UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
(Rule 14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by
the Registrant [X]
Filed by
a Party other than the Registrant [ ]
Check the
appropriate box:
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Preliminary Proxy
Statement |
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Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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[X] |
Definitive Proxy
Statement |
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Definitive Additional
Materials |
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Soliciting Material
Pursuant to § 240.14a-12 |
ATRM
HOLDINGS, INC.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Payment
of Filing Fee (Check the appropriate box): |
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[X] |
No fee required. |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title
of each class of securities to which transaction applies: |
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of securities to which transaction applies: |
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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): |
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Proposed maximum
aggregate value of transaction: |
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Fee paid previously
with preliminary materials: |
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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. |
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Amount previously
paid: |
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Form, Schedule
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Date Filed: |
ATRM
Holdings, Inc.
3050 Echo Lake Avenue, Suite 300
Mahtomedi,
Minnesota 55115
November
6, 2015
Dear Shareholders:
It
is our pleasure to invite you to the 2015 Annual Meeting of Shareholders of ATRM Holdings, Inc. We will hold the meeting on Thursday,
December 3, 2015, at 4:00 p.m., local time, at our offices located at 3050 Echo Lake Avenue, Suite 300, Mahtomedi, Minnesota 55115.
We
describe in detail the actions we expect to take at the annual meeting in the accompanying Notice of Annual Meeting of Shareholders
and proxy statement.
Your
vote is important. Whether or not you plan to attend the annual meeting, please promptly sign, date and return the enclosed proxy
card or voting instruction card in the envelope provided, or submit your proxy by telephone or over the Internet (if those options
are available to you) in accordance with the instructions on the enclosed proxy card or voting instruction card.
Thank
you for your ongoing support of and continued interest in ATRM Holdings, Inc. We hope to see you at the meeting.
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Sincerely, |
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/s/
Jeffrey E. Eberwein |
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Jeffrey E. Eberwein |
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Chairman of the Board |
ATRM
Holdings, Inc.
3050 Echo Lake Avenue, Suite 300
Mahtomedi, Minnesota 55115
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON December 3, 2015
Notice
is hereby given that the 2015 annual meeting of shareholders (the “Annual Meeting”) of ATRM Holdings, Inc. (the “Company”)
will be held on Thursday, December 3, 2015, at 4:00 p.m., local time, at our offices located at 3050 Echo Lake Avenue, Suite 300,
Mahtomedi, Minnesota 55115, for the following purposes, as more fully described in the accompanying proxy statement:
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1. |
to
elect each of Jeffrey E. Eberwein, Morgan P. Hanlon, Alfred John Knapp, Jr., Daniel M. Koch and Galen Vetter to serve until
the Company’s 2016 annual meeting of shareholders and until their successors are duly elected and qualify; |
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2. |
to
ratify the appointment of Boulay PLLP as the Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2015; |
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3. |
to
vote on a non-binding advisory resolution to approve the compensation of the Company’s named executive officers; and |
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4. |
to
transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Only
shareholders of record at the close of business on October 28, 2015 are entitled to notice of, and to vote at, the Annual Meeting.
Your
vote is extremely important, regardless of the number of shares you own. Whether or not you plan to attend the Annual Meeting,
we ask that you promptly sign, date and return the enclosed proxy card or voting instruction card in the envelope provided, or
submit your proxy by telephone or over the Internet (if those options are available to you) in accordance with the instructions
on the enclosed proxy card or voting instruction card.
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By
order of the Board of Directors, |
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/s/
Jeffrey E. Eberwein |
| November
6, 2015 |
Jeffrey
E. Eberwein |
| Mahtomedi,
Minnesota |
Chairman
of the Board |
Important
Notice Regarding the Availability of Proxy Materials for the ATRM Holdings, Inc.
2015 Annual Meeting of Shareholders to be Held on December 3, 2015
The
Proxy Statement, our form of proxy card, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 are available
on the Internet at www.icommaterials.com/ATRM
ATRM
HOLDINGS, INC.
TABLE
OF CONTENTS
PROXY
STATEMENT
This
proxy statement (“Proxy Statement”) is furnished by the Board of Directors of ATRM Holdings, Inc. (the “Board”)
in connection with the solicitation of proxies for use at the 2015 Annual Meeting of Shareholders (the “Annual Meeting”)
to be held at our offices located at 3050 Echo Lake Avenue, Suite 300, Mahtomedi, Minnesota 55115, on Thursday, December 3, 2015,
at 4:00 p.m., local time, and any adjournments thereof. This Proxy Statement, along with a Notice of Annual Meeting of Shareholders
and either a proxy card or a voting instruction card, are being mailed to shareholders beginning on or about November 6, 2015.
Unless
the context otherwise requires, in this Proxy Statement, we use the terms “we,” “our,” “us”
and “the Company” to refer to ATRM Holdings, Inc. and its subsidiaries.
Questions
and Answers about
the Proxy Materials and the Annual Meeting
| Q: |
Why
did I receive this Proxy Statement? |
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| A: |
The
Board is soliciting your proxy to vote at the Annual Meeting because you were a shareholder at the close of business on October
28, 2015, the record date, and are entitled to vote at the Annual Meeting. |
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This
Proxy Statement summarizes the information you need to know to vote at the Annual Meeting. You do not need to attend the Annual
Meeting to vote your shares. |
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| Q: |
What
information is contained in this Proxy Statement? |
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| A: |
The
information in this Proxy Statement relates to the proposals to be voted on at the Annual Meeting, the voting process, the
Board and its committees, the compensation of directors and certain executive officers, and certain other required information. |
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| Q: |
What
should I do if I receive more than one set of voting materials? |
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| A: |
You
may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy cards
or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate
voting instruction card for each brokerage account in which you hold shares. If you are a shareholder of record and your shares
are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each
proxy card and voting instruction card that you receive. |
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| Q: |
How
may I obtain an additional set of proxy materials? |
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| A: |
All
shareholders may write to us at the following address to request an additional copy of these materials: |
ATRM
Holdings, Inc.
3050 Echo Lake Avenue, Suite 300
Mahtomedi, Minnesota 55115
Attention: Corporate Secretary
| Q: |
What
is the difference between holding shares as a shareholder of record and as a beneficial owner? |
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If
your shares are registered directly in your name with our transfer agent, Computershare, you are considered, with respect
to those shares, the “shareholder of record.” If you are a shareholder of record, this Proxy Statement, our 2014
Annual Report on Form 10-K (the “2014 Form 10-K”), and a proxy card have been sent directly to you by the Company. |
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If
your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial
owner” of shares held in street name. If you own shares held in street name, this Proxy Statement and the 2014 Form
10-K have been forwarded to you by your broker, bank or nominee who is considered, with respect to those shares, the shareholder
of record. As the beneficial owner, you have the right to direct your broker, bank or nominee how to vote your shares by using
the voting instruction card included in the mailing or by following their instructions for voting by telephone or the Internet,
if the broker, bank or nominee offers these alternatives. Since a beneficial owner is not the shareholder of record, you may
not vote these shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank
or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting. |
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| Q: |
What
am I voting on at the Annual Meeting? |
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| A: |
You
are voting on the following proposals: |
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to
elect five directors to serve until the Company’s 2016 Annual Meeting of Shareholders and until their successors are
duly elected and qualify; |
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to
ratify the appointment of Boulay PLLP as the Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2015; |
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to
vote on a non-binding advisory resolution to approve the compensation of the Company’s named executive officers; and |
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to
transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
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The
Board recommends a vote “FOR” the election of each of its nominees to the Board; “FOR” the ratification
of the appointment of Boulay PLLP as the Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2015; and “FOR” the approval of a non-binding advisory resolution approving the compensation
of our named executive officers. |
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| Q: |
How
do I vote? |
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| A: |
You
may vote using any of the following methods: |
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Proxy
card or voting instruction card. Be sure to complete, sign and date the card and return it in the prepaid envelope. |
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By
telephone or the Internet. If you own shares held in street name, you will receive voting instructions from your bank,
broker or other nominee and may vote by telephone or on the Internet if they offer that alternative. Shareholders of record
will not be able to vote by telephone or on the Internet. |
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In
person at the Annual Meeting. All shareholders may vote in person at the Annual Meeting. You may also be represented by
another person at the Annual Meeting by executing a proper proxy designating that person. If you own shares held in street
name, you must obtain a legal proxy from your bank, broker or other nominee and present it to the inspector of election with
your ballot when you vote at the Annual Meeting. |
| Q: |
What
can I do if I change my mind after I vote my shares? |
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| A: |
If
you are a shareholder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by: |
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sending written
notice of revocation to our Corporate Secretary; |
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submitting a new,
proper proxy dated later than the date of the revoked proxy; or |
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attending the
Annual Meeting and voting in person. |
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If
you own shares held in street name, you may submit new voting instructions by contacting your broker, bank or nominee. You
may also vote in person at the Annual Meeting if you obtain a legal proxy as described in the answer to the previous question.
