UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
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SCHEDULESchedule 14A
(Rule 14a-101)––––––––––––––––––––––
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment
(Amendment No.)
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WORKHORSE GROUP INC.
(Name of Registrant as Specified inIn Its Charter)
__________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
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Workhorse Group Inc.WORKHORSE GROUP INC.
100 Commerce3600 Park 42 Drive, Suite 160E
Sharonville, OH 45241
Loveland, Ohio 45140
May 25, 2016
Dear Stockholders:
It is our pleasure to invite you to the 2016 annual Meeting of Stockholders of Workhorse Group Inc. We will hold the meeting on June 29, 2016, at our headquarters located at 100 Commerce Drive, Loveland, Ohio 45140, at 10:00 a.m., local time.
Details regarding admission to the meeting and the business to be conducted at the meeting are more fully described in the accompanying Notice of Annual Meeting of Stockholders and proxy statement.
We hope you will be able to attend the annual meeting. Whether or not you plan to attend the annual meeting, please promptly sign, date and return the enclosed proxy card or voting instruction card in the envelope provided in accordance with the instructions on the enclosed proxy card or voting instruction card.
Thank you for your ongoing support of and continued interest in Workhorse Group Inc.
Workhorse Group Inc.
100 Commerce Drive
Loveland, Ohio 45140
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 29, 2016To be Held August 28, 2023
To theA Special Meeting of Stockholders of Workhorse Group Inc.:
Notice is hereby given that the 2016 annual meeting of the stockholders(the “Special Meeting”) of Workhorse Group Inc. (“Workhorse” or the “Company”) will be held virtually on June 29, 2016, at our headquarters located at 100 Commerce Drive, Loveland, Ohio 45140,August 28, 2023, at 10:0030 a.m., local time. At Eastern Time, to consider the annualfollowing proposals:
1. To approve an amendment to our Articles of Incorporation to increase the number of authorized shares of common stock; and
2. To act on such other matters as may properly come before the meeting or any postponement, adjournment or delay thereof (the “Annual Meeting”),thereof.
Before you will be askedvote, we encourage you to considerread the full text of the enclosed Proxy Statement for an explanation of the proposal. You may wish to provide your response electronically through the internet by following the instructions set out on the enclosed Proxy Card. If you do attend the meeting and wish to vote uponyour shares personally, you may revoke your proxy.
Your vote is important. To ensure that your shares are voted at the following proposals:
meeting, we encourage you to act promptly. The Proxy Statement for the Special Meeting of Shareholders is also available on the internet at the website address identified on the enclosed Proxy Card.
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/s/ Raymond Chess | ||
Raymond Chess | ||
Chair of the |
Your attention is directed to theWORKHORSE GROUP INC.
Special Meeting of Stockholders
August 28, 2023
PROXY STATEMENT
This Proxy Statement which is set forth onfurnished in connection with the following pages, wheresolicitation of proxies by the foregoing items of business are more fully described. The Board of Directors (the “Board”) of Workhorse Group Inc. (“Workhorse” or the “Company”) to be voted at the Special Meeting of Stockholders (the “Special Meeting”), which will be held on August 28, 2023, at 10:30 a.m. Eastern Time and at any postponements or adjournments thereof. We are furnishing our proxy materials to stockholders on or about July 25, 2023. The Special Meeting will be held as a virtual meeting. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend and participate in the Special Meeting online via a live webcast by visiting www.virtualshareholdermeeting.com/WKHS2023SM. In addition to voting by submitting your proxy prior to the Special Meeting, you also will be able to vote your shares electronically during the Special Meeting.
REVOCABILITY OF PROXY AND SOLICITATION
Any stockholder executing a proxy that is solicited hereby has fixedthe power to revoke it prior to the voting of the proxy. Revocation may be made by attending the Special Meeting and voting the shares of stock in person, or by delivering to the General Counsel of the Company at the principal office of the Company prior to the Special Meeting a written notice of revocation or a later-dated, properly executed proxy. Solicitation of proxies may be made by directors, officers and other employees of the Company by personal interview, telephone, facsimile transmittal or electronic communications. No additional compensation will be paid for any such services. This solicitation of proxies is being made by the Company, which will bear all costs associated with the mailing of this Proxy Statement and the solicitation of proxies.
RECORD DATE
Stockholders of record at the close of business on May 11, 2016 as the record date for the determination of stockholdersJuly 10, 2023 (the “Record Date”), will be entitled to receive notice of, attend and vote at the Special Meeting. Each share of common stock that you owned as of the Record Date entitles you to one vote on each matter to be voted at the Special Meeting.
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
Why am I receiving these materials?
Workhorse has furnished these materials to you in connection with the Company’s solicitation of proxies for use at the Special Meeting of Stockholders to be held on August 28, 2023, at 10:30 a.m. Eastern Time. The Special Meeting will be held as a virtual meeting. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend and participate in the Special Meeting online via a live webcast by visiting www.virtualshareholdermeeting.com/WKHS2023SM. These materials have also been made available to you on the internet. These materials describe the proposal on which the Company would like you to vote and also give you information on this proposal so that you can make an informed decision. We are furnishing our proxy materials on or about July 25, 2023 to all stockholders of record entitled to vote at the AnnualSpecial Meeting.
What is included in these materials?
These materials include the proxy statement for this Special Meeting. The Proxy Statement for the Special Meeting of Shareholders is also available on the internet at the website address identified on the enclosed Proxy Card.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD, AND “FOR” EACH OF THE OTHER PROPOSALS.What is the proxy card?
The proxy card enables you to appoint Richard Dauch, our Chief Executive Officer, and James D. Harrington, our General Counsel, Chief Compliance Officer and Secretary, as your representatives at the Special Meeting. By completing and returning a proxy card, you are authorizing these individuals to vote your shares at the Special Meeting in accordance with your instructions on the proxy card. This way, your shares will be voted whether or not you attend the Special Meeting.
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What is the purpose of the Special Meeting?
At the Special Meeting, stockholders will act upon the matters outlined in the Notice of Special Meeting on the cover page of this Proxy Statement, including amending the Articles of Incorporation to increase the number of authorized shares of common stock and acting on such other matters as may properly come before the meeting.
Your vote is extremely important, regardlessVote Required; Quorum; Broker Non-Votes
The presence at the meeting, in person or by proxy, of the holders of a majority of the number of shares of common stock issued and outstanding on the record date will constitute a quorum permitting the meeting to conduct its business. As of the record date, there were 210,793,111 shares of Workhorse common stock issued and outstanding. Thus, the presence of the holders of common stock representing at least 105,396,556 votes will be required to establish a quorum.
For purposes of the quorum and the discussion below regarding the vote necessary to take stockholder action, stockholders of record who are present at the Special Meeting virtually or by proxy and who abstain, including brokers holding customers’ shares of record who cause abstentions to be recorded at the meeting, are considered stockholders who are present and entitled to vote and are counted towards the quorum.
Under the rules of the New York Stock Exchange (“NYSE”) applicable to voting by brokers, brokers who hold shares on behalf of beneficial owners have discretion to vote such shares with respect to matters deemed to be “routine” by the NYSE without receiving voting instructions from the beneficial owners of the shares. Brokers holding shares of record for customers generally are not entitled to vote on “non-routine” matters, unless they receive voting instructions from their customers. As used herein, “uninstructed shares” means shares held by a broker who has not received such instructions from its customers on a proposal. A “broker non-vote” occurs when a nominee holding uninstructed shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that non-routine matter. It is important that you own.provide voting instructions to your bank, broker or other nominee, if you wish to determine the voting of your shares.
Stockholders of Record
If on July 10, 2023, your shares were registered directly in your name with our transfer agent, Empire Stock Transfer, Inc., you are considered a stockholder of record with respect to those shares, and the Notice of Special Meeting and Proxy Statement was sent directly to you by the Company. As the stockholder of record, you have the right to direct the voting of your shares by returning the proxy card to us. Whether or not you plan to attend the AnnualSpecial Meeting, we ask thatif you promptlydo not vote over the internet, please complete, date, sign date and return a proxy card to ensure that your vote is counted.
Beneficial Owner of Shares Held in Street Name
If on July 10, 2023, your shares were held in an account at a brokerage firm, bank, broker-dealer, or other nominee holder, then you are considered the beneficial owner of shares held in “street name,” and the Notice of Special Meeting & Proxy Statement was forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Special Meeting. As the beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. However, since you are not the stockholder of record, you may not vote these shares in person at the Special Meeting unless you receive a valid proxy from the organization.
How do I vote?
Stockholders of Record.
If you are a stockholder of record, you may vote by any of the following methods:
• Via the Internet. You may vote by proxy via the internet by following the instructions provided on the enclosed Proxy Card.
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• By Mail. You may vote by completing, signing, dating and returning your proxy card or voting instruction card in the pre-addressed, postage-paidenvelope providedprovided.
