DEF 14A of BNB Standard Corp
Filed Nov 6, 2024 · FY20230001493152-24-043833
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Pursuant to the Company’s Bylaws, as amended, the number of directors may be established, increased or decreased from time to time by the Board, but will never be less than one, nor more than thirteen. The number of directors is currently set at five. The Company’s Articles of Incorporation require that all directors stand for election annually at the Company’s Annual Meeting. Accordingly, each of the Company’s directors holds office until the next annual meeting of stockholders and until his successor is duly elected and qualified. Unless otherwise instructed, the proxyholders will vote the proxies received by them for the five (5) nominees named below. If any of the nominees is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by the current Board to fill the vacancy. It is not currently expected that any of the nominees named below will be unable or will decline to serve as a director. If additional persons are nominated for election as directors, the proxyholders intend to vote all proxies received by them in a manner to assure the election of as many of the nominees listed below as possible. In such event, the specific nominees to be voted for will be determined by the proxyholders. Four of the Company’s current directors, Messrs. Anthony K. McDonald, James R. Shipley, Nicholas J. Etten, and Marion Mariathasan have been nominated for election for a one-year term expiring in 2025. A new nominee, Matthew Tarallo, has been nominated for election for a one-year term expiring in 2025. None of the independent nominees are being proposed for election pursuant to any agreement or understanding between them and the Company requiring that they be nominated for election as a director. Our Board and the Nominating Committee believe the directors nominated collectively have the experience, qualifications, attributes and skills to effectively oversee the management of the Company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing the Company, a willingness to devote the necessary time to Board duties, a commitment to representing the best interests of the Company and our stockholders and a dedication to enhancing stockholder value. A stockholder can vote for or withhold his vote from one or more of the director nominees. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxy “FOR” the election of the director nominees named below. If a nominee should decline or be unable to serve as a director, it is intended that the proxy will vote for the election of such person as is nominated by the Board as a replacement.
Information about the Nominees
Information about the Nominees Certain information, as of October 24, 2024, with respect to the nominees for election at the Annual Meeting, is set forth below, including their names, ages, a brief description of their recent business experience, including present occupations and employment, certain directorships that each person holds, and the year in which each person became a director of the Company. The business address of each of the nominees listed below is 385 South Pierce Avenue, Suite C Louisville, Colorado 80027.
Information about the Nominees
| Name | Age | Positions & Committees | | Anthony K. McDonald | [66] | Chairman of the Board; Chief Executive Officer and President | | James R. Shipley | [69] | Director; Compensation Committee Chair; Audit Committee Member | | Nicholas J. Etten | [57] | Director; Nominating Committee Chair; Audit Committee Member | | Matthew Trallo | [40] | Director; will be appointed as a member of the Audit Committee and the Compensation Committee | | Marion Mariathasan | [49] | Director; Nominating Committee Member |
Information about the Nominees
| Name and Year First Elected Director | Background Information and Principal Occupation(s) During Past Five Years and Beyond | | Anthony K. McDonald (2018) | Mr. McDonald was appointed a director on September 12, 2018. On November 28, 2018, Mr. McDonald was appointed our Chief Executive Officer and President. On June 24, 2020, Mr. McDonald was appointed Chairman of the Board. Mr. McDonald has been involved in building businesses in the cleantech, energy efficiency and heating, ventilation and air conditioning (“HVAC”) industries over the past 15 years. From 2008 to 2018, Mr. McDonald led sales and business development as Vice-President—Sales for Coolerado Corp., a manufacturer and marketer of innovative, energy-efficient air conditioning systems for commercial, government, and military use. Along with Coolerado’s CEO, Mr. McDonald was instrumental in growing the business to become an INC. 600 high-growth company award winner and assisted in raising $15 million of private funding from a cleantech investment fund. In 2015, Coolerado was acquired by Seeley International, Australia’s largest air conditioning manufacturer and an innovative global leader in the design and production of energy-efficient cooling and heating products, where Mr. McDonald served as National Account Manager. He is the author of Cleantech Sell: The Essential Guide to Selling Resource Efficient Products In The B2B Market. |
