UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934
Filed by the Registrant
|
x
|
Filed by a Party other than the Registrant
|
¨
|
Check the appropriate box:
|
x
|
Preliminary Proxy Statement
|
¨
|
Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))
|
¨
|
Definitive Proxy Statement
|
¨
|
Definitive Additional Materials
|
¨
|
Soliciting Material Pursuant to § 240.14a-12
|
WPCS INTERNATIONAL INCORPORATED
(Name of Registrant as Specified in its
Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|
x
|
No fee required
|
¨
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
(1)
|
Title of each class of securities to which transaction applies:
|
|
|
(2)
|
Aggregate number of securities to which transaction applies:
|
|
|
(3)
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
|
|
|
(4)
|
Proposed maximum aggregate value of transaction:
|
|
|
(5)
|
Total fee paid:
|
|
|
¨
|
Fee paid previously with preliminary materials:
|
|
|
¨
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
|
|
|
(1)
|
Amount previously paid:
|
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
|
|
(3)
|
Filing Party:
|
|
|
(4)
|
Date Filed:
|
WPCS INTERNATIONAL INCORPORATED
600 Eagleview Boulevard, Suite 300
Exton, Pennsylvania 19341
Telephone: (484) 359-7228
August 15, 2014
Dear Stockholders:
You are cordially invited
to attend the combined fiscal years April 30, 2014 and 2015 Annual Meeting of Stockholders (the “Annual Meeting”) of
WPCS International Incorporated (the “Company”). The meeting will be held at 10:00 a.m., local time, on [*], 2014,
at the offices of Sichenzia Ross Friedman Ference LLP at 61 Broadway, 32
nd
Floor, New York, New York 10006. Enclosed
are the official notice of this meeting, a proxy statement, a form of proxy and the Annual Report on Form 10-K for the year ended
April 30, 2014.
At this meeting you
will be asked to consider the following proposals:
1. To elect the
seven director nominees named in the Proxy Statement to hold office until the next annual meeting of stockholders;
2. To ratify the
appointment of Marcum LLP as the Company’s independent auditors for the fiscal year ending April 30, 2015;
3. To approve an
amendment to the Certificate of Incorporation of the Company to increase the Company’s authorized shares of common stock
from 14,285,714 to 75,000,000;
4. To approve, on an advisory basis,
the compensation of the Company’s named executive officers;
5. To recommend,
on an advisory basis, a three-year frequency with which the Company should conduct future shareholder advisory votes on named executive
officer compensation; and
6. To act on such
other matters as may properly come before the meeting or any adjournment there.
Please note that attendance
at the Annual Meeting will be limited to stockholders of record at the close of business on August 20, 2014, and to guests of the
Company.
If your shares are
registered in your name and you plan to attend the Annual Meeting, please bring the enclosed ballot with you to the meeting.
If your shares
are held by a broker, bank or other nominee and you plan to attend the meeting, please contact the person responsible for your
account regarding your intention to attend the meeting so they will know how you intend to vote your shares at that time. Stockholders
who do not expect to attend the Annual Meeting in person may submit their ballot to the Management of the Company at 600 Eagleview
Boulevard, Suite 300, Exton, Pennsylvania 19341.
BY ORDER OF THE BOARD OF DIRECTORS
/s/
Sebastian Giordano
|
|
Sebastian Giordano
|
Interim Chief Executive Officer
|
WPCS INTERNATIONAL INCORPORATED
600 Eagleview Boulevard, Suite 300
Exton, Pennsylvania 19341
Telephone: (484) 359-7228
NOTICE OF COMBINED FISCAL YEARS APRIL
30, 2014 AND 2015
ANNUAL MEETING ANNUAL MEETING OF STOCKHOLDERS
The combined fiscal
years April 30, 2014 and 2015 Annual Meeting of the stockholders of WPCS International Incorporated (the “Company”)
will be held on [*], [*], 2014, at 10:00 a.m. local time at the offices of Sichenzia Ross Friedman Ference LLP at 61 Broadway,
32
nd
Floor, New York, New York 10006, for the purposes of:
1. Electing the seven director
nominees named in the Proxy Statement to hold office until the next annual meeting of stockholders;
2. Ratifying the appointment of
Marcum LLP as the Company’s independent auditors for the fiscal year ending April 30, 2015;
3. Approving an amendment to the
Certificate of Incorporation of the Company to increase our authorized shares of common stock from 14,285,714 to 75,000,000;
4. Approving, on an advisory basis,
the compensation of the Company’s named executive officers;
5. Recommending, on an advisory
basis, a three-year frequency with which the Company should conduct future shareholder advisory votes on named executive officer
compensation; and
6. Acting on such other matters
as may properly come before the meeting or any adjournment there.
Only stockholders of
record at the close of business on August 20, 2014, will be entitled to attend and vote at the meeting. A list of all stockholders
entitled to vote at the Annual Meeting, arranged in alphabetical order and showing the address of and number of shares held by
each stockholder, will be available at the principal office of the Company during usual business hours, for examination by any
stockholder for any purpose germane to the Annual Meeting for 10 days prior to the date thereof. The proxy materials will
be furnished to stockholders on or about [*], 2014. Because we did not hold an annual meeting of stockholders during the fiscal
year ended April 30, 2014, the Annual Meeting will also serve as our Annual Meeting of stockholders for the fiscal year ended April
30, 2014.
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting of Stockholders
to be held on [*], 2014:
The Proxy Statement and Annual Report
on Form 10-K for the year ended April 30, 2014 are available at:
http://www.viewproxy.com/wpcs/2014.
BY ORDER OF THE BOARD OF DIRECTORS
/s/
Sebastian Giordano
|
|
Sebastian Giordano
|
Interim Chief Executive Officer
|
[*], 2014
|
You are cordially
invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return
the enclosed proxy as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting.
A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have
voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record
by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record
holder.
WPCS INTERNATIONAL INCORPORATED
600 Eagleview Boulevard, Suite 300
Exton, Pennsylvania 19341
Telephone: (484) 359-7228
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON [*], [*], 2014
SOLICITATION OF PROXIES
The enclosed proxy
is solicited by the Board of Directors of WPCS International Incorporated (the “Company”), for use at the Annual Meeting
of the Company’s stockholders to be held at 10:00 a.m., local time, on [*], 2014, at the offices of Sichenzia Ross Friedman
Ference LLP at 61 Broadway, 32
nd
Floor, New York, New York 10006, and any postponements or adjournments thereof.
Whether or not you expect to attend the meeting in person, please vote your shares as promptly as possible to ensure that your
vote is counted. The proxy materials will be furnished to stockholders on or about [*], 2014. Because we did not hold an annual
meeting of stockholders during the fiscal year ended April 30, 2014, the Annual Meeting will also serve as our Annual Meeting of
stockholders for the fiscal year ended April 30, 2014.
REVOCABILITY OF PROXY AND SOLICITATION
Any stockholder executing
a proxy that is solicited hereby has the power to revoke it prior to the voting of the proxy. Revocation may be made by attending
the Annual Meeting and voting the shares of stock in person, or by delivering to the Secretary of the Company at the principal
office of the Company prior to the Annual Meeting a written notice of revocation or a later-dated, properly executed proxy. Solicitation
of proxies may be made by directors, officers and other employees of the Company by personal interview, telephone, facsimile transmittal
or electronic communications. No additional compensation will be paid for any such services. This solicitation of proxies is being
made by the Company which will bear all costs associated with the mailing of this proxy statement and the solicitation of proxies.
RECORD DATE
Stockholders of record
at the close of business on August 20, 2014, will be entitled to receive notice of, attend and vote at the meeting.
ACTION TO BE TAKEN UNDER PROXY
Unless otherwise directed
by the giver of the proxy, the persons named in the form of proxy, namely, Sebastian Giordano, our Interim Chief Executive
Officer, and Joseph Heater, our Chief Financial Officer, or either one of them who acts, will vote:
|
·
|
FOR the election of the seven director
nominees named in the Proxy Statement to hold office until the next annual meeting of stockholders;
|
|
·
|
FOR ratification of the appointment of
Marcum LLP as the Company’s independent auditors for the fiscal year ending April 30, 2015;
|
|
·
|
FOR approval of an amendment to the Certificate
of Incorporation of the Company to increase our authorized shares of common stock from 14,285,714 to 75,000,000;
|
|
·
|
FOR approval of the executive compensation
of the Company’s named executive officers;
|
|
·
|
FOR approval of a three-year frequency
with which the Company should conduct future shareholder advisory votes on named executive officer compensation; and
|
|
·
|
According to their discretion, on the
transaction of such other matters as may properly come before the meeting or any adjournment there.
|
Should any nominee
named herein for election as a director become unavailable for any reason, it is intended that the persons named in the proxy will
vote for the election of such other person in his stead as may be designated by the Board of Directors. The Board of Directors
is not aware of any reason that might cause any nominee to be unavailable.
WHO IS ENTITLED TO VOTE; VOTE REQUIRED;
QUORUM
As of August 20, 2014,
there were [*] shares of common stock issued and outstanding, which constitutes all of the outstanding capital stock of the Company.
Stockholders are entitled to one vote for each share of common stock held by them.
Thirty-three and one-third
percent (33.33%) of the outstanding shares, or [*] shares, present in person or represented by proxy, will constitute a quorum
at the meeting. For purposes of the quorum and the discussion below regarding the vote necessary to take stockholder action, stockholders
of record who are present at the Annual Meeting in person or by proxy and who abstain, including brokers holding customers’
shares of record who cause abstentions to be recorded at the meeting, are considered stockholders who are present and entitled
to vote and are counted towards the quorum.
Brokers holding shares
of record for customers generally are not entitled to vote on “non-routine” matters, unless they receive voting instructions
from their customers. As used herein, “uninstructed shares” means shares held by a broker who has not received such
instructions from its customers on a proposal. A “broker non-vote” occurs when a nominee holding uninstructed shares
for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with
respect to that non-routine matter. In connection with the treatment of abstentions and broker non-votes, only the proposal to
ratify the independent auditors at this meeting is considered a “routine” matter, and brokers are entitled to vote
uninstructed shares only with respect to this proposal.