• In Person. You can vote at the meeting at www.virtualshareholdermeeting.com/WKHS2023SM.
Beneficial Owners of Shares Held in accordance withStreet Name.
If you are a beneficial owner of shares held in street name, you may vote by any of the following methods:
• Via the Internet. You may vote by proxy via the internet by following the instructions provided on the enclosed Proxy Card.
• By Mail. You may vote by proxy card or votingby filling out the vote instruction card.form and returning it in the pre-addressed, postage-paid envelope provided.
The proxy statement accompanying this notice provides a more complete description of the business to be conducted• In Person. You can vote at the Annual Meeting. We encourage you to read the proxy statement carefully and in its entirety.
YOU ARE RESPECTFULLY REQUESTED BY THE BOARD TO SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. IF YOU GRANT A PROXY, YOU MAY REVOKE IT AT ANY TIME PRIOR TO THE MEETING OR VOTE IN PERSON AT THE MEETING. IF YOU RECEIVED THIS PROXY STATEMENT IN THE MAIL, A RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE MEETING BUT WILL, HOWEVER, HELP TO ASSURE A QUORUM AND AVOID ADDED PROXY SOLICITATION COSTS.
meeting at This Notice of Annual Meeting of Stockholders, proxy statement and form of proxy are first being mailed to stockholders on or about May 25, 2016.
Important Notice Regarding the Availability of Proxy Materials for thewww.virtualshareholdermeeting.com/WKHS2023SM.
Workhorse Group Inc. Annual Meeting of Stockholders to be Held on June 29, 2016
The Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 areWhat happens if I do not give specific voting instructions?
availableStockholders of Record.
If you are a stockholder of record and you:
• indicate when voting on the Investor Relations portion of our web site at http://workhorse.com/ .
WORKHORSE GROUP INC.
TABLE OF CONTENTS
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PROXY STATEMENT
This proxy statement (the “Proxy Statement”) is furnishedinternet that you wish to vote as recommended by the Board of Directors, of Workhorse Group Inc. (the “Board”) in connection with the solicitation of proxies for use at the Annual Meeting of Stockholders or any postponement, adjournment or delay thereof (the “Annual Meeting”) to be held at our headquarters located at 100 Commerce Drive, Loveland, Ohio 45140, on June 29, 2016, at 10:00 a.m., local time. This Proxy Statement, along with a Notice of Annual Meeting of Stockholders
• sign and eitherreturn a proxy card or awithout giving specific voting instruction card, are being mailed to stockholders beginninginstructions
then the proxy holders will vote your shares in the manner recommended by the Board of Directors on or about May 25, 2016.
Unless the context otherwise requires,matter presented in this Proxy Statement we useand as the terms “Workhorse,” “we,” “our,” “us”proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Special Meeting.
Beneficial Owners of Shares Held in Street Name.
If you are a beneficial owner of shares held in street name and “the Company”do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters, but not on non-routine matters. Under NYSE rules, if your shares are held by a member organization, as that term is defined under NYSE rules, responsibility for making a final determination as to referwhether a specific proposal constitutes a routine or non-routine matter rests with that organization or third parties acting on its behalf.
What is the Board’s recommendation?
The Board’s recommendation and its reasons for so recommending are set forth more fully under “Discussion of Proposal to Be Voted On”, below. In summary, the Board recommends a vote:
• for approval of the amendment to our Articles of Incorporation to increase the number of authorized shares of our common stock.
With respect to any other matter that properly comes before the Special Meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion.
How are proxy materials delivered to households?
Only one copy of this Proxy Statement will be delivered to an address where two or more stockholders reside with the same last name or who otherwise reasonably appear to be members of the same family based on the stockholders’ prior express or implied consent.
We will deliver promptly upon written or oral request a separate copy of this Proxy Statement. If you share an address with at least one other stockholder, currently receive one copy of our Proxy Statement at your residence, and would like to receive a separate copy of our Proxy Statement for future stockholder meetings of the Company, or if
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you currently receive multiple copies of this document and would prefer to receive only one copy, please specify such request and send such request to Workhorse Group Inc.
, 3600 Park 42 Drive, Suite 160E, Sharonville, OH 45241; Attention: General Counsel.
QUESTIONS AND ANSWERS ABOUTInterest of Officers and Directors in matters to be acted upon
THE PROXY MATERIALS AND THE ANNUAL MEETING
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You may also contact our transfer agent at the telephoneSpecial Meeting, except to the extent they are stockholders or holders of options issued by the Company and the amendment to our Articles of Incorporation to increase the number or address listed below
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of authorized shares of our common stock may result in increased liquidity of our common stock and the exercisability of such options.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
FiveHow much stock is owned by 5% stockholders, directors, are to be elected at the Annual Meeting to serve until the 2016 annual Meeting of Stockholders (the “2016 annual Meeting”) and until their successors are duly elected and qualify. The director nominees, each of whom currently serves on the Board, are Raymond J. Chess James E. Taylor, , H. Benjamin Samuels, Gerald B. Budde and Stephen S. Burns.If for any reason any nominee does not stand for election, any proxies we receive will be voted in favor of the remaining nominees and may be voted for substitute nominees in place of those who do not stand. We have no reason to expect that any of the nominees will not stand for election. executive officers?
Executive Officers and Directors
Set forth below is a list of the names, ages as of May 11, 2016 and positions, and a brief account of the business experience of the individuals who serve as our directors as of the date of this proxy.
Our officers and directors are elected annually for a one year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.
The following is a brief summarytable sets forth certain information as of July 10, 2023 with respect to the beneficial ownership of the backgroundoutstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of our directors andthe Company’s executive officers including specific information about each director’s experience, qualifications, attributes or skills that led the Board of Directors to the conclusion that the individual is qualified to serve on our Board of Directors.
Raymond J. Chess, Director Chairman
Prior to joining the Company, Mr. Chess served as a Global Vehicle Line Executive for General Motors Co. (“GM”), where he was responsible for global, cross functional general management of the GM crossover market segment from May 2009 through December 2012. Prior to this, from August 2001 until April 2009, Mr. Chess was responsible for GM’s commercial truck segment. Previous GM assignments included leadership roles in the full size truck segment, metal fabrication and body assembly. Mr. Chess's background includes broad, hands-on manufacturing leadership roles with manufacturing, engineeringdirectors; and manufacturing floor operations. Mr. Chess holds a Bachelor’s of Science degree in Mechanical Engineering from Kettering University and an MBA from Indiana University.
James E. Taylor, Director
Mr. Taylor has over three decades of automotive experience. Currently he is Chief Marketing Officer at Karma Automotive responsible for Product Planning, Design, Sales and Marketing of the soon to be re launched luxury extended range electric vehicle of what was Fisker prior to their bankruptcy. While at GM, he served as CEO of Hummer during the attempted divesture. Prior to that, he was President of Cadillac, responsible for the product planning, marketing, promotional and sales activities that significantly contributed to Cadillac’s global renaissance. Prior to that, Mr. Taylor was a Vehicle Line Executive for Cadillac, directing the planning, engineering and manufacturing of the award-winning ground up Cadillac CTS, SRX and the STS models. In addition, he held several senior positions globally in the Purchasing area. Taylor holds a Bachelor of Science degree in Mechanical Engineering & Management from McMaster University, Ontario, Canada.
H. Benjamin Samuels, Director
Mr. Samuels served as CEO of Victory Packaging from May 2007 through 2015, during which time he led an executive team which currently manages more than 1,500 employees. In 2015, Mr. Samuels was appointed as Co-President after Victory Packaging was acquired by KapStone Paper and Packaging Corporation. From 1997 through 2007, Mr. Samuels served as Vice Chairman and leader of Victory Packaging's national accounts group, real estate, finance and legal departments, achieving a period of unprecedented growth in sales and revenues. Mr. Samuels joined Victory Packaging in 1995 as its regional operating manager of Texas. Mr. Samuels is an active member in the community, where he recently served as the Chairman of the Houston Food Bank. Mr. Samuels also served as the President of the Houston Chapter of the American Jewish Committee before joining its National Board of Governors. Mr. Samuels served on the boards of and held leadership positions with American Leadership Forum, Serve Houston, Holocaust Museum Houston, Jewish Federation of Greater Houston and Jewish Family Service. Mr. Samuels received a Bachelor’s degree in American studies and economics from Amherst College in Massachusetts well as an MBA from the Harvard Graduate School of Business Administration.
