UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
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the
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Definitive
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Soliciting
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Streamline
Health Solutions, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
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April
22, 2020
Dear
Fellow Stockholder,
I
want to begin this letter by recognizing the heroism of our healthcare provider customers on the front lines of the COVID-19 pandemic.
Healthcare providers all over our country are fighting for the health and well-being of all of us while imperiling themselves,
and in many cases their families, to do so. Our thoughts and prayers are with them, and we feel an ongoing duty to support them
however possible. For our team here at Streamline, that means continuing to provide solutions and services to ease their revenue
cycle challenges so they can devote more attention and resources to clinical care. I am grateful to our team members who gracefully
transitioned to working-from-home without any service interruptions.
In
this economic environment, it is increasingly difficult to conduct and forecast our business. That said, a number of the key strategic
moves we have executed in the past year have transformed Streamline Health into a much more nimble and highly focused company
that we believe will return to meaningful top line revenue growth. We successfully reshaped our cap structure, which enabled us
to sell our legacy ECM business. Today, we are leading an industry movement to enable healthcare providers to change the way they
code and bill patient records. Our SaaS-based technologies, specifically eValuator™, alter the way our customers manage
their revenue cycle for the better by leveraging software to analyze every coded record before it is billed. It is our belief
that through this paradigm shift, we can deliver the most value to you – our stockholders - while simultaneously benefitting
the American healthcare system. I thank you for your support in this matter.
On
behalf of the board of directors, I cordially invite you to attend the 2020 Annual Meeting of Stockholders of Streamline Health
Solutions, Inc., which will be held on Wednesday, May 21, 2020, commencing at 9:00 a.m., Eastern Time. Due to the continuance
of shelter in place rules, this year’s Annual Meeting will be a completely virtual meeting of stockholders, which will be
conducted solely online via live webcast. You will be able to attend and participate in the Annual Meeting online, vote your shares
electronically and submit your questions prior to and during the meeting by visiting: www.meetingcenter.io/280477576 at
the meeting date and time described in the accompanying proxy statement. The password for the meeting is STRM2020. There is no
physical location for the Annual Meeting. The matters to be acted upon at the meeting are described in the attached Notice of
Annual Meeting of Stockholders and Proxy Statement.
Your
vote on the business to be considered at the meeting is important, regardless of the number of shares you own. To ensure your
representation at the Annual Meeting, you are urged to vote by proxy via the Internet or telephone pursuant to the instructions
provided in the enclosed proxy card; or by completing, dating, signing and returning the enclosed proxy card.
The
Notice of Annual Meeting of Stockholders and Proxy Statement contain information about the official business of the Annual Meeting.
Whether or not you expect to attend, please vote your shares now. The Notice of Annual Meeting of Stockholders and Proxy Statement
also are available at http://www.edocumentview.com/STRM.
Regards,
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Wyche
T. (“Tee”) Green
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President
and Chief Executive Officer and Chairman of the Board
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STREAMLINE
HEALTH SOLUTIONS, INC.
11800
Amber Park Drive, Suite 125
Alpharetta,
GA 30009
NOTICE
OF VIRTUAL ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON MAY 21, 2020
To
the Stockholders of Streamline Health Solutions, Inc.:
Notice
is hereby given that the Virtual Annual Meeting of the Stockholders of Streamline Health Solutions, Inc. will be held on May 21,
2020 at 9:00 a.m., Eastern Time, at www.meetingcenter.io/280477576, for the following purposes:
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1.
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PROPOSAL 1—To
elect the five candidates nominated by our board of directors to serve as directors until a successor is duly elected and
qualified at the 2021 Annual Meeting of Stockholders or otherwise or until any earlier removal or resignation.
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2.
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PROPOSAL 2—To
approve a non-binding advisory vote on the compensation of our named executive officers (“say-on-pay”).
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3.
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PROPOSAL 3— To ratify the appointment of the firm of Dixon Hughes Goodman LLP to serve as our independent registered public
accounting firm for fiscal year 2020.
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4.
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To consider any and all other business that may properly come before the meeting or any adjournment thereof.
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Only
stockholders of record at the close of business on April 16 2020, will be entitled to notice of, and to vote at, the Virtual Annual
Meeting of Stockholders and any adjournment thereof.
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By
Order of the Board of Directors
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Thomas
J. Gibson
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Senior
Vice President and Chief Financial Officer
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Atlanta,
Georgia
April
22, 2020
A
Proxy Statement and proxy card are included herewith. As a stockholder, you are urged to vote. See “General Information—Voting
Methods” in the included Proxy Statement for more information on your voting options. It is important that your shares be
voted. In order to avoid the additional expense of further solicitation, we ask your cooperation in voting promptly.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 2020.
Our
Notice of Annual Meeting of Stockholders, Proxy Statement for the 2020 Annual Meeting of Stockholders and 2019 Annual Report to
Stockholders are available at http://www.edocumentview.com/STRM.
STREAMLINE
HEALTH SOLUTIONS, INC.
11800
Amber Park Drive, Suite 125
Alpharetta,
GA 30009
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD MAY 21, 2020
GENERAL
INFORMATION
Introduction
We
are furnishing this Proxy Statement on behalf of the board of directors of Streamline Health Solutions, Inc., a Delaware corporation,
for use at our 2020 Annual Meeting of Stockholders, or at any adjournments or postponements of the meeting (the “Annual
Meeting”), for the purposes set forth below and in the accompanying Notice of Annual Meeting of Stockholders. The Annual
Meeting will be held at www.meetingcenter.io/280477576, at 9:00 a.m. Eastern Time, on Wednesday, May 21, 2020.
If
you wish to submit a question prior to the Annual Meeting, you may do so beginning at 8:30 a.m. Eastern Time on May 21, 2020,
by logging into www.meetingcenter.io/280477576 and entering your control number. Once past the login screen, click on “Question
for Management,” type in your question, and click “Submit.” Alternatively, if you want to submit your question
during the meeting, log into the virtual meeting platform at www.meetingcenter.io/280477576, type your question into the “Ask
a Question” field, and click “Submit.”
If
you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register
to attend the Annual Meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that you received.
If
you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting
virtually on the Internet. To register to attend the Annual Meeting online by webcast you must submit proof of your proxy power
(legal proxy) reflecting your Streamline Health Solutions, Inc. holdings along with your name and email address to Computershare.
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time,
on May 11, 2020. You will receive a confirmation of your registration by email after we receive your registration materials. Requests
for registration should be directed to us at the following:
By
email
Forward
the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com
By
mail
Computershare
Streamline
Health Solutions, Inc. Legal Proxy
P.O.
Box 43001
Providence,
RI 02940-3001
As
used in this Proxy Statement, the terms “Streamline,” the “company,” “we,” “us,”
and “our” refer to Streamline Health Solutions, Inc. The term “common stock” means shares of our common
stock, par value $0.01 per share. The term “preferred stock” means shares of our Series A 0% Convertible Preferred
Stock, par value $0.01 per share.
This
Proxy Statement and the enclosed proxy card are first posted online stockholders on or about April 22, 2020. A copy of the 2019
Annual Report to Stockholders, including the Annual Report on Form 10-K for the fiscal year ended January 31, 2020, as filed with
the Securities and Exchange Commission (the “SEC”), also available online at http://www.edocumentview.com/STRM.
Important
Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on May 21, 2020:
This
Proxy Statement and the 2019 Annual Report to Stockholders are available at http://www.edocumentview.com/STRM.
Stockholders
Entitled to Notice and to Vote
All
holders of record of our common stock and our preferred stock at the close of business on April 16, 2020 (the “Record Date”),
will be entitled to notice of and to vote at the Annual Meeting. Our shares of common stock and preferred stock vote together
as a single class.
At
the close of business on the Record Date, we had 30,914,826 shares of common stock outstanding and entitled to vote and no shares
of preferred stock outstanding and entitled to vote. Holders of common stock are entitled to one vote for each share of our common
stock held. Shares of our common stock and preferred stock may not be voted cumulatively.
Quorum
Our
bylaws provide that the holders of a majority of all of the shares of our capital stock issued, outstanding, and entitled to vote,
whether present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Annual Meeting.
Shares that are voted FOR, AGAINST, WITHHELD, or ABSTAIN, as applicable, with respect to a matter are treated as being present
at the meeting for purposes of establishing a quorum.
Distinction
between Holding Shares as a Stockholder of Record and as a Beneficial Owner
Some
of our stockholders hold their shares through a broker, trustee, or other nominee rather than directly in their own name. As summarized
below, there are some distinctions between shares held of record and those shares owned beneficially.
Stockholder
of Record. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A.,
then you are considered, with respect to those shares, the “stockholder of record.” As the stockholder of record,
you have the right to grant your voting proxy directly to us or to a third party, or to vote in person at the Annual Meeting.
Beneficial
Owner. If your shares are held in a brokerage account, by a trustee or by another nominee, then you are considered the
“beneficial owner” of those shares. As the beneficial owner of those shares, you have the right to direct your broker,
trustee, or nominee how to vote and you also are invited to attend the Annual Meeting. However, because a beneficial owner is
not the stockholder of record, you may not vote these shares at the Annual Meeting unless you obtain a “legal proxy”
from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.
If
you are not a stockholder of record, please understand that we do not know that you are a stockholder, or how many shares you
own.
Voting
Methods
Stockholders
of Record
By
Mail. Registered stockholders may vote their shares by signing, dating and mailing the enclosed proxy card using the enclosed
postage pre-paid envelope. We strongly encourage you, however, to consider using the Internet or telephone voting options described
below because these voting methods are faster and less costly than voting by mailing your signed and dated proxy card. If you
vote via the Internet or telephone, you do not need to mail your proxy card.
By
Internet. Registered stockholders may vote on the Internet at www.meetingcenter.io/280477576. Please have your proxy card
available when going online and follow the online instructions. Stockholders that vote by Internet must bear all costs associated
with electronic access, including Internet access fees. Internet voting for registered stockholders is available up until 1:00
a.m., Central Time, on May 21, 2020, the day of the Annual Meeting. The Internet voting procedures are designed to authenticate
each stockholder by use of a control number to allow stockholders to vote their shares and to confirm that their instructions
have been properly recorded. The control number can be found on the enclosed proxy card.
By
Telephone. Registered stockholders also may vote by telephone by calling 1-800-652-8683 (toll-free) and using any touch-tone
telephone to transmit their votes up to 1:00 a.m., Central Time, on May 21, 2020, the day of the Annual Meeting. Please have your
proxy card in hand when you call and then follow the instructions. The control number necessary to vote your shares by telephone
can be found on the enclosed proxy card.
By
Attending the Annual Meeting. If you attend the Annual Meeting and wish to vote at the Annual Meeting, you may vote through
www.meetingcenter.io/280477576.
Beneficial
Owners
If
your shares are held of record in the name of a bank, broker or other nominee you should follow the separate instructions that
the nominee provides to you. Although most banks and brokers now offer Internet and telephone voting, availability and specific
processes will depend on their voting arrangements.
Voting
Requirements
At
the Annual Meeting, stockholders will consider and act upon (1) the election of five directors for terms expiring at the 2021
Annual Meeting of Stockholders, (2) the approval of a non-binding advisory vote on the compensation of our named executive officers
(“say-on-pay”), (3) the ratification of Dixon Hughes Goodman LLP to serve as the company’s independent registered
public accounting firm for fiscal year 2020 and (4) such other business as may properly come before the Annual Meeting.
With
regard to Proposal 1 (Election of Directors), votes may be cast for the nominees or may be withheld. All nominees are current
directors. The election of directors requires a plurality of the votes of the shares present or represented by proxy at the Annual
Meeting, and the five nominees receiving the greatest number of votes will be elected. Abstentions and broker “non-votes”
will have no effect on the outcome of this proposal.
With
regard to Proposal 2 (“Say-on-Pay”), votes may be cast for or against the proposal, or stockholders may abstain from
voting on the proposal. The approval of Proposal 2 requires the affirmative vote of the majority of the shares present or represented
by proxy and entitled to vote at the Annual Meeting. Abstentions will have the same effect as a vote against this proposal. Broker
“non-votes” will not be counted in determining the number of votes cast and, therefore, will have no effect on the
outcome of this proposal. The vote on Proposal 2 is a non-binding advisory vote.
With
regard to Proposal 3 (Ratification of Dixon Hughes Goodman LLP), votes may be cast for or against the proposal, or stockholders
may abstain from voting on the proposal. The approval of Proposal 3 requires the affirmative vote of the majority of the shares
present or represented by proxy and entitled to vote at the Annual Meeting. Abstentions will have the same effect as a vote against
this proposal. Broker “non-votes” will not be counted in determining the number of votes cast and, therefore, will
have no effect on the outcome of this proposal.
Treatment
of Voting Instructions
If
you provide specific voting instructions, your shares will be voted as instructed.
If
you hold shares as the stockholder of record and provide a proxy without giving specific voting instructions, then your shares
will be voted in accordance with the recommendations of our board of directors. Our board of directors recommends voting “FOR
ALL NOMINEES” listed in Proposal 1 and “FOR” Proposals 2 and 3, and in accordance with the discretion of the
named proxies on other matters brought before the Annual Meeting.
