UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. ____)
Filed
by the Registrant ☒ Filed
by a Party other than the Registrant
☐
Check
the appropriate box:
☒
Preliminary Proxy
Statement.
☐
Confidential, for
use of the Commission Only (as permitted by Rule
14a-6(e)(2)).
☐
Definitive Proxy
Statement.
☐
Definitive
Additional Materials.
☐
Soliciting
Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12.
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COMMAND CENTER, INC.
(Name
of Registrant as Specified in its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
☒
No fee
required.
☐
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1)
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Title
of each class of securities to which transaction applies:
_______________________________________________________________________________________
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2)
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Aggregate
number of securities to which transaction applies:
______________________________________________________________________________________
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3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
______________________________________________________________________________________
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4)
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Proposed
maximum aggregate value of transaction:
______________________________________________________________________________________
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5)
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Total
fee paid:
_________________________________________________________________________
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☐
Fee paid
previously with preliminary materials.
☐
Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
_________________________________________________________________
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2)
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Form,
Schedule or Registration Statement No.:
________________________________________________
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3)
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Filing
Party:
___________________________________________________________________________
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4)
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Date
Filed:
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COMMAND CENTER, INC.
3609 S. Wadsworth Boulevard, Suite 250
Lakewood, Colorado 80235
Telephone: 866-464-5844
[PRELIMINARY PROXY STATEMENT – SUBJECT TO
COMPLETION]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January [ ● ], 2018
Fellow
Command Center Shareholders:
The
Annual Meeting of Shareholders, or the Annual Meeting, of Command
Center, Inc., a Washington corporation, will be held at [ ●
], on [ ● ], January [ ● ], 2018, at [ ● ] for
the following purposes:
1.
to elect seven
directors to serve until the next annual meeting of shareholders,
or until their respective successors are elected and
qualified;
2.
to ratify the
selection of EKS&H LLLP as the Company’s independent
auditors for the fiscal year ending December 30, 2017;
3.
to approve, on a
non-binding advisory vote, the compensation paid to the
Company’s Named Executive Officers as disclosed in the
attached Proxy Statement (commonly known as
“Say-on-Pay”); and
4.
to transact such
other business as may properly come before the
meeting.
Your vote will be especially
important this year.
As you may
have heard, Ephraim Fields (together with his affiliates and
related parties “Fields”) has notified Command Center
that he intends to nominate a slate of five nominees for election
to the Board of Directors at the meeting in opposition to the
nominees recommended by our Board of Directors. You may receive a
proxy statement, white proxy card and other solicitation materials
from Fields. The Board of Directors strongly urges you not to sign
or return any white proxy card sent to you by
Fields.
The Command Center Board of Directors does not
endorse any Fields nominees and unanimously recommends that you
vote
FOR
the election of each of the nominees
proposed by the Board of Directors on your
GOLD
proxy card. If you have previously submitted a
white proxy card sent to you by Fields, you can revoke that proxy
and vote for our Board of Directors’ nominees and on the
other matters to be voted on at the Annual Meeting by using the
enclosed
GOLD
proxy card. Command Center also notes that
it is not responsible for the accuracy of any information provided
by or relating to Fields or its nominees contained in solicitation
materials filed or disseminated by or on behalf of Fields or any
other statements that Fields may make.
Whether or not you will attend the meeting, we
hope that your shares are represented and voted. In advance of the
meeting on January [
●
],
2018, please cast your vote through the Internet, by telephone or
by mail as described in your
GOLD
proxy card. Instructions on how to vote are found
in the section entitled
How to Cast Your Vote
on page 4.
Only
shareholders of record at the close of business on December [
● ], 2017, will be entitled to notice of, and to vote at, the
annual meeting and any adjournments thereof. Interested parties are
encouraged to visit the Company’s website at
www.
commandonline
.com
for additional
information.
By
Order of the Board of Directors,
_______________________
Brendan
Simaytis, Secretary
Lakewood,
Colorado
[
● ], 2017
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REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR
WAYS:
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VIA THE INTERNET
Visit
the website provided on your
GOLD
proxy card,
GOLD
voting instruction form, or
notice.
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BY TELEPHONE
Call
the telephone number on your
GOLD
proxy card,
GOLD
voting instruction form, or
notice.
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BY MAIL
Sign,
date, and return the enclosed
GOLD
proxy card or
GOLD
voting instruction
form.
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IN PERSON
Attend
the annual meeting. Please note that if you hold your shares
through a bank or broker, you must obtain a “legal
proxy” from your bank or broker to vote your shares at the
meeting.
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This Notice of Annual Meeting, the Proxy Statement, and the Annual
Report are or will be available at www.CommandOnline.com. If you
have any questions, please contact D.F. King, the proxy solicitor
assisting us in connection with the annual meeting, by calling toll
free (888) 414-5566 or emailing CCNI@dfking.com.
COMMAND CENTER, INC.
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
to be held: January [ ● ], 2018
Table of Contents
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PROXY SUMMARY
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3
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VOTING AT THE ANNUAL MEETING
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4
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VOTING MATTERS AND BOARD RECOMMENDATIONS
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5
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BACKGROUND OF THE SOLICITATION
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6
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GENERAL INFORMATION
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8
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PROPOSAL 1 - ELECTION OF DIRECTORS
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10
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PROPOSAL 2 - RATIFICATION OF SELECTION OF EKS&H
LLLP
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22
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PROPOSAL 3 - ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION
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25
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OTHER MATTERS
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31
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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31
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SHAREHOLDER PROPOSALS, HOUSEHOLDING AND OTHER MATTERS
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33
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COMMAND CENTER, INC.
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
to be held
January [ ● ], 2018
Our
Board of Directors is soliciting proxies from our shareholders to
vote their shares of Common Stock at the Command Center, Inc.
Annual Meeting of Shareholders to be held on January [
●
], 2018, at the location and for the purposes set forth in the
Notice of Annual Meeting, and at any adjournment thereof. Command
Center, Inc. is referred to in this document as
“we,” “us,” “our,” and the
“Company.”
The
cost of this solicitation of proxies will be borne by the Company.
Solicitations may be made by personal interview, mail, telephone,
facsimile, email, other electronic channels of communication, or
otherwise by directors, officers, and other employees of the
Company, but the Company will not additionally compensate its
directors, officers, or other employees for these services. The
Company will pay the entire cost of preparing, assembling,
printing, mailing, and distributing these proxy materials. The
Company will provide copies of these proxy materials to banks,
brokerage houses, fiduciaries, and custodians holding in their
names shares of our common stock beneficially owned by others so
that they may forward these proxy materials to the beneficial
owners.
The
Company has retained D.F. King & Co., Inc. (“D.F.
King”), a proxy solicitation firm, to assist in connection
with soliciting proxies for the Annual Meeting. This proxy
solicitation firm estimates that approximately [
●
] of its employees will assist in this proxy
solicitation, which they may conduct by personal interview, mail,
telephone, facsimile, email, other electronic channels of
communication, or otherwise. The Company will pay D.F. King a fee
of up to $[
●
], plus reimbursement of out-of-pocket expenses incurred in the
process of soliciting proxies. The Company's aggregate expenses,
including those of D.F. King, related to the solicitation in excess
of those normally spent for an annual meeting as a result of the
potential proxy contest and excluding base annual service fees,
salaries and wages of our directors, officers and regular
employees, are expected to be approximately $[
●
]. These solicitation costs are expected to include the fee payable
to our proxy solicitor; fees of outside counsel and advisors to
advise us in connection with a contested solicitation of proxies;
increased costs related to investor relations, increased mailing
costs, such as the costs of additional mailings of solicitation
material to stockholders, including printing costs, mailing costs
and the reimbursement of reasonable expenses of banks, brokerage
houses and other agents incurred in forwarding solicitation
materials to beneficial owners of our common stock, as described
above; and the costs of retaining an independent inspector of
election. We have agreed to indemnify D.F. King and certain related
persons against certain liabilities relating to or arising out of
the engagement. In addition, the Company will reimburse banks,
brokerage firms, other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy materials to
beneficial owners of the common stock of the Company.
Certain
of our directors, officers, and employees are considered
"participants" in this proxy solicitation under the rules of the
Securities and Exchange Commission (the "SEC"), by reason of their
position or because they may be soliciting proxies on our behalf.
Appendix A to this Proxy Statement sets forth certain information
relating to our directors, officers and employees who are
considered "participants" in the solicitation of
proxies.
Any
shareholder giving a proxy may revoke it any time prior to its use
at the Annual Meeting by giving written notice of such revocation
to the Secretary or any one of our other officers or by filing a
later dated written proxy with one of our officers. Personal
attendance at the Annual Meeting is not, by itself, sufficient to
revoke a proxy unless written notice of the revocation or a later
dated proxy is delivered to an officer before the revoked or
superseded proxy is used at the Annual Meeting. Proxies will be
voted as directed therein. Proxies which are signed by
shareholders, but which lack specific instruction with respect to
any proposal, will be voted in favor of the number and slate of
directors proposed by the Board of Directors and listed herein, for
the say-on-pay approval, and for the ratification of our
independent registered accounting firm.
The
presence at the Annual Meeting in person or by proxy of the holders
of a majority of our outstanding shares of Common Stock entitled to
vote shall constitute a quorum for the transaction of business. If
a broker returns a “non-vote” proxy, indicating a lack
of voting instructions by the beneficial holder of the shares and a
lack of discretionary authority on the part of the broker to vote
on a particular matter, then the shares covered by such non-vote
proxy shall be deemed present at the meeting for purposes of
determining a quorum but shall not be deemed to be represented at
the meeting for purposes of calculating the vote required for
approval of such matter. If a shareholder abstains from voting as
to any matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum,
but shall otherwise not be deemed to have been voted on such
matter. As a result, an abstention on any proposal will have no
effect on the outcome of any proposal.
The
mailing address of the principal executive office of Command Center
is 3609 South Wadsworth Boulevard, Suite 250, Lakewood, CO 80235.
We expect that this Proxy Statement, the related Form of Proxy, and
Notice of Annual Meeting will first be mailed to shareholders on or
about [
●
], 2017.
Below
is a summary of the information included in this Proxy Statement.
Please refer to the complete Proxy Statement for full information
and before you vote.
Meeting Information
Time:
8:00 a.m. Mountain
Standard Time
Record
Date:
December [
●
], 2017
Voting Eligibility:
Shareholders as of the record date are
entitled to vote, and each share of common stock is entitled to one
vote on all matters to be voted on. As of the record date for the
Annual Meeting, there were [
●
] shares of common stock outstanding and expected to be entitled to
vote at the Annual Meeting. There are no other securities
outstanding and entitled to vote at the Annual
Meeting.
Admission:
Only shareholders and authorized guests may
attend the meeting and all attendees will be required to show a
valid form of ID (such as a government-issued form of photo
identification). If you hold your shares in street name (i.e.,
through a bank or broker), you must also provide proof of share
ownership, such as a letter from your bank or broker or a recent
brokerage statement, and show a valid form of ID (such as a
government-issued form of photo identification.
HOW TO CAST YOUR VOTE
YOUR VOTE IS IMPORTANT!
Please cast your vote using the
enclosed
GOLD
proxy card
today.
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Shareholders
of record, who hold shares registered in their own name, can vote
by signing, dating and returning the enclosed
GOLD
proxy card in the postage-paid
return envelope, or by telephone or via the Internet, following the
easy instructions shown on the enclosed
GOLD
proxy card.
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Beneficial
owners, who own shares through a bank, brokerage firm or other
financial institution, can vote by returning the enclosed
GOLD
voting instruction
form, or by following the instructions for voting via telephone or
the Internet, as provided by the bank, broker or other
organization. If you own shares in different accounts or in more
than one name, you may receive different voting instructions for
each type of ownership. Please vote all your shares.
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If you
are a shareholder of record or a beneficial owner who has a legal
proxy to vote the shares, you may choose to vote in person at the
Annual Meeting. Even if you plan to attend the Annual Meeting in
person, please cast your vote as soon as possible by using the
GOLD
proxy
card.
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VOTING
AT THE ANNUAL MEETING
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General
. The close of business on December [
●
], 2017, has been fixed as the record date
for determination of the shareholders entitled to notice of, and
right to vote at the Annual Meeting, or the Record Date. As of the
Record Date, there were issued and outstanding [
●
] shares of common stock entitled to
vote. A majority of such shares will constitute a quorum for the
transaction of business at the Annual Meeting. The holders of
record on the Record Date of the shares entitled to be voted at the
Annual Meeting are entitled to cast one vote per share on each
matter submitted to a vote at the Annual Meeting. The affirmative
vote of a plurality of the votes cast is required for the election
of each of the nominees. All other actions proposed herein may be
taken upon a favorable vote of the holders of a majority of such
shares of common stock casting votes at the Annual Meeting,
provided a quorum is present at the meeting in person or by
proxy.
Internet Availability of Proxy Materials and Voting.
On or
about December [
●
], 2017, we will mail the proxy materials to
all of our shareholders. The Proxy Statement contains instructions
about how to access our proxy materials and vote online or by
telephone. If you previously chose to receive our proxy materials
electronically, you will continue to receive access to these
materials via e-mail unless you elect otherwise.
Voting.
Even if you plan to attend the Annual Meeting in
person on January [
●
], 2018, please vote as soon as
possible.
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VOTING
MATTERS AND BOARD RECOMMENDATIONS
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Shareholders
are being asked to vote on the following matters at the Annual
Meeting:
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Proposal
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Recommendation
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PROPOSAL 1: Election of Directors
Election of seven
director nominees
Steven
Bathgate,
Richard
Finlay, R. Rimmy Malhotra, Frederick J. Sandford, John Schneller,
J.D. Smith and John Stewart. The Board believes that each of the
nominees’ knowledge, skills, and abilities will positively
contribute to the function of the Board as a whole. Accordingly,
your proxy holder will vote your shares FOR the election of the
Board’s nominees unless you instruct otherwise.
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FOR Each Nominee
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PROPOSAL 2: Ratification of the Appointment of Independent
Registered Accounting Firm
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EKS&H LLLP has
been appointed as the Company’s independent registered public
accounting firm. The Audit Committee and the Board believe that
retention of the firm is in the best interests of the Company and
its shareholders. Accordingly, your proxy holder will vote your
shares FOR the ratification of the appointment of EKS&H LLLP as
our independent registered public accounting firm unless you
instruct otherwise.