Gerald Budde, Director
From September 2011 through the present, Mr. Budde serves as the Chief Financial Officer of AssuredPartners NL, LLC and maintains titles for other affiliated companies. Mr. Budde was previously the Chief Financial Officer and shareholder of Neace Lukens Holding Company and Subsidiaries from July 2003 through September 2011, when it was acquired by Assured Partners Capital, Inc. AssuredPartners was founded in 2011 and is a national partnership of leading independent property and casualty and employee benefits brokerage firms. Mr. Budde was the Machine Tool Group Controller of Cincinnati Milacron Inc. from April 1994 to October 1998, at which time he was appointed as Vice President of Finance after Cincinnati Milacron’s machine tool group was acquired by UNOVA Industrial Automation Systems, Inc. Mr. Budde remained in that role prior to joining Neace Lukens in 2003. Mr. Budde was a Certified Public Accountant until he left public accounting and Ernst & Young and after 11 years of service in 1994. Mr. Budde is currently a member of the Board of Trustees and the Finance Committee of Mt. Notre Dame high school and is also a member of the Finance Commission of St. Margaret of York parish and school. Mr. Budde received a Bachelor’s degree in Accounting from the University of Dayton.
Stephen S. Burns, Director, Chief Executive Officer, Secretary and Treasurer
Mr. Burns is a Co-Founder in the Company and has served as the Company’s CEO since inception. Mr. Burns was appointed as CEO, CFO, Treasurer and Secretary of the Company on December 28, 2009. Mr. Burns had founded several companies, most recently iTookThisOnMyPhone.com, a mobile photo and video-sharing technology company, MobileVoiceControl, Inc. a developer of high-end speech recognition software for smartphones sold to Nuance Communications (NASDAQ:NUAN), Inc. in 2006, AskMeNow [OTC:AKMN] a mobile search and information delivery system sold to Ocean West Holdings in 2005, PocketScript, the leading mobile electronic prescription system in the world which was sold to ZixCorp [NASDAQ:ZIXI] in 2002, Over The Line/AdLink, sold to Gannett Co. Inc. (NYSE:GCI) in 1994 and the design and development of Suspension Parameter Measurement Machines.
Transactions with Related Persons, Promoters and Certain Control Persons
Certain “related party” transactions involving related persons are presented to, reviewed and approved by the Board of Directors. Related persons include(iii) the Company’s directors and executive officers immediate family membersas a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information known to us with respect to the beneficial ownership of our common stock as of July 10, 2023 by (i) each of our named executive officers, (ii) each of our directors, (iii) all directors and executive officers as a group, and security holders who(iv) all persons known to us to beneficially own five percent (5%) or more of our common stock and their respective family members. The transactions subject to such review are those transactions in which the Company was or is to be a participant and the amount involved equals or exceeds $120,000. If the related party involved in a related party transaction is a director of the Company that would normally review such a transaction or a family member of such a director, then that director will not participate in the relevant discussion and review.preferred stock.
Information considered in evaluating such transactions may include: the nature of the related person’s interest in the transaction; the material terms of the transaction; whether the terms of the transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a related party; whether there are business reasons for the Company to enter into the transaction; whether the transaction would impair the independence of an outside director; and whether the transaction would present an improper conflict of interests for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or related party, the direct or indirect nature of the director’s, executive officer’s or related party’s interest in the transaction and the ongoing nature of any proposed relationship; and any other factors the Board of Directors deems relevant.
Except as set forth below, at no time during the last two fiscal years has any executive officer, director or any member of these individuals’ immediate families, any corporation or organization with whom any of these individuals is an affiliate or any trust or estate in which any of these individuals serves as a trustee or in a similar capacity or has a substantial beneficial interest been indebted to the Company or was involved in any transaction in which the amount exceeded $120,000 and such person had a direct or indirect material interest. On May 23, 2014 Mr. Burns converted an aggregate of $108,700 that Mr. Burns deposited and/or loaned to us into 108,700There were 210,793,111 shares of our common stock outstanding as of July 10, 2023.
Name Of Beneficial Owner(1) | Common | Percentage | ||||
Directors |
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Raymond J. Chess | 248,164 | (3) | * |
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Richard F. Dauch | 3,322,479 | (4) | 1.57 | % | ||
Jacqueline A. Dedo | 150,428 | (5) | * |
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Pamela S. Mader | 103,013 | (5) | * |
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William G. Quigley III | 82,508 | (5) | * |
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Austin Scott Miller | 73,315 | (5) | * |
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Brandon Torres Declet | 111,982 | (6) | * |
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Dr. Jean Botti | 111,982 | (6) | * |
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EXECUTIVE OFFICERS |
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Gregory T. Ackerson | 240,985 | (7) | * |
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Joshua J. Anderson | 256,753 | (8) | * |
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Ryan W. Gaul | 283,203 | (9) | * |
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Robert M. Ginnan | 385,298 | (10) | * |
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John W. Graber | 263,016 | (11) | * |
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James D. Harrington | 398,469 | (12) | * |
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Stanley R. March | 274,375 | (13) | * |
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James C. Peters | 149,663 | (14) | * |
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Kerry K. Roraff | 190,402 | (15) | * |
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All officers and directors as a group(17 people) | 6,646,035 |
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Certain Other Beneficial Holders |
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BlackRock, Inc. | 11,538,946 | (16) | 5.47 | % | ||
The Vanguard Group | 8,857,480 | (17) | 4.20 | % | ||
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* Less than one percent.
(1) Except as otherwise indicated, the address of each beneficial owner is c/o Workhorse Group Inc., 3600 Park 42 Drive, Suite 160E, Sharonville, Ohio 45241.
(2) Beneficial ownership is determined in accordance with the rules of the Securities and a common stockExchange Commission and generally includes voting or investment power with respect to securities. Stock options to purchase warrant to acquire 54,350 shares of common stock at $1.50 per share. Priorthat are currently exercisable or exercisable within 60 days of July 10, 2023 are deemed to joiningbe beneficially owned by the Board,person holding such securities for the Gerald B. Budde Living Trust dated 9/8/14,purpose of computing the percentage of ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
(3) Includes 61,882 shares of restricted stock which vest in August 2023.
(4) Includes 2,630,226 shares of restricted stock, all of which Mr. Budde is a trustee, acquired 50,000 shares of common stock and a common stockvest no later than February 22, 2026; and(ii) options to purchase warrant to acquire 25,000197,618 shares of common stock at an exercise price of $1.50. Prior to joining the Board, theSamuel 2012 Children's Trust UAD 10/28/12 (the "Trust") invested $2,000,000in consideration$10.27, all of 571,428 which options are currently exercisable.
(5) Includes 49,505 shares of commonrestricted stock a commonwhich vest in August 2023.
(6) Includes 111,982 shares of restricted stock which vest in November 2023.
(7) Includes (i) 119,847 shares of restricted stock held by Mr. Ackerson, all of which vest no later than February 22, 2026; and (ii) options to purchase warrant to acquire 428,57110,000 shares of common stock at an exercise price of $5.28 per share,$1.19 held by Mr. Ackerson, all of which options are currently exercisable.
(8) Includes 188,879 shares of restricted stock held by Mr. Anderson, all of which vest no later than February 22, 2026.
(9) Includes 240,532 shares of restricted stock held by Mr. Gaul, all of which vest no later than February 22, 2026.
(10) Includes 320,628 shares of restricted stock held by Mr. Ginnan, all of which vest no later than February 22, 2026.
(11) Includes 223,215 shares of restricted stock held by Mr. Graber, all of which vest no later than February 22, 2026.
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(12) Includes 321,813 shares of restricted stock held by Mr. Harrington, all of which vest no later than February 22, 2026.
(13) Includes 154,153 shares of restricted stock held by Mr. March, all of which vest no later than February 22, 2026.
(14) Includes 128,232 shares of restricted stock held by Mr. Peters, all of which vest no later than February 22, 2026.
(15) Includes 164,138 shares of restricted stock held by Ms. Roraff, all of which vest no later than February 22, 2026.
(16) This information was derived solely from the Schedule 13G/A filed by BlackRock, Inc. on January 31, 2023. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. BlackRock, Inc. reported sole voting power over 11,305,125 shares and a common stock purchase warrantsole dispositive power over 11,538,946 shares.
(17) This information was derived solely from the Schedule 13G filed by The Vanguard Group on February 9, 2023. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. The Vanguard Group reported shared voting power over 248,039 shares, sole dispositive power over 8,473,868 shares and shared dispositive power over 383,612 shares.
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DISCUSSION OF PROPOSAL TO BE VOTED ON
PROPOSAL NO. 1: AMENDMENT TO OUR ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Purposes of the Proposed Increase in Authorized Stock
On July 7, 2023, our Board of Directors (the “Board”) approved an amendment to acquire 142,857our Articles of Incorporation to increase the number of authorized shares of common stock at an exercise price of $5.28 per share. Mr. Samuels is a trustee ofto 450 million shares (the “Amendment”). Under the Trust.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended requires our directors and executive officers, and persons who beneficially own more than 10% of a registered classterms of our equity securities,Certificate of Amendment to report their initial beneficial ownershipArticles of Incorporation and any subsequent changes in that beneficial ownership of our securities toNevada law, the SEC. Based solely on a review of the copies of the reports furnished to us, we believe that all such reports for the year ended December 31, 2015 were filed on a timely basis.