Information about the Nominees
| | Prior to joining Coolerado, Mr. McDonald spent over ten years in the private equity industry where he was involved in numerous transactions in the technology, manufacturing, and power development industries. As a business development officer at several private equity acquisitions groups Mr. McDonald identified, financed, or acquired numerous transactions with total enterprise value in excess of $200 million. Mr. McDonald was also a consultant to international banks with KMPG from 1994 to 1997 and served as a director for Keating Capital, Inc., a publicly traded business development company that made investments in pre-IPO companies. He previously served as a mentor for companies in the Clean Tech Open competition. Mr. McDonald is a U.S. Army veteran and a graduate of the U.S. Military Academy at West Point, N.Y. where he earned a B.S. degree in Engineering and Economics. He also received an MBA degree from the Harvard Business School. Among the reasons for Mr. McDonald to be selected for service on the Board is his experience in sales, sales and operations management, mergers and acquisitions, the HVAC industry, his in-depth knowledge of climate control systems and technologies. | | James R. Shipley (2020) | Mr. Shipley was appointed a director on June 24, 2020. Mr. Shipley recently retired from AgTech Holdings where he was the Chief Strategy Officer of GroAdvisor and the Vice-President of Sales for VividGro since 2017. Since 2017, Mr. Shipley has assisted in design and build consulting along with supply chain management for cultivation operations in 12 states, Puerto Rico, and Canada, covering more than 500,000 square feet of warehouse indoor cultivation and continues to consult independently with operators in North America. From 2014 to 2017 Mr. Shipley, acting in several executive roles, helped build multiple business lines for MJIC Inc. (now CNSX: MSVN); these roles included being a member of the board of directors, Chairman and President. Mr. Shipley is currently president and a principal in RSX Enterprises Inc., a sales agency and marketing firm that sells and markets equipment for use in controlled environment agriculture on behalf of various manufacturers. Mr. Shipley has been active in the cannabis business, where he has founded various summits such as the Marijuana Investor Summit and been involved in many educational workshops and business expos. Previously, Mr. Shipley was an officer and Chief Revenue Officer with Carrier Access Corporation (CACS), a public company trading on Nasdaq. Prior to Carrier Access, Mr. Shipley worked at Williams Companies in their telecommunications divisions. Mr. Shipley has been selected for service on the Board because of his experience in and commitment to the cannabis industry, his demonstrated and consistent record of success as an executive and entrepreneur, and his extensive network of contacts in the cannabis industry. | | Nicholas J. Etten (2020) | Mr. Etten was appointed a director on June 24, 2020. Mr. Etten is the Chief Executive Officer of Lone Star Bioscience, a Texas-based medical cannabis company. From 2018 to 2022 he was the Senior Vice President of Government Affairs and a member of the senior management team at Acreage Holdings, a vertically integrated, multi-state operator of cannabis licenses and assets in the U.S. In 2017 he founded the Veterans Cannabis Project where he continues to serve as Chairman. Veterans Cannabis Project (VCP) is an organization dedicated to advocating on behalf of cannabis access issues for U.S. military veterans. From 2015 to 2017, Mr. Etten set aside his career to provide care for his seriously ill son. Mr. Etten’s career has been focused on the growth equity market, and prior to Acreage, he held positions including Vice President of Global Business Development for FreightWatch International, and Director of Corporate Development for Triple Canopy. Mr. Etten was an investment professional at Trident Capital, where he focused on the cyber-security space, and an investment banker at Thomas Weisel Partners. Mr. Etten served on active duty as a U.S. Navy SEAL officer. He earned an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University, and a BS in political science from the United States Naval Academy. |
Information about the Nominees
