UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE
14A
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14a-101)
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Soliciting
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LMP
Automotive Holdings, Inc. |
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LMP
AUTOMOTIVE HOLDINGS, INC.
500
East Broward Blvd., Suite 1900
Ft.
Lauderdale, Florida 33394
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held Monday, December 21, 2020 at 10:30 A.M.
(EST)
TO THE
STOCKHOLDERS OF LMP AUTOMOTIVE HOLDINGS, INC.:
Notice is
hereby given that the Annual Meeting of Stockholders (the “Annual
Meeting”) of LMP Automotive Holdings, Inc. (the “Company”) will be
held on Monday, December 21, 2020, at 10:30 A.M. EST, at the
offices of LMP Automotive Holdings, Inc., 500 East Broward Blvd.,
Suite 1900, Ft. Lauderdale, Florida 33394, for the purposes of
considering and acting on the following items:
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1. |
To
elect one (1) person to our Board of Directors, to hold office
until the 2023 annual meeting of stockholders and until his or her
successor shall have been duly elected or appointed and
qualify; |
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2. |
To
ratify the appointment of Grassi & Co., CPAs, P.C. as our
independent registered public accounting firm for the fiscal year
ending December 31, 2020; |
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3. |
To
amend the Company’s certificate of incorporation to reduce the
number of authorized shares of the Company’s common stock from
100,000,000 to 29,000,000 and the Company’s preferred stock from
20,000,000 to 1,000,000; |
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4. |
To
hold an advisory vote on executive compensation; and |
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5. |
To
approve the amendment to the Company’s Bylaws to reduce the
required stockholder vote threshold for the removal of a member of
the Board of Directors from 66.66% to 50.01% of the voting power of
the then-outstanding shares of the Company’s capital stock entitled
to vote generally at an election of directors (the “Bylaws
Amendment Proposal”). |
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The
enclosed Proxy Statement includes information relating to these
proposals. Additional purposes of the Annual Meeting are to
transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only
holders of record of our common stock as of the close of business
on November 17, 2020 are entitled to notice of, and to vote at, the
Annual Meeting. The holders of at least a majority of our
outstanding shares of voting stock entitled to vote and present in
person or by proxy are required for a quorum. You may vote
electronically through the Internet or by telephone. The
instructions on your proxy card describe how to use these
convenient services. Of course, if you prefer, you can vote by mail
by completing your proxy card and returning it to us in the
enclosed envelope.
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By
Order of the Board of Directors, |
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/s/
Sam Tawfik |
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Sam
Tawfik |
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President
and Chief Executive Officer |
November
27, 2020
Ft.
Lauderdale, Florida
OUR
BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN
OUR ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED.
ACCORDINGLY, PLEASE AUTHORIZE A PROXY TO VOTE YOUR SHARES BY
INTERNET, TELEPHONE OR MAIL. IF YOU ATTEND THE ANNUAL MEETING, YOU
MAY WITHDRAW YOUR PROXY, IF YOU WISH, AND VOTE IN PERSON. YOUR
PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN
THIS PROXY STATEMENT.
LMP
AUTOMOTIVE HOLDINGS, INC.
500
East Broward Blvd., Suite 1900
Ft.
Lauderdale, Florida 33394
PROXY
STATEMENT FOR
ANNUAL
MEETING OF STOCKHOLDERS
To
Be Held Monday, December 21, 2020 at 10:30 A.M.
(EST)
ANNUAL
MEETING AND PROXY SOLICITATION INFORMATION
General
This Proxy
Statement is furnished in connection with the solicitation of
proxies by the board of directors (the “Board of Directors”) of LMP
Automotive Holdings, Inc., a Delaware corporation, for use at the
Annual Meeting of Stockholders to be held on Monday, December 21,
2020, at 10:30 A.M. EST, at the offices of LMP Automotive Holdings,
Inc., 500 East Broward Blvd., Suite 1900, Ft. Lauderdale, Florida
33394, and at any postponements or adjournments thereof (the
“Annual Meeting”). This Proxy Statement, the Notice of Annual
Meeting of Stockholders and the accompanying proxy cards are being
mailed to stockholders on or about November 27, 2020.
Important Notice
Regarding the Internet Availability of Proxy Materials for the
Annual Meeting of Stockholders to Be Held on December 21, 2020: The
Proxy Statement and the Annual Report to Shareholders are available
at www.lmpmotors.com. We encourage you to review all of the
important information contained in the proxy materials contained
herein or accessed via our website before voting.
Solicitation and
Voting Procedures
Solicitation.
The solicitation of proxies will be conducted by mail, and we will
bear all attendant costs. These costs will include the expense of
preparing and mailing proxy materials for the Annual Meeting and
reimbursements paid to brokerage firms and others for their
expenses incurred in forwarding solicitation materials regarding
the Annual Meeting to beneficial owners of our shares entitled to
vote at the Annual Meeting. We may conduct further solicitation
personally, telephonically, electronically or by facsimile through
our officers, directors and regular employees, none of whom would
receive additional compensation for assisting with the
solicitation. We do not intend, but reserve the right, to use the
services of a third party solicitation firm to assist us in
soliciting proxies.
Voting.
Stockholders of record may authorize the proxies named in the
enclosed proxy cards to vote their shares in the following
manner:
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by
mail, by marking the enclosed proxy card(s) applicable to you as
the holder of shares of our common stock and/or our preferred
stock, signing and dating it, and returning it in the postage-paid
envelope provided; and |
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● |
through
the Internet, by accessing the World Wide Website address
http://onlineproxyvote.com/LMPX/. Stockholders voting by the
Internet need not return the proxy card(s) applicable to them as
the holder of shares of our common stock and/or our preferred
stock. |
Revocability of
Proxies. Any proxy given pursuant to this solicitation may be
revoked by the person giving it at any time before it is exercised
in the same manner in which it was given, or by delivering to Sam
Tawfik, the President and Chief Executive Officer of LMP Automotive
Holdings, Inc., at 500 East Broward Blvd., Suite 1900, Ft.
Lauderdale, Florida 33394, a written notice of revocation or a
properly executed proxy bearing a later date, or by attending the
Annual Meeting and giving notice of your intention to vote in
person.
Voting
Procedure. The presence at the Annual Meeting of a majority of
our outstanding shares of voting stock entitled to vote and
represented either in person or by proxy, will constitute a quorum
for the transaction of business at the Annual Meeting. The close of
business on November 17, 2020 has been fixed as the record date
(the “Record Date”) for determining the holders of shares of our
common stock entitled to notice of and to vote at the Annual
Meeting. Each share of common stock outstanding on the Record Date
is entitled to one vote on all matters.
As of the Record Date, there were 10,022,002 shares of common stock
outstanding, which shares were entitled to an aggregate of
10,022,002 votes at the Annual Meeting. Under Delaware law,
stockholders will not have appraisal or similar rights in
connection with any proposal set forth in this Proxy Statement.
Votes will
be tabulated by the persons appointed by the Board of Directors to
act as inspectors of election for the Annual Meeting. Shares
represented by a properly executed and delivered proxy will be
voted at the Annual Meeting and, when instructions have been given
by the stockholder, will be voted in accordance with those
instructions. If no instructions are given, the shares will be
voted FOR Proposal Nos. 1, 2, 3, 4 and 5, as applicable.
Abstentions and broker
non-votes will each be counted as present for the purpose of
determining whether a quorum is present at the Annual Meeting.