Determination of whether
a matter specified in the Notice of Annual Meeting of Stockholders has been approved will be determined as follows:
|
·
|
Those persons will be elected directors
who receive a plurality of the votes cast at the Meeting in person or by proxy and entitled to vote on the election. Accordingly,
abstentions or directions to withhold authority will have no effect on the outcome of the vote;
|
|
·
|
The affirmative vote of the holders of
a majority of the total outstanding shares as of the record date is necessary to approve the increase in authorized shares of common
stock; and
|
|
·
|
For each other matter specified in the
Notice of Annual Meeting of Stockholders, the affirmative vote of a majority of the shares of common stock present at the meeting
in person or by proxy and entitled to vote on such matter is required for approval. Abstentions will be considered shares present
in person or by proxy and entitled to vote and, therefore, will have the effect of a vote against the matter. Broker non-votes
will be considered shares not present for this purpose and will have no effect on the outcome of the vote.
|
Directions to withhold
authority to vote for directors, abstentions and broker non-votes will be counted for purposes of determining whether a quorum
is present for the Meeting.
QUESTIONS AND ANSWERS ABOUT THESE PROXY
MATERIALS AND VOTING
Why am I receiving these materials?
We have sent you these
proxy materials because the Board of Directors of
WPCS International Incorporated
(sometimes referred to as the “
Company
,” “
WPCS
,”
“
we
” or “
us
”) is soliciting your proxy to vote at the Annual Meeting of Stockholders. According
to our records, you were a stockholder of the Company as of the end of business on August 20, 2014.
You are invited
to attend the Annual Meeting to vote on the proposals described in this proxy statement. However, you do not need to attend the
meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.
The Company intends
to mail these proxy materials on or about
[*], 2014
to all stockholders of record on
August 20, 2014
(the “
Record
Date
”) entitled to vote at the Annual Meeting.
What is included in these materials?
These materials include:
|
·
|
this proxy statement for the Annual Meeting;
and
|
|
·
|
the Company’s annual report on Form
10-K for the fiscal year ended April 30, 2014, as filed with the SEC on July 30, 2014.
|
What is the proxy card?
The proxy card enables
you to appoint Sebastian Giordano, our Interim Chief Executive Officer, and Joseph Heater, our Chief Financial Officer, as your
representative at the Annual Meeting. By completing and returning a proxy card, you are authorizing these individuals to vote your
shares at the Annual Meeting in accordance with your instructions on the proxy card. This way, your shares will be voted whether
or not you attend the Annual Meeting.
When and where is the Annual Meeting
being held?
The Annual Meeting
will be held on [*], [*], 2014 commencing at 10:00 A.M., local time, at the offices of Sichenzia Ross Friedman Ference LLP at 61
Broadway, 32
nd
Floor, New York, New York 10006.
Can I view these proxy materials over
the Internet?
Yes. The Notice
of Meeting, this Proxy Statement and accompanying proxy card and our Annual Report on Form 10-K for the year ended April 30, 2014
are available at
http://www.viewproxy.com/wpcs/2014
.
Who can vote at the Annual Meeting?
Only stockholders of
record at the close of business on August 20, 2014 will be entitled to vote at the Annual Meeting. On this record date, there were
[*] shares of common stock outstanding and entitled to vote.
The Annual Meeting
will begin promptly at 10:00 A.M., local time. Check-in will begin one-half hour prior to the meeting. Please allow ample time
for the check-in procedures.
Stockholder of Record: Shares Registered
in Your Name
If on August 20, 2014
your shares were registered directly in your name with WPCS’s transfer agent, Interwest Transfer and Trust Company, then
you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or
not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy.
Beneficial Owner: Shares Registered
in the Name of a Broker or Bank
If on August 20, 2014,
your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, rather than in your name,
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 to be 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 regarding how to vote the
shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record,
you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent.
What am I voting on?
The following matters
are scheduled for a vote:
1. To elect the seven director
nominees named in the Proxy Statement to hold office until the next annual meeting of stockholders;
2. To ratify the appointment of
Marcum LLP as the Company’s independent auditors for the fiscal year ending April 30, 2015;
3. To approve an amendment to the
Certificate of Incorporation of the Company to increase the Company’s authorized shares of common stock from 14,285,714 to
75,000,000;
4. To approve, on an advisory basis,
the compensation of the Company’s named executive officers;
5. To recommend, on an advisory
basis, a three-year frequency with which the Company should conduct future shareholder advisory votes on named executive officer
compensation; and
6. To act on such other matters
as may properly come before the meeting or any adjournment there.
The Board of Directors
is not currently aware of any other business that will be brought before the Annual Meeting.
How do I vote?
You may vote “
For
”
all the nominees to the Board of Directors, you may “
Withhold
” your vote for all nominees or you may vote “
For
”
all nominees except for any nominee(s) you specify. For the other matters to be voted on, you may vote “
For
”
or “
Against
” or abstain from voting. The procedures for voting are fairly simple:
Stockholder of Record: Shares Registered
in Your Name
If you are a stockholder
of record as of the Record Date, you may vote in person at the Annual Meeting or vote by proxy using the enclosed proxy card. Whether
or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting
and vote in person even if you have already voted by proxy.
|
·
|
To vote in person, come to the Annual
Meeting and we will give you a ballot when you arrive. You should be prepared to present photo identification for admittance. A
list of stockholders eligible to vote at the Annual Meeting will be available for inspection at the Annual Meeting and for a period
of ten days prior to the Annual Meeting during regular business hours at our principal executive offices, which are located at
600 Eagleview Boulevard, Suite 300, Exton, Pennsylvania 19341.
|
|
·
|
To vote using the proxy card, simply complete,
sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your completed and signed
proxy card to us before the Annual Meeting, we will vote your shares as you direct.
|
Beneficial Owner: Shares Registered
in the Name of Broker or Bank
If you are a beneficial
owner of shares registered in the name of your broker, bank, or other agent, you should have received voting instructions with
these proxy materials from that organization rather than from us. Simply complete and mail your voting instructions as directed
by your broker or bank to ensure that your vote is counted. Alternatively, you may be able to vote by telephone or over the Internet
by following instructions provided by your broker or bank. To vote in person at the Annual Meeting, you must obtain a valid proxy
from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or
contact your broker or bank to request a proxy form.
How many votes do I have?
On each matter to be
voted upon, you have one vote for each share of common stock you own as of the Record Date.
What is a quorum for purposes of conducting
the Annual Meeting?
The presence, in person
or by proxy, of the holders of thirty-three and one-third percent (33.33%) of the issued and outstanding common stock, or [*] shares, entitled
to vote at the meeting is necessary to constitute a quorum to transact business. If a quorum is not present or represented at the
Annual Meeting, the stockholders entitled to vote thereat, present in person or by proxy, may adjourn the Annual Meeting from time
to time without notice or other announcement until a quorum is present or represented.
What if I return a proxy card but do
not make specific choices?
If you return a signed
and dated proxy card without marking any voting selections, your shares will be voted “
FOR
” the election of
each of the seven (7) nominees for director, “
FOR
” the ratification of Marcum LLP as independent registered
public accountants of the Company for its fiscal year ending April 30, 2015, “
FOR
” approval of the increase
in our authorized shares of common stock, “
FOR
” approval of the executive compensation of the Company’s
named executive officers, “
FOR
” approval of a three-year frequency with which the Company should conduct future
shareholder advisory votes on named executive officer compensation, and “
FOR
” approval of any adjournment of
the Annual Meeting, if necessary or appropriate, to transact such other business as may properly come before the meeting and all
adjournments and postponements thereof; and if any other matter is properly presented at the meeting, your proxy holder (one of
the individuals named on your proxy card) will vote your shares using his best judgment.
How does the Board of Directors recommend
that I vote?
Our Board of Directors
recommends that you vote your shares “
FOR
” each of the seven (7) nominees to the Board of Directors, “
FOR
”
the ratification of the appointment of Marcum LLP as our independent auditors for the fiscal year ending April 30, 2015, “
FOR
”
approval of the increase in authorized shares of common stock, “
FOR
” approval of the executive compensation
of the Company’s named executive officers, and “
FOR
” approval of a three-year frequency with which the
Company should conduct future shareholder advisory votes on named executive officer compensation. Unless you provide other instructions
on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the
Company's Board of Directors as set forth in this Proxy Statement.
Who is paying for this proxy solicitation?
We will bear the cost
of solicitation of proxies. Proxies may be solicited by mail or personally by our Directors, officers or employees, none of whom
will receive additional compensation for such solicitation. We have retained Alliance Advisors, LLC to assist in the solicitation
of proxies at an estimated cost of approximately $6,500, plus reasonable expenses. Those holding shares as of record for the benefit
of others, or nominee holders, are being asked to distribute proxy soliciting materials to, and request voting instructions from,
the beneficial owners of such shares. We will reimburse nominee holders for their reasonable out-of-pocket expenses.
What does it mean if I receive more
than one set of proxy materials?
If you receive more
than one set of proxy materials, your shares may be registered in more than one name or in different accounts. Please complete,
sign and return
each
proxy card to ensure that all of your shares are voted.
I share the same address with another
WPCS International Incorporated stockholder. Why has our household only received one set of proxy materials?
The SEC’s rules
permit us to deliver a single set of proxy materials to one address shared by two or more of our stockholders. This practice, known
as “householding,” is intended to reduce the Company’s printing and postage costs. We have delivered only one
set of proxy materials to stockholders who hold their shares through a bank, broker or other holder of record and share a single
address, unless we received contrary instructions from any stockholder at that address. However, any such street name holder residing
at the same address who wishes to receive a separate copy of the proxy materials may make such a request by contacting the bank,
broker or other holder of record, or Broadridge Financial Solutions, Inc. at (800) 542-1061 or in writing at Broadridge, Householding
Department, 51 Mercedes Way, Edgewood, NY 11717. Street name holders residing at the same address who would like to request householding
of Company materials may do so by contacting the bank, broker or other holder of record or Broadridge at the phone number or address
listed above.
Can I change my vote after submitting
my proxy?
Yes. You can revoke
your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy
in any one of three ways:
|
·
|
You may submit another properly completed
proxy card with a later date;
|
|
·
|
You may send a timely written notice that
you are revoking your proxy to the Company at 600 Eagleview Boulevard, Suite 300, Exton, Pennsylvania 19341, Attn: Chief
Financial Officer; or
|
|
·
|
You may attend the Annual Meeting and
vote in person. Simply attending the meeting will not, by itself, revoke your proxy.
|
If your shares are
held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
What are “broker non-votes”?
Broker non-votes occur
when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding
the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial
owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner
does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered
to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of
the New York Stock Exchange, “non-routine” matters include director elections (whether contested or uncontested) and
matters involving a contest or a matter that may substantially affect the rights or privileges of shareholders.
