INFINITE GROUP INC PRE 14A, filed Dec 15, 2021
INFINITE GROUP INC (IMCI)
PRE 14A
2021-12-15
For: 2021-12-15
View Original
Added on
October 25, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule
14a-101)
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No.)
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Preliminary
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Confidential,
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Only
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Materials Pursuant to §240.14a-12
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(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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Check
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INFINITE GROUP, INC.
175 SULLY’S TRAIL, SUITE 202, PITTSFORD, NEW YORK
14534
(585) 385-0610
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 26, 2022
The
annual meeting of stockholders (the “Annual Meeting”)
of Infinite Group, Inc. (the
“Company”) will be held on Wednesday, January 26, 2022
at 10:00 A.M., Eastern Time. The Annual Meeting will be held at the
Company’s headquarters located at 175 Sully’s Trail,
Suite 202, Pittsford, New York 14534.
The
Annual Meeting is being held for the following purposes, which are
more fully described in the accompanying proxy
statement:
1.
to elect three
directors;
2.
to approve, on an advisory basis, the compensation
of our named executive officers
(“say-on-pay”);
3.
to approve, on an
advisory basis, the frequency at which advisory votes on executive
compensation should be held
(“say-on-frequency”);
4.
to approve the
Company’s 2021 Equity Incentive Plan;
5.
to authorize the
Board of Directors to effect, in its discretion, a reverse stock
split of the outstanding and treasury shares of the Company’s
common stock at a ratio ranging from 1-for-3 to 1-for-75, to be
determined by the Board of Directors, and to approve a
corresponding amendment to the Company’s Amended and Restated
Certificate of Incorporation, as amended, to effect the reverse
stock split;
6.
to ratify the selection of Freed Maxick CPAs, P.C. as our independent
registered public accounting firm for the year ending December 31,
2021;
7.
to
approve an adjournment of the Annual Meeting to a later date or
time, if necessary, to permit further solicitation and vote of
proxies if there are not sufficient votes at the time of the Annual
Meeting to approve any of the proposals presented for a vote at the
Annual Meeting; and
8.
to transact such
other business as may properly come before the Annual Meeting or at
any adjournment of the meeting.
Our
board of directors has fixed the close of business on December 23,
2021 as the record date for determining the stockholders entitled
to notice of and to vote at the Annual Meeting and at any
adjournment of the Annual Meeting.
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By
Order of the Board of Directors
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James
Villa
Chief Executive Officer
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Pittsford,
New York
December
27, 2021
Your Vote is Important. Whether or
not you expect to attend the Annual Meeting, we hope you will vote
as soon as possible. You may vote by the internet, by telephone, by
fax, or by mailing the enclosed proxy card. We encourage you to
vote using the internet, as it is the most cost-effective way to
vote. Even if you have voted by internet, telephone, fax or proxy
card, you may still vote in person if you attend the Annual
Meeting. If you own your shares through a broker we encourage you
to follow the instructions provided by your broker about how to
vote. Unless you provide your broker with voting instructions, your
broker may not vote your shares on non-discretionary items such on
the proposal to elect the three director nominees, the proposal for
say-on-pay, the proposal for say-on-frequency, the proposal for the
2021 Equity Incentive Plan, or the proposal to authorize the
reverse stock split.
TABLE OF CONTENTS
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PROXY
STATEMENT
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1
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QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
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1
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PROPOSAL
ONE: ELECTION OF DIRECTORS
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8
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CORPORATE
GOVERNANCE
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10
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MANAGEMENT AND
EXECUTIVE OFFICERS
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11
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CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
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12
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EXECUTIVE
COMPENSATION
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14
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DIRECTOR
COMPENSATION
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15
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SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCK
HOLDER MATTERS
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16
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PROPOSAL
TWO: TO APPROVE, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)
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18
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PROPOSAL
THREE: TO VOTE, ON A NON-BINDING ADVISORY BASIS, WHETHER A
NON-BINDING ADVISORY VOTE ON INFINITE GROUP, INC.’S NAMED
EXECUTIVE OFFICER COMPENSATION SHOULD BE HELD EVERY ONE, TWO OR
THREE YEARS (“SAY-ON-FREQUENCY”)
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19
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PROPOSAL
FOUR: APPROVAL OF THE COMPANY’S 2021 EQUITY INCENTIVE
PLAN
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20
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PROPOSAL
FIVE: REVERSE STOCK SPLIT OF OUR COMMON STOCK AND RELATED AMENDMENT
TO CERTIFICATE OF INCORPORATION
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27
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PROPOSAL
SIX: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
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34
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PROPOSAL
SEVEN: ADJOURNMENT OF THE ANNUAL MEETING
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35
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OTHER
MATTERS
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36
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APPENDIX
A INFINITE GROUP, INC. 2022 EQUITY PLAN
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A-1
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APPENDIX
B CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF
INCORPORATION
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B-1
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i
INFINITE GROUP, INC.
PROXY STATEMENT
FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why am
I receiving these materials?
The
board of directors of Infinite Group, Inc. (“Infinite
Group,” the “Company,” “we,”
“our,” or “us”), a Delaware corporation, is
providing these proxy materials to you and is soliciting your proxy
to vote at the annual meeting of stockholders (the “Annual
Meeting”) to be held on January 26, 2022 at 10:00 A.M.,
Eastern Time, at 175 Sully’s Trail, Suite 202, Pittsford, New
York 14534, or at any adjournment or postponement of the meeting,
for the purposes set forth in this proxy statement and in the
accompanying notice of annual meeting of stockholders.
A copy of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2020 is being mailed
concurrently with this Proxy Statement. We are mailing these
proxy materials to stockholders on or about December __,
2021.
What is included in these proxy materials?
These
proxy materials include:
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Our Annual Report
to Stockholders for the fiscal year ended December 31, 2020
(“fiscal year 2020”);
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Notice of the 2021
Annual Meeting and proxy statement; and
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Proxy
Card.
What am I voting on?
The
board of directors is soliciting your proxy in connection with the
Annual Meeting to be held on January 26, 2022 at 10:00 A.M.,
Eastern Time, and any adjournment or postponement thereof. You are
voting on the following proposals:
●
Proposal One: the election of
three directors to serve until the 2022 annual meeting of
stockholders and until their successors are duly elected and
qualified;
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Proposal Two: the
approval, on an advisory basis, of the
compensation of our named executive officers
(“say-on-pay);
●
Proposal Three: the approval,
on an advisory basis, of the frequency at which advisory votes on
executive compensation should be held
(“say-on-frequency”);
●
Proposal Four: the approval of
the Company’s 2021 Equity Incentive Plan;
●
Proposal Five: the authorization of the Board of Directors to
effect, in its discretion, a reverse stock split of the outstanding
and treasury shares of the Company’s common stock at a ratio
ranging from 1-for-3 to 1-for-75, to be determined by the Board of Directors, and
to approve a corresponding amendment to the Company’s Amended
and Restated Certificate of Incorporation, as amended, to effect
the reverse stock split; and
●
Proposal
Six: the ratification of the
selection of Freed Maxick CPAs, P.C. as our independent registered
public accounting firm for the year ending December 31,
2021.
●
Proposal
Seven: the adjournment of the
Annual Meeting to a later date or time, if necessary, to permit
further solicitation and vote of proxies if there are not
sufficient votes at the time of the Annual Meeting to approve any
of the proposals presented for a vote at the Annual
Meeting
1
How does the board of directors recommend I vote?
Our
board of directors recommends that the stockholders vote their
shares:
1.
FOR each of the three director nominees
named in this proxy statement;
2.
FOR the approval, on an advisory basis, of the compensation of our
named executive officers (“say-on-pay);
3.
FOR the approval, on an advisory basis,
of the option of “1 Year” as the frequency at which
advisory votes on executive compensation should be held
(“say-on-frequency”);
4.
FOR the approval of the Company’s
2021 Equity Incentive Plan;
5.
FOR the authorization of the Board to
effect a reverse stock split of the Company’s outstanding and
treasury shares of the Company’s common stock at a ratio
ranging from 1-for-3 to 1-for-75; and
6.
FOR the
ratification of the selection of Freed Maxick CPAs, P.C. as our
independent registered public accounting firm for the year ending
December 31, 2021.
7.
FOR the adjournment of the Annual Meeting to a later
date or time, if necessary, to permit further solicitation and vote
of proxies if there are not sufficient votes at the time of the
Annual Meeting to approve any of the proposals presented for a vote
at the Annual Meeting
Who can vote at the Annual Meeting?
Only
stockholders at the close of business on December 23, 2021, the
record date for the Annual Meeting, will be entitled to notice of
and to vote at the Annual Meeting or any adjournment or
postponement thereof. As of the record date, there were _________
shares of our common stock outstanding and entitled to
vote.
Stockholders of Record: Shares Registered in
Your Name. If on December 23, 2021, your shares of our
common stock were registered directly in your name with our
transfer agent, Issuer Direct, then you are a stockholder of
record.
Beneficial Owners: Shares Registered in the
Name of a Broker or Bank. If on December 23, 2021, your
shares of our common stock were held in an account at a brokerage
firm, bank, dealer or other similar organization, then you are the
beneficial owner of shares held in “street name” and
these proxy materials are being forwarded to you by that
organization. The organization holding your account is considered
the stockholder of record for purposes of voting at the Annual
Meeting. As a beneficial owner, you have the right to direct your
broker or other agent on how to vote the shares in your account or
you may work with your broker to arrange to vote your shares
directly. You are also invited to participate in the Annual
Meeting. Your broker, trustee or nominee has enclosed or provided
voting instructions for you to use in directing the broker, trustee
or nominee on how to vote your shares.
For
instructions on how to vote your shares at the Annual Meeting, see
the “How do I vote?” section below.
Can I view a list of stockholders able to vote at the Annual
Meeting?
The
Company shall prepare and make, at least ten days before the Annual
Meeting, a complete list of stockholders eligible to vote at the
Annual Meeting that will be available for examination during
regular business hours at the Company’s office located at 175
Sully’s Trail, Suite 202, Pittsford, New York 14534. The list
will also be available for examination during the Annual Meeting
located at 175 Sully’s Trail, Suite 202, Pittsford, New York
14534.
Who may attend the Annual Meeting?
Record
holders and beneficial owners may attend the Annual Meeting. If
your shares are held in street name, you will need to bring a copy
of a brokerage statement or other documentation reflecting your
stock ownership as of the record date. Please see above for
instructions on how to vote at the Annual Meeting if your shares
are held in street name.
2
How can I submit a question at the Annual Meeting?
Stockholders who
attend the Annual Meeting may submit questions during the Annual
Meeting. We will respond to questions directly related to matters
being voted on at the Annual Meeting during the Annual Meeting. We
will respond to other questions received during the Annual Meeting
promptly after the meeting. Questions regarding personal matters,
including those related to employment, are not pertinent to Annual
Meeting matters and therefore will not be answered.
What is “householding” and how does it impact
me?
We have
adopted a process called “householding” for mailing
proxy materials in order to reduce printing and mailing expenses.
The SEC householding rules allow us to deliver a single set of
proxy materials to stockholders of record who share the same
address. If you share an address with another stockholder and have
received only one set of proxy materials, but you would prefer to
continue receiving a separate set of proxy materials, you may
request a separate copy of the proxy materials at no cost to you by
writing to the Corporate Secretary of the Company at Infinite
Group, Inc., 175 Sully’s Trail, Suite 202, Pittsford, New
York 14534, Attention: Corporate Secretary, or by calling
(585) 385-0610. Alternatively, if you are currently receiving
multiple copies of the proxy materials at the same address and wish
to receive a single copy in the future, you may contact us by
calling or writing to us at the telephone number or address given
above.
If you
are a beneficial owner, the bank, broker or other holder of record
may deliver only one copy of the proxy materials to stockholders
who have the same address unless the bank, broker or other holder
of record has received contrary instructions from one or more of
the stockholders. If you wish to receive a separate copy of the
proxy materials, now or in the future, you may contact us at the
address or telephone number above and we will promptly deliver a
separate copy. Beneficial owners sharing an address who are
currently receiving multiple copies of the proxy materials and wish
to receive a single copy in the future should contact their bank,
broker or other holder of record to request that only a single copy
be delivered to all stockholders at the shared address in the
future.
What does it mean if I receive more than one proxy card or voting
instruction form?
If you
receive more than one proxy card or voting instruction form, your
shares are registered in more than one name or are registered in
different accounts. Please vote using each proxy card or voting
instruction form to ensure that all of your shares are
voted.
Where can I view the proxy materials on the internet?
We are
making this proxy statement and voting instructions available to
stockholders on or about December 27, 2021, at
www.iproxydirect.com/IMIC. We are also making our annual report and
proxy card available at the same time and by the same
method.
How do I vote?
Stockholder of Record. If you are a
stockholder of record, there are four ways to vote:
●
By internet at
www.iproxydirect.com/IMIC. We encourage you to vote this
way.
●
By touch tone
telephone: call toll-free at 1-866-752-VOTE(8683).
●
By Fax: completing
and fax your proxy card to 202-521-3464.
●
By completing and
mailing your proxy card or voting instruction form.
●
At the Annual
Meeting: Attend the Annual Meeting in person and cast your
vote.
If you
need assistance in submitting your proxy or voting your shares or
need additional copies of this proxy statement or the enclosed
proxy card, please contact Issuer Direct, at the address, email and
telephone number listed below:
3
1
Glenwood Avenue
Suite
1001
Raleigh,
North Carolina 27603
Email:
proxy@issuerdirect.com
Phone:
(919) 447-3740
Whether
or not you plan to attend the meeting, we urge you to vote to
ensure your vote is counted. You may still attend the meeting and
vote your shares if you have already voted by proxy. Only the
latest vote you submit will be counted. For instructions on how to
change your vote, see the “Can I change my vote or revoke my
proxy?” section below.
Beneficial Owner. If you hold your
shares in “street name” as a beneficial owner of shares
registered in the name of your broker, bank or nominee
(“broker”), you must vote your shares in the manner
prescribed by your broker. Your broker has enclosed or otherwise
provided a voting instruction card for you to use in directing the
broker how to vote your shares. Check the voting instruction card
used by that organization to see if it offers internet or telephone
voting.
Instead
of directing your broker how to vote your shares, you may elect to
attend the Annual Meeting and vote your shares during the
meeting.
How many votes do I have?
On each
matter to be voted upon, you have one vote for each share of common
stock you owned as of December 23, 2021, the record date for
the Annual Meeting.
What is the quorum requirement?
A
quorum of stockholders is necessary to hold a valid meeting. A
quorum will be present if at least a majority of the outstanding
shares entitled to vote are “present” at the meeting.
As of the record date, there were ________ shares of our common
stock issued and outstanding and entitled to vote.
If you
are a stockholder of record, your shares will be counted as
“present” at the meeting if:
●
You attend and vote
at the meeting;
●
You have voted by
internet or telephone; or
●
You have properly
submitted a proxy card.
If your
shares are held in street name, your shares will be counted as
“present” at the meeting if your broker has voted on a
discretionary item or your broker has otherwise voted based on your
instructions.
Abstentions and
broker non-votes on non-discretionary items will be counted towards
the quorum requirement. If there is no quorum, a majority of the
shares present at the meeting and entitled to vote may adjourn the
meeting to another date.
4
How many votes are needed to approve each proposal?
The
table below shows the vote required to approve each of the
proposals described in this proxy statement, assuming the presence
of a quorum, in person or by proxy, at the Annual
Meeting.
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Proposal
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Description
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Vote
Required
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One
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Election of the
three directors
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Plurality of the
votes of the shares cast at the Annual Meeting
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Two
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To
approve, on an advisory basis, of the
compensation of our named executive officers
(“say-on-pay”)
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Affirmative vote of
a majority of the shares cast on the proposal
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Three
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To
approve, on an advisory basis, the frequency at which advisory
votes on executive compensation should be held
(“say-on-frequency”)
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The
voting frequency option that receives the highest number of votes
cast by stockholders will be deemed the frequency for the advisory
vote on executive compensation that has been selected by
stockholders
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Four
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To
approve the Company’s 2021 Equity Incentive Plan
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Affirmative vote of
a majority of the shares cast on the proposal
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Five
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To
authorize the Board to effect a reverse stock split of the
Company’s outstanding and treasury shares of the
Company’s common stock at a ratio ranging from 1-for-3 to
1-for-75.
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Affirmative vote of
a majority of the outstanding voting power
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Six
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To
ratify the selection of Freed Maxick
CPAs, P.C. as our independent registered public accounting
firm for the year ending December 31, 2021;
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Affirmative vote of
a majority of the shares cast on the proposal
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Seven
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To
approve an adjournment of the Annual Meeting to a later date or
time, if necessary, to permit further solicitation and vote of
proxies if there are not sufficient votes at the time of the Annual
Meeting to approve any of the proposals presented for a vote at the
Annual Meeting.
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Affirmative vote of
a majority of the shares cast on the proposal
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How are votes counted?
For
Proposal 1, you may vote “FOR” or
“WITHHOLD” with respect to each of the nominees. In
tabulating the voting results for the election of directors, only
“FOR” votes are counted. If you elect to abstain in the
election of directors, the abstention will not impact the outcome
of the election. Broker non-votes are not counted and will not
impact the outcome of the vote.
You may
vote “FOR,” “AGAINST” or
“ABSTAIN” with respect to Proposals 2, 4, 5, 6 and 7.
In tabulating the voting results for these proposals,
“FOR” and “AGAINST” votes are counted. For
Proposals 2, 4, 6 and 7 abstentions are not counted and will not
impact the outcome of the vote. For Proposal 5 abstentions and
broker non-votes are counted as a vote against. With respect to
Proposals 2, 3, and 4 broker non-votes are not counted and will not
impact the outcome of the vote.
You may
vote “1 Year,” “2 Years,” “3
Years” or “ABSTAIN” with respect to Proposals 3.
In tabulating the voting result for this proposal, the voting
frequency option that receives the highest number of votes cast by
stockholders will be deemed the frequency for the advisory vote on
executive compensation that has been selected by stockholders, and
abstentions are not counted and will not impact the outcome of the
vote.
5
Who counts the votes?
Issuer
Direct has been appointed inspector of election by the Company and
will tabulate votes at the Annual Meeting.