Abstentions will have no effect on the outcome of the election of
directors (Proposal No. 1), but will be counted as a vote, AGAINST
the ratification of Grassi & Co., CPAs, P.C. as our independent
registered public accounting firm (Proposal No. 2), AGAINST the
proposal to amend our certificate of incorporation to reduce the
number of authorized shares of common stock (Proposal No. 3),
AGAINST the approval of the advisory vote to approve the
compensation of our named executive officers (Proposal No. 4) and
AGAINST the Bylaws Amendment Proposal (Proposal No. 5).
Broker
non-votes will have no effect on the outcome of the election of
directors (Proposal No. 1), the ratification of Grassi & Co.,
CPAs, P.C. as our independent registered public accounting firm
(Proposal No. 2), the proposal to amend our certificate of
incorporation to reduce the number of authorized shares of common
stock (Proposal No. 3) or the approval of the advisory vote to
approve the compensation of our named executive officers (Proposal
No. 4), and the Bylaws Amendment Proposal (Proposal No.
5).
A broker
non-vote occurs when a broker submits a proxy card with respect to
shares of common stock held in a fiduciary capacity (typically
referred to as being held in “street name”), but declines to vote
on a particular matter because the broker has not received voting
instructions from the beneficial owner. If the beneficial owner
does not provide voting instructions, the broker or nominee can
still vote the shares with respect to matters that are considered
to be “routine,” but not with respect to “non-routine” matters. In
the event that a broker, bank, or other agent indicates on a proxy
that it does not have discretionary authority to vote certain
shares on a non-routine proposal, then those shares will be treated
as broker non-votes. We believe that all proposals in this proxy
statement, other than the ratification of the independent
registered public accounting firm, are non-routine proposals;
therefore, your broker, bank or other agent will only be entitled
to vote on Proposal No. 2 at the Annual Meeting without your
instructions.
On each
matter properly presented for consideration at the Annual Meeting,
holders of common stock will be entitled to one vote for each share
of common stock held. Stockholders do not have cumulative voting
rights in the election of directors.
Vote
Required.
For the
election of directors (Proposal No. 1), the nominee who receives a
plurality of votes from the shares present in person or by proxy
and entitled to vote at the Annual Meeting will be
elected.
For the
ratification of our independent registered public accounting firm
(Proposal No. 2) and the approval of the advisory vote to approve
the compensation of our named executive officers (Proposal No. 4),
the vote of a majority of the shares present in person or by proxy
and entitled to vote on the matter at the Annual Meeting is
required. Because your vote with respect to Proposal No. 4 is
advisory, it will not be binding upon our Board of
Directors.
For the
approval of the amendment of our certificate of incorporation to
reduce the number of authorized shares of common stock (Proposal
No. 3), the affirmative vote of the holders of a majority of the
votes present in person or represented by proxy is
required
For the
approval of the Bylaws Amendment Proposal (Proposal No. 5), the
affirmative vote of seventy five percent (75%) of the issued and
outstanding shares of common stock is required.
If any
other matters are properly presented for consideration at the
Annual Meeting, the persons named in the enclosed proxy will have
discretion to vote on those matters in accordance with their best
judgment.
Householding.
Some banks, brokers and other nominee record holders may be
participating in the practice of “householding” proxy statements
and annual reports. This means that only one copy of this Proxy
Statement or our annual report may have been sent to multiple
shareholders in your household. We will promptly deliver a separate
copy of either document to you if you call or write us at the
following address or phone number: LMP Automotive Holdings, Inc.,
500 East Broward Blvd., Suite 1900, Ft. Lauderdale, Florida 33394,
phone: 954-895-0352, Attention: Chief Financial Officer. If you
want to receive separate copies of our annual report and Proxy
Statement in the future, or if you are receiving multiple copies
and would like to receive only one copy for your household, you
should contact your bank, broker or other nominee record holder, or
you may contact us at the above address and phone
number.
PROPOSAL NO.
1
ELECTION OF
DIRECTOR
General
Our
Certificate of Incorporation provides that the Board of Directors
of our Company shall consist of not less than one (1) member and
not more than seven (7) members, as fixed by the Board of
Directors. Currently, the Board of Directors consists of four (4)
members.
At the
Annual Meeting, one (1) director is to be elected to serve until
the 2023 annual meeting of our stockholders and until such
director’s successor is elected or appointed and qualify or until
any such director’s earlier resignation or removal. The Board of
Directors has nominated the person listed below for election to the
Board of Directors at the Annual Meeting. The director nominee is
currently a member of our Board of Directors.
Name |
|
Age |
|
Position |
|
Director
Since |
William
“Billy” Cohen(1)(2)(3) |
|
63 |
|
Lead
Independent Director |
|
March
2018 |
|
(1) |
Chairman of Audit
Committee. |
|
(2) |
Chairman of
Compensation Committee. |
|
(3) |
Chairman of Nominating
and Corporate Governance Committee. |
If the
nominee is unable or unwilling to serve as a director at the time
of the Annual Meeting, the proxies may be voted for any substitute
nominee designated by the current Board of Directors or the proxy
holders to fill such vacancy, or the size of the Board of Directors
may be reduced in accordance with our Bylaws.
Nominee
The
following information is submitted concerning the nominee for
election as directors based upon information received by us from
such persons:
William “Billy”
Cohen has served as a member of our board of directors and
the Lead Independent Director since March 2018. He is the Chairman
of the Audit Committee, Compensation Committee, and Nominating and
Corporate Governance Committee. He is currently the Vice Chairman
at Newmark Knight Frank, a global commercial real estate advisory
firm, and has been involved with commercial real estate
acquisitions, conflict management, negotiation, fund raising,
tenant representation, owner representation, leasing advisory
services, property and asset management, and corporate advisory
services over the last 38 years. Mr. Cohen holds a B.A. in Finance
from the University of Miami.
Vote
Required and Board of Directors’ Recommendation
Assuming a
quorum is present, the affirmative vote of a plurality of the votes
cast at the Annual Meeting, either in person or by proxy, is
required for the election of a director. For purposes of the
election of directors, abstentions and broker non-votes will have
no effect on the result of the vote.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” THE NOMINEE NAMED IN PROPOSAL NO. 1.
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS
The
following table sets forth certain information regarding the
ownership of our common stock as of November 13, 2020 (the
“Determination Date”) by: (i) each current director of our company;
(ii) each of our Named Executive Officers; (iii) all current
executive officers and directors of our company as a group; and
(iv) all those known by us to be beneficial owners of more than
five percent (5%) of our common stock.
Beneficial
ownership and percentage ownership are determined in accordance
with the rules of the SEC. Under these rules, beneficial ownership
generally includes any shares as to which the individual or entity
has sole or shared voting power or investment power and includes
any shares that an individual or entity has the right to acquire
beneficial ownership of within 60 days of the Determination Date,
through the exercise of any option, warrant or similar right (such
instruments being deemed to be “presently exercisable”). In
computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of our common stock
that could be issued upon the exercise of presently exercisable
options and warrants are considered to be outstanding. These
shares, however, are not considered outstanding as of the
Determination Date when computing the percentage ownership of each
other person.
To our
knowledge, except as indicated in the footnotes to the following
table, and subject to state community property laws where
applicable, all beneficial owners named in the following table have
sole voting and investment power with respect to all shares shown
as beneficially owned by them. Percentage of ownership is based on
10,019,856 shares of common stock outstanding as of the
Determination Date. Unless otherwise indicated, the business
address of each person in the table below is c/o LMP Automotive
Holdings, Inc., 500 East Broward Blvd., Suite 1900, Ft. Lauderdale,
Florida 33394. No shares identified below are subject to a
pledge.
