate of Incorporation to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, without further approval or authorization of its stockholders, atCommon Stock by a ratio of not less than one-for-two1-for-5, 1-for-10, or 1-for-15.
(4)“FOR” the approval of, on an advisory and not more than one-for-five, withnon-binding basis, executive compensation as described in this proxy statement.
Q. What is the exact ratiovoting requirement to be set within this range as determined by the board of directors in its sole discretion at any time prior to the next annual meeting of stockholdersapprove each of the Company (the “Reverse Split”). The boarditems?
A. Item One—Election of directors has adoptedDirectors : Pursuant to our bylaws, a resolution (i) declaring the advisabilityplurality of the Reverse Split, (ii) approving a corresponding amendment of our certificate of incorporation to effect the Reverse Split (the “Reverse Split Amendment”), subject to stockholder approval, and (iii) authorizing any other action it deems necessary to effect a Reverse Split, without further approval or authorization of our stockholders, at any time prior to our next annual meeting of stockholders. The board of directors may subsequently effect, in its sole discretion, a Reverse Split if approved by the stockholders.
If approved by our stockholders, one Reverse Split (but not more than one) would become effective on any date selected by the board of directors at any time prior our next annual meeting of stockholders. Only one Reverse Split Amendment may be filed and become effective. Notwithstanding the foregoing, the board of directors reserves the right, even after stockholder approval, to forego or postpone effecting a Reverse Split and filing the Reverse Split Amendment if such action is determined not to be in the best interests of the Company and its stockholders. If the Reverse Split adopted by the stockholders is not subsequently implemented by the board of directors and effected by our next annual meeting of stockholders, the Reverse Split will be deemed abandoned, without any further effect. In such case, the board of directors may again seek stockholder approval at a future date for a reverse stock split if it deems a reverse stock split to be advisable at that time.
Proposal
Depending on the ratio for the Reverse Split determined by the board of directors, multiple shares (e.g., two, three, four or five) of existing common stock, as determined by the board of directors, will be combined into one share of common stock. The number of shares of common stock issued and outstanding will therefore be reduced, depending upon the reverse stock split ratio determined by the board of directors. The Reverse Split Amendment that is filed to effect the Reverse Split, if any, will include only the reverse split ratio determined by the board of directors to be in the best interests of stockholders.
The Reverse Split, if approved by our stockholders, would become effective upon the filing of the Reverse Split Amendment with the Secretary of State of the State of Delaware. The exact timing of the filing of the Reverse Split will be determined by the board of directors based on its evaluation as to when such action will be the most advantageous to the Company and its stockholders. In addition, the board of directors reserves the right, notwithstanding stockholder approval and without further action by the stockholders, to elect not to proceed with the Reverse Split if, at any time prior to filing the Reverse Split Amendment, the board of directors, in its sole discretion, determines that it is no longer in the Company’s best interests and the best interests of its stockholders to proceed with the Reverse Split. If a Reverse Split Amendment effecting the Reverse Split has not been filed with the Secretary of State of the State of Delaware by our next annual meeting of stockholders, the board of directors will abandon the Reverse Split.
Reasons for the Reverse Split
The reason for the Reverse Split is an effort to make our common stock eligible for listing (a “Listing”) on the NYSE AMEX (the “Amex”) or the Nasdaq Capital Market (“NASDAQ”) and thereby increase investor interest in our Company.
Our board of directors believes that a listing on the Amex or NASDAQ could increase liquidity for the holders of outstanding shares of common stock, could attract the interest of investors, and could maximize stockholder value. We believe that, if the Reverse Split is approved, there is a greater likelihood that we will satisfy the required minimum bid price of our common stock necessary for a Listing, which is $2.00 or $3.00 per share in the case of the Amex and $4.00 per share in the case of NASDAQ.
An increase in the per share price of our common stock, which we expect as a result of the Reverse Split, may heighten the interest of the financial community in our Company and broaden the pool of investors that may consider investing in our Company, potentially increasing the trading volume and liquidity of our common stock. As a matter of policy, many institutional investors are prohibited from purchasing stocks below minimum price levels. For the same reason, brokers often discourage their customers from purchasing such stocks. To the extent that the price per share of our common stock increases as a result of the Reverse Split, some of these concerns may be ameliorated. Many investors, however, will not invest in securities that have a historical trading price below $5.00 per share, and there can be no assurance that the Reverse Split will increase the price above that level for any period of time.
The reduction in the number of outstanding shares of common stock caused by the Reverse Split is anticipated initially to increase the market price of the common stock. However, because some investors may view the Reverse Split negatively, there can be no assurance that the market price of the common stock after the proposed Reverse Split will adjust to reflect the conversion ratio (e.g., if the market price is $0.75 before the Reverse Split and the selected ratio is one new share for every four shares outstanding there can be no assurance that the market price immediately after the Reverse Split will be $3.00 ($0.75 multiplied by four)), or that any price gain will be sustained in the future.
Principal Effects of the Proposed Reverse Split
Depending on the ratio for the Reverse Split determined by the board of directors, multiple shares (e.g., two, three, four or five) shares of existing common stock, as determined by the board of directors, will be combined into one share of common stock. The number of shares of common stock issued and outstanding will therefore be reduced, depending upon the reverse stock split ratio determined by the board of directors. In addition, the number of shares of our common stock subject to outstanding options and warrants issued by us, and the number of shares reserved for future issuances upon conversion of our preferred stock and under our stock plans, will be reduced by the same ratio. No fractional shares of our common stock will be issued in connection with the proposed Reverse Split. Holders of our common stock who would otherwise receive a fractional share of common stock pursuant to the Reverse Split will receive cash in lieu of the fractional share as explained more fully below.
If the Reverse Split is approvedvotes duly cast at the Annual Meeting and the board of directors, in its discretion, decides to effect a Reverse Split, the board of directors will fix a record date for determination of shares subject to the Reverse Split. As of the date of this Proxy Statement, the board of directors had not fixed a record dateis required for the Reverse Split. Aselection of directors. You may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The persons receiving the Record Date, there were approximately 81,746,232 shares of our common stock issued and outstanding, approximately 16,301,559 shares of common stock reserved for issuance upon the conversion of our Series A-2 Convertible Preferred Stock, and 8,360,304 shares of our common stock subject to warrants and options granted by us. If additional shares of our common stock are issued or redeemed prior to the record date for the Reverse Split, the actualhighest number of shares issued and outstanding before and after the Reverse Split will increase or decrease accordingly.
Because the Reverse Split will apply to all issued and outstanding shares of our common stock and outstanding rights to purchase our common stock or to convert other securities into our common stock, the proposed Reverse Split will not alter the relative rights and preferences of our existing stockholders. The Reverse Split Amendment will, however, effectively increase the number of shares of our common stock available for future issuances by the board of directors.
If the proposed Reverse Split is approved“FOR” votes at the Annual Meeting will be elected. Broker non-votes and effected by the board of directors, some of our stockholders may consequently own less than one hundred shares of our common stock. A purchase or sale of less than one hundred shares (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own less than one hundred shares following the Reverse Split may be required to pay higher transaction costs should they then determine to sell their shares.
After the filing of the Reverse Split Amendment, our common stockwithheld votes, if any, are not counted as votes cast and will have new Committee on Uniform Securities Identification Procedures (CUSIP) numbers, which is a number used to identify our equity securities, and stock certificates with the older CUSIP numbers will need to be exchanged for stock certificates with the new CUSIP numbers by following the procedures described below.
Cash Payment in Lieu of Fractional Shares
In lieu of any fractional shares to which a holder of our common stock would otherwise be entitled as a result of the Reverse Split, we will pay cash equal to such fraction multiplied by the average of the high and low trading prices of the Company’s common stock on the OTC Bulletin Board during regular trading hours for the five trading days immediately preceding the effective time of the Reverse Split, which amount is hereby determined to equal the fair market value of our common stock at the effective time of the Reverse Split. In the event that a stockholder owns a number of shares that is not evenly divisible by the split ratio determined by the board of directors, such stockholder will only be entitled to a cash payment.
Accounting Matters
The proposed amendments to our restated certificate of incorporation will not affect the par value of our common stock per share, which will remain at $0.0001. As a result, as of the filing of the Reverse Split Amendment, the stated capital attributable to common stock on our balance sheet will be reduced proportionately based on the reverse stock split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will be fewer shares of common stock outstanding.
Federal Income Tax Consequences
The following description of the material federal income tax consequences of a Reverse Split is based on the Internal Revenue Code of 1986, as amended (the “Code”), applicable Treasury Regulations promulgated thereunder, judicial authority and current administrative rulings and practices as inno effect on the dateoutcome of this Proxy Statement. Changes to the laws could alter the tax consequences described below, possibly with retroactive effect. We have not sought and will not seek an opinionelection.
Item Two—Ratification of counsel or a ruling from the Internal Revenue Service regarding the federal income tax consequencesAppointment of a Reverse Split. This discussion is for general information only and does not discuss the tax consequences which may apply to special classes of taxpayers (e.g., non-resident aliens, broker/dealers or insurance companies). The state and local tax consequences of a Reverse Split may vary significantly as to each stockholder, depending upon the jurisdiction in which such stockholder resides. Stockholders are urged to consult their own tax advisors to determine the particular consequences to them.Independent Registered Public Accounting Firm:
In general, the federal income tax consequences of a Reverse Split will vary among stockholders depending upon whether they receive cash for fractional shares or solely a reduced number of shares of our common stock in exchange for their old shares of our common stock. We believe that because a Reverse Split is not part of a plan to increase periodically a stockholder’s proportionate interest in our assets or earnings and profits, a Reverse Split will likely have the following federal income tax effects.
Our stockholders who receive solely a reduced number of shares of our common stock will not recognize gain or loss. In the aggregate, such a stockholder’s basis in the reduced number of shares of our common stock will equal the sum of the stockholder’s basis in its old shares of our common stock.
Our stockholders who receive cash in lieu of a fractional share as a result of a Reverse Split will generally be treated as having received the payment as a distribution in redemption of the fractional share, as provided in Section 302(a) of the Code, which distribution will be taxed as either a distribution under Section 301 of the Code or an exchange to such stockholder, depending on that stockholder’s particular facts and circumstances. Generally, a stockholder receiving such a payment should recognize gain or loss equal to the difference, if any, between the amount of cash received and the stockholder’s basis in the fractional share. A stockholder’s basis in the fractional shares of our common stock will equal the stockholder’s basis in its old shares of our common stock, decreased by the basis allocated to the reduced number of shares.
Information returns generally will be required to be filed with the Internal Revenue Service (IRS) with respect to the receipt of cash in lieu of a fractional share of our common stock pursuant to a Reverse Split in the case of certain U.S. holders. In addition, U.S. holders may be subject to a backup withholding tax on the payment of such cash if they do not provide their taxpayer identification numbers in the manner required or otherwise fail to comply with applicable backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the U.S. holder’s federal income tax liability, if any, provided the required information is timely furnished to the IRS.
We will not recognize any gain or loss as a result of a Reverse Split.
No Appraisal Rights
Under Delaware law and our restated certificate of incorporation, holders of our common stock will not be entitled to dissenter’s rights or appraisal rights with respect to a Reverse Split.
Board Discretion to Implement the Reverse Split
If the proposed Reverse Split is approved at the Annual Meeting, the board of directors may, in its sole discretion, at any time prior to our next annual meeting of stockholders, authorize the Reverse Split and file the Reverse Split Amendment with the Delaware Secretary of State. The determination by the board of directors will be based on a number of factors, including market conditions, existing and expected trading prices for our common stock and the likely effect of business developments on the market price for our common stock.
THE BOARD OF DIRECTORS HAS NOT YET MADE A DETERMINATION TO PROCEED WITH ANY REVERSE STOCK SPLIT OF OUR ISSUED AND OUTSTANDING SHARES OF COMMON STOCK. NOTWITHSTANDING APPROVAL OF THE REVERSE SPLIT AT THE ANNUAL MEETING, THE BOARD OF DIRECTORS MAY, IN ITS SOLE DISCRETION, DETERMINE NOT TO IMPLEMENT SUCH REVERSE SPLIT.
To be approved by the stockholders, the proposal to implement the Reverse Splitthis item must receive the affirmative“FOR” vote of holders of at least a majority of the outstandingtotal number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will have discretionary authority to vote in the absence of timely instructions from their customers. As a result, broker non-votes should not exist with respect to this proposal.
Item Three—Amendment to Company Charter to Effect a Reverse Stock Split: To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have no effect on the outcome of this proposal because they are not "entitled to vote" on the matter.
Item Four—Advisory Approval of Executive Compensation: Pursuant to our by-laws, the vote of the holders of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class, is required for the approval, on
an advisory and non-binding basis, of the executive compensation as described in this Proxy Statement. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this Proposal. To be approved, the shares voted “FOR” the proposal must exceed the number voted “AGAINST” the Proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the Proposal. Accordingly, an abstention will have the effect of a vote against the Proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have no effect on the outcome of this proposal because they are not "entitled to vote" on the matter.
Q. What happens if additional matters are presented at the Annual Meeting?
A. Other than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxies will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting.
Q. What happens if I do not give specific voting instructions?
A. If you are a stockholder of record, and vote without giving specific voting instructions, the proxyholders will vote your shares in the manner recommended by our Board of Directors on all matters presented in this Proxy Statement, and, with respect to any other matters that may properly come before the Annual Meeting, as the proxyholders may determine in their discretion.
If you are the beneficial owner of shares held in the name of a broker, bank or other nominee and do not provide that broker, bank or other nominee with voting instructions in the proxy card, your broker may vote your shares only with respect to certain matters considered routine. For any matters that are not routine for which you do not provide voting instructions in the proxy card, your shares will constitute “broker non-votes” and are not considered entitled to vote on that proposal. With respect to the matters being voted on at the Annual Meeting, your broker has discretionary authority to vote your shares in the absence of instructions from you only on the ratification of the selection of the Company’s independent registered public accounting firm. As a result, broker non-votes should not exist with respect to this proposal. Your broker does not have discretionary authority to vote your shares in the election of directors, the amendment to the Company’s charter to effect a reverse stock split, or the advisory approval of executive compensation if you do not furnish instructions on such matter. Thus, assuming that a quorum is obtained, any broker non-votes will not affect the outcomes of these proposals.
Q. What is the quorum requirement for the Annual Meeting?
A. A quorum is present at the Annual Meeting if a majority of the shares of our commoncapital stock issued and outstanding and entitled to vote on the Record Date are represented in person or by proxy. Your shares will be counted for purposes of determining if there is a quorum, whether representing votes for, against, withheld or abstained, if you:
•are present and vote at the Annual Meeting; or
•properly submit a proxy card or vote over the internet or by telephone.
For purposes of determining the presence of a quorum, abstentions, and with respect to the election of directors, “withhold” votes, will be treated as shares that are present and entitled to vote, while broker
“non-votes” will be treated only as shares that are present. If a quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is obtained.
Q. How can I change my vote after I return my proxy card?
A. If you are a stockholder of record, there are three ways you can change your vote or revoke your proxy after you have sent in your proxy card.
•First, you may send a timely written notice to Oblong, Inc., c/o Corporate Secretary, 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433 stating that you would like to revoke your proxy.
•Second, you may complete and submit another valid proxy by mail, telephone or over the internet that is later dated and if mailed, is properly signed, or if submitted by telephone or over the internet is received by 11:59 p.m. (Eastern Time) on December 29, 2022. Any earlier proxies will be revoked automatically.
•Third, you may attend the Annual Meeting and vote in person. Any earlier proxy will be revoked. However, attending the Annual Meeting without voting in person will not revoke your proxy.
If you hold your shares through a broker, bank or other nominee and you have instructed the broker, bank or other nominee to vote your shares, you must follow directions from your broker, bank or other nominee to change your vote.
Q. Who will tabulate the votes?
A. David Clark, our Chief Financial Officer, Treasurer and Corporate Secretary, will certify the tabulated vote and act as the inspector of elections for the Annual Meeting. Mr. Clark will be responsible for (i) determining the presence of a quorum at the Annual Meeting, (ii) receiving all votes and ballots, whether by proxy or in person, with regard to all matters voted upon at the Annual Meeting, (iii) counting and tabulating all such votes and ballots and (iv) determining and reporting the results with regard to all such matters voted upon at the Annual Meeting.
Q. Where can I find the voting results of the Record Date.Annual Meeting?
A. We intend to announce preliminary voting results at the Annual Meeting and publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days following the Annual Meeting.
Q. Who pays for the cost of this proxy solicitation?
A. Oblong will bear the cost of the solicitation of proxies from its stockholders, including the cost of preparing, assembling and mailing the proxy solicitation materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone or other electronic means or in person, but no such person will be specifically compensated for such services. We will cause brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons. We will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in doing so. We have engaged Broadridge
Financial Solutions to aid in the distribution of the proxy materials and will reimburse their related reasonable out-of-pocket expenses.
Q. Is there a list of stockholders entitled to vote at the Annual Meeting?
A. The boardnames of directors recommends astockholders of record entitled to vote FORat the proposal to authorizeAnnual Meeting will be available at the board of directors to amend the certificate of incorporation to effect a Reverse Split of our common stock at any timeAnnual Meeting and for 10 days prior to the Annual Meeting at our next annual meetingprincipal executive offices between the hours of stockholders.9:00 a.m. and 5:00 p.m. Mountain Time for any purpose relevant to the Annual Meeting. To arrange to view this list during the times specified above, please contact the Corporate Secretary of the Company at Oblong, Inc., c/o Corporate Secretary, 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433 or call 303-640-3838.
THIS QUESTION AND ANSWER SECTION IS ONLY MEANT TO GIVE AN OVERVIEW OF THE PROXY STATEMENT. FOR MORE INFORMATION, PLEASE REFER TO THE MATERIAL CONTAINED IN THE SUBSEQUENT PAGES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2 TO AUTHORIZE THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO AMEND THE CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE SPLIT OF OUR COMMON STOCK AT ANY TIME PRIOR TO OUR NEXT ANNUAL MEETING OF STOCKHOLDERS. PROXIES SOLICITED BY GLOWPOINT WILL BE VOTED IN FAVOR OF THIS PROPOSAL UNLESS STOCKHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
PROPOSAL NO. 3 —
1 -- ELECTION OF DIRECTORS
Directors to be elected are to serve until the next annual meeting of stockholders or until their respective successors are duly elected and qualified. The number of directors is determined from time to time, and may be increased or decreased, by our boardBoard of directorsDirectors, and is currently five members. The nominees who will stand for election are Jason Adelman, Matthew Blumberg, Peter Holst, James S. Lusk, Grant Dawson, David W. Robinson and Joseph Laezza,Deborah Meredith, all of whom are currently members of our boardBoard of directors. Peter A. Rust, currently a member of the board of directors, has decided not to stand for re-election.Directors. The fourfive nominees receiving the highest number of affirmative votes will be elected as directors. Pursuant to our by-laws, the vacancy on the board of directors may be filled by the remaining members of the board after the annual meeting to serve until the next annual meeting. In the event any nominee is unable or unwilling to serve as a nominee, the boardBoard of directorsDirectors may select a substitute nominee. If a substitute nominee is selected, proxies will be voted in favor of such nominee. Our boardBoard of directorsDirectors has no reason to believe that any of the named nominees will be unable or unwilling to serve as a nominee or as a director if elected. Proxies cannot be voted for a greater number of persons than the number of nominees named.
Director and Executive Officer InformationNominees
The following table sets forth information with respect to our director nominees and executive officers.
nominees.
| | | | | | | | | | | | | | |
| Name | | Age | | Position with Company |
| Jason Adelman (1)(2)(3) | | 53 | | Director, Chairman of the Compensation Committee, Chairman of the Nominating Committee |
| Matthew Blumberg (1)(3) | | 52 | | Chairman of the Board |
| Peter Holst | | 53 | | Director, Nominees | | President and Chief Executive Officer |
| James S. Lusk (1)(2)(3) | 54 | Director |
| 66 | Grant Dawson(1)(2)(3) | 42 | Director |
| Joseph Laezza | 39 | Director, Co-Chief Executive Officer, President, and Chief Operating Officer |
| David W. Robinson | 41 | Director, Co-Chief Executive Officer, General Counsel, Executive Vice President, Business Development and Corporate Secretary |
| | | |
| Non-Director Executive Officer | | |
| Edwin F. Heinen | 58 | Chief Financial Officer and Executive Vice President, Finance |
| Thomas Brown | 41 | Senior Vice President of Sales |
(1) | MemberChairman of the Audit Committee.Committee |
| Deborah Meredith (2)(3) | | 63 | | Director |
(2) | ___________________ (1) Member of the Audit Committee. (2) Member of the Compensation Committee. (3) Member of the Nominating Committee.
