UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment
No. __)
Filed
by the Registrant ☑
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, For Use of the Commission Only (As
Permitted by Rule 14a-6(e)(2))
☑ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under Rule 14a-12
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RELM Wireless Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
☑ No fee required
☐ Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction
applies:
(2)
Aggregate number of securities to which transaction
applies:
(3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
(4)
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(5)
Total fee paid:
☐ Fee paid previously with preliminary
materials.
☐ Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form or
schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:
RELM Wireless Corporation
7100 Technology Drive
West Melbourne, Florida 32904
April
25, 2017
Dear
Stockholder:
You are
cordially invited to attend the 2017 annual meeting of stockholders
of RELM Wireless Corporation, which we will hold on Thursday, June
15, 2017, at 2:00 p.m., local time, at the W Fort Lauderdale, 401 N
Fort Lauderdale Beach Blvd., Fort Lauderdale, Florida
33304.
We are
pleased to take advantage of Securities and Exchange Commission
rules that allow issuers to furnish proxy materials to their
stockholders on the Internet. We believe these rules allow us to
provide our stockholders with the information they need, while
lowering the costs of delivery and reducing the environmental
impact of our annual meeting. On or about May 4, 2017, we expect to
begin mailing a Notice of Internet Availability of Proxy Materials,
or E-proxy notice, to our stockholders of record as of the close of
business on April 24, 2017. The E-proxy notice contains
instructions for your use of this process, including how to access
our proxy statement, proxy card and annual report and how to vote
on the Internet. In addition, the E-proxy notice contains
instructions on how you may receive a paper copy of the proxy
statement, proxy card and annual report or elect to receive your
proxy statement, proxy card and annual report over the
Internet.
If you
are unable to attend the meeting in person, it is very important
that your shares be represented and voted at the annual meeting.
You may vote your shares over the Internet as described in the
E-proxy notice. Alternatively, if you received a paper copy of the
proxy card by mail, please complete, sign, date and promptly return
the proxy card in the self-addressed stamped envelope provided. You
may also vote by telephone as described in your proxy card. Voting
by telephone, over the Internet or by mailing a proxy card will not
limit your right to attend the annual meeting and vote your shares
in person.
We look
forward to seeing you at the meeting.
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Sincerely,
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/s/
Kyle D. Cerminara
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Kyle D. Cerminara |
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Chairman
of the Board of Directors
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RELM WIRELESS CORPORATION
7100 Technology Drive
West Melbourne, Florida 32904
NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JUNE 15, 2017
To the
stockholders of RELM Wireless Corporation:
The
2017 annual meeting of stockholders of RELM Wireless Corporation
will be held on Thursday, June 15, 2017, at 2:00 p.m., local time,
at the W Fort Lauderdale, 401 N Fort Lauderdale Beach Blvd., Fort
Lauderdale, Florida 33304, for the following purposes:
1.
To elect seven
directors named in the proxy statement to serve on our board of
directors until the next annual meeting of stockholders and until
their respective successors are duly elected and
qualified;
2.
To ratify the
appointment of Moore Stephens Lovelace, P.A. as our independent
registered public accounting firm for fiscal year
2017;
3.
To approve, on an
advisory, non-binding basis, the compensation of our named
executive officers;
4.
To approve, on an
advisory, non-binding basis, the frequency of the stockholder vote
to approve the compensation of our named executive
officers;
5.
To approve the RELM
Wireless Corporation 2017 Incentive Compensation Plan;
and
6.
To transact such
other business properly brought before the meeting and any
adjournment or postponement of the meeting.
Only
stockholders of record at the close of business on April 24, 2017
are entitled to notice of, and to vote at, the annual meeting and
any adjournment or postponement of the meeting. Each share of
common stock is entitled to one vote. A list of stockholders
entitled to vote at the annual meeting will be available for
inspection by our stockholders, for any purpose germane to the
meeting, at the annual meeting and during ordinary business hours
beginning 10 days prior to the date of the annual meeting, at our
principal executive offices at 7100 Technology Drive, West
Melbourne, Florida 32904.
Whether
or not you plan to attend the meeting in person, please vote your
shares over the Internet, as described in the Notice of Internet
Availability of Proxy Materials, or E-proxy notice. Alternatively,
if you received a paper copy of the proxy card by mail, please
complete, sign, date and promptly return the proxy card in the
self-addressed stamped envelope provided. You may also vote your
shares by telephone as described in your proxy card. Voting by
telephone, over the Internet or by mailing a proxy card will not
limit your right to attend the annual meeting and vote your shares
in person.
All
stockholders are cordially invited to attend the annual
meeting.
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By
Order of the Board of Directors,
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/s/ William P. Kelly
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William P. Kelly, Secretary
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West
Melbourne, Florida
April
25, 2017
Important Notice Regarding the Availability of Proxy Materials for
the Annual Stockholder Meeting to be held on June 15, 2017:
Our proxy statement, proxy card and annual report on Form 10-K for
the year ended December 31, 2016 are available at https://www.iproxydirect.com/RWC.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE VOTE YOUR PROXY TODAY. YOU CAN VOTE BY INTERNET, BY
TELEPHONE OR BY MAIL USING THE INSTRUCTIONS INCLUDED ON THE NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS OR PROXY
CARD.
RELM WIRELESS CORPORATION
________________________________________________________
2017 ANNUAL MEETING OF STOCKHOLDERS
JUNE 15, 2017
________________________________________________________
PROXY STATEMENT
________________________________________________________
This
proxy statement contains information related to the 2017 annual
meeting of stockholders of RELM Wireless Corporation (“RELM,” the “Company,” “we,” “our” or “us”) to be held on Thursday, June 15,
2017, at 2:00 p.m., local time, at the W Fort Lauderdale, 401 N
Fort Lauderdale Beach Blvd., Fort Lauderdale, Florida 33304, and at
any adjournments or postponements thereof. We are using the
Securities and Exchange Commission rules that allow issuers to
furnish proxy materials to their stockholders on the Internet. On
or about May 4, 2017, we expect to begin mailing a Notice of
Internet Availability of Proxy Materials, which is referred to
herein as the “E-proxy
notice,” to each holder
of record of our common stock as of the close of business on April
24, 2017, the record date for the meeting. The E-proxy notice and
this proxy statement summarize the information you need to know to
vote by proxy or in person at the annual meeting. You do not need
to attend the annual meeting in person in order to
vote.
________________________________________________________
TABLE OF CONTENTS
ABOUT THE ANNUAL
MEETING
What
is the purpose of the annual meeting?
At the
annual meeting, we are asking stockholders:
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To elect seven
directors named in this proxy statement to our board of directors
until the next annual meeting of stockholders and until their
respective successors are duly elected and qualified;
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To ratify the
appointment of Moore Stephens Lovelace, P.A. (“Moore Stephens Lovelace”) as our independent registered
public accounting firm for the fiscal year ending December 31, 2017
(“fiscal 2017”);
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To approve, on an
advisory, non-binding basis, the compensation of our named
executive officers (so-called
“say-on-pay”);
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To approve, on an
advisory, non-binding basis, the frequency of the stockholder vote
to approve the compensation of our named executive officers
(so-called “say-when-on-pay”);
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To approve the RELM
Wireless Corporation 2017 Incentive Compensation Plan (the
“2017 Incentive Compensation Plan”); and
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To transact such
other business properly brought before the meeting and any
adjournment or postponement of the meeting.
Why did I receive a Notice of Internet Availability of Proxy
Materials?
The
rules of the Securities and Exchange Commission (the “SEC”) permit us to make our proxy
materials available to beneficial owners of our stock
electronically over the Internet without having to mail printed
copies of the proxy materials. Accordingly, on or about May 4,
2017, we are sending a Notice of Internet Availability of Proxy
Materials, which is referred to herein as the “E-proxy notice,” to our beneficial owners. All
beneficial owners will have the ability to access the proxy
materials, including this proxy statement, the form of proxy card
and our annual report for the fiscal year ended December 31, 2016
(“fiscal 2016”), on the website referred to in the
E-proxy notice or to request a printed set of the proxy materials.
Instructions on how to access the proxy materials over the Internet
or to request a printed copy may be found in the E-proxy notice. In
addition, beneficial owners may request to receive proxy materials
in printed form by mail or electronically by email on an ongoing
basis.
On or
about May 4, 2017, we will begin mailing paper copies of our proxy
materials to stockholders who have requested them. Those
stockholders who do not receive the E-proxy notice, including
stockholders who have previously requested to receive paper copies
of proxy materials, will receive a copy of this proxy statement,
the proxy card and our annual report for fiscal 2016 by
mail.
Who is entitled to notice of, and to vote, at the annual
meeting?
You are
entitled to notice of the annual meeting and to vote, in person or
by proxy, at the annual meeting if you owned shares of our common
stock as of the close of business (5:00 p.m. EDT) on April 24,
2017, the record date of the annual meeting. On the record date,
13,842,084 shares of
our common stock were issued and outstanding and held by 849
holders of record.
Holders of record of our common stock on the record date are
entitled to one vote per share at the annual meeting.
Who can attend the meeting?
All
stockholders as of the record date, or their duly appointed
proxies, may attend. Please note that if you hold shares in
“street name” (that is, through a broker or other
nominee), you will need to bring a copy of a brokerage statement
reflecting your stock ownership as of the record date.
What constitutes a quorum?
If a
majority of the shares of our common stock outstanding on the
record date is represented either in person or by proxy at the
annual meeting, a quorum will be present at the annual meeting.
Shares held by persons attending the annual meeting but not voting,
shares represented in person or by proxy and for which the holder
has abstained from voting, and broker “non-votes” will be counted as present at the
annual meeting for purposes of determining the presence or absence
of a quorum.
What are broker “non-votes”?
A
broker non-vote occurs when a brokerage firm or other nominee
holding shares for a beneficial owner does not vote on a particular
proposal because the brokerage firm or other nominee did not
receive voting instructions from the beneficial owner and does not
have authority to vote on that particular proposal. Brokers and
other nominees are subject to the rules of the New York Stock
Exchange (the “NYSE”). The NYSE rules direct that
certain matters submitted to a vote of stockholders are considered
“routine” proposals. Brokers or other
nominees generally may vote on such proposals on behalf of
beneficial owners who have not furnished voting instructions,
subject to the rules of the NYSE concerning transmission of proxy
materials to beneficial owners, and subject to any proxy voting
policies and procedures of those brokerage firms or other nominees.
For “non-routine” proposals, brokers or other
nominees may not vote on such proposals unless they have received
voting instructions from the beneficial owner, and, to the extent
that they have not received voting instructions, brokers or other
nominees report such number of shares as “non-votes.”
Under
NYSE rules, Proposal 1 (election of directors), Proposal 3
(advisory approval of say-on-pay), Proposal 4 (advisory approval of
say-when-on-pay), and Proposal 5 (approval of the 2017 Incentive
Compensation Plan) are considered to be “non-routine”
matters. This means that brokers or other nominees who have not
been furnished voting instructions from their clients will not be
authorized to vote in their discretion on these proposals. Proposal
2, the ratification of the appointment of an independent registered
public accounting firm, is a “routine” matter. This means that brokers or
other nominees who have not been furnished voting instructions from
their clients will be authorized to vote for this proposal. For
beneficial stockholders, if you do not give your broker or other
nominee specific instructions, your shares will not be voted on
Proposals 1, 3, 4 or 5 and may be voted by the brokerage firm or
other nominee for Proposal 2. Broker non-votes will have no effect
on the outcome of the voting on any of the proposals.
How will abstentions be counted?
Because
the election of directors requires only a plurality vote,
abstentions will have no impact upon the election of directors.
Abstentions will also have no impact on the outcome of Proposal 2
(ratification of the independent registered public accounting
firm), Proposal 3 (advisory approval of say-on-pay) and Proposal 4
(advisory approval of say-when-on-pay). Under exchange rules,
abstentions will count as a vote “against” Proposal 5
(approval of the 2017 Incentive Compensation Plan).
How do I vote?
Whether
or not you plan to attend the annual meeting, we urge you to vote
your shares over the Internet as described in the E-proxy notice.
Alternatively, if you received a paper copy of the proxy card by
mail, please complete, sign, date and promptly return the proxy
card in the self-addressed stamped envelope provided. You may also
vote your shares by telephone as described in your proxy card.
Authorizing your proxy over the Internet, by mailing a proxy card
or by telephone will not limit your right to attend the annual
meeting and vote your shares in person. Your proxy (one of the
individuals named in your proxy card) will vote your shares per
your instructions. If you fail to provide instructions on a proxy
properly submitted via the Internet, mail or telephone, your proxy
will vote, as recommended by the board of directors, (1) to elect
to our board of directors the seven director nominees named in this
proxy statement, (2) to ratify the appointment of Moore Stephens
Lovelace as our independent registered public accounting firm for
fiscal 2017, (3) to approve, on an advisory, non-binding basis, the
compensation of our named executive officers, (4) to approve, on an
advisory, non-binding basis, a three-year frequency for the
advisory vote on the compensation of our named executive officers,
and (5) to approve the 2017 Incentive Compensation
Plan.
If you
have shares held by a broker or other nominee, you may instruct
your broker or nominee to vote your shares by following the
instructions that the broker or nominee provides to you. Most
brokers and nominees allow you to vote by mail, telephone and on
the Internet. As indicated above, under NYSE rules, Proposal 1
(election of directors), Proposal 3 (advisory approval of
say-on-pay), Proposal 4 (advisory approval of say-when-on-pay) and
Proposal 5 (approval of the 2017 Incentive Compensation Plan) are
“non-routine” matters, meaning that brokers or
other nominees who have not been furnished voting instructions from
their clients will not be authorized to vote in their discretion on
those proposals. Proposal 2 (ratification of the appointment of
Moore Stephens Lovelace) is a matter considered “routine,” meaning that brokers or nominees
who have not been furnished voting instructions from their clients
will be authorized to vote on that proposal.
Can I change my vote after I have voted?
Yes.
Voting by telephone, over the Internet or by mailing a proxy card
does not preclude a stockholder from voting in person at the annual
meeting. A stockholder may revoke a proxy, whether submitted via
telephone, the Internet or mailed, at any time prior to its
exercise by filing with our Corporate Secretary a duly executed
revocation of proxy, by properly submitting, either by telephone,
mail or Internet, a proxy to our Corporate Secretary bearing a
later date or by appearing at the annual meeting and voting in
person. Attendance at the annual meeting will not itself constitute
revocation of a proxy.
What are the board’s recommendations?
The
board unanimously recommends a vote “FOR”:
●
election to our
board of each of the seven director nominees named in this proxy
statement;
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ratification of the
appointment of Moore Stephens Lovelace as our independent
registered public accounting firm for fiscal 2017;
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approval, on an
advisory, non-binding basis, of the compensation of our named
executive officers;
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approval, on an
advisory, non-binding basis, of a three-year frequency for the vote
on the compensation of our named executive officers;
and
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approval of the
RELM Wireless Corporation 2017 Incentive Compensation
Plan.
We do
not expect that any other matters will be brought before the annual
meeting. If, however, other matters are properly presented, the
persons named as proxies will vote the shares represented by
properly executed proxies in accordance with their judgment with
respect to those matters, including any proposal to adjourn or
postpone the annual meeting.
What vote is required to approve the proposals?
Proposal 1: Election of
Directors. Directors will be elected by a plurality of the
votes cast, either in person or by proxy, at the annual meeting
(meaning that the seven director nominees who receive the highest
number of shares voted “for” their election are
elected). You may vote “for” or “withhold”
authority to vote for each of the director nominees. If you
“withhold” authority to vote with respect to one or
more director nominees, your vote will have no effect on the
election of such nominees. Broker non-votes will also have no
effect on the election of the director nominees.
Proposal 2: Ratification of
Appointment of Moore Stephens Lovelace. The number of votes
cast “for” the ratification of the appointment of Moore
Stephens Lovelace as our independent registered public accounting
firm for fiscal 2017, either in person or by proxy, at the annual
meeting must exceed the number of votes cast “against”
ratification. Abstentions and broker non-votes will have no effect
on the outcome of the vote.
Proposal 3: Advisory Vote on Named Executive
Officer Compensation (Say-on-Pay). The number of votes cast
“for” advisory approval of the compensation of our
named executive officers, either in person or by proxy, at the
annual meeting must exceed the number of votes cast
“against” advisory approval. Abstentions and broker-non
votes will have no effect on the outcome of the vote.
Proposal 4: Frequency of the Advisory Vote on
Named Executive Officer Compensation (Say-When-on-Pay). The
option of every year, every two years or every three years that
receives the highest number of votes cast, either in person or by
proxy, at the annual meeting will be considered the
stockholders’ recommendation of the frequency for the
advisory vote on the compensation of our named executive officers.
Abstentions and broker non-votes will have no effect on the outcome
of the vote.
Proposal 5: 2017 Incentive Compensation
Plan. The number of votes cast “for” the
approval of the 2017 Incentive Compensation Plan, either in person
or by proxy, at the annual meeting must exceed the number of votes
cast “against” the plan. Under exchange rules,
abstentions will count as votes cast “against” the
plan. Broker non-votes will have no effect on the outcome of the
vote.
Other Items. In the
event that other items are properly brought before the annual
meeting, under Nevada law, each matter other than the election of
directors will be approved if the number of votes cast in favor of
the item by the stockholders entitled to vote exceeds the number of
votes cast in opposition to the matter. A properly executed proxy
marked “abstain” with respect to any such matter will
not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention
will not be counted as a vote cast on the matter and therefore will
not affect the outcome of the matter.
As of
the record date, our directors and executive officers and their
affiliates owned and were entitled to vote approximately 4,303,457
shares of our common
stock, which represented approximately 30.9% of our common stock
outstanding on that date. We currently anticipate that all of these
persons will vote their and their affiliates’ shares in favor of the director
nominees, in favor of ratification of the appointment of Moore
Stephens Lovelace, in favor of the compensation of our named
executive officers, in favor of a three-year frequency for the
advisory vote on the compensation of our named executive officers,
and in favor of the 2017 Incentive Compensation Plan.
Who pays for the preparation of the proxy and soliciting
proxies?
We are
making this solicitation of proxies and have paid the entire
expense of preparing, printing and mailing the E-proxy notice and,
to the extent requested by our stockholders, this proxy statement
and any additional materials furnished to stockholders. In addition
to solicitations by mail, our directors, officers and employees may
solicit proxies from stockholders by telephone, e-mail or other
electronic means, or in person. These persons will not receive
additional compensation for soliciting proxies. Arrangements also
will be made with brokerage houses and other custodians, nominees
and fiduciaries for the forwarding of solicitation materials to the
beneficial owners of stock held of record by these persons, and we
will reimburse them for reasonable out-of-pocket
expenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
table below sets forth information regarding the beneficial
ownership of our common stock as of the record date, April 24,
2017, by the following individuals or groups:
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each person who is
known by us to own beneficially more than 5% of our common
stock;
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each of our
directors and nominees for director;
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each of our Named
Executive Officers (as identified in the “Summary Compensation Table For
2015-2016” appearing in
this proxy statement); and
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all of our
directors and executive officers as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to
securities. Shares of our common stock that are subject to our
stock options that are presently exercisable or exercisable within
60 days of April 24, 2017 are deemed to be outstanding and
beneficially owned by the person holding the stock options for the
purpose of computing the percentage of ownership of that person,
but are not treated as outstanding for the purpose of computing the
percentage of any other person.
Unless
indicated otherwise below, the address of our directors and
executive officers is c/o RELM Wireless Corporation, 7100
Technology Drive, West Melbourne, Florida 32904. Except as
indicated below, the persons named in the table have sole voting
and investment power with respect to all shares of common stock
beneficially owned by them. As of April 24, 2017, we had
outstanding 13,842,084 shares of our common
stock.
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Shares
of Common Stock Beneficially Owned
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Name and Address of Beneficial Owner
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Number of Shares
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Percent of Class
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Beneficial Owners of More
Than 5% of Our Common Stock:
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Fundamental
Global Investors, LLC and Ballantyne Strong, Inc.
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4,165,714(1)
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30.1%
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D. Kyle
Cerminara
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4,175,714(1)(2)(6)(11)
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30.1%
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Lewis
M. Johnson
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4,170,714(1)(3)(6)(11)
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30.1%
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Benchmark
Capital Advisors
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1,573,253(4)
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11.4%
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Donald
F.U. Goebert
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1,464,538(5)
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10.6%
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Directors, Director
Nominees and Named Executive Officers (not otherwise included
above):
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William
P. Kelly
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68,827(6)(7)(12)
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*
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James
E. Gilley
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21,000(6)(12)
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*
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General
E. Gray Payne
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5,000(8)(11)
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*
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Charles
T. Lanktree
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7,916(9)(11)
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*
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Ryan
R.K. Turner
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—(11)
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—
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John W.
Struble
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—(11)
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—
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Michael
R. Dill
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—(11)
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—
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David
P. Storey
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161,311(10)(12)
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1.2%
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All
current directors and executive officers as a group (10
persons)
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4,303,457(13)
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30.9%
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______________
*Less
than 1%
(1)
The
amount shown and the following information is derived from a
Schedule 13D/A filed by Fundamental Global Investors, LLC
(“Fundamental Global”) and its affiliates on January 5,
2017 and a Form 4 filed on March 10, 2017. Fundamental Global is
deemed to beneficially own the shares disclosed as directly owned
by certain of its affiliates, including 1,147,087 shares, or 8.3%
of outstanding shares, disclosed as directly owned by Ballantyne
Strong, Inc. (“Ballantyne Strong”), which Fundamental
Global is deemed to beneficially own by virtue of being the largest
stockholder of Ballantyne
Strong and D. Kyle Cerminara’s positions as the Chief
Executive Officer and Chairman of the Board of Directors of
Ballantyne Strong and as a principal of Fundamental Global.
Ballantyne Strong has shared voting and dispositive power with
respect to all 1,147,087 shares reported as directly owned by
Ballantyne Strong in the Schedule 13D/A. Ballantyne Strong’s
business address is 11422 Miracle Hills Drive, Suite 300, Omaha,
Nebraska 68154. Fundamental Global expressly disclaims beneficial
ownership of the shares disclosed as directly owned by Ballantyne
Strong. According to the Schedule 13D/A, CWA Asset Management
Group, LLC (“CWA”) reports 690,483 shares, or 5% of
outstanding shares, which are held in its customer accounts and are
included in the number of the shares listed in the table above. CWA
has the dispositive power over the shares held in its customer
accounts while CWA’s customers retain the voting power over
their shares. CWA’s business address is 9130 Galleria Court,
Third Floor, Naples, Florida 34109. According to the Schedule
13D/A, additional affiliates of Fundamental Global hold 356,876
shares, which represents 2.6% of outstanding shares and increases
the total number of shares beneficially owned by Fundamental Global
to 4,522,590 shares, or 32.7% of outstanding shares. Fundamental
Global has shared voting power with respect to 3,475,231 of the
shares listed in the table above and dispositive power with respect
to all of these shares. Fundamental Global’s business address
is 4201 Congress Street, Suite 140 Charlotte, North Carolina
28209.
(2)
Mr.
Cerminara is the Chief Executive Officer, Co-Founder and Partner of
Fundamental Global, Co-Chief Investment Officer of CWA, and Chief
Executive Officer and Chairman of the Board of Directors of
Ballantyne Strong. Due to his positions with Fundamental Global and
Ballantyne Strong, Mr. Cerminara is deemed to beneficially own the
4,165,714 shares disclosed as directly owned by certain affiliates
of Fundamental Global, including 1,147,087 shares disclosed as
directly owned by Ballantyne Strong. Mr. Cerminara expressly
disclaims beneficial ownership of these shares. The business
addresses for Mr. Cerminara are c/o Fundamental Global Investors,
LLC, 4201 Congress Street, Suite 140, Charlotte, North Carolina
28209; c/o Ballantyne Strong, Inc., 11422 Miracle Hills Drive,
Suite 300, Omaha, Nebraska 68154; and 131 Plantation Ridge Drive,
Suite 100, Mooresville, North Carolina 28117.