Name |
|
Number
of
Shares |
|
|
Percent
of
Shares
Outstanding
(%) |
|
Officers and
Directors: |
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|
|
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|
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|
Samer Tawfik,
President, CEO, and Chairman of the Board of Directors |
|
|
3,834,417 |
(1) |
|
|
38.27 |
% |
William “Billy” Cohen,
Lead Independent Director |
|
|
225,449 |
(2) |
|
|
2.25 |
% |
Robert “Bob” J.
Morris, Jr., Director |
|
|
15,479 |
(3) |
|
|
* |
|
Elias Nader,
Director |
|
|
15,479 |
(4) |
|
|
* |
|
Evan Bernstein, Chief
Financial Officer |
|
|
10,000 |
|
|
|
* |
|
Richard Aldahan, Chief
Operating Officer |
|
|
0 |
|
|
|
0 |
% |
All directors and
executive officers as a group (5 persons) |
|
|
4,100,824 |
(5) |
|
|
40.93 |
% |
|
* |
Beneficial ownership
of less than 1.0% is omitted. |
|
(1) |
Includes
1,100,000 shares of common stock owned by ST RXR Investments, LLC,
an entity wholly owned and controlled by Mr. Tawfik. |
|
(2) |
The
number of shares beneficially owned by Mr. Cohen includes 25,000
shares of common stock that Mr. Cohen can acquire within 60 days of
the date hereof upon exercise of options issued pursuant to the
Company’s 2018 Equity Incentive Plan at $3.33 per share and 15,000
shares of common stock that may be acquired by Mr. Cohen within 60
days of the date hereof upon the exercise of options issued
pursuant to the Company’s 2018 Equity Incentive 2018 at $4.75 per
share. |
|
(3) |
The
number of shares beneficially owned by Mr. Morris includes 15,479
shares of common stock that may be acquired by Mr. Morris within 60
days hereof upon the exercise of options issued pursuant to the
Company’s 2018 Equity Incentive Plan at $4.75 per
share. |
|
(4) |
The
number of shares beneficially owned by Mr. Nader includes 15,479
shares of common stock that may be acquired by Mr. Nader within 60
days hereof upon the exercise of options issued pursuant to the
Company’s 2018 Equity Incentive Plan at $4.75 per
share. |
|
(5) |
See the information
contained in footnotes (1) – (4) above. |
Biographical
Information Concerning Executive Officers
Biographical
information concerning our Chief Executive Officer, who also serves
as a member of our Board of Directors, our Chief Financial Officer,
and our Chief Operating Officer are set forth below.
Samer “Sam”
Tawfik is the founder of LMP Automotive Holdings, Inc. and
has served as our President, Chief Executive Officer and Chairman
of the board of directors since January 2018. Prior to the founding
of LMP Automotive Holdings, Inc., Mr. Tawfik was the founder and
Chief Executive Officer of Telco Group, Inc. which was acquired by
Leucadia National Corp. in 2007 with a valuation of $160,000,000.
Mr. Tawfik also founded and was Chief Executive Officer of PT-1
Communications, Inc. which was acquired by Star Telecommunications
Inc. in 1998 with a valuation of $590,000,000. From February 1999
through March 2000, Mr. Tawfik served as a Director of Star
Telecommunications, Inc. Mr. Tawfik has extensive experience in
technology, finance, banking and statistical science. Awards given
to Mr. Tawfik and his prior companies include, Top 10 technology
& communications CEO in the U.S., number 1 on Inc. 500’s
fastest growing company list in the U.S. for two consecutive years,
largest pre-paid Telecom company in the world, Consumer Reports’
best new product of the year, JPM / KPMG Top 25 private employers,
number 1 fastest growing in N.Y., 10th largest private
company in N.Y., 4th largest international and
8th largest long-distance telecom company in the U.S.
behind AT&T, and many more.
Evan
Bernstein has served as the Company’s Chief Financial
Officer since September 2020. Prior to that, Mr. Bernstein had been
serving as the Company’s Controller since August 2020. From 2001 to
2004, Mr. Bernstein was an auditor at Morrison, Brown, Argiz, and
Farra, and a senior auditor at Crowe Horwath from 2004 to 2005.
From 2005 to 2008, Mr. Bernstein served as Assistant Controller at
the Braman Organization, rising to Controller from 2008 to 2009,
Senior Controller from 2009 to 2015 and Chief Financial Officer and
Treasurer of Braman Automotive Dealerships Miami from 2015 to 2019,
a role in which he was responsible for 23 franchises generating
approximately $2 billion in annual revenue.
Richard
Aldahan has served as the Company’s Chief Operating Officer
since July 2020. From 1993 to 2020, Mr. Aldahan held various
positions as an Owner and Dealer Principal, General Manager and
Treasurer for franchised dealership brands such as Toyota,
Chevrolet, Hyundai and Nissan. Since January 2019, Mr. Aldahan
served as the Owner and Dealer Principal of Nissan of Streetsboro,
Ohio. From late 2013 to early 2019, Mr. Aldahan took time away from
the automotive industry to focus on managing his personal real
estate properties.
Director’s
Qualifications
In
selecting a particular candidate to serve on our Board of
Directors, we consider the needs of our company based on particular
experiences, qualifications, attributes and skills that we believe
would be advantageous for our Board members to have and would
qualify such candidate to serve on our Board given our business
profile and the environment in which we operate. The table below
sets forth such experiences, qualifications, attributes and skills,
and identifies the ones that the director nominee
possess.
Attributes |
|
|
Mr.
Cohen |
|
Financial
Experience |
|
|
X |
|
Public
Board Experience |
|
|
X |
|
Industry
Experience |
|
|
|
|
Scientific
Experience |
|
|
|
|
Commercial
Experience |
|
|
|
|
Corporate
Governance Experience |
|
|
X |
|
Capital
Markets Experience |
|
|
X |
|
Management
Experience |
|
|
X |
|
Arrangements
Regarding Director Nominations
There are
no arrangements regarding the nomination of our
directors.
Family
Relationships
There are
no familial relationships between any of our executive officers and
directors.
Director or Officer
Involvement in Certain Legal Proceedings
Our
directors and executive officers were not involved in any legal
proceedings as described in Item 401(f) of Regulation S-K in the
past ten years.
Independence of the
Board of Directors
The Board
of Directors utilizes NASDAQ’s standards for determining the
independence of its members. In applying these standards, the Board
considers commercial, industrial, banking, consulting, legal,
accounting, charitable and familial relationships, among others, in
assessing the independence of directors, and must disclose any
basis for determining that a relationship is not material. The
Board has determined that William “Billy” Cohen is an independent
director within the meaning of the NASDAQ independence standards.
In making this independence determination, the Board did not
exclude from consideration as immaterial any relationship
potentially compromising the independence of the above
director.
Meetings of the
Board of Directors
The Board
of Directors held eight meetings during 2020. During 2020, all
directors attended more than 75% of the aggregate number of
meetings of the Board of Directors that were held during the time
that they served as members of the Board of Directors. We do not
have a formal policy regarding attendance by members of the Board
of Directors at the annual meeting of stockholders, but we strongly
encourage all members of the Board of Directors to attend our
annual meetings and expect such attendance except in the event of
extraordinary circumstances.
