UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities ExchangeExchange Act of 1934 (Amendment No. )
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Applied Minerals, Inc.
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Applied Minerals, Inc.
Notice of 20172019 Annual Meeting and
Proxy Statement
Annual Meeting of Stockholders
December 7, 20174, 2019 at 2:3000 PM Eastern Time
304 Hudson300 Vesey Street,
Third 12th Floor
New York, NY 1001310282
Letter from your Board of Directors
October 21, 2017
22, 2019
Dear Fellow Stockholders:
We invite you to attend the Annual Meeting of Applied Minerals, Inc., which will be held at 2:3000 PM Eastern on December 7, 20174, 2019 at 304 Hudson300 Vesey Street, Third12th Floor, New York, NY 10013.N.Y. 10282. Doors open at 2:15 PM. The meeting will be webcast and you can listen to it by logging on at 1:30 PM Eastern.www.virtualshareholdermeeting.com/AMNL2017. The attached Notice of Annual Meeting and Proxy Statement give details of the business to be conducted at the meeting.
Extending the Maturity Date of the Series A Notes
An important development during the last year has been our agreement with the holders of our convertible Series A Notes (the “Series A Agreement”) that would extend the maturity date of the Series A Notes until May 2023. The Series A Notes currently mature in November 2018, but that date can be changed to November 2019 unless an Event of Default has occurred and is continuing.
Extending the maturity date would provide the Company a longer runway to convert our pipeline of commercial opportunities. If we are successful in taking advantage of the longer runway, we should be in a better position to refinance or pay off both series of our outstanding notes, the Series A Notes and the convertible Series 2023 Notes (collectively, the “Notes”) at maturity.
As of October 1, 2017, the Series A Notes had an outstanding principal balance of approximately $25.2 million and the Series 2023 Notes, which mature in August 2023, had a principal balance of approximately $15.5 million.
In order to induce the holders of the Series A Notes to extend the maturity date, we agreed to (i) lower the price at which the Series A Notes are convertible into shares of Common Stock, (ii) through a separate but related agreement (the “Series 2023 Agreement”), lower the price at which the Series 2023 Notes are convertible into Common Stock, and (iii) issue warrants to purchase Common Stock to the holders of the Series A and the Series 2023 Notes. The reduction of the conversion prices of the Notes means that more shares would be issued on conversion if the Notes are converted and as a result more shares must be reserved for the possible conversion of the Notes.
Under the terms of the Series A and Series 2023 Agreements, the changes in the Notes (including the extension of the maturity date of the Series A Notes) and the issuance of the warrants will become effective when our Certificate of Incorporation is amended to increase the number of authorized shares of Common Stock.
Our Certificate of Incorporation currently authorizes 250 million shares of Common Stock. All but 15,370,374 of those shares have been issued or reserved for issuance. In order to assure that there will be sufficient shares of Common Stock available for issuance when and if the holders of the Notes convert the Notes and/or exercise the warrants issued to them as part of the agreements, we need to reserve an additional 42,202,533 shares of Common Stock and in order to do that, we need to amend the Certificate of Incorporation to increase the number of authorized shares.
The proposed amendment to the Certificate of Incorporation would increase the number of authorized shares of Common Stock from 250 million to 400 million. In addition to reserving shares as discussed above, we plan to reserve shares for issuance on the exercise of certain options.
Part 7 of the Proxy Statement discusses in detail the matters discussed above.
It is important to note that the amendment of the Certificate of Incorporation requires the favorable vote of a majority of the outstanding shares. A failure to vote is the equivalent of a “no” vote.
Presentation at the Meeting and Q&A
At the Annual Meeting, we will have a full presentation of our achievements since the last Annual Meeting and our objectives for 2018. There will be a question and answer session at the meeting.
How to Vote
Record Owners: Mail. Use the proxy card delivered with the proxy statement, sign it, and and mail it back in the self-addressed envelope we have supplied or by mailing the proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Internet. Go to proxyvote.com and follow the directions. Please have the proxy card in hand when accessing proxyvote.com because you will need the 16-digit control number on the proxy card. Or scan the QR Barcode on your proxy card and vote immediately, if you have a QR Barcode reader.
Telephone. Use any touch-tone telephone to call 1-800-690-6903 and follow the instructions. Please have the proxy card in hand when accessing proxyvote.com because you will need the 16-digit control number on the proxy card.
At the meeting.You may vote at the meeting with proper identificationidentification.
Beneficial owners. Voting instruction form. You will receive from your broker or custodian a voting instruction form (or other means) to instruct your broker or custodian how to vote. Follow the directions on the form in order to vote. In order for your shares to be voted on the election of directors and executive compensation (Say-on-Pay), you must provide instructions.
At the meeting.Beneficial owners who wish to vote at the meeting must obtain from the broker or custodian a written authorization for the beneficial owner to vote the beneficial owner’s shares.
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We hope that you will attend the meeting or listen in to the webcast of the meeting. We look forward to talking with as many of you as possible.
Very Truly Yours,
Your Board of Directors
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APPLIED MINERALS. INC.
Notice of 20172019 Annual Meeting of Stockholders
Date: | December | |
Time: | 2: | |
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Record date: | October | |
Items of business: | ● | To elect |
● | To approve, on a non-binding advisory basis, the compensation that has been paid to our Named Executive | |
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| To approve an amendment to the Certificate of Incorporation increasing the total number of authorized shares | |
● | To ratify the selection of | |
● | To transact other business that may properly come before the Annual |
By order of the Board of Directors
William Gleeson
Secretary
New York, New York
October 21, 201722, 2019
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Equity Compensation Plan Information | 35 |
Part 7 Proposals to be Voted on at the Meeting |
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Part 1: Information about the Meeting
This Proxy Statement was first sent, given, or released to stockholders on October 21, 2017.22, 2019. It is furnished in connection with the solicitation of proxies. The proxies are to be voted at the Annual Meeting of Stockholders of Applied Minerals Inc. (the “Company”) for the purposes set forth in the accompanying Notice of Annual Meeting. The meeting will be held at 2:3000 PM Eastern Time on December 7, 2017 at 304 Hudson4, 2019 300 Vesey Street, Third12th Floor New York, NY 10013.10.
Stockholders who execute proxies retain the right to revoke them at any time before the shares are voted by proxy at the meeting. A stockholder may revoke a proxy by delivering a signed statement to our Corporate Secretary revoking the proxy at or prior to the Annual Meeting, or by timely executing and delivering, by Internet, mail, or in person at the Annual Meeting, another proxy dated as of a later date.
Internet Availability of Proxy Materials |
We are furnishing proxy materials to our stockholders primarily via the Internet instead of mailing printed copies of those materials to each stockholder. By doing so, we save costs and reduce the environmental impact of our Annual Meeting. On October 22, 2019, we mailed a Notice of Internet Availability of Proxy Materials to our stockholders. The Notice of Internet Availability of Proxy Materials contains instructions about how to access our proxy materials and vote online. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via e-mail unless you elect otherwise.
How to Vote |
Record Owners: You may vote by mail. You can vote by mail using the proxy card delivered with the proxy statement, if you requested a paper proxy statement, and mailing it back in the self-addressed envelope we have supplied or by mailing the proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Proxy cards submitted by mail must be received by the time of the Annual Meeting for your shares to be voted.
You may vote by Internet. You can vote by Internet by going to proxyvote.com and following the directions. Please have the proxy card or the Notice of Internet Availability in hand when accessing proxyvote.com because you will need the 16-digit control number on the proxy card.card or the Notice of Internet Availability. Or you can scan the QR Barcode on your proxy card and vote immediately, if you have a QR Barcode reader.
You may vote by phone. Use any touch-tone telephone to call 1-800-690-6903 and follow the instructions. Please have the proxy card or the Notice of Internet Availability in hand when accessing proxyvote.com because you will need the 16-digit control number on the proxy card.card or the Notice of Internet Availability.
You can use the Internet or telephone to transmit voting instructions up until 11:59 P.M. Eastern Time on December 6, 2017.3, 2019. Internet and telephone voting facilities for record holders are available 24 hours a day. If you do not have the 16-digit control number, you may contact Broadridge Shareholder Services at 877-830-4936 or shareholder@broadridge.com.
Beneficial owners.Voting instruction form. You will receive from your broker or custodian a voting instruction form (or other means) to instruct your broker or custodian how to vote. Follow the directions on the form in order to vote. PLEASE PROVIDE VOTING INSTRUCTIONS AS TO ALL OF THE PROPOSALS TO BE VOTED ON. IN ORDER FOR YOUR SHARES TO BE VOTED ON THE FOLLOWING PROPOSALS — THE ELECTION OF DIRECTORS AND EXECUTIVE COMPENSATION (SAY-ON-PAY) ---— YOU MUST PROVIDE INSTRUCTIONS.
Voting at the meeting.If you wish to vote at the meeting, you must obtain from your broker or custodian, and present at the meeting, a “legal proxy,” which is a written authorization from the broker or custodian authorizing the beneficial owner to vote the beneficial owner’s shares at the meeting.
Webcast of Meeting; Asking Questions
The meeting will be webcast at www.virtualshareholdermeeting.com/AMNL2017. Stockholders and others may listen to the meeting by logging into that address.
To ask questions if you are listening to the webcast, you will need the 16-digit control number on your proxy card or on the voting instruction form sent by your broker or custodian.
Solicitation of Proxies |
The Board of Directors of the Company is soliciting the proxy accompanying this Proxy Statement. Proxies may be solicited by officers, directors, and employees of the Company, none of whom will receive any additional compensation for their services. These solicitations may be made personally or by mail, facsimile, telephone, messenger, email, or the Internet. The Company will pay persons holding shares of Common Stock in their names or in the names of nominees, but not owning such shares beneficially (such as brokerage houses, banks, and other fiduciaries) for the expense of forwarding solicitation materials to their principals. The Company will pay all proxy solicitation costs.
Householding |
To reduce costs and reduce the environmental impact of our Annual Meeting, a single proxy statement, annual report, and Form 10-Q for the three months ended June 30, 20172018 will be delivered in one envelope to certain stockholders having the same last name and address and to individuals with more than one account registered at our transfer agent with the same address, unless contrary instructions have been received from an affected stockholder. Stockholders participating in householding will continue to receive separate proxy cards. If you are a registered stockholder and would like to enroll in this service or receive individual copies of this year’syear’s and/or future proxy materials, please contact our transfer agent, Broadridge Corporate CompanyIssuer Solutions, by phone at 1-(800) 542-1061 or mail at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. If you are a beneficial stockholder, you may contact the broker or bank where you hold the account.
