UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A INFORMATION
 
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
 
(Amendment No. )
 
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SharpSpring, Inc.
(Name of Registrant as Specified In Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
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550 SW 2nd
5001 Celebration Pointe Avenue, Suite 410
Gainesville, FL 3260132608
 
May 14, 2018June 16, 2020
 
Dear Fellow Stockholder:
 
The 20182020 Annual Meeting of Stockholders (the “Annual Meeting”) of SharpSpring, Inc. (the “Company”) will be held at 10:00 a.m. (Eastern Time) on Wednesday, June 13, 2018Thursday, July 9, 2020 at 550 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601.32608. I hope you will be able to attend.
 
The attached Notice of Annual Meeting and Proxy Statement describe the matters that we expect to be acted upon at the Annual Meeting. Management will be available to answer any questions you may have immediately after the Annual Meeting.
 
Please sign, date and return the enclosed Proxy without delay. The Company’s Annual Report on Form 10-K (including audited financial statements) for the fiscal year ended December 31, 2017,2019, as amended (“Annual Report”) accompanies the Proxy Statement. The proxy materials and Annual Report included in this package are also available on the internet under the “Investors” page of the Company’s website at http://sharpspring.com/.
 
All shares represented by Proxies will be voted at the Annual Meeting in accordance with the specifications marked thereon, or if no specifications are made, (i) as to Proposal No. 1, the Proxy confers authority to vote “FOR” all of the five (5) persons listed as candidates for a position on the Board of Directors; (ii) as to Proposal No. 2, the Proxy confers authority to vote “FOR” the ratification of Cherry Bekaert LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018;2020; (iii) as to Proposal No. 3, the Proxy confers authority to vote “FOR” the issuanceapproval of shares of the Company’s common stock upon conversion of the Convertible Promissory Note dated March 28, 2018 (together with certain additional convertible promissory notes issued in payment of accrued interest thereon, the “Notes”) pursuant to NASDAQ Listing Rule 5635(b); (iv) as to Proposal No. 4, the Proxy confers authority to vote “FOR” the issuance of shares of the Company’s common stock at the election of the Company upon the maturity of the Notes pursuant to NASDAQ Listing Rule 5635(d); (v) as to Proposal No. 5, the Proxy confers authority to vote “FOR” the amendment to increase the number of shares of common stock available for issuance under the 2010 Employee Stock Plan from 1,950,000 to 2,600,000 SharpSpring, Inc. 2019 Equity Incentive Plan; and to provide for certain other amendments; (vi) as to Proposal No. 6, the Proxy confers authority to vote “FOR” the approval of the advisory vote on the compensation of our named executive officers; (vii) as to Proposal No. 7, the Proxy confers authority to vote “FOR” the approval of the frequency we should seek an advisory vote on the compensation of our named executive officers; and (viii)(iv); as to any other business which comes before the Annual Meeting, the Proxy confers authority to vote in the Proxy holder’s discretion.
 
The Company’s Board of Directors believes that a favorable vote for each candidate for a position on the Board of Directors and for all other matters described in the attached Notice of Annual Meeting of Stockholders and Proxy Statement is in the best interest of the Company and its stockholders and recommends a vote “FOR” all candidates and all other matters. Accordingly, we urge you to review the accompanying material carefully and to return the enclosed Proxy promptly.
 
Your vote is important and we encourage you to vote promptly. For record holders, whether or not you are able to attend the Annual Meeting in person, please follow the instructions contained in the Notice on how to vote via internet, email, facsimile,phone, or request a paper proxy card to complete, sign and return by mail so that your shares may be voted. If your shares are held in the name of a broker, bank or other holder of record, follow the voting instructions you receive from the holder of record to vote your shares.
 
Thank you for your investment and continued interest in SharpSpring, Inc.
 
/s/ Steven A. Huey
 
Steven A. Huey,
Chair of the Board of Directors
 

 
SHARPSPRING, INC.
 
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, JUNE 13, 2018THURSDAY, JULY 9, 2020
 
To our Stockholders:
 
Notice is hereby given that the 20182020 Annual Meeting of Stockholders (the “Annual Meeting”) of SharpSpring, Inc. (the “Company”) will be held at 10:00 a.m. (Eastern Time) on Wednesday, June 13, 2018Thursday, July 9, 2020 at 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601,32608, for the following purposes:
 
1.To elect five (5) Directors to the Board of Directors to serve until the 2019 Annual Meeting of Stockholders or until their successors have been duly elected or appointed and qualified;
2.To ratify the appointment Cherry Bekaert LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018;
3.To approve the issuance of shares of the Company’s common stock upon conversion of the Convertible Promissory Note dated March 28, 2018 (together with certain additional convertible promissory notes issued in payment of accrued interest thereon, the “Notes”) pursuant to NASDAQ Listing Rule 5635(b);
4.To approve the issuance of up to 3,646,519 shares of the Company’s common stock at the election of the Company upon the maturity of the Notes pursuant to NASDAQ Listing Rule 5635(d);
5.
To approve an amendment to the Company’s 2010 Employee Stock Plan (the “Plan”) to increase the number of shares of common stock available for issuance under the Plan from 1,950,000 to 2,600,000, and to provide for certain other amendments
1.
To elect five (5) Directors to the Board of Directors to serve until the 2021 Annual Meeting of Stockholders or until their successors have been duly elected or appointed and qualified;
2.
To ratify the appointment Cherry Bekaert LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020;
3.
To approve an amendment to increase the number of shares of common stock available for issuance under the SharpSpring, Inc. 2019 Equity Incentive Plan to 1,025,000;
4.
To consider and take action upon such other business as may properly come before the Annual Meeting or any adjournments thereof.
6.
To hold a non-binding advisory vote on the compensation of our named executive officers;
7.To hold a non-binding advisory vote on how frequently we should seek an advisory vote on the compensation of our named executive officers;
8.
To consider and take action upon such other business as may properly come before the Annual Meeting or any adjournments thereof.
 
The Board of Directors has fixed the close of business on May 1, 2018,June 8, 2020, as the Record Date for determining the stockholders entitled to notice of, and to vote at, the Annual Meeting or any adjournments thereof.
 
For a period of 10 days prior to the Annual Meeting, a stockholders list will be kept at the Company’s office and shall be available for inspection by stockholders during usual business hours. A stockholders list will also be available for inspection at the Annual Meeting.
 
Your attention is directed to the accompanying Proxy Statement for further information regarding each proposal to be made.
 
STOCKHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY AND FAX, EMAIL OR MAIL IT IN THE ENCLOSED STAMPED, SELF-ADDRESSED ENVELOPE AS PROMPTLY AS POSSIBLE. IF YOU SIGN AND RETURN YOUR PROXY WITHOUT SPECIFYING YOUR CHOICES IT WILL BE UNDERSTOOD THAT YOU WISH TO HAVE YOUR SHARES VOTED IN ACCORDANCE WITH THE DIRECTORS’ RECOMMENDATIONS. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY, IF YOU DESIRE, REVOKE YOUR PROXY AND VOTE IN PERSON.
 
By Order of the Board of Directors
 
/s/ Steven A. Huey
Steven A. Huey,
Chair of the Board of Directors
May 14, 2018June 16, 2020
 

 
 
PROXY STATEMENT
 
20182020 ANNUAL MEETING OF STOCKHOLDERS
 
This Proxy Statement is furnished in connection with the solicitation by and on behalf of the Board of Directors (the “Board of Directors” or “Board”) of SharpSpring, Inc. of proxies to be voted at the 20182020 Annual Meeting of Stockholders (the “Annual Meeting”) that will be held at 10:00 a.m. (Eastern Time) on Wednesday, June 13, 2018Thursday, July 9, 2020 at 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 3260132608 and at any adjournments thereof (the “Annual Meeting”). In this Proxy Statement, SharpSpring, Inc. is referred to as “we,” “us,” “our,” or “Company” unless the context indicates otherwise. The Annual Meeting has been called to consider and take action on the following proposals: (i) to elect five (5) Directors to the Board of Directors; (ii) to ratify the appointment of Cherry Bekaert LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018;2020; (iii) to approve the issuance of shares of the Company’s common stock upon conversion of the Convertible Promissory Note dated March 28, 2018 (together with certain additional convertible promissory notes issued in payment of accrued interest thereon, the “Notes”) pursuant to NASDAQ Listing Rule 5635(b); (iv) to approve the issuance of up to 3,646,519 shares of the Company’s common stock at the election of the Company upon the maturity of the Notes pursuant to NASDAQ Listing Rule 5635(d); (v) to approve an amendment to increase the number of shares of common stock available for issuance under the 2010 Employee Stock Plan from 1,950,000 to 2,600,000 SharpSpring, Inc. 2019 Equity Incentive Plan; and to provide for certain other amendments; (vi) to approve an advisory vote on the compensation of our named executive officers; (vii) to approve the frequency we should seek an advisory vote on the compensation of our named executive officers; and (viii)(iv) to consider and take action upon such other business as may properly come before the Annual Meeting or any adjournments thereof.
 
The Board of Directors knows of no other matters to be presented for action at the Annual Meeting. However, if any other matters properly come before the Annual Meeting, the persons named in the proxy will vote on such other matters and/or for other nominees in accordance with their best judgment. The Company’s Board of Directors recommends that the stockholders vote in favor of each of the director nominees and each of the proposals.
 
Only holders of record of common stock of the Company at the close of business on May 1, 2018June 8, 2020 (the “Record Date”) will be entitled to vote at the Annual Meeting.
 
The approximate date on which this Proxy Statement, the proxy card and other accompanying materials are first being sent or given to stockholders is May 14, 2018.June 17, 2020. A copy of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2019, as amended (“Annual Report”) is enclosed with these materials, but should not be considered proxy solicitation material. The Company intends to provideAdditionally, the proxy materials by a “notice and access” process throughAnnual Report included in this package are also available on the Internet. Those stockholders who wish to receive paper proxy materials may request them. This process will be available commencing after our 2018 Annual Meeting.internet under the “Investors” page of the Company’s website at http://sharpspring.com/.
 
The principal executive offices of our Company are located at 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601,32608, and our telephone number is 888-428-9605.
 

 
INFORMATION CONCERNING SOLICITATION AND VOTING
 
Why did I receive this Proxy Statement?
 
Our Board of Directors is soliciting your proxy to vote at the Annual Meeting because you were a stockholder of record at the close of business on May 1, 2018June 8, 2020 (the “Record Date”), and are entitled to vote at the meeting. The Company has delivered this Proxy Statement and the Annual Report, along with either a proxy card or a voting instruction card to you by mail beginning on or about May 14, 2018.June 17, 2020. This Proxy Statement summarizes the information you need to know to vote at the Annual Meeting. You do not need to attend the Annual Meeting to vote your shares.
 
Who can attend the Annual Meeting?
 
All stockholders as of the Record Date, or their duly appointed proxies, may attend.
 
What do I need to be admitted to the Annual Meeting?
 
In order to be admitted to the Annual Meeting, a stockholder must present proof of ownership of SharpSpring, Inc. common stock on the Record Date. Any holder of a proxy from a stockholder must present the proxy card, properly executed. If your shares are held in the name of a bank, broker or other holder of record, you must present proof of your ownership, such as a bank or brokerage account statement, to be admitted to the meeting. All stockholders must also present a form of personal identification in order to be admitted to the meeting.
 
What am I being asked to vote on at the meeting?
 
We are asking our stockholders to elect directors, ratify the appointment of our independent registered public accounting firm approve for purposes of the NASDAQ Listing Rules, certain issuances or potential issuances of shares of Company common stock in connection with certain conversions of the Notes or payment of the Notes at maturity that need or potentially need stockholder approval,and approve an amendment to our 2010 Employee Stock Plan, approve our executive compensation in a non-binding advisory vote and approve the frequency in which we seek approval of our executive compensation in a non-binding advisory vote.SharpSpring, Inc. 2019 Equity Incentive Plan.
 
Who is entitled to vote?
 
Stockholders as of the close of business on the Record Date are entitled to vote. Each stockholder is entitled to one vote for each share of common stock held on the Record Date. Stockholders are not entitled to cumulative voting.
 
How many votes are needed for approval of each item?
 
Proposal Number 1. Directors will be elected by a plurality of the votes cast in person or by proxy, meaning the five nominees receiving the most votes will be elected as directors. A “withhold” vote with respect to any nominee will not effect the election of that nominee. Stockholders are not entitled to cumulative voting with respect to the election of directors.
 
Proposal Number 2. The appointment of Cherry Bekaert LLP to serve as our independent registered public accounting firm will be ratified if a majority of the votes present in person or by proxy and entitled to vote on the matter vote in favor of the proposal.Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal.
 
Proposal Number 3. The issuance of shares of the Company’s common stock upon conversion of the Notes pursuantamendment to NASDAQ Listing Rule 5635(b)our 2019 Employee Stock Plan will be approved if a majority of the votes present in person or by proxy and entitled to vote on the matter vote in favor of the proposal. Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal.
Proposal Number 4. The issuance of up to 3,646,519 shares of the Company’s common stock at the election of the Company upon the maturity of the Notes pursuant to NASDAQ Listing Rule 5635(d) will be approved if a majority of the votes present in person or by proxy and entitled to vote on the matter vote in favor of the proposal. Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal.

Proposal Number 5. The amendment to our 2010 Employee Stock Plan will be approved if the holders of a majority of the outstanding shares of common stock entitled to vote in person or by proxy and entitled to vote on the matter vote in favor of the proposal. Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal.
Proposal Number 6. The non-binding advisory vote on the compensation of our named executive officers will be approved if a majority of the votes present in person or by proxy and entitled to vote on the matter vote in favor of the proposal.
Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal.
Proposal Number 7. The non-binding advisory vote on how frequently we should seek an advisory vote on the compensation of our named executive officers will be approved.  If none of the alternatives receives the majority of votes cast, the Company will consider the alternative that receives the highest number of votes cast by stockholders to be the frequency selected by the stockholders.  Abstentions will not be counted in determining which of the three alternatives are favored by our stockholders, and broker non-votes will have no effect on the vote for this proposal.
 
Unless a contrary choice is indicated, all duly executed proxies will be voted in accordance with the instructions set forth on the proxy card.
 
What constitutes a quorum?
 
As of the Record Date, 8,453,65511,533,065 shares of our common stock were issued and outstanding. The presence, either in person or by proxy, of the holders of a majority of the shares entitled to vote at the Annual Meeting is necessary to constitute a quorum for the Annual Meeting. Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum.
 

How Do I Vote?
 
Record Holders:
 
1.
Vote by facsimile. Mark, date and sign and followInternet. Follow the facsimileVOTE BY INTERNET instructions on yourthe enclosed proxy card.
2.
Vote by email. Mark, date and sign and followphone. Follow the emailVOTE BY PHONE instructions on yourthe enclosed proxy card.
3.
Vote by mail. Mark, date, sign and mail promptlyFollow the VOTE BY MAIL instructions on the enclosed proxy card (a postage-paid envelope is provided for mailing in the United States).
4.
Vote by fax. Follow the VOTE BY FAX instructions on the enclosed proxy card.
5.
Vote in person. Attend and vote at the Annual Meeting.
 
If you vote by facsimilephone, fax or email,Internet, please DO NOT mail your proxy card.
 
Beneficial Owners (Holding Shares in Street Name):
 
1.
Vote by Internet. The website address for Internet Follow the VOTE BY INTERNET instructions on the enclosed proxy card/voting is on your vote instruction form.card.
2.
Vote by mail. Mark, date, sign and mail promptlyphone. Follow the VOTE BY PHONE instructions on the enclosed voteproxy card/voting instruction formcard.
3.
Vote by mail. Follow the VOTE BY MAIL instructions on the enclosed proxy card/voting instruction card (a postage-paid envelope is provided for mailing in the United States).
3.4.
Vote by fax. Follow the VOTE BY FAX instructions on the enclosed proxy card.
5.
Vote in person. Obtain a valid legal proxy from the organization that holds your shares and attend and vote at the Annual Meeting.
If you vote by phone, fax or Internet, please DO NOT mail your proxy card.
 
What is the difference between being a “record holder” and “holding shares in street name?”
 
Most stockholders of the Company hold their shares through in a stock brokerage account or by a nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
 
Record Holders: If your shares are registered directly in your name with our Company’s transfer agent, Issuer Direct Corporation, you are considered the stockholder of record with respect to those shares, and these proxy materials are being sent directly to you by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to us or to vote in person at the Annual Meeting. We have enclosed a proxy card for you to use.
 

Beneficial Owners (Holding Shares in Street Name): If your shares are held in a stock brokerage account or by a nominee, you are considered the beneficial owner of the shares which are held in “street name” and these proxy materials are being forwarded to you by your nominee, who is considered the stockholder of record with respect to these shares. As the beneficial owner, you have the right to direct your nominee on how to vote and are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you request, complete and deliver a legal proxy from your nominee. Your nominee has enclosed a proxy card/voting instruction card for you to use in directing the nominee how to vote your shares.
 
What happens if I return my signed proxy card but forget to indicate how I want my shares of common stock voted?
 
If you sign, date and return your proxy and do not mark how you want to vote, your proxy will be counted as a vote “FOR” all of the nominees for directors and “FOR” all of the other proposals.
 

What happens if I do not instruct my broker how to vote or if I mark “abstain” or “withhold” on the proxy?
 
If you mark your proxy “abstain” or “withhold authority,” your vote will have the same effect as a vote against the proposal except for Proposal 7 whereby abstentions will not be counted in determining which of the three alternatives are favored by our stockholders. A “withhold” vote with respect to any director nominee will not effector the election of that nominee.the applicable director. If you do not instruct your broker how to vote, your broker may vote for you on “routine” proposals but not on “non-routine” proposals. The ratification of our auditor is considered a routine, matter, but all other proposals the election of directors and the approval of the amendment to our 2019 Equity Incentive Plan are considered non-routine matters.non-routine. Therefore, if you do not vote on the non-routine matterselection of directors or provide voting instructions on the approval of the amendment to our 2019 Equity Incentive Plan, your broker will not be allowed to vote your shares on those matters and your broker will return your proxy card with no vote (the “non-vote”) on the non-routine matter.these matters. Broker non-votes with respect to a matter will not be considered as present and entitled to vote with respect to that matter and thus will have no effect on the vote for that matter.
 
Can I revoke or change my voting instructions before the meeting?
 
For shares that are held in "street name", the stockholder must follow the directions provided by its bank, broker or other intermediary for revoking or modifying voting instructions. For shares that are registered in the stockholder's own name, the proxy may be revoked by written notification to the Company Secretary prior to its exercise and providing relevant name and account information, submitting a new proxy card with a later date (which will override the earlier proxy) or voting in person at the Annual Meeting.
 
Who will count the vote?
 
Edward Lawton,Michael Power, our Chief Financial Officer, will tabulate the votes and act as inspector of election at the Annual Meeting.
 
Where can I find the voting results of the Annual Meeting?
 