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FOR
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PROPOSAL 3: Advisory Approval of Executive
Compensation
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The
Say-on-Pay Proposal, to approve, on an advisory basis, the
compensation paid to our Named Executive Officers for the year
ended December 30, 2016. The Company has designed its compensation
programs to reward and motivate employees to continue to enhance
shareholder value of the Company. The Compensation Committee and
the Board of Directors take shareholder views seriously and will
take into account the advisory vote in future executive
compensation decisions. Accordingly, your proxy holder will vote
your shares FOR the approval of the executive compensation paid to
our Named Executive Officers unless you instruct
otherwise.
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FOR
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Please
note that the best way to support our Board's nominees is to vote
FOR our Board's nominees on the enclosed
GOLD
proxy card. The Board urges you
NOT to sign or return any white proxy card sent to you by Fields.
Signing and returning any white proxy card that Fields may send to
you, even to vote against a proposal or vote "withhold" with
respect to the Fields nominees, will cancel any previous vote you
cast and may invalidate any votes you have cast for your Board's
nominees, as only your latest dated proxy card or voting
instructions form will be counted. Therefore, the Board urges you
to sign and return only the enclosed
GOLD
proxy card.
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BACKGROUND
OF THE SOLICITATION
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The
following timeline is provided in order to help shareholders
understand the Company’s material interactions and
communications with Fields and the sequence of events leading to
Fields nominating a slate of directors at the Annual
Meeting.
These
communications have not led to an agreement between the parties,
and Fields has expressed an intention to nominate five persons for
election to serve as directors in place of seven of the directors
nominated and recommended for election by our Board of Directors.
Our Board does not endorse the Fields nominees and recommends you
vote the
GOLD
proxy card FOR
the election of each of the nominees recommended by our
Board.
●
On July 20, 2015,
the Company’s CEO spoke with Fields and Fields questioned the
effect of oil prices on the Company’s North Dakota
operations, indicated he did not approve of Richard Finlay being
appointed to the Board and also discussed the Company’s stock
repurchase plan.
●
On November 23,
2015, the Company’s CEO and CFO spoke with Fields and
discussed the presentation of the Company’s financials in
public filings.
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On January 19,
2016, the Company’s CEO spoke with Fields and discussed
investor relations. Fields asked about the business generally,
dividends to shareholders, or a tender offer, or uplisting the
stock to a stock exchange such as the NASDAQ.
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On March 28, 2016,
the Company’s CEO spoke with Fields, and Fields asked about
the company’s operations generally and expressed concern
about the Company’s North Dakota operations in light of the
drop in the price of oil. Fields also asked about the possibility
of an uplisting and tender offer.
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On March 31, 2016,
the Company’s CEO spoke with Fields. Fields said the Company
should conduct earnings calls. Fields also inquired about the
Company’s fourth quarter 2015 financials and North Dakota
operations.
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In April 2016, Mr.
Bathgate and Mr. Malhotra were appointed to the Company’s
Board of Directors. Mr. Malhotra has spoken with Fields from time
to time before and after the appointment about the business and
governance of the Company.
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On May 10, 2016,
the Company’s CEO spoke with Fields and Fields asked the CEO
about the possibility of a search for a new CFO. Fields also stated
he would like to sell a block of his stock to the
Company.
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On May 17, 2016,
the Company’s CEO spoke with Fields and discussed the
possibility of the Company purchasing Fields’
stock.
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On March 2, 2017,
Fields sent the Company notice of his intent to nominate an
alternative slate of directors.
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On March 15, 2017,
the Company’s Chairman of the Board spoke with Fields wherein
Fields demanded that five of his nominees be seated on the Board,
stating that his belief that he could get enough shareholder votes
to win a proxy contest. The parties also discussed Fields’
perspective on the performance of the CEO.
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On March 22, 2017,
Fields sent the Company a letter demanding certain of the
company’s records.
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On March 23, 2017,
the Company’s Chairman of the Board spoke with Fields. Fields
expressed his desire for the Chairman’s “graceful
exit” to avoid the expense of a proxy contest.
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On March 24, 2017,
Fields issued a press release critical of the Board of
Directors.
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On April 3, 2017,
the Company provided Fields with the requested shareholder
records.
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On April 12, 2017,
the Company’s Chairman of the Board spoke with Fields, and
Fields stated he believed the Company was not taking his demands
for board representation seriously. Fields asked for a proposal
from the Company. The Chairman asked Fields to provide more detail
regarding the items Fields would specifically like the Company to
address. The Chairman further stated that Fields would not be
receiving a proposal from the Company at that
time.
●
On September 14,
2017, Fields sent the Company notice of his intent to nominate an
alternative slate of directors.
●
On September 27,
2017, Fields issued a press release criticizing a recent bylaw
amendment adopted by the Company relating to shareholder
proposals
●
On October 4, 2017,
Fields sent the Company a letter demanding certain of the
Company’s records.
●
On October 10,
2017, Fields issued a press release calling for Company’s
Chairman of the Board, John D. Stewart, to resign from the
Company’s Board of Directors.
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On October 11,
2017, Fields issued a press release proposing an alternative slate
of directors.
●
On October 11,
2017, the Company’s Chairman of the Board spoke with Fields
wherein Fields stated the members of the Company’s Board of
Directors should be changed. Fields stated that he desired to name
five members of the Company’s seven-person Board, but that he
would settle for naming four members of the Board instead. The
Chairman stated that the Company did not believe it was in the best
interests of shareholders for Fields to be given the unilateral
power to name a majority of the Board.
●
On October 16,
2017, the Company responded to Field’s additional document
request and provided additional shareholder records to
Fields.
●
On October 16,
2017, Fields sent an e-mail to several of the Company’s
employees seeking confidential information about the
Company.
●
On October 20,
2017, the Company sent Fields a letter requesting he cease
inappropriate communications with the Company’s
employees.
●
On November 1, 2017
a representative of Spotlight Advisors, an advisor to the Company,
spoke with Fields’ legal counsel and requested that the
Nominating and Governance Committee of the Board of Directors be
permitted to interview each of Fields’ nominees so that the
Nominating and Governance Committee could determine whether to
recommend any or all of Fields’ nominees for nomination to
the Board of the Company.
●
On November 2,
2017, Fields’ legal counsel informed a representative of
Spotlight Advisors that the Company’s Nominating Committee
would not be able to interview any of Field’s nominees unless
the Company was willing to commit to nominating more than two of
Fields’ nominees to the Board.
●
On November 7,
2017, a representative of Spotlight Advisors spoke with
Fields’ counsel and renewed the Nominating and Governance
Committee’s request to interview Fields’ nominees and
indicated that the Company could not commit to nominating any of
Fields’ nominees without interviewing them. The
representative from Spotlight Advisors also provided information
about the expected timing and process for the
interviews.
●
From November 17 to
November 22, 2017, the Company’s Chairman and a
representative of Spotlight Advisors had various conversations with
Fields in an effort to achieve a compromise. In addition, Mr.
Malhotra had separate conversations with Fields regarding potential
compromises.
●
On November 22,
2017, the Board determined to nominate seven directors for election
at the Annual Meeting and to make amendments to the Company’s
Bylaws.
●
On November 24,
2017, the Company filed a preliminary proxy statement with the U.S.
Securities and Exchange Commission.
Our
Board of Directors recommends that you simply DISREGARD any white
proxy card that may be sent to you by Fields and only vote using
the enclosed GOLD proxy card. Voting AGAINST Fields’ nominees
on its proxy card is
NOT
the same as voting FOR our
Board’s Director nominees because a vote against
Fields’ nominees on its white proxy card will revoke any
previous proxy submitted by you, including any vote you may have
made for our Board’s nominees. If you have already voted
using the white proxy card sent to you by Fields, you may change it
by voting in favor of our Board’s Director nominees using the
enclosed GOLD proxy card or by voting via Internet or by telephone
by following the instructions provided on the enclosed GOLD proxy
card. Only the latest validly executed proxy that you submit will
be counted.
If
you have any questions, please contact D.F. King, the proxy
solicitor assisting us in connection with the Annual Meeting, by
calling toll free (888) 414-5566 or emailing
CCNI@dfking.com.
Record Date
.
Shareholders of record at the close of business on December
[
●
], 2017, are entitled to vote at the Annual
Meeting. On December [
●
], 2017 the Company had [
●
] shares of common stock issued and
outstanding. Each share of common stock entitles the holder thereof
to one vote.
Mailing and Forwarding of Proxy Materials
.
On or about December [
●
], 2017, we will first mail proxy materials
to our shareholders. We will arrange with brokerage firms and other
custodians, nominees and fiduciaries to forward proxy solicitation
material to the beneficial owners of the common stock as of the
record date and will reimburse such brokerage firms, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses that
they incur as a result of forwarding the proxy materials. Your
cooperation in promptly voting your shares and submitting your
proxy will help avoid additional expense.
Shareholders of Record and Beneficial Owners.
Shareholders whose
shares are registered directly in their name with Command
Center’s transfer agent, Continental Stock Transfer and Trust
Company, are considered, with respect to those shares,
shareholders of record
. Each
shareholder of record will receive a Proxy Statement, the 2016
Annual Report and the
GOLD
proxy card directly from the Company.
Shareholders
whose shares are held in a brokerage account or by a bank or other
nominee, are considered the beneficial owner of those shares of
common stock. The Proxy Statement and the 2016 Annual Report will
be forwarded to beneficial owners by their respective broker, bank
or nominee who is considered, with respect to those shares, the
shareholder of record. As the beneficial owner, you have the right
to direct your broker, bank or nominee how to vote your shares by
using the voting instruction form included in the proxy
materials.
Revocation of Proxies
.
A shareholder who has executed and
returned a proxy may revoke it at any time before it is voted at
the Annual Meeting:
-
by timely executing
and returning, by Internet, mail, or in person at the Annual
Meeting, a proxy bearing a later date; or
-
by giving written
notice of revocation to the Secretary of the Company at 3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235, prior to
the Annual Meeting; or
-
by attending the
Annual Meeting and voting in person.
A proxy
is not revoked by the death or incompetence of the maker unless,
before the authority granted thereunder is exercised, written
notice of such death or incompetence is received by the Company
from the executor or administrator of the estate or from a
fiduciary having control of the shares represented by such proxy.
Your right to revoke your proxy is not limited by or subject to
compliance with a specified formal procedure, but you should follow
one of the methods listed above so that the number of shares
represented by proxy can be recomputed. Attendance at the meeting,
in and of itself, will not constitute a revocation of a
proxy.
If you
have previously signed a white proxy card sent to you by Fields,
his affiliates or another party you may change your vote by
marking, signing, dating and returning the enclosed
GOLD
proxy card in the accompanying
post-paid envelope or by voting by telephone or via the Internet by
following the instructions on your
GOLD
proxy card. Submitting a white
proxy card sent to you by Fields, his affiliates or another party
will revoke votes you have previously made via the Company's
GOLD
proxy
card.
Only
the latest validly executed proxy that you submit will be
counted.
Inspector of Elections.
Proxies and ballots will be received
and tabulated by [
●
], our transfer agent and the inspector of
elections for the Annual Meeting.
Quorum
.
A quorum is
necessary to hold a valid meeting. If shareholders entitled to cast
at least a majority of all the votes entitled to be cast at the
Annual Meeting are present in person or by proxy, a quorum will
exist. Shares represented by proxies containing an abstention as to
any matter will be treated as shares that are present and entitled
to vote for purposes of determining a quorum. Similarly, shares
held by brokers or nominees for the accounts of others as to which
voting instructions have not been given for that matter and for
which the broker does not have discretionary voting authority for
that matter, or Broker Non-Votes, will be treated as shares that
are present and entitled to vote for purposes of determining a
quorum.
Effect of Abstentions, Voting Requirements, Withheld Votes and
Broker Non-Votes
.
Voting
for director nominees is by plurality. Approval of the independent
registered accounting firm must be approved by the affirmative vote
of a majority of shares cast at the Annual Meeting, assuming a
quorum is present. That means that the shares voted
“for” a proposal must exceed the numbers voted
“against” that proposal. Because the
“say-on-pay” proposal asks for a non-binding, advisory
vote, there is no required vote that would constitute approval.
Abstentions and broker non-votes, if any, will not have any impact
on this advisory vote. The indication of an abstention on a proxy
or the failure to vote either by proxy or in person will be treated
as neither a vote “for” nor “against” a
nominee or proposal, and will have no effect on the outcome of the
vote. The shares of a shareholder whose ballot on any or all
proposals is marked as “abstain” will be included in
the number of shares present at the Annual Meeting for the purpose
of determining the presence of a quorum.
Broker
Non-Votes, shares held by brokers or custodians for the accounts of
others as to which voting instructions have not been given, will be
treated as shares that are present for determining a quorum, but
will not be counted for purposes of determining the number of votes
cast with respect to a proposal. If you are the beneficial owner of
shares held by a broker or other custodian, you may instruct your
broker how you would like your shares voted through the
GOLD
voting instruction form
included with this Proxy Statement.
If you
wish to vote the shares you own beneficially through a broker or
custodian at the Annual Meeting, you must first request and obtain
a “legal proxy” from your broker or other custodian. If
you choose not to provide instructions or a “legal
proxy” your shares are referred to as “uninstructed
shares.” Brokers may exercise discretion to vote uninstructed
shares as to which instructions are not given only with respect to
Proposal No. 2 regarding the ratification of the selection of the
independent registered accounting firm.
Brokers and custodians can no longer vote
uninstructed shares on your behalf in director elections, for
equity compensation plans or advisory votes on executive
compensation. For your vote to be counted, you must submit your
voting instruction form to your broker or custodian. The following
table shows how abstentions and Broker Non-Votes will be treated
with respect to each voting matter:
|
ProposalNumber
|
Item
|
Votes Required forApproval
|
Abstentions
|
UninstructedShares / Broker Non-Votes
|
|
1
|
Election
of Directors
|
Plurality
of votes cast
|
Not counted
|
Not
counted
|
|
2
|
Ratification
of Independent Auditors
|
Majority
of votes cast
|
Not
counted
|
Discretionary
vote
|
|
3
|
Advisory
vote on Executive
Compensation
|
Majority
of votes cast
|
Not
counted
|
Not
counted
|
Required Vote for Proposals to Pass.
Proposal No. 1—Election of Directors
: Our Board of
Directors unanimously recommends using the enclosed
GOLD
proxy card to vote FOR each of the
Board’s seven Director nominees.
