SCHEDULE 14A
(Amendment No. 1)
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SUMMER ENERGY HOLDINGS, INC.
(Name of the Registrant as Specified In Its Charter)
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EXPLANATORY NOTE
SUMMER ENERGY HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 19, 2017
_____________________________________________
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 2017 Annual Meeting (the “Annual Meeting”) of Stockholders of Summer Energy Holdings, Inc., a Nevada corporation (the “Company”), will be held on Monday, June 19, 2017, at 8:00 a.m. Central Standard Time at the Company’s principal executive offices, located at 800 Bering Drive, Suite 260, Houston, Texas 77057 for the following purposes, as more fully described in the proxy statement (the “Proxy Statement”) accompanying this notice (the “Notice”):
1. To elect two Class II Directors: Tom D. O’Leary and James Stapleton, each to serve for a three year term;
2. To consider and vote upon an advisory, non-binding resolution to approve our executive compensation as described in the Proxy Statement;
3. To ratify the appointment of LBB & Associates Ltd., LLP to serve as our independent registered public accountants for the fiscal year ending December 31, 2017; and
4. To transact such other business as may properly come before the Annual Meeting, or any postponement(s) or adjournment(s) thereof.
All stockholders of record at the close of business on April 24, 2017 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting and any adjournment(s) or postponement(s) thereof.
The Company’s Board of Directors (the “Board”) recommends that you vote in favor of the foregoing items of business, which are more fully described in the Proxy Statement accompanying this Notice.
We cordially invite all stockholders to attend the Annual Meeting in person. Whether or not you plan to attend, it is important that your shares are represented and voted at the Annual Meeting. As an alternative to voting in person at the Annual Meeting, you can vote your shares electronically over the Internet or by telephone, or if you receive a proxy card or a form of voting instructions in the mail, by mailing the completed proxy card or form of voting instructions. For detailed information regarding voting instructions, please refer to the section entitled “Voting Securities” beginning on page 2 of the Proxy Statement.
For admission to the Annual Meeting, you may be asked to present valid picture identification, such as a driver’s license or passport, and proof of ownership of the Company’s common stock (the “Common Stock”) as of the Record Date, such as a brokerage statement, proxy card or voting instruction form reflecting stock ownership.
INTERNET AVAILABILITY OF PROXY MATERIALS
A COMPLETE SET OF PROXY MATERIALS RELATING TO OUR ANNUAL MEETING IS AVAILABLE ON THE INTERNET. THESE MATERIALS, CONSISTING OF THE NOTICE OF ANNUAL MEETING, PROXY STATEMENT, PROXY CARD AND ANNUAL REPORT TO STOCKHOLDERS, MAY BE VIEWED ATWWW.COLONIALSTOCK.COM/SUMMER2017 ORWWW.SEC.GOV. INFORMATION INCLUDED ON THE COLONIAL STOCK WEBSITE OR THE COMPANY’S WEBSITE, OTHER THAN THE MATERIALS RELATED TO THE ANNUAL MEETING, IS NOT PART OF THE PROXY SOLICITING MATERIALS.
By Order of the Board of Directors,
Houston, Texas /s/ Neil M. Leibman
April 28, 2017
Neil M. Leibman
Chief Executive Officer
PROXY STATEMENT
FOR THE 2017 ANNUAL MEETING OF STOCKHOLDERS
JUNE 19, 2017
SOLICITATION, EXERCISE AND REVOCATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of Directors (the “Board”) of Summer Energy Holdings, Inc. (the “Company”) to be voted at the Annual Meeting to be held at the Company’s principal executive offices, located at 800 Bering Drive, Suite 260, Houston, Texas on June 19, 2017, at 8:00 a.m. Central Standard Time, and any and all adjournment(s) or postponement(s) thereof. In addition to the original solicitation by mail or through the Internet, certain of the Company’s officers, directors and employees (who will receive no compensation in addition to their regular salaries) may solicit proxies by telephone or in person. The Company has not specially engaged employees or solicitors for proxy solicitation purposes. All expenses of this solicitation, including the costs of preparing and mailing this Proxy Statement and the reimbursement of brokerage firms and other nominees for their reasonable expenses in forwarding proxy materials to beneficial owners of Common Stock, will be borne by the Company. You may vote in person at the Annual Meeting, if you wish, even though you have previously mailed in your proxy or voted via telephone or the Internet, as set forth in more detail in this Proxy Statement. This Proxy Statement and the accompanying proxy are being made available to the Company’s stockholders via the Internet on or about April 28, 2017 and are being filed with the Securities and Exchange Commission on or about such date. The proxy solicitation materials will also be first sent on or about April 28, 2017 to all stockholders entitled to vote at the Annual Meeting.
Unless otherwise indicated, “Summer Energy,” the “Company,” “we,” “us” and “our” shall refer to Summer Energy Holdings, Inc.
The persons named as proxies, Neil M. Leibman and Jaleea P. George, were designated by the Board. All properly executed proxies will be voted (except to the extent that authority has been withheld) and where a choice has been specified by the stockholder as provided in the proxy it will be voted in accordance with the specifications so made. Proxies submitted without specification will be votedFOR the election of each of the two nominees to serve as Class II directors on our Board listed in the Proxy Statement,FOR approval of the compensation of the Company’s named executive officers andFOR the ratification of LBB & Associates, Ltd., LLP to serve as our independent registered public accountants for the year ending December 31, 2017.
Any stockholder may revoke a proxy at any time before it is voted at the meeting by a proxy bearing a later date. A proxy may also be revoked by any stockholder delivering a written notice of revocation to the Secretary of the Company at 800 Bering Drive, Suite 260, Houston, Texas 77057, Attn: Corporate Secretary, or by voting in person at the Annual Meeting.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Purpose
At the Annual Meeting, stockholders will be asked to elect two Class II directors, to approve on an advisory basis the compensation of the Company’s named executive officers, to ratify the appointment of LBB & Associates Ltd., LLP to serve as our independent registered public accountants for the year ending December 31, 2017, and to transact such other business as may properly come before the Annual Meeting. The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the preceding Notice and are described in more detail in this Proxy Statement.
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Voting Securities
The holders of shares of our common stock (the “Common Stock”) are entitled to vote on all matters that properly come before the Annual Meeting.
If, as of the Record Date, you are a registered holder (meaning that your shares of Common Stock are registered in our records as being held in your name), then you may vote on matters presented at the Annual Meeting in the following ways:
by proxy: you may complete the proxy card and mail it to the Company;
by Internet or telephone in accordance with the instructions in the proxy card; or
in person: you may attend the Annual Meeting and cast your vote there.
If, as of the Record Date, you are a beneficial owner whose shares of Common Stock are held in “street-name” by a bank, broker or other record holder, please refer to your voting instructions card and other materials forwarded by the record holder for information on how to instruct the record holder to vote on your behalf.
If you are a registered holder and vote by proxy, the individuals named on the enclosed proxy card will vote your shares of Common Stock in the way that you indicate. When completing the proxy card, you may specify whether your shares of Common Stock should be voted for or against or to abstain from voting on all, some or none of the matters presented at the Annual Meeting.
If you do not indicate how your shares of Common Stock should be voted on a matter, the shares of Common Stock represented by your properly submitted proxy will be voted as the Board recommends. If you choose to vote by mailing a proxy card, your proxy card must be filed with the Corporate Secretary prior to or at the commencement of the Annual Meeting.
Registered holders who vote by sending in a signed proxy will not be prevented from attending the Annual Meeting and voting in person. You have the right to revoke a proxy at any time before it is exercised by (a) executing and returning a later dated proxy, (b) giving written notice of revocation to the Company’s Corporate Secretary at 800 Bering Drive, Suite 260, Houston, Texas 77057 or (c) attending the Annual Meeting and voting in person. In order to attend the Annual Meeting and vote in person, a beneficial holder whose shares are held in “street name” by a bank, broker or other record holder must follow the instructions provided by the record holder for voting in person at the Annual Meeting. The beneficial holder also must obtain from the record holder and present at the Annual Meeting a written proxy allowing the beneficial holder to vote the shares of Common Stock in person.
IT IS IMPORTANT THAT PROXIES BE SUBMITTED PROMPTLY. THEREFORE, STOCKHOLDERS ARE REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARD, OR SUBMIT THEIR VOTE VIA TELEPHONE OR THE INTERNET, AS SOON AS POSSIBLE, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON.