We intend to publish the final results in a current report on Form 8-K within four business days after the end of the Annual Meeting.
 
What does it mean if I get more than one proxy card?
 
It means that you hold shares registered in more than one account. You must return all proxies to ensure that all of your shares are voted.
 

How many copies of the Proxy Statement or Annual Report to Stockholders will I receive if I share my mailing address with another security holder?
 
Unless we have been instructed otherwise, we are delivering only one Proxy Statement Notice of Internet Availability of Proxy Materialsor Annual Report to Stockholders to multiple security holders sharing the same address. This is commonly referred to as “householding.” We will, however, deliver promptly a separate copy of the Proxy StatementNotice of Internet Availability of Proxy Materials or Annual Report to Stockholders to a security holder at a shared address to which a single copy of such documents was delivered, on written or oral request. Requests for copies of the Proxy Statement Notice of Internet Availability of Proxy Materialsor Annual Report to Stockholders or requests to cease householding in the future should be directed to Investor Relations, SharpSpring, Inc., 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601.32608. Telephone 888-428-9605. If you share an address with another stockholder and wish to receive a single copy of these documents, instead of multiple copies, you may direct this request to us at the address or telephone number listed above. Stockholders who hold shares in “street name” may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
 
How can I obtain additional proxy materials or other Company materials?
 
The proxy materials and Annual Report included in this package, along with the Company’s other SEC filings, are available on the internet under the “Investors” page of the Company’s website at sharpspring.comhttp://sharpspring.com/. Additionally, any stockholder desiring additional proxy materials, a copy of any other document incorporated by reference in this Proxy Statement, or a copy of the Company’s bylaws should contact Investor Relations, SharpSpring, Inc., 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601.32608. Telephone 888-428-9605.

 
Who pays for the cost of this proxy solicitation?
 
The Company pays for the cost of soliciting proxies on behalf of the Board of Directors. The Company also will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding proxy material to beneficial owners. Proxies may be solicited by mail, telephone, other electronic means or in person. Proxies may be solicited by directors,Directors, officers and regular, full-time employees of the Company, none of whom will receive any additional compensation for their services.services, may by telephone, facsimile, email or personally, request the return of proxies.
 
Who are the largest principal stockholders?
 
See “Security Ownership of Certain Beneficial OwnersVoting Securities and Principal Holders Thereof” elsewhere in this Proxy Statement for a table setting forth each owner of greater than 5% of the Company’s common stock as of the Record Date.
 
What percentages of stock do the directors and officers own?
 
Together, they own approximately 10%21.8% of our Company common stock as of the Record Date. For information regarding the ownership of our common stock by directors and officers, see the section entitled “Security Ownership of Certain Beneficial OwnersVoting Securities and ManagementPrincipal Holders Thereof” elsewhere in this Proxy Statement.
 
Do I have dissenters’ rights of appraisal?
 
Under Delaware General Corporation Law, our stockholders are not entitled to appraisal rights with respect to any of the items proposed to be voted upon at the Annual Meeting.
 
Where can I find general information about the Company?
 
General information about us can be found on our website at http://sharpspring.com/. The information on our website is for informational purposes only and should not be relied upon for investment purposes. The information on our website is not incorporated by reference into this Proxy Statement and should not be considered part of this or any other report that we file with the Securities and Exchange Commission (“SEC”). We make available free of charge, either by direct access on our website or a link to the SEC’s website, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Our reports filed with, or furnished to, the SEC are also available directly at the SEC’s website at www.sec.gov.
 
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF EACH DIRECTOR NOMINEEE AND FOR A PROPOSAL IF NO CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE DISCRETION OF THE PERSONS NAMED IN THE PROXY WITH RESPECT TO ANY OTHER BUSINESS THAT MAY COME BEFORE THE ANNUAL MEETING.
 


 
INFORMATION REGARDING DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
 
Board of Directors
 
Our bylaws provide that the number of directors is determined by resolution of the Board of Directors. Our Board of Directors is currently set at sevenfive directors and we currently have sevenfive directors serving on our Board of Directors. Five of ourAll current directors are standing for reelection at the Annual Meeting; Roy W. Olivier and John T. Troost have determined not to stand for re-election.Meeting. Each director is elected to serve a one (1) year term until the next annual meeting of stockholders and until the election and qualification of his or her successor or his or her earlier resignation or removal. After the Annual Meeting, our Board of Directors will have five members.
 
The Company’s Nominating and Corporate Governance Committee may evaluate individuals in the future to consider additional members for our Board of Directors following the Annual Meeting, although there is no current active candidate search currently underway and the Board of Directors is considering setting the number of directors to five directors.search. Proxies cannot be voted for a greater number of persons than the number of nominees named.
 
The names of the five directors standing for reelection at the Annual Meeting, and certain information about each of them, are set forth below.
 
Identity of Directors Standing for Reelection
 
Name Age Year First Elected Director Positions/Committees*
 
Independent Age 
Year First
Elected Director
 
 
Positions/Committees
 
 
Independent
Steven A. Huey 52 2016 COB, AC, CC, NCGC
 
yes 54 2016 COB, AC, CC, NCGC yes
Richard Carlson 45 2015 CEO, P
 
no 47 2015 CEO, P no
David A. Buckel 56 2014 AC, FE
 
yes 58 2014 AC, NCGC, FE yes
Marietta Davis 58 2017 AC, CC, NCGC
 
yes 60 2017 AC, CC yes
Daniel C. Allen** 43 2018 CC, NCGC
 
yes
Scott Miller 48 2019 CC, NCGC yes
 
AC - Audit Committee
CEO, P - Chief Executive Officer, President
COB - Chair of the Board of Directors (non-executive)
CC - Compensation Committee 
FE - Financial Expert 
NCGC - Nominating/Corporate Governance Committee 
*Note that Roy W. Olivier and John L. Troost continue serving as directors through the 2018 Annual Meeting. Mr. Olivier and Mr. Troost will not stand for re-election after their term expires at the 2018 Annual Meeting.
** Pursuant to a certain investors’ rights agreement, an investor has the right to designate one person for election to our Board of directors and the Company agreed to use its reasonable best efforts to cause such person to be elected to the Board at each annual meeting of the Company’s stockholders. The investor designated Mr. Allen, who is an affiliate of investor. See “Transactions with Related Persons” below.
 
Business Experience of Directors Standing for Reelection and New Director Nominees
 
Steven A. HueyHuey.. Steven A. Huey has been a director since December 2016 and the chair of our Board of Directors since July 2017. Since August 2012, Mr. Huey has been Chief Executive Officer of Capture Higher Ed, a technology firm that helps educational institutions meet their enrollment goals. Prior to that, from November 2007 to August 2012, Mr. Huey was Chief Operating Officer of The Learning House, Inc. Mr. Huey received a B.S. in Accounting and Finance from Miami University and an MBA from Emory University. Mr. Huey’s qualifications to serve on our Board of Directors include his extensive experience as a technology company executive, with a focus on growing early stage companies.companies.
 
Richard A. Carlson. Richard Carlson has been a director and has served as the Company’s Chief Executive Officer and President since October 1, 2015. From August 1, 2015 to October 1, 2015, he served as President of the Company. From August 15, 2014 until August 1, 2015, he served as the President of SharpSpring Technologies, Inc., our wholly owned subsidiary. Mr. Carlson founded RCTW, LLC (fka SharpSpring, LLC) in December 2011 and served as its President until it was acquired by the Company on August 15, 2014. From April 2009 to December 2011, he served as the Managing Director of US Operations for Panda Security, an international internet security software company. Mr. Carlson’s qualifications to serve on our Board of Directors include his knowledge of marketing automation technology, email technology, marketing strategies, as well as his general leadership skills.skills.
 

 
David A. Buckel. David A. Buckel has been a director since January 2014. Since November 2007 to present, Mr. Buckel has served as the Managing Director at BVI Venture Services, a professional services firm that provides experienced, C-Suite professionals to deliver strategic and functional consulting services to both private and small public technology companies. Mr. Buckel has hands-on experience creating accounting and control systems and processes, financial statements, financial and operating metrics, dashboards, cash flow forecast, budget processes, trend analysis and dealing with auditors. Additionally, Mr. Buckel has been CFO for various NASDAQ and AMEX Companies leading growth strategy, financial operations and various fund raising efforts. Mr. Buckel holds an M.B.A in Finance and Operations Management from Syracuse University and a B.S. in Accounting from Canisius College. He is also a Certified Management Accountant (CMA). Mr. Buckel’s qualifications to serve on our Board of Directors include a strong background and skill set in areas relating to board service, finance and management.management.
 
Marietta DavisDavis.. Marietta Davis has been a director since July 2017. Ms. Davis is currently an Advisory Board Member at DataOceans, LLC, a customer communications management solutions and services company, where she has served since April 2016. She is also currently a National Board Member of Youth Villages, a nationally-recognized nonprofit organization that helps children, young people and families, where she has served since January 2010. Davis also served as Vice President – US Dynamic Sales at Microsoft, from 2013 to 2016, where she helped define marketing strategies for SMB, mid-tier and enterprise customers for Dynamics CRM Cloud and ERP products and services. Prior to that time, from 2009 to 2013, Davis served as General Manager – Enterprise Accounts, Greater Southeast District at Microsoft, where she led the sales organization and managed strategic community engagement in the areas of economic development and innovation for that district. Davis holds a B.S. in communications from Bradley University. Ms. Davis’ qualifications to serve on our Board of Directors include experience in sales and marketing leadership roles in the CRM industry, which is highly-correlated to the Company’s marketing automation industry segment.
 
Daniel AllenScott Miller.. Daniel Allen Scott Miller brings nearly two decades of investment management knowledge as well as significant operating experience to the SharpSpring board. Since 2011, he has been a director since April 2018. Mr. Allenserved as the Founder and Managing Member of MVM Funds, an investment management firm that oversees multiple funds and limited partnerships, including Greenhaven Road Capital Fund 1, Greenhaven Road Capital Fund 2, and Greenhaven Road Capital Offshore LP. Scott also currently serves as Managing Partneron the board of Corona Park Investment Partners, a private investmentAcelero Learning, an education company that investshe cofounded and grows profitable technology enabled companies. He has held that position since January 2012. Since January 2013, he has also served as CEOthe Chief Financial Officer. Acelero, has grown to over 1,400 employees. Scott received a Bachelor of Evercel (EVRC), a holding company that manages its portfolio companiesArts degree from the University of Pennsylvania and seeks new opportunities to invest capital for long term returns. Evercel is the parent company of Printronix, a global industrial printing company, wherean MBA degree from Stanford University. Mr. Allen serves as Chairman of the Board. From 2001 to 2010, Mr. Allen worked at Bain Capital, where he also focused on investing in technology related growth opportunities.  Prior to Bain Capital, Mr. Allen was on the founding team of Fandango, a strategy consultant at McKinsey and Company, and worked at ABCNews in Moscow, London, Hong Kong and New York City.  Mr. Allen graduated from Harvard College and Harvard Business School. Mr. Allen’sMiller’s qualifications to serve on our Board of Directors include experience managing and investing in growth-focused technology companies.companies.
 
During the past ten years, none of our directors or nominees for director have been involved in any of the proceedings described in Item 401(f) of Regulation S-K.
 
Transactions with Related Persons
On August 15, 2014, the Company acquired substantially all the assets and assumed the liabilities of RTCW, LLC (f/k/a SharpSpring LLC), a Delaware limited liability company. The consideration for the transaction, as amended, consisted of a closing cash payment of $5 million in August 2014 and earn out consideration of (i) $2 million in cash and $3 million in Company common stock paid in May 2015, (ii) $1 million in cash paid in April 2016, and (iii) $4 million in Company common stock paid in May 2016. Mr. Richard A. Carlson, our Chief Executive Officer and President and a director, served throughout this time as RCTW’s president, and held a 33.8% ownership stake in RCTW, and Mr. Travis Whitton, our Chief Technology Officer, held a 13.0% ownership stake in RCTW. Mr. Steven A. Huey, one of our directors who is standing for reelection, held a 5.7% ownership stake in RCTW. Each of Mr. Carlson, Mr. Whitton and Mr. Huey were entitled to that proportionate amount of the earn-out consideration paid in connection with our Company’s acquisition of the RCTW assets. At no time prior to August 15, 2014, was Mr. Carlson, Mr. Whitton or Mr. Huey a “related person” as defined in Item 404 of Regulation S-K.
 
James Morgan, Richard Carlson’s brother-in-law, servesserved as our Vice President of Sales.Sales in 2018 and 2019, and in 2019 began serving as the Vice President of Partnerships. During 20172019 and 2016,2018, Mr. Morgan’s total compensation, including base salary, commissions, bonus and equity compensation approximated $158,000$133,500 and $219,000,$139,000, respectively. Mr. Morgan’s 2016 compensation included a one-time $78,000 payment related to the RCTW earn out that was required to be treated as compensation expense. Mr. Morgan’s compensation package is highly variable based on new sales and is comparable to industry standards. Mr. Morgan also participates in standard Company employment benefits that are available all Company employees.

 
On March 28, 2018, the Company entered into a convertible note purchase agreement (the “Note Purchase Agreement”) with SHSP Holdings, LLC (“SHSP Holdings”), pursuant to which the Company issued to SHSP Holdings an unsecured 5% convertible promissory note in the aggregate principal amount of $8,000,000 (the “Note”). As of the Record Date, no principal or interest has been paid to SHSP Holdings, and approximately $33,400 in interest has accrued on the Note. Simultaneously with the execution of the Note Purchase Agreement and the issuance of the Note, the Company entered into the Investors’ Rights Agreement (the “Investors’ Rights Agreement”) by and among the Company, SHSP Holdings, Richard Carlson, the Company’s CEO, and two management stockholders.Travis Whitton, the Company’s CTO. Under the Investors’ Rights Agreement, among other things, SHSP Holdings will have the right to designate one person for election to the Company’s Board of Directors for as long as SHSP Holdings continues to hold any of the Notes, and the Company agreed to use its reasonable best efforts to cause such person to be elected to the Board of Directors at each annual meeting of the Company’s stockholders. SHSP Holdings designated Daniel C. Allen, an affiliate of SHSP Holdings, who was appointed to our Board of Directors on April 3, 2018. Mr. Allen is the founder and manager of Corona Park Investment Partners, LLC (“CPIP”). CPIP is a member of Evercel Holdings LLC and is a member and sole manager of SHSP Holdings. Evercel, Inc. is a member and the manager of Evercel Holdings LLC and is a member of SHSP Holdings. Additionally, under the Investor Rights Agreement, SHSP Holdings has customary demand and piggyback registration rights with respect to the shares of common stock issued or issuable upon conversion of the Note and, under specified conditions, held by members of SHSP Holdings.
 
PursuantOn May 9, 2019, the Company entered into and made effective a Note Conversion Agreement (the “Conversion Agreement”) with SHSP Holdings and Evercel Holdings, LLC (“Evercel,” and together with SHSP Holdings, the “Investor”), pursuant to Proposal 3,which the parties agreed to the conversion (the “Conversion”) of the Note. The Company’s entry into the Conversion Agreement was unanimously approved by the disinterested members of the Company’s Board of Directors. Mr. Allen resigned as a member of our Board of Directors is recommending that stockholders approveon August 16, 2019.

Under the Conversion Agreement, the Note was deemed to have been converted into the Conversion Shares, and any interest in any amount ceased to accrue or be payable with respect to the Notes, and SHSP Holdings ceases to be a holder of any Note, and the Note cease to be outstanding, for purposes of the Investors’ Rights Agreement dated as of March 28, 2018. Effective as of the issuance of sharesand delivery of the Company’s common stock upon conversion ofConversion Shares to SHSP Holdings, the Note (together with certain additional convertible promissory notes issuedwas canceled and terminated in paymenttheir entirety and of accrued interest thereon, the “Notes”) pursuant to NASDAQ Listing Rule 5635(b). Pursuant to Proposal 4, the Board of Directors is recommending that stockholders approve the issuance of up to 3,646,519 shares of the Company’s common stock at the electionno further force and effect, and any and all indebtedness and other obligations of the Company uponunder the maturityNote was fully performed and discharged, and any and all claims or rights of SHSP Holdings or its affiliates thereunder were fully and finally extinguished and released. Additionally, under the terms of the Notes pursuantConversion Agreement, the Company agreed to NASDAQ Listing Rule 5635(d). In the event of conversionpay in shares 49% of the Notes, affiliates of Mr. Allen will be entitledremaining future interest totaling 115,037 shares. Refer to the proportionate number of shares of“Note 6: Convertible Notes” in Part II, Financial Statements and Supplementary Data in the Company’s common stock issued to the Investor, based upon his affiliates ownership interest in the Investor.Annual Report for additional information.
  
Policies and Procedures for Related-Party Transactions
 
Our Audit Committee considers and approves or disapproves any related person transaction as required by NASDAQ regulations.
 
Corporate Governance
 
Code of Ethics and Business Conduct
 
Our Company has adopted a Code of Ethics and Business Conduct which constitutes a “code of ethics” as defined by applicable SEC rules and a “code of conduct” as defined by applicable NASDAQ rules. Our Code of Ethics and Business Conduct applies to all of the Company’s employees, including its principal executive officer, principal accounting officer, and our Board of Directors. A copy of this Code is available for review on the “Investors” page of the Company’s website at http://sharpspring.com/. Requests for a copy of the Code of Ethics and Business Conduct should be directed to Investor Relations, SharpSpring, Inc., 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601.32608. The Company intends to disclose any changes in or waivers from its Code of Ethics and Business Conduct by posting such information on its website or by filing a Form 8-K.
 
The proxy materials and Annual Report included in this package, along with the Company’s other SEC filings, are available on the internet under the “Investors” page of the Company’s website at http://sharpspring.com/. Additionally, any stockholder desiring additional proxy materials, a copy of any other document incorporated by reference in this Proxy Statement, or a copy of the Company’s bylaws should contact Investor Relations, SharpSpring, Inc., 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601.32608. Telephone 888-428-9605.

 
Director Independence Standards
 
Applicable NASDAQ rules require a majority of a listed company’s board of directors to be comprised of independent directors. In addition, the NASDAQ rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. Under applicable NASDAQ rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.
 

Director Independence
 
In April 2018,2020, our Board of Directors undertook a review of the composition of our Board of Directors and its committees and the independence of each of our present directors and each director standing for reelection.directors. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that each of David A. Buckel, Steven A. Huey, Marietta Davis, Scott Miller, and Daniel C. Allen are(Mr. Allen resigned August 16, 2019) are/were “independent directors” as defined under applicable NASDAQ Stock Market Rules and Exchange Act Rules. In making such determination, our Board of Directors considered the relationships that each such non-employee director hashas/had with our Company and all other facts and circumstances that our Board of Directors deemed relevant in determining hishis/her independence, including the beneficial ownership of our capital stock by each non-employee director. The one member of our Board of Directors who is not an “independent director” is Richard Carlson as a result of his executive officer status with our Company.
 
