(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
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o Preliminary Proxy Statement
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þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material under §240.14a-12
Two Rivers Water and Farming Company
(Name of the Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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NOTICE OF ANNUAL MEETING
OF COMMON SHAREHOLDERS
Wednesday, June 11, 2014
The Annual Meeting of Common Shareholders of Two Rivers Water &and Farming Company (the "Company") will be held at theour principal executive offices of the Company, 2000 South Colorado Blvd., Tower 1, Suite 3100, Denver, CO 80222 at 2:30 p.m., Mountain Time on June 11, 2013 for the following purposes:
This year we are eligibleusing the SEC “Notice and Access” model, which allows us to deliver proxy materials via the Internet. We believe Notice and Access provides common shareholders with a convenient method to access the proxy materials and vote, while allowing us to conserve natural resources and reduce the costs of printing and distributing proxy materials. On April 16, 2014, we are mailing to common shareholders of record a notice with instructions on how to access the proxy materials via the Internet.
Whether or not you expect to attend the meeting, please complete, date, sign and return the proxy card, or vote over the telephone or the Internet, as instructed in the proxy materials, as promptly as possible in order to ensure your representation at the meeting. Even if you vote by proxy, you may still vote in person if you attend the meeting. If your common stock is held of record by a broker, bank or other nominee and you wish to vote at the annual meeting. Onmeeting, you must obtain a proxy issued in your name from the record date, there were 24,592,550 sharesholder.
April 16, 2014
Denver, Colorado
By Order of our common stock outstanding.the Board of Directors,
Important Notice Regarding Availability of Proxy Materials for Annual Meeting on June 11, 2014: The Proxy Statement, form of proxy card and our 2013 Annual Report to Shareholders are available at www.proxyvote.com. |
PROXY STATEMENT
FOR
ANNUAL MEETING OF COMMON SHAREHOLDERS
| QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND VOTING | 1 | |||
| PROPOSALS | 5 | |||
Proposal No. 1. Election of Directors | 5 | |||
Proposal No. 2. Appointment of Independent Registered Public Accounting Firm | 6 | |||
Proposal No. 3. Advisory Approval of Executive Compensation | 7 | |||
Other Matters | 7 | |||
Shareholder Proposals | 7 | |||
| EXECUTIVE OFFICERS | 8 | |||
| EXECUTIVE COMPENSATION | 8 | |||
Executive Compensation Tables | 8 | |||
Employment Agreements | 9 | |||
| BOARD OF DIRECTORS | 10 | |||
Biographical Information | 10 | |||
Board Committees | 11 | |||
Audit Committee Report | 12 | |||
| DIRECTOR COMPENSATION | 13 | |||
| CORPORATE GOVERNANCE | 13 | |||
Director Nomination Process | 13 | |||
Communicating with Independent Directors | 13 | |||
Code of Ethics | 13 | |||
Conflicts of Interest | 13 | |||
Compensation Committee Interlocks and Insider Participation | 14 | |||
| LIMITATION OF LIABILITY AND INDEMNIFICATION | 14 | |||
| RELATED-PARTY TRANSACTIONS | 16 | |||
| STOCK OWNERSHIP | 16 | |||
Directors, Officers and Principal Shareholders | 16 | |||
Section 16(a) Beneficial Ownership Reporting Compliance | 16 | |||
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES | 17 | |||
QUESTIONS AND ANSWERS ABOUT THE
PROXY MATERIALS AND VOTING
Why am I receiving proxy materials?
We have mailed you a notice of Internet availability of proxy materials, together with a proxy card, because the Board of Directors of Two Rivers Water and Farming Company is soliciting your proxy to vote at the 2014 Annual Meeting of Common Shareholders, including at any adjournments or postponements of the meeting. We urge you to access the proxy statement and other materials as described in the Notice of Internet Availability. You are invited to attend the meeting to vote on the proposals described in this proxy statement. You do not, however, need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the proxy card, or follow the instructions below to submit your proxy over the telephone or through the Internet.
We intend to send the notice of Internet availability of proxy materials and proxy card on or about April 16, 2014 to all shareholders of record entitled to vote at the meeting.
Why did I receive a notice as to the Internet availability of proxy materials instead of a full set of materials?
We have elected, pursuant to rules adopted by the SEC, to provide access to our proxy materials over the Internet. We have sent a notice of Internet availability of proxy materials, together with a proxy card, to our common shareholders of record as of April 15, 2014. Instructions on how to access proxy materials over the Internet or to request a printed copy may be found in the Notice of Internet Availability. In addition, you may request to receive future proxy materials in printed form by mail or electronically. Your election to receive future proxy materials by mail or electronically will remain in effect until you terminate such election.
You may view and also download our proxy materials for the meeting including the Notice of Internet Availability, the Proxy Statement, the form of proxy card and our 2013 Annual Report to Shareholders at www.proxyvote.com.
How many votesdo I attend the meeting?
The meeting will be held on Wednesday, June 11, 2014, at 2:30 p.m., Mountain daylight saving time, at our principal executive offices at 2000 South Colorado Boulevard, Tower 1, Suite 3100, Denver, Colorado. Directions to the meeting can be obtained at www.2riverswater.com/contact.html. Information on how to vote in person at the meeting is discussed below.
Do I have?need to present identification to attend the meeting?
Who can vote for each share heldat the meeting?
Only holders of record of common stock at the close of business on April 15, 2013.
Shareholder of Record — Shares Registered in Your Name: If on how you holdApril 15, 2014 your shares.
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What am I voting on?
There are three matters scheduled for a vote:
| ● | election of five directors nominated by the Board of Directors to hold office until the 2015 Annual Meeting of Common Shareholders; |
| ● | ratification of the selection, by the Audit Committee of the Board of Directors, of Eide Bailly LLP as our independent registered public accounting firm for 2014, and |
| ● | approval of, on an advisory basis, the compensation of our Named Executive Officers as identified in this proxy statement. |
At our 2013 Annual Meeting of Shareholders held on June 11, 2013, the common shareholders voted to approve annual advisory votes on compensation of our Named Executive Officers. The third proposal has been made pursuant to last year’s vote on the frequency of consideration of executive compensation.
