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UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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GLOBALSCAPE,
INC.
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(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):
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x
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No fee required.
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o
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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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o
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Fee paid previously with preliminary
materials.
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o
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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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GlobalSCAPE, Inc.
6000 Northwest Parkway, Suite 100
San Antonio, Texas 78249
(210) 308-8267
May 1, 2008
Dear Stockholders:
You are cordially invited to attend our 2008 Annual
Meeting of Stockholders to be held on June 5, 2008, at 9:00 a.m.,
local time, at GlobalSCAPEs new office located at 4500 Lockhill-Selma Road, Suite 150,
San Antonio, Texas 78249.
Information about the meeting and the matters on which
the stockholders will act is included in the Notice of Annual Meeting of
Stockholders and Proxy Statement that follow.
Also included is a Proxy Card and postage pre-paid envelope.
It is important that your shares be represented at the
Annual Meeting. Whether or not you plan
to attend, we hope that you will complete and return your Proxy Card in the
enclosed envelope as promptly as possible.
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Sincerely,
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Kelly E. Simmons
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President, Chief Financial Officer and Secretary
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GlobalSCAPE, Inc.
6000 Northwest Parkway, Suite 100
San Antonio, Texas 78249
(210) 308-8267
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To Be Held June 5, 2008
To the Stockholders of GlobalSCAPE, Inc.:
The 2008 Annual Meeting of Stockholders of GlobalSCAPE, Inc.
(the Company) will be held at the Companys new office located at 4500
Lockhill-Selma Road, Suite 150, San Antonio, Texas 78249, on June 5,
2008, at 9:00 a.m., local time, for the following purposes:
1.
To elect a Director to serve
for a term of three years. The Board of
Directors has nominated David Mann for election;
2.
To ratify the appointment of PMB Helin
Donovan, LLP as the Companys independent registered public accounting firm for
the year ending December 31, 2008; and
3.
To transact any other business that may
properly come before the meeting or any adjournment thereof, including a motion
to adjourn or postpone the meeting.
The foregoing items of business are described more
fully in the Proxy Statement accompanying this Notice.
The Companys Board of Directors has fixed the close
of business on April 14, 2008 as the record date for determining the
stockholders entitled to receive notice of, and to vote at, the Annual Meeting
and any adjournment thereof.
STOCKHOLDERS ARE
CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING
PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND
THE ANNUAL MEETING. NO POSTAGE IS
REQUIRED IF THE PROXY CARD IS MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME
PRIOR TO THE ANNUAL MEETING, AND, IF YOU ATTEND THE ANNUAL MEETING YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
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By Order of the
Board of Directors,
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Kelly E. Simmons
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May 1, 2008
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President, Chief
Financial Officer and
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Secretary
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San Antonio,
Texas
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GlobalSCAPE, Inc.
Proxy Statement
For
Annual Meeting of Stockholders
To Be Held Thursday, June 5, 2008
Table of Contents
PROXY
STATEMENT
This Proxy Statement and Proxy Card are furnished in
connection with the solicitation by the Board of Directors of GlobalSCAPE, Inc.
of proxies from the stockholders of GlobalSCAPE to be used at GlobalSCAPEs
2008 Annual Meeting of Stockholders.
This Proxy Statement and Proxy Card are first being mailed to
stockholders on or about May 1, 2008 together with GlobalSCAPEs Annual
Report on Form 10-K.
Date, Time, Place of Annual Meeting
GlobalSCAPEs 2008 Annual Meeting of Stockholders will
be held at 9:00 a.m., local time, on June 5, 2008, at GlobalSCAPEs
new office at 4500 Lockhill-Selma Road, Suite 150, San Antonio, Texas
78249. GlobalSCAPEs office is located
between N. Loop 1604 and Huebner Road.
If you need directions to our office, please call Mark Alvarado at (210)
308-8267, ext. 101.
Record Date, Shares Entitled to Vote, Quorum
GlobalSCAPEs Board of Directors has fixed the close
of business on April 14, 2008 as the record date for GlobalSCAPE stockholders
entitled to notice of and to vote at the annual meeting. As of the record date, there were 17,190,704
shares of GlobalSCAPE common stock outstanding, which were held by
approximately 2,349 holders of record.
Stockholders are entitled to one vote for each share of GlobalSCAPE
common stock held as of the record date.
The holders of a majority of the outstanding shares of
GlobalSCAPE common stock issued and entitled to vote at the annual meeting must
be present in person or by proxy to establish a quorum for business to be
conducted at the annual meeting. If you
attend the meeting in person or sign and return the enclosed Proxy Card, your
shares will be counted as present at the meeting. Abstentions and broker non-votes are included
for purposes of determining whether a quorum is present at the annual
meeting. Non-votes occur when a proxy:
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is returned by a broker or other stockholder who
does not have authority to vote;
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does not give authority to a proxy to vote; or
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withholds authority to vote on one or more
proposals.
If sufficient votes for approval of the matters to be
considered at the annual meeting have not been received prior to the meeting
date, GlobalSCAPE may postpone or adjourn the annual meeting in order to
solicit additional votes. The form of proxy being solicited by this Proxy
Statement provides the authority for the proxy holders, in their discretion, to
vote the stockholders shares with respect to a postponement or adjournment of
the annual meeting. At any postponed or adjourned meeting, proxies received
pursuant to this Proxy Statement will be voted in the same manner described in
this Proxy Statement with respect to the original meeting.
Attendance and Voting by Proxy
If you are unable or do not wish to attend the annual
meeting and vote your shares in person, you may complete and sign the enclosed
Proxy Card. Votes cast in person or by
proxy at the annual meeting will be tabulated at the annual meeting. By signing and returning the Proxy Card, you
appoint Thomas W. Brown and Kelly E. Simmons, and each of them, to attend the
meeting and vote your shares in your place.
All valid unrevoked proxies will be voted as directed. If you sign and return your Proxy Card
without making any direction as to how your shares are to be voted, the
representative will vote your shares in favor of each of the proposals listed
in the notice of annual meeting and for the election of the nominees for
director set forth herein.
If any matters other than those addressed on the Proxy
Card are properly presented for action at the annual meeting, the persons named
in the Proxy Card will have the discretion to vote on those matters in their
best judgment, unless authorization is withheld.
We have enclosed a postage-prepaid envelope for your convenience
in returning the Proxy Card.
1
Deadline for Voting by Proxy
Your signed Proxy Card must be received before the
annual meeting to be counted at the annual meeting.
Revocation of Proxy
You may revoke your proxy at any time prior to the
annual meeting by sending either a notice of revocation or a later-dated Proxy
Card to GlobalSCAPEs Secretary. If you
mail a Proxy Card, but decide to vote your shares in person at the annual
meeting, you may request that your proxy be revoked at the annual meeting. Attendance at the meeting will not by itself
revoke a proxy. You must affirmatively
request that your proxy be revoked.
Number of Votes Required to Approve Proposals
Proposal One, Election of Directors
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Our Amended and
Restated Bylaws provide that Directors shall be elected by plurality vote at
the annual meeting of stockholders. Therefore, the nominee who receives the
most votes will be elected. As of the
mailing date of this Proxy Statement, no nominees for Director had been
submitted other than the individual nominated by GlobalSCAPEs Board of
Directors. Therefore, provided there is
a quorum at the meeting, and there are any votes in favor of the election of
this individual, he will be elected to the Board of Directors. Shares not voted (whether by abstention,
broker non-vote or otherwise) will have no effect on the voting outcome with
respect to the election of Directors.
Proposal Two, Ratification of Selection of PMB Helin
Donovan, LLP as Independent Registered Public Accounting Firm.
This proposal must receive the affirmative
vote of the holders of a majority of the shares of GlobalSCAPE common stock
represented and voting at the meeting.
If you are present in person or represented by proxy at the meeting and
abstain from voting, it has the same effect as if you voted against this
proposal. If you do not instruct your
broker on how to vote on this proposal, your broker will not be able to vote
for you, but this will have no effect on the proposal because shares for which
brokers are not able to vote will not be considered as voting at the annual
meeting for purposes of ratifying the selection of our independent registered
public accounting firm.
Solicitation of Proxies
Proxies will be solicited by mail. Proxies may also be solicited personally, or
by telephone, fax, or other means by the directors, officers and employees of
GlobalSCAPE. Directors, officers and
employees soliciting proxies will receive no extra compensation, but may be reimbursed
for related out-of-pocket expenses.
GlobalSCAPE will make arrangements with brokerage houses and other
custodians, nominees and fiduciaries to send the proxy materials to beneficial
owners. GlobalSCAPE will, upon request,
reimburse these brokerage houses, custodians and other persons for their
reasonable out-of-pocket expenses in doing so.
GlobalSCAPE will pay the cost of solicitation of proxies.
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PROPOSAL ONE
ELECTION OF DIRECTORS
GlobalSCAPEs Articles of Incorporation divide the
Board of Directors into three classes of directors serving staggered three-year
terms, with one class to be elected at each annual meeting of
stockholders. At this years meeting,
one Class II director is to be elected for a term of three years, to hold
office until the expiration of his term in 2011, or until a successor shall
have been elected and shall have qualified.
The nominee for the Class II director is David L. Mann.
Assuming the presence of a quorum, the nominees for
director who receive the most votes will be elected. The enclosed form of proxy provides a means
for stockholders to vote for or to withhold authority to vote for the nominees
for director. If a stockholder executes
and returns a proxy, but does not specify how the shares represented by such
stockholders proxy are to be voted, such shares will be voted FOR the election
of the nominee for director. In
determining whether this item has received the requisite number of affirmative
votes, abstentions and broker non-votes will not be counted and will have no
effect.
The Board
of Directors recommends a vote FOR the election of the nominee to the Board
of Directors.
The following table sets forth the name and age of the
nominee as of the mailing date of this Proxy Statement, the principal
occupation of the nominee during the past five years, and the year he began
serving as a director of GlobalSCAPE:
Name
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David L. Mann
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58
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Mr. Mann has been in the real estate development and home
building business since his graduation from Southern Methodist University in
1975 where he earned a B.B.A. For the past twenty years, he has worked
exclusively in the San Antonio, Texas market. Mr. Mann currently serves
as a member of the Board of Directors of GlobalSCAPE and has served in such
capacity since June 2002.
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Assuming the presence of a quorum, the nominee for
director who receives the most votes will be elected. The enclosed form of Proxy Card provides a
means for stockholders to vote for or to withhold authority to vote for the
nominees for director. If a stockholder
executes and returns a Proxy Card, but does not specify how the shares
represented by such stockholders proxy are to be voted, such shares will be
voted FOR the election of the nominee for director. Under applicable Delaware law, in determining
whether this item has received the requisite number of affirmative votes,
abstentions and broker non-votes will not be counted and will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF THE INDIVIDUAL NOMINATED ABOVE AS DIRECTOR.