What happens if I do not give specific voting
instructions?
Stockholder of Record. If you are a
stockholder of record and you do not cast your vote, no votes will
be cast on your behalf on any of the items of business at the
Annual Meeting. However, if you sign a proxy card and no
instructions are given, the shares represented by the proxy will be
voted on your behalf as follows:
1.
FOR each of the three director nominees
named in this proxy statement;
2.
FOR the approval, on an advisory basis, of the compensation of our
named executive officers (“say-on-pay);
3.
FOR the approval, on an advisory basis,
of the option of “1 Year” as the frequency at which
advisory votes on executive compensation should be held
(“say-on-frequency”);
4.
FOR the approval of the Company’s
2021 Equity Incentive Plan;
5.
FOR the approval of the Board’s
authority to effect a reverse stock split of the Company’s
outstanding and treasury shares of the Company’s common stock
at a ratio ranging from 1-for-3 to 1-for-75;
6.
FOR the
ratification of the selection of Freed Maxick CPAs, P.C. as our
independent registered public accounting firm for the year ending
December 31, 2021; and
7.
FOR the adjournment of the Annual Meeting to a later
date or time, if necessary, to permit further solicitation and vote
of proxies if there are not sufficient votes at the time of the
Annual Meeting to approve any of the proposals presented for a vote
at the Annual Meeting.
In the
event other business properly comes before the Annual Meeting or at
any adjournment or postponement of the meeting, the individuals
named in the proxy will vote the shares represented by the proxy in
their discretion.
Beneficial Owner. If you are a
beneficial owner and you do not provide your broker with specific
voting instructions, or if you do not obtain a legal proxy that
gives you the right to vote the shares electronically via the
internet at the Annual Meeting, your broker is not permitted to,
and will not, vote your shares on your behalf, and your shares will
not be counted with respect to Proposal 1, Proposal 2, Proposal 3,
Proposal 4 and Proposal 5, which are non-routine proposals. Your
broker, trustee or nominee has discretionary authority to vote your
uninstructed shares with respect to Proposal 6, and Proposal 7,
which are routine proposals. Uninstructed shares with respect to
which your broker does not have discretionary authority are known
as “broker non-votes.”
Can I change my vote or revoke my proxy?
If you
are a stockholder of record, you may change your vote by revoking
your proxy at any time before it is voted at the Annual Meeting in
any one of following ways:
●
enter a timely new
vote by internet or telephone;
●
submit another
properly completed, later-dated proxy card;
●
send a written
notice that you are revoking your proxy to: Infinite Group, Inc.,
175 Sully’s Trail, Suite 202, Pittsford, New York 14534,
Attention: Corporate Secretary, which must be received no later
than January 25, 2022; or
●
attend the Annual
Meeting and vote during the meeting. Attending the meeting without
voting during the meeting will not, by itself, revoke a previously
submitted proxy unless you specifically request your prior proxy be
revoked.
6
If you
hold your shares in street name, contact your broker or other
organization regarding how to revoke your instructions and change
your vote. You may change your vote by submitting a later-dated
vote on the internet or by telephone or by participating in the
Annual Meeting webcast and by submitting a later vote during the
meeting.
How can I find out the voting results of the Annual
Meeting?
Preliminary voting
results will be announced at the Annual Meeting. Final voting
results will be published in a Current Report on Form 8-K to be
filed with the SEC within four business days after the Annual
Meeting.
Who is paying for this proxy solicitation?
Our
board of directors is soliciting proxies for use at the Annual
Meeting, and we will bear all of the cost involved in preparing,
assembling and mailing these proxy materials and all costs of the
proxy solicitation. In addition to solicitation by mail, our
directors, officers and employees may solicit proxies personally,
by telephone, email or other means of communication. We will not
compensate any of these persons for soliciting proxies on our
behalf. We will reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial
owners.
When are stockholder proposals and director nominations due for
next year’s annual meeting?
At our
annual meeting of stockholders each year, our board of directors
will submit to stockholders its nominees for election as directors.
In addition, the board of directors may submit other matters to the
stockholders for action at the annual meeting.
Our
stockholders may submit proposals for inclusion in the proxy
materials. These proposals must satisfy the requirements of Rule
14a-8 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). To be considered for inclusion in next
year’s proxy materials, you must submit your proposal in
writing by September 28, 2022 to our Corporate Secretary, 175
Sully’s Trail, Suite 202, Pittsford, New York
14534.
Who should I contact if I have any questions about the Annual
Meeting or how to vote?
If you
have questions about the Annual Meeting, please contact our
Corporate Secretary, 175 Sully’s Trail, Suite 202, Pittsford,
New York 14534, or by calling (585) 385-0610.
If you
need assistance in submitting your proxy or voting your shares or
need additional copies of this proxy statement or the enclosed
proxy card, please contact Issuer Direct, at the address, email and
telephone number listed below:
1
Glenwood Avenue
Suite
1001
Raleigh,
North Carolina 27603
Email:
proxy@issuerdirect.com
Phone:
(919) 447-3740
If your shares are held through an account with a broker, dealer,
bank or other nominee, you should call your broker, dealer, bank or
other nominee for additional information.
7
PROPOSAL ONE:
ELECTION OF DIRECTORS
The
number of directors is established by the board and is currently
set at three. At the Annual Meeting, the three persons listed below
will be nominated as directors. The term of office of each person
elected as a director will continue until the next annual meeting
or until his successor has been elected and qualified, or until the
director’s earlier death, resignation or
removal.
All
nominees have consented to serve if elected. In the event that any
nominee should be unable to serve or for good cause will not serve,
the proxies will be voted for the election of such other persons as
the board of directors may recommend, provided that proxies cannot
be voted for a greater number of persons than the number of
nominees named in this proxy statement.
The
SEC’s rules require us to briefly discuss the particular
experience, qualifications, attributes or skills that led our board
of directors to conclude that each director or nominee for director
should serve on our board of directors. We have provided this
discussion in a separate paragraph immediately below the
biographical information of each director.
The
board of directors unanimously recommends a vote FOR the election
as directors each of the nominees listed below.
Nominees for Election as Directors:
|
James Villa
|
|
|
|
Age: 64
|
|
Chief Executive Officer
|
|
|
|
|
|
Director since: July 2008
|
|
|
|
Mr.
Villa is our Chief Executive
Officer and a director. He became a director on July 1, 2008, our
President on February 25, 2010 and our Chief Executive Officer on
January 21, 2014. Mr. Villa was our Acting Chief Executive Officer
from December 31, 2010 to January 21, 2014. Mr. Villa brings to the
Board his experience with us since 2003 as well as professional
experience gained from his services to a variety of public and
privately held middle market businesses. Mr. Villa holds a
bachelor degree in electrical engineering from Clarkson University,
where he studied computer science and power transmission and
distribution. Mr. Villa also has software and technology experience
having acted as an IT and business consultant.
|
||
|
|
|
|
|
Experience and Qualifications
|
|
`
|
|
Mr.
Villa’s experience as Chief Executive Officer and as a
director of Infinite Group, Inc. along with his history of service
to other middle market business give him the qualifications, skills
and expertise to serve on the board of directors.
|
||
|
|
|
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|
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|
|
8
|
Donald W. Reeve
|
|
|
|
Age: 74
|
|
Chairman of the Board
|
|
|
|
|
|
Director since: December 2013
|
|
|
|
Mr.
Reeve became a director on
December 31, 2013. He became Chairman of the Board on August 20,
2019. Since January 2013, he has been the principal partner at
ReTech Services, LLC, a management consulting practice.
Previously, Mr. Reeve was Senior Vice President and Chief
Information Officer for Wegmans Food Markets, Inc.
(Wegmans) from May 1986 until his retirement in August 2012. In
that position, he managed an information technology staff of
approximately 300 professionals with responsibilities for
development, application and support services of computer
technology. Prior to May 1986 and since 1970, he held various
positions of increasing responsibility for Wegmans. He attended
Monroe Community College and SUNY Empire State College, earned an
associate degree atRochester Business Institute and is a veteran of
the U.S. Army. Mr. Reeve brings to the Board the experience of
managing the IT requirements for a growing company in a competitive
environment. Mr. Reeve provides strategic guidance to the Board and
our management as we continue to enter various commercial IT
markets. Mr. Reeve has served on numerous boards and
operating committees and is the past chairman of the Food Market
Institute’s Information Technology committee based in
Washington, DC. He formerly served as a director of the Psychology
Advisory Board for Rochester Institute of Technology, a director on
the board of governors at Monroe Golf Club, and as a director on
the Rochester Regional Health Information Organization. Currently,
Mr. Reeve serves on the boards of Frontier communications, Veterans
Outreach Center of Rochester, NY, as Chair, and Eastman Savings
& Loan.
|
||
|
|
|
|
|
Experience and Qualifications
|
|
|
|
Mr.
Reeve’s experience as director and Chairman of our Board
along with his experience in management consulting and information
technology management give him the qualifications, skills and
expertise to serve on our board of directors.
|
||
|
|
|
|
|
|
|
|
|
Andrew Hoyen
|
|
|
|
Age: 51
|
|
President and Chief Operating Officer
|
|
|
|
|
|
Director since: July 2017
|
|
|
|
Mr.
Hoyen is our current President
and Chief Operating Officer. He was initially appointed Chief
Administrative Officer and Senior Vice President of Business
Development on October 1, 2014. In January 2016, he was appointed
Chief Operating Officer. On July 18, 2017, he was elected to the
board of directors, In September 2020, he was named President
in addition to his role as Chief Operating Officer. Mr. Hoyen
is responsible for developing and implementing our strategic
direction through improved operations, M&A, sales and
marketing, product development, and overall collaboration across
the enterprise. Previously, he has served in a variety of executive
roles at Toyota Material Handling North America, Eastman Kodak
Company and their spin-off, Carestream Health that have enabled him
to fit the roles he has played at IGI. He holds a Bachelor of
Science degree in biotechnology from Worcester Polytechnic
Institute, a Master of Public Health degree from State University
of New York at Albany and a Master of Business Administration
degree from Rochester Institute of Technology.
|
||
|
|
|
|
|
Experience and Qualifications
|
|
|
|
Mr.
Hoyen’s experience as our President and our Chief Operating
Officer along with his past positions as our Chief Administrative
Officer and Senior Vice President of Business Development and his
past experience in executive roles for various companies give him
the qualifications, skills and expertise to serve on our board of
directors.
|
||
|
|
|
|
9
CORPORATE GOVERNANCE
Board Meetings
The
board of directors held four meetings during fiscal year 2020. Each
director then in office attended at least 75% of the total of board
meetings during fiscal year 2020.
Director Independence
Our
Board has determined that Donald Reeve is independent in accordance
with the NASDAQ’s independence standards.
Board Leadership Structure
We
separate the roles of Chief Executive Officer and Chairman of the
board because we believe that our corporate governance is most
effective when these positions are not held by the same person. The
board recognizes the differences between the two roles and believes
that separating them allows each person to focus on his individual
responsibilities. Under this leadership structure, our Chief
Executive Officer can focus his attention on generating sales,
overseeing sales and marketing, and managing the day-to-day company
operations, while our Chairman can focus his attention on board
responsibilities.
Although the board
has not adopted a formal policy regarding the separation of the
roles of the Chairman and the Chief Executive Officer, we believe
that having separate positions is the appropriate leadership
structure for us at this time. Depending on the circumstances,
other leadership models, such as combining the role of Chairman
with the role of Chief Executive Officer, might be appropriate.
Accordingly, our board of directors intends to periodically review
our leadership structure.
Board Diversity
Our Board believes that
diversity can strengthen board performance. While we do
not have a formal policy on diversity, the board considers
diversity to include the skill set, background, reputation, type
and length of business experience, diversity with respect
to characteristics, such as gender, race and ethnicity of
the board members as well as a particular nominee’s
contributions to that mix. The board believes that diversity brings
a variety of ideas, judgments and considerations that benefit the
Company and its stockholders. Although there are many other
factors, the board seeks individuals with experience on operating
and growing businesses.
Director Attendance at Annual Meetings
Although the
Company does not have a policy regarding director attendance of our
annual meeting of stockholders, board members are encouraged to
attend.
Role of the Board in Risk Oversight
The
Company’s risk management function is overseen by the board.
The Board focuses on risks associated with financial matters,
particularly financial reporting and disclosures, accounting,
internal control over financial reporting, financial policies, and
compliance with legal and regulatory matters related to accounting
and financial reporting. Our Board also focuses on the oversight of
risks arising from our compensation policies and
programs.
The
board retains responsibility for general oversight of risk. Our
Chairman works closely together with other members of the board
when material risks are identified on how to best address such
risks. If the identified risk poses an actual or potential conflict
with management, our independent directors may conduct the
assessment. In addition, our management keeps the board apprised of
material risks and provides its directors access to all information
necessary for them to understand and evaluate how these risks
interrelate, how they affect us, and how management addresses those
risks.
10
Code of Business Conduct and Ethics
The
board has adopted a Code of Business Conduct and Ethics (the
“Code of Ethics”) that applies to all of our employees,
including our executive officers and directors. The Code of Ethics
provides written standards that we believe are reasonably designed
to deter wrongdoing and promote honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships, full,
fair, accurate, timely and understandable disclosure and compliance
with laws, rules and regulations and the prompt reporting of
illegal or unethical behavior, and accountability for adherence to
the Code of Ethics. This code of
business conduct and ethics is posted on our website
at https://igicybersecurity.com/.
Delinquent Section 16(a) Reports
Section
16(a) of the Securities Exchange Act of 1934 (the “Exchange
Act”) requires the Company’s directors, executive
officers, and persons who own more than 10% of the Company’s
common stock to file initial reports of beneficial ownership and
changes in beneficial ownership of the Company’s common stock
and other equity securities with the SEC. These individuals are
required by the regulations of the SEC to furnish us with copies of
all Section 16(a) reports they file. Based solely on a review
of the copies of the forms furnished to us, we believe that, during
the year ended December 31, 2020, all of our executive officers,
directors and greater than 10% stockholders timely filed all
Section 16(a) reports, except Mr. Glickman was delinquent on filing
a recent Form 4, required under Section 16, but has subsequently
filed the required form.
Stockholder Communications
Stockholders may
send correspondence by mail to the full board of directors or to
individual directors. Stockholders should address correspondence to
the board of directors or individual board members in care of:
Infinite Group, Inc., 175 Sully’s Trail, Suite 202,
Pittsford, New York 14534, Attention: Corporate
Secretary.
All
stockholder correspondence will be compiled by our Corporate
Secretary and forwarded as appropriate. In general, correspondence
relating to corporate governance issues, long-term corporate
strategy, or similar substantive matters will be forwarded to the
board of directors or the individual director. Correspondence
relating to ordinary business affairs or those matters more
appropriately addressed by our officers or their designees will be
forwarded to such persons accordingly.
MANAGEMENT AND EXECUTIVE OFFICERS
We are
currently served by three executive officers, Mr. Villa, Ms. Hoyen,
and Mr. Glickman.
James Villa, age 64, is our President
and Chief Executive Officer. Mr. Villa has no family relationship
with any other director or executive officer of the Company.
Additional information about Mr. Villa can be found under
“Proposal One: Election of Directors.”
Andrew Hoyen, age 51,
is our current President and Chief
Operating Officer. Mr. Hoyen has no family relationship with
any other director or executive officer of the Company. Additional
information about Mr. Hoyen can be found under “Proposal One:
Election of Directors.”
Richard Glickman, age 59, has served as
our acting Chief Accounting Officer and VP of Finance of the
Company since February 2019. Mr. Glickman has no family
relationship with any other director or executive officer of the
Company. Mr. Glickman leads the finance department, accounting
department, and human resources of the Company and oversees various
tasks such as including SEC reporting, financial planning, payroll
and benefits. Previously from 2015 to 2018, Mr. Glickman held the
position of Chief Financial Officer for American Rock Salt Company
LLC. He directed financial, IT, and risk management operations of
the largest rock salt mine in the United States. This position
included the development of a financial and operational strategy
for the company. Mr. Glickman is also a certified accountant and
holds a Master’s in Business Administration in Finance and
Marketing from Simon Business School of the University of
Rochester.
11
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The
following is a summary of transactions since January 1, 2020 to
which we have been a party in which any of our executive officers,
directors, director nominees or beneficial holders of more than
five percent of our capital stock had or will have a direct or
indirect material interest, other than compensation arrangements
which are described under the sections of this proxy statement
entitled “Executive Compensation” and “Director
Compensation.”
On October 14, 2021, the Company entered into two
demand notes of $12,000 and on October 14, 2021 a third for
$12,000 each with James Villa,
Andrew Hoyen and Donald Reeve, respectively. Subsequently Mr. Reeve
was paid back on November 16, 2021.
On October 28, 2021, the Company entered into a
demand note of $150,000 with its Vice President of Business
Development, Richard Popper (the “Popper Note”). The
interest rate for this note was 6%. On November 2, 2021, the Company entered
into a subscription agreement (the “Subscription
Agreement”) with its Vice President of Business Development,
Richard Popper. Pursuant to the Subscription Agreement, Mr. Popper
agreed to purchase an aggregate amount
of 1,000,000 shares of the Company’s common stock,
par value $0.001 per share, at $0.10 per share, in
exchange for the conversion and cancellation of an aggregate of
$100,000 principal amount of the Popper Note. The closing of
the Subscription Agreement occurred concurrently with the execution
of the Subscription Agreement. The closing price of the Company
common stock on November 2 was $0.17 per share.
On May 25, 2021, the Company issued a short-term
note payable to a board member for $100,000. The note bears a 6% interest rate and is due on March 31, 2022. The
Company also issued two demand notes on September 16, 2021 payable
to two board members with $30,000 payable to Donald Reeve,
and $25,000 payable to Andrew Hoyen, totaling $55,000 . The demand notes bear
a 6% interest
rate.
On May 7, 2019, we entered into a note payable
agreement for up to $500,000 with Dr. Harry Hoyen. Dr. Harry Hoyen
is the brother of Mr. Andrew Hoyen, our current President, Chief
Operating Officer and member of our Board. The note has an interest
rate of 7.5% and is due on August 31, 2026. We borrowed $200,000
during the year ended December 31, 2019, $50,000 during the year
ended December 31, 2020 and $249,000 during the nine months ended.