You
may have granted to your broker, trustee, or other nominee discretionary voting authority over your account. Your broker, trustee,
or other nominee may be able to vote your shares depending on the terms of the agreement you have with your broker, trustee, or
other nominee.
The
election of directors is not considered a “routine” matter as to which brokers may vote in their discretion on behalf
of clients who have not furnished voting instructions with respect to the election of directors. As a result, if you hold your
shares in street name and do not provide your broker with voting instructions, your shares will not be voted at the Annual Meeting
with respect to Proposal 1 (Election of Directors) or Proposal 2 (“Say-on-Pay”). The ratification of Dixon Hughes
Goodman LLP as our independent registered public accounting firm is considered a “routine matter,” and therefore,
brokers will have the discretion to vote on this matter even if they do not receive voting instructions from the beneficial owner
of the shares.
The
persons identified as having the authority to vote the proxies granted by the proxy card will have discretionary authority to
vote, in their discretion, to the extent permitted by applicable law, on such other business as may properly come before the Annual
Meeting and any postponement or adjournment. The board of directors is not aware of any other matters that are likely to be brought
before the Annual Meeting. If any other matter is properly presented for action at the Annual Meeting, including a proposal to
adjourn or postpone the Annual Meeting to permit us to solicit additional proxies in favor of any proposal, the persons named
in the proxy card will vote on such matter in their own discretion.
Revocability
of Proxies
A
stockholder of record who has given a proxy may revoke it at any time prior to its exercise at the Annual Meeting by (i) giving
written notice of revocation to our Corporate Secretary, (ii) properly submitting a duly executed proxy bearing a later date,
or (iii) attending the Annual Meeting and voting during it.
If
you are the beneficial owner of shares held through a broker, trustee, or other nominee, you must follow the specific instructions
provided to you by your broker, trustee, or other nominee to change or revoke any instructions you already have provided to your
broker, trustee, or other nominee.
Attendance
at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy.
Costs
of Proxy Solicitation
We
will bear the expense of electronically hosting, printing and mailing proxy materials and soliciting the proxies we are seeking.
In addition to the solicitation of proxies by mail, solicitation may be made by certain of our directors, officers, and other
employees in person, by telephone, or via facsimile. Our directors, officers and other employees will receive no additional compensation
for any such solicitations. We will request brokers and nominees who hold shares of our common stock in their names to furnish
proxy materials to beneficial owners of such shares, and we will reimburse such brokers and nominees for the reasonable expenses
incurred in forwarding the materials to such beneficial owners. Your cooperation in voting promptly will help to avoid additional
expense.
List
of Stockholders
In
accordance with Delaware law, a list of stockholders entitled to vote at the Annual Meeting will be available at the Annual Meeting
and at our principal executive offices, which are located at 11800 Amber Park Drive, Suite 125, Alpharetta, GA 30009, on the date
of our Annual Meeting, May 21, 2020, and for ten days prior to the Annual Meeting, between the hours of 9:00 a.m. and 4:00 p.m.
Eastern Time.
PROPOSAL
1—ELECTION OF DIRECTORS
At
the Annual Meeting, the stockholders will elect five directors, each to hold office until a successor is duly elected and qualified
at the 2021 Annual Meeting of Stockholders, or otherwise, or until any earlier resignation or removal. All nominees standing for
election are currently serving as members of our board of directors and have consented to continue to serve. If any nominee for
any reason is unable to serve or will not serve, the proxies may be voted for such substitute nominee as the proxy holder may
determine. We are not aware of any nominee who will be unable or unwilling to serve as a director.
Candidates
for director were identified and recommended for nomination by the Governance and Nominating Committee of our board of directors.
All members of the Governance and Nominating Committee are independent directors. The Governance and Nominating Committee and
our board of directors have determined that a potential candidate to be nominated to serve as a director should have the following
primary attributes: high achievement expectations with regard to increasing stockholder value; uncompromising position on maintaining
ethics; conservative attitude towards financial accounting and disclosure; and ownership of shares of our common stock to bring
the perspective of a stockholder to the board of directors. The Governance and Nominating Committee and our board of directors
believe that the composition of the board of directors as a whole should reflect diversified business experiences, education,
knowledge of and skills relating to the healthcare and healthcare technology industries, sales and marketing, investment banking,
accounting and finance, and knowledge of our operations. The Governance and Nominating Committee and the board of directors take
all of these diversity factors into account when considering individual director candidates because we believe that these diversity
factors can enhance the overall perspectives of our board of directors and of management.
To
date, neither our board of directors nor the Governance and Nominating Committee has deemed it necessary to engage a third party
search firm to assist in identifying suitable candidates for directors, but have the authority to do so in the future. Accordingly,
no fees were paid to any such search firm in connection with the nominees for directors named in this Proxy Statement. The Governance
and Nominating Committee currently believes that the existing members of our board of directors and executive management have
sufficient networks of business contacts to form the candidate pool from which nominees will be identified. Once a candidate is
identified as a possible director nominee by the Governance and Nominating Committee, our board of directors (or as many members
of the board of directors as feasible) will meet with such candidate. The Governance and Nominating Committee will then take any
feedback that it receives from the board of directors regarding the possible director nominee and evaluate the candidate using
the criteria outlined above. The Governance and Nominating Committee would evaluate a director candidate recommended by a stockholder
using the same process described above.
Nominees
for Election as Directors
The
following five incumbent directors are being nominated by the board of directors for re-election to the board of directors: Wyche
T. “Tee” Green, III Kenan H. Lucas, Jonathan R. Phillips, Justin J. Ferayorni, and Judith E. Starkey. The name, age,
principal occupation for the last five years, selected biographical information and period of service as a director of Streamline
for each director nominee are set forth below.
Wyche
T. “Tee” Green, III, age 48, has served as our President and Chief Executive Officer since October 2019 and has
served on our board of directors since August 2018 and served as Chairman of our board of directors since January 2019. Mr. Green
has served as Chairman and Chief Executive Officer of Greenway Unlimited LLC, an investment company that he founded, since 2013.
Mr. Green previously served as Executive Director of Greenway Health, f/k/a Greenway Medical Technologies, Inc., an electronic
health record and practice management based in Carrollton, Georgia, which he co-founded, from 2001 to May 2018. Prior to forming
Greenway Unlimited in September 2013, Mr. Green served as Chief Executive Officer of Greenway Health from 2010 to April 2016 and
was responsible for leading the company’s strategic direction while managing the sales, marketing and business development
teams. Mr. Green currently serves on the Board of Directors of Caravan Health, Wellbox Inc., and Mint Health. Mr. Green received
a bachelor’s degree in business administration management from Auburn University. Mr. Green is well-qualified to serve on
our board of directors. He brings his experience as a software executive, his knowledge of our industry and his ability to bring
perspective to the Board.
Kenan
H. Lucas, age 35, has served on our board of directors since January 2018. Mr. Lucas joined Harbert Management Corporation
in August of 2014 where he currently serves as the Managing Director and Portfolio Manager of Harbert Discovery Fund, which invests
in small, publicly traded companies. Mr. Lucas also serves on the board of directors of Qumu Corporation (Nasdaq: QUMU), a provider
of tools to create, manage, secure, distribute, and measure the success of live and on demand video for the enterprise. Previously,
Mr. Lucas worked at Swander Pace Capital, a middle-market private equity firm. At Swander Pace, he closed a number of acquisitions
and re-financings, evaluated investment opportunities, and monitored portfolio companies, advising them on strategy, growth initiatives,
acquisition opportunities, and corporate financing options. Prior to Swander Pace, Mr. Lucas was at Cowen and Company, a middle-market
investment bank, where he advised companies on sell-side transactions and strategic alternatives. Mr. Lucas earned an MBA from
the Darden School of Business at the University of Virginia, where he received the Faculty Award for Academic Excellence. Mr.
Lucas has a BA in Economics, magna cum laude, from Vanderbilt University. Mr. Lucas’s investment management experience allows
him to provide our board of directors with valuable insights and analysis in equity capital markets, evaluating financing options,
assessing corporate strategy, and considering other strategic alternatives. He also contributes to the Board through his perspective
as one of the company’s largest shareholders.
Jonathan
R. Phillips, age 46, has served on our board of directors since May 2005 and previously served as Chairman of our board of
directors from May 2009 to January 2019. Mr. Phillips has served as Managing Director and Head of Private Equity at First Trust
Portfolios, a diversified asset management firm headquartered in Wheaton, Illinois, since November 2016. Mr. Phillips is also
the founder and Managing Partner of First Health Capital Partners, LLC, a healthcare technology and services investment firm founded
in January 2016. In 2005, Mr. Phillips founded Healthcare Growth Partners, a provider of strategic and financial advisory services
to healthcare technology companies, and served as its Managing Director until November 2016. Prior to founding Healthcare Growth
Partners, Mr. Phillips was a member of the Healthcare Investment Banking Group at William Blair and Company, LLC, an investment
banking firm. Prior to William Blair, he served in various roles in the healthcare practice of Deloitte Consulting. From 2007
until immediately prior to its acquisition by Merge Healthcare Incorporated (Nasdaq: MRGE) in 2011, Mr. Phillips was a director
of Ophthalmic Imaging Systems, Inc., a public company that provided software and technology for ophthalmology practices, where
he served on the audit, compensation, and nominating committees and chaired the special committee. Mr. Phillips also serves as
a director for several private companies. Mr. Phillips currently serves on the Board of Visitors of DePauw University, on the
Rush University Medical Center Associates board, and on the nonprofit board of the Ray Graham Association, where he is a member
of the finance committee. Mr. Phillips is a securities principal having completed the Series 24, 7 and 63 exams. Mr. Phillips
earned his MBA in Finance, Marketing and Health Services Management from the J. L. Kellogg School of Management, Northwestern
University, and his BA in Economics and Management from DePauw University. Mr. Phillips is well-qualified to serve on our board
of directors. He brings a wealth of industry knowledge and experience to the board of directors as a private equity investor managing
a portfolio of over 40 companies, including 18 healthcare companies. During his career, Mr. Phillips has completed over 115 transactions
involving healthcare companies, which transactions had an aggregate value of over $2 billion. He also has completed over 40 strategic
advisory engagements for healthcare technology and services companies. These experiences within the healthcare sector allow Mr.
Phillips to provide our board of directors with valuable insights and analysis as to strategic and financial developments within
the industry and potential opportunities and consequences such developments create for us.
Justin
J. Ferayorni, age 46, has served on our board of directors since December 2019. Mr. Ferayorni is the Founder and Chief Investment
Officer of Tamarack Advisers, LP which operates Tamarack Global Healthcare Funds, an SEC registered hedge fund family focused
on investing in healthcare related equities. Mr. Ferayorni has operated directly and indirectly in the financial and capital markets
for over 20 years through experience in investment banking and investment management. Mr. Ferayorni served in several positions
across the financial services industry focused on analyzing companies within the healthcare industry, including positions as a
healthcare analyst and portfolio manager. In addition, Mr. Ferayorni was previously employed with Robertson Stephens & Co.,
where he worked on both corporate finance and mergers and acquisitions transactions. Mr. Ferayorni is experienced in fundamental
financial analysis, corporate decision making, and accounting principles. Mr. Ferayorni received his CFA designation in September
2000. Mr. Ferayorni previously served as an independent director for Reality Shares ETF Trust.
Judith
E. Starkey, age 70, has served on our board of directors since September 2014. Ms. Starkey is the Founder and former Chairperson
of Chamberlin Edmonds & Associates, which she launched in 1986 and was acquired by Emdeon in 2010. Chamberlin Edmonds, now
Change Healthcare, is a leading provider of patient eligibility and enrollment services to hospitals, government agencies and
managed care organizations. Since 2010, Ms. Starkey has been a self-employed entrepreneur, speaker and author. Ms. Starkey began
her career in health service management, medical cost control and government systems with the Social Security Administration.
While employed by the government, Ms. Starkey designed a management system that enabled states to comply with federal and state
regulations. She also designed and implemented a process that reduced the cost of administering the Social Security Disability
Insurance Benefits program by several million dollars. Ms. Starkey is an oft-honored expert in her field and is an advanced member
of the Healthcare Financial Management Association, has delivered Congressional testimony and presents at national/state forums
of healthcare professionals. She currently serves on the board of The Johns Hopkins Berman Institute of Bioethics. Ms. Starkey
received her BS degree in Psychology from Spring Hill College and her MS in Psychology from Georgia State University. Ms. Starkey’s
experience as an entrepreneur and executive in the healthcare information technology industry provides our board with important
insight in growing and managing our business. Further, her experience in government provides the board with an important understanding
of the regulatory environment for our company.
The
board of directors recommends a vote “FOR ALL” nominees listed above.