Vote Required
The five (5) nominees receiving the highest number of affirmative votes willAmendment must be elected to the Board. You may withhold votes from any or all nominees.
Recommendation of the Board
The Board recommends a vote “FOR” the election of the nominees to the Board to serve until the 2017 Annual Meeting and until their successors are duly elected and qualify.
PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are seeking an advisory vote of our stockholders on the compensation of our named executive officers, as requiredapproved by Section 14A of the Exchange Act. Our board of directors recommends that you vote in favor of the resolution approving the compensation of our named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion contained in this proxy statement. Since the vote is advisory in nature, the results will not be binding on our board of directors or our Compensation Committee. However, if there is a significant vote against the compensation of our named executive officers, our board of directors and our Compensation Committee will carefully evaluate whether any actions are necessary to address those concerns.
Following our 2015 annual stockholder meeting, we decided to hold an advisory vote on the compensation of our named executive officers every year. Accordingly, the next advisory vote (following our 2017 Annual Meeting) on the compensation of our named executive officers will occur next year at our annual stockholder meeting.
Vote Required
The affirmative vote of the holders of a majority of the outstanding shares of common stock. A copy of the Amendment, which is in the form of a Certificate of Amendment to Articles of Incorporation, is attached to this Proxy Statement as Appendix A. The Amendment makes no other changes to our Articles of Incorporation.
The Amendment is intended to give the Company flexibility to issue common stock entitledor securities convertible into common stock for general corporate purposes if an attractive opportunity to votedo so arises. The Company plans to continue issuing and selling shares of common stock under its existing at-the-market offering program, if the annual meetingCompany determines such sales to be at desirable prices, and it will be required to approveissue and deliver $20 million of common stock to satisfy its obligations under its previously disclosed class action settlement, the Amendment. Abstentions will be counted as present for purposesissuance of determining if a quorumwhich is present, and will have the same effect as a negative vote on this proposal.
Recommendation of the Board
The Board recommends a vote “FOR” the approval of the compensation of the Company's named executive officers on an advisory basis.
PROPOSAL NO. 3:APPROVAL OF OUR 2016 INCENTIVE Stock PLAN
At the Annual Meeting, the Company's stockholders are being asked to approve the 2016 Incentive Stock Plan (the "2016 Incentive Plan") and to authorize 500,000 shares of Common Stock for issuance thereunder. The following is a summary of principal features of the 2016 Incentive Plan. The summary, however, does not purportexpected to be a complete descriptionmade on August 29, 2023. The Company is also currently exploring the possibility of all the provisions of the 2016 Incentive Plan. Any stockholder of the Company who wishes to obtain a copy of the actual plan document may do so upon written request to the Company's Secretary at the Company's principal offices.
General
The 2016 Incentive Plan was adopted by the Board of Directors. The Board of Directors has reserved 500,000 shares of Common Stock for issuance under the 2016 Incentive Plan. Under the Plan, options may be granted which are intended to qualify as Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue Code of 1986 (the "Code")entering into one or which are not ("Non-ISOs") intended to qualify as Incentive Stock Options thereunder.
The 2016 Incentive Plan is not a qualified deferred compensation plan under Section 401(a) of the Internal Revenue Code and is not subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Purpose
The primary purpose of the 2016 Incentive Plan is to attract and retain the best available personnel for the Company in order to promote the success of the Company's business and to facilitate the ownership of the Company's stock by employees. In the event that the 2016 Incentive Plan is not adopted the Company, the Company may have considerable difficulty in attracting and retaining qualified personnel, officers, directors and consultants.
Administration
The 2016 Incentive Plan is administered by acommittee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").. All questions of interpretation of the 2016 Incentive Plan are determined by the Committee, and its decisions are final and binding upon all participants.
Eligibility
Under the 2016 Incentive Plan, options may be granted to key employees, officers, directors or consultants of the Company, as provided in the 2016 Incentive Plan.
Terms of Options
The term of each Option granted under the Plan shall be contained in a stock option agreement between the Optionee and the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the Plan, including the following:
(a) PURCHASE PRICE. The purchase price of the Common Shares subject to each ISO shall not be less than the fair market value (as set forth in the 2016 Incentive Plan), or in the case of the grant of an ISO to a Principal Stockholder, not less that 110% of fair market value of such Common Shares at the time such Option is granted. The purchase price of the Common Shares subject to each Non-ISO shall be determined at the time such Option is granted, but in no case less than 100% of the fair market value of such Common Shares at the time such
Option is granted.
(b) VESTING. The dates on which each Option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall be fixed by the Committee, in its discretion, at the time such Option is granted.
(c) EXPIRATION. The expiration of each Option shall be fixed by the Committee, in its discretion, at the time such Option is granted; however, unless otherwise determined by the Committee at the time such Option is granted, an Option shall be exercisable for ten (10) years after the date on which it was granted (the "Grant Date"). Each Option shall be subject to earlier termination as expressly provided in the 2016 Incentive Plan or as determined by the Committee, in its discretion, at the time such Option is granted.
(d) TRANSFERABILITY. No Option shall be transferable, except by will or the laws of descent and distribution, and any Option may be exercised during the lifetime of the Optionee only by him. No Option granted under the Plan shall be subject to execution, attachmentmore convertible note or other process.
(e) OPTION ADJUSTMENTS. The aggregate number and class of shares asequity-linked transactions to which Options may be granted under the Plan, the number and class shares covered by each outstanding Option and the exercise price per share thereof (but not the total price), and all such Options, shall each be proportionately adjusted for anyprovide liquidity to allow it to continue to pursue its current business plan. Without an increase decrease in the number of authorized shares of common stock, the Company may be constrained in its ability to raise capital in order to support its business objectives, and may lose important business opportunities, including to competitors, which could adversely affect the Company’s financial performance and growth.
If the Company issues additional shares, the ownership interests of holders of our common stock will be diluted. Also, if the Company issues shares of preferred stock, the shares may have rights, preferences and privileges senior to those of its common stock.
Description of the Amendment
As of July 10, 2023, our current authorized capital stock of 325,000,000 consisted of 250,000,000 shares of common stock, of which 210,793,111 shares were outstanding and 75,000,000 shares of preferred stock, no shares of which were outstanding. Approximately 352,429 shares may be issued Common Shares resulting from split-up spin-off or consolidationupon the exercise of options under our employee incentive arrangements. We have also issued 3,099,303 unvested performance units, which upon vesting are typically settled in cash, but may be settled in shares of common stock at the Company’s option.
Under the terms of the Amendment, the total number of authorized shares of capital stock will be increased to 525,000,000. The number of shares or any like Capital adjustment orof common stock authorized will be increased to 450,000,000. The number of shares of preferred stock will remain unchanged at 75,000,000. The newly authorized shares of common stock will be identical to previously authorized shares of common stock, and will entitle the payment of any stock dividend.
Exceptholders thereto to the same rights and privileges as otherwise provided in the 2016 Incentive Plan, any Option granted hereunder shall terminate in the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidationholders of the Company. However, the Optionee shall have the right immediately prior to any such transaction to exercise his Option in whole or in part notwithstanding any otherwise applicable vesting requirements.previously authorized shares.
(f) TERMINATION, MODIFICATION AND AMENDMENT. The 2016 Incentive Plan (but not Options previously granted under the Plan) shall terminate ten (10) years from the earlierTerms of the datecommon stock
The terms of its adoptionthe common stock are as follows:
Dividends. The holders of our common stock will be entitled to dividends as may be declared from time to time by the Boardboard of Directors or the datedirectors from funds available therefor.
Voting Rights. Each share of common stock entitles its holder to one vote on which the Plan is approvedall matters to be voted on by the affirmative votestockholders. Our Articles of Incorporation do not provide for cumulative voting.
Preemptive Rights. Holders of common stock do not have preemptive rights with respect to the issuance and sale by the Company of additional shares of common stock or other equity securities of the Company.
Liquidation Rights. Upon dissolution, liquidation or winding-up, the holders of a majorityshares of common stock will be entitled to receive our assets available for distribution proportionate to their pro rata ownership of the outstanding shares of capitalcommon stock.
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Anti-takeover effects of the Increase in Authorized Shares
An increase in the number of authorized shares of common stock may also, under certain circumstances, be construed as having an anti-takeover effect. Although not designed or intended for such purposes, the effect of the proposed increase might be to render more difficult or to discourage a merger, tender offer, proxy contest or change in control of us and the removal of management, which stockholders might otherwise deem favorable. For example, the authority of our Board to issue common stock might be used to create voting impediments or to frustrate an attempt by another person or entity to effect a takeover or otherwise gain control of us because the issuance of additional shares of common stock would dilute the voting power of the common stock then outstanding. Our common stock could also be issued to purchasers who would support our Board in opposing a takeover bid which our Board determines not to be in our best interests and those of our stockholders.