Fields notified the Company that
he intends to nominate five nominees for election as Directors at
the annual meeting. As a result, if Fields proceeds with his
alternative nomination, the number of Director nominees will exceed
the number of Directors to be elected, and the seven nominees who
receive the greatest number of votes cast will be elected. Withheld
votes or Broker Non-Votes with respect to this proposal will have
no effect on this vote.
Proposal No. 2—Ratification of the selection of our
independent registered public accounting firm
: The
affirmative vote of the holders of a majority of shares cast is
required to ratify our selection of EKS&H LLLP as our
independent registered public accounting firm for the year ending
December 30, 2017. A properly executed proxy marked
“ABSTAIN” with respect to this proposal will not be
voted and will have no effect on this vote. Because Proposal No. 2
is a routine proposal on which a broker or other nominee is
generally empowered to vote, Broker Non-Votes likely will not
result from this proposal. Thus, if you are a beneficial owner
holding shares through a broker, bank or other holder of record and
you do not vote on this proposal, your broker may cast a vote on
your behalf for this proposal.
Proposal No. 3—Say-on-Pay
: Because this proposal asks
for a non-binding, advisory vote, there is no required vote that
would constitute approval. We value the opinions expressed by our
shareholders in this advisory vote, and our Compensation Committee,
which is responsible for overseeing and administering our executive
compensation programs, will consider the outcome of the vote when
designing our compensation programs and making future compensation
decisions for our Named Executive Officers. Abstentions and Broker
Non-Votes, if any, will not have any impact on this advisory
vote.
No Cumulative Voting.
Shareholders may not cumulate votes in
the election of directors, which means that each shareholder may
vote only the number of shares he or she owns for a single director
candidate.
Discretionary Authority
.
If any nominee for director is unable
to serve or for good cause will not serve, or if any matters not
specified in this proxy statement come before the meeting, eligible
shares will be voted as specified by the named proxies pursuant to
discretionary authority granted in the proxy. At the time this
proxy statement was printed, the Board of Directors was not aware
of any other matters to be voted on.
The
Company has received a notice from Fields regarding his intent to
nominate the Fields nominees to serve as members of the Company's
Board of Directors, to be considered at the Annual Meeting. If
these or other matters are properly brought before the Annual
Meeting, or any adjournment or postponement of the Annual Meeting,
your proxy will be voted as directed in your proxy, or if no
direction is given, as described below under "—Effect of
Abstentions, Voting Requirements, Withheld Votes and Broker
Non-Votes."
Solicitation of Proxies
.
Proxies may be solicited by officers,
directors and regular supervisory and executive employees of the
Company, none of whom will receive any additional compensation for
their services. The Company will bear the expense of preparing,
printing and mailing this Proxy Statement and the proxies we
solicit. Proxies will be solicited by mail and may also be
solicited by directors, officers and employees in
person.
Executive Offices
.
The principal executive office of the Company is located at 3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235. The
mailing address of the principal executive office is also 3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235. The
telephone number for principal executive office of the Company is
(866) 464-5844.
|
PROPOSAL 1
—
ELECTION
OF DIRECTORS
|
The
Board of Directors believes that the nominees’ knowledge,
skills, and abilities would positively contribute to the function
of the Board as a whole. Accordingly, we strongly recommend that
you vote your shares FOR the election of the Board’s nominees
named below. The Board of Directors knows of no reason why its
nominees will be unable to accept election or unwilling to serve as
a director. However, if a nominee becomes unable to accept
election, the Board will either reduce the number of directors to
be elected or select a substitute nominee. If a substitute nominee
is selected, proxies will be voted in favor of such
nominee.
Fields
has notified the Company of his intent to nominate five alternative
nominees for election to the Board of Directors at the meeting. If
Fields proceeds with his alternative nominations, Fields will be
seeking to elect an entirely different Board of Directors for the
Company. The Company does not believe that it is in the interests
of shareholders for all or a majority of the directors to be
selected by a single shareholder.
The
Governance and Nominating Committee reviewed the director nominees
proposed by Fields and requested to interview these candidates.
Fields has to-date refused to make these individuals available to
the Committee. The Committee has reviewed the backgrounds of the
Fields’ nominees and some members of the Board are familiar
with the business reputations and experience of several of
Fields’ nominees. After careful consideration of these
factors, the Committee and the Board have determined not to
recommend the Fields nominees and to instead recommend the
Board’s nominees in light of their backgrounds, career
experiences and qualifications, as well as their respective
contributions to the Board’s mix of skills and
experiences.
The
Board believes the Board’s nominees possess the skills and
experience necessary to oversee the Company effectively. Over the
five years ended November 17, 2017, the Company’s stock price
has generated compounded average returns of more than 15% per year.
From the last day of trading on December 30, 2016 through November
17, 2017, the value of the Company’s stock has increased by
36%. Since Frederick Sandford became our Chief Executive Officer on
February 26, 2013, through November 17, 2017, the Company’s
stock price has increased 133%. During this same period, the
average 30-day daily trading volume of our stock has increased
341%, providing our shareholders with more liquidity in which to
buy or sell our stock.
We
believe the improved performance of our stock value is a result of
solid fundamental operating performance and cash generation, which
has enabled the Company to repay most of its outstanding debt
obligations. In fiscal year 2012, the full-year before Mr. Stanford
joined the Company as its CEO, the Company lost $1.8 million on a
net operating cash flow basis and ended the 2012 fiscal year with
$9.1 million in debt. In the last twelve-month period ending
September 29, 2017, the Company generated positive net operating
cash flow of $5.3 million. At September 29, 2017, the Company has
$0.6 million in debt and $6.1 million in cash and cash equivalents.
Since the end of fiscal year 2012, our book value has increased
386% to $0.34 per share. You may receive a proxy statement, white
proxy card and other solicitation materials from Fields. The
Command Center Board of Directors does not endorse any Fields
nominees and unanimously recommends that you vote FOR the election
of each of the nominees proposed by the Board of Directors on the
GOLD
proxy card. Our
Board of Directors strongly urges you not to sign or return any
white proxy card sent to you by Fields. Please note that voting to
“withhold” with respect to any Fields nominee on a
white proxy card sent to you by Fields is not the same as voting
for your Board’s nominees because a vote to
“withhold” with respect to any Fields nominee on
its white proxy card will revoke any
GOLD
proxy you may have previously
submitted. To support the Board of Directors’ nominees,
you should vote FOR the Board’s nominees on the
GOLD
proxy card and disregard, and not
return, any white card sent to you by Fields. If you have
previously submitted a white proxy card sent to you by Fields, you
can revoke that proxy and vote for the Board of Directors’
nominees and on the other matters to be voted on at the meeting by
using the enclosed
GOLD
proxy card.
Your
vote is very important. Even if you plan to attend the Annual
Meeting, we request that you vote your shares by signing, dating
and returning the enclosed
GOLD
proxy card in the postage-paid
envelope provided or by voting via the Internet or by telephone
using the instructions provided on the enclosed
GOLD
proxy card. If your brokerage
firm, bank, broker-dealer or other similar organization is the
holder of record of your shares (i.e., your shares are held in
“street name”), you will receive voting instructions
from the holder of record. You must follow these instructions in
order for your shares to be voted. Your broker is required to vote
those shares in accordance with your instructions. Because of the
contested nature of the proposals, if you do not give instructions
to your broker, your broker may not be able to vote your shares
with respect to the election of directors or any of the other
proposals. We urge you to instruct your broker or other nominee, by
following those instructions, to vote your shares in line with the
Board’s recommendations on the
GOLD
proxy card.
The
persons named as proxies intend to vote the
proxies FOR the election of each of the Board’s
nominees unless you indicate on the
GOLD
proxy card a vote to
“WITHHOLD” your vote with respect to any of the
nominees.
Under
the current Bylaws of the Company, the proposed term of office for
which each nominee will be elected is until the next Annual Meeting
of Shareholders or until his successor shall have been elected and
shall have qualified.
The
affirmative vote of a plurality of votes cast is required for the
election of each of the directors.
Our
Board of Directors currently consists of seven directors. Each of
our current directors has been nominated by the Board for election
to a new term at this Annual Meeting:
|
Name
|
Position with the Company
|
Director since
|
|
Current Directors that Have Been Re-Nominated:
|
|
|
|
Steven
Bathgate, age 63
|
Director
|
2016
|
|
Richard
Finlay, age 57
|
Director
|
2015
|
|
R.
Rimmy Malhotra, age 41
|
Director
|
2016
|
|
Frederick
J. Sandford, age 56
|
Chief
Executive Officer, President and Director
|
2013
|
|
John
Schneller, age 52
|
Director
|
2008
|
|
J.D.
Smith, age 47
|
Director
|
2012
|
|
John
Stewart, age 61
|
Chairman
of the Board
|
2013
|
Nominees’ Biographies and Qualifications
Seven
directors will be elected at the Annual Meeting, each to serve a
one year term until the next annual meeting of shareholders, and
thereafter until each director’s successor is elected and
qualified or until his earlier resignation, removal from office or
death.
The
names of the directors who are our nominees at this Annual Meeting,
their principal occupations or employment and other qualifications,
are hereinafter set forth:
Steven Bathgate,
age 63, has
over 35 years of security industry experience, particularly with
microcap companies. He was appointed to our Board of Directors in
April 2016. In 1995 he founded GVC Capital LLC and he is the Senior
Managing Partner of that firm. GVC Capital is an investment banking
firm located in Denver, Colorado, focusing primarily on providing
comprehensive investment banking services to undervalued microcap
companies. Prior to founding GVC Capital, Mr. Bathgate was
CEO of securities firm Cohig & Associates in Denver from 1985
to 1995 and was previously Managing Partner, Equity Trading, at
Wall Street West. He currently is also a director for Bluebook
International, Inc. and a former director for Global Healthcare
REIT. Mr. Bathgate received a Bachelor of Science in Finance from
the University of Colorado, Leeds School of
Business.
Richard Finlay
, age 57, was
appointed to our Board of Directors on July 9, 2015. Mr. Finlay is
currently Chief Financial Officer at BNBuilders, Inc. (BNB), a
construction company focused on life science, biotech, lab
research, health care, education and commercial markets with
offices in Seattle and San Diego. Prior to joining BNB, Mr. Finlay
spent 4 years in non-profit leadership as CFO at Eastside Catholic
School and in Guatemala for Ecofiltro, a social enterprise
manufacturing and distributing water filters. Prior to his work in
Central America, Mr. Finlay served in senior leadership positions
(either CEO or CFO) with a veterinary hospital group, a boat
manufacturer, a fitness / nutrition focused company and an
innovative early stage health care company. Additional experience
includes more than 15 years’ experience in business
development, finance and accounting with a Fortune 500 company as
well as small and mid-size regional companies. He is a 1984
graduate of the University of Washington earning a Bachelor of Arts
in Business Administration.
R. Rimmy Malhotra
, age 41, was
appointed to our Board of Directors on April 6, 2016. From 2013 to
the present, Mr. Malhotra has served as the Managing Member and
Portfolio Manager for the Nicoya Fund LP, a private investment
partnership. Previously, from 2008-2013 he served as portfolio
manager of the Gratio Values Fund, a mutual fund registered under
the Investment Act of 1940. Prior to this, he was an Investment
Analyst at a New York based hedge fund. He earned an MBA in Finance
from The Wharton School and a Master’s degree in
International Relations from the University of Pennsylvania where
he was a Lauder Fellow. Mr. Malhotra holds undergraduate degrees in
Computer Science and Economics from Johns Hopkins
University.
Frederick J. Sandford
, age 56, was appointed as our
President and Chief Executive Officer on February 22, 2013, and was
first elected as a director at the Company’s 2013
shareholders meeting. Mr. Sandford has over 30 years of leadership
experience as CEO, President, or General Manager, guiding
businesses in various stages, including startups, turnarounds and
wind downs. He has led companies in diverse industries, including
technology, industrial fabrication, security services, waste
management and retail. Prior to joining our company, he served as
an independent consultant to Silicon Valley venture capitalists.
From 2003-2005, he led the restructuring of The Environmental
Trust, a land mitigation organization with 80 holdings, resulting
in significant asset protection. Mr. Sandford was awarded a full
fellowship and earned his MBA from Cornell University while serving
as the CEO of Student Agencies, America’s oldest student-run
company. He earned a BA in Psychology from the University of
Massachusetts at Amherst. He is a former U.S. Navy
SEAL.
John Schneller,
age 52, was appointed to our Board of
Directors on June 23, 2008. Mr. Schneller is currently the CEO of
an agricultural technology company, TerraLogix Group LLC.
Previously, he was a Partner at the investment banking firm of
Scura Paley & Company LLC. Prior to joining Scura Paley Mr.
Schneller was the Chief Financial Officer of iMedicor, Inc (now
iCoreConnect Inc.), a publicly-held New York based company and
provider of comprehensive healthcare communications solutions.
Prior to iMedicor Mr. Schneller served from 2002 to 2007 as an
investment analyst at Knott Partners, a multi-billion dollar,
value-based, New York hedge fund. Mr. Schneller's area of expertise
was analysis and investing in micro-to-mid-cap securities with
emphasis in the fields of intellectual property, technology,
content distribution, nanotechnology, healthcare, non-bank
financials, business services, insurance companies, packaging and
retail. Mr. Schneller received his Bachelor of Arts in History from
the University of Massachusetts at Amherst, MA, a Master's in
Public Administration from Suffolk University in Boston and a
Master’s in Business Administration from the Johnson Graduate
School of Management at Cornell University in Ithaca,
NY.
J.D. Smith
, age
47, has
been a member of our Board of Directors since December 10, 2012.
Mr. Smith has worked in real estate investment, construction and
development since 1982. Currently, Mr. Smith is the owner of Real
Estate Investment Consultants, LLC, a turnkey investment service
firm serving all sectors of real estate and investment and
development businesses. He also serves on the Board of Directors of
iCoreConnect Inc., a publicly-held New York based company and
provider of comprehensive healthcare communications solutions. From
2008 until 2012 he was Director of Development for CP Financial, a
venture capital firm based in Scottsdale, Arizona. From 1993 until
2008 he developed over two dozen projects in the Phoenix Metro
Area, acting through his companies JD Investments, Inc., The High
Sonoran Group, Inc., and JD Smith Development, LLC. In 1990 he
formed his first operating company to buy and maintain residential
rental properties and obtained his real estate license. In 1993 he
graduated from Arizona State University with a Bachelor’s of
Science degree in Real Estate.