The balance is $499,000 at
September 30, 2021. As consideration for providing this financing,
we granted a stock option to purchase a total of 2,500,000 common
shares at an exercise price of $.02 and recorded interest expense
of $14,250 in 2019 using the Black-Scholes option pricing model to
determine the estimated fair value of the
option.
On
July 12, 2018, we issued an unsecured demand note payable to
Northwest Hampton Holdings, LLC (Northwest) in the principal amount
of $70,000 with interest at 6% per annum. On June 19, and July 17,
2017, we issued unsecured demand notes payable to Northwest in the
principal amount of $12,000 with interest at 6% per annum. On
August 1, 2019, we paid $40,000 plus accrued interest to the
noteholder. On December 11, 2019, we paid $4,000 of principal only
to the noteholder. On March 31, 2020, we paid $4,000 plus accrued
interest to the noteholder. On July 31, 2020, we paid off the
remaining $34,000 plus accrued interest to the noteholder. Mr.
James Villa, our Chief Executive Officer, is the sole member of
Northwest.
On
June 29, 2017, we issued an unsecured demand note payable to Mr.
Donald Reeve, a member of our board, in the principal amount of
$20,000 with interest at 6% per annum. On December 31, 2020, we
paid off the principal plus accrued interest to the
noteholder.
On
July 18, 2017, we entered into an unsecured line of credit
financing agreement for $100,000 with Mr. Andrew Hoyen, our Chief
Operating Officer and member of our Board. The LOC Agreement
provides for working capital of up to $100,000 with interest at 6%
due quarterly through July 1, 2022. The principal balance owed was
$90,000 at September 30, 2021. In consideration for providing the
financing, Mr. Andrew Hoyen was granted an option to purchase
400,000 shares of common stock at $.04 per share with an
estimated fair value of $9,960 using the Black-Scholes
option-pricing model. The option expires on July 31,
2022.
12
On
September 21, 2017, we entered into an unsecured line of credit
financing agreement for $75,000 with Dr. Harry Hoyen, a related
party. The LOC Agreement provides for working capital of up to
$75,000 with interest at 6% due quarterly through January 2, 2023.
The principal balance owed was $70,000 at September 30, 2021. In
consideration for providing the financing, Mr. Harry Hoyen was
granted an option to purchase 400,000 shares of common stock at
$.04 per share with an estimated fair value of
$4,080 using the Black-Scholes option-pricing model. The
option expires on January 2, 2023.
We
are obligated under a convertible note payable to Northwest. This
note’s maturity date was amended to January 1, 2024. At
September 30, 2021, Northwest is the holder of a convertible note
bearing interest at 6% with principal of $146,300 and convertible
accrued interest of $102,586 and is convertible into shares of our
common stock at a conversion price of $.05 per share.
Generally,
upon notice, prior to the maturity date, note holders can convert
all or a portion of the outstanding principal on the Notes.
However, the Notes are not convertible into shares of our common
stock to the extent conversion would result in a change of control
which would limit the use of our net operating loss carryforwards;
provided, however, this limitation will not apply if we close a
transaction with another third party or parties that results in a
change of control which will limit the use of our net operating
loss carryforwards. Prior to any conversion, the holders of
the Notes are entitled to convert their Notes, on a pari passu
basis and upon any such participation the requesting note holder
shall proportionately adjust his conversion request such that, in
the aggregate, a change of control, which will limit the use of our
net operating loss carryforwards, does not occur; provided,
however, the right to participate is only available to a noteholder
if his Note is then convertible into 5% or more of our common
stock.
On
February 12, 2015, we issued a note payable to Mr. Andrew Hoyen,
our current President and Chief Operating Officer, in the principal
amount of $25,000 with interest at 7% per annum which matured on
March 31, 2018. During, 2019, Mr. Hoyen extended the maturity date
to March 31, 2021. During, 2021, Mr. Hoyen extended the maturity
date to June 30, 2023. At the election of the holder, the principal
of the note is convertible into shares of our common stock at a
conversion price of $.10 per share for a total of 250,000
shares.
13
EXECUTIVE COMPENSATION
This
proxy statement contains information about the compensation earned
and paid to our named executive officers during fiscal year 2020
and fiscal year ended December 31, 2019 (“fiscal year
2019”). For fiscal year 2020, in accordance with the
executive compensation disclosure rules and regulations of the SEC,
we determined that the following officers were our named executive
officers:
●
James Villa, our
Chief Executive Officer;
●
Andrew Hoyen, our
President and Chief Operating Officer; and
●
Richard Glickman,
our Vice President of Finance and Chief Accounting
Officer.
Summary Compensation Table
|
Name
and Principal Position
|
Year
|
Salary
|
Option
Awards*
|
Total
|
|
James Villa
|
2020
|
$238,664
|
$0
|
$238,664
|
|
Chief
Executive Officer
|
2019
|
$223,401
|
$5,575
|
$228,976
|
|
Andrew Hoyen
|
2020
|
$225,078
|
$0
|
$225,078
|
|
President
and Chief Operating Officer
|
2019
|
$214,251
|
$8,875
|
$223,126
|
|
Richard Glickman
|
2020
|
$114,235
|
$1,783
|
$116,018
|
|
VP
Finance and Chief Accounting Officer
|
2019
|
$97,308
|
$3,325
|
$100,633
|
* The amounts in this column reflect the grant date fair value for
stock option awards granted during the year and do not reflect
whether the recipient has realized a financial gain from such
awards such as by exercising stock options. The fair value of the
stock option awards was determined using the Black-Scholes option
pricing model. See Note 10 to the financial statements in our
annual report regarding assumptions underlying valuation of equity
awards.
Employment and Consulting Agreements with Named Executive
Officers
We do
not have any employment agreements with any of our named executive
officers.
14
Outstanding Equity Awards at Fiscal Year-End
The
following table sets forth the outstanding equity awards for our
Named Executive Officers as of
December 31, 2020.
|
Option
Awards
|
||||
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
|
James
Villa
|
500,000
|
-
|
$.115
|
1/20/2024
|
|
|
500,000
|
-
|
$.04
|
9/29/2021
|
|
|
250,000
|
-
|
$.05
|
12/22/2024
|
|
|
250,000
|
-
|
$.12
|
11/16/2025
|
|
|
|
|
|
|
|
Andrew
Hoyen
|
250,000
|
-
|
$.02
|
6/1/2026
|
|
|
500,000
|
-
|
$.04
|
9/29/2021
|
|
|
400,000
|
-
|
$.04
|
7/31/2022
|
|
|
100,000
|
-
|
$.04
|
7/17/2022
|
|
|
200,000
|
-
|
$.04
|
12/09/2024
|
|
|
250,000
|
-
|
$.05
|
12/22/2024
|
|
|
|
|
|
|
|
Richard
Glickman
|
200,000
|
-
|
$.02
|
7/23/2024
|
|
|
50,000
|
-
|
$.04
|
12/9/2024
|
|
|
25,000
|
-
|
$.12
|
7/12/2025
|
DIRECTOR COMPENSATION
Effective August 13, 2019, we established that in connection with
rendering services as a Board of Directors, each non-management
Director may receive compensation, as applicable to each Director,
if approved by the Board. Directors are reimbursed for the costs
relating to attending Board meetings.
Effective August 20, 2019, the Board resolved to compensate Donald
W. Reeve $12,000 annually as Chairman of the Board.
|
Director Compensation Fiscal Year Ending Dec. 31, 2020
|
|||||||
|
Name
|
Fees earned or paid in cash
|
Stock Award
|
Option Award
|
Non-Equity Incentive Plan Compensation
|
Change in Pension Value and Nonqualified Deferred Compensation
Earnings
|
All Other Compensation
|
Total
|
|
Donald W. Reeve
|
$12,000
|
-
|
-
|
-
|
-
|
-
|
$12,000
|
At December 31, 2020, Donald W. Reeve held exercisable options
for:
●
600,000
shares of our common stock at an exercise price of $.05 per share
which expires on November 30, 2024;
●
500,000
shares of common stock at an exercise price of $.15 per share which
expires on September 4, 2023; and
●
800,000
shares of common stock at an exercise price of $.04 per share which
expires on September 29, 2021; and
●
250,000
shares of common stock at an exercise price of $.05 per share which
expires on December 22, 2024.
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCK HOLDER MATTERS
The following table sets forth information regarding the beneficial
ownership of our common stock, our only class of voting securities,
as of the record date by 1) each person known to us to be the
beneficial owner of more than 5% of our outstanding shares; 2) each
director; 3) each Named Executive named in the Summary Compensation
Table above; and 4) all directors and executive officers as a
group. The percentages shown in the table are based on _________
shares of common stock outstanding as of December 23, 2021,
the record date for the Annual Meeting.
Beneficial ownership is determined in accordance with the rules of
the SEC and includes voting and/or investing power with respect to
securities. These rules generally provide that shares of common
stock subject to options, warrants or other convertible securities
that are currently exercisable or convertible, or exercisable or
convertible within 60 days of the Record Date, are deemed to be
outstanding and to be beneficially owned by the person or group
holding such options, warrants or other convertible securities for
the purpose of computing the percentage ownership of such person or
group, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person or
group.
Beneficial ownership as set forth below is based on our review of
our record stockholders list and public ownership reports filed by
certain stockholders of the Company, and may not include certain
securities held in brokerage accounts or beneficially owned by the
stockholders described below.
We believe that, except as otherwise noted and subject to
applicable community property laws, each person named in the
following table has sole investment and voting power with respect
to the shares of common stock shown as beneficially owned by such
person. Unless otherwise indicated, the address for each of the
individuals listed in the table below is c/o Infinite Group, Inc.,
175 Sully’s Trail, Suite 202, Pittsford, New York
14534.
|
Name of Beneficial Owner
|
Shares of Common Stock
Beneficially Owned
|
Percentage of Ownership
|
|
|
Richard
Glickman
|
340,000
|
(1)
|
___%
|
|
Andrew
Hoyen
|
2,136,734
|
(2)
|
___%
|
|
Donald
W. Reeve
|
2,981,460
|
(3)
|
___%
|
|
James
Villa
|
7,330,117
|
(4)
|
___%
|
|
All
Directors and Officers (4 persons) as a group
|
12,788,310
|
(5)
|
___%
|
|
|
|
|
|
|
5% Stockholders:
|
|
|
|
|
Paul J.
Delmore
|
|
|
|
|
One America
Place
|
|
|
|
|
600 West Broadway,
28th Floor
|
|
|
|
|
San
Diego, CA 92101
|
2,545,151
|
(6)
|
___%
|
|
|
|
|
|
|
Harry A.
Hoyen
|
2,900,000
|
(7)
|
___%
|
|
Marblehead, OH
43440
|
|
|
|
|
|
|
|
|
|
James
Leonardo
|
2,500,000
|
|
___%
|
|
435
Smith Street
|
|
|
|
|
Rochester,
New York 14608
|
|
|
|
|
|
|
|
|
|
Richard
Popper
|
1,787,455
|
(8)
|
___%
|
|
|
|
|
|
(1)
Includes
300,000 shares subject to currently exercisable
options.
(2)
Includes
250,000 shares, which are issuable upon the conversion of a note in
the principal amount of $25,000; and 1,200,000 shares subject to
currently exercisable options.
16
(3)
Includes
1,350,000 shares subject to currently exercisable
options.
(4)
Includes
5,018,117 shares, which are issuable upon the conversion of notes
to Northwest Hampton Holdings, LLC, whose sole member is James
Villa, including principal plus interest in the amount of $250,906;
and 1,000,000 shares subject to currently exercisable
options.
(5)
Assumes
that all currently exercisable options, which total 3,850,000
shares, and convertible securities, which total 5,220,980 shares,
owned by members of the group have been exercised.
(6)
Includes
2,360,000 shares owned of record by Upstate Holding Group, LLC, an
entity wholly-owned by Mr. Delmore.
(7)
Consists
of 2,900,000 shares subject to currently exercisable
options.
(8)
Includes
75,000 shares subject to currently exercisable
options.
17
PROPOSAL TWO:
TO APPROVE, ON AN
ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
(“SAY-ON-PAY”)
Section
14A of the Securities Exchange Act of 1934, as amended, requires us
to provide our stockholders with the opportunity to vote to
approve, on an advisory basis, the compensation of our named
executive officers (referred to as a “say-on-pay”
vote). The next required vote on the “say-on-pay” vote
will be determined by the Board under the advisement of the vote on
Proposal 3, the “say-on-frequency” vote.
We are
asking our stockholders to indicate their support and approval for
our named executive officer compensation as described in the
“Executive Compensation” section of this proxy
statement. We believe that our compensation program for our named
executive officers is designed to create value for our stockholders
over the long term and appropriately aligns pay with
performance.
For the
reasons summarized above, and as discussed in more detail in the
“Executive Compensation” section of this proxy
statement, our board of directors is asking our stockholders to
vote for the following advisory resolution:
RESOLVED,
that the compensation of the Company’s named executive
officers, as disclosed pursuant to Item 402 of Regulation S-K,
including the compensation tables, and related narrative
discussion, is hereby approved.
The
say-on-pay vote is advisory, and therefore it is not binding on our
board of directors. Nevertheless, our board of directors value the
opinions expressed by stockholders in their vote on this proposal
and will consider the outcome of the vote in deciding whether to
take any action as a result of the vote and when making future
compensation decisions for our named executive
officers.
The
board of directors recommends that you vote FOR the proposal to
approve, on an advisory basis, the
compensation of our named executive officers
(“say-on-pay”).
18
PROPOSAL THREE:
TO VOTE,
ON A NON-BINDING ADVISORY BASIS, WHETHER A NON-BINDING ADVISORY
VOTE ON INFINITE GROUP, INC.’S NAMED EXECUTIVE OFFICER
COMPENSATION SHOULD BE HELD EVERY ONE, TWO OR THREE YEARS
(“SAY-ON-FREQUENCY”)
In
addition to the advisory vote on executive compensation described
in Proposal 2, pursuant to Section 14A of the Exchange Act, we are
asking our stockholders to vote, on a non-binding, advisory basis,
on the frequency of future votes to approve the compensation of our
Named Executive Officers. This non-binding “frequency”
vote is required to be submitted to our stockholders at least once
every six years. Stockholders may indicate whether they prefer that
we conduct future advisory votes to approve the compensation of our
Named Executive Officers every one, two or three years, or
abstain.
The
Board has determined that holding an advisory vote to approve the
compensation of our Named Executive Officers every year is the most
appropriate policy at this time and recommends that future advisory
votes to approve the compensation of our Named Executive Officers
occur every year. The Board believes that a say-on-pay vote should
be conducted every year so that stockholders may annually express
their views on the Company’s executive compensation program
and so the Board may address stockholder concerns with executive
compensation more frequently.
Stockholders will
be able to specify one of four choices for this proposal on the
proxy card: one year, two years, three years, or abstain. The
voting frequency option that receives the highest number of votes
cast by stockholders will be deemed the frequency for the advisory
vote on executive compensation that has been selected by
stockholders. Although this advisory vote on the frequency of
future advisory votes to approve the compensation of our Named
Executive Officers is nonbinding, the Board will carefully review
and consider the voting results when determining the frequency of
future advisory votes to approve the compensation of our Named
Executive Officers.
The Board recommends that the stockholders vote to conduct future
advisory votes to approve the compensation of our Named Executive
Officers every year.
19
PROPOSAL FOUR:
APPROVAL OF THE
COMPANY’S 2021 EQUITY INCENTIVE PLAN
We are
asking our stockholders to approve the adoption of the Infinite
Group, Inc. 2021 Equity Incentive Plan (the
“2021 Plan”). Our Board approved and adopted the
2021 Plan on December 15, 2021, subject to stockholder
approval. The 2021 Plan is now being submitted to our
stockholders for their approval.
The
2021 Plan will become effective upon stockholder approval, and
no awards may be granted under the 2021 Plan after the date
that is 10 years from the date the 2021 Plan was last approved
by our stockholders.
If
approved, the 2021 Plan will replace the Company’s 2019
Stock Option Plan (the “2019 Plan”) and the
Company’s 2020 Stock Option Plan (the “2020
Plan,” and together with the 2019 Plan, the “Prior
Plans”), and no further awards would be granted under the
Prior Plans.
The
closing stock price of a share of the Company’s common stock
as reported on the Over the Counter Bulletin Board on December 23,
2021, our record date, was $__.
Description of the 2021 Plan
The
full text of the 2021 Plan is attached to this proxy statement
as Appendix A. The
principal terms of the 2021 Plan are described below, but the
description is qualified in its entirety by reference to the
2021 Plan itself. In the event of a conflict between the
description and the terms of the 2021 Plan itself, the terms
of the 2021 Plan will govern. The 2021 Plan will not
become effective unless approved by our stockholders.
Purpose
The
purpose of the 2021 Plan is to promote stockholder value and
our future success by providing appropriate retention and
performance incentives to employees and non-employee directors of
the Company or its affiliates, and any other individuals who
perform services for the Company or its affiliates.
Administration
Except
as noted below, the 2021 Plan will be administered by a
committee of the Board (the “Committee”). If
Company’s shares of common stock are not listed on a national
securities exchange, the Committee shall be appointed by the Board
from among its members, or if a separate committee is not
specifically established, the Board shall constitute the Committee.
If Company’s shares of common stock are listed on a national
securities exchange, the Committee will be the then existing
Compensation Committee of the Board, and each member of the
Committee will be required to be both a “Non-Employee
Director” within the meaning of Rule 16b-3 under the Exchange
Act of 1934, as amended (the “Exchange Act”), and a
non-employee director meeting the independence requirements for
compensation committee members under the rules and regulations of
the exchange on which the Company’s shares of common stock
are traded.
The
Committee will have the authority to select the employees and other
individuals (other than non-employee directors) to receive awards
under the 2021 Plan, to determine the type, size and terms of
the award to be made to each individual selected, to determine the
time when awards will be granted, to establish performance
objectives, and to prescribe the form of award agreement. The
Committee is also authorized to interpret the 2021 Plan and
the awards granted under the 2021 Plan, to establish, amend
and rescind any rules and regulations relating to the
2021 Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the
2021 Plan. The Committee may authorize any one or more of its
members or any officer of the Company or any affiliate to execute
and deliver documents or to take any other action on behalf of the
Committee with respect to awards made or to be made to
participants, subject to the requirements of applicable law,
including without limitation, Section 16 of the Exchange
Act.