(3)
Mr.
Johnson is the President, Co-Founder and Partner of Fundamental
Global, serves as Co-Chief Investment Officer of CWA, and is a
director of Ballantyne Strong. Accordingly, Mr. Johnson is deemed
to beneficially own the 4,165,714 shares disclosed as directly held
by affiliates of Fundamental Global, which includes 1,147,087
shares disclosed as directly owned by Ballantyne Strong. Mr.
Johnson expressly disclaims beneficial ownership of these shares.
The business addresses for Mr. Johnson are c/o Fundamental Global
Investors, LLC, 4201 Congress Street, Suite 140, Charlotte, North
Carolina 28209; and c/o CWA Asset Management Group, LLC, 9130
Galleria Court, Third Floor, Naples, Florida 34109.
(4)
The
amount shown and the following information is derived from a
Schedule 13G/A filed by Benchmark Capital Advisors (“Benchmark”), reporting beneficial
ownership as of February 14, 2015. According to the Schedule 13G/A,
Benchmark beneficially owns 1,573,253 shares, and has sole voting
and dispositive power with respect to 882,697 of these shares and
shared voting and dispositive power with respect to 1,573,253 of
these shares. Benchmark’s business address is 100 Wall
Street, 8th Floor, New
York, New York 10005.
(5)
The
amount shown is based on Mr. Goebert’s Form 4 filed on
December 30, 2016, plus 6,255 shares acquired upon option exercises
since the filing of the Form 4, but after Mr. Goebert’s
resignation as a director on January 9, 2017.
(6)
Share
ownership of the following persons includes options to purchase our
common shares presently exercisable or exercisable within 60 days
of April 24, 2017 as follows: for Mr. Cerminara – 10,000
shares; for Mr. Johnson – 5,000 shares; for Mr. Kelly –
42,000 shares; and for Mr. Gilley – 21,000
shares.
(7)
Includes 26,827
shares held jointly by Mr. Kelly with his wife.
(8)
General Payne was
appointed to our board of directors on January 9, 2017. The amount
shown does not include the 5,000 options exercisable for shares of
our common stock granted to General Payne on January 9, 2017, as
such options do not become exercisable until a date that is later
than 60 days after April 24, 2017.
(9)
Mr.
Lanktree was appointed to our board of directors on March 17, 2017.
Includes 7,702 shares directly owned by the Donna B. Lanktree
Family Trust, the trustee of which is Donna B. Lanktree, the spouse
of Mr. Lanktree.
(10)
Mr.
Storey, who is a Named Executive Officer, served as our President
and Chief Executive Officer during fiscal 2016. Mr. Storey resigned
from all positions with the Company as of the close of business on
January 16, 2017. The amount shown includes 45,000 shares received
upon Mr. Storey’s exercise of a fully vested option on March
8, 2017.
(11)
The
named person is a director and a nominee for director at the annual
meeting.
(12)
The
named person is a Named Executive Officer.
(13)
Includes 4,165,714
shares reported as beneficially owned by Fundamental Global, of
which Messrs. Cerminara and Johnson are deemed to have beneficial
ownership by virtue of their respective positions with Fundamental
Global and Ballantyne Strong. Includes 26,827 shares held jointly
by Mr. Kelly with his wife. Includes 7,702 shares directly owned by
the Donna B. Lanktree Family Trust, the trustee of which is Donna
B. Lanktree, the spouse of Mr. Lanktree. Includes options to
purchase our common shares presently exercisable or exercisable
within 60 days of April 24, 2017 as follows: for Mr. Cerminara
– 10,000 shares; for Mr. Johnson – 5,000 shares; for
Mr. Kelly – 42,000 shares; for Mr. Gilley – 21,000
shares; and for Mr. Timothy A. Vitou – 20,000 shares. Mr.
Vitou was appointed as our new President effective as of January
17, 2017 and is an executive officer of the Company. Mr. Vitou is
not separately included in the table because he was not a Named
Executive Officer for fiscal 2016.
PROPOSAL 1: ELECTION OF
DIRECTORS
General
At the
annual meeting, seven nominees will be elected as directors. Our
board of directors currently consists of seven members, all of whom
are standing for re-election at the annual meeting. At the 2016
annual meeting, our stockholders elected Timothy W. O’Neil,
D. Kyle Cerminara, Lewis M. Johnson, Donald F.U. Goebert and David
P. Storey to our board of directors. On January 9, 2017, Mr.
Goebert tendered a letter of resignation from the board, effective
immediately, which was accepted by the board. On the same day, the
board appointed General E. Gray Payne to the board to fill the
vacancy created by Mr. Goebert’s resignation. Mr. Storey, who
also served as the President and Chief Executive Officer, resigned
from all positions with the Company effective as of the close of
business on January 16, 2017. On March 16, 2017, Mr. O’Neil
submitted his resignation from the board, effective immediately,
which was accepted by the board. On March 17, 2017, the board
appointed Mr. Cerminara as the Chairman of the Board, replacing Mr.
O’Neil, and appointed Charles T. Lanktree, Ryan R.K. Turner,
John W. Struble and Michael R. Dill to the board, effective
immediately. The size of our board of directors is currently set at
seven.
Our
board of directors, based on the recommendation of the nominating
and governance committee, has nominated each of D. Kyle Cerminara,
Lewis M. Johnson, General E. Gray Payne, Charles T. Lanktree, Ryan
R.K. Turner, John W. Struble and Michael R. Dill to stand for
re-election at the annual meeting. We expect each nominee for
director to be able to serve if elected. If any nominee is not able
to serve, proxies will be voted in favor of the remainder of those
nominated and may be voted for substitute nominees, unless our
board of directors chooses to reduce the number of directors
serving on the board.
The directors elected at the annual meeting will serve until the
next annual meeting of stockholders and until their respective
successors are duly elected and qualified.
We are
of the view that the continuing service of qualified incumbent
directors promotes stability and continuity in the function of the
board of directors, contributing to the board’s ability to work as a collective
body, while giving us the benefit of the familiarity and insight
into our affairs that our directors have accumulated during their
tenure. With the addition of four new directors in 2017, the
board’s composition has been refreshed to bring the most
relevant skill sets and experiences to the board at this time. When
analyzing whether directors and nominees have the desired
experience, qualifications, attributes and skills, individually and
taken as a whole, the nominating and governance committee and the
board of directors focus on the information as summarized in each
of the directors’
individual biographies set forth below. In particular, the board
selected Mr. Cerminara to serve as a director because of his
extensive experience in the financial industry, including
investing, capital allocation, finance and financial analysis of
public companies, and operational experience as the Chief Executive
Officer of a publicly-traded company. He also brings the
perspective of one of our most significant stockholders. Mr.
Johnson also brings to the board the perspective of one of the
Company’s most
significant stockholders. He has extensive experience in the
financial industry, including investing, capital allocation,
finance and financial analysis of public companies. The board, upon
the recommendation of Mr. Cerminara, appointed General Payne as a
director because of his extensive strategic, operational and
leadership experience. General Payne also brings to the board
valuable insight into the military sector, having over 40 years of
military operational and strategic expertise. The board appointed
Messrs. Lanktree, Turner, Struble and Dill as directors upon the
recommendation of Messrs. Cerminara and Johnson. Mr. Lanktree
brings extensive operational and leadership experience, wireless
communications industry experience and public company experience to
the board, including experience as a Chief Executive Officer. Mr.
Turner brings extensive experience in investment analysis and
capital allocation for a publicly-traded company, as well as
business development experience. Mr. Struble provides extensive
experience in the accounting/finance field to the board and
qualifies as an “audit committee financial expert”
under the SEC’s rules. Mr. Dill brings over 20 years of
extensive leadership and operational experience to the board,
including experience in developing and implementing strategic
plans.
Vote Required
The
affirmative vote of a plurality of the votes cast, either in person
or by proxy, at the annual meeting is required for the election of
these nominees as directors.
Recommendation of the Board
Our
board of directors unanimously recommends that stockholders vote
“FOR” the election of the seven nominees
named in this proxy statement as directors.
Nominees for Election as Directors
The
following table sets forth the nominees to be elected at the annual
meeting, the year each nominee was first elected as a director,
each nominee’s age and
the positions currently held by each nominee with our
company:
|
Name and Year First Elected
|
|
Age
|
|
Position
|
|
D. Kyle
Cerminara (2015)(1)(2)
|
|
39
|
|
Chairman
of the Board
|
|
Lewis
M. Johnson (2016)(2)
|
|
47
|
|
Director
|
|
General
E. Gray Payne (2017)(1)(2)(3)
|
|
69
|
|
Director
|
|
Charles
T. Lanktree (2017)(1)
|
|
67
|
|
Director
|
|
Ryan
R.K. Turner (2017)(1)
|
|
38
|
|
Director
|
|
John W.
Struble (2017)(3)
|
|
40
|
|
Director
|
|
Michael
R. Dill (2017)(1)(3)
|
|
52
|
|
Director
|
_____________
|
(1)
|
Member
of the compensation committee.
|
|
(2)
|
Member
of the nominating and governance committee.
|
|
(3)
|
Member
of the audit committee.
|
|
|
|
The
business experience of each nominee for director is set forth below
as of April 25, 2017.
D. Kyle
Cerminara was appointed to the
board of directors in July 2015 and as Chairman in March 2017. Mr.
Cerminara is the Chief Executive Officer and Chairman of the Board
for Ballantyne Strong, Inc., a holding company with diverse
business activities focused on serving the cinema, retail,
financial and government markets. Mr. Cerminara assumed
responsibilities at Ballantyne Strong in 2015. Since 2012, Mr.
Cerminara has also served as the Chief Executive Officer,
Co-Founder and Partner of Fundamental Global Investors, LLC, an SEC
registered investment advisor that manages equity and fixed income
hedge funds and is the largest stockholder of the Company. In
addition, Mr. Cerminara is Co-Chief Investment Officer of CWA Asset
Management Group, LLC (d/b/a Capital Wealth Advisors), a wealth
advisor and multi-family office affiliated with Fundamental Global
Investors, LLC, which position he has held since 2012. Mr.
Cerminara also serves as President and Trustee of StrongVest ETF
Trust and Chief Executive Officer of StrongVest Global Advisors,
LLC. StrongVest Global Advisors, LLC, a wholly-owned subsidiary of
Ballantyne Strong, is an investment advisor, and CWA Asset
Management Group, LLC is a sub-advisor, to CWA Income ETF, an
exchange-traded fund and series of StrongVest ETF Trust. Mr.
Cerminara is a member of the Board of Directors of a number of
publicly held companies focused in the insurance, technology and
communications sectors, including Ballantyne Strong, Inc. (NYSE
MKT: BTN) since February 2015, 1347 Property Insurance Holdings,
Inc. (NASDAQ: PIH), a holding company, which, through its
subsidiaries, is engaged in providing property and casualty
insurance, since December 2016, Iteris, Inc. (NASDAQ: ITI), a
publicly traded applied informatics company since August 2016, and
Itasca Capital, Ltd. (TSXV: ICL) (formerly Kobex Capital Corp.), a
publicly traded investment firm, since June 2016. He also served on
the Board of Directors of Magnetek, Inc., a publicly traded
manufacturer, in 2015. Prior to these roles, Mr. Cerminara was a
Portfolio Manager at Sigma Capital Management, an independent
financial adviser, from 2011 to 2012, a Director and Sector Head of
the Financials Industry at Highside Capital Management from 2009 to
2011, and a Portfolio Manager and Director at CR Intrinsic
Investors from 2007 to 2009. Before joining CR Intrinsic Investors,
Mr. Cerminara was a Vice President, Associate Portfolio Manager and
Analyst at T. Rowe Price from 2001 to 2007 and an Analyst at Legg
Mason from 2000 to 2001. Mr. Cerminara received an MBA from the
Darden School of Business at the University of Virginia and a B.S.
in Finance and Accounting from the Smith School of Business at the
University of Maryland, where he was a member of Omicron Delta
Kappa, an NCAA Academic All American and Co-Captain of the
men’s varsity tennis team. He also completed a China
Executive Residency at the Cheung Kong Graduate School of Business
in Beijing, China. Mr. Cerminara holds the Chartered Financial
Analyst (CFA) designation.
Lewis M.
Johnson was elected to the board of directors in May 2016.
Mr. Johnson is the President, Co-Founder and Partner of Fundamental
Global Investors, LLC, an SEC registered investment advisor that
manages equity and fixed income hedge funds and is the largest
stockholder of the Company. In addition, Mr. Johnson is Co-Chief
Investment Officer of CWA Asset
Management Group, LLC (d/b/a Capital Wealth Advisors), a
wealth advisor and multi-family office affiliated with Fundamental
Global Investors, LLC. Prior to co-founding Fundamental Global
Investors, LLC and partnering with Capital Wealth Advisors, Mr.
Johnson was a private investor from 2010 to 2012. From 2008 to
2010, Mr. Johnson served as Portfolio Manager and Managing Director
at Louis Dreyfus Highbridge Energy. Previously, Mr. Johnson was a
Senior Vice President, Portfolio Manager and Analyst at Pequot
Capital from 2006 to 2007. Prior to joining Pequot Capital, Mr.
Johnson was a Vice President and Analyst at T. Rowe Price from 2000
to 2006. Mr. Johnson worked as an Analyst at Capital Research and
Management in 1999 and a Vice President at AYSA from 1992 to 1998.
Mr. Johnson received an MBA from the Wharton School of Business at
the University of Pennsylvania in addition to a MA in Political
Science and a BA in International Studies from Emory University,
where he graduated Magna Cum Laude and was a member of Phi Beta
Kappa. Mr. Johnson has served on the Board of Directors of
Ballantyne Strong, Inc. (NYSE MKT: BTN), a holding company with diverse business activities
focused on serving the cinema, retail, financial and government
markets, since May 2016 and on the Board of Directors of
1347 Property Insurance Holdings, Inc.
(NASDAQ: PIH), a holding company, which, through its subsidiaries,
is engaged in providing property and casualty insurance, since
April 2017.
General E.
Gray Payne was appointed to the
board of directors in January 2017. General Payne has served as
Senior Vice President of The Columbia Group (“TCG”),
where he has been responsible for managing the Marine Corps
Programs Division (since September 2010) and the Navy Programs
Division (since October 2013), with combined revenue of
approximately $29 million. TCG is a federal consulting firm working
with the Department of Defense, Department of Homeland Security,
NOAA and private clients. TCG consults in the areas of logistics,
acquisitions, program management, information technology, training,
marine architecture and engineering, and command and control
systems. Since December 2011, General Payne has also provided
consulting services to and served on the Advisory Council of
Marstel-Day, LLC, located in Fredericksburg, Virginia, which
consults in the areas of conservation, environmental compliance,
and encroachment. Prior to September 2010, General Payne was on
active duty with the Marine Corps for 10 years, retiring as a Major
General. Prior to March 2001, he worked with a number of companies
in various capacities, including as a management consultant, Chief
Financial Officer, Chief Operating Officer, and Chief Executive
Officer. General Payne currently serves on two non-profit boards:
The Marine Corps Association (since 2004) and the Marine Corps
Association Foundation (since 2010). He received a BS in Economics
from North Carolina State University and a MS in Strategic Studies
from U.S. Army War College.
Charles T.
Lanktree was appointed to the
board of directors in March 2017. Mr. Lanktree has served as
President and Chief Executive Officer of Eggland’s Best, LLC,
a joint venture between Eggland’s Best, Inc. and Land
O’Lakes, Inc. distributing nationally branded eggs, since
2012. Since 1997, Mr. Lanktree has served as President and Chief
Executive Officer of Eggland’s Best, Inc., a
franchisedriven consumer egg business, where he previously
served as the President and Chief Operating Officer from 1995 to
1996 and Executive Vice President and Chief Operating Officer from
1990 to 1994. Mr. Lanktree currently serves on the Board of
Directors of Eggland’s Best, Inc. and several of its
affiliates and on the Board of Directors of Ballantyne Strong, Inc.
(NYSE MKT: BTN), a holding company with diverse business activities
focused on serving the cinema, retail, financial and government
markets. From 2010 to 2013, he served on the Board of Directors of
Eurofresh Foods, Inc., a privately held company, and from 2004 to
2013, he was on the Board of Directors of Nature’s Harmony
Foods, Inc. Prior to joining Eggland’s Best, Inc., Mr.
Lanktree served as the President and Chief Executive Officer of
American Mobile Communications, Inc. from 1987 to 1990 and as the
President and Chief Operating Officer of Precision Target
Marketing, Inc. from 1985 to 1987. From 1976 to 1985, he held
various executivelevel marketing positions with The Grand
Union Company and BeechNut Foods Corporation. Mr. Lanktree
received an MBA from the University of Notre Dame and a B.S. in
Food Marketing from St. Joseph’s College. He also served in
the U.S. Army and U.S. Army Reserves from 1971 to
1977.
Ryan R.K.
Turner was appointed to the
board of directors in March 2017. Mr. Turner has served as Vice
President of Strategic Investments for Ballantyne Strong, Inc.
(NYSE MKT: BTN), a holding company with diverse business activities
focused on serving the cinema, retail, financial and government
markets, since 2016. Mr. Turner also serves as President of
StrongVest Global Advisors, LLC, a wholly-owned subsidiary of
Ballantyne Strong. He previously served as Director of Business
Development for Ballantyne Strong, Inc. from 2015 to 2016. From
2012 to 2015, Mr. Turner served as Director of Research and
Research Analyst for Fundamental Global Investors, LLC, an SEC
registered investment advisor that manages equity and fixed income
hedge funds and, together with Ballantyne Strong, is the largest
stockholder of the Company. Prior to joining Fundamental Global
Investors, LLC, Mr. Turner worked as an Associate Analyst at T.
Rowe Price from 2006 to 2012, and as an Associate in the Product
Services & Development Department at AST Trust Company from
2002 to 2006. Mr. Turner received an MBA from the Robert H. Smith
School of Business at the University of Maryland and a B.S. in
Business Administration from the University of Arizona. Mr. Turner
holds the Chartered Financial Analyst (CFA)
designation.
John W.
Struble was appointed to the
board of directors in March 2017. Mr. Struble has served as Chief
Financial Officer of IntraPac International Corporation, a
privateequity owned manufacturing company, since December
2013, where he is responsible for the finance, information
technology and human resources functions. From May 2012 to December
2013, he served as Corporate Controller and Treasurer of IntraPac.
From May 2010 to May 2012, he served as Corporate Controller
(Operations) of Euramax International, Inc., where he was
responsible for the accounting and finance functions for the North
American operations. Euramax is a public company that produces
aluminum, steel, vinyl and fiberglass products for OEM,
distributors, contractors, and home centers in North America and
Europe. Prior to that, he was Controller of RockTenn Company,
from December 2008 to February 2010. Mr. Struble is a Certified
Public Accountant. He received an MBA from the University of
Georgia and a B.S. in Business Administration from the State
University of New York at Buffalo.
Michael R.
Dill was appointed to the board
of directors in March 2017. Mr. Dill has served as President of the
Aerospace, Power Generation and General Industrial divisions at
AFGlobal Corporation, a privatelyheld, integrated technology
and manufacturing company, since 2014. Prior to joining AFGlobal,
Mr. Dill held various positions in the Aerospace and Defense
division of CIRCOR International, a publicly traded global
manufacturer of highly engineered environment products (NYSE: CIR),
including serving as Group Vice President from 2009 to 2014, Vice
President of Business Development and Strategy from 2010 to 2011
and Director of Continuous Improvement from 2009 to 2011. From 2007
to 2009, he served as a Business Unit Director and Facility Leader
within the aerospace group of Parker Hannifin Corporation (NYSE:
PH), a publicly traded diversified manufacturer of motion and
control technologies and systems. Before joining Parker Hannifin
Corporation, he held various positions with Shaw Aero Devices,
Inc., a producer of aerospace components and equipment, from 1996
to 2007, and Milliken and Company, a manufacturing company, from
1988 to 1996. Mr. Dill received a B.S. in Management from the
Georgia Institute of Technology.
Executive Officers
The
following table presents information with respect to our executive
officers as of April 25, 2017.
|
Name
|
|
Age
|
|
Position
|
|
Timothy
A. Vitou
|
|
60
|
|
President
|
|
William
P. Kelly
|
|
60
|
|
Executive
Vice President, Chief Financial Officer and Secretary
|
|
James
E. Gilley
|
|
53
|
|
Chief
Technology Officer and Vice President
|
Timothy A. Vitou was
appointed as our President effective as of January 17, 2017. He
previously served as the Company’s Senior Vice President of
Sales and Marketing since May 2008. Prior to that, he served as
Vice President of Sales for Mobility Electronics, Inc., from August
2006 to May 2007, Senior Director of Global Go-To-Market, for
Motorola Solutions, Inc., from April 2002 to April 2006, and
General Manager, Americas Region, for Motorola Solutions, from
April 2000 to April 2002.
William P.
Kelly has been our
Executive Vice President and Chief Financial Officer since July
1997, and Secretary since June 2000. From October 1995 to June
1997, he was Vice President and Chief Financial Officer of our
subsidiary, RELM Communications, Inc. From January 1993 to October
1995, he was the Financial Director of Harris Corp. Semiconductor
Sector.
James E.
Gilley has been our Chief Technology Officer and Vice
President since June 30, 2008. From September 1995 to June 2008, he
served as Chief Scientist of Transcrypt International, Inc., a
wholly-owned subsidiary of EFJ, Inc., a provider of secure wireless
technologies primarily for the homeland security marketplace. Mr.
Gilley received a Master of Science degree in Electrical
Engineering and a Bachelor of Science degree, Electrical
Engineering from the University of Nebraska in 1990 and 1985,
respectively.
CORPORATE
GOVERNANCE
The board of directors is committed to good business practices,
transparency in financial reporting and the highest level of
corporate governance. The board of directors, which is elected by
the stockholders, is our ultimate decision-making body except with
respect to those matters reserved to our stockholders. It selects
the senior management team, which is charged with the conduct of
our business. Having selected the senior management team, the board
of directors acts as an advisor and counselor to senior management
and ultimately monitors its performance.
Board of Directors Independence
In
accordance with the NYSE MKT corporate governance listing
standards, it is our policy that the board of directors consist of
a majority of independent directors. Our board of directors reviews
the relationships that each director has with us and other parties.
Only those directors who do not have any of the categorical
relationships that preclude them from being independent within the
independence requirements of the NYSE MKT corporate governance
listing standards and who the board of directors affirmatively
determines have no relationships that would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director are considered to be independent
directors. The board of directors has reviewed a number of factors
to evaluate the independence of each of its members. These factors
include its members’
current and historic relationships with us and our subsidiaries;
their relationships with management and other directors; the
relationships their current and former employers have with us and
our subsidiaries; and the relationships between us and other
companies of which our board members are directors or executive
officers. After evaluating these factors, the board of directors
has determined that all seven members are “independent” directors within the independence
requirements of the NYSE MKT corporate governance listing standards
and all applicable rules and regulations of the SEC.
There
are no family relationships between any of our directors, director
nominees or executive officers.
Independent members
of our board of directors meet in executive session without
management present, and are scheduled to do so at least once per
year. The board of directors has designated Mr. Cerminara as the
presiding director for these meetings.
Stockholder Communications
Our
board of directors believes that it is important for our
stockholders and other interested parties to have a process to send
communications to the board. Accordingly, stockholders and other
interested parties desiring to send a communication to the board of
directors or to a specific director may do so by delivering a
letter to the Corporate Secretary of RELM at 7100 Technology Drive,
West Melbourne, Florida 32904. The mailing envelope must contain a
clear notation indicating that the enclosed letter is a
“stockholder-board
communication” or
“stockholder-director
communication” (or
“interested party-board communication” or
“interested party-director communication,” as
appropriate). All such letters must identify the author as
the stockholder or interested party and clearly state whether the
intended recipients of the letter are all members of our board of
directors or certain specified individual directors. The secretary
will open such communications and make copies, and then circulate
them to the appropriate director or directors and such other
individuals in accordance with our corporate governance
policies.