John Stewart,
age 61, has been a member of our Board of
Directors since November of 2013 and was elected Chairman in
December 2014. Mr. Stewart graduated summa cum laude from the
University of North Dakota with a Bachelor's of Science in Business
Administration. He currently serves as Senior Advisor at Ritaway
Investment Group. Also, he has been the President of Glacial
Holdings, Inc. and Glacial Holdings LLC, private multi-family
residential and commercial real estate holding companies, and of
Glacial Holdings Property Management, Inc., a private property
management company since 1992. Through a number of private
entities, Mr. Stewart is an investor in various business
enterprises. During the past nine years, he has served as the chair
of the Advisory Board of the Bank of North Dakota, a director of
Corridor Investors, LLC, the Minot Family YMCA and Kalix, and as a
trustee of the Oppen Family Guidance Institute. Mr. Stewart was
employed as a Certified Public Accountant by the accounting firms
of Arthur Andersen & Co. (from 1978 to 1980) and Brady, Martz
& Associates P.C. (from 1980 to 1997). Mr. Stewart has been a
member of the Board of Trustees of Investors Real Estate Trust
(NYSE – IRET) since 2004.
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
ALL
|
|
SEVEN
NOMINEES FOR THE BOARD OF DIRECTORS.
|
Our
corporate governance documents described below are available on our
website at
www.commandonline.com
.
Meetings and Committees of the Board of Directors
The Board of Directors
Steven
Bathgate and R. Rimmy Malhotra were appointed as directors in 2016,
expanding the Board from five to seven directors. The board is now
composed of six outside directors and Frederick J. Sandford,
President and Chief Executive Officer of the Company.
Each
director is expected to devote sufficient time, energy and
attention to ensure diligent performance of his duties and to
attend all Board, committee and shareholders’ meetings.
Meetings and actions of the Board include regular meetings, special
meetings and actions by unanimous written consent.
During
2016, our Board held six meetings and acted by unanimous written
consent on four additional occasions. Each member attended at least
75% of the meetings of the Board and committees on which he served
during his or her term of office. Directors are expected to attend
the Company’s meetings of stockholders, absent unusual
circumstances.
Committees of the Board of Directors
The Board of Directors has established three standing committees
and a special committee to facilitate and assist the Board in the
execution of its responsibilities. The committees are the Audit
Committee, the Compensation Committee, the Nominating and
Governance Committee and the Strategic Alternatives Committee. The
composition and function of each of our committees complies with
the rules of the Securities and Exchange Commission that are
currently applicable to us and we intend to comply with additional
exchange listing requirements to the extent that they become
applicable to us in the future. The Board has also adopted a
charter for the Audit Committee, Compensation Committee and
Nominating and Governance Committee.
Charters for these
committees are available on our website at www.commandonline.com in
the “Investors” section. The charter of each committee
is also available in print to any shareholder who requests it. The
table below shows current membership for each of the standing Board
committees and the special Board committee. The current makeup of
each committee is as follows:
|
Audit Committee
|
Compensation Committee
|
Nominating and Governance Committee
|
Strategic Alternatives Committee
|
|
John
Stewart (Chair)
|
John
Schneller (Chair)
|
J.D.
Smith (Chair)
|
R.
Rimmy Malhotra (Chair)
|
|
Richard
Finlay
|
J.D.
Smith
|
Steven
Bathgate
|
John
Schneller
|
|
R.
Rimmy Malhotra
|
R.
Rimmy Malhotra
|
Frederick
Sandford
|
J.D.
Smith
|
|
|
|
|
Steven
Bathgate
|
The
Committees are described below.
Audit Committee
.
The Audit Committee is comprised of
three independent directors. John Stewart (Chairman), Richard
Finlay and R. Rimmy Malhotra currently serve on the Audit
Committee. The Audit Committee held four formal meetings in 2016,
and reviewed our quarterly filings and our annual filing and audit.
Additional discussions among committee members and meetings were
held to discuss the audit process and the preparation and review of
the consolidated financial statements.
Our Board of Directors has determined that Mr. Stewart
qualifies as an audit committee “financial expert” as
defined under the Securities Exchange Act of 1934 and the
applicable rules of the Nasdaq Capital Market. All members of the
Audit Committee are financially literate pursuant to the Nasdaq
Listing Rules.
The Audit Committee’s responsibilities include:
●
appointing,
determining funding for, evaluating, and replacing of, and
assessing the independence of our independent registered public
accounting firm;
●
reviewing
and discussing with management and the independent registered
public accounting firm our annual and quarterly financial
statements and related disclosures;
●
pre-approving
auditing and permissible non-audit services, and the terms of such
services, to be provided by our independent registered public
accounting firm;
●
coordinating
the oversight and reviewing the adequacy of our internal controls
over financial reporting;
●
establishing
policies and procedures for the receipt and retention of accounting
related complaints and concerns;
●
preparing
the audit committee report required by Securities and Exchange
Commission rules to be included in our annual proxy statement;
and
●
monitoring compliance with our Code of
Ethics
.
For the
fiscal year ending December 30, 2016, the audit of our financial
statements was reviewed by the Board of Directors and the Audit
Committee. The Company’s auditors also held a teleconference
with the Audit Committee. During the telephone conference, the
Audit Committee reviewed and discussed with the auditors, among
other things:
●
the status of any
significant issues arising during the quarterly reviews and annual
audit of the Company’s financial statements;
●
the Company’s
annual audit plan for 2016 and the internal and external staffing
resources necessary to carry out the Company’s audit
plans;
●
the Company’s
significant accounting policies and estimates;
●
the Company’s
progress toward documenting internal controls pursuant to Section
404 of the Sarbanes-Oxley Act of 2002;
●
the impact of new
accounting pronouncements;
●
current tax matters
affecting the Company; and
●
the Company’s
management information systems.
Policy on Audit Committee Pre-Approval Procedures
The Audit Committee will pre-approve all audit and non-audit
services provided by the independent registered public accounting
firm prior to the engagement of the independent accountants with
respect to such services. Prior to appointment of the Audit
Committee, the Board approved such services. The Company’s
independent accountants may be engaged to provide non-audit
services only after the Audit Committee has first considered the
proposed engagement and has determined in each instance that the
proposed services are not prohibited by applicable regulations, and
that the accountants’ independence will not be materially
impaired as a result of having provided such services. In making
this determination, the Audit Committee takes into consideration
whether a reasonable investor, knowing all relevant facts and
circumstances would conclude that the accountants’ exercise
of objective and impartial judgment on all issues encompassed
within the accountants’ engagement would be materially
impaired. The Audit Committee may delegate its approval authority
to pre-approve services provided by the independent accountants to
one or more of the members of the Audit Committee, provided that
any such approvals are presented to the Audit Committee at its next
scheduled meeting.
Compensation Committee
.
John Schneller (Chairman), J.D. Smith
and Rimmy Malhotra currently serve on the Compensation
Committee. The Compensation Committee met on six occasions in
2016. The Compensation Committee is comprised of three
independent directors. The independent directors have been
determined by the Board to be independent pursuant to Rule 10A-3 of
the Exchange Act and the Nasdaq Marketplace Rules.
The Compensation Committee oversees our executive compensation
program, establishes our compensation philosophy and policies, and
administers our compensation plans. The Compensation
Committee generally reviews the compensation programs applicable to
executive officers on an annual basis. In setting
compensation levels for a particular executive, the Committee takes
into consideration the proposed compensation package as a whole and
each element individually, as well as the executive's past and
expected future contributions to our business.
The Committee has the authority to engage its own independent
advisors to assist in carrying out its responsibilities.
No
such advisors are currently engaged.
The Compensation Committee did not use an advisor
to assist it in determining executive compensation for our 2016
fiscal year.
Executive management of the Company is
actively involved in determining appropriate compensation and
making recommendations to the Compensation Committee for its
consideration.
Nominating and Governance Committee.
The Nominating and Governance Committee is
comprised of three directors. Prior to November 22, 2017,
J.D. Smith (Chairman), John Schneller and Steven Bathgate served on
the Nominating and Corporate Governance Committee. On November 22,
2017, Frederick Sandford replaced John Schneller as a member of the
Nominating and Governance Committee. The Nominating and Corporate
Governance Committee met on three occasions in 2016 and various
times in 2017 relating to the Annual Meeting.
The
Nominating and Governance Committee Charter grants such Committee
the authority to determine the skills and qualifications required
of directors and to develop criteria to be considered in selecting
potential candidates for Board membership. Neither the Committee
nor the Board has established any minimum qualifications for
nominees, but the Board does consider the composition of the Board
as a whole, the requisite characteristics (including independence,
diversity, experience in industry, finance, administration and
operations) of each candidate, and the skills and expertise of its
current members, while taking into account the overall operating
efficiency of the Board and its committees.
The Nominating and Governance Committee’s responsibilities
include, but are not limited to:
●
developing
and recommending to the Board criteria for Board and committee
membership;
●
establishing
procedures for identifying and evaluating director candidates
including nominees recommended by shareholders;
●
identifying
individuals qualified to become Board members;
●
recommending
to the Board the persons to be nominated for election as directors
and to each of the Board’s committees; and
●
overseeing
the evaluation of the effectiveness of the organization of the
Board, including its committees, and the Board’s
performance.
Strategic Alternatives Committee:
In February 2017, our
Board established the Strategic Alternatives Committee as a special
committee and appointed John Schneller, J.D. Smith, Rimmy Malhotra
and Steven Bathgate to serve on the committee. Subsequently, the
Strategic Alternatives Committee appointed Rimmy Malhotra as chair.
The Committee is empowered to identify and evaluate strategic
opportunities available to the Company, which may include a sale,
acquisition, or other value maximizing transaction. The Committee
has engaged the services of an investment banking firm to assist
the Committee in fulfilling this assignment. Each of the members of
the Strategic Alternatives Committee meets the independence
standards for independent directors under Nasdaq Listing
Rules.
Director Nominations
The
Board of Directors nominates directors for election at each annual
meeting of stockholders and appoints new directors to fill
vacancies when they arise. The Nominating and Governance Committee
has the responsibility to identify, evaluate, recruit and recommend
qualified candidates to the Board of Directors for nomination or
election.
One of
the Board of Directors’ objectives in evaluating director
nominations is to ensure that its membership is composed of
experienced and dedicated individuals with a diversity of
backgrounds, perspectives and skills. The Nominating and Governance
Committee will select nominees for director based on their
character, judgment, diversity of experience, business acumen, and
ability to act on behalf of all stockholders. We do not have a
formal diversity policy. However, the Nominating and Governance
Committee endeavors to have a Board representing diverse viewpoints
as well as diverse expertise at policy-making levels in many areas,
including business, accounting and finance, marketing and sales,
legal, government affairs, regulatory affairs, business
development, technology and in other areas that are
relevant to our activities.
The
Nominating and Governance Committee believes that nominees for
director should have experience, such as those mentioned above,
that may be useful to Command Center and the Board of Directors,
high personal and professional ethics and the willingness and
ability to devote sufficient time to carry out effectively their
duties as directors. The Nominating and Governance Committee
believes it appropriate for at least one, and, preferably,
multiple, members of the Board of Directors to meet the criteria
for an “audit committee financial expert” as defined by
rules of the SEC, and for a majority of the members of the Board of
Directors to meet the definition of “independent
director” as defined by the Nasdaq Listing Rules. The
Nominating and Governance Committee also believes it appropriate
for key members of our management to participate as members of the
Board of Directors. Prior to each annual meeting of stockholders,
the Nominating and Governance Committee identifies nominees first
by evaluating the current directors whose terms will expire at the
annual meeting and who are willing to continue in service. These
candidates are evaluated based on the criteria described above,
including as demonstrated by the candidate’s prior service as
a director, and the needs of the Board of Directors with respect to
the particular talents and experience of its directors. In the
event that a director does not wish to continue in service, the
Nominating and Governance Committee determines not to re-nominate
the director, a vacancy is created on the Board of Directors as a
result of a resignation, an increase in the size of the Board or
other event, the Committee will consider various candidates for
Board membership, including those suggested by the Committee
members, by other Board members, by any executive search firm
engaged by the Committee or by stockholders.
A
stockholder who wishes to suggest a prospective nominee for the
Board of Directors should notify Command Center’s Secretary
in writing and include any supporting material the stockholder
considers appropriate. Information to be in the notice includes (i)
the name, age, business address and residence address for the
nominee, (ii) the principal occupation or employment of each such
nominee, (iii) the number of shares of capital stock of the
corporation which are owned of record and beneficially by each such
nominee (if any), (iv), such other information concerning each such
nominee as would be required to be disclosed in a proxy statement
soliciting proxies for the election of such nominee as a director
in an election contest (even if an election contest is not
involved) or that is otherwise required to be disclosed, under
Section 14(a) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the
“Exchange Act”), (v) the consent of the nominee to
being named in the proxy statement as a nominee and to serve as a
director if elected, and (vi) as to the Proposing Stockholder: (A)
the name and address of the Proposing Stockholder as they appear on
the corporation’s books and of the beneficial owner, if any,
on whose behalf the nomination is being made, (B) the class and
number of shares of the corporation which are owned by the
Proposing Stockholder (beneficially and of record) and owned by the
beneficial owner, if any, on whose behalf the nomination is being
made, as of the date of the Proposing Stockholder’s notice,
and a representation that the Proposing Stockholder will notify the
Corporation in writing of the class and number of such shares owned
of record and beneficially as of the record date for the meeting
promptly following the later of the record date or the date notice
of the record date is first publicly disclosed, (C) a description
of any agreement, arrangement or understanding with respect to such
nomination between or among the Proposing Stockholder and any of
its affiliates or associates, and any others (including their
names) acting in concert with any of the foregoing, and a
representation that the Proposing Stockholder will notify the
corporation in writing of any such agreement, arrangement or
understanding in effect as of the record date for the meeting
promptly following the later of the record date or the date notice
of the record date is first publicly disclosed, (D) a description
of any agreement, arrangement or understanding (including any
derivative or short positions, profit interests, options, hedging
transactions, and borrowed or loaned shares) that has been entered
into as of the date of the Proposing Stockholder’s notice by,
or on behalf of, the Proposing Stockholder or any of its affiliates
or associates, the effect or intent of which is to mitigate loss
to, manage risk or benefit of share price changes for, or increase
or decrease the voting power of the Proposing Stockholder or any of
its affiliates or associates with respect to shares of stock of the
corporation, and a representation that the Proposing Stockholder
will notify the Corporation in writing of any such agreement,
arrangement or understanding in effect as of the record date for
the meeting promptly following the later of the record date or the
date notice of the record date is first publicly disclosed, (E) a
representation that the Proposing Stockholder is a holder of record
of shares of the corporation entitled to vote at the meeting and
intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice, and (F) a
representation whether the Proposing Stockholder intends to deliver
a proxy statement and/or form of proxy to holders of at least the
percentage of the corporation’s outstanding capital stock
required to approve the nomination and/or otherwise to solicit
proxies from stockholders in support of the nomination. Submission
of a prospective nominee must comply with the requirements set
forth in the Company's Bylaws.