Board Diversity Matrix | | | | | | | | | | | | | | | | Board Diversity Matrix (as of November [__], 2022) | | Total Number of Directors | 5 | | Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 1 | 4 | – | – | | Part II: Demographic Background | | African American or Black | – | – | – | – | | Alaskan Native or American Indian | – | – | – | – |
| | | | | | | | | | | | | | | | Asian | – | – | – | – | | Hispanic or Latinx | – | – | – | – | | Native Hawaiian or Pacific Islander | – | – | – | – | | White | 1 | 4 | – | – | | Two or More Races or Ethnicities | – | – | – | – | | LGBTQ+ | – | | Did Not Disclose Demographic Background | – |
Nominee Biographies
Jason Adelman, Director. Mr. Adelman joined our Board of Directors in July 2019. Mr. Adelman is the Founder and Managing Member of Burnham Hill Capital Group, LLC, a privately held financial advisory firm, and serves as Managing Member of Cipher Capital Partners LLC, a private investment fund. Mr. Adelman also serves as a member of the Compensation Committee. |
(3) | Member of the Nominating Committee. |
| |
Biographies
Grant Dawson, Director. Mr. Dawson joined our board of directors of Trio-Tech International (Nasdaq Capital Market: TRT). Prior to founding Burnham Hill Capital Group, LLC in May 2009.2003, Mr. Dawson is SeniorAdelman served as Managing Director of Investment Analyst, North American Fixed Income, for MFC Global Investment Management, with responsibility for credit assessmentBanking at H.C. Wainwright and recommendations related to MFC GIM’s fixed income assets that are managed against industry benchmarks. He joined MFC Global Investment Management in 2008 and has worked in the investment industry since 1998. Previously, he was a lead analyst with a credit rating agency and has held various senior management positions in credit management and corporate finance with Nortel and in equity research with Dain Rauscher Ltd.Co., Inc. Mr. Dawson earned an M.B.A. from the SMU Cox School of Business, a B.A. and a Bachelor of CommerceAdelman graduated from the University of Windsor,Pennsylvania with a B.A. in Economics, cum laude, and isfrom Cornell Law School with a Chartered Financial Analyst.J.D.
In considering Mr. Dawson is “independent” (in accordance with the published listing requirementsAdelman as a director of the NYSE AMEX LLC)Company, the Board reviewed, among other qualifications, his experience and expertise in finance, accounting, banking and management. Based on his experience with Burnham Hill Capital Group LLC, Cipher Capital Partners LLC, and H. C. Wainwright & Co. Mr. Adelman qualifies as an "audit committee financial expert" under the applicable SEC rules and accordingly contributes to the Board of Directors his understanding of generally accepted accounting principles and his skills in auditing, as well as in analyzing and evaluating financial statements.
Matthew Blumberg, Chairman of the Board. Mr. Blumberg joined our Board of Directors in August 2021 and has been determinedserved as the Chairman of the Board since December 16, 2021. Mr. Blumberg is the Co-Founder and Chief Executive Officer of Bolster, an on-demand executive talent marketplace that helps accelerate companies’ growth by connecting them with experienced, highly vetted executives for interim, fractional, advisory, project-based or board roles. He also co-founder and currently serves as Chairman of Path Forward.ORG, a nonprofit organization on a mission to empower people to restart their careers after time spent focused on caregiving, working with more than 60 companies including Apple, Amazon, Wal-Mart, Intuit, Campbell’s Soup, PayPal, Verizon and Oracle. Mr. Blumberg is also an author and frequent public speaker. He was recognized as one of New York’s 100 most influential technology leaders by the Silicon Alley Insider in 2008, was one of Crain’s New York Top Entrepreneurs in 2012 and an Ernst & Young Entrepreneur of the Year finalist in 2012. He has served as a board to meetmember of
numerous corporate, nonprofit and community organizations. Mr. Blumberg attended Princeton University where he graduated Summa Cum Laude with an A.B. in Urban Planning in 1992.
In considering Mr. Blumberg as a director of the qualifications ofCompany, the Board reviewed his experience and expertise in work force matters and the leadership he has shown in his positions with current and prior companies. Mr. Blumberg qualifies as an “audit"audit committee financial expert” in accordance withexpert" under the applicable SEC rules. Mr. Dawson was originally broughtrules and accordingly contributes to the attentionBoard of Directors his understanding of generally accepted accounting principles and his skills in auditing, as well as in analyzing and evaluating financial statements.
Peter Holst, Director, President and Chief Executive Officer. Prior to being named President and CEO in January 2013, Mr. Holst served as the Company’s Senior Vice President for Business Development since October 1, 2012. Mr. Holst has served as a director of the nominating committee pursuant to Section 3.9(c) of that certain Series A-1 Convertible Preferred Stock Purchase Agreement, datedCompany since January 2013 and served as of March 16, 2009 (the “Purchase Agreement”), which provides that the nominating committee will consider one board nominee proposed by a purchaser thereto and so long as such purchaser owns at least 50%Chairman of the outstanding sharesBoard from July 2019 to December 15, 2021. Mr. Holst has more than 28 years of Series A-1 Convertible Preferred Stock. The purchaser underexperience in the Purchase Agreement, Vicis Capital, LLC, satisfied this criteriacollaboration industry. Prior to joining the Company, Mr. Holst served as the Chief Executive Officer of Affinity VideoNet, Inc., and submittedas the President and Chief Operating Officer of Raindance Communications. Mr. Dawson for consideration. The nominating party, however,Holst holds a degree in Business Administration from the University of Ottawa.
In considering Mr. Holst as a director of the Company, the Board reviewed his extensive knowledge and expertise in the communication services industry, and the leadership he has no affiliationshown in his positions with Mr. Dawson or his employer.prior companies.
James S. Lusk, Director. Director. Mr. Lusk joined our boardBoard of directorsDirectors in February 2007. He2007 and served as the Lead Independent Director of the Board from July 2019 to December 15, 2021. Mr. Lusk is currently the Chief Financial Officer of Sutherland Global Services, a global provider of business process transformation and technology management services. Mr. Lusk joined Sutherland in July 2015. From 2007 until July 2015, Mr. Lusk was Executive Vice President of ABM Industries Incorporated (NYSE:ABM), a leading provider of facility services contractor in the United Statessolutions, and Canada, and was formerlyserved as ABM’s Executive Vice President.Chief Financial Officer from 2007 until April 2015. Prior to joining ABM, he wasserved as Vice President, Business Services ofand Chief Operating Officer for the Europe, Middle East and Africa region for Avaya from 2005 to 2007. Mr. Lusk has also served as Chief Financial Officer and Treasurer of BioScrip/MIM, President of Lucent Technologies’ Business SolutionsServices division, and interim Chief Financial Officer and Corporate Controller of Lucent Technologies. Mr. Lusk earned his B.S. (Economics), cum laude, from the Wharton School, University of Pennsylvania, and his M.B.A (Finance) from Seton Hall University. He is a CPAcertified public accountant and was inducted into the AICPA Business and Industry Leadership Hall of Fame in 1999.
Joseph Laezza, Co-Chief Executive Officer, President and Director.In considering Mr. Laezza has been our Co-Chief Executive Officer and Director since March 2009, our President since June 2008, our Chief Operating Officer since April 2006 and previously servedLusk as our Vice President, Operations since March 2004. Mr. Laezza joineda director of the Company, from Con Edison Communications, where he was Vice President, Network Operations. He previously held management positions at a numberthe Board reviewed his extensive expertise and knowledge regarding finance and accounting matters, as well as compensation, risk assessment and corporate governance. Mr. Lusk qualifies as an “audit committee financial expert” under the applicable SEC rules and accordingly contributes to the Board of telecommunications service providers, including AT&TDirectors his understanding of generally accepted accounting principles and XO Communications, where he was responsible for operations, service delivery,his skills in auditing, as well as in analyzing and customer service.evaluating financial statements.
Deborah Meredith, Director. Ms. Meredith joined our Board of Directors in August 2021. Ms. Meredith currently serves as a board member, advisor and consultant to several high-tech companies with extensive experience in strategic roles with privately-held start-up companies such as Proofpoint, Aviatrix, Qventus, Alation and Kinsa Health. Ms. Meredith has more than three decades of experience
David W. Robinson, Co-Chief Executive Officer, General Counsel, Executive Vice President of Business Development, Corporate Secretary
working hands-on with company founders to assemble world-class teams, architect software products and Director. Mr. Robinson has been our Co-Chief Executive Officerestablish a roadmap for operational success. Ms. Meredith earned a master's degree in computer science from Stanford University and Director since March 2009, our Executive Vice President, Business Development since June 2008,an undergraduate degree in both computer science and General Counsel since May 2006. Prior to joining the Company, Mr. Robinson was Vice President and General Counsel of Con Edison Communications and served in senior executive positions with other telecommunications service providers and provided legal and business counseling to other businesses. Mr. Robinson received a B.A.mathematics from the University of Pennsylvania (Michigan.
magna cum laude
)
In considering Ms. Meredith as a director of the Company, the Board reviewed her experience and a Juris Doctorate from Boston College Law School.expertise in the technology industry and the leadership she has shown in her positions with prior companies.
Vote Required For Approval
Required Vote and Board Recommendation
APursuant to our bylaws, a plurality of the votes duly cast at the Annual Meeting is required for the election of directors. This means that the nomineesYou may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The persons receiving the highest number of affirmative“FOR” votes at the Annual Meeting will be elected to fill the director positions available. Stockholders doelected. Broker non-votes and withheld votes, if any, are not counted as votes cast and will have the right to cumulate their votes in the election of directors.
Assuming the four nominees are elected, there will be one vacancyno effect on the boardoutcome of directors. This vacancy may be filled by our board of directors in accordance with our by-laws after our annual meeting to serve until the next annual meeting.this election.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR“FOR” THE ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
TO SERVE UNTIL OUR NEXT ANNUAL MEETING OF STOCKHOLDERS, OR UNTIL HIS/HER SUCCESSOR IS DULY ELECTED AND QUALIFIED.
Edwin F. Heinen, Chief Financial Officer and Executive Vice President, Finance. Mr. Heinen, a certified public accountant, has been our Chief Financial Officer since April 2006 and previously served as our Controller since March 2005. Mr. Heinen joined the Company from Communications Network Enhancement, Inc., an audio conferencing company, where he was CFO since September 2001. Before that, Mr. Heinen served in senior financial executive positions with responsibility for accounting, auditing, treasury, analysis, budgeting, and financial and tax reporting. Mr. Heinen received a B.S. in Business Administration from Cornell University and an M.B.A in Finance from the University of Detroit.
Thomas Brown, Senior Vice President of Sales. Mr. Brown has been our Senior Vice President of Sales since February 2010. Prior to joining Glowpoint, Mr. Brown served as Senior Vice President of Sales and Marketing of Fibernet Telecom Group, Inc. from September 2003 until September 2009, when Fibernet was purchased by Zayo Group, Inc. Before that, Mr. Brown held sales and sales management positions with Fibernet, DirectNet Telecommunications, LCI International and AT&T. Mr. Brown has a B.A. from University of Massachusetts at Amherst.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Board of Directors
Our Board Committees and Meetings
Corporate governance is typically defined as the system that allocates duties and authority among a company’s stockholders, board of directors and management. The stockholders elect the board and vote on extraordinary matters; the board is the company’s governing body, responsible for hiring, overseeing and evaluating management, particularly the chief executive officer; and management runs the company’s day-to-day operations. The primary responsibilities of the board of directors are oversight, counseling and direction to our management in the long-term interests of us and our stockholders. At no time during 2009 was the chairman of our board of directors also our chief executive officer. Our board of directorsDirectors currently consists of five directors. The current boardBoard members include threefour independent directors, and two currentour chief executive officer. The core responsibility of our Board of Directors is to exercise its business judgment to act in what it reasonably believes to be in the best interests of the Company and its stockholders. Further, members of our seniorthe Board fulfill their responsibilities consistent with their fiduciary duty to the stockholders, and in compliance with all applicable laws and regulations. The primary responsibilities of the Board include:
•oversight of management performance and assurance that stockholder interests are served;
•oversight of the Company’s business affairs and long-term strategy; and
•monitoring adherence to the Company’s standards and policies, including, among other things, policies governing internal controls over financial reporting.
Our Board of Directors conducts its business through meetings of the Board and through activities of the standing committees, as further described below. The Board and each of the standing committees meet throughout the year and also holds special meetings and acts by written consent from time to time, as appropriate. Board agendas include regularly scheduled executive sessions of the independent directors to meet without the presence of management. The four director nominees include two independent directorsBoard has delegated various
responsibilities and two currentauthority to different committees of the Board, as described below. Members of the Board have access to all of our members of our senior management. Assuming all nominees are elected, there will be one vacancy on the boardmanagement outside of directors, which may be filled by our board of directors in accordance with our by-laws after our annual meeting.Board meetings.
Our boardBoard of directorsDirectors met eightand/or acted by written consent nine times during the year ended December 31, 2009.2021. During this period, each director then in office attended 75% or participated in more than 75% of the aggregate of (i) the total number of meetings of the boardBoard of directorsDirectors held during the period for which he was a director and (ii) the total number of meetings of committees of the boardBoard of Directors on which he served, held during the period for which he served. The board has an audit committee,Company does not have a compensation committee and a nominating committee.
As a general matter, board members are expectedpolicy with regard to attenddirectors’ attendance at our annual meetings.meetings of stockholders. All of our board members attended our 2009the 2021 annual meeting of stockholders held on May 28, 2009.
stockholders.
Director Independence
“Independent”
Our Board of Directors. Each has determined that each of our current directors, and director nominees other than Messrs. Laezza and Robinson qualifyMr. Holst qualifies as “independent” in accordance with the published listing requirementsstandards of The Nasdaq Capital Market. Because Mr. Holst is our president and chief executive officer and an employee of the NYSE Company, he does not qualify as independent.
AMEX LLC (“AmEx”). Messrs
. Laezza and Robinson are currently our employees.
The AmExNasdaq Capital Market independence definition includes a series of objective tests, such as that the director is not an officer or employee of the Company andor its subsidiaries, has not engaged in various types of business dealings with the Company.Company or its subsidiaries. In addition, as further required by the AmExThe Nasdaq Capital Market rules, the boardBoard has made a subjective determination as to each independent director that no relationship existexists which, in the opinion of the board,Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the directors reviewed and discussed information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to Glowpointthe Company and Glowpoint’sthe Company’s management.
Board Committees
In addition,
The Board has an audit committee, a compensation committee and a nominating committee, and may form special committees as is required by AmEx rules,from time to time. Each of the members ofcommittees regularly report on their activities and actions to the full Board. The charters for the audit committee, each qualify as “independent” under special standards established by the Securities and Exchange Commission (the “SEC”) for members of audit committees. The audit committee is also required to have at least one independent member who is determined by the board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules, including that the person meets the relevant definition of an “independent director.” Each member of the audit committee is independent and has been determined to be an audit committee financial expert. Stockholders should understand that this designation is a disclosure requirement of the SEC related to these directors’ experience and understanding with respect to certain accounting and auditing matters. The designation does not impose upon these directors any duties, obligations or liability that are greater than are generally imposed on them as a member of the auditcompensation committee, and the board, and their designation as an auditnominating committee financial expert pursuant toare available on the Company’s website at www.oblong.com/company/investor-relations. The contents of our website are not incorporated by reference into this SEC requirement does not affect the duties, obligations or liability ofdocument for any other member of the audit committee or the board.purpose.
Audit Committee
We currently have anThe audit committee consistingcurrently consists of James S. Lusk Peter A. Rust,(chair), Jason Adelman, and Grant Dawson. Mr. RustMatthew Blumberg. Our Board of Directors has decided not to standdetermined that all members of the audit committee are “independent” within the meaning of the corporate governance of Nasdaq Capital Market and the SEC rules governing audit committees and “financially literate” for re-election. Our boardpurposes of directorsapplicable Nasdaq Capital Market listing standards. In addition, our Board of Directors has determined that each member of the audit committeeMessrs. Lusk, Adelman, and Blumberg has the accounting and related financial management expertise and satisfiesto satisfy the requirement asrequirements of an “audit committee financial expert,” all as determined pursuant to the rules and regulations of the SEC. The audit committee consults and meets with our Independent Registered Public Accounting Firm and chief financial officerindependent registered public accounting firm, Chief Financial Officer and accounting personnel, reviews potential conflict of interest situations
where appropriate, and reports and makes recommendations to the full boardBoard of directorsDirectors regarding such matters. The audit committee operates under a written audit committee charter, which was originally filed with our proxy statement for the 2003 annual meeting of our stockholders, but was amended and restated by the board on September 29, 2005. Our amended and restated audit committee charter is available online at www.glowpoint.com/ governance. You may also request a copy of the audit committee charter, at no cost, by telephoning us at (866) GLOWPOINT or writing to us at Glowpoint, Inc., 225 Long Avenue, Hillside, New Jersey 07205, Attention: Investor Relations. The audit committee met sixfour times during the year ended December 31, 2009.2021.
Please see “Report of the Audit Committee of the Board of Directors” below for additional information regarding the audit committee and the report of its members for the year ended December 31, 2021.
Compensation Committee
We currently have aOur compensation committee consistingcurrently consists of Jason Adelman (chair), James S. Lusk, Peter A. Rust, and Grant Dawson. Mr. Rust has decided not to stand for re-election.Deborah Meredith. Each member of the compensation committee meets the applicable independence requirements of The Nasdaq Capital Market. The compensation committee met and/or acted by written consent three times during the AmEx. year ended December 31, 2021.
The compensation committee is responsible for supervisingestablishing and administering our executive compensation policies,policies. The role of the compensation committee is to (i) formulate, evaluate and approve compensation of the Company’s directors, executive officers and key employees, (ii) oversee all compensation programs involving the use of the Company’s stock and (iii) produce, if required under applicable securities laws, a report on executive compensation for inclusion in the Company’s proxy statement for its annual meeting of stockholders. The duties and responsibilities of the compensation committee under its charter include:
•annually reviewing officers’ salaries,and making recommendations to the Board with respect to compensation of directors, executive officers and key employees of the Company;
•annually reviewing and approving significant changescorporate goals and objectives relevant to Chief Executive Officer compensation, evaluating the Chief Executive Officer’s performance in employee benefitslight of those goals and objectives, and recommending to the boardBoard the Chief Executive Officer’s compensation levels based on this evaluation;
•reviewing competitive practices and trends to determine the adequacy of directors such other formsthe executive compensation program;
•approving and overseeing compensation programs for executive officers involving the use of remuneration as it deems appropriate. The compensation committee operates underthe Company’s stock;
•approving and administering cash incentives for executives, including oversight of achievement of performance objectives, and funding for executive incentive plans;
•annually performing a written compensation committee charter, which was adopted in May 2007 and is available online at www.glowpoint.com/governance. You may also request a copyself-evaluation on the performance of the compensation committee charter, at no cost, by telephoning us at (866) GLOWPOINT or writingcommittee; and
•making regular reports to us at Glowpoint, Inc., 225 Long Avenue, Hillside, New Jersey 07205, Attention: Investor Relations. Thethe Board concerning the activities of the compensation committee.
When appropriate, the compensation committee actedmay, in carrying out its responsibilities, form and delegate authority to subcommittees. The Chief Executive Officer plays a role in determining the compensation of our other executive officers by unanimous written consent duringevaluating the year ended December 31, 2009.performance of those executive officers. The Chief Executive Officer’s evaluations are then reviewed by the compensation committee. This process leads to a recommendation for any changes in salary, bonus terms and equity awards, if any,
-15-based on performance, which recommendations are then reviewed and approved by the compensation committee.
Nominating Committee
We currently have aOur nominating committee consistingcurrently consists of Jason Adelman (chair), James S. Lusk, Peter A. Rust,Matthew Blumberg, and Grant Dawson. Mr. Rust has decided not to stand for re-election.Deborah Meredith. Each member of the nominating committee meets the independence requirements of the AmEx.Nasdaq Capital Market. The nominating committee is responsible for assessing the performance of our boardBoard of directorsDirectors and making recommendations to our boardBoard regarding nominees for the board.Board. The nominating committee was formed in February 2004. Prior to the formation of the committee, its functions were performed by the board of directors. The nominating committee operates under a written nominating committee charter, which was filed with our proxy statement for the 2004 annual meeting of our stockholders and is available online at www.glowpoint.com/governance. You may also request a copy of the nominating committee charter, at no cost, by telephoning us at (866) GLOWPOINT met and/or writing to us at Glowpoint, Inc., 225 Long Avenue, Hillside, New Jersey 07205, Attention: Investor Relations. The nominating committee acted by unanimous written consent two times during the year ended December 31, 2009.2021.