PROPOSAL
2—ADVISORY VOTE ON COMPENSATION
OF
NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)
Proposed
Advisory Resolution of Stockholders
At
the Annual Meeting, stockholders will be given the opportunity to vote on the following advisory resolution:
RESOLVED,
that the stockholders of Streamline Health Solutions, Inc. hereby approve, on an advisory basis, the compensation of the company’s
named executive officers, as disclosed in the company’s Proxy Statement for the 2020 Annual Meeting of Stockholders pursuant
to the compensation disclosure rules of the Securities and Exchange Commission, including the disclosure under “Compensation
Discussion and Analysis,” and the compensation tables and related narrative disclosure under “Executive Compensation.”
References
in this Proxy Statement to “named executive officers” refer to Wyche T. “Tee” Green, Thomas J. Gibson,
David A. Driscoll, Randolph W. Salisbury and David W. Sides. For information regarding the compensation of our named executive
officers, see “Compensation Discussion and Analysis” and “Executive Compensation.”
Background
on Proposal
In
accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and related SEC
rules, stockholders are being given the opportunity to vote at the Annual Meeting on this advisory resolution regarding the compensation
of our named executive officers (commonly referred to as “say-on-pay”). As discussed in “Compensation Discussion
and Analysis—Overview of Streamline’s Executive Compensation,” the Compensation Committee’s compensation
objectives are to motivate executive officers to deliver superior short-term performance by providing conservative, but competitive,
base salaries and cash bonus opportunities; align the interests of our executive officers with the long-term interests of the
company’s stockholders through the grant of equity incentive awards; and provide an overall compensation package that is
conservative, but competitive and, therefore, promotes executive recruitment and retention. The Compensation Committee has determined
that the compensation structure for our named executive officers is effective and appropriate.
Effects
of Advisory Vote
While
the resolution is non-binding and will not be construed as overruling any decision by our board of directors or create or imply
any fiduciary duty by the board of directors, the board and the Compensation Committee value the opinions of our stockholders
and will take into account the outcome of the vote when considering future executive compensation arrangements.
Our
board of directors recommends a vote “FOR” the advisory vote on the compensation of the named executive officers as
set forth in this Proposal 2.
PROPOSAL
3—RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee proposes and recommends that the stockholders ratify the selection by the Audit Committee of the firm of Dixon
Hughes Goodman LLP (“DHG”) to serve as our independent registered public accounting firm for fiscal year 2020. Action
by our stockholders is not required by law in the appointment of an independent registered public accounting firm, but the appointment
is submitted by the Audit Committee in order to give our stockholders a voice in the designation of auditors. If the resolution
ratifying our selection of DHG as our independent registered public accounting firm is rejected by our stockholders, then the
Audit Committee will reconsider its choice of independent auditors. Even if the resolution is approved, the Audit Committee at
its discretion may direct the appointment of different independent auditors at any time during the year if it determines that
such a change would be in the best interests of the company and our stockholders.
Our
board of directors recommends a vote “FOR” ratification of the appointment of DHG as our independent registered public
accounting firm for fiscal year 2020.
CORPORATE
GOVERNANCE
We
have established corporate governance practices designed to serve the best interest of our company and our stockholders. We are
in compliance with the current corporate governance requirements imposed by the rules and regulations of the SEC and the listing
standards of The Nasdaq Stock Market (“Nasdaq”). Set forth below is information regarding the meetings of the board
of directors during fiscal 2019, a description of the board’s standing committees and additional information about our corporate
governance policies and procedures.
Board
of Directors Meetings and Committees
The
board of directors met fifteen (15) times during fiscal year 2019. Standing committees of the board of directors currently include
the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee.
All
nominees for election as directors at the Annual Meeting were unanimously recommended by the Governance and Nominating Committee
and unanimously nominated by the current board of directors, including all of the independent directors. Under our bylaws, director
nominations may be brought at an Annual Meeting of Stockholders only by or at the direction of the board of directors or by a
stockholder entitled to vote who has submitted a nomination in accordance with the requirements of the bylaws as in effect from
time to time. For this Annual Meeting, we received no director nominations from stockholders. For additional information, see
“Stockholder Proposals for 2021 Annual Meeting of Stockholders.”
Our
board of directors has determined that Messrs. Lucas, Phillips, Ferayorni and Ms. Starkey are all “Independent Directors”
in accordance with the standards set forth in Item 407(a)(1)(i) of Regulation S-K and in Rule 5605(a)(2) of the Nasdaq Marketplace
Rules.
There
are no family relationships among any of the above named directors or nominees for director or among any of the directors or nominees
for director and any of our executive officers.
In
fiscal year 2019, each incumbent director attended at least 75% of the aggregate number of meetings of our board of directors
and of the committees of the board of directors on which he or she served.
Our
board of directors currently combines the roles of Chairman of the board of directors and Chief Executive Officer. Periodically,
our board of directors and Governance and Nominating Committee assess these roles and the board leadership structure to ensure
our interests and the interests of our stockholders are best served at this time. Both the Chairman and CEO positions are currently
held by Wyche T. “Tee” Green. The board of directors believes having Mr. Green serve in both capacities allows him
to provide decisive and effective leadership and more effectively execute our strategic initiatives and business plans and confront
our challenges.
The
Audit Committee
The
Audit Committee is comprised entirely of independent directors. Ms. Starkey and Messrs. Phillips (Committee Chairman) and Lucas
are presently the members of the Audit Committee. The Audit Committee operates under a charter approved by our board of directors
and available through our website at http://www.streamlinehealth.net/investors. The Audit Committee met separately as a committee
seven (7) times during fiscal year 2019. The Audit Committee, along with management, met separately or as part of the entire board
of directors to review each of our quarterly and annual financial statements filed on Form 10-Q or Form 10-K prior to the filing
of those reports with the SEC. The Audit Committee Chairman separately discusses our financial reports with the auditors on a
regular basis. The Audit Committee’s functions include the engagement of our independent registered public accounting firm,
review of the results of the audit engagement and our financial results, review of our financial statements by the independent
registered public accounting firm and their opinion thereon, review of the auditors’ independence, review of the effectiveness
of our internal controls and similar functions, and approval of all auditing and non-auditing services performed by our independent
registered public accounting firm. The board of directors has determined that Jonathan R. Phillips is an audit committee financial
expert.
The
Compensation Committee
The
Compensation Committee is comprised entirely of independent directors. Ms. Starkey (Committee Chairwoman), Mr. Lucas and Mr. Phillips
are presently the members of the Compensation Committee. Our board of directors adopted a formal written charter for the Compensation
Committee, which is available through our website at http://www.streamlinehealth.net/investors, in January 2013 and amended it
in March 2014. The Compensation Committee met five (5) times during fiscal year 2019. The Compensation Committee reviews the performance
of, and establishes the salaries and all other compensation of our executive officers. The Compensation Committee also administers
the Second Amended 2013 Plan, and is responsible for grants of equity awards under the Second Amended 2013 Plan. Our Amended and
Restated 1996 Associate Stock Purchase Plan (the “ESPP”) was terminated effective January 1, 2020.
The
Governance and Nominating Committee
The
Governance and Nominating Committee is comprised entirely of independent directors. Mr. Lucas (Committee Chairman), Mr. Phillips
and Ms. Starkey are presently the members of the Governance and Nominating Committee. The purposes of the Governance and Nominating
Committee are to assist the board of directors in complying with and overseeing our Code of Business Conduct and Ethics (the “Code
of Conduct”), to review and consider developments in corporate governance practices, to identify and recommend individuals
to the board of directors for nomination as members of our board of directors and its committees, and to develop and oversee the
process for nominating board members. The Governance and Nominating Committee operates under a charter approved by our board of
directors and available through our website at http://www.streamlinehealth.net/investors. The Governance and Nominating Committee
met one (1) time during fiscal year 2019.
The
Governance and Nominating Committee has established procedures through which confidential complaints may be made by employees
directly to the Chairman of the Governance and Nominating Committee regarding: illegal or fraudulent activity; questionable accounting,
internal controls or auditing matters; conflicts of interest, dishonest or unethical conduct; disclosures in our filings with
the SEC; violations of our Code of Conduct; or any other matters relating to questionable actions taken by our employees, officers
or directors.
The
Governance and Nominating Committee also has established a review process for all members of our board of directors. In this process,
all members perform a self-review and assessment of their own performance as a director and also review and provide constructive
feedback of all the other directors. The Governance and Nominating Committee oversees a similar 360 degree review process for
our Chief Executive Officer where he is reviewed by himself, by the other directors, and by his direct management reports.
Corporate
Governance Policies
Communications
with the Board of Directors
We
encourage stockholder communication with the board. Any stockholder who wishes to communicate with the board or with any particular
director, including any independent director, may send a letter addressed to the Corporate Secretary at Streamline Health Solutions,
Inc., 11800 Amber Park Drive, Suite 125, Alpharetta, GA 30009. Communications should indicate that you are a company stockholder
and clearly specify whether it is intended to be delivered to the entire board or to one or more particular directors(s). All
communications to directors will be transmitted promptly without any editing or screening by the Corporate Secretary.
Code
of Conduct
The
board of directors adopted our Code of Conduct, which applies to all of our directors, officers (including our Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, and any person performing similar functions), and employees. Our Code
of Conduct is available through our website at http://www.streamlinehealth.net/investors.
Director
Attendance at Annual Meetings of Stockholders
We
have not implemented a formal policy regarding director attendance at the Annual Meeting of Stockholders. Typically, our board
of directors holds its annual organizational meeting directly following the Annual Meeting of Stockholders, which results in most
directors attending the Annual Meeting of Stockholders. All of our then-serving directors attended the 2019 Annual Meeting of
Stockholders in person and we currently expect all directors standing for re-election to attend the Annual Meeting.
Risk
Management
Our
management is responsible for day-to-day risk management of the company. Management reports to the board of directors on the material
risks the company faces when management determines that the company’s risk profile materially changes. The board of directors
uses management’s reports to evaluate the company’s exposure to risks in light of the company’s business plan
and growth strategies. The board of directors primarily focuses on risks in the areas of operations, liquidity and compliance,
which the board of directors believes are the areas most likely to have a potential impact on the company in a material way.
Executive
Sessions of Independent Directors
Our
board of directors has scheduled regular executive sessions of our independent directors. At executive sessions, our independent
directors meet without management or any non-independent directors present. The board believes that executive sessions foster
open and frank communication among the independent directors, which will ultimately add to the effectiveness of the board, as
a whole. Mr. Green, as the independent Chairman of the Board, presides over these executive sessions.
No
Executive Loans
We
do not extend loans to executive officers or directors, and we have no such loans outstanding.
Employee,
Officer and Director Hedging
We
do not have in place any practices or policies regarding hedging, and any transactions to purchase financial instruments or otherwise
engage in transactions that hedge or offset any decrease in market value of our securities by employees, officer or directors
are generally permitted.
STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information regarding the beneficial ownership of our common stock as of the Record Date (April 16,
2020) by: (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock; (ii) each director
and each nominee for director; (iii) each named executive officer; and (iv) all directors and current executive officers as a
group.
Beneficial
ownership is determined in accordance with the rules of the SEC, which deem a person to beneficially own any shares the person
has or shares voting or dispositive power over and any additional shares obtainable within 60 days through the conversion of preferred
stock or the exercise of options, warrants or other purchase rights. Shares of common stock subject to preferred stock that is
currently convertible or convertible within 60 days of the Record Date and options or other rights to purchase that are currently
exercisable or are exercisable within 60 days of the Record Date (including shares subject to restrictions that lapse within 60
days of the Record Date) are deemed outstanding for purposes of computing the percentage ownership of the person holding such
preferred stock, options or other rights, but are not deemed outstanding for purposes of computing the percentage ownership of
any other person. Unless otherwise indicated, each person possesses sole voting and investment power with respect to the shares
identified as beneficially owned. The percentages are based on 30,914,826 shares of common stock outstanding as of the Record
Date. None of our directors or executive officers beneficially owns any shares of our preferred stock. An asterisk indicates beneficial
ownership of less than 1% of the common stock outstanding.