Policy Concerning Director Attendance at Annual Stockholders’
Meetings
While
we encourage all members of our board of directors to attend our
annual stockholders’
meetings, there is no formal policy as to their attendance at
annual stockholders’
meetings. On the date of the 2016 annual stockholders’ meeting we had four board members.
All four members of our board of directors attended the 2016 annual
stockholders’
meeting.
Codes of Ethics
Our
board of directors has adopted the Code of Business Conduct and
Ethics (the “Code of
Conduct”) that applies to
all of our directors, officers and employees, including our
principal executive officer, principal financial officer and
principal accounting officer, and the Code of Ethics for the CEO
and Senior Financial Officers (the “Code of Ethics”) containing additional specific
policies. The Code of Conduct and the Code of Ethics are posted on
our Internet website, www.relm.com, under the “Investors” tab, and are available
free of charge, upon request to Corporate Secretary, 7100
Technology Drive, West Melbourne, Florida 32904; telephone number:
(321) 984-1414.
Any
amendment to, or waiver from, the codes applicable to our directors
and executive officers will be disclosed in a current report on
Form 8-K within four business days following the date of the
amendment or waiver unless the rules of the NYSE MKT then permit
website posting of such amendments and waivers, in which case we
would post such disclosures on our Internet website.
Meetings and Committees of the Board of Directors
The
board of directors held 14 meetings during 2016, and each of the
directors attended at least seventy-five percent (75%) of the total
number of meetings of the board of directors held during the period
for which he was a director and the total number of meetings held
by all committees of the board of directors on which he served
during the periods that he was a member of that
committee.
The
board of directors has a standing audit committee, compensation
committee and nominating and governance committee.
Audit
Committee. The
members of the audit committee are John W. Struble, who serves as
chairperson, General E. Gray Payne and Michael R. Dill. The audit
committee has a written charter, which is available at our website
at www.relm.com/resources/corporate-governance. The audit committee
charter requires that the audit committee consist of two or more
members of the board of directors, each of whom are independent as
defined by the corporate governance listing standards of the NYSE
MKT.
The
board of directors has determined that each of the members of the
audit committee is independent, as defined by Rule 10A-3 of the
Exchange Act and the corporate governance listing standards of the
NYSE MKT. The board of directors also has determined that Mr.
Struble is an “audit
committee financial expert,” as defined in Item 407(d)(5) of
Regulation S-K.
The
audit committee has oversight responsibility for the quality and
integrity of our consolidated financial statements and is directly
responsible for the appointment, compensation, retention and
oversight of our independent registered public accounting firm. The
committee meets privately with members of our independent
registered public accounting firm, which has unrestricted access
and reports directly to the committee, and annually reviews their
performance and independence from management in deciding whether to
continue to retain the accounting firm or engage a different
accounting firm. The audit committee also evaluates the lead
partner designated by the independent auditor. As required by the
SEC’s rules, the committee is directly involved in the review
and selection of the audit partners serving on the auditor’s
engagement team during mandated five-year partner rotations. The
audit committee also oversees audit fee negotiations associated
with our retention of the independent auditor and has the sole
authority to approve such fees. The audit committee met four times
during 2016. The primary functions of the audit committee are to
oversee: (i) the audit of our consolidated financial statements
provided to the SEC and our stockholders; (ii) our internal
financial and accounting processes; and (iii) the independent audit
process. Additionally, the audit committee has responsibilities and
authority necessary to comply with Rules 10A-3(b) (2), (3), (4),
and (5) of the Exchange Act, concerning the responsibilities
relating to: (a) registered public accounting firms, (b) complaints
relating to accounting, internal accounting controls or auditing
matters, (c) authority to engage advisors and (d) funding. These
and other aspects of the audit committee’s authority are more particularly
described in the audit committee charter.
The
audit committee has adopted a formal policy concerning approval of
audit and non-audit services to be provided to us by our
independent registered public accounting firm, Moore Stephens
Lovelace. The policy requires that all services to be provided by
Moore Stephens Lovelace, including audit services and permitted
audit-related and non-audit services, must be pre-approved by the
audit committee. The audit committee approved all audit services
provided by Moore Stephens Lovelace to us during 2016. Moore
Stephens Lovelace did not provide any audit-related or non-audit
services to us during 2016.
Compensation
Committee. The members of the
compensation committee are D. Kyle Cerminara, who serves as
chairperson, Charles T. Lanktree, General E. Gray Payne, Michael R.
Dill and Ryan R.K. Turner. All members of the compensation
committee are independent under the corporate governance listing
standards of the NYSE MKT and applicable SEC rules and regulations
and qualify as “outside
directors” under Section
162(m) of the Internal Revenue Code of 1986, as amended. The
compensation committee has a written charter, which is available at
our website at www.relm.com/resources/corporate-governance. The
functions performed by the compensation committee include reviewing
and approving all compensation arrangements for our executive
officers and administering our equity incentive plans and programs.
The compensation committee makes all final compensation decisions
for the named executive officers (as identified in the “Summary Compensation Table for
2015-2016” appearing in
this proxy statement, the “Named Executive Officers”), including grants of stock
options. Our principal executive officer annually reviews the
performance of each of the Named Executive Officers and other
officers, and makes recommendations regarding the Named Executive
Officers and other officers and managers of the company, while the
compensation committee reviews the performance of our principal
executive officer. The conclusions and recommendations resulting
from our principal executive officer’s review are then presented to the
compensation committee for its consideration and approval. The
compensation committee can exercise its discretion in modifying any
of our principal executive officer’s recommendations. In performing its
functions, the compensation committee may retain and terminate
outside counsel, compensation and benefits consultants or other
experts. During 2016, the compensation committee met two
times.
Nominating
and Governance Committee. The members of the
nominating and governance committee are D. Kyle Cerminara, who
serves as chairperson, Lewis M. Johnson and General E. Gray Payne.
All members of the nominating and governance committee are
independent under the corporate governance listing standards of the
NYSE MKT. The nominating and governance committee has a written
charter, which is available at our website at
www.relm.com/resources/corporate-governance. During 2016, the
nominating and governance committee met two times.
The
functions of the nominating and governance committee include
determining and recommending to the board of directors the slate of
director nominees for election to the board of directors at each
annual stockholders’
meeting and identifying and recommending director candidates to
fill vacancies occurring between annual stockholders’ meetings. In addition, the
nominating and governance committee reviews, evaluates and
recommends changes to our corporate governance guidelines and
policies, including our Code of Conduct and Code of Ethics, and
monitors our compliance with these corporate governance guidelines,
policies and codes.
Board Leadership and Board’s Role in Risk
Oversight
We have
a separate Chairman of the Board and Principal Executive Officer.
Our board of directors believes this board leadership structure is
best for the Company and our stockholders at this time. Our current
Chairman of the Board is D. Kyle Cerminara, an independent
director, and our current Principal Executive Officer is our
President, Timothy A. Vitou.
The
board believes it is in the Company’s best interest to have a
separate Chairman of the Board and Principal Executive Officer so
that the Principal Executive Officer can devote his time and energy
on the day-to-day management of the business while our independent
Chairman, currently Mr. Cerminara, can focus on providing advice
and independent oversight of management. Because our Chairman is
appointed annually by our non-management directors, such directors
are able to evaluate the leadership, performance and independence
of our Chairman each year.
Our
board of directors, through its three standing committees, has an
advisory role in the Company’s risk management process. In
particular, the board is responsible for monitoring and assessing
strategic and operational risk exposure. Our management team
maintains primary responsibility for the Company’s risk management, and the board and
its committees rely on the representations of management, the
external audit of our financial and operating results, our systems
of internal controls and our historically conservative practices
when assessing the Company’s risks. The audit committee
considers and discusses financial risk exposures and the steps
management has taken to monitor and control these exposures, and
also provides oversight of the performance of the internal audit
function. The nominating and governance committee monitors the
effectiveness of our corporate governance policies and the
selection of prospective board members and their qualifications.
The compensation committee, in conjunction with the audit
committee, assesses and monitors whether any of the
Company’s compensation
policies and programs have the potential to encourage excessive
risk-taking. Each committee must report findings regarding material
risk exposures to the board as quickly as possible. The board
believes that its role in risk oversight does not affect the
board’s leadership
structure.
Director Nomination Process
In
accordance with the nominating and governance committee’s written charter, the nominating
and governance committee has established policies and procedures
for the nomination of director candidates to the board of
directors. The nominating and governance committee determines the
required selection criteria and qualifications of director
candidates based upon our needs at the time director candidates are
considered. Minimum qualifications for director candidates are set
forth in the committee’s
“Policy Regarding Minimum
Qualifications of Director Candidates” and include threshold criteria such
as integrity, absence of conflicts of interest that would
materially impair a director’s ability to exercise
independent judgment or otherwise discharge the fiduciary duties
owed as a director to the company and our stockholders, ability to
represent fairly and equally all stockholders, demonstrated
achievement in one or more fields of business, professional,
governmental, communal, scientific or educational endeavors, sound
judgment, as a result of management or policy-making experience,
that demonstrates an ability to function effectively in an
oversight role, general appreciation regarding major issues facing
public companies of a size and operational scope similar to the
company, and adequate time to serve. As noted in the policy, the
committee, as one of its considerations, considers the extent to
which the membership of the candidate on the board will promote
diversity among the directors, and seeks to promote through the
nominations process an appropriate diversity on the board of
professional background, experience, expertise, perspective, age,
gender, ethnicity and country of citizenship. The committee also
considers the overall composition of the board and its committee,
compliance with the NYSE MKT listing standards, and the
contributions that a candidate can be expected to make to the
collective functioning of the board based upon the totality of the
candidate’s credentials, experience and expertise, the
composition of the board at the time, and other relevant
circumstances.
We are
of the view that the continuing service of qualified incumbent
directors promotes stability and continuity in the function of the
board of directors, contributing to the board’s ability to work as a collective
body, while giving us the benefit of the familiarity and insight
into our affairs that our directors have accumulated during their
tenure.
The
nominating and governance committee has adopted procedures
consistent with the practice of re-nominating incumbent directors
who continue to satisfy the committee’s criteria for membership on the
board, whom the committee believes continue to make important
contributions to the board and who consent to continue their
service on the board. These procedures are set forth in the
committee’s “Procedures for Identifying and
Evaluating Director Candidates” policy. When evaluating the
qualifications and performance of the incumbent directors that
desire to continue their service on our board, the committee will
(i) consider whether the director continues to satisfy the minimum
qualifications for director candidates adopted by the committee,
(ii) review the assessments of the performance of the director
during the preceding term made by the committee, and (iii)
determine whether there exist any special, countervailing
considerations against re-nomination of the director. When there is
no qualified and available incumbent, the committee will also
solicit recommendations for nominees from persons that the
committee believes are likely to be familiar with qualified
candidates. These persons may include members of our board of
directors and management of the Company. The committee may also
determine to engage a professional search firm to assist in
identifying candidates. As to each recommended candidate that the
committee believes merits consideration, the committee will
consider, among other things, whether the candidate possesses any
of the specific qualities or skills that under the
committee’s policies must be possessed by one or more members
of the board, the contribution that the candidate can be expected
to make to the overall functioning of the board and the extent to
which the membership of the candidate on the board will promote
diversity among the directors.
The
nominating and governance committee has adopted a policy with
regard to the consideration of director candidates submitted by
stockholders. This policy is set forth in the committee’s “Policy Regarding Director Candidate
Recommendations Submitted by Stockholders.” The committee
will only consider director candidates submitted by stockholders
who satisfy the minimum qualifications prescribed by the committee,
including that a director must represent the interests of all
stockholders and not serve for the purpose of favoring or advancing
the interests of any particular stockholder group or other
constituency.
In
accordance with this policy, the nominating and governance
committee will consider director candidates recommended by
stockholders only where the committee has determined to not
re-nominate an incumbent director. In addition, the nominating and
governance committee will not consider any recommendation by a
stockholder or an affiliated group of stockholders unless such
stockholder or group of stockholders has owned at least five
percent (5%) of our common stock for at least one year as of the
date the recommendation is made. Any eligible stockholder (or
affiliated group of stockholders) who desires to recommend a
director candidate for consideration by the nominating and
governance committee for the 2018 annual meeting of stockholders is
required to do so prior to January 4, 2018. Any such eligible
stockholder (or affiliated group of stockholders) is required to
submit complete information about itself and the recommended
director candidate as specified in the committee’s “Procedures for Stockholders
Submitting Director Candidate Recommendations” policy and as set forth in the
advance notice provisions in our amended and restated bylaws. Such
information must include, among other things, (i) the number of our
common shares beneficially owned by the recommending stockholder
and the length of time such shares have been held, (ii) the name,
age and experience of the director candidate, (iii) whether the
director candidate owns any of our securities, (iv) whether the
director candidate has a direct or indirect material interest in
any transaction in which we are a participant, (v) a description of
all relationships between the director candidate and the
recommending stockholder, and (vi) a statement setting forth the
director candidate’s
qualifications. Submissions should be addressed to the nominating
and governance committee care of our Corporate Secretary at our
principal headquarters, 7100 Technology Drive, West Melbourne,
Florida 32904. Submissions must be made by mail, courier or
personal delivery. E-mail submissions will not be
considered.
Copies
of the policies of the nominating and corporate governance
committee are available on our website at
https://www.relm.com/resources/policies-and-procedures.
The nominating and governance committee evaluated Messrs. D. Kyle
Cerminara, Lewis M. Johnson, General E. Gray Payne, Charles T.
Lanktree, Ryan R.K. Turner, John W. Struble and Michael R. Dill,
all of whom are incumbent directors, and recommended their
nomination to the board of directors. The board, in turn, nominated
these seven persons for election as directors at the annual
meeting.
DIRECTOR COMPENSATION FOR
2016
The
following table shows the compensation of our non-employee
directors for fiscal 2016. For a description of the compensation,
see the narrative description immediately following the
table.
|
Name
|
Fees Earned or Paid in Cash ($)
|
Option Awards ($)(3)
|
Total ($)
|
|
Donald F. U.
Goebert(1)
|
18,250
|
5,300
|
23,550
|
|
Timothy W.
O’Neil(2)
|
43,250
|
5,300
|
48,550
|
|
D. Kyle
Cerminara
|
16,750
|
5,300
|
22,050
|
|
Lewis M.
Johnson
|
9,500
|
5,300
|
14,800
|
__________________
|
(1)
|
Mr.
Goebert resigned as a director on January 9, 2017, and his options
reported in the table above expired as of such date.
|
|
|
|
|
(2)
|
Mr.
O’Neil resigned as a director on March 16, 2017, and his
options reported in the table above expired as of such
date.
|
|
|
|
|
(3)
|
On May
18, 2016, stock option grants for 5,000 shares of our common stock
under our 2007 Incentive Compensation Plan were made to Messrs.
Goebert, O’Neil,
Cerminara and Johnson following their re-election (or, in the case
of Mr. Johnson, election) to the board at our 2016 annual meeting.
The options were granted at an exercise price of $4.55 per share
and vested in full on April 19, 2017, subject to continued service
through such date. Options that are not exercisable at the time of
separation from service expire upon separation and options that are
exercisable at the time of separation from service expire three
months after separation. Amounts shown represent the aggregate
grant date fair value computed in accordance with Financial
Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic 718 “Compensation-Stock
Compensation”
(“FASB ASC Topic
718”). The value
ultimately realized by the director upon the actual exercise of the
stock options may or may not be equal to the FASB ASC Topic 718
computed value. For a discussion of valuation assumptions, see Note
11 (Share-Based Employee Compensation) of our consolidated
financial statements included in our Annual Report on Form 10-K for
fiscal 2016.
The
aggregate number of stock option awards outstanding (including
exercised and unexercised stock options) as of December 31, 2016
for each non-employee director was as follows:
Timothy
O’Neil –
25,000
D. Kyle
Cerminara – 10,000
Lewis
M. Johnson – 5,000
Donald
F. U. Goebert – 20,000
|
During
2016, we paid to each of our non-employee directors meeting fees of
$1,000 for attendance in person and $500 for attendance by
telephone at each board meeting. We also paid to each of our
non-employee directors, who served on any committee of the board,
meeting fees of $250 for attendance at each meeting of any such
committee which was held in conjunction with a meeting of the board
and meeting fees of $500 for attendance at each meeting of any such
committee which was not held in conjunction with a board meeting.
Each of our non-employee directors who served as chairperson of any
committee of the board of directors also received an annual fee of
$1,000. In addition, our non-employee directors received a yearly
retainer fee of $8,000, and the chairman of the board received a
yearly retainer fee of $25,000. All non-employee directors are
entitled to reimbursement of reasonable expenses incurred by them
in connection with their attendance at meetings of the board and
any committee thereof on which they serve or otherwise in
furtherance of our business.
On May 18, 2016, after the 2016 annual stockholders’ meeting, each of our non-employee
directors who was elected as a director at the annual meeting
received a stock option grant to purchase 5,000 shares of our
common stock at an exercise price of $4.55 per share. These stock
option grants were made pursuant to the terms of our 2007 Incentive
Compensation Plan. Our 2007 Incentive Compensation Plan provides
for automatic annual grants of stock options for 5,000 shares to
each non-employee director of the date of each annual meeting of
stockholders at which such individual is elected or re-elected as a
director. The 2007 Incentive Compensation Plan further provides
that each grant be made at an exercise price equal to the fair
market value of our common stock on the date of grant and on such
other terms and conditions determined by the compensation
committee, as administrator of the Plan, and consistent with the
Plan. However, under a policy established by the compensation
committee, all stock option grants to non-employee directors are
required to have an exercise price equal to either the book value
per share or the fair market value per share, whichever is greater
on the date of grant.
General
Payne, who was appointed as a director on January 9, 2017, received
a stock option grant to purchase 5,000 shares of our common stock
at an exercise price of $4.95, on January 9, 2017. The options vest
in full on December 10, 2017, subject to continued service through
such date. The grant was made pursuant to the terms of the 2007
Incentive Compensation Plan. Messrs. Dill, Lanktree, Struble and
Turner did not receive stock options upon their appointment to the
board in March 2017.
REPORT
OF THE AUDIT COMMITTEE
The
following report of the audit committee does not constitute
soliciting material and should not be deemed filed with the
Securities and Exchange Commission nor shall this report be
incorporated by reference into any of our filings under the
Securities Act of 1933 or the Securities Exchange Act of
1934.
The
audit committee oversees our financial reporting process on behalf
of the board of directors. Management has the primary
responsibility for the consolidated financial statements and the
reporting process, including the systems of internal controls. In
fulfilling its oversight responsibilities, the audit committee has
reviewed and discussed the audited consolidated financial
statements included in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2016 with management, including a
discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments,
and the clarity of disclosures in the consolidated financial
statements.
The
audit committee also has reviewed and discussed with our
independent registered public accounting firm, Moore Stephens
Lovelace, P.A., which is responsible for expressing an opinion on
the conformity of those consolidated financial statements with
accounting principles generally accepted in the United States, its
judgments as to the quality, not just the acceptability, of our
accounting principles and such other matters as are required to be
discussed with the committee by the Statement on Auditing Standards
No. 1301, Communications with Audit
Committees, as adopted by the Public Company Accounting
Oversight Board. In addition, the audit committee has received the
written disclosures and the letter from Moore Stephens Lovelace,
P.A. required by the applicable requirements of the Public Company
Accounting Oversight Board regarding the independent
accountant’s
communications with the audit committee concerning independence,
and has discussed with Moore Stephens Lovelace, P.A. its
independence.
Based
on the considerations and discussions referred to above, the audit
committee recommended to our board of directors (and the board
approved) that the audited consolidated financial statements for
2016 be included in our Annual Report on Form 10-K for the year
ended December 31, 2016, as filed with the Securities and Exchange
Commission.
This
report is provided by the following independent directors, who
comprise the audit committee:
|
|
John W.
Struble (chairperson)
|
|
|
General
E. Gray Payne
Michael
R. Dill
|
EXECUTIVE
COMPENSATION
SUMMARY
COMPENSATION TABLE FOR 2015-2016
The
following table provides certain summary information concerning the
compensation of our Named Executive Officers for the last two
completed fiscal years ended December 31, 2016:
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus($)(2)
|
Stock Awards
($)(3)
|
Non-Equity Incentive Plan Compensation ($)
|
All Other Compensation ($)
|
Total ($)
|
|
David P.
Storey(1)
|
2016
|
299,174
|
—
|
110,900
|
—
|
14,971(4)
|
425,045
|
|
Former President
and Chief Executive Officer
|
2015
|
299,174
|
—
|
—
|
—
|
14,842(4)
|
314,016
|
|
|
|
|
|
|
|
|
|
|
William P.
Kelly
|
2016
|
187,012
|
115,000
|
22,180
|
—
|
14,709(5)
|
338,901
|
|
Executive Vice
President, Chief Financial Officer and Secretary
|
2015
|
187,012
|
—
|
—
|
—
|
14,536(5)
|
201,548
|
|
|
|
|
|
|
|
|
|
|
James E.
Gilley
|
2016
|
150,000
|
50,000
|
—
|
—
|
4,345(6)
|
204,345
|
|
Chief Technology
Officer and Vice President
|
2015
|
149,838
|
—
|
—
|
—
|
4,157(6)
|
153,995
|
_____________
(1)
Mr.
Storey resigned from all positions with the Company as of the close
of business on January 16, 2017. Mr. Vitou was appointed as our
President after the end of fiscal 2016 and was not a Named
Executive Officer for fiscal 2016.
(2)
On March 17, 2017, the compensation committee, upon the
recommendation of management, approved payment of cash bonuses of
$115,000 to Mr. Kelly and $50,000 to Mr. Gilley based on their 2016
performance.
(3)
The
amounts in this column represent the aggregate grant date fair
value of stock options granted to the Named Executive Officer
computed in accordance with FASB ASC Topic 718. The value
ultimately realized by the Named Executive Officer upon the actual
exercise of the stock options may or may not be equal to the FASB
ASC Topic 718 computed value. For a discussion of valuation
assumptions, see Note 11 (Share-Based Employee Compensation) of our
consolidated financial statements included in our Annual Report on
Form 10-K for fiscal 2016. On February 24,
2016, the compensation committee granted non-qualified stock
options to Mr. Storey and Mr. Kelly to purchase 50,000 shares and
10,000 shares, respectively, of the Company’s common stock, at an exercise
price of $3.83 per share, the grant date fair value of which is
included in the table above. Mr. Storey forfeited all of these
unvested options upon his resignation from all positions with the
Company. Additional information about these awards can be found
under “—2016 Stock Option Awards.”
On
February 24, 2016, the compensation committee granted non-qualified
stock options to Mr. Storey and Mr. Kelly to purchase 50,000 shares
and 10,000 shares, respectively, of the Company’s common stock, at an exercise
price of $3.83 per share, the grant date fair value of which is
included in the table above. Mr. Storey forfeited all of these
unvested options upon his resignation from all positions with the
Company. Additional information about these awards can be found
under “—2016 Stock Option Awards.”
(4)
The
amounts in this column for Mr. Storey represent our matching
contributions for each of fiscal 2016 and the fiscal year ended
December 31, 2015 (“fiscal 2015”) of $6,031 to Mr.
Storey’ s account
under our 401(k) plan and our payments for fiscal 2016 and fiscal
2015 of $8,940 and $8,811, respectively, for long-term disability,
life and health insurance premiums for the benefit of Mr. Storey.
The amount for fiscal 2016 does not include a separation payment in
the gross amount of $300,000, payable in equal installments over a
period of 12 months, to be made to Mr. Storey pursuant to the
Separation and Release Agreement entered into with the Company on
February 3, 2017 and any payments to be made by the Company to Mr.