Stockholder
nominations must be made in accordance with the procedures outlined
in, and must include the information required by, our Bylaws and
must be addressed to: Secretary, Command Center, Inc., 3609 S.
Wadsworth, Suite 250, Lakewood, CO 80235. You can obtain a copy of
our Bylaws by writing to the Secretary at this
address.
Stockholder Communications with the Board of Directors
If you
wish to communicate with the Board of Directors, you may send your
communication in writing to: Secretary, Command Center, Inc., 3609
S. Wadsworth, Suite 250, Lakewood, CO 80235. Please include your
name and address in the written communication and indicate whether
you are a stockholder of Command Center. The Secretary will review
any communication received from a stockholder, and all material
communications from stockholders will be forwarded to the
appropriate director or directors or Committee of the Board of
Directors based on the subject matter.
Board Leadership Structure
We have
separate individuals serving as Chairman of the Board of Directors
and our Principal Executive Officer. Mr. Sandford began serving as
our Chief Executive Officer on February 22, 2013. The Board
appointed Mr. Stewart to serve as the Chairman in December 2014. As
Chief Executive Officer, Mr. Sandford manages the day-to-day
affairs of the Company.
The
principal role of the Chairman of the Board is to manage and to
provide leadership to the Board of Directors of the Company. The
Chairman is accountable to the Board and acts as a direct liaison
between the Board and the management of the Company, through the
Chief Executive Officer. The Chairman acts as the communicator for
Board decisions where appropriate.
The
Chairman is selected by the Board annually from among its members
and serves for a period of one year or until his successor is
elected. Understanding that separation of the roles of Chairman and
CEO is an important element of strong corporate governance, the
Board is committed to appointing a Chairman who is not also
CEO.
Furthermore,
the Board believes that the Chairman should be independent from
management and free from any interest and any business or other
relationships which could interfere with the Chairman’s
independent judgment other than interests resulting from being a
shareholder and Director of the Company. Consequently, the Chairman
should be independent, based upon the standards for determining
independence as adopted by the Board in the Corporate Governance
Guidelines.
The
duties and responsibilities of the Chairman include the
following:
–
To act
as a liaison between management and the Board;
–
To
provide independent advice and counsel to the CEO;
–
To
keep abreast generally of the activities of the Company and
management;
–
To
ensure that the Directors are properly informed and that sufficient
information is provided to the Directors;
–
In
concert with the CEO, to develop and set the agendas for meetings
of the Board;
–
To act
as chair at meetings of the Board;
–
To
recommend an annual schedule of the date, time and location of
Board and Committee meetings;
–
To sit
on other Committees of the Board where appropriate as determined by
the Board;
–
To
call special meetings of the Board if and when
necessary;
–
In
concert with the CEO, to determine the date, time and location of
the annual meeting of shareholders and to develop the agenda for
the meeting;
–
To
recommend to the Board, after consultation with the Directors and
management, the appointment of members of the Committees of the
Board;
–
To
assess and make recommendations to the Board annually regarding the
effectiveness of the Board as a whole, the Committees of the Board
and individual Directors;
–
To
ensure that regularly, upon completion of the ordinary business of
a meeting of the Board, the Directors hold discussions without
management present; and
–
To
perform all duties as set forth in the Bylaws.
The
Board believes that this structure is currently serving our Company
well, and intends to maintain it where appropriate and practicable
in the future. We have had varying board leadership models over our
history. In past years, one person filled the positions of Chairman
and Chief Executive Officer. More recently, beginning in December
2014, we have separated these positions. The Board believes that
the right structure should be based on the needs and circumstances
of our Company, the Board and our stockholders, and we believe
having an independent director lead the Board best serves these
interests.
The Board’s Role in Risk Oversight
The
Board has a comprehensive enterprise risk management process in
which management is responsible for managing the Company's risks.
The Board and its committees provide review and oversight in
connection with these efforts. The Board recognizes that it is
neither possible nor prudent to eliminate all risk. Purposeful and
appropriate risk taking is essential for the Company to be
competitive and to achieve its strategic objectives.
The
Board implements its risk oversight function both as a whole and
through committees, which play a significant role in carrying out
risk oversight. The risk oversight responsibility is enabled by
management reporting processes that are designed to provide
visibility to the Board about the identification, assessment and
management of critical risks and management’s risk mitigation
strategies. These areas of focus include competitive, economic,
operational, financial, legal, regulatory, compliance, safety,
environmental and political risks. While the Audit Committee is
responsible for oversight of management’s risk management
policies, oversight responsibility for particular areas of risk is
allocated among the Board committees according to the
committee’s area of responsibility as reflected in the
committee charters.
In
particular:
●
The full Board
oversees strategic, financial and execution risks and exposures
associated with the annual plan and other current matters that may
present material risk to the Company’s operations, plans,
prospects or reputation, in addition to acquisitions and executive
management succession planning.
●
The Audit Committee
oversees risks associated with financial matters, particularly
financial reporting, tax, accounting, disclosure, internal control
over financial reporting, financial policies, credit and liquidity
matters and compliance with legal and regulatory matters including
environmental matters.
●
The Compensation
Committee oversees risks and rewards associated with the
Company’s attraction and retention of talent, management
development, executive management succession plans, and
compensation philosophy and programs, including a periodic review
of such compensation programs to ensure that they do not encourage
excessive risk-taking.
●
The Nominating and
Governance Committee oversees risks associated with company
governance, director succession planning, and the structure and
performance of the Board and its committees.
The
Company believes that its leadership structure, discussed in detail
above, supports the risk oversight function of the Board. Strong
directors chair the various committees involved in risk oversight,
there is open communication between management and directors, and
all directors are involved in the risk oversight
function.
Board Compensation
The
following table summarized the cash, equity awards, and all other
compensation earned by each of our non-employee directors during
the year ended December 30, 2016. Mr. Sandford’s compensation
is disclosed in the Summary Executive Compensation table
below.
|
Name
|
Cash Fees Earned ($)
|
Stock Awards ($)
(1)
|
Total ($)
|
|
John Stewart
|
46,500
|
7,960
|
54,460
|
|
Richard Finlay
|
25,000
|
7,960
|
32,960
|
|
John Schneller
|
36,000
|
7,960
|
43,960
|
|
J.D. Smith
|
36,000
|
7,960
|
43,960
|
|
R.
Rimmy Malhotra
|
12,500
|
-
|
12,500
|
|
Steven
Bathgate
|
6,250
|
-
|
6,250
|
(1)
Represents the
aggregate grant date fair value of stock awards granted during the
fiscal year ended December 30, 2016 as computed in accordance with
FASB ASC Topic 718, Compensation — Stock Compensation. The
grant date fair value of shares awarded to each non-employee
director in 2016 (20,000 shares each) were calculated using the
closing price of our stock on the grant date in accordance with
GAAP.
These
amounts do not represent the actual amounts paid to or realized by
the directors during the fiscal year ended December 30,
2016.
Narrative to Director Compensation Table
The
Compensation Committee recommends and the Board of Directors
determines the compensation for the Company’s directors,
based on industry standards and the Company’s financial
situation. At all relevant times after July 9, 2015, we paid an
annual retainer of $30,000 for our chairman of the board and
$25,000 for each of our other independent directors, paid on a
quarterly basis. In addition, we paid $6,500 per annum, paid
quarterly, for serving as chair of the Audit committee and $5,000
per annum, paid quarterly, for the chairman of the Compensation and
Nominating and Governance Committees. Non-chairman members of each
board committee are also awarded compensation, $3,500 annually for
Audit Committee members and $2,500 annually for members of other
committees. Our employee directors receive no additional
compensation for attendance at Board meetings or meetings of Board
committees. Non-employee directors are also awarded 20,000 shares
of our common stock annually and reimbursed for any expenses they
may incur in attending meetings.
Related Person Transactions Policy and Procedures
As set
forth in the written charter of the Audit Committee, any related
person transaction involving a Company director or executive
officer must be reviewed and approved by the Audit Committee. Any
member of the Audit Committee who is a related person with respect
to a transaction under review may not participate in the
deliberations or vote on the approval or ratification of the
transaction. Related persons include any director or executive
officer, certain shareholders and any of their “immediate
family members” (as defined by SEC regulations). In addition,
the Board of Directors determines on an annual basis which
directors meet the definition of independent director under the
Nasdaq Listing Rules and reviews any director relationship that
would potentially interfere with his or her exercise of independent
judgment in carrying out the responsibilities of a
director.
Certain Relationships and Related Party Transactions
In the
two most recently completed fiscal years, there have been no
reportable related party transactions between the Company and any
executive officer, director or affiliate.
From time to time, our Audit Committee will review and report to
our Board of Directors on any related party transaction. In
considering related party transactions, the members of our Audit
Committee are guided by their fiduciary duties to our shareholders.
Our Audit Committee does not currently have any written or oral
policies or procedures regarding the review, approval and
ratification of transactions with related parties.
Indebtedness of Management
No
director or executive officer or nominee for director, or any
member of the immediate family of such has been indebted to the
Company during the past year.
Officer and Director Legal Proceedings
There
are no legal proceedings involving officers or directors of the
Company.
Director Independence
The Board affirmatively determines the independence of each
director and nominee for election as a director in accordance with
certain criteria, which include all elements of independence set
forth in the related Securities and Exchange Commission Rules and
Regulations and the Nasdaq Marketplace Rules. As part of the
Nominating and Governance Committee meetings and as they feel
necessary or appropriate at full board meetings, the independent
directors meet in executive session without management or any
non-independent directors present.
Based on these standards and information provided in the Director
and Officer Questionnaire, the Board determined that six of its
nominees, Steven Bathgate, Richard Finlay, R. Rimmy Malhotra, John
Schneller, J.D. Smith and John Stewart, are independent and have no
material relationship with the Company, except as directors and as
shareholders of the Company.
In making their determinations, the Board found no transactions,
relationships or arrangements which might impair the independence
of the respective directors.
Indemnification
The
Company’s Bylaws address indemnification of Directors and
Officers. Washington law provides that Washington corporations may
include within their Articles of Incorporation provisions
eliminating or limiting the personal liability of their directors
and officers in shareholder actions brought to obtain damages for
alleged breaches of fiduciary duties, as long as the alleged acts
or omissions did not involve intentional misconduct, fraud, a
knowing violation of law or payment of dividends in violation of
the Washington statutes. Washington law also allows Washington
corporations to include in their Articles of Incorporation or
Bylaws provisions to the effect that expenses of officers and
directors incurred in defending a civil or criminal action must be
paid by the corporation as they are incurred, subject to an
undertaking on behalf of the officer or director that he or she
will repay such expenses if it is ultimately determined by a court
of competent jurisdiction that such officer or director is not
entitled to be indemnified by the corporation because such officer
or director did not act in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the
corporation. The Company’s Articles of Incorporation provide
that a director or officer is not personally liable to the Company
or its shareholders for damages for any breach of fiduciary duty as
a director or officer, except for liability for (i) acts or
omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of distribution in violation
of Washington Business Corporation Act.
Code of Ethics
In
October 2015, the Board of Directors adopted the Standards of
Ethics and Business Conduct. The Code of Ethics applies to all
directors, officers and employees of the Company. The Code of
Ethics is available on our website at
www.commandonline.com
and in print to
any shareholder upon request to: Secretary, Command Center, Inc.,
3609 S. Wadsworth, Suite 250, Lakewood, CO 80235.
PROPOSAL 2
—
RATIFICATION
OF SELECTION OF EKS&H LLLP
AS OUR INDEPENDENT AUDITOR
|
The
Audit Committee of the Board of Directors has selected EKS&H
LLLP as the independent registered public accounting firm to audit
the Company’s consolidated financial statements for the
fiscal year ending December 29, 2017. Shareholder ratification of
the selection of EKS&H LLLP as the Company’s independent
auditors is not required by the Bylaws or otherwise. However, the
Board is submitting the selection of EKS&H LLLP to the
shareholders for ratification as a matter of corporate practice. If
the shareholders fail to ratify the selection, the Audit Committee
and the Board will reconsider whether or not to retain that firm.
Even if the selection is ratified, the Board, in its discretion,
may direct the appointment of a different independent accounting
firm at any time during the year if the Audit Committee determines
that such a change would be in the best interests of the Company
and its shareholders.
EKS&H
LLLP is experienced in the field of accounting and is well
qualified to act in the capacity of auditors.
A representative of EKS&H LLLP
will be present at the Annual Meeting to respond to appropriate
questions by shareholders and will have the opportunity to make a
statement if desired.
Ratification
of the appointment of EKS&H LLLP requires the affirmative vote
of a majority of the shares cast at the Annual Meeting in person or
by proxy. That means that the number of shares voted
“for” this Proposal must exceed the number of shares
voted “against” the Proposal. Unless marked to the
contrary, proxies received will be voted “FOR”
ratification of the appointment. A properly executed proxy marked
“ABSTAIN” with respect to this Proposal will not be
voted, although it will be counted for purposes of determining a
quorum. Accordingly, an abstention will be treated as neither a
vote “for” nor “against” this Proposal, and
will have no effect on the outcome of the vote. Because this
Proposal is a routine proposal on which a broker or other nominee
is generally empowered to vote, broker “non-votes”
likely will not result from this Proposal. Thus, if you are a
beneficial owner holding shares through a broker, bank or other
holder of record and you do not vote on this Proposal, your broker
may cast a vote on your behalf for this Proposal. In the event
ratification is not obtained, the Audit Committee and the Board
will review its future selection of our independent registered
public accounting firm but will not be required to select a
different independent registered public accounting
firm.