Committees of the
Board of Directors
The Board
of Directors has established and currently maintains the following
three standing committees: the Audit Committee, the Compensation
Committee, and the Nominating and Corporate Governance Committee
(the “N&GC”). The Board of Directors has adopted written
charters for each of these committees, which we make available free
of charge on or through our Internet website, along with other
items related to corporate governance matters, including our Code
of Conduct and Ethics applicable to all employees, officers and
directors. We maintain our Internet website at investors.lmpah.com.
You can access our committee charters and code of conduct on our
website by first clicking “Corporate Governance” and then
“Governance Documents.”
We intend
to disclose on our Internet website any amendments to or waivers
from our Code of Conduct and Ethics, as well as any amendments to
the charters of any of our standing committees. Any stockholder
also may obtain copies of these documents, free of charge, by
sending a request in writing to LMP Automotive Holdings, Inc., 500
East Broward Blvd., Suite 1900, Ft. Lauderdale, Florida 33394,
Attn: Chief Executive Officer.
Currently,
the Audit Committee consists of Mr. Cohen (Chair), Mr. Morris and
Mr. Nader, the Compensation Committee consists of Mr. Cohen
(Chair), Mr. Morris and Mr. Nader, and the N&GC consists of Mr.
Cohen (Chair), Mr. Morris and Mr. Nader. It is anticipated that,
following the Annual Meeting, Mr. Cohen will serve as Chair of the
Audit Committee, and that he will also serve as a member of the
Compensation Committee and the N&GC. During the 2019 fiscal
year, none of the Audit Committee, the Compensation Committee nor
the N&GC held any meetings.
Audit
Committee. Among other functions, the Audit Committee
authorizes and approves the engagement of the independent
registered public accounting firm, reviews the results and scope of
the audit and other services provided by the independent registered
public accounting firm, reviews our financial statements, reviews
and evaluates our internal control functions, approves or
establishes pre-approval policies and procedures for all
professional audit and permissible non-audit services provided by
the independent registered public accounting firm and reviews and
approves any proposed related party transactions. The Board of
Directors has determined that each of the current members of the
Audit Committee is an independent director within the meaning of
the NASDAQ independence standards and Rule 10A-3 promulgated by the
SEC under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). In addition, the Board of Directors has determined
that Mr. Cohen is an Audit Committee Financial Expert under
applicable SEC Rules and that each of the members of the Audit
Committee satisfies the NASDAQ standards of financial literacy and
financial or accounting expertise or experience.
Compensation
Committee. The Compensation Committee’s functions include
reviewing and approving the compensation and benefits for our
executive officers, administering our equity compensation plans and
making recommendations to the Board of Directors regarding these
matters. Neither the Compensation Committee nor the Board of
Directors retained any consultants to assist in the review and
approval of the compensation and benefits for the executive
officers of our company during 2019. The Board of Directors has
determined that each current member of the Compensation Committee
is an independent director within the meaning of the NASDAQ
independence standards.
Nominating and
Corporate Governance Committee. The N&CGC searches for and
recommends to the Board of Directors potential nominees for
director positions and makes recommendations to the Board of
Directors regarding the size, composition and compensation of the
Board of Directors and its committees. The Board of Directors has
determined that each current member of the N&CGC is an
independent director within the meaning of the NASDAQ independence
standards.
Selection of Board
Candidates
In
selecting candidates for the Board of Directors, the Board (or, as
used throughout this section, the N&GC, as applicable) begins
by determining whether the incumbent directors whose terms expire
at the annual meeting of stockholders desire and are qualified to
continue their service on the Board of Directors. If there are
positions on the Board of Directors for which the Board will not be
re-nominating an incumbent director, or if there is a vacancy on
the Board of Directors, the Board will solicit recommendations for
nominees from persons whom the Board believes are likely to be
familiar with qualified candidates, including members of our Board
of Directors and our senior management. The Board may also engage a
search firm to assist in the identification of qualified
candidates. The Board will review and evaluate those candidates
whom it believes merit serious consideration, taking into account
all available information concerning the candidate, the existing
composition and mix of talent and expertise on the Board of
Directors and other factors that it deems relevant. In conducting
its review and evaluation, the Board may solicit the views of
management and other members of the Board, and may conduct
interviews of proposed candidates.
The Board
generally requires that all candidates for the Board of Directors
be of the highest personal and professional integrity and have
demonstrated exceptional ability and judgment. The Board will
consider whether such candidate will be effective, in conjunction
with the other members of the Board of Directors, in collectively
serving the long-term interests of our stockholders. In addition,
the Board requires that all candidates have no interests that
materially conflict with our interests and those of our
stockholders, have meaningful management, advisory or policy making
experience, have a general appreciation of the major business
issues facing us and have adequate time to devote to service on the
Board of Directors.
The Board
will consider stockholder recommendations for nominees to fill
director positions, provided that the Board will not entertain
stockholder nominations from stockholders who do not meet the
eligibility criteria for submission of stockholder proposals under
Rule 14a-8 of Regulation 14A under the Exchange Act. Stockholders
may submit written recommendations for nominees to the Board of
Directors, together with appropriate biographical information and
qualifications of such nominees as required by our Bylaws, to our
Secretary following the same procedures as described in
“Stockholder Communications” in this Proxy Statement. In order for
a nominee for directorship submitted by a stockholder to be
considered, such recommendation must be received by the Corporate
Secretary by the time period set forth in our most recent proxy
statement for the submission of stockholder proposals under Rule
14a-8 of Regulation 14A under the Exchange Act. The Corporate
Secretary shall then deliver any such communications to the
Chairman of the Board or the N&GC, as applicable. The Board
will evaluate stockholder recommendations for candidates for the
Board of Directors using the same criteria as for other candidates,
except that the Board may consider, as one of the factors in its
evaluation of stockholder recommended candidates, the size and
duration of the interest of the recommending stockholder or
stockholder group in our equity.
Board
Leadership Structure and Role in Risk Oversight
Our Board
of Directors is currently chaired by Mr. Tawfik, who also serves as
our Chief Executive Officer, having been engaged in such roles
since the Company’s inception. The Board does not believe that it
is appropriate to prohibit one person from serving as both Chairman
of the Board and Chief Executive Officer. Our Board will
continually evaluate our leadership structure and could in the
future decide to separate the Chairman and Chief Executive Officer
positions if it believes that doing so would serve the best
interests of our company and its stockholders.
As noted
above, our Board has determined that Mr. Cohen, our Lead
Independent Director, is independent within the meaning of the
NASDAQ independence standards. As such, and in his role as Lead
Independent Director, we believe that Mr. Cohen can help to ensure
that our independent directors have a strong voice in the
leadership of our company, including having the ability to provide
management with guidance and feedback on their performance. To
further strengthen the voice of our independent directors, we
provide that such directors meet on a regular basis, and we have
provided that all of the members of the Audit Committee, the
Compensation Committee and the N&GC are independent.
Our Board
of Directors and the Audit Committee thereof is responsible for
overseeing the risk management processes on behalf of our company.
The Board and, to the extent applicable, the Audit Committee,
receive and review periodic reports from management, auditors,
legal counsel and others, as considered appropriate regarding our
company’s assessment of risks. Where applicable, the Audit
Committee reports regularly to the full Board of Directors with
respect to risk management processes. The Audit Committee and the
full Board of Directors focus on the most significant risks facing
our company and our company’s general risk management strategy, and
also ensure that risks undertaken by our company are consistent
with the Board’s appetite for risk. While the Board oversees the
risk management of our company, management is responsible for
day-to-day risk management processes. We believe this division of
responsibilities is the most effective approach for addressing the
risks facing our company and that our Board leadership structure
supports this approach.