Directors with Terms Expiring in 2009 and 2010
The following table sets forth the name and age of
each director as of the mailing date of this Proxy Statement other than Mr. Mann,
the principal occupation of each director during the past five years and the
year each began serving as a director of GlobalSCAPE.
Name
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Thomas W. Brown
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65
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Mr. Brown has been an independent
stockbroker and investment advisor in San Antonio since 1995. He entered the securities brokerage
business in 1967 after receiving an M.B.A. from Southern Methodist
University. In recent years, he has
also been involved in the real estate development business in San Antonio in
addition to stock and bond investments.
Mr. Brown currently serves as a member and Chairman of the Board
of Directors of GlobalSCAPE and has served in such capacity since June 2002. Mr. Browns term as a director of
GlobalSCAPE expires in 2009.
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Frank M. Morgan
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59
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Since 2005, Mr. Morgan has served as the Vice President and
General Manager of the Information Systems Department, Intelligence Solutions
Division, of L-3 Communications Services Group, managing offices in Reston,
Virginia, Colorado Springs, Colorado, and San Antonio, Texas. He held a
similar position with Titan Corporation from 2001 to 2005 before its
acquisition by L-3. From 1996 to 2001, Mr. Morgan worked for BTG, Inc.
(acquired by Titan Corp.), a publicly traded software development company and
computer security product value added reseller. As Vice President of federal sales, Mr. Morgan
was responsible for marketing this product across the federal
government. Mr. Morgan spent 26 years in the Air Force, retiring
in 1996 as a Colonel. His assignments included three tours at the
Pentagon in both operations and acquisitions.
He holds a B.S. in Aeronautical Engineering from the Air Force
Academy, a M.S. in Human Resources Management from the University of Utah,
and a M.S. in National Security and Strategic Studies from the Naval War
College. Mr. Morgans term as a
director of GlobalSCAPE expires in 2010.
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Charles R. Poole
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65
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Mr. Poole served as GlobalSCAPEs President from February 2004
until March 2008. Mr. Poole
currently serves as a director of GlobalSCAPE and has served in such capacity
since February 2004. From September 2003
until February 2004, he served as GlobalSCAPEs Vice President of Sales
and Marketing. Mr. Poole has over
twenty years of experience in senior management and sales with
telecommunications companies, most recently as the President of GlobalSCAPEs
former parent company, ATSI Communications, Inc., from 1998 2001. Mr. Poole served as a Senior Vice
President for A+ Communications, responsible for paging, cellular and
telemessaging sales from 1995 1997, as General Manager of American Paging,
Texas from 1994 1995, as a Division Manager of Data Documents, Inc. of
Omaha, Nebraska from 1992 1994, as President of GeoCom Partners, a
satellite-based telecommunications company from 1989 1992, as Senior Vice
President of MobileComm (a BellSouth Company) from 1984-1989, and as Regional
Vice President of Burroughs Corp (now Unisys) from 1966-1984. Mr. Pooles term as a director of
GlobalSCAPE expires in 2009.
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Phillip M. Renfro
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62
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Mr. Renfro is a retired partner of the law firm of Fulbright and
Jaworski, L.L.P., where from 1983 to 2005, he was division head of the
Corporate, Business and Banking Section in the firms San Antonio, Texas
office. Prior to his career in corporate law, from 1980 to 1983, he was
President and CEO of Resco International, Inc., an oil field service
company. He currently serves on the board of Enzon Pharmaceuticals, Inc.,
Bridgeport, New Jersey. Mr. Renfros
term as a director of GlobalSCAPE expires in 2010.
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Executive
Officers
The following table sets forth the name, age and
position of each of our executive officers as of the mailing date of this Proxy
Statement and the principal occupation of each executive officer during the
past five years.
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Kelly E. Simmons
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Chief Financial
Officer
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Mr. Simmons serves as GlobalSCAPEs
interim President and Chief Financial Officer. He joined GlobalSCAPE as
its CFO in September 2007 and was named interim President in
March 2008. He is a Texas CPA and has over 27 years experience in
financial management including accounting, SEC reporting, mergers and
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acquisitions, information systems, and investor relations. From
1988 to 2000, Mr. Simmons held various positions, including CFO, with
two affiliated public companies, US Long Distance and Billing Concepts which
grew from revenues of $2 million in 1988 to over $500 million in 1999 with
over 1,200 employees. Before joining GlobalSCAPE, he was CFO of Sino
Swearingen Aircraft Corporation, a manufacturer of light business jets. Mr. Simmons
holds a B.S. degree in Finance from Louisiana State University.
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Jeffrey Gehring
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Vice President
of Sales
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Mr. Gehring serves as GlobalSCAPEs Vice President of Sales and
has been with GlobalSCAPE since November 2004 in that capacity. Mr. Gehring
is responsible for GlobalSCAPEs inbound sales, corporate sales and the
reseller program. Mr. Gehring was employed by Nextel Partners as
Director of Sales in 2004, where he coordinated sales across the country.
From 2003 to 2004, Mr. Gehring was Sales Manager for GlobalSCAPE,
performing the duties he presently holds. From 2002 to 2003, Mr. Gehring
was a principal in a start up business, ConnectOne Telecom, where he got the
business off the ground from the organizational stage to operations. Prior to
2002, Mr. Gehring was Director of Sales and Marketing at UDP, a
telecommunications billing, order
management and customer service
software company. In
addition to his UDP experience, he has more than 20 years of operational and
sales management experience in large and medium-sized businesses, including Unisys,
Bell South and Metrocall. His experience includes strategic planning and
implementation for companies that require rapid growth, as well as
establishing processes and policies that foster world-class sales
organizations.
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Gregory Hoffer
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Vice President
and Chief
Technology
Officer
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Mr. Hoffer serves as Vice President and Chief Technology Officer
and has been employed by GlobalSCAPE since May 2000. Mr. Hoffer is
responsible for overseeing all software development and Web development at
GlobalSCAPE. Before joining GlobalSCAPE, Mr. Hoffer held software
development positions at the consulting firm of Marotz, Inc. Prior to
that, Mr. Hoffer managed the IT department and was head of the computer
science department at Saint Marys Hall, a private school in San Antonio,
Texas. Mr. Hoffer received a bachelors degree in computer science from
Trinity University and is pursuing his masters degree in computer science.
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Douglas Conyers
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Vice President
of WAFS
Products
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Mr. Conyers serves as Vice President of WAFS Products and has
been employed by GlobalSCAPE since March 2007. Mr. Conyers is
responsible for total customer satisfaction as they look to enhance and
customize GlobalSCAPE solutions based on their companys requirements. Prior
to joining GlobalSCAPE, he held positions as Chief Architect, Director of
Systems Engineering and Senior Software Engineer for SecureLogix Corp., an
information security company. Previous to that, he held software engineering
positions with both the Southwest Research Institute and Paradigm
Simulations. Conyers has a B.S. in Computer Science from Trinity University.
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Timothy J. Barton
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44
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Vice President
of Server
Products
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Mr. Barton serves as GlobalSCAPEs
Vice President of Server Products. He is responsible for coordinating the
product managers ideas and specifications with engineering and insuring
performance of quality assurance on completed products. Prior to joining GlobalSCAPE
in March 2006, Mr. Barton served as Chief Architect of Secure Logix
Corporation, an information security company, where he was responsible for
requirements definition and product design. Mr. Barton was employed by
Secure Logix from 1998 to 2006 and held positions of Director of Software
Engineering and ETM Development Manager prior to becoming Chief Architect in
2005. Prior to Secure Logix, Mr. Barton held positions as Research
Analyst and Senior Research Analyst at Southwest Research Institute where he
developed software for the US Military and NASA. Mr. Barton holds a B.S.
in Computer Science from Slippery Rock University
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K. Earl Posey
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65
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Vice President
of Investor
Relations/
Business
Operations
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Mr. Posey serves as GlobalSCAPEs Vice
President of Investor Relations/Business Operations. Mr. Posey is
responsible for locating technologies, partners and/or companies that fit
within GlobalSCAPEs strategies and developing relationships that will grow
GlobalSCAPEs business. Prior to joining GlobalSCAPE in January of 2006,
he was Vice-President of Administration for ATSI, Inc. an international
telecommunications company located in San Antonio, from 2000 to 2003. During
2004 and 2005, he was the Senior Principal and founder for Gossyppia Partners,
a management consulting firm specializing in development of strategic
management plans for corporations. Mr. Posey did his graduate and post
graduate work at Vanderbilt University.
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Meeting
Attendance
During the fiscal year ended December 31, 2007,
the Board of Directors held nine meetings and acted by written consent four
times. Separate from the full Board of
Directors Meetings, there were two Audit Committee meetings, two Compensation
Committee meetings and one Nominating and Governance Committee meeting. During 2007, each director attended at least
75% of all Board and applicable Committee meetings. During 2007, our directors, other than Mr. Poole,
received compensation for service to GlobalSCAPE as a director. See Executive Compensation Compensation of
Directors. Directors also received
reimbursement of travel expenses to attend meetings of the Board of
Directors. GlobalSCAPE encourages, but
does not require, directors to attend the annual meeting of stockholders. At GlobalSCAPEs 2007 Annual Meeting, all
members of the Board were present.
Board
Independence
A majority of the members of the Board of Directors,
as well as all members of the Audit, Compensation, and Nominating and
Governance Committees, are independent, as currently defined by the
Securities and Exchange Commission and the listing standards of the American
Stock Exchange.
Committees of
the Board of Directors
GlobalSCAPE has standing Audit, Compensation, and Nominating and
Governance Committees.
The Audit Committee is a separately-designated audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act. The Audit Committee, which consists
of Messers. Mann, Morgan and Renfro, met twice during 2007. The Board has
determined that Mr. Renfro, as defined by SEC rules, is an audit committee
financial expert and he serves as the Audit Committee Chairman. The Audit Committee aids management in the
establishment and supervision of our financial controls, evaluates the scope of
the annual audit, reviews audit results, makes
6
recommendations to
our Board regarding the selection of our independent registered public
accounting firm, consults with management and our independent registered public
accounting firm prior to the production of financial statements to stockholders
and, as appropriate, initiates inquiries into aspects of our financial
affairs. The Audit Committee Report,
which begins on page 28, more fully describes the activities and
responsibilities of the Audit Committee.
The Compensation Committee, which consists of Messers.
Mann, Morgan and Renfro, met twice during 2007.
The Compensation Committees role is to establish and oversee
GlobalSCAPEs compensation and benefit plans and policies, administer its stock
option plans, and review and approve annually all compensation decisions
relating to GlobalSCAPEs executive officers.