What if another matter is properly brought before the meeting?
The Board of Directors knows of no other matters that will be presented for consideration at the meeting. ToIf any other matters are properly brought before the meeting, it is the intention of the person named in the accompanying proxy card to vote on those matters in accordance with his best judgment.
How do I vote?
With respect to Proposal No. 1, you may vote “FOR” all of the nominees to the Board of Directors or you may “Withhold” your vote for one or more of the nominees. With respect to Proposal No. 2, you may vote “FOR” or “AGAINST” the ratification of Eide Bailly LLP as our independent registered public accounting firm for 2014, or you may abstain from voting. With respect to Proposal No. 3, you may vote “FOR” or “AGAINST” the approval of, on an advisory basis, the compensation of our Named Executive Officers.
Shareholder of Record — Shares Registered in Your Name: If you are a shareholder of record, you may vote in person at the meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy through the Internet. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person even if you have already voted by proxy.
| ● | To vote in person, bring your personal identification and proof of common stock ownership to the meeting and we will give you a ballot when you arrive. |
| ● | To vote by proxy, complete, sign and date the proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the meeting, we will vote your shares as you direct. |
| ● | To vote over the telephone from a location in the United States, Canada or Puerto Rico, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the proxy card. Your vote must be received by 11:59 p.m., Eastern daylight saving time, on June 10, 2014 to be counted. |
| ● | To vote through the Internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the company number and control number from the proxy card. Your vote must be received by 11:59 p.m., Eastern daylight saving time, on June 10, 2014 to be counted. |
Beneficial Owner — Shares Registered in the Name of a Broker or Bank: If you are a beneficial owner of shares of common stock registered in the name of your broker, bank, dealer or similar organization, you should have received proxy materials from that organization rather than from us. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by the organization holding your shares. To vote in person at the meeting, you must obtain a “legal proxy”valid proxy and proof of common stock ownership from the organization that holdsholding your shares. The availabilityFollow the instructions from the organization holding your shares included with these proxy materials, or contact that organization to request a proxy form.
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| We provide Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. Please be aware, however, that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies. |
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of Internet or telephone voting for beneficial owners will depend on the voting processescommon stock you owned as of your broker, bank or other holder of record. Therefore, we recommend that you follow the voting instructions in the materials you receive. If your broker, bank or other holder of record permits you to vote by telephone or on the Internet, you do not have toApril 15, 2014.
What if I return youra proxy card or voting instruction card.
If you do not provide the organization that holdsreturn a signed and dated proxy card or otherwise vote without marking voting selections, your shares with specific voting instructions then, underwill be voted, as applicable, rules,“FOR” the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspectorelection of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks, dealers and similar organizations for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one notice of Internet availability of proxy materials?
If you receive more than one notice of Internet availability of proxy materials, your shares of common stock may be registered in more than one name or in different accounts. Please follow the voting instructions on the proxy cards in the proxy materials to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
| ● | You may submit another properly completed proxy card with a later date. |
| ● | You may grant a subsequent proxy by telephone or through the Internet. |
| ● | You may send a timely written notice that you are revoking your proxy to Wayne Harding, our Secretary, at 2000 South Colorado Boulevard, Tower 1, Suite 3100, Denver, Colorado. |
| ● | You may attend the meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy. |
Your latest proxy card or telephone or Internet proxy is the one that is counted. If your shares are held by your broker, bank, dealer or similar organization as a nominee, you should follow the instructions provided by that organization.
How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting, who will separately count:
| ● | “FOR” and “Withhold” votes with respect to Proposal No. 1; |
| ● | “FOR” and “AGAINST” votes with respect to Proposal No. 2 and Proposal No. 3; and |
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| ● | abstentions and broker non-votes. |
Abstentions are counted in tabulations of the votes cast on proposals presented to shareholders other than the election of directors. Thus an abstention from voting on a matter considered “routine” under applicable rules. Ahas the same legal effect as a vote “AGAINST” that matter. Broker non-votes and directions to withhold are counted as present, but are not entitled to vote on proposals for which brokers do not have discretionary authority and have no effect other than to reduce the number of affirmative votes needed to approve a proposal.
What are “broker non-votes”?
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or other nominee may generallyholding the shares as to how to vote on routine matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. “Non-routine” matters are generally those involving a contest or a matter that may substantially affect the rights or privileges of shareholders, such as mergers, shareholder proposals and therefore no broker non-votesdirector elections, even if those matters are expectednot contested. Proposal No. 2 is considered to exist in connection with Proposal Two.be “routine.”
The election of directors (Proposal One), approval ofNo. 1) and the reverse stock split (Proposal Three), approval of the non-binding advisory resolution approving the Company’s executive compensation (Proposal Four), and approval, on a non-bindingan advisory basis, of the frequencycompensation of advisory votes on executive compensationour Named Executive Officers (Proposal Five)No. 3) are matters considered “non-routine” matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine“non-routine” matters, and therefore there may be broker non-votes may exist in connection with Proposals One, Three, Fouron Proposal No. 1 and Five. Broker non-votes will not be considered as votes cast and therefore, will not be counted for purposes of determining the outcome of a proposal. Therefore, it is important that you provide instructions to your broker so that you vote is counted.
To approve a one-time authorization, expiring June 30, 2014, forbe approved, Proposal No. 3, which relates to the Company to effect a reverse stock splitapproval, on an advisory basis, of the Company’s common stock within a rangecompensation of not less than 1-for-2 and not more than 1-for-3, but otherwise at terms to be determined byour Named Executive Officers, must receive “FOR” votes from the Company’s Board of Directors for the sole purpose of applying for and obtaining a listing on a national stock market exchange. (Proposal Three). The affirmative voteholders of a majority of the votes cast on Proposal Threeshares that are present in person or represented by proxy and entitled to vote at the meeting. If you “ABSTAIN” from voting, it will have the same effect as an “AGAINST” vote. Broker non-votes will have no effect.
What is requiredthe quorum requirement?