Name
of Beneficial Owner
|
|
Common
Stock
Beneficially
Owned
|
|
|
Percent
of Common
Stock
Owned
|
|
Five
Percent Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tamarack
Advisers, LP(1)
|
|
|
4,342,134
|
|
|
|
14.05
|
%
|
|
|
|
|
|
|
|
|
|
Harbert Discovery
Fund, LP(2)
|
|
|
3,341,637
|
|
|
|
10.81
|
%
|
|
|
|
|
|
|
|
|
|
Niraj Gupta(3)
|
|
|
1,769,890
|
|
|
|
5.73
|
%
|
|
|
|
|
|
|
|
|
|
Nantahala Capital Management, LLC, Wilmot
B. Harkey and Daniel Mack(4)
|
|
|
2,753,599
|
|
|
|
8.91
|
%
|
|
|
|
|
|
|
|
|
|
Noro-Moseley
Partners VI, L.P.(5)
|
|
|
1,633,333
|
|
|
|
5.28
|
%
|
|
|
|
|
|
|
|
|
|
Norman
H. Pessin(6)
|
|
|
1,566,664
|
|
|
|
5.07
|
%
|
|
|
|
|
|
|
|
|
|
Directors
and Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
W. Sides(7)
|
|
|
476,046
|
|
|
|
1.54
|
%
|
|
|
|
|
|
|
|
|
|
Thomas
J. Gibson(8)
|
|
|
219,026
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Wyche
T. “Tee” Green, III(9)
|
|
|
794,787
|
|
|
|
2.57
|
%
|
|
|
|
|
|
|
|
|
|
Kenan
H. Lucas(10)
|
|
|
3,341,637
|
|
|
|
10.81
|
%
|
|
|
|
|
|
|
|
|
|
Jonathan
R. Phillips(11)
|
|
|
830,677
|
|
|
|
2.69
|
%
|
|
|
|
|
|
|
|
|
|
Randolph
W. Salisbury(12)
|
|
|
584,326
|
|
|
|
1.89
|
%
|
|
|
|
|
|
|
|
|
|
Judith
E. Starkey(13)
|
|
|
375,560
|
|
|
|
1.21
|
%
|
|
|
|
|
|
|
|
|
|
Justin
J. Ferayorni(14)
|
|
|
4,342,134
|
|
|
|
14.05
|
%
|
|
|
|
|
|
|
|
|
|
All
current directors and executive officers as a group (9 persons)(15)
|
|
|
11,169,324
|
|
|
|
36.13
|
%
|
|
(1)
|
Based
on the Schedule 13D filed with the SEC on December 13, 2019. Tamarack Advisers, LP (“Tamarack Advisers”) is deemed
the beneficial owner of such shares pursuant to separate arrangements whereby it acts as investment adviser to Tamarack Global
Healthcare Fund, LP and Tamarack Global Healthcare Fund QP, LP. Each entity for which Tamarack Advisers acts as investment
adviser has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the
common stock purchased or held pursuant to such arrangements. Tamarack Capital GP, LLC (“Tamarack Capital”) is
deemed to be the beneficial owner of such shares because of its position of general partner and majority owner of Tamarack
Advisers. Tamarack Capital Management, LLC (“Tamarack GP”) is deemed to be the beneficial owner of such shares
because of its position as general partner to some of the private funds which together own the securities. Justin J. Ferayorni
is deemed to be the beneficial owner of such shares because he is the managing member and majority owner of Tamarack Capital.
In addition, Mr. Ferayorni also directly, or through family members, beneficially owns 36,252 shares of common stock. The
address of Tamarack Advisers, Tamarack Capital, Tamarack GP and Mr. Ferayorni is 5050 Avenida Encinas, Suite 360, Carlsbad,
CA 92008.
|
|
|
|
|
(2)
|
Based
on the Schedule 13D/A filed with the SEC on October 17, 2019. Harbert Discovery Fund, LP (the “Fund”) is deemed
to have shared voting and dispositive power over 3,341,637 shares of common stock which it purchases, holds and sells for
investment purposes. As further described below, each of Harbert Discovery Fund GP, LLC (the “Fund GP”), Harbert
Fund Advisors, Inc. (“HFA”), Harbert Management Corporation (“HMC”), Jack Bryant, Kenan Lucas and
Raymond Harbert exercises shared voting and dispositive power over the funds for the purchase of the shares of common stock
purchased by the Fund, and by virtue of such status, may be deemed to be the beneficial owner of such shares. Jack Bryant
is a Senior Advisor to the Fund and a Vice President and Senior Managing Director of HMC. Kenan Lucas is a Managing Director
and Portfolio Manager of the Fund GP, which serves as general partner of the Fund. Raymond Harbert is the controlling shareholder,
Chairman and Chief Executive Officer of HMC, an alternative asset investment management firm that is the managing member of
the Fund GP. Mr. Harbert also serves as the Chairman, Chief Executive Officer and Director of HFA, an indirect, wholly owned
subsidiary of HMC, which provides the Fund with certain operational and administrative services. The address of the Fund,
the Fund GP, HFA, HMC, Mr. Bryant, Mr. Lucas, and Mr. Harbert is 2100 Third Avenue North, Suite 600, Birmingham, AL 35203.
|
|
|
|
|
(3)
|
Based
on the Schedule 13G/A filed with the SEC on February 14, 2019. Niraj Gupta is deemed to have sole voting and dispositive power
over 1,769,890 shares of common stock. The shares of common stock are held by Mr. Gupta directly or through his individual
retirement account. The address of Mr. Gupta is 1350 Avenue of the Americas, 4th Floor, New York, NY 10019.
|
|
|
|
|
(4)
|
Based
on the Schedule 13G/A filed with the SEC on February 13, 2020. Nantahala Capital Management, LLC (“Nantahala”)
is deemed to have shared voting and dispositive power over 2,753,599 shares of common stock. Each of Wilmot B. Harkey and
Daniel Mack, as managing members of Nantahala, has voting and dispositive power with respect to such shares and therefore
may be deemed to be the beneficial owner thereof. The address of Nantahala and Messrs. Harkey and Mack is 19 Old Kings Highway
S, Suite 200, Darien, CT 06820.
|
|
(5)
|
Based
on the Schedule 13D filed with the SEC on August 29, 2012, as amended by the Schedule 13D/A filed with the SEC on September
5, 2013. Includes 1,633,333 shares of common stock issuable upon conversion of preferred stock, collectively beneficially
owned by Noro-Moseley Partners VI, L.P. and its general partner, Moseley and Company VI, LLC (collectively, “Noro-Moseley”).
Both entities are deemed to share voting and dispositive power of all 1,633,333 shares. Noro-Moseley’s address is 3284
Northside Parkway, N.W., Suite 525, Atlanta, GA 30327.
|
|
|
|
|
(6)
|
Based
on the Schedule 13D filed with the SEC on October 23, 2019 filed by Norman H. Pessin, Sandra F. Pessin and Brian L. Pessin,
as a group. Norman H. Pessin owns 219,233 shares of Common Stock of the Issuer, Sandra F. Pessin owns 980,391 shares of Common
Stock of the Issuer and Brian L. Pessin owns 367,040 shares of Common Stock of the Issuer. Norman H. Pessin has sole voting
and dispositive power with respect to the shares of Common Stock he owns directly. Sandra F. Pessin has sole voting and dispositive
power with respect to the shares of Common Stock she owns directly. Brian L. Pessin has sole voting and dispositive power
with respect to the shares of Common Stock he owns directly. The address of each of the beneficial owners is 500 Fifth Ave,
Suite 2240, New York, NY 10110.
|
|
|
|
|
(7)
|
Includes
189,796 shares of common stock held in an individual retirement account. The address of Mr. Sides is Meidinger Tower, 462
S. 4th Street, Suite 1100 Louisville, KT 40202. Mr. Sides service as Chief Executive Officer and President was
terminated on July 29, 2019.
|
|
|
|
|
(8)
|
Includes
154,750 shares of restricted stock over which the holder has sole voting but no investment power.
|
|
|
|
|
(9)
|
Includes
(i) 248,872 shares of restricted stock over which the holder has sole voting but no investment power; (ii) 343,137 shares
held by 121G, LLC of which Mr. Green is the managing member and as a result, has sole voting and dispositive power with respect
to such shares.
|
|
|
|
|
(10)
|
Based
on the Schedule 13D/A filed with the SEC on October 17, 2019. Harbert Discovery Fund, LP (the “Fund”) is deemed
to have shared voting and dispositive power over 3,341,637 shares of common stock which it purchases, holds and sells for
investment purposes. As further described below, each of Harbert Discovery Fund GP, LLC (the “Fund GP”), Harbert
Fund Advisors, Inc. (“HFA”), Harbert Management Corporation (“HMC”), Jack Bryant, Kenan Lucas and
Raymond Harbert exercises shared voting and investment power over the funds for the purchase of the shares of common stock
purchased by the Fund, and by virtue of such status, may be deemed to be the beneficial owner of such shares. Jack Bryant
is a Senior Advisor to the Fund and a Vice President and Senior Managing Director of HMC. Kenan Lucas is a Managing Director
and Portfolio Manager of the Fund GP, which serves as general partner of the Fund. Raymond Harbert is the controlling shareholder,
Chairman and Chief Executive Officer of HMC, an alternative asset investment management firm that is the managing member of
the Fund GP. Mr. Harbert also serves as the Chairman, Chief Executive Officer and Director of HFA, an indirect, wholly owned
subsidiary of HMC, which provides the Fund with certain operational and administrative services. The address of the Fund,
the Fund GP, HFA, HMC, Mr. Bryant, Mr. Lucas, and Mr. Harbert is 2100 Third Avenue North, Suite 600, Birmingham, AL 35203.
|
|
|
|
|
(11)
|
Includes
(i) 44,323 shares of restricted stock over which the holder has sole voting but no investment power and (ii) 10,000 shares
of common stock held by Mr. Phillips’s wife.
|
|
|
|
|
(12)
|
Includes
(i) 90,810 shares of common stock held in an individual retirement account, (ii) 135,500 shares of restricted stock over which
the holder has sole voting but no investment power, (iii) stock options that are currently exercisable or exercisable within
60 days of April 16, 2020 to purchase 262,500 shares of common stock, and (iv) stock options that are currently exercisable
or exercisable within 60 days of April 16, 2020 to purchase 30,000 shares of common stock and that are held by a limited liability
company of which Mr. Salisbury is the managing member and the owner with his wife of all of the equity interests.
|
|
|
|
|
(13)
|
Includes
44,323 shares of restricted stock over which the holder has sole voting but no investment power.
|
|
|
|
|
(14)
|
Based
on the Schedule 13D filed with the SEC on December 13, 2019. Tamarack Advisers, LP (“Tamarack Advisers”) is deemed
the beneficial owner of such shares pursuant to separate arrangements whereby it acts as investment adviser to Tamarack Global
Healthcare Fund, LP and Tamarack Global Healthcare Fund QP, LP. Each entity for which Tamarack Advisers acts as investment
adviser has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the
common stock purchased or held pursuant to such arrangements. Tamarack Capital GP, LLC (“Tamarack Capital”) is
deemed to be the beneficial owner of such shares because of its position of general partner and majority owner of Tamarack
Advisers. Tamarack Capital Management, LLC (“Tamarack GP”) is deemed to be the beneficial owner of such shares
because of its position as general partner to some of the private funds which together own the securities. Justin J. Ferayorni
is deemed to be the beneficial owner of such shares because he is the managing member and majority owner of Tamarack Capital.
In addition, Mr. Ferayorni also directly, or through family members, beneficially owns 36,252 shares of common stock. The
address of Tamarack Advisers, Tamarack Capital, Tamarack GP and Mr. Ferayorni is 5050 Avenida Encinas, Suite 360, Carlsbad,
CA 92008
|
|
|
|
|
(15)
|
Includes
(i) stock options that are currently exercisable or exercisable within 60 days of April 16, 2020 to purchase 367,500 shares
of common stock and (ii) 8,281,262 shares of common stock held indirectly.
|
EXECUTIVE
OFFICERS
The
names, ages, and positions held by our executive officers as of the Record Date are below. All of our current executive officers
hold office until their successors are elected and qualified or until any removal or resignation. Our executive officers are elected
by the board of directors and serve at the discretion of the board. For more information about Wyche T. “Tee” Green,
III, our President and Chief Executive Officer, please see “Proposal 1—Election of Directors—Nominees for Election
as Directors” in this Proxy Statement.
Name
|
|
Age
|
|
Position
|
|
First
Appointed
as
Executive
Officer
|
Wyche T. “Tee”
Green, III
|
|
48
|
|
President, Chief Executive
Officer and Chairman
|
|
2019
|
David W. Sides(1)
|
|
49
|
|
President, Chief Executive Officer and
Director
|
|
2014
|
Thomas J. Gibson
|
|
56
|
|
Senior Vice President and Chief Financial
Officer
|
|
2018
|
David A. Driscoll(2)
|
|
63
|
|
Senior Vice President and Chief Revenue
Officer
|
|
2019
|
William G. Garvis
|
|
53
|
|
Senior Vice President and Chief Revenue
Officer
|
|
2019
|
Randolph W. Salisbury
|
|
66
|
|
Senior Vice President and Chief Sales
and Marketing Officer
|
|
2014
|
|
(1)
|
The
Board appointed David W. Sides as President, Chief Executive Officer and a member of the board of directors, effective January
2015. Mr. Sides resigned as President, Chief Executive Officer and director of the company, effective July 29, 2019 to take
a position with another company.
|
|
|
|
|
(2)
|
The
Board appointed David A. Driscoll as Senior Vice President and Chief Revenue Officer, effective February 2019. Mr. Driscoll
resigned as Senior Vice President and Chief Revenue Officer, effective January 17, 2020, to pursue other opportunities.
|
Wyche
T. “Tee” Green, III joined Streamline as President and Chief Executive Officer in October 2019 and has served on our
board of directors since August 2018 and served as Chairman of our board of directors since January 2019. Mr. Green has served
as Chairman and Chief Executive Officer of Greenway Unlimited LLC, an investment company that he founded, since 2013. Mr. Green
previously served as Executive Director of Greenway Health, f/k/a Greenway Medical Technologies, Inc., an electronic health record
and practice management based in Carrollton, Georgia, which he co-founded, from 2001 to May 2018. Prior to forming Greenway Unlimited
in September 2013, Mr. Green served as Chief Executive Officer of Greenway Health from 2010 to April 2016 and was responsible
for leading the company’s strategic direction while managing the sales, marketing and business development teams. Mr. Green
currently serves on the Board of Directors of Caravan Health, Wellbox Inc., and Mint Health. Mr. Green received a bachelor’s
degree in business administration management from Auburn University. Mr. Green is well-qualified to serve on our board of directors.