Our election of directors
(Proposal No. 1), approval of approval of an amendment to the Certificate of Incorporation of the Company to increase the Company’s
authorized shares of common stock from 14,285,714 to 75,000,000 (Proposal No. 3), approval, on an advisory basis, of the compensation
of the Company’s named executive officers (Proposal No. 4) and recommendation, on an advisory basis, of the frequency with
which the Company should conduct future shareholder advisory votes on named executive officer compensation (Proposal No. 5) are
considered to be “non-routine” matters and as a result, brokers or nominees cannot vote your shares on these proposals
in the absence of your direction.
How are votes counted?
Votes will be counted
by the inspector of elections appointed for the meeting, who will separately count “
For
,” “
Withhold
”
and “
Against
” votes, abstentions and broker non-votes. Abstentions will not have an effect on, or be counted
towards the vote totals for, each of the other proposals. The ratification of the Company’s auditors is the only routine
proposal on which the Company expects that brokers or other nominees will be entitled to vote without receiving instructions from
the record holder of the applicable shares of common stock. Accordingly, no broker non-votes will result from these proposals.
The other proposals may result in broker non-votes, however, these will have no effect on or be counted towards the vote totals
for, such other proposals.
How many votes are needed to approve
each proposal?
For the election of
directors, each of the seven (7) nominees receiving “
For
” votes at the meeting in person or by proxy will be
elected. The affirmative vote of the holders of a majority of the total outstanding shares as of the record date is necessary to
approve the reverse split and increase in authorized shares of common stock. Approval of all other matters requires the favorable
vote of a majority of the votes cast on the applicable matter at the Annual Meeting in person or by proxy.
Is my vote kept confidential?
Proxy instructions,
ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy.
Your vote will not be disclosed either within the Company or to third parties, except:
|
·
|
as necessary to meet applicable legal
requirements;
|
|
·
|
to allow for the tabulation and certification
of votes; and
|
|
·
|
to facilitate a successful proxy solicitation.
|
Occasionally, stockholders
provide written comments on their proxy cards, which may be forwarded to the Company’s management and the Board.
How can I find out the results of the
voting at the Annual Meeting?
Preliminary voting
results will be announced at the Annual Meeting. Final voting results will be discussed in a Form 8-K filed after the Annual Meeting.
Who can help answer my questions?
If you need assistance with voting or have
questions regarding the Annual Meeting, please contact:
Alliance Advisors, LLC
200 Broadacres Drive, 3rd Floor
Bloomfield, NJ 07003
855-973-0095
(Banks and Brokers please call: 973-873-7721)
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Information about the Nominees
At the Annual Meeting,
the stockholders will elect seven directors to serve until the next annual meeting of Stockholders or until their respective successors
are elected and qualified. In the event any nominee is unable or unwilling to serve as a director at the time of the Annual Meeting,
the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board
or the proxy holders to fill such vacancy, or for the balance of the nominees named without nomination of a substitute, or the
size of the Board may be reduced in accordance with the Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a director if elected.
Assuming a quorum is
present, the seven nominees receiving the highest number of affirmative votes of shares entitled to be voted for them will be elected
as directors of the Company for the ensuing year. Unless marked otherwise, proxies received will be voted "FOR" the election
of each of the seven nominees named below. In the event that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them in such a manner as will ensure the election of as many of the nominees listed
below as possible, and, in such event, the specific nominees to be voted for will be determined by the proxy holders. All of the
director nominees, except for Divya Thakur, currently serve as directors.
NAME
|
|
AGE
|
|
CURRENT POSITION
|
|
|
|
|
|
Sebastian Giordano
|
|
57
|
|
Interim Chief Executive Officer and Director
|
Charles Benton
|
|
63
|
|
Director
|
Kevin Coyle
|
|
63
|
|
Director
|
Norm Dumbroff
|
|
53
|
|
Director
|
Neil Hebenton
|
|
58
|
|
Director
|
Edward Gildea
|
|
62
|
|
Director
|
Divya Thakur
|
|
29
|
|
--
|
The following information
with respect to the principal occupation or employment of each nominee for director, the principal business of the corporation
or other organization in which such occupation or employment is carried on, and such nominee's business experience during the past
five years, as well as the specific experiences, qualifications, attributes and skills that have led the Board to determine that
such Board members should serve on the Board of Directors, has been furnished to the Company by the respective director nominees:
Sebastian Giordano, Interim Chief
Executive Officer and Director
Mr. Giordano has been
Interim Chief Executive Officer since August 2013 and became a director of WPCS in February 2013. Since 2002, Mr. Giordano has
been Chief Executive Officer of Ascentaur, LLC, a business consulting firm providing comprehensive strategic, financial and business
development services to start-up, turnaround and emerging growth companies. From 1998 to 2002, Mr. Giordano was Chief Executive
Officer of Drive One, Inc., a safety training and education business. From 1992 to 1998, Mr. Giordano was Chief Financial Officer
of Sterling Vision, Inc., a retail optical chain. Mr. Giordano received B.B.A. and M.B.A. degrees from Iona College. Mr. Giordano’s
executive business experience was instrumental in his selection as a member of our Board of Directors.
Charles Benton, Director
Mr. Benton has been
a director of WPCS since July 2012. Since February 2008, Mr. Benton has served as the Director of Distribution Services –
Supply Chain for Ascena Retail Group / Charming Shoppes, Inc., a leading national specialty retailer of women’s apparel operating
more than 1,800 retail stores throughout the United States. Prior to that, from March 2006 to January 2008, he served as Director
of Finance – Supply Chain for Charming Shoppes, and from May 1999 to February 2006, as Manager of Finance – Supply
Chain for Charming Shoppes. Previously, Mr. Benton spent approximately 20 years for Consolidated Rail Corporation. He holds a B.S.
degree in accounting from St. Joseph’s University in Philadelphia, Pennsylvania. Mr. Benton’s financial experience
was instrumental in his selection as a member of our board of directors.
Kevin Coyle, Director
Mr. Coyle has been
a director of WPCS since August 2012. Since May 2014, Mr. Coyle has been Senior Vice President for Business Development of Elauwit
Networks, LLC., a telecommunications company serving the multifamily industry. Between 2009 and 2014 he was Principal of KPC Consulting,
his personal consulting company. In 2011, Mr. Coyle served as a Senior Vice President for Business Development at Comcast Communications,
Inc. in Philadelphia, Pennsylvania. Between 2005 and September 2009, Mr. Coyle served as the Chief Executive Officer of Ygnition
Networks, Inc., a Seattle, Washington-based communications service provider. Previously, Mr. Coyle served as Chief Executive Officer
of Digital Media Holdings in Denver, Colorado (2002 – 2003), Chief Financial Officer of OneSecure, Inc. in Denver, Colorado
and San Jose, California (2000 – 2002) and Group Vice President and Chief Financial Officer of Jones Intercable, Inc. in
Denver, Colorado (1990 – 1999). He holds a B.S. degree in finance from Villanova University in Villanova, Pennsylvania and
an M.B.A. from Drexel University in Philadelphia, Pennsylvania. Mr. Coyle's experience with communications services, his financial
experience and his senior executive experience were instrumental in his selection as a member of our Board of Directors.
Norm Dumbroff, Director
Mr. Dumbroff became
a Director of WPCS in November 2002. Since April 1990, he has been the Chief Executive Officer of Wav Incorporated, a distributor
of wireless products in North America. Prior to Wav Incorporated, Mr. Dumbroff was an engineer for Hughes Aircraft. He holds a
B.S. degree in Computer Science from Albright College. Mr. Dumbroff’s experience with wireless communications, his engineering
background and his senior executive experience was instrumental in his selection as a member of our board of directors.
Edward Gildea, Director
Mr. Gildea became a
director of WPCS in February 2013. Since February 2014, Mr. Gildea has been a partner in the law firm Fisher Broyles LLP. From
2006 to 2013, Mr. Gildea was President, Chief Executive Officer and Chairman of the Board of Directors of Converted Organics Inc.,
a publicly held green technology company that manufactures and sells an organic fertilizer, made from recycled food waste. Mr.
Gildea is a director for the following publicly held companies: Finjan Holdings, Inc. (intellectual property), Worlds, Inc. (intellectual
property), and Atrinsic, Inc. (internet marketing). Mr. Gildea received a B.A. from The College of the Holy Cross and a J.D. from
Suffolk University Law School. Mr. Gildea’s executive business experience was instrumental in his selection as a member of
our Board of Directors.
Neil Hebenton, Director
Mr. Hebenton became
a director of WPCS in October 2002. Since February 2003, he has been Senior Director, Business Development, for PAREXEL Informatics,
Inc. (a subsidiary of PAREXEL International Corp.), a company offering clinical trial technology solutions and services to pharmaceutical
and biotechnology companies. From January 1998 to January 2003, he was Head of US Sales and Operations for the U.K. based FW Pharma
Systems, a multi-million dollar application software company serving the pharmaceutical and biotechnology sectors. Prior to that,
Mr. Hebenton has held a variety of operational, sales and marketing positions in Europe with Bull Information Systems (BULL-Paris,
Frankfurt, Zurich) and Philips Information Systems. He received his B.S. in Mathematics from the University of Edinburgh, Scotland.
Mr. Hebenton’s experience in international business development was instrumental in his selection as a member of our
board of directors.
Divya Thakur
Since December 2013,
Mr. Thakur has served as the Chief Technology Officer of BTX Trader LLC, a wholly-owned subsidiary of the Company. Prior to that,
from November 2011 to December 2013, he served as a Developer for Goldman Sach’s REDI division and from September 2010 to
November 2011, as a Developer for Union Bancaire Privée Asset Management. He holds a Bachelor of Science degree from the
University of Toronto. Mr. Thakur’s technology experience was instrumental in his nomination to serve on our board of directors.
Information About The Board Of Directors
The Board of Directors
oversees our business and affairs and monitors the performance of management. In accordance with corporate governance principles,
the Board does not involve itself in day-to-day operations. The directors keep themselves informed through discussions with the
Chief Executive Officer, other key executives and by reading the reports and other materials that we send them and by participating
in Board and committee meetings. Our directors hold office until their successors have been elected and duly qualified unless the
director resigns or by reasons of death or other cause is unable to serve in the capacity of director. We did not hold an annual
meeting of stockholders during the fiscal year ended April 30, 2014. The Annual Meeting will serve as a combined annual
meeting of stockholders for fiscal years April 30, 2014 and 2015.