The
Board has all the powers otherwise vested in the Committee by the
terms of the 2021 Plan in respect of awards granted to
non-employee directors.
20
Notwithstanding the
foregoing, except for permitted adjustments in connection with a
corporate transaction or recapitalization, neither the Committee
nor the Board may, without the prior approval of the stockholders
of the Company, (a) reduce, directly or indirectly, the per-share
exercise price of an outstanding option or stock appreciation right
after it is granted; (b) cancel an option or stock appreciation
right when the exercise price of the option or stock appreciation
right exceeds the fair market value of a share in exchange for cash
or another award (other than in connection with a change in
control); or (c) take any other action that is treated as a
repricing under United States generally accepted accounting
principles or by the rules or regulations of the exchange on which
the Company’s shares are traded.
No
member of the Committee and no officer of the Company will be
liable for anything done or omitted to be done by him or her, by
any other member of the Committee or by any officer of the Company
in connection with the performance of duties under the 2021 Plan,
except for his or her own willful misconduct or gross negligence,
or as expressly provided by applicable law, and the Company will
indemnify each member of the Committee and officer of the Company
against any such liability.
Eligible Participants
Employees and
non-employee directors of the Company or its affiliates, and other
individuals who perform services for the Company or any of its
affiliates, are eligible to receive awards under the
2021 Plan. As of December 23, 2021, approximately 65 persons,
including 3 executive officers, 1 non-employee director and no
other individuals may be considered for awards under the
2021 Plan.
Neither
the Committee nor the Board has made any decisions with respect to
the individuals who may receive awards under the 2021 Plan on
or after January 26, 2022 or the amount or nature of future
awards.
Authorized Shares
The
maximum number of shares of Common Stock available for grant and
issuance under the 2021 Plan will be (a) 4,500,000, plus
(b) any shares of Common Stock that are subject to options
granted under the Prior Plans that expire, are forfeited or
canceled or terminate for any other reason without the issuance of
shares under the Prior Plans on or after January 26, 2022, plus
(c) any shares of Common Stock that are subject to options
granted under the Prior Plans that are used to pay the exercise
price of an option or withheld to satisfy the tax withholding
obligations related to any option under the Prior Plans on or after
January 26, 2022.
Awards
will be counted against the available share reserve on the date of
grant, based on the maximum number of shares that may be issued
pursuant to the award. Any shares of Common Stock related to awards
issued under the 2021 Plan that are forfeited, canceled, expired or
otherwise terminated without the issuance of shares of Common Stock
for any reason will be added back and again be available for
issuance under the 2021 Plan. In addition, shares of Common Stock
that are retained or reacquired by the Company to satisfy the
exercise price or purchase price of an award or to satisfy the tax
withholding obligation in connection with an award, as well as any
shares of Common Stock covered by an award that is settled in cash,
will be added back and again be available for issuance under the
2021 Plan.
Awards
granted through the assumption of, or substitution for, outstanding
awards previously granted by a company acquired by the Company or
any affiliate, or with which the Company or any affiliate combines,
will not reduce the maximum number of shares of Common Stock that
may be issued under the 2021 Plan.
Types of Awards
The
2021 Plan allows for the granting of the following types of
awards: stock options (both incentive stock options and
nonqualified stock options); stock appreciation rights; restricted
stock; restricted stock units; and other stock-based awards. Each
award granted under the 2021 Plan is subject to an award
agreement containing the particular terms and conditions of that
award, subject to the limitations imposed by the
2021 Plan.
21
Stock Options. A stock option is the
right to purchase a specified number of shares for a specified
exercise price. Stock options may be either (a) incentive
stock options, which are stock options that meet the requirements
under Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), or (b) nonqualified stock
options, which are stock options that do not meet the requirements
of Section 422 of the Code or that are designated as a
nonqualified stock option. Only employees of the Company and
certain of its affiliates may receive awards of incentive stock
options, and incentive stock options are subject to additional
limitations. Stock options (other than stock options assumed or
granted in substitution for outstanding stock options of a company
acquired by the Company or any affiliate) are subject to the
following: (i) the exercise price shall be equal to or greater
than the fair market value of the shares subject to such stock
option on the date of grant; and (ii) the expiration date
shall be no later than 10 years from the date of grant. The
exercise price may be payable either in (1) cash, (2) if
permitted by the Committee, by delivery of irrevocable instructions
to a broker to deliver promptly the proceeds from the sale of
shares, (3) if permitted by the Committee, by tendering shares
previously acquired, (4) if permitted by the Committee, by
withholding shares that would otherwise be issued having a fair
market value on the exercise date equal to the exercise price, or
(5) any combination of the foregoing.
Stock Appreciation Rights. A stock
appreciation right is a right to receive cash or other property
based on the increase in the value of a share over the per share
exercise price. Stock appreciation rights (other than stock
appreciation rights assumed or granted in substitution for
outstanding stock appreciation rights of a company acquired by the
Company or any affiliate) are subject to the following:
(a) the exercise price shall be equal to or greater than the
fair market value of the shares subject to such stock appreciation
right on the date of grant; and (b) the expiration date shall
be no later than 10 years from the date of grant.
Restricted Stock. Restricted stock is
an award of shares that is subject to vesting conditions. Prior to
the expiration of the vesting period, unless otherwise determined
by the Committee, a participant who has received an award of
restricted stock has the right to vote and to receive dividends on
the underlying unvested shares, subject, however, to the
restrictions and limitations imposed pursuant to the 2021 Plan
and award agreement.
Restricted Stock Units. A restricted
stock unit is an award that is valued by reference to shares, which
may be paid to a participant upon vesting in shares, cash or other
property.
Other Stock-Based Awards. An other
stock-based award is an award denominated or payable in shares,
other than a stock option, stock appreciation right, restricted
stock or restricted stock unit. Other stock-based awards may be
settled in cash, shares or other property.
Dividend Equivalents. Awards other than
stock options and stock appreciation rights may include the right
to receive dividends or dividend equivalents, subject to such
terms, conditions, restrictions or limitations, if any, as the
Committee may establish.
Award Limitations
Non-Employee Director Award Limitation.
The aggregate of (a) the grant date fair value for financial
reporting purposes of any awards granted during any fiscal year to
a non-employee director, and (b) the total amount of any cash fees
or other property paid to such non-employee director during the
fiscal year, in respect of the director’s service as a member
of the Board during such year, shall not exceed
$250,000.
Incentive Stock Options. Incentive
stock options may be granted only to employees of the Company or an
affiliate, provided such affiliate is also a “parent
corporation” of the Company within the meaning of Section
424(e) of the Code or a “subsidiary corporation” of the
Company within the meaning of Section 424(f) of the Code, on the
date of grant. The aggregate fair market value (determined as of
the time the incentive stock option is granted) of the shares of
Common Stock with respect to which incentive stock options are
exercisable for the first time by any individual during any
calendar year (under all plans of the Company and its affiliates)
shall not exceed $100,000, and any incentive stock option or
portions thereof which exceed such limit (according to the order in
which they were granted) will be treated as a nonqualified stock
option. If, at the time an incentive stock option is granted, the
employee recipient owns (after application of the rules contained
in Section 424(d) of the Code) shares of Common Stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company or its subsidiaries, then: (a) the exercise
price for such incentive stock option will be at least 110% of the
fair market value of the shares of Common Stock subject to such
incentive stock option on the date of grant; and (b) such incentive
stock option will not be exercisable after the date five years from
the date such incentive stock option is granted. The maximum number
of shares of Common Stock that may be issued under the 2021 Plan
pursuant to incentive stock options may not exceed, in the
aggregate, 4,500,000.
22
Vesting Conditions. The vesting of an
award may be conditioned upon a participant’s continued
employment with or service to the Company or its affiliates or the
achievement of specified performance objectives.
Transferability. A participant’s
rights in an award may be assigned or transferred only in the event
of death; provided, however, that the Committee may allow a
participant to assign or transfer without consideration an award
(other than an incentive stock option) to one or more members of
his or her immediate family, to a partnership of which the only
partners are the participant or members of the participant’s
immediate family, or to a trust established by the participant for
the exclusive benefit of the participant or one or more members of
his or her immediate family. Incentive stock options may not be
transferable by a participant other than by will or the laws of
descent and distribution and may only be exercisable during the
participant’s lifetime by the participant.
Tax Withholding
The
exercise or payment of awards and the issuance of shares under the
2021 Plan is conditioned upon a participant making
satisfactory arrangements for the satisfaction of any liability to
withhold federal, state, local or foreign income or other taxes. In
accordance with rules established by the Committee, the required
tax withholding obligations may be settled in cash, or with shares,
including shares that are part of the award that gives rise to the
withholding requirement.
Effect of Certain Events
Death, Disability or Termination. The
Committee may include in an award agreement provisions related to
the death, disability or termination of employment or service of a
participant, including without limitation the acceleration of the
exercisability, vesting or settlement of, or the lapse of
restrictions or deemed satisfaction of performance objectives with
respect to, an award.
Change in Control. The Committee may
provide in an award agreement provisions relating to a
“change in control” of the Company, including without
limitation the acceleration of the exercisability, vesting or
settlement of, or the lapse of restrictions or deemed satisfaction
of performance objectives with respect to, an award.
“Change in
control” generally means the occurrence of any one or more of
the following events:
(a)
an individual,
entity or group of persons acquires the ownership, directly or
indirectly, of the Company’s securities representing more
than 50% of the combined voting power of the Company’s
outstanding securities, other than (i) through a merger,
consolidation or similar transaction; (ii) in connection with a
financing by the Company through the issuance of equity securities;
or (iii) by an overall reduction in the number of the
Company’s outstanding securities;
(b)
a merger,
consolidation or similar transaction in which the Company’s
stockholders immediately before such transaction do not own,
directly or indirectly, more than 50% of the combined voting power
of the surviving entity (or the parent of the surviving entity) in
substantially the same proportions as their ownership immediately
prior to such transaction;
(c)
a sale, lease,
exclusive license or other disposition of all or substantially all
of the Company’s assets, other than to an entity more than
50% of the combined voting power of which is owned by the
Company’s stockholders in substantially the same proportions
as their ownership of the Company’s outstanding voting
securities immediately prior to such
transaction;
(d)
a majority of the
members of the Board serving on the date the 2021 Plan is approved
by the stockholders (the “Incumbent Board”) were no
longer serving on the Board within any 12-month period; provided
that any new Board member approved or recommended by a majority of
the Incumbent Board then in office (other than as a result of any
settlement of a proxy or consent solicitation contest or any action
taken to avoid such a contest) will be considered a member of the
Incumbent Board; or
(e)
the complete
dissolution or liquidation of the Company.
23
No
change in control shall be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record holders of the
capital stock of the Company immediately prior to such transaction
or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately
following such transaction or series of transactions.
Recoupment
Notwithstanding
anything in the 2021 Plan or in any award agreement to the
contrary, the Company will be entitled to the extent required by
applicable law (including, without limitation, Section 10D of
the Exchange Act and any regulations promulgated with respect
thereto) or stock exchange listing conditions, in each case as in
effect from time to time, to recoup compensation of whatever kind
paid under the 2021 Plan by the Company at any time. No such
recoupment of compensation will be an event giving rise to a right
to resign for “good reason” or “constructive
termination” (or similar term) under any agreement between a
participant and the Company.
Adjustments
In the
event of any change in the outstanding shares of the Company by
reason of any corporate transaction or change in corporate
capitalization such as a stock split, reverse stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, reorganization, combination,
consolidation, subdivision or exchange of shares, a sale by the
Company of all or part of its assets, any distribution to
stockholders other than a normal cash dividend, partial or complete
liquidation of the Company or similar event, the Board shall adjust
the (a) the class and aggregate number of shares available
under the 2021 Plan; (b) the class, number and exercise
price of outstanding stock options and stock appreciation rights
granted under the 2021 Plan; and (c) the class and number
of shares subject to any other awards granted under the
2021 Plan and the terms of such awards (including, without
limitation, any applicable performance goals), as may be determined
to be appropriate by the Board.
Amendments and Termination
The
2021 Plan may be amended in whole or in part at any time and
from time to time by the Board, and the terms of any outstanding
award under the 2021 Plan may be amended from time to time by
the Board in its discretion provided that no amendment may be made
without stockholder approval if such amendment would
(a) increase the number of shares available for grant under
the 2021 Plan; (b) change the class of persons eligible
to receive incentive stock options; (c) decrease the minimum
stock option or stock appreciation right exercise price;
(d) amend or repeal the prohibitions against repricing or
exchange; or (e) require stockholder approval under applicable
law, regulation, rule or securities exchange listing requirement.
No amendment may adversely affect in a material manner any right of
a participant under an award without his or her written
consent.
The
2021 Plan may be suspended in whole or in part at any time and
from time to time by the Board. The 2021 Plan shall terminate
upon the adoption of a resolution of the Board terminating the
2021 Plan. No award may be granted under the 2021 Plan
after the date that is 10 years from the date the 2021 Plan
was last approved and adopted by the stockholders of the Company.
No termination of the 2021 Plan shall materially alter or
impair any of the rights or obligations of any person, without his
or her consent, under any award granted under the
2021 Plan.
New Plan Benefits
The
benefits or amounts to be received by or allocated to participants
and the number of shares to be granted under the 2021 Plan
cannot be determined at this time because the amount and form of
grants to be made to any eligible participant in any year is
determined at the discretion of the Committee or Board, as
applicable.
24
Certain U.S. Federal Income Tax Consequences of 2021 Plan
Awards
The
following discussion is intended to provide only a general outline
of the U.S. federal income tax consequences of participation in the
2021 Plan and the receipt of awards or payments thereunder by
participants subject to U.S. taxes. It does not address any other
taxes imposed by the United States, taxes imposed by any state or
political subdivision thereof or foreign jurisdiction, or the tax
consequences applicable to participants who are not subject to U.S.
taxes. The discussion set forth below does not purport to be a
complete analysis of all potential tax consequences relevant to
recipients of awards, particular circumstances, or all awards
available under the 2021 Plan. It is based on U.S. federal income
tax law and interpretational authorities as of the date of this
proxy statement, which are subject to change at any
time.
Nonqualified stock options. A
participant who exercises a nonqualified stock option recognizes
taxable ordinary income in the year the stock option is exercised
in an amount equal to the excess of the fair market value of the
shares purchased on the exercise date over the exercise price.
Subject to applicable provisions of the Code, including
Section 162(m), the Company is entitled to a tax deduction in
an amount equal to the ordinary income recognized by the
participant. Any gain or loss realized by the participant upon the
subsequent disposition of the shares will be taxed as short-term
(if held one year or less) or long-term (if held more than one
year) capital gain, but will not result in any further deduction
for the Company.
Incentive stock options. A participant
who exercises an incentive stock option does not recognize ordinary
income at the time of exercise (although, the participant may be
subject to alternative minimum tax), and the Company is not
entitled to a tax deduction. Upon the disposition of the shares
obtained from the exercise of the incentive stock option more than
two years after the date of grant and more than one year after the
date of exercise, the excess of the sale price of the shares over
the exercise price of the incentive stock option is taxed as
long-term capital gain. If the shares are sold within two years of
the grant date and/or within one year of the date of exercise, the
excess of the fair market value of the shares on the date of
exercise (or sale proceeds if less) over the exercise price is
taxed as ordinary income, and, subject to applicable provisions of
the Code, including Section 162(m), the Company is entitled to
a tax deduction for this amount; any remaining gain is taxed as
short-term capital gain, without a Company tax
deduction.
Stock appreciation rights. A
participant who exercises a stock appreciation right recognizes
taxable ordinary income in the year the stock appreciation right is
exercised in an amount equal to the cash and/or the fair market
value of any shares or other property received. Subject to
applicable provisions of the Code, including Section 162(m),
the Company is entitled to a tax deduction in an amount equal to
the ordinary income recognized by the participant.
Restricted stock, restricted stock units and
other stock-based awards. A participant normally will not
recognize taxable income and the Company will not be entitled to a
deduction upon the grant of shares of restricted stock, restricted
stock units or other stock-based awards. When the restricted stock
vests, the restricted stock units settle or the other stock-based
awards are paid or settle, the participant will recognize taxable
ordinary income in an amount equal to the fair market value of the
shares or other property received at that time, less the amount, if
any, paid for the shares, and, subject to applicable provisions of
the Code, including Section 162(m), the Company will be
entitled at that time to a deduction in the same amount. However, a
participant may elect to recognize taxable ordinary income in the
year shares of restricted stock are granted in an amount equal to
the excess of their fair market value at the grant date, determined
without regard to certain restrictions, over the amount, if any,
paid for the shares. In that event, subject to applicable
provisions of the Code, including Section 162(m), the Company
will be entitled to a deduction in such year in the same amount.
Any gain or loss realized by the participant upon the subsequent
disposition of shares received will be taxed as short-term or
long-term capital gain, but will not result in any further
deduction for the Company.
25
Equity Compensation Plan Information as of December 31,
2020
|
|
Equity Compensation Plan Information
|
||
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights
|
Weighted average exercise price of outstanding options, warrants
and rights
|
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column
(a))
|
|
|
(a)
|
(b)
|
(c)
|
|
Equity compensation
plans approved by security holders
|
990,000
|
$0.10
|
-
|
|
Equity compensation
plans not approved by security holders(1)
|
5,865,500
|
$0.05
|
561,500
|
|
Individual equity
award agreements not approved by security holders(2)
|
5,575,000
|
$0.05
|
-
|
|
Total
|
12,430,500
|
$0.05
|
561,500
|
(1)
Represents grants under the Company’s 2009 Stock Option Plan
(the “2009 Plan”), the 2019 Plan and the 2020 Plan. The
material terms of the 2009 Plan, the 2019 Plan and the 2020 Plan
are summarized in Item 12 of the Company’s Annual Report for
the fiscal year ended December 31, 2020.
(2)
Represents the following individual stock option grants that have
not been approved by security holders:
(a) A
nonqualified stock option granted on September 5, 2013 to Donald W.
