American Resources Corp PRE 14A, filed Mar 24, 2021
American Resources Corp (AREC)
PRE 14A
2021-03-24
For: 2021-04-30
View Original
Added on
October 18, 2026
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☒ Preliminary Proxy Statement
☐ Confidential, for
Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☐ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under Exchange Act Rule
14a-12
American Resources Corporation
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
☒
No fee
required.
☐
Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1.)
Title of each class
of securities to which transaction applies:
2.)
Aggregate number of
securities to which transaction applies:
3.)
Per unit price or
other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4.)
Proposed maximum
aggregate value of transaction:
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Total fee
paid:
☐
Fee paid previously
with preliminary materials.
☐
Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1.)
Amount Previously
Paid:
2.)
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Registration Statement No.:
3.)
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Party:
4.)
Date
Filed
American Resources Corporation
Notice of Annual Meeting of Shareholders to be held on
April 30, 2021 and Proxy Statement
2
March
24, 2021
Dear
Fellow Shareholders:
We are
pleased to invite you to attend our annual shareholder meeting,
which is scheduled to be held on April 30, 2021, at 10:30 a.m.
Eastern Time. In light of COVID-19 (Coronavirus), the annual
shareholder meeting will be completely virtual. You may attend the
meeting, submit questions and vote your shares electronically
during the meeting via live webcast by visiting http://www.virtualshareholdermeeting.com/AREC2021.
You will need the 16-digit control number that is printed in the
box marked by the arrow on your proxy card to enter the meeting. We
recommend that you log in at least 15 minutes before the meeting to
ensure you are logged in when the meeting starts.
As
explained in the enclosed Proxy Statement, at this year’s
meeting you will be asked to vote for the election of five
directors.
Your vote is very important to us – participate in the future
of American Resources Corporation and exercise your shareholder
right by voting your shares right away.
Only
shareholders of record at the close of business on April 9, 2021,
or their proxy holders, may vote at the meeting. Attendance at the
meeting is limited to shareholders or their proxy holders and
American Resources Corporation guests. Only our shareholders or
their valid proxy holders may address the meeting.
Please
review the proxy card for the instructions on how you can vote your
shares over the internet, by telephone or by mail. It is important
that all American Resources Corporation shareholders, regardless of
the number of shares owned, participate in the affairs of the
Company.
Thank
you for your continued interest in American Resources
Corporation.
Sincerely,
Mark C.
Jensen
Chairman
and Chief Executive Officer
3
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4
Notice of Annual Meeting of Shareholders
Dear
Shareholders:
You are
cordially invited to attend the 2021 Annual Meeting of Shareholders
of American Resources Corporation (herein referred to as the
“Company,” “American Resources,”
“us,” “our,” and “we”). This is
your notice for the meeting. In light of COVID-19 (Coronavirus),
the 2020 Annual Meeting of Shareholders will be conducted solely
virtually, on the below date and time, via live audio webcast. You
or your proxyholder may participate, vote at the Annual Meeting by
visiting http://www.virtualshareholdermeeting.com/AREC2021
and using your 16-digit control number.
TIME AND DATE
10:30
a.m. Eastern Time on April 30, 2021 (“Annual
Meeting”).
LOCATION
http://www.virtualshareholdermeeting.com/AREC2021
ITEMS OF BUSINESS
●
To elect the five
nominees named in the Proxy Statement as directors to hold office
until the 2022 Annual Meeting of Shareholders;
●
To approve BF
Borgers CPA PC as our independent registered public accounting firm
for the fiscal year ending December 31, 2021; and
●
To consider and act
upon such other matters as may properly come before the meeting or
any adjournment or postponement thereof.
RECORD DATE
Shareholders
of record at the close of business on April 9, 2020 are entitled to
vote on the matters presented at the Annual Meeting.
PROXY VOTING
Our
Board of Directors is soliciting proxies to be voted at the Annual
Meeting of Shareholders. Each share entitles the holder to one
vote. You may vote either by attending the virtual meeting online
or by proxy. For specific voting information, please see
“Frequently Asked Questions About Voting” beginning on
page 1 of the Proxy Statement that follows. Whether or not you plan
to attend the virtual meeting, we hope you will vote as soon as
possible. You may vote by proxy over the Internet at
www.proxyvote.com or by telephone, or, if you requested paper
copies of the proxy materials, you can also vote by mail by
following the instructions on the proxy card or voting instruction
card. Voting over the Internet, by telephone or by written proxy or
voting instruction card will ensure your representation at the
meeting regardless of whether you attend the virtual
meeting.
5
In
accordance with the Securities and Exchange Commission’s
“notice and access” model, we are providing our Notice
of Annual Meeting of Shareholders, Proxy Statement and Annual
Report on Form 10-K for the year ended December 31, 2020 to you
online with paper copies available, free of charge, upon request.
On or about April 16, 2021, we will begin mailing a Notice of
Internet Availability of Proxy Materials detailing how to access
the proxy materials electronically and how to submit your proxy via
the Internet. The Notice of Internet Availability of Proxy
Materials also provides instructions on how to request and obtain
paper copies of the proxy materials and proxy card or voting
instruction form, as applicable. We believe this process provides
our shareholders with a convenient way to access the proxy
materials and submit their proxies online, while allowing us to
reduce our environmental impact as well as the costs of printing
and distribution.
Sincerely,
Mark C.
Jensen
Chairman
and Chief Executive Officer
March
12, 2021
Important Notice Regarding the Availability of Proxy Materials for
the
Annual Shareholder Meeting to be Held on April 30,
2021:
The
notice of Annual Meeting of Shareholders, Proxy Statement and 2020
Annual Report to
Shareholders
are available electronically at www.proxyvote.com
6
American
Resources Corporation
12115
Visionary Way, Suite 174
Fishers,
Indiana 46038
(317)
855-9926
www.AmericanResourcesCorp.com
Proxy Statement
FREQUENTLY ASKED QUESTIONS ABOUT VOTING
Where is the Annual Meeting?
The Annual Meeting will be completely virtual. Shareholders can
attend the virtual Annual Meeting by visiting http://www.virtualshareholdermeeting.com/AREC2021.
Why is the Annual Meeting a virtual meeting?
We have
decided to hold our Annual Meeting virtually due to COVID-19
(Coronavirus); we are sensitive to the public health and travel
concerns of our shareholders and employees and the protocols that
federal, state and local governments may impose. We believe that
hosting a virtual meeting will enable greater shareholder
attendance and participation from any location around the
world.
On what am I voting?
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Item Description
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More
Information
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Board Recommendation
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Broker Non-Votes
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Abstentions
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Voting Required for Approval
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Item 1:
Election of directors
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Page
9
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FOR
each nominee
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Do Not
Count
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Do Not
Count
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Plurality
of votes cast
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Who may vote?
Shareholders
recorded in our stock register at the close of business on April 9,
2021 may vote at the meeting. As of that date, there were
50,804,196 shares of our common stock outstanding.
How many votes do I have?
You
have one vote for each share of our common stock you owned as of
the record date for the meeting.
How do I vote?
Our
proxy materials are available to shareholders on the Internet and
by mail. You may read, print and download our 2020 Annual Report on
Form 10-K, Proxy Statement and proxy card at
http://www.proxyvote.com. On an ongoing basis, shareholders may
request to receive proxy materials in printed form by mail or
electronically by e- mail. You may vote your shares by the Internet
at http://www.proxyvote.com, by regular mail or by attending the
virtual meeting. Each of these voting options is described in the
Notice of Availability of Proxy Materials (the “Notice of
Availability” or “Notice”) and the proxy
card.
