DEF 14A of Mind Technology, Inc, Aug 7, 2023

DEF 14A of Mind Technology, Inc

Filed Aug 7, 2023 · FY20230001437749-23-022354

Open on EDGAR

  1. TO BE HELD AUGUST 30, 2023

    | DIRECTOR COMPENSATION | 21 | | General | 21 | | Retainer and Fees | 21 | | Equity-Based Compensation | 22 | | PROPOSAL 2: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | 23 | | PROPOSAL 3: RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 25 | | PROPOSAL 4: APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT | 26 | | General | 26 | | Reasons for the Reverse Stock Split | 26 | | Risks Associated with the Reverse Stock Split | 27 | | Procedure for Effecting the Reverse Stock Split | 28 | | Determination of the Reverse Stock Split Ratio | 28 | | Effects of the Reverse Stock Split | 29 | | No Appraisal Rights | 30 | | Accounting Matters | 30 | | Material United States Federal Income Tax Considerations | 30 | | FEES AND EXPENSES OF MOSS ADAMS LLP | 32 | | AUDIT COMMITTEE REPORT | 33 | | 2023 ANNUAL REPORT | 34 | | DELINQUENT SECTION 16(A) REPORTS | 34 | | STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS | 34 |

  2. Our Board

    Our Board

  3. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS Six individuals will be elected at the Annual Meeting to serve as directors until the next annual meeting, each until their respective successors are duly elected and qualified. Stockholders may not cumulate their votes in the election of our directors. Our Board has nominated the six individuals listed below to serve until our 2024 Annual Meeting. All of the director nominees are currently serving on our Board. Certain individual qualifications and skills of our directors that contribute to our Board’s effectiveness as a whole are described below in each director’s biographical information below. The persons appointed as proxies in the enclosed proxy card will vote such proxy “FOR” the persons nominated for election to our Board, except to the extent authority to vote is expressly withheld with respect to one or more nominees. If any nominee is unable to serve as a director for any reason, all shares represented by proxies pursuant to the enclosed proxy card, absent contrary instructions, will be voted for any substitute nominee designated by our Board. Our Board recommends a vote “FOR” the election of each of the director nominees identified below.

  4. Information About Director Nominees

    Information About Director Nominees The following table sets forth the names and ages, as of July 31, 2023, of our current directors, each of whom is a director nominee. Our directors are elected annually and serve one-year terms or until their death, resignation or removal.

  5. Information About Director Nominees

    | Name | Age | Positions Held | Director Since | | Peter H. Blum | 66 | Non-Executive Chairman | 2000 | | Robert P. Capps | 69 | Director, President, and Chief Executive Officer | 2004 | | William H. Hilarides | 64 | Director | 2019 | | Thomas S. Glanville | 65 | Director | 2015 | | Nancy J. Harned | 59 | Director | 2022 | | Alan P. Baden | 75 | Director | 2022 |