There are no family relationships between any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer.
 
Board Committees
 
Our Board of Directors has established the committees described below and may establish others from time to time. The charters for each of our committees are described below and are available on the “Investors” page of the Company’s website http://sharpspring.com/.
 
Audit Committee
 
We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our Audit Committee is comprised of David A. Buckel, Steven A. Huey, and Marietta Davis. Mr. Buckel is the chairperson of the committee. Each member of the Audit Committee is “independent” within the meaning of Rule 10A-3 under the Exchange Act and the NASDAQ Stock Market Rules. Our Board of Directors has designated David A. Buckel as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. The Audit Committee’s purpose and power are to (a) retain, oversee and terminate, as necessary, the auditors of the Company, (b) oversee the Company's accounting and financial reporting processes and the audit and preparation of the Company's financial statements, (c) exercise such other powers and authority as are set forth in the Charter of the Audit Committee of the Board of Directors, and (d) exercise such other powers and authority as shall from time to time be assigned thereto by resolution of the Board of Directors.
 
The Audit Committee also has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel and advisors to fulfill its responsibilities and duties. During our last fiscal year, our Audit Committee held four meetings and acted by unanimous consent one time.
 

Compensation Committee
 
Our Compensation Committee is comprised of Marietta Davis, Steven A. Huey and Daniel C. Allen,Scott Miller, with Ms. Davis being the chairperson of the Compensation Committee. Our Board of Directors has determined that each member of the Compensation Committee is an independent director for compensation committee purposes as that term is defined in the applicable rules of NASDAQ and the Exchange Act, is a “non-employee director” within the meaning of Rule 16b-3(d)(3) promulgated under the Exchange Act and is an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code, as amended. The Compensation Committee’s purpose and powers are to (a) review and approve the compensation of the chief executive officer of the Company and such other employees of the Company as are assigned thereto by the Board of Directors and to make recommendations to the Board of Directors with respect to standards for setting compensation levels, (b) exercise such other powers and authority as are set forth in a charter of the Compensation Committee of the Board of Directors, and (c) exercise such other powers and authority as shall from time to time be assigned thereto by resolution of the Board of Directors.
 
Our Compensation Committee has the authority to delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees as the committee may deem appropriate in its sole discretion. If the Committee elects to delegate any authority to a subcommittee, the subcommittee shall be comprised of at least two members who qualify as "non-employee directors" for the purposes of Rule 16b-3 under the Exchange Act, and as "outside directors" for the purposes of Section 162(m) of the Internal Revenue Code, as amended. The Committee is not precluded from accepting solely recommendations from executive officers regarding the amount or form of executive and director compensation. During 2019, our Compensation Committee engaged Pay Governance, as compensation consultants to provide independent consulting services in support of the Committee’s objectives related in general to the competitiveness of the executive compensation program. The scope of work consisted of assisting the Company with establishing a group of peer companies, benchmarking executive pay levels, and assessing the overall competitiveness of the Company’s equity program.
 
The Compensation Committee also has the power to investigate any matter brought to its attention within the scope of its duties, and to retain counsel and advisors to fulfill its responsibilities and duties. During our last fiscal year, our Compensation Committee held four meetings and acted by unanimous consent two times.
 
Compensation Committee Interlocks and Insider Participation
At the start of 2017, our Compensation Committee was comprised of Vadim Yasinovsky, John L. Troost, and David A. Buckel, and Mr. Yasinovsky was the chairperson of the committee. On January 27, 2017, Steven A. Huey replaced Mr. Yasinovsky as a member and as the chairperson of the Compensation Committee. Upon her appointment as a Director in July 2017, Ms. Davis replaced Mr. Troost as a member of the Compensation Committee and also became the chairperson of the committee. On April 27, 2018, Mr. Allen replaced Mr. Buckel as a member of the Compensation Committee. Neither of Marietta Davis, Steven A. Huey, Vadim Yasinovsky, John L. Troost, Daniel C. Allen or David A. Buckel is an officer or employee of our Company. None of our executive officers currently serves, or in the past year has served, as a member of the Board of Directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee. Disclosure is made with respect to Mr. Huey under the section entitled “Transactions with Related Persons” above.
 
Nominating and Corporate Governance Committee
 
Our Nominating and Corporate Governance Committee is comprised of Daniel C. Allen,Scott Miller, Steven A. Huey and Marietta Davis,David A. Buckel, with Mr. AllenMiller being the chairperson of the Nominating and Corporate Governance Committee.
 
Our Board of Directors has determined that each of the committee members is an independent director for Nominating and Corporate Governance Committee purposes as that term is defined in the applicable rules of NASDAQ and the Exchange Act. The Nominating and Corporate Governance Committee’s purpose and powers are to: (a) identify potential qualified nominees for director and recommend to the Board of Directors for nomination candidates for the Board of Directors, (b) develop the Company's corporate governance guidelines and additional corporate governance policies, (c) exercise such other powers and authority as are set forth in a charter of the Nominating and Corporate Governance Committee of the Board of Directors, and (d) exercise such other powers and authority as shall from time to time be assigned thereto by resolution of the Board of Directors.
 
The Nominating and Corporate Governance Committee also has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel and advisors to fulfill its responsibilities and duties. During our last fiscal year, our Nominating and Corporate Governance Committee held four meetings and acted by unanimous consent one time.times.

 
Each of the five directors standing for reelection at the Annual Meeting have expressed their willingness to serve as a director.
 
When new candidates for our Board of Directors are sought, all of our directors evaluate each candidate for nomination as director within the context of the needs and the composition of the Board of Directors as a whole. The Board of Directors conducts any appropriate and necessary inquiries into the backgrounds and qualifications of candidates. When evaluating director nominees, our Board of Directors generally seeks to identify individuals with diverse, yet complementary backgrounds. Our directors consider both the personal characteristics and experience of director nominees, including each nominee’s independence, diversity, age, skills, expertise, time availability and industry background in the context of the needs of the Board of Directors and the Company. The Board of Directors believes that director nominees should exhibit proven leadership capabilities and experience at a high level of responsibility within their chosen fields, and have the experience and ability to analyze business and/or scientific issues facing our Company. In addition to business expertise, the Board of Directors requires that director nominees have the highest personal and professional ethics, integrity and values and, above all, are committed to representing the long-term interests of our stockholders and other stakeholders. Except for Daniel Allen, toTo date, all new candidates have been identifiedi dentified and recommended by members of our Board of Directors, including management and non-management directors, our principal executive officer, and other executive officers, and we have not paid any fee to a third party to assist in the process of identifying or evaluating director candidates. Pursuant to the Investors’ Rights Agreement, the Investor has the right to designate one person for election to our Board of Directors and the Company agreed to use its reasonable best efforts to cause such person to be elected to the Board at each annual meeting of the Company’s stockholders. The Investor designated Mr. Allen, who is an affiliate of Investor. See “Transactions with Related Persons” and “Security Ownership of Certain Beneficial Owners and Management.”
 
Our directors will consider candidates for nomination as director who are recommended by a stockholder and will not evaluate any candidate for nomination for director differently because the candidate was recommended by a stockholder.
 
When submitting candidates for nomination to be elected at our annual meeting of stockholders, stockholders should follow the following notice procedures and comply with applicable provisions of our bylaws. To consider a candidate recommended by a stockholder for nomination at the 20192021 Annual Meeting of Stockholders, the recommendation must be delivered or mailed to and received by our Secretary within the time periods discussed elsewhere in this Proxy Statement under the heading “Stockholder Proposals for 20192021 Annual Meeting.” The recommendation must include the information specified in our bylaws for stockholder nominees to be considered at an annual meeting, along with the following:
 
●
The stockholder’s name and address and the beneficial owner, if any, on whose behalf the nomination is proposed;
●
The stockholder’s reason for making the nomination at the annual meeting, and the signed consent of the nominee to serve if elected;
●
The number of shares owned by, and any material interest of, the record owner and the beneficial owner, if any, on whose behalf the record owner is proposing the nominee;
●
A description of any arrangements or understandings between the stockholder, the nominee and any other person regarding the nomination; and
●
Information regarding the nominee that would be required to be included in our Proxy Statement by the rules of the Securities and Exchange Commission, including the nominee’s age, business experience for the past five years and any other directorships held by the nominee.
 

The information listed above is not a complete list of requisite information. The secretary will forward any timely recommendations containing the required information to our independent directors for consideration.
 
No material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors has occurred since we last provided disclosure regarding these procedures in our Definitive Schedule 14A filed on May 1, 2017.April 30, 2019.
 

Board Leadership Structure
 
Our bylaws provide the Board of Directors with flexibility to combine or separate the positions of Chair of the Board of Directors and Principal Executive Officer in accordance with its determination that utilizing one or the other structure is in the best interests of our Company. Our current structure is that of separate Principal Executive Officer and Chair of the Board of Directors. Richard Carlson serves as our Principal Executive Officer and is responsible for the day-to-day operation of our Company. Steven A. Huey serves as our Chair of the Board of Directors, which is a non-executive position. Mr. Huey is responsible for performing a variety of functions related to our corporate leadership and governance, including coordinating board activities, setting relevant items on the agenda and ensuring adequate communication between the Board of Directors and management, which he does in conjunction with the independent directors. Our Board of Directors has determined that maintaining the independence of a majority of our directors helps maintain its independent oversight of management.
 
Risk Oversight
 
The Board oversees risk management directly and through its committees associated with their respective subject matter areas. Generally, the Board oversees risks that may affect the business of the Company as a whole, including operational matters. The Audit Committee is responsible for oversight of the Company’s accounting and financial reporting processes and also discusses with management the Company’s financial statements, internal controls and other accounting and related matters. The Compensation Committee oversees certain risks related to compensation programs and the Nominating and Corporate Governance Committee oversees certain corporate governance risks. As part of their roles in overseeing risk management, these Committees periodically report to the Board regarding briefings provided by management and advisors as well as the Committees’ own analysis and conclusions regarding certain risks faced by the Company. Management is responsible for implementing the risk management strategy and developing policies, controls, processes and procedures to identify and manage risks. The interaction with management occurs not only at formal board and committee meetings, but also through periodic and other written and oral communications.
 
Stockholder Communications with the Board
 
Stockholders who desire to communicate with the Board of Directors, or a specific director, may do so by sending the communication addressed to either the Board of Directors or any director, c/o SharpSpring, Inc., 550 SW 2nd5001 Celebration Pointe Avenue, Suite, 410, Gainesville, FL 32601.32608. These communications will be delivered directly to the Board, or any individual director, as specified.
 
Board Meetings and Committees; Annual Meeting Attendance
 
During our last fiscal year, our Board of Directors held fivesix Board meetings. Each current director attended at least 75% of the total number of Board meetings and their respective committee meetings of the Board held during our last fiscal year. The Board of Directors acted at various times by unanimous written consent, as authorized by our bylaws and the Delaware General Corporation Law.
 
Our Company has no policy with regard to Board members' attendance at our annual meetings of security holders. One Board member attended our 20172019 annual meeting. 
 
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
 
Section 16(a) of the Securities Exchange Act of 1934 requires that our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC.  Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. To the best of our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to our Company during its most recent fiscal year and Forms 5 and amendments thereto furnished to our Company with respect to its most recent fiscal year, and any written representation referred to in paragraph (b)(1) of Item 405 of Regulation S-K, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements.requirements with the following exception: Mr. Daniel Allen filed one late Form 4, Mr. David Buckel filed one late Form 4, Ms. Marietta Davis filed one late Form 4 and Mr. Steven Huey filed one late Form 4.

 

Hedging Disclosure
We do not have any practices or policies regarding the ability of our employees (including officers) or directors, or any of their designees, to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities.
 
AUDIT COMMITTEE REPORT
 
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Audit Committee Report by reference therein.
 
Role of the Audit Committee
 
The Audit Committee’s primary responsibilities are generally as follows:
 
1.
To retain, oversee and terminate, as necessary, the auditors of the Company;
2.
To oversee the Company's accounting and financial reporting processes and the audit and preparation of the Company's financial statements;
3.
To exercise such other powers and authority as are set forth in the Charter of the Audit Committee of the Board of Directors; and
4.
To exercise such other powers and authority as shall from time to time be assigned thereto by resolution of the Board of Directors.
 
The Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or appropriate to each of the matters assigned to it under the Committee’s charter. In overseeing the preparation of the Company’s financial statements, the Committee met with management and the Company’s outside auditors, including meetings with the outside auditors without management present, to review and discuss all financial statements prior to their issuance and to discuss significant accounting issues. Management advised the Committee that all financial statements were prepared in accordance with generally accepted accounting principles, and the Committee discussed the statements with both management and the outside auditors. The Committee’s review included discussion with the outside auditors of matters required to be discussed pursuant to Statement on Auditing Standards No. 61, as amended (AICPA,  by Professional Standards, Vol. 1. AU section 380), as adopted bythe applicable requirements of the Public Company Accounting Oversight Board in Rule 3200T.(PCAOB) and the SEC.  
 
The Committee has received the written disclosures and the letter from the Company’s outside auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the outside auditor’s communications with the Committee concerning independence, and has discussed with the outside auditors the outside auditor's independence.
 
Recommendations of the Audit Committee. In reliance on the reviews and discussions referred to above, the Committee recommended to the Board that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2019, as amended, for filing with the SEC.
 
This Audit Committee Report has been furnished by the Audit Committee of the Board of Directors.
 
David A. Buckel, Chairman
Marietta Davis
Steven A. Huey
 


 
Executive Officers
 
Identity of Executive Officers
 
Name Age Position
Richard A. Carlson 4547 Director, Chief Executive Officer and President
Edward S. LawtonMichael Power 4054 Chief Financial Officer
Travis Whitton 3740 Chief Technology Officer
 
Business Experience of Executive Officers
 
Richard A. Carlson. Mr. Carlson’s business experience is described above under the caption “Identity and Business“Business Experience of Directors.Directors Standing for Reelection.”
 
Edward S. LawtonMichael Power. Edward S. Lawton Michael Power has served as our Chief Financial Officer since September 2014.December 2, 2019. Mr. LawtonPower is responsible for overseeing our Company’s financial reporting, accounting and administrative functions. Mr. LawtonPower has over 18 yearsthree decades of financialfinance and accounting experience in various leadership roles. Prior to his appointment, Mr. Power was Executive Vice President, Chief Financial Officer and Treasurer for ConnectWise, an IT management and Software-as-a-Service (SaaS) company with a focus on financial planning and analysis and integrating acquisitions for technology companies. From 2006more than 1,000 employees, which was acquired in 2019 by Thoma Bravo. Terms of the ConnectWise deal were not disclosed but it has been reported at approximately $1.5 billion. Prior to September 2014,that, Mr. LawtonPower served as Vice President and Controller for CHUBB, formerly ACE Limited. Mr. Power holds an active CPA in the Directorstate of FinancePennsylvania, CGMA from the American Institute of CPAs, and Senior Directorobtained a Bachelor of Finance at Bottomline Technologies (de), Inc., a publicly-traded cloud-based payment, invoice and digital banking solutions software companyScience in Accountancy from Villanova University..
 
Travis Whitton. Travis Whitton has served as our Chief Technology Officer since the acquisition of the SharpSpring assets in August 2014. Mr. Whitton was a co-founder of RCTW, LLC (fka SharpSpring, LLC) and served as its Chief Technology Officer from January 2012 until it was acquired by the Company in August 2014. From September 2007 to January 2012, Mr. Whitton served as Senior Software Engineer of Grooveshark, an online streaming music company.
 
Each officer is elected annually by the Board of Directors and holds their office until they resign or are removed by the Board of Directors or otherwise disqualified to serve, or their successor is elected and qualified.
 
During the past ten years, none of our executive officers have been involved in any of the proceedings described in Item 401(f) of Regulation S-K.
 
Executive Compensation
 
Compensation Discussion and Analysis
 
The compensation committee of our Board of Directors oversees, reviews and approves all compensation decisions relating to our named executive officers. In the discussion that follows, “executives” refers to our 20172019 named executive officers, Messrs. Carlson, LawtonStanczak, Power, and Whitton. Mr. Stanczak resigned as a named executive officer of our Company on December 2, 2019.

 
Objectives and Philosophy of Our Executive Compensation Program
 
The primary objectives of the compensation committee with respect to executive compensation are to:
 
●
enable us to attract, retain and motivate the best possible executive talent by ensuring that our compensation packages are competitive with those offered by similarly situated companies;
●
align our executive compensation with our corporate strategies and business objectives;
●
promote the achievement of key strategic and financial performance measures; and
●
align executives’ incentives with the creation of stockholder value.
 
To achieve these objectives, the compensation committee evaluates our executive compensation program with the goal of setting compensation at levels the committee believes are competitive with those of other companies of a comparable size within our industry. Executives are also evaluated on their professional growth and individual contributions to the Company’s success. We provide a portion of our executive compensation in the form of stock option awards that vest over time, typically four years, which we believe promotes the retention of our executives and aligns their interests with those of our stockholders since this form of compensation allows our executives to participate in the long-term success of our Company as reflected in stock price appreciation.
  

Compensation Challenges
 
We face challenges in hiring and retaining our executives and other key employees due to several factors. These challenges are similar to those faced by other high-growth technology companies and make recruiting and retaining our executives and other key employees difficult. Specifically, we face challenges related to the pace of our operations, the high growth rate of our businesses, the fact that we are in a competitive industry and the fact that many of our executives and key employees are targeted by other companies.companies.
 
Components of our Executive Compensation Program
 
The primary elements of our current executive compensation program are:
 
●
base salary;
●
cash bonuses;
●
stock option awards; and
●
retirement and other employee benefits
 
We do not have any formal or informal policy or target for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, the Compensation Committee determines what it believes to be the appropriate level and mix of the various compensation components based on recommendations from our chief executive officer, Company performance against stated objectives and individual performance.
 
Base Salary
 
Base salary is used to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our executives. When establishing base salaries, the compensation committee considers a variety of other factors such as the executive’s scope of responsibility, individual performance, prior employment experience and salary history, relative pay adjustments within the Company and our overall financial performance. Base salaries are reviewed at least annually by our compensation committee and may be adjusted from time to time based upon market conditions, individual responsibilities and Company and individual performance.
 
Mr. Whitton became a named executive officer during 2016, after his employment with the Company had commenced. Accordingly, his existing base salary in effect for 2016 prior to becoming a named executive officer was authorized in accordance with standard employee policies.
Mr. Carlson’s salary was increased from $200,000$330,000 to $250,000$340,000 on March 16, 2017.January 1, 2019. During 2016,2018, Mr. Carlson received a base salary of $200,000.$330,000.
 
Mr. Lawton’sStanczak joined the company on December 10, 2018 with a base salary of $185,000.
Mr. Power joined the company on December 2, 2019 with a base salary of $250,000.
Mr. Whitton’s salary was increased from $165,000$175,000 to $185,000$200,000 on DecemberJanuary 1, 2016. From the time2019. During 2018, Mr. Lawton joined the Company in September 2014 until December 1, 2016, Mr. LawtonWhitton received a base salary of $165,000.$175,000.
 