Storey for the difference in cost between Mr. Storey’s
portion and COBRA’s actual cost for coverage through December
31, 2017, which is estimated to be approximately $9,029 and has
been agreed to be paid by the Company pursuant to the terms of the
Separation and Release Agreement in the event that Mr. Storey
elects to continue health care coverage by electing continuation of
benefits through COBRA. See “—Separation and Release
Agreement with Mr. Storey” for more information.
(5)
The
amounts in this column for Mr. Kelly represent our matching
contributions for fiscal 2016 and fiscal 2015 of $5,847 and $5,806,
respectively, to Mr. Kelly’s account under our 401(k)
plan and our payments for fiscal 2016 and fiscal 2015 of $8,862 and
$8,730, respectively, for long-term disability, life and health
insurance premiums for the benefit of Mr. Kelly.
(6)
The
amounts in this column for Mr. Gilley represent our payments for
fiscal 2016 and fiscal 2015 of $4,345 and $4,157, respectively, for
long-term disability, life and health insurance premiums for the
benefit of Mr. Gilley.
Each of
the Named Executive Officers did not receive any other compensation
during 2016 or 2015 except for perquisites and other personal
benefits of which the total aggregate value for each Named
Executive Officer did not exceed $10,000.
Separation and Release Agreement with Mr. Storey
The
board of directors accepted Mr. Storey’s resignation from all
positions held with the Company effective as of the close of
business on January 16, 2017. On February 3, 2017, the Company and
Mr. Storey entered into a Separation and Release Agreement (the
“Separation Agreement”). Pursuant to the terms of the
Separation Agreement, Mr. Storey is entitled to a separation
payment in the gross amount of $300,000, payable in equal
installments over a period of 12 months. Mr. Storey also retained
the right to exercise his vested stock options for a period of
three months following his resignation. His unvested stock options
were forfeited upon his separation of service from the Company. Mr.
Storey’s health insurance benefits provided by the Company
ceased on January 31, 2017, and the Company agreed to pay the
difference in cost between Mr. Storey’s portion and
COBRA’s actual cost for coverage through December 31, 2017,
as long as Mr. Storey selects and continues his COBRA coverage
through such date. Mr. Storey’s participation in all benefits
of employment, including but not limited to, accrual of bonuses,
vacation and paid time off, ceased as of January 16,
2017.
The
Separation Agreement also includes customary confidentiality,
non-disparagement and non-solicitation covenants and a mutual
release of claims.
2016 Discretionary Cash Bonuses
On
March 17, 2017, the compensation committee, upon the recommendation
of management, approved payment of cash bonuses of $115,000 to Mr.
Kelly and $50,000 to Mr. Gilley based on their 2016
performance.
2015 Executive Bonus Plan
On
February 24, 2015, the compensation committee adopted an executive
incentive bonus plan for the 2015 fiscal year (the “2015 Executive Bonus
Plan”) for the Named
Executive Officers. Under the 2015 Executive Bonus Plan, each of
the Named Executive Officers was eligible to receive a cash award
if we achieved reportable audited pre-tax income for the 2015
fiscal year as specified in the plan (the “2015 Target Income”). The 2015 Executive Bonus Plan
established threshold, target and maximum cash bonus amounts, each
expressed as a percentage of a cash award pool (the “2015 Cash Award Pool”). If we had achieved the 2015
Target Income, the 2015 Cash Award Pool for the Named Executive
Officers would have been approximately 7.8% of the 2015 Target
Income (the “2015 Target
Cash Award Pool”). If we
had achieved a threshold of 90% of the 2015 Target Income, the 2015
Cash Award Pool for the Named Executive Officers would have been
50% of the 2015 Target Cash Award Pool. If we had achieved a
maximum of 120% of the 2015 Target Income, the 2015 Cash Award Pool
for the Named Executive Officers would have been 150% of the 2015
Target Cash Award Pool. If we had achieved reportable audited
pre-tax income between the threshold and maximum 2015 Target Income
amounts, the 2015 Cash Award Pool would have been proportionally
adjusted.
The
Named Executive Officers could not receive award cash awards that
exceeded 100% of their base salaries. The 2015 Cash Award Pool
allocable to the Named Executive Officers was as follows: 42% to
Mr. Storey, 35% to Mr. Kelly and 23% to Mr. Gilley.
In
addition, under the 2015 Executive Bonus Plan, the compensation
committee was permitted to grant discretionary awards to the Named
Executive Officers if we achieved reportable audited pre-tax income
for the 2015 fiscal year below or above such minimum and maximum
criterion for pre-tax income.
There
were no payouts made to any of the Named Executive Officers under
the 2015 Executive Bonus Plan because the targeted objectives for
2015 were not achieved, and no discretionary bonuses were
awarded.
2016 Stock Option Awards
On
February 24, 2016, the compensation committee granted non-qualified
stock options to Mr. Storey and Mr. Kelly to purchase 50,000 shares
and 10,000 shares, respectively, of the Company’s common stock, at an exercise price
of $3.83 per share. The stock options have ten-year terms and
become exercisable in five-year annual installments beginning on
the first anniversary of the grant date. Mr. Storey resigned from
all positions with the Company as of the close of business on
January 16, 2017. Pursuant to the Separation Agreement, Mr. Storey
forfeited all of his unvested options, including all of the
non-qualified stock options granted to him on February 24, 2016,
upon his separation of service from the Company.
2017 Stock Option Awards
On
March 17, 2017, the compensation committee granted non-qualified
stock options to Messrs. Vitou, Kelly and Gilley to purchase
25,000, 25,000 and 10,000 shares, respectively, of the
Company’s common stock, at an exercise price of $5.10 per
share. The stock options have ten-year terms and become exercisable
in five annual installments beginning on the first anniversary of
the grant date.
OUTSTANDING EQUITY
AWARDS AT FISCAL YEAR-END FOR 2016
The following table provides information with respect to
outstanding stock option awards for our shares of common stock
classified as exercisable and unexercisable as of December 31, 2016
for the Named Executive Officers.
|
|
Option Awards(5)
|
||||
|
Name
|
Number of Securities Underlying Unexercised Options (#)
Exercisable
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity Incentive Plan Awards: Number of Securities Underlying
Unexercised Unearned Options (#)
|
Option Exercise Price ($)
|
Option Expiration Date
|
|
David P.
Storey
|
45,000(1)
|
—
|
—
|
4.07
|
3/04/20(1)
|
|
|
—(2)
|
50,000(2)
|
—
|
3.83
|
2/24/26(2)
|
|
|
|
|
|
|
|
|
William P.
Kelly
|
25,000(1)
|
—
|
—
|
4.07
|
3/04/20
|
|
|
15,000(3)
|
—
|
—
|
2.23
|
3/12/23
|
|
|
—(2)
|
10,000
|
—
|
3.83
|
2/24/26
|
|
|
|
|
|
|
|
|
James E.
Gilley
|
1,000(4)
|
—
|
—
|
1.89
|
5/18/19
|
|
|
15,000(1)
|
—
|
—
|
4.07
|
3/04/20
|
|
|
5,000(3)
|
—
|
—
|
2.23
|
3/12/23
|
___________
|
(1)
|
The
option was granted on March 4, 2010. For Mr. Storey, the fully
vested option remained exercisable for three months following Mr.
Storey’s resignation from all positions held with the
Company, which occurred on January 16, 2017. Mr. Storey exercised
the option for all 45,000 shares on March 8, 2017.
|
|
|
|
|
(2)
|
The
option was granted on February 24, 2016. The option vests in five
equal annual installments beginning on February 24, 2017 and
thereafter on February 24, 2018, February 24, 2019, February 24,
2020 and February 24, 2021. Mr. Storey’s option was
outstanding as of December 31, 2016, but was forfeited upon his
resignation.
|
|
(3)
|
The
option was granted on March 12, 2013. The option is fully vested
and exercisable.
|
|
(4)
|
The
option was granted on May 19, 2009. The option is fully vested and
exercisable.
|
|
|
|
|
(5)
|
On
August 3, 2016, Mr. Gilley exercised options to acquire 13,000
shares of the Company’s common stock at an exercise price of
$1.50 per share. The options were granted to Mr. Gilley on June 30,
2008 as part of a grant of options to purchase 25,000 shares of the
Company’s stock. The options became exercisable in three
equal installments on June 30, 2009, June 30, 2010 and June 30,
2011. Mr. Gilley previously exercised part of these options to
acquire 12,000 shares on September 8, 2014 at an exercise price of
$1.50 per share. Messrs. Storey and Kelly did not exercise any
options during fiscal 2016.
|
RETIREMENT
BENEFITS FOR 2016
We do not have a defined benefit plan for the Named Executive
Officers or other employees. The only retirement plan available to
the Named Executive Officers in 2016 was our qualified 401(k)
retirement plan, which is available to all employees.
POTENTIAL PAYMENTS
UPON TERMINATION IN CONNECTION WITH A CHANGE OF
CONTROL
2016 Change of Control Agreements
Effective as of
February 24, 2016, we entered into change of control agreements
(the “2016 Change of
Control Agreements”) with
the Named Executive Officers and Mr. Vitou, our current President,
which were approved by the compensation committee on that same day.
The 2016 Change of Control Agreements replaced and terminated the
2012 Change of Control Agreements that we previously entered into
with the Named Executive Officers, which expired on February 29,
2016, and are substantially similar to the 2012 Change of Control
Agreements.
Mr.
Storey, who served as our President and Chief Executive Officer and
is a Named Executive Officer for fiscal 2016, resigned from all
positions with the Company as of the close of business on January
16, 2017. Accordingly, the discussion below only describes the
terms of the 2016 Change of Control Agreements currently in effect
between the Company and Messrs. Vitou, Kelly and Gilley. For a
description of the Severance Agreement entered into between the
Company and Mr. Storey, see “Summary Compensation Table for
2015-2016” – Severance Agreement with Mr. Storey”
in this proxy statement.
Each of
the 2016 Change of Control Agreements has a term of four years,
unless a “change of
control” (as defined in
the agreements) of the Company occurs within such four-year period,
in which case each agreement is automatically extended for twelve
months after the date of such change of control. Pursuant to the
2016 Change of Control Agreements, if the applicable Named
Executive Officer’s
employment is terminated within twelve months following a change in
control (i) by the Company for any reason other than for
“cause” (as defined in the agreements),
disability or death or (ii) by such Named Executive Officer for
“good reason” (as defined in the agreements), the
applicable Named Executive Officer will receive certain payments
and benefits. A Named Executive Officer is not entitled to any
payments and benefits if the Named Executive Officer terminates the
Named Executive Officer’s
employment without good reason.
The
payments and benefits to be paid pursuant to the 2016 Change of
Control Agreements are as follows:
●
Mr. Vitou will
receive (i) a cash payment equal to the sum of (x) 50% of his
then-current base salary and (y) the average of his annual cash
bonuses for the two fiscal years preceding the fiscal year in which
termination occurs, (ii) health, life and disability insurance
benefits for himself and, if applicable, his covered dependents for
a period of six months after the date of termination and (iii)
outplacement services for a period of six months following the date
of termination, provided that the costs of such services to the
Company may not exceed $7,500.
●
Mr. Kelly will
receive (i) a cash payment equal to the sum of (x) 75% of his
then-current base salary and (y) the average of his annual cash
bonuses for the two fiscal years preceding the fiscal year in which
termination occurs, (ii) health, life and disability insurance
benefits for himself and, if applicable, his covered dependents for
a period of nine months after the date of termination and (iii)
outplacement services for a period of nine months following the
date of termination, provided that the costs of such services to
the Company may not exceed $11,250.
●
Mr. Gilley will
receive (i) a cash payment equal to the sum of (x) 50% of his
then-current base salary and (y) the average of his annual cash
bonuses for the two fiscal years preceding the fiscal year in which
termination occurs, (ii) health, life and disability insurance
benefits for himself and, if applicable, his covered dependents for
a period of six months after the date of termination and (iii)
outplacement services for a period of six months following the date
of termination, provided that the costs of such services to the
Company may not exceed $7,500.
Under
the 2016 Change of Control Agreements, a change of control will
have occurred if:
●
individuals who, as
of February 24, 2016, constitute the board of directors (the
“Incumbent
Board”) cease for any
reason to constitute at least a majority of the board, provided
that any individual becoming a director subsequent to that date
whose election, or nomination for election by the
company’s stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the directors of the company, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) shall be considered as though such individual was
a member of the Incumbent Board; or
●
the approval by the
stockholders of the company of a reorganization, merger,
consolidation or other form of corporate transaction or series of
transactions (but not including an underwritten public offering of
the company’s common
stock or other voting securities (or securities convertible into
voting securities of the company) for the company’s own account registered under the
Securities Act of 1933, as amended (the “Securities
Act”)), in each case, with respect to which stockholders of
the company immediately prior to such reorganization, merger,
consolidation or other corporate transaction do not, immediately
thereafter, own more than fifty percent (50%) of the combined
voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated
entity’s then outstanding
voting securities, or a liquidation or dissolution of the company
or the sale of all or substantially all of the assets of the
company (unless such reorganization, merger, consolidation or other
corporate transaction, liquidation, dissolution or sale is
subsequently abandoned or terminated prior to being consummated);
or
●
the acquisition by
any person, entity or “group”, within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of more than fifty
percent (50%) of either the then outstanding shares of the
company’s common stock or
the combined voting power of the company’s then outstanding voting securities
entitled to vote generally in the election of directors
(hereinafter referred to as a “Controlling Interest”) excluding any acquisitions by (x)
the company or any of its subsidiaries, (y) any employee benefit
plan (or related trust) sponsored or maintained by the company or
any of its subsidiaries or (z) any person, entity or “group” that as of February 24, 2016 owns
beneficially (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) a Controlling Interest.
Each of
the 2016 Change of Control Agreements contains term and
post-termination confidentiality, non-solicitation and
non-competition covenants. The post-termination non-solicitation
and non-competition covenants survive six months for Mr. Vitou,
nine months for Mr. Kelly and six months for Mr. Gilley, while the
post-term confidentiality covenants survive indefinitely for each
of them.
Except
for the severance agreement entered into with Mr. Storey on
February 3, 2017, we do not have any employment agreements or
severance agreements with any of our Named Executive Officers. In
addition to the 2016 Change of Control Agreements, upon a change of
control, stock options held by our Named Executive Officers to the
extent then unvested would become vested and exercisable in
accordance with the terms of the related option agreements and the
equity compensation plans pursuant to which the options were
granted.
Under
the 2007 Incentive Compensation Plan, a change in control means the
occurrence of any of the following:
●
the acquisition by
any person, entity or “group”, within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of more than fifty
percent (50%) of either the then outstanding shares of the
company’s common stock or
the combined voting power of the company’s then outstanding voting securities
entitled to vote generally in the election of directors
(hereinafter referred to as a “Controlling Interest”); provided, however, that the
following acquisitions shall not constitute or result in a Change
in Control: (i) any acquisition directly from the company; (ii) any
acquisition by the company; (iii) any acquisition by any person
that as of the date of the plan (the “Effective Date”) owns Beneficial Ownership of a
Controlling Interest; (iv) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the company or
any related entity; or (v) any acquisition by any entity pursuant
to a transaction which complies with clauses (A), (B) and (C) of
the third bullet point below; or
●
individuals who
constitute the board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the
company’s stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the board; or
●
consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar transaction involving the company or any of its related
entities, a sale or other disposition of all or substantially all
of the assets of the company, or the acquisition of assets or
equity of another entity by the company or any of its related
entities (each a “Business Combination”), in each case, unless, following
such Business Combination, (A) all or substantially all of the
individuals and entities who were the Beneficial Owners,
respectively, of the outstanding company common stock and
outstanding company voting securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than fifty percent (50%) of the value of the then outstanding
equity securities and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of members of the board of directors (or comparable
governing body of an entity that does not have such a board), as
the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a
result of such transaction owns the company or all or substantially
all of the company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the outstanding company
common stock and outstanding company voting securities, as the case
may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the company or such entity resulting from such
Business Combination or any person that as of the Effective Date
owns Beneficial Ownership of a Controlling Interest) beneficially
owns, directly or indirectly, fifty percent (50%) or more of the
value of the then outstanding equity securities of the entity
resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such entity
except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of
the board of directors or other governing body of the entity
resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial
agreement, or of the action of the board, providing for such
Business Combination; or
●
approval by the
stockholders of the company of a complete liquidation or
dissolution of the company.
TRANSACTIONS WITH
RELATED PERSONS
Any transaction with a related person is subject to our written
policy for transactions with related persons, which is available on
our website at
https://www.relm.com/resources/policies-and-procedures. The
nominating and corporate governance committee is responsible for
applying this policy. As set forth in the policy, the nominating
and corporate governance committee reviews the material facts of
the transaction and considers, among other factors it deems
appropriate, whether the transaction is on terms no less favorable
than terms generally available to an unaffiliated third-party under
the same or similar circumstances and the extent of the related
person’s interest in the
transaction. The policy also prohibits our directors from
participating in any discussion or approval of any interested
transaction for which he is a related person, except that the
director is required to provide all material information concerning
the transaction to the nominating and corporate governance
committee.
If a
transaction with a related party will be ongoing, the nominating
and corporate governance committee will establish guidelines for
our management to follow in its ongoing relationships with the
related person, will review and assess ongoing relationships with
the related person to determine if such relationships are in
compliance with the committee’s guidelines, and based on all
the relevant facts and circumstances, will determine if it is in
the best interests of the Company and our stockholders to continue,
modify or terminate any such interested transaction.
The
policy provides exceptions for certain transactions, including (i)
those involving compensation paid to a director or executive
officer required to be reported in the Company’s proxy statement, (ii) transactions
with another company at which a related person’s only
relationship is as an employee (other than an executive officer),
director or beneficial owner of less than 10% of that
company’s shares, if the aggregate amount involved does not
exceed the greater of $500,000, or two percent (2%) of that
company’s total annual revenues, (iii) certain charitable
contributions, (iv) transactions where all stockholders of the
Company receive proportional benefits, (v) transactions involving
competitive bids, (vi) certain regulated transactions and (vii)
certain banking-related services.
During
2016 and 2015, we did not have any transactions with related
persons that were reportable under Item 404 of Regulation S-K, and
we do not have any transactions with related persons currently
proposed for 2017 that are reportable under Item 404 of Regulation
S-K.
RELATIONSHIP WITH OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Moore
Stephens Lovelace, an independent registered public accounting
firm, audited our financial statements for fiscal 2016 and fiscal
2015. We had no disagreements with Moore Stephens Lovelace on
accounting and financial disclosures. Moore Stephens
Lovelace’s work on our
audit for fiscal 2016 was performed by full time, permanent
employees and partners of Moore Stephens Lovelace.
Moore
Stephens Lovelace has been reappointed to serve as our independent
registered public accounting firm for fiscal 2017. The audit
committee, in discussing the reappointment of Moore Stephens
Lovelace, considered the qualifications, experience, independence,
compliance with regulations, quality control, candor, objectivity,
and professional skepticism of Moore Stephens Lovelace and the
effectiveness of the firm’s processes, including its
timeliness and responsiveness and communication and interaction
with management. The audit committee and the board of directors
believe that the continued retention of Moore Stephens Lovelace as
our independent registered public accounting firm is in the best
interests of the Company and our stockholders.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
Our
audit committee has appointed Moore Stephens Lovelace to serve as
our independent registered public accounting firm for fiscal 2017.
Representatives of Moore Stephens Lovelace are expected to be
present at the annual meeting and will have the opportunity to make
a statement if they so desire, and will be available to respond to
appropriate stockholder questions.
Although applicable
law does not require stockholder ratification of the appointment of
Moore Stephens Lovelace to serve as our independent registered
public accounting firm, our board has decided to ascertain the
position of our stockholders on the appointment. If our
stockholders do not ratify the appointment of Moore Stephens
Lovelace, our audit committee will reconsider the appointment. Even
if the selection is ratified, our audit committee in its discretion
may appoint a different independent registered public accounting
firm at any time during the year if it determines that such a
change would be in our best interests and in the best interests of
our stockholders.
Change in Independent Auditors
On
November 9, 2015, we dismissed BDO USA, LLP (“BDO USA”) as our independent registered
public accounting firm and appointed Moore Stephens Lovelace as our
new independent registered public accounting firm, effective
immediately. The decision to change our independent registered
public accounting firm to Moore Stephens Lovelace was approved by
the audit committee.
The
reports of BDO USA on our financial statements for the fiscal years
ended December 31, 2013 and 2014 did not contain an adverse opinion
or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. During the
fiscal years ended December 31, 2013 and 2014, and in the
subsequent interim periods through November 9, 2015, there were no
disagreements with BDO USA on any matter of accounting principles
or practices, financial statement disclosure or auditing scope and
procedure which, if not resolved to the satisfaction of BDO USA,
would have caused BDO USA to make reference to the matter in its
report.
During
the fiscal years ended December 31, 2013 and 2014, and in the
subsequent interim periods through November 9, 2015, there were no
“reportable
events” as that term is
defined in Item 304(a)(i)(v) of Regulation S-K promulgated under
the Exchange Act (“Regulation S-K”).
We
provided BDO USA with a copy of the foregoing disclosures and
requested BDO USA to furnish to us a letter addressed to the SEC
stating whether or not it agrees with the above disclosures. A copy
of this letter, dated November 9, 2015, was filed as an exhibit to
our Current Report on Form 8-K filed with the SEC on November 10,
2015.
Vote Required
This
proposal will be approved if the number of votes cast
“for” the ratification of Moore Stephens Lovelace as
our independent registered public accounting firm exceed the number
of votes cast “against” ratification. Abstentions and
broker non-votes will have no effect on the outcome of the vote.
Shares represented by properly executed proxies will be voted, if
specific instructions are not otherwise given, in favor of this
proposal.
Recommendation of the Board
Our
board of directors unanimously recommends that stockholders vote
“FOR” the ratification of the appointment
of Moore Stephens Lovelace as our independent registered public
accounting firm.
FEES PAID TO OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The rules of the SEC require us to disclose fees billed by our
independent registered public accounting firm for services rendered
to us for each of the years ended December 31, 2016 and 2015. Since
November 9, 2015, we have engaged Moore Stephens Lovelace as our
independent registered public accounting firm. The following table
represents aggregate fees billed for the fiscal years ended
December 31, 2016 and December 31, 2015 by Moore Stephens Lovelace
and BDO USA, our prior independent registered public accounting
firm.
|
|
2016
|
2015
|
|
Moore Stephens Lovelace,
P.A.
|
|
|
|
Audit Fees
(1)
|
$105,000
|
$105,000
|
|
Audit-Related Fees
(2)
|
—
|
—
|
|
Tax Fees
(3)
|
—
|
—
|
|
All Other Fees
(4)
|
—
|
—
|
|
|
|
|
|
BDO USA,
LLP
|
|
|
|
Audit Fees
(1)
|
—
|
53,700
|
|
Audit-Related Fees
(2)
|
—
|
—
|
|
Tax Fees
(3)
|
—
|
—
|
|
All Other Fees
(4)
|
—
|
—
|
|
Total
|
$105,000
|
$158,700
|
|
(1)
|
For
2016 and 2015, includes fees paid to Moore Stephens Lovelace for
professional services rendered for the audit for our annual
financial statements for the years ended December 31, 2016 and 2015
and for reviews of the financial statements included in our
Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, June 30 and September 30, 2016. For 2015, includes fees paid to
BDO USA for the reviews of the financial statements included in our
Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, June 30 and September 30, 2015.
|
|
|
(2)
|
No
audit-related services were performed for us by Moore Stephens
Lovelace in 2016 or 2015 or by BDO USA in 2015. Audit-related
services include assurance and related services that are related to
the performance of the audit or review of our financial
statements.
|
|
|
(3)
|
No tax
services were performed for us by Moore Stephens Lovelace in 2016
or 2015 or by BDO USA in 2015. Tax services include tax compliance,
tax advice and tax planning.
|
|
|
(4)
|
No
other services were performed for us by Moore Stephens Lovelace in
2016 or 2015 or by BDO USA in 2015.
|
|
As
previously discussed, the audit committee has implemented
pre-approval procedures consistent with the rules adopted by the
SEC.