The nominating committee considers qualified candidates to serve as a member of our boardBoard of directorsDirectors that are suggested by our stockholders. Nominees recommended by stockholders will be given appropriate consideration and evaluated in the same manner as other nominees. Stockholders can suggest qualified candidates for director by writing to our Corporate Secretary at 225 Long Avenue, Hillside, New Jersey 07205.25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. Stockholder submissions that are received in accordance with our by-lawsbylaws and that meet the criteria outlined in the nominating committee charter are forwarded to the members of the nominating committee for review. Stockholder submissions must include the following information:
• | A statement that the writer is our stockholder and is proposing a candidate for our board of directors for consideration by the nominating committee; |
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• | The name of and contact information for the candidate; |
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• | A statement of the candidate’s business and educational experience; |
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• | Information regarding each of the factors set forth in the nominating committee charter sufficient to enable the nominating committee to evaluate the candidate; |
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• | A statement detailing any relationship between the candidate and any of our customers, suppliers or competitors; |
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• | Detailed information about any relationship or understanding between the proposing stockholder and the candidate; and |
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• | A statement that the candidate is willing to be considered and willing to serve as our director if nominated and elected. |
•a statement that the writer is our stockholder and is proposing a candidate for our Board of Directors for consideration by the nominating committee;
•the name of and contact information for the candidate;
•a statement of the candidate’s business and educational experience;
•information regarding each of the factors set forth in the nominating committee charter sufficient to enable the nominating committee to evaluate the candidate;
•a statement detailing any relationship between the candidate and any of our customers, suppliers or competitors;
•detailed information about any relationship or understanding between the proposing stockholder and the candidate; and
•a statement that the candidate is willing to be considered and willing to serve as our director if nominated and elected.
In considering potential new directors, and officers, the nominating committee will review individuals from various disciplines and backgrounds. Among the qualifications to be considered in the selection of candidates are broad experience in business, finance or administration; familiarity with national and international business matters; familiarity with our industry; and prominence and reputation. While there is no formal policy with regard to consideration of diversity in identifying director nominees, the nominating committee will consider diversity in business experience, professional expertise, gender and ethnic background, along with various other factors when evaluating director nominees. The nominating committee will also consider whether the individual has the time available to devote to the work of our boardBoard of directorsDirectors and one or more of its committees. None of the candidates this year for election to the board of directors were brought to the nominating committee by stockholder submission pursuant to the foregoing.
The nominating committee will also review the activities and associations of each candidate to ensure that there is no legal impediment, conflict of interest or other consideration that might hinder or prevent service on our boardBoard of directors.Directors. In making its selection, the nominating committee will bear in mind that the foremost responsibility of a director of a corporation is to represent the interests of the stockholders as a whole. The nominating committee will periodically review and reassess the adequacy of its charter and propose any changes to the boardBoard of directorsDirectors for approval.
Our current director compensation policy, which became effective on June 1, 2009 following our last Annual Meeting
Contacting the Board of Stockholders, provides that directors who are not our executive officers or employees receive an annual cash fee of $20,000, payable in equal quarterly installments on the first business day following the end of the calendar quarter, and an annual grant of 25,000 restricted shares of our common stock, which shall be made at the annual meeting of our stockholders and shall vest at the next annual meeting of our stockholders. The chairperson of our board of directors, if any, and the chairperson of our audit committee will each receive an additional cash payment of $5,000 per year, payable in equal quarterly installments. Attendance at board meetings and committee meetings may be in person or by telephone.
Directors
The following table represents compensation paid to our directors during the year ended December 31, 2009:
| Name | Year | | Fees (1) | | | Stock Awards (2) | | | Option Awards (3) | | | Total | |
James Lusk | 2009 | | $ | 32,581 | | | $ | 20,238 | | | $ | 3,023 | | | $ | 55,842 | |
Peter Rust | 2009 | | | 28,668 | | | | 12,483 | | | | 3,023 | | | | 44,174 | |
Grant Dawson | 2009 | | | 11,668 | | | | 6,238 | | | | — | | | | 17,906 | |
Aziz Ahmad* | 2009 | | | 6,000 | | | | 3,610 | | | | 777 | | | | 10,387 | |
Bami Bastani** | 2009 | | | 17,000 | | | | 16,333 | | | | 3,023 | | | | 36,356 | |
Dean Hiltzik** | 2009 | | | 13,000 | | | | — | | | | 2,475 | | | | 15,475 | |
Richard Reiss* | 2009 | | | 6,000 | | | | — | | | | 777 | | | | 6,777 | |
(1) | Prior to June 1, 2009, non-employee directors were paid $2,000 for attending each board of director meeting and $1,000 for attending each committee meeting. Our current director compensation policy, which became effective on June 1, 2009 following our last Annual Meeting of Stockholders, provides that directors who are not our executive officers or employees receive an annual cash fee of $20,000 in lieu of payment for each meeting. |
(2) | Prior to June 1, 2009, when a non-employee is elected to the board of directors they received 80,000 restricted shares which vest as to 20,000 shares on each of the grant date and the first, second and third anniversary dates of the grant. The amounts included in the “Stock Awards” column represent the compensation cost we recognized in 2009 related to non-option stock awards, as described in FASB ASC Topic 718 without taking into account any forfeiture rates. We value the non-option stock awards using the common stock price of the grant date. Please see the “Grants of Plan-Based Awards” table for more information regarding stock awards we granted in 2009. Our current director compensation policy, which became effective on June 1, 2009 following our last Annual Meeting of Stockholders, provides that directors who are not our executive officers or employees receive an annual grant of 25,000 restricted shares of our common stock, which vest in one year. The table below summarizes, by year of grant, the expense amounts reported in the “Stock Awards” column for each named executive officer: |
| Name | Year | | 2006 | | | 2007 | | | 2008 | | | 2009 | | | Total | |
James Lusk | 2009 | | $ | — | | | $ | 14,000 | | | $ | — | | | $ | 6,238 | | | $ | 20,238 | |
Peter Rust | 2009 | | | 3,082 | | | | — | | | | 3,163 | | | | 6,238 | | | | 12,483 | |
Grant Dawson | 2009 | | | — | | | | — | | | | — | | | | 6,238 | | | | 6,238 | |
Aziz Ahmad | 2009 | | | 3,610 | | | | — | | | | — | | | | — | | | | 3,610 | |
Bami Bastani | 2009 | | | — | | | | 16,333 | | | | — | | | | — | | | | 16,333 | |
Dean Hiltzik | 2009 | | | — | | | | — | | | | — | | | | — | | | | — | |
Richard Reiss | 2009 | | | — | | | | — | | | | — | | | | — | | | | — | |
(3) | Prior to June 1, 2009, non-employee directors received options to acquire 1,000 shares of common stock for attending each Board of Director meeting and options to acquire 500 shares of common stock for attending each committee meeting. The options were fully vested when granted. The amounts included in the “Option Awards” column represent the compensation cost we recognized in 2009 related to option awards, as described in FASB ASC Topic 718. For a discussion of the valuation assumptions, see Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2009. In 2009, we used the following weighted average assumptions to determine the fair value of option awards: a risk-free interest rate of 2.0%, an expected life of five years, expected volatility of 113.3% and no dividends. Please see the “Grants of Plan-Based Awards” table for more information regarding option awards we granted in 2009. |
* Messrs. Ahmad and Reiss served on the board of directors until March 18, 2009.
** Messrs. Bastani and Hiltzik served on the board of directors until the 2009 Annual Meeting of Stockholders.
Contacting The Board Of Directors |
Any stockholder who desires to contact our boardBoard of directors,Directors, committees of the boardBoard of directorsDirectors and individual directors may do so by writing to:
Glowpoint, Oblong, Inc., [Addressee], 225 Long Avenue, Hillside, New Jersey 07205
| • | Audit Committee of the Board of Directors |
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| • | Compensation Committee of the Board of Directors |
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| • | Nominating Committee of the Board of Directors |
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| • | Name of individual directors
|
These communications are sent by us directly25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433, Attention: David Clark, Corporate Secretary. Mr. Clark will direct such communication to the specified addressee.
appropriate persons.
Board Leadership Structure and Role in Risk Oversight
Mr. Holst has served as the Company’s President and Chief Executive Officer since January 2013 and served as the Chairman of the Company’s Board of Directors from July 2019 up until our 2021 annual meeting of stockholders (December 16, 2021). Effective on the date of the 2021 annual meeting of stockholders, Mr. Blumberg replaced Mr. Holst as the Chairman of the Board of Directors.
To ensure a strong and independent Board, as discussed herein, the Board has affirmatively determined that all directors of the Company, other than Mr. Holst, are independent within the meaning of the Nasdaq Capital Market listing standards currently in effect. Our Corporate Governance Guidelines provide that non-management directors shall meet in regular executive session without management present, and that Mr. Lusk, who served as our lead independent director from July 2019 up until our 2021 annual meeting of stockholders, has acted as the Chairman of such meetings. Additionally, Mr. Lusk actively participated in establishing and setting Board meeting agendas.
The Board believes that there is no single approach to providing board leadership and that each possible leadership structure must be considered in the context of the individuals involved and the specific circumstances facing a company, as the right structure may vary as circumstances change. The Board believes it is in the best interest of the Company and its stockholders at this time to have separate Chief Executive Officer and Chair positions. The Board believes this structure will enable the Chief Executive Officer to focus on operation of the Company’s business, while the Chair focuses on leading the Board in its oversight role.
The Board has an active role, directly and through its committees, in the oversight of the Company’s risk management efforts. The Board carries out this oversight role through several levels of review. The Board regularly reviews and discusses with members of management information regarding the management of risks inherent in the operation of the Company’s business and the implementation of the Company’s strategic plan, including the Company’s risk mitigation efforts.
Each of the Board’s committees also oversees the management of the Company’s risks that are under each committee’s areas of responsibility. For example, the audit committee oversees management of accounting, auditing, external reporting, internal controls and cash investment risks. The nominating committee oversees and assesses the performance of the Board and makes recommendations to the Board from time to time regarding nominees for the Board. The compensation committee oversees risks arising
from compensation practices and policies. While each committee has specific responsibilities for oversight of risk, the Board is regularly informed by each committee about such risks. In this manner the Board is able to coordinate its risk oversight.
Family Relationships
There are no family relationships between the officers and directors of the Company.
Legal Proceedings
During the past ten years none of our directors or executive officers was involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The information contained in this Audit Committee Report is not “soliciting material” and has not been “filed” with the Securities and Exchange Commission. This Audit Committee Report will not be incorporated by reference into any of our future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we may specifically incorporate it by reference into a future filing.
The audit committee is composed of three members. Each member is a director who meets the current independence standards under the applicable SEC and AmExNasdaq Capital Market rules. The audit committee operates under a written audit committee charter. As described more fully in its charter, the purpose of the audit committee is to assist the boardBoard in its general oversight of Glowpoint’sthe Company’s financial reporting, internal controls and audit functions. Management is responsible forfor: the preparation, presentation and integrity of Glowpoint’sCompany’s financial statements; accounting and financial reporting principles; internal controls; and procedures designed to reasonably assure compliance with accounting standards, applicable laws and regulations. Amper, Politziner & Mattia,EisnerAmper LLP (“Amper”EisnerAmper”), our Independent Registered Public Accounting Firm,independent registered public accounting firm, is responsible for performing an independent audit of the consolidated financial statements in accordance with the Standards of the Public Company Accounting Oversight Board (United States). In accordance with applicable law, the audit committee has ultimate authority and responsibility to select, compensate, evaluate and, when appropriate, replace our Independent Registered Public Accounting Firm.independent registered public accounting firm. The audit committee has the authority to engage its own outside advisers, including experts in particular areas of accounting, as it determines appropriate, apart from counsel or advisers hired by management.
The audit committee members mayneed not be professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and the Independent Registered Public Accounting Firm,EisnerAmper, nor can the audit committee certify that the Independent Registered Public Accounting FirmEisnerAmper is “independent” under applicable rules. The audit committee serves a board-levelBoard-level oversight role, in which it provides advice, counsel and direction to management and the Independent Registered Public Accounting FirmEisnerAmper on the basis of the information it receives, discussions with management and the Independent Registered Public Accounting Firm,EisnerAmper, and the experience of the audit committee’s members in business, financial and accounting matters. Each memberAll members of the audit committee hashave been determined by the boardBoard to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules. Stockholders should understand that this designation is an SEC disclosure requirement related to these directors’ experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on these directors any duties, obligations or liability that are greater than are generally imposed on them as a member of the audit committee and the board,Board, and their designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the audit committee or the board.Board.
In accordance with law, the audit committee is responsible for establishing procedures for the receipt, retention and treatment of complaints received by Glowpointthe Company regarding accounting, internal accounting controls or auditing matters, including the confidential, anonymous submission by our employees received through established procedures, of concerns regarding questionable accounting or auditing matters.
Among other matters, the audit committee monitors the activities and performance of Glowpoint’s Independent Registered Public Accounting Firm,EisnerAmper, including the audit scope, external audit fees, Independent Registered Public Accounting Firm independence matters and the extent to which the Independent Registered Public Accounting Firmfirm may be retained to perform non-audit services.
In accordance with audit committee policy and theapplicable legal requirements, of law, all services to be provided by AmperEisnerAmper are pre-approved by the audit committee. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly-tradedpublicly traded company from obtaining certain non-audit services from its Independent Registered Public Accounting Firm.EisnerAmper. We obtain these services from other service providers as needed.
The audit committee has reviewed our audited financial statements and met and held discussions with management regarding the audited financial statements. Management has represented to the audit committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States.
The audit committee has discussed with Amper, our Independent Registered Public Accounting Firm,EisnerAmper the matters required to be discussed by Statement ofthe statement on Auditing Standards No. 61 (Communication1301, “Communications with Audit Committees).Committees,” as adopted by the Public Company Accounting Oversight Board. These discussions have included a review as to the quality, not just the acceptability, of our accounting principles.
Our Independent RegisteredThe audit committee has received the written disclosures and the letter from EisnerAmper required by applicable requirements of the Public Company Accounting Firm also provided toOversight Board regarding EisnerAmper’s communications with the audit committee the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees),concerning independence, and the audit committee has discussed with the Independent Registered Public Accounting FirmEisnerAmper its independence from management and our company.the Company. The audit committee has also considered the compatibility of non-audit services with the Independent Registered Public Accounting Firm’sEisnerAmper’s independence.
Based on the audit committee’s discussion with managementreview and the Independent Registered Public Accounting Firm, the audit committee’s review of the audited financial statements, the representations of management and thediscussions described in this report, of the Independent Registered Public Accounting Firm to the audit committee, the audit committee recommended to the Board of Directors that the board of directors file theour audited consolidated financial statements for the year ended December 31, 20092021 be included in the Company’s Annual Report on Form 10-K for filing with the SEC on Form 10-K.SEC.
Respectfully submitted,
| | Respectfully submitted,
|
| | James Lusk, Chairman
Grant Dawson
Peter Rust
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James Lusk, Chairman
Jason Adelman
COMPENSATION DISCUSSION AND ANALYSISMatthew Blumberg
General Compensation Philosophy
Our overall compensation philosophy is to provide a total compensation package that is competitive and enables us to attract, motivate, reward and retain key executives and other employees who have the skills and experience necessary to promote our short- and long-term financial performance and growth.PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Compensation Committee recognizes the critical roleaudit committee, composed entirely of our executive officers in our growth, success and in our future prospects. Accordingly, our executive compensation policies are designed to (1) align the interests of executive officers with those of stockholders by encouraging stock ownership by executive officers and by making a significant portion of executive compensation dependent on our financial performance, (2) provide compensation that will attract and retain talented professionals, (3) reward individual results through base salary, annual cash bonuses, long-term incentive compensation in the form of stock options, restricted stock awards and various other benefits, and (4) manage compensation based on skill, knowledge, effort and responsibility needed to perform a particular job successfully.
In establishing salary, bonuses and long-term incentive compensation for our executive officers, the Compensation Committee takes into account both the position and the expertise of a particular executive, as well as the Committee’s understanding of competitive compensation for similarly situated executives in our sector of the technology industry. Each of our Co-Chief Executive Officers confers withindependent, non-employee members of the Compensation Committee, and makes recommendations, regardingBoard of Directors, has appointed the compensationfirm of all executive officers other than him. Neither Co-Chief Executive Officer, however, participates inEisnerAmper as the Compensation Committee's deliberations regarding his own compensation. In determiningindependent registered public accounting firm to audit the compensation of our executive officers, the Compensation Committee may consult available compensation reports, and at its sole discretion may engage in retaining a compensation consultant or engage in benchmarking. In 2009 the Compensation Committee did not engage a compensation consultant.
Components of Compensation
The componentsconsolidated financial statements of the compensation program for named executive officers are described below.
Base Salary. Salaries for executive officers for 2009 were generally determined by the Compensation Committee on an individual basis in connection with the determination of the terms of such executive’s applicable employment agreement, based on the following criteria: the executive’s scope of responsibility, performance, prior experienceCompany and salary history, as well as the salaries for similar positions at comparable companies.
The base salaries for the named executive officers for 2009 were increased from the 2008 levels pursuant to an employment agreement or in accordance with our company policy and past practice.
Bonus/Incentive Compensation. The Compensation Committee believes that a substantial portion of the annual compensation of each executive officer should be in the form of variable cash incentive pay. Accordingly, we did not award a guaranteed bonus to any executive officer in 2009. However, each executive officer is eligible, at the discretion of the Compensation Committee, to receive up to 40% of his base salaryits subsidiaries for the fiscal year uponending December 31, 2022 and is asking the achievementstockholders for ratification of the appointment. If the stockholders do not approve the selection of EisnerAmper, the audit committee will reconsider the appointment, but may conclude that it is in the best interests of the Company to retain EisnerAmper for the current fiscal year. Even if the appointment is ratified, the audit committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the audit committee determines that such a change would be in the best interests of the Company.
As our independent registered public accounting firm, EisnerAmper would audit our consolidated financial statements for the fiscal year ending December 31, 2022, review the related interim quarters, and perform audit-related services and consultation in connection with various accounting and financial reporting matters. EisnerAmper may also perform certain financial performance goals or other criteria and metricsnon-audit services for our Company. The audit committee has determined that the provision of the services provided by EisnerAmper as established by the Co-CEOsset forth herein are compatible with maintaining EisnerAmper’s independence and the Compensation Committee.
The Compensation Committee did not award any bonus to the named executive officers for 2009. Mr. Laezza did, however, receive $15,000, in lieu of any payments due under our sales commission plan, for new business he originated in 2009.
Long-Term Incentive Awards. The Compensation Committee believes that equity-based compensationprohibitions on performing non-audit services set forth in the formSarbanes-Oxley Act and relevant SEC rules.
Representatives of stock options or restricted stock linksEisnerAmper are not expected to be present at the interests of executives with the long-term interests of our stockholders and encourages executives to remain in our employ. We grant stock options in accordance with our various stock option plans. Grants of options and/or restricted stock are awarded based on a number of factors, including the individual’s level of responsibility, the amount and term of options already held by the individual, the individual’s contributions to the achievement of our financial and strategic objectives, and industry practices and norms.
Broad-based Employee Benefits. As employees, our named executive officersAnnual Meeting but will have the opportunity to participatemake a statement if they desire to do so and are expected to be available to respond to appropriate questions.
Audit Fees
EisnerAmper, our principal accountant, billed us approximately $299,000 for professional services for the audit of our annual consolidated financial statements for the 2021 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2021 fiscal year. EisnerAmper billed us $301,000 for professional services for the audit of our annual consolidated financial statements for the 2020 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2020 fiscal year.
Audit-Related Fees
EisnerAmper did not bill us in the 2021 and 2020 fiscal years for any professional services rendered for audit-related items.
Tax Fees
EisnerAmper did not bill us in the 2021 and 2020 fiscal years for any professional services rendered for tax compliance, tax advice or tax planning.
All Other Fees
EisnerAmper did not bill us in the 2021 and 2020 fiscal years for any other products or services.
Audit Committee Pre-Approval Policy
The audit committee is required to pre-approve the engagement of EisnerAmper to perform audit and other services for the Company. Our procedures for the pre-approval by the audit committee of all services provided by EisnerAmper comply with SEC regulations regarding pre-approval of services. Services subject to these SEC requirements include audit services, audit-related services, tax services and other services. The audit engagement is specifically approved, and the auditors are retained by the audit committee. The audit committee also has adopted policies and procedures for pre-approving all non-audit work performed by EisnerAmper. In accordance with audit committee policy and the requirements of law, all services provided by EisnerAmper in the 2021 and 2020 fiscal years were pre-approved by the audit committee and all services to be provided by EisnerAmper will be pre-approved. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from its auditing firm. We obtain these services from other service providers as needed.