On
April 17, 2017, we dismissed PMB Helin Donovan LLP as our
independent registered public accounting firm, effective April 17,
2017. Effective April 17, 2017, we appointed EKS&H LLLP based
in Denver, Colorado as our new independent registered public
accounting firm. The dismissal of PMB Helin Donovan and the
appointment of EKS&H was approved by our Audit Committee on
April 17, 2017.
PMB
Helin Donovan LLP’s reports on our consolidated financial
statements as of and for the fiscal years ended December 30, 2016
and December 25, 2015 did not contain any adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles. During our two
most recent fiscal years ended December 30, 2016 and December 25,
2015 and through April 17, 2017, we have not had any disagreement
with PMB Helin Donovan LLP on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedures, which disagreement, if not resolved to PMB Helin
Donovan LLP’s satisfaction, would have caused PMB Helin
Donovan LLP to make reference to the subject matter of the
disagreement in their reports on our consolidated financial
statements. In addition, during our two most recent fiscal years
ended December 30, 2016 and December 25, 2015 and through April 17,
2017, there were no “reportable events” as that term is
defined in Item 304(a)(1)(v) of Regulation S-K.
We have
not consulted EKS&H LLLP on any matter relating to either (i)
the application of accounting principles to a specific transaction,
either completed or contemplated, or the type of audit opinion that
might be rendered on our financial statements or (ii) any matter
that was the subject of a disagreement (as that term is defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions)
or a "reportable event" (as that term is defined in Item
304(a)(1)(v) of Regulation S-K) for the fiscal years ended December
30, 2016 and December 25, 2015.
We
provided PMB Helin Donovan LLP and EKS&H LLLP each with a copy
of this disclosure prior to its filing with the Securities and
Exchange Commission, and requested that PMB Helin Donovan LLP and
EKS&H LLLP review this disclosure for accuracy and
completeness.
Principal Accountant Fees and Services.
We engaged EKS&H
LLLP as our independent registered public accounting firm on April
17, 2017. Prior to April 17, 2017, we engaged PMB Helin Donovan LLP
as our independent registered accounting firm. The following table
summarizes the fees that PMB Helin Donovan charged us for the
listed services in fiscal years 2016 and 2015. We expect that
EKS&H will serve as our auditors for fiscal year
2017.
|
Type of fee
|
Year ended
December 30, 2016
|
Year ended
December 25, 2015
|
|
Audit
Fees (1)
|
$122,500
|
$131,500
|
|
Audit-related
Fees (2)
|
-
|
-
|
|
Tax
Fees (3)
|
$35,310
|
$22,286
|
|
All
Other Fees (4)
|
-
|
-
|
|
Total
Fees
|
$157,810
|
$153,786
|
|
(1)
|
Audit
fees consist of fees billed for professional services provided in
connection with the audit of the Company’s consolidated
financial statements and reviews of our quarterly consolidated
financial statements.
|
|
(2)
|
Audit-related
fees consist of assurance and related services that include, but
are not limited to, internal control reviews, attest services not
required by statute or regulation and consultation concerning
financial accounting and reporting standards, and not reported
under “Audit fees.”
|
|
(3)
|
Tax
fees consist of the aggregate fees billed for professional services
for tax compliance, tax advice, and tax planning. These
services include preparation of federal income tax
returns.
|
|
(4)
|
All
other fees consist of fees billed for products and services other
than the services reported above.
|
The
Audit Committee reviews and approves audit and permissible
non-audit services performed by the Company’s independent
auditors, as well as the fees charged for such services. In its
review of non-audit service fees and the appointment of its
independent auditors as the Company’s independent
accountants, the Audit Committee considers whether the provision of
such services is compatible with maintaining its auditors'
independence. All of the services provided and fees charged by the
independent auditors in 2016 and 2015 were pre-approved by the
Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATON
OF EKS&H LLLP AS OUR INDEPENDENT AUDITORS FOR FISCAL YEAR
2017
|
Audit Committee Report
This report shall not be deemed to be incorporated by reference by
any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, and shall not otherwise be deemed
filed under such acts.
Management
has the primary responsibility for the Company’s internal
controls and financial reporting process. The independent
registered public accounting firm is responsible for performing an
independent audit of the Company’s consolidated financial
statements in accordance with the standards of the Public Company
Accounting and Oversight Board and issuing an opinion thereon. The
Audit Committee’s responsibility is to monitor and oversee
these processes. As part of its ongoing activities, the Audit
Committee has:
●
reviewed and
discussed with management and the independent registered public
accounting firm the Company’s audited consolidated financial
statements for the fiscal year ended December 30,
2016;
●
met
with the Company’s Chief Executive Officer, Chief Financial
Officer, and the independent registered public accounting firm to
discuss the scope and the results of the audits and the overall
quality of the Company’s financial reporting and internal
controls;
●
discussed with the
independent registered public accountants the matters required to
be discussed by Statement on Auditing Standards No. 61,
Communications with Audit Committees, as amended;
●
received the
written disclosures and the letter from the independent registered
public accounting firm required by applicable requirements of the
Public Company Accounting and Oversight Board regarding the
independent registered public accounting firm’s
communications with the Audit Committee concerning independence as
currently in effect, and discussed with the independent registered
public accounting firm its independence from the Company;
and
●
pre-approved all
audit, audit related and other services to be provided by the
independent registered public accounting firm.
Based
on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited
consolidated financial statements be included in the
Company’s annual report on Form 10-K for the fiscal year
ended December 30, 2016, for filing with the Securities and
Exchange Commission.
In
addition, the Audit Committee appointed EKS&H LLLP as the
Company’s independent registered public accounting firm for
the year ending December 29, 2017, and any interim periods,
subject to the ratification of this appointment by the
shareholders.
Audit Committee
John
Stewart, Chairman
Richard
Finlay
R.
Rimmy Malhotra
|
PROPOSAL 3 — ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
|
We are
providing shareholders with the opportunity to cast an advisory
vote on executive compensation as described below. Pursuant to
Section 14A of the Securities Exchange Act of 1934, as amended,
shareholders are entitled to an advisory (non-binding) vote on
compensation programs for our Named Executive Officers (sometimes
referred to as “say-on-pay”).
Accordingly, we are asking shareholders to
approve, on an advisory basis, the compensation of our named
executive officers disclosed in the section entitled
“Executive Compensation” below.
We believe that
it is appropriate to seek the views of shareholders on the design
and effectiveness of the Company’s executive compensation
program.
As
described below in the section entitled “Executive
Compensation” of this proxy statement, our compensation
program is designed to support our business goals and promote
short- and long-term profitable growth of the Company and align
compensation with the long-term interests of our
shareholders.
The
Board is asking shareholders to read the section entitled
“Executive Compensation” of this proxy statement, which
describes in more detail how our executive compensation policies
and procedures operate and are designed to achieve our compensation
objectives, as well as the Summary Compensation Table and other
related compensation tables and narratives, which provide detailed
information on the compensation of our Named Executive Officers.
The Board believes that the policies and procedures articulated in
the Executive Compensation section are effective in achieving our
goals and that the compensation of our Named Executive Officers
reported in this proxy statement has supported and contributed to
the Company’s recent and long-term success.
The
Board is asking shareholders to support this proposal based on the
disclosure set forth in these sections of this proxy statement,
which, among other things,
●
provides
a total compensation package that is competitive with other
companies in the temporary staffing industry, yet is consistent
with our focus on profitability; and
●
emphasizes
incentive and equity compensation for our executive team in order
to promote long-term incentives to increase shareholder value and
align the interests of our officers with those of our
shareholders.
Approval
of this proposal requires the affirmative vote of a majority of the
shares cast at the meeting, in person or represented by proxy, and
entitled to vote. Because the vote is advisory, it will not be
binding upon the Board of Directors, and the Compensation Committee
or the Board of Directors will not be required to take any action
as a result of the outcome of the vote on this proposal. The
Compensation Committee and the Board of Directors will carefully
assess the voting results, and if those results reflect any broadly
held issues or concerns, the Board of Directors will consult
directly with shareholders to better understand their
views.
The
frequency of holding “say-on-pay” advisory votes was
determined to be on a yearly basis by the decision of the
shareholders during the Company’s 2013 Annual Shareholders
Meeting.
Because
this proposal asks for a non-binding, advisory vote, there is no
required vote that would constitute approval. We value the opinions
expressed by our shareholders in this advisory vote, and our
Compensation Committee, which is responsible for overseeing and
administering our executive compensation programs, will consider
the outcome of the vote when designing our compensation programs
and making future compensation decisions for our Named Executive
Officers. Abstentions and broker “non-votes,” if any,
will not have any impact on this advisory vote.
The
Board of Directors is asking shareholders to cast a non-binding,
advisory vote
FOR
the
following resolution:
“RESOLVED,
the shareholders of Command Center, Inc. approve on an advisory
basis, the compensation paid to our Named Executive Officers as
disclosed pursuant to the compensation disclosure rules of the SEC,
including the compensation tables and accompanying narrative
disclosure included in this Proxy Statement.”
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS.
|
Executive Officers
The
following table sets forth the names and ages of all executive
officers of the Company as of November 22, 2017; all positions held
by such persons; term of office
(1)
and the period
during which he has served as such; and any arrangement or
understanding between him and any other person(s) pursuant to which
he was elected as an officer:
|
Name of Officer
|
Age
|
Position
|
Period of Service
|
|
Frederick
J. Sandford
|
55
|
Chief
Executive Officer, President
|
2/22/13
- present
|
|
Ronald
L. Junck
|
69
|
Executive
Vice President and General Counsel
|
10/10/06
- present
|
|
Cory
Smith
|
41
|
Chief
Financial Officer
|
7/31/17
– present
|
(1)
Executive
officers serve at the pleasure of the Board of Directors. Unless
otherwise set forth in any Executive Employment Agreement (as
discussed above), the term of office for each executive officer is
generally for a period of one year or until his or her successor is
duly appointed.
Executive Officer Biographies
Frederick J. Sandford, age 55, Chief Executive officer, President
and Director
.
For Mr.
Sandford’s biography, please refer to the section
“Director Biographies and Qualifications” on p.
13.
Ronald L. Junck,
age 69, has been our Executive Vice
President, Secretary and General Counsel since November 2006. From
1974 until 1998, Mr. Junck practiced law in Phoenix, Arizona,
specializing in business law and commercial transactions,
representing a wide variety of business organizations in their
corporate and business affairs, as well as in court. He has
lectured extensively at colleges and universities on various
aspects of business law. From 1998 through 2001, Mr. Junck served
as Executive Vice President and General Counsel of Labor Ready,
Inc., and for several years served as a director of that company.
In 2001, Mr. Junck returned to the private practice of law. Mr.
Junck served as a member of our Board of Directors from November
2005 until November 2007. Mr. Junck received a Bachelor of Science
in Mechanical Engineering from the University of Illinois in 1971
and a Juris Doctorate from Valparaiso University in 1974. He is
admitted to practice before all of the state and federal courts in
the State of Arizona, the United States Court of Appeals for the
Ninth Circuit and the U.S. Court of Federal Claims.
Cory Smith,
age 41, was appointed as our and Chief Financial
Officer on July 31, 2017. Mr. Smith was previously employed by
Command Center from 2010 through 2015 and served as the Controller
during the final 2 years of his tenure. Between 2015 and 2017, he
was employed by WorldWide Staffing, where he served as the
Controller and Vice President of Finance. Prior to 2010, Mr. Smith
worked as a Certified Public Accountant for several years,
primarily performing attestation work. Mr. Smith received his
Bachelor of Science in Business Administration from Lewis-Clark
State College.
Named Executive Officers
In
accordance with the rules and regulations of the Securities and
Exchange Commission for smaller reporting companies, we determined
that the following officers were our Named Executive Officers for
fiscal year 2016:
|
|
●
|
Frederick
J. Sandford, Chief Executive Officer;
|
|
|
●
|
Colette
Pieper, former Chief Financial Officer (through July 31,
2017);
|
|
|
●
|
Ronald
L. Junck, Executive Vice President and General Counsel;
and
|
|
●
|
Jeff
Wilson, former Chief Financial Officer (through September 1,
2016.)
|
Overview of Compensation Program
We compete with many other temporary staffing companies in seeking
to attract and retain a skilled work force. Our compensation
philosophy is to offer our employees, including our executive
officers, compensation that is competitive and that meets our goals
of attracting, retaining and motivating highly skilled employees,
but that is also consistent with our financial goals of cost
containment and long-term profitability. Utilizing this philosophy,
our executive compensation policies are designed to:
●
provide
a total compensation package that is competitive with other
companies in the temporary staffing industry, yet is consistent
with our focus on profitability; and
●
emphasize
incentive and equity compensation for our executive team in order
to promote long-term incentives to increase shareholder value and
align the interests of our officers with those of our
shareholders.
General Philosophy and Objectives
In general, our objectives in structuring compensation programs for
our NEOs is to attract, retain, incentivize, and reward talented
executives who can contribute to our growth and success and thereby
build value for our shareholders over the long term. In the
past, we have focused on cash compensation in the form of base
salary as the primary element of our compensation program for
NEOs.
In 2008, the Board appointed the Compensation Committee and adopted
the Compensation Committee Charter. Subsequently, our Compensation
Committee has reviewed and approved all of our executive
compensation packages, and determined the appropriate level of each
compensation component for each NEO based upon available
compensation data. Our Compensation Committee has also relied on
its members’ business judgment and collective experience in
our industry. Although it did not benchmark our executive
compensation program and practices, our Compensation Committee
believes that our executive compensation levels have historically
been at or below compensation levels for comparable executives in
other companies of similar size and stage of development in similar
industries and locations.
Past Say-on-Pay Vote
The
Compensation Committee considered the fact that a majority of the
votes approved
FOR
the
Say-on-Pay proposal at the 2016 Annual Meeting. Given the
shareholders’ (non-binding) approval of the Say-on-Pay Vote
in 2016, the Compensation Committee determined to continue to apply
the same general approach with respect to compensation policies and
decisions for fiscal year 2016, with modifications as deemed
necessary by the Committee to further the Company’s overall
compensation philosophy.
The
Compensation Committee will continue to consider the results of the
annual Say-on-Pay votes in their future compensation policies and
decisions. A more detailed analysis of our executive compensation
decisions and policies in 2015 and 2016 is set forth
below.