The Compensation Committee submits its decisions regarding executive
compensation to the independent members of the Board for approval. In the first quarter of each year, the chief executive officer submits to the
Compensation Committee his recommendations for salary adjustments and long-term
equity incentive awards based upon his subjective evaluation of individual
performance and his subjective judgment regarding each executive officers
salary and equity incentives, for each executive officer except himself. The Compensation Committee reviews and
discusses the recommendations and has the sole authority to determine the chief
executive officers base salary, bonus and equity incentives. The agenda for meetings of the Compensation
Committee is determined by its Chairman, Mr. Mann. Compensation Committee
meetings are regularly attended by the chief executive officer. At each meeting, the Compensation Committee
meets in executive session. The Compensation Committees Chairman reports the
committees recommendations on executive compensation to the Board. The Companys
personnel support the Compensation Committee in its duties and, along with the
chief executive officer, may be delegated authority to fulfill certain
administrative duties regarding the compensation programs. The Compensation
Committee has authority under its charter to retain, approve fees for and terminate
advisors, consultants and agents as it deems necessary to assist in the
fulfillment of its responsibilities but has not, in the past, utilized the
services of a third party consultant to review the policies and procedures with
respect to executive compensation. The Compensation Committee may engage a
third party to provide such services in the future, as it deems necessary or
appropriate at the time in question.
The Nominating and Governance Committee, which
consists of Messers. Mann, Morgan and Renfro, met once during 2007. The primary
function of the Nominating and Governance Committee is to assist the Board in
identifying, screening and recruiting qualified individuals to become Board
members and determining the composition of the Board and its committees,
including recommending nominees for annual stockholders meetings or to fill
vacancies on the Board.
Each of the Boards committees has a written charter,
and copies of the charters are available for review on the Companys website at
www.globalscape.com.
Code of Ethics
GlobalSCAPE has adopted a Code of Ethics which applies
to all of its employees, including the President and Chief Executive Officer
and its Chief Financial Officer. This
Code is a statement of GlobalSCAPEs high standards for ethical behavior, legal
compliance and financial disclosure, and is applicable to all directors,
officers and employees. A copy of the
Code of Ethics can be found in its entirety on GlobalSCAPEs website at www.globalscape.com. Additionally, should there be any changes to,
or waivers from, GlobalSCAPEs Code of Ethics, those changes or waivers will be
posted immediately on our website at the address noted above.
Stockholder
Communications with Board
The Board of Directors has implemented a process by
which stockholders may communicate with the Board of Directors. Any stockholder desiring to communicate with
the Board of Directors may do so in writing by sending a letter addressed to
The Board of Directors, c/o The Corporate Secretary. The Corporate Secretary has been instructed
by the Board to promptly forward communications so received to the members of
the Board of Directors.
Nominations
The Nominating and Governance Committee is the
standing committee responsible for determining the slate of director nominees
for election by stockholders, which the committee recommends for consideration
by the
7
Board. All director nominees are approved by the
Board prior to annual proxy material preparation and are required to stand for
election by stockholders at the next annual meeting. For positions on the Board created by a
directors leaving the Board prior to the expiration of his current term,
whether due to death, resignation, or other inability to serve, Article III
of the Companys Amended and Restated Bylaws provides that a Director elected
by the Board to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
The Nominating and Governance Committee does not
currently utilize the services of any third party search firm to assist in the
identification or evaluation of Board member candidates. The Nominating and Governance Committee may
engage a third party to provide such services in the future, as it deems
necessary or appropriate at the time in question.
The Nominating and Governance Committee determines the
required selection criteria and qualifications of director nominees based upon
the needs of the Company at the time nominees are considered. A candidate must possess the ability to apply
good business judgment and must be in a position to properly exercise his
duties of loyalty and care. Candidates
should also exhibit proven leadership capabilities, high integrity and
experience with a high level of responsibility within their chosen fields, and
have the ability to quickly understand complex principles of, but not limited
to, business and finance. Candidates
with potential conflicts of interest or who do not meet independence criteria
will be identified and disqualified. The
Nominating and Governance Committee will consider these criteria for nominees
identified by the Committee, by stockholders, or through some other
source. When current Board members are
considered for nomination for reelection, the Nominating and Governance
Committee also takes into consideration their prior Board contributions,
performance and meeting attendance records.
The Nominating and Governance Committee will consider
qualified candidates for possible nomination that are recommended by stockholders,
for possible nomination. Stockholders
wishing to make such a recommendation may do so by sending the following
information to the Nominating and Governance Committee, c/o Corporate Secretary
at the address listed above: (1) name
of the candidate with brief biographical information and resume; (2) contact
information for the candidate and a document evidencing the candidates
willingness to serve as a director if elected; and (3) a signed statement
as to the submitting stockholders current status as a stockholder and the
number of shares currently held. Any
such nomination must comply with the advance notice provisions of our Amended
and Restated Bylaws. These provisions are
summarized under Stockholder Proposals to be Presented At Next Annual Meeting
on page 3 of this document.
The Nominating and Governance Committee conducts a
process of making a preliminary assessment of each proposed nominee based upon
the resume and biographical information, an indication of the individuals
willingness to serve and other background information. This information is evaluated against the
criteria set forth above as well as the specific needs of the Company at that
time. Based upon a preliminary
assessment of the candidate(s), those who appear best suited to meet the needs
of the Company may be invited to participate in a series of interviews, which
are used for further evaluation. The
Nominating and Governance Committee uses the same process for evaluating all
nominees, regardless of the original source of the information.
No candidates for director nominations were submitted
to the Nominating and Governance Committee by any stockholder in connection
with the 2008 Annual Meeting.
Compensation
Committee Interlocks and Insider Participation
Messers. Morgan, Mann and Renfro served on the
Compensation Committee during 2007. No
member of the Compensation Committee was at any time during 2007 or at any
other time an officer or employee of GlobalSCAPE and no member had any relationship
with GlobalSCAPE requiring disclosure as a related-party transaction in the
section Certain Relationships and Related Transactions of this proxy
statement.
Section 16(a) Beneficial
Ownership Reporting Compliance
GlobalSCAPE believes, based solely on its review of
the copies of Section 16(a) forms furnished to it and written
representations from executive officers and directors (and its ten percent
stockholders), that all Section 16(a) filing requirements were
fulfilled on a timely basis, with the following exceptions:
8
·
Thomas Brown filed a Form 4 on July 3,
2007, which included untimely reporting of his receipt of a stock option grant
on June 1, 2007.
·
David Mann filed a Form 4 on July 3,
2007, which included untimely reporting of his receipt of a stock option grant on
June 1, 2007.
·
Philip Renfro filed a Form 4 on July 3,
2007, which included untimely reporting of his receipt of a stock option grant
on June 1, 2007.
·
Frank Morgan filed a Form 4 on July 3,
2007, which included untimely reporting of his receipt of a stock option grant
on June 1, 2007.
·
Charles R. Poole filed a Form 4 on November 2,
2007, which included untimely reporting of his exercise of stock options on October 22,
2007.
·
Greg Hoffer filed a Form 4 on November 19,
2007, which included untimely reporting of the exercise of stock options by his
wife on September 17, 2007.
In making this disclosure, GlobalSCAPE has relied
solely on written representations of its directors and executive officers (and
its ten percent stockholders) and copies of the reports that they have filed
with the SEC.
9
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information
regarding ownership of our common stock as of April 14, 2008 by (i) each
person known by GlobalSCAPE to be the beneficial owner of more than 5% of the
outstanding shares of common stock, (ii) each director of GlobalSCAPE, (iii) the
President, (iv) each of the named executive officers of GlobalSCAPE and (v) all
executive officers and directors of GlobalSCAPE as a group.
|
|
As of April 14, 2007
|
|
Name of Beneficial Owner
|
|
Number of
Shares (1)
|
|
Percentage of
Class
|
|
|
|
|
|
|
|
Thomas
W. Brown, Director
2511 N. Loop 1604, Suite 203
San Antonio, TX 78258
|
|
5,825,583
|
(2)
|
33.85
|
%
|
|
|
|
|
|
|
David
L. Mann, Director
150 N. Loop 1604 East, Suite 202
San Antonio, TX 78258
|
|
1,926,000
|
(4)
|
11.19
|
%
|
|
|
|
|
|
|
Charles
R. Poole, Director
President & CEO
6000 Northwest Parkway, Suite 100
San Antonio, Texas 78249
|
|
442,666
|
(3)
|
2.55
|
%
|
|
|
|
|
|
|
Kelly
E. Simmons, Chief Financial Officer
6000 Northwest Parkway, Suite 100
San Antonio, TX 78249
|
|
10,000
|
|
*
|
|
|
|
|
|
|
|
Philip
M. Renfro, Director
28210 Steeple Chase Lane
Fair Oaks Ranch, Texas 78015
|
|
30,000
|
(4)
|
*
|
|
|
|
|
|
|
|
Frank
M. Morgan, Director
6100 Bandera Road, Suite 808
San Antonio, TX 78238
|
|
20,000
|
(4)
|
*
|
|
|
|
|
|
|
|
Jeffrey
Gehring, Vice President of Sales
6000 Northwest Parkway, Suite 100
San Antonio, TX 78249
|
|
100,000
|
(5)
|
*
|
|
|
|
|
|
|
|
K.
Earl Posey, Vice President of Investor Relations/Business Operations
6000 Northwest Parkway, Suite 100
San Antonio, TX 78249
|
|
66,667
|
(6)
|
*
|
|
|
|
|
|
|
|
Timothy
J. Barton, Vice President of Server Products
6000 Northwest Parkway, Suite 100
San Antonio, TX 78249
|
|
66,667
|
(6)
|
*
|
|
|
|
|
|
|
|
Gregory
Hoffer, Vice President and Chief Technology Officer
6000 Northwest Parkway, Suite 100
San Antonio, TX 78249
|
|
96,083
|
(7)
|
*
|
|
|
|
|
|
|
|
Douglas
Conyers, Vice President of WAFS Products
6000 Northwest Parkway, Suite 100
San Antonio, TX 78249
|
|
33,333
|
(8)
|
*
|
|
10
|
|
As of April 14, 2007
|
|
Name of Beneficial Owner
|
|
Number of
Shares (1)
|
|
Percentage of
Class
|
|
Michael
A. Roth
|
|
1,118,668
|
(9)
|
6.51
|
%
|
|
|
|
|
|
|
Brian
J. Stark
|
|
1,118,668
|
(9)
|
6.51
|
%
|
|
|
|
|
|
|
All
directors and executive officers as a group (11 persons)
|
|
8,616,999
|
|
48.33
|
%
|
*
Denotes ownership of less than 1%.