A quorum of shareholders is necessary to approve Proposal Three. The Company plans to seekhold a listing onvalid meeting. A quorum will be present if shareholders holding at least a national stock market exchange, such as the NYSE MKT. The national stock market exchanges require a minimum stock price. The Company believes a reverse stock split will assist the Company in achieving certain minimum stock prices.
Your shares of common stock will be counted towards the accompanying Proxy Statement (Proposal Four). The affirmativequorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the votes cast on Proposal Four is requiredmeeting in person or represented by proxy may adjourn the meeting to approveanother date.
How can I find out the compensationresults of the Company’s named executive officers.voting at the meeting?
Preliminary voting results will be announced at the meeting. Final voting results will be included on a current report on Form 8-K filed with the SEC on or before June 17, 2014.
We have no reason to believe that any of the director nominees will be unavailable. Inunable to serve if elected. However, if any of these nominees becomes unavailable, the event a nominee for director should become unavailable for election, the personsperson named in the Proxy willproxy intends to vote for any alternate designated by the current Board, or the Board may reduce the number of current directors.
None of the director nominees is related by blood, marriage or adoption to any of the other director nominees or any of our executive officers, and none is party to an arrangement or understanding with any person pursuant to which the nominee is to be selected or nominated for election as a director.
Directors are elected by plurality of the votes of the holders of common stock present in person or represented by proxy and entitled to vote on the election of any other person who maydirectors. The five nominees receiving the highest number of affirmative votes will be recommended and nominated by the Board for the office of director. The persons named in the accompanying Proxy intend to vote for the election as directorelected.
Brief biographies of the nominees listed above. Information regarding directors isare set forth below.
| The Board of Directors recommends that holders of common stock vote “FOR” election of each of John R. McKowen, John Stroh II, Dennis Channer, Gregg Campbell and Gus Blass, III. |
Proposal No. 2. Appointment of Independent Registered Public Accounting Firm
The affirmative vote of the Company from August, 2009holders of a majority of the common stock present in person or represented by proxy and entitled to October, 2010 Mr. Stroh received his Bachelorvote at the meeting will be required to ratify the selection of ScienceEide Bailly. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the shareholders and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in Business Administration from Colorado State University in 1976. In 1991, he passed the Colorado State Certified Appraiser exam. He received his real estate broker license in the State of Colorado in 1976. Mr. Strohdetermining whether this matter has been a real estate broker since he received his broker license in 1976. He is the owner/managing broker of Southern Colorado Land and Livestock Company, a real estate management, appraisal, consulting, and brokerage firm.approved.
| The Board of Directors recommends that holders of common stock vote “FOR” ratification of the appointment of Eide Bailly, LLP as independent registered public accounting firm. |
In accordance with SEC rules, we are asking common shareholders to cast an advisory vote to approve the compensation of our Named Executive Officers disclosed below in “Executive Compensation.” While this vote is non-binding, we value the opinions of its shareholders and, consistent with our record of shareholder engagement, will consider the outcome of the vote when making future compensation decisions.
In considering your vote, we invite you to review the compensation tables and narrative presented below under “Executive Compensation.” As described in that section, we believe that our executive compensation program enables us to attract, motivate and retain key executives, aligns our compensation arrangements with our annual and long-term business objectives and strategy, and provides variable compensation opportunities that are directly linked with our financial and strategic performance.
We are asking our shareholders to vote FOR, in a non-binding vote, the following advisory resolution on executive compensation:
| RESOLVED, | that the holders of common stock approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Summary Compensation Table, the other compensation tables, and the related notes and narratives set forth under “Executive Compensation” of the proxy statement for the 2014 Annual Meeting of Common Shareholders. |
The Board has adopted a policy of providing annual advisory votes on the compensation of our Named Executive Officers. At the 2013 Annual Meeting of Shareholders, common shareholders approved this policy, on an advisory basis. The next advisory vote to approve our executive compensation is expected to occur at the 2015 Annual Meeting of Common Shareholders.
The Board of Directors recommends that holders of common stock vote “FOR” the advisory resolution on executive compensation. |
Other Matters
The Board of Directors is not aware of any matters other than those set forth in this proxy statement that will be presented for consideration at the meeting. If any other matters properly come before the meeting, it is the intention of the person named in the accompanying proxy card to vote on such matters in accordance with both financial knowledge and management experience. He is Chairhis best judgment.
Shareholder Proposals
To be considered for inclusion in our proxy materials for presentation at the 2015 Annual Meeting of Common Shareholders, shareholder proposals must be received in writing by our Audit Committee.Secretary at our corporate headquarters at 2000 South Colorado Boulevard, Tower 1, Suite 3100, Denver, Colorado, by December 17, 2014.