Summary Compensation Table
The
following table provides a summary of information about
compensation paid or accrued by us during the fiscal years ended
December 30, 2016, and December 25, 2015 for our 2016 NEOs,
determined in accordance with SEC rules. Columns required by
SEC rules are omitted where there is no amount to
report.
|
Name and Principal Position
|
Year
|
Salary (S)
|
Bonus ($)
|
Stock Awards ($)
(1)
|
Option Awards ($)
|
All Other Compensation ($)
(2)
|
Total ($)
|
|
Frederick
J. Sandford,
(3)
President,
Chief Executive Officer and Director
|
2016
|
275,000
|
85,000
|
-
|
-
|
258
|
360,258
|
|
2015
|
253,923
|
-
|
-
|
-
|
138
|
254,061
|
|
Colette
Pieper,
(4)
former
Chief Financial Officer
|
2016
|
60,481
|
-
|
-
|
-
|
54,830
|
115,311
|
|
2015
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Ronald
L. Junck,
Executive
Vice President, General Counsel
|
2016
|
185,000
|
35,000
|
-
|
-
|
228
|
220,228
|
|
2015
|
185,000
|
-
|
-
|
-
|
762
|
185,762
|
|
Jeff
Wilson,
(5),
former Chief
Financial Officer and Director
|
2016
|
149,029
|
-
|
13,256
|
-
|
194
|
162,479
|
|
2015
|
200,000
|
-
|
-
|
-
|
136
|
200,138
|
(1)
Represents the
aggregate grant date fair value of stock awards granted during the
fiscal years ended December 30, 2016 and December 25, 2015 as
computed in accordance with FASB ASC Topic 718, Compensation
— Stock Compensation. The grant date fair value of shares
awarded to each non-employee director in 2015 (20,000 shares each)
were calculated using the closing price of our stock on the grant
date in accordance with GAAP. These amounts do not represent the
actual amounts paid to or realized by the officers during the
fiscal years 2016 or 2015.
(2)
Includes payments
from Company sponsored life insurance.
(3)
Frederick J.
Sandford was appointed as our Chief Executive Officer and Director
on February 22, 2013. His annual salary for 2016 and part of 2015
was $275,000, effective July 1, 2015. From July 1, 2014
to June 30, 2015 his annual salary was $235,000.
(4)
Colette Pieper
served as our Chief Financial Officer from September 2, 2016 until
July 31, 2017. Her annual salary for 2016 was $185,000. Ms.
Pieper’s compensation for 2016 includes $54,698 of
reimbursable relocation expense. Her tenure as CFO and as an
employee of the company ended upon the effective date of her
resignation on July 31, 2017.
(5)
Jeff Wilson served
as our Chief Financial Officer from September 2, 2014 until
September 1, 2016. His annual salary for 2015 and 2016 was
$200,000. Mr. Wilson’s tenure as CFO and as an employee of
the company ended when his contract expired on September 1,
2016.
Narrative to Summary Compensation Table
Elements of Our Compensation Program
The
three primary components of our executive compensation program are:
(i) base salary, (ii) incentive compensation in the form of cash
bonuses, and (iii) equity based compensation.
Base Salary:
The compensation of our NEOs includes a base
salary. Base salaries for our executives are established based on
the scope of their responsibilities and individual experience.
Subject to any applicable employment agreements, base salaries will
be reviewed annually, and adjusted from time to time to realign
salaries with market levels after taking into account individual
responsibilities, performance and experience.
Annual Bonus:
In addition to base salaries, NEO compensation
may include annual bonuses based on satisfactory achievement of
performance objectives established by the Compensation Committee
prior to or at the beginning of each fiscal year. The Compensation
Committee’s objectives for 2015 were based on positive cash
flow for the Company. The executive bonus pool for 2015 was
calculated by taking EBITDA above $5.0 million, multiplied by 35%.
This pool is then distributed to the executive officers based upon
their position. In 2015 we did not achieve the required
EBITDA level and no executive bonuses were awarded. Similarly, in
2016 bonuses were not awarded based upon the EBITDA component,
however bonuses of $85,000 and $35,000 were paid to Mr. Sandford
and Mr. Junck, respectively, for their roles in the successful
relocation of the corporate office from Coeur d’Alene, Idaho
to the Denver area.
Equity and Other Compensation:
We offer between $20,000 and
$100,000 of Company paid life insurance to most employees,
including officers depending on position within the Company. Prior
to the expiration of the 2008 Stock Incentive Plan in January 2016,
we also offered stock options and common share grants to employees
and officers under that plan. With the approval of the 2016 Stock
Incentive Plan in November 2016, stock option and share grants are
now awarded pursuant to the 2016 plan. There were no stock options
granted to the NEO’s in either 2015 or 2016, except as
follows. In 2016, we awarded 25,000 shares of common stock to Jeff
Wilson pursuant to the terms of his employment
agreement.
Perquisites and Other Personal Benefits:
From a
philosophical standpoint, we do not provide NEOs with perquisites
and personal benefits that are not available to all employees. We
make available standard health benefits packages including medical,
dental and vision coverage, for the same premium contributions as
offered to all full time employees of the Company. We believe that
the compensation potential available from its three main components
of compensation detailed herein are sufficiently attractive that
the reliance on other forms of exclusive perquisites and benefits
are not necessary to enable the Company to attract and retain
superior employees for key positions.
In addition, employment agreements with our executive officers may
in the future provide for certain retirement benefits and potential
payments upon termination of employment for a variety of reasons,
including a change in control of our Company.
Summary of Executive Employment Agreements
On
October 13, 2015, we entered into an executive employment agreement
with Frederick Sandford. The key terms of the agreement
are as follows: (i) a base salary of $275,000, with an annual bonus
opportunity under the terms and conditions of the Executive Bonus
Plan, without guarantee of any annual bonus amount; (ii) if there
is a change in control (as defined in the agreement), Mr. Sandford
will continue to receive his Base Salary and Annual Bonus for 24
months after termination, together with vesting of all options
granted; (iii) in the event of termination without cause (as
defined in the agreement), Mr. Sandford would continue to receive
his Base Salary for the longer of 18 months following termination
or the remainder of the then current term of the agreement; (iv)
noncompetition and confidentiality provisions are applicable under
the agreement; and (v) the effective date of the agreement is July
1, 2015, and the term continues for three years after the effective
date unless sooner terminated. Automatic extensions apply in
certain events.
Pursuant
to the Executive Employment Agreement with our former Chief
Financial Officer, Colette Pieper, that ended with her resignation
on July 31, 2017, Mrs. Pieper was entitled to base salary of
$200,000, with an annual bonus opportunity under the terms and
conditions of the Executive Bonus Plan. There was no guarantee of
any annual bonus. Noncompetition and confidentiality provisions are
applicable under the agreement.
There
are no present or anticipated executive employment agreements with
Ronald Junck, Executive Vice President and General Counsel. Ronald
Junck receives a base salary of $225,000 per year,
effective July 18, 2017, plus performance based compensation as set
by the Board. Prior to July 18, 2017, Mr. Junck’s base salary
was $185,000 annually, plus bonus opportunity.
Pursuant
to the Executive Employment Agreement with our former Chief
Financial Officer, Jeff Wilson, that expired on September 1, 2016,
Mr. Wilson was entitled to base salary of $200,000, with an annual
bonus opportunity under the terms and conditions of the Executive
Bonus Plan. There was no guarantee of any annual bonus.
Noncompetition and confidentiality provisions are applicable under
the agreement.
Potential Payments upon Termination
The
employment agreements we entered into with Mr. Sandford and Mrs.
Pieper, respectively, provide for potential payments upon
termination or a change of control. If there is a change in control
and Mr. Sandford is terminated or resigns within thirty days of
such change in control, Mr. Sandford will continue to receive his
Base Salary and Annual Bonus for 24 months after termination,
together with vesting of all options granted. In the event of
termination without cause (as defined in the agreement), Mr.
Sandford will continue to receive his Base Salary for the longer
of: 18 months following termination or the remainder of the then
current term of the agreement. In case of death or disability of
Mr. Sandford or Mrs. Pieper, he or she or their respective estates
will continue to receive 6 months of his or her Base Salary and all
stock options will vest. If there is a change in control, Mrs.
Pieper will continue to receive her Base Salary and Annual Bonus
for 12 months after termination, together with vesting of all
options granted pursuant to the agreement. In the event of
termination without cause (as defined in the agreement), Mrs.
Pieper will continue to receive her Base Salary for the longer of:
12 months following termination or the remainder of the then
current agreement.
The following table was prepared as though each of Messrs.
Sandford, Junck and Mrs. Pieper had been terminated on December 30,
2016, the last day of our last completed fiscal year, without
cause, as that term is defined in the agreements with our Company.
Mr. Wilson left on September 1, 2016, and therefore is not included
in these tables and discussion. More detailed information about the
payment of benefits, including duration, is contained in the
discussion above. All such payments and benefits would be provided
by our Company. The assumptions and valuations are noted in the
footnotes.
|
Name
|
Salary
Continuation ($)
|
|
Frederick
J. Sandford, President and Chief Executive Officer
|
412,500
|
|
Colette
Pieper, former Chief Financial Officer (2)
|
100,000
|
|
Ronald
Junck, General Counsel
|
0
|
(1)
For purposes of
this table, the annual bonus amount is assumed to be equal to 100%
of base salary.
(2)
Mrs. Pieper’s
tenure as Chief Financial Officer and as an employee of the Company
expired on July 31, 2017. The amounts listed are amounts that would
have been payable at the most recent fiscal year end. Currently,
the amounts listed for Mrs. Pieper would become zero.
Potential Payments upon Change of Control
The following table was prepared as though each of Messrs. Sandford
and Junck and Mrs. Pieper had been terminated on December 30, 2016,
the last day of our last completed fiscal year, upon change of
control, as that term is defined in the agreements with our
Company. More detailed information about the payment of benefits,
including duration, is contained in the discussion above. All such
payments and benefits would be provided by our Company. The
assumptions and valuations are noted in the footnotes.
|
Name
|
Salary
Continuation ($)
|
Bonus ($)
|
|
Frederick
J. Sandford, President and Chief Executive Officer
|
550,000
|
550,000
(1)
|
|
Colette
Pieper, former Chief Financial Officer
|
200,000
|
137,500
(2)
|
|
Ronald
Junck, General Counsel
|
0
|
0
|
(1)
For purposes of
this table, the annual bonus amount is assumed to be equal to 100%
of base salary.
(2)
For purposes of
this table, the bonus amount is assumed to be equal to 50% of the
President and CEO’s annual bonus stated above for the
applicable time period. Mrs. Pieper’s tenure as Chief
Financial Officer and as an employee of the Company ended with her
resignation on July 31, 2017. The amounts listed are amounts that
would have been payable at the most recent fiscal year
end.
Retirement Benefits
We do
not have any qualified or non-qualified defined benefit
plans.
Non-qualified Deferred Compensation
We do
not have any non-qualified defined contribution plans or other
deferred compensation plans.
Outstanding Equity Awards at Fiscal Year-End
The
information specified concerning the outstanding stock options of
the Named Executive Officers during the fiscal year ended December
30, 2016, is provided in the following table:
|
Name
|
Grant Date
|
Number of securities underlying unexercised options
exercisable
|
Number of securities underlying unexercised options
unexercisable
|
Option exercise price
|
Option expiration date
|
|
Frederick Sandford
|
2/22/2013
10/31/14
|
1,125,000
150,000
|
375,000
150,000
|
0.20
0.67
|
2/21/2023
10/30/2021
|
|
Ronald L. Junck
|
-
|
-
|
-
|
-
|
-
|
|
Colette C. Pieper
|
-
|
-
|
-
|
-
|
-
|
|
Jeff Wilson
|
-
|
-
|
-
|
-
|
-
|
During
our fiscal year ended December 30, 2016 there were no options
exercised by our NEOs.
All stock
awards were valued based on the market price of our common stock at
the dates of issuance.
As of
the date of this proxy statement, the Board of Directors is not
aware of any additional matters that will be presented for action
at the Annual Meeting other than those described above. Should
other business properly be brought before the Annual Meeting, it is
intended that the accompanying proxy will be voted thereon in the
discretion of the persons named as proxies.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
The
following tables summarizes (a) the ownership of any non-management
person known to us to own more than five percent of any class of
our voting common stock, and (b) the number and percentage of our
shares of common stock held by each director, each of the named
executive officers and directors and officers as a group.
Percentages of ownership have been calculated based upon 60,615,549
shares of common stock issued and outstanding as of November 22,
2017:
Security Ownership of Non-Management Owners
|
Name and Address of Beneficial Owner (1) (2)
|
|
Title of Class
|
|
Amount of Beneficial Ownership
|
|
|
Percent of Class
|
|
|
Jerry
Smith (3)
|
|
Common
Stock
|
|
|
5,625,073
|
|
|
|
9.3
|
%
|
|
Merle
Rydesky (4)
|
|
Common
Stock
|
|
|
7,420,000
|
|
|
|
11.9
|
%
|
|
(1)
|
The
address of the non-management owners is: care of Command
Center, Inc., 3609 S Wadsworth Blvd, Suite 250 Lakewood, CO
80235.
|
|
(2)
|
Beneficial
ownership is calculated in accordance with Rule 13-d-3(d)(1) of the
Exchange Act, and includes shares held outright and shares issuable
upon exercise of options or warrants which are exercisable on or
within 60 days of November 22, 2017.
|
|
(3)
|
The
number of shares comprising Mr. Smith’s beneficial ownership
is based upon our shareholder records and information provided by
Mr. Smith.
|
|
(4)
|
The
number of shares comprising Dr. Rydesky’s beneficial
ownership is based upon our shareholder records.
|
Security Ownership of
Management
The following table sets forth certain information as
of November 22, 2017, as to shares of our common stock
beneficially owned by: (1) each of our Named Executive Officers
listed in the Summary Compensation Table, (2) each of our current
directors and (3) all of our directors and executive officers as a
group.
|
|
|
|
Amount of Beneficial Ownership
|
Percentage of Shares Beneficially Owned
|
|
Name of Beneficial Owner (1) (2)
|
Nature of Beneficial Ownership
|
|
Shares Owned
|
|
Shares – Rights to Acquire
|
|
Total
|
|
|
Frederick
Sandford (3)
|
Chief
Executive Officer and Director
|
|
195,000
|
|
1,787,500
|
|
1,982,500
|
|
|
3.3
|
%
|
|
Jeff
Wilson
|
Former
Chief Financial Officer
|
|
130,000
|
|
|
|
130,000
|
|
|
*
|
%
|
|
Colette
Pieper
|
Former
Chief Financial Officer
|
|
|
|
|
|
0
|
|
|
|
|
|
Ronald
Junck (4)
|
Exec.