If you receive more than one proxy card because your shares are registered in different names or at different addresses, please provide voting instructions for all proxy cards you receive so that all of your shares of Common Stock will be represented at the Annual Meeting. The Company is delivering Proxy Statements and Annual Reports to those stockholders who have requested physical delivery of the Proxy Statement and related materials and who are sharing an address unless it receives contrary instructions from one or more of the stockholders. If you are a stockholder residing at a shared address and would like to request an additional copy of the Proxy Statement or Annual Report now or with respect to future mailings (or to request to receive only one copy of the Proxy Statement or Annual Report if you are currently receiving multiple copies), please send your request to the Company, Attn: Corporate Secretary at the address noted above or call us at 713-375-2793.
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Record Date, Quorum and Voting Requirements
Record Date
To be able to vote, you must have been a stockholder as of the Record Date, April 24, 2017. As of the Record Date, 22,463,424 shares of Common Stock par value $0.001 (“Common Stock”) were issued and outstanding. Each share of Common Stock is entitled to one (1) vote.
Quorum
For business to be conducted at the Annual Meeting, a quorum must be present. The presence at the Annual Meeting, either in person or by proxy, of holders of shares of the Company’s Common Stock entitled to vote and representing at least a majority of the Company’s outstanding voting power will constitute a quorum for the transaction of business. Accordingly, shares representing at least 11,231,713 votes must be present in person or by proxy at the Annual Meeting. Abstentions and “broker non-votes” will be counted for the purpose of determining whether a quorum is present for the transaction of business. If a quorum is not present, the Annual Meeting will be adjourned until a quorum is obtained.
Required Vote
For purposes of the quorum and the discussion below regarding the vote necessary to take stockholder action, stockholders of record who are present at the Annual Meeting in person or by proxy and who vote for or against, abstain or withhold their vote from a matter, including broker non-votes, are considered stockholders who are present and entitled to vote and count toward the quorum. As used herein, “broker non-vote” means the votes that are not cast on the matter in question by a broker with respect to shares of Common Stock because (i) the broker has not received voting instructions from the beneficial owner on such matter and (ii) such broker lacks discretionary voting authority to vote the shares of Common Stock on such matter. Brokers holding shares of record for beneficial owners generally are entitled to exercise their discretion to vote on Proposal 3 included in this Proxy Statement unless they receive other instructions from the beneficial owners. The effect of proxies marked “withheld” as to any director nominee or “abstain” as to a particular proposal and broker non-votes is discussed under each respective proposal below.
Proposal One, Election of Directors. Our directors will be elected by a plurality of votes cast at the Annual Meeting. This means that the two nominees for director who receive the most votes will be elected. Only votes “for” or “against” affect the outcome. Abstentions are not counted for the purposes of election of directors. Should any nominee(s) become unavailable to serve before the Annual Meeting, the proxies will be voted by the proxy holders for such other person(s) as may be designated by our Board or for such lesser number of nominees as may be prescribed by the Board. Votes cast for the election of any nominee who has become unavailable will be disregarded.
Proposal Two, Advisory Vote on Executive Compensation. An advisory, non-binding resolution to approve executive compensation as described in this Proxy Statement. The affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting, without regard to either broker non-votes, or shares as to which the “ABSTAIN” box has been selected on the proxy card, is required for the approval of this non-binding resolution. While this vote is required by law, it will neither be binding on the Company or the Board, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on, the Company or the Board.
Proposal Three, Ratification of LBB & Associates Ltd., LLP as our Independent Registered Public Accountants. Ratification of LBB & Associates requires the affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting.
Other Matters. For each other matter brought before the stockholders at the Annual Meeting for a vote, the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting is required for approval. If you are present at the Annual Meeting but do not vote on
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any of these proposals, or if you have given a proxy and abstain on any of these proposals, this will have the same effect as if you voted against the proposal. If there are broker non-votes on the issue, the shares not voted will have no effect on the outcome of the proposal.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to revoke it at any time before it is voted. It may be revoked by filing with the Secretary of the Company at the Company’s principal executive office, located at 800 Bering Drive, Suite 260, Houston, Texas, 77057, Attn: Corporate Secretary, a written notice of revocation or a duly executed proxy bearing a later date, or it may be revoked by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, by itself, revoke a proxy.
Stockholder Proposals for 2018 Annual Meeting of Stockholders
Any stockholder desiring to submit a proposal for action at the 2018 annual meeting of stockholders and presentation in the Company’s proxy statement with respect to such meeting should arrange for such proposal to be delivered to the Company’s offices, 800 Bering Drive, Suite 260, Houston, Texas, 77057, no later than December 15, 2017 in order to be considered for inclusion in the Company’s proxy statement relating to the 2018 annual meeting of stockholders. Matters pertaining to such proposals, including the number and length thereof, eligibility of persons entitled to have such proposals included and other aspects are regulated by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules and Regulations of the Securities and Exchange Commission and other laws and regulations to which interested persons should refer.
Additionally, under Rule 14a-4, as promulgated under the Exchange Act, if a stockholder fails to notify the Company of a proposal at least 45 days prior to the month and day of mailing of the prior year’s proxy statement, then the Company will be allowed to use its discretionary voting authority when the proposal is raised at the annual meeting, without any discussion of the matter in the proxy statement. With respect to the Company’s 2018 annual meeting of stockholders, a stockholder proposal not previously submitted for the Company’s proxy statement may be submitted until March 20, 2018; thereafter, the Company will use its voting authority as described above.
PROPOSAL 1
ELECTION OF DIRECTORS
Our board of directors currently consists of seven directors, divided among three classes. Our Class II Directors, whose term will expire at the Annual Meeting, are Tom O’Leary and James Stapleton. Our Class III Directors, whose terms will expire at the annual meeting of our stockholders in the year 2018, are Jaleea George, Neil Leibman and Stuart Gaylor. Our Class I Directors, whose term will expire at the annual meeting of our stockholders in the year 2019, are J. Mace Meeks and Andrew Bursten. The Company’s Nominating and Corporate Governance Committee has nominated Tom O’Leary and James Stapleton to serve as the Class II Directors. The term of the Class II Directors who are elected at the Annual Meeting will expire at the annual meeting of our stockholders in the year 2020.
It is intended that shares represented by the proxies will be votedFOR the election to the Board of the persons named below unless authority to vote for nominees has been withheld in the proxy. Broker non-votes and proxies marked “withheld” as to one or more of the nominees will result in the respective nominees receiving fewer votes. However, the number of votes otherwise received by the nominee will not be reduced by such action. Although each of the persons named below has consented to serve as a director if elected and the Board has no reason to believe that any of the nominees named below will be unable to serve as a director, if any nominee withdraws or otherwise becomes unavailable to serve, the persons named as proxies will vote for any substitute nominee designated by the Board.
The following lists the two nominees for election as directors at the Annual Meeting and the five directors of our Company whose term of office will continue after the Annual Meeting, and includes as to each person how long such person has been a director of our company, such person’s professional background, other public company
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directorships and other factors considered in the determination that such person possesses the requisite qualifications and skills to serve as a member of our Board. The number of shares of our Common Stock beneficially owned by each director, as of March 31, 2017, is set forth in this proxy statement under the caption “Beneficial Ownership of Securities.”
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES NAMED BELOW.
Nominees for Election as Directors
Name | Age | Position with the Company |
Tom D. O’Leary | 60 | Director, Member of Compensation Committee and Nomination and Corporate Governance Committee |
James Stapleton | 55 | Director, Member of Audit Committee |
Tom D. O’Leary, 60. Tom O’Leary has been a member of the Company’s Board since 2013. Mr. O’Leary is currently the CEO and COO of Horizon Power and Light, LLC (“Horizon”) and REP Energy, LLC (“REP Energy”), both retail electric providers in the Northeastern United States and has served in such positions since 2006. Neither Horizon nor REP Energy is a competitor of the Company. Mr. O’Leary is also currently the President of PDS Management Group, LLC, a project development and construction management firm for commercial, industrial, institutional, entertainment and retail, hospitality and mixed-use developments with projects primarily in Texas and the southwest. Mr. O’Leary currently serves on the board of directors and as treasurer of USGBC Texas Gulf Coast Chapter. Mr. O’Leary also currently serves on the board of directors of the Memorial Park Conservancy and the Houston Arboretum and was the Arboretum’s president from 2009-2011. From 2002-2005, Mr. O’Leary served on the board of Gexa Energy Corp., a pioneer in the Texas retail electricity marketplace. Mr. O’Leary has previously served as a director of other private and public companies, as well as a director of various other charitable organizations. Mr. O’Leary received a bachelor’s degree in Architecture and a Masters of Business Administration from the University of Houston.