Mr. Whitton has received aThe Company reduced all 2020 base salary of $160,000 since September 1, 2015.
Effectivesalaries 10% as of April 1, 2020, due to the startimpact of 2018, executive salaries were increased as follows: Mr. Carlson’s salary was increased to $300,000, Mr. Lawton’s salary was increased to $200,000 and Mr. Whitton’s salary was increased to $175,000.the Covid-19 virus.
 

 
Cash Bonuses
 
Cash bonuses are used to compensate and align our executives toward certain financial, strategic and operational goals. The Compensation Committee approves payment of quarterly or annual cash bonuses as part of the overall compensation packages of our executive officers, and retains the authority to review and adjust the overall bonus at year-end. During the last three years,2018 and 2019, the executive cash bonuses have beenpaid to our named executive officers were based on revenue and EBITDA targets for the year, as determined by the Compensation Committee, with payments varying between annual and quarterly. For the performance during the year endedyears ending December 31, 2015, executive bonuses were paid annually during February 2016. For the performance during the year ended December 31, 2016,2018 and 2019, executive bonuses were paid quarterly following the financial reporting of each quarter. For the performance during the year ended December 31, 2017, executive bonuses were paid annually during February 2018. The following summarizes the executive cash bonus awards paid to our named executive officers, separated based on both the timing of the payment and the performance year for which the bonus was earned:
  
 
Earned for year
 
 
Paid in Year
 
  
 
2018
 
 
2019
 
 
2018
 
 
2019
 
 
2020
 
NameYear
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richard A. Carlson2019
 $- 
 $117,810 
 $- 
 $86,573 
 $31,238 
 2018
 $69,078 
 $- 
 $51,625 
 $17,453 
 $- 
 
 
 $69,078 
 $117,810 
 $51,625 
 $104,026 
 $31,238 
 
    
    
    
    
    
Travis Whitton2019
 $- 
 $49,500 
 $- 
 $36,375 
 $13,125 

2018
 $29,605 
 $- 
 $22,125 
 $7,480 
 $- 

 
 $29,605 
 $49,500 
 $22,125 
 $43,855 
 $13,125 
 
    
    
    
    
    
Bradley Stanczak (1)2019
 $- 
 $69,300 
 $- 
 $50,925 
 $18,375 

2018
 $28,200 
 $- 
 $25,000 
 $3,200 
 $- 

 
 $28,200 
 $69,300 
 $25,000 
 $54,125 
 $18,375 
 
    
    
    
    
    
Michael Power2019
 $- 
 $- 
 $- 
 $- 
 $- 

2018
 $- 
 $- 
 $- 
 $- 
 $- 

 
 $- 
 $- 
 $- 
 $- 
 $- 
   
 
Paid in Year
 
   
 
2016
 
 
2017
 
 
2018
 
Name Earned For year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richard A. Carlson
 
2017
 $- 
 $- 
 $37,500 
 
 
2016
 $26,250 
 $- 
 $- 
 
 
2015
 $40,000 
 $- 
 $- 
 
 
 $66,250 
 $- 
 $37,500 
 
 
    
    
    
Edward Lawton
 
2017
 $- 
 $- 
 $45,000 
 
 
2016
 $15,750 
 $- 
 $- 

 
2015
 $24,000 
 $- 
 $- 
 
 
 $39,750 
 $- 
 $45,000 
 
 
    
    
    
Travis Whitton
 
2017
 $- 
 $- 
 $15,000 
 
 
2016
 $5,550 
 $7,550 
 $- 
 
 
2015
 $8,000 
 $- 
 $- 
 
 
 $13,550 
 $7,550 
 $15,000 
(1)As disclosed in Current Report 8-K filed on November 11, 2018, Mr. Stanczak received a $25,000 signing bonus upon relocation to the Gainesville, FL area.
 
Stock Option Awards
 
Stock option and stock awards are the primary vehicle for long-term retention of our executives. Our compensation committee believes that stock optionsoption and stock awards promote, create and reward long term stockholder value creation, as well as provide a strong incentive for the executive to remain employed by the Company.
 
The following table shows stock option and stock grants made to executives during 2017.2019.
 
   
 
Number
 
 
 
 
 
Grant Date
 
   
 
of Stock
 
 
Exercise
 
 
Fair Value of
 
Name Grant Date
 
Options (#)
 
 
Price ($)
 
 
Options ($)
 
 
 
 
 
 
 
 
 
 
 
 
 
Richard Carlson(1)
 
3/17/2017
  100,000 
 $4.74 
 $233,861 
 
 
    
    
    
Edward Lawton(2)
 
3/17/2017
  50,000 
 $4.74 
 $116,931 
 
 
    
    
    
Travis Whitton(2)
 
3/17/2017
  35,000 
 $4.74 
 $81,851 
 
 
    
    
    
 
 
Option Awards
 
 
Stock Awards
 
  
 
Number
 
 
 
 
 
Grant Date
 
 
Number of Shares
 
 
Grant Date
 
  
 
of Stock
 
 
Exercise
 
 
Fair Value of
 
 
or Units of Stock
 
 
Fair Value of
 
NameGrant Date
 
Options (#)
 
 
Price ($)
 
 
Options ($)
 
 
Issued
 
 
Options ($)
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richard Carlson2/21/2019
  17,500 
 $13.88 
 $123,085 
  - 
  - 
 
    
    
    
    
    
Travis Whitton2/21/2019
  10,294 
 $13.88 
 $72,402 
  - 
  - 
 
    
    
    
    
    
Michael Power12/2/2019
  - 
  - 
  - 
  50,494 
 $596,839 
 
    
    
    
    
    
___________
1.
The options expire ten years from the grant date andvest over a 4-year period, with 1/48 of the original number of options vesting every month.
 

2.
The options expire ten years from the grant date andvest over a 4-year period, with 25% vesting on the first anniversary of the grant date and an additional 1/48 of the original number of options vesting every month thereafter, until becoming fully vested on the fourth anniversary of the grant date.
Benefits and Other Compensation
 
We maintain broad-based benefits that are provided to all of our employees, including (for U.S. resources) health and dental insurance, life insurance and a retirement plan. Executives are eligible to participate in all of our employee benefit plans, in each case on the same terms as our other employees. No employee benefit plans are in place solely for the benefit of our executives.
 
Severance and Change in Control Benefits
 
Pursuant to employment agreements we have entered into with our executives and the terms of our 2010 Restated Employee Stock Plan and 2019 Equity Incentive Plan, our executives are entitled to certain benefits in the event of a change in control of our Company or the termination of their employment under specified circumstances, including termination following a change in control. We believe these benefits help us compete for and retain executive talent and are generally in line with severance packages offered to executives by the companies in our peer group. We also believe that these benefits would serve to minimize the distraction caused by any change in control scenario and reduce the risk that key talent would leave the Company before any such transaction closes, which could reduce the value of the Company if such transaction failed to close.
 
2017

2019 Summary Compensation Table
 
The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers that earned more than $100,000 for the fiscal years ended December 31, 2017 and 2016:
  
 
 
 
 
 
 
 
Option
 
 
All
 
 
 
 
NameYear
 
Salary
 
 
Bonus
 
 
Awards
 
 
Other
 
 
Total
 
  
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
  
 
 
 
 
(a)
 
 
(b)
 
 
(c)
 
 
 
 
Richard Carlson2019
 $340,000 
 $117,810 
 $123,085 
 $8,400 
 $589,295 
Chief Executive Officer and President (Principal Executive Officer), Director2018
 $330,000 
 $69,078 
 $233,198 
 $8,250 
 $640,526 
 
    
    
    
    
    
Travis Whitton2019
 $200,000 
 $49,500 
 $72,402 
 $7,316 
 $329,218 
Chief Technology Officer2018
 $175,000 
 $29,605 
 $116,599 
 $6,364 
 $327,568 
 
    
    
    
    
    
Bradley Stanczak (1)2019
 $185,000 
 $69,300 
 $- 
 $5,771 
 $260,071 
Chief Financial Officer (Principal Financial Officer)2018
 $11,266 
 $28,200 
 $629,121 
 $- 
 $668,587 
 
    
    
    
    
    
Michael Power (2)2019
 $20,032 
 $- 
 $596,839 
 $- 
 $616,871 
Chief Financial Officer (Principal Financial Officer)2018
 $- 
 $- 
 $- 
 $- 
 $- 
______________________________________________
 
 
 
 
 
 
 
 
 
 
Option
 
 
All Other
 
 
 
 
Name
 
Year
 
Salary
 
 
Bonus
 
 
Awards
 
 
Compensation
 
 
Total
 
 
 
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
 
 
 
 
 
 
(a)
 
 
(b)
 
 
(c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richard Carlson
 
2017
 $239,586 
 $- 
 $233,861 
 $7,188 
 $480,635 
Chief Executive Officer and President (Principal Executive Officer), Director
 
2016
 $200,000 
 $66,250 
 $- 
 $7,950 
 $274,200 
 
 
    
    
    
    
    
Edward Lawton
 
2017
 $185,000 
 $- 
 $116,931 
 $5,550 
 $307,481 
Chief Financial Officer (Principal Financial Officer)
 
2016
 $166,667 
 $39,750 
 $17,707 
 $6,193 
 $230,317 
 
 
    
    
    
    
    
Travis Whitton (1)
 
2017
 $160,000 
 $- 
 $81,851 
 $5,027 
 $246,878 
Chief Technology Officer
 
2016
 $160,000 
 $13,550 
 $37,911 
 $3,758 
 $215,219 
_________
(a)
The amounts in this column represent the dollar value of cashreflect earned bonus earnedawards by theour named executive officer during the fiscal year.
officers under our executive incentive compensation program.
(b)
The amounts in this column represent the grant date fair values of option grants as computed based on the Black-Scholes methodology.
(c)
These amounts consist primarily of our matching contributions to each executive’s retirement savings plan account.
account and severance payments
(1) Mr. Whitton became an executive officer of the CompanyStanczak served as our Chief Financial Officer from December 10, 2018 to December 1, 2019.
(2) Mr. Power was named as our Chief Financial Officer on JulyDecember 2, 2016.2019.
 

During 20172019 and 2016,2018, we provided our U.S. employees the ability to contribute to a 401(k) retirement plan. Under the plan, eligible employees may elect to defer part of their compensation to the plan each year. The amount of compensation an employee can elect to defer is generally expressed as a percentage of the employee’s compensation up to a maximum of $18,000 $19,000 for 20172019 and 2016.$18,500 for 2018. The Company provides a matching contribution of 100% of employee deferrals up to 3% of total compensation. We have no other annuity, pension, retirement or similar benefit plans in place on behalf of our executive officers.
 
We grant stock awards and stock options to our executive officers based on their level of experience and contributions to our Company. The aggregate fair value of awards and options are computed in accordance with FASB ASC 718 and options are reported in the Summary Compensation Table above in columns (a). The assumptions made in the computation may be found in Note 15: Stock-Based Compensation to our financial statements contained in our latest Form 10-K Annual Report.
 
At no time during the last fiscal year was any outstanding option otherwise modified or re-priced, and there was no tandem feature, reload feature, or tax-reimbursement feature associated with any of the stock options we granted to our executive officers or otherwise.
 

The table below summarizes all of the outstanding equity awards for our named executive officers as of December 31, 2017,2019, our latest fiscal year end:
 
Outstanding Equity Awards At Fiscal Year-End
 
 
Option Awards
 
 
Stock Awards
 
 
 
 
 
 
Number of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
underlying
 
 
 
 
 
 
 
 
 
 
 
Number of
 
 
Market value of
 
 
 
 
 
 
unexercised
 
 
Option
 
 
Option
 
 
Initial
 
 
shares or units
 
 
shares or units
 
 
 
 
 
 
options(#)
 
 
exercise
 
 
expiration
 
 
vesting
 
 
of stock that
 
 
of stock that
 
 
 
 
Name
 
Exercisable
 
 
Unexercisable
 
 
price ($)
 
 
date
 
 
date
 
 
have not vested
 
 
have not vested
 
 
 
 
Richard A. Carlson
  3,646 
  13,854 
 $13.88 
 
02/21/29
 
 
03/21/19
 
  - 
  - 
  (1)
 
  45,834 
  54,166 
 $4.65 
 
02/08/28
 
 
03/08/18
 
  - 
  - 
  (1)
 
  68,750 
  31,250 
 $4.74 
 
03/17/27
 
 
04/17/17
 
  - 
  - 
  (1)
 
  250,000 
  - 
 $4.80 
 
10/01/25
 
 
11/01/15
 
  - 
  - 
  (1)
 
  60,000 
  - 
 $6.29 
 
06/01/25
 
 
12/31/16
 
  - 
  - 
  (2)
 
    
    
    
 
 
 
 
 
 
    
    
    
Bradley Stanczak
  25,000 
  75,000 
 $12.40 
 
12/10/28
 
 
12/10/19
 
  - 
  - 
  (3)
 
    
    
    
 
 
 
 
 
 
    
    
    
Travis Whitton
  - 
  10,294 
 $4.65 
 
02/21/19
 
 
02/21/19
 
  - 
  - 
  (3)
 
  22,917 
  27,083 
 $4.65 
 
02/08/28
 
 
02/08/19
 
  - 
  - 
  (3)
 
  24,603 
  10,397 
 $4.74 
 
03/17/27
 
 
03/17/18
 
  - 
  - 
  (3)
 
  23,959 
  1,041 
 $3.34 
 
02/17/26
 
 
02/17/17
 
  - 
  - 
  (3)
 
  25,000 
  - 
 $6.29 
 
06/01/25
 
 
12/31/16
 
  - 
  - 
  (2)
 
    
    
    
 
 
 
 
 
 
    
    
    
Michael Power
  - 
  - 
  - 
  - 
  - 
  50,494 
  596,839 
  (3)
 
 
 
Number of
 
 
 
 
  
 
 
 
 
 
securities
 
 
 
 
  
 
 
 
 
 
underlying
 
 
 
 
  
 
 
 
 
 
unexercised
 
 
Option
 
OptionInitial
 
 
 
 
 
options(#)
 
 
exercise
 
expirationvesting
 
 
 
Name
 
Exercisable
 
 
Unexercisable
 
 
price ($)
 
datedate
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Richard A. Carlson
  18,750 
  81,250 
 $4.74 
03/17/2704/17/17
(1)
 
  135,417 
  114,583 
 $4.80 
10/01/2511/01/15
(1)
 
  45,000 
  15,000 
 $6.29 
06/01/2512/31/16
(2)
 
    
    
    
      
Edward Lawton
  - 
  50,000 
 $4.74 
03/17/2703/17/18
(3)
 
  2,480 
  4,520 
 $5.15 
07/12/2607/12/17
(3)
 
  14,063 
  10,937 
 $4.82 
09/13/2509/13/16
(3)
 
  41,667 
  8,333 
 $6.29 
08/14/2408/14/15
(3)
 
    
    
    
      
Travis Whitton
  - 
  35,000 
 $4.74 
03/17/2703/17/18
(3)
 
  11,459 
  13,541 
 $3.34 
02/17/2602/17/17
(3)
 
  18,750 
  6,250 
 $6.29 
06/01/2512/31/16
(2)
_________________________
1.
Vests monthly over four years, with 1/48 vesting each month.
2.
Vests 50% on December 31, 2016, 25% on December 31, 2017 and 25% on December 31, 2018.
3.
Vests over four years, with 25% vesting on the first anniversaryDecember 2, 2019, and 1/48 of the grant vesting each month thereafter.
 

Compensation of Non-Employee Directors
 
Compensation for our directors is discretionary and is reviewed from time to time by our Board of Directors. Any determinations with respect to Board compensation are made by our Board of Directors. Since our second quarter of 2017, we have compensated all non-employeenonemployee directors with a stipend of $7,500 per quarter ($30,000 per year), payable quarterly in stock. Prior to this, all non-employee directors with the exception of our chairman received $5,000 per quarter ($20,000 per year), payable quarterly in stock. From November 2014 until his departure in the third quarter of 2017, our former Chair of the Board of Directors received a stipend of $150,000 per year, payable quarterly in stock. Typically, newly elected non-employee directors receive 16,000 stock options upon joining the board, which vest over four years. All directors are also entitled to reimbursement for travel expenses for attending director meetings.
  
Set forth below is a summary of the compensation of our directors during our December 31, 20172019 fiscal year.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonqualified
 
 
 
 
 
 
 
 
 
Fees Earned
 
 
 
 
 
 
 
 
Non-Equity
 
 
Deferred
 
 
 
 
 
 
 
 
 
or Paid in
 
 
Stock
 
 
Option
 
 
Incentive Plan
 
 
Compensation
 
 
 All Other
 
 
 
 
Name
 
Cash
 
 
Awards
 
 
Awards
 
 
Compensation
 
 
Earnings
 
 
Compensation
 
 
Total
 
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
Semyon Dukach (1)
  - 
 $158,388 
  - 
  - 
  - 
 $19,498 
 $177,886 
John L. Troost (2)
  - 
 $26,787 
  - 
  - 
  - 
  - 
 $26,787 
David A. Buckel (2)
  - 
 $26,787 
  - 
  - 
  - 
  - 
 $26,787 
Steven A. Huey (2)(3)
  - 
 $26,787 
 $35,832 
  - 
  - 
  - 
 $62,619 
Marietta Davis (2)(3)
  - 
 $9,833 
 $33,164 
  - 
  - 
  - 
 $42,997 
Roy W. Olivier (2)(3)
  - 
 $9,833 
 $33,164 
  - 
  - 
  - 
 $42,997 
Vadim Yasinovsky (4)
  - 
 $14,570 
  - 
  - 
  - 
  - 
 $14,570 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonqualified
 
 
 
 
 
 
 
 
 
Fees Earned
 
 
 
 
 
 
 
 
Non-Equity
 
 
Deferred
 
 
 
 
 
 
 
 
 
or Paid in
 
 
Stock
 
 
Option
 
 
Incentive Plan
 
 
Compensation
 
 
 All Other
 
 
 
 
Name
 
Cash
 
 
Awards
 
 
Awards
 
 
Compensation
 
 
Earnings
 
 
Compensation
 
 
Total
 
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
 
($)
 
Daniel C. Allen (1)
 $7,500 
 $30,373 
  - 
  - 
  - 
  - 
 $37,873 
David A. Buckel (1)
 $7,500 
 $30,373 
  - 
  - 
  - 
  - 
 $37,873 
Marietta Davis (1)
 $7,500 
 $30,373 
  - 
  - 
  - 
  - 
 $37,873 
Steven A. Huey (1)
 $12,500 
 $30,373 
  - 
  - 
  - 
  - 
 $42,873 
Scott Miller Jr. (1)(2)
 $3,750 
 $6,397 
 $82,903 
  - 
  - 
  - 
 $93,051 
1.
Mr. Dukach was Chair of the Board of Directors until July 28, 2017. For his service, Mr. Dukach received a $150,000 per year stipend, payable quarterly in stock. During 2017, Mr. Dukach received 34,719 shares of fully-vested Company stock related to this stipend. The quarterly stock stipend was issued in arrears shortly after quarter end, and the amount above represents the values on the date of issuance related to his service from our fourth quarter of 2016 to our third quarter of 2017. Mr. Dukach’s other compensation relates to participation in our Company’s health plan.
2.
During 2017,2019, SharpSpring’s non-employee directors received a quarterly stipend, payable in stock and cash, issued in arrears. The stipend paid in the first and second quarters of 2017 (for services in the fourth quarter of 2016 and the first quarter of 2017, respectively) was $5,000. The stipend paid in the third and fourth quarters of 2017 (for services in the second and third quarters of 2017, respectively) was $7,500. Quarterly stock stipends are issued shortly after quarter end, and the amount above represents the values on the dates of issuance.
3.
Ms. Davis and2. Mr. OlivierMiller joined the Board of Directors on July 1, 2017. Each received anAugust 16, 2019, receiving a stock option grant during 2017 of 16,000 options, vesting over four years with 25% vesting(25% on the first anniversary of the grand date and an additional 1/48 of the grant vesting each month thereafter.
4.
Mr. Huey joined the Boardoriginal number of Directors on December 19, 2016. During March 2017, Mr. received an option grant of 16,000 options vesting over four years, with 1/48 of the grant vesting each month.
5.
Mr. Yasinovsky ceased being a director on June 1, 2017.
The aggregate fair value of option awards are computed in accordance with FASB ASC 718. The assumptions made in the computation may be found in Note 15: Stock-Based Compensation to our financial statements contained in our latest Annual Report.every month thereafter.
 