7
To
ensure that your vote is counted at the meeting, regardless of
whether you plan to attend the meeting virtually, you should vote
by using the Internet voting option on your proxy card or mailing
in your proxy card to American Resources’ address shown
above. If you return an executed proxy card without marking your
instructions, your executed proxy card will be voted in accordance
with the recommendations of the board of directors (the
“Board” or “Board of Directors”). If you
indicate a choice with respect to any matter to be acted upon on
your proxy card or voting instruction card, your shares will be
voted per your instructions.
What are the Board of Director’s
recommendations?
The
Board of Director’s recommendations are set forth together
with the description of each item in this Proxy Statement. In
summary, the Board of Directors and the Audit Committee recommend a
vote as follows:
●
FOR the election of the five nominees
named in this Proxy Statement as directors.
●
FOR the ratification of the appointment
of BF Borgers CPA PC as our independent registered public
accounting firm for the fiscal year ending December 31,
2021.
If any
other matters properly come before the Annual Meeting, we will vote
the shares in accordance with our best judgment and
discretion.
What if I change my mind after I have voted?
You may
revoke your proxy before it is voted by:
●
submitting a new
proxy card with a later date;
●
voting at the
virtual meeting; or
●
giving written
notice to the Corporate Secretary at American Resources’
address shown above.
Will my shares be voted if I do not provide my proxy and
don’t attend the Annual Meeting?
If you
do not provide a proxy or vote your shares held in your name, your
shares will not be voted. If you hold your shares in street name,
your broker may be able to vote your shares for certain
“routine” matters even if you do not provide the broker
with voting instructions. However, the proposal to elect directors
is not considered routine. As a result, no broker may vote your
shares on the proposal to elect directors without your specific
instructions.
How do I attend the virtual meeting?
To
attend and participate in the Annual Meeting, shareholders will
need to access the live audio webcast of the meeting. To do so,
shareholders of record will need to visit http://www.virtualshareholdermeeting.com/AREC2021
and use their 16-digit Control Number provided in the Notice to log
in to the website, and beneficial owners of shares held in street
name will need to follow the instructions provided by the broker,
bank or other nominee that holds their shares. We would encourage
shareholders to log in to this website and access the webcast at
least 15 minutes before the meeting to ensure you are logged in
when the meeting starts.
8
What constitutes a quorum?
To
carry on the business of the meeting, we must have a quorum. This
means at least a majority of the voting power of all of the
outstanding shares of stock entitled to vote as of the record date
must be represented at the meeting, either by proxy or by joining
the virtual meeting. Shares of common stock owned by American
Resources are not voted and do not count for this
purpose.
Abstentions
and proxies submitted by brokers that do not indicate a vote
because they do not have discretionary authority and have not
received instructions as to how to vote on a proposal (so-called
“broker non-votes”) will be considered as present for
quorum purposes.
What vote is required to approve the proposal to elect
directors?
Under
our bylaws, directors are elected by a plurality of the votes cast
at the meeting. This means that the five directors who receive the
most “for” votes are elected. Abstentions and broker
non-votes will not affect the outcome of the vote. For additional
information on the election of directors, see “Item 1:
Election of Directors.”
Who conducts the proxy solicitation and how much will it
cost?
American
Resources is requesting your proxy for the annual shareholder
meeting and will pay all the costs of requesting shareholder
proxies. We can request proxies through the mail or by telephone,
fax or Internet. We can use directors, officers and other employees
of American Resources to request proxies. Directors, officers and
other employees will not receive additional compensation for these
services. We will reimburse brokerage firms, nominees, fiduciaries,
custodians and other agents for their expenses in distributing
proxy material to the beneficial owners of our common
stock.
ITEM 1: ELECTION OF
DIRECTORS
Nominees for Directors
Each of
our directors will be elected at this year’s meeting to a
one-year term expiring at the Annual Meeting of Shareholders in
2022.
If any
nominee becomes unavailable for election, the Board of Directors
can name a substitute nominee, and proxies will be voted for the
substitute nominee pursuant to discretionary
authority.
Listed
below are the biographies of each director nominee. The biographies
include information regarding each individual’s service as a
director of the Company, business experience, director positions at
public companies held currently or at any time during the last five
years, and the experiences, qualifications, attributes or skills
that caused the Board of Directors to determine that the person
should serve as a director for the Company.
9
Set forth below are the names, ages and positions of our director
nominees as of the date of this Proxy Statement:
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Name
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Age
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Position
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Mark C
Jensen
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41
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Chairman
of the Board, Chief Executive Officer
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Thomas
M. Sauve
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42
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Director,
President
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Courtenay
O. Taplin
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70
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Independent
Director
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Michael
G. Layman
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29
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Independent
Director
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Gerardine
G. Botte, PH.D.
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50
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Independent
Director
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MARK C.
JENSEN
Board Chairman
Committee: Environmental, Health, and Safety Committee
Mr.
Jensen has been an operator, investor and consultant in various
natural resources and energy businesses. He has been highly
involved in the navigation of numerous growth businesses to mature
businesses, working as a managing member at T Squared Capital LLC
since 2007, an investment firm focused on private equity styled
investing in start-up businesses. Mr. Jensen has significant
experience with major Wall Street firms such as Citigroup and
graduated from the Kelley School of Business at Indiana University
with a BS in Finance and International Studies with a focus on
Business. He also studied in Sydney Australia through Boston
University completing his International Studies degree with a focus
on East Asian culture and business.
The
Board nominated Mr. Jensen for his leadership, experience in
finance and ability to lead mergers and acquisitions. There are no
arrangements or understandings between him and any other persons
pursuant to which he was selected as an officer. He has no direct
or indirect material interest in any transaction required to be
disclosed pursuant to Item 404(a) of Regulation S-K.
THOMAS
M. SAUVE
Committee: Environmental, Health, and Safety Committee
Mr.
Sauve has been involved a number of energy related businesses.
Prior he had been an investor and partner in various natural
resources assets over the last seven years including coal mining
operations and various oil and gas wells throughout Texas and the
Appalachia region. Since 2007, Mr. Sauve also worked as a managing
member at T Squared Capital LLC, an investment firm focused on
private equity styled investing in start-up businesses. Mr. Sauve
received his bachelor’s degree in Economics, magna cum laude,
from the University of Rochester, New York, with additional studies
at the Simon Graduate School of Business.
The
Board nominated Mr. Sauve for his experience in finance, mergers
and acquisitions and resource management. There are no arrangements
or understandings between him and any other persons pursuant to
which he was selected as an officer. He has no direct or indirect
material interest in any transaction required to be disclosed
pursuant to Item 404(a) of Regulation S-K.
10
COURTENAY
O. TAPLIN
Independent Director Nominee
Committee: Audit
Mr.