Our executive officers as of April 29, 2013 are16, 2014 were as follows:
EXECUTIVE COMPENSATION
| Name & Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (11) | Option Awards ($) | Non-equity incentive plan comp ($) | Non-qualified deferred comp earnings ($) | All other comp ($) | Total ($) | |
| John McKowen, CEO, Chairman | 2012(1) | 175,400 | 50,000 | 31,284 | 256,684 | |||||
| 2011(2) | 193,042 | 26,660 | - | - | - | - | 26,589 | 246,291 | ||
| 2010(3) | 223,158 | - | - | - | - | - | 14,738 | 237,896 | ||
| Wayne Harding, CFO & Secretary | 2012(4) | 116,630 | 255,833 | 4,800 | 377,263 | |||||
| 2011(4) | 127,167 | 20,498 | 142,500 | - | - | - | 4,800 | 294,965 | ||
| 2010(4) | 97,750 | 1,833 | - | - | - | - | 14,880 | 114,463 | ||
| Gary Barber, COO & Pres. | 2012(5) | 106,976 | 32,500 | 14,800 | 154,276 | |||||
| 2011(6) | 109,000 | 31,162 | - | - | - | - | 33,700 | 173,862 | ||
| 2010(7) | - | - | - | - | - | - | 32,000 | 32,000 | ||
| John Stroh, President | 2012 | - | - | 241,666 | - | - | - | - | 241,666 | |
| 2011(8) | - | - | 101,247 | - | - | - | 76,045 | 177,292 | ||
| 2010(9) | 45,260 | 1,125 | - | - | - | - | 58,437 | 104,822 | ||
| (1) | Other Compensation is the payment of the health insurance benefit by the Company ($13,284) and office allowance ($18,000). | |||||||||
| (2) | Other Compensation is the payment of the health insurance benefit by the Company ($10,089) and office allowance ($16,500). | |||||||||
| (3) | Other Compensation is the payment of the health insurance benefit by the Company ($5,757) and auto allowance ($8,981). | |||||||||
| (4) | Other Compensation is the payment of the health insurance benefit by the Company. | |||||||||
| (5) | Other Compensation is office reimbursement of $10,000, and health insurance benefit of $4,800. Mr. Barber resigned as the Company’s President and Chief Operating Officer in November 2012. | |||||||||
| (6) | Other Compensation is the payment of the health insurance benefit by the Company ($3,200), office allowance ($12,000), and consulting fees ($18,500). | |||||||||
| (7) | Mr. Barber was paid as a contract employee during 2010. | |||||||||
| (8) | Mr. Stroh’s Other Compensation is the payment of contract pay. | |||||||||
| (9) | Mr. Stroh’s Other Compensation is the payment of contract pay of $54,666 and health insurance benefit payment by the Company of $3,771. | |||||||||
| (10) | Mr. Stroh became the President of TRWC, Inc. in August, 2009 and resigned in October, 2010. He is paid via a contract labor agreement. In 2009, Mr. Stroh was paid $61,840 in contract labor and $1,352 in health and dental insurance premiums. | |||||||||
| (11) | Stock award compensation is based on Restricted Stock Units granted, vested and issued during the year. For payroll tax purposes, and as reported here, valuation of the RSU grants that are vested is recorded through payroll at a 25% fair value discount due to large blocks and limitations on selling. This is based on outside executive compensation consultant’s opinion. For financial statement purposes, the full fair value of the grant is recorded, less expected forfeitures. | |||||||||
The following table sets forth certain information concerning outstanding option awards heldcompensation earned during the last three years by the PresidentJohn McKowen and Wayne Harding, who were our most highly compensatedonly two executive officers for the fiscal year ended December 31, 2012during 2013 and whom we refer to the "Namedherein as our Named Executive Officers":Officers:
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(5) | All Other Compensation ($) | Total ($) | ||||||||||||||
| John R. McKowen | 2013(1) | 246,010 | — | — | 38,284 | 284,294 | ||||||||||||||
| Chief Executive Officer | 2012(2) | 175,400 | 50,000 | 31,284 | 256,684 | |||||||||||||||
| 2011(3) | 193,042 | 26,660 | — | 26,589 | 246,291 | |||||||||||||||
| Wayne E. Harding III | 2013(4) | 123,772 | — | 83,333 | 4,800 | 211,905 | ||||||||||||||
| Chief Financial Officer and Secretary | 2013(4) | 116,630 | — | 255,833 | 4,800 | 377,263 | ||||||||||||||
| 2011(4) | 127,167 | 20,498 | 142,500 | 4,800 | 294,965 | |||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) |
| (5) | |||||||||
Outstanding Equity Awards at Year-End
The following table sets forth certain information concerning outstanding optionrestricted stock unit awards held by the President and our most highly compensated executive officers for the fiscal year endedat December 31, 2012 to the "Named2013 by our Named Executive Officers":
| Name | Grant Date | Estimated future payouts under non-equity incentive plan awards | Estimated future payments under equity incentive plan awards | All other stock awards: No. of shares of stock or units (#) | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards ($) | ||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||
| John McKowen | Oct 2010 | N/A | N/A | N/A | 1,480,948 | 2,480,947 | 2,480,947 | 0 | 0 | N/A | 4,561,000 |
| John McKowen | Jan 2012 | N/A | N/A | N/A | 466,667 | 1,400,000 | 1,400,000 | 0 | 0 | N/A | 2,218,000 |
| Gary Barber (1) | Oct 2010 | N/A | N/A | N/A | 0 | 0 | 0 | 0 | 0 | N/A | 1,701,000 |
| Wayne Harding | Oct 2010 | N/A | N/A | N/A | 200,000 | 700,000 | 700,000 | 0 | 0 | N/A | 1,292,000 |
| Wayne Harding | Jan 2012 | N/A | N/A | N/A | 166,667 | 500,000 | 500,000 | 0 | 0 | N/A | 792,000 |
Officers. The following table sets forth certain information concerning compensation paid to our directors for services as directors, butNamed Executive Officers did not including compensation for services as officers reported in the "Summary Executives Compensation Table” during the year endedhold any unexercised stock options at December 31, 2012:
| Name | Fees earned or paid in cash ($) | Stock awards ($) (3) | Option Awards ($) | Non-equity incentive plan compensa-tion ($) | Non-Qualified deferred compensation earnings ($) | All other compen-sation ($) | Total ($) |
| John McKowen (1) | - | - | - | - | - | - | - |
| John Stroh II (2) | 4,500 | 237,166 | - | - | - | - | 241,666 |
| Bradley Walker | 4,500 | 34,825 | - | - | - | - | 39,325 |
| Dennis Channer | 4,500 | 37,925 | - | - | - | 557 | 42,982 |
| Gregg Campbell | 4,500 | 37,925 | - | - | - | 500 | 42,925 |
Estimated Future Payments Under Equity Incentive Plan Awards | Grant Date Fair Value | ||||||||||||||||
Name | Grant Date | Threshold (#) | Target (#) | Maximum (#) | of Stock ($) | ||||||||||||
| John R. McKowen | October 2010 | 1,480,948 | 2,480,947 | 2,480,947 | 4,561,000 | ||||||||||||
| Wayne E. Harding III | October 2010 | 166,667 | 166,667 | 166,667 | 1,292,000 | ||||||||||||
Long-Term Compensation Plans and Stock Options
The boardBoard of directorsDirectors has adopted a Management Incentive Plan that contemplates the issuance of stock-based compensation as well as cash bonuses to certain executive officers and key employees of the Company.employees. The incentive plan is administered by the Company's board of directorsBoard’s Nominating, Compensation and Corporate Governance Committee under guidance from the Company’sBoard. The Management Incentive Plan authorizes our chief executive officer to approve grants of equity incentive awards to employees, except that grants to our chief executive officer or chief financial officer must be approved by the Board or the Nominating, Compensation and Corporate Governance Committee. It is contemplated that cash bonuses, RSUsrestricted stock units and options will be granted following the successful closing of an equity or debt funding and successful acquisitions by the Company.or an acquisition. The amount of the grants will be based on the value of the transaction, and participants arewill be designated by the Company's board of directorsBoard or Nominating, Compensation and Corporate Governance Committee upon recommendation by the Chief Executive Officer.our chief executive officer.