Stockholder
Communications
All
stockholder communications must: (i) be addressed to our Secretary
at our address; (ii) be in writing either in print or electronic
format; (iii) be signed by the stockholder sending the
communication; (iv) indicate whether the communication is intended
for the entire Board of Directors, a committee thereof, or the
independent directors; (v) if the communication relates to a
stockholder proposal or director nominee, identify the number of
shares held by the stockholder, the length of time such shares have
been held, and the stockholder’s intention to hold or dispose of
such shares, provided that we will not entertain shareholder
proposals or shareholder nominations from shareholders who do not
meet the eligibility and procedural criteria for submission of
shareholder proposals under Rule 14a-8 of Regulation 14A under the
Exchange Act; and (vi) if the communication relates to a director
nominee being recommended by the stockholder, must include
appropriate biographical information of the candidate as is
required by our Bylaws.
Upon
receipt of a stockholder communication that is compliant with the
requirements identified above, the Chief Financial Officer shall
promptly deliver such communication to the appropriate member(s) of
the Board of Directors or committee member(s) identified by the
stockholder as the intended recipient of such communication by
forwarding the communication to either the chairman of the Board of
Directors and Chief Executive Officer, the chairman of the
applicable committee, or to each of the independent directors, as
the case may be.
The Chief
Executive Officer may, in his sole discretion and acting in good
faith, provide copies of any such stockholder communication to any
one or more of our directors and executive officers, except that in
processing any stockholder communication addressed to the
independent directors, the Chief Executive Officer may not copy any
member of management in forwarding such communications. In
addition, the Chief Executive Officer may, in his sole discretion
and acting in good faith, not forward certain items if they are
deemed of a commercial or frivolous nature or otherwise
inappropriate for consideration by the intended recipient and any
such correspondence may be forwarded elsewhere in our company for
review and possible response.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Approval for
Related Party Transactions
It is our
practice and policy to comply with all applicable laws, rules and
regulations regarding related-person transactions. The Related
Party Transactions Policy adopted by our Board of Directors
requires that all officers, directors and nominees disclose to the
Chief Executive Officer the nature of any transaction that is
entered into between the Company any related party of such officer,
director or nominee (including any immediate family member of such
employee, officer or director, and any entity owned or controlled
by such persons). The Chief Executive Officer must bring the
transaction to the attention of the Audit Committee, which must
review and approve the transaction in advance. In considering such
transactions, the Audit Committee takes into account the relevant
available facts and circumstances.
Related
Party Transactions
During
2018, the Company entered into a non-interest bearing revolving
line of credit agreement with an entity related to Mr. Tawfik.
Amounts drawn on the line of credit become due and payable on the
earlier of written demand by the lender or May 21, 2020, as defined
in the agreement. The line of credit was paid in full in December
2019.
During
2018, the Company entered into a lease with an entity wholly owned
by Mr. Tawfik for its facilities in Plantation, Florida. The
five-year, triple-net lease provides for monthly payments of
$28,500 plus CAM and sales taxes, with annual escalations of 3%.
The Company has an option to extend the lease for an additional
five-year term, with annual escalations of 3%. The option to extend
the lease is not recognized in the right-of-use asset or operating
lease liability. On July 8, 2020, the Company purchased the
building where its former headquarters in Plantation, Florida were
located, from its landlord, ST RXR Investments, LLC, a related
party owned by Mr. Tawfik, for $3,600,000 in cash.
The
Company leases vehicles under its subscription and sales-type
programs to certain officers and directors under 6-month contracts.
Total payments made by officers and directors for the vehicle
leases amounted to $60,869 and $84,459 for the three- and six-month
period ended June 30, 2020.
PROPOSAL NO.
2
RATIFICATION OF
APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We have
appointed Grassi & Co., CPAs, P.C. (“Grassi”) to serve as our
independent registered public accounting firm for the fiscal year
ending December 31, 2020. Grassi has served as our independent
registered public accounting firm since 2018.
In the
event that ratification of this appointment of independent
registered public accounting firm is not approved by the
affirmative vote of a majority of votes cast on the matter, then
the appointment of our independent registered public accounting
firm will be reconsidered by us.
Your
ratification of the appointment of Grassi as our independent
registered public accounting firm for the fiscal year ending
December 31, 2020 does not preclude us from terminating our
engagement of Grassi and retaining a new independent registered
public accounting firm, if we determine that such an action would
be in our best interest.
The
following table sets forth the fees billed to us for professional
services rendered by Grassi for the years ended December 31, 2019
and 2018:
Services |
|
2019 |
|
|
2018 |
|
Audit Fees
(1) |
|
$ |
166,746 |
|
|
$ |
117,266 |
|
Audit-Related fees
(2) |
|
|
79,608 |
|
|
|
89,741 |
|
Tax fees
(3) |
|
|
20,961 |
|
|
|
9,563 |
|
Other fees
(4) |
|
|
- |
|
|
|
50,519 |
|
Total
fees |
|
$ |
267,315 |
|
|
$ |
267,089 |
|
|
(1) |
Audit Fees –
Audit fees consist of fees billed for the audit of our annual
consolidated financial statements and the review of the interim
consolidated financial statements. |
|
(2) |
Audit-Related Fees
– Audit-related fees consist of services that are normally
provided in connection with registration statements, including the
registration statement for our initial public offering. |
|
(3) |
Tax Fees – Tax fees
consist of aggregate fees for tax compliance and tax advice,
including the review and preparation of our various jurisdictions’
income tax returns. |
|
(4) |
Other fees – Other
fees consist of consulting services associated with potential
acquisition identification. |
Pre-Approval
Policies and Procedures
The Audit
Committee has the authority to appoint or replace our independent
registered public accounting firm (subject, if applicable, to
stockholder ratification). The Audit Committee is also responsible
for the compensation and oversight of the work of the independent
registered public accounting firm (including resolution of
disagreements between management and the independent registered
public accounting firm regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work.
The independent registered public accounting firm was engaged by,
and reports directly to, the Audit Committee.
The Audit
Committee pre-approves all audit services and permitted non-audit
services (including the fees and terms thereof) to be performed for
us by our independent registered public accounting firm, subject to
the de minimis exceptions for non-audit services described in
Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7)(i)(C)
of Regulation S-X, provided that all such excepted services are
subsequently approved prior to the completion of the audit. We have
complied with the procedures set forth above, and the Audit
Committee has otherwise complied with the provisions of its
charter.
Vote
Required and Board of Directors’ Recommendation
Assuming a
quorum is present, the affirmative vote of a majority of the shares
present at the Annual Meeting and entitled to vote, either in
person or by proxy, is required for approval of Proposal No. 2. For
purposes of the ratification of our independent registered public
accounting firm, abstentions will have the same effect as a vote
against this proposal and broker non-votes will have no effect on
the result of the vote.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” PROPOSAL NO. 2.
PROPOSAL NO.
3
APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO
REDUCE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK AND
PREFERRED STOCK
The Board
unanimously recommends that our stockholders approve a proposal to
amend Section 1 of Article IV of our certificate of incorporation
to decrease the number of authorized shares of common stock from
100,000,000 shares to 29,000,000 shares and preferred stock from
20,000,000 shares to 1,000,000 shares. The full text of Section 1
of Article IV of the certificate of incorporation as proposed to be
amended by this proposal is as follows:
“Section 1.