  6. Information About Director Nominees

    Peter H. Blum has been a member of our Board since July 2000 and was elected Non-Executive Chairman of our Board on July 8, 2004. Mr. Blum is Co-Chief Executive Officer and Co-President of Ladenburg Thalmann & Co., Inc., an investment banking firm, where he has been employed since 2004. Prior to 2004, Mr. Blum was a senior investment banker with various Wall Street firms. Mr. Blum started his career with Arthur Young & Co. as a Certified Public Accountant and received a Bachelor of Business Administration degree from the University of Wisconsin-Madison. Mr. Blum has over 30 years of experience as an investment banker in the energy industry during which time he provided consultation and advice to a variety of companies. He also has extensive experience in financial and capital markets. Our Board believes that Mr. Blum’s experience supports its efforts in overseeing and advising on corporate strategy and financial matters, enabling him to effectively serve as a director on our Board. Robert P. Capps has been a member of our Board since July 2004. In June 2006, Mr. Capps was appointed as our Executive Vice President of Finance and Chief Financial Officer. In September 2015, Mr. Capps was named to the additional position of Co-Chief Executive Officer. In August 2021, Mr. Capps was appointed to sole Chief Executive Officer and President of the Company. From July 1999 until May 2006, he was the Executive Vice President and Chief Financial Officer of TeraForce Technology Corporation, a publicly-held provider of defense electronics products. From 1996 to 1999, Mr. Capps was Executive Vice President and Chief Financial Officer of Dynamex, Inc., a NASDAQ-listed supplier of same-day transportation services. Prior to his employment with Dynamex, Mr. Capps was Executive Vice President and Chief Financial Officer of Hadson Corporation, a New York Stock Exchange-listed energy company. Mr. Capps was formerly with Arthur Young & Co. Mr. Capps holds a Bachelor of Accountancy degree from the University of Oklahoma. Mr. Capps has over 35 years of financial experience, including more than 20 years as chief financial officer for public companies, including ours. Our Board believes that Mr. Capps’ experience allows him to offer valuable perspectives on our corporate planning, budgeting, and financial reporting, thereby enabling him to effectively serve as a director on our Board. Vice Admiral William H. Hilarides (retired) was appointed to our Board in August 2019 on the recommendation of the Nominating Committee. Mr. Hilarides is a graduate of the U.S. Naval Academy and was commander of Naval Sea Systems Command (“NAVSEA”) prior to his retirement in 2016. As NAVSEA commander, he oversaw a global workforce of more than 56,000 military and civilian personnel responsible for the development, delivery and maintenance of the Navy’s ships, submarines and systems. He held a number of other posts during his career, including director, Advanced Submarine Research and Development, program manager of the SSGN Program, program executive officer for submarines and commander of the nuclear submarine USS Key West. Our Board believes that this experience managing large complex organizations and knowledge of sophisticated marine technologies enables Mr. Hilarides to effectively serve as a director on our Board. Thomas S. Glanville was appointed to our Board in September 2015 based on the recommendation of the Nominating Committee. Mr. Glanville is the managing partner of Eschelon Advisors, LP, and affiliates, providing energy and private equity investment and advisory services. From 1999-2002, Mr. Glanville served as vice president of technology and new ventures for Reliant Energy, Inc., one of the world’s largest international energy services companies, and its affiliate, Reliant Resources, Inc. Mr. Glanville currently serves on the board of directors of the privately-held oil and gas exploration and production companies Crescent Pass Energy Holdings, L.L.C. and Strand Energy, L.L.C. Since May 2021, Mr. Glanville has served on the board of Enchant Energy Corporation, a private company developing carbon capture projects, and is currently its Vice Chair. Mr. Glanville served from 2001 to 2022 as a Director, including service as Chair of the Audit/Finance Committee and member of the Compensation and Corporate Governance Committees of Itron, Inc., a publicly traded technology and services company dedicated to the resourceful use of energy and water. He also served as Chairman of the Texas Tri-Cities branch (Houston, Austin, San Antonio) of the National Association of Corporate Directors (NACD) from 2011 to 2016. Mr. Glanville graduated with a Master of Science degree in Mineral Economics from the Colorado School of Mines and holds a Bachelor of Arts degree in Economics from the University of Virginia. Our Board believes that Mr. Glanville’s operational and financial experience in various senior management positions and his experience as a director of a public company enable him to effectively serve as a director on our Board. Nancy J. Harned was appointed to our Board in May 2022 based on the recommendation of the Nominating Committee. Ms. Harned retired in 2020 from a 34-year career as a civilian employee of the Department of Defense. She served from 2007-2020 in various Senior Executive Service positions (equivalent to general officer or flag officer rank in the U.S. Armed Forces). From 2015-2020 she was the Executive Director for the Navy Expeditionary Combat Command, responsible to man, train and equip the Navy’s 19,000+ Expeditionary Sailors. Her other Senior Executive assignments included the Office of the Assistant Secretary of the Army (Acquisition, Logistics and Technology), the Office of the Assistant Secretary of Defense for Research and Engineering, and Deputy Director for Programming on the Chief of Naval Operations staff, responsible to develop the annual $125B U.S. Navy budget. From 2001-2007 Ms. Harned served in a variety of positions on the Chief of Naval Operations staff, and from 1993-2001 she led sonar research programs at the Office of Naval Research. She began her career at the Naval Air Warfare Center, developing sonar signal processing techniques for anti-submarine warfare. She has her bachelors and masters degrees in electrical engineering. Our Board believes that Ms. Harned’s significant senior leadership and industry-specific experience enables her to effectively serve as a director on our Board. Alan P. Baden was appointed to our Board in May 2022 based on the recommendation of the Nominating Committee. Mr. Baden is a retired corporate finance and securities attorney. Mr. Baden practiced law in Ohio, Texas and New York. From 2014 to 2021, Mr. Baden was a partner and then counsel in the firm of Thompson & Knight L.L.P., which merged with Holland & Knight L.L.P. in 2021, where he was a consulting counsel until his retirement in 2022. Prior to joining Thompson & Knight, Mr. Baden was a partner in the Houston and New York offices of the law firm of Vinson & Elkins, where he practiced for over 35 years. Mr. Baden is a graduate of the Wharton School of the University of Pennsylvania with a BS in Economics degree and Case Western Reserve Law School with a JD degree. Our Board believes that Mr. Baden’s extensive legal and financial experience as partner in various prestigious law firms enables him to effectively serve as a director on our Board.