He brings his experience as a software executive, his knowledge of our industry and his ability to bring perspective to the Board.
Thomas
J. Gibson joined Streamline as Senior Vice President and Chief Financial Officer in September 2018. From April 2013 to December
2013, Mr. Gibson served as Principal Accounting Officer, Senior Vice President of Finance and Corporate Controller at R1 RCM (previously
Accretive Health, Inc.), a healthcare revenue cycle management company. In his role at R1 RCM, Mr. Gibson oversaw the company’s
accounting operations and financial reporting functions. Prior to his service with R1 RCM, Mr. Gibson served as Chief Financial
Officer of Vivex Biomedical, Inc., a regenerative biologics company from December 2013 to December 2015 and of Citra Health Solutions,
a leading healthcare services and technology firm, from December 2015 to September 2018, where he was primarily responsible for
the respective company’s financial reporting, treasury and financial business operations. Mr. Gibson received his bachelor’s
degree from the University of South Alabama.
Randolph
W. Salisbury joined Streamline as Senior Vice President and Chief Marketing Officer in February 2014. From July 2008 to February
2014, Mr. Salisbury served as a founding partner and consultant at Mockingbird Partners Consulting Group, LLC, a marketing communications
and investor relations consulting firm. During his time with Mockingbird Partners, Mr. Salisbury performed marketing functions
on behalf of various clients and performed investor relations consulting services for Streamline. Currently, Mr. Salisbury is
on the board of directors of Decooda, Inc., a private, software-as-a-service start-up company. Mr. Salisbury received his bachelor’s
degree from Ohio Wesleyan University and his MBA from Goizueta Business School at Emory University.
William
G. Garvis joined Streamline as Senior Vice President Client Services in 2016 and has served as Senior Vice President and Chief
Operating Officer since August 2019. Mr. Garvis previously served as Senior Vice President of Operations for HealthPort Technologies,
a health technology company. In his role at HealthPort Technologies, Mr. Garvis supported all facets of service deliveries for
more than 5,000 clients. Prior to his service with HealthPort Technologies, Mr. Garvis served as Vice President of Operations
for Discovery Health Record Solutions, a health information services provider and one of the nation’s largest processors
of third party medical record requests. Mr. Garvis received his bachelor’s degree from Texas A&M University and his
MBA from Southern Methodist University.
COMPENSATION
DISCUSSION AND ANALYSIS
References
in this Proxy Statement to our “named executive officers” refer to:
|
●
|
Wyche
T. “Tee” Green, Chairman and Chief Executive Officer;
|
|
●
|
Thomas
J. Gibson, Senior Vice President and Chief Financial Officer;
|
|
●
|
David
W. Sides, President, Chief Executive Officer and Director;
|
|
●
|
David
A. Driscoll, Senior Vice President and Chief Revenue Officer; and
|
|
●
|
Randolph
W. Salisbury, Senior Vice President and Chief Sales and Marketing Officer.
|
Executive
Summary
The
Compensation Committee has a conservative pay-for-performance compensation philosophy and endeavors to have executive compensation
practices that align executive pay with company performance. In fiscal year 2019, the Compensation Committee took the following
actions with respect to the executive compensation program:
|
●
|
Made
only modest increases to base salaries;
|
|
●
|
Continued
to consider adjusted EBITDA, revenue and sales performance as financial measures for executive bonuses; and
|
|
●
|
Continued
to award restricted stock in order to align the interests of our executives with those of our stockholders and provide appropriate
performance and retention incentives.
|
Streamline’s
financial performance in fiscal year 2019 did not meet all the company’s goals. As a result, cash bonuses in an amount equivalent
to $0 of the target bonus amount were awarded. The Compensation Committee believes any incentive bonuses awarded should demonstrate
strong alignment between executive pay and company performance.
The
Compensation Committee has recently made the following decisions with respect to the company’s executive compensation in
fiscal year 2020:
|
●
|
The
base salaries for certain executive officers have been modestly increased.
|
The
Board appointed Wyche T. “Tee” Green as the company’s President and Chief Executive Officer effective as of
October 16, 2019. The company entered into an employment agreement with Mr. Green when he was appointed President and Chief Executive
Officer of the company.
The
Board appointed Randolph Salisbury as the company’s Senior Vice President and Chief Sales and Marketing Officer effective
as of February 1, 2020. The company entered into an employment agreement with Mr. Salisbury when he was appointed Senior Vice
President and Chief Sales and Marketing Officer of the company.
The
Board appointed William G. Garvis as Senior Vice President and Chief Operating Officer of the company, effective August 1, 2019.
The company entered into an employment agreement with Mr. Garvis when he was appointed Senior Vice President and Chief Operating
Officer of the company.
The
Board appointed David W. Sides as President, Chief Executive Officer and a member of the board of directors, effective January
2015. Mr. Sides resigned as President, Chief Executive Officer and director of the company, effective July 29, 2019 to take a
position with another company.
The
Board appointed David A. Driscoll as Senior Vice President and Chief Revenue Officer, effective February 2019. Mr. Driscoll resigned
as Senior Vice President and Chief Revenue Officer, effective January 17, 2020, to pursue other opportunities.
Compensation
Philosophy
The
Compensation Committee believes that executive compensation should be conservative and (i) provide an incentive for Streamline’s
executives to achieve the company’s goals, (ii) reward executives with equity interests in the company and align the interests
of executives with stockholder interests to enhance stockholder value and (iii) attract and retain key executives critical to
Streamline’s long-term success. Under the oversight of the Compensation Committee, the company has developed and implemented
a pay-for-performance executive compensation program that rewards senior management for the achievement of certain financial performance
objectives. Streamline achieves the philosophies of pay-for-performance and alignment of executive compensation with stockholder
value primarily by providing a substantial portion of each executive officer’s total annual compensation through annual
short-term cash bonus opportunities and grants of long-term equity, primarily in the form of restricted stock. In 2019, the Compensation
Committee increased the proportion of annual long-term incentive compensation to our named executive officers represented in the
form of restricted shares as compared to stock options. This Compensation Committee action reflects, among other things, the changes
in accounting standards modifying the accounting treatment of nonqualified stock options. The Compensation Committee intends to
continually monitor these issues regarding tax and accounting regulations, overall effectiveness of the programs and best practices.
We describe our fiscal year 2019 short-term incentive plan in greater detail below under “Cash Bonus Opportunity”
and describe equity grants in more detail under “Long-Term Equity Incentive Compensation—Restricted Stock.”
Say
on Pay Results and Consideration of Stockholder Support
At
the Annual Meeting of Stockholders on April 22, 2019, over 99% of the votes cast were in favor of the advisory vote to approve
executive compensation. The Compensation Committee considered this positive result and concluded that the stockholders continue
to support the compensation paid to our executive officers and the company’s overall pay practices.
In
light of this support, the Compensation Committee decided to retain the core design of our executive compensation program for
fiscal year 2019, with an emphasis on short-term and long-term incentive compensation that rewards our senior executives when
they successfully implement our business plan and, in turn, deliver value for our stockholders.
The
committee will continue to monitor best practices, future advisory votes on executive compensation and other stockholder feedback
to guide it in evaluating the alignment of the company’s executive compensation program with the interests of the company
and its stockholders.
Overview
of Streamline’s Executive Compensation
The
Compensation Committee designed the company’s compensation program to provide our executive officers with a combination
of cash (salary and bonus) and long-term equity incentive compensation to align their interests with those of our stockholders.
For fiscal year 2019, our executive officer compensation primarily consisted of the following components:
|
●
|
base
salary;
|
|
●
|
cash
bonus opportunity; and
|
|
●
|
long-term
equity incentive awards.
|
Although
the Compensation Committee has not established a policy or formula for the allocation of total compensation among these different
elements of total executive officer compensation, the Compensation Committee endeavors to offer an appropriate mix among the different
types of compensation:
|
●
|
to motivate executive officers to deliver superior short-term
performance by providing conservative, but competitive, base salaries and cash bonus opportunities;
|
|
●
|
to align the interests of our executive officers with
the long-term interests of the company’s stockholders through the grant of equity incentive awards; and
|
|
●
|
to provide an overall compensation package that is conservative,
but competitive and, therefore, promotes executive recruitment and retention.
|
The
Compensation Committee Process
The
Compensation Committee has the primary authority to determine Streamline’s compensation philosophy and to establish compensation
for the executive officers and directors. In establishing executive officer compensation, the Compensation Committee uses its
subjective evaluation of the executives’ performance and responsibilities, the company’s overall performance and the
President and Chief Executive Officer’s recommendations. In establishing director compensation, the Compensation Committee
takes into account director’s compensation for the prior fiscal year and also takes recommendations from the executive officers.
The Compensation Committee discusses director compensation with the board and such compensation is subsequently approved by the
board. The Compensation Committee does not typically use any compensation consultant in setting executive salaries, or in determining
other components of executive compensation. Additionally, the Compensation Committee does not typically benchmark the compensation
of executive officers against compensation paid by other companies to their executives.
Management’s
Role in the Compensation-Setting Process
Company
management plays a significant role in the compensation-setting process. The most significant aspects of management’s role
are:
|
●
|
evaluating
associate performance;
|
|
●
|
preparing
information for Compensation Committee meetings;
|
|
●
|
establishing
business performance targets and objectives;
|
|
●
|
providing
information about the company’s strategic objectives; and
|
|
●
|
recommending
salary levels and equity awards.
|
In
the past, the Compensation Committee has authorized the President and Chief Executive Officer to negotiate employment agreements
with senior executive officers (other than himself). The negotiated employment agreements are subject to review and approval by
the Compensation Committee. Also, in certain circumstances, the Compensation Committee may delegate to one or more of our officers
the authority to grant awards, and to make other determinations under the Second Amended 2013 Plan with respect to such awards,
to persons who are not directors or officers subject to the provisions of Section 16 of the Exchange Act, and who are not subject
to the requirements of “covered employees” under Section 162(m) of the Code.
Base
Salary
The
Compensation Committee seeks to provide base salaries for our executive officers that provide guaranteed cash compensation in
accordance with their experience, professional status and job responsibilities. Salaries for our named executive officers are
generally provided for in their employment agreements, subject to review and adjustment by the Compensation Committee from time
to time. The Compensation Committee has not historically retained a compensation consultant to assist it in determining appropriate
compensation levels and has not engaged in any formal benchmarking processes. The Compensation Committee has instead relied on
the general knowledge, experience and judgment of its members, both with regard to competitive compensation levels and the relative
success that has been achieved by the company. In addition, the committee takes into account: years of service; level of experience;
individual areas of responsibility; the annual rate of inflation; and the company’s operating performance.
The
following table sets forth the base salaries for each of our named executive officers in effect as of January 31, 2020:
Name
|
|
Base
Salary
|
|
Wyche
T. “Tee” Green
|
|
$
|
258,410
|
|
David
W. Sides
|
|
$
|
182,625
|
|
Thomas
J. Gibson
|
|
$
|
279,000
|
|
David
A. Driscoll
|
|
$
|
237,820
|
|
Randolph
W. Salisbury
|
|
$
|
232,925
|
|
Benefits
Streamline
offers a comprehensive package of employee retirement and welfare benefits (including group life insurance, health and dental
care insurance, and long-term disability insurance), in which executive officers may participate on the same basis as other full-time
associates.
Streamline
currently sponsors a 401(k) Plan for all of our eligible associates. This plan (the “401(k) Plan”) is a tax-qualified
retirement plan designed to meet the requirements of Sections 401(a) and 401(k) of the Code. Under the 401(k) Plan, participants
may elect to make pre-tax savings deferrals from 1% to 60% of their compensation each year, subject to annual limits on such deferrals
(e.g., $19,000 in 2019) imposed by the Code. Participants age 50 and older also may elect to make certain catch-up contributions,
subject to a separate annual limit on such contributions (e.g., $6,000 in 2019) imposed by the Code. New participants automatically
defer 6% of their compensation unless they make a contrary election. The company matches dollar for dollar the first 2% of each
associate’s income contributed to the 401(k) Plan, including those contributions made by the executive officers.
The
company also offered the ESPP to encourage stock ownership by our associates, including our executive officers, at an approximate
15% discount to the market price. The ESPP was terminated effective January 1, 2020.