(1)
To the knowledge of
GlobalSCAPE, each stockholder named in the table has sole voting and investment
power with respect to all shares of GlobalSCAPE common stock shown as
beneficially owned by such stockholder unless otherwise stated. Shares of
GlobalSCAPE common stock that are not outstanding but that may be acquired by a
person upon exercise of options within 60 days are deemed outstanding for the
purpose of computing the percentage of outstanding shares beneficially owned by
such stockholder but are not deemed outstanding for the purpose of computing
the percentage of outstanding shares beneficially owned by any other
stockholder.
(2)
Includes 20,000 shares
issuable upon exercise of presently exercisable options or options exercisable
within 60 days. Includes 650 shares
owned by Mr. Browns spouse. Mr. Brown disclaims beneficial ownership
of the shares owned by his spouse.
(3)
Includes 200,000 shares
issuable upon exercise of presently exercisable options or options exercisable
within 60 days.
(4)
Includes 20,000 shares
issuable upon exercise of presently exercisable options.
(5)
Includes 100,000 shares
issuable upon exercise of presently exercisable options or options exercisable
within 60 days.
(6)
Includes 66,667 shares
issuable upon exercise of presently exercisable options or options exercisable
within 60 days.
(7)
Includes 93,333 shares
issuable upon exercise of presently exercisable options or options exercisable
within 60 days.
(8)
Includes 33,333 shares
issuable upon exercise of presently exercisable options or options exercisable
within 60 days.
(9)
Does not i
nclude 480,000 shares issuable upon
exercise of warrants issued in connection with the securities purchase
agreement which are subject to exercise caps that preclude the holder from
utilizing its exercise rights to the extent that it would beneficially own in
excess of 4.99% and 9.99% of the common stock.
Michael A. Roth and Brian J. Stark are the Managing Members of Stark
Offshore Management, LLC, which acts as the investment manager and has the sole
power to direct the management of SF Capital Partners, Ltd. Through Stark Offshore, Messers. Roth and
Stark possess voting and dispositive power over all of the shares. Messers. Roth and Stark disclaim beneficial
ownership of all of such shares. The
address of SF Capital Partners, Ltd. is: c/o Stark Offshore Management, LLC,
3600 South Lake Drive, St. Francis, WI 53235.
11
Equity
Compensation Plan Information
The following
table gives aggregate information regarding grants under all equity
compensation plans of GlobalSCAPE through December 31, 2007.
Plan Category
|
|
Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights
(a)
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
|
|
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)
|
|
Equity compensation plans
approved by security holders
|
|
1,732,828
|
|
$
|
1.94
|
|
2,427,172
|
|
TOTAL
|
|
1,732,828
|
|
$
|
1.94
|
|
2,427,172
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions
in 2007
Robert Langenbahn, who is one of our Business
Development Managers, earned $419,496 in base salary and commissions in 2007. Mr. Langenbahn is the son-in law of
Thomas W. Brown, our Chairman of the Board. Mr. Langenbahns compensation
plan is the same as all other GlobalSCAPE employees who hold a similar
position.
Policy Related
to Related Person Transactions
In March 2007, our Board of Directors adopted a
formal written related person transaction approval policy, which sets out
GlobalSCAPEs policies and procedures for the review, approval, or ratification
of related person transactions. For
these purposes, a related person is a director, nominee for director,
executive officer, or holder of more than 5% of our common stock, or any
immediate family member of any of the foregoing. This policy applies to any
financial transaction, arrangement or relationship or any series of similar
financial transactions, arrangements or relationships in which GlobalSCAPE is a
participant and in which a related person has a direct or indirect interest,
other than the following:
·
payment
of compensation by GlobalSCAPE to a related person for the related persons
service in the capacity or capacities that give rise to the persons status as
a related person;
·
transactions
available to all employees or all stockholders on the same terms;
·
purchases
of supplies from GlobalSCAPE in the ordinary course of business at the same
price and on the same terms as offered to our other customers, regardless of
whether the transactions are required to be reported in GlobalSCAPEs filings with
the SEC; and
·
transactions,
which when aggregated with the amount of all other transactions between the
related person and GlobalSCAPE, involve less than $5,000 in a fiscal year.
Our Audit Committee is to approve any related person
transaction subject to this policy before commencement of the related person
transaction, provided that if the related person transaction is identified
after it commences, it shall be brought to the Audit Committee for
ratification, amendment or rescission. The chairman of our Audit Committee has
the authority to approve or take other actions in respect of any related person
transaction that arises, or first becomes known, between meetings of the audit
committee, provided that any action by the Chairman must be reported to our
Audit Committee at its next regularly scheduled meeting.
12
Our Audit
Committee will analyze the following factors, in addition to any other factors
the members of the Audit Committee deem appropriate, in determining whether to
approve a related person transaction:
·
whether the terms are fair to GlobalSCAPE;
·
whether the transaction is material to
GlobalSCAPE;
·
the role the related person has played in
arranging the related person transaction;
·
the structure of the related person transaction;
and
·
the interest of all related persons in the
related person transaction.
Our Audit Committee may, in its sole discretion,
approve or deny any related person transaction. Approval of a related person
transaction may be conditioned upon GlobalSCAPE and the related person
following certain procedures designated by the Audit Committee.
13
EXECUTIVE
COMPENSATION
Compensation
Discussion & Analysis
We compensate our management through a combination of
base salary, incentive bonuses and long-term equity based awards in the form of
stock options which is designed to be competitive with those of a group of
companies which we have selected for comparative purposes in order to attract
and retain our executive officers while also creating incentives which will
align executive performance with the long-term interests of our stockholders.
This section discusses the principles underlying our
executive compensation policies and decisions and the most important factors
relevant to an analysis of these policies and decisions. It provides
qualitative information regarding the manner and context in which compensation
is awarded to and earned by our executive officers named in the Summary
Compensation Table below, whom we sometimes refer to as our named executive
officers or NEOs, and places in perspective the data presented in the tables
and narrative that follow.
Our
Compensation Committee
Our Compensation Committee approves, implements and
monitors all compensation and awards to executive officers including the chief
executive officer, chief financial officer and the other NEOs. The Committees membership is determined by
the Board of Directors and is composed of three non-management directors. The
Committee has the authority to delegate any of its responsibilities to
subcommittees as the Committee may deem appropriate in its sole discretion.
During 2007, the Committee did not delegate any of its responsibilities.
The Committee periodically approves and adopts, or
makes recommendations to the Board for, GlobalSCAPEs compensation decisions
(including the approval of grants of stock options to our named executive
officers). In the first quarter of each
year, the chief executive officer, submits his recommendations for salary adjustments
and long-term equity incentive awards based upon his subjective evaluation of
individual and company performance and his subjective judgment regarding each
executive officers salary and long-term equity incentives, for each executive
officer except himself, to the Compensation Committee.
The Compensation Committee reviewed all components of
compensation for our executive officers, including salary, bonuses, long-term
equity incentives, the dollar value to the executive and cost to GlobalSCAPE of
all perquisites and all severance and change of control arrangements. Based on this review, the Compensation
Committee determined that the compensation paid to our executive officers
reflected our compensation philosophy and objectives.
Compensation
Philosophy and Objectives
Our underlying philosophy in the development and
administration of GlobalSCAPEs annual, incentive and long-term compensation
plans is that our compensation system should be designed to attract and retain
talented executives while also creating incentives which reward performance and
align the interests of our NEOs with those of GlobalSCAPEs stockholders. Key elements of this philosophy are:
·
Establishing
base salaries which are competitive with the companies in our comparative
group, within GlobalSCAPEs budgetary constraints and commensurate with
GlobalSCAPEs salary structure.
·
Rewarding
our NEOs for outstanding company-wide performance as reflected by financial
measures, such as sales revenue or net income, or other goals, such as the
consummation of an acquisition.
·
Providing
equity-based incentives for our NEOs to ensure that they are motivated over the
long-term to respond to GlobalSCAPEs business challenges and opportunities as
owners rather than just as employees.
14
Attracting and Retaining
Executive Talent
.
As a small company, we recognize that while we must
pay salaries which help us to attract and retain talented executives who will
help our company grow, we must do so within budgetary constraints. As a result,
we generally set our base salaries at a level which is at the 25
th
percentile relative to a comparison group consisting of a list of San
Antonio-based companies with a similar number of employees maintained by
Salary.com.
Salary.com is a national
compensation benchmark subscription service with over 7,000 subscribers
consisting of over 10 million employees that offer real time survey information
on general industry positions that can be searched by revenue and company
size. We use this list because we
believe that it provides us with a useful starting place in setting initial
base salaries for our NEOs and we have chosen the 25th percentile because we
believe it is reflective of our small size and budgetary constraints. With respect to new NEOs, we take into
account their prior base salary and annual cash incentives, as well as the contribution
expected to be made by the new executive officer, our business needs and the
role of the new NEO with GlobalSCAPE.
Annual adjustments are made based upon a raise pool which is
subjectively determined by our chief executive officer and approved by the
Compensation Committee.
Rewarding Performance
.
We reward outstanding performance with cash bonuses
which are based on financial measures, such as sales revenue or net income, or
other goals, such as the consummation of an acquisition. For more information
on our bonus program, see the discussion below under Elements of Executive
CompensationIncentive Compensation.
Aligning Executive and
Stockholder Interests
.
We believe that equity-based compensation provides an
incentive to our NEOs to build value for our Company over the long-term and
aligns the interests of our NEOs and stockholders. We use stock options because we believe that
options will generate value to the recipient only if our stock price increases
during the term of the option. The stock
options granted to our NEOs vest solely based on the passage of time, other
than in the event of a change of control.
We believe that time-vested equity awards encourage long-term value
creation and executive retention because executives can realize value from such
rewards only if they remain employed by us until the awards vest.
Elements of
Executive Compensation
The compensation currently paid to GlobalSCAPEs
executive officers consists of three core elements: base salary, bonuses under
a performance-based, non-equity incentive plan and stock option awards granted
pursuant to our 2000 Employee Long-Term Equity Incentive Plan, which we refer
to as the 2000 Employee Plan, plus other employee benefits generally available
to all employees of GlobalSCAPE. We
believe these elements support our underlying philosophy of attracting and
retaining talented executives while remaining within our budgetary constraints
and also creating cash incentives which reward company-wide and individual
performance and aligning the interests of our named executive officers with
those of GlobalSCAPEs stockholders by providing the named executive officers
equity-based incentives to ensure motivation over the long-term. We view the three core elements of
compensation as related but distinct.