Taplin serves as Director of American Resources Corporation. He
brings over 40 years of experience of sourcing and supplying iron
ore, coke and metallurgical coal to the steel industry to assist
American Resources with their supply chain, logistics, customers,
overall corporate strategy. He has a vast knowledge of both the
global and domestic marketplace where he works with both suppliers
and consumers. Courtenay is currently Managing Director of Compass
Point Resources, LLC which he founded in 2007. His prior experience
includes Crown Coal & Coke Company and Pickands Mather &
Company out of Cleveland, OH. Mr. Taplin attended Hobart College
and received his degree from Case Western Reserve
University
The
Board nominated Mr. Taplin to serve as a director because of his
experience and relationships in the raw materials and coking sector
and his experience in managing growing businesses. He has no direct
or indirect material interest in any transaction required to be
disclosed pursuant to Item 404(a) of Regulation S-K.
MICHAEL
G. LAYMAN
Independent Director Nominee
Committees: (1) Audit and (2) Compensation
Mr.
Layman is a well-established financial industry executive with a
track record for driving value and growth for both private and
publicly traded companies. Mr. Layman currently serves as General
Partner/CEO of Emerald Shoals Targeted Opportunities Fund LP, a
hybrid growth fund backed by a network of ultra-high net worth
individuals seeking novel opportunities to invest in high-growth
catalyst driven companies. Prior to his current role at Emerald
Shoals, Mr. Layman served at a large top-four brokerage house where
he was co-owner of a private wealth management group where he was
responsible for identifying attractive and undervalued investment
opportunities. Additionally, he also aided in the development and
implementation of various investment strategies based on differing
types of needs from conservative to aggressive growth.
Additionally, Mr. Layman previously worked for a private equity
fund in New York where he established a strong network of
relationships with research analysts and investment bankers at a
number of Wall Street firms. Mr. Layman obtained his Bachelor of
Arts degree in business from Otterbein University.
The
Board nominated Mr. Layman to serve as a director because of his
leadership in the finance industry and assisting companies with
capital raising. He has no direct or indirect material interest in
any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
GERARDINE
G. BOTTE
Independent Director Nominee
Committees: (1) Audit and (2) Compensation
Dr.
Botte has over 21 years of experience in the development of
electrochemical processes and advanced water treatment. She has
served in leadership roles for the Electrochemical Society and is
currently the Chair of the Electrochemical Process Engineering and
Technology Division of the International Society of
Electrochemistry. Dr. Botte also serves as the Editor in Chief of
the Journal of Applied Electrochemistry. In 2014, she was named a
Fellow of the Electrochemical Society for her contributions and
innovation in electrochemical processes and engineering. She became
a Chapter Fellow of the National Academy of Inventors in 2012. In
2010, she was named a Fellow of the World Technology Network for
her contributions on the development of sustainable and
environmental technologies. Prior to Texas Tech, Dr. Botte was
University Distinguished Professor and Russ Professor of Chemical
and Biomolecular Engineering at Ohio University, the founder and
Director of Ohio University’s Center for Electrochemical
Engineering Research, and the founder and Director of the
Consortium for Electrochemical Processes and Technology – an
Industry University Cooperative Research Center. Her
entrepreneurial spirit has led to the commercialization of various
technologies and has founded and co-founded various companies to
help achieve this goal.
The
Board nominated Dr. Botte to serve as a director because of her
thought leadership in the technical innovations of in carbon and
rare earth elements. She has no direct or indirect material
interest in any transaction required to be disclosed pursuant to
Item 404(a) of Regulation S-K
The Board of Directors recommends a vote FOR the election of each
of the nominees as directors.
11
ITEM 2: SELECTION OF BF BORGERS CPA PC AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2021.
The Board of Directors has selected BF Borgers CPA PC (“BF
Borgers CPA PC” or “BFB”), as our independent
registered public accounting firm for the year ending December 31,
2021. A representative of BF Borgers CPA PC is expected to be
present at the Annual Meeting, will have an opportunity to make a
statement if he so desires and will be available to respond to
appropriate questions.
Shareholder ratification of the appointment of our independent
registered public accounting firm is not required by our bylaws or
otherwise. However, our Board is submitting the appointment of BF
Borgers CPA PC to the shareholders for ratification as a matter of
what it considers to be good corporate practice. Even if the
appointment is ratified, our Board in its discretion may direct the
appointment of a different independent registered public accounting
firm at any time during the year if the Board determines that such
a change would be in our and our shareholders’ best
interests.
The following table sets forth the aggregate fees billed by our
independent registered accounting firm for the fiscal years ended
December 31, 2020 and December 31, 2019. These fees are categorized
as audit fees, audit-related fees, tax fees, and all other fees.
The nature of the services provided in each category is described
in the table below.
|
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2020
|
2019
|
|
Audit
fees
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$180,000
|
$-
|
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Audit-related
fees
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10,000
|
–
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Tax
fees
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-
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-
|
|
All other
fees
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–
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$–
|
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Total
Fees
|
$190,000
|
$-
|
Audit fees. Consist of fees
billed for professional services rendered for the audit of the
consolidated financial statements and review of the quarterly
interim consolidated financial statements. These fees also include
the review of registration statements and the delivery of consents
in connection with registration statements.
Tax fees. Consists of fees paid
to BFB related to the filings of Federal and State returns during
the years ended December 31, 2020 and 2019.
All other fees. Consists of
fees related to letters to underwriters in connection with certain
registration statements for the years ended December 31, 2020 and
2019.
The Audit Committee of our Board of Directors has established its
pre-approval policies and procedures, pursuant to which the Audit
Committee approved the foregoing audit and audit-related services
provided by BFB in 2020 and 2019 consistent with the Audit
Committee’s responsibility for engaging our independent
auditors. The Audit Committee also considered whether the non-audit
services rendered by our independent registered public accounting
firm are compatible with an auditor maintaining independence. The
Audit Committee has determined that the rendering of such services
is compatible with BFB maintaining its independence.
The Board of Directors recommends a vote FOR the selection of each
of BF Borgers CPA PC as our independent registered public
accounting firm for the fiscal year ending December 31,
2021.
12
CORPORATE GOVERNANCE
Criteria for Director Nominations
In
assessing the qualifications of candidates for nomination as
director, in addition to qualifications set forth in our bylaws,
the Board considers whether a candidate possesses the integrity,
judgment, knowledge, experience, skills and expertise that are
likely to enhance the Board of Directors’ ability to manage
and direct our affairs and business, including, when applicable, to
enhance the ability of the committees of the Board of Directors to
fulfill their duties.
Although
the Board is willing to consider candidates recommended by our
shareholders, it has not adopted a formal policy with regard to the
consideration of any director candidates recommended by our
shareholders. The Board believes that a formal policy is not
necessary or appropriate because of the small size of the Board and
because the current Board already has a diversity of business
background and industry experience. Our Board will consider
director candidates recommended by shareholders who are highly
qualified in terms of business experience and both willing and
expressly interested in serving on the Board. Shareholders
recommending candidates for consideration should send their
recommendations to us at our principal executive offices (American
Resources Corporation, 12115 Visionary Way, Suite 174, Fishers,
Indiana 46038) in accordance with the procedures described in our
amended and restated bylaws. The Board will consider
recommendations for the 2022 Annual Meeting of Shareholders if they
are received by the close of business on February 28,
2022.
13
Director Independence
The
Board of Directors determined that Messrs. Taplin and Layman and
Dr. Botte are independent within the meaning of the listing
standards for general independence of the NASDAQ Global Select
Market.
Under
the listing standards, the Audit Committee is required to be
composed solely of independent directors. The standards for audit
committee membership include additional requirements under rules of
the Securities and Exchange Commission (the “SEC”). The
Board has determined that all of the members of the audit committee
meet the applicable independence requirements.