Compensation Policies and Practices As They Relate To Our Risk Management
 
Our compensation program for employees does not create incentives for excessive risk taking by our employees or involve risks that are reasonably likely to have a material adverse effect on us. Our compensation has the following risk-limiting characteristics:
 
●
Our base pay consists of competitive salary rates that represent a reasonable portion of total compensation and provide a reliable level of income on a regular basis, which decreases incentive on the part of our executives to take unnecessary or imprudent risks;
●
Option awards are not tied to formulas that could focus executives on specific short-term outcomes; and
●
Option awards, generally, have multi-year vesting which aligns the long-term interests of our executives with those of our shareholders and, again, discourages the taking of short-term risk at the expense of long-term performance.
 

Securities Authorized for Issuance under Equity Compensation Plans
 
Equity Compensation Plans as of December 31, 2017.2019.
 
Equity Compensation Plan Information
 
Plan category
 
Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
(a)
 
 
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
 
 
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities reflected
in column (a))
(c)
 
 
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and RSUs
 
 
Weighted-averageexercise price of outstanding options
 
 
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
 
 
(a)
 
 
(b)
 
 
(c)
 
Equity compensation plans approved by security holders (1)
  1,069,330 
 $5.11 
  523,236 
  1,977,578 
 $7.30 
  511,338 
Equity compensation plans not approved by security holders (2)
  80,000 
 $7.81 
  - 
Equity compensation plans not approved by security holders
  0 
 $0.00 
  0 
Total
  1,149,330 
 $5.30 
  523,236 
  1,977,578 
 $7.30 
  511,338 
 
(1)Reflects our 2010 Employee Stock Plan, as amended for the benefit of our directors, officers, employees and consultants. We currently have reserved 1,950,000 shares of common stock for such persons pursuant to that plan.
(2)Comprised of common stock purchase warrants we issued for services.
1. Reflects shares of common stock to be issued pursuant to our 2019 Equity Incentive Plan and our 2010 Restated Employee Stock Plan, both of which are for the benefit of our directors, officers, employees and consultants. We have reserved 697,039 shares of common stock for such persons pursuant to our 2019 Equity Incentive Plan. We terminated our 2010 Restated Employee Stock Plan in 2019 and no additional awards are made under that plan.
(b) The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options to purchase shares of our common stock. It does not reflect the shares of our common stock that will be issued upon the vesting of outstanding awards of RSUs, which have no exercise price.
 
Voting Securities and Principal Holders Thereof
 
As of the Record Date, we had outstanding 8,453,65511,533,065 shares of common stock. Each share of our common stock is entitled to one vote with respect to each matter on which it is entitled to vote.

 
The following table sets forth, as of the Record Date, the names, addresses, amount and nature of beneficial ownership and percent of such ownership of (i) each person or group known to our Company to be the beneficial owner of more than five percent (5%) of our common stock; and (ii) each of our officers and directors, and officers and directors as a group:
 

 
 
 
 
 
 
 
 
Options
 
 
 
 
 
 
 
 
 
Included in Shares
 
Name and Address
 
Shares Beneficially Owned
 
 
Beneficially Owned
 
of Beneficial Owner (1)(2)
 
Number
 
 
Percent (3)
 
 
Number(4)
 
5% Stockholders(5)
 
 
 
 
 
 
 
 
 
Greenhaven Road Investment Management, LP
  1,362,697 
  11.82%
  - 
c/o Royce & Associates LLC, 8 Sound Shore Drive, Suite 190, Greenwich, CT 06830
    
    
    
Cat Rock Capital Management LP
  1,148,545 
  9.96%
  - 
8 Sound Shore Drive, Suite 250, Greenwich, CT 06830
    
    
    
Richard H. Witmer, Jr.
  828,881 
  7.19%
  - 
16 Fort Hills Lane, Greenwich, CT 06831
    
    
    
BlackRock, Inc.
  684,579 
  5.94%
  - 
55 East 52nd Street, New York, NY 10055
    
    
    
Long Path Partners, LP
  608,038 
  5.27%
  - 
4 Landmark Square, Stamford, CT 06901
    
    
    
AWM Investment Company Inc.
  587,098 
  5.09%
  - 
527 Madison Avenue, Suite 2600, New York, NY 10022
    
    
    
 
    
    
    
Directors and Executive Officers (6)
    
    
    
Richard A. Carlson, Chief Executive Officer and President, Director
  911,086 
  7.59%
  464,330 
Travis Whitton, Chief Technology Officer
  279,063 
  2.40%
  113,635 
David A. Buckel, Director
  41,260 
  * 
  16,000 
Steven A. Huey, Director
  28,118 
  * 
  13,334 
Marietta Davis, Director
  23,053 
  * 
  12,000 
Scott Miller, Director (7)
  1,362,697 
  11.82%
    
 
Michael Power, Chief Financial Officer
  4,757 
  * 
    
All executive officers and directors as a group (7 persons)
  2,650,034 
  21.81%
  619,299 
 
Security Ownership of Certain Beneficial Owners and Management
 
 
 
 
 
 
 
 
Options
 
 
 
 
 
 
 
 
 
Included in Shares
 
Name and Address
 
Shares Beneficially Owned
 
 
Beneficially Owned
 
of Beneficial Owner (1)(2)
 
Number
 
 
Percent (3)
 
 
Number(4)
 
5% Stockholders(5)
 
 
 
 
 
 
 
 
 
Richard H. Witmer, Jr.
  728,881 
  8.62%
  - 
16 Fort Hills Lane, Greenwich, CT 06831
    
    
    
Inlight Wealth Management, LLC
  651,585 
  7.71%
  - 
1175 Peachtree Street NE, 100 Colony Square, Suite 760, Atlanta, GA 30361
    
    
    
Greenhaven Road Capital Fund 1
  541,550 
  6.41%
  - 
c/o Royce & Associates LLC, 8 Sound Shore Drive, Suite 190, Greenwich, CT 06830
    
    
    
AWM Investment Company, Inc.
  530,734 
  6.28%
  - 
c/o Special Situations Funds, 527 Madison Avenue, Suite 2600, New York, NY
    
    
    
Evercel, Inc.
  519,000 
  6.14%
  - 
228 Park Avenue South; Suite 90959, New York, NY 10003
    
    
    
Columbus Capital Management, LLC
  492,100 
  5.82%
  - 
1 Embarcadero Center, Suite 1130, San Francisco, CA 94111
    
    
    
 
    
    
    
Directors and Executive Officers (6)
    
    
    
Daniel C. Allen, Director (7)
  1,585,667 
  16.66%
  - 
Richard A. Carlson, Chief Executive Officer and President, Director
  791,079 
  9.09%
  251,251 
Travis Whitton, Chief Technology Officer
  250,732 
  2.95%
  44,272 
Edward Lawton, Chief Financial Officer
  91,585 
  1.07%
  84,085 
John L. Troost, Director (8) (9)
  37,359 
  * 
  16,000 
David A. Buckel, Director
  34,566 
  * 
  16,000 
Steven A. Huey, Director
  14,090 
  * 
  5,000 
Marietta Davis, Director
  5,359 
  * 
  - 
Roy W. Olivier, Director (9)
  5,359 
  * 
  - 
All executive officers and directors as a group (9 persons)
  2,815,796 
  28.34%
  416,608 
———————
*
Represents less than 1% of the outstanding shares of common stock.
(1)
1. To our best knowledge, as of the date hereof, such holders had the sole voting and investment power with respect to the voting securities beneficially owned by them, unless otherwise indicated herein. Includes the person's right to obtain additional shares of common stock within 60 days from the Record Date.
June 8, 2020.
(2)
2. Unless otherwise noted, in care of SharpSpring, Inc., 550 SW 2nd Avenue,5001 Celebration Point Ave Suite 410, Gainesville, FL 32601.
32608.
(3)
3. Based on8,453,655 11,533,065 shares of common stock outstanding on the Record Date.June 8, 2020. Does not include shares underlying: (i) options to purchase shares of our common stock under our 2010 and 2019 Employee Stock Plan,Plans, or (ii) outstanding warrants to purchase shares of our common stock, or (iii) shares issuable upon conversion of convertible notes.
stock.
(4)
4. Represents options exercisable within 60 days from the Record Date.
June 8, 2020.
(5)
5. Based solely upon a review of Schedule 13G and Form 4 filings with the SEC.
(6)
6. If a person listed on this table has the right to obtain additional shares of common stock within 60 days from the Record Date,June 8, 2020, the additional shares are deemed to be outstanding for the purpose of computing the percentage of class owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of any other person.
(7)
Consists of7. Additionally includes (i) 519,000673,244 shares of common stock held directly by Evercel Holdings LLC, a subsidiary of Evercel, Inc.Greenhaven Road Capital Fund 1, L.P.; and (ii) 1,066,667689,453 shares of common stock issuable upon conversion of a convertible note held directly by SHSP Holdings, LLC that is convertible within 60 days fromGreenhaven Road Capital Fund 2, L.P.. Mr. Miller serves as the Record Date. Mr. Allen isManaging Member of the founderGeneral Partner (for itself and manageron behalf of Corona Park Investment Partners, LLC (“CPIP”). CPIP is a member of Evercel Holdings LLC and is a member and sole manager of SHSP Holdings, LLC. Evercel, Inc. is a memberGreenhaven Fund 1, Greenhaven Fund 2 and the manager of Evercel Holdings LLC and is a member of SHSP Holdings.
(8)
Includes 1,600 shares held by Mr. Troost’s wife, for which Mr. Troost disclaims beneficial ownership.
(9)
Mr. Troost and Mr. Olivier have determined not to stand for re-election at the 2017 annual meeting.
Investment Manager)
 
We are not aware of any arrangements that could result in a change of control.
 


 
PROPOSAL ONE
 
ELECTION OF DIRECTORS
 
At the time of the Annual Meeting, our Board of Directors will consist of sevenfive directors: Steven A. Huey, Richard Carlson, David A. Buckel, Marietta Davis Daniel C. Allen, John L. Troost and Roy W. Olivier.Scott Miller. At the Annual Meeting, five directors are to be elected for a one (1) year term to serve until the next annual meeting of stockholders and until a successor for such director is elected and qualified, or until the death, resignation or removal of such director. Mr. John L. Troost and Mr. Roy W. Olivier have determined not to stand for re-election at the 2018 annual meeting.
 
Nominees
 
There are five nominees, all of whom currently serve on our Board of Directors. Set forth below is information regarding the nominees for election to our Board of Directors:
 
Name Position(s) with the Company Year First Elected Director
Steven A. Huey Chair of the Board of Directors 2016
Richard Carlson Chief Executive Officer; Director 2015
David A. Buckel Director 2014
Marietta Davis Director 2017
Daniel C. AllenScott Miller Director 20182019
 
Each person nominated has agreed to serve if elected, and our Board of Directors has no reason to believe that any nominee will be unavailable or will decline to serve. In the event, however, that any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who is designated by the current Board of Directors to fill the vacancy.
 
Vote Required
 
Directors will be elected by a plurality of the votes cast at the Annual Meeting. A “withhold” vote with respect to any nominee will not effect the election of that nominee. Each holder of common stock is entitled to one vote for each share held.
 
Recommendation of the Board of Directors
 
The Board of Directors recommends a vote “FOR” the election of all of the above nominees.
 

 
PROPOSAL TWO
 
RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR 20182019
 
We are asking stockholders to ratify the appointment of Cherry Bekaert LLP to serve as our Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. Cherry Bekaert LLP was our independent registered public accounting firm for our fiscal year ended December 31, 2017.2020. Representatives of Cherry Bekaert LLP will not be present at the Annual Meeting.
As disclosed in the Company’s Current Report on Form 8-K filed with the SEC on September 2, 2016, on September 1, 2016, the Company dismissed McConnell & Jones, LLP (“McConnell & Jones”) as its independent registered public accounting firm. The Company’s Audit Committee and Board of Directors unanimously approved the decision to dismiss McConnell & Jones. On September 1, 2016, the Company appointed Cherry Bekaert LLP (“Cherry Bekaert”) as its new independent registered public accounting firm commencing for its quarter ending September 30, 2016 and its fiscal year ending December 31, 2016. The Company’s Audit Committee and Board of Directors unanimously approved the engagement of Cherry Bekaert.
McConnell & Jones’ reports on the financial statements of the Company for the years ended December 31, 2015 and 2014 did not contain an adverse opinion or disclaimer of opinion, nor were they modified or qualified as to uncertainty, audit scope or accounting principles. There were no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) and no “reportable event” occurred (as that term is defined in Item 304(a)(1)(v) of Regulation S-K during the fiscal years ended December 31, 2015 and 2014 and the subsequent interim period up to and including the date of McConnell & Jones’ dismissal between the Company and McConnell & Jones on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of McConnell & Jones, would have caused them to make reference to the subject matter of the disagreement in connection with their report on the Company’s financial statements for those periods. The Company provided McConnell & Jones with a copy of the Company’s Current Report on Form 8-K filed with the SEC on September 2, 2016 and requested in writing that McConnell & Jones provide a letter addressed to the Securities and Exchange Commission stating whether or not they agree with the above statements. The Company received the requested letter from McConnell & Jones and included the letter as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 2, 2016.
The Company did not consult with Cherry Bekaert during the fiscal years ended December 31, 2015 and 2014 and any subsequent interim period prior to their engagement regarding: (i) the application of accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was provided that Cherry Bekaert concluded was an important factor in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event as defined and described in paragraphs (a)(1)(iv) and (a)(1)(v) of Item 304 of Regulation S-K, promulgated under the Securities Exchange Act of 1934, as amended and there was neither a written report nor oral advice provided to the Company by Cherry Bekaert that Cherry Bekaert concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue.
 
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 20172019 and December 31, 20162018 by the Company’s independent registered public accounting firms. The aggregate fees billed for the fiscal year ended December 31, 2017 were from Cherry Bekaert LLP and the aggregate fees billed for the fiscal year ended December 31, 2016 were from both Cherry Bekaert and McConnell & Jones, LLP.
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Audit Fees
 $162,447 
 $232,797 
Audit-Related Fees
  9,200 
  11,924 
Tax Fees
  — 
  — 
All Other Fees
  — 
  — 
Total
 $171,647 
 $244,721 

 
 
2019
 
 
2018 
 
Audit Fees
 $207,587 
 $157,587 
Audit-Related Fees
  7,500 
  12,000 
Tax Fees
  — 
  — 
All Other Fees
  25,600 
  3,500 
Total
 $240,687 
 $173,087 
 
Audit Fees are the fees billed during the years ended December 31, 20172019 and December 31, 20162018 for professional services rendered by our independent auditors for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Q or services that are normally provided by the audit firm in connection with statutory and regulatory filings or engagements.
 
Audit-Related Fees are the aggregate fees billed during the years ended December 31, 20172019 and December 31, 20162018 for assurance and related services rendered by our independent auditors that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under the category Audit Fees described above.
 
Tax Fees are the fees billed during the years ended December 31, 20172019 and December 31, 20162018 fortax compliance, tax advice, and tax planningrendered by our independent auditors.
 
All Other Fees are the aggregate fees billed for products and services provided during the years ended December 31, 20172019 and December 31, 20162018 rendered by our independent auditors, other than the services reported in the above categories. This includes work related to the March 7, 2019 equity issuance, May 9, 2019 Note Conversion Agreement, and November 21, 2019 equity issuance. For the year ened December 31, 2018 the amount above included work related to the issuance of the Convertible Promissory Notes on March 28, 2018.
 
Audit Committee Pre-Approval Policies.Policies.
 
The Company’s audit committee currently does not have any pre-approval policies or procedures concerning services performed by rendered by our independent auditors. However, all the services performed by rendered by the independent auditors that are described above were pre-approved by the Company’s audit committee.
 
None of the hours expended on rendered by our independent auditor’s engagement to audit the Company’s financial statements for the years ended December 31, 20172019 and December 31, 20162018 were attributed to work performed by persons other than rendered by the independent auditor’s full-time, permanent employees.
 
Vote Required
 
The vote required to ratify the appointment of Cherry Bekaert LLP to serve as our Company’s independent registered public accounting firm for the fiscal year ending December 31, 20182020 is the affirmative vote of the holders of a majority of the votes cast at the Annual Meeting entitled to vote on the matter. Each holder of common stock is entitled to one vote for each share held.
 
Recommendation of the Board of Directors
 
The Board of Directors recommends that the stockholders vote “FOR” the proposal to ratify the appointment of Cherry Bekaert LLP to serve as our Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018.2020.
 

