UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
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by the Registrant
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to Section 240.14a-12
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INTELLICHECK
MOBILISA, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than Registrant)
Payment
of Filing Fee (Check the appropriate box):
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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Proposed
maximum aggregate value of transaction:
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Form,
Schedule or Registration Statement No.:
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To
the Stockholders of
INTELLICHECK
MOBILISA, INC.
Re:
2017 Annual Meeting of Stockholders
Dear
Shareholder:
You
are cordially invited to attend Intellicheck Mobilisa, Inc.’s 2017 Annual Meeting of Stockholders. The meeting will be held
Thursday, May 4, 2017 at the Embassy Suites Hotel, 1900 Diagonal Road, Alexandria, Virginia 22314. The meeting will begin promptly
at 1:00 p.m., Eastern Time. Please plan to arrive a few minutes before the meeting.
The
formal notice of the meeting follows on the next page. No admission tickets or other credentials are required unless you hold
your shares in street name. If you hold your shares in street name, please follow the directions given in the Proxy Statement.
Some
of our directors and officers will be available before and after the meeting to speak with you. At the meeting, the Company will
answer your questions about our business affairs and will consider the matters explained in the Notice and Proxy Statement that
follow.
Please
vote, sign and return the enclosed proxy card as soon as possible, whether or not you plan to attend the meeting. Your vote is
important.
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Sincerely
yours
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/s/
Michael D. Malone
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Michael
D. Malone
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Chairman
of the Board
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NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 2017
To
the Stockholders of
INTELLICHECK
MOBILISA, INC.
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Stockholders of INTELLICHECK MOBILISA, INC. (the “Company”), a Delaware
corporation, will be held Thursday, May 4, 2017 at 1:00 p.m. Eastern Time, at the Embassy Suites Hotel, 1900 Diagonal Road, Alexandria,
Virginia 22314, for the following purposes:
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1.
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To
elect five directors to serve for a one-year term or until their respective successors have been duly elected and qualified;
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2.
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To
ratify the appointment of EisnerAmper, LLP as the Company’s independent public accountants for the 2017 fiscal
year;
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3.
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To
approve an amendment to the Company’s Certificate of Incorporation to change the Company name from Intellicheck Mobilisa,
Inc. to Intellicheck, Inc.;
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4.
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Advisory
vote to approve the compensation of our named executive officers; and
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5.
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To
transact such other business as may properly come before the meeting or any adjournment or adjournments thereof.
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The
Board of Directors has fixed the close of business on March 6, 2017 as the record date for the meeting and only record holders
of shares of the Company’s common stock at that time will be entitled to notice of and to vote at the Annual Meeting of
Stockholders or any adjournment or adjournments thereof. This proxy statement and the accompanying proxy will be mailed on or
about April 11, 2017.
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By
Order of the Board of Directors,
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/s/
Bill White
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Bill
White
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Chief
Financial Officer, Treasurer and Secretary
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Jericho,
NY
April
11, 2017
IMPORTANT
IF
YOU CANNOT PERSONALLY ATTEND THE MEETING, IT IS
REQUESTED
THAT YOU INDICATE YOUR VOTE ON THE ISSUES
INCLUDED
ON THE ENCLOSED PROXY AND DATE, SIGN AND MAIL
IT
IN THE ENCLOSED SELF-ADDRESSED ENVELOPE WHICH
REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING HELD ON MAY 4, 2017:
The Notice of Annual Meeting of
Stockholders, Proxy Statement and the Annual Report to Stockholders are available on the following website:
www.intellicheck.com/proxy2017
INTELLICHECK
MOBILISA, INC.
100
Jericho Quadrangle, Suite 202
Jericho,
NY 11753
PROXY
STATEMENTfor
ANNUAL
MEETING OF STOCKHOLDERS
to
be held Thursday, May 4, 2017
SOLICITATION
OF PROXY
The
accompanying proxy is solicited on behalf of the board of directors (the “Board of Directors”) of Intellicheck Mobilisa,
Inc. (“Intellicheck Mobilisa,” or the “Company”), for use at the annual meeting of stockholders of the
Company (the “Annual Meeting”) to be held Thursday, May 4, 2017 at the Embassy Suites Hotel, 1900 Diagonal Road, Alexandria,
Virginia 22314. The meeting will begin promptly at 1:00 p.m., Eastern Time. This proxy statement contains information about the
matters to be considered at the meeting or any adjournments or postponements of the meeting. In addition to mail, proxies may
be solicited by personal interview, telephone or telegraph by our officers and regular employees, without additional compensation.