How often did the Board and the Board committees meet
during fiscal 2014?
During fiscal 2014,
the Board of Directors held 19 meetings and the Audit Committee held four meetings. The Board, Audit Committee, Executive Committee
and Nominating Committee also approved certain actions by unanimous written consent.
What committees has the Board established?
The Board of Directors
has standing Audit, Executive, and Nominating Committees. Information concerning the membership and function of each committee
is as follows:
Board Committee Membership
|
|
Name
|
|
Audit
Committee
|
|
Executive Committee
|
|
Nominating Committee
|
Kevin Coyle
|
|
**
|
|
|
|
|
Norm Dumbroff
|
|
*
|
|
*
|
|
*
|
Neil Hebenton
|
|
*
|
|
*
|
|
**
|
Charles Benton
|
|
*
|
|
**
|
|
|
Edward Gildea
|
|
*
|
|
*
|
|
*
|
* Member of Committee
** Chairman of Committee
Audit Committee
Our Audit Committee
consists of Kevin Coyle, Charles Benton, Norm Dumbroff, Edward Gildea, and Neil Hebenton, with Mr. Coyle elected as Chairman of
the Committee. Our Board of Directors has determined that all of the members are “independent” as that term is defined
under applicable SEC rules and under the current listing standards of The NASDAQ Stock Market. Mr. Doyle is our audit committee
financial expert.
Our Audit Committee’s
responsibilities include: (i) reviewing the independence, qualifications, services, fees, and performance of the independent auditors,
(ii) appointing, replacing and discharging the independent auditor, (iii) pre-approving the professional services provided by the
independent auditor, (iv) reviewing the scope of the annual audit and reports and recommendations submitted by the independent
auditor, and (v) reviewing our financial reporting and accounting policies, including any significant changes, with management
and the independent auditor. Our Audit Committee also prepares the Audit Committee report that is required pursuant to the rules
of the SEC.
Executive Committee
Our Executive Committee
consists of Charles Benton, Norm Dumbroff, Edward Gildea, and Neil Hebenton, with Mr. Benton elected as Chairman of the Committee.
Our Board of Directors has determined that all of the members are “independent” under the current listing standards
of The NASDAQ Stock Market. Our Board of Directors has adopted a written charter setting forth the authority and responsibilities
of the Executive Committee.
Our Executive Committee
has responsibility for assisting the Board of Directors in, among other things, evaluating and making recommendations regarding
the compensation of our executive officers and directors, assuring that the executive officers are compensated effectively in a
manner consistent with our stated compensation strategy, producing an annual report on executive compensation in accordance with
the rules and regulations promulgated by the SEC, periodically evaluating the terms and administration of our incentive plans and
benefit programs and monitoring of compliance with the legal prohibition on loans to our directors and executive officers.
Nominating Committee
Our Nominating Committee
consists of Norm Dumbroff, Edward Gildea, and Neil Hebenton, with Mr. Hebenton elected as Chairman of the Committee. The Board
of Directors has determined that all of the members are “independent” under the current listing standards of The NASDAQ
Stock Market.
Our Nominating Committee
has responsibility for assisting the Board in, among other things, effecting the organization, membership and function of the Board
and its committees. The Nominating Committee shall identify and evaluate the qualifications of all candidates for nomination for
election as directors.
Nomination of Directors
As provided in its
charter and our company’s corporate governance principles, the Nominating Committee is responsible for identifying individuals
qualified to become directors. The Nominating Committee seeks to identify director candidates based on input provided by a number
of sources, including (1) the Nominating Committee members, (2) our other directors, (3) our stockholders, (4) our Chief Executive
Officer or Chairman, and (5) third parties such as professional search firms. In evaluating potential candidates for director,
the Nominating Committee considers the entirety of each candidate’s credentials.
Qualifications for
consideration as a director nominee may vary according to the particular areas of expertise being sought as a complement to the
existing composition of the Board of Directors. However, at a minimum, candidates for director must possess:
|
·
|
high personal and professional ethics
and integrity;
|
|
·
|
the ability to exercise sound judgment;
|
|
·
|
the ability to make independent analytical
inquiries;
|
|
·
|
a willingness and ability to devote adequate
time and resources to diligently perform Board and committee duties; and
|
|
·
|
the appropriate and relevant business
experience and acumen.
|
In addition to these
minimum qualifications, the Nominating Committee also takes into account when considering whether to nominate a potential director
candidate the following factors:
|
·
|
whether the person possesses specific
industry expertise and familiarity with general issues affecting our business;
|
|
·
|
whether the person’s nomination
and election would enable the Board to have a member that qualifies as an “audit committee financial expert” as such
term is defined by the SEC in Item 401 of Regulation S-K;
|
|
·
|
whether the person would qualify as an
“independent” director under the listing standards of the Nasdaq Stock Market;
|
|
·
|
the importance of continuity of the existing
composition of the Board of Directors to provide long term stability and experienced oversight; and
|
|
·
|
the importance of diversified Board membership,
in terms of both the individuals involved and their various experiences and areas of expertise.
|
The Nominating Committee
will consider director candidates recommended by stockholders provided such recommendations are submitted in accordance with the
procedures set forth below. In order to provide for an orderly and informed review and selection process for director candidates,
the Board of Directors has determined that stockholders who wish to recommend director candidates for consideration by the Nominating
Committee must comply with the following:
|
·
|
The recommendation must be made in writing
to the Corporate Secretary at WPCS International Incorporated;
|
|
·
|
The recommendation must include the candidate's
name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships
between the candidate and the Company within the last three years and evidence of the recommending person's ownership of the Company’s
common stock;
|
|
·
|
The recommendation shall also contain
a statement from the recommending shareholder in support of the candidate; professional references, particularly within the context
of those relevant to board membership, including issues of character, judgment, diversity, age, independence, expertise, corporate
experience, length of service, other commitments and the like; and personal references; and
|
|
·
|
A statement from the shareholder nominee
indicating that such nominee wants to serve on the Board and could be considered "independent" under the Rules and Regulations
of the Nasdaq Stock Market and the SEC, as in effect at that time.
|
All candidates submitted
by stockholders will be evaluated by the Nominating Committee according to the criteria discussed above and in the same manner
as all other director candidates.
How are directors compensated?
Directors serve without
compensation and without other fixed remuneration. Directors are entitled to receive discretionary cash bonuses and stock options
under our stock option plans as determined by the Board of Directors. We reimburse our directors for expenses incurred in connection
with attending Board meetings.
Code of Ethics
We have adopted a Code
of Ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial
officer and principal accounting officer.
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and holders of more than 10% of
our common stock to file with the SEC reports regarding their ownership and changes in ownership of our securities We believe that,
during fiscal 2014 except for Form 4s relating to stock option grants made on April 24, 2014 to Sebastian Giordano, Joseph Heater,
Neal Hebenton, Norm Dumbroff, Ed Gildea, Kevin Coyle and Charlie Benton, our directors, executive officers and 10% stockholders
complied with all Section 16(a) filing requirements.
The proxy holders intend
to vote the shares represented by proxies for all of the board's nominees, except to the extent authority to vote for the nominees
is withheld.
Recommendation
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR” EACH OF ITS NOMINEES.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee
has appointed the firm of Marcum LLP as the independent registered public accounting firm of the Company for the year ending April
30, 2015, subject to ratification of the appointment by the Company's stockholders. A representative of Marcum LLP is expected
to attend the Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement if he or she
so desires.
Review of the Company's audited financial
statements for the fiscal year ended April 30, 2014
The Audit Committee
met and held discussions with management and the independent auditors. Management represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States,
and the Audit Committee reviewed and discussed the consolidated financial statements with management and the independent auditors.
The Audit Committee also discussed with the independent auditors the matters required to be discussed by Statement on Auditing
Standards No. 114 (Codification of Statements on Auditing Standards, AU 380), as amended.
In addition, the Audit
Committee discussed with the independent auditors the auditors' independence from the Company and its management, and the independent
auditors provided to the Audit Committee the written disclosures and letter required by the Independence Standards Board Standard
No. 1 (Independence Discussions With Audit Committees).
The Audit Committee
discussed with the Company's independent auditors the overall scope and plans for their respective audits. The Audit Committee
met with the independent auditors, with and without management present, to discuss the results of their examinations and the overall
quality of the Company's internal controls and financial reporting.
Based on the reviews
and discussions referred to above, the Audit Committee approved the audited financial statements be included in the Company's Annual
Report on Form 10-K for the year ended April 30, 2014, for filing with the SEC.
Audit Fees
The aggregate fees
billed by our independent auditors, for professional services rendered for the audit of our annual financial statements for the
years ended April 30, 2014 and 2013, and for the reviews of the financial statements included in our Quarterly Reports on Form
10-Q during the fiscal years were $357,713 and $503,077, respectively.
Audit-Related Fees
We incurred fees to
our independent auditors of $52,614 and $4,901, respectively, for audit related fees during the fiscal years ended April 30, 2014
and 2013. These fees were related to the specific review of certain Company’s transactions during these fiscal years, respectively.
Tax and Other Fees
We did not incur fees
to our independent auditors for tax compliance services during the fiscal years ended April 30, 2014 and 2013.
Consistent with SEC
policies and guidelines regarding audit independence, the Audit Committee is responsible for the pre-approval of all audit and
permissible non-audit services provided by our principal accountants on a case-by-case basis. Our Audit Committee has established
a policy regarding approval of all audit and permissible non-audit services provided by our principal accountants. Our Audit Committee
pre-approves these services by category and service. Our Audit Committee has pre-approved all of the services provided by our principal
accountants.
Recommendation
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION
OF MARCUM LLP
AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDED APRIL 30, 2015.
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO CERTIFICATE
OF INCORPORATION TO INCREASE OUR AUTHORIZED SHARES OF COMMON STOCK FROM 14,285,714 TO 75,000,000
Our Board of Directors
has approved, subject to shareholder approval, an amendment to our Certificate of Incorporation to increase our authorized shares
of common stock from 14,285,714 to 75,000,000. The increase in our authorized shares of common stock will become effective upon
the filing of the amendment to our Certificate of Amendment with the Secretary of State of Delaware. If the amendment to increase
our authorized shares of common stock is approved by shareholders at the Annual Meeting, we intend to file the amendment to our
Certificate of Incorporation as soon as practicable following the Annual Meeting.
The form of Certificate
of Amendment to be filed with the Secretary of State of the State of Delaware is set forth as
Appendix A
to this
proxy statement.