Although we review total compensation, we do not believe that
significant compensation derived from one component should increase or reduce
compensation from another component. We
determine the appropriate level for each component of compensation
separately. We have not adopted any
formal or informal policies or guidelines for allocating compensation among
long-term incentives and annual base salary and bonuses, between cash and
non-cash compensation, or among different forms of non-cash compensation;
however, we do consider the age, tenure and seniority of each named executive
officer in making compensation decisions.
GlobalSCAPE does not have any deferred compensation
programs, other than for Mr. Poole, who retired in March 2008, or
supplemental executive retirement plans and no perquisites are provided to
GlobalSCAPEs executive officers that are not otherwise available to all
employees of GlobalSCAPE, and no perquisites are valued in excess of $10,000
per employee.
15
Base Salary
. In determining base salaries for the named
executive officers of GlobalSCAPE, we aim to set base salaries at a level we
believe enables us to hire and retain individuals in a competitive environment
and to reward individual performance and contribution to our overall business
goals while remaining within our budgetary constraints. We review the salary structure of GlobalSCAPE
on an annual basis to ensure our competitiveness at the 25th percentile level.
The base salaries paid to our NEOs in 2007 are set
forth below in the Summary Compensation Table.
For 2007, base salary cash compensation was $716,261 with our CEO
receiving $187,049. We believe that the
salaries paid achieved our objectives.
Base salaries are adjusted on an annual basis. During the fourth quarter of each year, our
chief executive officer subjectively determines a raise pool for the other
NEOs and submits this amount to the Compensation Committee for its
approval. For 2007, the raise pool was
a 4.5% increase over the base salary levels in 2006 and in 2008 the raise pool
is 5%. Among the factors considered by
the chief executive officer are the achievement of established financial goals
for sales revenue and net income. Raises
for Mr. Poole, our recently retired CEO, were governed by the terms of his
employment agreement. Mr. Pooles
employment agreement provided for annual raises of $25,000 on each anniversary
of Mr. Pooles employment agreement (July 1 of each year during the
term). The full amount of these increases
is deposited into a deferred payment account for Mr. Poole. For more information on Mr. Pooles
employment agreement, see Employment Agreements and Potential Payments upon
Termination or Change in Control.
Incentive Compensation
. GlobalSCAPEs current bonus plan was adopted
by our Board of Directors in 2005. The
purpose of the bonus plan is to create financial incentives for our named
executive officers that are tied directly to financial or other goals that best
reflect their respective duties and responsibilities or the achievement of
certain goals determined at the time the NEO was hired. The Compensation Committee may, at its
discretion, increase or decrease bonuses, but did not do so in 2007.
Mr. Poole.
Under his
employment agreement, Mr. Poole was paid a bonus equal to 2% of our net
income. We believe that this formula best reflected Mr. Pooles duties and
responsibilities as our CEO since it includes both a reflection of sales revenue, which we believe is the best
measure of our ability to continue growing our business, and whether we are
properly managing our business by containing costs.
Mr. Gehring.
Mr. Gehrings
bonus is based upon the achievement of certain revenue goals and the amount of
sales dollars collected which we believe are the best measures of his
performance in his role as Vice President of Sales. Bonuses are paid if more
than 80% of the target sales quotas are achieved. The amount of the bonus is $5,000 if 100% of
the sales quotas are met and a multiplier of 2 is used for each percentage
point above or below 100%. For example,
if 106% of the sale quota is attained, the bonus is equal to $5,600 (5,000
times 1.12) or if 84% of the sales quota is attained, the bonus is equal to
$3,400 (5,000 times 0.68). The quarterly
sales quotas in 2007 were:
Quarter
|
|
Quota
|
|
Amount of Bonus
|
|
Actual Percentage
|
|
1
|
|
$
|
3,200,000
|
|
$
|
0
|
|
73
|
%
|
2
|
|
3,506,790
|
|
3,170
|
|
82
|
%
|
3
|
|
3,691,752
|
|
3,973
|
|
90
|
%
|
4
|
|
2,955,000
|
|
5,868
|
|
109
|
%
|
|
|
|
|
|
|
|
|
|
|
Additionally Mr. Gehring received 2% of collected
sales by all sales persons for all non-internet sales (except for sales of
Cascade Server). Mr. Gehring
received a bonus of $242,253 on collected sales of over $12 million. In 2008, Mr. Gehring
is eligible to receive incentive compensation equal to 1% of direct sales, with
the exception of renewed maintenance and service contracts, plus quarterly
bonuses of $10,000 upon the achievement of certain financial goals and personal
goals assigned by the chief executive officer.
Mr. Schneider.
At the time
he was hired in 2006, Mr. Schneider, who was our chief financial officer
until September 2007, and the Board agreed that he would receive bonus
payments, if any, based upon the successful closing of an acquisition ($7,500),
the completion of a securities offering ($15,000) and the achievement of the
listing of our common stock on a national securities exchange ($30,000). In
2007, Mr. Schneider earned a bonus of $30,000 for completing the listing
of the Companys stock on the American Stock Exchange.
16
Mr. Barton.
Mr. Barton
received a discretionary bonus of $3,300 in 2007 awarded by the CEO. In 2008, Mr. Barton
is eligible to receive quarterly bonuses of $10,000 upon the achievement of
certain financial goals and personal goals assigned by the CEO.
Mr. Simmons
. Mr. Simmons was not eligible to receive
a bonus in 2007. In 2008, Mr. Simmons
is eligible to receive quarterly bonuses of $10,000 upon the achievement of
certain financial goals and personal goals assigned by Mr. Poole in January 2008.
Long-Term
Equity Incentive Plan
.
GlobalSCAPEs 2000 Employee Plan, which was approved by our stockholders
in 2000, authorizes us to grant incentive stock options, non-qualified
stock options and shares of restricted stock to our named executive officers,
as well as to all employees of GlobalSCAPE.
A total of
3,660,000 shares of common stock are reserved for issuance under this
plan. We use stock options as a form of
long-term compensation because we believe that stock options motivate our
executive officers to exert their best efforts on behalf of our stockholders
and align the interests of our named executive officers with our
stockholders. Vesting is accelerated in
certain events described under Employment Agreements and Potential Payments
Upon Termination or Change in Control.
The purposes of this plan are to employ and retain
qualified and competent personnel and to promote the growth and success of
GlobalSCAPE, which can be accomplished by aligning the long-term interests of
the executive officers with those of the shareholders by providing the
executive officers an opportunity to acquire an equity interest in
GlobalSCAPE. All grants are made with an
exercise price equal to the closing price of our common stock on the date of
grant. Each of our NEOs was granted
options to purchase shares which vest over three years from his hiring
date. Each is eligible to receive new
grants at the discretion of the Compensation Committee, but not less often than
every 24 months. The amount of
additional grants may be up to an additional 100,000 options with the exact
number determined at the Compensation Committees and the Boards discretion,
and based upon input from the CEO. We do
not time stock option grants in coordination with the release of material
non-public information.
Other Employee Benefits
.
GlobalSCAPEs executive
officers are eligible to participate in all of our employee benefit plans, such
as medical, dental, group life and long-term disability insurance, in each case
on the same basis as other employees.
GlobalSCAPEs executive officers are also eligible to participate in our
401(k) plan on the same basis as other employees. GlobalSCAPEs Board of Directors, at its sole
discretion, may authorize GlobalSCAPE to match (in part or in whole) the
contributions of each employee to the 401(k) plan during a given year;
GlobalSCAPE contributions may be in the form of cash, shares of common stock or
a combination of both.
Compensation
Committee Report
The Compensation Committee of GlobalSCAPE has reviewed
and discussed the Compensation Discussion and Analysis required by
Item 402(b) of Regulation S-K with management and, based on such
review and discussions, the Compensation Committee recommended to the Board
that the Compensation Discussion and Analysis be included in this Proxy
Statement.
This report is submitted by the members of the
Compensation Committee, which consists of the following directors:
David L. Mann, Chairman
Frank M. Morgan
Phillip M. Renfro
17
Summary
Compensation Table
The following table sets forth a summary of
compensation for the fiscal years ended December 31, 2006 and 2007 that
GlobalSCAPE paid to each of its named executive officers.
Name and
Principal Position
|
|
Year
|
|
Salary
($)(1)
|
|
Option
Awards
($) (2)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
($)
|
|
Total
($)
|
|
Charles R. Poole, Former
|
|
2007
|
|
187,049
|
(3)(4)
|
34,296
|
|
108,752
|
|
5,380
|
(5)
|
335,477
|
|
President and Chief Executive Officer
|
|
2006
|
|
162,512
|
(3)(4)
|
33,834
|
|
55,099
|
|
2,829
|
(5)
|
254,274
|
|
Jeff Gehring, Vice President of Sales
|
|
2007
|
|
74,806
|
|
3,529
|
|
255,264
|
|
|
|
333,599
|
|
|
|
2006
|
|
70,000
|
|
4,237
|
|
165,659
|
|
|
|
235,985
|
|
Bernard Schneider Former Chief
|
|
2007
|
|
136,415
|
|
105,959
|
|
30,000
|
|
|
|
272,374
|
|
Financial Officer and Treasurer
|
|
2006
|
|
72,917
|
|
57,181
|
|
22,500
|
|
|
|
152,598
|
|
Ellen Ohlenbusch, Former Vice
|
|
2007
|
|
141,231
|
|
88,675
|
|
9,600
|
|
|
|
239,506
|
|
President of Marketing
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
Tim Barton, Vice President of Server
|
|
2007
|
|
136,375
|
|
69,441
|
|
3,300
|
|
|
|
209,116
|
|
Products
|
|
2006
|
|
108,330
|
|
62,497
|
|
|
|
|
|
170,827
|
|
Kelly E. Simmons, President, Chief
|
|
2007
|
|
40,385
|
|
82,834
|
|
|
|
|
|
123,219
|
|
Financial Officer and Treasurer
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts in this
column include any salary contributed by the named executive officer to
GlobalSCAPEs 401(k) plan.
|
|
|
|
(2)
|
|
The amounts in this
column reflect the dollar amount recognized for financial statement reporting
purposes for the years ended December 31, 2006 and 2007 in accordance
with FAS 123R, for options granted to the named executive officer and
includes amounts from awards granted in years prior to 2006. See notes 1 and
9 of the notes to our consolidated financial statements included in our
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 26, 2008 for the discussion of all assumptions made
in the calculation of this amount set forth elsewhere in this proxy.
|
|
|
|
(3)
|
|
Includes $59,220 in 2006
and $62,048 in 2007 in deferred compensation paid to Mr. Poole pursuant
to his employment agreement.
|
|
|
|
(4)
|
|
Reflects amount payable
pursuant to Mr. Pooles employment agreement.
|
|
|
|
(5)
|
|
Reflects earnings
(interest) on amounts deferred pursuant to Mr. Pooles employment
agreement.
|
18
Grants of
Plan-Based Awards
The following table provides information with regard
to potential cash bonuses paid or payable in 2007 under our performance-based,
non-equity incentive plan, and with regard to each stock option granted to each
named executive officer during 2007.
|
|
|
|
Estimated Future Payouts Under Non-Equity
Incentive Plan Awards
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
|
|
Exercise or
Base Price
of Options
|
|
Grant Date
Fair Value
of Stock
|
|
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Options
(#)
|
|
Awards
($ /Share)
|
|
and Option
Awards ($)(1)
|
|
Charles R.