We will bear the cost of solicitation of proxies. Brokerage houses, banks and other custodians, nominees and fiduciaries will
be reimbursed for out-of-pocket and reasonable expenses incurred in forwarding proxies and proxy statements. The Board of Directors
has set March 6, 2017, as the record date (the “Record Date”) to determine those holders of record of common stock,
par value $0.001 (“Common Stock”) who are entitled to notice of, and to vote at the Annual Meeting. Each share of
Common Stock entitles its owner to one vote. On the Record Date, there were 10,730,871 shares outstanding. On or about April 11,
2017, this Proxy Statement and the proxy card (the “Proxy Card” or “Proxy”) are being mailed to stockholders
of record as of the close of business on March 6, 2017.
ABOUT
THE MEETING
What
is being considered at the meeting?
You
will be voting on the following:
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The
election of five directors, each to serve until the next annual meeting;
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The
ratification of the appointment of EisnerAmper, LLP, as our independent registered public accountant firm;
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To
approve an amendment to the Company’s Certificate of Incorporation to change the Company name from Intellicheck Mobilisa,
Inc. to Intellicheck, Inc.; and
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Advisory
vote to approve the compensation of our named executive officers.
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Who
is entitled to vote at the meeting?
You
may vote if you owned Common Stock as of the close of business on March 6, 2017. Each share of Common Stock is entitled to one
vote.
How
many votes must be present to hold the meeting?
Your
shares are counted as present at the meeting if you attend the meeting and vote in person or if you properly return a Proxy by
mail. To conduct our meeting, a majority of the combined voting power of our Common Stock as of March 6, 2017, must be present
at the meeting. This is referred to as a quorum. We believe that on March 6, 2017, there were 10,730,871 outstanding shares of
Common Stock entitled to vote.
How
do I vote?
You
can vote in two ways:
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by
attending the meeting in person; or
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by
completing, signing and returning the enclosed Proxy Card.
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Can
I change my mind after I submit my Proxy?
Yes,
you may change your mind at any time before a vote is taken at the meeting. You can do this by (1) signing another Proxy with
a later date and submitting it in the same manner as the prior Proxy was submitted; (2) if you hold your shares in your name,
voting again at the meeting; or (3) if you hold your shares in street name, arranging with your broker to vote your shares at
the annual meeting.
What
if I return my Proxy Card but do not include voting instructions?
Proxies
that are signed and returned but do not include voting instructions will be voted FOR the election of the nominated directors
and FOR the approval of the appointment of our independent public accountants. Proxies will not be voted with respect to the advisory
vote on executive compensation.
What
does it mean if I receive more than one Proxy Card?
It
means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We recommend that
you contact your broker and/or our transfer agent to consolidate as many accounts as possible under the same name and address.
Our transfer agent is Continental Stock Transfer and Trust Company. The transfer agent’s telephone number is (212) 509-4000.
Will
my shares be voted if I do not provide my Proxy?
If
you hold your shares directly in your own name, they will not be voted if you do not provide a Proxy. Your shares may be voted
under certain circumstances if they are held in the name of a brokerage firm. Brokerage firms generally have the authority to
vote customers’ unvoted shares on certain “routine” matters, including approval of the appointment of independent
public accountants. When a brokerage firm votes its customer’s unvoted shares, these shares are counted for purposes of
establishing a quorum. At our meeting, these shares will be counted as voted by the brokerage firm in the approval of the appointment
of our independent public accountants.
What
vote is required to approve each item?
The
affirmative vote of a plurality of the votes cast at the annual meeting is required for approval of the election of directors
and for the ratification of the appointment of our independent public accountants. The advisory vote to approve named executive
compensation will be approved, on a non-binding, advisory basis, on the affirmative vote of a plurality of the votes cast at the
annual meeting.