Vote Required For Approval
To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the total number of benefits programs that are generally availablevotes of our capital stock represented in person or by proxy and entitled to all eligible employees. These benefits include:
· | Healthcare Plans – includes medical benefits, dental benefits, and vision care program. |
· | 401(k) Retirement Plan – allows eligible employees to save for retirementvote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on a tax-advantaged basis. Under the 401(k) Plan, participants may elect to defer a portion of their compensation on a pre-tax basis and have it contributed to the Plan subject to applicable annual Internal Revenue Code limits. Pre-tax contributions are allocated to each participant's individual account and are then invested in selected investment alternatives according to the participants' directions. Employee elective deferrals are 100% vested at all times. The 401(k) Plan allows for matching contributions to be made by us. As a tax-qualified retirement plan, contributions to the 401(k) Plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) Plan and all contributions are deductible by us when made. |
Compensation Committee Report
The information contained in this Compensation Committee Report is not “soliciting material” and has not been “filed” withproposal. To be approved, the Securities and Exchange Commission. This Compensation Committee Reportshares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be incorporatedvoted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will have discretionary authority to vote in the absence of timely instructions from their customers. As a result, broker non-votes should not exist with respect to this proposal.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 2, TO RATIFY THE SELECTION OF EISNERAMPER LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022.
PROPOSAL NO. 3 -- AMENDMENT TO COMPANY CHARTER TO EFFECT A REVERSE STOCK SPLIT
General
At the Annual Meeting, Oblong’s stockholders will be asked to approve an amendment to Article FOURTH of the Company Charter (the “Reverse Stock Split Amendment”) to effect a reverse stock split of Oblong’s issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15 (the “Reverse Stock Split”), with the final ratio to be selected by Oblong’s Board of Directors. A vote “FOR” Proposal No. 3 will constitute approval of the Reverse Stock Split Amendment and will grant Oblong’s Board of Directors the authority to determine whether to implement the Reverse Stock Split and to select the Reverse Stock Split ratio out of the range approved by the Company’s stockholders. The Board expects to authorize the consummation of the Reverse Stock Split only if and to the extent necessary to meet the listing requirements of the Nasdaq Capital Market, as further discussed under “--Purpose” below. Upon the effectiveness of the Reverse Stock Split (the “split effective time”), the issued and outstanding shares of Oblong’s Common Stock immediately prior to the split effective time will be reclassified into a smaller number of shares based on the Reverse Stock Split ratio selected by the Board.
The Reverse Stock Split, as more fully described below, will not change the number of authorized shares of Common Stock or preferred stock, or the par value of Common Stock or preferred stock.
The description in this Proxy Statement of the proposed Reverse Stock Split Amendment is qualified in its entirety by reference intoto, and should be read in conjunction with, the full text of the Form of Amendment to the Company Charter attached to this Proxy Statement as Appendix A.
Purpose
The purpose of the Reverse Stock Split is generally to increase the per share trading value of the Common Stock in order to regain compliance with the Bid Price Rule as described below. As previously reported, on February 17, 2022, Oblong received written notice (the "Notice") from the Nasdaq Stock Market, LLC indicating that the bid price for the Common Stock, for the last 30 consecutive business days, had closed below the minimum $1.00 per share and, as a result, the Company is not in compliance with the $1.00 minimum bid price requirement for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule").
On August 17, 2022, the Company received written notification from the Listing Qualifications Department of Nasdaq, granting the Company's request for a 180-day extension to regain compliance with the Bid Price Rule. The Company now has until February 13, 2023 to meet the requirement. If at any time prior to February 13, 2023, the bid price of our future filingsthe Company's ordinary shares closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Company will regain compliance with the Bid Price Rule.
If the Company does not regain compliance with the Bid Price Rule during the additional 180-day extension, Nasdaq will provide written notification to the Company that its Common Stock will be delisted. At that time, the Company may appeal the relevant delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if the Company does appeal the delisting determination by Nasdaq to the hearings panel, that such appeal would be successful. Nasdaq's extension notice has no immediate effect on the listing or
trading of the Company's Common Stock, which will continue to trade on the Nasdaq Capital Market under the Securities Actsymbol “OBLG”.
Principal Effects of 1933 or the Securities Exchange ActReverse Stock Split
Effect on Proportionate Ownership. The Reverse Stock Split will be effected simultaneously for all outstanding shares of 1934,CommonStock. The Reverse Stock Split will affect all of Oblong’s stockholders uniformly and will not affect any stockholder’s percentage ownership interest in Oblong, except to the extent that we may specifically incorporate it by reference intothe Reverse Stock Split results in any of Oblong’s stockholders owning a future filing.fractional share, since any resulting fractional share will be rounded up to a whole share. Shares of Oblong’s Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and nonassessable. The Reverse Stock Split will not affect Oblong continuing to be subject to the periodic reporting requirements of the Exchange Act.
Effect on Outstanding Options, Stock Option and Equity Incentive Plans and Warrants. In addition, proportionate adjustments will bemade to the per share exercise price and/or the number of shares issuable upon the exercise or conversion of all outstanding options, warrants and other convertible or exchangeable securities entitling the holders thereof to purchase, exchange for, or convert into, shares of Common Stock, which will result in approximately the same aggregate price being required to be paid for such options and restricted stock awards and units upon exercise immediately preceding the Reverse Stock Split. The number of shares reserved for issuance or pursuant to the securities or plans described in the immediately preceding sentence will be reduced proportionately.
Effect on Voting Rights. Proportionate voting rights of the holders of the Company’s common stock willnot be affected by the reverse stock split, regardless of the reverse stock split ratio selected by the Board, except to the extent that the reverse stock split results in any of the Company’s stockholders owning a fractional share, since any resulting fractional share will be rounded up to a whole share. For example, a holder of 1.0% of the voting power of the outstanding shares of the Company’s common stock immediately prior to the effective time of the reverse stock split would continue to hold 1.0% of the voting power of the outstanding shares of common stock after the reverse stock split, regardless of the reverse stock split ratio selected by the Board, subject to the de minimis effect of any fractional share being rounded up to a whole share.
Assuming Reverse Stock Split ratios of 1-for-5, 1-for-10, and 1-for-15, the following table sets forth (i) the number of shares of our Common Stock that would be issued and outstanding and (ii) the number of shares of our Common Stock that would be reserved for issuance pursuant to outstanding warrants, options, and restricted stock units and under our equity incentive plan, each giving effect to the Reverse Stock Split and based on securities outstanding as of November 14, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of Shares Before Reverse Stock Split | | Reverse Stock Split Ratio of 1-for-5 | | Reverse Stock Split Ratio of 1-for-10 | | Reverse Stock Split Ratio of 1-for-15 |
| | | | | | | | |
| | | | | | | | |
| Number of Shares of Common Stock Issued and Outstanding | | 30,816,048 | | | 6,163,210 | | | 3,081,605 | | | 2,054,404 | |
| Number of Shares of Common Stock Reserved for Issuance | | 5,425,404 | | | 1,085,081 | | | 542,541 | | | 361,694 | |
If this Proposal No. 3 is approved and our Board of Directors elects to effect the Reverse Stock Split, the number of outstanding shares of Common Stock will be reduced in proportion to the ratio of the split chosen by our Board of Directors.
Additionally, if this Proposal No. 3 is approved and our Board of Directors elects to effect the Reverse Stock Split, we would communicate to the public, prior to the effective date of the stock split, additional details regarding the reverse split, including the specific ratio selected by our Board of Directors.
After the split effective time, the Common Stock will have a new CUSIP number, which is a number used to identify the Company’s equity securities, and stock certificates with the older CUSIP number will need to be exchanged for stock certificates with the new CUSIP number by following the procedures described below.
After the split effective time, the Company will continue to be subject to periodic reporting and other requirements of the Exchange Act. The Common Stock will continue to be listed on the Nasdaq Capital Market under the symbol “OBLG”.
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Proposal No. 3, except to the extent of their ownership in shares of our Common Stock and securities convertible or exercisable for Common Stock.
Certain Risks Associated with the Reverse Stock Split
If the Reverse Stock Split is effected and the market price of the Common Stock declines, the percentage decline may be greater than would occur in the absence of a Reverse Stock Split. We expect that the market price of the Common Stock will, however, also be based on performance and other factors, which are unrelated to the number of shares outstanding.
•There can be no assurance that the Reverse Stock Split will result in any particular price for the Common Stock. As a result, the trading liquidity of the Common Stock may not necessarily improve.
•There can be no assurance that the market price per share of the Common Stock after a Reverse Stock Split will increase in proportion to the reduction in the number of shares of the Common Stock outstanding before the Reverse Stock Split. Accordingly, the total market capitalization of the Common Stock after the Reverse Stock Split may be lower than the total market
capitalization before the Reverse Stock Split. Moreover, in the future, the market price of the Common Stock following the Reverse Stock Split may not exceed or remain higher than the market price prior to the Reverse Stock Split.
•Because the number of issued and outstanding shares of Common Stock would decrease as result of the Reverse Stock Split, the number of authorized but unissued shares of Common Stock will increase on a relative basis. If the Company issues additional shares of Common Stock, then the ownership interest of the Company’s current stockholders would be diluted, possibly substantially.
•There are certain agreements, plans and proposals that may have material anti-takeover consequences. The proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect. For example, the issuance of a large block of Common Stock could dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of the Company with another company.
•The Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of Common Stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.
The Compensation CommitteeBoard intends to effect the Reverse Stock Split only if it believes that a decrease in the number of shares is likely to improve the trading price of the Common Stock to the extent necessary to meet the listing requirements of the Nasdaq Capital Market and if the implementation of the Reverse Stock Split is determined by the Board to be in the best interests of the Company and its stockholders. The Board does not expect to implement a Reverse Stock Split if Oblong can otherwise meet the listing requirements of the Nasdaq Capital Market.
Procedure for Effecting the Reverse Stock Split and Exchange of Stock Certificates
If Oblong’s stockholders approve the Reverse Stock Split, and implementing the Reverse Stock Split is necessary to meet the listing requirements of the Nasdaq Capital Market and if its Board of Directors still believes that a Reverse Stock Split is in the best interests of Oblong, the Oblong Board of Directors will determine and fix the Reverse Stock Split ratio out of the range approved by Oblong’s stockholders and the split effective time. Oblong’s Board of Directors may delay effecting, or choose not to pursue, the Reverse Stock Split in its discretion without resoliciting stockholder approval.
Beneficial Owners of Book Entry Shares of Common Stock. Upon the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders in “street name” (i.e., through a bank, broker, custodian or other nominee), in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our Common Stock in street name. However, these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split and making payment for fractional shares. If a stockholder holds shares of our Common Stock with a bank, broker, custodian or other nominee and has reviewedany questions in this regard, stockholders are encouraged to contact their bank, broker, custodian or other nominee.
Registered Holders of Book Entry Shares of Common Stock. Certain of our registered holders of Common Stock hold some or all oftheir shares electronically in book-entry form with our transfer agent, American Stock Transfer & Trust Company, LLC. These stockholders do not hold physical stock certificates evidencing their ownership of our Common Stock. However, they are provided with a statement reflecting the number of shares of our Common Stock registered in their accounts. If a stockholder holds registered shares in book-entry form with our transfer agent, no action needs to be taken to receive post-Reverse Stock Split shares. If a stockholder is entitled to post-Reverse Stock Split shares, a transaction statement will automatically be sent to the stockholder’s address of record indicating the number of shares of our Common Stock held following the Reverse Stock Split.
Registered Holders of Certificated Shares of Common Stock. Stockholders of record at the time of the Reverse Stock Split who holdshares of Common Stock in certificated form will be sent a transmittal letter by the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, after the split effective time that will contain the necessary materials and discussedinstructions on how a stockholder should surrender his, her or its certificates, if any, representing shares of our Common Stock to the Compensation Discussiontransfer agent.
Fractional Shares
No fractional shares will be issued in connection with the Reverse Stock Split. Stockholders of record who otherwise would be entitled to receive fractional shares because they hold a number of pre-split shares not evenly divisible by the number of pre-split shares for which each post-split share is to be reclassified, will be entitled, upon surrender to the transfer agent of certificates representing such shares, to be issued such additional fraction of a share as is necessary to increase the fractional share to a full share.
No Appraisal Rights
Under the Delaware General Corporation Law, stockholders are not entitled to appraisal rights with respect to the Reverse Stock Split, and Analysis section appearing abovethe Company will not independently provide stockholders with Glowpoint’s management. Basedany such right.
Accounting Matters
The Reverse Stock Split will not affect the par value of a share of the Common Stock. As a result, as of the split effective time, the stated capital attributable to Common Stock on the Company’s balance sheet will be reduced proportionately based on the Reverse Stock Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will be fewer shares of Common Stock outstanding.
Potential Anti-Takeover Effect
Although the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of Oblong’s Board of Directors or contemplating a tender offer or other transaction for the combination of Oblong with another company, the Reverse Stock Split proposal is not being proposed in response to any effort of which Oblong is aware to accumulate shares of Oblong’s Common Stock or obtain control of Oblong, nor is it
part of a plan by management to recommend a series of similar amendments to Oblong’s Board of Directors and stockholders. Other than the proposals being submitted to Oblong’s stockholders for their consideration at the Annual Meeting, Oblong’s Board of Directors does not currently contemplate recommending the adoption of any other actions that could be construed to affect the ability of third parties to take over or change control of Oblong.
Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain U.S. federal income tax consequences of the Reverse Stock Split to U.S. holders of Oblong’s Common Stock. For purposes of this reviewdiscussion, the term “U.S. holder” means a beneficial owner of common shares that is for U.S. federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation, or entity treated as a corporation for U.S. federal income tax purposes, organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and these discussions,one or more U.S. persons have the Compensation Committee recommendedauthority to Glowpoint’s boardcontrol all substantial decisions of directors that the Compensation Discussiontrust or (b) such trust has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes or (iv) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source. The following summary is based upon the provisions of the U.S. Internal revenue Code of 1986, as amended (the "Code"), the U.S. Department of the Treasury regulations promulgated thereunder (the "Regulations") and Analysis be includedjudicial and administrative authorities, rulings and decisions, all as in effect as of the date of this proxy statement. These authorities may change, possibly with retroactive effect, and any such change could affect the accuracy of the statements and conclusions set forth in this summary. This summary is not a complete description of all of the tax consequences of the Reverse Stock Split and, in particular, does not address any tax consequences arising under the laws of any U.S. state, local or non-U.S. jurisdiction, or under any U.S. federal laws other than those pertaining to the income tax.
Respectfully submitted,The following discussion applies only to U.S. holders of Oblong's Common Stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that might be relevant to U.S. holders in light of their particular circumstances and does not apply to U.S. holders subject to special treatment under the U.S. federal income tax laws (such as, for example, dealers or brokers in securities, commodities or foreign currencies; traders in securities that elect to apply a mark-to-market method of accounting; banks and certain other financial institutions; insurance companies; mutual funds; tax-exempt organizations; holders subject to the alternative minimum tax provisions of the Code; partnerships, S corporations or other pass-through entities, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, or investors in any of the foregoing; holders whose functional currency is not the U.S. dollar; holders of Oblong equity awards, including Oblong restricted stock, options, stock appreciation rights, and other forms of compensation; holders who hold Oblong's Common Stock as part of a hedge, straddle, constructive sale or conversion transaction or other integrated investment; holders who acquire Oblong's Common Stock pursuant to the exercise of employee stock options, through a tax qualified retirement plan or otherwise as compensation; and holders who actually or constructively own more than 5% of the Oblong's Common Stock).
Grant Dawson
Peter Rust
James LuskIf an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Oblong's Common Stock, the tax treatment of a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Any entity treated as a partnership for U.S. federal income tax purposes that holds Oblong's Common Stock, and any partners in such partnership,
-21-should consult their own independent tax advisors regarding the tax consequences of the Reverse Stock Split to them under their specific circumstances. Determining the actual tax consequences of the Reverse Stock Split to you may be complex and will depend on your specific situation and on factors that are not within the parties’ control. You should consult your own independent tax advisor as to the specific tax consequences of the Reverse Stock Split in your particular circumstances, including the applicability and effect of the alternative minimum tax and any U.S. state, local, non-U.S. and other tax laws and of changes in those laws.
Consequences of the Reverse Stock Split Generally to U.S. Holders of Oblong Shares
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. Accordingly, a U.S. holder generally should not recognize gain or loss upon the Reverse Stock Split, except for those U.S. holders that receive a whole share of Oblong’s Common Stock in lieu of a fractional share, as discussed below. A U.S. holder’s aggregate tax basis in the shares of Oblong’s Common Stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of Oblong’s Common Stock surrendered (increased by any income or gain recognized on receipt of a whole share in lieu of a fractional share), and such U.S. holder’s holding period in the shares of Oblong’s Common Stock received should include the holding period in the shares of Oblong’s Common Stock surrendered. The Regulations provide detailed rules for allocating the tax basis and holding period of the shares of Oblong’s Common Stock surrendered to the shares of Oblong’s Common Stock received pursuant to the Reverse Stock Split. U.S. holders of shares of Oblong’s Common Stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
The treatment of fractional shares of Oblong’s Common Stock being rounded up to the next whole share is uncertain, and a U.S. holder that receives a whole share of Oblong’s Common Stock in lieu of a fractional share of Oblong’s Common Stock may recognize income, which may be characterized as either capital gain or as a dividend to the extent of the portion of our accumulated earnings and profits attributable to the rounded share, in an amount not to exceed the excess of the fair market value of such whole share over the fair market value of the fractional share to which the U.S. holder was otherwise entitled. U.S. holders should consult their tax advisors regarding the U.S. federal income tax and other tax consequences of receiving a whole share in lieu of a fractional share.
Vote Required For Approval
To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have no effect on this proposal, because they are not "entitled to vote" on this matter.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 3, TO AMEND THE COMPANY CHARTER TO EFFECT A REVERSE
STOCK SPLIT OF THE COMPANY’S ISSUED AND OUTSTANDING SHARES OF COMMON STOCK BY A RATIO OF 1-FOR-5, 1-FOR-10, OR 1-FOR-15.
PROPOSAL NO. 4
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION AND OTHER MATTERS
Summary Compensation Table
The table set forth below summarizes forDodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables stockholders to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed pursuant to Section 14A of the Exchange Act. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
The Say-on-Pay vote is advisory, and therefore is not binding on us, the compensation paid, accruedcommittee or granted, during or with respectour Board of Directors. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board of Directors and our compensation committee value the opinions of our stockholders and to the two years ended December 31, 2009. Certain columnarextent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote, consider our stockholders’ concerns and the compensation committee will evaluate whether any actions are necessary to address those concerns.
The Company last held a “say-on-frequency” vote in 2019, at which point our stockholders voted for, and the Board determined to hold, say-on-pay votes every three years. The next say-on-pay vote will be held in 2025. The next say-on-frequency vote will also be held in 2025.