Record Date; Shares Eligible to Vote; Quorum
Record Date; Shares Eligible to Vote; Quorum |
Stockholders of record at the close of business on October 13, 201715, 2019 will be entitled to vote at the meeting on the basis of one vote for each share held. On October 13, 2017, there were 136,338,949 shares of Common Stock outstanding and 663outstanding. As of October 15, 2019, there were 615 record holders of the Company’s Common Stock.
The presence of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting (68,169,475(175,513,549 shares), in person or represented by proxy, is necessary to constitute a quorum. Abstentions and “broker non-votes” are counted as “present and entitled to vote” for purposes of determining a quorum.
Election of Directors |
SixEight directors are to be elected at the Annual Meeting to hold office until the next Annual Meeting of Stockholders or until their respective successors are elected and qualified. If, for any reason, the directors are not elected at an Annual Meeting, they may be elected at a special meeting of stockholders called for that purpose in the manner provided by the By-Laws of the Company (“By-Laws”).qualified or until such director's earlier resignation or removal.
The Board of Directors expects that each of the nominees will be available for election, but if any of them is unable to serve at the time the election occurs, the proxy will be voted for the election of another nominee designated by our Board.
If, for any reason, the directors are not elected at an Annual Meeting, they may be elected at a special meeting of stockholders called for that purpose in the manner provided by the By-Laws of the Company (“By-Laws”).
Voting Procedures and Votes Required for Election of Directors and Approval of Proposals |
Voting Procedures and Votes Required for Election of Directors and Approval of Proposals
Voting of proxies
All proxies solicited by the Company, whether received by means of a proxy card, telephone, or the Internet, will be voted, and where a choice is made with respect to a matter to be voted on, the shares will be voted in accordance with the specifications so made.
Except for broker non-votes (explained below), if a proxy is submitted without indicating that the shares are to be cast (i) FOR all nominees (ii) WITHHOLD for all nominees or (iii) FOR all except specified nominee(s), it will be deemed to grant authority to vote FOR all nominees presentedto serve as directors as set forth in Part 7 – “Proposals to be voted on” and discussed in Part 2 “Information concerning Directors“ to serve as directors..
Except for broker non-votes, if a Proxyproxy is submitted without indicating voting instructions on Proposal 2 (Say-on-Pay), Proposal 3 (amendment ofto the Certificate of Incorporation to authorize additional shares of Stock)Incorporation), or Proposal 4 (ratification of independent auditor), it will be deemed to grant authority to vote FOR the Proposal(s) as to which no instruction is given.
Voting of shares held of record, but not beneficially, by brokers and other custodians
Beneficial owners will receive with this Proxy Statement a voting instruction form or other means, as specified by the broker or custodian, to instruct your broker, custodian, or other fiduciary how to vote. Beneficial owners may instruct the broker or custodian or other fiduciaries how to vote the shares through the voting instruction form or other means. If you wish to vote the shares you own beneficially at the meeting, you must request and obtain from your broker or other custodian and bring to the meeting, a “legal proxy” (a written authorization from the broker or custodian authorizing you to vote at the meeting).
Tabulation of shares present at meeting and tabulation of votes
Employees of the Company will tabulate the shares present at the meeting and the votes cast. We expect to report the final vote tabulation on a Form 8-K filed with the SEC within four business days of the Annual Meeting.
Vote standard for election of directors; additional nominations
The directors will be elected by a plurality of the votes cast, meaning the directors receiving the largest number of “FOR” votes will be elected to the open positions. The Company’sCompany’s By-Laws contain advance notice provisions for nominations for director by stockholders. If a stockholder makes a nomination that is not made in accordance with such advance-notice provisions, the nomination may not be voted on at the meeting. As of the date of this proxy statement, the date for stockholder to comply with the advance notice provisions, and thus to be eligible to make a nomination at the meeting, has passed
Broker Non-Votes
If you are the beneficial owner of shares held by a broker or other custodian and you instruct the broker or custodian to vote but choose not to provide instructions as to one or more ballot items, your shares are referred to as “uninstructed shares” as to the ballot items on which you do not provide instructions. Whether your broker or custodian has the discretion to vote these shares on your behalf depends on the ballot item. See table below. If the broker or custodian has discretion, the broker or custodian may vote as it chooses. If the broker or custodian does not have discretion to vote on a proposal, the shares will not be voted on that proposal and are referred to as “broker non-votes.”non-votes” as to that proposal.
Quorum
Quurum
Shares represented by proxies submitted without instructions or with instructions only on some issues or with withhold or absentions as well as shares represented by broker non-votes will be included in the number of shares present at the Annual Meeting to determine whether a quorum is present.
Vote required for approval
The following table summarizes the votes required for passage of each proposal, the effect of abstentions on the voting of shares, and the effect of uninstructed shares held by brokers or other custodians on the voting of such shares.
Votes Required for Approval | Abstentions Is Vote Cast or Not Cast? | Broker Non-Votes Is Vote Cast or Not Cast? | ||||
Election of directors | Plurality of shares cast | Vote not cast | Vote not cast | |||
Advisory vote on executive compensation (“Say-on-Pay”) | Majority of shares cast | Vote not cast | Vote not cast | |||
Amendment | Majority of outstanding shares | Vote not cast | Broker or custodian may vote using its discretion | |||
Ratification of independent auditor | Majority of shares cast | Vote not cast | Broker or custodian may vote using its discretion |
Voting on Other Matters |
Under the Company’sCompany’s By-Laws, if other matters in addition to those listed in the Notice are properly presented at the Annual Meeting for consideration, the persons appointed as proxies by the Board of Directors (the persons named on your proxy card if you are a stockholder of record) will have the discretion to vote the proxies they hold on those matters for you and will follow the instructions of the Board of Directors. However, the Company’s By-Laws contain advance notice provisions for proposals to be made by stockholders. If a stockholder offers a proposal for a vote that is not made in accordance with such advance-notice provisions, the proposal may not be voted on at the meeting. As of the date of this proxy statement, the date for a stockholder to comply with the advance notice provisions, and thus to be eligible to make a proposal at the meeting, has passed.
Part 22: Information concerningConcerning Directors
The Company’s directors are to be elected at each Annual Meeting of Stockholders. The Company’s Certificate of Incorporation provides that the number of directors is to be fixed from time to time by resolution of the Board of Directors, and the Board of Directors has fixed the number at six.
At this Annual Meeting, sixeight directors are to be elected, and each director to serve until the next Annual Meeting of Stockholders or until such director’sdirector’s successor is elected and qualified.qualified or such director resigns or is removed. The Board of Directors’ nominees for the Board of Directors are:
| ● | Mario Concha |
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● | John Levy |
● | Michael Barry |
● | Robert Betz |
● | Michael Pohly |
● | Geoffrey Scott |
● | Ali Zamani |
● | Alexandre Zyngier |
Information about Nominees |
The following table provides the names, ages, positions, with the Company,ages and principal occupations of our current directors who have been nominated for election as a director at the Annual Meeting:directors:
Name | Age |
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Mario Concha |
| President and CEO since September 2019; Chairman since
| President and CEO of | |||
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Robert T. Betz |
| Director since 2014 | Owner, Personal Care Ingredients | |||
John F. Levy | 65 | Vice Chairman since 2016; Director since 2008 | CEO of Sticky fingers Restaurant, LLC | |||
Michael Pohly | 50 | Director since 2018 | Founder and Managing Member of Goshawk Partners, LLC. | |||
Geoffrey Scott | 71 | Director since 2019 | Private Investor | |||
Ali Zamani |
| Director since 2014 | Managing Partner, | |||
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AllThe directors are elected to serve until the next annual meeting of the nominees are incumbents and their current terms expire at 2017 Annual Meeting.shareholders.
Information about persons nominated by the BoardBackground of Directors for the position of director of the Company is listed below, including brief biographies. Each biographic summary is followed by a brief summary of certain experiences, qualifications, attributes or skills that led the Board to determine that each nominee is qualified to, and should, serve as a director for the Company. General information regarding the nomination process is included under the “Governance and Nominating Committee and Nomination Process” heading.Officers
Mario Concha, Non-Executive Chairman and Director
Mr. Concha is the President of Mario Concha and Associates, LLC, a firm providing consulting services to senior executives and members of boards of directors. In addition to providing consulting services, he He serves on the board of the National Association of Corporate Directors, Atlanta Chapter. He has served as a director of Arclin, Ltd., a manufacturer of specialty resins, and Auro Resources, Corp, a mineral exploration company with holdings in Colombia’s gold region. Prior to founding Mario Concha and Associates in 2005, Mr. Concha was an officer of Georgia Pacific Corporation and president of its Chemical Division from 1998 to 2005. Prior to Georgia Pacific, Mr. Concha participated in the formation of GS Industries, a manufacturer of specialty steels for the mining industry, through a leveraged buyout of Armco Inc’sInc.’s Worldwide Grinding Systems Division. He then served as President of its International Division from 1992 to 1998. From 1985 to 1992, Mr. Concha was Vice President-International for Occidental Chemical Corporation. Prior to Occidental Chemical, he served in several senior management positions at Union Carbide Corporation in the United States and overseas.
Mr. Concha is a graduate of Cornell University with a degree in Chemical Engineering. He has attended the Advanced Management Program at the University of Virginia's Darden School of Business and the NACD-ISS accredited Director's College at the University of Georgia's Terry College of Business. He is a member of the National Association of Corporate Directors, the American Chemical Society, and the American Institute of Chemical Engineers.
Key attributes, experience and skills:skills: Mr. Concha has over 40 years experience as a hands-on corporate executive. He has first-hand industry knowledge, gained from senior executive positions in various industries, including chemicals, plastics, forest products, metals, and mining. In addition to manufacturing operations, he has had extensive involvement in marketing, sales, and finance. Mr. Concha also brings corporate governance experience, having served on both public and private company boards.
Michael Barry, Director
Mr. Barry is the General Counsel and Chief Compliance Officer at Samlyn Capital, LLC. Prior to joining Samlyn Capital, LLC in 2009, Michael was a Partner at Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. in New York City from 2006 through 2009, and a corporate associate from 2000. Prior thereto, he was an associate at Skadden, Arps, Slate, Meagher and Flom LLP in New York City. Michael began his career as an associate at Whitman, Breed, Abbott & Morgan in New York City.
Key attributes experience and skills. Mr. Barry is expert in fiduciary duties of directors under Delaware law.