The Board is not presently aware of any attempt, or contemplated attempt, to acquire control of the Company entitledand the proposed Certificate of Amendment to vote thereon, and no Option shall be granted after terminationincrease the number of authorized shares of common stock is not part of any plan by our Board to recommend or implement a series of anti-takeover measures.
Interest of Certain Persons in Matters to Be Acted Upon
None of the Plan. SubjectCompany’s officers or directors has an interest in the Amendment, except to certain restrictions, the Plan may at any time be terminated and from time to time be modifiedextent they are stockholders or amendedholders of options issued by the affirmative voteCompany and the Amendment may result in increased liquidity of our common stock and the holdersexercisability of such options.
Dissenter’s Rights of Appraisal
The stockholders who dissent from the Amendment have no right to appraisal under the Nevada Revised Statutes, our Articles of Incorporation, or our bylaws.
Procedure for Implementing the Increase in Authorized Shares
The Amendment will become effective upon the filing of a majoritycertificate of the outstanding sharesamendment to our Articles of the capital stock of the Company present, or represented, and entitled to vote at a meeting duly held in accordanceIncorporation with the applicable lawsSecretary of State of the State of Delaware.
FEDERAL INCOME TAX ASPECTS OF THE 2016 INCENTIVE PLAN
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF SHARES UNDER THE 2016 Incentive Plan. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE 2016 Incentive Plan AND FOR REFERENCE TO APPLICABLE PROVISIONS OF THE CODE.
Incentive Stock Options
The recipient of an incentive stock option generally will not be taxed upon grant of the option. Federal income taxes are generally imposed only when the shares of common stock from exercised incentive stock options are disposed of, by sale or otherwise. The amount by which the fair market value of the common stock on the date of exercise exceeds the exercise price is, however, included in determining the option recipient's liability for the alternative minimum tax. If the incentive stock option recipient does not sell or dispose of the shares of common stock until more than one year after the receipt of the shares and two years after the option was granted, then, upon sale or disposition of the shares, the difference between the exercise price and the market value of the shares of common stock as of the date of exercise will be treated as a capital gain, and not ordinary income. If a recipient fails to hold the shares for the minimum required time the recipient will recognize ordinary income in the year of disposition generally in an amount equal to any excess of the market value of the common stock on the date of exercise (or, if less, the amount realized or disposition of the shares) over the exercise price paid for the shares. Any further gain (or loss) realized by the recipient generally will be taxed as short-term or long-term gain (or loss) depending on the holding period. We will generally be entitled to a tax deduction at the same time and in the same amount as ordinary income is recognized by the option recipient, if any.
Nonstatutory Stock Options
The recipient of stock options not qualifying as incentive stock options generally will not be taxed upon the grant of the option. Federal income taxes are generally due from a recipient of nonstatutory stock options when the stock options are exercised. The excess of the fair market value of the common stock purchased on such date over the exercise price of the option is taxed as ordinary income. Thereafter, the tax basis for the acquired shares is equal to the amount paid for the shares plus the amount of ordinary income recognized by the recipient. We will generally be entitled to a tax deduction at the same time and in the same amount as ordinary income is recognized by the option recipient by reason of the exercise of the option.
Other Awards
Recipients who receive restricted stock unit awards will generally recognize ordinary income when they receive shares upon settlement of the awards, in an amount equal to the fair market value of the shares at that time. Recipients who receive awards of restricted shares subject to a vesting requirement will generally recognize ordinary income at the time vesting occurs, in an amount equal to the fair market value of the shares at that time minus the amount, if any, paid for the shares. However, a recipient who receives restricted shares which are not vested may, within 30 days of the date the shares are transferred, elect in accordance with Section 83(b) of the Code to recognize ordinary compensation income at the time of transfer of the shares rather than upon the vesting dates. Recipients who receive performance shares will generally recognize ordinary income at the time of settlement, in an amount equal to the cash received, if any, and the fair market value of any shares received. We will generally be entitled to a tax deduction at the same time and in the same amount as ordinary income is recognized by the recipient.
Restrictions on Resale
Certain officers and directors of the Company may be deemed to be "affiliates" of the Company as that term is defined under the Securities Act. The Common Stock acquired under the 2016 Incentive Plan by an affiliate may be reoffered or resold only pursuant to an effective registration statement or pursuant to Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act.
Nevada.
Vote Required to Approve the Increase in Authorized Shares of Common Stock
The affirmative voteUnder the terms of our Certificate of Amendment to Articles of Incorporation and Nevada law, the Amendment must be approved by the holders of a majority of the outstanding shares of common stock entitled to vote at the annual meeting will be required to approve the Amendment.stock. Abstentions will be counted as present for purposes of determining if a quorum is present, and will have the same effect as votes against the Amendment. Because the Amendment is expected to be considered a negative vote on this proposal.
“routine” matter, we do not expect to receive any “broker-non-votes”; however, if any “broker non-votes” are received they would have the same effect as votes against the Amendment.
Board Recommendation of the Board
The Board recommends athat stockholders vote “FOR”FOR the approval of the Company's 2016 Incentive Stock Plan.Amendment.
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PROPOSAL NO. 4: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMOTHER MATTERS
The Board has appointed Clark, Schaefer, Hackett & Co. as our independent registered public accounting firm for the fiscal year ending December 31, 2016. Although this appointment does not require ratification, the Board has directed that the appointment of Clark, Schaefer, Hackett & Co. be submitted to stockholders for ratification due to the significance of their appointment to us. If stockholders do not ratify the appointment of Clark, Schaefer, Hackett & Co., the Board will consider the appointment of another independent registered public accounting firm for the fiscal year ending December 31, 2016. Representatives of Clark, Schaefer, Hackett & Co. are expected to be present at the Annual Meeting, where they will be available to respond to appropriate questions and, if they desire, to make a statement.
Fees Billed by our Independent Registered Public Accounting Firm During Fiscal 2014 and 2015
The total fees charged to the Company by Clark Schaefer Hackett & Company, the Company's independent registered public accounting firm, are as follows ($ thousands):
| Audit | Taxes | Other | Total | |||||||||||||||
| 2015 | 71.2 | 4.8 | 2.4 | 78.4 | ||||||||||||||
| 2014 | 68.5 | 4.7 | 0.3 | 73.5 |
The current policy of the directors, acting as the audit committee, is to approve the appointment of the principal auditing firm and any permissible audit-related services. The audit and audit related fees include fees for the annual audit of the financial statements and review of financial statements included in 10Q filings. Fees charged by Clark, Schaefer Hackett & Company were approved by the Board with engagement letters signed by Stephen S. Burns, Chief Executive Officer.
Vote Required
The affirmative vote of a majority of the votes cast on the matter is required to ratify the appointment of Clark, Schaefer, Hackett & Co. as our independent registered public accounting firm for the fiscal year ending December 31, 2016. Abstentions will not affect the outcome of the vote on the proposal.
Recommendation of the Board
The Board recommends a vote “FOR” the ratification of the appointment of Clark, Schaefer, Hackett & Co. as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.
The following table sets forth information known to us regarding the beneficial ownership of our common stock as of March 25, 2016, by:
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
| Name of Beneficial Owner (1) | Common Stock Beneficially Owned | Percentage of Common Stock (2) | ||||||||||
| Joseph T. Lukens | (3 | ) | 6,924,135 | 28.3 | % | |||||||
| Stephen D. Baksa | (4 | ) | 3,389,423 | 14.7 | % | |||||||
| Stephen S. Burns * | (5 | ) | 1,552,054 | 6.7 | % | |||||||
| Benjamin Samuels * | (6 | ) | 1,192,856 | 5.3 | % | |||||||
| James Taylor * | (7 | ) | 469,936 | 2.1 | % | |||||||
| Raymond Chess * | (8 | ) | 160,000 | ** | ||||||||
| Gerald Budde * | (9 | ) | 125,000 | ** | ||||||||
| Martin Rucidlo * | (10 | ) | 219,919 | 1.0 | % | |||||||
| Julio C. Rodriguez * | (11 | ) | 143,433 | ** | ||||||||
| Executive officers and directors as a group | 3,863,197 | 15.1 | % | |||||||||
CORPORATE GOVERNANCE
Governance Policies of the Board of Directors
The Board of Directors has adopted Governance Policiesknows of the Board of Directors to assist the Board in the exercise of its duties and responsibilities and to serve the best interests of the Company and its stockholders. These policies provide a framework for the conduct of the Board’s business.
Committees
Establishment of Board Committees and Adoption of Charters
On December 17, 2015, the Company established a Nominating and Corporate Governance Committee, a Compensation Committee and an Audit Committee (collectively, the "Committees") and approved and adopted charters to govern each of the Committees.