Mr. O’Leary’s industry experience has given him extensive knowledge of the Company’s business model and he brings leadership and unique perspective to the Board.
James P. Stapleton, 55. James Stapleton has been a member of the Company’s Board since March, 2012. Mr. Stapleton is currently CFO of Mount Tam Biotechnologies Inc. (OTCMKTS: MNTM) where he has served since May 2016. From August 2012 to September 2014 Mr. Stapleton was the CFO at Ozone International, LLC, which provides ozone equipment and solutions to food processors. From February 2012 to June 2012, Mr. Stapleton was the CFO for Jones Soda (NASDAQ: JSDA). From 2007 to 2011, Mr. Stapleton was a consultant and advisor to a variety of companies, both public and private. From May 2005 through July 2007, Mr. Stapleton was the Chief Financial Officer of Bionovo (NASDAQ: BNVI). From January 2003 through April 2005, Mr. Stapleton was the Chief Financial Officer of Auxilio (OTC BB AUXO). From 1996 through 2002, Mr. Stapleton was employed in a variety of positions for Prosoft Training (NASDAQ: POSO), including Corporate Secretary, Vice President Investor relations, and Chief Financial Officer. Mr. Stapleton was Chief Financial Officer of BioTek Solutions, Inc. from 1995 through February 1996. Mr. Stapleton graduated from the University of California at Irvine (UCI) with a MBA in 1995, and from the University of Washington with a BA in Economics in 1985.
Mr. Stapleton brings corporate governance and financial expertise to the Board garnered through his leadership positions and board service with other entities. His experience and qualifications provide sound governance and financial leadership to the board.
Directors Whose Terms Expire in 2018
Stuart C. Gaylor, 56. Stuart Gaylor has been a member of the Company’s Board since March, 2012 and was elected Chairman of the Board in April, 2012. Stuart Gaylor is President of Lighthouse Property Development LLC, a real estate development firm specializing in retail development. He is also on the Board, CEO and CFO of Al’s Formal Wear. Al’s is a Houston based tuxedo specialty retailer which rents and sells formalwear. He was born
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in Houston, and graduated from Bellaire High School. He attended the University of Texas at Austin, graduating with a BBA in Accounting and Data Processing in 1983. Upon college graduation, Stuart worked briefly at Ernst & Whinney, where he earned his CPA certificate. He joined Al’s Formal Wear in late 1984 as the company’s controller. He became President in 1996 and then CEO in 2014. Stuart served as a member of the board of directors of Gexa Energy from 2002-2005. Stuart is married to Anita for 30 years. They have three children.
Mr. Gaylor’s experience in managing a large organization provides the Board invaluable business strategy and leadership experience. Further, Mr. Gaylor’s previous experience on the board of a retail electric provider in Texas will prove valuable as the Company continues to execute on its business plan.
Neil M. Leibman, 57. Neil Leibman has been a member of the Company’s Board since January, 2013. Mr. Leibman is the Company’s Chief Executive Officer. From January 2013 through February 2014, Mr. Leibman served as the Company’s President and Chief Executive Officer. Since 2006, Mr. Leibman was Chairman and CEO of Aspen Pipeline, LP, a company which develops and operates midstream pipeline projects, primarily in Texas. Since 2006 Mr. Leibman has also been an officer of Horizon Power and Light, LLC (“Horizon”) and REP Energy, LLC (“REP Energy”). Horizon and REP Energy are both retail electric providers in other states; however neither Horizon nor REP Energy is a competitor of the Company. Mr. Leibman served, from 2001-2005, as Chairman and CEO of Gexa Energy Corp., a pioneer in the Texas retail electricity marketplace, where he helped grow the company from a start-up to an established firm with revenues of $500 million, and also oversaw the sale of that company to FPL Group, Inc. (NYSE: FPL) in June 2005. Prior to his time at Gexa, Mr. Leibman was an entrepreneur and corporate attorney, investing in and advising a variety of companies. Mr. Leibman currently serves on the board of the Texas Rangers, the Texas Rangers Foundation, Tumbleweed Resources, LLC and the St. Francis Episcopal Day School. Mr. Leibman has previously served as a director of both private and public companies, as well as a director of various charitable organizations. Mr. Leibman received a BA from Emory University and a Masters of Business Administration and Juris Doctorate, with honors, from the State University of New York, Buffalo.
Mr. Leibman’s industry experience has given him extensive knowledge of the Company’s business model and brings leadership and unique perspective to the Company and the Board.
Jaleea P. George, 55. Jaleea George has been a member of the Company’s Board since March, 2012. She is the Company’s Secretary, Treasurer and Chief Financial Officer, was a founding member of Summer Energy, LLC, and manages all financial operations of the Company. Since 2007 Ms. George has performed accounting and financial functions in the Maryland and District of Columbia markets for Horizon Power & Light, LLC (“Horizon”). Horizon is not a competitor of the Company. Ms. George has extensive accounting, taxation and administration experience. Ms. George has served in various financial positions that encompassed a diverse range of industry experience, including a 9,600 mile pipeline company covering several states, an international manufacturing company with operations in thirty-two countries, and a project developer of a 50 megawatt wood-waste biomass fired electricity generations facility. Prior to joining Horizon, Ms. George served as the Director of Finance of a major not-for-profit organization. Ms. George graduated from The University of Texas at Austin with a BBA in accounting and is certified by the Texas State Board of Public Accountancy. She is a member of the American Institute of Certified Public Accountants (AICPA), Texas Society of CPAs (TSCPA) and the Houston Chapter of TSCPA.
Ms. George’s financial and accounting experience, particularly in the retail electric industry, provides the Board with necessary skills and expertise due to her extensive knowledge of our industry and in-depth knowledge of our business and operations.
Directors Whose Terms Expire in 2019
Jeffery Mace Meeks, 51. J. Mace Meeks has been a member of the Company’s Board since March, 2012. Mr. Meeks has been a partner at Insgroup Insurance Agency since January 1, 2015. Prior to that, and since 1996, Mr. Meeks was a partner at Dean & Draper Insurance Agency, LP. Upon graduating from Rice University in 1989, Mace entered the insurance industry. He has accumulated 24 years of expertise in his field. As a leading producer over the past 24 years, Mr. Meeks, has developed a broad foundation of knowledge in commercial
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insurance, personal insurance, and employee benefits. With over 800 specific clients, Mr. Meeks prides himself on developing a tailor made insurance program to fit each client.
Mr. Meeks’ background and experience in the risk management and insurance industry brings to the board strategic planning and risk management skills that are important to the implementation of our growth strategies and oversight of the Company and operational risk management.
Andrew Bursten, 58. Andrew Bursten has been a member of the Company’s Board since 2013. Since 2007, Andrew Bursten has been a private investor and entrepreneur. Prior to that time, Mr. Bursten served as Chairman of CyrusOne, an outsourced data center service provider, from inception in 2000 until 2007, when it was successfully sold to a private equity investment firm. Prior to CyrusOne, Mr. Bursten co-founded and served as the President of Coastal Telephone Company, a long distance telecommunications company in 1985. Through his leadership, Coastal Telephone Company grew from a Texas based company to servicing over 100,000 customers in 19 states. In 1999, Coastal Telephone Company was successfully sold to Eclipse Telecommunications, a subsidiary of IXC Communications (NASDAQ: IIXC).
Mr. Bursten currently serves on the Board of Directors for a variety of non-profit organizations. He is the former President of the Board of Trustees and remains on the Executive Committee for The Emery Weiner School and a former Executive Committee member and Advisory Board member for the Holocaust Museum Houston. He has also served on the Boards of The Alley Theater, Bellaire Little League, The Fay School, Congregation Emanu El and The Evelyn Rubenstein Jewish Community Center. Mr. Bursten attended Tulane University and later received his law degree from The Thurgood Marshall School of Law.
Mr. Bursten brings corporate governance expertise to the Board garnered through his leadership positions and board service with other entities. His experience and qualifications provide sound governance leadership to our Board.
Board Meeting and Attendance
During fiscal year 2016, our Board held nine (9) meetings in person or by telephone. Members of our Board were provided with information between Board meetings regarding the Company’s operations and were consulted on an informal basis with respect to pending business. Each director attended at least 88% of the total number of Board meetings and the meetings held by all committees of our Board on which such director served during the year.