Code of Conduct and Financial Code of Ethics
Our
Code of Conduct and Financial Code of Ethics provides general
statements of our expectations regarding ethical standards that we
expect our directors, officers and employees to adhere to while
acting on our behalf. The Code of Conduct and Financial Code of
Ethics are available on our Internet website,
www.americanresourcescorp.com.
We
intend to post on our website any amendments to, or waivers of, any
provision of the Code of Conduct or Financial Code of Ethics to the
extent applicable to our Chief Executive Officer, President, Chief
Financial Officer or Chief Operating Officer or that relates to any
element of the SEC’s definition of a “code of
ethics.”
Conflicts of Interest and Related-Party Transactions
The
Audit Committee will address and resolve any issues with respect to
related-party transactions and conflicts of interest involving our
senior officers, directors or other “related persons”
under Item 404(a) of the SEC’s Regulation S-K and in
accordance with our Related Persons Transactions
Policy.
Our
Code of Conduct provides that all directors, officers and other
employees should avoid actual conflicts of interest as well as
potential conflicts of interest, and our Financial Code of Conduct,
applicable to our Chief Executive Officer, President, Chief
Financial Officer, Chief Operating Officer and other senior
financial officers, similarly obligates those employees to handle
actual or apparent conflicts of interest between personal and
professional relationships in an ethical manner. Any questionable
situation is required to be disclosed to an employee’s direct
supervisor or the Chief Compliance Officer, which is currently our
Chief Financial Officer.
Pursuant
to our Code of Conduct and our Related Persons Transactions Policy,
the Board has delegated to the Audit Committee the responsibility
for reviewing and resolving any issues with respect to
related-party transactions and conflicts of interests involving
senior officers or directors of the Company or other related
persons under the applicable rules of the SEC. Our Code of Conduct
requires that (i) each director and officer shall promptly disclose
to the Chief Compliance Officer any potential conflicts of interest
he (or a member of such person’s immediate family) may have
with respect to any matter involving the Company and, if
appropriate, recuse himself from any discussions or decisions on
any of these matters, and (ii) the Chief Compliance Officer shall
promptly advise the Audit Committee and the Chief Executive Officer
of any potential conflicts of interest he or she may have with
respect to any matter involving the Company and, if appropriate,
recuse himself from any discussions or decisions on any of these
matters.
14
In
accordance with our Related Persons Transactions Policy, in
determining whether to approve or ratify a related- party
transaction, the Committee will take into account, among other
factors it deems appropriate: (1) whether the transaction is on
terms no less favorable than terms generally available to an
unaffiliated third-party under the same or similar circumstances,
(2) the benefits to the Company and the related person, (3) the
extent of the related person’s interest in the transaction,
(4) the nature of the interest of the related person and (5)
whether the transaction may involve a conflict of
interest.
Policy with Respect to Hedging Transactions
We have
not adopted any practice or policy regarding the ability of our
employees (including officers) or directors, or any of their
designees, to purchase financial instruments (including prepaid
variable forward contracts, equity swaps, collars, and exchange
funds), or otherwise engage in transactions, that hedge or offset,
or are designed to hedge or offset, any decrease in the market
value of our equity securities. As such, our employees, officer,
directors or their designees are generally permitted to engage in
these transactions.
Board Leadership
The
Board does not have a policy regarding the separation of the roles
of Chief Executive Officer and Chairman of the Board, as our Board
believes it is in our best interests to make that determination
based on our position and direction and membership of the Board.
Currently, the position of Chief Executive Officer and Chairman are
held both by Mark C. Jensen.
The Board’s Role in Risk Oversight
The
Board of Directors is actively involved in the oversight of risks
that could impact American Resources, and risk oversight is the
responsibility of the full Board. The Board has ultimate oversight
responsibility for the Company’s system of enterprise risk
management.
Throughout
the year, the full Board (or the appropriate committee in the case
of risks in areas for which responsibility has been delegated to a
particular committee) participates in reviews with management of
the Company’s risk management process, the major risks facing
the Company and steps taken to mitigate those risks. The Board
reviews include litigation and other legal matters, regulatory
developments, budget and policy, and industry and economic
developments. In addition, existing committees help the Board carry
out its responsibility for risk oversight by focusing on specific
key areas of risk:
●
the Audit Committee
oversees the management of financial risks;
●
the Compensation
Committee oversees the management of risks relating to our employee
compensation plans and arrangements; and
●
the Environmental,
Health and Safety Committee oversees the management of risks
relating to our environmental, health and safety policies, programs
and initiatives.
15
Director Attendance
Last
year, the Board met 17 times, and the standing committees met a
total of 4 times. Each director attended 100% of the meetings (in
person or by telephone) of the Board of Directors and each of the
committees on which they served in 2020.
Board Organization and Committees
The
Board oversees the management of the Company’s business and
affairs. The Board appoints committees to help carry out its
duties. The following table sets forth the standing committees of
the Board and their members as of the date of this Proxy Statement,
as well as the number of meetings each committee held during
2020:
|
Director
|
Audit
Committee
|
Compensation
Committee
|
Environmental,
Health and Safety Committee
|
|
Courtenay
O. Taplin
|
X
|
|
|
|
Michael
G. Layman
|
X*
|
X*
|
|
|
Gerardine
G. Botte
|
X
|
X
|
|
|
Mark C.
Jensen
|
|
|
X
|
|
Thomas
M. Sauve
|
|
|
X*
|
|
Number of Meetings Held in 2020
|
4
|
4
|
4
|
*
Indicates Chairperson
Audit Committee:
The
primary responsibilities of the Audit Committee are to assist the
Board in fulfilling its oversight responsibility for:
●
the integrity of
the financial reports and other financial information provided by
us to the public or any governmental body;
●
our compliance with
legal and regulatory requirements;
●
our systems of
internal controls over financial reporting;
●
the qualifications
and independence of our independent auditors;
●
our auditing,
accounting and financial reporting processes generally;
and
●
the performance of
such other functions as the Board may assign from time to
time.
The
Audit Committee has sole responsibility to appoint and, where
appropriate, replace our independent auditors and to approve all
audit engagement fees and terms. The Audit Committee’s report
is on page 23.
The
Board of Directors has determined that Mr. Layman is an audit
committee financial expert within the meaning of the regulations of
the SEC, and that each member of the Audit Committee is independent
for purposes of serving on such committee under the Nasdaq listing
standards and applicable federal law.
Compensation Committee:
The
primary responsibilities of the Compensation Committee are to
assist the Board in fulfilling its oversight responsibility
for:
●
our executive and
director compensation; and
●
the administration
of our stock incentive plans.
16
The
Board of Directors has determined that Mr. Layman meets the
independence requirements applicable to the Compensation Committee
under the Nasdaq rules. In addition, the Board determined that Mr.
Layman is a “non-employee director” in accordance with
Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”).
Environmental, Health, and Safety Committee:
The
primary responsibilities of the Environmental, Health and Safety
Committee are to assist the Board in fulfilling its oversight
responsibility for our environmental, health and safety policies,
programs and initiatives. The Board of Directors has selected Mr.
Sauve as committee chair.
Executive Sessions of the Board
The
small size of the Board and the relationship between management and
non-employee directors put each director in a position to influence
agendas, flow of information, and other matters. On occasion, the
Board will hold separate meetings for independent directors without
management present. These meetings generally will be held in
conjunction with regularly scheduled meetings and at other times as
requested by an independent director.
