DEF 14A of Birchtech Corp.
Filed Nov 27, 2024 · FY20230001477932-24-007662
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
General
General The Board is currently composed of four directors. Our current directors are Richard MacPherson, Christopher Greenberg, David M. Kaye and Troy Grant. There are no family relationships among any of our directors or executive officers.
Nominees for Election as Directors at the Annual Meeting
Nominees for Election as Directors at the Annual Meeting This year’s nominees for election to the Board as directors, each to hold office until their successors have been elected and qualified or until the earlier of their resignation or removal, are Richard MacPherson, Christopher Greenberg, David M. Kaye, Troy Grant and Mitzi H. Coogler. Other than Mitzi H. Coogler, each of the nominees is currently a member of our Board. Each nominee has agreed to serve as a director if elected, and we have no reason to believe that any nominee will be unable to serve if elected.
Nominees for Election as Directors at the Annual Meeting
| Name | Age | Positions and Offices Held with the Company | Director Since | | Richard MacPherson | 69 | President, Chief Executive Officer, Secretary, Director | 2011 | | Christopher Greenberg | 58 | Chairman of the Board, Director | 2013 | | David M. Kaye | 70 | Director | 2019 | | Troy Grant | 51 | Director | 2023 | | Mitzi H. Coogler | 54 | None | - |
Nominees for Election as Directors at the Annual Meeting
The affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of our directors. The five nominees receiving the highest number of affirmative votes will be elected as directors. You may vote “for” all of the nominees or “withhold” authority to vote for one or all of the nominees. Shares represented by all proxies received by the Board and not marked so as to withhold authority to vote for any individual nominee will be voted “for” the election of the nominees named above. If you select “withhold” with respect to the election of a nominee, your vote will not be counted as a vote cast for the purposes of electing such nominee but will be considered in the application of the Company’s Majority Voting Policy as described under “Corporate Governance” below. In order not to be subject to the application of our Majority Voting Policy, each director must receive more “for” votes than “withhold” votes. The Board unanimously recommends that you vote FOR the election of Richard MacPherson, Christopher Greenberg, David M. Kaye, Troy Grant and Mitzi H. Coogler to the Board. Below is additional information about each of the nominees as of the date of this Proxy Statement, including business experience, public company director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes, or skills that caused our Board to determine that such person should continue to serve as one of our directors. Richard MacPherson has been a Director of the Company since June 2011, has served as President and Chief Executive Officer of the Company since March 2015 and was appointed as Secretary of the Company in June 2023. Mr. MacPherson is the founder of MES, Inc. (current subsidiary and operating company of the Company) and had been its Chief Executive Officer from 2008 until 2011. From 2011 to March 2015, Mr. MacPherson served as Vice President of Business Development of the Company. Since 2008, Mr. MacPherson has worked with industry leading scientists and engineers to bring the Company’s technology from the R&D phase, through multiple product development stages, to the final commercialization phase, acting as the lead on all required initiatives and activities. He has been a senior-level executive in the services industry for over 25 years. Mr. MacPherson brings extensive start-up and business development knowledge, applied and proven through his corporate experience throughout the United States and Canada. He has worked in multiple industries, such as electric utilities, communications, and marketing, as well as in several entrepreneurial ventures in the communications, hospitality, geological, and real estate development industries. We believe that Mr. MacPherson’s deep experience in business and strong leadership skills, coupled with being the founder of our operating subsidiary and his extensive knowledge of our technology, qualifies him to serve on our board.