We believe that the information required by Item 402(c)(2)provided in the “Executive Compensation” section of Regulation S-K has been omitted for categories where there has been nothis Proxy Statement demonstrates that our executive compensation awardedprogram was designed appropriately and is working to orensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the named executive officers, during or with respectas disclosed in the Proxy Statement for the 2022 Annual Meeting pursuant to the two years ended December 31, 2009.
| Name and Principal Position | Year | | Salary | | | Bonus (4) | | | Stock Awards (1) | | | Option Awards (2) | | | All Other Compensation (3) | | | Total | |
Edwin F. Heinen Chief Financial Officer | 2009 | | $ | 211,616 | | | $ | — | | | $ | 61,064 | | | $ | 20,182 | | | $ | 4,840 | | | $ | 297,702 | |
| | 2008 | | | 211,523 | | | | — | | | | 79,553 | | | | 33,398 | | | | 7,072 | | | | 331,546 | |
Joseph Laezza Co-Chief Executive Officer and President | 2009 | | | 259,081 | | | | 15,000 | | | | 42,035 | | | | 22,662 | | | | 4,840 | | | | 343,618 | |
| | 2008 | | | 256,067 | | | | 15,000 | | | | 55,219 | | | | 29,243 | | | | 6,455 | | | | 361,984 | |
David W. Robinson Co-Chief Executive Officer, Executive Vice President, General Counsel | 2009 | | | 266,635 | | | | — | | | | 36,035 | | | | 22,949 | | | | 4,840 | | | | 330,459 | |
| | 2008 | | | 262,322 | | | | — | | | | 63,219 | | | | 26,167 | | | | 7,265 | | | | 358,973 | |
Michael Brandofino Former Chief Executive Officer | 2009 | | | 62,404 | | | | — | | | | — | | | | — | | | | 283,242 | | | | 345,646 | |
| | 2008 | | | 277,115 | | | | — | | | | 107,969 | | | | 21,786 | | | | 8,421 | | | | 415,291 | |
(1) | The amounts included in the “Stock Awards” column represent the compensation cost we recognized in 2009 and 2008 related to non-option stock awards, as described in FASB ASC Topic 718 without taking into account any forfeiture rates. We value the non-option stock award using the common stock price on the grant date. Please see the “Grants of Plan-Based Awards” table for more information regarding stock awards we granted in 2009 and 2008. The table below summarizes, by year of grant, the 2009 and 2008 expense amounts, respectively, reported in the “Stock Awards” column for each named executive officer: |
| Name | Year | | 2006 | | | 2007 | | | 2008 | | | 2009 | | | Total | |
Edwin F. Heinen | 2009 | | $ | — | | | $ | 37,333 | | | $ | 5,167 | | | $ | 18,564 | | | $ | 61,064 | |
| | 2008 | | | — | | | | 37,334 | | | | 42,219 | | | | — | | | | 79,553 | |
Joseph Laezza | 2009 | | | — | | | | 13,000 | | | | 5,167 | | | | 23,868 | | | | 42,035 | |
| | 2008 | | | — | | | | 13,000 | | | | 42,219 | | | | — | | | | 55,219 | |
David W. Robinson | 2009 | | | 7,000 | | | | — | | | | 5,167 | | | | 23,868 | | | | 36,035 | |
| | 2008 | | | 21,000 | | | | — | | | | 42,219 | | | | — | | | | 63,219 | |
Michael Brandofino | 2009 | | | — | | | | — | | | | — | | | | — | | | | — | |
| | 2008 | | | — | | | | 52,000 | | | | 55,969 | | | | — | | | | 107,969 | |
(2) | The amounts included in the “Option Awards” column represent the compensation cost we recognized in 2009 and 2008 related to option awards, as described in FASB ASC Topic 718. For a discussion of the valuation assumptions, see Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2009. In 2009, we used the following weighted average assumptions to determine the fair value of the option awards: a risk-free interest rate of 2.0%, an expected life of five years, expected volatility of 113.3% and no dividends. Please see the “Grants of Plan-Based Awards” table for more information regarding option awards we granted in 2009 and 2008. The following table summarizes, by year of grant, the 2009 and 2008 expense amounts, respectively, reported in the “Option Awards” column for each named executive officer: |
| Name | Year | | 2005 | | | 2006 | | | 2007 | | | 2008 | | | 2009 | | | Total | |
Edwin F. Heinen | 2009 | | $ | — | | | $ | 1,608 | | | $ | 8,890 | | | $ | — | | | $ | 9,684 | | | $ | 20,182 | |
| | 2008 | | | 7,231 | | | | 5,816 | | | | 20,351 | | | | — | | | | — | | | | 33,398 | |
Joseph Laezza | 2009 | | | — | | | | 1,608 | | | | 8,603 | | | | — | | | | 12,451 | | | | 22,662 | |
| | 2008 | | | 3,464 | | | | 5,816 | | | | 19,963 | | | | — | | | | — | | | | 29,243 | |
David W. Robinson | 2009 | | | — | | | | 1,608 | | | | 8,890 | | | | — | | | | 12,451 | | | | 22,949 | |
| | 2008 | | | — | | | | 5,816 | | | | 20,351 | | | | — | | | | — | | | | 26,167 | |
Michael Brandofino | 2009 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | 2008 | | | — | | | | 5,816 | | | | 15,970 | | | | — | | | | — | | | | 21,786 | |
(3) | The following table presents all other compensation during the years ended December 31, 2009 and 2008 to the named executive officers: |
| Name | Year | | Vehicle Allowance | | | Company Contributions to 401(k) Plan | | | Health Insurance | | | Severance (5) | | | Total | |
Edwin F. Heinen | 2009 | | $ | 4,840 | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,840 | |
| | 2008 | | | 4,840 | | | | 2,232 | | | | — | | | | — | | | | 7,072 | |
Joseph Laezza | 2009 | | | 4,840 | | | | — | | | | — | | | | — | | | | 4,840 | |
| | 2008 | | | 4,840 | | | | 1,615 | | | | — | | | | — | | | | 6,455 | |
David W. Robinson | 2009 | | | 4,840 | | | | — | | | | — | | | | — | | | | 4,840 | |
| | 2008 | | | 4,840 | | | | 2,425 | | | | — | | | | — | | | | 7,265 | |
Michael Brandofino | 2009 | | | 1,280 | | | | — | | | | — | | | | 281,962 | | | | 283,242 | |
| | 2008 | | | 4,840 | | | | 3,581 | | | | — | | | | — | | | | 8,421 | |
(4) | The reported amounts were paid in cash to Mr. Laezza in lieu of any payments due under our sales commission plan. |
(5) | The following table presents the severance benefits during the year ended December 31, 2009 to the named executive officer: |
| Name | Year | | Legal Fees & Other Expenses | | | Cancellation of Option Awards | | | Net Value of Modification of Stock Awards | | | Extension of Post Termination Option Exercise Period | | | COBRA Insurance | | | Severance | | | Total | |
Michael Brandofino | 2009 | | $ | 7,998 | | | $ | (26,537 | ) | | $ | 50,531 | | | $ | 30,096 | | | $ | 8,336 | | | $ | 211,538 | | | $ | 281,962 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grants of Plan-Based Awards
The table set forth below presents all plan-based equity and non-equity grants made by Glowpoint during the years ended December 31, 2009 and 2008 to the named executive officers. Certain columnar information required by Item 402(d)(2) of Regulation S-K has been omitted for categories where there has been no compensation awarded to, or paid to, the named executive officers during or with respect to the years ended December 31, 2009 and 2008.
| Name | Grant Date | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | | All Other Awards: Number of Securities Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/sh) | | | Grant Date Fair Value of Stock and Option Awards | |
Edwin F. Heinen | 3/10/08 | | | 75,000 | (1 | ) | | | — | | | $ | — | | | $ | 41,250 | |
| | 10/24/08 | | | 50,000 | (2 | ) | | | — | | | | — | | | | 15,500 | |
| | 3/20/09 | | | — | | | | | 140,000 | | | | 0.40 | | | | 37,239 | |
| | 3/20/09 | | | 210,000 | (3 | ) | | | — | | | | — | | | | 71,400 | |
Joseph Laezza | 3/10/08 | | | 75,000 | (1 | ) | | | — | | | | — | | | | 41,250 | |
| | 10/24/08 | | | 50,000 | (2 | ) | | | — | | | | — | | | | 15,500 | |
| | 3/20/09 | | | — | | | | | 180,000 | | | | 0.40 | | | | 47,879 | |
| | 3/20/09 | | | 270,000 | (4 | ) | | | — | | | | — | | | | 91,800 | |
David W. Robinson | 3/10/08 | | | 75,000 | (1 | ) | | | — | | | | — | | | | 41,250 | |
| | 10/24/08 | | | 50,000 | (2 | ) | | | — | | | | — | | | | 15,500 | |
| | 3/20/09 | | | — | | | | | 180,000 | | | | 0.40 | | | | 47,879 | |
| | 3/20/09 | | | 270,000 | (4 | ) | | | — | | | | — | | | | 91,800 | |
(1) | Restricted stock awards for each of the named officers of 75,000 shares were granted on March 10, 2008 and vested on the date of the grant. |
(2) | Restricted stock awards for each of the named officers of 50,000 shares were granted on October 24, 2008, and vests as to 33.33% of the total number of shares subject to the grant on each of the first, second and third anniversary dates of the grant. |
(3) | A restricted stock award of 210,000 shares was granted on March 20, 2009 and vests on March 20, 2012. |
(4) | Restricted stock awards for each of the named officers of 270,000 shares were granted on March 20, 2009 and vests on March 20, 2012. |
Employment Agreements
We have entered into employment agreements with our executive officers. Additional information as to the termsdisclosure rules of the employment agreements is set forth in our 2009 Annual Report on Form 10-K, which was filed withSEC, including the Securitiescompensation tables and Exchange Commission on March 31, 2010narrative discussion, and is attached hereto. Such information is subject toother related disclosure.”
Vote Required For Approval
To be approved by the detailed provisionsstockholders, this item must receive the “FOR” vote of a majority of the respective agreements attachedtotal number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as exhibits to our filings witha single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the Securities and Exchange Commission.
Outstanding Equity Awards at Fiscal Year-End
The table set forth below presentsshares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and values of exercisable and unexercisable options and unvested restricted stock at December 31, 2009. Certain columnar information required by Item 402(f)(2) of Regulation S-K has been omittedentitled to vote for categories where there has been no compensation awarded to, or paid to, the named executive officers required to be reported in the table during two fiscal years ended December 31, 2009.
| Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | | | Market Value of Shares or Units of Stock That Have Not Vested ($) (10) | |
Edwin F. Heinen | | | 40,000 | | | | — | | | | | $ | 2.13 | | | 3/02/2015 | | | | — | | | | | $ | — | |
| | | | 14,000 | | | | — | | | | | | 1.17 | | | 8/10/2015 | | | | — | | | | | | — | |
| | | | 75,000 | | | | — | | | | | | 1.00 | | | 9/29/2015 | | | | — | | | | | | — | |
| | | | 100,000 | | | | — | | | | | | 0.41 | | | 6/27/2016 | | | | — | | | | | | — | |
| | | | 66,667 | | | | 33,333 | | (1 | ) | | | 0.60 | | | 6/25/2017 | | | | — | | | | | | — | |
| | | | — | | | | 140,000 | | (3 | ) | | | 0.40 | | | 3/20/2019 | | | | — | | | | | | — | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 66,666 | | (5 | ) | | | 46,000 | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 33,333 | | (7 | ) | | | 23,000 | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 210,000 | | (8 | ) | | | 144,900 | |
Joseph Laezza | | | 50,000 | | | | — | | | | | | 1.17 | | | 8/10/2015 | | | | — | | | | | | — | |
| | | | 100,000 | | | | — | | | | | | 0.41 | | | 6/27/2016 | | | | — | | | | | | — | |
| | | | 208,333 | | | | 41,667 | | (2 | ) | | | 0.52 | | | 5/15/2017 | | | | — | | | | | | — | |
| | | | — | | | | 180,000 | | (4 | ) | | | 0.40 | | | 3/20/2019 | | | | — | | | | | | — | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 50,000 | | (6 | ) | | | 34,500 | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 33,333 | | (7 | ) | | | 23,000 | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 270,000 | | (9 | ) | | | 186,300 | |
David W. Robinson | | | 100,000 | | | | — | | | | | | 0.41 | | | 6/27/2016 | | | | — | | | | | | — | |
| | | | 66,667 | | | | 33,333 | | (1 | ) | | | 0.60 | | | 6/25/2017 | | | | — | | | | | | — | |
| | | | — | | | | 180,000 | | (4 | ) | | | 0.40 | | | 3/20/2019 | | | | — | | | | | | — | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 33,333 | | (7 | ) | | | 23,000 | |
| | | | — | | | | — | | | | | | — | | | | — | | | | 270,000 | | (9 | ) | | | 186,300 | |
(1) | Options for each of the named officers to purchase 100,000 shares were granted on June 25, 2007, and vests as to 33.33% of the total number of shares subject to the grant on each of the first, second and third anniversary dates of the grant. |
(2) | An option to purchase 250,000 shares was granted on May 15, 2007, and vests as to 125,000 shares subject to the grant on that date and as to the remaining 125,000 shares subject to the grant, 33.33% on each of the first, second and third anniversary dates of the grant. |
(3) | Options to purchase 140,000 shares were granted on March 20, 2009, and vests on March 20, 2012. |
(4) | Options for each of the named officers to purchase 180,000 shares were granted on March 20, 2009, and vests on March 20, 2012. |
(5) | A restricted stock award of 200,000 shares was granted on January 30, 2007, and vests as to 33.33% of the total number of shares subject to the grant on each of the first, second and third anniversary dates of the grant. As of December 31, 2009, 133,334 of the shares had vested, and 66,666 of the shares were unvested. |
(6) | A restricted stock award of 100,000 shares was granted on May 15, 2007, and vests as to 50% of the total number of shares subject to the grant on each of the second and fourth anniversary dates of the grant. As of December 31, 2009, 50,000 of the shares had vested and 50,000 of the shares were unvested. |
(7) | Restricted stock awards for each of the named officers of 50,000 shares was granted on October 24, 2008, and vests 33.33% on each of the first, second and third anniversary dates of the grant. As of December 31, 2009, 16,667 of the shares had vested and 33,333 of the shares were unvested. |
(8) | A restricted stock award of 210,000 shares was granted on March 20, 2009, and vests on the third anniversary date of the grant. As of December 31, 2009, none of the shares had vested. |
(9) | Restricted stock awards for each of the named officers of 270,000 shares was granted on March 20, 2009, and vests on the third anniversary date of the grant. As of December 31, 2009, none of the shares had vested. |
(10) | The market value of the stock awards is based on the $0.69 closing price our common stock on December 31, 2009. |
Option Exercises and Stock Vested
The table set forth below present’s information concerning stock option exercises and vesting of restricted stock during the year ended December 31, 2009 for each named executive officer. Certain columnar information required by Item 402(g)(2) of Regulation S-K has been omitted for categories where there has been no compensation awarded to, or paid to, the named executive officers required to be reported in the table during the fiscal year ended December 31, 2009.
| | | | Option Awards | | | Stock Awards | |
| Name | Year | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise (1) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting (2) | |
Edwin F. Heinen | 2009 | | | — | | | $ | — | | | | 83,334 | | | $ | 32,334 | |
Joseph Laezza | 2009 | | | — | | | | — | | | | 66,667 | | | | 28,667 | |
David W. Robinson | 2009 | | | — | | | | — | | | | 63,333 | | | | 27,400 | |
(1) | The value of an option is the difference between (a) the market price upon exercise and (b) the exercise price of the option upon grant. |
(2) | The value of a restricted stock share upon vesting is the market value of a share of the Company’s common stock on the vesting date. |
Potential Payments upon Termination or Change-in-Control
The tables below outline the potential payments to our Co-Chief Executive Officers and other named executive officers upon the occurrence of certain termination triggering events as of December 31, 2009. For the purposes of the table, below areproposal. Accordingly, an abstention will have the standard definitions foreffect of a vote against the various types of termination, although exact definitions may vary by agreement and by person.proposal. On this proposal, brokers will not have discretionary
“Voluntary Resignation” means the resignation initiated by the executive officer.
“Resignation for Good Reason” means if the executive officer resigns because: (i) there has been a diminution in his base salary; (ii) he is requiredauthority to be based in an office that is more than a certain distance (e.g., 50 or 75 miles) from the current location of the office; (iii) he is assigned duties that are materially inconsistent with his current position; or (iv) there is a material diminution of his status, office, title, responsibility, or reporting requirements.
“Termination For Cause” means a termination of executive officer’s employment by the Company because,vote in the judgmentabsence of the Company: (i) the executive officer willfully engaged in any act or omission which is in bad faith and to the detriment of the Company; (ii) the executive officer exhibited unfitness for service, dishonesty, habitual neglect, persistent and serious deficiencies in performance, or gross incompetence, which conduct is not cured within fifteen (15) days after receipt by the executive officer of written notice of the conduct; (iii) the executive officer is convicted of a crime; or (iv) the executive officer refused or failed to act on any reasonable and lawful directive or ordertimely instructions from his superior or the Board.
“Termination Without Cause" means a termination for a reason other than for Cause, as defined above.
“Benefits upon a Change in Control or Corporate Transaction” means the benefit the named executivetheir customers. Broker non-votes will receive upon a Change in Control or Corporate Transaction, as each such term is defined it the executive officer’s employment contract and restricted stock award agreement.
No named executive officer is entitled to a payment in connection with Voluntary Resignation, Disability or a Termination for Cause.
Executive Benefits and Payments Upon Termination (1) | | Resignation for Good Reason or Termination Without Cause | | | Death | | | Change in Control or Corporate Transaction | |
| Edwin F. Heinen | | | | | | | | | |
| Compensation | | | | | | | | | |
Severance (2) | | $ | 210,000 | | | $ | 210,000 | | | $ | 210,000 | |
| Equity | | | | | | | | | | | | |
Restricted Stock (7) | | | 32,078 | | | | 32,078 | | | | 65,311 | |
Options (8) | | | — | | | | — | | | | — | |
| Benefits and Perquisites (3) | | | | | | | | | | | | |
401(k) Match (4) | | | 1,575 | | | | 1,575 | | | | 1,575 | |
Health Insurance (5) | | | — | | | | — | | | | — | |
Accrued vacation pay (6) | | | 16,154 | | | | 16,154 | | | | 16,154 | |
| Joseph Laezza | | | | | | | | | | | | |
| Compensation | | | | | | | | | | | | |
Severance (2) | | | 257,100 | | | | 257,100 | | | | 257,100 | |
| Equity | | | | | | | | | | | | |
Restricted Stock (7) | | | 48,767 | | | | 48,767 | | | | 95,171 | |
Options (8) | | | — | | | | — | | | | — | |
| Benefits and Perquisites (3) | | | | | | | | | | | | |
401(k) Match (4) | | | 1,929 | | | | 1,929 | | | | 1,929 | |
Health Insurance (5) | | | 16,426 | | | | — | | | | 16,426 | |
Accrued vacation pay (6) | | | 19,777 | | | | 19,777 | | | | 19,777 | |
| David W. Robinson | | | | | | | | | | | | |
| Compensation | | | | | | | | | | | | |
Severance (2) | | | 264,600 | | | | 264,600 | | | | 264,600 | |
| Equity | | | | | | | | | | | | |
Restricted Stock (7) | | | 35,767 | | | | 35,767 | | | | 77,296 | |
Options (8) | | | — | | | | — | | | | — | |
| Benefits and Perquisites (3) | | | | | | | | | | | | |
401(k) Match (4) | | | 1,986 | | | | 1,986 | | | | 1,986 | |
Health Insurance (5) | | | 16,426 | | | | — | | | | 16,426 | |
Accrued vacation pay (6) | | | 20,354 | | | | 20,354 | | | | 20,354 | |
(1) | For purposes of this analysis, we assume that the named Executive Officer's compensation is as follows: Mr. Heinen’s current base salary is $210,000; Mr. Laezza’s current base salary is $257,100; and Mr. Robinson’s current base salary is $264,600. |
(2) | Severance is calculated based on the officer’s current base pay times the twelve months detailed in their employment agreements. |
(3) | Payments associated with benefits and perquisites are limited to the items listed. No other continuation of benefits or perquisites occurs under the termination scenarios listed. |
(4) | 401(k) Employer Match is calculated on salary paid as per Safe Harbor provision of the 401(k) Plan up to the maximum allowable contribution. |
(5) | Health Insurance is calculated based on the current COBRA costs for the officer’s current coverage times twelve months detailed in their employment agreements. |
(6) | Assumes four weeks of unused vacation days at the time of termination. |
(7) | Represents the value of unvested restricted stock whose vesting would be accelerated as a result of termination of employment (one year) or change in control (all unvested shares). |
(8) | No accelerated vesting of options upon termination. |
Internal Revenue Code Section 162(m) Limitation |
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally disallows a tax deduction to publicly held companies for compensation exceeding $1 million per year paid to certain executive officers. The limitation applies only to compensation that is not considered to be performance-based. The non-performance based compensation paid to our executive officers in 2009 did not, in the case of any officer, exceed the $1 million per year limit. The compensation committee generally intends to limit the dollar amount of all non- performance based compensation payable to our executive officers tohave no more than $1 million per year.
Compensation Committee Interlocks And Insider Participation |
Grant Dawson, Peter Rust, Dean Hiltzik, Bami Bastani, and James S. Lusk served as members of the compensation committee of the board of directors at various times during 2009. No member of the compensation committee was at any time during 2009 or at any other time our officer or employee. No member of the compensation committee servedeffect on the board of directors or compensation committee of any entity that has one or more executive officers serving as a member ofproposal because they are not “entitled to vote” on the board or our compensation committee.matter.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Board Recommendation
We receive financial and tax services from Marks, Paneth & Shron LLP, an accounting and consulting firm in which Dean Hiltzik, one of our directors, who resigned in May 2009, is a partner. In the last fiscal year through the date he resigned as a director, we incurred fees of approximately $26,000 for services received from this firm. We provide managed video services to a company in which James Lusk, one of our directors, is an officer. In the last fiscal year, we received fees of approximately $305,000 for the provision of our services. We believe that all of the foregoing described transactions are at arm’s-length and for terms that would have been obtained from, or provided by, unaffiliated third parties.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE EXECUTIVE COMPENSATION AS DESCRIBED IN THIS PROXY STATEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of commonour capital stock as of April 16, 2010November 14, 2022 by each of the following:
| · | each person (or group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) known by us to own beneficially more than 5% of the common stock; |
| · | each person who has been a director or named executive officers since January 1, 2009 (the beginning of our last fiscal year); and |
| · | all of our directors and executive officers as a group. |
•each person (or group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) known by us to own beneficially more than 5% of any class of our voting securities;
•the named executive officers set forth in the Summary Compensation Table under “Executive Compensation” below;
•each of our directors serving during 2022 and director nominees; and
•all of our current directors and executive officers as a group.