The
audit committee has determined that the provision of the services
by Moore Stephens Lovelace and BDO USA reported hereunder had no
impact on their independence.
PROPOSAL 3: ADVISORY APPROVAL OF NAMED EXECUTIVE
OFFICER COMPENSATION
General
We are
providing stockholders with the opportunity to cast an advisory
vote on the compensation of our Named Executive Officers at this
annual meeting as required by the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 (the “Dodd Frank Act”)
and Section 14A of the Exchange Act. At the 2011 annual meeting of
stockholders, stockholders were asked to recommend how often they
should be given the opportunity to cast this advisory vote. The
stockholders voted to hold the advisory vote on executive
compensation every three years and the board of directors approved
this choice. Stockholders also have the opportunity to vote on the
frequency of future votes on named executive officer compensation
at this annual meeting, as described below under “Proposal 4
– Advisory Approval of the Frequency of the Advisory Vote on
Named Executive Officer Compensation.” The last advisory vote
on named executive officer compensation was held at our 2014 annual
meeting of stockholders. At that meeting, approximately 98% of
stockholders who cast votes on the matter voted in favor of the
compensation of our named executive officers. The compensation
committee considered the results of the last advisory say-on-pay
vote when setting executive compensation and decided, based upon
strong stockholder support, not to make any changes to our
compensation program.
This
proposal gives our stockholders the opportunity to express their
views on the compensation of our Named Executive Officers. This
vote is not intended to address any specific item of compensation
or any single compensation philosophy, policy or practice, but
rather the overall compensation of our Named Executive Officers as
described in this proxy statement.
We are
asking our stockholders to indicate their support for the
compensation of our Named Executive Officers by voting on the
following resolution at the annual meeting:
“RESOLVED,
that the stockholders of RELM Wireless Corporation approve, on an
advisory, non-binding basis, the compensation of the
Company’s Named Executive Officers, as disclosed in the
Company’s Proxy Statement for the 2017 Annual Meeting of
Stockholders pursuant to the compensation disclosure rules of the
Securities and Exchange Commission, including the Summary
Compensation Table and the other related tables and
disclosure.”
While
the board of directors values the opinions of our stockholders, the
say-on-pay vote is advisory and is not binding on the Company, the
board of directors or the compensation committee. We will consider
the results of the vote when evaluating our executive compensation
practices and considering future executive compensation
arrangements.
Vote Required
The
number of votes cast by stockholders, either in person or by proxy,
at the annual meeting “for” advisory approval of the
compensation of our Named Executive Officers pursuant to the above
resolution must exceed the number of votes cast
“against” advisory approval. Abstentions and broker
non-votes will have no effect on the vote. Shares represented by
properly executed proxies will be voted, if specific instructions
are not otherwise given, for the advisory approval of the
compensation of our Named Executive Officers.
Recommendation of the Board
Our
board of directors unanimously recommends that stockholders vote
“FOR” advisory
approval of the compensation of our Named Executive Officers
pursuant to the above resolution.
PROPOSAL 4: ADVISORY APPROVAL OF THE FREQUENCY OF
THE ADVISORY VOTE ON NAMED EXECUTIVE OFFICER
COMPENSATION
General
The
Dodd-Frank Act enables our stockholders to indicate how frequently
we should seek an advisory vote on the compensation of our Named
Executive Officers (also known as “say-when-on-pay”).
This advisory vote, which is also required by Section 14A of the
Exchange Act, must be solicited from our stockholders at least once
every six years. At the last vote held at the 2011 annual meeting
of stockholders, stockholders voted for the advisory vote on Named
Executive Officer compensation to be held once every three years,
and the board of directors approved this choice.
The
board of directors believes that a frequency of every three years
for the advisory vote on executive compensation is the optimal
interval for conducting and responding to a vote on executive
compensation. Stockholders who have concerns about executive
compensation during the interval between votes on executive
compensation may bring their specific concerns to the attention of
the board of directors. Please refer to “Stockholder
Communications” in this proxy statement for information about
communicating with the board of directors. The board and the
compensation committee believe that holding a vote on executive
compensation every three years provides the board and the
compensation committee with the opportunity to thoroughly consider
the results of the advisory vote, respond to the vote results and
effectively implement any appropriate changes to our executive
compensation policies and procedures.
We
understand that our stockholders may have different views as to the
frequency of “say-on-pay” votes, and we look forward to
hearing from our stockholders on this Proposal 4. We are asking our
stockholders to indicate whether they would prefer that we conduct
future advisory votes on the compensation of our Named Executive
Officers annually, every two years or every three years by voting
on the following resolution at the annual meeting:
“RESOLVED, that
the option of every year, every two years or every three years that
receives the highest number of votes cast for this resolution will
be considered the stockholders’ recommendation of the
frequency with which RELM Wireless Corporation is to hold a
stockholder advisory vote on the compensation of its Named
Executive Officers.”
Although this
advisory vote on the frequency of the advisory vote on our Named
Executive Officer compensation is non-binding, the board and the
compensation committee will take into account the outcome of the
vote when considering the frequency of future advisory votes on the
compensation of our Named Executive Officers. Notwithstanding the
board’s recommendation and the outcome of the stockholder
vote, the board may in the future decide to conduct advisory votes
on the compensation of our Named Executive Officers on a more or
less frequent basis and may vary its practice based on factors such
as discussions with stockholders and changes to compensation
programs. The next stockholder vote on the frequency of future
votes on the compensation of our Named Executive Officers is
currently expected to occur at our 2023 annual meeting of
stockholders.
Vote Required
The
option of every year, every two years or every three years that
receives the highest number of votes cast by stockholders, either
in person or by proxy, at the annual meeting will be considered the
stockholders’ recommendation of the frequency for the
advisory vote on the compensation of our Named Executive Officers.
Abstentions and broker non-votes will have no effect on the vote.
Shares represented by properly executed proxies will be voted, if
specific instructions are not otherwise given, for a three year
frequency.
Recommendation of the Board
Our
board of directors recommends a vote “FOR” the option of every
three years as the frequency
to have an advisory vote on the compensation of our Named Executive
Officers.
PROPOSAL 5:
APPROVAL OF THE RELM WIRELESS CORPORATION
2017 INCENTIVE COMPENSATION PLAN
Our
board of directors approved the RELM Wireless Corporation 2017
Incentive Compensation Plan (the “2017 Plan”) on March
27, 2017, subject to approval by our stockholders. We are
recommending that stockholders approve the 2017 Plan because we
believe that the 2017 Plan will be essential to our continued
success, by allowing the Company to provide incentives to attract
and retain key employees, non-employee directors and consultants
and align their interests with those of our
stockholders.
If
approved by our stockholders, the 2017 Plan will be the successor
to the Company’s 2007 Incentive Compensation Plan (the
“2007 Plan”). As of March 27, 2017, approximately
189,837 shares of the Company’s common stock
(“shares”) remained available for issuance under the
2007 Plan. If the 2017 Plan is approved by our stockholders, no
further awards will be made under the 2007 Plan. However, awards
granted under the 2007 Plan (and its predecessor, our 2007 Omnibus
Plan) before stockholder approval of the 2017 Plan will remain
outstanding in accordance with their terms.
Stockholders
are being asked to approve the 2017 Plan to authorize a number of
shares for issuance under the 2017 Plan equal to 1,000,000 shares
(including 293,337 shares available as of December 31, 2016 for
issuance under the Prior Plan), minus the number of shares subject
to awards granted under the 2007 Plan after December 31, 2016 and
prior to stockholder approval of the 2017 Plan. Additionally,
shares subject to outstanding awards under the 2007 Plan after
December 31, 2016 that are forfeited, cancelled, surrendered,
settled in cash or otherwise terminated without the issuance of
shares will be added to the number of shares available for issuance
under the 2017 Plan. As of March 27, 2017, 304,500 shares were
subject to the outstanding awards under the Prior
Plan.
In
recommending that the board of directors adopt the 2017 Plan, the
compensation committee considered factors such as the number of
shares remaining for awards under the 2007 Plan, the
Company’s historical and expected usage of equity
compensation, the potential dilutive effect of the 2017 Plan on the
Company’s stockholders, and the importance of an effective
equity compensation program to the Company’s
success.
As of
March 27, 2017, there were no
shares subject to outstanding “full-value” awards
(i.e., awards other than
stock options and stock appreciation rights) granted under the 2007
Plan and 304,500 shares subject to outstanding stock options
granted under the 2007 Plan. As of that date, the weighted average
exercise price of our outstanding stock options was
$4.58, and the weighted average
remaining contractual term of our stock options was 7.46
years.
Based
on our historical equity grant practices, we believe that the
shares reserved for issuance under the 2017 Plan, if approved by
our stockholders, will be sufficient for us to continue granting
equity awards for approximately ten years. Without stockholder
approval of the 2017 Plan, we may be required to increase the cash
components of our compensation program which would inhibit our
ability to align interests of our executives with those of our
stockholders.
Stockholders
are also being asked to approve the 2017 Plan for the following
reasons:
●
To
authorize the grant of awards under the 2017 Plan that are intended
to be treated as “qualified performance-based
compensation” for purposes of Section 162(m) of the Internal
Revenue Code (“Section 162(m)”). Section 162(m)
generally would prevent the Company from claiming a federal income
tax deduction for compensation in excess of $1 million per year
paid to its principal executive officer or either of its two other
most highly compensated named executive officers. However, if
certain conditions are met, “qualified performance-based
compensation” is excluded for purposes of calculating the
amount of compensation subject to the $1 million limit. Among other
requirements, in order for awards to be treated as “qualified
performance-based compensation” for purposes of Section
162(m), the material terms of the performance goals under which
compensation may be paid must be disclosed to and approved by our
stockholders. Those material terms include (i) the employees
eligible to receive compensation, (ii) a description of the
business criteria on which the performance goals are based, and
(iii) the maximum amount of compensation that can be paid to an
employee under the performance-based awards. Each of these aspects
of the 2017 Plan is discussed below.
●
To
approve an annual limit of $200,000 that will apply to the grant
date fair value of equity awards that may be granted to any one
non-employee director under the 2017 Plan, plus the amount of cash
fees paid to the non-employee director during the
year.
●
To
authorize the grant of stock options that qualify for treatment as
incentive stock options for purposes of Section 422 of the Internal
Revenue Code.
Plan Highlights
The
2017 Plan contains a number of provisions that are consistent with
our compensation philosophy and designed to protect the interests
of our stockholders, including the following:
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Feature
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Description
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Minimum Vesting Requirements (with 5% Exception)
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The
2017 Plan generally requires that all awards be subject to a
minimum vesting period of at least one year, except that up to 5%
of the shares reserved for issuance under the 2017 Plan may be
subject to awards with a shorter vesting period (or with no vesting
requirement). Other exceptions to the minimum vesting requirement
may apply in connection with a change in control or for awards to
participants outside the United States.
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No “Liberal” Change in Control Definition
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The
2017 Plan does not provide a “liberal” change in
control definition, which means that a change in control must
actually occur in order for the change in control provisions in the
2017 Plan to be triggered.
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No Automatic “Single-Trigger” Vesting on a Change in
Control
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The
2017 Plan generally provides for “double-trigger”
vesting of equity awards that are assumed in a change in control
transaction, which means that awards which are assumed in the
transaction generally will continue to vest based on continued
service, or, if earlier, upon a termination by the Company without
cause or by the participant for good reason, within two years after
the change in control.
Awards
that are not assumed in the transaction would vest on a
“single-trigger” basis upon a change in
control.
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No “Liberal” Share Recycling
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The
2017 Plan prohibits “liberal” share recycling with
respect to any awards granted under the 2017 Plan, which means that
shares used to pay the exercise price of a stock option, shares
used to satisfy a tax withholding obligation with respect to any
award, and shares that are repurchased by the Company with stock
option proceeds will not be added back to the 2017 Plan. In
addition, when a stock appreciation right is settled in shares, all
of the shares underlying the stock appreciation right will be
counted against the share limit of the 2017 Plan.
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No Discounted Stock Options or Stock Appreciation
Rights
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The
2017 Plan does not permit the use of “discounted” stock
options or stock appreciation rights.
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No Re-Pricing of Stock Options or Stock Appreciation Rights; No
Reload Awards
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The
2017 Plan does not permit the “re-pricing” of stock
options and stock appreciation rights without stockholder approval.
This includes a prohibition on cash buyouts of underwater options
or stock appreciation rights and “reloads” in
connection with the exercise of options or stock appreciation
rights.
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No Dividends or Dividend Equivalents on Unvested Awards or Stock
Options/Stock Appreciation Rights
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No
dividends or dividend equivalents will be paid currently while
awards are unvested. Instead, any dividends or dividend equivalents
with respect to unvested awards will be accumulated or deemed
reinvested until such time as the underlying award becomes vested
(including, where applicable, the achievement of performance
goals). Additionally, no dividend equivalents will be granted with
respect to any shares underlying a stock option or stock
appreciation right.
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A summary of the material terms of the 2017 Plan
is provided below and the complete text of the 2017 Plan is
attached as Annex A to this proxy statement. The following summary of
the 2017 Plan does not purport to be complete and is qualified in
its entirety by reference to Annex A.
Summary of the Plan
Awards and Term of the Plan
Awards
granted under the 2017 Plan may be in the form of stock options
(which may be incentive stock options or nonqualified stock
options), stock appreciation rights (or “SARs”),
restricted shares, restricted share units, other share-based awards
and cash-based awards. No awards may be made under the 2017 Plan
after March 27, 2027, or such earlier date as the board of
directors may terminate the 2017 Plan.
Administration
The
2017 Plan will be administered by the compensation committee of the
board of directors, or by such other committee or subcommittee as
may be appointed by our board, and which consists entirely of two
or more individuals who are “outside directors” within
the meaning of Section 162(m), “non-employee directors”
within the meaning of Rule 16b-3 under the Exchange Act and
“independent directors” within the meaning of
applicable stock exchange rules. The compensation committee can
make rules and regulations and establish such procedures for the
administration of the 2017 Plan as it deems appropriate, and may
delegate any of its authority to one or more directors or employees
of the Company, to the extent permitted by applicable laws. Our
board of directors also reserves the authority to administer and
issue awards under the 2017 Plan.
Eligibility
The
2017 Plan provides for awards to our non-employee directors and to
employees and consultants of the Company and our subsidiaries
designated by the compensation committee, except that incentive
stock options may only be granted to our employees and employees of
our subsidiaries. It is currently anticipated that approximately
105 employees and seven non-employee directors will be eligible for
awards under the 2017 Plan.
Shares Available
The
maximum number of shares that may be issued or transferred with
respect to awards under the 2017 Plan is 1,000,000 shares
(including 293,337 shares available as of December 31, 2016 for
issuance under the Prior Plan), decreased by the number of shares
subject to awards granted under the 2007 Plan after December 31,
2016 and prior to stockholder approval of the 2017 Plan, and
increased by the number of shares covered by outstanding awards
under the 2007 Plan after December 31, 2016 that are forfeited,
cancelled, surrendered, settled in cash or otherwise terminated
without the issuance of shares. The number of shares available for
issuance under the 2017 Plan is also subject to adjustment in
certain circumstances, as described below. Shares issued under the
2017 Plan may include authorized but unissued shares, treasury
shares, shares purchased in the open market, or a combination of
the foregoing.
Shares
underlying awards that are settled in cash or that expire or are
forfeited, cancelled, surrendered or otherwise terminated without
the issuance of shares will again be available for issuance under
the 2017 Plan. Shares used to pay the exercise price of stock
options, repurchased by us with stock option proceeds, or used to
pay withholding taxes upon exercise, vesting or payment of an
award, will not again be available for issuance under the 2017
Plan. In addition, when a SAR is exercised and settled in shares,
all of the shares underlying the SAR will be counted against the
share limit of the 2017 Plan regardless of the number of shares
used to settle the SAR.
Shares
subject to awards that are granted in assumption of, or in
substitution or exchange for, outstanding awards previously granted
by an entity acquired directly or indirectly by the Company will
not count against the share limit above, except as may be required
by the rules and regulations of any stock exchange or trading
market.
Non-Employee Director Award Limits
The
2017 Plan provides that the aggregate grant date fair value of all
awards granted to any single non-employee director during any
single calendar year (determined as of the applicable grant date(s)
under applicable financial accounting rules), taken together with
any cash fees paid to the non-employee director during the same
calendar year, may not exceed $200,000.
Individual Award Limits under Section 162(m)
The
compensation committee may, but is not required to, grant awards
under the 2017 Plan that are intended to qualify for exemption from
Section 162(m) as “qualified performance-based
compensation.” Therefore, the 2017 Plan imposes the following
additional individual sub-limits on awards granted under the 2017
Plan that are intended to satisfy that exemption:
●
the
maximum aggregate number of shares that may be subject to stock
options or SARs granted in any calendar year to any one participant
will be 500,000 shares;
●
the
maximum aggregate number of shares of restricted stock and shares
issuable or deliverable under restricted share units and other
share-based awards granted in any calendar year to any one
participant will be 500,000 shares; and
●
the
maximum aggregate cash compensation that can be paid pursuant to
cash-based awards or other share-based awards granted in any
calendar year to any one participant will be (a) $5,000,000 with
respect to any 12-month performance period (pro-rated for any
performance period of less than 12 months) or (b) with respect to
any performance period of more than 12 months, $5,000,000
multiplied by the number of full 12-month periods in the applicable
performance period.
Stock Options
Subject
to the terms and provisions of the 2017 Plan, options to purchase
shares may be granted to eligible individuals at any time and from
time to time as determined by the compensation committee. Options
may be granted as incentive stock options (all of the shares
available for issuance under the 2017 Plan may be issued pursuant
to incentive stock options), or as non-qualified stock options.
Subject to the limits provided in the 2017 Plan, the compensation
committee or its delegate will determine the number of options
granted to each recipient. Each option grant will be evidenced by a
stock option agreement that specifies whether the options are
intended to be incentive stock options or non-qualified stock
options and such additional limitations, terms and conditions as
the compensation committee may determine.
The
exercise price for each stock option may not be less than 100% of
the fair market value of a share on the date of grant, and each
stock option shall have a term no longer than 10 years. As of March
27, 2017, the closing price of our common stock as reported on the
NYSE MKT was $5.10 per share. The method of exercising a stock
option granted under the 2017 Plan will be set forth in the
applicable award agreement and may include payment of cash or cash
equivalent, tender of previously acquired shares with a fair market
value equal to the exercise price, a cashless exercise (including
withholding of shares otherwise deliverable on exercise or a
broker-assisted arrangement as permitted by applicable laws), a
combination of the foregoing methods, or any other method approved
by the compensation committee in its discretion.
The
grant of a stock option does not accord the recipient the rights of
a stockholder, and such rights accrue only after the exercise of
the stock option and the registration of shares in the
recipient’s name.
Stock Appreciation Rights
The
compensation committee in its discretion may grant SARs under the
2017 Plan. A SAR entitles the holder to receive from us upon
exercise an amount equal to the excess, if any, of the aggregate
fair market value of a specified number of shares that are the
subject of such SAR over the aggregate exercise price for the
underlying shares. The exercise price for each SAR may not be less
than 100% of the fair market value of a share on the date of grant,
and each SAR shall have a term no longer than 10
years.
We
may make payment of the amount to which the participant exercising
a SAR is entitled by delivering shares, cash or a combination of
stock and cash as set forth in the applicable award agreement. Each
SAR will be evidenced by an award agreement that specifies the date
and terms of the award and such additional limitations, terms and
conditions as the compensation committee may
determine.
Restricted Shares
Under the 2017 Plan, the compensation committee
may grant or sell restricted shares to plan participants
(i.e., shares that are subject to a substantial risk of
forfeiture and restrictions on transferability). Except for these
restrictions and any others imposed by the compensation committee,
upon the grant of restricted shares, the recipient will have rights
of a stockholder with respect to the restricted shares, including
the right to vote the restricted shares and to receive dividends
and other distributions paid or made with respect to the restricted
shares, except that any dividends with respect to unvested
restricted shares will be accumulated or deemed reinvested until
the vesting of the underlying restricted shares. During the
applicable restriction period, the recipient may not sell,
transfer, pledge, exchange or otherwise encumber the restricted
shares. Each award of restricted shares will be evidenced by an
award agreement that specifies the terms of the award and such
additional limitations, terms and conditions, which may include
restrictions based upon the achievement of performance objectives,
as the compensation committee may determine.
Restricted Share Units
Under
the 2017 Plan, the compensation committee may grant or sell to plan
participants restricted share units, which constitute an agreement
to deliver shares (or an equivalent value in cash) to the
participant at the end of a specified restriction period and
subject to such other terms and conditions as the compensation
committee may specify. Restricted share units are not shares and do
not entitle the recipients to the rights of a stockholder.
Restricted share units granted under the 2017 Plan may be subject
to performance conditions. Restricted share units will be settled
in cash or shares or a combination thereof, in an amount based on
the fair market value of a share on the settlement date. Each
restricted share unit award will be evidenced by an award agreement
that specifies the terms of the award and such additional
limitations, terms and conditions as the compensation committee may
determine, which may include restrictions based upon the
achievement of performance objectives.
Other Share-Based Awards
The
2017 Plan also provides for grants of other share-based awards
under the plan, which may include unrestricted shares or time-based
or performance-based unit awards that are settled in shares and/or
cash. Each other share-based award will be evidenced by an award
agreement that specifies the terms of the award and such additional
limitations, terms and conditions as the compensation committee may
determine.
Dividend Equivalents
As determined by the compensation committee in its
discretion, restricted share units or other share-based awards may
provide the participant with a deferred and contingent right to
receive dividend equivalents, either in cash or in additional
shares. Any such dividend equivalents will be accumulated or deemed
reinvested until such time as the underlying award becomes vested
(including, where applicable, the achievement of performance
objectives). No dividend
equivalents shall be granted with respect to shares underlying any
stock option or SAR.
Cash-Based Awards
The 2017 Plan authorizes the compensation
committee to grant cash-based awards, which will
be evidenced by an award agreement
that specifies the terms of the award, such as the achievement of
applicable stated performance objectives.
Minimum Vesting Requirements
In general, each award granted under the 2017 Plan
will have a minimum vesting or performance period of at least one
year. However, awards covering up to 5% of the 2017 Plan’s
share reserve may be granted as
unrestricted awards or otherwise with a vesting or performance
period of less than one year. Other exceptions to the minimum
vesting requirement may apply in connection with a change in
control or for awards to participants outside the United
States.
Performance Objectives
The
plan provides that performance objectives may be established by the
compensation committee in connection with any award granted under
the 2017 Plan. Performance objectives may relate to performance of
the Company or one or more of our subsidiaries, divisions,
departments, units, functions, partnerships, joint ventures or
minority investments, product lines or products, or the performance
of an individual participant, and performance objectives may be
made relative to the performance of a group or companies or a
special index of companies.
The
compensation committee may, in its discretion, grant awards under
the 2017 Plan that are intended to qualify for the “qualified
performance-based compensation” exemption from Section
162(m). In the case of an award intended to qualify for that
exemption, such goals shall be based on the attainment of specified
levels of one or more of the following measures: earnings per
share; revenues or margins; cash flow; operating margin; return on
net assets, investment, capital, or equity; economic value added;
direct contribution; net income; pretax income; earnings before
interest and taxes; earnings before interest, taxes, depreciation
and amortization; earnings after interest expense and before
extraordinary or special items; operating income; income before
interest income or expense, unusual items and income taxes, local,
state or federal and excluding budgeted and actual bonuses which
might be paid under any ongoing bonus plans of the Company; working
capital; management of fixed costs or variable costs;
identification or consummation of investment opportunities or
completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or
divestitures; total shareholder return; debt reduction; market
share; entry into new markets, either geographically or by business
unit; customer retention and satisfaction; strategic plan
development and implementation, including turnaround plans; and/or
the fair market value of a share.
