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ITEM 10.
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DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
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Directors
Set forth
below are the names of, and certain biographical information regarding, the directors of the Company. The Board of Directors currently
consists of three directors.
Harvey
P. Eisen, 77, has served as Chairman of the board of directors and Chief Executive Officer of the Company since
June 2007 and also has served as its President since July 2007. Mr. Eisen has served as a director of the Company since
2004. Mr. Eisen has served as Chairman and Managing Member of Bedford Oak Advisors, LLC, an investment partnership
(“Bedford Oak”), since 1998 and was Chairman and Director of GP Strategies Corporation, a global performance solutions
provider (“GP Strategies”) from 2004 to 2018. Mr. Eisen has also served on the board of directors of VerifyMe, Inc.,
a provider of physical, cyber and biometric security solutions from April 2018 through February 2019.
Mr. Eisen was previously
Senior Vice President of Travelers, Inc. and held various executive positions with Primerica, SunAmerica Corp., and Integrated
Resources Asset Management. Mr. Eisen was president and portfolio manager of Eisen Capital Management for 10 years.
He began his career as an analyst with Stifel, Nicolaus & Co. and Wertheim. Mr. Eisen has served on the Strategic
Development Board for the Trulaske College of Business, University of Missouri since 1995 where he established the first accredited
course on the Warren Buffett Principles of Investing. He also serves on the University’s Investment Advisory Committee.
Mr. Eisen is qualified
to serve on our board of directors and brings valuable insight to our board of directors as a result of his broad range of business
skills and his financial literacy and expertise and executive and management leadership skills. Mr. Eisen developed these skills
and expertise during his long and successful business career as Chairman and Managing Member of Bedford Oak, a Senior
Vice President of Travelers and Primerica, as well as his service on other public company and institutional boards.
Lawrence
G. Schafran, 81, is a private investor and has served as a director and chairman of the audit committee of the Company
since 2006. Mr. Schafran also serves as a director of Glasstech, Inc., a manufacturer and seller of glass bending and tempering
systems. Mr. Schafran also served as director of other public and private companies, such as Cupcake Digital, Inc., a developer
of mobile applications focusing on the children’s market from 2013 to June 2019 and VerifyMe, Inc., a provider of physical,
cyber and biometric security solutions from 2013 to June 2019. He also served as a Managing Director of Providence Capital, Inc.,
an investment and advisory firm from March 2003 until December 2012.
Mr. Schafran is
qualified to serve on our board of directors because of his extensive business skills and experiences and his financial literacy
and expertise. Mr. Schafran also possesses a broad range of experiences and skill garnered from the various leadership
positions and from his service on other public company boards and committees.
Dort A. Cameron
III, 75, is currently the managing member of Airlie Enterprises, LLC, a private consulting and principal investments company
established in 1995 and has served as a director and chairman of the Compensation and Nominating and Corporate Governance Committee
since February 2019. Mr. Cameron is also the President of the Cameron Family Foundation. Mr. Cameron was a principal of the Investment
Manager, a managing director of the General Partner of the Investment Manager and Chief Investment Officer (portfolio manager)
of the Airlie Opportunity Fund’s portfolio from 2003 through 2014.
Mr. Cameron has
over 30 years of investment banking, merchant banking, and investment management experience.
His experience
encompasses institutional portfolio management, alternative and principal investing, fiduciary oversight, and significant private
equity, high yield, and distressed transactions/situations. Mr. Cameron’s professional experience includes a position as
the Chairman of the Board of Directors and a majority owner of Entex Information Services, Inc., a computer services company headquartered
in Rye Brook, New York (“Entex”). Mr. Cameron was also the General Partner of BMA Limited Partnership, a mezzanine
private equity fund, which was the general partner of Investment Limited Partnership (“ILP”), which he co-founded
in 1984 with Richard Rainwater of the Bass organization and managed through June of 1996.
Mr. Cameron has
served as a member of the Board of Directors of First Marblehead Corporation, Greenwich Life Settlements, TLC Beatrice as well
as Middlebury College, where he still currently serves, and the Rippowam Cisqua School.
Mr. Cameron’s
is qualified to serve on our Board because of his senior management roles in investment banking, merchant banking, and investment
management and his other professional experience, each of which have required him to balance the demands of clients, employees
and investors.
Executive Officers Who Are Not a Director
Set forth below is the name of, and
certain biographical information regarding executive officers of the Company who do not serve as directors of the Company.
Harold D. Kahn,
66, is the Acting Chief Financial Officer and Acting Principal Accounting Officer of the Company since March 2019. Mr. Kahn previously
served as a consultant to the Company. Mr. Kahn has been the Managing Member of Vela Capital Advisors, LLC, an independent advisory
consultancy since February 2007. Mr. Kahn has been a senior principal for several privately-held technology consulting and investment
management firms. Earlier in his career, he was a Partner at PricewaterhouseCoopers in New York and Tokyo. Mr. Kahn holds
an AB in Economics from Stanford University.