Robert T. Betz, Director
From 2000 through his retirement in 2002, Mr. Betz was the President of Cognis Corp., the North American division of Cognis GmbH, a $4 billion worldwide supplier of specialty chemicals and nutritional ingredients that was spun off from Henkel AG & Company ("Henkel"). From 1989 through 2000, Mr. Betz held a number of management positions at Henkel, including Executive VP and President of its Emery Group, a leading manufacturer of oleochemicals, and President of its Chemicals Group for North America.
From 1979 through 1989, Mr. Betz worked in a number of manufacturing and operations capacities for the Emery Division of National Distillers and Chemicals Corp., eventually rising to President of the division. Mr. Betz began his career in the specialty chemicals industry by joining Emery Industries in 1963. Between 1963 and 1979 he worked for the company as Market Development Representative, Manager of Corporate Planning, Vice President of Operations - Emery (Canada), Manager of Commercial Development, and General Manager of Business Groups. Emery Industries was sold to National Distillers and Chemicals Corp. in 1979.
Since 2003, Mr. Betz has been the owner of Personal Care Ingredients, LLC, a privately-owned marketer of natural products to the personal care industry. Mr. Betz also serves as a director for Hightower Petroleum, a marketer of various energy products.
Mr. Betz holds a B.S. in Chemical Engineering and an M.B.A., both degrees from the University of Cincinnati. He has also attended the Program for Management Development at Harvard University.
Key attributes experience and skills. During Mr. Betz’s career, he has been involved in developing new products or new markets for existing products. Several of these products grew into sizeable businesses. He managed multiple chemical manufacturing facilities and managed a multi-billion dollar polyethylene business. He was responsible for profit and loss for businesses with sales of $900 million. While heading the chemical operations, he was responsible for all aspects of the business: manufacturing, sales, R&D, IT, HS&E, HR, purchasing, engineering, and legal. His career has continuously involved developing, manufacturing, and selling products directed at most of the markets that Applied Minerals is attempting to penetrate. Since his retirement, he served on the boards of three chemical-related, private companies: Plaza Group, Syrgis, and Hightower Petroleum.
John F. Levy, Vice Chairman and Director
Since May 2005, Mr. Levy has served as the Chief Executive Officer of Board Advisory, a consulting firm that advises public companies in the areas of corporate governance, corporate compliance, financial reporting, and financial strategies.Additionally, Mr. Levy currently serves as the Chief Executive Officer of Sticky Fingers Restaurant, LLC, a South Carolina based barbeque restaurant chain, and has held this position since August 2019. Mr. Levy previously served as a business consultant with Sticky Fingers Restaurants, LLC from February 2019 to August 2019 when he assumed his current role with the company. In addition to his service on theApplied Minerals, Inc. board of directors, of three public companies including Applied Minerals. Mr. Levy has been a director, chairman of the Audit Committee, and a member of the Governance and Nominating Committee, of Washington Prime Group, a Real Estate Investment Trust, since 2016. Mr. Levy has beenwas a director, chairman of the Governance and Nominating Committee, and a member of the Audit and Compensation Committees of Takung Art Co., Ltd., an operator of an electronic online platform for artists, art dealers and art investors to offer and trade in ownership units over valuable artwork since 2016.from February 2016 to June 2019. He was a director of China Commercial Credit, a publicly held Chinese micro-lender, from 2013 to 2016. He was a director and audit committee member of Applied Energetics, Inc. (AERG), a publicly held company that specialized in the development and application of high power lasers, high voltage electronics, advanced optical systems and energy management systems technologies from 2009 to 2016.
From 2006 to 2013, Mr. Levy was a director and chair of the Audit Committee of Gilman Ciocia, Inc., a publicly traded financial planning and tax preparation firm and served as lead director from 2007 to 2013. From 2010 to 2012, he served as director of Brightpoint, Inc., a publicly traded company that provides supply chain solutions to leading stakeholders in the wireless industry. From 2008 through 2010, he served as a director of Applied Natural Gas Fuels, Inc. (formerly PNG Ventures, Inc.). From 2006 to 2010, Mr. Levy served as a director and Audit Committee chairman of Take Two Interactive Software, Inc., a public company that is a global developer and publisher of video games best known for the Grand Theft Auto franchise. Mr. Levy served as Interim Chief Financial Officer from 2005 to 2006 for Universal Food & Beverage Company, which filed a voluntary petition under the provisions of Chapter 11 of the United States Bankruptcy Act on August 31, 2007. Mr. Levy is a frequent speaker on the roles and responsibilities of Board members and audit committee members. He has authored The 21st Century Director: Ethical and Legal Responsibilities of Board Members, Acquisitions to Grow the Business: Structure, Due Diligence, Financing, Ethics and Sustainability: A 4-way Path to Success, Finance and Innovation: Reinvent Your Department and Your Company, Predicting the Future: 21st Century Budgets and Projections and Heartfelt Leadership: How Ethical Leaders Build Trusting Organizations. All courses have been presented to state accounting societies.
Mr. Levy is a Certified Public Accountant with nineseveral years experience with the national public accounting firms of Ernst & Young, Laventhol & Horwath, and Grant Thornton.experience. Mr. Levy hasis a B.S. degree in economics fromgraduate of the Wharton School of the University of Pennsylvania, and received his M.B.A.MBA from St. Joseph's University (PA).in Philadelphia. Mr. Levy has completed the National Association of Corporate Directors’ Board Leadership Fellow program of study.
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Key attributes, experience and skills:Mr. Levy has over 35 years of progressive financial, accounting, and business experience, including having served as Chief Financial Officer of both public and private companies for over 13 years. Mr. Levy brings to the board expertise in corporate governance and compliance matters along with extensive experience gained from numerous senior executive positions with public companies. Further, Mr. Levy’s service on the boards of directors of public companies in a variety of industries allows him to bring a diverse blend of experiences to the Company’s board.
Robert T. Betz,Michael Pohly, Director
From 2000 through his retirementMichael Pohly is the founder and Managing Member of Goshawk Partners LLC, a private investment firm. Prior to forming Goshawk Partners, LLC, Mr. Pohly was a Portfolio Manager and Sector Head for Credit, Currencies and Commodities at Kingdon Capital Management LLC. He joined Kingdon in 2002, Mr. Betz wasJanuary 2009 and has over 27 years of investment experience. Previously, he worked at Morgan Stanley for 17 years, most recently as Managing Director and Head of Global Proprietary Fixed Income Trading, a role held from December 2005 to May 2008. During this time, he served as Senior Portfolio Manager of a $1 billion proprietary credit effort, managing a team that invested in investment grade and high yield corporate and structured credit products. He served on the PresidentBoard of Cognis Corp., the North American division of Cognis GmbH, a $4 billion worldwide supplier of specialty chemicals and nutritional ingredients that was spun off from Henkel AG & Company ("Henkel"). From 1989 through 2000, Mr. Betz held a number of management positions at Henkel, including Executive VP and President of its Emery Group, a leading manufacturer of oleochemicals, and President of its Chemicals Group for North America.
From 1979 through 1989, Mr. Betz worked in a number of manufacturing and operations capacities for the Emery Division of National Distillers and Chemicals Corp., eventually rising to PresidentDirectors of the division. Mr. Betz began his career inInternational Swaps Dealer Association (ISDA) from 2006 to 2007. From 2006 to 2008 he served as Vice Chairman of the specialty chemicals industryBoard and president of Cournot Capital Inc., a derivatives product company founded by joining Emery Industries in 1963. Between 1963 and 1979 he worked for the company as Market Development Representative, Manager of Corporate Planning, Vice President of Operations - Emery (Canada), Manager of Commercial Development, and General Manager of Business Groups. Emery Industries was sold to National Distillers and Chemicals Corp. in 1979.
Since 2003, Mr. Betz has been the owner of Personal Care Ingredients, LLC, a privately-owned marketer of natural products to the personal care industry. Mr. Betz also serves as a director for Bio-Botanica, a manufacturer of natural extracts.
Mr. BetzMorgan Stanley. He holds a B.S.BS in Chemical Engineering and an M.B.A., both degreesEconomics from the Wharton School of the University of Cincinnati. He has also attended the Program for Management Development at Harvard University.Pennsylvania, graduation summa con laude.
Key attributes, experience and skills. skillsDuring: Mr. Betz’s career, hePohly has been involvedover 27 years of investment experience, including over 9 years at Kingdon Capital and 17 years at Morgan Stanley. Mr. Pohly has extensive experience in developing new products or newthe credit markets, for existing products. Severalhaving worked on the both the buy and sell side. Additionally, Mr. Pohly brings a unique investor perspective to the board due to his substantial experience in evaluating and investing in the mining and other sectors.
Geoffrey Scott, Director
Mr. Scott is a private investor. From 1995 to 2018, Mr. Scott was an investment advisor and president of these products grew into sizeable businesses. He managed multiple chemical manufacturing facilities and managed a multi-billion dollar polyethylene business. He was responsible for profit and loss for businesses with sales of $900 million. While heading the chemical operations,Scott Asset Management, whose clients were high net worth individuals. From 1990 to 1995, he was responsible for all aspectsa vice president, corporate finance at Merrill Lynch. From 1973 to 1990, he was a vice president of the business: manufacturing, sales, R&D, IT, HS&E, HR, purchasing, engineering,corporate banking at Chase Manhattan Bank.
Key attributes, experience and legal. His career has continuously involved developing, manufacturing, and selling products directed at most of the markets that Applied Minerals is attempting to penetrate. Since his retirement,skills: For 10 years, he served on the boardsBoard of three chemical-related,a private companies: Plaza Group, Syrgis,company, growing revenue from approximately $50 million to $150 million. In a quickly growing company, allocation of resources is a very important consideration. He served on the audit and Bio-Botanica. compensation committees. The company was eventually sold to a private equity buyer. His experience with charting the growth of smaller companies will be of value to the Board of the Company.
Ali Zamani, Director
Ali Zamani is currently the Managing Partner of Overlook Investments, and Chairman of Mexican Gold Corp.LLC. He served as a Portfolio Manager and CIO at Gefinor Capital Management from 2014 to 2016. Prior to Gefinor Mr. Zamani was a Principal at SLZ Capital Management, a New York-based asset management firm, from July 2012 to December 2013. Prior thereto, he was a Portfolio Manager at Goldman Sachs from 2004 to 2012 where he focused on the energy, materials, utilities, and industrials sectors. From 2002 to 2004, he was a mergers and acquisitions analyst at Dresdner Kleinwort Wasserstein, a boutique New York-based investment bank focused on the energy and utilities sectors.
Mr. Zamani holds a B.S. in Economics from the Wharton School at the University of Pennsylvania, where he graduated magna cum laude.