Poole (2)
|
|
n/a
|
|
|
|
29,000
|
(3)
|
n/a
|
(5)
|
|
|
|
|
|
|
Jeff Gehring
|
|
6/13/2007
|
|
|
|
30,000
|
(3)
|
n/a
|
(5)
|
|
|
|
|
|
|
Bernard
Schneider
|
|
6/13/2007
|
|
|
|
30,000
|
(4)
|
|
|
|
|
|
|
|
|
Ellen
Ohlenbusch
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tim Barton
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kelly E.
Simmons
|
|
9/17/2007
|
|
|
|
|
|
|
|
150,000
|
(6)
|
4.25
|
|
497,004
|
|
(1)
|
|
Reflects
the grant date fair value of the awards computed in accordance with FAS 123R.
See notes 1 and 9 to the notes to our consolidated financial statements
included in our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 26, 2008 for the discussion of all
assumptions made in the calculation of this amount set forth elsewhere in
this proxy.
|
|
|
|
(2)
|
|
Mr. Pooles
bonus was determined under the terms of his employment agreement which
provided that he receive a bonus equal to 2% of GlobalSCAPEs net income.
|
|
|
|
(3)
|
|
Because
the amount of this payment was not determinable on the date of grant, the
amount included is a representative amount which equals the amount that the
named executive officer would have been granted in 2007 based on
GlobalSCAPEs 2006 results of operations.
|
|
|
|
(4)
|
|
Because
the amount of this payment was not determinable on the date of grant and is
based upon the occurrence of three defined events (acquisition closings,
completion of a securities offering and the achievement of the listing of our
common stock on a national securities exchange), the amount included is a
representative amount which equals the amount based upon the Boards
expectation at the time Mr. Schneider was hired in 2006. Based on events
that did occur in 2007, Mr. Schneider actually earned $30,000. Please
see the discussion under Compensation Discussion and Analysis Elements of
Executive Compensation Incentive Compensation for more information
beginning on page 16
|
|
|
|
(5)
|
|
There
is no maximum amount payable for awards under the bonus plans applicable to
Messers. Poole and Gehring. The amount set forth under Target is a
representative amount which equals the amount that Messers. Poole and Gehring
would have earned in 2007 based on GlobalSCAPEs 2006 results. Please see the
discussion
under Compensation Discussion and Analysis Elements of Executive
Compensation Incentive Compensation for more information.
|
|
|
|
(6)
|
|
Options
vest over the three years following the grant date as long as the grantee is
employed at GlobalSCAPE with 33% vesting at the end of years one and two, and
34% vesting at the end of year three.
|
Relationship
of Salary and Annual Incentive Compensation to Total Compensation
The following
table sets forth the relationship of salary and annual incentive compensation
to total compensation for each of our former CEO, CFO and the remaining NEOs.
Name
|
|
% of Salary to
Total Compensation
|
|
% of Annual Cash Incentive
Payment to Total Compensation
|
|
Charles R.
Poole
|
|
37.26
|
|
32.42
|
|
|
|
|
|
|
|
Jeff Gehring
|
|
22.42
|
|
76.52
|
|
19
Name
|
|
% of Salary to
Total Compensation
|
|
% of Annual Cash Incentive
Payment to Total Compensation
|
|
Bernard
Schneider
|
|
50.08
|
|
11.01
|
|
|
|
|
|
|
|
Ellen
Ohlenbusch
|
|
58.97
|
|
4.01
|
|
|
|
|
|
|
|
Tim Barton
|
|
65.22
|
|
1.58
|
|
|
|
|
|
|
|
Kelly E.
Simmons
|
|
32.77
|
|
0.00
|
|
Employment
Agreements and Potential Payments Upon Termination or Change in Control
GlobalSCAPE had an employment agreement with its
former President and Chief Executive Officer, Charles R. Poole. The term of the
agreement began on July 1, 2005 and continues until December 31,
2008, unless terminated earlier. Mr. Pooles
employment agreement was terminated in connection with his retirement in March 2008. Beginning in July 2005, Mr. Poole
started receiving a bi-weekly base salary of $5,769.69, less $962.00 which is
deposited into an investment account held in the Companys name (the Deferred
Pay Account). The bi-weekly base salary increases each July 1
st
beginning July 1, 2006 during the term of employment by $962.00, provided
however that such increase will be deposited in the Deferred Pay Account.
Amounts in the Deferred Pay Account earn 6% per annum and will be distributed
to Mr. Poole on December 31, 2008, or upon Mr. Pooles death,
disability or termination of his employment due to a change in control. On a
quarterly basis, following the completion of a quarterly review or annual
audit, as applicable, of the Companys most recently completed quarter, the
Company pays a bonus equal to 2% of net income reflected on the Companys
operating statements for such completed quarter to Mr. Poole. If Mr. Pooles
employment is terminated prior to the end of the quarter, no bonus will accrue
for the quarter. The Employment Agreement also provides for certain benefits
related to group health, life and disability programs, participation in the
Companys 401(k) and any other retirement or savings plans made available
to the Companys other executives and officers, and the reimbursement of
expenses related to the performance of his duties. If Mr. Pooles
employment is terminated prior to December 31, 2008, the circumstances of
such termination will determine the nature and amount of any separation
payments and funds to be paid from the Deferred Pay Account, including
additional funds if a change in control takes place. Mr. Poole received a
grant of 300,000 incentive stock options in connection with the Employment
Agreement at $0.31 per share. The options vest 33% on each of the first and
second anniversary of the grant date and 34% on the third anniversary of the
grant. The options become fully vested and exercisable upon certain change in
control events. The options expire on the 10
th
anniversary of the
date of the grant. The Employment Agreement also contains customary covenants
by Mr. Poole regarding assignment of inventions, confidentiality,
non-competition and non-solicitation of employees and customers of the company.
Mr. Poole retired in March 2008 but continues as a director of
GlobalSCAPE. Effective April 1,
2008, he became eligible for the compensation paid to our directors. See Compensation of Directors on page 25.
Under Mr. Pooles option agreement, Change of
Control means the occurrence of any of the following events:
(i)
any person as that term
is used in Section 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the Exchange Act), (other than the Company, the
Brown and Mann Joint Venture, a Texas General Partnership (Brown and Mann
Joint Venture) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned, directly or
indirectly, by the Brown and Mann Joint Venture or Thomas W. Brown) is or
becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the
Companys then outstanding voting securities;
(ii)
during any period of twenty-four (24) consecutive
months, individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a person who has
entered into any agreement with the Company to effect a transaction described
in subsection (i), (iii) or (iv) of this paragraph) whose
election by the Board or nomination by the Board for election by the
stockholders was approved by a vote of at least
20
two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination was previously so
approved, cease for any reason to constitute a majority of the Board;
(iii)
the stockholders of the Company approve a merger,
consolidation or reorganization of the Company with any other corporation
(other than a merger, consolidation, or reorganization with any company owned
directly or indirectly by the Brown and Mann Joint Venture or Thomas W. Brown
or a merger, consolidation or reorganization which would result in the
stockholders of the Company immediately before such merger, consolidation or
reorganization, owning, directly or indirectly immediately following such
merger, consolidation or reorganization, at least fifty-one percent (51%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger, consolidation or
reorganization in substantially the same proportion as their ownership of the
voting securities immediately before such merger, consolidation, or
reorganization; or
(iv)
the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Companys assets.
Notwithstanding anything to the contrary herein, a Change of Control shall not
be deemed to occur as a result of an acquisition of Company securities or
assets by the Brown and Mann Joint Venture, Thomas W. Brown, or any
consolidation, merger or exchange of securities.
The following table sets forth the compensation that Mr. Poole
would have received if his employment had been terminated on December 31,
2007:
Termination and Change in Control Payments Table
Type of Benefit
|
|
Before Change in
Control
Termination w/o
Cause or w/Cause
($)
|
|
Termination
Upon Death or
Disability ($)
|
|
After Change in
Control
Termination w/o
Cause ($)
|
|
Voluntary
Termination
($)
|
|
Death /
Disability ($)
|
|
Deferred
Compensation
|
|
119,711
|
|
119,711
|
|
119,711
|
|
119,711
|
|
119,711
|
|
Options(1)
|
|
1,038,000
|
|
1,038,000
|
|
1,557,000
|
|
1,038,000
|
|
1,038,000
|
|
Total
|
|
1,157,711
|
|
1,157,711
|
|
1,676,711
|
|
1,157,711
|
|
1,157,711
|
|
(1)
|
|
The
value of outstanding equity represents the aggregate excess over the fair
market value of the vested options as of December 31, 2007 over the
option exercise price. Any outstanding equity awards under a termination for
cause are forfeited.
Additionally,
upon a change in control of GlobalSCAPE, all outstanding stock options will
immediately become exercisable.
|
The following table sets forth the compensation
that Mr. Gehring would have received if there had been a change of control
on December 31, 2007:
Termination and Change in Control Payments Table
Type of Benefit
|
|
Before Change in
Control
Termination w/o
Cause or w/Cause
($)
|
|
Termination
Upon Death or
Disability ($)
|
|
After Change in
Control
Termination w/o
Cause ($)
|
|
Voluntary
Termination
($)
|
|
Death /
Disability ($)
|
|
Deferred
Compensation
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Options(1)
|
|
535,000
|
|
535,000
|
|
535,000
|
|
535,000
|
|
535,000
|
|
Total
|
|
535,000
|
|
535,000
|
|
535,000
|
|
535,000
|
|
535,000
|
|
21
(1)
The value of outstanding
equity represents the aggregate excess over the fair market value of the vested
options as of December 31, 2007 over the option exercise price. Any
outstanding equity awards under a termination for cause are forfeited.
Mr. Schneider left the Company in September 2007
and would not have been entitled to any change of control payments on December 31,
2007.