Performance
objectives related to an award intended to be treated as qualified
performance-based compensation for purposes of Section 162(m) will
be set by the compensation committee within the time period and
other requirements prescribed by Section 162(m). We have not
adopted any policy that would require the Committee to grant awards
under the 2017 Plan that are intended to treated as qualified
performance-based compensation, and there can be no guarantee that
any awards granted under the 2017 Plan will be so treated. As such,
we may from time to time pay compensation that is not deductible
under Section 162(m), if we believe that it is in our
stockholders’ best interests.
Change in Control
The
2017 Plan generally provides for “double-trigger”
vesting of equity awards in connection with a change in control of
the Company, as described below.
To the
extent that outstanding awards granted under the 2017 Plan are
assumed in connection with a change in control, then, except as
otherwise provided in the applicable award agreement or in another
written agreement with the participant, all outstanding awards will
continue to vest and become exercisable (as applicable) based on
continued service during the remaining vesting period, with
performance-based awards being converted to service-based awards at
the “target” level. Vesting and exercisability (as
applicable) of awards that are assumed in connection with a change
in control generally would be accelerated in full on a
“double-trigger” basis, if, within two years after the
change in control, the participant’s employment is
involuntarily terminated without cause, or by the participant for
“good reason”. Any stock options or SARs that become
vested on a “double-trigger” basis generally would
remain exercisable for the full duration of the term of the
applicable award.
To the extent outstanding awards granted under the
2017 Plan are not assumed in connection with a change in control,
then such awards generally would become vested in full on a
“single-trigger” basis, effective immediately prior to
the change in control, with performance-based awards
becoming vested at the “target” level. Any stock options or SARs that become
vested on a “single-trigger” basis generally would
remain exercisable for the full duration of the term of the
applicable award.
The
compensation committee has the discretion to determine whether or
not any outstanding awards granted under the 2017 Plan will be
assumed by the resulting entity in connection with a change in
control, and the compensation committee has the authority to make
appropriate adjustments in connection with the assumption of any
awards. The compensation committee also has the right to cancel any
outstanding awards in connection with a change in control, in
exchange for a payment in cash or other property (including shares
of the resulting entity) in an amount equal to the excess of the
fair market value of the shares subject to the award over any
exercise price related to the award, including the right to cancel
any “underwater” stock options and SARs without payment
therefor.
For
purposes of the 2017 Plan, subject to exceptions set forth in the
2017 Plan, a “change in control” generally includes (a)
the acquisition of more than 50% of the company’s common
stock; (b) the incumbent board of directors ceasing to constitute a
majority of the board of directors; (c) a reorganization, merger,
consolidation or similar transaction, or a sale of substantially
all of the Company’s assets; and (d) the complete liquidation
or dissolution of the company. The full definition of “change
in control” is set out in the 2017 Plan.
Whether
a participant’s employment has been terminated for
“cause” will be determined by the compensation
committee. Unless otherwise provided in the applicable award
agreement or in an another written agreement with the participant,
“cause”, as a reason for termination of a
participant’s employment generally includes (a) the
participant’s failure to perform, in a reasonable manner, his
or her assigned duties; (b) the participant’s violation or
breach of his or her employment agreement, consulting agreement or
other similar agreement; (c) the participant’s violation or
breach of any non-competition, non-solicitation, non-disclosure
and/or other similar agreement; (d) any act of dishonesty or bad
faith by the participant with respect to the Company or a
subsidiary; (e) the participant’s breach of fiduciary duties
owed to the Company, (e) the use of alcohol, drugs or other similar
substances in a manner that adversely affects the
participant’s work performance, or (f) the
participant’s commission of any act, misdemeanor, or crime
reflecting unfavorably upon the participant or the Company or any
subsidiary.
For
purposes of the 2017 Plan, unless otherwise provided in the
applicable award agreement or in an another written agreement with
the participant, “good reason” generally includes (a)
the assignment to the participant of any duties that are
inconsistent in any material respect with his or her duties or
responsibilities as previously assigned by the Company or a
subsidiary, or any other action by the Company or a subsidiary that
results in a material diminution of the participant’s duties
or responsibilities, other than any action that is remedied by the
Company or a subsidiary promptly after receipt of notice from the
participant; or (b) any material failure by the Company or a
subsidiary to comply with its obligations to the participant as
agreed upon, other than an isolated, insubstantial and inadvertent
failure which is remedied by the Company or subsidiary promptly
after receipt of notice from the Participant.
Forfeiture and Recoupment of Awards
Awards
granted under the 2017 Plan also may be subject to forfeiture or
recoupment as provided pursuant to any compensation recovery (or
“clawback”) policy that the Company may adopt or
maintain from time to time.
Adjustments
In
the event of any equity restructuring, such as a stock dividend,
stock split, spin off, rights offering or recapitalization through
a large, nonrecurring cash dividend, the compensation committee
will adjust the number and kind of shares that may be delivered
under the 2017 Plan, the individual share award limits, and, with
respect to outstanding awards, the number and kind of shares
subject to outstanding awards and the exercise price or other price
of shares subject to outstanding awards, to prevent dilution or
enlargement of rights. In the event of any other change in
corporate capitalization, such as a merger, consolidation or
liquidation, the compensation committee may, in its discretion,
make such equitable adjustment as described in the foregoing
sentence, to prevent dilution or enlargement of rights. However,
unless otherwise determined by the compensation committee, we will
always round down to a whole number of shares subject to any award.
Moreover, in the event of any such transaction or event, the
compensation committee, in its discretion, may provide in
substitution for any or all outstanding awards such alternative
consideration (including cash) as it, in good faith, may determine
to be equitable in the circumstances and may require in connection
therewith the surrender of all awards so replaced.
Transferability
Except
as the compensation committee otherwise determines, awards granted
under the 2017 Plan will not be transferable by a participant other
than by will or the laws of descent and distribution. Except as
otherwise determined by the compensation committee, stock options
and SARs will be exercisable during a participant’s lifetime
only by him or her or, in the event of the participant’s
incapacity, by his or her guardian or legal representative. Any
award made under the 2017 Plan may provide that any shares issued
as a result of the award will be subject to further restrictions on
transfer.
Amendment; Prohibition on Re-Pricing
The
board of directors may amend, alter or discontinue the 2017 Plan at
any time, with stockholder approval to the extent required by
applicable laws. No such amendment or termination, however, may
adversely affect in any material way any holder of outstanding
awards without his or her consent, except for amendments made to
cause the plan to comply with applicable law, stock exchange rules
or accounting rules.
Except
in connection with a corporate transaction, no award may be amended
or otherwise subject to any action that would be treated as a
“re-pricing” of such award, unless such action is
approved by our stockholders.
Federal Income Tax Consequences
The
following is a summary of certain U.S. federal income tax
consequences of awards made under the 2017 Plan, based upon the
laws in effect on the date hereof. The discussion is general in
nature and does not take into account a number of considerations
which may apply in light of the circumstances of a particular
participant under the plan. The income tax consequences under
applicable state and local tax laws may not be the same as under
federal income tax laws.
Non-Qualified
Stock Options. A participant will not recognize taxable income at
the time of grant of a non-qualified stock option, and we will not
be entitled to a tax deduction at that time. A participant will
recognize compensation taxable as ordinary income (and subject to
income tax withholding in respect of an employee) upon exercise of
a non-qualified stock option equal to the excess of the fair market
value of the shares purchased over their exercise price, and we
generally will be entitled to a corresponding
deduction.
Incentive
Stock Options. A participant will not recognize taxable income at
the time of grant of an incentive stock option. A participant will
not recognize taxable income (except for purposes of the
alternative minimum tax) upon exercise of an incentive stock
option. If the shares acquired by exercise of an incentive stock
option are held for the longer of two years from the date the
option was granted and one year from the date the shares were
transferred, any gain or loss arising from a subsequent disposition
of such shares will be taxed as long-term capital gain or loss, and
we will not be entitled to any deduction. If, however, such shares
are disposed of within either of such two- or one-year periods,
then in the year of such disposition the participant will recognize
compensation taxable as ordinary income equal to the excess of the
lesser of the amount realized upon such disposition and the fair
market value of such shares on the date of exercise over the
exercise price, and we generally will be entitled to a
corresponding deduction.
Stock
Appreciation Rights. A participant will not recognize taxable income at
the time of grant of a SAR, and we will not be entitled to a tax
deduction at such time. Upon exercise, a participant will recognize
compensation taxable as ordinary income (and subject to income tax
withholding in respect of an employee) equal to the fair market
value of any shares delivered and the amount of cash paid by us,
and we generally will be entitled to a corresponding
deduction.
Restricted
Shares. A participant will not recognize taxable income at
the time of grant of restricted shares, and we will not be entitled
to a tax deduction at such time, unless the participant makes an
election under Section 83(b) of the Internal Revenue Code to be
taxed at such time. If such election is made, the participant will
recognize compensation taxable as ordinary income (and subject to
income tax withholding in respect of an employee) at the time of
the grant equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for the
restricted shares. If such election is not made, the participant
will recognize compensation taxable as ordinary income (and subject
to income tax withholding in respect of an employee) at the time
the restrictions lapse in an amount equal to the excess of the fair
market value of the shares at such time over the amount, if any,
paid for the restricted shares. We generally will be entitled to a
corresponding deduction at the time the ordinary income is
recognized by the participant, except to the extent the deduction
limits of Section 162(m) apply.
Restricted
Share Units. A participant will not recognize taxable income at
the time of grant of a restricted share unit award, and we will not
be entitled to a tax deduction at such time. A participant will
recognize compensation taxable as ordinary income (and subject to
income tax withholding in respect of an employee) at the time of
settlement of the award equal to the fair market value of any
shares delivered and the amount of cash paid by us, and we
generally will be entitled to a corresponding deduction, except to
the extent the deduction limits of Section 162(m)
apply.
Other
Share-Based Awards and Cash-Based Awards. Generally, participants will recognize taxable
income at the time of payment of cash-based awards and at the time
of settlement of other share-based awards (with the amount of
income recognized pursuant to other share-based awards generally
being equal to the amount of cash and the fair market value of any
shares delivered under the award). We generally will be entitled to
a corresponding deduction, except to the extent the deduction
limits of Section 162(m) apply.
Section
162(m). Section 162(m) generally limits the deductibility
of certain compensation paid by the Company to its chief executive
officer and the next two most highly compensated named executive
officers. Compensation paid to such an officer during a year in
excess of $1 million that is not qualified performance-based
compensation (or does not comply with other exceptions) would not
be deductible on our federal income tax return for that year. The
compensation committee will evaluate from time to time the relative
benefits to us of qualifying other awards under the plan for
deductibility under Section 162(m).
Section
409A. Section 409A of the
Internal Revenue Code imposes certain restrictions upon the payment
of nonqualified deferred compensation. We intend that awards
granted under the 2017 Plan will be designed and administered in
such a manner that they are either exempt from the application of,
or comply with, the requirements of Section 409A of the Internal
Revenue Code. However, the Company does not warrant the tax
treatment of any award under Section 409A or
otherwise.
Registration with the SEC
The
Company intends to file a Registration Statement on Form S-8
relating to the issuance of shares under the 2017 Plan with the SEC
pursuant to the Securities Act after approval of the 2017 Plan by
the Company’s stockholders.
New Plan Benefits
Because
it is within the discretion of the compensation committee to
determine which non-employee directors, employees and consultants
will receive awards and the amount and type of such awards, it is
not presently possible to determine the number of individuals to
whom awards will be made in the future under the 2017 Plan or the
amount of such awards.
Vote Required
The
number of votes cast by stockholders, either in person or by proxy,
at the annual meeting “for” approval of the 2017
Incentive Compensation Plan must exceed the number of votes cast
“against” approval of the plan. Abstentions will count
as a vote “against” the plan and broker non-votes will
have no effect on the vote. Shares represented by properly executed
proxies will be voted, if specific instructions are not otherwise
given, for the approval of the 2017 Incentive Compensation
Plan.
Recommendation of the Board
Our
board of directors recommends a vote “FOR” the approval of the 2017
Incentive Compensation Plan.
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2016
with respect to our equity compensation plans: the 2007
Non-Employee Director Stock Option Plan and the 2007 Incentive
Compensation Plan, under which our common stock is authorized for
issuance. On December 31, 2016, no shares of our common stock were
available for issuance under the 2007 Non-Employee Director Stock
Option Plan and 293,337 shares of our common stock were available
for issuance under the 2007 Incentive Compensation
Plan.
|
Plan Category
|
(a)
Number of securities to be issued upon exercise of outstanding
options,
warrants and rights (1)
|
(b)
Weighted- average exercise price of outstanding options, warrants
and rights
|
(c)
Number of securities remaining available for future issuance under
equity compensation plan (excluding securities reflected in column
(a)) (2)
|
|
Equity compensation
plans approved by security holders
|
311,000
|
$3.48
|
293,337
|
|
Equity compensation
plans not approved by security holders
|
—
|
—
|
—
|
|
Total
|
311,000
|
$3.48
|
293,337
|
|
(1)
|
Includes
311,000 shares issuable upon the exercise of awards outstanding
under the 2007 Incentive Compensation Plan.
|
|
(2)
|
Represents
shares available for issuance under the 2007 Incentive Compensation
Plan.
|
MISCELLANEOUS
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires that our directors and executive
officers, and persons who own more than 10 percent of our common
stock, file with the SEC initial statements of beneficial ownership
of common stock and statements of changes in beneficial ownership
of common stock. Officers, directors and greater than 10 percent
stockholders are required by SEC regulations to furnish us with all
Section 16 reports they file.
Based
solely on a review of the copies of such reports furnished to us
and representations that no other reports were required, we believe
that all Section 16 filing requirements applicable to our officers,
directors and 10 percent beneficial owners were timely complied
with during fiscal 2016, except for Mr. Goebert’s Form 4 for
the exercise of stock options, filed on May 25, 2016, which was
inadvertently filed late.
Annual Report on Form 10-K
Copies
of our Annual Report on Form 10-K for fiscal 2016, as filed with
the SEC, are available to stockholders without charge upon written
request to Corporate Secretary of RELM at 7100 Technology Drive,
West Melbourne, Florida 32904.
Eliminating Duplicative Proxy Materials
A
single Notice of Internet Availability of Proxy Materials or a
single copy of our Annual Report on Form 10-K for fiscal 2016 and
this proxy statement will be delivered to multiple stockholders who
live at the same address. If you live at the same address as
another stockholder and would like to receive your own copy of the
Notice of Internet Availability of Proxy Materials, the 2016 annual
report, or this proxy statement, please contact us at 7100
Technology Drive, West Melbourne, Florida 32904; telephone number:
(321) 984-1414. A separate copy of the Notice of Internet
Availability of Proxy Materials, or of our 2016 annual report and
this proxy statement, will be delivered to you promptly and without
charge. If you live at the same address as another stockholder and
are receiving multiple copies of our proxy materials, please
contact us at the telephone number or address above if you only
want to receive one copy of those materials.
Stockholder Proposals
Inclusion of Proposals in our Proxy Statement Pursuant to SEC
Rules
Pursuant to Rule
14a-8 under the Exchange Act, some stockholder proposals may be
eligible for inclusion in our proxy statement for our 2018 annual
meeting of stockholders. To be eligible for inclusion in our 2018
proxy statement, any such proposals must be delivered in writing to
the Corporate Secretary of RELM no later than January 4, 2018, and
must meet the requirements of Rule 14a-8 under the Exchange Act.
The submission of a stockholder proposal does not guarantee that it
will be included in our proxy statement.
Advance Notice Requirements for Stockholder Submission of
Nominations and Proposals
In
addition, pursuant to the advance notice provisions set forth in
our bylaws, for a stockholder’s proposal or nomination to be
properly presented at the 2018 annual meeting of stockholders, but
not submitted for inclusion in our proxy statement, such
stockholder’s written
notice of the intent of such stockholder to make a nomination of a
person for election as a director or to bring any other matter
before the annual meeting must be delivered to the Corporate
Secretary of RELM at the principal executive offices of the Company
no less than 120 days nor more than 180 days prior to the first
anniversary of the date on which we first mailed our proxy
materials for the preceding year’s annual meeting of stockholders. As
a result, proposals for the 2018 annual meeting of stockholders
submitted outside the provisions of Rule 14a-8 will be considered
untimely if submitted prior to November 5, 2017 or after January 4,
2018. Also, any proxy granted with respect to the 2018 annual
meeting of stockholders will confer on management discretionary
authority to vote with respect to a stockholder proposal or
director nomination if notice of such proposal or nomination is not
received by our Corporate Secretary within the timeframe provided
above.
Other Matters
As of
the date of this proxy statement, our board of directors does not
know of any other matters for consideration at the annual meeting
other than as described in this proxy statement. If, however, any
other matters are properly brought before the annual meeting, the
persons named as proxies will vote in accordance with their best
judgment with respect to such matters.
ANNEX
A
RELM
WIRELESS CORPORATION
2017
INCENTIVE COMPENSATION PLAN
1.
Establishment, Purpose,
Duration.
a. Establishment. RELM
Wireless Corporation (the “Company”) hereby establishes
an equity compensation plan to be known as the RELM Wireless
Corporation 2017 Incentive Compensation Plan (the
“Plan”). The Plan is effective as of March
27, 2017 (the “Effective Date”), subject to the
approval of the Plan by the shareholders of the Company (the date
of such shareholder approval being the “Approval
Date”). Definitions of capitalized terms used in
the Plan are contained in Section 2 of the Plan.
b. Purpose. The
purpose of the Plan is to attract and retain Directors,
Consultants, officers and other key Employees of the Company and
its Subsidiaries and to provide to such persons incentives and
rewards for superior performance.
c. Duration. No
Award may be granted under the Plan after the day immediately
preceding the tenth (10th) anniversary of the Effective Date, or
such earlier date as the Board shall determine. The Plan
will remain in effect with respect to outstanding Awards until no
Awards remain outstanding.
d. Prior
Plans. If the Company’s shareholders
approve the Plan, the RELM Wireless Corporation 2007 Incentive
Compensation Plan (the “Prior Plan”) will terminate in
its entirety effective on the Approval Date; provided that all outstanding awards
under the Prior Plan as of the Approval Date shall remain
outstanding and shall be administered and settled in accordance
with the provisions of the Prior Plan.
2. Definitions. As
used in the Plan, the following definitions shall
apply.
a. “Applicable
Laws” means the applicable requirements relating to the
administration of equity-based compensation plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code,
the rules of any stock exchange or quotation system on which the
Shares are listed or quoted and the applicable laws of any other
country or jurisdiction where Awards are granted under the
Plan.
b. “Approval
Date” has the meaning given such term in
Section 1(a).
c. “Award”
means an award of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Shares, Restricted
Share Units, Other Share-Based Awards, or Cash-Based Awards granted
pursuant to the terms and conditions of the Plan.
d. “Award
Agreement” means either: (a) an agreement, in written or
electronic format, entered into by the Company and a Participant
setting forth the terms and provisions applicable to an Award
granted under the Plan; or (b) a statement, in written or
electronic format, issued by the Company to a Participant
describing the terms and provisions of such Award, which need not
be signed by the Participant.
e. “Beneficial
Owner” shall have the meaning ascribed to such term in
Rule 13d-3 under the Exchange Act and any successor to such
Rule.
f. “Board”
means the Board of Directors of the Company.
g. “Business
Combination” has the meaning given such term in
Section 2(j).
h. “Cash-Based
Award” shall mean a cash Award granted pursuant to Section 11
of the Plan.
A-1
i. “Cause”
as a reason for a Participant’s termination of a
Participant’s Continuous Service shall have the meaning
specified in the Award Agreement. In the absence of any definition
in the Award Agreement, “Cause” shall have the
equivalent meaning or the same meaning as “cause” or
“for cause” set forth in any employment, consulting, or
other agreement for the performance of services between the
Participant and the Company or a Subsidiary or, in the absence of
any such agreement or any such definition in such agreement, such
term shall mean (a) the failure by the Participant to perform, in a
reasonable manner, his or her duties as assigned by the Company or
a Subsidiary, (b) any violation or breach by the Participant of his
or her employment, consulting or other similar agreement with the
Company or a Subsidiary, if any, (c) any violation or breach by the
Participant of any non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a
Subsidiary, (d) any act by the Participant of dishonesty or bad
faith with respect to the Company or a Subsidiary, (e) breach of
fiduciary duties owed to the Company, (e) use of alcohol, drugs or
other similar substances in a manner that adversely affects the
Participant’s work performance, or (f) the commission by the
Participant of any act, misdemeanor, or crime reflecting
unfavorably upon the Participant or the Company or any Subsidiary.
The good faith determination by the Committee of whether the
Participant’s Continuous Service was terminated by the
Company for “Cause” shall be final and binding for all
purposes hereunder.
j. “Change
in Control” shall mean, unless otherwise specified in an
Award Agreement, the occurrence of any of the
following:
a. The
acquisition by any Person of Beneficial
Ownership of more than fifty percent (50%) of
either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities) (the foregoing Beneficial Ownership hereinafter being
referred to as a “Controlling Interest”); provided, however, that for purposes of
this paragraph, the following acquisitions shall not constitute or
result in a Change in Control: (u) any acquisition directly from
the Company, (v) any acquisition by Fundamental Global Investors,
LLC, Ballantyne Strong, Inc. and their affiliates), (w) any
acquisition by the Company, (x) any acquisition by any Person that
as of the Effective Date owns Beneficial Ownership of a Controlling
Interest, (y) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
Subsidiary, or (z) any acquisition by any entity pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
paragraph (c) below; or
b. Individuals
who constitute the Board on the Effective Date (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
c. Consummation
of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving the Company or any
of its Subsidiaries, or a sale or other disposition of all or
substantially all of the assets of the Company (each a
“Business Combination”), in each case, unless,
following such Business Combination, (i) no Person (other than
Fundamental Global Investors, LLC, Ballantyne Strong, Inc. and
their affiliates, any employee benefit plan (or related trust) of
the Company or such entity resulting from such Business Combination
or any Person that as of the Effective Date owns Beneficial
Ownership of a Controlling Interest) beneficially owns, directly or
indirectly, fifty percent (50%) or more of the value of the
then outstanding equity securities of the entity resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such entity except to the extent
that such ownership existed prior to the Business Combination; and
(ii) at least a majority of the members of the board of directors
or other governing body of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
d. A
complete liquidation or dissolution of the Company.
k. “Code”
means the Internal Revenue Code of 1986, as amended.
l. “Committee”
means the Compensation Committee of the Board or such other
committee or subcommittee of the Board as may be duly appointed to
administer the Plan and having such powers in each instance as
shall be specified by the Board. To the extent required
by Applicable Laws, the Committee shall consist of two or more
members of the Board, each of whom is a “non-employee
director” within the meaning of Rule 16b-3 promulgated under
the Exchange Act, an “outside director” within the
meaning of regulations promulgated under Section 162(m) of the
Code, and an “independent director” within the meaning
of applicable rules of any securities exchange upon which Shares
are listed.
m. “Company”
has the meaning given such term in Section 1(a) and any
successor thereto.
n. “Consultant”
means an independent contractor that (a) performs services for the
Company or a Subsidiary in a capacity other than as an Employee or
Director and (b) qualifies as a consultant under the applicable
rules of the SEC for registration of shares on a Form S-8
Registration Statement.
o. “Continuous
Service” means the uninterrupted provision of services to the
Company or any Subsidiary in any capacity of Employee, Director,
Consultant or other service provider. Continuous Service
shall not be considered to be interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any
Subsidiaries, or any successor entities, in any capacity of
Employee, Director, Consultant or other service provider, or (iii)
any change in status as long as the individual remains in the
service of the Company or a Subsidiary in any capacity of Employee,
Director, Consultant or other service provider (except as otherwise
provided in the Award Agreement). An approved leave of absence
shall include sick leave, military leave, or any other authorized
personal leave.
p. “Controlling
Interest” has the meaning given such term in
Section 2(j).
q. “Date
of Grant” means the date specified by the Committee on which
the grant of an Award is to be effective. The Date of
Grant shall not be earlier than the date of the resolution and
action therein by the Committee. In no event shall the
Date of Grant be earlier than the Effective Date.
r. “Director”
means any individual who is a member of the Board and who is not an
Employee.
s. “Effective
Date” has the meaning given such term in
Section 1(a).
t. “Employee”
means any employee of the Company or a Subsidiary; provided, however, that for purposes of
determining whether any person may be a Participant for purposes of
any grant of Incentive Stock Options, the term
“Employee” has the meaning given to such term in
Section 3401(c) of the Code, as interpreted by the regulations
thereunder and Applicable Laws.
u. “Exchange
Act” means the Securities Exchange Act of 1934 and the rules
and regulations thereunder, as such law, rules and regulations may
be amended from time to time.
v. “Fair
Market Value” means the value of one Share on any relevant
date, determined under the following rules: (a) the closing sale
price per Share on that date as reported on the principal exchange
on which Shares are then trading, if any, or if applicable the NYSE
MKT, or if there are no sales on that date, on the next preceding
trading day during which a sale occurred; (b) if the Shares are not
reported on a principal exchange or national market system, the
average of the closing bid and asked prices last quoted on that
date by an established quotation service for over-the-counter
securities; or (c) if neither (a) nor (b) applies, (i) with respect
to Stock Options, Stock Appreciation Rights and any Award of stock
rights that is subject to Section 409A of the Code, the value as
determined by the Committee through the reasonable application of a
reasonable valuation method, taking into account all information
material to the value of the Company, within the meaning of Section
409A of the Code, and (ii) with respect to all other Awards, the
fair market value as determined by the Committee in good
faith.
w. “Good
Reason” shall, with respect to any Participant, have the
meaning specified in the applicable Award Agreement. In
the absence of any definition in the Award Agreement, “Good
Reason” shall have the equivalent meaning or the same meaning
as “good reason” or “for good reason” set
forth in any employment, consulting or other agreement for the
performance of services between the Participant and the Company or
a Subsidiary or, in the absence of any such agreement or any such
definition in such agreement, such term shall mean (i) the
assignment to the Participant of any duties inconsistent in any
material respect with the Participant's duties or responsibilities
as assigned by the Company or a Subsidiary, or any other action by
the Company or a Subsidiary which results in a material diminution
in such duties or responsibilities, excluding for this purpose any
action which is remedied by the Company or a Subsidiary promptly
after receipt of notice thereof given by the Participant; or (ii)
any material failure by the Company or a Subsidiary to comply with
its obligations to the Participant as agreed upon, other than an
isolated, insubstantial and inadvertent failure which is remedied
by the Company or a Subsidiary promptly after receipt of notice
thereof given by the Participant.
x. “Incentive
Stock Option” or “ISO” means a Stock Option that
is designated as an Incentive Stock Option and that is intended to
meet the requirements of Section 422 of the Code.
y. “Incumbent
Board” has the meaning given such term in
Section 2(j).
z. “Nonqualified
Stock Option” means a Stock Option that is not intended to
meet the requirements of Section 422 of the Code or otherwise
does not meet such requirements.
aa.