VP and General Counsel
|
|
1,460,225
|
|
81,250
|
|
1,541,475
|
|
|
2.5
|
%
|
|
Cory
Smith (5)
|
Chief
Financial Officer
|
|
15,000
|
|
12,500
|
|
27,500
|
|
|
|
|
|
Richard
M. Finlay
|
Director
|
|
50,200
|
|
-
|
|
50,200
|
|
|
*
|
%
|
|
John
Schneller (6)
|
Director
|
|
315,000
|
|
40,000
|
|
355,000
|
|
|
*
|
%
|
|
J.D.
Smith (7)
|
Director
|
|
236,000
|
|
145,000
|
|
381,000
|
|
|
*
|
%
|
|
John
Stewart (8)
|
Chairman
|
|
698,900
|
|
125,000
|
|
823,900
|
|
|
1.4
|
%
|
|
R.
Rimmy Malhotra (9)
|
Director
|
|
1,306,947
|
|
-
|
|
1,306,947
|
|
|
2.2
|
%
|
|
Steven
Bathgate (10)
|
Director
|
|
1,169,710
|
|
-
|
|
1,169,710
|
|
|
1.9
|
%
|
|
All Officers and Directors as a Group
|
|
5,576,982
|
|
2,191,250
|
|
7,768,232
|
|
|
12.8
|
%
|
*
Indicates ownership of less than 1.0%.
|
(1)
|
The
address of the NEOs and Directors is: care of Command
Center, Inc., 3609 S Wadsworth Blvd, Suite 250, Lakewood, CO
80235.
|
|
(2)
|
Beneficial
ownership is calculated in accordance with Rule 13-d-3(d)(1) of the
Exchange Act, and includes shares held outright, shares held by
entity(s) controlled by NEOs and/or Directors, and shares issuable
upon exercise of options or warrants which are exercisable on or
within 60 days of November 22, 2017.
|
|
(3)
|
Includes
vested options to acquire 1,500,000 shares at $0.20, terminating
February 22, 2023, 225,000 shares at $0.67, terminating October 31,
2021 and 62,500 shares at $0.45, terminating September 29, 2027.
Does not include unvested options to purchase 262,500
shares.
|
|
(4)
|
Includes
1,353,148 shares held directly and 107,077 shares held indirectly
through Inland Empire TSS, LLC. Mr. Junck is a co-owner of Inland
Empire. Also includes vested options to acquire 50,000 shares at
$0.40, terminating on September 22, 2027 and 31,250 options at
$0.45, terminating on September 29, 2027. Does not include options
not exercisable within 60 days to acquire 243,750
shares.
|
|
(5)
|
Includes vested
options to acquire 12,500 shares at $0.45, terminating on September
29, 2027. Does not include unvested options to acquire 37,500
shares.
|
|
(6)
|
Includes
vested options to acquire 40,000 shares at $0.73, terminating
December 11, 2021.
|
|
(7)
|
Includes
vested options to acquire 145,000 shares at $0.73, terminating
December 11, 2021.
|
|
(8)
|
Includes
80,000 shares held directly, and 618,900 held indirectly. Includes
vested options to acquire 125,000 shares at $0.73, terminating
December 11, 2021.
|
|
(9)
|
Includes
20,000 shares held directly and 1,286,947 held indirectly through
Nicoya Fund LLC. Mr. Malhotra is the managing member and a co-owner
of Nicoya Capital LLC, which is the managing member and owner of
the Nicoya Fund.
|
|
(10)
|
Includes
174,710 shares directly owned and 995,000 indirectly owned,
including 800,000 by Mr. Bathgate’s spouse, 95,000 by the
Bathgate Family Partnership and 100,000 by Viva Co.,
LLC.
|
As of
December 30, 2016, there are no arrangements among our beneficial
owners known to management which may result in a change in control
of our Company.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Securities and Exchange Act of 1934, as amended,
requires our officers, directors, and beneficial owners of more
than 10% any of our equity securities to timely file certain
reports regarding ownership of and transactions in our securities
with the Securities and Exchange Commission. Copies of the required
filings must also be furnished to us. Section 16(a) compliance was
required during the fiscal year ended December 30, 2016. Based
solely on a review of Forms 3, 4 and 5 and amendments thereto
furnished to us pursuant to Rule 16a-3(e) under the Exchange
Act during 2016, we believe that, during 2016, the filing
requirements under Section 16(a) of the Exchange Act were
satisfied except
one Form 4 was
filed late by 349 days for one transaction by Mr. Jeff
Wilson.
|
SHAREHOLDER
PROPOSALS, HOUSEHOLDING AND OTHER MATTERS
|
Shareholder Proposals
There
are no shareholder proposals for this Annual Meeting. The
Company’s next annual meeting is expected to be held in
January of 2018. A shareholder who desires to have a qualified
proposal considered for inclusion in the proxy statement for that
meeting must notify the Secretary of the terms and content of the
proposal in the manner and by the time required by the
Company’s Bylaws at
3609 S.
Wadsworth Boulevard, Suite 250, Lakewood, Colorado, 80235,
Attention: Corporate Secretary.
The stockholder proponent,
or a representative who is qualified under state law, must appear
in person at the next annual meeting of stockholders to present the
proposal. The Company’s Bylaws outline the procedures
including notice provisions, for shareholder nomination of
directors and other shareholder business to be brought before
shareholders at the Annual Meeting. A copy of the pertinent Bylaw
provisions is available upon written request to
3609 S. Wadsworth Boulevard, Suite 250, Lakewood,
Colorado, 80235, Attention: Corporate
Secretary.
“Householding” of Proxy Materials
The SEC
has adopted rules that permit companies and intermediaries such as
brokers to satisfy delivery requirements for proxy statements with
respect to two or more shareholders sharing the same address by
delivering a single proxy statement addressed to those
shareholders. This process, which is commonly referred to as
“householding,” potentially provides extra convenience
for shareholders and cost savings for us. Under this procedure,
multiple shareholders who share the same last name and address will
receive only one copy of the annual proxy materials, unless they
notify us that they wish to continue receiving multiple copies. We
have undertaken householding to reduce our printing costs and
postage fees.
If you
wish to opt-out of householding and continue to receive multiple
copies of the proxy materials at the same address, you may do so at
any time prior to thirty days before the mailing of the notice of
availability of proxy materials, which will typically be mailed in
May of each year, by notifying us in writing at:
3609 S. Wadsworth Boulevard, Suite 250, Lakewood,
Colorado, 80235, Attention: Corporate Secretary
, or by
contacting us at (866) 464-5844. You also may request additional
copies of the proxy materials by notifying us in writing at the
same address or contacting us at (866) 464-5844, and we will
undertake to deliver such additional copies promptly. If you share
an address with another shareholder and currently are receiving
multiple copies of the proxy materials, you may request
householding by notifying us at the above referenced address or
telephone number.
Form 10-K
Any shareholder of record may obtain a copy of the Company’s
Annual Report on Form 10-K for the fiscal year ended December 30,
2016, or the Form 10-K, without cost, upon written request to the
Secretary of the Company at 3609 S. Wadsworth Boulevard, Suite 250,
Lakewood, Colorado, 80235, Attention: Corporate Secretary, or by
contacting us at (866) 464-5844.
The Form 10-K is not part
of the proxy solicitation material for the Annual Meeting but may
be provided. Additionally, the Securities and Exchange Commission
maintains a web site that contains reports and other information at
the following address http://www.sec.gov, as well as links from the
Company’s website at www.commandonline.com.
Upon request by any shareholder to the Company
Secretary at the address listed above, we will furnish a copy of
any or all exhibits to the Form 10-K for 2016.
FORWARD LOOKING STATEMENTS
This proxy statement includes statements of judgment and
forward-looking statements that involve risks and uncertainties.
These forward-looking statements are based on our current
expectations, estimates and projections about our industry, our
business, compensation, management's beliefs, and certain
assumptions made by us, all of which are subject to change.
Forward-looking statements can often be identified by words such as
"anticipates," "expects," "intends," "plans," "predicts,"
"believes," "seeks," "estimates," "may," "will," "should," "would,"
"could," "potential," "continue," "ongoing," or similar
expressions, and variations or negatives of these words and
include, but are not limited to, statements regarding projected
performance and compensation. Actual results could differ
significantly from those projected in the forward-looking
statements as a result of certain factors, including, but not
limited to, the risk factors discussed in our Form 10-K for the
year ended December 25, 2016. We assume no obligation to update the
forward-looking statements.
Whether or not you intend to be present at the Annual Meeting, we
urge you to vote your shares promptly.
By
Order of the Board of Directors,
_______________________
Brendan
Simaytis, Secretary
[
● ], 2017
THANK YOU
Thank
you for being a shareowner of Command Center, Inc.
Learn
more at
www.commandonline.com
APPENDIX A
SUPPLEMENTAL INFORMATION REGARDING PARTICIPANTS
The
following tables ("Directors and Nominees" and "Officers and
Employees") set forth the name and business address of our
directors and nominees, and the name, present principal occupation
and business address of our officers and employees who, under the
rules of the Securities and Exchange Commission, are considered to
be participants in our solicitation of proxies from our
stockholders in connection with our Annual Meeting of stockholders
(collectively, the "Participants").
Directors
and Nominees
The
principal occupations of our directors and nominees are set forth
under the section above titled "Election of Directors" of this
proxy statement. The name of the Directors and Nominees are set
forth below and the business addresses for all the Directors and
Nominees is c/o Command Center, Inc.,
3609 S. Wadsworth Boulevard, Suite
250, Lakewood, Colorado 80235.
|
Name
|
Position
|
|
Steven
Bathgate
|
Director
|
|
Richard
Finlay
|
Director
|
|
R.
Rimmy Malhotra
|
Director
|
|
Frederick
J. Sandford
|
Chief
Executive Officer, President
|
|
John
Schneller
|
Director
|
|
J.D.
Smith
|
Director
|
|
John
Stewart
|
Chairman
|
Officers
and Employees
The
principal occupations of our executive officers and employees who
are considered Participants are set forth below. The principal
occupation refers to such person's position with the company, and
the business address for each person is Command Center, Inc.,
3609 S. Wadsworth
Boulevard, Suite 250, Lakewood, Colorado 80235
.
|
Name of Officer
|
Position
|
|
Frederick
J. Sandford
|
Chief
Executive Officer, President
|
|
Ronald
L. Junck
|
Executive
Vice President, Secretary, General Counsel
|
|
Cory
Smith
|
Chief
Financial Officer
|
Information
Regarding Ownership of Company Securities By
Participants
The
number of shares of our common stock held by our directors and
named executive officers as of November 22, 2017 is set forth under
the “Security Ownership of Certain Beneficial Owners and
Management” section of the Proxy Statement. That table sets
forth the number of shares beneficially owned as of November 22,
2017 by all of our directors, officers and employees who are
“participants.”
Information
Regarding Transactions in the Company's Securities by
Participants
The
following table sets forth information regarding purchases and
sales of the Company's securities by each Participant during the
past two years. No part of the purchase price or market value of
these securities is represented by funds borrowed or otherwise
obtained for the purpose of acquiring or holding such
securities.
Shares of Company Securities Purchased or Sold (November 2015 to
November 2017)
|
Name
|
|
Transaction Date
|
|
# of Shares
|
|
Transaction Description
|
|
Frederick
Sandford
|
|
-
|
|
|
-
|
|
-
|
|
Jeff
Wilson
|
|
06/24/2016
|
|
|
25,000
|
|
Acquisition
|
|
Colette
Pieper
|
|
-
|
|
|
-
|
|
-
|
|
Ronald
Junck
|
|
-
|
|
|
-
|
|
-
|
|
Cory
Smith
|
|
-
|
|
|
-
|
|
-
|
|
Richard
M. Finlay
|
|
12/21/2015
|
|
|
10,200
|
|
Acquisition
|
|
|
|
06/23/2016
|
|
|
20,000
|
|
Acquisition
|
|
|
|
09/20/2017
|
|
|
20,000
|
|
Acquisition
|
|
John
Schneller
|
|
06/23/2016
|
|
|
20,000
|
|
Acquisition
|
|
|
|
09/20/2017
|
|
|
20,000
|
|
Acquisition
|
|
J.D.
Smith
|
|
06/23/2016
|
|
|
20,000
|
|
Acquisition
|
|
|
|
09/20/2017
|
|
|
20,000
|
|
Acquisition
|
|
John
Stewart
|
|
06/23/2016
|
|
|
20,000
|
|
Acquisition
|
|
|
|
09/20/2017
|
|
|
20,000
|
|
Acquisition
|
|
|
|
09/29/2017
|
|
|
77,900
|
|
Acquisition
|
|
|
|
09/29/2017
|
|
|
37,100
|
|
Acquisition
|
|
R.
Rimmy Malhotra
|
|
09/20/2017
|
|
|
20,000
|
|
Acquisition
|
|
Steven
Bathgate
|
|
09/20/2017
|
|
|
20,000
|
|
Acquisition
|
Miscellaneous Information Concerning Participants
Other
than as set forth in this Appendix A or the Proxy Statement, none
of the participants or their associates (i) beneficially owns,
directly or indirectly, any shares or other securities of Command
Center, Inc. or any of our subsidiaries or (ii) has any substantial
interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon at the Annual Meeting other than, with
respect to each director nominee, such nominee’s interest in
election to our Board of Directors. In addition, except as set
forth in this Appendix A or the Proxy Statement, neither we nor any
of the participants listed above has been within the past year a
party to any contract, arrangement or understanding with any person
with respect to any of our securities, including, but not limited
to, joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses
or profits or the giving or withholding of proxies.
Other
than as set forth in this Appendix A or the Proxy Statement,
neither we nor any of the participants listed above or any of their
associates have or will have (i) any arrangements or understandings
with any person with respect to any future employment by us or our
affiliates or with respect to any future transactions to which we
or any of our affiliates will or may be a party or (ii) a direct or
indirect material interest in any transaction or series of similar
transactions since the beginning of our last fiscal year or any
currently proposed transactions, or series of similar transactions,
to which we or any of our subsidiaries was or is to be a party in
which the amount involved exceeds $120,000.
37
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