Attendance at the Annual Meeting will not, by itself, revoke a proxy. |
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| Q: |
What
if I return a signed proxy card, but do not vote for some of the matters listed on the proxy card? |
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| A: |
If
you return a signed proxy card without indicating your vote, your shares will be voted in accordance with the Board’s
recommendations as follows: “FOR” the election of each of its nominees to the Board; “FOR” the ratification
of the appointment of Boulay PLLP as the Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2015; and “FOR” the approval of a non-binding advisory resolution approving the compensation
of our named executive officers. |
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| Q: |
Can
my broker vote my shares for me without my instructions? |
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| A: |
Brokers
may not use discretionary authority to vote shares on the election of directors or the compensation of the Company’s
named executive officers if they have not received instructions from their clients. Please provide voting instructions on
these proposals so your vote can be counted. |
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| Q: |
Can
my shares be voted if I do not return my proxy card or voting instruction card and do not attend the Annual Meeting? |
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| A: |
If
you do not vote your shares held of record (registered directly in your name, not in the name of a bank or broker), your shares
will not be voted. |
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If
you do not vote your shares held in street name with a broker, your broker will not be authorized to vote on most items being
put to a vote, including the election of directors and the compensation of the Company’s named executive officers. If
your broker returns a valid proxy but is not able to vote your shares, they will constitute “broker non-votes,”
which are counted for the purpose of determining the presence of a quorum, but otherwise do not affect the outcome of any
matter being voted on at the Annual Meeting. |
| Q: |
What
are the voting requirements with respect to each of the proposals? |
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| A: |
In
the election of directors (Proposal No. 1), each director receiving a plurality of the affirmative (“FOR”) votes
cast will be elected. You may withhold votes from any or all nominees. |
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The
ratification of the appointment of Boulay PLLP as the Company’s independent registered public accounting firm for the
fiscal year ending December 31, 2015 (Proposal No. 2) and the approval of a non-binding advisory resolution to approve the
compensation of the Company’s named executive officers (Proposal No. 3) require the affirmative (“FOR”)
vote of the majority of the votes cast on the matter. Abstentions will not affect the outcome of the vote on these proposals.
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If
you own shares held in street name and do not provide your broker with voting instructions, your shares may constitute “broker
non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without
instructions from the beneficial owner and instructions are not given. In tabulating the voting result for any particular
proposal, shares that constitute broker non-votes will be counted for the purpose of establishing a quorum at the Annual Meeting,
but otherwise do not affect the outcome of any matter being voted on at the Annual Meeting. |
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| Q: |
How
many votes do I have? |
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| A: |
You
are entitled to one vote for each share of our common stock, par value $0.001 per share (“Common Stock”), that
you hold. As of October 28, 2015, the record date, there were 2,266,219 shares of Common Stock outstanding. |
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| Q: |
Is
cumulative voting permitted for the election of directors? |
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| A: |
We
do not use cumulative voting for the election of directors. |
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| Q: |
What
happens if a nominee for director does not stand for election? |
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| A: |
If
for any reason any nominee does not stand for election, any proxies we receive will be voted in favor of the remaining nominees
and may be voted for a substitute nominee in place of the nominee who does not stand. We have no reason to expect that any
of the nominees will not stand for election. |
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| Q: |
What
happens if additional matters are presented at the Annual Meeting? |
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| A: |
Other
than the three items of business described in this Proxy Statement, we are not aware of any other business to be acted upon
at the Annual Meeting. If you grant a proxy, the persons named as proxy holders, Jeffrey E. Eberwein and Daniel M. Koch, will
have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. |
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| Q: |
How
many shares must be present or represented to conduct business at the Annual Meeting? |
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| A: |
A
quorum will be present if at least a majority of the outstanding shares of our Common Stock entitled to vote at the Annual
Meeting, totaling 1,133,110 shares, is represented at the Annual Meeting, either in person or by proxy. |
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Both abstentions
and broker non-votes (described above) are counted for the purpose of determining the presence of a quorum. |
| Q: |
How
can I attend the Annual Meeting? |
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| A: |
You
are entitled to attend the Annual Meeting only if you were a shareholder of the Company as of the close of business on October
28, 2015, the record date, or if you hold a valid proxy for the Annual Meeting. You should be prepared to present photo identification
for admittance. If you are a shareholder of record, your name will be verified against the list of shareholders of record
on the record date prior to your admission to the Annual Meeting. If you are not a shareholder of record, but hold shares
through a broker, bank or nominee (i.e., in street name), you should provide proof of beneficial ownership on the record date,
such as your most recent account statement prior to October 28, 2015, a copy of the voting instruction card provided by your
broker, bank or nominee, or other similar evidence of ownership. If you do not provide photo identification or comply with
the other procedures outlined above, you will not be admitted to the Annual Meeting. |
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The
Annual Meeting will begin promptly on December 3, 2015, at 4:00 p.m., local time. You should allow adequate time for check-in
procedures. |
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| Q: |
How
can I vote my shares in person at the Annual Meeting? |
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| A: |
Shares
held in your name as the shareholder of record may be voted in person at the Annual Meeting. Shares held beneficially in street
name may be voted in person at the Annual Meeting only if you obtain a legal proxy from the broker, bank or nominee that holds
the shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also
submit your proxy card or voting instruction card as described herein so your vote will be counted if you later decide not
to attend the Annual Meeting. |
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| Q: |
What
is the deadline for voting my shares? |
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| A: |
If
you hold shares as the shareholder of record, your vote by proxy must be received before the polls close at the Annual Meeting. |
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If
you hold shares beneficially in street name, please follow the voting instructions provided by your broker, bank or nominee.