“Other Share-Based Award” means an equity-based or
equity-related Award not otherwise described by the terms of the
Plan, granted in accordance with the terms and conditions set forth
in Section 10.
bb.
“Outstanding Company Common Stock” has the meaning
given such term in Section 2(j).
cc.
“Outstanding Company Voting Securities” has the meaning
given such term in Section 2(j).
dd.
“Participant” means any eligible individual as set
forth in Section 5 who holds one or more outstanding
Awards.
ee.
“Performance-Based Exception” means the
performance-based exception from the tax deductibility limitations
of Section 162(m) of the Code.
ff.
“Performance Objectives” means the performance
objective or objectives established by the Committee with respect
to an Award granted pursuant to the Plan. Any
Performance Objectives may relate to the performance of the Company
or one or more of its Subsidiaries, divisions, departments, units,
functions, partnerships, joint ventures or minority investments,
product lines or products, or the performance of the individual
Participant, and may include, without limitation, the Performance
Objectives set forth in Section 14(b). The Performance Objectives
may be made relative to the performance of a group of comparable
companies, or a published or special index that the Committee, in
its sole discretion, deems appropriate, or the Company may select
Performance Objectives as compared to various stock market indices.
Performance Objectives may be stated as a combination of the listed
factors. Any Performance Objectives that are
financial metrics may be determined in accordance with United
States Generally Accepted Accounting Principles
(“GAAP”), if applicable, or may be adjusted when
established to include or exclude any items otherwise includable or
excludable under GAAP.
gg.
“Person” shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, and shall include a “group” as
defined in Section 13(d) thereof.
hh.
“Plan” means this RELM Wireless Corporation 2017
Incentive Compensation Plan, as amended from time to
time.
ii. “Prior
Plan” has the meaning given such term in
Section 1(d).
jj. “Qualified
Termination” means any termination of a Participant’s
Continuous Service during the two-year period commencing on a
Change in Control (a) by the Company, any of its Subsidiaries or
the resulting entity in connection with a Change in Control other
than for Cause, or (b) by the Participant for Good
Reason.
kk.
“Restricted Shares” means Shares granted or sold
pursuant to Section 8 as to which neither the substantial risk
of forfeiture nor the prohibition on transfers referred to in such
Section 8 has expired.
ll. “Restricted
Share Unit” means a grant or sale of the right to receive
Shares or cash at the end of a specified restricted period made
pursuant to Section 9.
mm.
“SEC” means the United States Securities and Exchange
Commission.
nn.
“Share” means a share of common stock of the Company,
par value $.60 per share, or any security into which such Share may
be changed by reason of any transaction or event of the type
referred to in Section 16.
oo.
“Stock Appreciation Right” means a right granted
pursuant to Section 7.
pp.
“Stock Option” means a right to purchase a Share
granted to a Participant under the Plan in accordance with the
terms and conditions set forth in Section 6. Stock
Options may be either Incentive Stock Options or Nonqualified Stock
Options.
qq.
“Subsidiary” means: (a) with respect to an Incentive
Stock Option, a “subsidiary corporation” as defined
under Section 424(f) of the Code; and (b) for all other purposes
under the Plan, any corporation or other entity in which the
Company owns, directly or indirectly, a proprietary interest of
more than fifty percent (50%) by reason of stock ownership or
otherwise.
rr. “Ten
Percent Shareholder” shall mean any Participant who owns more
than 10% of the combined voting power of all classes of stock of
the Company, within the meaning of Section 422 of the
Code.
3.
Shares
Available Under the Plan.
a. Shares
Available for Awards. The maximum number of
Shares that may be granted pursuant to Awards under the Plan shall
be 1,000,000 Shares, reduced by Shares covered by an award granted
under the Prior Plan after December 31, 2016 but prior to the
Approval Date, and increased by Shares covered by an award
outstanding under the Prior Plan after December 31, 2016 that is
forfeited, canceled, surrendered, settled in cash or otherwise
terminated without the issuance of such Share. All of
the Shares authorized for grant under the Plan may be issued
pursuant to Incentive Stock Options. Shares issued or delivered
pursuant to an Award may be authorized but unissued Shares,
treasury Shares, including Shares purchased in the open market, or
a combination of the foregoing. The aggregate number of
Shares available for issuance or delivery under the Plan shall be
subject to adjustment as provided in Section 16.
b. Share
Counting. The following Shares shall not count
against the Share limit in Section 3(a): (i) Shares
covered by an Award that expires or is forfeited, canceled,
surrendered, or otherwise terminated without the issuance of such
Shares; (ii) Shares covered by an Award that is settled only in
cash; and (iii) Shares granted through the assumption of, or in
substitution for, outstanding awards granted by a company to
individuals who become Employees, Directors or Consultants as the
result of a merger, consolidation, acquisition or other corporate
transaction involving such company and the Company or any of its
Affiliates (except as may be required by reason of the rules and
regulations of any stock exchange or other trading market on which
the Shares are listed). This Section 3(b) shall apply to
the number of Shares reserved and available for Incentive Stock
Options only to the extent consistent with applicable Treasury
regulations relating to Incentive Stock Options under the
Code.
c. Prohibition
of Share Recycling. The following Shares subject
to an Award shall not again be available for grant as described
above, regardless of whether those Shares are actually issued or
delivered to the Participant: (i) Shares tendered in
payment of the exercise price of a Stock Option; (ii) Shares
withheld by the Company or any Subsidiary to satisfy a tax
withholding obligation; and (iii) Shares that are repurchased by
the Company with Stock Option proceeds. Without limiting
the foregoing, with respect to any Stock Appreciation Right that is
settled in Shares, the full number of Shares subject to the Award
shall count against the number of Shares available for Awards under
the Plan regardless of the number of Shares used to settle the
Stock Appreciation Right upon exercise.
d. Per-Person
Limits. Subject to adjustment as provided in
Section 16 of the Plan, the following limits shall apply with
respect to Awards that are intended to qualify for the
Performance-Based Exception: (i) the maximum aggregate number of
Shares that may be subject to Stock Options or Stock Appreciation
Rights granted in any calendar year to any one Participant shall be
500,000 Shares; (ii) the maximum aggregate number of Restricted
Shares and Shares issuable or deliverable under Restricted Share
Units and Other Share-Based Awards granted in any calendar year to
any one Participant shall be 500,000 Shares; (iii) the maximum
aggregate cash compensation that can be paid pursuant to Cash-Based
Awards or Other Share-Based Awards granted in any calendar year to
any one Participant shall be (x) $5,000,000 with respect to any 12
month performance period (pro-rated for any performance period that
is less than 12 months based upon the ratio of the number of days
in the performance period as compared to 365), and (y) with respect
to any performance period that is more than 12 months, $5,000,000
multiplied by the number of full 12 months periods that are in the
performance period.
e. Director
Limits. Notwithstanding any other provision of
the Plan to the contrary, the aggregate grant date fair value
(determined as of the applicable Date(s) of Grant in accordance
with applicable financial accounting rules) of all Awards granted
to any Director during any single calendar year, taken together
with any cash fees paid to such person during such calendar year,
shall not exceed $200,000.
4. Administration
of the Plan.
a. In
General. The Plan shall be administered by the
Committee. Except as otherwise provided by the Board,
the Committee shall have full and final authority in its discretion
to take all actions determined by the Committee to be necessary in
the administration of the Plan, including, without limitation,
discretion to: select Award recipients; determine the sizes and
types of Awards; determine the terms and conditions of Awards in a
manner consistent with the Plan; grant waivers of terms,
conditions, restrictions and limitations applicable to any Award,
or accelerate the vesting or exercisability of any Award, in a
manner consistent with the Plan; construe and interpret the Plan
and any Award Agreement or other agreement or instrument entered
into under the Plan; establish, amend, or waive rules and
regulations for the Plan’s administration; and take such
other action, not inconsistent with the terms of the Plan, as the
Committee deems appropriate. To the extent permitted by
Applicable Laws, the Committee may, in its discretion, delegate to
one or more Directors or Employees any of the Committee’s
authority under the Plan. The acts of any such delegates
shall be treated hereunder as acts of the Committee with respect to
any matters so delegated.
b. Determinations. The
Committee shall have no obligation to treat Participants or
eligible Participants uniformly, and the Committee may make
determinations under the Plan selectively among Participants who
receive, or Employees, Directors or Consultants who are eligible to
receive, Awards (whether or not such Participants or eligible
Employees, Directors or Consultants are similarly
situated). All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related
orders and resolutions of the Committee shall be final, conclusive
and binding on all persons, including the Company, its
Subsidiaries, shareholders, Directors, Consultants, Employees,
Participants and their estates and beneficiaries.
c. Authority
of the Board. The Board may reserve to itself any
or all of the authority or responsibility of the Committee under
the Plan or may act as the administrator of the Plan for any and
all purposes. To the extent the Board has reserved any
such authority or responsibility or during any time that the Board
is acting as administrator of the Plan, it shall have all the
powers of the Committee hereunder, and any reference herein to the
Committee (other than in this Section 4(c)) shall include the
Board. To the extent that any action of the Board under
the Plan conflicts with any action taken by the Committee, the
action of the Board shall control.
5. Eligibility
and Participation. Each Employee, Director and Consultant is
eligible to participate in the Plan. Subject to the
provisions of the Plan, the Committee may, from time to time,
select from all eligible Employees, Directors and Consultants those
to whom Awards shall be granted and shall determine, in its sole
discretion, the nature of any and all terms permissible by
Applicable Laws and the amount of each Award. No
Employee, Director or Consultant shall have the right to be
selected to receive an Award under the Plan, or, having been so
selected, to be selected to receive future Awards.
6. Stock
Options. Subject to the terms and conditions of the Plan,
Stock Options may be granted to Participants in such number, and
upon such terms and conditions, as shall be determined by the
Committee in its sole discretion.
a. Award
Agreement. Each Stock Option shall be evidenced
by an Award Agreement that shall specify the exercise price, the
term of the Stock Option, the number of Shares covered by the Stock
Option, the conditions upon which the Stock Option shall become
vested and exercisable and such other terms and conditions as the
Committee shall determine and which are not inconsistent with the
terms and conditions of the Plan (including, but not limited to,
the minimum vesting provisions of Section 12). The Award Agreement
also shall specify whether the Stock Option is intended to be an
Incentive Stock Option or a Nonqualified Stock
Option. No dividend equivalents may be granted with
respect to the Shares underlying a Stock Option.
b. Exercise
Price. The exercise price per Share of a Stock
Option shall be determined by the Committee at the time the Stock
Option is granted and shall be specified in the related Award
Agreement; provided,
however, that in no event shall the exercise price per Share
of any Stock Option be less than one hundred percent (100%) of the
Fair Market Value of a Share on the Date of Grant.
c. Term. The
term of a Stock Option shall be determined by the Committee and set
forth in the related Award Agreement; provided, however, that in no event
shall the term of any Stock Option exceed ten (10) years from its
Date of Grant.
d. Exercisability. Stock
Options shall become vested and exercisable at such times and upon
such terms and conditions as shall be determined by the Committee
and set forth in the related Award Agreement. Such terms
and conditions may include, without limitation, the satisfaction of
(a) performance goals based on one or more Performance Objectives,
and (b) time-based vesting requirements.
e. Exercise
of Stock Options. Except as otherwise provided in
the Plan or in a related Award Agreement, a Stock Option may be
exercised for all or any portion of the Shares for which it is then
exercisable. A Stock Option shall be exercised by the delivery of a
notice of exercise to the Company or its designee in a form
specified by the Company which sets forth the number of Shares with
respect to which the Stock Option is to be exercised and full
payment of the exercise price for such Shares. The
exercise price of a Stock Option may be paid, in the discretion of
the Committee and as set forth in the applicable Award Agreement:
(i) in cash or its equivalent; (ii) by tendering (either by actual
delivery or attestation) previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the
aggregate exercise price; (iii) by a cashless exercise (including
by withholding Shares deliverable upon exercise and through a
broker-assisted arrangement to the extent permitted by Applicable
Laws); (iv) by a combination of the methods described in clauses
(i), (ii) and/or (iii); or (v) through any other method approved by
the Committee in its sole discretion. As soon as practicable after
receipt of the notification of exercise and full payment of the
exercise price, the Company shall cause the appropriate number of
Shares to be issued to the Participant.
f. Special
Rules Applicable to Incentive Stock
Options. Notwithstanding any other provision in
the Plan to the contrary:
(i) Incentive
Stock Options may be granted only to Employees of the Company and
its Subsidiaries. The terms and conditions of Incentive
Stock Options shall be subject to and comply with the requirements
of Section 422 of the Code.
(ii) To
the extent that the aggregate Fair Market Value of the Shares
(determined as of the Date of Grant) with respect to which an
Incentive Stock Option is exercisable for the first time by any
Participant during any calendar year (under all plans of the
Company and its Subsidiaries) is greater than $100,000 (or such
other amount specified in Section 422 of the Code), as calculated
under Section 422 of the Code, then the Stock Option shall be
treated as a Nonqualified Stock Option.
(iii) No
Incentive Stock Option shall be granted to any Participant who, on
the Date of Grant, is a Ten Percent Shareholder, unless (x) the
exercise price per Share of such Incentive Stock Option is at least
one hundred and ten percent (110%) of the Fair Market Value of a
Share on the Date of Grant, and (y) the term of such Incentive
Stock Option shall not exceed five (5) years from the Date of
Grant.
7. Stock
Appreciation Rights. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants in such number, and upon such terms and conditions, as
shall be determined by the Committee in its sole
discretion.
a. Award
Agreement. Each Stock Appreciation Right shall be
evidenced by an Award Agreement that shall specify the exercise
price, the term of the Stock Appreciation Right, the number of
Shares covered by the Stock Appreciation Right, the conditions upon
which the Stock Appreciation Right shall become vested and
exercisable and such other terms and conditions as the Committee
shall determine and which are not inconsistent with the terms and
conditions of the Plan (including, but not limited to, the minimum
vesting provisions of Section 12). No dividend
equivalents may be granted with respect to the Shares underlying a
Stock Appreciation Right.
b. Exercise
Price. The exercise price per Share of a Stock
Appreciation Right shall be determined by the Committee at the time
the Stock Appreciation Right is granted and shall be specified in
the related Award Agreement; provided, however, that in no event
shall the exercise price per Share of any Stock Appreciation Right
be less than one hundred percent (100%) of the Fair Market Value of
a Share on the Date of Grant.
c. Term. The
term of a Stock Appreciation Right shall be determined by the
Committee and set forth in the related Award Agreement;
provided, however, that in
no event shall the term of any Stock Appreciation Right exceed ten
(10) years from its Date of Grant.
d. Exercisability
of Stock Appreciation Rights. A Stock
Appreciation Right shall become vested and exercisable at such
times and upon such terms and conditions as may be determined by
the Committee and set forth in the related Award
Agreement. Such terms and conditions may include,
without limitation, the satisfaction of (i) performance goals based
on one or more Performance Objectives, and (ii) time-based vesting
requirements.
e. Exercise
of Stock Appreciation Rights. Except as otherwise
provided in the Plan or in a related Award Agreement, a Stock
Appreciation Right may be exercised for all or any portion of the
Shares for which it is then exercisable. A Stock Appreciation Right
shall be exercised by the delivery of a notice of exercise to the
Company or its designee in a form specified by the Company which
sets forth the number of Shares with respect to which the Stock
Appreciation Right is to be exercised. Upon exercise, a Stock
Appreciation Right shall entitle a Participant to an amount equal
to (a) the excess of (i) the Fair Market Value of a Share on the
exercise date over (ii) the exercise price per Share, multiplied by
(b) the number of Shares with respect to which the Stock
Appreciation Right is exercised. A Stock Appreciation Right may be
settled in whole Shares, cash or a combination thereof, as
specified by the Committee in the related Award
Agreement.
8. Restricted
Shares. Subject to the terms and conditions of
the Plan, Restricted Shares may be granted or sold to Participants
in such number, and upon such terms and conditions, as shall be
determined by the Committee in its sole discretion.
a. Award
Agreement. Each Restricted Shares Award shall be
evidenced by an Award Agreement that shall specify the number of
Restricted Shares, the restricted period(s) applicable to the
Restricted Shares, the conditions upon which the restrictions on
the Restricted Shares will lapse and such other terms and
conditions as the Committee shall determine and which are not
inconsistent with the terms and conditions of the Plan (including,
but not limited to, the minimum vesting provisions of Section
12).
b. Terms,
Conditions and Restrictions. The Committee shall impose such
other terms, conditions and/or restrictions on any Restricted
Shares as it may deem advisable, including, without limitation, a
requirement that the Participant pay a purchase price for each
Restricted Share, restrictions based on the achievement of specific
Performance Objectives, time-based restrictions or holding
requirements or sale restrictions placed on the Shares by the
Company upon vesting of such Restricted Shares. Unless
otherwise provided in the related Award Agreement or required by
applicable law, the restrictions imposed on Restricted Shares shall
lapse upon the expiration or termination of the applicable
restricted period and the satisfaction of any other applicable
terms and conditions.
c. Custody
of Certificates. To the extent deemed appropriate
by the Committee, the Company may retain any certificates
representing Restricted Shares in the Company’s possession
until such time as all terms, conditions and/or restrictions
applicable to such Shares have been satisfied or
lapse.
d. Rights
Associated with Restricted Shares during Restricted
Period. During any restricted period applicable
to Restricted Shares: (i) the Restricted Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or
hypothecated; (ii) unless otherwise provided in the related Award
Agreement, the Participant shall be entitled to exercise full
voting rights associated with such Restricted Shares; and (iii) the
Participant shall be entitled to all dividends and other
distributions paid with respect to such Restricted Shares during
the restricted period; provided,
however, that any dividends with respect to unvested
Restricted Shares shall be accumulated or deemed reinvested in
additional Restricted Shares, subject to the same terms and
conditions as the original Award (including service-based vesting
conditions and any Performance Objectives) until such Award is
earned and vested.
9. Restricted
Share Units. Subject to the terms and conditions
of the Plan, Restricted Share Units may be granted or sold to
Participants in such number, and upon such terms and conditions, as
shall be determined by the Committee in its sole
discretion.
a. Award
Agreement. Each Restricted Share Unit Award shall
be evidenced by an Award Agreement that shall specify the number of
units, the restricted period(s) applicable to the Restricted Share
Units, the conditions upon which the restrictions on the Restricted
Share Units will lapse, the time and method of payment of the
Restricted Share Units, and such other terms and conditions as the
Committee shall determine and which are not inconsistent with the
terms and conditions of the Plan (including, but not limited to,
the minimum vesting provisions of Section 12).
b. Terms,
Conditions and Restrictions. The Committee shall impose such
other terms, conditions and/or restrictions on any Restricted Share
Units as it may deem advisable, including, without limitation, a
requirement that the Participant pay a purchase price for each
Restricted Share Unit, restrictions based on the achievement of
specific Performance Objectives or time-based restrictions or
holding requirements.
c. Form
of Settlement. Restricted Share Units may be
settled in whole Shares, cash or a combination thereof, as
specified by the Committee in the related Award
Agreement.
d. Dividend
Equivalents. Restricted Share Units may provide the
Participant with dividend equivalents, payable either in cash or in
additional Shares, as determined by the Committee in its sole
discretion and set forth in the related Award Agreement;
provided, however, that any
dividend equivalents with respect to unvested Restricted Share
Units shall be accumulated or deemed reinvested in additional
Restricted Share Units, subject to the same terms and conditions as
the original Award (including service-based vesting conditions and
any Performance Objectives) until such Award is earned and
vested.
10. Other
Share-Based Awards. Subject to the terms and conditions of
the Plan, Other Share-Based Awards may be granted to Participants
in such number, and upon such terms and conditions, as shall be
determined by the Committee in its sole discretion. Other
Share-Based Awards are Awards that are valued in whole or in part
by reference to, or otherwise based on the Fair Market Value of,
Shares, and shall be in such form as the Committee shall determine,
including without limitation, unrestricted Shares or time-based or
performance-based units that are settled in Shares and/or
cash.
a. Award
Agreement. Each Other Share-Based Award shall be
evidenced by an Award Agreement that shall specify the terms and
conditions upon which the Other Share-Based Award shall become
vested, if applicable, the time and method of settlement, the form
of settlement and such other terms and conditions as the Committee
shall determine and which are not inconsistent with the terms and
conditions of the Plan (including, but not limited to, the minimum
vesting provisions of Section 12).
b. Form
of Settlement. An Other Share-Based Award may be
settled in whole Shares, cash or a combination thereof, as
specified by the Committee in the related Award
Agreement.
c. Dividend
Equivalents. Other Share-Based Awards may provide
the Participant with dividend equivalents, on payable either in
cash or in additional Shares, as determined by the Committee in its
sole discretion and set forth in the related Award Agreement;
provided, however, that any
dividend equivalents with respect to unvested Other Share-Based
Awards shall be accumulated or deemed reinvested, subject to the
same terms and conditions as the original Award (including
service-based vesting conditions and any Performance Objectives)
until such Award is earned and vested.