Perquisites
Streamline
may offer limited perquisites to our executive officers. We provided no perquisites to any executive officer in fiscal year 2019.
Cash
Bonus Opportunity
Each
executive officer’s employment agreement establishes a cash bonus target as a percentage of his base salary. The following
table sets forth the target bonuses for each of our named executive officers in effect as of January 31, 2020.
Name
|
|
Target
Bonus
|
|
Wyche T. “Tee”
Green
|
|
|
50
|
%
|
David W. Sides
|
|
|
100
|
%
|
Thomas J. Gibson
|
|
|
40
|
%
|
David A. Driscoll
|
|
|
20
|
%
|
Randolph W. Salisbury
|
|
|
30
|
%
|
The
Compensation Committee believes that cash bonuses should be contingent on performance relative to pre-established targets and
objectives. Each cash bonus is determined based on whether these pre-established performance goals are met, upon which, the executives
would be eligible to receive a bonus in an amount determined by the Compensation Committee, although the Compensation Committee
may elect not to award such bonuses. For the named executive officers to have been eligible for the cash bonus for fiscal year
2019 to be paid at target levels, the company was required to meet financial targets, as determined through an internal planning
process, as follows:
|
●
|
An
adjusted EBITDA target of $5,806,000;
|
|
●
|
Sales
bookings as $6,300,000 in annualized contract value; and
|
|
●
|
Revenue
of $22,682,000.
|
We
calculate adjusted EBITDA as net earnings (loss) plus interest expense, tax expense, depreciation and amortization expense of
tangible and intangible assets, stock-based compensation expense, significant non-recurring operating expenses, and transaction-related
expenses, including: gains and losses on debt and equity conversions, associate severances and related restructuring expenses,
associate inducements, and professional and advisory fees. In awarding any additional cash bonus amounts above target amounts,
the Compensation Committee would consider extraordinary company financial performance, as well as personal performance involving
executive leadership.
The
Compensation Committee determined that not all of the objective financial goals were achieved for fiscal year 2019, and as a result,
cash bonuses in an amount equivalent to 0% of the target bonus amount were awarded. In awarding cash bonuses to executive officers
for the fiscal year ending January 31, 2021, the Compensation Committee will consider multiple potential performance criteria
including sales, adjusted EBITDA and revenue targets, as well as successful completion of certain aspects of the company’s
strategic objectives. However, certain retention bonuses were awarded during fiscal year 2019 for certain of our key executives.
See “Executive Compensation – Summary Compensation Table.”
Long-Term
Equity Incentive Compensation—Restricted Stock
We
currently grant equity awards under the Second Amended 2013 Plan. On June 1, 2017, our stockholders approved an amendment to the
Original 2013 Plan to, among other things, increase the number of available shares under the plan by 300,000 shares. Awards can
be granted under the Second Amended 2013 Plan until April 12, 2027 or the earlier termination of the Second Amended 2013 Plan
by the board. The Second Amended 2013 Plan permits the grant of stock options (both incentive stock options and non-qualified
stock options), stock appreciation rights, restricted stock, restricted stock units, and other incentive awards. As of January
31, 2020, there were 1,499,760 shares available for grant under the Second Amended 2013 Plan.
In
fiscal year 2019, long-term incentive compensation to key personnel, including the company’s named executive officers, was
comprised primarily of restricted awards. The restricted stock awards awarded in fiscal year 2019 vest ratably over a three year
period beginning on the anniversary of the date of grant, unless a separate vesting schedule was approved by the board. The Compensation
Committee believes that its fiscal year 2019 approach to long-term incentive compensation provided the appropriate long-term incentives
from both executive retention and pay-for-performance perspectives. The Compensation Committee believes that the granting of restricted
stock awards supports the executive retention goal.
We
have historically awarded equity grants to executive officers upon the commencement of their employment with the company. In addition,
from time to time, the Compensation Committee has considered and approved additional grants to certain associates of the company,
including the executive officers, where circumstances make such grants appropriate to the company’s incentive and retention
goals. In approving equity grants during fiscal year 2019, the Compensation Committee considered a number of factors, including
the number of shares available for grant under the Second Amended 2013 Plan, the grant rate over certain periods (as a percentage
of shares of common stock), the amount of restricted stock to be granted, the performance of the named executive officer and his
role, the impact of specific grants on the total compensation of the named executive officer, and the aggregate retention strength
of all unvested equity held by such named executive officer and other key personnel. During fiscal year 2019, the Compensation
Committee approved grants of equity incentive awards to certain of our associates, including the following equity grants to our
named executive officers:
Wyche
T. “Tee” Green —President and Chief Executive Officer. On July 29, 2019, Mr. Green was granted an award of 50,000
shares of restricted stock which vested upon grant. On October 17, 2019, Mr. Green was awarded 250,000 shares of restricted stock:
50,000 of which vested upon grant, 100,000 shares that will vest in four substantially equal quarterly installments commencing
on the first anniversary of the date of grant, subject to Mr. Green’s continued employment with the company over such period,
and 100,000 shares that are subject to performance-based vesting and may vest on July 31, 2020 based upon the achievement of certain
growth rates of revenue.
Thomas
J. Gibson — Senior Vice President and Chief Financial Officer. On February 1, 2019, Mr. Gibson was granted an award of 50,000
shares of restricted stock, such restricted stock vesting in three substantially equal annual installments commencing on the first
anniversary of the date of grant, subject to Mr. Gibson’s continued employment with the company over such period. On August
1, 2019, Mr. Gibson was granted an award of 75,000 shares of restricted stock, such restricted stock vesting in four substantially
equal quarterly installments commencing on the first anniversary of the date of grant, subject to Mr. Gibson’s continued
employment with the company over such period.
Randolph
W. Salisbury — Senior Vice President and Chief Marketing Officer. On January 29, 2019, Mr. Salisbury was granted an award
of 25,000 shares of restricted stock, such restricted stock vesting in three substantially equal annual installments commencing
on the first anniversary of the date of grant, subject to Mr. Salisbury’s continued employment with the company over such
period.
David
A. Driscoll — Senior Vice President and Chief Revenue Officer. On February 18, 2019, Mr. Driscoll was granted an award of
75,000 shares of restricted stock, such restricted stock vesting in three substantially equal annual installments commencing on
the first anniversary of the date of grant, subject to Mr. Driscoll’s continued employment with the company over such period.
On August 1, 2019, Mr. Driscoll was granted an award of 150,000 shares of restricted stock, such restricted stock vesting in four
substantially equal quarterly installments commencing on the first anniversary of the date of grant, subject to Mr. Driscoll’s
continued employment with the company over such period.
William
Garvis — Chief Operations Officer. On August 1, 2019, Mr. Garvis was granted an award of 50,000 shares of restricted stock,
such restricted stock vesting in four substantially equal quarterly installments commencing on the first anniversary of the date
of grant, subject to Mr. Gibson’s continued employment with the company over such period.
Risk
Considerations in our Compensation Program
The
Compensation Committee generally structures the compensation of the executive officers to consist of both fixed and variable compensation.
The fixed (or base salary) portion of compensation is designed to provide a steady income so executives do not feel pressured
to focus exclusively on short-term gains or annual stock price performance, which may be to the detriment of long-term appreciation
and other business metrics. The variable portion of compensation (e.g., cash bonuses and stock option awards) is designed to reward
both individual performance and overall company performance. For individual and company performance, any cash bonuses are determined
by the Compensation Committee. The Compensation Committee believes that the variable components of compensation are sufficient
to motivate executive officers to produce short-term and long-term company results, while the fixed element is also sufficient
such that executives are not encouraged to take unnecessary or excessive risks in doing so.
Employment
Agreements
Streamline
has entered into employment agreements with each of Messrs. Green, Garvis and Salisbury. We describe each of these agreements
in more detail below.
On
July 29, 2019, the company entered into an employment agreement with Mr. Green when he was appointed interim President and Chief
Executive Officer of the company. The initial term of Mr. Green’s employment agreement is month-to-month, continuing on
the first day of each successive month, unless either party elects not to renew. Mr. Green’s employment agreement provides
that Mr. Green is entitled to a monthly base salary of $35,000 for the first three months and a monthly base salary of $45,000
for each month following the initial three-month period. Mr. Green was also granted a restricted stock award of 50,000 shares
and is entitled to receive a $20,000 cash bonus on the date which Mr. Green’s replacement executes his or her employment
agreement to assume the role of President and Chief Executive Officer. In addition, Mr. Green’s employment agreement contains
standard confidentiality, expense reimbursement, vacation time, and other standard executive benefit provisions.
On
October 17, 2020, the company entered into an employment agreement with Mr. Green when he was appointed President and Chief Executive
Officer of the company on a full-time basis. The initial term of the employment agreement is one year, automatically renewing
in successive one year periods unless either party elects not to renew. Mr. Green’s employment agreement provides that Mr.
Green is entitled to an annual base salary of $480,000 and provides that Mr. Green will be eligible for an annual incentive bonus
with a target amount of 50% of his annual base salary, based on the achievement of certain performance objectives. Mr. Green was
also granted a restricted stock award of 50,000 shares (which vested immediately), a restricted stock award of 100,000 shares
(vesting quarterly over the first year of his employment) and a restricted stock award of 100,000 shares (vesting upon fulfillment
of certain predetermined percentage targets of the trailing twelve (12)-month revenue growth of the Company (exclusive of certain
business segments) which will be assessed as of the quarter ended July 31, 2020). Mr. Green also received a $50,000 cash bonus.
Mr.Green’s employment agreement further provides for standard expense reimbursement, vacation time, and other standard executive
benefits.
On
August 1, 2019, the company entered into an employment agreement with Mr. Garvis when he was appointed Senior Vice President and
Chief Operating Officer of the company. The initial term of Mr. Garvis’ employment agreement is one year, after which it
renews for successive one-year terms unless either party elects not to renew. Mr. Garvis’ employment agreement provides
for an annual base salary of $255,000 and provides that Mr. Garvis will be eligible for an annual incentive bonus with a target
amount of 45% of his annual base salary, based on the achievement of certain performance objectives. Mr. Garvis was also granted
a restricted stock award of 50,000 shares and such stock will vest quarterly, in arrears, 25% per quarter through August 1, 2020
subject to Mr. Garvis’ continued employment on each vesting date. In addition, Mr. Garvis’ employment agreement contains
standard confidentiality provisions and non-competition covenants. Mr. Garvis’ employment agreement further provides for
standard expense reimbursement, vacation time, and other standard executive benefits.
On
February 1, 2020, the company entered into an employment agreement with Mr. Salisbury when he was appointed Senior Vice President
and Chief Sales and Marketing Officer. The initial term of Mr. Salisbury’s employment agreement is one year, after which
it renews for successive six-month terms, unless either party elects not to renew. Mr. Salisbury’s employment agreement
provides for an annual base salary of $275,000 and provides that Mr. Salisbury will be eligible for an annual incentive bonus
with a target amount of 30% of his annual base salary, based on the achievement of certain performance objectives. Mr. Salisbury
also received a one-time signing bonus of $10,000 and bonus compensation of $68,500 for the fiscal year ending January 31, 2020.
Additionally, Mr. Salisbury was also granted a restricted stock award of 100,000 shares on February 5, 2020. Such stock will vest
quarterly, in arrears, 25% per quarter through February 1, 2021, subject to Mr. Salisbury’s continued employment on each
vesting date. In addition, Mr. Salisbury’s employment agreement contains standard confidentiality provisions and non-competition
covenants. Mr. Salisbury’s employment agreement further provides for standard expense reimbursement, vacation time, and
other standard executive benefits.
Each
of the employment agreements with Streamline’s named executive officers provides assurances to the company with regard to
the availability of the executive’s services, provides protection for the company’s confidential information and trade
secrets, and restricts the ability of the executive officers to compete with the company during their employment and for a specified
period after its termination. In return, the executive officers are provided assurances with regard to salary, other compensation
and benefits, as well as severance benefits if their employment is terminated by the company other than for “good cause.”
For this purpose, “good cause” includes the current use of illegal drugs; conviction of any crime which involves moral
turpitude, fraud or misrepresentation; commission of any act which would constitute a felony and which adversely impacts the business
or reputation of the company; fraud, misappropriation or embezzlement of company funds or property; wrongful conduct which is
materially injurious to the reputation, business or business relationships of the company; material violation or default on any
of the provisions of the employment agreement; and the material and continuous failure to meet reasonable performance criteria
or reasonable standards of conduct as established from time to time by the board of directors.
In
addition, each of our named executive officers is provided additional assurances following a change of control of the company.
In such a situation, they would receive enhanced severance benefits, but only if their employment were terminated without “good
cause” or if they chose to terminate their employment for “good reason.” This additional “double trigger”
change of control protection has been provided to our named executive officers because they are considered vulnerable in a change
of control context due to their positions with the company, their relative levels of equity ownership and the stage of their careers.
Executive
Stock Ownership Guidelines
Streamline
has not adopted any stock ownership guidelines for executives. Executives were eligible to participate in the ESPP, which allows
participants to purchase the company’s common stock at an approximate 15% discount to the market price. The ESPP was terminated
effective January 1, 2020.