Do
we currently have, or do we intend to submit for shareholder approval, any anti-takeover device?
Our
Certificate of Incorporation, Bylaws and other corporate documents do not contain any provisions that contain material anti-takeover
aspects. We have no plans or proposals to submit any other amendments to the Certificate of Incorporation or Bylaws, or other
measures in the future that have anti-takeover effects.
Proposal
No. 1
ELECTION
OF DIRECTORS
Our
Board of Directors has one class of directors, with each director elected annually for a term of one year. Unless specified to
be voted otherwise, the persons named in the accompanying Proxy will vote for the election of the following persons as directors,
all of whom are presently members of the Board of Directors, to hold office for the terms set forth below or until their respective
successors have been elected and qualified. Each Proxy will be voted for the nominees named below. The nominees have consented
to serve as directors if elected.
The
Board of Directors recommends that you elect the nominees identified below.
Name
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Age
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Position with the Company
and Principal Occupation
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Director
Since
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New
Board
Term Expires
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Vice
Admiral Michael D. Malone
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69
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Chairman of the Board of Directors
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2011
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2018
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Lieutenant
General Emil R. Bedard
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72
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Director
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2008
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2018
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Major
General Jack A. Davis
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70
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Director
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2014
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2018
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William
P. Georges
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62
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Director
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2014
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2018
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Guy
L. Smith
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67
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Director
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2005
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2018
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DIRECTORS
AND EXECUTIVE OFFICERS
The
following table sets forth certain information with respect to each director and executive officer as of March 6, 2017:
Name
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Age
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Position with the Company
and Principal Occupation
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Held
Office Since
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Current
Board
Term
Expires
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Vice
Admiral Michael D. Malone
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69
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Chairman of the Board of Directors
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2011
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2017
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Lieutenant General Emil R. Bedard
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72
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Director
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2008
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2017
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Major
General Jack A. Davis
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70
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Director
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2014
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2017
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William
P. Georges
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62
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Director
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2014
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2017
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Guy
L. Smith
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67
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Director
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2005
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2017
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Russell
T. Embry
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52
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Chief Technology Officer, Senior Vice President
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2001
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N/A
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Dr.
William H. Roof
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63
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Chief
Executive Officer
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2014
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N/A
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Bill
White
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56
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Chief Financial Officer, Secretary and Treasurer
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2012
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N/A
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Business
Experience
Michael
D. Malone, Vice Admiral, U.S. Navy, Retired,
was appointed Chairman of the Board of Directors effective November 13, 2012.
Vice Admiral Malone became a member of the Board of Directors July 1, 2011. From November 2004 to February 2011, he was President
of Skarven Enterprises, a designer and developer of analytic approaches and technology applications specializing in real time/streaming
data fusion and analysis for a variety of applications in government, financial services, auditing and industry competitive intelligence.
During his time at Skarven Enterprises he led the company through a significant period of reorganization and growth, dramatically
improving the company’s research and development efforts, and production and field support capability, while dramatically
cutting costs and increasing revenue five-fold. As a result of his efforts, Skarven Enterprises was acquired by The Boeing Company
in December 2008. Vice Admiral Malone remained President of the company, as part of the acquisition agreement, until February
2011. Since leaving the military, Vice Admiral Malone has also served as a technical advisor and consultant to Pequot Capital,
a venture capital firm (in 2006 and 2007) and Environmental Tectonics Corporation, a high-technology simulation and manufacturing
company (June 2007 to present). Vice Admiral Malone was selected to serve as a director in part due to his considerable experience
as an officer in the U.S. military working with government contracts, and his knowledge of the sectors in which the Company does
business.
Lieutenant
General Emil R. “Buck” Bedard
was appointed a member of the Board of Directors on March 14, 2008. General Bedard
was appointed a director of Mobilisa in September 2004. He retired from the U.S. Marine Corps with over 37 years of active duty
service in 2003. General Bedard’s military career included two combat tours in Vietnam, as well as commanding the 7
th
Marine Regiment in Somalia and the 1
st
Marine Expeditionary Force during Operation Desert Storm. General Bedard’s
final active duty tour was as the Deputy Commandant for Plans, Policies and Operations for the US Marine Corps Headquarters in
Washington, D.C., where he served until his retirement in 2003. He has continued to serve with the Marine Corps in Afghanistan
and Iraq since his retirement. General Bedard’s many military awards include a Distinguished Service Medal, Legion of Merit,
and Bronze Star (with Combat V). General Bedard graduated from the University of North Dakota in 1967 with a Masters in Science.