Authorized Shares. The aggregate number of shares which
the Corporation shall have the authority to issue is 30,000,000;
1,000,000 shares of the par value of $0.00001 shall be designated
as Preferred Stock and 29,000,000 shares of the par value of
$0.00001 shall be designated Common Stock.”
If the
proposed amendment to the certificate of incorporation is approved
by the stockholders, it will become effective upon filing and
recording of the Certificate of Amendment with the Delaware
Secretary of State as required by the Delaware General Corporation
Law.
Reasons
for and Effect of the Proposed Amendment
The reason for the proposed decrease in the number of authorized
shares is to effect a significant saving in the amount of franchise
tax that the Company must pay each year in the State of Delaware.
The Company pays franchise tax in Delaware based, in part, on the
number of shares of common stock and preferred stock that are
authorized in the certificate of incorporation. By reducing the
authorized number of shares as proposed, the Company will reduce
its annual franchise tax from approximately $102,000 prior to the
authorized share reduction to approximately $30,000 after the
authorized share reduction.
Impact
of the Proposed Reduction
If
approved, the proposed reduction of authorized shares will not
impact issued and outstanding shares of common stock or outstanding
warrants or options to purchase our common stock. As of November
13, 2020, 10,019,856 shares of common stock were issued and
outstanding, and no shares of preferred stock were issued and
outstanding. The Board believes that the new reduced level of
authorized shares will be adequate to cover anticipated
requirements in the foreseeable future. In the event that
additional authorized shares are needed in the future, the
stockholders will be asked to approve an amendment to the
certificate of incorporation, as amended to increase the authorized
shares to the level needed at that time.
Vote
Required and Board of Directors’ Recommendation
Assuming a
quorum is present, the affirmative vote of a majority of the votes
entitled to be cast, either in person or by proxy, is required for
approval of Proposal No. 3. For purposes of approval of Proposal
No. 3, abstentions will have the same effect as a vote against this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” PROPOSAL NO. 3.
PROPOSAL NO.
4
ADVISORY VOTE ON
EXECUTIVE COMPENSATION
We are
providing stockholders an advisory vote on executive compensation.
This nonbinding vote is required under Section 14A of the Exchange
Act. We intend to seek an advisory vote on executive compensation
annually.
The
section entitled “Executive Compensation” describes the
compensation of our principal executive officers and our other most
highly compensated executive officers during the 2019 fiscal year.
Such executive officers are referred to in this Proposal No. 4 as
our named executive officers.
Our Board
of Directors believes that the policies, procedures and
compensation articulated in the “Executive Compensation” section of
this proxy statement were appropriate for our company with respect
to our 2019 fiscal year, and that the compensation of our named
executive officers in 2019 reflects and supports these compensation
policies and procedures.
We are
asking our stockholders to indicate their support at the Annual
Meeting for the compensation of our named executive officers as
described in this proxy statement. This vote is intended to provide
an overall assessment of our policies and procedures relating to
the compensation of our named executive officers with respect to
our 2019 fiscal year, rather than focus on any specific item of
compensation. Further, in evaluating this proposal, we note that:
(i) one of our Named Executive Officers for the 2019 fiscal year,
namely Bryan Silverstein, our former Chief Financial Officer, was
terminated from his position with the Company on April 19, 2020;
and (ii) Evan Bernstein, our current Chief Financial Officer since
September 14, 2020 did not receive any compensation during the 2019
fiscal year.
Accordingly, we are
recommending that our stockholders vote FOR the following
resolution:
RESOLVED,
that the stockholders of LMP Automotive Holdings, Inc. approve, on
an advisory basis, the compensation of the named executive officers
of LMP Automotive Holdings, Inc., as disclosed in this proxy
statement for the 2020 Annual Meeting of Stockholders pursuant to
Item 402 of Regulation S-K with respect to our 2019 fiscal year,
including, as applicable, the Summary Compensation Table and the
other related tables and disclosures contained in the section of
this proxy statement captioned “Executive Compensation”.
This
advisory vote on executive compensation, commonly referred to as a
‘say-on-pay’ advisory vote, is not binding on our Board of
Directors. However, our Board of Directors will take into account
the result of the vote when determining future executive
compensation arrangements.
Vote
Required and Board of Directors’ Recommendation
Assuming a
quorum is present, the affirmative vote of a majority of the shares
present at the Annual Meeting, either in person or by proxy, and
entitled to vote, is required for approval of this Proposal No. 4.
Because your vote is advisory, it will not be binding upon our
Board of Directors. For purposes of the approval of Proposal No. 4,
abstentions will have the same effect as a vote against this
proposal, and broker non-votes will have no effect on the result of
the vote.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” PROPOSAL NO. 4.
PROPOSAL NO.
5
APPROVAL OF AN
AMENDMENT TO REDUCE THE REQUIRED SHAREHOLDER VOTE THRESHOLD FOR THE
REMOVAL OF A MEMBER OF THE BOARD OF DIRECTORS
The
Company’s Bylaws (the “Bylaws”) currently provides that a member of
the Board of Directors of the Company may only be removed by the
affirmative vote of the holders of not less than two thirds
(66.66%) of the voting power of the then-outstanding shares of
capital stock of the Company entitled to vote generally at an
election of directors.
The Board
of Directors hereby requests that the Company’s stockholders
decrease the required stockholder vote threshold for the removal of
a member of the Board of Directors from 66.66% to 50.01%. The full
text of Section 20 of the Bylaws as proposed to be amended by this
proposal is as follows (the “Bylaws Amendment
Proposal”):
“Section 20.
Removal. Subject to any limitations imposed by applicable law
or the Certificate of Incorporation, the Board of Directors or any
director may be removed from office at any time with or without
cause by the affirmative vote of the holders of not less than
50.01% of the voting power of all then-outstanding shares of
capital stock of the corporation entitled to vote generally at an
election of directors.”
The Bylaws
Amendment Proposal will not affect the Board of Director’s ability
to fix the authorized number of directors within the authorized
range.
The Board
of Directors believes that reducing the stockholder vote threshold
required to remove a member of the Board of Directors is in the
best interests of the Company and its stockholders. The Board of
Directors believes that the Bylaws Amendment Proposal will allow
for greater flexibility and efficiency among the Board of Directors
and will enhance the overall collective effectiveness of the Board
of Directors.
Vote
Required and Board of Directors’ Recommendation
Assuming a
quorum is present, the affirmative vote of seventy five percent
(75%) of the issued and outstanding shares of common stock is
required for the approval of this Proposal No. 5. For purposes of
approval of this Proposal No. 5, abstentions will have the same
effect as a vote against this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE HOLDERS OF
PREFERED STOCK VOTE
“FOR” THIS PROPOSAL NO. 5.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit
Committee of the Board of Directors, on behalf of the Board of
Directors, serves as an independent and objective party to monitor
and provide general oversight of the integrity of our financial
statements, the independent registered public accounting firm’s
qualifications and independence, the performance of the independent
registered public accounting firm, the compliance by us with legal
and regulatory requirements and our standards of business conduct.
The Audit Committee performs these oversight responsibilities in
accordance with its Audit Committee Charter.