The amounts and percentages in the table below are based on 81,746,23230,816,048 shares of common stockCommon Stock issued and outstanding as of April 16, 2010. November 14, 2022.
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. A person is considered the beneficial owner of securities that can be acquired within 60 days of such date through the exercise or conversion of any option, warrant or right.other derivative security. Shares of common stockCommon Stock subject to options, restricted stock units (“RSUs”), warrants or rightsother derivative securities which are currently exercisable or convertible or are exercisable or convertible within such 60 days are considered outstanding for computing the ownership percentage of the person holding such options, RSUs, warrants or rights,other derivative security, but are not considered outstanding for computing the ownership percentage of any other person. However, unless specifically waived by such 5% owner, the 5% owner is prohibited from acquiring shares of common stock under the Series A-2 Convertible Preferred Stock to the extent the selling stockholder would beneficially own more than 4.9% or 9.9%, as applicable, of our outstanding common stock after such acquisition.
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| | Common Stock |
| Name and Address of Beneficial Owners (1) | | Amount and Nature of Beneficial Ownership (2) | | | Percent of Class |
| Named Executive Officers and Directors: | | | | | | |
| Peter Holst | | 413,491 | | | (3) | | 1.3 | | % |
| David Clark | | 58,933 | | | (4) | | 0.2 | | % |
| Pete Hawkes | | — | | | | | --- | % |
| Jason Adelman | | 646,000 | | | (5) | | 2.1 | | % |
| James Lusk | | 93,406 | | | (6) | | 0.3 | | % |
| Matthew Blumberg | | — | | | (7) | | --- | % |
| Deborah Meredith | | — | | | (8) | | --- | % |
All current directors, director nominees and executive officers as a group
(6 persons) | | 1,211,830 | | | | | 3.9 | | % |
| | | | | | |
| Greater than 5% Owners: | | | | | | |
| Foundry Group 700 Front St., Suite 104, Louisville, CO 80027 | | 7,839,509 | | | (9) | | 25.4 | | % |
Stepstone Group LP
4225 Executive Square, Suite 1600
La Jolla, CA 90237 | | 3,692,661 | | | (10) | | 12.0 | | % |
| Morgan Stanley Funds 100 Front Street West Conshohocken, PA 19428 | | 2,552,739 | | | (11) | | 8.3 | | % |
—
_________________________| Name And Address of Beneficial Owners (1) | | Number of Shares Owned (2) | Percentage of Outstanding Shares |
| Executive Officers and Directors: | | | | | |
Joseph Laezza | | | 1,274,315 | (3) | 1.5% |
Edwin F. Heinen | | | 1,654,333 | (4) | 2.0% |
David W. Robinson | | | 1,442,875 | (5) | 1.8% |
Thomas Brown | | | 210,000 | (6) | * |
Grant Dawson | | | 25,000 | | * |
James Lusk | | | 147,500 | (7) | * |
Peter Rust | | | 162,000 | (8) | * |
Michael Brandofino** | | | 808,718 | (9) | * |
| All directors and executive officers as a group (8 people) | | | 5,724,741 | | 6.8% |
| 5% Owners: | | | | | |
Vicis Capital, LLC 445 Park Avenue, New York, New York 10022 | | | 30,343,833 | (10) | 37.1% |
———————
* Less than 1%
** Michael Brandofino resigned without disagreement in March 2009, as reported on the Company’s Form 8-K filed on March 19, 2009, and no longer serves as a director or executive officer.
(1) | Unless otherwise noted, the address of each person listed is c/o Glowpoint, Inc., 225 Long Avenue, Hillside, New Jersey 07205. |
(2) | (1) Unless otherwise noted, the address of each person listed is c/o Oblong, Inc., 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. (2) Unless otherwise indicated by footnote, the named persons have sole voting and investment power with respect to the shares of common stock beneficially owned. |
(3) | Includes 503,333 shares of restricted stock that are subject to forfeiture, 71,985 shares issuable upon conversion of our Series A-2 Convertible Preferred Stock, and 400,000 shares subject to stock options presently exercisable or exercisable within 60 days. |
(4) | Includes 393,333 shares of restricted stock that are subject to forfeiture, 410,627 shares issuable upon conversion of our Series A-2 Convertible Preferred Stock, and 295,666 shares subject to stock options presently exercisable or exercisable within 60 days. |
(5) | Includes 453,333 shares of restricted stock that are subject to forfeiture, 316,171 shares issuable upon conversion of our Series A-2 Convertible Preferred Stock, and 166,666 shares subject to stock options presently exercisable or exercisable within 60 days. |
(6) | Includes 210,000 shares of restricted stock that are subject to forfeiture. |
(7) | Includes 42,500 shares subject to stock options presently exercisable or exercisable within 60 days. |
(8) | Includes 47,000 shares subject to stock options presently exercisable or exercisable within 60 days. |
(9) | Based on ownership information provided when Mr. Brandofino resigned in March 2009, he had 59,159 shares and he subsequently exercised stock options for 32,000 shares of common stock and includes 142,559 shares issuable upon conversion of our Series A-2 Convertible Preferred Stock, and 400,000 shares of restricted stock that are subject to forfeiture. |
(10) | Based on ownership information from the Schedule 13G filed by Vicis Capital LLC on April 16, 2010, stating that as of April 15, 2010, holder then owned 30,343,833 shares. Does not include 10,667,074 shares issuable upon conversion of our Series A-2 Convertible Preferred Stock which are exercisable on 61 days’ prior written notice to the Company. The required 61 days prior written notice is designed to assure that the holder will not be deemed the beneficial owner of all underlying shares because the 61 day waiting period before the waiver becomes effective denies the holder the right to have beneficial ownership within 60 days. Therefore, without giving effect to the contractual ownership limitation, holder presently would have the right to acquire a total of 41,010,907, or 44.4% of the resulting outstanding shares. |
Equity Compensation Plan Information |
The following table provides information regarding the aggregate number of securities to be issued under all of our stock options and equity-based plans upon exercise of outstanding options, warrants and other rights and their weighted-average exercise prices as of December 31, 2009. The securities issued under equity compensation plans not approved by security holders consist entirely of options issued with respect to individual compensation arrangements for directorsthe shares of Common Stock beneficially owned by them.
(3) Includes 325,991 shares of Common Stock and consultants.87,500 shares of Common Stock subject to stock options presently exercisable.
(4) Includes 48,933 shares of Common Stock and 10,000 shares of Common Stock subject to stock options presently exercisable.
(5) Based on ownership information from the Form 4 filed by Mr. Adelman with the SEC on August 20, 2021. Mr. Adelman beneficially owns 646,000 shares of Common Stock, of which 569,500 shares are held directly by Mr. Adelman and 76,500 shares are held in a retirement plan.
(6) Based on ownership information from the Form 4 filed by Mr. Lusk with the SEC on August 20, 2021. Includes 54,502 shares of Common Stock, 10,000 shares of Common Stock subject to stock options presently exercisable, and 28,904 shares of Common Stock issuable from vested RSUs (for which the shares of Common Stock have not yet been delivered in accordance with the terms of these RSUs).
(7) Based on ownership information from the Form 3 filed by Mr. Blumberg with the SEC on August 25, 2021.
(8) Based on ownership information from the Form 3 filed by Ms. Meredith with the SEC on August 25, 2021.
(9) Based on ownership information from an amendment to Schedule 13D filed on February 22, 2021.
(10) Based on ownership information from an amendment to Schedule 13G/A filed on February 11, 2022.
(11) Based on records from the Company's transfer agent as of the date of this Proxy Statement.
| 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 reflecting in the first column) | |
Equity compensation plans approved by security holders | | | 4,686,051 | | | $ | 0.82 | | | | 1,529,219 | |
Equity compensation plans not approved by security holders | | | 20,000 | | | | 3.94 | | | | — | |
Total | | | 4,706,051 | | | $ | 0.84 | | | | 1,529,219 | |
Section16(A) Beneficial Ownership Reporting Compliance
|
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers and directors and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission.SEC. Executive officers, directors and greater than 10% stockholders are required by regulations of the Securities and Exchange CommissionSEC to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of reports we received, or written representations that no such reports were required for those persons, we believe that, for 2009,the year ended December 31, 2021, all statements of beneficial ownership required to be filed with the Securities and Exchange CommissionSEC were filed on a timely basis.basis.
PROPOSAL NO. 4 –
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
EXECUTIVE OFFICERS
The audit committee, composed entirelyfollowing table sets forth certain information regarding our current executive officers.
| | | | | | | | | | | | | | |
| Name | | Age | | Position |
| Peter Holst | | 53 | | Director, President, and Chief Executive Officer |
| David Clark | | 53 | | Chief Financial Officer, Treasurer, and Corporate Secretary |
| | | | |
Biographies
Peter Holst, Director, President, and Chief Executive Officer. See “Proposal No. 1 - Election of independent, non-employee membersDirectors — Nominee Biographies” above for Mr. Holst’s biography.
David Clark, Chief Financial Officer, Treasurer, and Corporate Secretary. Mr. Clark joined the Company in March 2013 as Chief Financial Officer. Mr. Clark has more than 30 years of experience in finance and accounting. Prior to joining the boardCompany, Mr. Clark served as Vice President of directors, has appointed the firm of Amper, Politziner & Mattia, LLP (“Amper”) as the Independent Registered Public Accounting Firm to audit the consolidated financial statements of ourFinance, Treasurer and acting Chief Financial Officer for Allos Therapeutics, a publicly traded biopharmaceutical company, and its subsidiaries for fiscal year 2010as Chief Financial Officer of Seurat Company (formerly XOR, Inc.), an e-commerce managed services company. Mr. Clark started his career and is asking the stockholders for ratification of the appointment. Stockholder ratification is not required by our company’s bylaws or under any other applicable legal requirement. If the stockholders do not approve the selection of Amper,spent seven years in the audit committee will reconsiderpractice of PricewaterhouseCoopers LLP. Mr. Clark is an active Certified Public Accountant and received a Master of Accountancy and a B.S. in Accounting from the appointment.University of Denver.
Amper has completed our auditEXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth for the fiscal years ended December 31, 2009,2021 and 2020 the compensation awarded to, paid to, or earned by: Peter Holst, Director, President, and Chief Executive Officer; David Clark, CFO, Treasurer, and Corporate Secretary; and Pete Hawkes, former SVP, Design, Product, and Engineering (the “named executive officers”), as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Positions | Year | Salary (1) ($) | Bonus ($) | Stock Awards (2) ($) | All Other (3) ($) | Total ($) |
| Peter Holst | 2021 | 246,340 | | | 200,000 | | | — | | | 8,693 | | | 455,033 | | |
| Director, President, and Chief Executive Officer | 2020 | 199,875 | | | 210,000 | | | — | | | 8,550 | | | 418,425 | | |
| David Clark | 2021 | 242,164 | | | 100,000 | | | — | | | 8,688 | | | 350,852 | | |
| Chief Financial Officer, Treasurer, and Corporate Secretary | 2020 | 225,133 | | | 118,125 | | | — | | | 8,550 | | | 351,808 | | |
| Pete Hawkes (4) | 2021 | 200,000 | | | — | | | 372,000 | | | 5,769 | | | 577,769 | | |
| Former Senior Vice President, Design, Product, and Engineering | 2020 | 180,304 | | | — | | | — | | | — | | | 180,304 | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | |
| (1) Effective July 1, 2021, the annual salaries for Mr. Holst and Mr. Clark were increased to $295,000 and $260,000, respectively. Effective June 29, 2020, Mr. Hawkes annual salary is $200,000. | |
| (2) These amounts represent the aggregate grant date fair value for awards of stock options for 2021, computed in accordance with FASB ASC Topic 718. | |
| (3) Represents matching contributions under the Company’s 401(k) Plan for Mr. Holst of $8,693 for 2021 and $8,550 for 2020; for Mr. Clark of $8,688 for 2021 and $8,550 for 2020; and $5,769 for Mr. Hawkes for 2021. | |
| (4) On March 4, 2022, Pete Hawkes was terminated as Senior Vice President of Product, Design, and Engineering due to the elimination of his position with the Company. In connections with Mr. Hawkes' departure, the Company and Mr. Hawkes entered into a separation agreement which included a customary release of claims and provides for a separation payment of $47,639 | |
Outstanding Equity Awards at 2021 Fiscal Year-End
The table set forth below presents the number and values of stock option awards held by the named executive officers at December 31, 20082021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | |
| Name | Grant Date | Number of Securities Underlying Unexercised Options
(#)(1)(2) | | Option Exercise Price ($) | | Option Expiration Date | | | | | |
| Peter Holst | 1/13/2013 | 87,500 | | | 19.80 | | 1/13/2023 | | | | | |
| David Clark | 3/25/2013 | 10,000 | | | 15.10 | | 3/25/2023 | | | | | |
| Pete Hawkes | 6/28/2021 | 150,000 | | | 3.25 | | 6/28/2031 | | | | | |
| | |
| (1) All stock option awards held by Messers Holst and Clark were fully vested and exercisable as of December 31, 2021. |
| (2) At December 31, 2021, Mr. Hawkes held 150,000 stock options, which were subject to vesting over a three-year period; 1/3 on June 28, 2022, 1/3 on June 28, 2023, and 1/3 on June 28, 2024. On March 4, 2022, Mr. Hawkes was terminated and his stock options were forfeited. |
|
401(k) Plan
The Company maintains a tax-qualified 401(k) plan on behalf of its eligible employees, including its named executive officers. Pursuant to the terms of the plan, for fiscal years 2021 and 2020 eligible employees may defer up to 80% of their salary each year, and the Company matched 50% of an
employee’s contributions on the first 6% of the employee’s salary. This matching contribution vests over four years.
Agreements with Named Executive Officers
We have entered into employment agreements with certain of our named executive officers, excluding Mr. Hawkes. All named executive officers, whether or not subject to an employment agreement, are “at will” employees of the Company.
Peter Holst Employment Agreement.
On January 13, 2013, the Board appointed Peter Holst as the Company’s President and Chief Executive Officer, and as a member of the Board. In connection with his appointment, the Company entered into an employment agreement with Mr. Holst, which was subsequently amended and restated as of January 28, 2016 and as of July 19, 2019 (as amended and restated, the “Holst Employment Agreement”). Pursuant to the Holst Employment Agreement, Mr. Holst received an annual base salary of $199,875 for 2019 and 2020 and is eligible to receive an annual incentive bonus equal to 100% of his base salary, at the discretion of the compensation committee of the Board based on meeting certain financial and non-financial goals. Effective July 1, 2021, Mr. Holst's annual base salary was increased to $295,000.
Under the terms of the Holst Employment Agreement, if Mr. Holst’s employment is terminated outside of a “change in control” (as defined in the Holst Employment Agreement) (i) by the Company without “cause” or by Mr. Holst for “good reason” (as such terms are defined therein) or (ii) as a result of the expiration of the term of the Holst Employment Agreement caused by the Company's election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•12 months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•100% of his maximum annual target bonus payable for the calendar year in which such termination occurs;
•100% accelerated vesting of Mr. Holst’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Holst and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of 12 months.
In addition to the above payments and benefits, in the event that Mr. Holst’s employment is terminated during the 18-month period following a “change in control” (i) by the Company without “cause” or by Mr. Holst for “good reason” or (ii) as a result of the expiration of the term of the Holst Employment Agreement caused by the Company’s election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•24 months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•100% of his maximum annual target bonus payable for the calendar year in which such termination occurs;
•a pro-rated portion of his maximum annual target bonus for the calendar year in which the effective date of the termination occurs;
•80% accelerated vesting of Mr. Holst’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Holst and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of 12 months.
In consideration of the payments and benefits under the Holst Employment Agreement, Mr. Holst is restricted from engaging in competitive activities for 12 months after the termination of his employment, as well as prohibited from soliciting the Company’s clients and employees and from disclosing the Company’s confidential information.
The Holst Employment Agreement contains a “best after-tax benefit” provision, which provides that, to the extent that any amounts payable under the Holst Employment Agreement would be subject to the federal tax levied on certain “excess parachute payments” under Section 4999 of the Code, the Company will either pay Mr. Holst the full amount due under the Holst Employment Agreement or, alternatively, reduce his payments to the extent that no Section 4999 excise tax would be due, whichever provides the highest net after-tax benefit to Mr. Holst.
David Clark Employment Agreement.
On March 25, 2013, the Company entered into an employment agreement with David Clark in connection with his appointment as Chief Financial Officer of the Company, which was subsequently amended and restated on July 19, 2019 (as amended and restated, the “Clark Employment Agreement”). Pursuant to the Clark Employment Agreement, Mr. Clark received an annual base salary of $225,133 for 2019 and 2020 and is eligible to receive an annual incentive bonus equal to 50% of his base salary, at the discretion of the compensation committee of the Board, based on meeting certain financial and non-financial goals. Effective July 1, 2021, Mr. Clark's annual base salary was increased to $260,000.
Under the terms of the Clark Employment Agreement, if Mr. Clark’s employment is terminated outside of a “change in control” (as defined in the Clark Employment Agreement) (i) by the Company without “cause” or by Mr. Clark with or without “good reason” (as such terms are defined therein) or (ii) as a result of the expiration of the term of the Clark Employment Agreement caused by the Company’s election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•Six months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•50% of his maximum annual target bonus payable for the calendar year in which such termination occurs;
•a pro-rated portion of his maximum annual target bonus for the calendar year in which the effective date of termination occurs;
•100% accelerated vesting of Mr. Clark’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Clark and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of six months.
In addition to the above payments and benefits, in the event that Mr. Clark’s employment is terminated during the 18-month period following a “change in control” by the Company without “cause” or by Mr. Clark for “good reason,” then he will also be entitled to receive (i) increased severance equal to 18 months’ base salary, (ii) 100% of his maximum annual target bonus payable for the calendar year in which such termination occurs, and (iii) extended payment (or reimbursement) of the COBRA premiums for 12 months. In such event, Mr. Clark will be entitled to receive 80% accelerated vesting of his then-unvested shares of restricted stock and RSUs.
In consideration of the payments and benefits under the Clark Employment Agreement, Mr. Clark is restricted from engaging in competitive activities for six months after the termination of his employment, as well as prohibited from soliciting the Company’s clients and employees and from disclosing the Company’s confidential information.
Pete Hawkes Separation Agreement.
On March 4, 2022, Pete Hawkes was terminated as the Senior Vice President of Product, Design & Engineering due to the elimination of his position with the Company. In connection with Mr. Hawkes' departure, the Company and Mr. Hawkes entered into a separation agreement, which includes a customary release of claims and provides for a separation payment of $47,639 (which was paid in a single lump sum during the year ended December 31, 2022). Pursuant to the separation agreement, Mr. Hawkes executed a customary release of claims and proprietary information and inventions agreement and will remain subject to restrictive covenants, including covenants related to non-disparagement.
Potential Payments to Named Executive Officers upon Termination or Change-in-Control
In accordance with the terms of the 2007 Stock Incentive Plan and 2014 Equity Incentive Plan, upon a Change in Control or Corporate Transaction, as each such term is defined in such Plans, all shares of restricted stock, restricted stock units and all unvested options immediately vest. No Named Executive Officer is entitled to accelerated vesting in connection with Voluntary Resignation, retirement, disability or a termination for cause. In accordance with the terms of the 2019 Equity Incentive Plan, the Company is given authority to accelerate the timing of the exercise provisions of awards under such plan in the event of certain change in control or other corporate transactions.
See “Agreements with Named Executive Officers” above for a discussion of certain payments the Company could be required to make upon the termination of a Named Executive Officer.
DIRECTOR COMPENSATION
The Company’s director compensation plan provides that non-employee directors are entitled to receive annually: (i) a grant of 2,500 shares of restricted stock or restricted stock units ("RSUs") (pro-rated as necessary for the period of service from the director’s date of appointment to the Board of Directors until the next annual meeting of stockholders); and (ii) a retainer fee of $20,000. The annual fee is payable in equal quarterly installments on the first business day following the end of the calendar quarter, in cash or shares of Restricted Stock, as chosen by the director, on an annual basis on or before December 31 of the applicable fiscal year. The annual equity grants to directors are made as of the date of the annual meeting of the Company’s stockholders. Grants of Restricted Stock or RSUs vest on the first anniversary of the grant date or earlier upon the occurrence of certain termination events or upon a change in control of the Company. Vested RSUs are settled in shares of Common Stock on a 1-for-1 basis upon the earliest of (i) the tenth anniversary of the grant date of the RSUs, (ii) a change in control (as defined in the award agreement) of the Company and (iii) the date of a director’s separation from service.