You may vote these shares in person at the Annual Meeting only if at the Annual Meeting you provide a legal proxy obtained
from your broker, bank or nominee. |
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| Q: |
Is
my vote confidential? |
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| A: |
Proxy
instructions, ballots and voting tabulations that identify individual shareholders are handled in a manner that protects your
voting privacy. Your vote will not be disclosed either within the Company or to third parties except (i) as necessary to meet
applicable legal requirements, (ii) to allow for the tabulation of votes and certification of the vote and (iii) to facilitate
a successful proxy solicitation. Occasionally, shareholders provide written comments on their proxy card, which are then forwarded
to our management. |
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| Q: |
How
are votes counted? |
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| A: |
For
the election of directors, you may vote “FOR” any or all nominees or your vote may be “WITHHELD” with
respect to any or all nominees. For the other items of business, you may vote “FOR,” “AGAINST” or
“ABSTAIN.” |
| Q: |
Where
can I find the voting results of the Annual Meeting? |
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| A: |
We
intend to announce preliminary voting results at the Annual Meeting and publish final voting results in a Current Report on
Form 8-K to be filed with the Securities and Exchange Commission (“SEC”) within four business days after the Annual
Meeting. |
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| Q: |
Who
will bear the cost of soliciting votes for the Annual Meeting? |
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|
| A: |
We
are making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing these
proxy materials and soliciting votes. We have retained InvestorCom, Inc., at 65 Locust Avenue, New Canaan, CT 06840, to act
as a proxy solicitor in connection with the Annual Meeting at a cost of $6,000, plus out-of-pocket expenses. If you have questions
about the Annual Meeting, please call InvestorCom at (203) 972-9300 or toll free at (877) 972-0090, or email them at info@investor-com.com. |
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We
will also reimburse brokerage firms and nominees for their expenses in forwarding proxy material to beneficial owners of our
Common Stock. In addition, our officers and employees (none of whom will receive any compensation therefore in addition to
their regular compensation) may solicit proxies. Proxies may be solicited through the mail and through telephonic or telegraphic
communications to, or by meetings with, shareholders or their representatives. |
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| Q: |
How
can I obtain the Company’s corporate governance information? |
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| A: |
The
following information is available in print to any shareholder who requests it: |
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Amended
and Restated Articles of Incorporation |
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Bylaws,
as amended |
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The
charters of the following committees of the Board: the Audit Committee, the Nomination and Corporate Governance Committee
and the Compensation Committee |
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Code
of Business Conduct and Ethics |
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● |
Policy
regarding shareholder communications with the Board |
| Q: |
How may I obtain
the 2014 Form 10-K and other financial information? |
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| A: |
A
copy of the 2014 Form 10-K is enclosed with this Proxy Statement. Shareholders may request another free copy of the 2014 Form
10-K and other financial information by contacting us at: |
ATRM
Holdings, Inc.
3050 Echo Lake Avenue, Suite 300
Mahtomedi, Minnesota 55115
Attention: Corporate Secretary
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Alternatively,
current and prospective investors can access the 2014 Form 10-K at www.icommaterials.com/ATRM. We will also furnish any exhibit
to the 2014 Form 10-K if specifically requested. Our SEC filings are also available free of charge at the SEC’s website,
www.sec.gov, and at the Investor Relations portion of our website, atrmholdings.com/about-us-investor-relations. |
| Q: |
What
if I have questions for the Company’s transfer agent? |
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|
| A: |
Please
contact our transfer agent at the telephone number or address listed below with any questions concerning stock certificates,
transfer of ownership or other matters pertaining to your stock account. |
Computershare
Mail Address: P.O. BOX 30170, College Station, TX, 77842
Overnight Delivery Address: 211 Quality Circle, Suite 210, College
Station, TX, 77845
Toll free for US and Canada: (800) 962-4284
Outside of US and Canada: 1 (781) 575-3120
| Q: |
Who can help
answer my questions? |
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|
| A: |
If
you have any questions about the Annual Meeting or how to vote or revoke your proxy, please contact InvestorCom at: |
InvestorCom,
Inc.
65 Locust Avenue
New Canaan, CT 06840
Telephone: (203) 972-9300 or Toll Free (877) 972-0090
Fax: (203) 966-6478
E-mail: info@investor-com.com
| |
You also can contact
us at: |
ATRM
Holdings, Inc.
3050 Echo Lake Avenue, Suite 300
Mahtomedi, Minnesota 55115
Attention: Corporate Secretary
Proposal
No. 1: Election of Directors
There
are five nominees for election to the Board at the Annual Meeting: Jeffrey E. Eberwein, Morgan P. Hanlon, Alfred John Knapp, Jr.,
Daniel M. Koch and Galen Vetter. Each of the nominees currently serves as a director.
Each
director is elected annually to serve until our next annual meeting of shareholders and until his or her successor is duly elected
and qualifies. Except where authority to vote for directors has been withheld, it is intended that the proxies received pursuant
to this solicitation will be voted “FOR” the nominees named below. If for any reason any nominee does not stand for
election, such proxies will be voted in favor of the remainder of those named and may be voted for substitute nominees in place
of those who do not stand. Management has no reason to expect that any of the nominees will not stand for election.
The
following table and paragraphs set forth information regarding our executive officers and nominees for election to the Board,
including the business experience for the past five years (and, in some instances, for prior years) of each of our executive officers
and directors and the experiences and skills that led to the conclusion that the nominees should serve as directors.
Name |
|
Age |
|
Position |
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|
|
|
|
| Jeffrey E. Eberwein
|
|
45 |
|
Chairman of the
Board |
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|
|
|
|
| Daniel M. Koch |
|
62 |
|
President, Chief
Executive Officer and Director |
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|
|
|
|
| Paul H. Askegaard |
|
63 |
|
Chief Financial
Officer, Treasurer and Secretary |
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|
|
|
|
| Morgan P. Hanlon |
|
50 |
|
Director |
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|
|
|
|
| Alfred John Knapp,
Jr. |
|
64 |
|
Director |
| |
|
|
|
|
| Galen Vetter |
|
64 |
|
Director |
Jeffrey
E. Eberwein joined our Board in January 2013. In addition to his service to the Company, he is the founder and chief executive
officer of Lone Star Value Management, LLC (“Lone Star Value”), an investment firm. Prior to founding Lone Star Value
in January 2013, Mr. Eberwein was a Portfolio Manager at Soros Fund Management from January 2009 to December 2011 and Viking Global
Investors from March 2005 to September 2008. Mr. Eberwein is Chairman of the Board of Digirad Corporation; Crossroads Systems,
Inc.; AMERI Holdings, Inc.; and Hudson Global, Inc. Mr. Eberwein also serves on the board of Novation Companies, Inc. Mr. Eberwein
previously served on the board of The Goldfield Corporation from May 2012 to May 2013, On Track Innovations Ltd. from December
2012 to March 2014, and NTS, Inc. from December 2012 until its sale to a private equity firm was completed in June 2014. Mr. Eberwein
served on the board of Hope for New York, a 501(c)3 organization dedicated to serving the poor in New York City from 2011 to 2014
where he was Treasurer and on the Executive Committee. Mr. Eberwein earned a MBA from The Wharton School, University of Pennsylvania
and a BBA with High Honors from The University of Texas at Austin. Mr. Eberwein brings to our Board over 23 years of Wall Street
experience and valuable public company and financial expertise, gained from both his employment history and directorships.
Daniel
M. Koch has served as our President and Chief Executive Officer since November 15, 2013, and has served on our Board since
November 2013. Previous to that, Mr. Koch served as vice president – marketing since October 2012. From September 2010 to
September 2012, Mr. Koch served as a Senior Account Manager for Delta Design – Rasco, a manufacturer of test handlers. From
March 1991 to August 2010, Mr. Koch served as our vice president – worldwide sales. From March 1990 to March 1991, Mr. Koch
served as the vice president of sales of Summation, Inc., a company involved with the testing of PC boards. From December 1973
to March 1990, Mr. Koch served in various sales positions and most recently as vice president of sales of Micro Component Technology,
Inc. Mr. Koch’s extensive experience in sales and general management and knowledge of our products, our markets and our
customers is invaluable to our Board.