In connection with the establishment of the Nominating and Corporate Governance Committee, Compensation Committee and Audit Committee, the Board of Directors of the Company appointed members to each such committee. Currently, all three committees are comprised of three (3) directors meeting the requirements set forth in each applicable charter. The membership of these three standing committees of the Board of Directors of the Company is as follows:
Compensation Committee.
Our board of directors has determined that each of the members are an “independent director” as defined by the rules of The NASDAQ Stock Market, Inc. applicable to members of a compensation committee. The Compensation Committee is responsible for establishing the compensation of our senior management, including salaries, bonuses, termination arrangements, and other executive officer benefits. The Compensation Committee also administers our equity incentive plans. During 2015, the Compensation Committee did not meet as the committee was only formed in December 2015. The Compensation Committee is governed by a written charter approved by the board of directors. A copy of the Compensation Committee’s charter is posted on the Company’s website at www.workhorse.com in the “Investors” section of the website. The Compensation Committee works with the Chairman of the Board and Chief Executive Officer and reviews and approves compensation decisions regarding senior management including compensation levels and equity incentive awards. The Compensation Committee also approves employment and compensation agreements with our key personnel and directors. The Compensation Committee has the power and authority to conduct or authorize studies, retain independent consultants, accountants or others, and obtain unrestricted access to management, our internal auditors, human resources and accounting employees and all information relevant to its responsibilities.
Nominating and Corporate Governance Committee.
Our board of directors has determined that each of the members of the Governance Committee is an “independent director” as defined by the rules of The NASDAQ Stock Market, Inc. The Governance Committee is generally responsible for recommending to our full board of directors policies, procedures, and practices designed to help ensure that our corporate governance policies, procedures, and practices continue to assist the board of directors and our management in effectively and efficiently promoting the best interests of our stockholders. The Governance Committee is also responsible for selecting and recommending for approval by our board of directors and our stockholders a slate of director nominees for election at each of our annual meetings of stockholders, and otherwise for determining the board committee members and chairmen, subject to board of directors ratification, as well as recommending to the board director nominees to fill vacancies or new positions on the board of directors or its committees that may occur or be created from time to time, all in accordance with our bylaws and applicable law. The Governance Committee’s principal functions include:
During 2015, the Governance Committee did not meet due to the fact that the committee was only formed in December 2015. The Governance Committee is governed by a written charter approved by our board of directors. A copy of the Governance Committee’s charter is posted on the Company’s website at www.workhorse.com in the “Investors” section of the website. In identifying potential independent board of directors candidates with significant senior-level professional experience, the Governance Committee solicits candidates from the board of directors, senior management and others and may engage a search firm in the process. The Governance Committee reviews and narrows the list of candidates and interviews potential nominees. The final candidate is also introduced and interviewed by the board of directors and the lead director if one has been appointed. In general, in considering whether to recommend any particular candidate for inclusion in our board of directors’ slate of recommended director nominees, the Governance Committee will apply the criteria set forth in our corporate governance guidelines. These criteria include the candidate’s integrity, business acumen, commitment to understanding our business and industry, experience, conflicts of interest and the ability to act in the interests of our stockholders. Further, specific consideration is given to, among other things, diversity of background and experience that a candidate would bring to our board of directors. The Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow our board of directors to fulfill its responsibilities. Stockholders may recommend individuals to the Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials to our Governance Committee. Assuming that appropriate biographical and background material has been provided on a timely basis, the Governance Committee will evaluate stockholder recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.
Audit Committee.
We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our board of directors has determined that the members are all “independent directors” as defined by the rules of The NASDAQ Stock Market, Inc. applicable to members of an audit committee and Rule 10A-3(b)(i) under the Exchange Act. In addition, Mr. Budde is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K and demonstrates “financial sophistication” as defined by the rules of The NASDAQ Stock Market, Inc. The Audit Committee is appointed by our board of directors to assist our board of directors in monitoring (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, and (3) the independence and performance of our internal and external auditors. The Audit Committee’s principal functions include:
As the committee was only formed in December 2015, the Audit Committee has not met. The Audit Committee is governed by a written charter approved by our board of directors. A copy of the Audit Committee’s charter is posted on the Company’s website at www.workhorse.com in the “Investors” section of the website.
Meetings may be held from time to time to consider matters for which approval of our Board of Directors is desirable or is required by law.
Company Policies
The Company has established the following written policies that have been distributed and reviewed with all Company employees: Approval policy, Purchase Requisition policy, Conflict of Interest policy, “Do the Right Thing (ethics) policy and a Travel and Expense policy.
Compensation of Directors
We have entered into the following arrangements:
On October 11, 2010, Mr. Taylor entered into a letter agreement with the Company pursuant to which he was appointed as a director of the Company in consideration of an annual fee of $40,000. Additionally, the Company granted Mr. Taylor options to purchase 325,000 shares of the Company’s common stock at $0.68 per share. The options will expire five years from the vesting period with 75,000 options vesting upon the signing of the agreement and 50,000 every six months thereafter for a total of 325,000 shares.
On October 24, 2013, the size of the Board of Directors was increased from two to three and Raymond J. Chess was appointed as a director of the Company. Prior to joining the Board of Directors, Mr. Chess served on our advisory board pursuant to which he received a stock option to acquire 100,000 shares of common stock at an exercise price of $0.25 per share. On October 24, 2013, Mr. Chess entered into a letter agreement with the Company pursuant to which he was appointed as a director of the Company in consideration of an annual fee of $40,000. Additionally, the Company granted Mr. Chess options to purchase 500,000 shares of the Company’s common stock at US$0.26 per share. The options will expire five years from the vesting period with 100,000 options vesting upon the signing of the agreement and 40,000 every six months thereafter for a total of 500,000 shares.
On February 13, 2015 Marshall Cogan entered into an agreement with the Company to serve as Chief Investment Officer. In addition, Mr. Cogan was appointed as Chairman of the Board of directors for the Company, replacing James Taylor, who remained on the Board as a director. Mr. Cogan entered into a letter of agreement with the Company to receive an annual salary of $135,000 and options to acquire 750,000 shares of common stock, exercisable for the three-year Employment Term at $1.50 per share ("Executive Stock Options"), subject to vesting. The Executive Stock Options were to be earned and vested in equal tranches of 250,000 on the one-year, two-year and three-year anniversary of the agreement, which such vesting is subject to Executive's continued employment as an executive with the Company as of the vesting date. In May 2015, the Company terminated Marshall S. Cogan as Chief Investment Officer. Further, the Executive Employment Agreement and the Stock Option Agreement entered between the Company and Mr. Cogan dated February 13, 2015 have also been terminated. On June 17, 2015, Mr. Cogan submitted his resignation as a director of the Company.
On December 17, 2015, Messrs. Budde and Samuels entered into letter agreements with the Company pursuant to which they were each appointed as directors of the Company in consideration of an annual fee of $40,000. Additionally, the Company granted Messrs. Budde and Samuels options to purchase 50,000 shares of the Company’s common stock at $7.01 per share. The options will expire five years from the vesting period with 10,000 options vesting upon the signing of the agreement and 4,000 every June 30 and December 31 thereafter for a total of 50,000 shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who own more than 10% of the issued and outstanding shares of our common stock to file reports of initial ownership of common stock and other equity securities and subsequent changes in that ownership with the SEC. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2015 all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with.
Board Leadership Structure
Mr. Burns currently serves as our principal executive officer and Raymond J. Chess serves as chairman of our Board of Directors. The Board of Directors has chosen to separate the principal executive officer and chairman positions because it believes that (i) independent oversight of management is an important component of an effective board of directors and (ii) this structure benefits the interests of all stockholders. If the Board of Directors convenes for a special meeting, the non-management directors will meet in executive session if circumstances warrant. Given the composition of the Board of Directors with a strong slate of independent directors, the Board of Directors does not believe that it is necessary to formally designate a lead independent director at this time, although it may consider appointing a lead independent director if circumstances change. We believe that the structure described above is the best structure to lead us in the achievement of our goals and objectives and establishes an effective balance between management leadership and appropriate oversight by independent directors.
Board Role in Risk Oversight
Senior management is responsible for assessing and managing our various exposures to risk on a day-to-day basis, including the creation of appropriate risk management programs and policies. The Board is responsible for overseeing management in the execution of its responsibilities and for assessing our approach to risk management. In addition, an overall review of risk is inherent in the Board’s consideration of our long-term strategies and in the transactions and other matters presented to the Board, including capital expenditures, acquisitions and divestitures, and financial matters.
Code of Ethics
We have adopted a Code of Ethics applicable to our officers, directors and employees. The Code of Ethics requires each covered person to act with honesty, ethics and integrity and to avoid actual or apparent conflicts of interest in their personal and professional relationships. We intend to disclose any amendments to, or waivers of, certain provisions of the Code of Ethics as required by the applicable rules and regulations of the SEC. The text of the Code of Ethics is posted in the “Corporate Governance” section of our website, http://workhorse.com/. A copy of the Code of Ethics is also available in print, free of charge, upon written request to 100 Commerce Drive, Loveland, Ohio 45140, Attention: Stephen Burns.