On May 6, 2005, the Company's board of directorsBoard adopted the Two Riversour 2005 Stock Option Plan, (“or 2005 Plan”)Plan, pursuant to which the boardBoard may grant options to purchase a maximum of 5,000,000 shares of Two Rivers common stock to key employees, directors and consultants. As of December 31, 2012,consultants options to purchase an aggregate of 1,668,200up to 5,000,000 shares of common stock (1,643,200 from the 2005 Plan and 25,000 from the 2011 Plan) were issued and outstanding consisting of options to purchase 1,623,200 shares of common stock at an exercise price of $1.25 per share, options to purchase an aggregate of 20,000 shares of common stock at an exercise price of $3.00 per share, and from our 2011 Plan, options to purchase 25,000 shares at $1.05 per share.
stock. During 2011, the Board authorized the issuance of 800,000 shares from the 2005 Plan as compensation for future debt and capital efforts by consultants. In 2011 and 2012, 600,000 shares were issued and properly expensed,under the 2005 Plan, leaving 200,000 shares available to be issued.
On August 26, 2011, the Board adopted our 2011 Long-Term Stock Plan, or 2011 Plan, which was approved by our shareholders on November 7, 2011. The 2011 Plan allows the Board to grant stock incentives to executives and permits our chief executive officer to grant stock incentives to non-executive employees, vendors and consultants for up to a combined total of 10,000,000 shares of common stock. The per-share exercise price of common stock options granted under the 2011 Plan may not be less than the fair market value of a share of common stock on the date of grant as determined by the board of directors and willBoard. Stock options must expire no later than the tenth anniversary of the date of grant. The boardgrant and may establishbe subject to vesting or other requirements which must be met prior toestablished by the exercise of the stock options.Board. In the event of a corporate transaction involving Two Riversour company (including without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the boardBoard may adjust outstanding awards to preserve the benefits or potential benefits of the awards.
Employment Agreements
We entered into an employment agreement with John McKowen, our Chief Executive Officer, on September 9, 2004 and outstanding.amended that agreement on June 15, 2005 and December 16, 2010. The initial two-year term of the contract renews automatically for successive one-year terms unless and until either party delivers notice of termination within 30 days of the expiration of the then-current term. Effective January 1, 2013, Mr. McKowen’s base salary, which had been decreased effective January 1, 2011 to $180,000 per year, was increased to $250,000 per year.
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We entered into an employment agreement with Wayne Harding, who then served as our Controller and now serves as our Chief Financial Officer, on November 1, 2008 an amended that agreement on December 16, 2010. The initial one-year term of the contract renews automatically for successive one-year terms unless and until either party delivers notice of termination within 30 days of the expiration of the then-current term. Effective January 1, 2013, Mr. Harding’s base salary was increased to $125,000.
Our employment agreements with Messrs. McKowen and Harding provide for accelerated stock vesting in the event of a change in control. Change in control is defined generally as the sale or other disposition to a person, entity or group of 50% or more of our consolidated assets.
BOARD OF DIRECTORS
Our current directors, all of whom have been nominated for re-election at the meeting, are as follows:
John R. McKowen has served as our Chief Executive Officer and Chairman of the Board since our company was founded in December 2002. Mr. McKowen served in a number of capacities at Navidec, Inc. (now BPZ Resources, Inc.), including as a director from 2002 to 2005, as president and chief executive officer from 2003 to 2004, and as a financial consultant involved in private, public and secondary financings from 1996 to 1999. Mr. McKowen began his career in the financial services industry in 1978 and worked as an independent consultant from 1984 to 2007. Mr. McKowen received a B.A. in economics from Metropolitan State College. He is 64 years old.
John Stroh II has served as one of our directors since September 2010. Mr. Stroh is the owner/managing broker of Southern Colorado Land and Livestock Company, a real estate management, appraisal, consulting, and brokerage firm. He has been a real estate broker since receiving his real estate broker license in the State of Colorado in 1976. In 1991, he passed the State of Colorado Certified Appraiser exam. Mr. Stroh is secretary of the Lower Cucharas Water Users Association, secretary of the Holita Ditch and Reservoir Companies, secretary of the Walsenburg Ditch Company, and chairperson of the Sangre de Cristo Habitat Partnership Program Committee. Mr. Stroh received his B.S. in Business Administration from Colorado State University, and he teaches real estate courses, including water law, broker and mandatory fair housing courses, at Trinidad State Junior College.
Dennis Channer has served as one of our directors since October 2010. Mr. Channer has 36 years of financial and investment management experience. Since 2001 Mr. Channer has been a principal at Cornerstone Investment Advisors LLC, a financial planning, portfolio and trust management firm. He served on the board of directors of AeroGrow International, Inc., a publicly traded provider of advanced indoor garden systems, in 2007 and 2008. In 1999 and 2000, he served as a senior consultant and vice president of Portfolio Management Consultants, Inc., a provider of wealth management services. From 1996 to 1999, Mr. Channer was the co-founder of Investors Independent Trust Company and served in various capacities, including managing director and chairman of the board. His background also includes experience as a Certified Financial Planner, Registered Investment Advisor, Certified Public Accountant and Controller, and he holds Certified Financial Planner, Accredited Estate Planner and Certified Public Accountant licenses in Colorado. He received his B.S. from Metropolitan State College.