Stock
Holding Periods
Streamline
does not have any stock holding period requirements for executive officers beyond option exercise or restricted stock vesting.
Recoupment
Policy
Streamline
has not adopted a separate recoupment or “clawback” policy in the event of a financial restatement, but intends to
do so once the SEC finalizes the rules on this matter required by the Dodd-Frank Act.
Income
Deduction Limitations
Section
162(m) of the Code generally sets a limit of $1 million on the amount of compensation that the company may deduct for federal
income tax purposes in any given year with respect to the compensation of each of our named executive officers. For years beginning
prior to January 1, 2018, the $1 million limitation did not apply to qualified performance-based compensation that satisfied certain
requirements, including, among others, approval of the material terms of the plan by the company’s shareholders. Effective
for the years beginning on or after January 1, 2018, there is no exception for qualified performance-based compensation from the
Section 162(m) limitation, but a transition rule applies to any such qualified performance-based compensation that is provided
pursuant to a written binding contract in effect on November 2, 2017, to the extent not materially modified thereafter. Notwithstanding
the foregoing, however, the Compensation Committee reserves the right to grant awards under the Second Amended 2013 Plan that
may not be deductible because of Section 162(m) of the Code as the Compensation Committee, in the exercise of its business judgment,
determines appropriate to meet the company’s compensation objectives.
EXECUTIVE
COMPENSATION
Summary
Compensation
The
following table is a summary of certain information concerning the compensation earned by our named executive officers for the
fiscal years presented. Each of our current named executive officers has an employment agreement that influences or defines certain
of the elements of compensation shown below. For a description of the material terms of these employment agreements, see “Compensation
Discussion and Analysis—Employment Agreements.”
Summary
Compensation Table
Name
and Principal Position
|
|
Year
|
|
|
Salary(1)
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards(2)
($)
|
|
|
Option
Awards(2)
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)(3)
|
|
|
All
Other
Compensation
(4)
($)
|
|
|
Total
($)
|
|
Wyche T. “Tee”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Green President and
Chief Executive Officer(5)
|
|
2019
|
|
|
$
|
258,410
|
|
|
$
|
50,000
|
|
|
$
|
358,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
2,089
|
|
|
$
|
668,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
W. Sides
|
|
2018
|
|
|
$
|
357,213
|
|
|
|
—
|
|
|
$
|
270,000
|
|
|
|
—
|
|
|
$
|
222,384
|
|
|
$
|
13,410
|
|
|
$
|
863,007
|
|
President and Chief Executive Officer(6)
|
|
2019
|
|
|
$
|
182,625
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
3,662
|
|
|
$
|
360,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
J. Gibson
|
|
2018
|
|
|
$
|
114,583
|
|
|
|
—
|
|
|
$
|
140,000
|
|
|
|
—
|
|
|
$
|
41,264
|
|
|
$
|
3,936
|
|
|
$
|
299,783
|
|
Senior Vice President and Chief Financial Officer(7)
|
|
2019
|
|
|
$
|
279,000
|
|
|
$
|
111,649
|
|
|
$
|
163,250
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
5,339
|
|
|
$
|
559,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randolph
W. Salisbury
|
|
2018
|
|
|
$
|
232,925
|
|
|
|
—
|
|
|
$
|
30,000
|
|
|
|
—
|
|
|
$
|
111,545
|
|
|
$
|
11,594
|
|
|
$
|
386,064
|
|
Senior Vice President and Chief Sales and Marketing
Officer
|
|
2019
|
|
|
$
|
232,925
|
|
|
$
|
65,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
4,557
|
|
|
$
|
302,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Driscoll
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Vice President and Chief Revenue Officer(8)
|
|
2019
|
|
|
$
|
237,820
|
|
|
$
|
60,000
|
|
|
$
|
279,750
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
5,121
|
|
|
$
|
344,871
|
|
|
(1)
|
Includes
amounts contributed by the named executive officers to our 401(k) Plan.
|
|
|
|
|
(2)
|
The
amounts included in the table above reflect the total grant date fair value and were determined in accordance with Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The assumptions
used in determining the grant date fair values of these awards are set forth in the footnotes to our consolidated financial
statements, which are included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2019 filed with the
SEC.
|
|
|
|
|
(3)
|
Non-Equity
Incentive Plan Compensation reported for all named executive officers consists of compensation earned pursuant to the cash
bonus opportunity.
|
|
|
|
|
(4)
|
Reflects
our matching contribution to the 401(k) Plan equal to a 100% match on the first 4% of the employee’s compensation which
is available to all employees who participate in the plan. Excludes group life insurance, health care insurance, ESPP discounts,
long-term disability insurance and similar benefits provided to all employees that do not discriminate in scope, terms or
operations in favor of the named executive officers. Also excludes perquisites and other personal benefits, the aggregate
amount of which with respect to each of the named executive officers does not exceed $10,000 reported for the fiscal years
presented.
|
|
|
|
|
(5)
|
Mr.
Green began service as interim President and Chief Executive Officer on July 29, 2019 and formally took on that same role
on October 16, 2019.
|
|
|
|
|
(6)
|
Mr.
Sides resigned as President and Chief Executive Officer on July 29, 2019.
|
|
|
|
|
(7)
|
Mr.
Gibson joined Streamline on September 10, 2018 as Senior Vice President and Chief Financial Officer.
|
|
|
|
|
(8)
|
Mr.
Driscoll resigned as Senior Vice President and Chief Revenue Officer, effective January 17, 2020.
|
Equity
Compensation Information
Outstanding
Equity Awards at 2019 Fiscal Year End
The
following table sets forth information with respect to the named executive officers equity awards outstanding as of January 31,
2020. The following table sets forth information with respect to the named executive officers equity awards outstanding as of
January 31, 2020.
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
|
|
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Number
of
Shares
that
Have
Not
Vested
|
|
|
Market
Value
of
Shares
that
Have
Not
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wyche
T. “Tee” Green
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,000
|
|
|
|
82,500
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
110,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
J. Gibson
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
67,000
|
|
|
|
73,700
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,750
|
|
|
|
18,425
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
55,000
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,250
|
|
|
|
61,875
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randolph
W. Salisbury
|
|
|
125,000
|
|
|
|
—
|
|
|
$
|
6.14
|
|
|
|
2/2/2024
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
30,000
|
|
|
|
—
|
|
|
$
|
4.00
|
|
|
|
8/14/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
50,000
|
|
|
|
—
|
|
|
$
|
4.02
|
|
|
|
1/31/2025
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
62,500
|
|
|
|
—
|
|
|
$
|
2.58
|
|
|
|
7/7/2025
|
|
|
|
18,750
|
|
|
|
20,625
|
(7)
|
|
|
|
25,000
|
|
|
|
—
|
|
|
$
|
1.18
|
|
|
|
3/1/2027
|
|
|
|
16,750
|
|
|
|
18,425
|
(8)
|
|
(1)
|
This
restricted stock grant vests ratably quarterly beginning on the first quarter after the grant date of October 17, 2019 until
fully vested on October 17, 2020.
|
|
|
|
|
(2)
|
Performance-based
restricted stock award, which will vest on July 31, 2020, contingent upon continued employment and fulfillment of certain
predetermined percentage targets of the trailing twelve (12)-month revenue growth of the Issuer (exclusive of certain business
segments).
|
|
|
|
|
(3)
|
This
restricted stock grant vests ratably annually beginning on the first anniversary after the grant date of September 10, 2018
until fully vested on September 10, 2021.
|
|
|
|
|
(4)
|
This
restricted stock grant vests ratably annually beginning on the first anniversary after the grant date of January 29, 2019
until fully vested on January 29, 2022.
|
|
|
|
|
(5)
|
This
restricted stock grant vests ratably annually beginning on the first anniversary after the grant date of February 1, 2019
until fully vested on February 1, 2022.
|
|
|
|
|
(6)
|
This
restricted stock grant vests ratably quarterly beginning on the first quarter after the grant date of August 1, 2019 until
fully vested on August 1, 2020.
|
|
|
|
|
(7)
|
This
restricted stock grant vests ratably annually beginning on the first anniversary after the grant date of May 25, 2016 until
fully vested on May 25, 2020.
|
|
|
|
|
(8)
|
This
restricted stock grant vests ratably annually beginning on the first anniversary after the grant date of January 29, 2019
until fully vested on January 29, 2022.
|
Equity
Compensation Plan Information
We
maintain the Second Amended 2013 Plan, pursuant to which we may grant awards of stock options, stock appreciation rights, restricted
awards, performance awards, phantom stock awards and other stock-based awards. Prior to its termination, effective January 1,
2020, we also maintained the ESPP, which allowed employees to purchase the company’s common stock at an approximate 15%
discount to the market price.
The
following table presents additional information regarding securities authorized for issuance under our equity compensation plans
as of January 31, 2020:
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants, and rights
|
|
|
Weighted-average
exercise price of outstanding options, warrants, and rights
|
|
|
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
(a))
|
|
Plan
category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity
compensation plans approved by security holders
|
|
|
673,603
|
(1)
|
|
$
|
5.41
|
|
|
|
1,499,760
|
(3)
|
Equity
compensation plans not approved by security holders
|
|
|
125,000
|
(2)
|
|
$
|
6.14
|
|
|
|
—
|
(4)
|
Total
|
|
|
798,603
|
(1)(2)
|
|
|
|
|
|
|
1,499,760
|
|
|
(1)
|
Includes
672,103 options exercisable under the 2005 Incentive Compensation Plan and the Third Amended 2013 Plan. Does not include outstanding
shares of previously awarded restricted stock.
|
|
|
|
|
(2)
|
Stock
options granted under inducement grants in accordance with Nasdaq Marketplace Rule 5635(c)(4). The terms and conditions of
each inducement grant are similar to the terms and conditions of the stockholder-approved equity compensation plan in effect
on the date of such inducement grant.
|
|
|
|
|
(3)
|
Includes
1,499,760 options or other share-based awards available under the Third Amended 2013 Plan as of January 31, 2020.
|
|
|
|
|
(4)
|
Our
board of directors has not established any specific number of shares that could be issued without stockholder approval. Inducement
grants to new key employees are determined on a case-by-case basis. Other than possible inducement grants, we expect that
all equity awards will be made under stockholder-approved plans.
|
DIRECTOR
COMPENSATION
For
the 2019 fiscal year, we paid the following annual retainers immediately following our 2019 Annual Meeting of Stockholders to
each of our then-serving non-employee directors: Kenan H. Lucas, $60,000; Jonathan R. Phillips, $60,000; Judith E. Starkey, $60,000;
and Wyche T. Green, $100,000 (which was awarded prior to Mr. Green being appointed President and Chief Executive Officer). Justin
Ferayorni was appointed as director on December 10, 2019 and was not paid an annual retainer in fiscal year 2019 for his service
in that same fiscal year. Mr. Ferayorni will receive director compensation at the end of fiscal year 2020 for his service in fiscal
year 2019 and fiscal year 2020. In order to attract and retain high quality non-employee independent directors, we allow independent
directors to accept restricted stock with a maximum one-year vesting period, in equal value to all or a portion of their annual
retainers, in lieu of cash. For the 2019 fiscal year, we did not pay our directors additional fees for meeting attendance.
On
January 29, 2019, we also granted each then-serving non-employee director whose service on the Board was continuing beyond the
2018 Annual Meeting of Stockholders (other than Kenan H. Lucas) the following amounts of restricted stock that vest upon the earlier
of (i) the date of the next annual meeting of shareholders and (ii) January 29, 2020: Wyche T. “Tee” Green, III, 52,778
shares; Jonathan R. Phillips, 38,888 shares; and Judith E. Starkey, 35,000 shares. We made these awards pursuant to the Second
Amended 2013 Plan, and the awards were valued at the closing price of our common stock on the grant date.
We
believe that awarding restricted stock to directors is a necessary component of their total compensation, including their retainer
fees, and aligns their interests with those of our stockholders. Our Compensation Committee and board of directors have allowed
a limited exception to this policy in connection with Mr. Moseley’s and Mr. Lucas’s service as a director on our board
to account for limitations on his ability to accept compensation for service as a director and in recognition that a grant of
restricted stock to Noro-Moseley or Harbert Discovery Fund GP, LLC, respectively, would not satisfy the intent of the board’s
policy.
Mr.
Sides, as our previous President and Chief Executive Officer, was not separately compensated for his service on our board of directors.
Mr. Sides served as our President and Chief Executive Officer since January 2014 and resigned from his positions, effective July
29, 2019. See the Summary Compensation Table under “Executive Compensation—Summary Compensation” for information
relating to the compensation paid to Mr. Sides.