Stockholder Communications with the Board
Stockholders who wish to do so may communicate directly with the Board or specified individual directors by writing to:
Board of Directors (or name of individual director)
Workhorse Group Inc.
100 Commerce Drive
Loveland, Ohio 45140
We will forward all communications from security holders and interested parties to the full Board, to non-management directors, to an individual director that is most closely related to the subject matter of the communication, except for the following types of communications: (i) communications that advocate that we engage in illegal activity; (ii) communications that, under community standards, contain offensive or abusive content; (iii) communications that have no relevance to our business or operations; and (iv) mass mailings, solicitations and advertisements. The Corporate Secretary will determine when a communication is not to be forwarded. Our acceptance and forwarding of communications to directors does not imply that directors owe or assume any fiduciary duties to persons submitting the communications.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below sets forth the compensation earned for services rendered to us, for the fiscal years indicated, by our executive officers.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-equity Incentive Plan Compensation ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
| Stephen S. Burns CEO and | 2015 | 275,000 | 111,900 | 386,900 | ||||||||||||||||||||||||||||||||
| Director | 2014 | 200,000 | - | - | 256,034 | - | - | - | 456,034 | |||||||||||||||||||||||||||
| Martin J. Rucidlo | 2015 | 125,000 | 22,380 | 147,380 | ||||||||||||||||||||||||||||||||
| President | 2014 | 125,000 | - | - | 112,074 | - | - | - | 237,074 | |||||||||||||||||||||||||||
| Julio C. Rodriguez Chief Financial | 2015 | 150,000 | 55,950 | 205,950 | ||||||||||||||||||||||||||||||||
| Officer | 2014 | 150,000 | - | - | 68,804 | - | - | - | 218,804 | |||||||||||||||||||||||||||
Employment Agreements
Stephen S. Burns Employment Agreement
On December 8, 2010, Stephen S. Burns entered into an employment agreement with the Company pursuant to which he was appointed as the President of the Company in consideration of an annual salary of $200,000, however, only 50% of the salary ($100,000) will be payable at this time. The remaining 50% of the salary will accrue and be deferred until the board of directors elects to increase the salary to include all or a portion of the deferred salary based on certain events. Additionally, Mr. Burns will be eligible for annual bonuses with a target amount of 100% of his salary. The actual amount of any bonus may be more or less than such target and will be determined by the Board in its absolute discretion. Half of the bonus may be paid, in the Company’s discretion, in unregistered shares of common stock at a price per share equal to the weighted average closing price per share of the common stock over the twenty most recent trading days prior to such grant. In addition to the salary and any bonus, Mr. Burns will be entitled to receive health and fringe benefits that are generally available to the Company’s management employees in accordance with the then existing terms and conditions of the Company’s policies. As additional compensation, the Company granted Mr. Burns options to acquire 30,000 shares of common stock at an exercise price of $7.20 per share for a period of ten years. The Company also provided Mr. Burns with a common stock purchase warrant to acquire 30,000 shares of Common Stock exercisable at any time in the five years following the signing of the agreement at an exercise price of $2.00 per share. Effective August 24, 2012, Mr. Burns resigned as President and continues to serve as a director as well as Chief Executive Officer, Secretary and Treasurer of the Company. As of December 31, 2015, payroll in the amount of $108,335 was due and payable and included in accounts payable, based on terms of Mr. Burns’s employment agreement.
Martin J. Rucidlo Employment Agreement
On August 24, 2012, Martin J. Rucidlo was engaged by the Company to serve as the President of the Company. Mr. Rucidlo replaced Stephen S. Burns who resigned as President and continues to serve as a director as well as Chief Executive Officer, Secretary and Treasurer of the Company. On August 24, 2012, Mr. Rucidlo entered into a letter agreement with the Company pursuant to which he was appointed as the President of the Company in consideration of an annual salary of $125,000. As additional compensation, the Company granted Mr. Rucidlo options to purchase 30,000 shares of the Company’s common stock at an exercise price of $2.10 per share. The options will expire three years from the vesting period with 9,000 options vesting upon the signing of the Agreement and 10,500 options vesting each of the following two years on the anniversary date of the Agreement for a total of 30,000 shares.
Julio C. Rodriguez Employment Agreement
On August 15, 2013, Julio C. Rodriguez and the Company entered into an employment agreement pursuant to which Mr. Rodriguez agreed to serve as the Chief Financial Officer of the Company. The Agreement has an effective date of August 7, 2013. Mr. Rodriguez will replace Richard J. Calme who resigned as the Interim Chief Financial Officer. Mr. Calme has been appointed to serve as Director of Finance of the Company. Pursuant to the terms of the Employment Agreement, Mr. Rodriguez shall receive an annual salary of $150,000. In addition to the salary, Mr. Rodriguez will be entitled to receive health and fringe benefits that are generally available to the Company’s management employees. As additional compensation, the Company granted Mr. Rodriguez options to acquire 30,000 shares of common stock at an exercise price of $4.00 per share for a period of two years.
The following table sets forth information with respect to the outstanding equity awards of our principal executive officers and principal financial officer during 2014, and each person who served as an executive officer of the Company as of December 31, 2015:
Outstanding Equity Awards at 2015 Fiscal Year End
The following table presents, for each of the named executive officers, information regarding outstanding equity awards as of December 31, 2015.
| Outstanding Equity Awards at Fiscal Year-End | ||||||||||||||||||||||||||||||||||
| Option awards | Stock awards | |||||||||||||||||||||||||||||||||
| Name and principal position | Number of securities underlying unexercised options (#) Exercisable | Number of securities underlying unexercised options (#) Unexercisable | Equity incentive plan awards: Number of securities underlying unexercised options (#) | Options exercise price ($) | Option expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | |||||||||||||||||||||||||
| Stephen | 50,000 | 0 | 0 | $ | 6.00 | 5/23/2016 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| S. Burns | 30,000 | 4,538 | 0 | $ | 1.10 | 12/3/2016 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| CEO and | 40,000 | 17,333 | 0 | $ | 2.90 | 3/14/2018 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| Director | 16,667 | 0 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| 40,000 | 0 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 50,000 | 26,250 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 174,773 | 0 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 50,000 | 30,000 | 0 | $ | 1.40 | 12/18/2019 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 50,000 | 35,000 | 0 | $ | 1.75 | 8/11/2020 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 60,000 | 19,470 | 0 | $ | 4.00 | 11/15/2020 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 30,000 | 30,000 | 0 | $ | 7.20 | 12/5/2020 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| Martin J. | 25,000 | 3,781 | 0 | $ | 1.10 | 12/3/2016 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| Rucidlo | 20,000 | 8,667 | 0 | $ | 2.90 | 3/14/2018 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| President | 25,000 | 15,000 | 0 | $ | 1.40 | 12/18/2019 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| 10,000 | 7,000 | 0 | $ | 1.75 | 8/11/2020 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 20,000 | 6,490 | 0 | $ | 4.00 | 11/15/2020 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| Julio C. | 30,000 | 10,333 | 0 | $ | 4.00 | 8/6/2018 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| Rodriguez | 49,323 | 0 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| CFO | 4,110 | 0 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||||||||||||
| 20,000 | 10,500 | 0 | $ | 0.10 | 6/30/2019 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 15,000 | 9,000 | 0 | $ | 1.40 | 12/18/2019 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
| 25,000 | 17,500 | 0 | $ | 1.75 | 8/11/2020 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||
Director Compensation
The following table summarizes the compensation for our non-employee directors for the fiscal year ended December 31, 2015. All compensation paid to our employee directors is included under the summary compensation table above.
| Name | Fees Earned or Paid in Cash $ | Stock Awards $ | Option Awards $ | Non-equity Incentive Plan Compensation $ | Change in Pension Value and Non-Qualified Degerred Compensation Earnings $ | All Other Compensation $ | Total $ | |||||||||||||||||||||
| Benjamin Samuels | - | - | 159,330 | - | - | - | 159,330 | |||||||||||||||||||||
| Ray Chess | 40,000 | - | 22,380 | - | - | - | 62,380 | |||||||||||||||||||||
| Gerald Budde | - | - | 159,330 | - | - | - | 159,330 | |||||||||||||||||||||
| Jim Taylor | 80,000 | - | 70,445 | - | - | - | 150,445 | |||||||||||||||||||||
STOCKHOLDER PROPOSALS
Stockholder proposals, including director nominations, intended for inclusion in our proxy statement for the 2017 Annual Meeting (expected to be held on or about May 1, 2017) pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 must be submitted to us on or before December 31, 2016 so that they may be considered by us for inclusion in our proxy statement relating to that meeting.