Key attributes, experience and skills: Mr. Zamani has over 15 years of financial industry experience, including 8 years as a senior investment professional at Goldman Sachs & Co. Mr. Zamani brings significant capital markets expertise, including extensive mining and industrial sector investing experience. Additionally, Mr. Zamani brings a unique stockholder/investor perspective to the board having been a major stockholder in numerous similar companies over his career.
Andre M. Zeitoun, Chief Executive Officer, President, Director
Mr. Zeitoun is President and CEO and has served in those positions since January 1, 2009.
Mr. Zeitoun was a Portfolio Manager at SAC Capital/CR Intrinsic Investors from March 2007 through December 2008. At SAC, he led a team of six professionals and managed a several hundred million dollar investment portfolio focused on companies that required a balance sheet recapitalization and/or operational turnaround. Many of these investments required Mr. Zeitoun to take an active role in the turnaround process. From 2003 to 2006, he headed the Special Situations Group at RBC Dain Rauscher as a Senior Vice President and head of the division. He managed all group matters related to sales, trading, research and the investment of the firm’s proprietary capital. From 1999 to 2003, Mr. Zeitoun was a Senior Vice President at Solomon Smith Barney. In this role, Mr. Zeitoun led a Special Situations sales trading research team serving middle market institutions. Mr. Zeitoun is a graduate of Canisius College.
Key attributes, experience and skills: Mr. Zeitoun has over 15 years experience identifying, allocating capital to, and taking an active role in corporate situations requiring a balance sheet recapitalization and/or operational restructuring. Since January 2009, Mr. Zeitoun has spearheaded efforts to raise critically needed capital, engage industry-leading consultants to quantify and characterize the Company’s Dragon Mine resource, increase processing capabilities, establish a marketing infrastructure, and lead the marketing effort. During his time as President and Chief Executive Officer of the Company, Mr. Zeitoun has developed a level of expertise in the area of the commercialization of halloysite and iron oxide applications.
Alexandre Zyngier,
Lead Director
Mr. Zyngier is a nominee for election to the Board of Directors. He has been the Managing Director of Batuta Advisors since founding it in August 2013. The firm pursues high return investment and advisory opportunities in the distressed and turnaround sectors. Mr. Zyngier has over 20 years of investment, strategy, and operating experience. He is currently a director of Atari SA, AudioEye Inc., GT Advanced Technologies, Inc and Torchlight Energy Resources Inc. and certain other private entities. Before starting Batuta Advisors, Mr. Zyngier was a portfolio manager at Alden Global Capital from February 2009 until August 2013, investing in public and private opportunities. He has also worked as a portfolio manager at Goldman Sachs & Co. and Deutsche Bank Co. Additionally, he was a strategy consultant at McKinsey & Company and a technical brand manager at Procter & Gamble. Mr. Zyngier holds an MBA in Finance and Accounting from the University of Chicago and a BS in Chemical Engineering from UNICAMP in Brazil.
Key attributes, experience, and skills. We believe that Mr. Zyngier’s investment experience and his experience in overseeing a broad range of companies will greatly benefit the Board of Directors.
Who originally recommended the Nominees
Mr. Levy was originally recommended for election as director by David Taft, at the time a significant stockholder but notand later a director. Mr. Zeitoun was initially elected a director pursuant to the terms of his agreement to become CEO. Mr. Concha was originally recommended by Mr. Levy. Mr. Betz was originally recommended by Mr. Concha. Mr. Zamani was originally recommended security holders. Mr. Zyngier was recommended by Mr. Zeitoun, formerly a director and CEO and President. Mr. Scott was recommended by Mr. Zeitoun. Messrs. Barry and Pohly were appointed pursuant to director nomination agreements with the holders of the Series A and the Series 2023 Notes, respectively.
Director Nomination Agreements. Agreements
The Company entered into an director nomination agreement (“Samlyn Director Nomination Agreement’) in 2011 in connection with a $10 million investment in the Company with Samlyn Onshore Fund, LP, a Delaware limited partnership, and Samlyn Offshore Master Fund, Ltd., a Cayman Islands exempted company (together the “Samlyn Funds”). Subject to the terms and conditions of the Samlyn Director Nomination Agreement, until the occurrence of a Termination Event (as defined in the Samlyn Director Nomination Agreement), the Samlyn Funds jointly have the right to designate one person to be nominated for election to the Board. The Samlyn Funds have exercised the right to designate a person in 2013. Theby designating Michael Barry, the General Counsel and Chief Compliance Officer of Samlyn Capital, LLC, Mr. Barry is currently serving as a director and is a Board nominee Bradley Tirpak, served from 2013 until February 2017 when he resigned. The Samlyn Funds have not designatedfor election as a replacement.director at the 2019 Annual Meeting
The Company entered into a director nomination agreement (“2023 Director Nomination Agreement’Agreement”) in 2017 with the Holders of the 10% PIK Election Convertible Notes Due 2023 (“2023 Holders”). Subject to the terms and conditions of the 2023 Director Nomination Agreement, until the Company raises $1.5 million in equity, the 2023 Holders have the right to appoint a Board Observer. The 2023 Holders have designated James Berylson as the Board Observer. After the Company raises at least $1.5 million (which has not yet occurred), the 2023 Holders have the right to designate one person to be nominated for election to the Board. Such rights expire uponThe 2023 Holders exercised that right to designate by designating Michael Pohly, who at the occurrencetime was Portfolio Manager and Sector Head for Credit, Currencies and Commodities at Kingdon Capital Management LLC. He is now the founder and Managing Member of Goshawk Partners LLC. Mr. Pohly is currently serving as a Termination Eventdirector and is a board nominee for election as defined ina director at the 2023 Director Nomination Agreement.2019 Annual Meeting.
Director Compensation for the Year Ended December 31, 20162018
The following sets forth compensation to the persons who served asour directors in 2016. Mr. Zeitoun receives no2018. The fees payable to directors are $50,000 per year and $10,000 per year for chairman of the Board and $10,000 per year for chairman of a committee, except the Operations Committee (“Board Fees”). The fees payable for the Operations Committee are $150,000 for the chairman and $62,500 for the member who is an independent director (“Operations Committee Fees”). The directors, except for Messrs. Barry and Pohly, were granted options on December 14, 2017 that covered Board Fees for the fourth quarter of 2017 and the first three quarters of 2018. The Board Fees vested quarterly. On the same date, options were granted for Operations Committee Fees for service on the Operations Committee for the year beginning May 1, 2018. The Operations Committee Fees vested on May 1, 2018. Messrs. Barry and Pohly earned Board Fees for the period from their appointments to the Board until September 30, 2018. The Board Fees for Messrs. Barry and Pohly were issued to funds managed by their employers. Beginning the last quarter of 2018, Board Fees have been accrued but not paid. The Board Fees may be paid in cash or equity in the future, to be determined by the Board. The fees reported below represent (i) Board Fees for the first three quarters of 2018 and Operations Committee fees for service asthe period from May 1, 2018 to December 31, 2018, which were paid through option grants in 2017, and (i) accrued but unpaid fees for the fourth quarter of 2018. No fees are shown for Mr. Scott because he became a director.director in 2019.
Name |
| Fees Earned or Paid in Cash ($) |
| Common Stock Awards ($) |
| Options Awards ($) |
| Total ($) | Fees Earned or in Cash ($)(4) | Common Stock Awards ($) | Options Awards ($)(5) | Total ($) | ||||||||||||||||||
Mario Concha | 17,500 | -0- | 123,338 | 140,838 | ||||||||||||||||||||||||||
Michael Barry (1) | 12,500 | -0- | 37,153 | 49,653 | ||||||||||||||||||||||||||
Robert Betz | 15,000 | -0- | 67,994 | 82,994 | ||||||||||||||||||||||||||
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John Levy |
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| 17,500 |
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| - 0 - |
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| 38,404 |
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| 55,904 | 15,000 | -0- | 37,950 | 52,950 | ||||||||||||||
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Robert Betz |
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| 15,000 |
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| - 0 - |
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| 45,942 |
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| 60,942 | ||||||||||||||||||
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Mario Concha |
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| 15,000 |
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| - 0 - |
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| 93,686 |
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| 108,686 | ||||||||||||||||||
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David Taft(1) |
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| 8,750 |
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| 12,500 |
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| 19,037 |
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| 40,287 | ||||||||||||||||||
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Bradley Tirpak(2) |
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| - 0 - |
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| 12,890 |
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| 30,765 |
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| 43,655 | ||||||||||||||||||
Michael Pohly (2) | 12,500 | -0- | 29,722 | 42,222 | ||||||||||||||||||||||||||
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Ali Zamani |
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| - 0 - |
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| - 0 - |
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| 43,382 |
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| 43,382 | 12,500 | -0- | 31,625 | 44,125 | ||||||||||||||
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Andre Zeitoun |
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| - 0 - |
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| - 0 - |
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| - 0 - |
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| - 0 -- | ||||||||||||||||||
Alexandre Zyngier | 15,000 | -0- | 18,404 | 33,404 | ||||||||||||||||||||||||||
Andre Zeitoun (3) | -0- | -0- | -0- | -0- |
| (1) | Mr. |
| (2) | Mr. |
| (3) | Mr. Zeitoun |
(4) | Amounts represent fees earned for service for the period from October 31, 2018 through December 31, 2018. These amounts have been accrued but not yet paid as of December 31, 2018. |
(5) | Black Scholes value at grant date |
Board Leadership |
Alexandre Zyngier serves as Lead Director. The Lead Director fees for 2016 were as follows: (i) Base Fees: $50,000 per year for being onfacilitates the Board; $10,000 for Committee Chair (except Operations Committee) or Board Chair; $100,000 for Operations Committee Chair and $25,000 for non-employee director member of the Operations Committee. The fees were initially payable in stock or options. Beginning in June, 2016, fees were paid in options. The Black Scholes value of the options was based on an exercise price that is the higher of $.25 or the market price on the date of grant. (ii) 50,000 shares of restricted stock or the equivalent value in options; and (iii) 50,000 options. If taken in options, the number of options is calculated by dividing the fee by the higher of $.25 or the Black Scholes value at the date of grant.
During 2017 until August 18, 2017, Director fees for 2017 are as follows: (i) Base Fees: $50,000 per year for being on the Board; $10,000 for Committee Chair (except Operations Committee) or Board Chair; $150,000 for Operations Committee Chair and $62,500 for non-employee director member of the Operations Committee and (ii) the value of 50,000 shares in options. The fees were payable in options. The number of options is calculated by dividing the fee by the higher of $.25 or the Black Scholes value at the date of grant. The Black Scholes value of the options is based on an exercise price that is the higher of $.25 or the market price on the date of grant.