Outstanding Shares and Purpose of the
Proposal
Our Certificate of
Incorporation currently authorizes us to issue a maximum of 14,285,714 shares of common stock, par value $0.0001 per share, and
5,000,000 shares of preferred stock, $0.0001 par value per share. Our issued and outstanding securities, as of August 11, 2014,
on a fully diluted basis, are as follows:
|
·
|
13,913,164 shares of common stock;
|
|
·
|
$898,334 in principal amount of convertible
debentures convertible into 4,491,670 shares of common stock,
|
|
·
|
2,438 shares of Series E Convertible Preferred
Stock, not including any dividends that are currently convertible or may be convertible in the future, convertible into approximately
696,571 shares of common stock,
|
|
·
|
Warrants to purchase 3,774,796 shares
of common stock; and
|
|
·
|
Options to purchase 1,159,207 shares of
common stock.
|
Pursuant to agreements
related to the conversion of our outstanding convertible securities, we agreed to use our reasonable best efforts to obtain stockholders’
approval at the next annual stockholder meeting or a special meeting of stockholders for the increase of the number of shares of
Common Stock authorized for issuance to 75,000,000. Thus, this increase is necessary to allow for the conversion of our outstanding
convertible securities, as set forth above. In addition, the Board of Directors believes that the increase in authorized common
shares will provide the Company greater flexibility with respect to the Company’s capital structure for purposes including
additional equity financings and stock based acquisitions.
Effects of the Increase in Authorized
Common Stock
The additional shares
of common stock will have the same rights as the presently authorized shares, including the right to cast one vote per share of
common stock. Although the authorization of additional shares will not, in itself, have any effect on the rights of any holder
of our common stock, the future issuance of additional shares of common stock (other than by way of a stock split or dividend)
would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per
share of existing shareholders.
At present, other than
in connection with the conversion of outstanding convertible securities (which conversions would be at the option of the respective
holders), the Board of Directors has no plans to issue the additional shares of common stock authorized by the proposed amendment.
However, it is possible that some of these additional shares could be used in the future for various other purposes without further
shareholder approval, except as such approval may be required in particular cases by our charter documents, applicable law or the
rules of any stock exchange or other system on which our securities may then be listed. These purposes may include: raising
capital, providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies,
and expanding the Company’s business or product lines through the acquisition of other businesses or products.
Possible Anti-Takeover Effects of Increase
in Authorized Common Stock
We could also use the
additional shares of common stock that will become available for issuance to oppose a hostile takeover attempt or to delay or prevent
changes in control or management of the Company. For example, it may be possible for the Board of Directors to delay or impede
a takeover or transfer of control of the Company by causing such additional authorized shares to be issued to holders who might
side with the Board of Directors in opposing a takeover bid that the Board of Directors determines is not in the best interests
of the Company or its stockholders. The proposed increase in authorized shares of common stock therefore may have the effect of
discouraging unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover attempts, the
proposed increase in authorized shares of common stock may limit the opportunity for the Company’s stockholders to dispose
of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. The
proposed increase in authorized shares of common stock may have the effect of permitting the Company’s current management,
including the current Board of Directors, to retain its position, and place it in a better position to resist changes that stockholders
may wish to make if they are dissatisfied with the conduct of the Company’s business. However, the Board of Directors
is not aware of any attempt to take control of the Company and the Board of Directors has not approved the proposed increase in
authorized shares of common stock with the intent that it be utilized as a type of anti-takeover device.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED SHARES OF COMMON STOCK FROM 14,285,714
TO 75,000,000.
PROPOSAL NO. 4
ADVISORY VOTE ON THE APPROVAL OF EXECUTIVE
COMPENSATION
The Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Section 14A of the Exchange Act entitle
the Company’s shareholders to have the opportunity to cast a non-binding advisory vote regarding the approval of the compensation
disclosed in this Proxy Statement of the Company’s executive officers who are named in the Summary Compensation Table herein
(the “Named Executive Officers”). The Company has disclosed the compensation of the Named Executive Officers pursuant
to rules adopted by the SEC.
The Company believes
that its executive compensation programs are designed to (1) motivate and retain executive officers, (2) reward the achievement
of the Company’s short-term and long-term performance goals, (3) establish an appropriate relationship between executive
pay and short-term and long-term performance, and (4) align executive officers' interests with those of the Company’s
shareholders. Under these programs, the Company’s executive officers are rewarded for the achievement of goals established
by the Executive Committee and the realization of increased shareholder value. The Executive Committee is responsible for reviewing
the compensation programs for WPCS’ executive officers to ensure they achieve the desired goals of aligning WPCS’ executive
compensation structure with WPCS’ shareholders' interests and current market practices.
The Company is asking
shareholders to indicate their support for the compensation of the Company’s Named Executive Officers as disclosed herein.
This proposal, commonly known as a "say-on-pay" proposal, gives the Company’s shareholders the opportunity to express
their views on the Company’s executive compensation. This vote is not intended to address any specific item of compensation,
but rather the overall compensation of the Company’s Named Executive Officers and the philosophy, policies and practices
described in this proxy statement. Accordingly, the Company asks its shareholders to vote "FOR" the following resolution
at the Annual Meeting:
"RESOLVED, that
the compensation paid to the Company’s Named Executive Officers, as disclosed in the Company’s Proxy Statement for
the Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the compensation table, other executive
compensation tables and related narrative disclosures, is hereby APPROVED."
The say-on-pay vote
is advisory, and therefore not binding on the Company, the Executive Committee or the Company’s Board of Directors. The Company’s
Board of Directors and Executive Committee value the opinions of shareholders and to the extent there is any significant vote against
the Named Executive Officer compensation as disclosed in this proxy statement, the Company will consider shareholders' concerns
and the Executive Committee will evaluate whether any actions are necessary to address those concerns.
Recommendation
THE BOARD RECOMMENDS A VOTE FOR APPROVAL
OF THE COMPENSATION DISCLOSED IN THIS PROXY STATEMENT OF THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY
STATEMENT.
PROPOSAL NO. 5
ADVISORY VOTE ON THE FREQUENCY OF HOLDING
AN ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Act
requires the Company’s shareholders to have the opportunity to cast a non-binding advisory vote regarding how frequently
the Company should seek from its shareholders a non-binding advisory vote (similar to Proposal 4 above) on the compensation disclosed
in the Company’s proxy statement of its Named Executive Officers. The Company has included this proposal among the items
to be considered at the Annual Meeting pursuant to the requirements of Section 14A of the Exchange Act. By voting on this
frequency proposal, shareholders may indicate whether they would prefer that the advisory vote on the compensation of the Company’s
Named Executive Officers occur every one, two or three years. Shareholders may also abstain from voting on the proposal. Accordingly,
the following resolution is submitted for an advisory shareholder vote at the Annual Meeting:
RESOLVED, that the
highest number of votes cast by the shareholders of the Company for the option set forth below shall be the preferred frequency
of the Company’s shareholders for holding an advisory vote on the compensation of the Company’s executive officers
who are named in the Summary Compensation Table of the Company’s Proxy Statement:
every year;
every
two years; or
every three years.
The Board of Directors
has determined that an advisory vote by the Company’s shareholders on executive compensation that occurs every three years
is the most appropriate alternative for the Company. In formulating its conclusion, the Board of Directors considered that, because
the Company’s compensation program for executive officers is not complex, a shareholder advisory vote every three years should
be sufficient to permit our shareholders to express their views about our compensation program. Also, the Board of Directors believes
that the success of the Company’s executive compensation program should be judged over a period of time that is longer than
one year.
You may cast your vote
on your preferred voting frequency by choosing the option of one year, two years or three years when you vote in response to this
proposal, and you may also abstain from voting on the proposal. Your vote on this proposal is not a vote to approve or disapprove
of the Board’s recommendation but rather is a vote to select one of the options described in the preceding sentence. The
option of one year, two years or three years that receives the highest number of votes cast by shareholders will be the frequency
of the advisory vote on executive compensation that has been recommended by the shareholders. However, because this vote is advisory
and not binding on either the Board of Directors or the Company, the Board of Directors may subsequently decide that it is in the
best interests of the Company and its shareholders to hold an advisory vote on executive compensation that differs in frequency
from the option that received the highest number of votes from the Company’s shareholders at the Annual Meeting.
Recommendation
THE BOARD RECOMMENDS THAT YOU VOTE FOR
A THREE-YEAR FREQUENCY FOR HOLDING AN ADVISORY VOTE ON EXECUTIVE COMPENSATION.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information
regarding beneficial ownership of our common stock as of August 11, 2014:
|
·
|
by each person who is known by us to beneficially
own more than 5% of our common stock;
|
|
·
|
by each of our officers and directors;
and
|
|
·
|
by all of our officers and directors as
a group.
|
Name And Address Of Beneficial Owner (1)
|
|
Number of
Shares Owned
(2)
|
|
|
Percentage
of Class (3)
|
|
Sebastian Giordano
|
|
|
2,857
|
(4)
|
|
|
*
|
|
Joseph Heater
|
|
|
13,173
|
(4)
|
|
|
*
|
|
Norm Dumbroff
|
|
|
17,691
|
(4)
|
|
|
*
|
|
Neil Hebenton
|
|
|
7,571
|
(4)
|
|
|
*
|
|
Kevin Coyle
|
|
|
8,571
|
(4)
|
|
|
*
|
|
Charles Benton
|
|
|
8,571
|
(4)
|
|
|
*
|
|
Edward Gildea
|
|
|
2,857
|
(4)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All Officers and Directors as a Group (7 persons)
|
|
|
61,291
|
(4)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Hudson Bay Master Fund Ltd. (5)
|
|
|
1,544,189
|
(6)
|
|
|
9.99
|
%
|
Iroquois Master Fund Ltd. (7)
|
|
|
1,542,602
|
(8)
|
|
|
9.99
|
%
|
Barry Honig
|
|
|
1,447,553
|
(9)
|
|
|
9.42
|
%
|
Divya Thakur
|
|
|
1,464,767
|
(10)
|
|
|
9.53
|
%
|
Ilya Subkhankulov
|
|
|
732,273
|
(10)
|
|
|
5.00
|
%
|
(1)
|
The address for each of our officers and directors is 600 Eagleview Boulevard, Suite 300, Exton, PA 19341.
|
(2)
|
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of August 11, 2014 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.
|
(3)
|
Percentage based on 13,913,164 shares of common stock outstanding.