The Company also pays the chairman of its Board of Directors an additional cash payment of $20,000 per year, the chairperson of its audit committee an additional cash payment of $10,000 per year, each of the chairpersons of its compensation committee and nominating committee an additional cash payment of $5,000 per year, and each non-chair member of any standing committee an additional cash payment of $3,000 per year, in each case payable in equal quarterly installments in arrears. In addition, the Company may establish special committees of the Board from time to time and provide for additional retainers in connection therewith.
There are no agreements or arrangements between any director or director nominee and any person or entity other than the Company relating to the compensation or other payment in connection with such person's candidacy or service as director.
The following table represents compensation for the Company’s non-employee directors during the year ended December 31, 2021. All compensation for Peter Holst, the Company’s Chairman during the year ended December 31, 2021 is included in the Summary Compensation Table under “Executive Compensation” above.
| | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash | | Stock Awards (1) | | Total Fees |
| Jason Adelman | | $ | 33,000 | | | $ | 328,500 | | | $ | 361,500 | |
| Matthew Blumberg | | $ | 10,627 | | | None | | $ | 10,627 | |
| James S. Lusk | | $ | 36,000 | | | $ | 109,500 | | | $ | 145,500 | |
| Deborah Meredith | | $ | 9,750 | | | None | | $ | 9,750 | |
| | | | | | | | | | | | | | | | | | | | |
| (1) These amounts represent the aggregate grant date fair value for awards of restricted stock units for fiscal year 2021 computed in accordance with FASB ASC Topic 718. |
As of December 31, 2021, Mr. Lusk has 10,000 outstanding vested stock options and 627 unvested restricted stock awards. In addition, as of December 31, 2021, 28,904 vested RSUs issued to Mr. Lusk remain outstanding due to the deferred payment provisions set forth in these RSU awards. No other equity awards are outstanding as of December 31, 2021 for the remaining non-employee directors.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information concerning our equity compensation plans as of December 31, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Stock Options (a)(1) | | Weighted-Average Exercise Price of Outstanding Stock Options (b) | | Number of Securities to be Issued Upon Vesting of Outstanding Restricted Stock Units (*) (c) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in columns (a) & (c))(1) |
| Equity compensation plans approved by security holders | | 407,500 | | | $ | 7.57 | | | — | | | 2,513,500 | |
___________________
(*) As of December 31, 2021, 28,904 vested RSUs remain outstanding under the Company’s 2014 Equity Incentive Plan, as shares of common stock have not yet been delivered for these units in accordance with the terms of the RSUs.
(1) In March 2022, 150,000 unvested stock options were forfeited and added back into the pool of securities available for future issuance.
TRANSACTIONS WITH RELATED PERSONS
Other than compensation arrangements for our directors and named executive officers, which are described elsewhere in this proxy statement, there were no transactions since January 1, 2020 to which we were a party or will be a party, in which:
•the amounts involved exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years; and
•any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.
Policy on Future Related Party Transactions
Transactions with related parties, including the transactions referred to above, are reviewed and approved by independent members of the Board of Directors of the Company in accordance with the Company’s written Code of Business Conduct and Ethics.
HEDGING POLICY
We have adopted an Insider Trading Policy that prohibits all of our directors, officers and employees, as well as any other person having access or potential access to material information, from entering into hedging or monetization transactions or similar arrangements with respect to the Company’s securities, short sales, and puts, calls or other derivative securities on the Company’s securities, unless advance approval is obtained from the Company’s Chief Financial Officer.
CODE OF CONDUCT AND ETHICS
We have adopted a code of conduct and ethics, as amended effective October 12, 2015, that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer. The text of the code of conduct and ethics (as amended) is posted on our website at www.oblong.com/company/investor-relations and will be made available to stockholders without charge, upon request, in writing to the Corporate Secretary at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our principal executive officer, principal financial officer, principal accounting officer or controller or person performing similar functions will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, unless website posting of such amendments or waivers is then permitted by the rules of the national securities exchange on which the Company trades.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR
Any stockholder who intends to present a proposal for inclusion in our proxy materials for the Company’s 2021 annual meeting of stockholders must deliver the proposal to the Corporate Secretary of Oblong, Inc. at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433, no later than July 31, 2023.
In addition, our bylaws provide that, in order for a stockholder to timely propose business for consideration at our next annual meeting of stockholders or nominate a person for election to our Board of Directors at our next annual meeting of stockholders, the stockholder must give written notice to our Corporate Secretary at our principal executive offices between October 1, 2023, which is 90 days prior to the anniversary of our 2022 annual meeting of stockholders, and October 31, 2023, which is 60 days prior to such anniversary. In the event that our next annual meeting of stockholders is called for a date that is not within 30 days before or after December 30, 2023, notice by the stockholder in order to be timely must be received not later than the close of business on the 10th day following the day on which notice of our next annual meeting of stockholders is mailed or public disclosure of our next annual meeting of stockholders is made, whichever occurs first.
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS
The SEC previously adopted a rule concerning the delivery of annual disclosure documents. The rule allows us or brokers holding our shares on your behalf to send a single set of our annual report and proxy statement to any household at which two or more of our stockholders reside, if either we or the brokers believe that the stockholders are members of the same family. This practice, referred to as “householding,” benefits both stockholders and us. It reduces the volume of duplicate information received by you and helps to reduce our expenses. The rule applies to our annual reports, proxy statements and information statements. Once stockholders receive notice from their brokers or from us that communications to their addresses will be “householded,” the practice will continue until stockholders are otherwise notified or until they revoke their consent to the practice. Each stockholder will continue to receive a separate proxy card or voting instruction card.
Those stockholders who either (i) do not wish to participate in “householding” and would like to receive their own sets of our annual disclosure documents in future years or (ii) who share an address with another one of our stockholders and who would like to receive only a single set of our annual disclosure documents should follow the instructions described below:
•Stockholders whose shares are registered in their own name should contact our transfer agent, American Stock Transfer & Trust Company, LLC, and inform them of their request by calling them at 1-800-937-5449 or writing them at 6201 15th Avenue, 2nd Floor, Brooklyn, NY 11219.
•Stockholders whose shares are held by a broker or other nominee should contact such broker or other nominee directly and inform them of their request. Stockholders should be sure to include their name, the name of their brokerage firm and their account number.
We will promptly deliver separate copies of our proxy statement and annual report at the request of any stockholder who is in a household that participates in the householding of the Company’s proxy materials. You may call the Corporate Secretary at 303-640-3838 or send your request to the Corporate Secretary at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly periods therein. On March 31, 2010, we filed our 2009 audited consolidated financialsand current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public through the internet at the SEC’s web site at www.sec.gov.
We will mail without charge, upon written request, a copy of our Annual Report on Form 10-K.
As our Independent Registered Public Accounting Firm, Amper would audit our consolidated10-K for the year ended December 31, 2021, including the financial statements for fiscal year 2010, review the related interim quarters, and perform audit-related serviceslist of exhibits, and consultation in connection with various accounting and financial reporting matters. Amper may also perform certain non-audit services for our company. The audit committee has determined that the provision of the services provided by Amper as set forth herein are compatible with maintaining Amper’s independence and the prohibitions on performing non-audit services set forth in the Sarbanes-Oxley Act and relevant Securities and Exchange Commission rules.
Amper will have a representative present at the Annual Meeting who willany exhibit specifically requested. Requests should be available to respond to appropriate questions. The representative will also have the opportunity to make a statement if he or she desires to do so.
Audit Fees
Amper, Politziner & Mattia, LLP (“Amper”), our principal accountant, billed us approximately $255,000 for professional services for the audit of our annual consolidated financial statements for the 2009 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2009 fiscal year and approximately $278,000 for the audit of our annual consolidated financial statements for the 2008 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2008 fiscal year.
Audit-Related Fees
sent to:
Amper did not render in services in connection with audit related services in the 2009 fiscal year. In connection with filing a registration statement in 2008, Amper billed us approximately $10,000 in fiscal year 2008. Except for the foregoing and as reported in the paragraph immediately above, Amper did not bill us for any assurance and related services that are reasonably related to the performance of the audit and review of our consolidated financial statements that are not already. All of these fees were billed in connection with our filings with the Securities and Exchange Commission and attendance at audit committee meetings.
-31-25587 Conifer Road, Suite 105-231,
Conifer, Colorado 80433Attention: Corporate Secretary
Tax Fees
Amper did not render any services in connection with tax advice, tax compliance and tax planning in the 2009 fiscal year. In connection with tax advice, Amper billed us approximately $6,000 but did not render any professional services to us for tax compliance and tax planning in the 2008 fiscal year.
All Other Fees
303-640-3838
Amper did not bill us in the 2009 or 2008 fiscal years for any services or products other than Audit Fees, Audit-Related Fees and Tax Fees, as listed above.
In accordance with audit committee policy and the requirements of law, all services provided by Amper were pre-approved by the audit committee and all services to be provided by Amper will be pre-approved. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from its auditing firm. We obtain these services from other service providers as needed.
Required Vote and Board Recommendation
While approval of the Independent Registered Public Accounting Firm proposal is not required, the board seeks the affirmative vote of a majority of the shares of common stock present at the Annual Meeting in person or by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF AMPER, POLITZINER & MATTIA, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2010.
OTHER MATTERS
The boardBoard of directorsDirectors knows of no other business to be presented for action at the Annual Meeting. If any matters do come before the meeting on which action can properly be taken, the persons named in the enclosed proxy will have the discretion to vote such matters in accordance with their judgment.
ADDITIONAL INFORMATION
APPENDIX A - FORM OF AMENDMENT TO THE COMPANY CHARTER
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
OBLONG, INC.
Oblong, Inc. (the “Corporation”), a corporation organized and existing under, and by virtue of, the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that:
FIRST: The required financial information included our 2009 Annual Report on Form 10-K, whichname of the Corporation is Oblong, Inc.
SECOND: The original Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) was filed with the Securities and Exchange Commission on March 31, 2010 and is attached hereto, is hereby incorporated into this Proxy Statement.
Exhibit A
GLOWPOINT, INC.
AMENDED AND RESTATED 2007 STOCK INCENTIVE PLAN
1.PurposesSecretary of State of the Plan.State of Delaware (the “Delaware Secretary”) on November 4, 1996. The purposesCertificate of thisIncorporation was amended by that certain Agreement and Plan of Merger dated as of November 27, 1996, and Certificate of Amendment filed with the Delaware Secretary on May 18, 2000, and subsequently amended and restated in its entirety by the Amended and Restated 2007 Stock Incentive Plan are to attract and retainCertificate of Incorporation filed with the best available personnel, to provide additional incentive to Employees, Directors, and Consultants, and to promoteDelaware Secretary on May 18, 2000 (such certificate, the success“A&R Certificate of the Company’s business.Incorporation
2.Definitions. As used herein, the following terms shall have the following definitions:
(a)“Administrator” means the Board or the Committee.
(b)“Affiliate” and “Associate” means these terms as defined in Rule 12b-2 promulgated under the Exchange Act.
(c)“Applicable Laws” means the legal requirements relating to the administration”). The A&R Certificate of equity compensation plans, if any, under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents therein.
(d)“Award” means the grant of an Option, SAR, or Restricted Stock under this Plan.
(e)“Award Agreement” means the written agreement evidencing the grant of an Award executedIncorporation was subsequently amended by the CompanyCertificate of Amendment, filed with the Delaware Secretary on May 18, 2000, Certificate of Amendment, filed with the Delaware Secretary on June 22, 2001, Certificate of Amendment, filed with the Delaware Secretary on September 24, 2003, Certificate of Amendment, filed with the Delaware Secretary on August 22, 2007, Certificate of Amendment, filed with the Delaware Secretary on June 2, 2009, Certificate of Amendment, filed with the Delaware Secretary on January 10, 2011, and effective as of January 14, 2011, Certificate of Amendment, filed with the Grantee, including any amendments thereto.Delaware Secretary on April 17, 2019, and Certificate of Amendment, filed with the Delaware Secretary on March 4, 2020, and effective as of March 6, 2020 (the A&R Certificate of Incorporation, as amended to date, the “Amended Certificate”).
(f)“Board” meansTHIRD: That at a meeting of the Board of Directors of the Company.Corporation duly called and held on [_____], 2022, resolutions were duly adopted setting forth a proposed amendment (the “Amendment”) of the Amended Certificate, declaring said amendment to be advisable. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Amended Certificate be amended by changing Article IV thereof to insert the following language at the end of such Article:
(g)
“Cause” means, with respectUpon the filing and effectiveness (the “Effective Time”), pursuant to the terminationDelaware General Corporation Law, of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, each [__] ([__]) shares of Common Stock either issued and outstanding or held by the Company or a Related Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such term is expressly definedCorporation in a then-effective written agreement between the Grantee and the Company or Related Entity, or in the absence of such then-effective written agreement and definition, results from, as determined by the Administrator in its exclusive discretion, the Grantee’s: (i) refusal or failure to act in accordance with any specific, lawful direction or order of the Company or Related Entity; (ii) unfitness or unavailability for service, or unsatisfactory performance (other than as a result of Disability); (iii) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or Related Entity; (iv) dishonesty, intentional misconduct, or material breach of any agreement with the Company or Related Entity; or (v) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person or entity. At least thirty (30) daystreasury stock immediately prior to the terminationEffective Time shall, automatically and without any action on the part of the Grantee’s Continuous Service pursuant to (i) or (ii) above, the Administratorrespective holders thereof, be combined and converted into one (1) fully paid and nonassessable share of Common Stock (the “Reverse Stock Split”). No fractional shares shall provide the Grantee with written notice of the Company’s or Related Entity’s intent to terminate, the reason therefor, and an opportunity for the Grantee to cure such defectsbe issued in his or her service to the Company’s or Related Entity’s satisfaction. During this thirty (30) day (or longer) period, the Grantee may not exercise any Award, purchase Shares, or vest in any Shares.
(h)“Change in Control” means a change in ownership or control of the Company effected through either of the following transactions:
(i)the direct or indirect acquisition by any person or entity or related group of persons or entities (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person or entity that directly or indirectly controls, is controlled by, or is under common controlconnection with the Company)Reverse Stock Split. In lieu of beneficial ownership (within the meaningany fractional share of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty (50%) percent of the total combined voting power of the Company’s outstanding securities pursuantCommon Stock to a tender or exchange offer made directly to the Company’s shareholders for which a majoritystockholder would otherwise be entitled in connection with the Reverse Stock Split (taking into consideration all shares of Common Stock owned by such stockholder), the Continuing Directors who are not Affiliates or AssociatesCorporation will issue that number of shares of Common Stock resulting from the offeror do not recommend the then current shareholders accept; or
(ii)a change in the composition of the Board over thirty-six (36) months or less such that a majority of the Board members (roundedReverse Stock Split as rounded up to the nextnearest whole number) ceases,share upon the submission of a transmission letter by reason of one or more contested elections for Board membership, to be composed of individuals whoa stockholder holding the shares in book-entry form and, where shares are Continuing Directors.
(i)“Code” meansheld in certificated form, upon the Internal Revenue Code of 1986, as amended.
(j)“Committee” means the Compensation Committeesurrender of the Board or such other committee designated by the Board.
(k)“Common Stock” means the common stock of the Company.
(l)“Company” means Glowpoint, Inc., a Delaware corporation.
(m)“Consultant” means any person or entity (other than an Employee or Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or Related Entity to render consulting or advisory services to the Company or Related Entity.
(n)“Continuing Directors” means members of the Board who either (i) have been Board members continuously for at least thirty-six (36) months; or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.
(o)“Continuous Service” meansstockholder’s Old Certificates (as defined below). Each certificate that the provision of services to the Company or Related Entity in any capacity of Employee, Director, or Consultant, is not interrupted or terminated. Continuous Service shall not be considered interrupted for (i) any approved leave of absence; (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director, or Consultant; or (iii) any change in status as long as the individual remains in the service of the Company or Related Entity as an Employee, Director, or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted hereunder, if such leave exceeds ninety (90) days, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of such ninety (90) day period.
(p)“Corporate Transaction” means any one or more of the following transactions:
(i)a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;
(ii)the sale, transfer, or other disposition of all or substantially all of the assets of the Company (including without limitation the capital stock of the Company’s Subsidiaries);
(iii)approval by the Company’s shareholders of any plan or proposal for the complete liquidation or dissolution of the Company;
(iv)any reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty (50%) percent of the total combined voting power of the Company’s outstanding securities are transferred to a person or entity or persons or entities different from those that held such securities immediately prior to such merger; or
(v)acquisition by any person or entity or related group of persons or entities (other than the Company or a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty (50%) percent of the total combined voting power of the Company’s outstanding securities (whether or not in a transaction also constituting a Change in Control).
(q)“Director” means a member of the Board or the board of directors of any Related Entity.
(r)“Disability” means the Grantee meets (i) or (ii): (i) the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) the Grantee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three months under an accident and heath plan covering the Company’s or Related Entity’s employees.
(s)“Employee” means any person, including an Officer or Director, who is a common law employee of the Company or Related Entity. For Incentive Stock Options, Employee means any person, including a Director or Officer, who is a common law employee of the Company, a Parent or a Subsidiary. The payment of a director’s fee shall not be sufficient to constitute employment by the Company or Related Entity.
(t)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(u)“Fair Market Value” means, as of any date, the valueEffective Time represented shares of Common Stock determined as follows:(“
(i)Old CertificatesWhen there exists a public market for the”), shall thereafter represent that number of shares of Common Stock into which
the Fair Market Value shall be (A) the closing price for a Share for the market trading day on the dateshares of grant (or, if no closing price was reported on that date, on the last trading date on which a closing price was reported) on the stock exchange determinedCommon Stock represented by the AdministratorOld Certificate shall have been combined, subject to be the primary market for the Common Stock or the Nasdaq National Market, whichever is applicable; or (B) if the Common Stock is not traded on any such exchange or national market system, the averageelimination of fractional share interests as described above.
The par value per share of the closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the day prior to the date of the determination (or, if no such prices were reported on that date, on the last date on which such prices were reported), in each case, as reported in The Wall Street Journal or such other source that the Administrator determines reliable in its exclusive discretion; or
(ii)If, in the opinion of the Administrator in its exclusive discretion, subparagraph (i) is not applicable or reasonable, the Fair Market Value of a Share, as determined by an independent appraisal that satisfies the requirements of Code Section 401(a)(28)(C)Corporation’s capital stock and the regulations thereunder, as of a date that is no more than twelve (12) months before the transaction to which the valuation is applied.
(v)“Good Reason” means the voluntary separation from service by a Grantee after a Corporate Transaction, Change in Control, or a Related Entity Disposition when the following conditions are satisfied:
(i)the separation from service occurs no later than two (2) years following the initial existence (which may begin prior to the Corporate Transaction, Change in Control, or Related Entity Disposition) of one or more of the following conditions arising without the Grantee’s consent:
(A)A material diminution in the Grantee’s base compensation;
(B)A material diminution in the Grantee’s authority, duties, or responsibilities;
(C)A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Grantee is required to report, including a requirement that the Grantee report to a corporate officer or employee instead of reporting directly to the Company’s board of directors;
(D)A material diminution in the budget over which the Grantee retains authority;
(E)A material change in the geographical location at which the Grantee performs services; or
(F)Any other action or inaction that constitutes a material breach by the Company or Related Entity of the employment agreement or other agreement under which the Grantee provides services.
(ii)The Grantee must provide written notice to the Board of the existence of the condition described in subparagraph (i) above within ninety (90) days of the initial existence of the condition, and upon the Board’s receipt of the written notice the Company or Related Entity has thirty (30) days to cure the condition.
(w)“Grantee” means an Employee, Director, or Consultant who receives an Award pursuant to an Award Agreement.
(x)“Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which these persons have more than fifty (50%) percent of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty (50%) percent of the voting interests.
(y)“Incentive Stock Option” means an Option intended to qualify as an incentive stock option under Code Section 422.
(z)“Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.
(aa)“Officer” means a person who is an officer of the Company or Related Entity under Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(bb)“Option” means an option to purchase Shares pursuant to an Award Agreement.
(cc)“Parent” means a parent corporation” whether now or hereafter existing, under Code Section 424(e).
(dd)“Plan” means this Amended and Restated 2007 Stock Incentive Plan as it may be amended.