Corporate Governance
General
The Company is
committed to establishing sound principles of corporate governance which promote honest, responsible and ethical business practices.
The Company’s Board of Directors and Nominating and Corporate Governance Committee actively review and evaluate the Company’s
corporate governance practices. This review includes comparing the Board’s current governance policies and practices with
those suggested by corporate governance authorities as well as the practices of other public companies of comparable size. The
Board of Directors has adopted those corporate governance policies and practices that its evaluation suggests are the most appropriate
for the Company.
Audit Committee
Our Audit Committee
is currently composed of Lawrence G. Schafran (Chairman) and Dort A. Cameron III. The Board of Directors affirmatively determined
that Mr. Schafran and Mr. Cameron are independent, in accordance with The Nasdaq Stock Market (“Nasdaq”) independence
criteria and for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Board of Directors
determined that each of Messrs. Schafran and Cameron is able to read and understand financial statements and that each of Messrs.
Schafran and Cameron has accounting or related financial management expertise in accordance with the applicable rules of Nasdaq.
The Board of Directors also determined that each of Messrs. Schafran and Cameron, who serve as the Audit Committee financial experts,
has the accounting or related financial management expertise necessary to be considered a “financial expert” under
SEC rules.
The Audit Committee
is responsible for maintaining free and open communications among itself, the independent registered public accounting firm and
Company management. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibility to the stockholders,
potential stockholders, the investment community and others relating to the integrity of the Company’s financial statements
and the financial reporting process, the Company’s compliance with legal and regulatory requirements, the independent registered
public accounting firm’s qualifications and independence, the Company’s systems of internal accounting and financial
controls, the annual independent audit of the Company’s financial statements and the engagement of the independent registered
public accounting firm.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of
the Exchange Act requires the Company’s executive officers and directors to file reports regarding ownership of the Company’s
common stock with the SEC, and to furnish the Company with copies of all such reports. Based on a review of these filings, the
Company believes that with respect to the most recently concluded fiscal year, all such reports were timely filed.
Code of Ethics
The Company has
adopted a Code of Ethics for its principal executive officer, senior financial officers, including the principal financial officer
and the principal accounting officer, and persons performing similar functions for its subsidiaries. If the Company makes any
substantive amendment to the Code of Ethics or grants any waiver from a provision of the Code of Ethics for said executive officers,
the Company will disclose the nature of such amendment or waiver in a filing on Form 8-K. The Code of Ethics was originally filed
as Exhibit 14.1 to the Company’s Form 10-K for the year ended December 31, 2004, which was filed with the SEC on April 15,
2005 and is incorporated by reference herein. The Company will also provide a copy of such Code of Ethics to any person, without
charge, upon written request made to the Company’s Secretary at the following address: Wright Investors’ Service Holdings,
Inc., Attn: Secretary, 118 North Bedford Road, Ste. 100, Mount Kisco, NY 10549.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Principal Stockholders
The following table
sets forth the number of shares of common stock beneficially owned as of April 15, 2020 by each person who is known by the Company
to own beneficially more than five percent of outstanding Company common stock other than executive officers or directors of the
Company, whose beneficial ownership is reflected in the Security Ownership of Directors and Executive Officers table below. There
were 19,839,777, shares of Company common stock outstanding on April 15, 2020.
Security Ownership of Principal Stockholders
Table
Name and Address
of Beneficial Owner
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Amount
and Nature of Beneficial
Ownership
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Percent
of Class
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Bedford Oak Advisors, LLC
118 North Bedford Road, Suite 100
Mount Kisco, NY 10549
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5,511,169
(1)
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27.78%
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William H. Miller III
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2,870,400
(2)
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14.47%
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Joseph H. Moglia
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1,165,877
(3)
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5.88%
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(1)
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Based on a Schedule 13D/A filed
jointly by Bedford Oak Advisors, LLC (“Bedford Oak”), Bedford Oak Capital,
L.P. (“Capital”), Bedford Oak Acorn, L.P. (“Acorn”) and Mr. Eisen
with the SEC on August 30, 2019, and updated for other information known to the Company,
including various Form 4’s filed jointly by Bedford Oak, Capital and Mr. Eisen
with the SEC through August 30, 2019, Mr. Eisen is deemed to have beneficial ownership
of such shares by virtue of his position as managing member of Bedford Oak, the investment
manager of Capital and Acorn and certain other private investment partnerships. Mr.
Eisen beneficially owned at such date an aggregate of 29.04% of the Company’s common
stock, which percentage includes the 27.78% beneficially owned by Bedford Oak Advisors,
LLC. Does not include options to purchase 250,000 shares of Company common stock
exercisable by Mr. Eisen within 60 days of April 15, 2020. See Security Ownership
of Directors and Executive Officers table below.
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(2)
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Based on a Schedule 13D/A filed
jointly by William H. Miller III and William H. Miller III Living Trust with the SEC
on August 30, 2019.