| | Mr. Etten has been selected for service on the Board because of his experience in and commitment to the cannabis industry, his experience with multi-site cannabis operators, his demonstrated and consistent record of success as an executive, and his extensive network of contacts in the cannabis industry and investment banking world. | | Marion Mariathasan (2022) | Marion Mariathasan was appointed as a director on January 17, 2022. Mr. Mariathasan is the Chief Executive Officer and Co-Founder of Simplifya, the cannabis industry’s leading regulatory and operational compliance software platform. The company’s suite of products takes the guesswork out of confusing and continually changing state and local regulations. Featuring SOPs, badge tracking, document storage, tailored reporting and employee accountability features, the company’s Custom Audit software reduces the time clients spend on compliance by up to 45 percent. Mr. Mariathasan is also a serial entrepreneur who has founded or advised numerous startups. He is currently an investor in 22 domestic and international companies that range from cannabis companies to dating apps - four of which he serves as a board member. Mr. Mariathasan studied Architecture and Computer Science at the University of Kansas and Computer Information Systems with a minor in Business Management from Emporia State University. Marion is a regular guest speaker at events such as Denver Start-Up Week, Colorado University’s program on social entrepreneurship, various universities on the topic of entrepreneurship and the United Nations Global Accelerator Initiative. Mr. Mariathasan was selected for service on the Board because of his experience in and commitment to the cannabis industry, his demonstrated and consistent record of success as an executive and entrepreneur, and his extensive network of contacts in the cannabis industry. | | Matthew Tarallo (Nominated 2024) | Matthew Tarallo was nominated to be a director on October 14, 2024. Matthew Tarallo is the Founder & Principal of AETHER Brand Group, an Incubating and Operating Brand house focused on Adult Consumption Categories, which includes a current portfolio of several consumer brands across alcohol and cannabis. With over 15 years in the consumer product goods space, Mr. Tarallo’s career comes with deep experience and success building and leading global brands in both developed and emerging markets, which includes direct P&L ownership across large Fortune 500 & FTSE 100 companies as well as startups. Prior to starting AETHER Brand Group, Mr. Tarallo served as Senior Vice President of Business Development & Beyond Nicotine at Reynolds American, a subsidiary of British American Tobacco. Mr. Tarallo was part of the Reynolds American management team and accountable for building and leading new, multi-category transformational division (Beyond Nicotine) to deliver long-term value by commercializing fast growing, science-backed brands to reach new customers and consumers across wellbeing & stimulation and cannabis. Additionally, Mr. Tarallo was the Global Vice President for The Coca-Cola Company, where he led the Global Amazon Business Unit, a multi-billion-dollar retail business. Mr. Tarallo’s success creating and scaling global brands has garnered large scale recognition and awards such as from Cannes Lions for his global campaign with Coca-Cola, McLaren F1 and Amazon as well as the launch of the US Beyond Nicotine division at Reynolds American. Mr. Tarallo earned his BS in Business Management from Saint Vincent College as well as a Venture Capital Executive Certificate from the University of California, Berkeley, Haas School of Business. Mr. Tarallo lives in Atlanta area with his wife and two young children. Mr. Tarallo was selected for service on the Board because of his knowledge of and experience in the consumer retail space across highly regulated industries, including cannabis and nicotine, and his experience with financial statements in operating significant divisions of public companies. |
Information about the Nominees
The election of a director requires a plurality of all the votes cast either in person or by proxy present at the Annual Meeting (i.e., the director nominees receiving the greatest number of votes cast for each of the director positions being voted upon). Each share of common stock entitled to vote may be voted for as many persons as there are directors to be elected. However, stockholders may not cumulate their votes. If you vote “Withhold Authority” with respect to a director nominee, your shares will not be voted with respect to the person indicated. Because directors are elected by a plurality of all votes cast, abstentions and broker non-votes will have no effect of the election of directors. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT.