(ee)“Related Entity” means the corporation or other entity, other than the Company, to which the Grantee primarily provides services on the date of grant of an Award, and any corporation or other entity, other than the Company, in an unbroken chain of corporations or other entities beginning with the Company in which each corporation or other entity has a controlling interest in another corporation or other entity in the chain, and ending with the corporation or other entity to which the Grantee primarily provides services on the date of grant of an Award. In the case of a corporation, a controlling interest means ownership of stock possessing at least fifty (50%) percent of total combined voting power of all classes of stock entitled to vote, or at least fifty (50%) percent of the total valuenumber of shares of all classes of stock. Incapital stock that the Corporation is authorized to issue pursuant to this Article IV shall, in each case, not be affected by the Reverse Stock Split.”
No other change to the Certificate of Incorporation is hereby made, including, without limitation, any other change to Article IV.
FOURTH: That, pursuant to a partnership or limited liability company, a controlling interest means ownership of at least fifty (50%) percentmajority action by the Corporation’s Stockholders in accordance with Section 228 of the profits interest or capital interestDGCL, the holders of the partnership or limited liability company.
(ff)“Related Entity Disposition” means the sale, distribution, or other disposition by the Company, Parent, or a Subsidiarynecessary number of all or substantially allshares of the interests ofCorporation’s outstanding capital stock as required by statute approved the Company, Parent, or a SubsidiaryAmendment.
FIFTH: That said Amendment was duly adopted in any Related Entity effected by a sale, merger, consolidation, or other transaction involving that Related Entity, or the sale of all or substantially all of the assets of that Related Entity, other than any Related Entity Disposition to the Company, Parent, or a Subsidiary.
(gg)“Restricted Stock” means Shares issued to a Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as determined by the Administrator.
(hh)“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.
(ii)“SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as set forth in the Award Agreement, measured by the increase in the Fair Market Value of a specified number of Shares from the date of grant until the date of exercise.
(jj)“Section 424 Corporate Transaction” means the occurrence, in a single transaction or a series of related transactions, of any one or more of the following: (i) a sale or other disposition of all or substantially all of the assets of the Company and its Subsidiaries; (ii) a sale or other disposition of more than fifty (50%) percent of the outstanding stock of the Company; (iii) the consummation of a merger, consolidation, or similar transaction after which the Company is the surviving corporation but the shares outstanding immediately preceding the merger, consolidation, or similar transaction are converted or exchanged by reason of the transaction into other stock, property, or cash; or (iv) a distribution by the Company (excluding an ordinary dividend or a stock split or stock dividend described in Treasury Regulation Section 1.424-1(e)(4)(v)).
(kk)“Share” means a share of the Common Stock.
(ll)“Subsidiary” means a subsidiary corporation, whether now or hereafter existing, under Code Section 424(f).
3.Stock Subject to the Plan.
(a)Subject toaccordance with the provisions of Section 10,242 of the maximum aggregate numberDGCL.
SIXTH: This Certificate of Shares that mayAmendment shall be issued pursuant to all Awards is 5,500,000 Shareseffective as of Common Stock. The maximum number[______] at 5:00 P.M. Eastern Standard Time.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of aggregate Shares that may be issued pursuant to Incentive Stock Options is 5,500,000 Shares of Common Stock. The SharesAmendment to be issued pursuant to Awards may besigned by its authorized but unissued, or reacquired Common Stock.officer this [____________].
Name: David Clark
Title: Authorized Officer
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OBLONG, INC. 25587 CONIFER ROAD, SUITE 105-231 CONIFER, COLORADO 80433 | VOTE BY INTERNET - www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on December 29, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on December 29, 2022. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your completed and signed proxy card must be received by December 29, 2022. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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| | | KEEP THIS PORTION FOR YOUR RECORDS |
| | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
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| OBLONG, INC. |
The Board of Directors recommends you vote FOR the following: 1.Election of Directors Nominees: 01) Jason Adelman 04) Matthew Blumberg 02) Peter Holst 05) Deborah Meredith 03) James Lusk | For
All
☐ | Withhold
All
☐ | For All
Except
☐ | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) you wish to withhold on the line below.
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| The Board of Directors recommends you vote “FOR” Proposal No. 2. | | For | Against | Abstain |
| 2. Ratification of the appointment of EisnerAmper LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2022. | ☐ | ☐ | ☐ |
| The Board of Directors recommends you vote “FOR” Proposal No. 3. | For | Against | Abstain |
| 3. Approval of an amendment to Article FOURTH of the Company's Amended & Restated Certificate of Incorporation to effect a reverse stock split of the Company's issued and outstanding shares of common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15. | ☐ | ☐ | ☐ |
| The Board of Directors recommends you vote “FOR” Proposal No. 4. | For | Against | Abstain |
| 4. Approve, on an advisory and non-binding basis, executive compensation as described in this proxy statement. | ☐ | ☐ | ☐ |
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| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and 2021 Annual Report are available at www.proxyvote.com.
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| | OBLONG, INC. | | |
| | Annual Meeting of Stockholders | | |
| | December 30, 2022 9:00 AM MST | | |
| | This proxy is solicited by the Board of Directors | | |
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| The stockholder(s) hereby appoint(s) Peter Holst and David Clark, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of OBLONG, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 AM MST on December 30, 2022, at the offices of Arnold & Porter Kaye Scholer LLP, located at 1144 Fifteenth Street, Suite 3100, Denver, Colorado 80202. | |
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| This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations and in favor of the election of each of the director nominees. | |
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| | Continued and to be signed on reverse side | | |
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(b)Any Shares covered by an Award (or portion of an Award) that is forfeited or cancelled, expires or is settled in cash, shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares that may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company, such Shares shall become available for future grant under the Plan.
4.Administration of the Plan.
(a)
Plan Administrator.
(i)Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers or Directors, the Plan shall be administered by (A) the Board; or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.
(ii)Administration With Respect to Consultants and Other Employees. For grants of Awards to Employees or Consultants who are neither Directors nor Officers, the Plan shall be administered by (A) the Board; or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant such Awards and may limit such authority as the Board determines in its exclusive discretion.
(b)Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the exclusive authority and discretion:
(i)to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;
(ii)to determine whether and to what extent Awards are granted hereunder;
(iii)to determine the number of Shares and the amount of other consideration to be covered by each Award granted hereunder;
(iv)to approve forms of Award Agreements;
(v)to determine the terms and conditions of any Award granted hereunder;
(vi)to amend the terms of any outstanding Award, provided that any amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent;
(vii)to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of Award or Award Agreement;
(viii)to establish additional terms, conditions, rules, and procedures to accommodate the rules or laws of applicable foreign jurisdictions and to afford Grantees favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules, and procedures with terms or conditions that are inconsistent with the Plan’s provisions; and
(ix)to take such other action, not inconsistent with the terms of the Plan, as the Administrator determines appropriate in its exclusive discretion.
5.Eligibility. Awards other than Incentive Stock Options may be granted to Employees, Directors, and Consultants. Incentive Stock Options may be granted only to Employees of the Company, Parent, or a Subsidiary. An Employee, Director, or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors, or Consultants who are residing in foreign jurisdictions as the Administrator determines in its exclusive discretion.
6.Terms and Conditions of Awards.
(a)Type of Awards. The Administrator is authorized to make an Award to an Employee, Director, or Consultant that is not inconsistent with the terms of the Plan and that consist of an Option, SAR, or Restricted Stock. The Option or SAR shall have an exercise price equal to the Fair Market Value of the Shares underlying the Option or SAR on the date of grant of the Option or SAR.
(b)Designation of Award. Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. Notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options that become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or Parent or any Subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with respect to such Shares was granted.
(c)Conditions of Award. Subject to the Plan’s terms, the Administrator shall, in its exclusive discretion, determine the provisions, terms, and conditions of each Award, including but not limited to the Award’s vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment by the Grantee (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established may be based on any one of, or combination of, increase in share price, earnings per share, total shareholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measure of performance selected by the Administrator. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement.
(d)For any Award that contains a repurchase obligation for Shares (other than a right of first refusal), or a put or call right that is not a lapse restriction under Treas. Reg. § 1.83-3(i), the purchase price shall be the Fair Market Value of the Shares (disregarding lapse restrictions under Treas. Reg. §1.83-3(i)) at the time of repurchase.
(e)Acquisitions and Other Transactions. The Administrator may issue Awards in settlement, assumption, or substitution for, outstanding Awards or obligations to grant future Awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity, or an additional interest in a Related Entity, whether by merger, stock purchase, asset purchase, or other form of transaction.
(f)Early Exercise. The Award Agreement may include a provision whereby the Grantee may, while an Employee, Director, or Consultant, exercise any part or all of an Option or SAR prior to full vesting. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity, or to any other restriction the Administrator determines appropriate in its exclusive discretion.
(g)Term of Award. The term of each Award shall be the term stated in the Award Agreement; provided, however, that the term of an Incentive Stock Option shall not exceed ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten (10%) percent of the voting power of all classes of stock of the Company or Parent or any Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as provided in the Award Agreement.
(h)Transferability of Awards. Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution, and may be exercised, during the Grantee’s lifetime, only by the Grantee; provided, however, that the Grantee may designate a beneficiary of an Incentive Stock Option on the Grantee’s death on a beneficiary designation form provided by the Administrator. An Award Agreement may provide that other Awards may be transferred by gift or through a domestic relations order to members of the Grantee’s Immediate Family, or in the manner and to the extent determined by the Administrator in its exclusive discretion.
(i)Grant of Restricted Stock. Upon an Award of Restricted Stock, the Company shall issue in the Grantee’s name and deliver to the Grantee a certificate or certificates for the Shares. The Shares represented by the certificate or certificates shall be subject to the restrictions in the Award Agreement. Once the Restricted Stock is no longer subject to the restrictions, the Company shall issue a new certificate for the Shares without restrictions, and the Grantee shall tender the certificate for the Shares subject to restrictions for cancellation by the Company.
7.Award Exercise or Purchase Price, Consideration, and Taxes.
(a)Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows:
(i)In the case of an Incentive Stock Option:
(A)granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten (10%) percent of the voting power of all classes of stock of the Company or Parent or any Subsidiary, the per Share exercise price shall not be less than one hundred and ten (110%) percent of the Fair Market Value per Share on the date of grant; and
(B)granted to any Employee other than an Employee described in subparagraph (A), the per Share exercise price shall not be less than one hundred (100%) percent of the Fair Market Value per Share on the date of grant.
(ii)In the case of a Non-Qualified Stock Option, the per Share exercise price shall not be less than one hundred (100%) percent of the Fair Market Value per Share on the date of grant.
(iii)In the case of an SAR, the per Share exercise price shall not be less than one hundred (100%) percent of the Fair Market Value per Share on the date of grant.
(iv)Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(e), the exercise or purchase price for the Award shall be determined in accordance with the principles of Code Sections 409A and 424(a).
(b)Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award, including without limitation the method of payment, shall be determined by the Administrator in its exclusive discretion (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares the following, provided that the portion of the consideration equal to the Shares’ par value must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law:
(i)cash;
(ii)check;
(iii)surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require in its exclusive discretion (including withholding of Shares otherwise deliverable upon exercise of the Award) that have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which the Award is exercised (but only to the extent that such exercise of the Award would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price unless otherwise determined by the Administrator in its exclusive discretion);
(iv)with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares; and (B) shall provide written directions to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm to complete the sale transaction; or
(v)any combination of the foregoing methods of payment.
(c)Taxes. No Shares shall be delivered to any Grantee or other person or entity until such Grantee or other person or entity has made arrangements acceptable to the Administrator in its exclusive discretion for the satisfaction of foreign, federal, state, and local income, employment, and excise tax withholding obligations, including without limitation obligations incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of an Award, the Company shall withhold or collect from Grantee an amount sufficient to satisfy such tax obligations.
8.Exercise of Award.
(a)Procedure for Exercise; Rights as a Stockholder.
(i)An Option or SAR shall be exercisable at such times and under such conditions as set forth under the terms of the Plan and specified in the Award Agreement.
(ii)An Option or SAR shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person or entity entitled to exercise the Award and full payment is made for the Shares with respect to which the Award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b)(iv). Until the issuance (as evidenced by the appropriate entry on the Company’s books or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to Shares subject to an Option or SAR, notwithstanding the exercise of an Option or SAR. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Option or SAR. In addition, upon the exercise of an Option or SAR, the Grantee shall not be entitled to all or part of the dividends declared and paid on the Shares underlying the Option or SAR between the date of grant and the date of exercise. For Restricted Stock, until the time all restrictions are removed or satisfied, the Grantee shall not be entitled to all or part of the dividends declared and paid on the Shares between the date of grant and the date of vesting.
(b)Exercise of Award Following Termination of Continuous Service.
(i)An Award may not be exercised after the termination date of such Award set forth in the Award Agreement, and may be exercised following the termination of a Grantee’s Continuous Service only as provided in the Award Agreement.
(ii)When the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.
(iii)Any Award designated as an Incentive Stock Option, to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee’s Continuous Service, shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Award Agreement.
9.Conditions Upon Issuance of Shares.
(a)Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. Notwithstanding the foregoing provisions of this Section 9(a), if the expiration of the right to exercise an Award is tolled because the exercise would violate an applicable federal, state, local, or foreign law, the period during which the Award may be exercised cannot be extended more than thirty (30) days after the exercise first would no longer violate an applicable federal, state, local, or foreign law.
(b)As a condition to the exercise of an Award, the Company may require the person or entity exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by Applicable Laws.
10.Adjustments Upon Changes in Capitalization.
(a)For Non-Qualified Stock Options, on a stock split (including a reverse stock split) or stock dividend in which the only effect is to increase or decrease on a pro-rata basis the number of Shares subject to the Non-Qualified Stock Option, the Committee may, in its exclusive discretion, proportionally adjust the exercise price and number of Shares subject to the Non-Qualified Stock Option.
(b)For Incentive Stock Options and Restricted Stock Awards, if any combination, consolidation, forward or reverse split, merger, reorganization, repurchase, spin-off, or exchange or stock, stock dividend, or other special and nonrecurring dividend or distribution (whether in cash, securities, or other property), liquidation, dissolution, or other transaction, affects the Common Stock such that an adjustment is appropriate to prevent dilution or enlargement of Grantees’ rights, then the Committee may, in its exclusive discretion, adjust all or any portion of (i) the number of Shares and classes of stock available thereafter for Incentive Stock Options and Restricted Stock Awards in the aggregate to all Grantees, and individually to any one Grantee; (ii) the number of Shares and classes of stock that may be delivered for outstanding Incentive Stock Options and Restricted Stock Awards; and (iii) the exercise or purchase price for any Incentive Stock Option or Restricted Stock Award.
11.Corporate Transactions/Changes in Control/Related Entity Dispositions. Except as otherwise provided in an Award Agreement:
(a)On the specified effective date of a Corporate Transaction or Change in Control, each Award that is at the time outstanding automatically shall become fully vested and exercisable and be released from any restrictions on transfer (other than transfer restrictions applicable to Incentive Stock Options) and repurchase or forfeiture rights, immediately prior to the specified effective date of such Corporate Transaction or Change in Control, for all the Shares at the time represented by such Award. Notwithstanding the foregoing provisions, the Administrator may, in its exclusive discretion, provide as part of a Section 424 Corporate Transaction that any one or more of the foregoing provisions shall not apply.
(b)On the specified effective date of a Related Entity Disposition, for each Grantee who on such specified effective date is engaged primarily in service to the Related Entity that is the subject of the Related Entity Disposition, each Award that is at the time outstanding automatically shall become fully vested and exercisable and be released from any restrictions on transfer (other than transfer restrictions applicable to Incentive Stock Options) and repurchase and forfeiture rights, immediately prior to the specified effective date of such Related Entity Disposition, for all the shares at the time represented by such Award. Notwithstanding the foregoing provisions, the Administrator may, in its exclusive discretion, provide as part of a Section 424 Corporate Transaction that any one or more of the foregoing provisions shall not apply.
(c) For Non-Qualified Stock Options and SARs, the Administrator may provide in any Award, Award Agreement, or as part of a Section 424 Corporate Transaction, that if the requirements of Treasury Regulation §1.424-1 (without regard to the requirement described in Treas. Reg. §1.424-1(a)(2) that an eligible corporation be the employer of the optionee) would be met if the stock right were an Incentive Stock Option, the substitution of a new Non-Qualified Stock Option or SAR for a portion of or an entire outstanding Non-Qualified Stock Option or SAR, and the assumption of a portion of or an entire outstanding Non-Qualified Stock Option or SAR, shall not be treated as the grant of a new stock right or a change in the form of payment. The requirement of Treasury Regulation §1.424-1(a)(5)(iii) is deemed satisfied if the ratio of the exercise price to the Fair Market Value of the underlying Shares immediately after the substitution or assumption is not greater than the ratio of the exercise price to the Fair Market Value of the Shares immediately before the substitution or assumption. In the case of a transaction described in Code Section 355 in which the stock of the distributing corporation and the stock distributed in the transaction are both readily tradable on an established securities market immediately after the transaction, the requirements of Treasury Regulation §1.424-1(a)(5) may be satisfied by:
(i)using the last sale before or the first sale after the specified date as of which such valuation is being made, the closing price on the last trading day before or the trading day of a specified date, the arithmetic mean of the high and low prices on the last trading day before or the trading day of such specified date, or any other reasonable method using actual transactions in such stock as reported by such market on a specified date, for the stock of the distributing corporation and the stock distributed in the transaction, provided the specified date is designated before such specified date, and such specified date is not more than sixty (60) days after the transaction;
(ii)using the arithmetic mean of such market prices on trading days during a specified period designated before the beginning of such specified period, when such specified period is not longer than thirty (30) days and ends no later than sixty (60) days after the transaction; or
(iii)using an average of such prices during such prespecified period weighted based on the volume of trading of such stock on each trading day during such prespecified period.
(d)For Incentive Stock Options, the Administrator may provide in any Award, Award Agreement, or as part of a Section 424 Corporate Transaction that in a Section 424 Corporate Transaction each Incentive Stock Option may be assumed or an equivalent Incentive Stock Option substituted by the successor corporation, or a parent or subsidiary of the successor corporation, in accordance with the requirements of Code Section 424.
(e)For Restricted Stock, the Administrator may provide in any Award, Award Agreement, or as part of a Section 424 Corporate Transaction that in a Section 424 Corporate Transaction each Restricted Stock Award may be assumed or an equivalent Restricted Stock Award substituted by the successor corporation, or a parent or subsidiary of the successor corporation.
12.Effective Date and Term of Plan. The Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years from the earlier of the date that the Board adopted the Plan prior to this Amendment and Restatement, and the date that the Company’s shareholders adopted the Plan prior to this Amendment and Restatement, unless sooner terminated. Subject to Section 17 and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.
13.Amendment, Suspension, or Termination of the Plan.
(a)The Board may at any time amend, suspend, or terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree necessary.
(b)No Award may be granted during any suspension of the Plan or after termination of the Plan.
(c)Any amendment, suspension, or termination of the Plan (including termination of the Plan under Section 12) shall not affect Awards already granted, and such Awards shall remain in full force and effect as if the Plan had not been amended, suspended, or terminated.
14.Reservation of Shares.
(a)The Company, during the term of the Plan, shall at all times reserve and keep available such number of Shares as are sufficient to satisfy the Plan’s requirements.
(b)The inability of the Company to obtain approval from any regulatory body having jurisdiction, which approval is determined by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability for failure to issue or sell Shares as to which such the requisite approval was not obtained.
15.No Effect on Terms of Employment/Consulting Relationship. The Plan and any Award Agreement shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the Company’s or Related Entity’s right to terminate the Grantee’s Continuous Service at any time, with or without cause.
16.No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a governing document of another plan or arrangement, Awards shall not be considered compensation for purposes of computing benefits or contributions under any tax-qualified or nonqualified employee benefit plan, tax-qualified or nonqualified deferred compensation plan, bonus plan, or incentive plan (the “Other Plans”) of the Company or Related Entity, and shall not affect the amounts of any benefits or contributions under any Other Plans subsequently established. The Plan is not an employee benefit plan under the Employee Retirement Income Security Act of 1974, as amended.
17.Code Section 409A. Notwithstanding any other provision of this Plan, the Administrator shall construe and administer this Plan and all Award Agreements, and exercise all authority and discretion under this Plan, to satisfy the requirements of Code Section 409A and the regulations thereunder, or any exemption thereto.
18. Date of Grant. The term date of grant of an Award means the date on which the Company completes all action by the Company necessary to create the legally binding right to the Award. An action by the Company is not complete until the date on which the maximum number of Shares that can be purchased or received under the Award is fixed and determinable, the minimum exercise or purchase price is fixed and determinable, and the class of underlying stock and the Grantee’s identity is designated.