|
(4)
|
Includes the following number of shares of common stock which may be acquired by certain officers and directors through the exercise of stock options which were exercisable as of August 11, 2014 or become exercisable within 60 days of that date: Sebastian Giordano, 2,857 shares; Joseph Heater, 13,173 shares; Norm Dumbroff, 7,571 shares; Neil Hebenton, 7,571 shares; Kevin Coyle, 8,571 shares; Charles Benton, 8,571 shares; Edward Gildea, 2,857 shares; and all officers and directors as a group, 55,143 shares.
|
(5)
|
Hudson Bay Capital Management LP, the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Sander Gerber disclaims beneficial ownership over these securities.
|
(6)
|
Represents shares of common stock issuable upon conversion and/or exercise of outstanding secured convertible notes, series E convertible preferred stock and common stock purchase warrants and represents the maximum beneficial ownership percentage pursuant to exercise limitations contained within secured convertible notes, series E convertible preferred stock and common stock purchase warrants owned by this beneficial owner.
|
(7)
|
Iroquois Capital Management LLC (“Iroquois Capital”) is the investment manager of Iroquois Master Fund Ltd. (“IMF”). Consequently, Iroquois Capital has voting control and investment discretion over securities held by IMF. As managing members of Iroquois Capital, Joshua Silverman and Richard Abbe make voting and investment decisions on behalf of Iroquois Capital in their capacity as investment managers to IMF. As a result of the foregoing, Mr. Silverman and Mr. Abbe may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange of 1934, as amended) of these securities held by IMF. Notwithstanding the foregoing, Mr. Silverman and Mr. Abbe disclaim such beneficial ownership.
|
(8)
|
Includes 1,528,299 shares of common stock issuable upon conversion and/or exercise of outstanding secured convertible notes, series E convertible preferred stock and common stock purchase warrants and represents the maximum beneficial ownership percentage pursuant to exercise limitations contained within secured convertible notes, series E convertible preferred stock and common stock purchase warrants owned by this beneficial owner.
|
(9)
|
Includes 174,435 shares of common stock issuable upon exercise of outstanding common stock purchase warrants and 80,857 shares of common stock issuable upon conversion of series E convertible preferred stock owned directly by Mr. Honig, Also includes 6,824 shares of common stock, 424,326 shares of common stock issuable upon exercise of outstanding common stock purchase warrants, 38,571 shares of common stock issuable upon conversion of series E convertible preferred stock and 729,364 shares of common stock issuable upon conversion of secured convertible notes owned by GRQ Consultants Inc. 401K (“GRQ”). Mr. Honig has voting and dispositive power over the shares owned by GRQ.
|
(10)
|
Represents shares of common stock issuable upon conversion of outstanding secured convertible notes.
|
INFORMATION ABOUT THE EXECUTIVE OFFICERS
The executive officers
are elected annually by our Board of Directors and hold office until their successors are elected and duly qualified. There are
no family relationships between any of our directors or executive officers. The current executive officers of the Company are as
follows:
NAME
|
|
AGE
|
|
OFFICES HELD
|
Sebastian Giordano
|
|
57
|
|
Interim Chief Executive Officer and Director
|
Joseph Heater*
|
|
51
|
|
Chief Financial Officer
|
______
* The Company has announced that Mr. Heater will resign as its
Chief Financial Officer effective as of August 31, 2014.
Biographical information about Mr. Giordano
is provided in “Proposal No. 1 - Election of Directors”.
Joseph Heater, Chief Financial Officer
Mr. Heater has been
Chief Financial Officer since July 2003. From November 2001 to June 2003, Mr. Heater was the Controller for Locus Pharmaceuticals,
Inc., a development stage pharmaceutical company. Prior to that, from April 1999 to September 2001, Mr. Heater was Director of
Finance and Corporate Controller for esavio Corporation, an information technology consulting company. Prior to that, from March
1995 to November 1998, Mr. Heater was Director of Financial Planning and Assistant Corporate Controller for Airgas, Inc. Mr. Heater
holds a B.S. from the University of Nebraska and an M.B.A. from Villanova University.
Involvement in Certain Legal Proceedings
Our directors and executive
officers have not been involved in any of the following events during the past ten years:
|
1.
|
any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
|
|
|
|
2.
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
|
|
|
3.
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;
|
|
|
|
|
4.
|
being found by a court of competent jurisdiction in a civil action, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
|
|
|
|
|
5.
|
being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
|
|
|
|
6.
|
being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
EXECUTIVE COMPENSATION
The Executive Committee
has reviewed and discussed the following Compensation Discussion and Analysis with management. Based on this review and these
discussions, the Executive Committee recommended to the Board of Directors that the following Compensation Discussion and
Analysis be included in the Company’s Annual Report on Form 10-K.
Submitted by the Executive Committee
Charles Benton, Chairman
Norm Dumbroff
Edward Gildea
Neil Hebenton
COMPENSATION DISCUSSION AND ANALYSIS
(CD&A)
The following discussion
and analysis of compensation arrangements of our named executive officers for the fiscal year ended April 30, 2014 should be read
together with the compensation tables and related disclosures set forth below.
Compensation Philosophy and Objectives
We believe our success
depends on the continued contributions of our named executive officers. Our named executive officers are primarily responsible
for our growth and operations strategy, and the management of the day-to-day operations of our subsidiaries. Therefore, it is important
to our success that we retain the services of these individuals to ensure our future success and prevent them from competing with
us should their employment with us terminate.
Our overall compensation
philosophy is to provide an executive compensation package that enables us to attract, retain and motivate executive officers to
achieve our short-term and long-term business goals. We strive to apply a uniform philosophy regarding compensation of all employees,
including members of senior management. This philosophy is based upon the premise that our achievements result from the combined
and coordinated efforts of all employees working toward common goals and objectives in a competitive, evolving market place. The
goals of our compensation program are to align remuneration with business objectives and performance and to enable us to retain
and competitively reward executive officers and employees who contribute to our long-term success. In making executive compensation
and other employment compensation decisions, the Executive Committee considers achievement of certain criteria, some of which relate
to our performance and others of which relate to the performance of the individual employee. Awards to executive officers are based
on our achievement and individual performance criteria.
The Executive Committee
will evaluate our compensation policies on an ongoing basis to determine whether they enable us to attract, retain and motivate
key personnel. To meet these objectives, the Executive Committee may from time to time increase salaries, award additional stock
options or provide other short and long-term incentive compensation to executive officers and other employees.
Compensation Program & Forms of
Compensation
We provide our executive
officers with a compensation package consisting of base salary and participation in benefit plans generally available to other
employees. In setting total compensation, the Executive Committee considers individual and Company performance, as well as market
information regarding compensation paid by other companies in our industry.
In order to achieve
the above goals, our total compensation packages include base salary, annual bonus, as well as long-term compensation in the form
of stock options.
Base Salary.
Salaries
for our executive officers are initially set based on negotiation with individual executive officers at the time of recruitment
and with reference to salaries for comparable positions in the industry for individuals of similar education and background to
the executive officers being recruited. We also consider the individual’s experience, and expected contributions to our company.
Base salary is continuously evaluated by competitive pay and individual job performance. Base salaries for executives are reviewed
annually or more frequently should there be significant changes in responsibilities. In each case, we take into account the results
achieved by the executive, his or her future potential, scope of responsibilities and experience, and competitive salary practices.
Bonuses.
A
component of each executive officer’s potential annual compensation may take the form of a performance-based bonus. Contractually,
our Executive Vice Presidents are entitled to receive an annual bonus range of 2-3% of the annual profit before interest and taxes
of the designated subsidiaries assigned to him. Our CEO and CFO are entitled to an annual bonus, to be determined at the discretion
of the Executive Committee, based on our financial performance and the achievement of the officer’s individual performance
objectives.
Long-Term Incentives.
Longer-term
incentives are provided through stock options, which reward executives and other employees through the growth in value of our stock.
The Executive Committee believes that employee equity ownership provides a major incentive for employees to build stockholder value
and serves to align the interests of employees with those of our stockholders. Grants of stock options to executive officers are
based upon each officer’s relative position, responsibilities and contributions, with primary weight given to the executive
officers’ relative rank and responsibilities. Initial stock option grants designed to recruit an executive officer may be
based on negotiations with the officer and with reference to historical option grants to existing officers. Stock options are generally
granted at an exercise price equal to the market price of our common stock on the date of grant and will provide value to the executive
officers only when the price of our common stock increases over the exercise price. Although the expenses of stock options affect
our financial statements negatively, we continue to believe that this is a strong element of compensation that focuses the employees
on financial and operational performance to create value for the long-term.
With regard to our
option grant practice, the Executive Committee has the responsibility of approving all stock option grants to employees. Stock
option grants for plan participants are generally determined within ranges established for each job level. These ranges are established
based on our desired pay positioning relative to the competitive market. Specific recruitment needs are taken into account for
establishing the levels of initial option grants. Annual option grants take into consideration a number of factors, including performance
of the individual, job level, prior grants and competitive external levels. The goals of option grant guidelines are to ensure
future grants remain competitive from a grant value perspective and to ensure option usage consistent with option pool forecasts.
Based on the definition of fair market value in our stock option plan, options are granted at 100% of the closing sales price of
our stock on the last market trading date prior to the grant date. We do not time the granting of our options with any favorable
or unfavorable news released by us. Proximity of any awards to an earnings announcement or other market events is coincidental.
Executive Equity Ownership
We encourage our executives
to hold an equity interest in our company. However, we do not have specific share retention and ownership guidelines for our executives.
Performance-Based Compensation and Financial
Restatement
We have not considered
or implemented a policy regarding retroactive adjustments to any cash or equity-based incentive compensation paid to our executives
and other employees where such payments were predicated upon the achievement of certain financial results that were subsequently
the subject of a financial restatement.
Tax and Accounting Considerations
Compliance with
Internal Revenue Code Section 162(m).
Section 162(m) of the Internal Revenue Code of 1986, as amended, restricts deductibility
of executive compensation paid to our Chief Executive Officer and each of the four other most highly compensated executive officers
holding office at the end of any year to the extent such compensation exceeds $1,000,000 for any of such officers in any year and
does not qualify for an exception under Section 162(m) or related regulations. The Executive Committee’s policy is to qualify
its executive compensation for deductibility under applicable tax laws to the extent practicable. Income related to stock options
granted under our incentive stock plans generally qualify for an exemption from these restrictions imposed by Section 162(m).
In the future, the Executive Committee will continue to evaluate the advisability of qualifying its executive compensation for
full deductibility.