Reeve to purchase up to 500,000 shares of Common Stock at the price
of $0.15 per share. The option is fully vested and expires
September 5, 2023.
(b) A
nonqualified stock option granted on December 1, 2014 to Donald W.
Reeve to purchase up to 600,000 shares of Common Stock at the price
of $0.05 per share. The option is fully vested and expires December
1, 2024.
(c) A
nonqualified stock option granted on September 30, 2016 to Donald
W. Reeve to purchase up to 800,000 shares of Common Stock at the
price of $0.04 per share. The option was exercised on September 16,
2021 before it expired on September 30, 2021.
(d) A
nonqualified stock option granted on December 28, 2017 to Harry A.
Hoyen to purchase up to 400,000 shares of Common Stock at the price
of $0.04 per share. The option is fully vested and expires January
2, 2023.
(e) A
nonqualified stock option granted on May 14, 2019 to Harry A. Hoyen
to purchase up to 2,500,000 shares of Common Stock at the price of
$0.02 per share. The option is
fully vested and expires August 31, 2026.
(f) A
nonqualified stock option granted on December 31, 2020, that was
transferred to Pittsford Management LLC, to purchase up to 25,000
shares of Common Stock at the price of $ .10 per share. The option
vested immediately and expires December 31, 2023.
(g)
Pittsford Management LLC forfeited 473,000 options exercisable at
$.0925 and expiring August 11, 2021 and was granted 200,000 options
exercisable at $.1925 and expiring April 5, 2031.
The board of directors recommends that you vote FOR the proposal to
approve the 2021 Equity Incentive Plan.
26
PROPOSAL FIVE:
REVERSE STOCK SPLIT
OF OUR COMMON STOCK AND RELATED AMENDMENT TO CERTIFICATE OF
INCORPORATION
Overview
Our
Board has determined it to be advisable and in the best interest of
the Company and its stockholders and is submitting to the
stockholders for their approval a proposed amendment to our
Certificate of Incorporation that would effect a reverse stock
split of our issued and outstanding common stock and treasury stock
(the “Reverse Split”) at a ratio ranging from 1-for-3
to 1-for-75, with the final ratio to be determined by the Board in
its discretion following the approval by the stockholders, without
the proportional reduction in the number of shares of common stock
the Company is authorized to issue.
If the
Board, following the approval by the stockholders, decides in its
discretion to effect the Reverse Split, it would set the Reverse
Split ratio from the range described in this Proposal 5 and the
Certificate of Incorporation would be amended accordingly. Approval
of this Reverse Split proposal will authorize the Board in its
discretion to effect the Reverse Split at any of the ratios within
the range described above, or not to effect the Reverse Split. A
form of the Certificate of Amendment to the Certificate of
Incorporation that would be filed with the Secretary of State of
Delaware to effect the Reverse Split is set forth in Appendix B (the
“Certificate of Amendment”). However, such form is
subject to amendment to include such changes as may be required by
the office of the Secretary of State of Delaware or as the Board
deems necessary and advisable to effect the Reverse Split. If at
any time prior to the effectiveness of the filing of the
Certificate of Amendment with the Delaware Secretary of State, the
Board determines that it would not be in the best interest of the
Company and its stockholders to effect the Reverse Split, in
accordance with Delaware law and notwithstanding the approval by
the stockholders, the Board may abandon the Reverse Split without
further action by the stockholders.
We
believe that giving the Board the discretion to set the ratio
within the stated range will provide us with the flexibility to
implement the Reverse Split in a manner designed to maximize the
anticipated benefits for our stockholders. By voting in favor of
the Reverse Split, you are expressly authorizing the Board to
select one ratio from among the ratios set forth in this Proposal
5. If the stockholders approve this Proposal 5, the Board would
effect the Reverse Split only upon the Board’s determination
that the Reverse Split would be in the best interest of the Company
and its stockholders at that time. In determining whether to
implement the Reverse Split and selecting the Reverse Split ratio,
our Board will consider several factors, including:
●
the initial listing
requirements of The Nasdaq Capital Market, including the minimum
bid price requirement;
●
the historical
trading price and trading volume of our common stock;
●
the then prevailing
trading price and trading volume for our common stock;
●
the anticipated
impact of the Reverse Split on the trading price of and market for
our common stock; and
●
the prevailing
general market and economic conditions.
If
approved by the stockholders, the authorization to effect the
Reverse Split will remain effective until our common stock is
listed on a national securities exchange or one year from the date
of the Annual Meeting, whichever is earlier.
Reasons for the Reverse Split
The
purpose of the Reverse Split is to increase the market price of our
common stock in connection with the contemplated listing of our
common stock on The Nasdaq Capital Market. The Board intends to
implement the Reverse Split only if it believes that a decrease in
the number of shares outstanding is likely to improve the trading
price for our common stock.
27
The
Board believes that effecting the Reverse Stock Split is desirable
for a number of reasons, including:
List our
common stock on The Nasdaq Capital Market. Our common stock is currently quoted on the
Over The Counter (OTC) Bulletin Board and on the OTCQB market under
the symbol “IMCI”. On December 23, 2021, the last sale
price of our common stock was $_____ per share. We intend to apply
to have our common stock listed on The Nasdaq Capital Market. We
expect that the Reverse Split will increase the market price of our
common stock so that we will be able to meet the minimum bid price
requirement of the listing rules of The Nasdaq Capital
Market.
Broaden our
investor base. We believe the
Reverse Split may increase the price of our common stock and thus
may allow a broader range of institutional investors with the
ability to invest in our common stock. For example, many funds and
institutions have investment guidelines and policies that prohibit
them from investing in stocks trading below a certain threshold. We
believe that increased institutional investor interest in the
Company and our common stock will potentially increase the overall
market for our common stock.
Increase
Analyst and Broker Interest. We believe the Reverse Split would help
increase analyst and broker-dealer interest in our common stock as
many brokerage and investment advisory firms’ policies can
discourage analysts, advisors, and broker-dealers from following or
recommending companies with low stock prices. Because of the
trading volatility and lack of liquidity often associated with
lower-priced stocks, many broker-dealers have adopted investment
guidelines, policies and practices that either prohibit or
discourage them from investing in or trading such stocks or
recommending them to their customers. Some of those guidelines,
policies and practices may also function to make the processing of
trades in lower-priced stocks economically unattractive to
broker-dealers. While we recognize that we will remain a
“penny stock” under the SEC rules, if our common stock
is not listed on The Nasdaq Capital Market, we expect the increase
in the stock price resulting from the Reverse Split will position
us better if our business continues to grow as we anticipate.
Additionally, because brokers’ commissions and dealer
mark-ups/mark-downs on transactions in lower-priced stocks
generally represent a higher percentage of the stock price than
commissions and mark-ups/mark-downs on higher-priced stocks, the
current average price per share of our common stock can result in
stockholders or potential stockholders paying transaction costs
representing a higher percentage of the total share value than
would otherwise be the case if the share price were substantially
higher.
Certain Risks Associated with the Reverse Split
If the
Reverse Split does not result in a proportionate increase in the
price of our common stock, we may not be able to list our common
stock on The Nasdaq Capital Market.
We
expect that the Reverse Split of will increase the market price of
our common stock so that we will be able to meet the minimum bid
price requirement of the listing rules of The Nasdaq Capital
Market. However, the effect of Reverse Split upon the market price
of our common stock cannot be predicted with certainty, and the
results of reverse stock splits by companies in similar
circumstances have been varied. It is possible that the market
price of our common stock following the Reverse Split will not
increase sufficiently for us to be in compliance with the minimum
bid price requirement. If we are unable meet the minimum bid price
requirement, we may be unable to list our shares on The Nasdaq
Capital Market.
Even if the
Reverse Split achieves the requisite increase in the market price
of our common stock, we cannot assure you that we will be able to
continue to comply with the minimum bid price requirement of The
Nasdaq Capital Market.
Even
if the reverse stock split achieves the requisite increase in the
market price of our common stock to be in compliance with the
minimum bid price of The Nasdaq Capital Market, there can be no
assurance that the market price of our common stock following the
Reverse Split will remain at the level required for continuing
compliance with that requirement. It is not uncommon for the market
price of a company’s common stock to decline in the period
following a reverse stock split. If the market price of our common
stock declines following the effectuation of the Reverse Split, the
percentage decline may be greater than would occur in the absence
of a reverse stock split. In any event, other factors unrelated to
the number of shares of our common stock outstanding, such as
negative financial or operational results, could adversely affect
the market price of our common stock and jeopardize our ability to
meet or maintain The Nasdaq Capital Market’s minimum bid
price requirement.
28
Even if the Reverse Split increases the market price of our common
stock, our stock price could fall and we could be delisted from The
Nasdaq Capital Market.
The
Nasdaq Capital Market requires that the trading price of its listed
stocks remain above one dollar in order for the stock to remain
listed. If a listed stock trades below one dollar for more than 30
consecutive trading days, then it is subject to delisting from The
Nasdaq Capital Market. In addition, to maintain a listing on The
Nasdaq Capital Market, we must satisfy minimum financial and other
continued listing requirements and standards, including those
regarding director independence and independent committee
requirements, minimum stockholders’ equity, and certain
corporate governance requirements. If we are unable to satisfy
these requirements or standards, we could be subject to delisting.
Such a delisting would likely have a negative effect on the price
of our common stock and would impair your ability to sell or
purchase our common stock when you wish to do so. In the event of a
delisting, we would expect to take actions to restore our
compliance with the listing requirements, but we can provide no
assurance that any such action taken by us would allow our common
stock to become listed again, stabilize the market price or improve
the liquidity of our common stock, prevent our common stock from
dropping below the minimum bid price requirement, or prevent future
non-compliance with the listing requirements.
The Reverse
Split may decrease the liquidity of our common
stock.
The
liquidity of the shares of our common stock may be affected
adversely by the reverse stock split given the reduced number of
shares that will be outstanding following the Reverse Split,
especially if the market price of our common stock does not
increase as a result of the Reverse Split. In addition, the Reverse
Split may increase the number of stockholders who own odd lots
(less than 100 shares) of our common stock, creating the potential
for such stockholders to experience an increase in the cost of
selling their shares and greater difficulty effecting such
sales.
Following
the Reverse Split, the resulting market price of our common stock
may not attract new investors, including institutional investors,
and may not satisfy the investing requirements of those investors.
Consequently, the trading liquidity of our common stock may not
improve.
Although
we believe that a higher market price of our common stock may help
generate greater or broader investor interest, there can be no
assurance that the Reverse Split will result in a share price that
will attract new investors, including institutional investors. In
addition, there can be no assurance that the market price of our
common stock will satisfy the investing requirements of those
investors. As a result, the trading liquidity of our common stock
may not necessarily improve.
Principal Effects of the Reverse Split
If
approved and implemented, the principal effects of the Reverse
Split would include the following:
●
the
number of outstanding shares of the Company’s common stock
and treasury stock will decrease based on the Reverse Split ratio
selected by the Board;
●
the
number of shares of the Company’s common stock held by
individual stockholders will decrease based on the Reverse Split
ratio selected by the Board, and the number of stockholders who own
“odd lots” of less than 100 shares of our common stock
will increase;
●
the
number of shares common stock reserved for issuance under our 2021
Plan will be reduced proportionally based on the Reverse Split
ratio selected by the Board (along with any other appropriate
adjustments or modifications); and
●
the
exercise price of our outstanding stock options and warrants and
the conversion price of our outstanding convertible securities,
including debt securities, and the number of shares reserved for
issuance upon exercise or conversion thereof will be adjusted in
accordance with their terms based on the Reverse Split ratio
selected by the Board.
29
The
Reverse Split will not change the number of authorized shares of
our common stock or preferred stock, or the par value of the common
stock or preferred stock.
The
table below shows, as of the Record Date, the approximate number of
outstanding shares of our common stock (excluding treasury shares)
that would result from the Reverse Split ratios (without giving
effect to the treatment of fractional shares) based on _________
shares of common stock issued and outstanding as of December 23,
2021:
|
Reverse Stock Split Ratio
|
Shares of Common Stock Outstanding After the Reverse Stock
Split
|
|
1-for-3
|
_________
|
|
1-for-50
|
_________
|
|
1-for-75
|
_________
|
If
the Reverse Split ratio is between the two numbers in the table
above, the number of outstanding shares will be proportionately
reduced.
If
effected, the Reverse Split also would reduce our treasury shares
proportionately based on the Reverse Split ratio. As of the Record
Date, we had __________ shares of common stock held as treasury
shares.
Shares
of common stock after the Reverse Split will be fully paid and
non-assessable. The amendment will not change any of the other
terms of our common stock. The shares of common stock after the
Reverse Split will have the same voting rights and rights to
dividends and distributions and will be identical in all other
respects to the shares of common stock prior to the Reverse Split.
Following the Reverse Split, we will continue to be subject to the
reporting requirements of the Exchange Act.
Because
the number of authorized shares of our common stock will not be
reduced, an overall effect of the Reverse Split of the outstanding
common stock will be an increase in authorized but unissued shares
of our common stock. These shares may be issued by our Board in its
sole discretion. See “Anti-Takeover Effects of the Reverse
Split” below. Any future issuance will have the effect of
diluting the percentage of stock ownership and voting rights of the
present holders of our common stock and preferred
stock.
Fractional Shares
No
fractional shares will be issued in connection with the Reverse
Split. We will round up any fractional shares resulting from the
Reverse Split to the nearest whole share.
No Going Private Transaction
Notwithstanding
the decrease in the number of outstanding shares of common stock
following the proposed Reverse Stock Split, the Board does not
intend for this transaction to be the first step in a “going
private transaction” within the meaning of Rule 13e-3 under
the Exchange Act.
30
Procedure for Implementing the Reverse Split
The Reverse Split, if approved by our
stockholders, would become effective following the filing of the
Certificate of Amendment with the Secretary of State of the State
of Delaware as of the time of filing or such other time set forth
in the Certificate of Amendment (the “Effective Time”).
The Effective Time of the Reverse Split will be determined by our
Board based on its evaluation as to when such action will be the
most advantageous to us and our stockholders. Beginning at the
Effective Time, each certificate representing shares of our common
stock will be deemed for all corporate purposes to evidence
ownership of the number of whole shares into which the shares
previously represented by the certificate were combined pursuant to
the Reverse Split. The form of amendment to our Certificate of
Incorporation to implement the Reverse Split is attached to this
Proxy Statement as Appendix
B. The Reverse Split alone will
have no effect on our authorized capital stock, and the total
number of authorized shares will remain the same as before the
Reverse Split.
After
the Effective Time, our common stock will have a new Committee on
Uniform Securities Identification Procedures (“CUSIP”)
number, which is a number used to identify our equity securities.
Stock certificates with the older CUSIP number will need to be
exchanged for stock certificates with the new CUSIP number by
following the procedures described below.
Effect on Beneficial Owners of Common Stock
Upon
the implementation of the Reverse Split, we intend to treat shares
held by stockholders through a bank, broker, custodian or other
nominee in the same manner as the stockholders whose shares are
registered in their names. Banks, brokers, custodians or other
nominees will be instructed to effect the Reverse Split for their
beneficial holders holding our common stock in street name.
However, these banks, brokers, custodians or other nominees may
have different procedures than registered stockholders for
processing the Reverse Split. Stockholders who hold shares of our
common stock with a bank, broker, custodian or other nominee and
who have any questions in this regard are encouraged to contact
their banks, brokers, custodians or other nominees.
Effect on Registered “Book-Entry” Holders of Common
Stock
Certain
registered holders of our common stock may hold some or all of
their shares electronically in book-entry form with Issuer Direct
our transfer agent (the “Transfer Agent”). These
stockholders do not have stock certificates evidencing their
ownership of the common stock. They are, however, provided with a
statement reflecting the number of shares registered in their
accounts.
Stockholders
who hold shares electronically in book-entry form with the Transfer
Agent will not need to take action in connection with the Reverse
Split. The Reverse Split will automatically be reflected in the
Transfer Agent’s records and on their next
statement.
Exchange of Stock Certificates and Elimination of Fractional Share
Interests
We
expect that the Transfer Agent will act as the exchange agent for
the purposes of implementing the exchange of stock certificates in
connection with the Reverse Split. As soon as practicable after
filing of an amendment to our Certificate of Incorporation
effecting a Reverse Split, the stockholders holding common stock in
certificated form will be sent a letter of transmittal by the
Transfer Agent. The letter of transmittal will contain instructions
on how a stockholder should surrender his, her or its certificates
representing pre-split shares of our common stock to the Transfer
Agent in exchange for certificates representing post-split shares.
No new certificates will be issued to a stockholder until that
stockholder has surrendered the certificate(s) representing the
outstanding pre-Reverse Split shares together with the properly
completed and executed letter of transmittal.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD
NOT SUBMIT ANY CERTIFICATES TO THE TRANSFER AGENT WITHOUT THE
LETTER OF TRANSMITTAL. PLEASE DO NOT SEND ANY CERTIFICATES TO THE
COMPANY.
31
No
service charges, brokerage commissions or transfer taxes will be
payable by any stockholder in connection with the exchange of
certificates, except that if any new stock certificates are to be
issued in a name other than that in which the surrendered
certificate(s) are registered it will be a condition of such
issuance that (1) the person requesting such issuance pays all
applicable transfer taxes resulting from the transfer (or prior to
transfer of such certificate, if any) or establishes to our
satisfaction that such taxes have been paid or are not payable, (2)
the transfer complies with all applicable federal and state
securities laws, and (3) the surrendered certificate is properly
endorsed and otherwise in proper form for transfer.
Accounting Matters
The
Reverse Split and the related proposed amendment to our Certificate
of Incorporation will not affect the par value of our common stock,
which will remain $0.001 per share. As a result of the Reverse
Split, upon the Effective Time, the stated capital on our balance
sheet attributable to our common stock, which consists of the par
value per share of our common stock multiplied by the aggregate
number of shares of our common stock issued and outstanding, will
be reduced in proportion to the size of the Reverse Split.