Director Independence
The Board, in the exercise of its reasonable business judgment, has determined that the following members of the Board meet the definition of “independent” set forth in the NASDAQ corporate governance listing standards: James Stapleton, J. Mace Meeks, Stuart Gaylor, Tom O’Leary, and Andrew Bursten.
Board Leadership Structure
We have chosen to split the roles of Chairman of the Board and Chief Executive Officer. Mr. Leibman serves as Chief Executive Officer while Mr. Gaylor is currently the non-executive Chairman of the Board. The Board believes that this structure is appropriate for the Company and provides the appropriate level of independent oversight necessary to ensure that the Board meets its fiduciary obligations to our stockholders, that the interests of management and our stockholders are properly aligned, and that we establish and follow sound business practices and strategies that are in the best interests of our stockholders.
Board’s Role in Risk Management
The Board provides oversight with respect to our management of risk, both as a whole and through its standing committees. The Board typically reviews and discusses with management at each of its regular quarterly meetings, information presented by management relating to our operational results and outlook, including
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information regarding risks related to our business and operations, as well as risks associated with the markets we serve. At least annually, the Board reviews and discusses an overall risk assessment conducted by management and the strategies and actions developed and implemented by management to monitor, control and mitigate such risks.
The Audit Committee of our Board also provides risk oversight, focusing in particular on financial and credit risk. The Audit Committee oversees the management of such risks, generally as part of its responsibilities related to the review of our financial results and our internal control over financial reporting, and specifically in connection with its consideration of particular actions being contemplated by us, such as financing activities. The Compensation Committee has responsibility for overseeing the management of risk related to our compensation policies and practices. The Compensation Committee considers risks associated with our business in developing compensation policies and the components of our executive compensation program, and periodically reviews and discusses assessments conducted by management with respect to risk that may arise from our compensation policies and practices for all employees.
Committees of the Board
Compensation Committee
The Compensation Committee is presently composed of Andrew Bursten, J. Mace Meeks and Tom O’Leary, with Mr. Meeks acting as chairperson of the committee. Each of Messrs. Bursten, Meeks and O’Leary meet the definition of “independent” set forth in the NASDAQ corporate governance listing standards. Pursuant to the authority delegated to it by the Board, the Compensation Committee reviews the performance of our executive officers and establishes overall employee compensation policies. The Compensation Committee also reviews and recommends compensation levels for our directors and our corporate officers, including salary, bonus, and stock option grants. The compensation levels recommended by the Compensation Committee are ratified by the Board. The Compensation Committee may not delegate its responsibilities, and our executive officers are not involved in determining or recommending the amount or form of executive and director compensation. The Compensation Committee met five (5) times during the fiscal year ended December 31, 2016. The Compensation Committee operates under a written charter adopted by the Board, which is available on our website at www.summerenergy.com.
Audit Committee
The Audit Committee is presently composed of James Stapleton, who serves as chairperson, Stuart Gaylor and J. Mace Meeks, all of whom meet the definition of “independent” set forth in the NASDAQ corporate governance listing standards. The Board has also determined that each of James Stapleton and Stuart Gaylor is an “audit committee financial expert,” as defined by the SEC rules. The functions of the Audit Committee include, among other things, reviewing our annual and quarterly financial statements, reviewing and discussing the results of each audit and quarterly review with our independent registered public accountants, and discussing the adequacy of our accounting and control systems. The Audit Committee met four (4) times during the fiscal year ended December 31, 2016. The Audit Committee operates under a written charter adopted by the Board, which is available on our company website at www.summerenergy.com.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is composed of Tom O’Leary, who serves as chairperson, Andrew Bursten, and Stuart Gaylor, all of whom meet the definition of “independent” set forth in the NASDAQ corporate governance listing standards. The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board, which is available on our company website at www.summerenergy.com. The Nominating and Corporate Governance Committee met one (1) time during the fiscal year ended December 31, 2016.
8
Nomination of Directors
Nominees for the Board at the Annual Meeting were recommended by our Nominating and Corporate Governance Committee and approved by the Board. In identifying potential nominees, the Nominating and Corporate Governance Committee took into account such factors as it deemed appropriate, including the current composition of the Board, the range of talents, experiences and skills that would best complement those that are already represented on the Board, the balance of management, director independence, and the need for specialized expertise.
The Nominating and Corporate Governance Committee seeks to identify director nominees through a combination of referrals, including referrals provided by management, existing members of the Board and our stockholders, and direct solicitations, where warranted. Referrals of director nominees should be sent to the Nominating and Corporate Governance Committee, c/o Chief Financial Officer, Summer Energy Holdings, Inc., 800 Bering Drive, Suite 260, Houston, Texas 77057. All referrals will be compiled by the Chief Financial Officer and forwarded to the Nominating and Corporate Governance Committee for their review and consideration. At a minimum, a recommendation should include the individual’s name, current and past business experience, professional affiliations, age, stock ownership in the Company, particular business qualifications, and such other information as the stockholder deems relevant to assist the Nominating and Corporate Governance Committee in considering the individual’s potential service as a director.
Communications with the Board
Stockholders may communicate with the Board or any individual director by sending written communications addressed to the Board, or to the individual member of the Board, c/o Chief Financial Officer, Summer Energy Holdings, Inc., 800 Bering Drive, Suite 260, Houston, Texas 77057. All communications are compiled by the Chief Financial Officer and forwarded to the Board or the individual director(s) accordingly.
Review and Approval of Transactions with Related Parties
In accordance with our Audit Committee procedures, the Audit Committee of our Board reviews and approves all transactions that are required to be reported under Item 404(a) of Regulation S-K.
Code of Ethics
We have adopted a “code of ethics,” as defined in Item 406(b) of the SEC’s Regulation S-K that applies to all our employees, including our principal executive officer, principal financial officer and principal accounting officer. A copy of our Code of Ethics is attached as Exhibit 14.1 to our Form 10-Q, filed with the SEC on May 15, 2012, is available on our website, www.summerenergy.com, and is available upon written request to the Company’s Secretary at 800 Bering Drive, Suite 260, Houston, Texas 92691, Attn: Corporate Secretary.
Director Attendance at Annual Meetings
Directors are encouraged to attend annual meetings of stockholders. One non-executive member attended the 2016 annual meeting of stockholders.
EXECUTIVE OFFICERS
Our current executive officers are as follows:
Name | Age | Position |
Neil M. Leibman | 57 | Chief Executive Officer |
Jaleea P. George | 55 | Chief Financial Officer, Secretary, Treasurer |
Angela Hanley | 39 | President |
9
All officers serve at the discretion of the Board.
For additional information with respect to Mr. Leibman and Ms. George, who also serve as members of our Board, please refer to their profiles set forth above under the section titled “ELECTION OF DIRECTORS.”
Angela Hanley, 39. Angela Hanley was appointed President of the Company in February 2014, having previously served as the Company’s Senior Vice President of Operations and Marketing from February, 2013 through February 2014. Ms. Hanley has over 10 years of experience in the Texas electricity and natural gas market. Ms. Hanley is responsible for all operational, day to day activities of the Company as well as sales and marketing efforts. Ms. Hanley served as a vice president of operations and marketing for the Company’s subsidiary, Summer Energy, LLC, from April 2011 through February 2014, where she helped launch Summer Energy, LLC’s initial marketing efforts and assisted with operations. From January 2009 until she joined Summer Energy, LLC, Ms. Hanley was the Regional Marketing Manager for Atmos Energy, one of the country’s largest natural-gas-only distributors selling natural gas supply and services to industrial and commercial customers in Tennessee, Alabama, Kentucky and Texas. From October 2007 through December 2008, Ms. Hanley served as President, Operations for Horizon Power & Light, LLC, a retail electric provider in the Northeast. Since 2002 Ms. Hanley has held various marketing positions for other retail electric providers in Texas including Business Development Manager, Marketing Manager, and Director of Sales. Ms. Hanley has a Bachelor of Science degree from Stephen F. Austin State University in Nacogdoches, Texas. She is also a member of the Women’s Energy Network.
Legal Proceedings
No director or executive officer has been involved in any legal proceeding during the past ten years that is material to an evaluation of his or her ability or integrity.
Family Relationships
There are no family relationships among any of our directors and executive officers.
10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table discloses the compensation received in each of the last two fiscal years by our “Named Executive Officers.” Our Named Executive Officers include persons who (i) served as our principal executive officer during the most recent fiscal year, (ii) were serving at fiscal year-end as our two most highly compensated executives, other than the principal executive officer, and (iii) if applicable, individuals for whom disclosure would have been provided as a most highly compensated executive, but for the fact that the individual was not serving as an executive at fiscal year-end.