  7. Summary Compensation Table for Fiscal Year Ended January 31, 2023

    Summary Compensation Table for Fiscal Year Ended January 31, 2023 The following table summarizes, with respect to our Named Executive Officers, information relating to the compensation earned for services rendered in all capacities during fiscal years 2023 and 2022.

  8. Summary Compensation Table for Fiscal Year Ended January 31, 2023

    | Name and Principal Position | Fiscal Year Ended January 31 | Salary | Stock Awards (2) | Option Awards (3) | All Other Compensation (4) | Total | | | | ($) | | ($) | ($) | ($) | | Robert P. Capps | 2023 | 285,000 | — | 48,767 | 13,434 | 347,201 | | President, CEO | 2022 | 262,500 | — | 72,487 | 12,838 | 347,825 | | Mark A. Cox | 2023 | 230,000 | — | 29,260 | 11,234 | 270,494 | | Vice President and CFO | 2022 | 218,000 | — | 41,421 | 10,658 | 270,079 | | Dennis P. Morris | 2023 | 225,625 | — | — | 105,975 | 331,600 | | Former Vice President and COO (1) | 2022 | 285,000 | — | 62,132 | 82,785 | 429,917 |

  9. Summary Compensation Table for Fiscal Year Ended January 31, 2023

    | (1) Mr. Morris resigned, by mutual agreement, from his position of Vice President and Chief Operating Officer on April 15, 2022. The amounts reported for 2023 include all compensation that was paid to Mr. Morris during fiscal 2023. | | (2) There were no stock awards granted in 2023 or 2022. | | (3) This column includes the grant date fair value of the option awards granted to our Named Executive Officers in fiscal 2023 and 2022, computed in accordance with FASB ASC Topic 718 and determined without regard to estimated forfeitures. These amounts reflect our accounting valuation of these awards, and do not correspond to any actual value that may be recognized by our Named Executive Officers. The assumptions used in the calculation of these amounts are discussed in Note 18 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. The fiscal 2023 option awards were granted on August 3, 2022 to Messrs. Capps and Cox. The fiscal 2022 option awards were granted on August 5, 2021 to Messrs. Capps, Cox and Morris. See “Executive Compensation--Narrative Disclosure to Summary Compensation Table--Long-Term Equity-Based Incentives” for a description of the material features of the option awards granted to our Named Executive Officers in fiscal 2023 and 2022. | | (4) The amounts reflected in the “All Other Compensation” column for fiscal 2023 consist of the following: |

  10. Summary Compensation Table for Fiscal Year Ended January 31, 2023

    | Name | Life Insurance Premiums | 401(k) Matching Contributions | Other(a) | Total | | | ($) | ($) | ($) | ($) | | Robert P. Capps | 2,034 | 11,400 | — | 13,434 | | Mark A. Cox | 2,034 | 9,200 | — | 11,234 | | Dennis P. Morris | 809 | 4,322 | 100,844 | 105,975 |

  11. Summary Compensation Table for Fiscal Year Ended January 31, 2023

    | (a) Reflects the yearly bonus of $71,250 stipulated in Mr. Morris’ employment agreement dated April 21, 2020, and a $29,594 payout for unused vacation upon Mr. Morris’ termination. |

  12. Outstanding Equity Awards Value at Fiscal 2023 Year-End Table

    Outstanding Equity Awards Value at Fiscal 2023 Year-End Table The following table provides information concerning all equity awards granted to our Named Executive Officers that were outstanding as of January 31, 2023.