11. Cash-Based
Awards. Subject to the terms and conditions of
the Plan, Cash-Based Awards may be granted to Participants in such
amounts and upon such other terms and conditions as shall be
determined by the Committee in its sole discretion. Each Cash-Based
Award shall be evidenced by an Award Agreement that shall specify
the payment amount or payment range, the time and method of
settlement and the other terms and conditions, as applicable, of
such Award which may include, without limitation, restrictions
based on the achievement of specific Performance Objectives and
such other terms and conditions as the Committee shall determine
and which are not inconsistent with the terms and conditions of the
Plan (including, but not limited to, the minimum vesting provisions
of Section 12).
12. Minimum
Vesting Provisions. Subject to Sections 19, 21
and 22(b) of the Plan, (a) no condition on vesting or
exercisability of an Award, whether based on continued employment
or other service or based upon the achievement of Performance
Objectives, shall be based on service or performance (as
applicable) over a period of less than one year, and (b) upon and
after such minimum one-year period, restrictions on vesting or
exercisability may lapse on a pro-rated, graded, or cliff basis as
specified in the Award Agreement; provided, however, that Awards covering
up to five percent (5%) of the Shares reserved for issuance
pursuant to Section 3(a) may be granted under the Plan as
unrestricted Shares or otherwise as Awards with a performance
period or vesting period of less than one year.
13. Compliance
with Section 409A. Awards granted under the Plan
shall be designed and administered in such a manner that they are
either exempt from the application of, or comply with, the
requirements of Section 409A of the Code. To the extent
that the Committee determines that any award granted under the Plan
is subject to Section 409A of the Code, the Award Agreement shall
incorporate the terms and conditions necessary to avoid the
imposition of an additional tax under Section 409A of the Code upon
a Participant. Notwithstanding any other provision of
the Plan or any Award Agreement (unless the Award Agreement
provides otherwise with specific reference to this Section
13): (i) an Award shall not be granted, deferred,
accelerated, extended, paid out, settled, substituted or modified
under the Plan in a manner that would result in the imposition of
an additional tax under Section 409A of the Code upon a
Participant; and (ii) if an Award is subject to Section 409A of the
Code, and if the Participant holding the award is a
“specified employee” (as defined in Section 409A of the
Code, with such classification to be determined in accordance with
the methodology established by the Company), then, to the extent
required to avoid the imposition of an additional tax under Section
409A of the Code upon a Participant, no distribution or payment of
any amount shall be made before the date that is six (6) months
following the date of such Participant’s “separation
from service” (as defined in Section 409A of the Code) or, if
earlier, the date of the Participant’s death. Although the
Company intends to administer the Plan so that Awards will be
exempt from, or will comply with, the requirements of Section 409A
of the Code, the Company does not warrant that any Award under the
Plan will qualify for favorable tax treatment under Section 409A of
the Code or any other provision of federal, state, local, or
non-United States law. The Company shall not be liable to any
Participant for any tax, interest, or penalties the Participant
might owe as a result of the grant, holding, vesting, exercise, or
payment of any Award under the Plan.
14. Compliance
with Section 162(m).
a. In
General. Notwithstanding anything in the Plan to
the contrary, Awards may be granted in a manner that is intended to
qualify for the Performance-Based Exception. As determined by the
Committee in its sole discretion, the grant, vesting,
exercisability and/or settlement of any Restricted Shares,
Restricted Share Units, Other Share-Based Awards and Cash-Based
Awards intended to qualify for the Performance-Based Exception
shall be conditioned on the attainment of one or more Performance
Objectives during a performance period established by the Committee
and must satisfy the requirements of this Section 14.
b. Performance
Objectives. If an Award is intended to qualify for the
Performance-Based Exception, then the Performance Objectives shall
be based on specified levels of or growth in one or more of the
following criteria: (i) earnings per share; (ii) revenues or
margins; (iii) cash flow; (iv) operating margin; (v) return on net
assets, investment, capital, or equity; (vi) economic value added;
(vii) direct contribution; (viii) net income; pretax income;
earnings before interest and taxes; earnings before interest,
taxes, depreciation and amortization; earnings after interest
expense and before extraordinary or special items; operating
income; income before interest income or expense, unusual items and
income taxes, local, state or federal and excluding budgeted and
actual bonuses which might be paid under any ongoing bonus plans of
the Company; (ix) working capital; (x) management of fixed costs or
variable costs; (xi) identification or consummation of investment
opportunities or completion of specified projects in accordance
with corporate business plans, including strategic mergers,
acquisitions or divestitures; (xii) total shareholder return;
(xiii) debt reduction; (xiv) market share; (xv) entry into new
markets, either geographically or by business unit; (xvi) customer
retention and satisfaction; (xvii) strategic plan development and
implementation, including turnaround plans; and/or (xviii) the Fair
Market Value of a Share.
c. Establishment
of Performance Objectives. With respect to Awards
intended to qualify for the Performance-Based Exception, the
Committee shall establish: (i) the applicable Performance
Objectives and performance period, and (ii) the formula for
computing the payout. Such terms and conditions shall be
established in writing while the outcome of the applicable
performance period is substantially uncertain, but in no event
later than the earlier of: (x) ninety days after the beginning of
the applicable performance period; or (y) the expiration of
twenty-five percent (25%) of the applicable performance
period.
d. Certification
of Performance. With respect to any Award
intended to qualify for the Performance-Based Exception, the
Committee shall certify in writing whether the applicable
Performance Objectives and other material terms imposed on such
Award have been satisfied, and, if they have, ascertain the amount
of the payout or vesting of the Award. Notwithstanding
any other provision of the Plan, payment or vesting of any such
Award shall not be made until the Committee certifies in writing
that the applicable Performance Objectives and any other material
terms of such Award were in fact satisfied in a manner conforming
to applicable regulations under Section 162(m) of the
Code.
e. Adjustments. If
the Committee determines that a change in the Company’s
business, operations, corporate structure or capital structure, or
in the manner in which it conducts its business, or other events or
circumstances render the Performance Objectives unsuitable, the
Committee may in its discretion adjust such Performance Objectives
or the related level of achievement, in whole or in part, as the
Committee deems appropriate and equitable, including, without
limitation, to exclude the effects of events that are unusual in
nature or infrequent in occurrence (as determined in accordance
with applicable financial accounting standards), cumulative effects
of tax or accounting changes, discontinued operations,
acquisitions, divestitures and material restructuring or asset
impairment charges; provided,
however, that in no event will any such adjustment be made
that would cause an Award intended to qualify for the
Performance-Based Exception to fail to so qualify.
f. Negative
Discretion. With respect to any Award intended to qualify
for the Performance-Based Exception, after the date that the
Performance Objectives are required to be established in writing
pursuant to Section 14(c), the Committee shall not have discretion
to increase the amount of compensation that is payable upon
achievement of the designated Performance
Objectives. However, the Committee may, in its sole
discretion, reduce the amount of compensation that is payable upon
achievement of the designated Performance Objectives.
15. Transferability. Except
as otherwise determined by the Committee, no Award or dividend
equivalents paid with respect to any Award shall be transferable by
the Participant except by will or the laws of descent and
distribution; provided,
that if so determined by the Committee, each Participant may, in a
manner established by the Board or the Committee, designate a
beneficiary to exercise the rights of the Participant with respect
to any Award upon the death of the Participant and to receive
Shares or other property issued or delivered under such
Award. Except as otherwise determined by the Committee,
Stock Options and Stock Appreciation Rights will be exercisable
during a Participant’s lifetime only by the Participant or,
in the event of the Participant’s legal incapacity to do so,
by the Participant’s guardian or legal representative acting
on behalf of the Participant in a fiduciary capacity under state
law and/or court supervision.
16. Adjustments.
In the event of any equity restructuring (within the meaning of
Financial Accounting Standards Board Accounting Standards
Codification Topic 718, or any successor thereto), such as a stock
dividend, stock split, reverse stock split, spinoff, rights
offering, or recapitalization through a large, nonrecurring cash
dividend, the Committee shall cause there to be an equitable
adjustment in the number and kind of Shares specified in Section 3
of the Plan and, with respect to outstanding Awards, in the number
and kind of Shares subject to outstanding Awards and the exercise
price or other price of Shares subject to outstanding Awards, in
each case to prevent dilution or enlargement of the rights of
Participants. In the event of any other change in
corporate capitalization, or in the event of a merger,
consolidation, liquidation, or similar transaction, the Committee
may, in its sole discretion, cause there to be an equitable
adjustment as described in the foregoing sentence, to prevent
dilution or enlargement of rights; provided, however, that, unless otherwise
determined by the Committee, the number of Shares subject to any
Award shall always be rounded down to a whole
number. Notwithstanding the foregoing, the Committee
shall not make any adjustment pursuant to this Section 16 that
would (i) cause any Stock Option intended to qualify as an ISO to
fail to so qualify, (ii) cause an Award that is otherwise exempt
from Section 409A of the Code to become subject to Section 409A, or
(iii) cause an Award that is subject to Section 409A of the Code to
fail to satisfy the requirements of Section 409A. The
determination of the Committee as to the foregoing adjustments, if
any, shall be conclusive and binding on all Participants and any
other persons claiming under or through any
Participant.
17. Fractional
Shares. The Company shall not be required to issue or
deliver any fractional Shares pursuant to the Plan and, unless
otherwise provided by the Committee, fractional shares shall be
settled in cash.
18. Withholding
Taxes. To the extent required by Applicable Laws, a
Participant shall be required to satisfy, in a manner satisfactory
to the Company or Subsidiary, as applicable, any withholding tax
obligations that arise by reason of the exercise of a Stock Option
or Stock Appreciation Right, the vesting of or settlement of Shares
under an Award, an election pursuant to Section 83(b) of the
Code or otherwise with respect to an Award. The Company and its
Subsidiaries shall not be required to issue or deliver Shares, make
any payment or to recognize the transfer or disposition of Shares
until such obligations are satisfied. The Committee may permit or
require these obligations to be satisfied by having the Company
withhold a portion of the Shares that otherwise would be issued or
delivered to a Participant upon exercise of a Stock Option or Stock
Appreciation Right or upon the vesting or settlement of an Award,
or by tendering Shares previously acquired, in each case having a
Fair Market Value equal to the amount required to be withheld. Any
such elections are subject to such conditions or procedures as may
be established by the Committee and may be subject to disapproval
by the Committee. In no event will the Fair Market Value of the
Shares to be withheld or tendered pursuant to this Section 18 to
satisfy applicable withholding taxes exceed the amount of taxes
required to be withheld based on the maximum statutory tax rates in
the applicable taxing jurisdictions.
19. Foreign
Participants. Without amending the Plan, the Committee may
grant Awards to Participants who are foreign nationals, or who are
subject to Applicable Laws of one or more non-United States
jurisdictions, on such terms and conditions different from those
specified in the Plan as may in the judgment of the Committee be
necessary or desirable to foster and promote achievement of the
purposes of the Plan, and, in furtherance of such purposes, the
Committee may approve such sub-plans, supplements to or amendments,
modifications, restatements or alternative versions of this Plan as
may be necessary or advisable to comply with provisions of
Applicable Laws of other countries in which the Company or its
Subsidiaries operate or have Employees or Consultants.
20. Compensation
Recovery Policy. Any Award granted to a
Participant shall be subject to forfeiture or repayment pursuant to
the terms of any applicable compensation recovery policy maintained
by the Company from time to time, including any such policy that
may be maintained to comply with the Dodd-Frank Wall Street Reform
and Consumer Protection Act or any rules or regulations issued by
the SEC or applicable securities exchange.
21. Change
in Control.
a. Committee
Discretion. The Committee may, in its sole
discretion and without the consent of Participants, either by the
terms of the Award Agreement applicable to any Award or by
resolution adopted prior to the occurrence of the Change in
Control, determine whether and to what extent outstanding Awards
under the Plan shall be assumed, converted or replaced by the
resulting entity in connection with a Change in Control (or, if the
Company is the resulting entity, whether such Awards shall be
continued by the Company), in each case subject to equitable
adjustments in accordance with Section 16 of the Plan.
b. Awards
that are Assumed. To the extent outstanding
Awards granted under this Plan are assumed, converted or replaced
by the resulting entity in the event of a Change in Control (or, if
the Company is the resulting entity, to the extent such Awards are
continued by the Company) as provided in Section 21(a) of the Plan,
then, except as otherwise provided in the applicable Award
Agreement or in another written agreement with the Participant, or
in a Company severance plan applicable to the Participant: (i) any
outstanding Awards that are subject to Performance Objectives shall
be converted by the resulting entity, as if “target”
performance had been achieved as of the date of the Change in
Control, and shall continue to vest during the remaining
performance period or other period of required service, and (ii)
all other Awards shall continue to vest during the applicable
vesting period, if any. Notwithstanding the preceding sentence, if
a Participant incurs a Qualified Termination, then upon such
termination (A) all outstanding Awards held by the Participant that
may be exercised shall become fully exercisable and shall remain
exercisable for the full duration of their term, (B) all
restrictions with respect to outstanding Awards shall lapse, with
any specified Performance Objectives with respect to outstanding
Awards deemed to be satisfied at the “target” level,
and (C) all outstanding Awards shall become fully
vested.
c. Awards
that are not Assumed. To the extent
outstanding Awards granted under this Plan are not assumed,
converted or replaced by the resulting entity in connection with a
Change in Control (or, if the Company is the resulting entity, to
the extent such Awards are not continued by the Company) in
accordance with Section 21(a) of the Plan, then effective
immediately prior to the Change in Control, except as otherwise
provided in the applicable Award Agreement or in another written
agreement with the Participant, or in a Company severance plan
applicable to the Participant: (i) all outstanding Awards held by
the Participant that may be exercised shall become fully
exercisable and shall remain exercisable for the full duration of
their term, (ii) all restrictions with respect to outstanding
Awards shall lapse, with any specified Performance Objectives with
respect to outstanding Awards deemed to be satisfied at the
“target” level, and (iii) all outstanding Awards shall
become fully vested.
d. Cancellation
Right. The Committee may, in its sole
discretion and without the consent of Participants, either by the
terms of the Award Agreement applicable to any Award or by
resolution adopted prior to the occurrence of the Change in
Control, provide that any outstanding Award (or a portion thereof)
shall, upon the occurrence of such Change in Control, be cancelled
in exchange for a payment in cash or other property (including
shares of the resulting entity in connection with a Change in
Control) in an amount equal to the excess, if any, of the Fair
Market Value of the Shares subject to the Award, over any exercise
price related to the Award, which amount may be zero if the Fair
Market Value of a Share on the date of the Change in Control does
not exceed the exercise price per Share of the applicable
Awards.
22. Amendment,
Modification and Termination.
a. In
General. The Board may at any time and from time
to time, alter, amend, suspend or terminate the Plan in whole or in
part; provided,
however, that no alteration
or amendment that requires shareholder approval in order for the
Plan to comply with any rule promulgated by the SEC or any
securities exchange on which Shares are listed or any other
Applicable Laws shall be effective unless such amendment shall be
approved by the requisite vote of shareholders of the Company
entitled to vote thereon within the time period required under such
applicable listing standard or rule.
b. Adjustments
to Outstanding Awards. The Committee may in its
sole discretion at any time (i) provide that all or a portion of a
Participant’s Stock Options, Stock Appreciation Rights and
other Awards in the nature of rights that may be exercised shall
become fully or partially exercisable; (ii) provide that all or a
part of the time-based vesting restrictions on all or a portion of
the outstanding Awards shall lapse, and/or that any Performance
Objectives or other performance-based criteria with respect to any
Awards shall be deemed to be wholly or partially satisfied; or
(iii) waive any other limitation or requirement under any such
Award, in each case, as of such date as the Committee may, in its
sole discretion, declare. Unless otherwise determined by
the Committee, any such adjustment that is made with respect to an
Award that is intended to qualify for the Performance-Based
Exception shall be made at such times and in such manner as will
not cause such Awards to fail to qualify under the
Performance-Based Exception. Additionally, the Committee shall not
make any adjustment pursuant to this Section 22(b) that would cause
an Award that is otherwise exempt from Section 409A of the Code to
become subject to Section 409A, or that would cause an Award
that is subject to Section 409A of the Code to fail to satisfy
the requirements of Section 409A.
c. Prohibition
on Repricing. Except for adjustments made
pursuant to Sections 16 or 21, the Board or the Committee will not,
without the further approval of the shareholders of the Company,
authorize the amendment of any outstanding Stock Option or Stock
Appreciation Right to reduce the exercise price. No
Stock Option or Stock Appreciation Right will be cancelled and
replaced with an Award having a lower exercise price, or for
another Award, or for cash without further approval of the
shareholders of the Company, except as provided in Sections 16 or
21. Furthermore, no Stock Option or Stock Appreciation
Right will provide for the payment, at the time of exercise, of a
cash bonus or grant or sale of another Award without further
approval of the shareholders of the Company. This Section 22(c) is
intended to prohibit the repricing of “underwater”
Stock Options or Stock Appreciation Rights without shareholder
approval and will not be construed to prohibit the adjustments
provided for in Sections 16 or 21.
d. Effect
on Outstanding Awards. Notwithstanding any other
provision of the Plan to the contrary (other than Sections 16, 21,
22(b) and 24(d)), no termination, amendment, suspension, or
modification of the Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under the
Plan, without the written consent of the Participant holding such
Award; provided that the
Committee may modify an ISO held by a Participant to disqualify
such Stock Option from treatment as an “incentive stock
option” under Section 422 of the Code without the
Participant’s consent.
23. Applicable
Laws. The obligations of the Company with respect
to Awards under the Plan shall be subject to all Applicable Laws
and such approvals by any governmental agencies as the Committee
determines may be required. The Plan and each Award
Agreement shall be governed by the laws of the State of Nevada,
excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of the Plan to
the substantive law of another jurisdiction.
24. Miscellaneous.
a. Deferral
of Awards. Except with respect to Stock Options,
Stock Appreciation Rights and Restricted Shares, the Committee may
permit Participants to elect to defer the issuance or delivery of
Shares or the settlement of Awards in cash under the Plan pursuant
to such rules, procedures or programs as it may establish for
purposes of the Plan. The Committee also may provide that deferred
issuances and settlements include the payment or crediting of
dividend equivalents or interest on the deferral amounts. All
elections and deferrals permitted under this provision shall comply
with Section 409A of the Code, including setting forth the
time and manner of the election (including a compliant time and
form of payment), the date on which the election is irrevocable,
and whether the election can be changed until the date it is
irrevocable.
b. No
Right of Continued Service. The Plan shall not
confer upon any Participant any right with respect to continuance
of employment or other service with the Company or any Subsidiary,
nor shall it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such
Participant’s employment or other service at any
time. Awards granted under the Plan shall not be
considered a part of any Participant’s normal or expected
compensation or salary for any purposes, including, but not limited
to, calculating any severance, resignation, termination,
redundancy, dismissal, end of service payments, bonuses,
long-service awards, pension or retirement or welfare benefits or
similar payments, and in no event shall any Award be considered as
compensation for, or relating in any way to, past services for the
Company or any Subsidiary or affiliate.
c. Unfunded,
Unsecured Plan. Neither a Participant nor any
other person shall, by reason of participation in the Plan, acquire
any right or title to any assets, funds or property of the Company
or any Subsidiary, including without limitation, any specific
funds, assets or other property which the Company or any Subsidiary
may set aside in anticipation of any liability under the Plan. A
Participant shall have only a contractual right to an Award or the
amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan
shall constitute a guarantee that the assets of the Company or any
Subsidiary shall be sufficient to pay any benefits to any
person.
d. Severability. If
any provision of the Plan is or becomes invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended or limited in scope
to conform to Applicable Laws or, in the discretion of the
Committee, it shall be stricken and the remainder of the Plan shall
remain in full force and effect.
e. Acceptance
of Plan. By accepting any benefit under the Plan,
each Participant and each person claiming under or through any such
Participant shall be conclusively deemed to have indicated their
acceptance and ratification of, and consent to, all of the terms
and conditions of the Plan and any action taken under the Plan by
the Committee, the Board or the Company, in any case in accordance
with the terms and conditions of the Plan.
f. Successors. All
obligations of the Company under the Plan and with respect to
Awards shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or other event, or a sale
or disposition of all or substantially all of the business and/or
assets of the Company and references to the “Company”
herein and in any Award Agreements shall be deemed to refer to such
successors.
[END OF
DOCUMENT]
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RELM WIRELESS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JUNE 15, 2017 AT 2:00 P.M., LOCAL
TIME
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CONTROL ID:
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REQUEST ID:
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The
undersigned stockholder(s) of RELM Wireless Corporation, a Nevada
corporation (the “Company”), hereby revoking any proxy
heretofore given, does hereby appoint Timothy A. Vitou and William
P. Kelly, and each of them, with full power to act alone, the true
and lawful attorneys-in-fact and proxies of the undersigned, with
full powers of substitution, and hereby authorize(s) them and each
of them, to represent the undersigned and to vote all shares of
common stock of the Company that the undersigned is entitled to
vote at the 2017 Annual Meeting of Stockholders of the Company to
be held on June 15, 2017 at 2:00 p.m., local time, at the W Fort
Lauderdale, 401 N Fort Lauderdale Beach Blvd., Fort Lauderdale,
Florida 33304, and any and all adjournments and postponements
thereof, with all powers the undersigned would possess if
personally present, on the following proposals, each as described
more fully in the accompanying proxy statement, and any other
matters coming before said meeting.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete the
reverse portion of this Proxy Card and Fax to 202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/RWC
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OF
RELM WIRELESS CORPORATION
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE: ☒
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR ALL
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WITHHOLD
ALL
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FOR ALL
EXCEPT
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Election of Directors:
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D.
Kyle Cerminara
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Lewis
M. Johnson
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☐
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CONTROL ID:
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General
E. Gray Payne
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☐
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REQUEST ID:
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Charles
T. Lanktree
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Ryan
R.K. Turner
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John
W. Struble
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Michael
R. Dill
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☐
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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To ratify the appointment of Moore Stephens Lovelace, P.A. as our
independent registered public accounting firm for fiscal
2017.
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☐
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☐
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Proposal 3
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FOR
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AGAINST
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ABSTAIN
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To approve, on an advisory, non-binding basis, the compensation of
our Named Executive Officers.
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☐
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☐
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Proposal 4
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ONE-YEAR FREQUENCY
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TWO-YEAR FREQUENCY
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THREE-YEAR FREQUENCY
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ABSTAIN
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To approve, on an advisory, non-binding basis, the frequency of the
advisory vote on the compensation of our Named Executive
Officers.
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☐
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Proposal 5
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FOR
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AGAINST
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ABSTAIN
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To approve the RELM Wireless Corporation 2017 Incentive
Compensation Plan.
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☐
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Proposal 6
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FOR
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AGAINST
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ABSTAIN
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To transact such other business properly brought before the meeting
and any adjournment or postponement of the meeting.
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING: ☐
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This proxy will be voted in the manner directed herein by the
undersigned.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE, AND IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED, “FOR” THE
ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN PROPOSAL 1,
“FOR” RATIFICATION OF THE AUDITOR APPOINTMENT IN
PROPOSAL 2, “FOR” THE ADVISORY APPROVAL OF THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, “FOR” A
THREE-YEAR FREQUENCY FOR THE ADVISORY VOTE ON THE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS, “FOR” THE APPROVAL OF THE
RELM WIRELESS CORPORATION 2017 INCENTIVE COMPENSATION PLAN
AND IN THE DISCRETION OF THE
PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW.
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MARK HERE FOR ADDRESS CHANGE ☐ New Address (if applicable):
________________________________________________________
IMPORTANT: Please sign exactly
as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name
by authorized person.
Dated: ________________________, 2017
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(Print Name of Stockholder and/or
Joint Tenant)
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(Signature of Stockholder)
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(Second Signature if held jointly)
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