On August 18, 2017, the Board granted 7,083,333 options to the membersfunctioning of the Board of Directors (except Mr. Zeitoun)independently of management of the Company and provides independent leadership to the Board. In fulfilling his or her responsibilities. the Lead Director is responsible for: (a) providing leadership to ensure that the Board functions independently of management of the Company and other non-independent directors; (b) working with the Chair to ensure that the appropriate committee structure is in connection with feesplace and assisting the Governance and Nominating Committee in making recommendations for Board serviceappointment to such committees; (c) recommending to the Chair items for the four quarters beginning October 1, 2017, except for serviceconsideration on the Operations Committee. The options, exceptagenda for each meeting of the Operations Committee options, vest quarterly beginning September 30, 2017,Board; (d) commenting to the Chair on the quality, quantity and timeliness of information provided by management to the person isindependent directors; (e) in the positionabsence of the Chair, chairing Board meetings,; in addition, chairing each Board meeting at which only outside directors or independent directors are present; (f) consulting and meeting with any or all of the independent directors, at the relevant date. The options for Operations Committee service are fordiscretion of either party and with or without the year beginning May 1, 2018 and vest as of May 1, 2018. The options are ten-year options with an exercise price of $.06. The closing market price on the date of grant was $.04.
The total number of options granted to eachattendance of the Chair, and representing such directors, is as follows: Mr. Betz -- 1,791,667; Mr. Concha: 3,250,000; Mr. Levy -- 1,000,000; Mr. Zamani -- 833,333; Mr. Taft -- 208,333 (Mr. Taft decided not to seek reelection at the Annual Meeting).
The total number of options granted to the directors is as follows: Mr. Betz -- 1,791,667; Mr. Concha: 3,250,000; Mr. Levy -- 1,000,000; Mr. Zamani -- 833,333; Mr. Taft -- 208,333 (Mr. Taft decided not to seek reelection at the Annual Meeting).
The options were granted under the 2017 Incentive Plan, which was adopted on August 18, 2017 by the Board of Directors. Forty million shares of Common Stock are subject to the plan.
Since 2009, the Company has,on corporate governance issues and has had, separate persons serving inother matters; and (g) working with the roles ofChair and the Chief Executive Officer to ensure that the Board is provided with the resources, including external advisers and Chairmanconsultants to the Board as considered appropriate, to permit it to carry out its responsibilities and bringing to the attention of the Board. Chair and the Chief Executive Officer any issues that are preventing the Board from being able to carry out its responsibilities.
The Board believesdoes not believe that separatingconsolidating the Chair fromof the Board and CEO position facilitates morepositions impairs effective board interaction and improves management accountability.
Mr. Concha, the Board Chair, sets the agenda for and presides at Board meetings and coordinates the Board’s communication with Mr. Zeitoun and the management of the Company. Mr. Concha is fully independent.
Mr. Zeitoun, the Chief Executive Officer, is responsible for, among other things, managing the business and affairs of the Company within the guidelines established by the Board, reporting to the Board of Directors, recommending to the Board strategic directions for the Company’s business, and implementing the strategic, business and, operational plans approved by the Board.
Director Independence |
Messrs. Concha, Levy, Barry, Betz, Pohly, Scott, Zamani and ZamaniZyngier are deemed to be independent for purposes of the Board under the independence standards of Nasdaq, which the Company uses to determine independence, and under the enhanced independence standards of Section 10A-3 of the Securities Exchange Act. They are also deemed to be outside directors under the standards of Section 162(m) of the Internal Revenue Code. Messrs. Zeitoun and Taft are deemed to be not independent. Mr. Zeitoun is not independent because he is an employee of the Company. Mr. Taft is deemed to be not independent because of the size of his beneficial holdings of the Company’s Common Stock.
Risk Oversight |
The Board oversees management’smanagement’s evaluation and planning for risks that the Company faces. Management regularly discusses risk management at its internal meetings and reports to the Board and/or Operations Committee those risks that it thinks are most critical and what it is doing in response to those risks. The Board exercises oversight by reviewing key strategic and financial plans with management at each of its regular quarterly meetings as well as at certain special meetings. The Board’s risk oversight function is coordinated under the leadership of the independent Chair of the Board and the Board believes that this oversight is enhanced by the separation of the role of Chair from CEO.
Code of Ethics |
We have adopted a Code of Conduct and Ethics for our Chief Executive Officer and our senior financial officers. A copy of our Code of Conduct and Ethics is posted on our website at www.appliedminerals.com and can be obtained at no cost, by telephone at (212) 226-4265 or via mail by writing to Applied Minerals, Inc., 55 Washington Street, Brooklyn, NY 11201. We believe our Code of Conduct and Ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; to provide full, fair, accurate, timely and understandable disclosure in public reports; to comply with applicable laws; to ensure prompt internal reporting of code violations; and to provide accountability for adherence to the Code.
Board and Committee Meetings and Meeting Attendance |
Board and Committee Meetings and Meeting Attendance
ThereDuring 2018, there were eleven ten meetings of the Board of Directors, in 2016. In 2016, thee wereten meetings of the Operations Committee, five meetings of the Compensation Committee, eight meetings of the Audit Committee, sixand four meetings of the Compensation Committee, five meetingseach of the Governance and Nominating Committee and four meetings of the Health, Safety and Environment Committee. Every director attended at least 75% of all board meetings and also attended all committee meetings of committees of which that director was a member.
It is the policy of the Board that all Board members attend the Annual Meetingannual meeting of stockholders,shareholders, if possible. All members of the Board, except Mr. Taft, who is not standing for reelection, are expected to attend the 2017 Annual Meeting. All directors attended the 2016 Annual Meeting.
Committees of the Board |
The following table indicates sets forth the standing Committees of the Board membership on the committees, and chairsmembership of the committees.
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This symbol -- * -- indicates chairman of the Committee
The charters of the Committeescommittees are available onat the Company’sCompany’s website, www.appliedminerals.com.appliedminerals.com. The Board of Directors has determined that all committee members are independent under the independence definition used by NASDAQ except for Mr. Concha.
Audit Committee | Governance and Nominating Committee | Compensation Committee | Health, Safety & Environment Committee | Operations Committee | |
Mario Concha | X | X | |||
John Levy | X* | X | |||
Michael Barry | |||||
Robert Betz | X | X | X* | X* | X* |
Michael Pohly | |||||
Geoffrey Scott | X | X | |||
Ali Zamani | X | X | |||
Alexandre Zyngier | X* |
* Committee Chairman
The Audit Committee satisfies the definition of Audit Committee in Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
There is a special committee of the Board appointed to deal with the disposition of the funds received from the sale of five waste piles on August 2018. The Committee consists of Messrs. Concha, Levy, Betz, Zamani, and Zyngier.
Audit Committee Financial Expert
Audit Committee Financial Expert |
The Board of Directors has determined that Mr. Zamani is an Audit Committee Financial Expert as thisthe term is defined in the rules of the Securities and Exchange Commission.
In the discharge of its responsibilities, the Audit CommitteeThe audit committee has reviewed and discussed the Company’s audited financial statements for fiscal year 2016 included elsewhere in thethis Annual Report of Form 10-K for the year ended December 31, 2016;with management;
The Audit Committeeaudit committee has discussed with the independent auditors the matters required to be discussed by the Auditing Standards AU Section 380 –- The Auditor’s Communication with those charged with Governance as adopted by the Public Company Accounting Oversight Board in Rule 3200T;
The Audit Committeeaudit committee has received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence and has discussed with the independent accountant the independent accountant's independence; and
Based on the review and discussions referred to in three preceding paragraphs, the Audit Committeeaudit committee recommended to the Boardboard of Directorsdirectors that the audited financial statements be included in the Company's annual report on Form 10-K (17 CFR 249.310) for the last fiscal year for filing with the Securities and Exchange Commission.
Audit Committee (as of the time the Audit Committee Report was made)
Ali Zamani,Alexandre Zyngier, Chairman
Mario Concha
Robert Betz
Ali Zamani
Governance and Nominating Committee and Nomination Process.
Governance and Nominating Committee and Nomination Process. |
The Governance and Nominating Committee does not have a set process for identifying and evaluating nominees for director and does not have any specific minimum requirements that must be met by any committee-recommended nominee for a position on the Board of Directors. Characteristics expected of all directors include independence, integrity, high personal and professional ethics, sound business judgment, and the ability and willingness to commit sufficient time to the Board. In evaluating the suitability of individual Board members, the Board takes into account many factors, including general understanding of marketing, finance, and other disciplines relevant to the success of a publicly tradedpublicly-traded company in today's business environment; understanding of the Company's business; educational and professional background; and personal accomplishment. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best promote the success of the Company's business and represent stockholder interests through the exercise of sound judgment, using its diversity of experience.judgment. In determining whether to recommend a director for re-election, the Governance and Nominating Committee also considers the director's past attendance at meetings, participation in and contributions to the activities of the Board, and the results of the most recent Board self-evaluation.
The Board does not have a policy relating to diversity in connection with the identification or selection of nominees and has not considered the issue.
The Board will consider director candidates recommended by any stockholder. In evaluating candidates recommended by our stockholders, the Board of Directors has no set process for evaluating nominees, and the criteria would include the ones set forth above that are applied to nominees nominated by the Board. Any stockholder recommendations for director nominees proposed for consideration by the Board should include the candidate's name and qualifications for service as a Board member, a document signed by the candidate indicating the candidate's willingness to serve, if elected, and evidence of the stockholder's ownership of Company Common Stock and should be addressed in writing to the Chairman, Applied Minerals, Inc., 55 Washington Street, Suite 301 Brooklyn, NY 11201.
There have been no changes in the procedures by which stockholders may recommend candidates for director.
The Governance and Nominating Committee has a charter and it is posted on the Company's website.
Samlyn Funds --— Rights to Nominate Directors
In connection with their investment of $10 million in 2011, Samlyn Onshore Fund, LP, a Delaware limited partnership, and Samlyn Offshore Master Fund, Ltd., a Cayman Islands exempted company (collectively, the “Samlyn Entities”) were granted the joint right to designate one person (the “Initial Nominee”) to be nominated for election to the Board and the Board of Directors must use commercially reasonable efforts to cause the election or appointment, as the case may be, of such nominee as a director of the Company.