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(3)
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Based on a Schedule 13D filed by
Joseph H. Moglia with the SEC on September 12, 2019.
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Security Ownership of Directors
and Executive Officers
The following table
sets forth the beneficial ownership of Company outstanding common stock as of April 15, 2020 by each person who is a director
or named executive officer of the Company as of such date, naming each such person, and all persons who are directors and executive
officers of the Company as of such date, as a group.
Security Ownership of Directors and
Executive Officers Table
Name
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Amount and
Nature of Beneficial
Ownership
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Percent
of Class
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Harvey
P. Eisen
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5,761,169
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(1)
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29.04%
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Dort
Cameron III
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396,267
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(2)
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2.45%
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Lawrence
G. Schafran
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485,968
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(3)
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2.00%
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Harold
D. Kahn
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0
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0%
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Directors and executive officers as a
group
(4 persons) (4)
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6,643,404
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33.49%
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(1)
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Includes 5,511,169 shares of Company
common stock beneficially owned by Bedford Oak, Capital and Acorn. Mr. Eisen
is deemed to have beneficial ownership of such shares by virtue of his position as managing
member of Bedford Oak, the investment manager of Capital and Acorn. See footnote
1 to Principal Stockholders table above. Also includes 250,000 shares of Company
common stock issuable upon the exercise of options that are fully vested and exercisable
by Mr. Eisen on April 28, 2020.
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(2)
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On February 13, 2019 the Board
of Directors of the Corporation appointed Dort A. Cameron III as a director of the Corporation.
Includes 100,000 RSU’s which shall vest in 1/3 increments of 33,333 on each of
the one year and two year anniversary and 33,334 on the three year anniversary of the
February 13, 2019 date of grant (the “Grant Date”) and shall be subject to
a three year transfer of sale restriction until the three year anniversary of the Grant
Date.
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(3)
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Includes 100,000 shares of Company
common stock issuable to Mr. Schafran upon the exercise of options, all of which are
fully vested and exercisable by Mr. Schafran on April 28, 2020.
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(4)
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Includes Messrs. Schafran, and
Cameron, each of whom is currently a director of the Company, and Mr. Eisen who is currently
a director and a named executive officer of the Company and Mr. Kahn who is a named executive
officer of the Company.
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Equity Compensation Plan Information
The following table
provides information as of December 31, 2019 with respect to shares of Company common stock that may be issued under existing
equity compensation plans.
Plan
category
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Number of securities
to be issued upon
exercise of
outstanding options,
warrants, Restricted
Stock Units and rights
(a)
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Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
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Number of securities
remaining
available for future
issuance
under equity
compensation
plans (excluding
securities
reflected in column
(a))
(c)
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Equity compensation
plans approved by
security holders (1)
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550,000
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$1.35
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0
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(1)
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Consists of: (i) the 2003 Stock
Plan, as amended, which was originally adopted by the Board of Directors and approved
by the sole stockholder of the Company on November 3, 2003 and the amendment thereto,
which was approved by the Board of Directors of the Company on March 1, 2007 and by the
stockholders of the Company on December 20, 2007; and (ii) the 2007 Incentive Stock Plan,
which was approved by the Board of Directors on July 30, 2007 and by the stockholders
of the Company on December 20, 2007.
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The periods during which additional
awards may be granted under the plans have expired and no further awards may be granted under any of these plans after December
20, 2017.
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ITEM 13.
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CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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Other Compensation
See the narrative
disclosure following the Summary Compensation Table and the Outstanding Equity Awards at Fiscal Year-End Table in “Item
11. Executive Compensation” for summaries of the compensation arrangements and agreements in which the Company and its executive
officers and directors are participants.
Director Independence
Since the adoption
of the Sarbanes-Oxley Act in July 2002, there has been growing public and regulatory focus on the independence of directors. The
Company is not subject to the listing requirements of any securities exchange, including Nasdaq, because the Company’s common
stock is traded on the over-the-counter bulletin board. However, in July 2007, the Board of Directors adopted the standards for
independence for Nasdaq-listed companies, and the independence determinations that follow are based upon the criteria established
by Nasdaq for determining director independence and upon the criteria established by Nasdaq and the SEC for determining Audit
Committee member independence.
The Board of Directors
determines the independence of its members through a broad consideration of all relevant facts and circumstances, including an
assessment of the materiality of any relationship between the Company and a director. In making each of these independence determinations,
the Board of Directors considered and broadly assessed, from the standpoint of materiality and independence, all of the information
provided by each director in response to detailed inquiries concerning his independence and any direct or indirect business, family,
employment, transactional or other relationship or affiliation of such director with the Company.
Using the objective
and subjective independence criteria enumerated in the Nasdaq marketplace rules listing requirements and SEC rules, the Board
of Directors has reviewed all relationships between each director and the Company and, based on this review, the Board of Directors
has affirmatively determined that, in accordance with Nasdaq independence criteria, (i) Messrs. Cameron and Schafran are independent,
and that (ii) Messrs. Eisen is not independent.