Gregg Campbell has served as one of our directors since July, 2011. Mr. Campbell began his career in water with the Denver Board of Water Commissioners in 1974. Over a span of fourteen years with Denver Water, he served in various engineering capacities, was chief planner for the Denver water system, and oversaw the management of Denver’s multi-billion dollar water portfolio as chief of water rights acquisition, protection and development. In 1988 Mr. Campbell founded Kiowa Resources, Inc., a water investment and development venture. As president and chief executive officer of Kiowa, he directed the acquisition of senior South Platte River water rights and assets and the development of an innovative municipal water supply project concept that has been widely copied. In 1995, Mr. Campbell founded HydroSource, LLC to provide consulting and water rights brokerage services to buyers and sellers of water, water rights, and water storage reservoirs in both the public and private sectors of the Colorado Front Range. HydroSource specializes in assembling large blocks of water, water rights, and water storage for municipal and commercial customers, but provides equal attention to the needs of individual clients. Mr. Campbell has testified on multiple occasions as an expert on water rights, and water rights and water storage valuation, in Colorado water court and condemnation proceedings. Mr. Campbell brings to the Board of Directors an in-depth knowledge of water and water rights.
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Gus J. Blass III has served as one of our directors since February 2014. Since 1981 Mr. Blass has been a general partner for Capital Properties LLC, an Arkansas partnership that owns and manages over 1,000,000 square feet of warehouse space in Little Rock and invests in public and private companies. From 1984 to 2013, Mr. Blass was a principal at Falcon Securities, Inc., a FINRA-registered broker-dealer. Mr. Blass brings a wealth of board experience to Two Rivers. Currently he serves on the boards of: BancorpSouth, Inc., an NYSE-listed financial holding company; First Federal Bancshares of Arkansas, Inc., a NASDAQ-listed bank holding company; Heatwurx, Inc., a NASDAQ-listed developer of alternative methods of pavement repair; Berkley Partners, a hotel management company; Cajuns Wharf Corporation, a restaurant operator; and U.S. Bentonite, Inc., a mining company. He is also active on not-for-profit boards and civic activities. Mr. Blass served on the Arkansas Governor’s staff for the prior governor, David Pryor. Mr. Blass graduated from the University of Arkansas with a B.S. in Finance and Banking.
Board Committees
The Board of Directors has established an Audit Committee and a Nominating, Compensation and Corporate Governance.
Audit Committee
| ● | overseeing management’s establishment and maintenance of processes to provide for the reliability and integrity of our accounting policies, financial statements, and financial reporting and disclosure practices; |
| ● | overseeing management’s establishment and maintenance of processes to provide for an adequate system of internal control over our financial reporting and management’s policies and guidelines for the assessment and management of risk, and overseeing our compliance with laws and regulations relating to financial reporting and internal control over financial reporting; |
| ● | overseeing management’s establishment and maintenance of processes to provide for compliance with our financial policies; |
| ● | retaining our independent registered public accounting firm and overseeing the firm’s independence, qualifications and performance; and |
| ● | preparing the report required by the rules of the Securities and Exchange Commission to be included in annual proxy statements. |
Nominating, Compensation and Corporate Governance Committee
The members of the Nominating, Compensation and Corporate Governance Committee, or the NCCG Committee, are Gus Blass, Gregg Campbell and Dennis Channer. Mr. Brad Walker areCampbell chairs the other board members serving onNCCG Committee. The primary functions of the Audit Committee.NCCG Committee are:
| · | identifying and recommending to the Board of Directors for election or appointment qualified candidates for membership on the Board and the committees of the Board; |
| ● | reviewing director candidates proposed by shareholders; |
| ● | discussing and setting compensation for officers; |
| ● | developing and recommending to the Board corporate governance principles and monitor compliance with all such principles; |
| ● | proposing a slate of candidates for election as directors at each annual meeting; and |
| ● | developing and monitoring succession plans for members of the Board, the members of the committees of the Board, and the Chairs of those committees. |
The NCCG Committee approves employment agreements and bonuses paid to our executives. There is no set schedule for the payment of bonuses. Bonuses are considered when certain benchmarks are reach. The benchmarks can include such activities as a successful capital or debt raise, operational performance, and acquisitions of significant assets or agreements that are accretive to our business. Both the benchmarks and the amount and type of bonus are determined by the Board with input from the NCCG Committee.
In identifying and evaluating individuals qualified to become Board members, the NCCG Committee considers such factors as the members deem appropriate to assist in developing a board of directors and committees thereof that are diverse in nature and comprised of experienced and seasoned advisors. The NCCG Committee has not adopted a formal policy with regard to the consideration of diversity when evaluating candidates for election to the Board. However, the NCCG Committee believes that membership should reflect diversity in its broadest sense, but should not be chosen nor excluded based on race, color, gender, national origin or sexual orientation. In this context, the NCCG Committee and the Board consider a candidate’s experience, education, industry knowledge and, history with Two Rivers, and differences of viewpoint when evaluating the candidate’s qualifications for election to the Board. In evaluating such candidates, the NCCG Committee seeks to achieve a balance of knowledge, experience and capability in its composition. In connection with this evaluation, the Board determines whether to interview the prospective nominee, and if warranted, one or more directors interview prospective nominees in person or by telephone.
Audit Committee Report
The Audit Committee has reviewed and discussed the audited consolidated financial statements of Two Rivers and its subsidiaries for the year ended December 31, 2013, and has discussed these financial statements with the management of Two Rivers and Eide Bailly LLP, the independent registered public accounting firm of Two Rivers for 2013.
The Audit Committee also has received from, and discussed with, Eide Bailly LLP the matters required to be discussed by the Auditing Standards Board Statement of Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has also received and reviewed the required written disclosures and a confirming letter from Eide Bailly LLP under applicable requirements of the Public Accounting Oversight Board regarding Eide Bailly LLP’s independence, and has discussed the matter with Eide Bailly LLP.
Based upon its review and discussions of the foregoing, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the year ended December 31, 2013 be included in the Annual Report on Form 10-K of Two Rivers for the year ended December 31, 2013.