Name and Principal Position | Year | Salary ($) | Bonuses and Commissions ($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($) (2) | Total ($) |
Neil M. Leibman (3) | 2016 | $150,000 | $27,000 |
|
|
| $177,000.00 |
Chief Executive Officer
| 2015 | $150,000 | $ - | $ - | $9,919 | $ - | $159,919 |
|
|
|
|
|
|
|
|
Angela Hanley | 2016 | $140,000 | $27,000 |
|
|
| $167,000 |
President | 2015 | $140,000 | $5,000 | $ | $29,080 | $ - | $174,080 |
|
|
|
|
|
|
|
|
Jaleea P. George (5) | 2016 | $140,000 | $27,000 |
|
| $3,350 | $170,350 |
Chief Financial Officer, Secretary and Treasurer
| 2015 | $140,000 | $5,000 | $ - | $18,585 | $2,164 | $165,749 |
|
|
|
|
|
|
|
|
Travis Andrews | 2016 | $207,737 |
|
| $174,089.47 |
| $381,826.47 |
Travis Andrews (6) | 2015 | $210,170 | $ - | $ - | $17,991 | $ - | $228,161 |
11
granted an option to purchase 35,000 shares of the Company’s Common Stock with a strike price of $1.50 per share, based on the Company reaching certain performance metrics as set forth in Ms. Hanley’s employment agreement, and was granted an option to purchase 10,000 shares of the Company’s Common Stock on December 11, 2015 with a strike price of $1.50 per share. In December 2015 the Board paid Ms. Hanley a bonus of $5,000.
Narrative to Summary Compensation Table
Neil M. Leibman
Effective January 21, 2013, the Board appointed Neil M. Leibman to serve as the Company’s President and Chief Executive Officer. Mr. Leibman was also appointed to the Board in 2013 to fill a vacancy on the Board. On January 21, 2015, the Company entered into an employment agreement (the “2015 Leibman Agreement”) with Neil M. Leibman to serve as Chief Executive Officer (“CEO”) of the Company. Mr. Leibman will continue to report to the Board and will have duties and responsibilities assigned by the Board. The 2015 Leibman Agreement was effective as of January 1, 2015, had a term of two (2) years, and provided for an annual base salary of $150,000. Mr. Leibman also received the customary employee benefits paid by the Company and was eligible to receive bonuses and to participate in incentive compensation plans of the Company in accordance with any plan or decision that the Board, or any committee or other person authorized by the Board, may in its sole discretion determine from time to time. Mr. Leibman was granted a fully vested option to purchase 25,000 shares of the Company’s Common Stock with a strike price of $1.00 per share, and was granted a second option to purchase 25,000 shares of the Company’s Common Stock with a strike price of $1.00 per share on July 3, 2015, which vested on January 1, 2016. Mr. Leibman was also eligible to receive additional options to purchase Common Stock of the Company upon reaching certain milestones related to the performance of the Company. On August 6, 2015, Mr. Leibman was granted an option to purchase 35,000 shares of the Company’s Common Stock with a strike price of $1.50 per share based on the Company reaching certain performance metrics as set forth in the 2015 Leibman Agreement These milestones were not reached in 2016; thus no options were granted in 2016 based on performance. The foregoing description of the 2015 Leibman Agreement is qualified in its entirety by reference to the full context of the employment agreement, which is found as Exhibit 10.2 to our Form 8-K filing on January 27, 2015.
12
Jaleea P. George
On March 27, 2012, Jaleea P. George was appointed as our Secretary, Treasurer and Chief Financial Officer (“CFO”). On January 21, 2015, the Company entered into an employment agreement (the “2015 George Agreement”) with Jaleea P. George to serve as Secretary, Treasurer and Chief Financial Officer (“CFO”) of the Company. Ms. George will continue to report to the Board and will have duties and responsibilities assigned by the Board. The 2015 George Agreement was effective as of January 1, 2015, had a term of two (2) years, and provided for an annual base salary of $140,000. Ms. George also received the customary employee benefits paid by the Company and was eligible to receive bonuses and to participate in incentive compensation plans of the Company in accordance with any plan or decision that the Board, or any committee or other person authorized by the Board, may in its sole discretion determine from time to time. Pursuant to the 2015 George Agreement, Ms. George was granted a fully vested option to purchase 35,000 shares of the Company’s Common Stock with a strike price of $1.00 per share in January 2015, and was granted a second option to purchase 35,000 shares of the Company’s Common Stock with a strike price of $1.00 per share on July 3, 2015, which vested on January 1, 2016. Ms. George was also eligible to receive additional options to purchase Common Stock of the Company upon reaching certain milestones related to the performance of the Company. On August 6, 2015, Ms. George was granted an option to purchase 35,000 shares of the Company’s Common Stock with a strike price of $1.50 per share based on the Company reaching certain performance metrics as set forth in the 2015 George Agreement These milestones were not reached in 2016; thus no options were granted in 2016 based on performance. The foregoing description of the 2015 George Agreement is qualified in its entirety by reference to the full context of the employment agreement, which is found as Exhibit 10.1 to our Form 8-K filing on January 27, 2015.
Travis Andrews
Mr. Andrews was appointed as the Senior Vice President of Risk Management for the Company’s subsidiary, Summer Energy, LLC on February 17, 2014 and is party to a written employment agreement with the Company dated as of August 11, 2014 (the “Andrews Employment Agreement”). The Andrews Employment Agreement continues through July 1, 2017 unless earlier terminated. Mr. Andrews’ compensation for 2014, set forth in the Andrews Employment Agreement, includes an annual base salary of $225,000. Mr. Andrews is also eligible for an annual discretionary bonus based upon performance metrics as reasonably determined by the Company from time to time. Mr. Andrews will also receive the customary employee benefits paid by the Company. The Andrews Employment Agreement contains customary provisions for termination for cause (as defined in the employment agreement). Mr. Andrews is also subject to a non-solicitation and non-compete covenant for a period of two (2) years following the termination of Mr. Andrews’ employment for any reason.
Angela Hanley
Effective February 3, 2014, the Board Appointed Angela Hanley to serve as President of the Company. From February 11, 2013 through February 3, 2014, Ms. Hanley served as Senior Vice President, Operations and Marketing of the Company. The Company and Ms. Hanley entered into a written employment agreement which continued through December 31, 2014 (the “Hanley Employment Agreement”). Ms. Hanley’s compensation for 2014, set forth in the Hanley Employment Agreement, includes an annual base salary of $135,000. Ms. Hanley was also granted 25,000 shares of restricted stock pursuant to the Company’s 2012 Stock Option and Stock Award Plan, which shares vested on February 11, 2014. Ms. Hanley was also eligible to receive two future grants of 25,000 options to purchase Common stock of the Company upon reaching certain milestones related to the number of retail electricity customers of the Company, which were not achieved. Effective February 3, 2014, in conjunction with Ms. Hanley’s appointment as President of the Company, the Company and Ms. Hanley entered into an amendment (the “Amendment”) to the Hanley Employment Agreement. The Amendment, which had an effective date of February 3, 2014, provided that Ms. Hanley will transition from her role as Vice President, Operations and Marketing to serve as the Company’s President, and restructured her incentive compensation. Pursuant to the terms of the Amendment and in conjunction with her appointment, Ms. Hanley was granted an option to purchase 25,000 shares of the Company’s Common Stock. One-half of the options vested immediately, and the remaining one-half vested on August 3, 2014. The foregoing summary of the terms of the Hanley Employment Agreement and Amendment are qualified in their entirety to the actual terms of such agreements, which are included as Exhibits 10.2 of the
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Company’s Form 8-K filed February 14, 2013, and, as to the Amendment, as Exhibit 10.1 of the Company’s Form 8-K filed February 6, 2014.