The following table sets forth the compensation
that Ms. Ohlenbusch would have received if there had been a change of
control on December 31, 2007:
Termination and Change in Control Payments Table
Type of Benefit
|
|
Before Change in
Control
Termination w/o
Cause or w/Cause
($)
|
|
Termination
Upon Death or
Disability ($)
|
|
After Change in
Control
Termination w/o
Cause ($)
|
|
Voluntary
Termination
($)
|
|
Death /
Disability ($)
|
|
Deferred
Compensation
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Options(1)
|
|
78,666
|
|
78,666
|
|
236,000
|
|
78,666
|
|
78,666
|
|
Total
|
|
78,666
|
|
78,666
|
|
236,000
|
|
78,666
|
|
78,666
|
|
(1)
The value of outstanding
equity represents the aggregate excess over the fair market value of the vested
options as of December 31, 2007 over the option exercise price. Any
outstanding equity awards under a termination for cause are forfeited.
Ms. Ohlenbush left full-time employment with the
Company in February 2008 and currently is serving as an advisor to the
Board of Directors.
The following
table
sets
forth the compensation that
Mr. Barton would have received if there had been a change of control on December 31,
2007:
Termination and Change in Control Payments Table
Type of Benefit
|
|
Before Change in
Control
Termination w/o
Cause or w/Cause
($)
|
|
Termination
Upon Death or
Disability ($)
|
|
After Change in
Control
Termination w/o
Cause ($)
|
|
Voluntary
Termination
($)
|
|
Death /
Disability ($)
|
|
Deferred
Compensation
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Options(1)
|
|
95,999
|
|
95,999
|
|
288,000
|
|
95,999
|
|
95,999
|
|
Total
|
|
95,999
|
|
95,999
|
|
288,000
|
|
95,999
|
|
95,999
|
|
(1)
The value of outstanding
equity represents the aggregate excess over the fair market value of the vested
options as of December 31, 2007 over the option exercise price. Any outstanding
equity awards under a termination for cause are forfeited.
22
The following
table sets forth the compensation that Mr. Simmons
would have received if there had been a change of control on December 31,
2007:
Termination and Change in Control Payments Table
Type of Benefit
|
|
Before Change in
Control
Termination w/o
Cause or w/Cause
($)
|
|
Termination
Upon Death or
Disability ($)
|
|
After Change in
Control
Termination w/o
Cause ($)
|
|
Voluntary
Termination
($)
|
|
Death /
Disability ($)
|
|
Deferred
Compensation
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Options(1)
|
|
0
|
|
0
|
|
187,500
|
|
0
|
|
0
|
|
Total
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
(1)
The value of outstanding
equity represents the aggregate excess over the fair market value of the vested
options as of December 31, 2007 over the option exercise price. Any
outstanding equity awards under a termination for cause are forfeited.
Outstanding
Equity Awards At Fiscal-Year End
The table below
contains certain information concerning outstanding option awards at December 31,
2007 for our named executive officers.
None of the named executive officers had outstanding stock awards at December 31,
2007.
OPTION AWARDS
Name
|
|
Number of Securities
Underlying
Unexercised Options
(#)
Exercisable
|
|
Number of Securities
Underlying
Unexercised Options
(#)
Unexercisable
|
|
Option
Exercise
Price
($/sh)
|
|
Option
Expiration Date
|
|
Charles R.
Poole
|
|
200,000
|
|
100,000
|
|
0.31
|
|
2015
|
|
Jeff Gehring
|
|
100,000
|
|
|
|
0.15
|
|
2014
|
|
Bernard
Schneider
|
|
|
|
|
|
|
|
|
|
Ellen
Ohlenbusch
|
|
33,333
|
|
66,667
|
|
3.14
|
|
2016
|
|
Tim Barton
|
|
33,333
|
|
66,667
|
|
2.62
|
|
2016
|
|
Kelly E.
Simmons
|
|
|
|
150,000
|
|
4.25
|
|
2017
|
|
Option
Exercises And Stock Vested
The table below contains certain information concerning exercises of stock
options and other stock awards during the fiscal year ended December 31, 2007, by our
named executive officers.
OPTION AWARDS
Name
|
|
Number of Shares Acquired on Exercise (#)
|
|
Value Realized on
Exercise ($ )(1)
|
|
Charles R.
Poole
|
|
150,000
|
|
1,092,000
|
|
Bernard
Schneider
|
|
66,667
|
|
97,000
|
|
(1)
The value realized on
exercise is the aggregate excess over the fair market value of the option at
the time of the exercise and the grant price of the option times the number of
options exercised.
23
Pension
Benefits
GlobalSCAPE
does not sponsor any
pension benefit plans and none of the named executive officers contribute to
such a plan.
Non-Qualified
Deferred Compensation
GlobalSCAPE does not sponsor any non-qualified defined
compensation plans or other non-qualified deferred compensation plans other
than the non-qualified deferred compensation arrangement for Mr. Poole
pursuant to his employment agreement, which is described under Employment
Agreements and Potential Payments Upon Termination or Change in Control. The following table sets forth certain
information regarding Mr. Pooles deferred compensation:
Nonqualified Deferred Compensation
Name
|
|
Executive
Contributions in
Last FY
|
|
Registrant
Contributions in
Last FY
|
|
Aggregate
Earnings in
Last FY
|
|
Aggregate
Withdrawals/
Distributions
|
|
Aggregate
Balance
at Last
FYE
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Charles R. Poole
|
|
62,049
|
|
0
|
|
5,380
|
|
0
|
|
119,711
|
|
Compensation
of Directors
The Board of
Directors has the authority to determine the amount of compensation to be paid
to its members for their services as directors and committee members and to
reimburse directors for their expenses incurred in attending meetings. Prior to
December 2006, our Board of Directors made all executive compensation
decisions. In December 2006, the Board formed a Compensation Committee
consisting of Messers. Mann, Morgan and Renfro, all of whom are independent
as currently defined by the Securities and Exchange Commission and the listing
standards of the American Stock Exchange.
During 2005, none of our directors were compensated
for their service as directors of GlobalSCAPE. In 2006, with the addition of
two new Board members, Messers. Morgan and Renfro, we began to compensate our
non-employee directors. In 2007, each of our non-employee directors received an
option grant of 20,000 shares of our common stock under the GlobalSCAPE, Inc.
2006 Non-Employee Directors Long-Term Equity Incentive Plan, or the 2006
Directors Plan. Under this plan, a
maximum of 500,000 shares of GlobalSCAPE common stock may be awarded. At April 14, 2008, options to purchase a
total of 160,000 shares were outstanding of which 80,000 were vested at April 14,
2008. The 2006 Directors Plan is
administered by the Compensation Committee of the Board of Directors which will
set the exercise price, term and other conditions applicable to each stock
option granted under the Plan. If
options, as opposed to shares, are awarded, the exercise share price shall be
no less than 100% of the fair market value on the date of the award while the
option terms and vesting schedules are at the discretion of the Compensation
Committee. The 2006 Directors Plan
provides that each year, at the first regular meeting of the Board of Directors
immediately following GlobalSCAPEs annual stockholders meeting, each
non-employee director shall be granted or issued awards of 20,000 shares of
GlobalSCAPE common stock, for participation in Board and Committee meetings
during the previous calendar year. The maximum annual award for any one person
is 20,000 shares of GlobalSCAPE common stock.
In addition to grants under the 2006 Directors Plan,
each director other than Mr. Poole earned a quarterly fee of $3,000. Mr. Renfro also receives an additional
fee of $1,000 per quarter for serving as chairman of the Audit Committee. The
fees earned in the fourth quarter of 2007 were paid in January 2008.
In 2008, the annual compensation for Directors will be
$60,000 for the Chairman of the Board of Directors, and $48,000 for each
director other than the Chairman. In addition, each director will be awarded
20,000 stock options after the Annual Meeting. Of Stockholders.
24
The following table sets forth a summary of
compensation for the fiscal year ended December 31, 2007 that GlobalSCAPE
paid to each director. GlobalSCAPE does
not sponsor a pension benefits plan, a non-qualified deferred compensation plan
or a non-equity incentive plan for our directors; therefore, these columns have
been omitted from the following table.
Director Compensation Table
Name
|
|
Fees Earned
or Paid in Cash(1)
|
|
Option
Awards(2)
|
|
All Other
Compensation(3)
|
|
Total
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
Thomas W. Brown
|
|
9,000
|
|
36,080
|
|
2,753
|
|
47,833
|
|
David L. Mann
|
|
9,000
|
|
36,080
|
|
|
|
45,080
|
|
Frank M. Morgan
|
|
9,000
|
|
36,080
|
|
|
|
45,080
|
|
Phillip M. Renfro
|
|
12,000
|
|
36,080
|
|
3,718
|
|
51,798
|
|
(1)
This column represents the
amounts paid in cash to each director.
(2)
The amounts in
this column represent the dollar amount recognized for financial statement
purposes for the years ended December 31, 2007, computed in accordance
with FAS 123R, and thus includes amounts from awards granted prior to
2007. See notes 1, 8 and 9 of the notes
to our consolidated financial statements included in our Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 26, 2008 for
the discussion of all assumptions made in the calculation of this amount set
forth elsewhere in this proxy. The grant
date fair value of these awards computed in accordance with FAS 123R was
$192,424.
(3)
Consists of
premiums on health and dental insurance
The table below
contains certain information concerning outstanding option awards at December 31,
2007 for each of the directors. None of
the named directors had outstanding stock awards at December 31, 2007.
Outstanding Equity Awards at
Fiscal-Year End Table
Name
|
|
Option
Awards
|
|
|
|
|
|
Thomas W. Brown
|
|
40,000
|
|
David L. Mann
|
|
40,000
|
|
Frank M. Morgan
|
|
40,000
|
|
Phillip M. Renfro
|
|
40,000
|
|
Separate option awards of
20,000 were granted to each Director above in both 2006 and 2007. The options
awarded in 2006 have vested and the options awarded in 2007 will vest in June 2008.
25
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Board of Directors has selected PMB Helin Donovan,
LLP to serve as our independent registered public accounting firm for the
fiscal year ending December 31, 2008.
Although stockholder ratification is not required, the Board of
Directors has directed that the selection of PMB Helin Donovan, LLP be
submitted to the stockholders for ratification at the annual meeting. PMB Helin Donovan, LLP provided audit
services to GlobalSCAPE for the years ended December 31, 2004, 2005, 2006
and 2007. A representative of PMB Helin
Donovan, LLP will be present at the annual meeting, will have an opportunity to
make a statement if he or she desires to do so, and will be available to
respond to appropriate questions.
In connection with the audits of GlobalSCAPE for the
last three fiscal years, there were no disagreements with PMB Helin Donovan,
LLP on any matters of accounting principles, financial statement disclosure or
audit scope and procedures, which if not resolved to the satisfaction of PMB
Helin Donovan, LLP would have caused PMB Helin Donovan, LLP to make reference
to the subject matter of the disagreement(s) in connection with its
reports. Also, during the relevant
period there were no reportable events as described in Item 304(a)(i)(v) of
the SECs Regulation S-K.