Paul
H. Askegaard has served as our Chief Financial Officer since December 2013, our Secretary since November 2013, and our
Treasurer since February 1992. Previously, Mr. Askegaard served as our corporate controller from October 1986 to February 1992,
as our assistant secretary from May 2000 to November 2013, and as a director from November 2013 to November 2015. Mr. Askegaard
received his Bachelor of Science degree from the University of North Dakota. Mr. Askegaard is a licensed certified public accountant
(inactive).
Morgan
P. Hanlon has served on our Board since April 2014. Mr. Hanlon is the founder and since 2006 has served as the Managing
Member of Casey Real Estate Investment, LLC, Casey Property Management, LLC and PhilMor Real Estate Investments, LLC, which acquire,
own and operate commercial real estate, primarily in the self storage and multi-family sectors. Previously, Mr. Hanlon held investment
banking positions with Wells Fargo Securities and Morgan Stanley. Mr. Hanlon earned a BS from the United States Military Academy
at West Point and an MBA from the University of Pennsylvania, Wharton Graduate School of Business. Mr. Hanlon brings to the Board
financial and investment expertise and experience, as well as business analysis acumen and advanced financial literacy.
Alfred
John Knapp, Jr. has served on our Board since April 2014 and previously served on our Board from January 2013 to March
2013. Mr. Knapp has served as the President, Chief Executive Officer and principal shareholder of Andover Group, Inc. since 1978.
Andover’s two main business lines are real estate development and investment management. He also is a Partner at CCM Opportunistic
Partners, an investment fund that invests with emerging managers. Previously, Mr. Knapp served as the Chief Executive Officer
and a director of ICO, Inc., a resin processor, from October 2005 to April 2010, when ICO was acquired by A. Schulman, Inc. He
has served as a director of On Track Innovations Ltd., a company principally engaged in the design and development of cashless
payment solutions, since December 2012. Mr. Knapp is a CFA and has served as a trustee of Annunciation Orthodox School in Houston,
and is currently a trustee of the Armand Bayou Nature Center. Mr. Knapp is an honors graduate of Williams College. Mr.
Knapp’s extensive corporate and business strategy experience makes him a valuable asset to the Board.
Galen
Vetter joined our Board in January 2013. He is currently a private investor and professional corporate director. In his
career Mr. Vetter served as president of Rust Consulting, Inc. (December 2008 to May 2012), as global chief financial officer
of Franklin Templeton Investment Funds (April 2004 to November 2008) and in numerous roles at McGladrey (June 1973 to March 2004).
In addition to our Board, Mr. Vetter currently serves as a member on the Advisory Board of Directors of Land O’Lakes and
serves on the board of Alerus Financial, Crossroads Systems, Inc. and Hill Capital Corporation. Mr. Vetter is a licensed certified
public accountant (inactive). Mr. Vetter is a member of the National Association of Corporate Directors, including being Board
Leadership Fellow certified. Mr. Vetter received his Bachelor of Science degree from the University of Northern Iowa. Mr. Vetter
brings to our Board diverse management experience including financial, analytical, information management, strategy and team development.
In addition to Mr. Vetter’s extensive financial experience, our Board benefits from Mr. Vetter’s enterprise risk management
and international business experience.
Family
Relationships
There
are no family relationships among our executive officers and directors.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors, executive officers
and holders of more than 10% of our Common Stock to file with the SEC initial reports of ownership and reports of changes in the
ownership of Common Stock and other equity securities of the Company. Such persons are required to furnish us with copies of all
Section 16(a) filings.
Based
solely upon a review of the copies of the forms furnished to us, we believe that our directors, officers and holders of more than
10% of our Common Stock complied with all applicable filing requirements during the 2014 fiscal year, except as follows: Galen
Vetter filed a Form 4 on April 15, 2014 reporting one transaction that occurred on January 7, 2014 and Jeffrey E. Eberwein filed
a Form 4 on April 4, 2014 reporting one transaction that occurred on April 1, 2014.
Related
Person Transactions and Certain Relationships
Jeffrey
E. Eberwein and Lone Star Value
Jeffrey
E. Eberwein, our Chairman of the Board, is the manager of Lone Star Value Investors GP, LLC (“LSVGP”), the general
partner of Lone Star Value Investors, LP (“LSVI”) and Lone Star Value Co-Invest I, LP (“LSV Co-Invest I”),
and sole member of Lone Star Value Management, LLC (“LSVM”), the investment manager of LSVI. As of October 28, 2015,
LSVI owned a total of 1,067,885 shares of Common Stock, or approximately 47% of the shares outstanding.
In
order to finance our acquisition of our KBS business, on April 1, 2014, we entered into a Securities Purchase Agreement with LSVI
pursuant to which it purchased for $6.5 million in cash, an unsecured promissory note made by the Company in the principal amount
of $6.0 million (the “April 2014 LSVI Promissory Note”), bearing interest at 10.0% per annum, with interest payable
semiannually and any unpaid principal and interest due on April 1, 2019, and an unsecured convertible promissory note made by
the Company in the principal amount of $0.5 million (the “LSVI Convertible Promissory Note”), bearing interest at
5.0% per annum, with interest payable semiannually and any unpaid principal and interest due on April 1, 2019. At any time after
July 30, 2014, at LSVI’s option, the unpaid principal amount of the LSVI Convertible Promissory Note could be converted
into shares of our Common Stock at $4.66 per share. On October 7, 2014 the LSVI Convertible Promissory Note was converted into
107,297 shares of our Common Stock. ATRM may prepay the April 2014 LSVI Promissory Note at any time after a specified amount of
advance notice to LSVI. A principal payment of $1.0 million was made on the April 2014 LSVI Promissory Note on December 30, 2014.
On
May 9, 2014, as provided for in the April 2014 Securities Purchase Agreement, we entered into a Registration Rights Agreement
(the “Registration Rights Agreement”) with LSVI. The Registration Rights Agreement provides LSVI with certain demand
and piggyback registration rights, effective at any time after July 30, 2014, with respect to the shares of our Common Stock issuable
upon the conversion of the LSVI Convertible Promissory Note.
In
order to provide additional working capital to the Company, we entered into two Securities Purchase Agreements with LSV Co-Invest
I and one additional Securities Purchase Agreement with LSVI. Pursuant to these agreements, LSV Co-Invest I purchased for $2.5
million in cash, an unsecured promissory note, dated July 21, 2014, made by the Company in the principal amount of $2.5 million,
and for $2.0 million in cash, an unsecured promissory note, dated September 19, 2014, made by the Company in the principal amount
of $2.0 million, and LSVI purchased for $1.0 million in cash, an unsecured promissory note, dated February 25, 2015, made by the
Company in the principal amount of $1.0 million. Each of these notes bears interest at 10.0% per annum, with interest payable
semiannually in January and July and any unpaid principal and interest is due on April 1, 2019. Except for the principal amounts,
the terms of these promissory notes are identical to the terms of the April 2014 LSVI Promissory Note. The LSVI promissory note
dated February 25, 2015 was repaid on September 21, 2015.
ATRM’s
entry into the Securities Purchase Agreements with LSVI and LSV Co-Invest I were approved by a Special Committee of our Board
consisting solely of independent directors.
Procedures
for Review and Approval of Transactions with Related Parties
All
transactions between us and any of our officers, directors, director nominees, principal shareholders or their immediate family
members are required to be reviewed and approved by the Audit Committee. Such policy and procedures are set forth in the Audit
Committee charter.
Vote
Required
Each
nominee receiving a plurality of the affirmative (“FOR”) votes cast at the Annual
Meeting will be elected to the Board.