On June 10, 2015, the Company entered into a new employment agreement (the ���2015 Hanley Agreement”) with Angela Hanley to serve as President of the Company. Ms. Hanley will continue to report to the Board and will have duties and responsibilities assigned by the Board. The 2015 Hanley Agreement continues through December 31, 2016, and provides for an annual base salary of $140,000. Ms. Hanley will also receive the customary employee benefits paid by the Company and is eligible to receive bonuses and to participate in incentive compensation plans of the Company in accordance with any plan or decision that the Board, or any committee or other person authorized by the Board, may in its sole discretion determine from time to time. The Company granted a fully vested option to purchase 100,000 shares of the Company’s Common Stock with a strike price of $1.00 per share, and granted a second option to purchase 50,000 shares of the Company’s common stock with a strike price of $1.00 per share, which vested as follows: as to 25,000 shares of stock, such option vested on the date of grant; and as to the remaining 25,000 shares of stock, such option vested on January 1, 2016. Ms. Hanley is also eligible to receive additional options to purchase common stock of the Company upon reaching certain milestones related to the performance of the Company. On August 6, 2015, Ms. Hanley was granted an option to purchase 35,000 shares of the Company’s Common Stock with a strike price of $1.50 per share based on the Company reaching certain performance metrics as set forth in the 2015 Hanley Agreement These milestones were not reached in 2016; thus no options were granted in 2016 based on performance. The foregoing description of the 2015 Hanley Agreement is qualified in its entirety by reference to the full context of the employment agreement, which is found as Exhibit 99.1 to our Form 8-K filing on June 15, 2015.
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OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
The following table details all outstanding equity awards held by Named Executive Officers at December 31, 2016.
Name | Option awards | Stock awards | |||||||
Number of securities underlying unexercised options | Number of securities | Equity | Option | Option expiration date | Number of shares or units of stock that have not vested | Market value of shares of units of stock that have not vested | Equity | Equity | |
Neil M. Leibman | 250,000 | - | - | $1.00 | 1/21/2023 | - | - | - | - |
| 151,115 | - | - | $1.50 | 5/13/2019 | - | - | - | - |
| 25,000 |
|
| $1.00 | 1/21/2025 |
|
|
|
|
| 25,000 |
|
| $1.00 | 7/3/2025 |
|
|
|
|
| 35,000 |
|
| $1.00 | 8/6/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Angela Hanley | 25,000 | - | - | $1.00 | 2/3/2024 | - | - | - | - |
| 25,000 |
|
| $1.00 | 7/3/2025 |
|
|
|
|
|
| 25,000 |
| $1.00 | 7/3/2025 |
|
|
|
|
| 100,000 |
|
| $1.00 | 7/3/2025 |
|
|
|
|
| 35,000 |
|
| $1.50 | 8/6/2025 |
|
|
|
|
| 10,000 |
|
| $1.50 | 12/11/2020 |
|
|
|
|
Jaleea George | 35,000 |
|
| $1.00 | 7/3/2025 |
|
|
|
|
|
| 75,000 |
| $1.50 | 7/3/2025 |
|
|
|
|
| 35,000 |
|
| $1.50 | 8/6/2025 |
|
|
|
|
| 10,000 |
|
| $1.50 | 12/11/2020 |
|
|
|
|
Travis Andrews | 100,000 |
|
| $1.00 | 7/3/2025 |
|
|
|
|
|
| 25,000 |
| $1.50 | 7/3/2025 |
|
|
|
|
| 100,000 |
|
| $1.10 | 10/13/2026 |
|
|
|
|
15
Equity Compensation Plan Information
The following table provides certain information as of December 31, 2016 with respect to our existing equity compensation plans under which shares of our Common Stock are authorized for issuance.
Plan | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuances Under Plans (excluding securities reflected in column (a)) |
| (a) | (b) | (c) |
Equity compensation plans approved by security holders (1): | 632,000 | 1.24 | 2,000 |
Equity compensation plans approved by security holders (2): | 899,500 | 1.37 | 645,500 |
Equity compensation plans not approved by security holders (3): | 1,927,993 |
| - |
Total | 3,459,493 |
| 647,500 |
(1) This plan is the 2012 Stock Option and Stock Award Plan.
(2) This plan is the 2015 Stock Option and Stock Award Plan.
(3) From time to time and at the discretion of the Board, we may issue warrants and stock options to our key individuals or officers as performance based compensation.
DIRECTOR COMPENSATION FOR 2016
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Stuart Gaylor | — |
| $35,213.60 | — | — | — | $35,213.60 |
J. Mace Meeks | — |
| $31,107.33 | — | — | — | $31,107.33 |
James Stapleton | — |
| $31,107.33 | — | — | — | $31,107.33 |
Andrew Bursten | — |
| $31,107.33 | — | — | — | $31,107.33 |
Tom O’Leary | — |
| $31,107.33 | — | — | — | $31,107.33 |
Narrative to Director Compensation Table
Beginning in August 2013, the Company elected to compensate its non-employee directors for their service on the Board with a grant of options to purchase up to 25,000 shares of the Company’s Common Stock on an annual basis, granted quarterly. With the exception of the Chairman, as described below, in the 2016 fiscal year, a total of 25,000 options to purchase the Company’s Common Stock were granted to each non-executive director with exercise prices of $1.50 – $2.25 per share. Beginning in October 25, 2016, the Compensation Committee and the Board agreed to compensate the Chairman, Mr. Gaylor, with an option to purchase 35,000 shares of the Company’s Common Stock per year. In the 2016 fiscal year, other than as disclosed regarding additional compensation to the Chairman of the Board, directors were paid no additional compensation for service as a member of the Audit Committee, the Nominating and Corporate Governance Committee or the Compensation Committee.
16
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board reviews and establishes compensation strategies and programs to ensure that the Company attracts, retains, properly compensates, and motivates qualified executives and other key associates. The Committee consists of Mr. Meeks, who acts as chairperson, Mr. Bursten and Mr. O’Leary. No member of the Compensation Committee is an employee or officer. As a smaller reporting company, the Company is not required to provide a report of the Compensation Committee; however, the Company is including this report to provide additional details to the stockholders of the Company.
The philosophy of the Compensation Committee is (i) to provide competitive levels of compensation that integrate pay with the individual executive’s performance and the Company’s annual and long-term performance goals; (ii) to motivate key executives to achieve strategic business goals and reward them for their achievement; (iii) to provide compensation opportunities and benefits that are comparable to those offered by other companies in the Company’s industry, thereby allowing the Company to compete for and retain talented executives who are critical to the Company’ long-term success; and (iv) to align the interests of key executives with the long-term interests of stockholders and the enhancement of stockholder value through the granting of stock options. The compensation of our executive officers is currently comprised of annual base salary, a bonus plan pursuant to certain performance criteria being achieved, and long-term performance incentives in the form of stock option grants under the stock option plans.
By the Compensation Committee,
J. Mace Meeks, Chairman
Andrew Bursten
Tom O’Leary
April 25, 2017
17
BENEFICIAL OWNERSHIP OF SECURITIES
The following table and the notes thereto set forth certain information regarding the beneficial ownership of our Common Stock as of March 31, 2017, by (i) each current director and director nominee; (ii) each executive officer named in the summary compensation table included herein who was serving as an executive officer at the end of the 2016 fiscal year; (iii) all our current directors, director nominees and executive officers as a group; and (iv) each person who is known by us to be a beneficial owner of five percent or more of our Common Stock. Unless otherwise noted, each of the following disclaims any beneficial ownership of the shares, except to the extent of his or her pecuniary interest, if any, in such shares.
| Shares Beneficially Owned | |
Name and Address of Beneficial Owner (1) | Number (2) | Percent |
Directors, Officers and Director Nominees:
|
|
|
Neil M. Leibman | 3,731,448 (3) | 16.26% |
Jaleea P. George | 771,224 (4) | 3.41% |
Angela Hanley | 366,522 (5) | 1.62% |
Stuart C. Gaylor | 2,487,469 (6) | 11.03% |
Jeffery Mace Meeks | 117,500 (7) | * |
James P. Stapleton | 117,500 (8) | * |
Tom D. O’Leary | 3,377,833 (9) | 14.86% |
Andrew Bursten | 1,560,812 (10) | 6.92% |
Travis Andrews | 284,022 (11) | 1.25% |
|
|
|
All directors, director nominees and executive officers, as a group | 12,814,330 | 56.33% |
|
|
|
5% Shareholders: |
|
|
|
|
|
Adam Pulaski | 1,818,182 | 8.09% |
* Less than 1% of the outstanding shares of Common Stock.
(1) The address for all officers and directors is c/o Summer Energy Holdings, Inc., 800 Bering Drive, Suite 260, Houston, Texas 77057.
(2) Unless otherwise indicated, the named persons possess sole voting and investment power with respect to the shares listed (except to the extent such authority is shared with spouses under applicable law). The percentages are based upon 22,463,424 shares outstanding as of March 31, 2017, except for certain parties who hold stock options and warrants that are presently exercisable or exercisable within 60 days into shares of Common Stock, whose percentages are based upon the sum of shares of Common Stock outstanding as of March 31, 2017 plus the number of shares of Common Stock subject to stock options and warrants that are presently exercisable or exercisable within 60 days held by them, as indicated in the following notes.