If any nominee is jointly designated by the Samlyn Entities at a time (A) at which such nominee cannot be included in the proxy statement prepared by management of the Company in connection with the soliciting of proxies for a meeting of the stockholders of the Company called with respect to the election of directors or (B) after which a meeting of the stockholders has been held with respect to the election of directors collectively,(collectively, the “Interim Period”) or (ii) is nominated for election to the Board but not elected by the stockholders of the Company for any reason whatsoever, the Board shall increase the number of members serving on the Board by one and the Samlyn Entities shall be entitled to promptly designate a nominee, who shall be appointed by the Board to fill the additional member position promptly.
If the Samlyn Entities, together with their respective affiliates, cease to beneficially own at least 9,700,000 shares of Common Stock, the rights of the Samlyn Entities described above shall terminate automatically (the “Termination Event”). As promptly as practicable following the Termination Event, at the request of the Board, the Samlyn NomineesNominee shall cause such Nominee to execute and deliver a letter of resignation to the Company, which resignation shall be effective immediately with respect to the Company and, if applicable, any subsidiary of the Company for which such Nominee serves as a director, manager or other similar position.
The Samlyn EntitiesFunds exercised theirthe right to nominatedesignate a person by designating Michael Barry, the General Counsel and Chief Compliance Officer of Samlyn Capital, LLC. Mr. Barry was appointed to the Board in April 2018. At his direction, Mr. Barry’s compensation as a director nominating Bradley Tirpak, who was elected a director in March, 2015. Mr. Tirpak resigned in February 2017. Theis paid to the Samlyn Entities have not exercised their rights since Mr. Tirpak’s resignationFunds.
Observer/Director Nomination Agreement with Series 2023 Noteholders
In August, 2013, the Company sold $10.5 million of 10% PIK Election Convertible Notes due 2023 (“2023 Notes”). In connection with such sale, the Company agreed to cause two independent directors to be appointed to its Board of Directors. The appointment of Messrs. Concha and Betz satisfied the requirements to appoint independent directors. The holders of the 2023 Notes did not nominate and had no input into the Board’s decision to appoint Messrs. Concha or Betz to the Board.
The Company has entered into a observer/director nomination agreement (“2023 Observr/Director Nomination Agreement’) in 2017 with the Holders of the 10% PIK Election Convertible Notes Due 2023 (“2023 Holders”). Subject to the terms and conditions of the 2023 Observer/Director Nomination Agreement, until the Company raises $1.5 million in equity after April 19, 2017, the 2023 Holders have the right to appoint a Board Observer. The 2023 Holders have designated James Berylson as the Board Observer. After the Company raises at least $1.5 million (which has not yet occurred), the 2023 Holders have the right to designate one person to be nominated for election to the Board. If anyThe 2023 Holders have designated Michael Pohly, who at the time was Portfolio Manager and Sector Head for Credit, Currencies and Commodities at Kingdon Capital Management LLC and is now the founder and managing member of Goshawk Partners LLC, as a director and Mr. Pohly has been appointed as a director. Prior to March 31, 2019, at his direction, Mr. Pohly’s compensation as a director was paid to M. Kingdon Offshore Master Fund, L.P. Under the 2023 Director Nomination Agreement, if a nominee (i) is designated by the at a time (A) at which such nominee cannot be included in the proxy statement prepared by management of the Company in connection with the soliciting of proxies for a meeting of the stockholders of the Company called with respect to the election of Directors or (B) after which a meeting of the stockholders has been held with respect to the election of Directors or (ii) is nominated for election to the Board but not elected by the stockholders of the Company for any reason whatsoever (including, without limitation, such Nominee’snominee’s death, disability, disqualification or withdrawal as a nominee), the Board shall increase the number of members serving on the Board by one, if appropriate, and the noteholders shall be entitled to promptly designate a nominee by written notice to the Company, who shall be appointed by the Board to fill such additional member position promptly. Such rights expire upon the occurrence of a Termination Event as defined. A Termination Event occurs if the holders of Series 2023 Notes,Holders, together with their respective Affiliates, cease to Beneficially Own at least 80 per cent of the Series 2023 Notes that have been issued in the aggregate, whether as a result of dilution, transfer, conversion, or otherwise.
Compensation Committee |
The Compensation Committee is required to meet at least twice a year. The Committee charter states that the Committee will have the resources and authority necessary to discharge its duties and responsibilities and the Committee has sole authority to retain and terminate outside counsel, compensation consultants, or other experts or consultants, as it deems appropriate, including sole authority to approve the fees and other retention terms for such persons.
The principal responsibilities of the Compensation Committee are as follows:
1. | Board Compensation. Periodically review the compensation paid to non-employee directors and make recommendations to the Board for any adjustments. |
2. | Chief Executive Officer Compensation. |
a. | Conduct an annual CEO evaluation. |
b. | Assist the Board in establishing CEO annual goals and objectives, if appropriate. |
c. | Recommend CEO compensation to the other independent members of the Board for approval. |
(The CEO may not be present during deliberations or voting concerning the CEO's compensation.)
The Compensation Committee may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the committee. The Committee may delegate to the Chief Executive Officer authority to make grants of equity-based compensation in the form of rights or options to eligible officers and employees who are not executive officers, such authority including the power to (i) designate officers and employees of the Company or any of its subsidiaries to be recipients of such rights or options created by the Company, and (ii) determine the number of such rights or options to be received by such officers and employees; provided, however, that the resolution so authorizing the Chief Executive Officer shall specify the total number of rights or options the Chief Executive Officer may so award. If such authority is delegated, the Chief Executive Officer shall regularly report to the Committee grants so made. The Committee may revoke any delegation of authority at any time. The Compensation Committee has not delegated any authority to the Chief Executive Officer. For purposes of determining CEO compensation for
A copy of the compensation committee charter is available at www.appliedminerals.com.
None of the members of the Compensation Committee
Stockholders may communicate with the Board of Directors by sending an email or a letter to Applied Minerals, Inc. Board of Directors, c/o President, 55 Washington Street, Brooklyn, New York 11201. The President will receive the correspondence and forward it to the individual director or directors to whom the communication is directed or to all directors if not directed to one or more specifically.
16
Part 3 Information concerning Executive Officers and Their Compensation
The Named Executive Officers of the Company are :
Marion Concha.Mr. Concha became President and CEO on September 9, 2019 Andre Zeitoun
Christopher T. Carney From
William Gleeson. Mr. Gleeson was appointed General Counsel and Secretary in
All officers serve at the pleasure of the Board.
18
The Company does not have any pension plan
Outstanding Equity Awards at December 31,
The following table provides information on the holdings as of December 31,
Options Exercised and Stock Vested None of the Named Executive Officers has exercised any options, SARs or similar instruments
Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans There are no nonqualified defined contribution and other nonqualified deferred compensation plans
Part
The
Accordingly, compensation for the Named Executive Officers is designed to:
The Company does not have a policy concerning minimum ownership or hedging by officers of Company securities. the Named Executive Officers was significantly lower in 2016 than in 2015 due to the Board’s assessment of performance and ways to incentivize the NEOs as well as the Company’s actual and prospective condition. The cash compensation in 2017 was higher in 2016 based on the Board’s assessment of NEO performance.. There was a large option granted designed to give the NEOs a significant long-term incentive. 2018 compensation was lower than 2017 primarily because no option grant was made in 2018.
Mr. Zeitoun
2016 Compensation In order to assist the Compensation Committee in setting the 2016 compensation, the Compensation Committee hired CRI, the same compensation consultant that the Committee had used in connection with 2014 and 2015. At a meeting with the Compensation Committee on December 8, 2015, CRI presented a written report. The report indicated that CRI redefined the peer group used in connection with Mr. The peer group was redefined to provide a “similar industry look.” The peer group companies for purposes of 2016 compensation: (i) were involved in specialty chemical manufacturing, biotech and pharmaceuticals, software, and mining; (ii) were national in geographic location with compensation adjusted to New York City; (iii) had a market capitalization between $20 million and $75 million; and (iv) had less than 50 employees.
The Compensation Consultant assumed that Mr.
Based on such assumptions measured against the peer group, the Compensation Consultant provided the following findings:
After extensive discussion, the Board decided upon the following compensation package for Mr. Zeitoun in 2016. Salary: The
2017 Compensation On March 8, 2017, the Board determined that Mr. Zeitoun’s 2017 compensation is as follows: salary — $350,000; cash receipts bonus — 4% of monthly gross cash receipts, up to a maximum bonus of $150,000; revenue bonus — $100,000 if GAAP revenue exceeds $6 million; cash flow bonus — $100,000 if the Company On December 14, 2017, options to purchase 11,910,772 shares of common stock were issued to Mr. Zeitoun. The options are ten-year options and the exercise price is $0.06. Vesting conditions are as follows:
On December 7, 2017, the Board of Directors, on the recommendation of the Compensation Committee, granted to Mr. Zeitoun a bonus for service in 2017 of $120,000. 2018 Compensation On the recommendation of the Compensation Committee, the Board determined Mr. Zeitoun’s 2018 compensation to be as follows. salary — $350,000. bonus — $75,000. The bonus
In reaching its decisions, the Compensation Committee and the Board took into account (i) the results of the most recent the Say-on-Pay vote (93%) in favor, which suggested that stockholders were generally favorable to the compensation scheme, (ii) the Company’s financial results and prospects for generating revenues and the need to conserve capital, which led to no increase in salary and the elimination of the 4% bonus, (iii) Mr. Zeitoun’s efforts in connection of the amendment of Series A and the Series 2023 notes and the sale of the waste piles for $4.5 million, which led to the bonus and (iv) the options granted in 2017, which provided sufficient lion-term incentive, so that no more long-term incentive was deemed necessary. The Compensation Committee did not use a compensation consultant.
Compensation for Messrs. Gleeson and Carney
2016 Compensation On December 9,
On March 9, 2016, the Board determined that 2016 bonus arrangements for Messrs. Carney, and Gleeson would be as follows: Up to $25,000 based on achievement of personal goals and $50,000 if (i) the Statement of Cash Flow from Operations in the audited financial statements for the year ended December 31, 2016, adjusted for purposes of determining whether bonuses are payable to assume payment of all such bonuses is positive (based upon the business being operated in the ordinary course consistent with past practices, in the judgment of the Compensation Committee) and (ii) the Compensation Committee believes that it is more likely than not that cash flow from operations in 2017 will be positive.