Recommendation
of the Board
The
Board unanimously recommends a vote “FOR” the election of each of its nominees to the Board to serve until the Company’s
2016 Annual Meeting of Shareholders and until their successors are duly elected and qualify.
Proposal
No. 2: Ratification of Appointment of Independent Registered
Public Accounting Firm
The
Audit Committee has appointed Boulay PLLP as our independent registered public accounting firm for the fiscal year ending December
31, 2015. Although this appointment does not require ratification, the Board has directed that the appointment of Boulay PLLP
be submitted to shareholders for ratification due to the significance of the appointment. If shareholders do not ratify the appointment
of Boulay PLLP, the Audit Committee will consider the appointment of another independent registered public accounting firm.
Boulay
PLLP served as the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2014
and 2013. A representative of Boulay PLLP is expected to be present at the Annual Meeting, will have an opportunity to make a
statement and will be available to respond to appropriate questions.
Change
in Independent Registered Public Accounting Firm
We
engaged Boulay PLLP as our new independent registered public accounting firm on December 30, 2013, following our dismissal of
Grant Thornton LLP on December 23, 2013. The dismissal of Grant Thornton LLP was approved by the Audit Committee. The reports
of Grant Thornton LLP on our financial statements for the fiscal years ended December 31, 2012 and 2011 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, 2012 and 2011 and through the date of their dismissal, (i) there were no disagreements
with Grant Thornton LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope
or procedure, which disagreements, if not resolved to the satisfaction of Grant Thornton LLP, would have caused it to make reference
to such disagreement in its reports and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
Audit
and Non-Audit Fees
The
following table presents aggregate fees billed for professional services rendered by Boulay PLLP for fiscal years 2014 and 2013.
There were no other professional services rendered or fees billed by Boulay PLLP for fiscal years 2014 or 2013.
| Services
Rendered | |
2014 | | |
2013 | |
| Audit
Fees (1) | |
$ | 176,000 | | |
$ | 50,000 | |
| Audit-Related
Fees (2) | |
| 18,725 | | |
| — | |
| Tax
Fees (3) | |
| 53,595 | | |
| — | |
| All
Other Fees (4) | |
| 156,278 | | |
| — | |
| (1) |
These
fees include the audits of our annual consolidated financial statements for fiscal years 2014 and 2013 and the reviews of
our consolidated financial statements included in our Quarterly Reports on Form 10-Q and 10-Q/A for fiscal year 2014. |
| |
|
| (2) |
These
fees are related to an acquisition and divestiture in 2014 and consultations related to contingent consideration and discontinued
operations. |
| |
|
| (3) |
These
fees are related to the preparation of our 2013 federal and state income tax returns and consultations regarding Section 382
of the Code. |
| |
|
| (4) |
These
fees are related to the audits of the historical financial statements of an acquired business. |
Pre-Approval
Policies and Procedures
All
services provided by our independent registered public accounting firms are subject to pre-approval by our Audit Committee. The
Audit Committee has authorized each of its members to approve services by our independent registered public accounting firms in
the event there is a need for such approval prior to the next full Audit Committee meeting. The Audit Committee has also adopted
policies and procedures that are detailed as to the particular service and that do not include delegation of the Audit Committee’s
responsibilities to management under which management may engage our independent registered public accounting firm to render audit
or non-audit services. Any interim approval given by an Audit Committee member and any such engagement by management must be reported
to the Audit Committee no later than its next scheduled meeting. Before granting any approval, the Audit Committee (or a committee
member if applicable) gives due consideration to whether approval of the proposed service will have a detrimental impact on the
independence of the independent registered public accounting firm. The full Audit Committee then serving pre-approved all services
provided by Boulay PLLP in fiscal year 2014.
Vote
Required
The
affirmative (“FOR”) vote of the majority of the votes cast on the matter at the Annual Meeting is required to ratify
the appointment of Boulay PLLP as our registered public accounting firm for the fiscal year ending December 31, 2015.
Recommendation
of the Board
The
Board unanimously recommends a vote “FOR” the ratification of the appointment of Boulay PLLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2015.
Proposal
No. 3: Advisory Vote on Executive Compensation
The
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the “Dodd-Frank Act,” enables shareholders to
vote to approve, on an advisory, non-binding basis, the compensation of the named executive officers as disclosed in this Proxy
Statement in accordance with the SEC’s rules.
We
are asking shareholders to indicate their support for the compensation of our named executive officers named in the “Summary
Compensation Table” included in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal,
gives shareholders the opportunity to express their views on the compensation of our named executive officers. Accordingly, we
will ask shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED,
that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed
in the Company’s Proxy Statement for the 2015 Annual Meeting of Shareholders pursuant to the compensation disclosure rules
of the Securities and Exchange Commission, including the Summary Compensation Table and the other related tables and disclosure.”
The
say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. The Board and
the Compensation Committee value the opinions of our shareholders and to the extent there is any significant vote against the
named executive officer compensation as disclosed in this Proxy Statement, we will consider our shareholders’ concerns and
the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
Vote
Required
The
affirmative (“FOR”) vote of the majority of the votes cast on the matter at the Annual Meeting is required to approve
the compensation of our named executive officers.
Recommendation
of the Board
The
Board unanimously recommends a vote “FOR” the adoption of the resolution approving the compensation of the Company’s
named executive officers.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information with respect to the beneficial ownership of our Common Stock as of October 28, 2015, by:
| |
● |
each
person, or group of affiliated persons, known to us to beneficially own more than 5% of our outstanding Common Stock; |
| |
|
|
| |
● |
each
of our directors and named executive officers; and |
| |
|
|
| |
● |
all
of our directors and executive officers as a group. |
The
amounts and percentages of Common Stock beneficially owned are reported on the basis of regulations of the SEC governing the determination
of beneficial ownership of securities. The information relating to our 5% beneficial owners is based on information we received
from such holders. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that
person has or shares voting power, which includes the power to vote or direct the voting of a security, or investment power, which
includes the power to dispose of or to direct the disposition of a security. A person is also deemed to be a beneficial owner
of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than
one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities
as to which such person has no economic interest. Except as otherwise set forth below, the address of the persons listed below
is c/o ATRM Holdings, Inc., 3050 Echo Lake Avenue, Suite 300, Mahtomedi, Minnesota 55115, and each of the persons listed has,
to our knowledge, sole voting and investment power with respect to the indicated shares of Common Stock.
| Name
of Beneficial Owner | |
Number
of
Shares of
Common Stock | | |
Percentage
of
Outstanding
Common Stock (1) | |
| 5%
or Greater Shareholders | |
| | | |
| | |
| Lone
Star Value Investors, LP | |
| 1,067,885 | (2) | |
| 47.1 | % |
| | |
| | | |
| | |
| Directors
and Named Executive Officers | |
| | | |
| | |
| Jeffrey
E. Eberwein | |
| 1,077,885 | (3) | |
| 47.6 | % |
| Daniel
M. Koch | |
| 19,010 | (4) | |
| * | |
| Paul
H. Askegaard | |
| 23,000 | (5) | |
| 1.0 | % |
| Morgan
P. Hanlon | |
| 10,000 | | |
| * | |
| Alfred
John Knapp, Jr. | |
| 10,000 | | |
| * | |
| Galen
Vetter | |
| 20,185 | | |
| * | |
| All
executive officers and directors as a group (6 persons)(6) | |
| 1,160,080 | (6) | |
| 50.9 | % |
*
Represents holdings of less than 1% of shares outstanding.