AUDIT COMMITTEE | |||
Gus J. Blass III Gregg Campbell Dennis Channer | |||
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DIRECTOR COMPENSATION
The following table sets forth information concerning compensation paid to our non-employee directors for services as directors in 2013:
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) | |||||||||
Gregg Campbell | 22,350 | 41,000 | 63,350 | |||||||||
Dennis Channer | 9,000 | 41,000 | 50,000 | |||||||||
John Stroh II | 9,000 | 30,750 | 39,750 | |||||||||
Bradley Walker(1) | 9,000 | 30,750 | 39,750 | |||||||||
________________________
| (1) | Mr. Walker resigned from the Board of Directors in February 2014. |
| (2) | Stock awards are granted the first calendar quarter following the calendar year of service. |
Since October 1, 2012, each non-employee director receives $2,000 per calendar quarter and $1,000 for each meeting in person. For the first year of service, a non-employee director receives 5,000 shares of common stock per calendar quarter. After a full year of service, a non-employee director receives 7,500 shares of common stock per calendar quarter. The Chairs of the Audit Committee and of the Nominating, Compensation and Corporate Governance Committee receive an additional 2,500 shares of common stock per calendar quarter.
In 2010 the Company established a separate Compensation, Governance & Nominating Committee. The Chairfirst quarter of this Committee is2014, we granted stock options for the following numbers of shares of common stock, at an average valuation of $1.03 per share: Gregg Campbell. Mr.Campbell, 40,000 shares; Dennis Channer, 40,000 shares; John Stroh, 30,000 shares; and Mr. Brad Walker, 30,000 shares.
CORPORATE GOVERNANCE
Director Nomination Process
For a discussion of our process for nominating directors, please see “Board of Directors—Board Committees—Nominating, Compensation and Corporate Governance Committee.”
Communicating with Independent Directors
The Board of Directors will give appropriate attention to written communications that are submitted by shareholders and will respond if and as appropriate. Our Chairman of the Board is primarily responsible for monitoring communications from shareholders and for providing copies or summaries of those communications to the other board members servingdirectors as he considers appropriate.
Communications are forwarded to all directors if the communications relate to important substantive matters and include suggestions or comments that the Chairman of the Board considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications.
Shareholders who wish to send communications on this Committee.any topic to the Board should address such communications to the Board in care of our Secretary at Two Rivers Water and Farming Company, 2000 South Colorado Boulevard, Tower 1, Suite 3100, Denver, Colorado 80222.
Code of Ethics
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Conflicts of Interest
Our directorsofficers and officersdirectors are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including among other things, time, efforts and corporationcorporate opportunity, involved in participation with such other business entities. While each officer and director of our business is engaged in business activities outside of our business, they devote to our business such time as they believe to be necessary.
Presently no requirement is contained in our Articles of Incorporation, Bylaws, or minutes which requirethat requires our officers and directors of our business to disclose to us business opportunities whichthat come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities whichthat come to their attention, in their capacity as an officer, and/or director or otherwise. Excluded from this duty would be opportunities whichthat the person learns about through his involvement as an officer and director of another company.
Compensation Committee Interlocks and Insider Participation
Since January 1, 2013, none of our executive officers has served as a member of either the board of directors or compensation committee of any entity, one or more of whose executive officers served as a member of either the Board of Directors or its Nominating, Compensation and Corporate Governance Committee.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Indemnification of Directors and Officers
As permitted by the Colorado Corporation Act, the personal liability of directors for monetary damages for breach or alleged breach of their duty of care is limited. In addition, as permitted by the Colorado Corporation Act, our Bylaws provide generally that we shall indemnify our directors and officers to the fullest extent permitted by Colorado law, including those circumstances in which indemnification would otherwise be discretionary.
We have agreed to indemnify each of our directors and officers to provide the maximum indemnity allowed to directors and executive officers by the Colorado Corporation Act and our Bylaws, as well as certain additional procedural protections. In addition, the indemnification agreements provide generally that we will advance expenses incurred by directors and officers in any action or proceeding as to which they may be indemnified.
The indemnification provision in our Bylaws, and the indemnification agreements we have entered into with our directors and officers, may be sufficiently broad to permit indemnification of the officers and directors for liabilities arising under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
We maintain director and officer insurance providing for indemnification of our directors and officers for certain liabilities, including certain liabilities under the Securities Act. We also maintain a general liability insurance policy that covers certain liabilities of directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.
There is no intentionpending litigation or proceeding involving any of merging withour directors or acquiring an affiliate, associate personofficers to which indemnification is required or business opportunity from any affiliate or any clientpermitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.
RELATED-PARTY TRANSACTIONS
The following discussion relates to certain transactions that involve both our company and one of our executive officers, directors, director nominees or five percent shareholders, including their immediate family members, each of whom we refer to as a “related party.” For purposes of this discussion, a “related-party transaction” (as defined under Item 404 of Regulation S-K) is a transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships in which we participate (i) that involves an amount in excess of $120,000; and (ii) in which a related party has a direct or indirect material interest. The Board of Directors recognizes that related party transactions present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof) and therefore follows the procedures as described below to address such person.risks.
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The Board is required to review all related party transactions. We are prohibited from entering or continuing a material related party transaction that has not been reviewed and approved or ratified by the Board. Additionally, in transactions where an executive officer is related to any of our goods or services provider, the Board must approve the transaction. In reviewing a related party transaction the Board considers all of the relevant factors surrounding the transaction including:
| ● | whether there is a valid business reason for us to enter into the related party transaction consistent with the best interests of Two Rivers and our shareholders; |
| ● | whether the transaction is negotiated on an arm’s-length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to employees generally; |
| ● | whether the Board determines that it has been duly apprised of all significant conflicts that may exist or may otherwise arise on account of the transaction, and it believes, nonetheless, that we are warranted in entering into the related party transaction and have developed an appropriate plan to manage the potential conflicts of interest; |
| ● | whether the rates or charges involved in the transaction are determined by competitive bids, or the transaction involves rates or charges fixed in conformity with law or governmental authority; and |
| ● | whether the interest of the related party or that of a member of the immediate family of the related party arises solely from the ownership of our class of equity securities and all holders of our equity securities received the same benefit on a pro-rata basis. |
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STOCK OWNERSHIP
Directors, Officers and Principal Shareholders
The following table sets forth information regarding the beneficial ownership of common stock as of April 16, 2014 for (a) each person known to us to own beneficially 5% or more of the outstanding shares of common stock, (b) each of our directors and Named Executive Officers, and (c) all of our directors and executive officers as a group.