Accordingly, our additional paid-in capital account, which consists
of the difference between our stated capital and the aggregate
amount paid to us upon issuance of all currently outstanding shares
of our common stock, shall be credited with the amount by which the
stated capital is reduced. Our stockholders’ equity, in the
aggregate, will remain unchanged. However, after the Reverse Split,
net income or loss per share, and other per share amounts, will be
increased because there will be fewer shares of common stock
outstanding. In future financial statements, net income or loss per
share and other per share amounts for periods ending before the
Reverse Split would be recast to give retroactive effect to the
Reverse Split.
Certain Federal Income Tax Consequences
Each stockholder is advised to consult their own tax advisor as the
following discussion may be limited, modified or not apply based on
your particular situation.
The
following discussion of the material U.S. federal income tax
consequences of the Reverse Split is based on the current
provisions of the Internal Revenue Code of 1986, as amended (the
“Code”), Treasury regulations promulgated under the
Code, Internal Revenue Service (“IRS”) rulings and
pronouncements and judicial decisions now in effect. Those legal
authorities are subject to change at any time by legislative,
judicial or administrative action, possibly with retroactive effect
to the Reverse Split. No ruling from the IRS with respect to the
matters discussed below has been requested, and there is no
assurance that the IRS or a court would agree with the conclusions
set forth in this discussion. The following discussion assumes that
the pre-split shares of common stock were, and post-split shares
will be, held as “capital assets” as defined in the
Code. This discussion may not address certain U.S. federal income
tax consequences that may be relevant to particular stockholders in
light of their specific circumstances or to certain types of
stockholders (like dealers in securities, insurance companies,
foreign individuals and entities, financial institutions and
tax-exempt entities) that may be subject to special treatment under
the U.S. federal income tax laws. This discussion also does not
address any tax consequences under state, local or foreign
laws.
PLEASE CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S. FEDERAL,
STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE
REVERSE SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL
REVENUE CODE AND THE LAWS OF ANY OTHER TAXING
JURISDICTION.
We
will not recognize any gain or loss for U.S. federal income tax
purposes as a result of the Reverse Split.
A
stockholder will not recognize gain or loss for U.S. federal income
tax purposes on the exchange of pre-Reverse Split shares of our
common stock for post-Reverse Split shares of our common stock in
the Reverse Split. A stockholder’s aggregate tax basis in the
post-Reverse Split shares of our common stock the stockholder
receives in the Reverse Split will be the same as the
stockholder’s aggregate tax basis in the pre-Reverse Split
shares of our common stock the stockholder surrenders in exchange
therefor. A stockholder’s holding period for the post-Reverse
Split shares of our common stock the stockholder receives in the
Reverse Split will include the stockholder’s holding period
for the pre-Reverse Split shares of our common stock the
stockholder surrenders in exchange therefor. Stockholders who have
different bases or holding periods for pre-Reverse Split shares of
our common stock should consult their tax advisors regarding their
bases or holding periods in their post-Reverse Split common
stock.
32
Effect of Not Obtaining the Required Vote of Approval
The
failure of stockholders to approve the Reverse Stock Proposal could
prevent us from meeting the Nasdaq $4.00 minimum bid price
requirement (the “Minimum Bid Price Requirement”),
among other things, unless the market price of our common stock
increases above the Minimum Bid Price Requirement without a reverse
split. If we are unable to uplist our common stock to Nasdaq,
interest in our common stock may decline and certain institutions
may not have the ability to trade in our common stock, all of which
could have a material adverse effect on the liquidity or trading
volume of our common stock. If our common stock becomes
significantly less liquid due to our inability to qualify for
listing on Nasdaq, our stockholders may not have the ability to
liquidate their investments in our common stock when desired and we
believe our access to capital would become significantly diminished
as a result.
No Appraisal Rights
Stockholders
have no rights under the Delaware law or under our charter
documents to exercise dissenters’ rights of appraisal with
respect to the Reverse Stock Split.
Interests of Directors and Executive Officers in this
Proposal
As indicated in the Beneficial Ownership Table
under the above section titled “SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCK HOLDER
MATTERS” many of our directors and executive officers have a
direct interest in increasing the value of our shares. Therefore,
they have an interest in the approval of this proposal as it is
expected it will lead to an increase in the value of our shares.
However, the Board does not believe this interest is different from
that of any other stockholder.
Anti-Takeover Effects of the Reverse Split
The
effective increase in our authorized and unissued shares as a
result of the Reverse Split could potentially be used by our Board
to thwart a takeover attempt. The overall effects of this might be
to discourage, or make it more difficult to engage in, a merger,
tender offer or proxy contest, or the acquisition or assumption of
control by a holder of a large block of our securities and the
removal of incumbent management. The Reverse Split could make the
accomplishment of a merger or similar transaction more difficult,
even if it is beneficial to the stockholders. Our Board might use
the additional shares to resist or frustrate a third-party
transaction, favored by a majority of the independent stockholders
that would provide an above-market premium, by issuing additional
shares to frustrate the takeover effort.
As
discussed above, the principal goals of the Company in effecting
the Reverse Split are to list our securities on NASDAQ and increase
the ability of institutions to purchase our common stock and
stimulate the interest in our common stock by analysts and brokers.
This Reverse Split is not the result of management’s
knowledge of an effort to accumulate the Company’s securities
or to obtain control of the Company by means of a merger, tender
offer, solicitation or otherwise.
Neither
our Certificate of Incorporation nor our Bylaws presently contain
any provisions having anti-takeover effects and the Reverse Split
proposal is not a plan by our Board to adopt a series of amendments
to our Certificate of Incorporation or Bylaws to institute an
anti-takeover provision. We do not have any plans or proposals to
adopt other provisions or enter into other arrangements that may
have material anti-takeover consequences.
The
board of directors recommends that you vote FOR the proposal to
authorize the Board’s authority to effect a reverse stock
split of the Company’s outstanding and treasury shares of the
Company’s common stock.
33
PROPOSAL SIX:
RATIFICATION
OF THE APPOINTMENT OF
OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Our
Board has selected Freed Maxick CPAs,
P.C., (“Freed Maxick”) to serve as our
independent registered public accounting firm for the fiscal year
ending December 31, 2021. Freed Maxick has been Infinite Group,
Inc.’s independent registered public accounting firm since
1993.
Selection of
Infinite Group, Inc.’s independent registered public
accounting firm is not required to be submitted to a vote of the
stockholders of Infinite Group for ratification. However, Infinite
Group is submitting this matter to the stockholders as a matter of
good corporate governance. Even if the selection is ratified, the
Board may, in its discretion, appoint a different independent
registered public accounting firm at any time during the year if
they determine that such a change would be in the best interests of
the Infinite Group and its stockholders. If the appointment is not
ratified, the Board will consider its options.
A
representative of Freed Maxick is not expected to be present at the
Annual Meeting.
Principal Accounting Fees and Services
The
aggregate fees billed by our principal accounting firm, Freed
Maxick CPAs, P.C. for the years ended December 31, 2020 and 2019
are as follows:
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2020
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2019
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Audit
fees
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$85,900
|
$80,000
|
Audit
fees for 2020 and 2019 were for professional services rendered for
the audits of our annual financial statements and reviews of the
financial statements included in our Quarterly Reports on Form
10-Q. There were no tax or other non-audit related services
provided by the independent accountants for 2020 and
2019.
The board of directors recommends that you vote FOR the
ratification of the appointment
of
Freed Maxick CPAs, P.C. as our independent registered public
accounting firm.
34
PROPOSAL SEVEN:
ADJOURNMENT OF THE ANNUAL MEETING
The
stockholders are being asked to approve an adjournment of the
Annual Meeting to a later date or time, if necessary, to permit
further solicitation and vote of proxies if there are not
sufficient votes at the time of the Annual Meeting to approve any
of the proposals presented for a vote at the Annual
Meeting.
If
the Annual Meeting is adjourned to a different date or time, notice
need not be given, if the new date and time are announced at the
Annual Meeting. But if the adjournment is for more than 30 days, or
if after the adjournment a new record date is fixed for the
adjourned meeting, the notice of the adjourned meeting will be
given to each stockholder of record entitled to such notice
pursuant to the Bylaws and applicable law.
Any
adjournment of the Special Meeting for the purpose of soliciting
additional proxies will allow stockholders who have already sent in
their proxies to revoke them at any time prior to the time the
proxies are used.
The Board recommends a vote “For” the adjournment of
the Annual Meeting to a later date or time, if necessary, to permit
further solicitation and vote of proxies if there are not
sufficient votes at the time of the Annual Meeting to approve any
of the proposals presented for a vote at the Annual
Meeting.
35
OTHER MATTERS
As of
the date of this proxy statement, the board of directors does not
know of any other matters that are to be presented for action at
the Annual Meeting. Should any other matter come before the Annual
Meeting, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies with respect to the
matter in accordance with their judgment.
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By
Order of the Board of Directors
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|
|
|
|
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James
Villa
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|
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Chief Executive Officer
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|
|
|
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Pittsford,
New York
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|
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December
27, 2021
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36
APPENDIX A
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*
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INFINITE
GROUP, INC.
2021 EQUITY INCENTIVE PLAN
Section
1. Purpose
The
purpose of the Infinite Group, Inc. 2021 Equity Incentive Plan (the
“Plan”)
is to promote stockholder value and the future success of Infinite
Group, Inc. by providing appropriate retention and performance
incentives to the employees and non-employee directors of the
Company and its Affiliates (each as defined below), and any other
individuals who perform services for the Company or its
Affiliates.
Section
2. Definitions
2.1.
“Affiliate”
means any entity in which the Company has a direct or indirect
equity interest of 50 percent or more, any entity included in the
audited consolidated financial statements of the Company and any
other entity in which the Company has a substantial ownership
interest and which has been designated as an Affiliate for purposes
of the Plan by the Committee in its sole
discretion.
2.2. “Award”
means any form of incentive or performance award granted under the
Plan to a Participant by the Committee pursuant to any terms and
conditions that the Committee may establish and set forth in the
applicable Award Agreement. Awards granted under the Plan may
consist of: (a) Options granted pursuant to
Section 7; (b) Stock Appreciation Rights granted
pursuant to Section 8; (c) Restricted Stock granted pursuant
to Section 9; (d) Restricted Stock Units granted pursuant
to Section 9;and (e) Other Stock-Based Awards granted
pursuant to Section 10.
2.3. “Award
Agreement” means the
written or electronic document(s) evidencing the grant of an Award
to a Participant.
2.4. “Board”
means the Board of Directors of the Company.
2.5. “Change
in Control” means the
happening of any of the following:
(a) any Exchange Act
Person becomes the owner, directly or indirectly, of securities of
the Company representing more than 50 percent of the combined
voting power of the Company’s then outstanding securities
other than by virtue of a merger, consolidation or similar
transaction. Notwithstanding the foregoing, a Change in Control
will not be deemed to occur (A) on account of the acquisition
of securities of the Company by an investor, any affiliate thereof
or any other Exchange Act Person from the Company in a transaction
or series of related transactions the primary purpose of which is
to obtain financing for the Company through the issuance of equity
securities or (B) solely because the level of ownership held by any
Exchange Act Person (the “Subject Person”) exceeds
the designated percentage threshold of the outstanding voting
securities as a result of a repurchase or other acquisition of
voting securities by the Company reducing the number of shares
outstanding, provided that if a Change in Control would occur (but
for the operation of this sentence) as a result of the acquisition
of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the owner of any additional
voting securities that, assuming the repurchase or other
acquisition had not occurred, increases the percentage of the then
outstanding voting securities owned by the Subject Person over the
designated percentage threshold, then a Change in Control will be
deemed to occur;
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(b) there is
consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar
transaction, the stockholders of the Company immediately prior
thereto do not own, directly or indirectly, either
(A) outstanding voting securities representing more than 50
percent of the combined outstanding voting power of the surviving
entity in such merger, consolidation or similar transaction or
(B) more than 50 percent of the combined outstanding voting
power of the parent of the surviving entity in such merger,
consolidation or similar transaction, in each case in substantially
the same proportions relative to each other as their ownership of
the outstanding voting securities of the Company immediately prior
to such transaction;
(c) there is
consummated a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of the
Company and its Affiliates, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated
assets of the Company and its Affiliates to an entity, more than 50
percent of the combined voting power of the voting securities of
which are owned by stockholders of the Company in substantially the
same proportions relative to each other as their ownership of the
outstanding voting securities of the Company immediately prior to
such sale, lease, license or other disposition;
(d) individuals who,
immediately following the Effective Date, are members of the Board
(the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the members of the Board within any 12-month period;
provided, however, that if the appointment or election (or
nomination for election) of any new Board member was approved or
recommended by a majority vote of the members of the Incumbent
Board then still in office (other than as a result of any
settlement of a proxy or consent solicitation contest or any action
taken to avoid such a contest), such new member will, for purposes
of the Plan, be considered as a member of the Incumbent Board;
or
(e) the complete
dissolution or liquidation of the Company.
Notwithstanding the
foregoing, a “Change in Control” will not be deemed to
have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the
record holders of the capital stock of the Company immediately
prior to such transaction or series of transactions continue to
have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Company
immediately following such transaction or series of
transactions.
In
addition, solely with respect to any Award that constitutes
“deferred compensation” subject to Section 409A
and that is payable on account of a Change in Control (including
any installments that are accelerated on account of a Change in
Control), a Change in Control will occur only if such event also
constitutes a “change in the ownership,” “change
in the effective control,” or a “change in the
ownership of a substantial portion of the assets” of the
Company as those terms are defined by Section 1.409A-3(i)(5)
of the Treasury Regulations, but only to the extent necessary to
establish a time or form of payment that complies with
Section 409A, without altering the definition of Change in
Control for purposes of determining whether a Participant’s
rights to such Award become vested or otherwise unconditional upon
the Change in Control.
A-2
2.6. “Code”
means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated and other official guidance issued
thereunder.
2.7. “Committee”
means: (a) if the shares of Common Stock are not listed on a
national securities exchange, the committee appointed by the Board
from among its members to administer the Plan, provided that if a
separate committee has not been specifically established, the Board
shall constitute the Committee, and all references hereunder to the
Committee shall refer to the Board; or (b) if the shares of Common
Stock are listed on a national securities exchange, the
Compensation Committee of the Board, or any successor committee
that the Board may designate to administer the Plan, provided such
Committee consists of two or more individuals, each of whom must be
(i) a “Non-Employee Director” within the meaning
of Rule 16b-3 under the Exchange Act and (ii) a non-employee
director meeting the independence requirements for compensation
committee members under the rules and regulations of the Exchange
on which the shares of Common Stock are traded. References to
“Committee” include persons to whom the Committee has
delegated authority pursuant to Section 3.4.
2.8. “Common
Stock” means the common
stock, par value $0.001 per share, of the Company, and stock of any
other class or company into which such shares may thereafter be
changed.
2.9. “Company”
means Infinite Group, Inc., a Delaware corporation, or any
successor thereto.
2.10. “Disability”
with respect to a Participant, has the meaning assigned to such
term under the long-term disability plan maintained by the Company
or an Affiliate in which such Participant is covered at the time
the determination is made, and if there is no such plan, means the
permanent inability as a result of accident or sickness to perform
any and every duty pertaining to such Participant’s
occupation or employment for which the Participant is suited by
reason of the Participant’s previous training, education and
experience; provided that, for Incentive Stock Options, Disability
will mean a “permanent and total disability” as defined
by Section 22(e) of the Code; and provided further, that to
the extent an Award subject to Section 409A is payable upon a
Participant’s Disability, a Disability will not be deemed to
have occurred for such purposes unless the circumstances would also
result in a “disability” within the meaning of
Section 409A, unless otherwise provided in the Award
Agreement.
2.11. “Effective
Date” means the date on
which the Plan is approved by the stockholders of the
Company.
2.12. “Exchange”
means the Nasdaq Stock Market, or such other principal securities
market on which the shares of Common Stock are
traded.
2.13. “Exchange
Act” means the Securities
Exchange Act of 1934, as amended, and the regulations and
interpretations thereunder.
A-3
2.14. “Exchange
Act Person” means any
natural person, entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” will not include (i) the
Company or any Affiliate, (ii) any employee benefit plan of
the Company or any Affiliate or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
any Affiliate, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) an
entity owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company; or (v) any natural person, entity or
“group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act) that, as of the Effective Date, is the
owner, directly or indirectly, of securities of the Company
representing more than 50 percent of the combined voting power of
the Company’s then outstanding
securities.
2.15. “Fair
Market Value” of a share
of Common Stock as of any specific date means: (a) if the shares of
Common Stock are not listed on a national securities exchange, the
fair market value of the shares as of such date, as determined by
the Committee in its good faith judgment, consistent with the
requirements of Section 409A (or Section 422 of the Code for
Incentive Stock Options); or (b) if the shares of Common Stock are
listed on a national securities exchange, the per share closing
price reported by the Exchange on such date, or, if there is no
such reported closing price on such date, then the per share
closing price reported by the Exchange on the last previous day on
which such closing price was reported, or such other value as
determined by the Committee in accordance with applicable law. The
Fair Market Value of any property other than shares of Common Stock
means the market value of such property as determined by the
Committee using such methods or procedures as it may establish from
time to time.
2.16. “Incentive
Stock Option” means an
Option that qualifies as an incentive stock option under
Section 422 of the Code.
2.17. “Nonqualified
Stock Option” means an
Option that does not qualify as an Incentive Stock Option or which
is designated a Nonqualified Stock Option.
2.18. “Option”
means a right to purchase shares of Common Stock at a specified
exercise price that is granted subject to certain terms and
conditions pursuant to Section 7, and includes both Incentive Stock Options and
Nonqualified Stock Options.
2.19. “Other
Stock-Based Award” means
an Award denominated in shares of Common Stock that is granted
subject to certain terms and conditions pursuant to
Section 10.
2.20. “Participant”
means an individual who has been granted an Award under the Plan,
or in the event of the death of such individual, the
individual’s beneficiary.
2.21. “Person”
means any individual, corporation, firm, partnership, joint
venture, limited liability company, estate, trust, business
association, organization, or other entity.
2.22. “Prior
Plans” means the Infinite
Group, Inc. 2020 Stock Option Plan and the Infinite Group, Inc.
2019 Stock Option Plan.
A-4
2.23. “Restricted
Period” means the period
during which Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed
of.
2.24. “Restricted
Stock” means an Award of
shares of Common Stock that is granted subject to certain terms and
conditions pursuant to Section 9.