Determining Executive and Director Compensation
The
Compensation Committee of the Board is responsible for determining
executive and director compensation. For executive officers, the
Compensation Committee receives and reviews reports and
recommendations from the Chief Executive Officer and Chief
Financial Officer regarding the performance and recommended
compensation of the other executive officers of the Company, and
the Compensation Committee recommends to the Board the annual
compensation, including salary, bonus, incentive and equity
compensation, for such officers. The Chief Executive Officer and
Chief Financial Officer may be present during Compensation
Committee discussions evaluating and setting the compensation
levels of the Company’s executive officers other than
themselves, but they may not vote on such
deliberations.
Shareholder Communications with Directors
Interested
parties who wish to make concerns known to the non-management
directors may communicate directly with the non-management
directors by making a submission in writing to “Board of
Directors (independent members)” in care of our Corporate
Secretary at the address indicated on the first page of this Proxy
Statement. Aside from this procedure for communications with the
non-management directors, the entire Board of Directors will
receive communications in writing from shareholders. Any such
communications should be addressed to the Board of Directors in
care of the Corporate Secretary at the same address.
Website Availability of Documents
American
Resources’ Annual Report on Form 10-K, the charters of the
Audit Committee, Compensation Committee, and Environmental, Health
and Safety Committee, the Code of Ethics and Financial Code of
Conduct can be found on the Investor Relations section of our
website at www.americanresourcescorp.com.
Unless specifically stated herein, documents and information on our
website are not incorporated by reference in this Proxy
Statement.
17
RELATED PARTY TRANSACTIONS
Transactions with Related Persons, Promoters and Certain Control
Persons.
On June
12, 2015, the Company executed a consulting agreement with an
entity with common ownership. During 2018 and 2017, the Company
incurred fees totaling $0 and $0 relating to services rendered
under this agreement. The amount outstanding and payable as of
December 31, 2018 and 2017, was $0 and $17,840,615, respectively.
The amount is due on demand and does not accrue interest. On May
25, 2018, the related party agreed to terminate the agreement and
extinguish the entire $17,840,615 payable.
During
2015, equipment purchasing was paid by an affiliate resulting in a
note payable. The balance of the note was $74,000 as of December
31, 2020 and 2019 respectively.
On
January 1, 2016, the Company awarded stock options for 827,862
shares in exchange for consulting efforts to an entity with common
ownership. 0 and 636,830 stock options were awarded to related
parties during 2020 or 2019, respectively.
On
April 30, 2017, the Company purchased $250,000 of secured debt that
had been owed to that party, by an operating subsidiary of a
related party. As a result of the transaction, the Company is now
the creditor on the notes. The first note in the amount of $150,000
is dated March 13, 2013, carries an interest rate of 12% and was
due on September 13, 2015. The second note in the amount of
$100,000 is dated July 17, 2013, carries an interest rate of 12%
and was due January 17, 2016. Both notes are in default and have
been fully impaired due to collectability uncertainty as of
December 31, 2020 and 2019, respectively.
During
July 2017 and October 2018, an officer of the Company advanced
$50,000 and $13,500, respectively, to the Company. The advance is
non-secured, non-interest bearing and due on demand.
During
December 2018, an officer of the Company advanced $5,000 to the
Company. The advance is non-secured, non-interest bearing and due
on demand.
The
Company, through its subsidiaries, leases property and mineral from
a related entity, Land Resources & Royalties LLC. During the
year ended December 31, 2020 and 2019, the Company incurred royalty
expense in the amount of $232,208 and $330,060.29 to a related
entity formally consolidated as a variable interest entity. As of
December 31, 2020, and 2019, the Company owed the related entity a
total of $679,146 and $737,981 for unpaid royalties and advances,
respectively. From inception, October 24, 2016, through June 30,
2018, the accounts of Land Resources & Royalties LLC were
consolidated with the company as a variable interest entity. Due to
its ongoing review, on July 1, 2018 management determined that Land
Resources & Royalties LLC no longer met the requirements of
consolidation and the accounts were deconsolidated.
On
October 13, 2020, the company paid $110,828.89 to settle past sales
commission invoices. The sales broker is 50% owned by one of our
directors.
18
On June
30, 2020 and on October 20, 2020, an investment fund controlled by
one of our directors made investments in the Company’s
convertible debt offering for a total of $1,250,000 as of December
31, 2020.
On
November 23, 2020, American Rare Earth, entered into an operating
agreement with one of our directors to form Advanced Carbon
Materials, LLC. The agreement calls for the company to fund the
Advanced Carbon Materials, LLC in the amount of $4,000 monthly for
the purpose of procuring licenses to further advance the
technologies in advanced carbon uses. As of December 31, 2020, no
transaction between the companies had been made.
On
February 13, 2020, the Company entered into a Contract Services
Agreement with Land Betterment Corp, an entity controlled by
certain members of the Company’s management who are also
directors and shareholders. The contract terms state that service
costs are passed through to the Company with a 10% mark-up and a
50% share of cost savings. The agreement covers services across all
of the Company’s properties. During 2020, the amount incurred
under the agreement amounted to $1,547,671 and the amount paid
amounted to $1,547,671. As of December 31, 2020, the amount due
under the agreement amounted to $355,899.32.
On June
11, 2020 the Company purchased $1,494,570 of secured debt included
accrued interest that had been owed to that party, by an operating
subsidiary of a related party. As a result of the transaction, the
Company is now the creditor on the four notes. The first note in
the amount of $75,000 is dated June 28, 2013, carries an interest
rate of 12% and was due on June 28, 2015. The second note in the
amount of $150,000 is dated June 28, 2013, carries an interest rate
of 12% and was due June 28, 2015. The third note in the amount of
$199,500 is dated March 18, 2014, carries an interest rate of 4%
and was due on March 18, 2016. The fourth note in the amount of
$465,500 is dated March 18, 2014, carries an interest rate of 4%
and was due on March 18, 2016. The notes are in default and have
been fully impaired due to collectability uncertainty.
DIRECTOR COMPENSATION
The
Compensation Committee of the Board oversees fee levels and other
elements of compensation for American Resources’
directors.
Director Compensation Table
The
table below and the narrative in the footnote provide compensation
amounts for our non-employee directors for 2019 as well as
additional material information in connection with such amounts.
For summary information on the provision of the plans and programs,
refer to the “Director Compensation” discussion
immediately preceding this table.
19
|
Director
|
Fees Earned
or
Paid in Cash
($)
|
Stock
Awards(1)
($)
|
Total
($)
|
|
Courtenay
Taplin(2)
|
-
|
41,000
|
41,000
|
|
Michael
Layman(3)
|
-
|
93,500
|
93,500
|
|
Gerardine
Botte(4)
|
-
|
41,000
|
41,000
|
|
Mark
Jensen(5)
|
-
|
41,000
|
41,000
|
|
Thomas
Sauve(6)
|
-
|
41,000
|
41,000
|
(1)
Reported amounts in
the table represent the aggregate grant date fair value of awards
computed in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification
(“ASC”) Topic 718.
(2)
Mr. Taplin was
appointed as a director on November 15, 2018. In 2018, Mr. Taplin
was awarded 15,000 options for services rendered as a director. The
options to Mr. Taplin vest equally over the course of three years.