Beneficial ownership is calculated in accordance with the rules of the SEC, which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include shares of common stock issuable upon the exercise of options, or upon the vesting of restricted stock units, by May 11, 2014 (60 days after April 16, 2014). Except as otherwise indicated, all of the shares reflected in the table are common stock and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws.
Percentage ownership calculations are based on 24,879,549 shares outstanding as of April 16, 2014. Addresses of named beneficial owners are in care of Two Rivers Water and Farming Company, 2000 South Colorado Boulevard, Tower 1, Suite 3100, Denver, Colorado 80222.
Shares Beneficially Owned | ||||||||
| Name of Beneficial Owner | Number | Percentage | ||||||
John R. McKowen (1) | 4,651,620 | 17.0 | % | |||||
Wayne E. Harding III (2) | 814,756 | 3.3 | ||||||
John Stroh II | 653,902 | 2.6 | ||||||
Dennis Channer | 50,000 | * | ||||||
Greg Campbell | 35,000 | * | ||||||
Gus Blass | — | — | ||||||
All directors and executive officers as a group (6 persons) | 6,205,278 | 22.5 | ||||||
| * | Less than 1%. |
| (1) | Includes 2,480,948 shares subject to restricted stock units. |
| (2) | Includes (a) 166,667 shares subject to restricted stock units and (b) 6,666 shares owned by an individual retirement account for the benefit of Mr. Harding’s spouse. |
Section 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEBeneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires our Officersofficers and Directors,directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of copies of such reports received, and representations from certain reporting persons, we believe that, during the fiscal year ended December 31, 2012,2013, some of the Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were not filed in compliance with all applicable requirements, except for Brad Walker who owns 47,500 shares of the Company’s common stock.requirements.
| Title of Class | Name & Address of Beneficial Owner | Amount & Nature of Beneficial Owner | % of Class (1) |
| Common Shares | John McKowen (CEO & Chairman of the Board) (2), 2000 S Colorado Blvd, Ste 1-3100, Denver CO 80222 | 4,318,287 | 15.28% |
| Common Shares | Wayne Harding (CFO & Secretary) (3), 2000 S Colorado Blvd, Ste 1-3100, Denver CO 80222 | 540,423 | 1.91% |
| Common Shares | John Stroh II, (Board member) (5), 2000 S Colorado Blvd, Ste 1-3100, Denver CO 80222 | 950,357 | 3.36% |
| Common Shares | Dennis Channer (Board member) (6), 2000 S Colorado Blvd, Ste 1-3100, Denver CO 80222 | 50,000 | 0.18% |
| Common Shares | Brad Walker, (Board member) (7), 2000 S Colorado Blvd, Ste 1-3100, Denver CO 80222 | 47,500 | 0.17% |
| Common Shares | Greg Campbell, (Board member) (8), 2000 S Colorado Blvd, Ste 1-3100, Denver CO 80222 | 35,000 | 0.12% |
| Total for All Directors & Executive Officers as a Group | 5,941,567 | 21.02% | |
Year Ended | |||
2012 | 2011 | ||
(in thousands) | |||
| Audit Fees(1) | $94,833 | $60,500 | |
| Audit-related Fees (2) | - | - | |
| Tax Fees(3) | - | - | |
| All Other Fees(4) | - | - | |
| Total Fees | $94,833 | $60,500 | |
Year Ended December 31, | ||||||||
Fee Category | 2012 | 2013 | ||||||
| (in thousands) | ||||||||
| Audit fees (1) | $ | 101,345 | $ | 92,833 | ||||
| Audit-related fees (2) | — | — | ||||||
| Tax fees (3) | — | — | ||||||
| All other fees (4) | — | — | ||||||
| Total fees | $ | 101,345 | $ | 92,833 | ||||
| _____________________ |
| (1) |
| (2) |
| (3) | Tax |
| (4) |
All audit and non-audit services provided by Eide Bailly, LLP are pre-approved by the Audit Committee on a case-by-case basis, which considers whether the provision of non-audit services is compatible with maintaining the independent registered public accounting firm’s independence. All of the non-audit services provided by our independent registered public accounting firm in 2012 were pre-approved in accordance with this policy.
AS FILED WITH THE SEC, IS INCLUDED IN OUR 2013 ANNUAL REPORT TO SHAREHOLDERS, WHICH MAY BE ACCESSED OVER THE INTERNET AS SET FORTH IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS SENT TO OUR COMMON SHAREHOLDERS OF RECORD AS OF APRIL 16, 2014. YOU MAY VIEW AND ALSO DOWNLOAD OUR 2013 ANNUAL REPORT TO SHAREHOLDERS AT www.proxyvote.com. A reverse stock split refers to a reduction in the number of outstanding shares of a class of a corporation's capital stock, which may be accomplished, as in this case, by reclassifying and combining all of our outstanding shares of Common Stock into a proportionately smaller number of shares. For example, if the Board decides to implement a 1-for-2 reverse stock split of Common Stock, then a stockholder holding 10,000 shares of Common Stock before the reverse stock split would instead hold 5,000 shares of Common Stock immediately after the reverse stock split. Each stockholder's proportionate ownership of outstanding shares of Common Stock would remain the same, except that stockholders that would otherwise receive fractional shares as a result of the reverse stock split will have their stock received rounded up to the next whole share in lieu of fractional shares. As a result, no holders of Common Stock would be eliminated in the event that the proposed reverse stock split is implemented and, under the Colorado Business Corporation Act, shareholders are not entitled to dissenters’ or appraisal rights.