2.25. “Restricted
Stock Unit” means an
Award of a right to receive shares of Common Stock (or an
equivalent value in cash or other property, or any combination
thereof) that is granted subject to certain terms and conditions
pursuant to Section 9.
2.26. “Section 409A”
means Section 409A of the Code.
2.27. “Stock
Appreciation Right” means
a right to receive (without payment to the Company) cash, shares of
Common Stock or other property, or any combination thereof, as
determined by the Committee, based on the increase in the value of
a share of Common Stock over the per share exercise price, that is
granted subject to certain terms and conditions pursuant to
Section 8.
2.28. “Treasury
Regulations” means the
tax regulations promulgated under the Code.
Section
3. Administration
3.1.
Administration and
Authority. Except as otherwise
specified herein, the Plan will be administered solely by the
Committee. Subject only to Section 3.2, the
Committee has all the powers vested in it by the terms of the Plan
set forth herein, such powers to include exclusive authority to
select the employees and other individuals to be granted Awards
under the Plan, to determine the type, size and terms of the Award
to be made to each individual selected, to determine the time when
Awards will be granted, to establish performance objectives, to
prescribe the form of Award Agreement and to modify the terms of
any Award that has been granted. The Committee is authorized to
interpret the Plan and the Awards granted under the Plan, to
establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award in the
manner and to the extent the Committee deems necessary or desirable
to carry it into effect. Any decision of the Committee in the
interpretation and administration of the Plan, as described herein,
will lie within its sole and absolute discretion and will be final,
conclusive and binding on all parties
concerned.
3.2. Non-Employee Director
Awards. In respect of Awards
granted to non-employee directors of the Company or its Affiliates,
the Board has all the powers otherwise vested in the Committee by
the terms of the Plan set forth herein, including the exclusive
authority to select the non-employee directors to be granted Awards
under the Plan, to determine the type, size and terms of the Award
to be made to each non-employee director selected, to modify the
terms of any Award that has been granted to a non-employee
director, to determine the time when Awards will be granted to
non-employee directors and to prescribe the form of the Award
Agreement embodying Awards made under the Plan to non-employee
directors.
A-5
3.3. Repricing
Prohibited Absent Stockholder Approval. Notwithstanding any provision of the Plan,
except for adjustments pursuant to Section 11, neither the Board nor the Committee may, without
the prior approval of the stockholders of the Company,
(a) reduce, directly or indirectly, the per-share exercise
price of an outstanding Option or Stock Appreciation Right after it
is granted; (b) cancel an Option or Stock Appreciation Right
when the exercise price of the Option or Stock Appreciation Right
exceeds the Fair Market Value of a share of Common Stock in
exchange for cash or another Award (other than in connection with a
Change in Control);or (c) take any other action that is
treated as a repricing under United States generally accepted
accounting principles or by the rules or regulations of the
Exchange.
3.4. Delegation.
The Committee may authorize any one or more of its members or any
officer of the Company to execute and deliver documents or to take
any other action on behalf of the Committee with respect to Awards
made or to be made to Participants, subject to the requirements of
applicable law, including without limitation, Section 16 of
the Exchange Act.
3.5. Indemnification.
No member of the Committee and no officer of the Company will be
liable for anything done or omitted to be done by him, by any other
member of the Committee or by any officer of the Company in
connection with the performance of duties under the Plan, except
for his own willful misconduct or gross negligence, or as expressly
provided by applicable law, and the Company will indemnify each
member of the Committee and officer of the Company against any such
liability.
Section
4. Participation
4.1.
Eligible
Individuals. Consistent with
the purposes of the Plan, subject to
Section 3.2, the
Committee will have exclusive power to select the employees and
non-employee directors of the Company and its Affiliates and other
individuals performing services for the Company and its Affiliates
who may participate in the Plan and be granted Awards under the
Plan.
4.2. Condition
to Receipt of Awards. Unless
otherwise waived by the Committee, no prospective Participant will
have any rights with respect to an Award unless and until such
Participant has executed an Award Agreement evidencing the Award,
delivered a fully executed copy thereof to the Company, and
otherwise complied with the applicable terms and conditions of such
Award.
Section
5. Shares
Subject to Plan
5.1.
Maximum Number of
Shares that May Be Issued.
(a) Available Shares. Subject to adjustment
as provided in Section 11, the maximum number of shares of
Common Stock reserved and available for grant and issuance pursuant
to the Plan as of the Effective Date will be (i) 4,500,000, plus
(ii) any shares of Common Stock that are subject to options granted
under the Prior Plans that expire, are forfeited or canceled or
terminate for any other reason without the issuance of shares under
the Prior Plans on or after the Effective Date, plus (iii) any
shares of Common Stock that are subject to options granted under
the Prior Plans that are used to pay the exercise price of an
option or withheld to satisfy the tax withholding obligations
related to any option under the Prior Plans on or after the
Effective Date. If the Plan is approved by the stockholders of the
Company on the Effective Date, no new awards may be granted under
the Prior Plans after the Effective Date.
A-6
(b) Share Counting. For purposes of
counting shares against the maximum number of shares of Common
Stock that may be issued under the Plan as described in
Section 5.1(a), on the date of grant, Awards denominated
solely in shares of Common Stock (such as Options and Restricted
Stock) and other Awards that may be exercised for, settled in or
convertible into shares of Common Stock will be counted against the
Plan reserve on the date of grant of the Award based on the maximum
number of shares that may be issued pursuant to the Award, as
determined by the Committee.
(c) Shares Added Back. Shares of Common
Stock related to Awards issued under the Plan that are forfeited,
canceled, expired or otherwise terminated without the issuance of
shares of Common Stock will be added back and again available for
issuance under the Plan. In addition, shares of Common Stock that
are retained or reacquired by the Company to satisfy the exercise
price or purchase price of an Award or to satisfy the tax
withholding obligation in connection with an Award, as well as any
shares of Common Stock covered by an Award that is settled in cash,
will be added back and again be available for issuance under the
Plan.
(d) Source of Shares. Shares of Common
Stock issued pursuant to the Plan may be authorized but unissued
shares, treasury shares, reacquired shares or any combination
thereof.
(e) Assumed or Substituted Awards. Awards
granted through the assumption of, or substitution for, outstanding
awards previously granted by a company acquired by the Company or
any Affiliate, or with which the Company or any Affiliate combines,
will not reduce the maximum number of shares of Common Stock that
may be issued under the Plan as described in
Section 5.1(a).
(f) Fractional Shares. No fractional shares
of Common Stock may be issued under the Plan, and unless the
Committee determines otherwise, an amount in cash equal to the Fair
Market Value of any fractional share of Common Stock that would
otherwise be issuable will be paid in lieu of such fractional share
of Common Stock. The Committee may, in its sole discretion, cancel,
terminate, otherwise eliminate or transfer or pay other securities
or other property in lieu of issuing any fractional share of Common
Stock.
Section
6. Awards
Under Plan
6.1.
Types of
Awards. Awards under the Plan
may include one or more of the following types: Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units and
Other Stock-Based Awards.
6.2. Dividend
Equivalents. Other than with
respect to Options or Stock Appreciation Rights, the Committee may
choose, at the time of the grant of an Award or any time thereafter
up to the time of the Award’s payment, to include or to
exclude as part of such Award an entitlement to receive cash
dividends or dividend equivalents, subject to such terms,
conditions, restrictions or limitations, if any, as the Committee
may establish. Dividends and dividend equivalents will be paid in
such form and manner (i.e., lump sum or installments), and at such
times as the Committee will determine.
A-7
6.3. Vesting
Conditions. The vesting of an
Award may be conditioned upon a Participant’s continued
employment with or service to the Company and its Affiliates and/or
the achievement of specified performance
objectives.
6.4. Transferability.
An Award and a Participant’s rights and interest under the
Award, may not be sold, assigned or transferred, hypothecated or
encumbered in whole or in part either directly or by operation of
law or otherwise (except in the event of a Participant’s
death) including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner;
provided, however, that the Committee may allow a Participant to
assign or transfer without consideration an Award (other than an
Incentive Stock Option) to one or more members of his immediate
family, to a partnership of which the only partners are the
Participant or members of the Participant’s immediate family,
or to a trust established by the Participant for the exclusive
benefit of the Participant or one or more members of his immediate
family.
6.5. Award
Agreement. Unless otherwise
determined by the Committee, each Award will be evidenced by an
Award Agreement in such form as the Committee will prescribe from
time to time in accordance with the Plan, including a written
agreement, contract, certificate or other instrument or document
containing the terms and conditions of an individual Award granted
under the Plan which may, in the discretion of the Company, be
transmitted electronically. Each Award and Award Agreement will be
subject to the terms and conditions of the
Plan.
6.6. Method
of Payment. The Committee may,
in its discretion, settle any Award through the payment of cash,
the delivery of shares of Common Stock or other property, or a
combination thereof, as the Committee determines or as specified by
the Plan or an Award Agreement. Any Award settlement, including
payment deferrals, may be subject to conditions, restrictions and
contingencies as the Committee determines.
6.7. Death,
Disability or Termination. The
Committee may include in an Award Agreement provisions related to
the death, Disability or termination of employment or service of a
Participant, including without limitation the acceleration of the
exercisability, vesting or settlement of, or the lapse of
restrictions or deemed satisfaction of performance objectives with
respect to, an Award.
6.8. Change
in Control. The Committee may
include in an Award Agreement provisions related to a Change in
Control, including without limitation the acceleration of the
exercisability, vesting or settlement of, or the lapse of
restrictions or deemed satisfaction of performance objectives with
respect to, an Award.
6.9. Forfeiture
Provisions. The Committee may,
in its discretion, provide in an Award Agreement that an Award will
be canceled if the Participant, without the consent of the Company,
while employed by or providing services to the Company or any
Affiliate or after termination of such employment or service,
violates a non-competition, non-solicitation or non-disclosure
covenant or agreement, or otherwise engages in activity that is in
conflict with or adverse to the interest of the Company or any
Affiliate, including fraud or conduct contributing to any financial
restatements or irregularities, as determined by the Committee in
its sole discretion. Notwithstanding the foregoing, none of the
non-disclosure restrictions in this
Section 6.9
or in any Award Agreement will, or
will be interpreted to, impair the Participant from exercising any
legally protected whistleblower rights (including under Rule 21F
under the Exchange Act).
A-8
6.10. Recoupment
Provisions. Notwithstanding
anything in the Plan or in any Award Agreement to the contrary, the
Company will be entitled to the extent required by applicable law
(including, without limitation, Section 10D of the Exchange
Act and any regulations promulgated with respect thereto) or
Exchange listing requirement, in each case as in effect from time
to time, to recoup compensation of whatever kind paid under the
Plan by the Company at any time. No such recoupment of compensation
will be an event giving rise to a right to resign for “good
reason” or “constructive termination” (or similar
term) under any agreement between any Participant and the
Company.
6.11. Non-Employee
Director Award Limitation. The
aggregate of (a) the grant date fair value for financial
reporting purposes of any Awards granted during any fiscal year to
a non-employee director, and (b) the total amount of any cash
fees or other property paid to such non-employee director during
the fiscal year, in respect of
the director’s service as a member of the Board during such
year, may not exceed $250,000.
7.1.
Grant of
Options. The Committee may
grant Awards of Options. The Committee may grant Incentive Stock
Options provided the terms of such grants comply with
Section 7.4
and the requirements of
Section 422 of the Code. Each Option granted under the Plan
will comply with the following terms and conditions, and with such
other terms and conditions as the Committee, in its discretion, may
establish.
7.2. Exercise Price;
Expiration Date. Except for
Options granted through the assumption of, or substitution for,
outstanding awards previously granted by a company acquired by the
Company or any Affiliate, or with which the Company or any
Affiliate combines, the exercise price will be equal to or greater
than the Fair Market Value of the shares of Common Stock subject to
such Option on the date that the Option is granted. The Committee
in its discretion will establish the expiration date of an Option;
provided that in no event will the expiration date be later than 10
years from the date that the Option is granted.
7.3. Exercisability.
The Option will not be exercisable unless the Option has vested,
and payment in full of the exercise price for the shares of Common
Stock being acquired thereunder at the time of exercise is made in
such form as the Committee may determine in its discretion,
including, but not limited to:
(a) cash;
(b) if permitted by the
Committee, by instructing the Company to withhold a number of
shares of Common Stock that would otherwise be issued having a Fair
Market Value equal to the applicable portion of the exercise price
being so paid;
(c) if permitted by the
Committee, by tendering (actually or by attestation) to the Company
a number of previously acquired shares of Common Stock that have
been held by the Participant for at least six months (or such
shorter period, if any, determined by the Committee in
consideration of applicable accounting standards) and that have a
Fair Market Value equal to the applicable portion of the exercise
price being so paid;
A-9
(d) if permitted by the
Committee, by authorizing a third party to sell, on behalf of the
Participant, the appropriate number of shares of Common Stock
otherwise issuable to the Participant upon the exercise of the
Option and to remit to the Company a sufficient portion of the sale
proceeds to pay the entire exercise price and any tax withholding
resulting from such exercise; or
(e) any combination of
the foregoing.
7.4. Limitations for
Incentive Stock Options. The
terms and conditions of any Incentive Stock Options granted
hereunder will comply with the requirements of Section 422 of
the Code. Incentive Stock
Options may be granted only to employees of the Company or an
Affiliate, provided such Affiliate is also a “parent
corporation” of the Company within the meaning of
Section 424(e) of the Code or a “subsidiary
corporation” of the Company within the meaning of
Section 424(f) of the Code, on the date of grant. The
aggregate Fair Market Value (determined as of the time the
Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable for
the first time by any individual during any calendar year (under
all plans of the Company and its Affiliates) may not exceed
$100,000, and any Incentive Stock Option or portions thereof which
exceed such limit (according to the order in which they were
granted) will be treated as a Nonqualified Stock Option. Incentive
Stock Options may not be transferable by a Participant other than
by will or the laws of descent and distribution and may only be
exercisable during the Participant’s lifetime by the
Participant. If, at the time an Incentive Stock Option is granted, the employee
recipient owns (after application of the rules contained in
Section 424(d) of the Code) shares of Common Stock possessing
more than 10 percent of the total combined voting power of all
classes of stock of the Company or its subsidiaries, then:
(a) the exercise price for such Incentive Stock Option will be
at least 110 percent of the Fair Market Value of the shares of
Common Stock subject to such Incentive Stock Option on the date of
grant; and (b) such Incentive Stock Option will not be
exercisable after the date five years from the date such Incentive
Stock Option is granted. The maximum number of shares of Common
Stock that may be issued under the Plan pursuant to Incentive Stock
Options may not exceed, in the aggregate,
4,500,000.
8.1.
Grant of Stock
Appreciation Rights. The
Committee may grant Awards of Stock Appreciation Rights. Each Award
of Stock Appreciation Rights granted under the Plan will comply
with the following terms and conditions, and with such other terms
and conditions as the Committee, in its discretion, may
establish.
8.2. Exercise Price;
Expiration Date. Except for
Stock Appreciation Rights granted through the assumption of, or
substitution for, outstanding awards previously granted by a
company acquired by the Company or any Affiliate, or with which the
Company or any Affiliate combines, the exercise price will be equal
to or greater than the Fair Market Value of the shares of Common
Stock subject to such Stock Appreciation Right on the date that the
Stock Appreciation Right is granted. The Committee in its
discretion will establish the expiration date of a Stock
Appreciation Right; provided that in no event will the expiration
date be later than 10 years from the date that the Stock
Appreciation Right is granted.
A-10
8.3. Exercisability.
Stock Appreciation Rights may not be exercisable unless the Stock
Appreciation Rights have vested.
8.4. Exercise
and Settlement. An Award of
Stock Appreciation Rights entitles the Participant to exercise such
Award and to receive from the Company in exchange therefore,
without payment to the Company, that number of shares of Common
Stock having an aggregate Fair Market Value equal to (or, in the
discretion of the Committee, less than) the excess of the Fair
Market Value of one share of Common Stock, at the date of such
exercise, over the exercise price per share, times the number of
shares of Common Stock for which the Award is being exercised. The
Committee will be entitled in its discretion to elect to settle the
obligation arising out of the exercise of a Stock Appreciation
Right by the payment of cash or other property, or any combination
thereof, as determined by the Committee, equal to the aggregate
Fair Market Value of the shares of Common Stock it would otherwise
be obligated to deliver.
9.1.
Grant of Restricted
Stock and Restricted Stock Units. The Committee may grant Awards of Restricted
Stock or Restricted Stock Units. Each Award of Restricted Stock or
Restricted Stock Units under the Plan will comply with the
following terms and conditions, and with such other terms and
conditions as the Committee, in its discretion, may
establish.
9.2. Restricted
Stock Issuance. Shares of
Common Stock issued to a Participant in accordance with the Award
of Restricted Stock may be issued in certificate form or through
the entry of an uncertificated book position on the records of the
Company’s transfer agent and registrar. The Company may
impose appropriate restrictions on the transfer of such shares of
Common Stock, which will be evidenced in the manner permitted by
law as determined by the Committee in its discretion, including but
not limited to (a) causing a legend or legends to be placed on
any certificates evidencing such Restricted Stock, or
(b) causing “stop transfer” instructions to be
issued, as it deems necessary or appropriate.
9.3. Stockholder
Rights. Unless otherwise
determined by the Committee in its discretion, prior to the
expiration of the Restricted Period, a Participant to whom an Award
of Restricted Stock has been made will have ownership of such
shares of Common Stock, including the right to vote the same and to
receive dividends or other distributions made or paid with respect
to such shares of Common Stock, subject, however, to the
restrictions and limitations imposed thereon pursuant to the Plan
or Award Agreement.
The
Committee may grant Other Stock-Based Awards. Each Other
Stock-Based Award granted under the Plan will comply with the
following terms and conditions, and with such other terms and
conditions as the Committee, in its discretion, may establish. The
Committee will be entitled in its discretion to settle the
obligation under an Other Stock-Based Award by the payment of cash,
shares of Common Stock or other property, or any combination
thereof.
A-11
Section
11. Dilution
and Other Adjustments
11.1.