In 2020, Mr. Taplin was awarded 25,000 options which vest
immediately. The Option Award to Directors in Column (d) of
$161,450 represents the amortized book value of warrants priced
using the Black-Scholes Option Pricing Model and does not represent
the actual cash value of the warrants to the warrant
holder.
(3)
Mr. Layman was
appointed as a director on July 16, 2020. In 2020, Mr. Layman was
awarded 75,000 options for services rendered as a director. The
options to Mr. Layman immediately. The Option Award to Directors in
Column (d) of $93,500 represents the amortized book value of
warrants valued using the Black-Scholes Option Pricing Model and
does not represent the actual cash value of the warrants to the
warrant holder.
(4)
Ms. Botte was
appointed as a director on November 23, 2020. Ms. Botte was awarded
25,000 options for her services on the board. The options vest
immediately. The Option Award to Directors in Column (d) of $41,000
represents the amortized book value of warrants priced using the
Black-Scholes Option Pricing Model and does not represent the
actual cash value of the warrants to the warrant
holder.
(5)
For services
rendered on the board of directors, Mr. Jensen was issued 25,000
options which vest immediately on October 1, 2020. The Option Award
to Directors in Column (d) of $41,000 represents the amortized book
value of warrants priced using the Black-Scholes Option Pricing
Model and does not represent the actual cash value of the warrants
to the warrant holder.
(6)
For services
rendered on the board of directors, Mr. Sauve was issued 25,000
options which vest immediately on October 1, 2020. The Option Award
to Directors in Column (d) of $41,000 represents the amortized book
value of warrants priced using the Black-Scholes Option Pricing
Model and does not represent the actual cash value of the warrants
to the warrant holder.
STOCK OWNERSHIP
The
following table shows stock ownership of (a) each person who is
known to us to own beneficially more than 5% of American
Resources’ common stock, based solely on statements filed by
such persons pursuant to Section 13(d) or 13(g) of the Exchange
Act, and (b) each director or nominee for director, the Chief
Executive Officer, President, the Chief Financial Officer, the
other executive officers for whom we are providing detailed
compensation information under “Executive Compensation
Tables” and our executive officers and directors as a group.
Information for the executive officers and directors is given as of
December 31, 2020 except as otherwise indicated. As of December 31,
2020, the Company had 40,882,762 shares of common stock issued,
outstanding, and eligible to vote. Beneficial ownership is
determined in accordance with Rule 13d-3 under the Exchange Act
and, except as otherwise indicated, the respective holders have
sole voting and investment powers over such shares.
All
information with respect to beneficial ownership has been furnished
by the respective 5% or more stockholders, directors or Named
Executive Officers (as defined below), as the case may be. Unless
otherwise noted, the mailing address of each listed beneficial
owner is c/o American Resources Corporation, 12115 Visionary Way,
Suite 174, Fishers, Indiana 46038.
20
|
Name of
Beneficial Owner
|
Common Stock
Beneficially Owned(1)
|
Percent of
Common Stock Beneficially Owned(2)
|
|
|
|
|
|
Directors
and Named Executive Officers:
|
|
|
|
Mark C. Jensen,
Chief Executive Officer, Director(3)
|
5,251,755
|
12.85%
|
|
Thomas M. Sauve,
President, Director(4)
|
4,464,136
|
10.92%
|
|
Kirk P. Taylor,
Chief Financial Officer
|
1,620,383
|
3.96%
|
|
Tarlis R. Thompson,
Chief Operating Officer
|
163,170
|
0.40%
|
|
All
Directors and Officers as a Group (4 persons)
|
11,412,313
|
27.91%
|
|
|
|
|
|
Five
Percent Shareholders:
|
|
|
|
Golden Properties,
Ltd.
|
2,404,917
|
5.88%
|
|
|
|
|
|
All
Directors, Officers and 5% Holders as a Group (5
persons)
|
13,817,230
|
33.80%
|
(1)
A person is deemed
to be the beneficial owner of securities that can be acquired by
such a person within 60 days from December 31, 2020, upon exercise
of options, warrants or convertible securities. Each beneficial
owner’s percentage ownership is determined by assuming that
options, warrants and convertible securities that are held by such
a person (but not those held by any other person) and are
exercisable within 60 days from that date have been
exercised.
(2)
Based on 40,882,762
Class A Common Stock outstanding as of December 31, 2020. These
percentages have been rounded for convenience.
(3)
Mr. Jensen
beneficially owns 92,264 shares of our Class A Common Stock through
his equity ownership in T Squared Capital LLC, which shares are
included in the table above.
(4)
Mr. Sauve
beneficially owns 61,509 shares of our Class A Common Stock through
his equity ownership in T Squared Capital LLC, which shares are
included in the table above.
EXECUTIVE OFFICERS
|
Name
|
Age
|
Position
|
|
Mark C.
Jensen
|
41
|
Chief
Executive Officer and Chairman of the Board
|
|
Thomas
M. Sauve
|
42
|
President
and Director
|
|
Kirk P.
Taylor
|
41
|
Chief
Financial Officer
|
|
Tarlis
R. Thompson
|
37
|
Chief
Operating Officer
|
Biographical
information for Messrs. Jensen and Sauve is set forth in this Proxy
Statement under the heading “Item 1: Election of
Directors.”
21
Kirk P. Taylor, CPA. Mr. Taylor conducts all tax and
financial accounting roles of the organization, and has substantial
experience in tax credit analysis and financial structure. Mr.
Taylor’s main focus over his 13 years in public accounting
had been the auditing, tax compliance, financial modeling and
reporting on complex real estate and business transactions
utilizing numerous federal and state tax credit and incentive
programs. Prior to joining American Resources Corporation, he was
Chief Financial Officer of Quest Energy, Inc., ARC’s
wholly-owned subsidiary. Prior to joining Quest Energy in 2015, he
was a Manager at K.B. Parrish & Co. LLP where he worked since
2014. Prior to that, he worked at Katz Sapper Miller since 2012 as
Manager. In addition, Mr. Taylor is an instructor for the CPA
examination and has spoken at several training and industry
conferences. He received a BS in Accounting and a BS in Finance
from the Kelley School of Business at Indiana University,
Bloomington Indiana and is currently completing his Master of
Business Administration from the University of Saint Francis at
Fort Wayne, Indiana. Mr. Taylor serves his community in various
ways including as the board treasurer for a community development
corporation in Indianapolis, Indiana. Mr. Taylor does not have any
family relationships with any of the Company’s directors or
executive officers. There are no arrangements or understandings
between Mr. Taylor and any other persons pursuant to which he was
selected as an officer. He has no direct or indirect material
interest in any transaction required to be disclosed pursuant to
Item 404(a) of Regulation S-K.
Tarlis R. Thompson. Mr. Thompson overseas all operations at
American Resources’ Central Appalachian subsidiaries, which
includes McCoy Elkhorn, Deane Mining, and Knott County Coal. In
this role, Mr. Thompson manages the activities at the
company’s various coal processing facilities and loadout,
coordinates coal production at the company’s various mines,
manages environmental compliance and reclamation, and is
responsible for coal quality control and shipments to customers.