Accounting for
Stock-Based Compensation
. We record compensation expense for the fair value of stock-based compensation.
Employment Contracts and Termination of Employment and Change-In-Control
Arrangements
Contract with Joseph Heater
On February 1, 2010,
we entered into a five-year employment contract with Joseph Heater, our Chief Financial Officer with a base salary of $250,000
per annum. Upon each one year anniversary of the agreement, the agreement will automatically renew for another five years from
the anniversary date. In addition, Mr. Heater is entitled to participate in any and all benefit plans, from time to time, in effect
for our employees, along with vacation, sick and holiday pay in accordance with our policies established and in effect from time
to time.
On March 31, 2014,
we entered into the Separation Agreement with Mr. Heater, which was amended on July 28, 2014. Pursuant to the Separation Agreement,
as amended, Mr. Heater will resign, effective on August 31, 2014, or such other date mutually agreed upon between the Company and
Mr. Heater ( the Termination Date) as the Chief Financial Officer of the Company and from all officer and director positions with
all of our subsidiaries.
Pursuant to the Separation
Agreement, as amended, we shall pay Heater the sum of $250,000 between the Termination Date and January 31, 2015, which will be
payable in five (5) monthly installments of $41,666.67, payable on the first business day of each month from September 2014 through
January 2015 and one (1) final payment of $41,666.65 to be made on January 31, 2015. In addition, Heater shall receive a bonus
of $35,000, to be paid on July 31, 2014, and we will pay Heater for all accrued but unused vacation time through August 31, 2014.
Heater will also receive medical and other insurance benefits through January 31, 2015 under the applicable plans maintained by
the Company.
Contract with Sebastian Giordano
Effective August 1,
2013, we entered into the Giordano Agreement with Sebastian Giordano to serve as Interim Chief Executive Officer on a part-time
basis until a permanent chief executive officer is appointed. The Giordano Agreement can be terminated by either party upon 30
days prior notice. Pursuant to the Giordano Agreement, Mr. Giordano shall receive a monthly consulting fee of $10,833. In addition,
upon shares of common stock being reserved for issuance under our 2014 Equity Incentive Plan, Mr. Giordano shall receive a grant
of 30,000 shares of our common stock. In addition, Mr. Giordano shall be entitled to receive a discretionary bonus upon successful
achievement of a merger or acquisition of the Company by another entity. We will also reimburse Mr. Giordano for all reasonable
expenses in connection with his services to us.
Summary Compensation Table
The following table
provides certain summary information concerning compensation awarded to, earned by or paid to our Chief Executive Officer, the
two highest paid executive officers and up to two other highest paid individuals whose total annual salary and bonus exceeded $100,000
for fiscal years 2014 and 2013.
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
Option Awards
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Hidalgo
|
|
2014
|
|
|
325,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
325,000
|
|
Former Chairman, Chief Executive
|
|
2013
|
|
|
325,000
|
|
|
|
-
|
|
|
|
18,592
|
|
|
|
-
|
|
|
|
343,592
|
|
Officer and Director (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sebastian Giordano
|
|
2014
|
|
|
86,664
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
86,664
|
|
Interim Chief Executive Officer (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph Heater
|
|
2014
|
|
|
250,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,286
|
|
|
|
252,286
|
|
Chief Financial Officer (3)
|
|
2013
|
|
|
250,000
|
|
|
|
-
|
|
|
|
17,593
|
|
|
|
-
|
|
|
|
267,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Curtis LaChance
|
|
2014
|
|
|
161,144
|
|
|
|
101,987
|
|
|
|
25,103
|
|
|
|
-
|
|
|
|
288,234
|
|
President of Seattle Operations (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Myron Polulak
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President (5)
|
|
2013
|
|
|
200,000
|
|
|
|
10,000
|
|
|
|
13,619
|
|
|
|
-
|
|
|
|
223,619
|
|
(1) Mr. Hidalgo has served as Chairman, Chief Executive Officer
and Director since May 24, 2002, until his resignation on July 30, 2013.
(2) Mr. Giordano has served as
Interim Chief Executive Officer since August 1, 2013.
(3) Mr. Heater has served as Chief
Financial Officer since July 15, 2003, until his resignation August 31, 2014.
(4) Mr. LaChance has served as
President of the Seattle Operations since August 1, 2010.
(5) Mr. Polulak resigned December
31, 2013.
GRANTS OF PLAN-BASED AWARDS
The following
table sets forth
the stock options granted to the named executive officers during fiscal 2014.
Name
|
|
Grant
Date
|
|
All Other Option
Awards: Number
of Securities
Underlying
Options (#)
|
|
|
Exercise or
Base Price
of Option
Awards
($/Sh)
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards ($)
(1)
|
|
Sebastian Giordano
|
|
4/24/14
|
|
|
250,000
|
|
|
$
|
1.20
|
|
|
|
|
|
Joseph Heater
|
|
4/24/14
|
|
|
50,000
|
|
|
$
|
1.20
|
|
|
|
|
|
Curtis LaChance
|
|
4/24/14
|
|
|
30,000
|
|
|
$
|
1.20
|
|
|
|
|
|
|
(1)
|
As of April 30, 2014, no compensation expense was recorded for these stock option grants as shareholder approval was not obtained to conclude that a measurement date for an award had occurred.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table
sets forth information for the named executive officers regarding the number of shares subject to both exercisable and unexercisable
stock options, as well as the exercise prices and expiration dates thereof, as of April 30, 2014.
Name
|
|
Number of Securities
underlying Unexercised
Options (#) Exercisable
|
|
|
Number of Securities
underlying Unexercised
Options (#) Unexercisable
|
|
|
Option
Exercise
Price ($/Sh)
|
|
|
Option
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
Sebastian Giordano
|
|
|
2,857
|
|
|
|
-
|
|
|
$
|
4.20
|
|
|
9/18/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph Heater
|
|
|
13,173
|
|
|
|
-
|
|
|
$
|
4.20
|
|
|
9/18/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Curtis LaChance
|
|
|
3,571
|
|
|
|
-
|
|
|
$
|
4.20
|
|
|
9/18/2017
|
Director Compensation
The following table
sets forth summary information concerning the total compensation earned by our non-employee directors in 2014 for services to our
company.
Name
|
|
Fees Earned or
Paid in Cash
|
|
Charles Benton
|
|
$
|
16,000
|
|
Kevin Coyle
|
|
|
12,000
|
|
Norm Dumbroff
|
|
|
12,000
|
|
Neil Hebenton
|
|
|
12,000
|
|
Ed Gildea
|
|
|
7,000
|
|
Sebastian Giordano
|
|
|
7,000
|
|
Total:
|
|
$
|
66,000
|
|
EQUITY COMPENSATION PLAN INFORMATION
The following table
sets forth information about the shares of our common stock that may be issued upon the exercise of options granted to employees
under the 2002 Stock Option Plan, which were approved by the Board of Directors, 2006 and 2007 Incentive Stock Plans approved by
the Board of Directors and shareholders and the 2014 Equity Incentive Plan approved by the Board of Directors and Shareholders.
Plan Category
|
|
(a)
Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
|
|
|
(b)
Weighted-average
exercise price of
outstanding
options, warrants
and rights
|
|
|
(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans excluding securities
reflected in column (a)
(1)
|
|
Equity compensation plan approved by board of directors (1)
|
|
|
12,636
|
|
|
$
|
6.58
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plan approved by security holders (2)
|
|
|
25,142
|
|
|
$
|
4.19
|
|
|
|
21,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plan approved by security holders (3)
|
|
|
41,429
|
|
|
$
|
5.45
|
|
|
|
13,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plan approved by security holders (4)
|
|
|
1,080,000
|
|
|
|
-
|
|
|
|
2,420,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,159,207
|
|
|
$
|
5.23
|
|
|
|
2,455,704
|
|
|
(1)
|
We established a nonqualified stock option plan pursuant to which options to acquire a maximum of 59,523 shares of our common stock were reserved for grant (the “2002 Plan”). As of April 30, 2014, included above in the 2002 Plan are 12,636 shares issuable upon exercise of options granted to employees and directors. The 2002 Plan has reached its 10 year term, and therefore, no additional options may be granted thereunder.
|
|
(2)
|
We established the 2006 Incentive Stock Plan, under which 57,142 shares of common stock were reserved for issuance upon the exercise of stock options, stock awards or restricted stock. As of April 30, 2014, 25,142 shares were issuable upon exercise of options granted to employees and directors.
|
|
(3)
|
We established the 2007 Incentive Stock Plan, under which 57,142 shares of common stock were reserved for issuance upon the exercise of stock options, stock awards or restricted stock. As of April 30, 2014, 41,429 shares were issuable upon exercise of options granted to employees and directors.
|
|
(4)
|
We established the 2014 Equity Incentive Plan, under which 3,500,000 shares of common stock were to be reserved for issuance upon the exercise of stock options, stock awards or restricted stock upon stockholder approval of the 2014 Equity Incentive Plan and an increase in authorized common stock. As of April 30, 2014, options to purchase 1,080,000 shares were granted to employees and directors, however, the exercise of such options was subject to stockholder approval of the 2014 Equity Incentive Plan and an increase in authorized common stock. On July 15, 2014, the stockholders approved the 2014 Equity Incentive Plan, however, the stockholders rejected an increase in authorized common stock. As a result, no shares of common stock are currently reserved for issuance under the 2014 Equity Incentive Plan. Upon an increase in authorized common stock, shares of common stock will be reserved for issuance under the 2014 Equity Incentive Plan and any options granted thereunder can then be exercised.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At the time of the
following transactions, there were no affiliations between us and the other parties. As a result of these transactions, the other
parties became affiliates. The obligations resulting from these transactions were ongoing after the close, resulting in payoffs
to the other parties who became affiliates.
The China Operations
earned revenue for contracting services provided to Taian Gas Group (TGG, andnoncontrolling interest in China Operations) and subsidiaries
of $274,348 and $1,345,524 for the years ended April 30, 2014 and 2013, respectively. In connection with the revenue earned from
TGG of $647,518 for the year ended April 30, 2013, the accounts receivable was settled by the receipt of real estate from TGG which
fair value approximates the recorded amount of accounts receivable. Since the transaction was between related parties, the net
book value of the real estate of $449,660 was determined as the transfer value of the real estate. The difference between the fair
value and transfer value, or $200,766, was booked to noncontrolling interest at April 30, 2013.