  13. Outstanding Equity Awards as of January 31, 2023

    Outstanding Equity Awards as of January 31, 2023

  14. Outstanding Equity Awards as of January 31, 2023

    | | Option Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Robert P. Capps | 60,000 | — | 5.00 | 5/27/2025 | | | 60,000 | — | 2.80 | 1/12/2026 | | | 90,000 | — | 4.62 | 2/15/2027 | | | 50,000 | — | 3.79 | 7/12/2028 | | | 50,000 | — | 4.19 | 7/23/2029 | | | — | 46,667(1) | 1.97 | 8/05/2031 | | | — | 100,000(2) | 1.97 | 8/05/2031 | | Mark A. Cox | 30,000 | — | 4.64 | 2/22/2027 | | | 20,000 | — | 3.79 | 7/12/2028 | | | 20,000 | — | 4.19 | 7/23/2029 | | | 13,333 | 26,667(1) | 1.97 | 8/05/2031 | | | — | 60,000(2) | 1.97 | 8/03/2032 | | Dennis P. Morris | 250,000(3) | — | 1.25 | 3/31/2030 | | | 60,000(3) | — | 1.97 | 8/05/2031 |

  15. Outstanding Equity Awards as of January 31, 2023

    | (1) One-half of the unexercisable stock options granted on August 5, 2021 became excercisable on August 5, 2023, and one-half will become exercisable on August 5, 2024, so long as the applicable executive remains employed through the respective vesting date. | | (2) One-third of the unexercisable stock options granted on August 3, 2022 became exercisable on August 3, 2023, one-third will become exercisable on August 3, 2024, and one-third will become exercisable on August 3, 2025, so long as the applicable executive remains employed through the respective vesting date. | | (3) Pursuant to the terms of the Separation Agreement, all of Mr. Morris’ outstanding options vested as of the date of the Separation Agreement. |

  16. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Each year, the Compensation Committee reviews the total compensation paid to our non-employee directors and the Non-Executive Chairman of our Board. The purpose of the review is to ensure that the level of compensation is appropriate to attract and retain a diverse group of directors with the breadth of experience necessary to perform our Board’s duties and to fairly compensate directors for their service. The review includes the consideration of qualitative and comparative factors. To ensure directors are compensated relative to the scope of their responsibilities, the Compensation Committee considers: (1) the time and effort involved in preparing for Board, committee and management meetings and the additional duties assumed by committee chairs; (2) the level of continuing education required to remain informed of broad corporate governance trends and material developments and strategic initiatives within the Company; and (3) the risks associated with fulfilling their fiduciary duties. The following table sets forth a summary of the compensation we paid to our non-employee directors during fiscal 2023. Mr. Capps, who is a full-time employee, received no compensation for serving as a director.

  17. Director Compensation for the Fiscal Year Ended January 31, 2023

    Director Compensation for the Fiscal Year Ended January 31, 2023

  18. Director Compensation for the Fiscal Year Ended January 31, 2023

    | Name | Fees Earned or Paid in Cash | Stock Awards (1) | Option Awards (2) | Total | | | ($) | ($) | ($) | ($) | | Peter H. Blum, Non-Executive Chairman | 131,375 | — | 34,136 | 165,511 | | Robert J. Albers (3) | 23,375 | — | — | 23,375 | | Alan P. Baden | 43,875 | 5,500 | 53,005 | 102,380 | | Thomas S. Glanville | 71,000 | — | 21,945 | 92,945 | | Nancy P. Harned | 45,000 | 5,500 | 53,005 | 103,505 | | William H. Hilarides | 72,500 | — | 21,945 | 94,445 |

  19. Director Compensation for the Fiscal Year Ended January 31, 2023

    | (1) This column includes the grant date fair value of the stock awards granted to our non-employee directors computed in accordance with FASB ASC Topic 718 and determined without regard to estimated forfeitures. These amounts reflect our accounting valuation of these awards. The assumptions used in the calculation of these amounts are discussed in Note 18 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. The 2023 stock awards were granted to Mr. Baden and Ms. Harned on May 2, 2022. | | (2) This column includes the grant date fair value of the option awards to our non-employee directors computed in accordance with FASB ASC Topic 718 and determined without regard to estimated forfeitures. These amounts reflect our accounting valuation of these awards, and do not correspond to the actual value that may be recognized by our non-employee directors. The assumptions used in the calculation of these amounts are discussed in Note 18 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. The 2023 option awards were granted on August 3, 2022 to Messrs. Blum, Baden, Glanville and Hilarides, and Ms. Harned. As of January 31, 2023, Messrs. Blum, Glanville, Hilarides, and Baden, and Ms. Harned held a total of 283,000, 203,000, 130,000, 85,000 and 85,000 unexercised stock options, respectively. | | (3) Mr. Albers passed away on February 26, 2022. The outstanding stock options held by Mr. Albers vested immediately upon his death and expired on February 26, 2023. |