Mr. Thompson graduated from Millard High School in Kentucky in 2001
and subsequently worked for Commercial Testing and Engineering,
working underground, performing surveying services and coal
sampling. In 2002 he joined SGS Minerals, working as a Quality
Control Manager. Shortly thereafter, he joined Massey Energy,
working as logistics manager for coal shipments via truck and
train, as well as a coal quality manager, working under Jim Slater
and Mike Smith. After several years at Massey, Mr. Thompson joined
Central Appalachian Mining (CAM), in charge of lab analysis and
environmental compliance at CAM’s various processing plants
and loadouts. Tarlis graduated from Millard High School and has
additional courses in Mining Engineering from Virginia Tech
(Training), Business Administration Management from National
College in Pikeville, and LECO Certified Course from West Virginia
Training Institute. Mr. Thompson does not have any family
relationships with any of the Company’s directors or
executive officers. There are no arrangements or understandings
between Mr. Thompson and any other persons pursuant to which he was
selected as an officer. He has no direct or indirect material
interest in any transaction required to be disclosed pursuant to
Item 404(a) of Regulation S-K.
EXECUTIVE COMPENSATION
TABLES
As an
“emerging growth company,” we have opted to comply with
the executive compensation disclosure rules applicable to
“smaller reporting companies,” as such term is defined
in the rules promulgated under the Securities Act of 1933, as
amended. These rules require compensation disclosure for our
principal executive officer and the two most highly compensated
executive officers other than our principal executive officer.
These officers are referred to as our “Named Executive
Officers”. The following tables show compensation information
(in US dollars) for our Named Executive Officers for the two-year
period ended December 31, 2020.
22
|
Name and
principal position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-equity
Incentive
plan
Compensation
|
Nonqualified
deferred compensation earnings
|
All
other
Compensation
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C.
Jensen
|
2020
|
$250,000
|
0
|
0
|
$100,000
|
0
|
0
|
$24,187
|
$374,187
|
|
CEO
|
2019
|
156,000
|
0
|
0
|
0
|
0
|
0
|
15,550
|
171,550
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas M.
Sauve
|
2020
|
200,000
|
0
|
0
|
57,730
|
0
|
0
|
29,197
|
286,927
|
|
President
|
2019
|
156,000
|
0
|
0
|
0
|
0
|
0
|
15,550
|
171,550
|
|
|
|
|
|
|
|
|
|
|
|
|
Kirk P.
Taylor
|
2020
|
200,000
|
0
|
0
|
57,730
|
0
|
0
|
25,836
|
181,467
|
|
CFO
|
2019
|
156,000
|
0
|
0
|
0
|
0
|
0
|
25,467
|
181,467
|
|
|
|
|
|
|
|
|
|
|
|
|
Tarlis R
Thompson
|
2020
|
175,000
|
0
|
0
|
435,000
|
0
|
0
|
0
|
610,000
|
|
COO
|
2019
|
117,055
|
0
|
0
|
151,500
|
0
|
0
|
0
|
268,555
|
Narrative Disclosure to the Summary Compensation Table
For
2020, the principal elements of compensation provided to the Named
Executive Officers were base salaries and option awards granted
under our 2018 Stock Option Plan.
Base Salary. Base salaries for our Named Executive Officers
during 2020 were generally set at levels deemed by the Board of
Directors as necessary to attract and retain qualified individuals
with superior talent commensurate with their relative expertise and
prior experience. When establishing the base compensation for our
Named Executive Officers during 2020, the Board of Directors
specifically considered our stage of development at that time as
well as each of our Named Executive Officers’ duties and
responsibilities.
Stock Awards. On July 16,
2020, the Board issued a total of 50,000 options to a director of
the Company under the 2018 Plan as amended. The options have an
expiration date of March 15, 2021 and vest immediately. On November
23, 2020, the Board issued a total of 302,439 options to 3
employees and 4 directors. The options have an expiration of
November 22, 2027 and vest immediately.
The
Company believes that the stock awards are an appropriate reward
for the Company’s continued growth and expansion and further
align the interests of named executives with the long-term
interests of the Company’s stockholders.
Outstanding Equity Awards at Fiscal Year-End 2020
The
following list provides information regarding the outstanding
equity awards held by our Named Executive Officers as of December
31, 2020. The closing stock price on the NASDAQ Global Select
Market on December 31, 2020 was $1.95.
The
following equity awards, including, options, restricted stock or
other equity incentives from the Company to current officers are as
follows:
●
Chief Executive
Officer, who was issued options under our Employee Incentive Stock
Option Plan on November 23, 2020 to purchase up to 85,976 shares of
our Company at $1.64 per share. Those options vest upon
issuance.
23
●
President, who was
issued options under our Employee Incentive Stock Option Plan on
November 23, 2020 to purchase up to 70,732 shares of our Company at
$1.64 per share. Those options vest upon issuance.
●
Chief Financial
Officer, who was issued options under our Employee Incentive Stock
Option Plan on November 23, 2020 to purchase up to 45,732 shares of
our Company at $1.64 per share. Those options vest upon
issuance.
●
Chief Operating
Officer, who was issued options under our Employee Incentive Stock
Option Plan on June 18, 2020 to purchase up to 500,000 shares of
our Company at $1.13 per share, June 5, 2019 to purchase up to
75,000 shares of our Company at $2.63 per share and on September
12, 2018 to purchase up to 136,830 shares of our Company at $1.00
per share. Those options vest equally over the course of three
years.
Potential Payments upon Change in Control or
Termination
If
during the term of the contract, there is a change in control event
involving the Company, the contract shall stay in force with the
surviving operating entity or have the Executive’s option of
being bought out for 100% of base salary plus any earned and
accrued bonuses.
EQUITY COMPENSATION PLAN
INFORMATION
The
following table provides certain information with respect to our
2018 Stock Option Plan as of December 31, 2020, the only equity
compensation plan in effect as of December 31, 2020, which was
approved by our existing shareholders prior to our initial public
offering.
|
|
Number of
Securities to be Issued Upon Exercise of Outstanding
Options
|
Weighted Average
Exercise Price of Outstanding Options
|
Number of
Securities Remaining Available for Future Issuance Under the
Incentive Plan(1)
|
|
Equity compensation
plans approved by security holders
|
2,114,269
|
$1.56/share
|
1,885,731
|
(1)
The securities
remaining available for issuance may be issued in the form of stock
options. The shares remaining available for issuance generally may
be used for any of these types of awards.
REPORT OF THE AUDIT
COMMITTEE
The
Audit Committee assists the Board in fulfilling its responsibility
for independent oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of American
Resources. The Audit Committee is responsible for the appointment,
compensation, retention, oversight and evaluation of the
independent external audit firm retained to audit American
Resources’ financial statements. Further description of the
Audit Committee’s responsibilities is provided in the Audit
Committee Charter available at
www.americanresourcescorp.com.
The
Audit Committee is composed of four directors, each of whom is
independent as defined by the NASDAQ Global Select Market listing
standards. The relevant experience and qualifications of the
directors are set forth in director biographies included in this
Proxy Statement. After reviewing qualifications and evaluating
independence and past performance, the Audit Committee retained the
registered accounting firm of BF Borgers CPA PC as the
Company’s independent auditor (the “Independent
Auditor”).