In July, 2016, Mr. Carney volunteered to exchange $50,000 of salary for options. Mr. Carney agreed to reduce his salary by $50,000 in the period from August 15, 2016 to August
2017 Compensation Mr. Carney’s 2017 compensation was as follows: salary — $150,000 per annum through August 15, 2017 and $200,000 per annum thereafter; revenue bonus — $25,000 if GAAP revenue exceeded $6 million; cash flow bonus — $25,000 if the Company was cash flow positive for 2017. Mr. Gleeson’s 2017 compensation was as follows: salary — $250,000; revenue bonus — $25,000 if GAAP revenue exceeded $6 million; cash flow bonus — $25,000 if the Company was cash flow positive for 2017. None of the bonuses were earned or paid. On December 14, 2017, 4,780,550 options to purchase Common Stock were granted to Mr. Carney and 3,748,439 options were granted to Mr. Gleeson. The vesting conditions and the relevant definitions are the same as vesting conditions and definitions described above relating to the options granted to Mr. Zeitoun on December 14, 2017. On December 7, 2017, the Board of Directors, on the recommendation of the Compensation Committee, granted to each of Mr. Carney and Mr. Gleeson a bonus for service in 2017 of $30,000, which was paid in 2018. 2018 Compensation On the recommendation of the Compensation Committee, the Board determined 2018 compensation to be as follows: Mr. Carney: salary — $200,000; bonus — $20,000. The bonus was determined on January 31, 2019. Mr. Gleeson: salary — $250,000; bonus — $20,000. The bonus was determined on January 31, 2019. In reaching its decisions, the Compensation Committee and the Board took into account (i) the results of the most recent the Say-on-Pay vote (93%) in favor, which suggested that stockholders were generally favorable to the compensation scheme, (ii) the Company’s financial results and prospects for generating revenues and the need to conserve capital, which led to no increase in salary, (iii) their efforts in connection of the amendment of Series A and the Series 2023 notes and the sale of the waste piles for $4.5 million, which led to the bonus and (iv) the options granted in 2017, which provided sufficient lion-term incentive, so that no more long-term incentive was deemed necessary. The Compensation Committee did not use a compensation consultant. Tax and Accounting Treatment of Compensation
Tax Deductibility Cap on Executive Compensation The Compensation Committee is aware that Section 162(m) of the Internal Revenue Code treats certain elements of executive compensation in excess of $1 million a year as an expense not deductible by the Company for federal income tax purposes. Depending on the market price of the Company’s
Tax and Accounting Treatment of Options We are required to recognize in our financial statements compensation cost arising from the issuance of stock options. GAAP requires that such that compensation cost is determined using fair value principles (we use the Black-Scholes method of valuation) and is recognized in our financial statements over the requisite service period of an instrument. However, the tax deduction is only recorded on our tax return when the option is exercised. The tax benefit received at exercise and recognized in our tax return is generally equal to the intrinsic value of the option on the date of exercise.
Compensation of Policies and Practices as they relate to Risk Management The Company does not believe that its compensation policies and practices (cash compensation and at-the-market or above-market five- and ten-year options without or without performance standards and with or without vesting schedules) are reasonably likely to have a material adverse effect on the Company as they relate to risk management practices and risk-taking incentives.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the
Mario Concha John Levy Robert Betz
26
Part 5 Information concerning Independent Registered Public Accountant
The Board has selected MaloneBailey as the Company’ independent registered public accounting firm for the year ended December 31, 2019. The Board asks stockholders to ratify that selection. Although current law, rules, and regulations require the Board of Directors to engage and retain the Company’s independent auditor, the Board considers the selection of the independent auditor to be an important matter of stockholder concern and is submitting the selection of
The affirmative vote of holders of a majority of the shares of Common Stock cast in person or by proxy at the meeting is required to approve the ratification of the selection of Representatives of the
EisnerAmper LLP
The following table presents fees for
The following table presents fees for services rendered by MaloneBailey, the independent auditor for the audit of the Company’s annual consolidated financial statements for the year ended December 31, 2018.
The audit reports of EisnerAmper on the financial statements of the Company as of and for the years ended December 31, 2017 and 2016 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle except, the audit reports for the years ended December 31, 2017 and 2016 include an explanatory paragraph about the existence of substantial doubt concerning the Company's ability to continue as a going concern. During the years ended December 31, 2017 and 2016 and the interim period from January 1, 2018 through October 4, 2018, the Company had no disagreements with EisnerAmper on Management identified the following material weaknesses as of December 31, 2017 as reported in the 2018 Form 10-K, which were still applicable as of June 30, 2018, and have caused management to conclude that as of December 31, 2017, their internal controls over financial reporting were not effective at the reasonable assurance level:
Because of the material weaknesses described in the 2018 Form 10-K, the Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2017, based on criteria in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. EisnerAmper discussed each of these matters with the Company’s management and the Audit Committee. The Company has authorized EisnerAmper to fully respond to the inquiries of Malone Bailey, the successor independent registered public accounting firm, concerning the subject matter of each reportable event referred to above. During the fiscal years ended December 31, 2017 and 2016 and the interim period from January 1, 2018 through October 4, 2018, neither the Company, nor anyone on its behalf, consulted Malone Bailey regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the financial statements of the Company and no written report or oral advice was provided to the Company that Malone Bailey concluded was an
The Audit Committee has adopted a policy for the pre-approval of all audit, audit-related, tax, and other services provided by the Company’s independent registered public accounting firm. The policy is designed to ensure that the provision of these services does not impair the registered public accounting firm’s independence. Under the policy, any services provided by the independent registered public accounting firm, including audit, audit-related, tax and other services must be specifically pre-approved by the Board of Directors. The Board of Directors does not delegate responsibilities to pre-approve services performed by the independent registered public accounting firm to management. For the fiscal year ended December 31, Part 6 Additional Important Information
Security Ownership of Certain Beneficial
The following table sets forth, as of October
* Less than 1%
Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors, and any person who beneficially owns more than 10% of our Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Executive officers, directors, and more than 10% shareholders are required by regulation to furnish us with copies of all Section 16(a) forms which they file. To the best of our knowledge, all filings were made timely in
No determination has been made as to when the
Proposals made under Rule 14a-8 Rule 14a-8 under the Securities Exchange Act indicates the date or time frame, for purposes of Rule 14a-8, that a proposal must be submitted to the Company in order to be included in the
Proposals and Nominations made under the The
The Company will not consider at the
SEC.
Company. Mr.
Our Board of Directors reviews any transaction, except for ordinary business travel and entertainment, involving the Company and a related party before the transaction or upon any significant change in the transaction or relationship. For these purposes, the term "related-party transaction" includes any transaction required to be disclosed pursuant to Item 404 of Regulation S-K of the
Plans Approved by Stockholders Shareholders approved the The number of shares subject to the 2012 LTIP for issuance or reference was 8,900,000. The number of shares subject to the 2016 IP was 15,000,000. Plans Not Approved by Prior to the adoption of the November 2012 LTIP, the Company granted options to purchase 12,378,411 shares of common stock under individual arrangements. In May and August, 2016, the Company adopted the 2016 Long-Term Incentive Plan (“2016 LTIP”). The number of shares of common stock for issuance or for reference purposes subject to In 2017, prior to the
The Equity Compensation Information As of December 31, 2018
The following options were granted under the 2016 Long-Term Incentive Plan: On May 11, 2016, the Company granted 250,000 nonqualified options to two directors with On July 6, 2016, the Company
On August On December 14, 2017, the Board granted 27.5 million options to five members of management. The options are ten-year options with an exercise price of
The vesting conditions of the options are as follows: (i) 25% of the options will vest upon the closing of the sale of an aggregate of $600,000 of units at The following options were granted under the Company’s 2017 Incentive Plan:
On
The options cover fees for Board service for the fourth quarter of 2017 and the first three quarters of 2018, except for service on the Operations Committee.
The fees for Board service are $50,000 in options for membership on the Board, $10,000 on options or chairmanship of the Board or a committee (except the Operations Committee). The options for such fees, except for the Operations Committee, vest as the beginning of each calendar quarter provided the person in in office at that time.
The Chairman of the Operations Committee receives as fee of $150,000 per year and the non-management member receives a fee of $62,500 per year. The options for such fees vest on May 1, 2018.