Our
management is responsible for preparing our financial statements
and our financial reporting process. Our independent registered
public accounting firm is responsible for performing an independent
audit of our consolidated financial statements in accordance with
the standards of the Public Company Accounting Oversight Board
(“PCAOB”). The Audit Committee’s responsibility is to administer
and oversee these processes.
The Audit
Committee met with the independent registered public accounting
firm, with and without management present, to discuss the audit
plan, the results of their examinations, and the overall quality of
our financial reporting.
In this
context, the Audit Committee has reviewed and discussed the audited
financial statements for the year ended December 31, 2019 with
management and with the independent registered public accounting
firm. The Audit Committee has discussed with the independent
registered public accounting firm the matters required to be
discussed by Auditing Standard No. 16, Communications with Audit
Committees, which includes, among other items, matters related
to the conduct of the audit of our annual financial
statements.
The Audit
Committee has also received the written disclosures and the letter
from the independent registered public accounting firm required by
applicable requirements of the PCAOB regarding the independent
accountant’s communications with the Audit Committee concerning
independence, and has discussed with the independent registered
public accounting firm the issue of its independence from us and
management. In addition, the Audit Committee has considered whether
the provision of any non-audit services by the independent
registered public accounting firm in 2019 is compatible with
maintaining the registered public accounting firm’s independence
and has concluded that it is.
Based on
its review of the audited financial statements and the various
discussions noted above, the Audit Committee recommended to the
Board of Directors that the audited financial statements be
included in our Annual Report on Form 10-K for the year ended
December 31, 2019.
|
Respectfully, |
|
|
|
William
Cohen, Chairman |
|
Robert
J. Morris, Jr. |
|
Elias
Nader |
The
foregoing Audit Committee Report does not constitute soliciting
material and shall not be deemed filed or incorporated by reference
into any of our filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except
to the extent we specifically incorporate this Audit Committee
Report by reference therein.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth information regarding compensation
earned during 2019 and 2018 by our principal executive officers and
our other most highly compensated executive officers as of the end
of the 2019 fiscal year (“Named Executive Officers”).
Name
and Principal Position |
|
Year |
|
|
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($)(1) |
|
|
Option
Awards
($)(1) |
|
|
All
Other Compensation
($) |
|
|
Total
($) |
|
Samer
Tawfik, Chairman, |
|
2019 |
|
|
$ |
120,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
120,000 |
|
President
and CEO |
|
2018 |
|
|
$ |
120,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
120,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bryan
Silverstein, Former CFO |
|
2019 |
|
|
$ |
125,000 |
|
|
$ |
36,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
161,000 |
|
|
|
2018 |
(2) |
|
$ |
39,450 |
|
|
$ |
12,000 |
|
|
$ |
- |
|
|
$ |
35,280 |
|
|
$ |
- |
|
|
$ |
86,730 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evan
Bernstein, CFO |
|
2019 |
(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2018 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
Aldahan, COO |
|
2019 |
(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2018 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
Cohen |
|
2019 |
|
|
$ |
24,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
24,000 |
|
Board
of Directors |
|
2018 |
|
|
$ |
20,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
63,650 |
|
|
$ |
- |
|
|
$ |
83,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bob
Morris |
|
2019 |
(5) |
|
$ |
16,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
39,000 |
|
|
$ |
- |
|
|
$ |
55,000 |
|
Board
of Directors |
|
2018 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elias
Nader |
|
2019 |
(5) |
|
$ |
16,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
39,000 |
|
|
$ |
- |
|
|
$ |
55,000 |
|
Board
of Directors |
|
2018 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith
Locker |
|
2019 |
(5) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
95,520 |
|
|
$ |
- |
|
|
$ |
95,520 |
|
Former
Member of Board of Directors |
|
2018 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
(1) |
Represents
the aggregate grant date fair value of the award computed in
accordance with the provisions of FASB ASC Topic 718. The
assumptions used in calculating the aggregate grant date fair value
of the awards reported in this column are set forth in Note 1 to
our consolidated financial statements included in this annual
report to Form 10-K. |
|
(2) |
Mr.
Silverstein began his employment with our company in September 2018
and was terminated in April 2020. Mr. Silverstein’s option awards
have since been forfeited. |
|
(3) |
Mr.
Bernstein began his employment with our company in August
2020. |
|
(4) |
Mr.
Aldahan began his employment with our company in July
2020. |
|
(5) |
Messrs.
Morris, Nader, and Locker joined the Board of Directors in 2019.
Mr. Locker resigned from the Board of Directors in April 2020, at
which point his option awards were forfeited. |
Narrative
Disclosures Regarding Compensation; Employment
Agreements
Samer Tawfik
Employment Agreement
On
February 20, 2018, our wholly owned subsidiary, LMPMotors.com, LLC,
and our Chairman, President and Chief Executive Officer, Samer
Tawfik, entered into an employment agreement, or the Tawfik
agreement, pursuant to which Mr. Tawfik shall serve as Chief
Executive Officer of LMPMotors.com, LLC. Pursuant to the Tawfik
agreement, his annual salary is equal to $120,000.
Bryan
Silverstein Employment Agreement
On August
31, 2018, our wholly owned subsidiary, LMPMotors.com, LLC, and our
Chief Financial Officer, Bryan Silverstein, entered into an
employment agreement, pursuant to which Mr. Silverstein’s annual
salary is equal to $125,000. Mr. Silverstein’s employment agreement
was terminated on April 19, 2020 pursuant to and in accordance with
the terms thereof.
Evan
Bernstein Employment Agreement
On August
8, 2020, the Company entered into an employment agreement and
related options agreement with our Chief Financial Officer, Evan
Bernstein. Pursuant to such agreements, Mr. Bernstein will receive
an annual base salary of $240,000 per year plus 4% of the
consolidated share of factory statement income in which the Company
has an ownership interest (the “Revenue Share”), not to exceed
$25,000 per month. Mr. Bernstein is also entitled to a guaranteed
bonus of $20,000 per month for his first six months of employment,
unless his Revenue Share is greater than $20,000 in any such month.
In addition, Mr. Bernstein received options to purchase 40,000
shares of the Company’s common stock at an exercise price of $7.50.
The options will vest pro rata on an annual basis over a two-year
period.
Richard Aldahan
Employment Agreement
Effective
July 27, 2020, the Company entered into an employment agreement and
related options agreement with our Chief Operating Officer, Richard
Aldahan. Pursuant to such agreements, Mr. Aldahan will receive an
annual base salary of $120,000 per year plus 3% of the Company’s
pre-tax income, not to exceed $50,000 per month. In addition, Mr.
Aldahan received options to purchase 40,000 shares of the Company’s
common stock at an exercise price of $8.21. The options will vest
pro rata on an annual basis over a two-year period.
As part of its designated duties, our Compensation Committee plans
to review the salaries and option grants to our executive
officers.
Outstanding Equity
Awards at Fiscal Year End
2019
Outstanding Equity Awards at Fiscal Year-end Table
The
following table sets forth information regarding the outstanding
equity awards held by our Named Executive Officers as of the end of
our 2019 fiscal year:
Name |
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#) |
|
Option
Exercise Price
($) |
|
Option
Expiration
Date |
|
Number
of Shares or Units of Stock That Have Not Vested
(#) |
|
Market
Value of Shares or Units of Stock That Have Not Vested
($) |
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights That Have Not Vested
(#) |
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or Other Rights That Have Not Vested
($) |
Samer
Tawfik |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
|
— |
|
— |
|
— |
|
— |
Bryan
Silverstein |
|
4,940 |
|
13,060 |
|
N/A |
|
$4.75 |
|
9/3/2023 |
|
— |
|
— |
|
— |
|
— |
We have
not engaged in any option re-pricings or other modifications to any
of our outstanding equity awards to our Named Executive Officers
during fiscal year 2019.