ANNUAL REPORT
The Annual Report is being sent with this Proxy Statement to each stockholder and is availablepresented at the Investor Relations portion of our website as well as on the SEC’s website at www.sec.gov. The Annual Report contains our audited financial statements for the fiscal year ended December 31, 2015. The Annual Report, however, is not to be regarded as part of the proxy soliciting material.
DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS
Only one copy of this Proxy Statement and one copy of our Annual Report are being delivered to multiple registered stockholders who share an address unless we have received contrary instructions from one or more of the stockholders. A separate form of proxy and a separate notice of the Annual Meeting are being included for each account at the shared address. Registered stockholders who share an address and would like to receive a separate copy of our Annual Report and/or a separate copy of this Proxy Statement, or have questions regarding the householding process, may contact the Company’s transfer agent: Empire Stock Transfer, by calling (702) 818-5898, or by forwarding a written request addressed to Empire Stock Transfer, 1859 Whitney Mesa Drive, Henderson, NV 89014; (F) 702-974-1444; email: rico@empirestock.com. Promptly upon request, a separate copy of our Annual Report on Form 10-K and/or a separate copy of this Proxy Statement will be sent. By contacting Empire Stock Transfer, registered stockholders sharing an address can also (i) notify the Company that the registered stockholders wish to receive separate annual reports to stockholders, proxy statements and/or Notices of Internet Availability of Proxy Materials, as applicable, in the future or (ii) request delivery of a single copy of annual reports to stockholders, proxy statements and/or Notices of Internet Availability of Proxy Materials, as applicable, in the future if registered stockholders at the shared address are receiving multiple copies.
Many brokers, brokerage firms, broker/dealers, banks and other holders of record have also instituted “householding” (delivery of one copy of materials to multiple stockholders who share an address).Special Meeting. If your family has one or more “street name” accounts under which you beneficially own shares of our common stock, you may have received householding information from your broker, brokerage firm, broker/dealer, bank or other nominee in the past. Please contact the holder of record directly if you have questions, require additional copies of this Proxy Statement or our Annual Report or wish to revoke your decision to household and thereby receive multiple copies. You should also contact the holder of record if you wish to institute householding.
OTHER MATTERS
Management does not know of any other matters which are likely to be brought before the meeting. However, in the event that any other matters properly come before the meeting, the persons named in the enclosed proxyProxy, or their substitutes, will vote said proxythe shares represented thereby in accordance with their judgment in saidon such matters.
ADDITIONAL INFORMATION
The information presented in thisHouseholding
Under SEC rules, only one proxy statement under the caption “Reportneed be sent to any household at which two or more of our stockholders reside if they appear to be members of the Boardsame family and contrary instructions have not been received from an affected stockholder. This procedure, referred to as householding, reduces the volume of Directors”duplicate information stockholders receive and reduces mailing and printing expenses for us. Brokers with account holders who are our stockholders may be householding these materials. Once you have received notice from your broker that it will not be deemedhouseholding communications to be “soliciting material”your address, householding will continue until you are notified otherwise or deemed filed withuntil you revoke your consent. If, now or at any time in the SEC under the Securities Act of 1933future, you no longer wish to participate in householding and would like to receive a separate proxy statement, or the Securities Exchange Act of 1934, and nothing contained in any of our previous filings under such acts shall be interpreted as incorporating by reference the information presented under said specified captions.
Where You Can Find More Information
We file annual, quarterly and other reports and information with the SEC. These reports and other information can be inspected and copied at, andif you currently receive multiple copies of these materials candocuments at your address and would prefer that the communications be obtainedhouseholded, you should contact us at prescribed rates from, the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. We distribute to our stockholders annual reports containing financial statements audited by our independent registered public accounting firmjim.harrington@workhorse.com or James D. Harrington, General Counsel, Chief Compliance Officer and upon request, quarterly reports for the first three quarters of each fiscal year containing unaudited financial information. In addition, the reports and other information are filed through Electronic Data Gathering, Analysis and Retrieval (known as “EDGAR”) system and are publicly available on the SEC’s Web site, located at http://www.sec.gov . We will provide without charge to you, upon written or oral request, a copy of the reports and other information filed with the SEC.
Any requests for copies of information, reports or other filings with the SEC should be directed toSecretary, Workhorse Group Inc., 100 Commerce3600 Park 42 Drive, Loveland,Suite 160E, Sharonville, Ohio 45140, Attn: Investor Relations.45241.
Proxy Solicitation Costs
The proxies being solicited hereby are being solicited by the Company. The Company will bear the entire cost of solicitation of proxies including preparation, assembly, printing and mailing of the Proxy Statement, the Proxy card and establishment of the internet site hosting the proxy material. We have engaged Morrow Sodali to assist us in the solicitation of votes described above. We will bear the costs of the fees for the solicitation agent, which includes a fee of $12,500 and a fee of $6.50 per proxy solicitation call with our shareholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of common stock beneficially owned by others to forward to such beneficial owners. Officers and regular employees of the Company may, but without compensation other than their regular compensation, solicit proxies by further mailing or personal conversations, or by telephone, telex, facsimile or electronic means. We will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to the beneficial owners of stock.
By Order of the Board of Directors | ||
/s/ Raymond Chess | ||
Raymond |
Loveland, Ohio
May 25, 2016
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and the Annual Report are available at the Investor Relations portion of our website at http://www.workhorse.com.
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9
APPENDIX A
A-1
A-2
Workhorse Group, Inc
Amended Articles Continued
Corporation is 525,000,000 shares of capital stock, consisting of 450,000,000 shares of common stock with full voting rights and with a par value of $0.001 per share, and 75,000,000 shares of preferred stock, with a par value of $0.001 per share (the “Preferred Stock”). The Preferred Stock may be issued from time to time in one or more series with such designations, preferences and relative participating, optional or other special rights and qualifications, limitations or restrictions thereof, as shall be stated in the resolutions adopted by the Corporation’s Board of Directors (the “Board”) providing for the issuance of such Preferred Stock or series thereof; and the Board is hereby vested with authority to fix such designations, preferences and relative participating, optional or other special rights or qualifications, limitations, or restrictions for each series, including, but not by way of limitation, the power to fix the redemption and liquidation preferences, the rate of dividends payable and the time for the priority of payment thereof and to determine whether such dividends shall be cumulative or not and to provide for and fix the terms of conversion of such Preferred Stock or any series thereof into Common Stock of the Corporation and fix the voting Power, if any, of shares of Preferred Stock or any series thereof.
Pursuant to NRS 78.385 and NRS 78.390, and any successor statutory provisions, the Board of Directors is authorized to adopt a resolution to increase decrease, add, or remove or otherwise alter any current or additional classes or series of this Corporations’ capital stock by a board resolution amending these Articles, in the Board or Directors’ sole discretion for increases or decreased of any class or series of authorized stock where applicable pursuant to NRS 78.207 and any successor statutory provision, or otherwise subject to the approval of the holders of at least a majority or shares having voting rights, either in a special meeting or the next annual meeting of shareholders. Notwithstanding the foregoing, where any shares of any class or series would be materially and adversely affected by such change, shareholder approval by the holders of at least a majority of such adversely affected shares must also be obtained before filing an amendment with the Office of the Secretary of State of Nevada. The capital stock of this Corporation shall be non-accessible and shall not be subject to assessment to pay the debts of the Corporation.”
A-3
WORKHORSE GROUP INC. 3600 PARK 42 DRIVE SUITE 160E SHARONVILLE, OH 45241 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 08/27/2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/WKHS2023SM You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 08/27/2023. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY The Board of Directors recommends you vote FOR the following proposal: 1. Approve an amendment to our Articles of Incorporation to increase the number of authorized shares of common stock. For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000617958_1 R1.0.0.6
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NOTE:
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: The Notice and Proxy Statement is available at www.proxyvote.com Workhorse Group Inc. PROXY FOR SPECIAL MEETING TO BE HELD ON AUGUST 28, 2023 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned stockholder hereby appoints Richard Dauch, Chief Executive Officer, and James Harrington, General Counsel, Chief Compliance Officer and Secretary, or either of them (each with full power to act alone), as attorneys and proxies arefor the undersigned, with the power to appoint his substitute, to represent and to vote all the shares of the common stock of Workhorse Group Inc. (the “Company”), which the undersigned would be entitled to vote, at the Company’s Special Meeting of Stockholders to be held on, August 28, 2023, at 10:30 a.m., Eastern Time, and any adjournments thereof, subject to the directions indicated on the reverse side hereof. The Special Meeting will be held in a virtual meeting format at www.virtualshareholdermeeting.com/WKHS2023SM. In their discretion, the Proxy is authorized to vote on all such matters asupon any other matter that may properly come before the meeting or any adjournmentadjournments thereof. This proxy, when properly executed, will be voted in the manner directed on the reverse side by the undersigned stockholder. If no direction is made, this proxy will be voted FOR Proposal 1. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. Continued and to be signed on reverse side
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