The total number of options granted to each of the directors is as follows: Mr. Betz On December 21, 2017, the Company granted options to purchase 545,289 shares to Alexandre Zyngier. Each option has an exercise price of $0.075 and a term of 5 years. Of the options granted to Mr. 38 Part 7 Proposals to
Eight persons, all of whom are currently directors, have been nominated for election at the Annual
The directors will be elected by a plurality of the votes cast, which means that the nominees receiving the largest number of “FOR” votes will be elected to the open positions. The Board of Directors has evaluated the key attributes, experience, and skills of each nominee (set forth after biographical information of each nominee in “Information about the Nominees” in Part 2) and has concluded on that basis that each nominee listed below should be renominated for another term as director. The following table provides the names, positions, ages and principal occupations of our current and renominated directors:
OUR BOARD UNANIMOUSLY RECOMMENDS VOTING FOR EACH NOMINEE 39
As required by Section 14A of the Securities and Exchange Act of 1934, we are asking for your approval of the following resolution (the “Say-on-Pay” resolution): RESOLVED, that the stockholders approve, in a nonbinding vote, the compensation of the Company’s Named Executive Officers. Reductions in 2016 Compensation as Compared to 2015 Compensation Given the Board’s conclusion that the Company was not moving forward toward cash flow positive at an acceptable rate, 2016 cash compensation and 2016 total compensation for the Named Executive Officers represented significant reductions in comparison to 2015 cash compensation and 2015 total compensation. Details about 2015 and 2016 compensation are set forth below. 2015 Compensation
For 2016, the Board cut the salaries from 2015 levels as follows: Mr. Zeitoun — 42% reduction: (from $600,000 to $350,000) and Mr. Gleeson — 16% reduction (from $300,000 to $250,000). Mr. Carney agreed to take options in lieu of 25% of his salary for one year ($50,000) beginning in August, 2016. Mr. Zeitoun’s 2016 compensation arrangement included a revenue-based bonus of up to $150,000 (4% of revenues up to $4 million up to a $150,000 bonus) and he was paid that amount in full. The Board agreed to pay performance bonuses to the Named Executive Officers based on financial performance and personal goals. The financial performance bonus required management to cause the Company to perform at a high level in comparison to prior years, the standard for payment of the bonus being sustainable cash flow breakeven after payment of the bonuses. The cash flow performance bonus was structured on an “all-or-nothing” basis. If the Company were to reach cash flow breakeven, the entire bonuses (both for financial performance and for personal goals) would have been payable in cash, but if cash flow goal was not met, any bonus for achievement of personal goals would be payable in options. The cash flow goal was not met. Mr. Zeitoun’s total maximum bonus for 2016 was $500,000. 80% of Zeitoun’s bonus was based on achievement of cash flow goals and 20% was based on achievement of personal goals. The cash flow goals were not met. No bonus for achievement of personal goals will be paid, although no determination was made as to the achievement of personal goals. The maximum total bonus for each of Messrs. Carney and Gleeson was $75,000, two-thirds of which is based on the cash flow goal and one-third was based on for personal goals. The cash flow goals were not met. No bonus for achievement of personal goals will be paid, although no determination was made as to the achievement of personal goals. 2017 Compensation In March 2017, on recommendation of the Compensation Committee, the Board determined the compensation of the Named Executive Officers would be as follows: Mr. Zeitoun’s 2017 compensation is as follows: salary — $350,000; cash receipts bonus — 4% of monthly gross cash receipts, up to a maximum bonus of $150,000; revenue bonus — $100,000 if GAAP revenue exceeds $6 million; cash flow bonus — $100,000 if the Company is cash flow positive for 2017. Mr. Carney’s 2017 compensation is as follows: salary — $150,000 per annum until August 15, 2017 and $200,000 thereafter; revenue bonus — $25,000 if GAAP revenue exceeds $6 million;; cash flow bonus — $25,000 if the Company is cash flow positive for 2017. Mr. Gleeson’s 2017 compensation is as follows: salary — $250,000; revenue bonus — $25,000 if GAAP revenue exceeds $6 million; cash flow bonus — $25,000 if the Company is cash flow positive for 2017. Mr. Zeitoun was paid the revenue bonuses. Because the thresholds were not achieved, none of the other bonuses were paid to any Named Executive Officer. On August 18, 2017, on the recommendation of the Compensation Committee, the Board, in order that the Named Executive Officers would be properly motivated to take action that would increase value for stockholders, granted options to Named Executive Officers as follows: Andre Zeitoun: 12,910,772 options; Christopher Carney: 4,780,550 options; William Gleeson: 3,749,439 options. The options are ten-year options and the exercise price is $0.06. Vesting conditions are as follows: (i) 25% of the options will vest upon the closing of the sale of an aggregate of $600,000 of units (consisting of one share of Common Stock and a warrant to purchase .25 of a share of Common Stock) at $.04 per unit (this goal has been achieved); (ii) 25% of the options will vest upon the receipt of at least $900,000 from one or more of the following sources: sale(s) of Common Stock over and above $600,000, consideration for entering into licensing or similar agreement(s), and/or consideration for entering into agreement(s) relating to the sale or lease of minerals rights or entering into options or other agreements relating mineral rights; (iii) 25% of the options will vest when the Company has toll processing arrangements with two toll processors of halloysite that, in management’s good faith belief, can process halloysite to the Company’s specifications (one of the agreements may be a back-up or standby arrangement); (iv) 8.3% of the options if EBITDA is positive over a period of twelve months; (v) 8.3% of the options if EBITDA equals or exceeds $2 million over a period of twelve months; and (vi) 8.3% of the options if EBITDA equals or exceeds $4 million over a period of twelve months. The vesting under the first three conditions need not be sequential and the vesting under fourth and fifth or under the fourth, fifth, and sixth, or the fifth and sixth can occur simultaneously. EBITDA is defined as operating incomeplus depreciation and amortization expenseplus non-cash expenseplus any unusual, one-time expense incurred during the period. The options were granted under the 2017 Incentive Plan, which was adopted on August 18, 2017 by the Board of Directors. Forty million shares of Common Stock are subject to the plan. On December 7, 2017, the Board of Directors, on the recommendation of the Compensation Committee, granted to Mr. Zeitoun a bonus for service in 2017 of $120,000, and in particular for work on amendments to the Series A and Series 2023 Notes and the BASF supply and tolling agreements, and to each of Mr. Carney and Mr. Gleeson a bonus for service in 2017. The 2018 Compensation 2018 salaries for the Named Executive Officers are as follows: Mr. Zeitoun: $350,000; Mr. Carney: $200,000; Mr. Gleeson; $250,000. The Board, on recommendation of the Compensation Committee, awarded bonuses for 2018 performance in the amount of $75,000 to In reaching its decisions for 2018 compensation, the Compensation Committee and the Board took into account (i) the results vote the Say-on-Pay vote (86%) in favor, which suggested that stockholders were generally favorable to the compensation scheme, (ii) the Company’s financial results and prospects for generating revenues and the need to conserve capital, which led to no increase in salary, (iii) their efforts in connection of the amendment of Series A and the Series 2023 notes and the sale of the waste piles for $4.5 million, which led to the bonus and (iv) the options granted in 2017, which provided sufficient lion-term incentive, so that no more long-term incentive was deemed necessary. ** * * Approval of the advisory vote on executive compensations requires a majority of votes cast. OUR BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” ON THE ADVISORY VOTE ON EXECUTIVE COMPENSATION 42
Our Certificate of Incorporation The Board of Directors has unanimously approved the advisability of, and adopted, subject to stockholder approval, an amendment to our Certificate of Incorporation, providing for an increase in the number of authorized shares from 410,000,000 to 710,000,000 and an increase in the number of authorized shares of Common
The affirmative vote of a majority of all outstanding shares of Common Stock is required for approval of the If this Proposal is approved by our stockholders, the Amendment to our Certificate of Incorporation will Why Additional Shares Are Needed As of the date of this proxy statement, all except 27,541,647 of the 400 million authorized shares of Common Stock
Uses of Additional The Board of Directors has no specific plans for the additional shares. The shares many be used, among other reasons, in connection financings, the grant of shares or options to
The additional shares of Common Stock authorized by the proposed amendment can be issued upon approval by the Board of Directors without further vote of our stockholders except as may be required in particular cases by applicable law, regulatory agencies or, if the shares of Common Stock become listed, the rules of a stock exchange.
Under Delaware law, stockholders are not entitled to appraisal rights with respect to their shares of Common Stock in the event that the Certificate of Incorporation is amended to authorize additional shares.
Information about the Common Stock
Dividend Rights The Delaware General Corporation Law (“DGCL”) provides that dividends may be paid out of a
The statute defines the term “surplus” in relation to the
Miscellaneous The Common Stock is not convertible.
The Common Stock has no sinking fund provisions, is not subject to redemption, and is not liable to further calls or to assessment by the Company for liabilities of the Company imposed on its stockholders.
The Board of Directors is not classified.
There is no preferred stock outstanding and hence the Common Stock is not subject to any preferred stock. If preferred stock is issued, it could have liquidation preferences over Common Stock.
Upon liquidation, the Common Stock is entitled to receive distributions on a pro rata basis.
The Common Stock has no preemptive rights, except as set forth below. Until such time as Samlyn Onshore Fund, LP, a Delaware limited partnership (“Samlyn Onshore”), and Samlyn Offshore Master Fund, Ltd., a Cayman Islands exempted company (“Samlyn Offshore,” and together with Samlyn Onshore, the “Investors” together with any of their Affiliates, beneficially own less than 9,700,000 shares of Common Stock in the aggregate: (a) If the Company proposes to issue any (i) equity securities or (ii) securities convertible into or exercisable or exchangeable for equity securities, other than any Excluded Securities (as defined) (the “Dilutive Securities”), the Company shall deliver to each Investor a written notice prior to the date of the proposed issuance; (b) Each Investor shall have the option, to subscribe for up to a number of such Dilutive Securities, equal to the number of such Dilutive Securities proposed to be offered multiplied by a fraction, the numerator of which is the total number of shares of Common Stock beneficially owned by such Investor and any of its Affiliates at the time the Company proposes to issue any Offer Securities and the denominator of which is the total number of shares of Common Stock issued and outstanding at such time (“Pro Rata Portion”); (c) If any Investor does subscribe or subscribes for a number of Securities less than its Pro Rata Portion, the Company may within 90 days issue the part of such Dilutive Securities as to which such Investor has elected not to subscribe (the “Refused Securities”) to any other Person (a “New Investor”) in accordance with the terms and conditions set forth in the notice.
There are no restrictions on alienability of the Common Stock, and no discrimination against any existing or prospective holder of Common Stock as a result of such holder owning a substantial amount of securities, imposed by the DGCL or the Company’s Certificate of Incorporation or By-Laws.
The amendment to our Certificate of Incorporations under this Item 3 requires the affirmative vote of a majority of our outstanding shares of Common Stock. If the amendment to the Charter is approved, then it will become effective upon filing with the Delaware Department of State, which filing would be made promptly after the Annual Meeting.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION
The Audit Committee has selected
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE INDEPENDENT AUDITOR.
Accompanying this proxy statement are the The following are incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2018 filed on April 16, 2019
The following APPLIED MINERALS, INC. 55 WASHINGTON ST. SUITE 301 BROOKLYN, NY 11201 SCAN TO VIEW MATERIALS & VOTE VOTE IN PERSON A Record Stockholder who wants to vote at the meeting will need to request a ballot to vote these shares. VOTE BY INTERNET Go towww.proxyvote.comor scan the QR Barcode above Use the Internet to transmit voting instructions up until 11:59 P.M. Eastern Time on the day before the meeting. Record holders, if using www.proxyvote.com, please have the proxy card in hand when accessing the website and follow the instructions to obtain records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on the day before the meeting. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date the 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: DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED. APPLIED MINERALS, INC. The Notice of Annual Meeting of Stockholders, Proxy Statement, the Annual Report to Stockholders (Form 10-K), and the Quarterly Report for the three months ended June 30, 2019 (10-Q) are available on the following website: www.proxyvote.com. SOLICITED BY THE BOARD OF DIRECTORS APPLIED MINERALS, INC. ANNUAL MEETING OF STOCKHOLDERS December 4, 2019 The undersigned hereby appoints Eric Basroon and Christopher T. Carney or either of them, with full power of substitution, proxies for the undersigned and authorizes them to represent and vote, as designated, all the shares of Applied Minerals, Inc. registered in the name of the undersigned at the 2019 Annual Meeting to be held at 300 Vesey Street, 12th Floor, New York, NY 10282 on December 4, 2019, at 3:00 p.m., Eastern Time, and at any adjournment of such meeting, as indicated with respect to the proposals listed on the reverse side hereof and with discretionary authority as to any other matters that may properly come before the meeting, as recommended by the Board of Directors, all in accordance with and as described in the Notice and Proxy Statement of the Annual Meeting. If this Proxy is executed without indicating (i) a vote for all nominees (ii) withhold for all nominees or (iii) a vote for all except specified nominee(s), it will be deemed to grant authority to vote FOR all nominees. If this Proxy is executed without indicating voting instructions on one or more of Proposals 2, 3, or 4, then it will be deemed to grant authority to vote FOR such uninstructed Proposal(s). THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. (Continued and to be marked, dated and signed, on the other side) |