24
In
discharging its oversight responsibility as to the audit process,
the Audit Committee (a) obtained from the independent auditor a
formal written statement describing all relationships between the
Independent Auditor and its representatives and American Resources
that might reasonably be thought to bear on the auditor’s
independence consistent with applicable Public Company Accounting
Oversight Board (PCAOB) requirements and (b) discussed with the
Independent Auditor any relationships that may impact the
objectivity and independence of the Independent Auditor. The Audit
Committee reviewed with the independent auditor the audit plans,
audit scope and identification of audit risks. The Audit Committee
discussed and reviewed with the Independent Auditor all
communications and other matters required to be discussed by the
applicable requirements of the PCOAB and the Securities and
Exchange Commission (SEC), including those described in PCAOB
Auditing Standard No. 16, as amended (Communication with Audit
Committees).
The
Audit Committee established a practice to meet at least once per
year with the Compensation Committee and the Environment and Health
and Safety Committee, currently charged with oversight of
management’s response to the risks related to the Coronavirus
and cyber security, to review the material issues before these
Committee’s and the practices of the Committees in responding
thereto, particularly as they relate to enterprise
risk.
Management
has the responsibility for the preparation of American
Resources’ financial statements and for its internal controls
and has represented to the Audit Committee that the financial
statements were prepared in accordance with generally accepted
accounting principles. The independent auditor has the
responsibility for the examination of those statements and the
related audit of internal control over financial reporting. During
2020, the Audit Committee met 4 times with management and the
independent auditor, including meetings to discuss the interim
financial information contained in each quarterly earnings
announcement prior to public release. The Audit Committee reviewed
and discussed the audited financial statements of American
Resources as of and for the fiscal year ended December 31, 2020,
separately and together with management and the Independent
Auditor. The Audit Committee also reviewed and discussed,
separately and together with management and the independent
auditor, management’s report on internal control over
financial reporting and the independent auditor’s examination
of and report on the quality and adequacy of American
Resources’ internal financial controls and reporting and the
testing of those controls.
Based
on the above-mentioned review and discussions with management and
the independent auditor, the Audit Committee recommended to the
Board that American Resources’ audited financial statements
for the fiscal year ended December 31, 2020, be included in its
Annual Report on Form 10-K for filing with the SEC.
Michael
G. Layman, Chairman
Gerardine
Botte
Courtenay
Taplin
25
PRINCIPAL ACCOUNTING FIRM
FEES
The
Audit Committee of the Board has appointed BF Borgers CPA PC as the
independent registered public accounting firm of the Company for
the fiscal year ending December 31, 2020. Prior to that, the Audit
Committee of the Board has appointed MaloneBailey, LLP as the
independent registered public accounting firm of the Company for
the fiscal year ending December 31, 2019.
The
Company does not expect that representatives of either BF Borgers
CPA PC or MaloneBailey, LLP will be present at the Annual
Meeting.
Aggregate
fees related to services provided to American Resources for the
fiscal years ended December 31, 2020 and 2019 by the
Company’s principal accounting firm, BF Borgers CPA PC and
MaloneBailey, LLP, respectively, are set forth below.
|
|
Year Ended
December 31
|
|
|
|
2020
|
2019
|
|
Audit Fees - BF
Borgers CPA PC
|
$180,000
|
$0
|
|
Audit-Related Fees
- BF Borgers CPA PC
|
10,000
|
0
|
|
Audit Fees -
MaloneBailey, LLP
|
0
|
235,000
|
|
Audit-Related Fees
- MaloneBailey, LLP
|
35,000
|
34,000
|
|
Tax
Fees
|
0
|
0
|
|
Other
Fees
|
0
|
0
|
Audit Committee Policies and Procedures for Preapproval of Audit
and Non-Audit Services
The
Audit Committee adopted a formal policy concerning approval of
audit and non-audit services to be provided our independent
registered public accounting firm. The policy requires that all
services our independent registered public accounting firm provides
to us be pre-approved by the Audit Committee. The Audit Committee
approved all services provided by BF Borgers CPA PC during
2020.
During
2020, no preapproval requirements were waived for services included
in the Audit-related fees caption of the fee table above pursuant
to the limited waiver provisions in applicable rules of the
SEC.
GENERAL INFORMATION
In
accordance with the SEC’s “notice and access”
model, we are providing our Notice of Annual Meeting of
Shareholders, Proxy Statement and Annual Report on Form 10-K for
the year ended December 31, 2020 to you online with paper copies
available, free of charge, upon request. On or about April 16,
2021, we will begin mailing a Notice of Internet Availability of
Proxy Materials detailing how to access the proxy materials
electronically and how to submit your proxy via the Internet. The
Notice of Internet Availability of Proxy Materials also provides
instructions on how to request and obtain paper copies of the proxy
materials and proxy card or voting instruction form, as
applicable.
26
The
Proxy Statement and proxy card are being furnished at the direction
of the Board of Directors. We will pay all solicitation costs. We
will reimburse brokerage firms, nominees, fiduciaries, custodians,
and other agents for their expenses in distributing proxy material
to the beneficial owners of our common stock. In addition, certain
of our directors, officers and employees may solicit proxies by
telephone and personal contact.
The
Board of Directors does not intend to bring any other matters
before the meeting and has not been informed that any other matters
are to be properly presented to the meeting by others. If other
business is properly raised, your proxy card authorizes the people
named as proxies to vote as they think best.
Shareholder Proposals for 2022 Annual Meeting
Any
shareholder who intends to present a proposal at the 2022 Annual
Meeting of Shareholders and who requests inclusion of the proposal
in American Resources’ Proxy Statement and form of proxy in
accordance with SEC Rule 14a-8 must file such proposal with us at
our principal executive offices (American Resources Corporation,
12115 Visionary Way, Suite 174, Fishers, Indiana 46038) no later
than the close of business on December 30, 2021. In the event the
date of the 2022 Annual Meeting of Shareholders is more than 30
days before or after April [ ], 2022, any nominations or proposals
must be delivered to, or mailed and received at our principal
executive offices not earlier than the 120th day before the date of
the 2022 Annual Meeting of Shareholders and not later than the
later of the 90th day prior to the 2022 Annual Meeting Shareholders
or the close of business on the 10th day following the day on which
the first public disclosure of the date of the 2022 Annual Meeting
of Shareholders was made.
Householding of Annual Meeting Materials
The SEC
has adopted rules that permit companies to deliver a single Notice
of Internet Availability or a single copy of proxy materials to
multiple shareholders sharing an address unless a company has
received contrary instructions from one or more of the shareholders
at that address. This means that only one copy of the Annual
Report, this Proxy Statement and notice may have been sent to
multiple shareholders in your household. If you would prefer to
receive separate copies of the Notice of Internet Availability
and/or Proxy Statement either now or in the future, please contact
our Secretary either by calling (317) 855-9926 or by mailing a
request to Attn: Secretary, 12115 Visionary
Way, Suite 174, Fishers, Indiana 46038. Upon written or oral
request to the Secretary, we will promptly provide a separate copy
of the Annual Report and this Proxy Statement and notice. In
addition, shareholders at a shared address who receive multiple
Notices of Internet Availability or multiple copies of Proxy
Statements may request to receive a single Notice of Internet
Availability or a single copy of Proxy Statements in the future in
the same manner as described above.
Annual Report to Shareholders
The
Annual Report to Shareholders, which includes a copy of our Annual
Report on Form 10-K containing our consolidated financial
statements for the year ended December 31, 2020, accompanies the
proxy material being mailed to all shareholders. The Annual Report
is not part of the proxy solicitation material.
By
Order of the Board of Directors,
Mark C.
Jensen
Chairman
of the Board & Chief Executive Officer
27