Nominees for Election as Directors at the Annual Meeting
| 6 | | Table of Contents |
Nominees for Election as Directors at the Annual Meeting
Christopher Greenberg has been a director of the Company since June 2013 and Chairman of the Board since December 2014. Beginning in 1997, Mr. Greenberg and his wife co-owned multiple Express Employment Professionals franchises. Express Employment Professionals is a staffing agency that provides full time and temporary job placement, human resources services and consulting. In 2003, Mr. Greenberg and his wife co-founded Global Safety Network, which grew into a leading, national provider of workforce risk management solutions. Mr. Greenberg served as its Chief Executive Officer from 2003 to May 2021. In 2015, Mr. Greenberg and his wife also co-founded Greenberg Enterprises, which provides business management and consulting services. Global Safety Network was sold in June 2022 and their final Express Employment Professionals franchise was sold in January 2023. These recent business sales have enabled Mr. Greenberg to devote additional time towards the growth of Greenberg Enterprises and its related entities. As an entrepreneur and operating Executive, Mr. Greenberg has demonstrated his ability to lead diverse professional teams to higher levels of achievement in a variety of highly competitive industries, cutting-edge markets, and fast-paced environments. He has strong business and technical qualifications with a track record of more than 30 years of hands-on experience in strategic planning, business development, project management, mergers and acquisitions, and partnerships. We believe that Mr. Greenberg’s deep experience in business, along his strong entrepreneurial and executive management background, qualifies him to serve on our board. David M. Kaye has been a director of the Company since June 2019 and acted as Secretary from December 2019 to June 2023. Mr. Kaye is an attorney and has been a partner in the law firm of Kaye Cooper Kay & Rosenberg, LLP, located in Roseland, New Jersey, since the firm’s inception in February 1996. Since 1980, Mr. Kaye has been a practicing attorney in the New York City metropolitan area specializing in business, corporate, and securities matters. From March 2006 to June 2011, Mr. Kaye was a director of China Youth Media, Inc., resigning from such position effective with the merger between the Company with MES, Inc. which was completed in June 2011. From December 2000 to October 2009, Mr. Kaye also served on the Board of Directors of Dionics, Inc. Mr. Kaye received his B.A. from George Washington University (1976) and his J.D. from the Benjamin N. Cardozo School of Law, Yeshiva University (1979). We believe that Mr. Kaye’s deep experience in business and transactional matters and working with public companies qualifies him to serve on our board. Troy Grant has been a director of the Company since May 2023. Mr. Grant, a graduate from St. Francis Xavier University with a Bachelor of Commerce degree, has extensive experience in investment financing, predominantly focusing on raising significant funding across global platforms and management of strategic operations. For the past 10 years, his career has been dedicated to his role as Chief Executive Officer (CEO) with Elcora Advanced Materials Corp. (TSXV: ERA). Elcora was founded in 2011 and has been successfully structured as a vertically integrated battery material company with mining assets in Sri Lanka and Morocco. As CEO, in addition to responsibility for the overall strategic operations, including exploration, business development and implementation of the company vision, Mr. Grant works diligently to raise equity and advance assets. Mr. Grant also currently serves as a director and member of the Audit Committee of several publicly listed companies, including Elcora Advanced Materials Corp., i3 Interactive Inc. (CSE: BETS), Auxly Cannabis Group Inc. (TSX: XLY), and Cleantech Power Corp. (formerly, Alkaline Fuel Cell Power Corp.) (NEO: PWWR). We believe Mr. Grant’s deep public company experience in Canada and his strong background in business and investment financing qualifies him to serve on our board. Mitzi H. Coogler, director nominee, is a certified public accountant and has maintained an accounting practice since 2014 in Northport, Alabama specializing in management support and guidance for closely held businesses. Since November 2023, she has been Chief Financial Officer of JT Harrison Construction Co., Inc., located in Northport, Alabama, which provides design, general contracting and construction management services. From November 2017 to December 2021, she served as Chief Executive Officer and a member of the Board of Directors of Southeast Cancer Network, Inc., located in Tuscaloosa, Alabama. From February 2018 to July 2022, she also served as Chief Financial Officer of closely held businesses wholly or majority owned by Dr. Scott Drummond (deceased). From January 2005 to January 2014, she was a shareholder/employee of Echols, Coogler & Associates, P.C., an accounting firm, located in Tuscaloosa, Alabama. Ms. Coogler received her B.S. in accounting from University of Alabama in 1993. We believe Ms. Coogler’s extensive financial, accounting and transactional experience qualifies her to serve on our board.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Board of Directors
Board of Directors The Board of Directors has a stewardship responsibility to supervise the management of and oversee the conduct of the business of the Company, provide leadership and direction to management, evaluate management, set policies appropriate for the business of the Company and approve corporate strategies and goals. The day-to-day management of the business and affairs of the Company is delegated by the Board of Directors to the executive officers of the Company. The Board of Directors gives direction and guidance through the CEO to management and keeps management informed of its evaluation of the executive officers in achieving and complying with goals and policies established by the Board of Directors.
Board of Directors
| 7 | | Table of Contents |
Board of Directors
The Board of Directors exercises its independent supervision over management by its policies that (a) periodic meetings of the Board of Directors be held to obtain an update on significant corporate activities and plans; and (b) all material transactions of the Company are subject to prior approval of the Board of Directors. To facilitate open and candid discussion among its independent directors, such directors are encouraged to communicate with each other directly to discuss ongoing issues pertaining to the Company.
Fiscal Year 2023 and 2022 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (4) | Option Awards ($) (4) | All Other Compensation ($) (5) | Total ($) | | Richard MacPherson, President and Chief Executive Officer, Director (1) | 2023 2022 | 495,000 411,667 | - - | 486,667 70,667 | - - | 105,314 39,361 | 1,086,981 521,695 | | John Pavlish, Senior Vice President (2) | 2023 2022 | 415,000 330,000 | - - | - - | - 69,838 | 38,262 19,100 | 453,262 418,938 | | James Trettel, Executive Vice President of Operations (3) | 2023 2022 | 400,000 316,667 | - - | - - | - 159,279 | 21,533 17,000 | 421,533 492,946 |
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023 The following table sets forth certain information about the number of unexercised nonqualified stock options and unearned stock awards held as of December 31, 2023 by each executive named in the Summary Compensation Table. There were no stock options exercised during fiscal 2023 by such executives.