Director
Compensation in 2019
Name
|
|
Fees
Earned
or
Paid in
Cash
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Total
($)
|
|
Wyche
T. “Tee” Green, III(2)
|
|
|
—
|
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
Kenan
H. Lucas(3)
|
|
$
|
60,000
|
|
|
|
—
|
|
|
$
|
60,000
|
|
Jonathan
R. Phillips(2)
|
|
|
—
|
|
|
$
|
60,000
|
|
|
$
|
60,000
|
|
Judith
E. Starkey(2)
|
|
|
—
|
|
|
$
|
60,000
|
|
|
$
|
60,000
|
|
Justin
J. Ferayorni
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(1)
|
The
amounts included in the table above for Stock Awards reflect the total grant date fair value and were determined in accordance
with FASB ASC Topic 718. The assumptions used in determining the grant date fair values of these awards are set forth in the
footnotes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the fiscal year
ended January 31, 2019 filed with the SEC.
|
|
|
(2)
|
Represent
the grant of restricted stock to Mr. Green of $100,000 in restricted stock (prior to his appointment as President and Chief
Executive Officer), the grant of restricted stock to Mr. Phillips of $60,000 in restricted stock, and the grant to Ms. Starkey
of $60,000 in restricted stock. Each grant vested upon the earlier of (i) the date of the next annual meeting of shareholders
and (ii) January 29, 2020.
|
|
|
(3)
|
As
described above, Mr. Lucas is not permitted to accept personal compensation for service on our board. A total of $20,000 was
paid to Harbert Discovery Fund GP, LLC relating to his service as a director in fiscal 2018.
|
On
January 29, 2019, the board of directors appointed Wyche T. “Tee” Green, III as Chairman of the board of directors,
effective as of the same date. On January 29, 2019, our board of directors decreased the size of our board of directors from six
directors to five directors effective as of the annual meeting of stockholders.
RELATED
PARTY TRANSACTIONS
Transactions
with Related Persons
In
the second quarter of fiscal year 2019, we entered into a consulting agreement with 121G Consulting, LLC (“121G Consulting”),
to provide an assessment of the Company’s innovation and growth teams and strategies and to develop a set of prioritized
recommendations to be consolidated into a strategic plan for the Company’s leadership team. Mr. Green is a member of 121G
Consulting, and, accordingly, has a financial interest in and control (as such term is defined in Rule 405 of the Securities Act
of 1933, as amended) over that entity. Subsequent to our entry into the consulting agreement with 121G Consulting, in October
2019, Mr. Green was appointed as President and Chief Executive Officer of the Company on a full-time basis. For the fiscal year
2019, 121G Consulting fees from this consulting agreement totaled $276,000; $88,000 were included in executive transition cost
and $188,000 was included in the Company’s operating cost in the accompanying consolidated statements of operations.
Subsequent
to fiscal year 2019, on March 19, 2020, we entered into a Master Services Agreement (the “MSA”) with 180 Consulting,
LLC (“180 Consulting”), pursuant to which 180 Consulting will provide a variety of services including product management,
internal systems platform integration and software engineering services, among others, through separate statements of work. While
no related person has a direct or indirect material interest in this MSA or the related statements of work, individuals providing
services to us under the MSA and statements of work may share workspace and administrative costs of operation with 121G Consulting.
None of these shared arrangements would be deemed to be a “related party transaction” under Item 404 of Regulation
S-K.
Review,
Approval or Ratification of Transactions with Related Persons
Under
Nasdaq Marketplace Rules and our Related Party Transactions Policy, our Audit Committee (or another independent body of our board
of directors) is required to conduct an appropriate review of all related party transactions for potential conflict of interest
situations on an ongoing basis. In accordance with our Audit Committee’s charter, the Audit Committee is responsible for
overseeing all related party transactions. For these purposes, a “related party transaction” refers to any transaction
that is required to be disclosed pursuant to Item 404 of Regulation S-K.
In
addition, all of our employees, officers and directors are required to comply with our Code of Conduct. The Code of Conduct addresses,
among other things, what actions are required when potential conflicts of interest may arise, including those from related party
transactions. Specifically, if an employee, officer or director believes a conflict of interest exists or may arise, he or she
is required to disclose immediately the nature and extent of the conflict, or potential conflict, to his or her supervisor, who,
along with appropriate officials of Streamline, will evaluate the conflict and take the appropriate action, if any, to ensure
that our interests are protected.
AUDIT
COMMITTEE REPORT
The
Audit Committee, which operates under a charter approved by our board of directors and available through our website at http://www.streamlinehealth.net/investors,
oversees our financial reporting process on behalf of the board of directors. Our management has the primary responsibility for
the consolidated financial statements and the reporting process, including the systems of internal control over financial reporting.
In fulfilling its oversight responsibilities, the Audit Committee reviewed with management the audited consolidated financial
statements that are included in our Annual Report on Form 10-K, which review included a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the
consolidated financial statements.
The
Audit Committee met independently or as part of the whole board of directors to review with management each of our quarterly and
annual consolidated financial statements filed on Form 10-Q or Form 10-K, respectively, prior to the filing of those reports with
the SEC. The Audit Committee reviewed with DHG, our independent registered public accounting firm for fiscal year 2019, who are
responsible for expressing an opinion on the conformity of those audited consolidated financial statements with standards of the
Public Company Accounting Oversight Board (“PCAOB”), their judgments as to the quality, not just the acceptability,
of our accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted
auditing standards. In particular, the Audit Committee has discussed with DHG those matters required to be discussed by Auditing
Standard No. 16, “Communication with Audit Committees.” DHG also provided to the Audit Committee the written disclosures
and the letter required by applicable requirements of the PCAOB regarding the independent registered accountant’s communications
with the audit committee concerning independence, and the Audit Committee discussed the independent registered public accounting
firm’s independence with the auditors themselves.
The
Audit Committee discussed with our independent registered public accounting firm the overall scope and plans for their audit.
The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss
the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.
In
reliance on the reviews and discussions referred to above, the Audit Committee recommended to the board of directors (and the
board of directors approved) that the audited consolidated financial statements be included in the Annual Report on Form 10-K
for the fiscal year ended January 31, 2020 as filed with the SEC.
In
connection with the audit of our fiscal year 2019 consolidated financial statements, we entered into an audit engagement agreement
with DHG which sets forth the terms by which DHG would perform the audit services for us. The Audit Committee has determined that
the terms and conditions of the DHG audit engagement agreement are similar to other registered public accounting firms, and a
common business practice between companies and their audit firms.
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AUDIT
COMMITTEE
|
|
|
|
|
|
Jonathan
R. Phillips, Chairman
|
|
Judith
E. Starkey
|
|
Kenan
H. Lucas
|
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
audit committee approved the engagement of DHG as our independent registered public accounting firm on April 18, 2019, to be effective
immediately after the filing of our Annual Report on Form 10-K, which occurred on April 22, 2019. A representative of DHG is expected
to be present at the Annual Meeting and will have the opportunity to make a statement if he or she desires to do so and is expected
to be available to respond to appropriate questions.
Change
in Independent Registered Public Accounting Firm
On
April 18, 2019, the Audit Committee approved the engagement of DHG as our independent registered public accounting firm for the
fiscal year ended January 31, 2020 and the dismissal and replacement of RSM US LLP (“RSM”) as our independent registered
public accounting firm, each to be effective immediately after the filing of our Annual Report on Form 10-K, which occurred on
April 22, 2019. DHG’s engagement as our independent registered public accounting firm commenced on April 22, 2019. The dismissal
of RSM was effective on April 22, 2019. The decision to change auditors was the result of a comprehensive, competitive process.
Independent
Registered Public Accounting Firm Fees
The
following table sets forth the aggregate fees for the 2019 and 2018 fiscal years billed by DHG and RSM for audit and other services
approved by the Audit Committee.
|
|
2019
|
|
|
2018
|
|
Audit
Fees
|
|
$
|
476,365
|
|
|
$
|
442,578
|
|
Audit-Related Fees
|
|
|
—
|
|
|
$
|
29,584
|
|
Tax Fees
|
|
|
55,125
|
|
|
|
—
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
Total Fees
|
|
$
|
531,490
|
|
|
$
|
472,162
|
|
Fees
represented in the “Audit Fees” category include fees for audit work performed for our consolidated financial statements.
Fees represented in the “Audit-Related Fees” category include fees for consultations related to potential business
acquisitions and/or dispositions.
Audit
Committee’s Pre-Approval Policies and Procedures
All
audit-related services, tax services and other non-audit services were pre-approved by the Audit Committee, which concluded that
the provision of such services by DHG was compatible with the maintenance of the respective firm’s independence in the conduct
of its auditing functions. The Audit Committee’s outside auditor independence policy provides for pre-approval of audit,
audit-related and tax services specifically described by the committee on an annual basis and, in addition, individual engagements
anticipated to exceed pre-established thresholds must be separately approved.
OTHER
SECURITIES FILINGS
The
information contained in this Proxy Statement under the heading “Audit Committee Report” is not, and should not be
deemed to be, incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange
Act that purport to incorporate by reference other SEC filings made by us, in whole or in part, including this Proxy Statement.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our directors and certain officers, and persons who beneficially own more than 10% of any class
of our equity securities, who collectively we refer to as “insiders,” to file with the SEC initial reports of beneficial
ownership and reports of changes in beneficial ownership of common stock and other equity securities of the company. Our insiders
are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file.
Based
solely on a review of the copies of the forms furnished to us, we believe that during the 2019 fiscal year our insiders complied
with all applicable filing requirements.
OTHER
BUSINESS
Our
board of directors does not presently intend to bring any other business before the Annual Meeting, and, so far as is known to
the board of directors, no matters are to be brought before the Annual Meeting except as specified in the Notice of Annual Meeting
of Stockholders. We have not been informed by any of our stockholders of any intention to propose any other matter to be acted
upon at the Annual Meeting. The persons named in the accompanying Proxy are allowed to exercise their discretionary authority
to vote upon any other business as may properly come before the Annual Meeting. As to any such other business that may properly
come before the meeting, it is intended that proxies, in the form enclosed, will be voted in respect thereof in accordance with
the judgment of the persons voting such proxies.
ANNUAL
REPORT ON FORM 10-K
A
copy of our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, as filed with the SEC, will be mailed without
charge to any beneficial owner of our common stock, upon request. Requests for Annual Reports on Form 10-K should be addressed
to: Investor Relations, Streamline Health Solutions, Inc., 11800 Amber Park Drive, Suite 125, Alpharetta, GA 30009. The Form 10-K
includes certain exhibits. Copies of the exhibits will be provided only upon receipt of payment covering our reasonable expenses
for such copies. The Form 10-K and exhibits also may be obtained through our website at http://www.streamlinehealth.net/investors,
or directly from the SEC’s website, http://www.sec.gov.
STOCKHOLDER
PROPOSALS FOR 2021 ANNUAL MEETING OF STOCKHOLDERS
Stockholder
proposals intended for inclusion in our proxy statement and form of proxy relating to our 2021 Annual Meeting of Stockholders
must be received by us not later than December 18, 2020. Such proposals should be sent to the Corporate Secretary, Streamline
Health Solutions, Inc., 11800 Amber Park Drive, Suite 125 Alpharetta, GA 30009. The inclusion of any proposal will be subject
to applicable rules of the SEC, including Rule 14a-8 under the Exchange Act, and timely submission of a proposal does not guarantee
its inclusion in our proxy statement.
Any
stockholder who intends to propose any other matter to be acted upon at the 2021 Annual Meeting of Stockholders must do so in
accordance with our bylaws. Under our bylaws, director nominations and other business may be brought at an Annual Meeting of Stockholders
only by or at the direction of our board of directors or by a stockholder entitled to vote who has submitted a proposal in accordance
with the requirements of our bylaws as in effect from time to time. To be timely under our bylaws as now in effect, a stockholder
notice must be delivered or mailed to our Corporate Secretary at our principal executive offices not less than 90 days prior to
the first anniversary of the preceding year’s Annual Meeting of Stockholders. Stockholder proposals for the 2021 Annual
Meeting of Stockholders, other than proposals intended for inclusion in our proxy statement as set forth in the preceding paragraph,
must be received by February 22, 2020. However, in the event that the date of the 2020 Annual Meeting of Stockholders is advanced
more than 30 days prior to such anniversary date or delayed more than 60 days after such anniversary date, then to be timely such
notice must be received no later than the later of 90 days prior to the date of the meeting or the tenth day following the day
on which public announcement of the date of the meeting was made. Please refer to the full text of our advance notice bylaw provisions
for additional information and requirements.
Only
such proposals as are (1) required by the rules of the SEC, and (2) permissible under the Delaware General Corporation Law will
be included on the 2021 Annual Meeting of Stockholders agenda.
*
* * * *
ALL
STOCKHOLDERS ARE URGED TO VOTE. SEE “GENERAL INFORMATION—VOTING METHODS” FOR MORE INFORMATION ON YOUR
VOTING OPTIONS.
THANK
YOU FOR YOUR PROMPT ATTENTION TO THIS MATTER.
|
By
Order of the Board of Directors,
|
|
|
|
|
|
|
|
Wyche
T. “Tee” Green, III
|
|
Chairman
of the Board
|
|
|
Atlanta,
Georgia
|
|
April
22, 2020
|
|
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