Executive and Director Compensation
Executive and Director Compensation
Director Compensation Program
Director Compensation Program On January 17, 2022 (the “Effective Date”), the Board of Directors adopted a compensation plan for directors to replace the prior plan adopted in 2021. The plan is divided into two phases: from the Effective Date of the Plan until February 9, 2022, the day prior to the uplisting of the Company to Nasdaq. (“Pre-uplist”) and from February 10, 2022, the uplist date forward (“Post-uplist”). Pre-uplist phase: The Company paid its independent directors an annual cash fee of $15,000, payable quarterly in advance on the first business day of each quarter, as consideration for their participation in: (i) any regular or special meetings of the Board or any committee thereof attended in person, (ii) any telephonic meeting of the Board or any committee thereof in which the director is a member, (iii) any non-meeting consultations with the Company’s management, and (iv) any other services provided by them in their capacities as directors (other than services as the Chairman of the Board, the Chairman of the Company’s Audit Committee, and the Committee Chairman). At the time of initial election or appointment, each independent director received an equity retention award in the form of restricted stock units (“RSUs”). The aggregate value of the RSUs at the time of grant was to be $25,000, with the number of shares underlying the RSUs to be determined based on the closing price of the Company’s common stock on the date immediately prior to the date of grant. Vesting of the RSUs was as follows: (i) 50% at the time of grant, and (ii) 50% on the first anniversary of the grant date. In addition, on the first business day of January each year, each independent director will also receive an equity retention award in the form of RSUs. The aggregate value of the RSUs at the time of grant will be $25,000, with the number of shares underlying the RSUs to be determined based on the closing price of the Company’s common stock on the date immediately prior to the date of grant. These RSUs will be fully vested at date of grant. The Company pays the Audit Committee Chairman an additional annual fee of $10,000, payable quarterly in advance, for services as the Audit Committee Chairman. The Company pays the Chairmen of any other committees of the Board an additional annual fee of $5,000, payable quarterly in advance, for services as a Committee Chairman. There is no additional compensation paid to members of any committee of the Board. Interested (i.e. Executive directors) serving on the Board do not receive compensation for their Board service. Post-uplist phase: The Company will pay its independent directors an annual cash fee of $25,000, payable quarterly in advance on the first business day of each quarter. All other terms remain the same. Each director is responsible for the payment of any and all income taxes arising with respect to the issuance of common stock and the vesting and settlement of RSUs. The Company reimburses independent directors for out-of-pocket expenses incurred in attending Board and committee meetings and undertaking certain matters on the Company’s behalf. All independent directors, Messrs. Shipley, Etten, Reisner, and Mariathasan are subject to the Plan. Each independent director is responsible for the payment of any and all income taxes arising with respect to the issuance of any equity awarded under the plan, including the exercise of any non-qualified stock options. Employee directors do not receive separate fees for their services as directors.
Director Compensation Table
Director Compensation Table The following table sets forth the compensation earned by or awarded or paid in 2023 and 2022 to the individuals who served as our independent directors during such period.
Director Compensation Table
| Name | Year | Fees Earned or Paid in Cash (1) | Stock Awards (2), (3) | Option Awards (4), (5) | Total | | James R. Shipley | 2023 | $30,000 | $25,000 | $- | $55,000 | | | 2022 | $27,500 | $- | $15,000 | $42,500 | | Nicholas J. Etten | 2023 | $30,000 | $25,000 | $- | $55,000 | | | 2022 | $27,500 | $- | $15,000 | $42,500 | | Troy Reisner | 2023 | $35,000 | $25,000 | $- | $60,000 | | | 2022 | $32,500 | $25,000 | $- | $57,500 | | Marion Mariathasan | 2023 | $25,000 | $25,000 | $- | $50,000 | | | 2022 | $22,500 | $25,000 | $- | $47,500 |
Director Compensation Table
| (1) Excludes reimbursement of out-of-pocket expenses. | | (2) Reflects grants to two independent directors of 281 each of restricted stock units on January 17, 2022, in connection with their appointment. 141 shares were immediately vested and 140 vested on January 17, 2023. | | (3) Reflects grants to each independent director of 2,479 of restricted stock units on January 3, 2023, in connection with the director compensation plan. The shares vested immediately. | | (4) Reflects the dollar amount of the grant date fair value of awards, measured in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718 (“Topic 718”) without adjustment for estimated forfeitures. For a discussion of the assumptions used to calculate the value of equity awards, refer to Note 13 to our consolidated financial statements for the fiscal year ended December 31, 2023 included in this Annual Report. | | (5) Reflects a grant to each independent director on January 3, 2022 of non-qualified stock options to purchase 261 shares of the Company’s common stock. |
Director Compensation Table
The aggregate number of non-qualified stock options and restricted stock units held as of December 31, 2023, by each independent director are as follows:
Director Compensation Table
| Name | Shares Underlying Non-Qualified Stock Options (1) | Shares Underlying Restricted Stock Units | Total | | James R. Shipley | 880 | – | 880 | | Nicholas J. Etten | 880 | – | 880 |
Director Compensation Table
(1) Includes grant to each independent director on June 24, 2020 of non-qualified stock options to purchase 556 shares of the Company’s common stock, a grant to each independent director on August 20, 2021 of non-qualified stock options to purchase 64 shares of the Company’s common stock, and a grant on January 3, 2022 of non-qualified stock options to purchase 260 shares of the Company’s common stock. Subsequent to December 31, 2023, the following cash fees were paid to directors based on the January 17, 2022 compensation plan.