Outstanding Equity Awards as of December 31, 2023
| 13 | | Table of Contents |
Outstanding Equity Awards as of December 31, 2023
| Option Awards | | | | | Stock Awards | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares of units or stock that have not vested ($) (1) | | Richard MacPherson | 250,000 | - | 0.81 | 06/28/2024 | 1,500,000 | 1,380,000 | | | 750,000 | - | 1.20 | 06/28/2024 | - | - | | | 1,500,000 | - | 0.27 | 06/28/2024 | - | - | | | 500,000 | - | 0.19 | 07/08/2025 | - | - | | | 500,000 | - | 0.58 | 12/14/2025 | - | - | | | 750,000 | - | 0.78 | 11/22/2026 | - | - | | John Pavlish | 2,000,000 | - | 0.74 | 06/28/2024 | - | - | | | 1,000,000 | - | 0.45 | 06/28/2024 | - | - | | | 50,000 | - | 1.15 | 02/10/2027 | - | - | | | 600,000 | - | 0.27 | 06/28/2024 | - | - | | | 500,000 | - | 0.19 | 07/08/2025 | - | - | | | 500,000 | - | 0.58 | 12/14/2025 | - | - | | | 500,000 | - | 0.78 | 11/22/2026 | - | - | | | 500,000 | - | 0.21 | 05/31/2027 | - | - | | James Trettel | 250,000 | - | 0.42 | 06/28/2024 | - | - | | | 500,000 | - | 1.15 | 02/10/2027 | - | - | | | 1,000,000 | - | 0.27 | 06/28/2024 | - | - | | | 500,000 | - | 0.19 | 07/08/2025 | - | - | | | 500,000 | - | 0.58 | 12/14/2025 | - | - | | | 500,000 | - | 0.78 | 11/22/2026 | - | - | | | 500,000 | - | 0.21 | 05/31/2027 | - | - |
Outstanding Equity Awards as of December 31, 2023
| (1) The market value of the stock awards that have not vested is calculated using the closing price of $0.92 of our common stock on December 29, 2023, the last trading day of 2023. |
Pay Versus Performance
Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation actually paid (as defined by SEC rules) to our principal executive officer (“PEO”) and our other named executive officers (“NEOs”) and certain financial performance of the Company for the fiscal years listed below.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Total for Non-PEO NEOs (1) | Average Compensation Actually Paid to Non-PEO NEOs (2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (3) | Net Income (Loss) (4) | | 2023 | $1,086,981 | $1,920,014 | $437,398 | $437,398 | $143.75 | $5,904,013 | | 2022 | $521,695 | $1,235,647 | $455,942 | $451,142 | $40.63 | $(1,581,476) | | 2021 | $750,936 | $750,936 | $534,192 | $534,192 | $92.19 | $(3,632,683) |
Pay Versus Performance
| (1) Compensation for the Company’s PEO, Richard MacPherson, reflects the amounts reported in Summary Compensation Table for fiscal years 2023, 2022 and 2021. Average compensation for our NEOs is based on the compensation of John Pavlish and James Trettel reported in the Summary Compensation Table for the respective years. | | (2) SEC rules require that certain adjustments be made to the total compensation set forth in the “Summary Compensation Table” in order to determine “compensation actually paid” for purposes of this Pay Versus Performance Disclosure. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. The below table reflects the required adjustments to reconcile total compensation as set forth in the Summary Compensation Table to “compensation actually paid” for purposes of the Pay Versus Performance Disclosure. |
Pay Versus Performance
| | PEO 2023 | PEO 2022 | PEO 2021 | Non-PEO NEOs 2023 | Non-PEO NEOs 2022 | Non-PEO NEOs 2021 | | Summary Compensation Table Total | $1,086,981 | $521,695 | $750,936 | $437,398 | $455,942 | $534,192 | | Less stock award value reported in Summary Compensation Table for the covered year | (486,667) | (70,667) | (307,050) | - | (114,559) | (204,700) | | Plus the year-end fair value of outstanding unvested awards granted in covered year | - | 792,300 | - | - | - | - | | Plus (less) change in year-end fair value of outstanding and unvested awards granted in prior years | 584,700 | - | - | - | - | - | | Plus the fair value as of the vesting date of awards granted and vested in the covered year | - | - | 307,050 | - | 114,559 | 204,700 | | Plus (less) change in fair value as of the vesting date of awards granted in prior years that vested in the covered year | 735,000 | - | - | - | - | - | | Less the prior year-end fair value of awards forfeited during the covered year | - | - | - | - | - | - | | Compensation Actually Paid | $1,920,014 | $1,235,647 | $750,936 | $437,398 | $451,142 | $534,192 |
Pay Versus Performance
| Fair values of equity awards set forth in the table above are computed in accordance with FASB ASC Topic 718 as of the end of the respective fiscal year, other than fair values of equity awards that vest in the covered year, which are valued as of the applicable vesting date. The valuation methodologies applied do not materially differ from the valuation methodologies applied at the time of grant. |