(3) Includes 46,479 shares held of record by Boxer Capital, Ltd., a Texas limited partnership. Mr. Leibman is general partner of Boxer Capital, Ltd. and has sole voting and dispositive power over such shares. Also includes 1,807,576 shares held of record by MAA Holdings Limited, a Texas limited partnership. Mr. Leibman is general partner of MAA Holdings Limited and has sole voting and dispositive power over such shares. Also includes 59,022 shares held of record by Northeast Opco, LLC, a Texas limited liability company. Mr. Leibman is a principal and 20% owner of such entity and has shared voting and dispositive power of such shares. Also includes 486,115 shares of Common Stock issuable upon exercise of stock options held by Mr. Leibman.
(4) Includes 597,222 shares held of record by The Jaleea K. Pyle Living Trust. Ms. George is a trustee of such trust and has voting and dispositive control over securities held by The Jaleea K. Pyle Living Trust. Also includes 59,022 shares held of record by Northeast Opco, LLC, a Texas limited liability company. Ms. George is a
18
principal and 20% owner of such entity and has shared voting and dispositive power of such shares. Also includes 115,000 shares of Common Stock issuable upon exercise of stock options held by Ms. George.
(5) Includes 220,000 shares of Common Stock issuable upon exercise of stock options held by Ms. Hanley. Also includes 59,022 shares held of record by Northeast Opco, LLC, a Texas limited liability company. Ms. Hanley is a principal and 20% owner of such entity and has shared voting and dispositive power of such shares.
(6) Includes 1,805,556 shares held of record by GF Holdings, Ltd., a Texas limited partnership. Mr. Gaylor is the manager of GF Holdings GP, LLC, a Texas limited liability company, which is the general partner of GF Holdings, Ltd. Mr. Gaylor has voting and dispositive control over securities held by GF Holdings, Ltd. Also includes 95,000 shares of Common Stock issuable upon exercise of stock options held by Mr. Gaylor.
(7) Includes 92,500 shares of Common Stock issuable upon exercise of stock options held by Mr. Meeks.
(8) Includes 92,500 shares of Common Stock issuable upon exercise of stock options held by Mr. Stapleton.
(9) Includes 243,615 shares of Common Stock issuable upon exercise of stock options held by Mr. O’Leary. Also includes 59,022 shares held of record by Northeast Opco, LLC, a Texas limited liability company. Mr. O’Leary is a principal and 20% owner of such entity and has shared voting and dispositive power of such shares.
(10) Includes 1,343,312 shares held of record by The Riva Bursten 2000 Trust. Mr. Bursten is a trustee of such trust and shares voting and dispositive control over securities held by The Riva Bursten 2000 Trust. Also includes 92,500 shares of Common Stock issuable upon exercise of stock options held by Mr. Bursten.
(11) Includes 225,000 shares of Common Stock issuable upon exercise of stock options held by Mr. Andrews. Also includes 59,022 shares held of record by Northeast Opco, LLC, a Texas limited liability company. Mr. Andrews is a principal and 20% owner of such entity and has shared voting and dispositive power of such shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and ten-percent stockholders are required by the SEC’s regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on the review of copies of such reports furnished to the Company and written representations that no other reports were required, during the 2016 fiscal year, all of the Company’s officers, directors and tenpercent stockholders complied with all applicable Section 16(a) filing requirements, except that Andrew Bursten, Neil Leibman, Stuart Gaylor and Tom O’Leary filed late Form 4s on February 1, 2016 and Neil Leibman filed a late Form 4 on April 14, 2016.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Neil Leibman was party to a five (5) year credit facility agreement (the “2013 Leibman Credit Facility Agreement”) dated August 29, 2013 with the Company. Pursuant to the 2013 Leibman Credit Facility Agreement, Mr. Leibman agreed to act as surety and personal guarantor with respect to $413,000 of the Company’s depository requirements, consisting of a line of credit from a financial institution and certain extensions of credit by critical vendors that are necessary for the Company to carry out its business. As consideration for Mr. Leibman acting as surety and personal guarantor, the Company issued Mr. Leibman 413,000 shares of its Series A Preferred Stock. Pursuant to its right under the 2013 Leibman Credit Facility Agreement, in May 2014 the Company called the shares of Series A Preferred Stock and issued Mr. Leibman options to purchase 151,115 shares of Common Stock with a strike price of $1.50. The 2013 Leibman Credit Facility Agreement terminated in May 2014.
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Tom O’Leary was party to a five (5) year credit facility agreement (the “2013 O’Leary Credit Facility Agreement”) dated August 29, 2013 with the Company. Pursuant to the 2013 O’Leary Credit Facility Agreement, Mr. O’Leary agreed to act as surety and personal guarantor with respect to $413,000 of the Company’s depository requirements, consisting of a line of credit from a financial institution and certain extensions of credit by critical vendors that are necessary for the Company to carry out its business. As consideration for Mr. O’Leary acting as surety and personal guarantor, the Company issued Mr. O’Leary 413,000 shares of its Series A Preferred Stock. Pursuant to its right under the 2013 O’Leary Credit Facility Agreement, in May 2014 the Company called the shares of Series A Preferred Stock and issued Mr. O’Leary options to purchase 151,115 shares of Common Stock with a strike price of $1.50. The 2013 O’Leary Credit Facility Agreement terminated in May 2014.
In February 2014, among other investors, Andrew Bursten, Tom O’Leary and Neil Leibman, members of the Company’s Board of Directors, each entered into a Series B Preferred Stock Purchase Agreement with the Company whereby Messrs. Bursten, O’Leary and Leibman purchased shares of the Company’s Series B Preferred Stock (the “Series B Preferred Stock”) with cash in a private placement transaction pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The holders of outstanding shares of Series B Preferred Stock were entitled to receive, out of funds legally available for the payment of dividends, cumulative monthly dividends at the annual rate of 12% of the “Deemed Original Issue Price per share,” in preference to and in priority over any dividends with respect to Common Stock. At the option of the holders of Series B Preferred Stock, dividends could be paid to holders of Series B Preferred Stock in shares of the Company’s Common Stock valued at fair market value of such shares of Common Stock as determined in good faith by the Board.
During the year ended December 31, 2015, the Company had paid $228,004 of cumulative monthly dividends on Series B Preferred Stock. Certain stockholders elected to be paid in shares of the Company’s Common Stock valued at $37,023 and the remaining holders were paid a total of $190,981 in cash. During the year ended December 31, 2016, the Company paid $109,940 of cumulative monthly dividends on Series B Preferred Stock. Certain stockholders elected to be paid in shares of the Company’s Common Stock valued at $23,145 and the remaining holders were paid a total of $86,795 in cash.
On June 24, 2016, the holders of the Series B Preferred Stock affirmatively elected to convert all outstanding shares of Series B Preferred Stock into shares of Common Stock with a conversion price as of such date equal to $1.00 per share of Series B Preferred Stock.
On April 18, 2014, four members of the Company’s Board, Stuart Gaylor, Andrew Bursten, Tom O’Leary and Neil Leibman (“Guarantors”) guaranteed an Advance to Loan Note in the amount of $1,500,000 which increased to $1,700,000. The Company agreed to issue the four Guarantors a total of 120,000 shares of the Company’s common stock per month (30,000 shares of common stock per month per Guarantor) reduced accordingly as the loan is reduced in consideration for agreeing to act as a Guarantor of the Advance to Loan Amount. In May 2016, the Company released the Guarantors from the obligation to guaranty the Advance to Loan Amount Note and stock payments for such guaranty were discontinued as of May 31, 2016. The balance of the Advance to Loan Amount was zero as of December 31, 2016.
The Company believes that the foregoing transactions were in the best interests of the Company and its stockholders. As a matter of policy, these transactions were and all future transactions between the Company and its officers, directors, principal stockholders or their affiliates will be approved by a majority of the disinterested members of the Board, on terms no less favorable than could be obtained from unaffiliated third parties and in connection with bona fide business purposes of the Company.
PROPOSAL 2
ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION
The following proposal is an advisory, non-binding vote on the compensation of the Company’s Named Executive Officers, or a “Say-on-Pay” proposal, as required by Section 14A of the Securities Exchange Act, which
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was added by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and by rules of the SEC. The Company presents the resolution set forth below for approval by the stockholders.
We believe that our compensation policies and procedures are competitive, are focused on pay for performance principles and are strongly aligned with the long-term interests of our stockholders. In addition, our compensation programs are designed to reward our Named Executive Officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total stockholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.