Adjustment for
Corporate Transaction or Change in Corporate
Capitalization. In the event of
any change in the outstanding shares of Common Stock of the Company
by reason of any corporate transaction or change in corporate
capitalization such as a stock split, reverse stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, reorganization, combination,
consolidation, subdivision or exchange of shares, a sale by the
Company of all or part of its assets, any distribution to
stockholders other than a normal cash dividend, partial or complete
liquidation of the Company or other extraordinary or unusual event,
the Board will make such adjustment in (a) the class and
maximum number of shares of Common Stock that may be delivered
under the Plan as described in Section 5.1,
(b) the class, number and exercise price of outstanding
Options and Stock Appreciation Rights, and (c) the class and
number of shares subject to any other Awards granted under the Plan
(provided that the number of shares of any class subject to Awards
will always be a whole number) and the terms of such Awards (including, without
limitation, any applicable performance goals), as may be determined to be appropriate by the
Board, and such adjustments will be final, conclusive and binding
for all purposes of the Plan.
11.2. Adjustment
for Merger or Consolidation. In
the event of any merger, consolidation or similar transaction as a
result of which the holders of shares of Common Stock receive
consideration consisting exclusively of securities of the surviving
entity (or the parent of the surviving entity) in such transaction,
the Board will, to the extent deemed appropriate by the Board,
adjust each Award outstanding on the date of such merger,
consolidation or similar transaction so that it pertains and
applies to the securities which a holder of the number of shares of
Common Stock subject to such Award would have received in such
merger, consolidation or similar transaction.
11.3. Assumption
or Substitution of Awards. In
the event of a dissolution or liquidation of the Company; a sale of
all or substantially all of the Company’s assets (on a
consolidated basis); or a merger, consolidation or similar
transaction involving the Company in which the holders of shares of
Common Stock receive securities and/or other property, including
cash, other than shares of the surviving entity in such transaction
(or the parent of such surviving entity), the Board will, to the
extent deemed appropriate by the Board, have the power to provide
for the exchange of each Award (whether or not then exercisable or
vested) for an Award with respect to: (a) some or all of the
property which a holder of the number of shares of Common Stock
subject to such Award would have received in such transaction; or
(b) securities of the acquirer or surviving entity (or parent
of such acquirer or surviving entity) and, incident thereto, make
an equitable adjustment, as determined by the Board, in the
exercise price of the Award, or the number of shares or amount of
property subject to the Award or provide for a payment (in cash or
other property) to the Participant to whom such Award was granted
in partial consideration for the exchange of the Award. In
addition, the Board will, to the extent deemed appropriate by the
Board, have the power to cancel, effective immediately prior to the
occurrence of such event, each Award (whether or not then
exercisable or vested), and, in full consideration of such
cancellation, pay to the Participant to whom such Award was granted
an amount in cash, for each share of Common Stock subject to such
Award, equal to the value, as determined by the Board, of such
Award, provided that with respect to any outstanding Option or
Stock Appreciation Right such value will be equal to the excess of
(i) the value, as determined by the Board, of the property
(including cash) received by the holder of shares of Common Stock
as a result of such event, over (ii) the exercise price of
such Option or Stock Appreciation Right, provided further that the
value of any outstanding Option or Stock Appreciation Right will be
zero where the exercise price of such Option or Stock Appreciation
Right is greater than the value, as determined by the Board, of the
property (including cash) received by the holder of shares of
Common Stock as a result of such event; and that no change to the
original timing of payment will be made to the extent it would
violate Section 409A.
A-12
Section
12. Amendment
and Termination
12.1.
Amendment.
The Plan may be amended in whole or in part at any time and from
time to time by the Board, and the terms of any outstanding Award
under the Plan may be amended from time to time by the Board, in
its discretion in any manner that it deems necessary or
appropriate; provided however, that no amendment may be made
without stockholder approval if such amendment
would:
(a) increase the number
of shares available for grant specified in Section 5.1(a)
(other than pursuant to Section 11);
(b) change the class of
persons eligible to receive Incentive Stock Options;
(c) decrease the
minimum Option exercise price set forth in Section 7.2 or the
minimum Stock Appreciation Rights exercise price set forth in
Section 8.2 (in each case, other than changes made pursuant to
Section 11);
(d) amend or repeal the
prohibition against repricing or exchange set forth in
Section 3.3; or
(e) require stockholder
approval under applicable law, regulation, rule or Exchange listing
requirement.
No such
amendment may adversely affect in a material manner any right of a
Participant under an Award without his written consent. Any
stockholder approval requirement under the Plan will be met if such
approval is obtained in accordance with applicable law.
Notwithstanding the foregoing, any amendment to the Plan or any
outstanding Award under the Plan will be made in a manner as to
ensure that an Award intended to be exempt from Section 409A
will continue to be exempt from Section 409A and that an Award
intended to comply with Section 409A will continue to comply
with Section 409A.
12.2. Termination.
The Plan may be suspended in whole or in part at any time and from
time to time by the Board. The Plan will terminate upon the
adoption of a resolution of the Board terminating the Plan. No
Award may be granted under the Plan after the date that is 10 years
from the date the Plan was last approved and adopted by the
stockholders of the Company. No termination of the Plan will
materially alter or impair any of the rights or obligations of any
person, without his consent, under any Award theretofore granted
under the Plan.
Section
13. Miscellaneous
13.1.
Loans. No loans from the Company or any
Affiliate to a Participant will be permitted in connection with the
Plan.
13.2. Reservation
of Rights of Company. No
employee or other person will have any claim or right to be granted
an Award under the Plan. Neither the Plan nor any action taken
hereunder will be construed as giving any employee or other person
any right to continue to be employed by or perform services for the
Company or any Affiliate, and the right to terminate the employment
of or performance of services by any Participant at any time and
for any reason is specifically reserved.
A-13
13.3. Non-Uniform
Treatment. Determinations made
by the Committee under the Plan need not be uniform and may be made
selectively among eligible individuals under the Plan, whether or
not such eligible individuals are similarly
situated.
13.4. General
Conditions of Awards. No
Participant or other person will have any right with respect to the
Plan, the shares of Common Stock reserved for issuance under the
Plan or in any Award, contingent or otherwise, until written
evidence of the Award has been delivered to the recipient and all
the terms, conditions and provisions of the Plan and the Award
applicable to such recipient (and each person claiming under or
through him) have been met.
13.5. Rights
as a Stockholder. Unless
otherwise determined by the Committee in its discretion, a
Participant holding Options, Stock Appreciation Rights, Restricted
Stock Units or Other Stock-Based Awards will have no rights as a
stockholder with respect to any shares of Common Stock (or as a
holder with respect to other securities), if any, issuable pursuant
to any such Award until the date of the issuance of a stock
certificate to him or the entry on his behalf of an uncertificated
book position on the records of the Company’s transfer agent
and registrar for such shares of Common Stock or other instrument
of ownership, if any. Except as provided in Section 11, no adjustment will be made for dividends,
distributions or other rights (whether ordinary or extraordinary,
and whether in cash, securities, other property or other forms of
consideration, or any combination thereof) for which the record
date is prior to the date such book entry is made or a stock
certificate or other instrument of ownership, if any, is
issued.
13.6. Compliance
with Applicable Laws. No shares
of Common Stock or other property may be issued or paid hereunder
with respect to any Award unless counsel for the Company is
satisfied that such issuance will be in compliance with applicable
federal, state, local and foreign legal, securities exchange and
other applicable requirements. The Company will be under no
obligation to effect the registration pursuant to the Securities
Act of 1933, as amended, of any shares of Common Stock to be issued
hereunder or to effect similar compliance under any state or local
laws.
13.7. Withholding
of Taxes. The Company and its
Affiliates will have the authority and right to deduct or withhold
from any payment made under the Plan, or require a Participant to
remit to the Company or Affiliate, the federal, state or local
income or other taxes required by law to be withheld with respect
to the exercise, lapse of restriction, settlement, payment or other
taxable event of any Award under the Plan. It will be a condition
to the obligation of the Company to issue shares of Common Stock or
other property, or any combination thereof, upon exercise,
settlement or payment of any Award under the Plan, that the
Participant remit to the Company, upon its demand, such amount as
may be requested by the Company for the purpose of satisfying any
liability to withhold federal, state or local income or other
taxes. If the amount requested is not paid, the Company may refuse
to issue or pay shares of Common Stock or other property, or any
combination thereof. The Committee may, in its discretion, permit
an eligible Participant to elect to pay a portion or all of the
amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Committee deems to be
appropriate, including, but not limited to, by authorizing the
Company to withhold, or agreeing to surrender to the Company on or
about the date such tax liability is determinable, shares of Common
Stock or other property, or any combination thereof that would
otherwise be distributed, or have been distributed, as the case may
be, pursuant to such Award to such person, having a Fair Market
Value equal to the minimum amount required to be withheld, or if
permitted by the Company, up to such greater amount that will not
trigger adverse accounting consequences and is permitted under
applicable tax withholding rules.
A-14
13.8. Unfunded
Nature of Plan. The Plan will
be unfunded. The Company will not be required to establish any
special or separate fund or to make any other segregation of assets
to assure the payment of any Award under the Plan, and the rights
to the payment of Awards will be no greater than the rights of the
Company’s general creditors.
13.9. Consent.
By accepting any Award or other benefit under the Plan, each
Participant and each person claiming under or through him will be
conclusively deemed to have indicated his acceptance and
ratification of, and consent to, any action taken under the Plan by
the Company, the Board or the Committee.
13.10. No
Warranty of Tax Effect.
Although the Company may structure an Award to qualify for
favorable federal, state, local or foreign tax treatment, or to
avoid adverse tax treatment, no person connected with the Plan in
any capacity, including, but not limited to, the Company and its
directors, officers, agents and employees, makes any
representation, commitment or guarantee that any intended tax
treatment will be applicable with respect to any Award under the
Plan, or that such tax treatment will apply to or be available to a
Participant or his beneficiary. Furthermore, the existence of an
Award will not affect the right or power of the Company or its
stockholders to take any corporate action, regardless of the
potential effect of such action on the tax treatment of an Award
under the Plan.
13.11. Interpretation.
Unless the context indicates otherwise, references to
“Sections” in the Plan refer to Sections of the Plan.
Headings of Sections herein are inserted only for convenience of
reference and are not to be considered in the construction of the
Plan. In the Plan, the use of the masculine pronoun will include
the feminine and the use of the singular will include the plural,
as appropriate.
13.12. Severability.
If any provision of the Plan is held unlawful or otherwise invalid
or unenforceable in whole or in part by a court of competent
jurisdiction, such provision will be deemed limited to the
extent that such court of competent jurisdiction deems it lawful,
valid or enforceable and as so limited will remain in full force
and effect, and will not affect any other provision of the
Plan or part thereof, each of which will remain in full force and
effect.
13.13. Choice
of Law. The validity,
construction, interpretation, administration and effect of the
Plan, and of its rules and regulations, and rights relating to the
Plan and to Awards granted under the Plan, will be governed by the
substantive laws, but not the choice of law rules, of the State of
Delaware.
13.14. Section 409A.
Awards granted under the Plan are intended to qualify for an
exception from or comply with Section 409A, and the Plan and
Award Agreements will be administered, construed and interpreted in
accordance with such intent. Notwithstanding the foregoing, the
Company makes no representation that Awards qualify for an
exception from or comply with Section 409A and in no event
will the Company be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by a
Participant on account of non-compliance with Section 409A.
Notwithstanding anything in the Plan or any Award Agreement to the
contrary, if a Participant is a “specified employee”
(within the meaning of Section 409A(2)(B)) as of the date of
such Participant’s separation from service (as determined
pursuant to Section 409A), then to the extent any Award
payable to such Participant on account of such separation from
service would be considered nonqualified deferred compensation
under Section 409A, such payment or benefit will be paid or
provided in a lump sum upon the earlier of the first day of the
seventh month following such separation from service and the date
of the Participant’s death. Unless the Committee determines
otherwise, any provision of the Plan that would cause the grant of
an Award or the payment, settlement or deferral thereof to fail
exception from or compliance with Section 409A may be amended
to qualify for exception from or comply with Section 409A,
which may be made on a retroactive basis, in accordance with
Section 409A.
* *
*
*
*
A-15
APPENDIX B
* *
*
*
*
Certificate of Amendment
of the
Certificate of Incorporation
Of
Infinite Group, Inc.
Infinite Group,
Inc., a corporation organized and existing under and by
virtue of the provisions of the General Corporation Law of the
State of Delaware (the “General Corporation
Law”), hereby certifies as follows:
FIRST:
The name of the corporation is Infinite
Group, Inc. (the “Corporation”).
SECOND:
The Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of
Delaware on October 14, 1986.
THIRD:
The amendment effected by this Certificate of Amendment is
as follows:
A. The
following shall be added in its entirety to Article FOURTH
of the Corporation’s Certificate of Incorporation:
“Upon the filing and effectiveness (the
"Effective
Time") pursuant to the Delaware
General Corporation Law of this Certificate of Amendment to the
Certificate of Incorporation of the Corporation, each _________
shares of Common Stock issued and outstanding immediately prior to
the Effective Time shall, automatically and without any action on
the part of the respective holders thereof, be combined and
converted into one (1) share of Common Stock (the
"Reverse
Stock Split"). No fractional
shares shall be issued in connection with the Reverse Stock Split
and fractional shares resulting from the Stock Split will be
rounded up to the nearest whole share. Each certificate that
immediately prior to the Effective Time represented shares of
Common Stock ("Old
Certificates"), shall
thereafter represent that number of shares of Common Stock into
which the shares of Common Stock represented by the Old Certificate
shall have been combined, subject to rounding of fractional share
interests as described above."
FOURTH:
This amendment was duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
[Signature
page follows.]
B-1
In Witness Whereof, the Company
has caused this Certificate of Amendment to be signed by its duly
authorized officer on this ___________ day of
_____________.
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By:
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B-2
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INFINITE GROUP, INC.
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Annual Meeting of Stockholders
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January 26, 2022 at 10:00 A.M. Eastern Time
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This proxy is solicited on behalf of our Board of
Directors
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and each matter to be voted on at the
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Annual Meeting has been proposed by our Board of
Directors.
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The
undersigned hereby appoints James Villa and Andrew Hoyen, as
proxies, with the power to appoint a substitute, and hereby
authorize them to represent and to vote, as designated on the
reverse side of this ballot, all of the shares of common stock of
Infinite Group, Inc. that the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held at 10:00 A.M. Eastern
Time on Wednesday, January 26, 2022, at 175 Sully’s Trail,
Suite 202, Pittsford, New York 14534 and any adjournment or
postponement thereof.
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● This proxy will be
voted as specified by you and it revokes any prior proxy given by
you.
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● Unless
you withhold authority to vote for one or more of the nominees
according to the instructions on the reverse side of this proxy,
your signed proxy will be voted FOR the election of the three
director nominees listed on the reverse side of this proxy and
described in the accompanying Proxy Statement.
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● Unless
you specify otherwise, your signed proxy will be voted FOR
Proposals 2, 4, 5, 6, and 7, and for “1 Year” for
Proposal 3 listed on the reverse side of this proxy and described
in the accompanying Proxy Statement.
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● You acknowledge
receipt with this proxy of a copy of the Notice of Annual Meeting
and Proxy Statement dated December 27, 2021 describing more fully
the proposals listed in this proxy.
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Continued and to be signed on reverse side
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete the
reverse portion of this Proxy Card and Fax to 202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/IMCI
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OF
INFINITE GROUP, INC.
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PLEASE
COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR ALL
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WITHHOLD
ALL
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FOR ALL EXCEPT
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Election
the election of three directors to serve until the 2022 annual
meeting of stockholders and until their successors are duly elected
and qualified
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☐
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☐
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James
Villa
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☐
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Donald
W. Reeve
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☐
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CONTROL
ID:
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Andrew
Hoyen
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REQUEST
ID:
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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To approve, on an advisory basis, the compensation of our named
executive officers (“say-on-pay”).
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☐
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☐
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Proposal 3
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1 YEAR
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2 YEARS
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3 YEARS
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ABSTAIN
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To
approve, on an advisory basis, the frequency at which advisory
votes on executive compensation should be held
(“say-on-frequency”)
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☐
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☐
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☐
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☐
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Proposal 4
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FOR
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AGAINST
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ABSTAIN
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To
approve the Company’s 2021 Equity Incentive
Plan.
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☐
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☐
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☐
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Proposal 5
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FOR
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AGAINST
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ABSTAIN
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To
authorize the Board of Directors to effect, in its discretion, a
reverse stock split of the outstanding and treasury shares of the
Company’s common stock at a ratio ranging from 1-for-3 to
1-for-75, to be determined by the Board of Directors, and to
approve a corresponding amendment to the Company’s Amended
and Restated Certificate of Incorporation, as amended, to effect
the reverse stock split.
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Proposal 6
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FOR
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AGAINST
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ABSTAIN
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To
ratify the selection of Freed Maxick CPAs, P.C. as our independent
registered public accounting firm for the year ending December 31,
2021.
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Proposal 7
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FOR
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AGAINST
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ABSTAIN
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To
approve an adjournment of the Annual Meeting to a later date or
time, if necessary, to permit further solicitation and vote of
proxies if there are not sufficient votes at the time of the Annual
Meeting to approve any of the proposals presented for a vote at the
Annual Meeting
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING:
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Unless
you withhold authority to vote for one or more of the nominees
according to the instructions on the reverse side of this proxy,
your signed proxy will be voted FOR the election of the three
director nominees listed on the reverse side of this proxy and
described in the accompanying Proxy Statement.
Unless
you specify otherwise, your signed proxy will be voted FOR
Proposals 2, 4, 5, 6, and 7, and for “1 Year” for
Proposal 3 listed on the reverse side of this proxy and described
in the accompanying Proxy Statement.
In
their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting, and any
adjournment or adjournments thereof
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR ALL THE NOMINEES
LISTED AND PROPOSALS 2, 4, 5, 6, AND 7, AND FOR “1
YEAR” FOR PROPOSAL 3.
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MARK
HERE FOR ADDRESS CHANGE ☐ New Address (if
applicable):
____________________________________________________________________________________
IMPORTANT: 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.
Dated:
________________________
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(Print
Name of Stockholder and/or Joint Tenant)
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(Signature
of Stockholder)
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(Second
Signature if held jointly)
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