Compensation of
Directors
2019
Director Compensation Table
The
following Director Compensation Table sets forth information
concerning compensation for services rendered by our independent
directors for fiscal year 2019.
Name |
|
Fees
Earned
or
Paid in
Cash
($) |
|
|
Stock
Awards
($) |
|
|
Option
Awards
($)(1) |
|
|
All
Other
Compensation
($) |
|
|
Total
($) |
|
William
Cohen (2) |
|
$ |
24,000 |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
24,000 |
|
Robert
J. Morris, Jr. (3) |
|
|
16,000 |
|
|
|
— |
|
|
|
39,000 |
|
|
|
— |
|
|
|
55,000 |
|
Elias
Nader (4) |
|
|
16,000 |
|
|
|
— |
|
|
|
39,000 |
|
|
|
— |
|
|
|
55,000 |
|
Keith
Locker (5) |
|
|
- |
|
|
|
— |
|
|
|
95,520 |
|
|
|
— |
|
|
|
95,520 |
|
Total: |
|
$ |
56,000 |
|
|
|
— |
|
|
$ |
173,520 |
|
|
|
— |
|
|
$ |
229,520 |
|
|
(1) |
Represents
the aggregate grant date fair value under FASB ASC Topic 718 of
options to purchase shares of our common stock granted during
2019. |
|
(2) |
Mr.
Cohen was appointed to serve as a member of the Board in March
2018. As of December 31, 2019, Mr. Cohen held options to purchase
up to 40,000 shares of our common stock. |
|
(3) |
Mr.
Morris was appointed to serve as a member of the Board in May 2019.
As of December 31, 2019, Mr. Morris held options to purchase up to
20,000 shares of our common stock. |
|
(4) |
Mr.
Nader was appointed to serve as a member of the Board in May 2019.
As of December 31, 2019, Mr. Nader held options to purchase up to
20,000 shares of our common stock. |
|
(5) |
Mr.
Locker was appointed to serve as a member of the Board in December
2019. As of December 31, 2019, Mr. Locker held options to purchase
up to 12,000 shares of our common stock. Mr. Locker
resigned from the Board of Directors on April 19, 2020. |
Mr. Tawfik
has not been included in the Director Compensation Table because he
is a Named Executive Officer of our company, and all compensation
paid to him during 2019 is reflected in the Summary Compensation
Table above.
Director
Compensation Program
Our
compensation program for directors for the 2019 fiscal year
consisted of: (i) a grant of options to purchase up to 20,000
shares of common stock, which options vested 50% three months
following the Company’s initial public offering and the remainder
vest pro rata over three years; and (ii) an annual cash
payment of $24,000 per year, payable annually. In addition to the
annual fee described in item (ii) of the immediately preceding
sentence, we agreed to pay to the Lead Independent Director an
annual amount of $4,000 in 2018 and $8,000 in 2019.
Equity
Compensation Plan Information
The
following table provides aggregate information as of the end of the
2019 fiscal year with respect to all of the compensation plans
under which our common stock is authorized for issuance, including
our 2018 Equity Incentive Plan:
Plan
Category |
|
Number of
securities to be issued upon exercise of outstanding options,
warrants and rights |
|
|
Weighted-average
exercise price of outstanding options, warrants and
rights |
|
|
Number of
securities remaining available for future issuance under equity
compensation plans (excluding securities to be issued upon exercise
of outstanding options, warrants and rights) |
|
Equity
compensation plans approved by security holders |
|
|
711,000 |
|
|
$ |
4.57 |
|
|
|
789,000 |
|
Equity
compensation plans not approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total: |
|
|
711,000 |
|
|
$ |
4.57 |
|
|
|
789,000 |
|
SUBMISSION OF
STOCKHOLDER PROPOSALS
We intend
to hold our 2021 annual meeting of stockholders (the “2021 Annual
Meeting”) in December 2021. To be considered for inclusion in our
notice of annual meeting and proxy statement for, and for
presentation at, the 2021 Annual Meeting, a stockholder proposal
must be received by the Chief Financial Officer, LMP Automotive
Holdings, Inc., 500 East Broward Blvd., Suite 1900, Ft. Lauderdale,
Florida 33394, no later than July 30, 2021, and must otherwise
comply with applicable rules and regulations of the SEC, including
Rule 14a-8 of Regulation 14A under the Exchange Act.
Our Bylaws
require advance notice of any proposal by a stockholder intended to
be presented at an annual meeting that is not included in our
notice of annual meeting and proxy statement because it was not
timely submitted under the preceding paragraph, or made by or at
the direction of any member of the Board of Directors, including
any proposal for the nomination for election as a director. To be
considered for such presentation at the 2021 Annual Meeting, any
such stockholder proposal must be received by the Chief Financial
Officer, LMP Automotive Holdings, Inc., no earlier than August 23,
2021 and no later than September 12, 2021, provided, that if the
2021 Annual Meeting is scheduled to be held on a date more than 30
days before the anniversary date of the 2020 annual meeting of
stockholders or more than 30 days after the anniversary date of the
2020 annual meeting of stockholders, a stockholder’s proposal shall
be timely if delivered to, or mailed to and received by, our
company not later than the close of business on the later of (A)
the 90th day prior to the scheduled date of the 2020
Annual Meeting (but in no event no earlier than the close of
business on the 120th day prior to the scheduled date of
the 2020 Annual Meeting), or (B) the 10th day following
the day on which public announcement of the date of the 2020 Annual
Meeting is first made by us, and in any case discretionary
authority may be used if such proposal is untimely
submitted.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires
our executive officers and directors, and persons who own more than
10% of a registered class of our equity securities (“Reporting
Persons”), to file reports of ownership and changes in ownership
with the SEC. Based solely on our review of the reports filed by
Reporting Persons, and written representations from certain
Reporting Persons that no other reports were required for those
persons, we believe that, during the year ended December 31, 2019,
the Reporting Persons met all applicable Section 16(a) filing
requirements.
OTHER
MATTERS
We will
furnish without charge to each person whose proxy is being
solicited, upon the written request of any such person, a copy of
our Annual Report on Form 10-K for the fiscal year ended December
31, 2019, as filed with the SEC, including the financial
statements. Requests for copies of such Annual Report on Form 10-K
should be directed to LMP Automotive Holdings, Inc., 500 East
Broward Blvd., Suite 1900, Ft. Lauderdale Florida 33394, Attn:
Chief Financial Officer.
Our Board
of Directors does not know of any other matters that are to be
presented for action at the Annual Meeting. If any other matters
are properly brought before the Annual Meeting or any adjournments
thereof, the persons named in the enclosed proxy will have the
discretionary authority to vote all proxies received with respect
to such matters in accordance with their best judgment.
It is
important that the proxies be returned promptly and that your
shares are represented at the Annual Meeting. Stockholders are
urged to mark, date, execute and promptly return the accompanying
proxy card in the enclosed envelope.
|
By
order of the Board of Directors, |
|
|
|
/s/ Sam
Tawfik |
|
Sam
Tawfik |
|
Chief
Executive Officer |
November
27, 2020
Ft.
Lauderdale, Florida


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