PROPOSAL THREE
APPROVAL OF THE ISSUANCE OF SHARES OF THE COMPANY’S COMMON STOCK UPON THE CONVERSION OF THE NOTES PURSUANT TO NASDAQ LISTING RULE 5635(B)
Background
On March 28, 2018, the Company entered into a Convertible Note Purchase Agreement (the “Note Purchase Agreement”) with SHSP Holdings, LLC, an affiliate of Evercel, Inc. and Corona Park Investment Partners (“SHSP Holdings”), pursuant to which the Company issued to SHSP Holdings a Convertible Promissory Note in the aggregate principal amount of $8,000,000 (the “Note”). The Company intends to use the proceeds from the financing for increasing sales and marketing spend to accelerate customer acquisition and revenue growth. The Company also plans to strategically invest in research and development to further advance the functionality and features of its platform.
Pursuant to the Note Purchase Agreement, the Company issued the Note to SHSP Holdings on March 28, 2018 (the “Issuance Date”). Interest on the Note accrues at a rate of 5.0% per annum, beginning on the Issuance Date until the principal amount and all accrued but unpaid interest shall have been paid or converted into shares of the Company’s common stock.
The Note will be due and payable on the fifth anniversary of the Issuance Date (the “Maturity Date”). Interest under the Note will be due and payable on each anniversary of the Issuance Date and will be paid by the issuance of additional convertible promissory notes of like tenor to the Note (each, a “PIK Note” and, together with the Note, the “Notes”), with a principal amount equal to the accrued interest being paid by delivery of such PIK Note.
SHSP Holdings may convert the principal amount of the Note and any accrued interest thereon, in whole or in part, into shares of the Company’s common stock at any time prior to the Maturity Date at a conversion price of $7.50 per share, subject to customary adjustments (the “Conversion Price”). At the Maturity Date, the Company may elect to convert all outstanding Notes into shares of the Company’s common stock at a conversion price equal to 80% of the volume weighted average closing price of the common stock for the 30 trading days prior to and including the Maturity Date (the “VWAP”). The Company will have the right to extend the Maturity Date for up to six months on up to three separate occasions, during which time interest would accrue on the outstanding principal amount of the Note at a rate of 10% per annum.
The Note contains a “limitation on conversion” provision pursuant to which the Company and SHSP Holdings have agreed that SHSP Holdings will not attempt to convert any portion of the Note, and the Company will not issue to SHSP Holdings any common stock upon any attempted conversion of the Note, if the number of shares of common stock issuable upon such conversion, plus (i) the number of shares of common stock issued pursuant to conversions prior thereto and (ii) the number of shares of common stock beneficially owned by any affiliate of SHSP Holdings would (x) equal 20% or more of the number of the outstanding shares of common stock or (y) represent 20% or more of the total voting power of the Company’s securities outstanding immediately after giving effect to such issuance that are entitled to vote on a matter being voted on by holders of the common stock, unless and until the Company obtains stockholder approval permitting such issuance. In addition, under the limitation on conversion provision, the Company agreed to seek stockholder approval at the 2018 Annual Stockholders Meeting for the issuance of the shares of common stock issuable to SHSP Holdings upon conversion of the Note.
If SHSP Holdings were to convert all of the Notes at the Conversion Price on the Maturity Date, the Company would be required to issue 1,361,367 additional shares of common stock to SHSP Holdings. Based on the number of shares of common stock outstanding as of the Record Date, SHSP Holdings and its affiliates beneficially owned, in aggregate, 6.14% of the Company’s outstanding common stock. Assuming the issuance of shares of common stock upon full conversion of the Notes on the Maturity Date by SHSP Holdings, SHSP Holdings and its affiliates would beneficially own, in aggregate, approximately 22.26% of the number of shares of the Company’s common stock outstanding immediately prior to the Issuance Date.

Stockholder Approval Requirement
Our common stock is listed on the NASDAQ Capital Market and, accordingly, we are subject to NASDAQ’s stockholder approval rules. NASDAQ Listing Rule 5635(b) (the “change of control rule”) requires stockholder approval prior to an issuance of securities that will result in a “change of control” of a listed company, which for NASDAQ purposes is generally deemed to occur when an investor or group of investors acquires, or has the right to acquire, 20% or more of the outstanding common stock or voting power of a company and such ownership or voting power would be the largest ownership position.
SHSP Holdings may, upon conversion of all or a portion of the Notes, acquire beneficial ownership of 20% or more of the number of shares of the Company’s common stock outstanding immediately prior to the Issuance Date, thereby requiring stockholder approval under the change of control rule. As a result, and in accordance with the terms of the Note, the Company is seeking stockholder approval of the issuance of shares of the Company’s common stock upon conversion of the Notes by SHSP Holdings. Stockholder approval of this proposal is intended to satisfy the stockholder approval requirement of the change of control rule.
Consequences of Failure to Obtain Stockholder Approval
Pursuant to the limitation on conversion provision in the Note, if stockholder approval of the issuance of shares of the Company’s common stock upon the conversion of the Notes is not obtained at the 2018 Annual Meeting of Stockholders, SHSP Holdings would continue to be prohibited from converting any portion of the Note if the number of shares of common stock issuable upon such conversion, plus (i) the number of shares of common stock issued pursuant to conversions prior thereto and (ii) the number of shares of common stock beneficially owned by any affiliate of SHSP Holdings, would represent 20% or more of the total voting power of the Company’s securities outstanding immediately after giving effect to such issuance, unless and until the Company obtains stockholder approval permitting such issuance. Furthermore, the Company would be required to call a special meeting of its stockholders to be held no later than 90 days after the 2018 Annual Meeting of Stockholders at which it would again seek stockholder approval. If stockholder approval is not obtained at the special meeting, the Company would be required to continue to call special meetings of its stockholders at least quarterly until stockholder approval is obtained. If stockholder approval of the issuance of shares of the Company’s common stock upon the conversion of the Notes is not obtained within two years of the date of the Note, affiliates of SHSP Holdings may elect to sell all shares of common stock (not just those subject to conversion) held by them in order to effectuate the conversion of the Notes without exceeding the limitation on conversion, in which case the Company has agreed to reimburse them for any underwriting commissions and other transaction costs of such sales. The timing and amount of any such sale of shares by SHSP Holdings or its affiliates may cause negative pressure on our stock price and be detrimental to other stockholders as a whole.
In addition, pursuant to the Investors’ Rights Agreement entered into as of March 28, 2018 by and among the Company, SHSP Holdings, Evercel Holdings, LLC (an affiliate of SHSP Holdings) and certain management stockholders of the Company (the “Investors’ Rights Agreement”), if the Company fails to obtain stockholder approval of the issuance of shares of the Company’s common stock upon the conversion of the Notes within two years of the date of the Note, SHSP Holdings and its affiliates holding shares of common stock will have the right, in accordance with the Investors’ Rights Agreement, to demand registration under the Securities Act of 1933, as amended, of sales of up to all of the shares held by the SHSP Holdings and/or its affiliates.
The description of the terms of the Note Purchase Agreement, the Notes and the Investors’ Rights Agreement provided under “Background,” above, is intended to provide basic information regarding such terms for purposes of Proposals Three and Four. The description is qualified in all respects by the text of the Note Purchase Agreement, the Note and the Investors’ Rights Agreement, which the Company has filed as exhibits to its Current Report on Form 8-K dated March 28, 2018.
Vote Required
The vote required to approve, pursuant to NASDAQ Listing Rule 5635(b), the issuance of shares of the Company’s common stock upon the conversion of the Notes is the affirmative vote of the holders of the majority of the votes cast at the Annual Meeting. Each holder of common stock is entitled to one vote for each share held.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote “FOR” approval, pursuant to NASDAQ Listing Rule 5635(b), of the issuance of shares of the Company’s common stock upon the conversion of the Notes.

PROPOSAL FOUR
APPROVAL OF THE ISSUANCE OF SHARES OF THE COMPANY’S COMMON STOCK AT THE ELECTION OF THE COMPANY UPON THE MATURITY OF THE NOTES PURSUANT TO NASDAQ LISTING RULE 5635(D)
Background
As more fully described in Proposal Three, above, on March 28, 2018, the Company entered into the Note Purchase Agreement with SHSP Holdings pursuant to which the Company issued the Note to SHSP Holdings. Interest under the Note accrues at a rate of 5.0% per annum, due and payable on each anniversary of the Issuance Date. Under the terms of the Note, the Company is required to pay the accrued interest by the issuance of PIK Notes, with a principal amount equal to the accrued interest being paid by delivery of such PIK Note.
The Note further provides that, at the Maturity Date, in lieu of paying the outstanding principal amount of, and any accrued interest on, the Notes, the Company may elect (on at least 30 days’ prior written notice to SHSP Holdings) to repay all outstanding Notes with a number of shares of the Company’s common stock equal to the outstanding principal amount of, and any accrued interest on, the Notes at the Maturity Date divided by a price equal to 80% of the VWAP.
Stockholder Approval Requirement
NASDAQ Listing Rule 5635(d) requires that we obtain stockholder approval prior to the issuance of the Company’s common stock in connection with certain non-public offerings involving the sale, issuance or potential issuance by us of our common stock equal to 20% or more of our common stock outstanding before the issuance, if the price per share is less than the greater of book value or market on the date of pricing. In the event the Company elects to repay all outstanding Notes at the Maturity Date with shares of common stock, the associated share issuance could equal or exceed 20% of the shares of the Company’s common stock outstanding immediately prior to the Issuance Date. The Company is seeking approval of this proposal to provide us with the flexibility to elect to repay the outstanding Notes, if any, at the Maturity Date by issuing up to 3,646,519 shares of the Company’s common stock if we deem such an election advisable.
Number of Shares Potentially Issuable
The exact number of shares that may be issuable at the Maturity Date if the Company elects to repay all outstanding Notes with shares of the Company’s common stock is currently indeterminable because it would be based on the VWAP and the outstanding unconverted principal amount of the Notes, if any, at the Maturity Date. The Notes are initially convertible into the Company’s common stock at $7.50 per share (subject to customary adjustments), but, under the terms of the Note, the number of shares that would be issuable at the Maturity Date upon the Company’s election to repay the Notes with stock would be calculated based on 80% of the VWAP.
The following table illustrates the number of shares of our common stock potentially issuable upon full repayment of the Notes at the Maturity Date with stock, on which date the aggregate principal amount of the Notes, including the accrued PIK Notes, would equal $10,210,253, at hypothetical VWAPs of $3.50, $4.50, $5.50 and $6.50 per share.
VWAP
 $3.50 
 $4.50 
 $5.50 
 $6.50 
Conversion Price per Share
 $2.80 
 $3.60 
 $4.40 
 $5.20 
Total Issuable Shares
  3,646,519 
  2,836,181 
  2,320,512 
  1,963,510 
The Company cannot currently determine what the VWAP will be at the Maturity Date, nor can it determine the outstanding unconverted principal amount of the Notes, if any, at the Maturity Date. For purposes of this Proposal Four, we are requesting that stockholders approve the issuance of up to 3,646,519 shares of common stock if the Company, in accordance with the terms of the Note, elects to repay all outstanding Notes with shares of common stock at the Maturity Date, assuming the maximum principal amount of $10,210,253, a VWAP of $3.50 per share and a resulting conversion price of $2.80 per share. Stockholder approval of this proposal is intended to satisfy the stockholder approval requirement of NASDAQ Listing Rule 5635(d).

Consequences of Failure to Obtain Stockholder Approval
If this stockholder approval is not obtained and the Notes are not converted by SHSP Holdings, the Company will be required to seek additional capital to repay the Notes in cash, which may not be on commercially reasonable terms and may negatively impact shareholders at that time. If the Company elects to seek additional capital with the issuance of new shares, it is also likely that the Company may again need to seek stockholder approval at a future special or annual meeting of stockholders for the issuance of those shares, may need to seek alternative means to finance the payment, or may take such other actions as the Board of Directors deems advisable and in the best interests of the Company and its stockholders at that time.
The description of the terms of the Note Purchase Agreement and the Notes provided under “Background,” above, is intended to provide basic information regarding such terms for purposes of this Proposal Four. The description is qualified in all respects by the text of the Note Purchase Agreement and the Note, which the Company has filed as exhibits to its Current Report on Form 8-K dated March 28, 2018.
Vote Required
The vote required to approve the issuance of up to 3,646,519 shares of common stock at the election of the Company upon maturity of the Notes pursuant to NASDAQ Listing Rule 5635(d) is the affirmative vote of the holders of the majority of the votes cast at the Annual Meeting. Each holder of common stock is entitled to one vote for each share held.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote “FOR” approval, pursuant to NASDAQ Listing Rule 5635(d), of the issuance of up to 3,646,519 shares of common stock at the election of the Company upon maturity of the Notes.

PROPOSAL FIVE
 
AMENDMENT TO THE COMPANY’S 2010 EMPLOYEE STOCK
SHARPSPRING, INC. 2019 EQUITY INCENTIVE PLAN
 
On April 25, 2019, the Board of Directors of the Company adopted and approved the SharpSpring, Inc. 2019 Equity Incentive Plan (the “Plan”), subject to stockholder approval prior to April 25, 2020.
Purpose of the Proposal
 
The Board of Directors of the Company has approved and is recommending to stockholdersshareholders of the Company an amendment to our Company’s 2010 Employee Stock2019 Equity Incentive Plan as previously amended (the “Plan” or “2019 Equity Incentive Plan”) to (i) amend paragraph 4Section 4.1 of the Plan to increase the number of shares of common stock available for issuance under the Plan from 1,950,000 to 2,600,0001,025,000 so that a sufficient amount of awards are available for issuance in the future; (ii) amend paragraph 5 of the Plan to eliminate the ability of the Company to pay dividends on unearned equity awards; and (iii) amend paragraph 16 of the Plan to eliminate the ability of the Company to reduce the exercise price of awards without stockholder approval.future.
 
The Board of Directors approved the Plan to ensure that the Company has adequate ways in which to provide stock based compensation to its directors, officers, employees, and consultants. The Board of Directors believes that the ability to grant stock-based compensation is important to the Company’s future success.
The grant of stock-based compensation, such as stock options, can motivate high levels of performance and provide an effective means of recognizing employee and consultant contributions to the Company’s success. In addition, stock-based compensation can be valuable in recruiting and retaining highly qualified technical and other key personnel who are in great demand, as well as rewarding and providing incentives to the Company’s current employees, directors and consultants.
Additionally, due to the impact of the Covid-19 virus, as of April 1, 2020 our Company reduced by 10% all Company employee 2020 base salaries and in exchange issued all Company employees additional stock-based compensation pursuant to the Plan.
Our Board of Directors believes that:
●
that the increase in the number of common shares available for issuance under the Plan is necessary in order to continue to offer stock-based compensation programs that will allow the Company to carry out the purposes of the Plan, including attracting and retaining employees who are critical to the growth and success of the Company;
Company and providing the Company with the flexibility to make compensation adjustments during certain challenging times such as the current Covid-19 pandemic.
●
eliminatingThe Board of Directors approved the Plan to ensure that the Company has adequate ways in which to provide stock based compensation to its directors, officers, employees, and consultants. The Board of Directors believes that the ability ofto grant stock-based compensation is important to the Company to pay dividends on unearned equity awards is a matter of good corporate governance; and
●
eliminating the ability of the Company to reduce the exercise price of awards without stockholder approval is a matter of good corporate governance.
Company’s future success.
 
Information Regarding Options Granted under the Plan, Dilution
 
The Plan is our only active equity compensation plan. With respect to ourthe Plan, as of the Record Date:
●
1,549,4501,585,381 stock options were outstanding under the Plan
o●
The weighted average exercise price of such options was $4.97$7.28
o●
The weighted average remaining term of such options was 8.187.36 years
●
The total number of shares available for grant under the Plan was 53,022269,519
●
There were 8,453,65511,533,065 shares of our common stock were issued and outstanding
●
There were no78,706 unvested restricted stock awards were outstanding under the Plan
●
There were no16,355 unvested shares were issued in lieu of cash compensation
●
ThereNo stock appreciation rights were nooutstanding under the Plan
●
No awards were issued that will be settled solely in cash
●
ThereNo performance-contingent awards were no performance-contingent awardsissued
●
The Plan does not have fungible counting provisions
 
Summary of the Plan
 
The principal termsPlan incorporates key corporate governance practices, including the following:
●
Limits the number of shares available to 697,039, which represents approximately 6% of our issued and provisionsoutstanding common shares as of the Record Date. If the amendment to the Plan is approved by the shareholders, the Plan will limit the number of shares available to 1,025,000, which represents approximately 8.89% of our issued and outstanding common shares as of the Record Date;
●
The price of any outstanding Award may not be repriced without stockholder approval;
●
Discounted stock options are summarized below. Asnot allowed;
●
Reload options are not provided for under the Plan;
●
Performance goals may be imposed on grants;
●
The Plan does not have fungible counting provisions
●
Payment of the exercise price or applicable taxes made by delivery of shares, or withholding of shares, in satisfaction of a participant’s obligation, will not result in additional shares becoming available for subsequent awards under the Plan.
Significant Features of the Plan:
The following is a summary the description below is not a complete description of all the termscertain significant features of the PlanPlan. The information which follows is subject to, and is qualified in its entirety by reference to, the full textPlan. We urge you to read the Plan in its entirety.
Awards that may be granted include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, (f) Cash Awards, and (g) Other Equity-Based Awards. These awards offer the Company’s officers, employees, directors and consultants the possibility of future value, depending on the long-term price appreciation of the Plan.Company’s common stock and the award holder’s continuing service with the Company.
Stock options give the option holder the right to acquire from the Company a designated number of shares of common stock at a purchase price that is fixed upon the grant of the option. The exercise price will be not less than the market price of the common stock on the date of grant. Stock options granted may be either tax-qualified stock options (so-called “incentive stock options”) or non-qualified stock options.
 
Types of AwardsStock Appreciation Rights (SARs), sometimes referred to as phantom equity,. Both incentive stock options, or ISOs, and nonqualified stock options, or NSOs, and stock grants and stock purchase rights may be granted alone or in tandem with options, have an economic value similar to that of options. When a SAR for a particular number of shares is exercised, the holder receives a payment equal to the difference between the market price of the shares on the date of exercise and the exercise price of the shares under the Plan. ISOs receive favorable tax treatmentSAR. The exercise price for SARs is the market price of the shares on exercise, andthe date the SAR is granted. Under the Plan, holders of SARs may receive favorable tax treatmentthis payment – the appreciation value – either in cash or shares of common stock valued at the fair market value on the date of exercise. The form of payment will be determined by the Company.
A Restricted Award is an Award of actual shares of common stock ("Restricted Stock") or hypothetical common stock units ("Restricted Stock Units") having a qualifying dispositionvalue equal to the Fair Market Value of an identical number of shares of common stock at no cost. Restricted shares are forfeitable and non-transferable until the shares vest. The vesting date or dates and other conditions for vesting are established when the shares are awarded. Restricted Stock Units with a deferral feature, whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an Award Agreement ("Deferred Stock Units"), may also be granted.
The Plan also provides for performance compensation awards, representing the right to receive a payment, which may be in the form of cash, shares of common stock, or a combination, based on the attainment of pre-established goals.
All of the underlying shares. However, ISOs must complypermissible types of awards under the Plan are described in more detail as follows:
Purposes of Plan: The purposes of the Plan are to: (a) enable the Company to attract and retain the types of employees, consultants and directors who will contribute to the Company's long range success; (b) provide incentives that align the interests of employees, consultants and directors with certain requirements regarding exercise price, maximum termthose of the shareholders of the Company; and post termination exercise period,(c) promote the success of the Company's business. 
Administration of the Plan: The Plan is administered by a committee of one or more members of the Board of Directors appointed by the Board of Directors to administer the Plan or, in the Board's sole discretion, by the Board of Directors (the “Committee”).  Among other things, the Committee has the authority to select persons who will receive awards, determine the types of awards and mustthe number of shares to be issued under a stockholder-approved plan. NSOs are not subjectcovered by awards, and to these requirements, nor may they receive this favorable tax treatment upon exercise.establish the terms, conditions, restrictions and other provisions of awards. The Committee has authority to establish, amend and rescind rules and regulations relating to the Plan.
 