The China Operations
accounts receivable due from TGG and subsidiaries is $0 and $117,751 as of the years ended April 30, 2014 and 2013, respectively.
As of April 30, 2014,
the China Operations had outstanding payables due TGG, totaling $778,573 due on demand, representing interest accrued on former
working capital loans from TGG to the China Operations.
On
December 17, 2013, BTX Trader LLC (BTX) purchased software technology and related intellectual property rights in the emerging
digital currency industry from Divya Thakur and Ilya Subkhankulov in consideration for (i) the assignment of $439,408 of senior
secured convertible notes (the Notes), along with all rights under the related securities purchase agreement, security and pledge
agreement and registration rights agreement (other than the Exchange Cap Allocation and Authorized Share Allocation, as such terms
are defined in the Notes)
and (ii) assumption of a secured promissory
note in the principal amount of $500,000, which accrues interest at a rate of 3.32% (the BTX Note). BTX’s obligations under
the BTX Note are secured by the assets of BTX pursuant to a Security Agreement.
PROPOSALS OF SHAREHOLDERS FOR THE FISCAL
2016 ANNUAL MEETING
If you want to submit
a proposal for inclusion in our proxy statement for the fiscal 2016 Annual Meeting of stockholders, you may do so by following
the procedures in Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). To be
eligible for inclusion, shareholder proposals (other than nominees for directors) must be received at the Company’s principal
executive office, at the following address: 600 Eagleview Boulevard, Suite 300, Exton, Pennsylvania 19341, Attention: Secretary,
no later than [*], 2015 (120 days before the anniversary of this year’s mailing date).
Under Rule 14a-4 promulgated
under the Exchange Act, if a proponent of a proposal that is not intended to be included in the proxy statement fails to notify
us of such proposal at least 45 days prior to the anniversary of the mailing date of the preceding year’s proxy statement,
then we will be allowed to use our discretionary voting authority under proxies solicited by us when the proposal is raised at
such Annual Meeting of stockholders, without any discussion of the matter in the proxy statement. We were not notified of any stockholder
proposals to be addressed at our Annual Meeting, and will therefore be allowed to use our discretionary voting authority if any
stockholder proposals are raised at the Annual Meeting.
In addition, our Amended
and Restated Bylaws contain an advance notice provision that requires that all business proposed by a shareholder that will be
conducted or considered at a meeting must meet notice requirements. For business to be properly submitted by a shareholder for
a vote at an Annual Meeting, the shareholder must (i) be a shareholder of record as of the record date for the meeting, (ii) be
entitled to vote at the meeting, and (iii) have given timely notice in writing of the proposal to be submitted by the shareholder
for a vote. The shareholder’s notice must be delivered to the Secretary at the Company’s principal executive office.
To be timely, a shareholder’s notice must be received by the Secretary at least 60 calendar days before the date corresponding
to the date for the annual meeting in the preceding year, and no more than 90 calendar days before that date; provided, however,
if the date of the annual meeting is changed by more than 30 calendar days from the date corresponding to the date of the preceding
year’s Annual Meeting, or if we did not hold an annual meeting in the preceding year, then the shareholder’s notice
will be considered timely if it is received by the Secretary at least (a) 60 calendar days before the date for the annual meeting
to be held or 10 calendar days following the date on which public announcement of the date for the annual meeting is first made
by the Company, and (b) no more than 90 calendar days before the date for the Annual Meeting.
A shareholder’s
notice to the Secretary must set forth as to each matter the shareholder proposes to bring before the annual meeting: (i) a
description in reasonable detail of the business desired to be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and address, as they appear on the Company’s books, of the shareholder
proposing such business and of the beneficial owner, if any, on whose behalf the proposal is made, (iii) such information regarding
each director nominee or each matter of business to be proposed by such stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the U. S. Securities and Exchange Commission, or the SEC, had the nominee been nominated,
or intended to be nominated, or the matter been proposed, or intended to be proposed by the Company’s Board of Directors;
(iv) if applicable, the consent of each nominee to be named in the proxy statement and to serve as director of the Company if so
elected; (v) the class and number of shares of the Company that are owned beneficially and of record by the shareholder proposing
such business and by the beneficial owner, if any, on whose behalf the proposal is made, and (vi) any material interest of
such shareholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made in such business.
OTHER BUSINESS
The Board of Directors
knows of no business to be brought before the Annual Meeting other than as set forth above. If other matters properly come before
the stockholders at the meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on
such matters in accordance with their judgment.
By Order of the Board of Directors,
/s/ SEBASTIAN GIORDANO
Sebastian Giordano
Interim Chief Executive Officer
Exton, Pennsylvania
August 15, 2014
Appendix A
Certificate of Amendment
of
Certificate of Incorporation
of
WPCS International Corporation
Under Section 242 of the Delaware General
Corporation Law
WPCS International
Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”) hereby
certifies as follows:
1. The certificate of incorporation of
the Corporation is hereby amended by replacing Article Fourth, in its entirety, with the following:
“ARTICLE 4: The Corporation
is authorized to issue two classes of stock. One class of stock shall be common stock, par value $0.0001. The second class of stock
shall be Preferred Stock, par value $0.0001. The Preferred Stock, or any series thereof, shall have such designations, preferences
and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as shall
be expressed in the resolution or resolutions providing for the issue of such stock adopted by the Board of Directors and may be
made dependent upon facts ascertainable outside such resolution or resolutions of the Board of Directors, provided that the matter
in which such facts shall operate upon such designations, preferences, rights and qualifications; limitations or restrictions of
such class or series of stock is clearly and expressly set forth in the resolution or resolutions providing for the issuance of
such stock by the Board of Directors.
The total number of shares of stock of
each class which the Corporation shall have authority to issue and the par value of each share of each class of stock are as follows:
Class
|
|
Par
Value
|
|
|
Authorized Shares
|
|
Common
|
|
$
|
0.0001
|
|
|
|
75,000,000
|
|
Preferred
|
|
$
|
0.0001
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
|
|
|
|
80,000,000
|
|
2. The foregoing amendment has been duly
adopted in accordance with the provisions of Section 242 of the General Corporation law of the State of Delaware by the vote of
a majority of each class of outstanding stock of the Corporation entitled to vote thereon.
IN WITNESS WHEREOF, I have signed this Certificate this ____
day of __________, 2014.
|
|
Sebastian Giordano
Interim Chief Executive Officer
|
|
PROXY
WPCS INTERNATIONAL INCORPORATED
PROXY FOR ANNUAL MEETING TO BE HELD ON
[*], 2014
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies,
hereby appoints SEBASTIAN GIORDANO and JOSEPH HEATER and each of them, with full power of substitution in each, as proxies for
the undersigned, to represent the undersigned and to vote all the shares of Common Stock of the Company which the undersigned would
be entitled to vote, as fully as the undersigned could vote and act if personally present, at the Annual Meeting of Stockholders
(the “Meeting”) to be held on [*], 2014, at 10:00 a.m., local time, at the offices of Sichenzia Ross Friedman Ference
LLP at 61 Broadway, 32
nd
Floor, New York, New York 10006 or at any adjournments or postponements thereof.
Should the undersigned be present and elect
to vote at the Meeting or at any adjournments or postponements thereof, and after notification to the Secretary of the Company
at the Meeting of the stockholder’s decision to terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be revoked by filing a written notice of revocation with
the Secretary of the Company or by duly executing a proxy bearing a later date.
In their discretion, the Proxies are authorized
to vote upon any other matter that may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE, BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AND FOR
THE PROPOSALS LISTED ON THE REVERSE SIDE.
IMPORTANT—This Proxy must be signed
and dated on the reverse side.
▲
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.
▲
|
Important Notice Regarding the Availability of
Proxy Materials for the Annual Meeting of Stockholders to be held [*], 2014.
This Proxy Statement and our 2014 Annual Report
on Form 10-K are available at:
http://www.viewproxy.com/wpcs/2014
.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “FOR ALL NOMINEES” IN PROPOSAL 1, FOR PROPOSALS 1 – 4 AND A VOTE OF 3 YEARS FOR PROPOSAL 5
Nominees:
01 Sebastian Giordano
|
02 Charles Benton
|
03 Kevin Coyle
|
04 Norm Dumbroff
|
05 Neil Hebenton
|
06 Edward Gildea
|
07 Divya Thakur
|
|
¨
FOR
ALL NOMINEES
¨
WITHHOLD
AUTHORITY FOR ALL NOMINEES
¨
FOR
ALL, EXCEPT AS NOTED BELOW
|
|
(Except nominee(s) written above)
|
|
|
2.
|
Proposal to ratify the appointment of Marcum LLP as the Company’s independent registered
public accounting firm for the fiscal year ending April 30, 2015.
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
|
3.
|
Proposal to approve an amendment to the Company’s Certificate of Incorporation to increase
the Company’s authorized shares of common stock from 14,285,714 to 75,000,000.
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
|
4.
|
Proposal to approve, on an advisory basis, the compensation of the Company’s named executive
officers.
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
|
5.
|
Proposal to recommend, on an advisory basis, the frequency with which the Company should conduct
future shareholder advisory votes on named executive officer compensation.
|
¨
1 YEAR
|
¨
2
YEARS
|
¨
3
YEARS
|
¨
ABSTAIN
|
|
If you plan to attend the Annual Meeting please mark this box
¨
|
|
|
|
|
Dated: ______________________________________, 2014
|
|
|
|
|
Signature _______________________________________
|
|
|
|
|
Name (printed)___________________________________
|
|
|
|
Title
__________________________________________
|
|
|
|
Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such.
|
▲
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.
▲
|
CONTROL NUMBER
PROXY VOTING INSTRUCTIONS
Please have your 11 digit control number
ready when voting by Internet or Telephone
INTERNET
Vote Your Proxy on the Internet:
Go to
www.cesvote.com
Have your proxy card available
when you access the above
website. Follow the prompts to
vote your shares.
|
|
TELEPHONE
Vote Your Proxy by Phone:
Call 1 (888) 693-8683
Use any touch-tone telephone to
vote your proxy. Have your proxy
card available when you call.
Follow the voting instructions to
vote your shares.
|
|
MAIL
Vote Your Proxy by Mail:
Mark, sign, and date your proxy
card, then detach it, and return it
in the postage-paid envelope
provided.
|
DropCar (NASDAQ:DCAR)
Historical Stock Chart
From Aug 2024 to Sep 2024
DropCar (NASDAQ:DCAR)
Historical Stock Chart
From Sep 2023 to Sep 2024