The affirmative vote of the holders of a majority of
the votes cast is required to ratify the selection of PMB Helin Donovan,
LLP. In the event the stockholders fail
to ratify the appointment, the Board may reconsider its appointment for this
year. Even if the appointment is
ratified, the Board, in its discretion, may, if circumstances dictate, direct
the appointment of a different independent registered public accounting firm at
any time during the year if the Board determines that such a change would be in
the Companys and its stockholders best interests.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE SELECTION OF PMB HELIN DONOVAN, LLP AS INDEPENDENT PUBLIC
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2007.
PRINCIPAL
AUDITOR FEES AND SERVICES
Audit
Fees
. The aggregate fees billed for professional
services rendered by PMB Helin Donovan, LLP for the audit of GlobalSCAPEs
annual financial statements for the years ended December 31, 2007 and December 31,
2006, for the audit of GlobalSCAPEs internal controls over financial reporting
for the years ended December 31, 2007 and December 31, 2006, and the
reviews of the condensed financial statements included in GlobalSCAPEs
quarterly reports on Form 10-Q for the years ended December 31, 2007
and December 31, 2006, were $68,650 and $70,000, respectively.
Audit-Related
Fees.
The aggregate fees billed by PMB Helin Donovan,
LLP for assurance and related services that were reasonably related to the
performance of the audit or review of GlobalSCAPEs financial statements and
are not reported in audit fees above, for the years ended December 31,
2007 and December 31, 2006, were $11,977 and $50,327, respectively.
The fees in 2007 were for services associated with S-1 and S-8 registration
statements in relation to GlobalSCAPEs registration statement on Form S-1
which became effective on April 16, 2007. The fees in 2006 were for
services provided by PMB Helin Donovan related to the audit of Availl, Inc.
for the year ended 2006 and for the review of Availl, Inc. financial
statements during interim periods in 2006, and for work through the end of 2006
in relation to GlobalSCAPEs registration statement on Form S-1 which
became effective on April 16, 2007.
All
Other Fees
. There were no aggregate fees billed for
other services, exclusive of the fees disclosed above relating to financial
statement audit services, rendered by PMB Helin Donovan, LLP during the years
ended December 31, 2007 or December 31, 2006.
Consideration of Non-Audit Services Provided by the
Independent Auditors
.
The Audit Committee has considered whether the services provided for
non-audit services are compatible with maintaining PMB Helin Donovan, LLPs
independence, and has concluded that the independence of such firm has been
maintained.
26
AUDIT
COMMITTEE PRE-APPROVAL POLICY
The Audit Committees policy is to pre-approve all
audit, audit-related and non-audit services provided by the independent
auditors. These services may include audit services, audit-related services,
tax services and other services. The Audit Committee may also pre-approve
particular services on a case-by-case basis. The independent auditors are
required to periodically report to the Audit Committee regarding the extent of
services provided by the independent auditors in accordance with such
pre-approval. The Audit Committee may also delegate pre-approval authority to
one or more of its members. Such member(s) must report any decisions to
the Audit Committee at the next scheduled meeting.
AUDIT
COMMITTEE REPORT
The Audit Committee reviews GlobalSCAPEs financial
reporting process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the reporting process,
including the system of internal controls. The Audit Committee is responsible
for engaging independent auditors to perform an independent audit of
GlobalSCAPEs consolidated financial statements in accordance with generally
accepted accounting principles, to perform an independent audit of GlobalSCAPEs
internal controls over financial reporting in accordance with Section 404
of the Sarbanes-Oxley Act of 2002, and to issue reports thereon. The Committee
reviews and oversees these processes, including oversight of (i) the
integrity of GlobalSCAPEs financial statements, (ii) GlobalSCAPEs
independent auditors qualifications and independence, (iii) the
performance of GlobalSCAPEs independent auditors and (iv) GlobalSCAPEs
compliance with legal and regulatory requirements.
In this context, the Committee met and held
discussions with management and the independent auditors. Management
represented to the Committee that GlobalSCAPEs consolidated financial
statements were prepared in accordance with accounting principles generally
accepted in the United States, and the Committee reviewed and discussed the
consolidated financial statements with management and the independent auditors.
The Committee also discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61 (Codification of
Statements on Auditing Standards, AU § 380), as amended.
In addition, the Committee discussed with the
independent auditors the auditors independence from GlobalSCAPE and its
management, and the independent auditors provided to the Committee the written
disclosures and letter required by the Independence Standards Board Standard No. 1
(Independence Discussions With Audit Committees).
The Committee also discussed with GlobalSCAPEs
independent auditors the overall scope and plans for their respective audit.
The Committee met the independent auditors, with and without management
present, to discuss the results of their examinations, the evaluations of
GlobalSCAPEs internal controls, and the overall quality of GlobalSCAPEs
financial reporting.
Based on the reviews and discussions referred to
above, the Committee recommended to the Board of Directors, and the Board has
approved, the audited financial statements that were included in GlobalSCAPEs
Annual Report on Form 10-K for the year ended December 31, 2007, as
filed with the Securities and Exchange Commission. The Committee and the Board
also have recommended, subject to stockholder ratification, the selection of
GlobalSCAPEs independent auditors for fiscal year 2008.
This report is submitted by the members of the Audit
Committee.
Phillip M. Renfro, Chairman
David L. Mann
Frank M. Morgan
27
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Under the rules of the Securities and Exchange
Commission, stockholders who wish to include a proposal in our Proxy Statement
for the 2008 Annual Meeting of Stockholders must submit their proposal so that
the Secretary receives it no later than the close of business on December 15,
2007. Any proposal received after December 15,
2007 is considered untimely. The
Securities and Exchange Commission rules set forth standards as to which
stockholder proposals are required to be included in a proxy statement. Under the rules of the Securities and
Exchange Commission, stockholders who wish to submit proposals for a meeting of
the stockholders other than a regularly scheduled annual meeting, the deadline
is a reasonable time before the Company begins to print and mail its proxy
materials.
Under our Bylaws, certain procedures must be followed
for a stockholder to nominate persons as directors or to introduce a proposal
at an annual meeting. A stockholder
wishing to make a nomination for election to the Board of Directors or to have
a proposal presented at an annual meeting must submit written notice of such
nomination or proposal so that the Secretary receives it not less than 60 days
(which for the 2008 meeting would be April 4, 2008) nor more than 90 days
(which for the 2008 meeting would be March 5, 2008) prior to the first
anniversary of the preceding years annual meeting; provided, however, that if
the date of our next annual meeting is changed by more than 30 days from what
is currently contemplated (which for the 2008 meeting would be June 5,
2008), stockholder proposals must be received no later than the 10th day
following the date on which a notice of the date of the annual meeting is
mailed or the date of the meeting is publicly announced. Our Bylaws set forth certain informational
requirements for stockholders nominations of directors and proposals.
AVAILABLE INFORMATION
We are a reporting company under the Securities
Exchange Act of 1934, as amended, and file annual, quarterly and special
reports and other information with the SEC.
You may read and copy any material that we file with the SEC at the SECs
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain more information
about the SECs Public Reference Room by calling 1-800-SEC-0330. The SEC also maintains an Internet site that
contains all of these reports and other information regarding our company and
other issuers that file electronically with the SEC at http://www.sec.gov. We also post links to our SEC filings at our
web site at http://www.globalscape.com.
28
You may request a copy of
GlobalSCAPEs annual, quarterly and special reports, proxy statements and other
information at no cost, including our annual report on Form 10-K,
including financial statements and schedules thereto, for the year ended December 31,
2007, by writing or telephoning GlobalSCAPE at the following address:
Chief Financial Officer
GlobalSCAPE, Inc.
6000 Northwest Parkway, Suite 100
San Antonio, Texas 78249
(210) 308-8267
OTHER MATTERS
As of the date of this Proxy Statement, the Board of
Directors does not know of any other matter that will be brought before the
annual meeting. However, if any other
matter properly comes before the annual meeting, or any adjournment thereof,
the person or persons voting the proxies will vote on such matters in
accordance with their best judgment and discretion.
|
By Order of the
Board of Directors,
|
|
|
|
|
|
|
|
Kelly E. Simmons
|
|
President, Chief
Financial Officer
|
|
and Secretary
|
29
GLOBALSCAPE, INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 5, 2008
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
The undersigned stockholder of GlobalSCAPE, Inc., a
Delaware corporation (GlobalSCAPE), hereby appoints Thomas W. Brown and Kelly
E. Simmons, or either of them, as proxies, each with power to act without the
other and with full power of substitution, on behalf of the undersigned to vote
the number of shares of Common Stock of GlobalSCAPE that the undersigned would
be entitled to vote if personally present at the Annual Meeting of Stockholders
of GlobalSCAPE, Inc. to be held on Friday, June 5, 2008 at 9:00 a.m. Central
Time, at the offices of GlobalSCAPE, 4500 Lockhill-Selma Road, Suite 150,
Shavano Park, Texas 78249 and at any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND TIMELY
RETURNED, WILL BE VOTED IN THE MANNER DIRECTED BY THE STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR
THE NOMINEE; FOR RATIFICATION
OF PMB HELIN DONOVAN, LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM AND IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS ON ALL
OTHER MATTERS REFERRED TO ON THE REVERSE SIDE HEREOF.
(Continued and to be
signed on the other side)
Address Change/Comments (Mark the
corresponding box on the reverse side)
FOLD AND DETACH HERE
Please Mark Here for Address Change or Comments
SEE REVERSE
SIDE
o
(1)
|
Proposal to approve the election of the following
nominee for membership on the Companys Board of Directors:
|
|
|
|
|
|
FOR
|
WITHHOLD
|
|
|
|
|
|
|
01
|
David L. Mann
|
o
|
o
|
|
|
|
|
|
|
To serve until the expiration of his term in 2011,
or until his successor is duly elected and qualified.
|
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
|
|
|
(2)
|
Proposal to ratify the appointment of PMB Helin
Donovan, LLP as independent Registered Public Accounting Firm for fiscal year
ending December 31, 2008.
|
o
|
o
|
o
|
|
|
|
|
|
|
(3)
|
In the discretion of the proxies on any other
matters that may properly come before the Meeting or any adjournments
thereof, including without limitation, a vote to adjourn or postpone the
meeting.
|
|
|
|
|
|
|
PLEASE MARK, DATE, SIGN AND MAIL
YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
Signature
|
|
Signature
|
|
Date
|
|
, 2008
|
Please date this proxy and sign exactly as your name appears hereon.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person. All joint holders must sign.
FOLD AND DETACH HERE
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