 
AdministrationEligible Recipients:. The Plan is administered by either the Board of Directors of the Company or a Stock Plan Committee (“Committee”) appointed by the Board of Directors.
Eligibility. Awards Persons eligible to receive awards under the Plan may onlywill be made as follows: ISOs may be granted to any employee of the Company. Officersthose officers, employees, consultants, and directors of the Company and its subsidiaries (if any) who are not employees may not be granted ISOs underselected by the Plan. Non-Qualified Options, stock grants and authorizations to make stock purchases may be granted to any director (whetherCompany’s Board of Directors or not an employee), officer, employee or consultantthe Committee of the Company.Board administering the Plan. As of the Record Date, thereapproximately 240 individuals were seven non-employee directors and 159 employees, along with and various consultants who are eligible to participate in the Plan.
Shares Available Under the Plan: The maximum number of shares of our common stock that may be delivered to participants under the Plan is 1,025,000 (plus the number of shares of Common Stock underlying any award granted under the 2010 Restated Employee Stock Plan that expires, terminates or is canceled or forfeited under the terms of the 2010 Restated Employee Stock Plan); subject to adjustment for certain corporate changes affecting the shares, such as stock splits. Shares subject to an award under the Plan for which the award is canceled, forfeited or expires again become available for grants under the Plan. Shares subject to an award that is settled in cash will not again be made available for grants under the Plan. Payment of the exercise price or applicable taxes made by delivery of shares, or withholding of shares, in satisfaction of a participant’s obligation, will not result in additional shares becoming available for subsequent awards under the Plan.
Stock Options:
 
NumberGeneral. Subject to the provisions of Shares. As a result of previous amendments to the Plan, the aggregateCommittee has the authority to determine all grants of stock options. That determination will include: (i) the number of shares that may be issued pursuant to the Plan is 1,950,000, subject to adjustmentany option; (ii) the exercise price per share; (iii) the expiration date of the option; (iv) the manner, time and date of permitted exercise; (v) other restrictions, if any, on the option or the shares underlying the option; and (vi) any other terms and conditions as described below.the Committee may determine.
 
AdjustmentsOption Price. InThe exercise price for stock options will be determined at the eventtime of grant. Normally, the exercise price may not be less than the fair market value on the date of grant. As a subdivisionmatter of tax law, the exercise price for any incentive stock option awarded may not be less than the fair market value of the outstanding commonshares on the date of grant. However, incentive stock a declaration of a dividend payable in shares of common stock, a combinationoption grants to any person owning 10% or consolidationmore of the outstanding commonCompany’s voting stock into a lesser numbermust have an exercise price of not less than 110% of the fair market value on the grant date.
Exercise of Options. An option may be exercised only in accordance with the terms and conditions for the option agreement as established by the Committee at the time of the grant. The option must be exercised by notice to the Company, accompanied by payment of the exercise price. Payments may be made in cash or, at the option of the Committee, by actual or constructive delivery of shares of common stock a recapitalization, a reclassificationto the holder of the option based upon the fair market value of the shares on the date of exercise.
Expiration or Termination. Options, if not previously exercised, will expire on the expiration date established by the Committee at the time of grant. In the case of incentive stock options, such term cannot exceed ten years provided that in the case of holders of 10% or more of the Company’s voting stock, such term cannot exceed five years. Options will terminate before their expiration date if the holder’s service with the Company or a similar occurrence,subsidiary terminates before the expiration date. The option may remain exercisable for specified periods after certain terminations of employment, including terminations as a result of death, disability or retirement, with the precise period during which the option may be exercised to be established by the Committee shall make appropriate adjustments, subject to the limitations set forthand reflected in the Plan.grant evidencing the award.
 
TransferabilityIncentive and Non-Qualified Options.. No ISO shall As described elsewhere in this summary, an incentive stock option is an option that is intended to qualify under certain provisions of the Internal Revenue Code of 1986, as amended (the “Code”) for more favorable tax treatment than applies to non-qualified stock options. Any option that does not qualify as an incentive stock option will be assignable or transferable bya non-qualified stock option. Under the grantee exceptCode, certain restrictions apply to incentive stock options. For example, the exercise price for incentive stock options may not be less than the fair market value of the shares on the grant date and the term of the option may not exceed ten years. In addition, an incentive stock option may not be transferred, other than by will or by the laws of descent and distribution, and is exercisable during the holder’s lifetime only by the holder. In addition, no incentive stock options may be granted to a holder that is first exercisable in a single year if that option, together with all incentive stock options previously granted to the holder that also first become exercisable in that year, relate to shares having an aggregate market value in excess of $100,000, measured at the grant date.
Stock Appreciation Rights: Awards of stock appreciation rights or “SARs” may be granted alone or in tandem with stock options. SARs provide the holder with the right, upon exercise, to receive a payment, in cash or shares of stock, having a value equal to the excess of the grantee each ISOfair market value on the exercise date of the shares covered by the award over the exercise price of those shares. Essentially, a holder of a SAR benefits when the market price of the common stock increases, to the same extent that the holder of an option does, but, unlike an option holder, the SAR holder need not pay an exercise price upon exercise of the award.

Stock Awards: Stock Awards can also be granted under the Plan. A stock award is a grant of shares of common stock or of a right to receive shares in the future. These awards will be subject to such conditions, restrictions and contingencies as the Committee shall determine at the date of grant. Those may include requirements for continuous service and/or the achievement of specified performance goals.
Cash Awards: A cash award is an award that may be exercisable onlyin the form of cash or shares of common stock or a combination, based on the attainment of pre-established performance goals and other conditions, restrictions and contingencies identified by him. Allthe Committee.
Other Equity-Based Awards: The Committee may grant Other Equity-Based Awards, either alone or in tandem with other Awards, in such amounts and subject to such conditions, restrictions and contingencies identified by the Committee.
Performance Goals: are the one or more goals established by the Committee for the performance period based upon business criteria or other performance measures determined by the Committee in its discretion.
Other Material Provisions: Awards will be evidenced by a written agreement, in such form as may be approved by the Committee. In the event of various changes to the capitalization of the Company, such as stock splits, stock dividends and similar re-capitalizations, an appropriate adjustment will be made by the Committee to the number of shares covered by outstanding awards or to the exercise price of such awards. The Committee is also permitted to include in the written agreement provisions that provide for certain changes in the award in the event of a change of control of the Company, including acceleration of vesting. Except as otherwise permitted by the Committee, awards will not be transferable, other than by will or the laws of descent and distribution. Prior to any award distribution, the Company is permitted to deduct or withhold amounts sufficient to satisfy any employee withholding tax requirements. Our Board also has the authority, at any time, to discontinue the granting of awards. The Board also has the authority to alter or amend the Plan or any outstanding award or may terminate the Plan as to further grants, provided that no amendment will, without the approval of the Company’s shareholders, to the extent that such approval is required by law or the rules of an applicable exchange, increase the number of shares available under the Plan, change the persons eligible for awards under the Plan, shallextend the time within which awards may be freely transferable subject to certain limitations imposed bymade, or amend the Plan, when applicable.
Termination of Service. Each option shall set forth the extent to which the optionee shall have the right to exercise their option following termination of the optionee’s employment with the Company. Such provisions shall be determined in the sole discretion of the Board of Directors or Committee, and need not be uniform among all options issued pursuant to the Plan. Notwithstanding the foregoing, and to the extent required by applicable law, each option shall provide that the optionee shall have the right to exercise the vested portion of any option held at termination for at least ninety (90) days following termination of employment with the Company for any reason, and that the optionee shall have the right to exercise the option for at least twelve (12) months if the optionee’s employment terminates due to death or disability.
Amendment and Termination. The Plan became effective on June 15, 2010, the date of its adoption by the Board of Directors, and was approved by the holders of a majority of the outstanding shares of common stock of the Company on November 23, 2010. The Plan was subsequently amended on six other occasions pursuant to approval of both the Board of Directors and stockholders (other than the fourth Plan amendment that did not require stockholder approval). Unless sooner terminated pursuant to the terms of the Plan related to amendments. No amendment that would adversely affect any outstanding award made under the Plan will terminate on June 14, 2020. The Board of Directors may terminate or amendcan be made without the Plan at any time except that the holders of a majorityconsent of the outstanding sharesholder of common stock must approve certain amendments. Except as provided for in the Plan, neither the Board of Directors nor the stockholders can alter or impair the rights of an optionee, without his/her consent, under any award previously granted to him/her under the Plan.such award.
Tax Aspects of the Plan
 
Federal Income Tax ConsequencesConsequences:. The following discussion summarizesis based on current laws, regulations and interpretations, all of which are subject to change. It does not purport to be complete and does not describe the materialstate, local or foreign tax considerations or the consequences for any particular individual.
Non-qualified Options.  Under current federal income tax law, the grant of a non-qualified option under the Plan will have no federal income tax consequences to us or the Company andoptionee (unless the participants in connection withoptions are publicly traded). Generally, upon exercise of a non-qualified stock option granted under the Plan, under existing applicable provisionsthe excess of the Internal Revenue Codefair market value of the stock at the date of exercise over the option price (the “CodeSpread”) and the regulations adopted pursuant to such Code. The discussion is general in nature and does not address issues relatingtaxable to the optionee as ordinary income tax circumstances of any specific individual employee or holder. The discussionand is subject to possible future changeswithholding. All such amounts taxable to an employee are deductible by us as compensation expense. The deduction will be allowed for our taxable year which includes the end of the taxable year in which the optionee includes an amount in income.
Generally, the shares received on exercise of an option under the Plan are not subject to restrictions on transfer or risks of forfeiture and, therefore, the optionee will recognize income on the date of exercise of a non-qualified stock option. However, if the optionee is subject to Section 16(b) of the Exchange Act, the Section 16(b) restriction will be considered a substantial risk of forfeiture for tax purposes. Under current law, employees who are either our directors or officers will be subject to restrictions under Section 16(b) of the Exchange Act during their term of service and for up to six months after termination of such service. SEC Rule 16b-3 provides an exemption from the restrictions of Section 16(b) for the grant of derivative securities, such as stock options, under qualifying plans. Because the Plan satisfies the requirements for exemption under SEC Rule 16b-3, the grant of options will not be considered a purchase and the exercise of the options to acquire the underlying shares of common stock will not be considered a purchase or a sale. Thus, ordinary income will be recognized and the Spread will be measured on the date of exercise.
The taxable income resulting from the exercise of a non-qualified stock option will constitute wages for employees and is generally subject to withholding. We will be required to make whatever arrangements are necessary to ensure that funds equaling the amount of tax required to be withheld, if any, are available for payment, including the deduction of required withholding amounts from the optionee’s other compensation and requiring payment of withholding amounts as part of the exercise price. The tax basis for the common stock acquired is the option price plus the taxable income recognized. An optionee will recognize gain or loss on the subsequent sale of shares acquired upon exercise of a non-qualified stock option in an amount equal to the difference between the amount realized and the tax basis of such shares. Such gain or loss will be long-term or short-term capital gain or loss, depending upon whether the shares have been held for more than one year.

Incentive Stock Options.   There will be no federal income tax consequences to us or the employee as a result of the grant of an incentive stock option. The optionee also will not recognize income when the incentive stock option is exercised (subject to the alternative minimum tax rules discussed below). Generally, we receive no deduction at the time of exercise.
In the event of a disposition of shares acquired upon exercise of an incentive stock option, the tax consequences depend upon how long the employee has held the shares. If the employee does not dispose of the shares within two years after the incentive stock option was granted, or within one year after the incentive stock option was exercised and shares were purchased, then the employee must recognize only a long-term capital gain or loss. We are not entitled to any deduction under these circumstances.
If the optionee fails to satisfy either of the foregoing holding periods, then he or she must recognize ordinary income in the Codeyear of disposition (referred to as a “disqualifying disposition”). The amount of such ordinary income generally is determined under the rules applicable to non-qualifiedoptions (see above) based on the Spread at the date of exercise. However, such ordinary income will in no event exceed the amount of the gain realized on the sale, provided that the disposition involves an arm’s-length sale or other relevant law. exchange with an unrelated party. Any gain in excess of the amount taxed as ordinary income will be treated as capital gain. In the year of the disqualifying disposition, we are entitled to a deduction equal to the amount of ordinary income recognized by the optionee.
The discussion doesSpread under an incentive stock option is treated as an adjustment in computing alternative minimum taxable income (“AMTI”) for the year of exercise. As a result, the Spread on an incentive stock option will be included in income for purposes of the alternative minimum tax even though it is not addressincluded in taxable income for purposes of determining the consequencesregular tax liability of state, local or foreignan optionee. A subsequent disqualifying disposition of shares acquired upon exercise of an incentive stock option will eliminate the AMTI adjustment if the disposition occurs in the same taxable year as the exercise. A disqualifying disposition in a subsequent taxable year will not affect the alternative minimum tax laws.computation in the earlier year.
 
NonqualifiedPayment of Option Exercise Price in Shares.  To the extent an optionee pays all or part of the option exercise price of a non-qualified stock option by tendering shares of common stock owned by the optionee, the tax consequences described above apply except that the number of shares of common stock received upon such exercise which is equal to the number of shares surrendered in payment of the option price will have the same tax basis and holding periods as the shares surrendered. The additional shares of common stock received upon such exercise will have a tax basis equal to the amount of ordinary income recognized on such exercise and a holding period which commences on the day following the date of recognition of such income. Under Treasury regulations, if an optionee exercises an incentive stock option by tendering shares of common stock previously acquired by the exercise of an incentive stock option that have not satisfied statutory holding period requirements, a disqualifying disposition will occur and the optionee will recognize income and be subject to other basis allocation and holding period requirements.
Restricted Stock OptionsAwards.  Stock granted under the Plan may, in the determination of the Committee, be subject to rights of repurchase and other transfer restrictions. The tax consequences of stock granted under the Plan depends on whether the stock is subject to restrictions and if so, whether the restrictions are deemed to create a “substantial risk of forfeiture” under Code Section 83 (for example, stock granted under the Plan which is subject to our right to repurchase the stock at a price that is less than fair market value which right lapses over a period of continued employment is considered a “substantial risk of forfeiture” under Code Section 83).
If stock is not subject to a “substantial risk of forfeiture,” the recipient normally will recognize taxable ordinary income equal to the value of the stock in the year in which the stock is granted less the amount paid for that stock. If the stock is subject to a “substantial risk of forfeiture,” the recipient normally will recognize taxable ordinary income as and when the “substantial risk of forfeiture” lapses in the amount of the fair market value of the shares no longer subject to the “substantial risk of forfeiture” less the amount paid for the stock. Upon disposition of the stock, the recipient will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for the stock plus any amount recognized as ordinary income upon grant or vesting of the stock. The gain or loss will be long or short-term depending on how long the recipient held the stock. In general, the holding period for the stock commences when the stock is no longer subject to a substantial risk of forfeiture.
A recipient of stock subject to a “substantial risk of forfeiture” may make an election under Code Section 83(b) to recognize ordinary income in the year the recipient purchases the restricted stock, rather than waiting until the “substantial risk of forfeiture” lapses. If the stock recipient makes a Section 83(b) election, the recipient will be required to recognize as ordinary income in the year the recipient purchases the stock the difference, if any, between the fair market value of the stock on the purchase date and the purchase price paid. If the stock recipient makes a Section 83(b) election, the recipient will not havebe required to recognize any income when the “substantial risk of forfeiture lapses.”
Generally, with respect to employees, we are required to withhold from regular wages or supplemental wage payments an amount based on the ordinary income recognized. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, we will generally be entitled to a business expense deduction equal to the taxable ordinary income realized by the stock recipient.

Stock Appreciation Rights.  Generally, the recipient of a SAR will not recognize any taxable income at the time an NSOthe SAR is granted nor willgranted. With respect to stand-alone SARs, if the Company be entitled to a deduction at that time. When an NSO is exercised,holder receives the grantee will have taxable ordinary income (whetherappreciation inherent in the option price is paidSARs in cash, or by surrender of already owned shares of common stock), and the Companycash will be entitledtaxable as ordinary compensation income to a tax deduction,the employee at the time that it is received. If the holder receives the appreciation inherent in an amountthe stand-alone SARs in stock, the holder will recognize ordinary compensation income equal to the excess of the fair market value of the shares to whichstock on the option exercise pertainsday it is received over any amounts paid by the option exercise price.holder for the stock.
 

The income recognized by the holder of a stand-alone SAR will generally be subject to U.S. income tax withholding and employment taxes.
In general, we will not be entitled to a federal income tax deduction upon the grant or termination of stand-alone SARs. However, upon the exercise of a stand-alone SAR, we will be entitled to a deduction for federal income tax purposes equal to the amount of ordinary income that the holder is required to recognize as a result of the exercise, provided that the deduction is not otherwise disallowed under the Code.
             
Incentive Stock OptionsPerformance Compensation Awards.  A granteeGenerally, the recipient of a performance compensation award will not haverecognize any taxable income at the time an ISOthe award is granted ormade but will generally recognize taxable income at the time the ISOaward is exercised.paid. If a grantee disposes of the shares acquired on exercise of an ISO after two years afterperformance compensation award is payable in cash, the grant of the ISO and one year after exercise of the ISO, the gain, if any,cash will be long-term capital gains eligible for favorable tax rates undertaxable as ordinary compensation income to the Code.participant at the time that it is received. If the grantee disposes ofholder receives the shares within two years ofperformance compensation award in stock, the grant of the ISO or within one year of exercise of the ISO, the disposition is a “disqualifying disposition,” and the granteeparticipant will have taxablerecognize ordinary compensation income in the year of the disqualifying disposition equal to the lesserexcess of (a) the difference between the fair market value of the sharesstock on the day it is received over any amounts paid by the holder for the stock.
The income recognized by the holder of a performance compensation award will generally be subject to U.S. income tax withholding and the exercise price of the shares at the time of option exercise, or (b) the difference between the sales price of the shares and the exercise price of the shares. Any gain realized from the time of option exercise to the time of the disqualifying disposition wouldemployment taxes.
In general, we will not be long-term or short-term capital gains, depending on whether the shares were sold more than one year or up to and through one year respectively, after the ISO was exercised. The Company is not entitled to a federal income tax deduction as a result ofupon the grant or exercisetermination of an ISO. If the grantee has ordinary income taxable asperformance compensation as a resultawards. However, upon payment of a disqualifying disposition, the Companyperformance compensation award, we will then be entitled to a deduction for federal income tax purposes equal to the amount of ordinary income that the participant is required to recognize as a result of such payment, provided that the deduction is not otherwise disallowed under the Code.
Limitations on Deductions.  Section 162(m) of the Code denies a deduction to any publicly held corporation for compensation paid to certain “covered employees” in a taxable year to the same amount as the grantee recognizes as ordinary income.extent that compensation to each covered employee exceeds $1 million.
 