| |
(1) |
The
applicable percentage of ownership for each beneficial owner is based on 2,266,219 shares of Common Stock outstanding as of
October 28, 2015. Shares of our Common Stock issuable upon exercise of options, warrants or other rights or the conversion
of other convertible securities beneficially owned that are exercisable or convertible within 60 days are deemed outstanding
for the purpose of computing the percentage ownership of the person holding such securities and rights and all executive officers
and directors as a group. |
| |
|
|
| |
(2) |
Represents
1,067,885 shares of Common Stock owned directly by LSVI. LSVGP is the general partner of LSVI. LSVM is the investment
manager of LSVI. Jeffrey E. Eberwein, the Chairman of our Board of Directors, as the manager of LSVGP and sole member of LSVM,
may be deemed the beneficial owner of these securities. Mr. Eberwein disclaims beneficial ownership of such securities, except
to the extent of his pecuniary interest therein. The principal business address of LSVI is 53 Forest Avenue, 1st
Floor, Old Greenwich, Connecticut 06870. |
| |
|
|
| |
(3) |
Represents
10,000 unvested restricted shares of Common Stock owned directly by Mr. Eberwein and 1,067,885 shares of Common
Stock owned directly by LSVI. Mr. Eberwein, the Chairman of our Board of Directors, as the manager of LSVGP and sole member
of LSVM, may be deemed the beneficial owner of the securities owned by LSVI. Mr. Eberwein disclaims beneficial ownership of
such securities, except to the extent of his pecuniary interest therein. |
| |
|
|
| |
(4) |
Includes
5,500 shares of Common Stock issuable upon exercise of options. |
| |
|
|
| |
(5) |
Includes
8,000 shares of Common Stock issuable upon exercise of options. |
| |
|
|
| |
(6) |
Includes
13,500 shares of Common Stock issuable upon exercise of options. |
Corporate
Governance
Director
Independence
The
Board has determined that all of our non-employee directors, other than Mr. Eberwein, are independent within the meaning of SEC
and Nasdaq rules. The Board has also determined that all directors serving on the Audit Committee, the Compensation Committee
and the Nomination and Corporate Governance Committee are independent within the meaning of SEC and Nasdaq rules.
Board
and Committee Meetings
During
the fiscal year ended December 31, 2014, the Board met or took action in writing nine times, the Audit Committee met or took action
in writing six times, the Compensation Committee met or took action in writing two times and the Nomination and Corporate Governance
Committee met or took action in writing two times. Each of the directors then serving attended at least 75% or more of the aggregate
of (i) the total number of meetings of the Board (held during the period for which he served as a director), and (ii) the total
number of meetings held by all committees of the Board on which he served (during the periods that he served on such committees).
All of our then-incumbent directors attended our 2014 annual meeting of shareholders.
We
have no written policy regarding director attendance at annual meetings of shareholders.
Board
Committees
Our
Board has three standing committees to assist it with its responsibilities. These committees are described below.
Audit
Committee. The primary purpose of the Audit Committee is to oversee the accounting and financial reporting processes of the
Company and the audits of the consolidated financial statements of the Company. The Audit Committee is also charged with the review
and approval of all related party transactions involving the Company. The current members of the Audit Committee are Messrs. Vetter,
Hanlon and Knapp. Mr. Vetter currently serves as Chairman of the Audit Committee. The Board has determined that all members of
the Audit Committee are audit committee financial experts, as defined by the Exchange Act, based on their past business experience
and financial certifications. The Audit Committee charter is posted in the “About Us – Governance” section of
our website at atrmholdings.com.
Compensation
Committee. The duties and responsibilities of the Compensation Committee include, among other things, reviewing and approving
the Company’s general compensation policies, setting compensation levels for the Company’s executive officers, setting
the terms of and grants of awards under share-based incentive plans and retaining and terminating executive compensation consultants.
The current members of the Compensation Committee are Messrs. Knapp, Hanlon and Vetter. Mr. Knapp currently serves as Chairman
of the Compensation Committee. The Compensation Committee charter is posted in the “About Us – Governance” section
of our website at atrmholdings.com.
Nomination
and Corporate Governance Committee. The duties and responsibilities of the Nomination and Corporate Governance Committee include,
among other things, assisting the Board in identifying individuals qualified to become Board members and recommending director
nominees for the next annual meeting of shareholders, and taking a leadership role in shaping the corporate governance of the
Company. The current members of the Nomination and Corporate Governance Committee are Messrs. Hanlon, Knapp and Vetter. Mr. Hanlon
currently serves as Chairman of the Nomination and Corporate Governance Committee. The Nomination and Corporate Governance Committee
charter is posted in the “About Us – Governance” section of our website at atrmholdings.com.
Director
Nominations
The
Nomination and Corporate Governance Committee evaluates and recommends candidates for membership on the Board consistent with
the criteria established by the committee. The Nomination and Corporate Governance Committee has not formally established any
specific, minimum qualifications that must be met by each candidate for the Board or specific qualities or skills that are necessary
for one or more of the members of the Board to possess. However, the Nomination and Corporate Governance Committee, when considering
a candidate, will factor into its determination the following qualities of a candidate: educational background; diversity of professional
experience, including whether the person is a current or former CEO or CFO or the head of a division of a successful company;
knowledge of our business; integrity; professional reputation; strength of character; mature judgment; relevant technical experience;
diversity; independence; wisdom; and ability to represent the best interests of our shareholders. The Nomination and Corporate
Governance Committee may also consider such other factors as it may deem to be in the best interests of the Company and our shareholders.
The
Nomination and Corporate Governance Committee uses the same criteria for evaluating candidates nominated by shareholders and self-nominated
candidates as it does for those proposed by other Board members, management and search companies. For more information on how
shareholders can nominate candidates for election as directors, see “Shareholder Proposals” below.
The
Nomination and Corporate Governance Committee identifies nominees by first evaluating the current members of the Board willing
to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are
willing to continue in service are considered for re-nomination, thereby balancing the value of continuity of service by existing
members of the Board with that of obtaining a new perspective. If any member of the Board up for re-election at an upcoming annual
meeting of shareholders does not wish to continue in service, the Nomination and Corporate Governance Committee identifies the
desired skills and experience of a new nominee in light of the criteria above. Current members of the Nomination and Corporate
Governance Committee and Board will be polled for suggestions as to individuals meeting the criteria of the Nomination and Corporate
Governance Committee. Research may also be performed to identify qualified individuals. If the Nomination and Corporate Governance
Committee believes that the Board requires additional candidates for nomination, it may explore alternative sources for identifying
additional candidates. Alternative sources may include engaging, as appropriate, a third party search firm to assist in identifying
qualified candidates.
While
we do not have a specific policy related to Board diversity, the Board seeks nominees with a broad diversity of experience, expertise
and backgrounds. We believe that the backgrounds and qualifications of the directors, considered as a group, should provide a
significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities and
meet its objectives. Nominees are not discriminated against on the basis of race, gender, religion, national origin, sexual orientation,
disability or any other basis prescribed by law.
Board
Leadership Structure
The
Board is led by Jeffrey E. Eberwein, our Chairman of the Board since November 2013. The Board does not have a policy regarding
the separation of the roles of Chief Executive Officer and Chairman of the Board as the Board believes it is in the best interests
of the Company to make that determination based on the then-current position and direction of the Company and the membership of
the Board. The Board has determined that separating the roles of Chief Executive Officer and Chairman of the Board is in the best
interests of the Company’s shareholders at this time. This structure permits the Chief Executive Officer to focus exclusively
on the management of our day-to-day operations and the Board to provide appropriate oversight.
Board
Role in Risk Oversight
Senior
management is responsible for assessing and managing our various exposures to risk on a day-to-day basis, including the creation
of appropriate risk management programs and policies. The Board is responsible for overseeing management in the execution of its
responsibilities and for assessing our approach to risk management. The Board exercises these responsibilities periodically as
part of its meetings and also through the Board’s three committees, each of which examines various components of enterprise
risk as part of its responsibilities. Members of each committee report to the full Board at the next Board meeting regarding risks
discussed by such committee. In addition, an overall review of risk is inherent in the Board’s consideration of our long-term
strategies and in the transactions and other matters presented to the Board, including capital expenditures, acquisitions and
divestitures, and financial matters.