Director Compensation Table
| Name | Cash Fees Paid | | James R. Shipley | $30,000 | | Nicholas J. Etten | $30,000 | | Troy L. Reisner | $35,000 | | Marion Mariathasan | $25,000 | | Total | $120,000 |
Director Compensation Table
Subsequent to December 31, 2023, the following restricted stock units were issued to directors based on the January 17, 2022 compensation plan.
Director Compensation Table
| | Shares Underlying | | | Restricted Stock | | Name | Units | | Nicholas J. Etten | 3,788 | | Troy L. Reisner | 3,788 | | Marion Mariathasan | 3,788 | | Total | 11,364 |
Director Compensation Table
These restricted stock units vested upon grant.
Compensation of Executive Officers
| Name and Principal Position | Year | Salary | Bonus | Stock Awards (1) | Option Awards (1) | Non-equity Incentive Plan Compensation | Non-qualified Deferred Compensation Earnings | All Other Compensation | Total | | Anthony K. McDonald - Chief Executive | 2023 | $350,000 | $10,938 | $- | $32,370 | $- | $- | $22,245 | $415,552 | | Officer and President (2) | 2022 | $338,173 | $22,917 | $- | $22,917 | $- | $- | $19,313 | $403,320 | | Ian K. Patel- Chief Financial Officer, Secretary, and Treasurer (3) | 2023 | $275,000 | $6,445 | $- | $19,075 | $- | $- | $16,583 | $317,103 | | | 2022 | $212,596 | $- | $- | $33,000 | $- | $- | $7,615 | $253,212 | | Richard B. Knaley - Chief Financial | 2023 | $- | $- | $- | $- | $- | $- | $- | $- | | Officer and Treasurer (4) | 2022 | $54,719 | $- | $- | $- | $- | $- | $1,499 | $56,218 |
Pay versus Performance
Pay versus Performance On Aug. 25, 2022, the SEC released its final regulations implementing Dodd Frank Section 953(a) Pay for Performance rules. These regulations require companies to disclose (in tabular and narrative format) the relationship between compensation actually paid to the Company’s named executive officers and certain performance measures. Below is a summary of the Company’s pay versus performance measures:
Pay versus Performance
| Year | Summary compensation total for PEO(1) | Compensation actually paid to PEO(1) | Average summary compensation table total for Non-PEO NEOS(2) | Average compensation actually paid to non-PEOs NEOS(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (“TSR”) | Net Loss | | (a) | (b) | ( c) | (d) | ( e) | ( f) | ( g) | | 2023 | $415,552 | $410,643 | $317,103 | $314,985 | 10.47 | (2,911,551) | | 2022 | $403,320 | $284,523 | $309,429 | $235,809 | 16.08 | (5,497,175) |
Pay versus Performance
| (1) Represents information for Mr. McDonald in both 2022 and 2023 | | (2) Represents average compensation information for Mr. Knaley in 2022 and the average compensation information for Mr. Patel in 2022 and 2023 |