Pay Versus Performance
| 16 | | Table of Contents |
Pay Versus Performance
| (3) Reflects the cumulative shareholder return over the relevant fiscal year, computed in accordance with SEC rules, assuming an investment of $100 in our common stock at a price per share equal to the closing price of our common stock on the last trading day before the commencement of the earliest applicable fiscal year (December 30, 2020) and the measurement end point of the closing price of our common stock on the last trading day in the applicable fiscal year. For 2023, the closing price of our common stock on December 31, 2022 was $0.26 and the closing price of our common stock on December 29, 2023 (the last trading name in 2023) was $0.92. For 2022, the closing price of our common stock on December 31, 2021 was $0.59 and the closing price of our common stock on December 30, 2022 (the last trading day in 2022) was $0.26. For 2021, the closing price of our common stock on December 31, 2020 was $0.64 and the closing price of our common stock on December 31, 2021 was $0.59. | | (4) The dollar amount reported represent the amount of net income (loss) reflected in our audited consolidated financial statements for the applicable year. |
Relationship between Pay Versus Performance
Relationship between Pay Versus Performance Our “total shareholder return” as set forth in the above table, during the thee-year period ended December 31, 2023 increased by approximately 44% compared to an increase in “compensation actually paid” to our PEO from $750,936 in 2021 to $1,920,014 in 2023, and a decrease in average “compensation actually paid” to our Non-PEO NEOs from $534,192 in 2021 to $437,398 in 2023. In addition, during 2021, we had a net loss of $3.6 million compared to net income of $5.9 million in 2023, an improvement of 264%, compared to the aforementioned changes in “compensation actually paid” to our PEO and Non-PEO NEOs.
Director Compensation
Director Compensation
Director Compensation Table for Year Ended December 31, 2023
Director Compensation Table for Year Ended December 31, 2023 The following table sets forth information regarding the compensation for 2023 of each non-executive member of the board of directors:
Director Compensation Table for Year Ended December 31, 2023
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Option Awards ($) (1) | Total ($) | | Christopher Greenberg | 100,000 | - | - | 100,000 | | David M. Kaye | - | - | - | - | | Troy Grant | 37,500 | - | 30,527 | 68,027 |
Director Compensation Table for Year Ended December 31, 2023
| (1) Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. There can be no assurance the amounts determined in accordance with FASB ASC Topic 718 will ever be realized. The following table provides information concerning the stock options granted to the Directors for 2023: |
Director Compensation Table for Year Ended December 31, 2023
| Name | Stock Options (#) | FASB ASC Topic 718 Value | | Christopher Greenberg | - | - | | David M. Kaye | - | - | | Troy Grant | 125,000(1) | 30,527 |
Director Compensation Table for Year Ended December 31, 2023
| (1) On May 26, 2023, Mr. Grant was granted a non-qualified stock option to acquire 125,000 shares of the Company’s common stock exercisable at $0.41 per share, representing the fair market value of the common stock as of the date of grant. Fifty percent of the option shall vest and become exercisable on November 26, 2023 and the remaining fifty percent shall vest and become exercisable on May 26, 2024. The option will expire five years after the date of grant. |
Director Compensation Table for Year Ended December 31, 2023
| 17 | | Table of Contents |
Director Compensation Table for Year Ended December 31, 2023
For 2023, Mr. Greenberg’s compensation for serving as Chairman of the Board was $100,000. As of December 31, 2023, $50,000 of Mr. Greenberg’s cash compensation remained unpaid. Mr. Kaye was not paid any cash compensation for service on the Board in 2023. Troy Grant, who was appointed to the Board on May 26, 2023, was paid $37,500 for his service on the Board during 2023. All directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with their duties to the Company. Effective as of January 1, 2024, Mr. Greenberg shall be paid $150,000 per year for serving as Chairman of the Board, and each of Mr. Kaye and Mr. Grant shall be paid $75,000 annually for serving on the Board. On September 19, 2024, Mr. Greenberg resigned as chairperson of the Audit Committee and Troy Grant was appointed chairperson in his place and will be paid $75,000 annually for serving in such position in addition to the fee paid for his serving on the Board.