Code
of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics (the “Code of Ethics”), which covers a wide range of business practices
and procedures and is intended to ensure to the greatest extent possible that our business is conducted in a consistently legal
and ethical manner. The Code of Ethics is consistent with how we have always conducted our business and applies to all of our
directors, officers and other employees, including our principal executive officer and principal financial and accounting officer.
A copy of the Code of Ethics is publicly available on our website at atrmholdings.com/about-us-governance-documentation. We intend
to promptly disclose on our website any grant of waivers from or amendments to a provision of the Code of Ethics following such
amendment or waiver.
Shareholder
Communications with the Board
Any
shareholder wishing to do so may communicate directly with the Board or specified individual directors by writing to:
Board
of Directors (or name of individual director)
c/o
Corporate Secretary
ATRM
Holdings, Inc.
3050
Echo Lake Avenue, Suite 300
Mahtomedi,
Minnesota 55115
All
communications that are reasonably related to the Company or its business will be directed by the Corporate Secretary to the Board,
or particular Board members, not later than the next regularly scheduled meeting of the Board. Notwithstanding the foregoing,
the Corporate Secretary has the authority to discard or disregard or take other appropriate actions with respect to any inappropriate
communications, such as unduly hostile, illegal or threatening communications.
Additionally,
the Audit Committee has established procedures for the receipt, retention and confidential treatment of complaints received by
the Company regarding accounting, internal accounting controls or auditing matters, including procedures for confidential, anonymous
submissions by employees with respect to such matters. Employees and shareholders may raise a question or concern to the Audit
Committee regarding accounting, internal accounting controls or auditing matters by writing to:
Chairman,
Audit Committee
c/o
Corporate Secretary
ATRM
Holdings, Inc.
3050
Echo Lake Avenue, Suite 300
Mahtomedi,
Minnesota 55115
Audit
Committee Report
The
Audit Committee has reviewed and discussed the consolidated financial statements for the fiscal year ended December 31, 2014 with
both management and Boulay PLLP, the Company’s independent registered public accounting firm. In its discussion, management
has represented to the Audit Committee that the Company’s consolidated financial statements for the fiscal year ended December
31, 2014 were prepared in accordance with generally accepted accounting principles.
The
Audit Committee meets with the Company’s independent registered public accounting firm, with and without management present,
to discuss the results of their examinations, their evaluations of the Company’s internal controls and the overall quality
of the Company’s financial reporting. The Audit Committee has discussed with Boulay PLLP the matters required to be discussed
by Statement on Auditing Standard No. 16, “Communications with Audit Committees,” issued by the Public Company Accounting
Oversight Board. Boulay PLLP reported to the Audit Committee regarding the critical accounting estimates and practices and the
estimates and assumptions used by management in the preparation of the audited consolidated financial statements as of December
31, 2014 and for the fiscal year then ended, all alternative treatments of financial information within generally accepted accounting
principles that have been discussed with management, the ramifications of use of such alternative treatments and the treatment
preferred by Boulay PLLP.
Boulay
PLLP provided a report to the Audit Committee describing Boulay PLLP’s internal quality-control procedures and related matters.
Boulay PLLP also provided to the Audit Committee the written disclosures and the letter required by the applicable requirements
of the Public Company Accounting Oversight Board regarding Boulay PLLP’s communications with the Audit Committee concerning
independence, and the Audit Committee discussed with Boulay PLLP its independence. When considering Boulay PLLP’s independence,
the Audit Committee considered, among other matters, whether Boulay PLLP’s provision of non-audit services to the Company
is compatible with maintaining the independence of Boulay PLLP. All audit and permissible non-audit services in 2014 and 2013
were pre-approved pursuant to these procedures.
Based
on the Audit Committee’s review of the audited financial statements and the various discussions noted above, the Audit Committee
recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2014.
| |
AUDIT
COMMITTEE |
| |
|
| |
Galen Vetter (Chairman) |
| |
Morgan P. Hanlon |
| |
Alfred John Knapp,
Jr. |
Executive
Compensation
Summary
Compensation Table
The
following table sets forth the cash and non-cash compensation for the fiscal years ended December 31, 2014 and December 31, 2013
earned by our named executive officers:
| Name
and Principal Position (1) | |
Year | |
| Salary
($) | | |
| Total
($) | |
| Daniel
M. Koch | |
2014 | |
| 128,743 | | |
| 128,743 | |
| President
and Chief Executive Officer | |
2013 | |
| 128,743 | | |
| 128,743 | |
| | |
| |
| | | |
| | |
| Paul
H. Askegaard | |
2014 | |
| 138,280 | | |
| 138,280 | |
| Chief
Financial Officer, Treasurer and Secretary | |
2013 | |
| 138,280 | | |
| 138,280 | |
| (1) |
Mr.
Koch was appointed President and Chief Executive Officer effective November 15, 2013. Mr. Askegaard was appointed Chief Financial
Officer effective December 23, 2013. |
Employment
Agreements
Each
of the Company’s current executive officers, Messrs. Koch and Askegaard, are employees “at will” and do not
have employment agreements with the Company.
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth equity incentive plan awards for each named executive officer outstanding as of the end of our last
completed fiscal year:
| | |
Option
Awards |
| Name | |
Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | |
Number
of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | |
Option
Exercise
Price ($) (1) | | |
Option
Expiration Date |
| Daniel
M. Koch | |
| 5,500 | (2) | |
| — | | |
| 6.10 | | |
11/1/2017 |
| | |
| | | |
| | | |
| | | |
|
| Paul
H. Askegaard | |
| 3,000 | (3) | |
| — | | |
| 23.50 | | |
8/26/2015 |
| | |
| 5,500 | (4) | |
| — | | |
| 7.75 | | |
3/19/2017 |
| | |
| 2,500 | (5) | |
| — | | |
| 5.20 | | |
11/20/2017 |
| (1) |
All
option share and exercise price amounts reflect the one-for-10 reverse stock split we implemented effective October 11, 2013. |
| |
|
| (2) |
The
stock option was granted on November 1, 2012. The stock option became fully exercisable effective March 13, 2013 as a result
of an agreement we entered into with an activist shareholder group that triggered an accelerated vesting provision in Mr.
Koch’s change of control agreement. |
| |
|
| (3) |
The
stock option was granted on August 26, 2010. The stock option became fully exercisable effective March 13, 2013 as a result
of an agreement we entered into with an activist shareholder group that triggered an accelerated vesting provision in Mr.
Askegaard’s change of control agreement. |
| |
|
| (4) |
The
stock option was granted on March 19, 2012. The stock option became fully exercisable effective March 13, 2013 as a result
of an agreement we entered into with an activist shareholder group that triggered an accelerated vesting provision in Mr.
Askegaard’s change of control agreement. |
| |
|
| (5) |
The
stock option was granted on November 20, 2012. The stock option became fully exercisable effective March 13, 2013 as a result
of an agreement we entered into with an activist shareholder group that triggered an accelerated vesting provision in Mr.
Askegaard’s change of control agreement. |
Potential
Payments Upon Termination or Change of Control
Effective
as of January 6, 2004, or upon their later employment, we entered into Change of Control Agreements (each a “Change of Control
Agreement”) with certain of our executives, including the named executive officers, that provide for severance pay and other
benefits in the event of a change of control. The Change of Control Agreements provide for severance payments of two times the
executive’s annual base salary in the event the executive’s employment is terminated, either voluntarily with “good
reason” or involuntarily, during the two-year period following a change of control. The severance payments are to be made
over 24 months following the date of employment termination according to our regular payroll practices and policies. An executive
receiving severance payments is also entitled to reimbursement of the employer portion of group medical and group dental premiums
under COBRA continuation coverage. The Change of Control Agreements also provide for immediate vesting of all unvested options
outstanding to the executive upon a change of control. In January 2008, the Change of Control Agreements were amended to conform
to Section 409A of the Internal Revenue Code.