We encourage you to closely review the compensation of our “Named Executive Officers” as described in this Proxy Statement under “Executive Compensation.” Stockholders are encouraged to read this section of the Proxy Statement, which discusses the compensation of our Named Executive Officers.
We seek to attract and retain experienced, highly qualified executives critical to the Company’s long-term success and enhancement of stockholder value. The Board believes the Company’s compensation policies and procedures achieve this objective, and therefore recommend stockholders vote “FOR” the proposal. Specifically, stockholders are being asked to approve the following:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the Company’s Named Executive Officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K.”
Because your vote is advisory, it will not be binding upon our Board and may not be construed as overruling any decision by the Board or create or imply any additional fiduciary duty by the Board. However, the Board and Compensation Committee value constructive dialogue on executive compensation and other important governance topics with our stockholders and encourage all stockholders to vote their shares in this manner. The Board will review the voting results and take them into consideration when making future decisions regarding our executive compensation programs.
THE BOARD RECOMMENDS A VOTE “FOR” THE NON-BINDING RESOLUTION APPROVING THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SECURITIES AND EXCHANGE COMMISSION.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Board, acting upon the recommendation of the Audit Committee, has appointed LBB & Associates Ltd., LLP, independent registered public accountants, to audit the financial statements of the Company for the fiscal year ending December 31, 2017. LBB & Associates Ltd., LLP has audited the accounts and records of the Company (including its subsidiary, Summer Energy, LLC) since 2011 to the present. In determining whether the proposal has been approved, abstentions will be counted as votes against the proposal and broker non-votes will not be counted as votes for or against the proposal or as votes present and voting on the proposal.
THE BOARD RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF LBB & ASSOCIATES LTD., LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 2017.
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FEES PAID TO OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Audit Fees
The aggregate fees for professional services rendered by LBB & Associates Ltd., LLP for the annual audit of the Company’s financial statements and the reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q billed during the fiscal years ended December 31, 2015 and 2016 were $116,650 and $117,250, respectively.
Audit-related Fees
There were no fees for audit-related services rendered by LBB & Associates Ltd., LLP for consents and other assurance services during the during the fiscal years ended December 31, 2015 and 2016.
Tax Fees
There were no fees for tax services rendered by LBB & Associates Ltd., LLP during the fiscal years ended December 31, 2015 and 2016. Income tax return preparation services were provided by another firm in both years.
All Other Fees
There were no other fees for other services rendered by LBB & Associates Ltd., LLP during fiscal years ended December 31, 2015 and 2016.
Audit Committee Pre-Approval Policies and Procedures
Our Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm in accordance with applicable SEC rules. The Audit Committee generally pre-approves particular services or categories of services on a case-by-case basis. The independent registered public accounting firm and management periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with these pre-approvals, and the fees for the services performed to date. All of the professional services rendered by LBB & Associates Ltd., LLP for the fiscal year ended December 31, 2015 as well as the fiscal year ended December 31, 2016 were pre-approved by the Audit Committee of our Board in accordance with applicable SEC rules.
We do not expect representatives of LBB & Associates Ltd., LLP to be present at the Annual Meeting.
AUDIT COMMITTEE REPORT
The Audit Committee’s role is to act on behalf of the Board in the oversight of all aspects of our financial reporting, internal control and audit functions. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Annual Report for fiscal year 2016 with management.
The Audit Committee also reviewed with LBB & Associates Ltd., LLP, our independent registered public accounting firm, their judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards (including Statement on Auditing Standards No. 61). The independent registered public accounting firm also provided the Audit Committee with the written disclosures required by Rule 3526 of the Public Company Accounting Oversight Board, “Communications with Audit Committees Concerning Independence (Rule 3526)”. The Audit Committee has also considered whether the provision of non-audit services by LBB & Associates Ltd., LLP is compatible with their independence, although there were none.
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The Audit Committee discussed with the Company’s independent registered public accountants the overall scope and plans for their audit. The Audit Committee met with the independent registered public accountants, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2016 for filing with the SEC.
No portion of the information in this report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.
By the Audit Committee,
James P. Stapleton, Chairperson
Stuart Gaylor
J. Mace Meeks
April 25, 2017
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ANNUAL REPORT
The Company’s Annual Report on Form 10-K, including financial statements, for the fiscal year ended December 31, 2016, accompanies this Proxy Statement or is available via the Internet at www.colonialstock.com/summer2017 orwww.sec.gov.
IN ADDITION, THE COMPANY WILL PROVIDE WITHOUT CHARGE, AT THE WRITTEN REQUEST OF ANY BENEFICIAL OWNER OF SHARES ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS, A COPY (WITHOUT EXHIBITS) OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016. REQUESTS SHOULD BE MAILED TO THE SECRETARY, SUMMER ENERGY HOLDINGS, INC., 800 BERING DRIVE, SUITE 260, HOUSTON, TEXAS 77057.
INTERNET AVAILABILITY OF PROXY MATERIALS
A COMPLETE SET OF PROXY MATERIALS RELATING TO OUR ANNUAL MEETING IS AVAILABLE ON THE INTERNET. THESE MATERIALS, CONSISTING OF THE NOTICE OF ANNUAL MEETING, PROXY STATEMENT, PROXY CARD AND ANNUAL REPORT TO STOCKHOLDERS, MAY BE VIEWED ATWWW.COLONIALSTOCK.COM/SUMMER2017 ORWWW.SEC.GOV. INFORMATION INCLUDED ON THE COLONIAL STOCK WEBSITE OR THE COMPANY’S WEBSITE, OTHER THAN THE MATERIALS RELATED TO THE ANNUAL MEETING, IS NOT PART OF THE PROXY SOLICITING MATERIALS.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not aware of any matters other than those set forth herein and in the Notice of Annual Meeting of Stockholders that will come before the meeting. Should any other matters arise requiring the vote of stockholders, it is intended that proxies will be voted in respect thereto in accordance with the best judgment of the person or persons voting the proxies.
Please return your proxy as soon as possible. Unless a quorum consisting of a majority of the outstanding shares entitled to vote is represented at the meeting, no business can be transacted. Therefore,please be sure to date and sign your proxy exactly as your name appears on your stock certificate and return it in the enclosed postage prepaid return envelope. Please act promptly to ensure that you will be represented at this important meeting.
By Order of the Board of Directors,
SUMMER ENERGY HOLDINGS, INC.
/s/ Stuart C. Gaylor
Stuart C. Gaylor
Chairman of the Board
Houston, Texas
April 25, 2017
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Summer Energy Holdings, Inc.
800 Bering Drive, Suite 260
Houston, Texas 77057
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates, constitutes and appoints each of Neil M. Leibman and Jaleea P. George the attorney, agent and proxy of the undersigned (the “Proxies”), with full power of substitution, to vote all stock of Summer Energy Holdings, Inc. which the undersigned is entitled to represent and vote at the Annual Meeting of Stockholders of the Company to be held June 19, 2017, at 8:00 a.m. Central Standard Time at 800 Bering Drive, Suite 260, Houston, Texas 77057, and at any and all adjournments or postponements thereof, as fully as if the undersigned were present and voting at the meeting, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 1
1. ELECTION OF DIRECTORS:
o FOR all nominees listed below (except as marked to the contrary below) | o WITHHOLD AUTHORITY To vote for all nominees listed below |
Election of the following nominees as Class II directors: Tom O’Leary and James Stapleton
(Instructions: To withhold authority to vote for any nominee, print that nominee’s name in the space provided below.)
________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2
2. APPROVAL, BY NON-BINDING VOTE, OF EXECUTIVE COMPENSATION:
o FOR | o AGAINST | o ABSTAIN |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 3
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS:
o FOR | o AGAINST | o ABSTAIN |
Ratification of the appointment of LBB & Associates Ltd., LLP as the Company’s independent auditors.
_________________
4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1, PROPOSAL 2 AND PROPOSAL 3.
IMPORTANT – PLEASE SIGN, DATE AND RETURN PROMPTLY
DATED:
______________________________________, 2017
______________________________________
(Signature)
Please sign exactly as the name appears above. When shares are held by joint tenants, both should sign. When signing as an attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by the President or other authorized officer. If a partnership, please sign in the partnership name by an authorized person
PLEASE SIGN THIS CARD AND RETURN PROMPTLY. IF YOUR ADDRESS IS INCORRECTLY SHOWN, PLEASE PRINT CHANGES. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
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