New Compliance with Section 409A of the Code.  Code Section 409A imposes requirements on non-qualified deferred compensation plans. The requirements include the timing of elections to defer, the timing of distributions and prohibitions on the acceleration of distributions. Failure to satisfy these requirements may result in the immediate taxation of the arrangement, the imposition of an additional 20% income tax on the participant and the possible imposition of interest and penalties on the unpaid tax. Proposed regulations generally provide that the type of equity incentives provided under the Plan will not be considered non-qualified deferred compensation. However, some awards could be covered by Section 409A of the Code. For example, the modification of a stock option or stock appreciation right with an exercise price less than fair market value of the underlying common stock could constitute non-qualified deferred compensation. In such event, the administrator normally would expect to design and administer any such award in a manner that ordinarily should avoid adverse federal income tax consequences under Section 409A of the Code to any affected participant. In the event that an award under the Plan is determined to constitute “non-qualified deferred compensation” that would be subject to additional tax under Section 409A of the Code, the Committee may impose such additional conditions as it deems necessary to avoid the imposition of the additional tax.
Recognition of Compensation Expense. In accordance with ASC 718, Compensation-Stock Compensation, the Company is required to recognize compensation expense in its income statement for the grant-date fair value of stock options and other equity-based compensation issued to its employees and directors, the amount of which can only be determined at the time of grant.
Plan Benefits
 
AllAwards, if any, that will be made to eligible persons under the Plan are subject to the discretion of the Committee and, therefore, we cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to our employees, officers, directors and consultants under the PlanPlan.
Compensation for our directors is discretionary and is reviewed from time to time by our Board of Directors. Any determinations with respect to Board compensation are made atby our Board of Directors. Since our second quarter of 2017, we have compensated all non-employee directors with a stipend of $7,500 per quarter ($30,000 per year), payable quarterly in stock. However, during 2019, non-employee directors received quarterly stipends, payable in stock and cash, issued in arrears. All stock granted to our directors are Stock Awards issued from the discretion of thePlan.

Typically, newly elected non-employee directors receive 16,000 stock options upon joining our Board of Directors, on a case by case basis. Therefore,which vest over four years, which will also be issued from the benefits and amounts that will be received or allocated under the Plan in the future are not determinable at this time.Plan.
 
Copy of Plan and Proposed Amendment
 
Set forth below is where you can find a complete copy of the Company’s 2010 Employee Stock2019 Equity Incentive Plan, along with all subsequent amendments and the proposed amendment:
 
Original 2010 Employee Stock PlanExhibit 10.1 to Form S-1 filed on December 2, 2010
First2019 Equity Incentive Plan AmendmentAppendix A to Schedule 14C filed on April 29, 2011
Second Plan AmendmentAppendix A to Schedule 14C filed on October 28, 2013
Third Plan AmendmentAppendix A to Schedule 14C filed on April 30, 2014
Fourth Plan AmendmentExhibit 4.2 to Form 8-K filed on November 12, 2014
Fifth Plan AmendmentAppendix A to Schedule 14A filed on April 15, 2016
Sixth Plan AmendmentAppendix A to Schedule 14A filed on May 1, 201730, 2019
Proposed AmendmentAppendix A to this Schedule 14A
 
Vote Required
 
The vote required to approve the proposed amendment to the 2019 Equity Incentive Plan is the affirmative vote of the holders of a majority of the votes cast at the Annual Meeting entitled to vote on the matter. Each holder of common stock is entitled to one vote for each share held.
 
Recommendation of the Board of Directors
 
The Board of Directors recommends that the stockholders vote “FOR” approval of the amendment to the 2010 Employee Stock Plan.

PROPOSAL SIX
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) added Section 14A to Securities Exchange Act of 1934, as amended (the “Exchange Act”), which enables our stockholders to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this Information Statement in accordance with the SEC’s rules.
Our Compensation Committee is comprised of three independent, non-employee, outside directors. The Compensation Committee’s purpose and powers are to (a) review and approve the compensation of the chief executive officer and other executive officers of the Company, and such other employees of the Company as are assigned thereto by the Board of Directors and to make recommendations to the Board of Directors with respect to standards for setting compensation levels, (b) exercise such other powers and authority as are set forth in a charter of the Compensation Committee of the Board of Directors, and (c) exercise such other powers and authority as shall from time to time be assigned thereto by resolution of the Board of Directors.
Our named executive officer compensation program is designed to attract, motivate and retain our named executive officers, who are critical to our success, while working within the available resources. Our Company’s practice is to provide total compensation that attracts, retains and incentivizes the management talent needed to execute our business strategies, and that promotes both our short and long-term objectives. Achievement of short-term objectives is rewarded through cash bonus incentives, while equity-based incentive awards encourage our named executive officers to focus on the Company’s long-term goals. These incentives are based on business and financial objectives considered by the Compensation Committee and Board of Directors to be important to the Company and its shareholders, including execution of growth strategies, generation of earnings growth, and return on capital investments. Both our Compensation Committee and Board of Directors believe that they have taken a responsible approach to compensating our named executive officers whereby our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to value creation for our stockholders. Please read the “Executive Compensation” section of this Proxy Statement for additional details about our named executive compensation program.
We are asking our stockholders to indicate their support for our named executive officer compensation as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2018 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.”
The say-on-pay vote is advisory, and therefore not binding on the Company, our Compensation Committee or our Board of Directors. Our Compensation Committee and Board of Directors value the views of our stockholders and will consider the outcome of the vote when determining future compensation arrangements for our named executive officers.
Vote Required
This vote is an advisory vote and is therefore not binding on the Company, the Compensation Committee or the Board of Directors. The vote required for approval of the compensation of our named executive officers is the affirmative vote of the holders of a majority of the votes cast at the Annual Meeting entitled to vote on the matter. Each holder of common stock is entitled to one vote for each share held.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholdersshareholders vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement pursuantamendment to the compensation disclosure rules of the SEC.2019 Equity Incentive Plan.
 

 
PROPOSAL SEVEN
ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
Section 14A of the Exchange Act, as added by the Dodd-Frank Act, also enables our stockholders to indicate their preference as to how frequently we should seek an advisory vote on the compensation of our named executive officers. The ballot card provides stockholders with the opportunity to choose among four options (holding the advisory vote on executive compensation every one, two or three years, or abstain from voting) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of the Board of Directors. You may cast your vote on your preferred voting frequency by choosing the option of once every year (“1 year”), once every two years (“2 years”), once every three years (“3 years”), or you may abstain from voting.
After careful consideration of this proposal, the Board of Directors has determined that an advisory vote on executive compensation that occurs every three years is the most appropriate alternative for the Company, and therefore your Board of Directors recommends that you vote for a three year (3-year) frequency for the advisory vote on executive compensation.
In formulating its recommendation, our Board of Directors considered that a triennial vote will allow stockholders to better evaluate our executive compensation program in relation to our short- and long-term Company performance. Additionally, a triennial vote will provide us with time to respond to stockholder concerns and implement appropriate revisions.
The purpose of this proposal is to assess stockholder preferences on the frequency of future advisory votes on executive compensation, and as such, there will be no approval or adoption of a resolution establishing the frequency of future advisory votes on executive compensation. The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be considered the frequency for the advisory vote on executive compensation that is preferred by our stockholders. However, because this vote is advisory and not binding on the Board of Directors or the Company in any way, the Board of Directors may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option preferred by our stockholders.
Vote Required
This vote is an advisory vote and is therefore not binding on the Company or the Board of Directors. You may choose from the following alternatives: every year, every two years, every three years or you may abstain. The option of one year, two years or three years that receives the highest number of votes cast by stockholders entitled to vote on the matter will be considered the frequency for the advisory vote on executive compensation that is preferred by our stockholders. While the Board of Directors will consider our stockholders’ preference as reflected in the vote on this proposal in determining how frequently the advisory vote on executive compensation occurs in the future, our Board of Directors will have the discretion to determine the actual frequency at which the required advisory stockholder vote on the compensation of our named executive officers will be conducted, because the vote on such frequency is only advisory and non-binding. The Board of Directors’ determination on the actual frequency of such vote will be disclosed in a Form 8-K to be filed in accordance with the rules of the SEC.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote “FOR” a three year (3-year) frequency for the advisory vote on executive compensation.

STOCKHOLDER PROPOSALS FOR 20192021 ANNUAL MEETING
 
In order for stockholder proposals to be included in our proxy statement for the 20192021 Annual Meeting, we must receive them at our principal executive offices, 550 SW 2nd5001 Celebration Pointe Avenue, Suite 410, Gainesville, FL 32601,32608, by January 14, 2019,February 16 2021, being 120 days prior to the date of the first anniversary of the date of our proxy statement for the 20182020 Annual Meeting of Stockholders. All other stockholder proposals, including nominations for directors, in order to be voted on at the 20192021 Annual Meeting, must be received by us not earlier than January 23, 2019March 11, 2021 and not later than February 22, 2019April 10, 2021 being, respectively, 120 days and 90 days prior to the date of the first anniversary of the 20182020 Annual Meeting of Stockholders. In the event that the 20192021 Annual Meeting is called for a date that is not within 30 days before or after the anniversary date of the 20182020 Annual Meeting of Stockholders, notice by a stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the 20192021 Annual Meeting is mailed or such public disclosure of the date of the 20192021 Annual Meeting is made, whichever first occurs.
 
 
OTHER MATTERS
 
Our Board of Directors knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, our Board of Directors intends that the persons named in the proxies will vote upon such matters in accordance with the best judgment of the proxy holders.
 
Whether or not you intend to be present at the meeting, you are urged to fill out, sign, date and return the enclosed proxy at your earliest convenience.
 
Gainesville, FL
 
May 14, 2018
June 16, 2020
 
 

 
APPENDIX A
 
AMENDMENT
Amendment No. 71
TOto
SHARPSPRING, INC. 2010 EMPLOYEE STOCK PLANSharpSpring, Inc. 2019 Equity Incentive Plan
 
The SharpSpring, Inc. 2010 Employee Stock2019 Equity Incentive Plan (the “Plan”) is hereby amended as follows (capitalized terms used herein and not defined herein shall have the respective meaning ascribed to such terms in the Plan):
 
1.
Paragraph 4Section 4.1 of the Plan shall be deleted in its entirety and replaced with the following:
 
4. Stock.  The stock subject4.1 Subject to Options, Awards and Purchases shall be authorized but unissuedadjustment in accordance with Section 11, no more than 1,025,000 shares of Common Stock ofplus the Company, $.001 par value (the “Common Stock”), ornumber of shares of Common Stock reacquired byunderlying any award granted under the 2010 Restated Employee Stock Plan that expires, terminates or is canceled or forfeited under the terms of the 2010 Restated Employee Stock Plan shall be available for the grant of Awards under the Plan (the "Total Share Reserve"). During the terms of the Awards, the Company in any manner.  The aggregate number of shares that may be issued pursuant to the Plan is 2,600,000, subject to adjustment as provided in paragraph 13.  Any such shares may be issued as ISOs, Non-Qualified Options or Awards, or to persons or entities making Purchases, so long asshall keep available at all times the number of shares issued does not exceedof Common Stock required to satisfy such number, as adjusted. If any Option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, or if the Company shall reacquire any unvested shares issued pursuant to Awards or Purchases, the unpurchased shares subject to such Options and any unvested shares so reacquired by the Company shall again be available for grants of Stock Rights under the Plan.Awards.
 
2.
Paragraph 5 of the Plan shall be deleted in its entirety and replaced with the following: 
5. Granting of Stock Rights. Stock Rights may be granted under the Plan at any time after June 16, 2010 and prior to June 15, 2020. Any Stock Right issued pursuant to subsection (iii) of paragraph 2.D. shall be held for the period of time described in that subsection. The date of grant of a Stock Right under the Plan will be the date specified by the Committee at the time it grants the Stock Right; provided, however, that such date shall not be prior to the date on which the Committee acts to approve the grant. The Committee shall have the right, with the consent of the optionee, to convert an ISO granted under the Plan to a Non-Qualified Option pursuant to paragraph 16. Awards and the price of Purchases shall be at fair market value as determined by the Board of Directors Except as expressly provided below in paragraph 13 with respect to changes in capitalization and stock dividends, in the event the Company pays any dividend on its outstanding Common Stock, no such dividend shall be paid on any restricted Common Stock acquired on the exercise of a Stock Right prior to the vesting of such Stock Right.
3.
Paragraph 16 of the Plan shall be deleted in its entirety and replaced with the following: 
16. Conversion of ISOs into Non-Qualified Options; Termination of ISOs. The Committee, at the written request of any optionee, may in its discretion take such actions as may be necessary to convert such optionee's ISOs (or any installments or portions of installments thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the optionee is an employee of the Company or a Related Corporation at the time of such conversion. Such actions may include, but not be limited to, extending the exercise period or reducing the exercise price of the appropriate installments of such options; except that any reduction in the exercise price of such options are subject to approval by the stockholders of the Company at the next Meeting of Stockholders. At the time of such conversion, the Committee (with the consent of the Optionee) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Committee in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any optionee the right to have such optionee's ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Committee takes appropriate action. The Committee, with the consent of the optionee, may also terminate any portion of any ISO that has not been exercised at the time of such termination.
4.
All other provisions of the Plan remain in full force and effect, other than any provision that conflicts with the terms and spirit of this amendment.
 
Adopted by the Board of Directors on April 27, 2018.June 15, 2020
 
Adopted by the Shareholders on _____________._____________
 
A-1

  
SHARPSPRING, INC.INC
c/o ISSUER DIRECT CORPORATION
P.O. BOX 17136THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS –
JULY 9, 2020 AT 10:00 AM LOCAL TIME
SALT LAKE CITY, UT  84117   
 
CONTROL ID:
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Issuer Direct Corporation, P.O. Box 17136, Salt Lake City, UT  84117.
VOTE BY FACSIMILE - (801) 277-3147
Mark, sign and date your proxy card and fax it to (801) 277-3147 Attention: Julie, up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
  
VOTE BY EMAIL - Julie.Felix@issuerdirect.com
Mark, sign and date your proxy card and email it to Julie.Felix@issuerdirect.com up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
   
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLY
ForWithholdFor AllTo withhold authority to vote for any individual
AllAllExceptnominee(s), mark “For All Except” and write the
The Board of Directors recommends you vote FOR the following:number(s) of the nominee(s) on the line below.
1.Election of Directors☐☐☐
Nominees:REQUEST ID:
     
     
01 Steven A. Huey02 Richard Carlson03 David A. Buckel04 Marietta Davis05 Daniel C. Allen
    
The
This proxy, when properly executed, will be voted in the manner directed herein.  If no such direction is made, this proxy will be voted in accordance with the Board of Directors recommends you vote FOR proposals 2, 3, 4, 5 and 6 and 3 YEARS on proposal 7.
ForAgainstAbstain
2.Ratification of the appointment of Cherry Bekaert LLP to serve as the Company’s Independent Registered Public Accounting firm for fiscal year 2018.☐☐☐
3.Approval of the issuance of shares of the Company’s common stock upon conversion of the Convertible Promissory Note dated March 28, 2018 pursuant to NASDAQ Listing Rule 5635(b).☐☐☐
4.Approval of the issuance of up to 3,646,519 shares of the Company’s common stock at the election of the Company upon the maturity of the Convertible Promissory Note dated March 28, 2018 pursuant to NASDAQ Listing Rule 5635(d).☐☐☐
5.
recommendations. Approval of the amendment to increase the number of shares of common stock available for issuance under the 2010 Employee Stock Plan and to provide for certain other amendments.
☐☐☐
6.Advisory vote on the compensation of our named executive officers.☐☐☐
7.Advisory vote on the frequency of future advisory votes on executive compensation.
☐
1 year
☐
2 years
☐
3 years
☐
NOTE: In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting
Please print and sign your name(s). When signing as attorney, executor,
administrator, or other fiduciary, please give full title as such. Joint owners
should each sign personally. All holders must sign. If a corporation or
partnership, please sign in full corporate or partnership name, by authorized officer.
______________________________ __________________________________
  Print Name                             Print Name (Joint Owners)
  SignatureDate  Signature (Joint Owners)Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice & Proxy Statement, Form 10-K, as amended is/are available athttp://sharpspring.com/.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
SHARPSPRING, INC.
Annual Meeting of Shareholders
June 13, 2018 10:00 AM
This proxy is solicited by the Board of Directors
The undersigned hereby appoint(s) Richard Carlson and/or Edward LawtonMichael Power with the power of substitution and resubstitution to vote any and all shares of capital stock of SharpSpring, Inc. (the "Company") which the undersigned would be entitled to vote as fully as the undersigned could do if personally present at the Annual Meeting of the Company, to be held on Wednesday, June 13, 2018Thursday, July 9, 2020 at 10:00 a.m. local time, and at any adjournments thereof, hereby revoking any prior proxies to vote said stock, upon the following items more fully described in the notice of any Proxy Statement for the Annual Meeting (receipt of which is hereby acknowledged).
 
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations.(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
 
 
 
 
 
Continued and to be signed on reverse sideVOTING INSTRUCTIONS
If you vote by phone, fax or internet, please DO NOT mail your proxy card.
 
 
 
 
 
 
MAIL:  Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope.
FAX:  
Complete the reverse portion of this Proxy Card and Fax to 202-521-3464.
INTERNET:  https://www.iproxydirect.com/SHSP
PHONE:  1-866-752-VOTE(8683)
 
 

ANNUAL MEETING OF THE STOCKHOLDERS OF
SHARPSPRING, INC
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Proposal 1

FOR
ALL
AGAINST
ALL
FOR ALL
EXCEPT
Election of Directors☐☐
  Steven A. Huey☐
  Richard Carlson☐CONTROL ID:
  David A. Buckel☐REQUEST ID:
  Marietta Davis☐
  Scott Miller☐


Proposal 2
FORAGAINSTABSTAIN
Ratification of the appointment of Cheery Bekaert LLP to serve as the Company’s Independent Registered Public Accounting firm for fiscal year 2020.◻◻◻
Proposal 3
FORAGAINSTABSTAIN
Approval of the amendment to the 2019 Equity Incentive Plan.◻◻◻
NOTE



In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.







MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: ◻

MARK HERE FOR ADDRESS CHANGE
◻ New Address (if applicable):

IMPORTANT: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
Dated: ________________________, 2020
(Print Name of Stockholder and/or Joint Tenant)
(Signature of Stockholder)
(Second Signature if held jointly)