For
purposes of the Change of Control Agreements, a change of control was deemed to occur upon:
| |
● |
the
sale or other transfer of all or substantially all of our assets; |
| |
|
|
| |
● |
the
approval by our shareholders of a liquidation or dissolution of the company; |
| |
|
|
| |
● |
any
person, other than a bona fide underwriter, becoming the owner of more than 40% of our outstanding shares of Common Stock; |
| |
|
|
| |
● |
a
merger, consolidation or exchange involving the company, but only if our shareholders prior to such transaction own less than
65% of the combined voting power of the surviving or acquiring entity following the transaction; or |
| |
|
|
| |
● |
the
“continuity” members of our board, being the incumbent members of our board as of the end of 2012 and future members
of our board who were approved by at least a majority of our continuity members, ceasing to constitute at least a majority
of the board. |
Effective
March 13, 2013, we entered into an agreement with Concerned Aetrium Shareholders, a shareholder group, pursuant to which our Board
was reconstituted to include three incumbent directors and three members of the shareholder group. This was deemed to constitute
a change of control under the Change of Control Agreements, resulting in unvested options to purchase a total of 25,772 shares
of our Common Stock held by executives becoming immediately and fully exercisable pursuant to the terms of the Change of Control
Agreements.
Compensation
of Non-Employee Directors
The
following table sets forth the cash and non-cash compensation for our fiscal year ended December 31, 2014 awarded to or earned
by our directors other than the named executive officers.
| Name | |
Fees
Earned or Paid in Cash ($) | | |
Total
($) | |
| Jeffrey
E. Eberwein | |
| — | | |
| — | |
| Morgan
P. Hanlon | |
| — | | |
| — | |
| Alfred
John Knapp, Jr. | |
| — | | |
| — | |
| Galen
Vetter | |
| 2,500 | | |
| 2,500 | |
| Richard
K. Coleman, Jr. (1) | |
| 2,500 | | |
| 2,500 | |
| (1) |
Mr. Coleman, Jr.
resigned from our board of directors in April 2014. |
At
the present time, our directors receive no cash compensation for their services as members of the Board, although their out-of-pocket
expenses incurred on our behalf are reimbursed. Messrs. Vetter and Coleman received $2,500 each in cash as compensation for their
service on a special committee of the Board created in connection with the KBS acquisition.
Shareholder
Proposals
Proposals
of shareholders intended to be presented at the Company’s 2016 Annual Meeting of Shareholders (the “2016 Annual Meeting”)
must be received by the Company at its principal executive offices on or before July 9, 2016 and must satisfy the requirements
of the proxy rules promulgated by the SEC, in order to be included in our proxy statement and form of proxy relating to the 2015
Annual Meeting.
Under
SEC rules, if the Company does not receive notice of a shareholder proposal at least 45 days prior to the first anniversary of
the date of mailing of the prior year’s proxy statement, then the Company will be permitted to use its discretionary voting
authority when the proposal is raised at the annual meeting, without any discussion of the matter in the proxy statement. In connection
with the 2016 Annual Meeting, if the Company does not have notice of a shareholder proposal on or before September 22, 2016, the
Company will be permitted to use its discretionary voting authority as outlined above.
Proxy
Solicitation
The
solicitation of proxies is made on behalf of the Board, and the cost thereof will be borne by us. We have retained InvestorCom,
Inc., at 65 Locust Avenue, New Canaan, CT 06840, to act as a proxy solicitor in connection with the Annual Meeting at a cost of
$6,000, plus out-of-pocket expenses. We will also reimburse brokerage firms and nominees for their expenses in forwarding proxy
material to beneficial owners of our Common Stock. In addition, our officers and employees (none of whom will receive any compensation
therefore in addition to their regular compensation) may solicit proxies. Proxies may be solicited through the mail and through
telephonic or telegraphic communications to, or by meetings with, shareholders or their representatives.
Annual
Report
The
2014 Form 10-K is being sent with this Proxy Statement to each shareholder and is available at www.icommaterials.com/ATRM. The
2014 Form 10-K contains audited consolidated financial statements of the Company and its subsidiaries for the fiscal year ended
December 31, 2014. The 2014 Form 10-K, however, is not to be regarded as part of the proxy soliciting material.
ATRM
HOLDINGS, INC.
ANNUAL
MEETING OF SHAREHOLDERS – December 3, 2015
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned shareholder of ATRM Holdings, Inc., a Minnesota corporation (the “Company”), hereby appoints Jeffrey E.
Eberwein and Daniel M. Koch, each with full power of substitution, as proxies, to vote all capital stock of the Company that the
shareholder would be entitled to vote on all matters that may properly come before the Company’s Annual Meeting of the Shareholders
to be held at 4:00 p.m., local time, on Thursday, December 3, 2015 (the “Annual Meeting”) at the Company’s offices
located at 3050 Echo Lake Avenue, Suite 300, Mahtomedi, Minnesota 55115, and any adjournments or postponements thereof. The undersigned
shareholder hereby revokes any proxy or proxies heretofore given by the undersigned for the Annual Meeting.
This
proxy when properly executed and returned will be voted in the manner directed by the undersigned shareholder. If no direction
is made, this proxy will be voted in accordance with the recommendations of the Board. The proxies are also authorized to vote
upon such other matters as may properly come before the Annual Meeting in accordance with their discretion.
PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
The
Board recommends a vote FOR the election of the listed nominees and FOR Proposals 2 and 3.
| 1. |
Election
of nominees named below to the Board of Directors of the Company. |
| |
[ ] |
FOR ALL NOMINEES. |
| |
|
|
| |
[ ] |
WITHHOLD AUTHORITY
FOR ALL NOMINEES. |
| |
|
|
| |
[ ] |
FOR ALL EXCEPT |
| |
|
(See instructions
below) |
| |
Nominees: |
● |
Jeffrey E. Eberwein |
| |
|
● |
Morgan P. Hanlon |
| |
|
● |
Alfred John Knapp,
Jr. |
| |
|
● |
Daniel M. Koch |
| |
|
● |
Galen Vetter |
| INSTRUCTIONS: |
To
withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to
each nominee you wish to withhold, as shown here: ● |
| 2.
|
To
ratify the appointment of Boulay PLLP as the Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2015. |
| |
FOR
[ ] |
AGAINST
[ ] |
ABSTAIN
[ ] |
| 3. |
To
approve an advisory resolution regarding the compensation of the Company’s named executive officers. |
| |
FOR
[ ] |
AGAINST
[ ] |
ABSTAIN
[ ] |
This
proxy may be revoked prior to the time it is voted by delivering to the Secretary of the Company either a written revocation or
a proxy bearing a later date, or by appearing at the Annual Meeting and voting in person.
See
reverse side for additional instructions
PLEASE
ACT PROMPTLY
PLEASE
SIGN AND DATE THIS PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE TODAY
To
change the address on your account, please check the box at right and indicate your new address in the address space above. Please
note that changes to the registered name(s) on the account may not be submitted via this method. [ ]
| DATE:
________________________ |
|
|
| |
|
(Signature
of Shareholder) |
| |
|
|
| DATE:
________________________ |
|
|
| |
|
(Signature
of Shareholder) |
| |
|
|
| |
|
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. |