General Bedard was selected to serve as a Director in part due to his considerable experience as an officer in the U.S. military
working with government contracts and his knowledge of the Company, including as a director of Mobilisa.
Major
General Jack A. Davis, U.S. Marine Corps, Retired,
was appointed a member of the Board of Directors on August 11, 2014. Major
General Davis is a proven leader in the military, law enforcement and business arenas. In a 37-year career in the United States
Marine Corps, during which he rose to the rank of Major General, he commanded at every level from an infantry platoon in Vietnam
to Commanding General of the 4th Marine Division. His final assignment prior to retirement was Vice Commander, Marine Corps Forces
Atlantic/Deputy Commander Marine Corps Forces Europe, for which he received the Distinguished Services Medal. He also served five
years in federal law enforcement before joining the North Carolina State Bureau of Investigation in 1979, retiring in 1999 with
a distinguished record of service. He also established JA Davis & Associates, a frontrunner in leadership and security training
development. He holds a Bachelor of Science degree and two master’s degrees. He previously served on Mobilisa’s Board
of Directors from October 2005 until the merger with Intellicheck in March 2008.
William
P. Georges
was appointed a member of the Board of Directors on August 11, 2014. Mr. Georges is President and CEO of The Georges
Group, LLC, a provider of strategic consulting services and project management in the areas of corporate operations/relations
to both public and private entities worldwide. Prior to forming the firm, he spent nine years as senior vice president of The
Century Council, overseeing their development of programs to fight alcohol misuse, drunk driving and underage drinking. He is
a retired 25-year veteran of the Albany, NY Police Department where he ultimately achieved the rank of Assistant Chief/Chief of
Patrol where he was responsible for all uniformed police services. Mr. Georges is a life member of the International Association
of Chiefs of Police. He serves on the Traffic Law Enforcement Committee of the Transportation Research Board of the National Academies
and has been recognized by numerous organizations for his dedication to law enforcement.
Guy
L. Smith
was appointed a member of the Board of Directors in June 2005. Mr. Smith has been the Executive Vice President of
Diageo, the world’s leading premium drinks company, since 2000 and is responsible for Corporate Relations and Marketing
Public Relations. At Diageo, Mr. Smith’s responsibilities include overseeing the corporation’s civic and social responsibility
efforts in North America, including the Diageo Marketing Code. The code governs the company’s social responsibility activities
with regard to the marketing and sale of alcoholic beverages and the company’s undertakings to reduce underage access and
abuse of alcohol. From 1998 to 1999, prior to joining Diageo, Mr. Smith was Special Advisor to President Clinton on The White
House staff, where he served on the impeachment defense team. Mr. Smith also served as an informal strategic communications advisor
to President Clinton from the beginning of the Clinton Administration. From 1999 to 2000, Mr. Smith was associated with The Hawthorn
Group, a Washington-based public affairs firm, as well as with his own firm, Smith Worldwide Inc., from 1994 to 1996, which focused
on reputation and crisis management. He was Chief Operating Officer of Hill & Knowlton International Public Relations, from
1992 to 1993, where he consulted with the firm’s largest consumer product, technology, and legal clients. Prior to that
Mr. Smith was Vice President-Corporate Affairs, the senior public affairs and public relations officer, for Philip Morris Companies
Inc. from 1975 to 1992. During his 17 years with Philip Morris, Mr. Smith led the Corporate Affairs departments of the Miller
Brewing Company and The Seven-Up Company, both then Philip Morris operating companies. Mr. Smith began his career as a reporter
and assistant city editor for The Knoxville Journal. He is currently chairman of the Barrier Island Trust, an environmental protection
organization and sits on the Board of Advisors of Mount Vernon, George Washington’s home outside Washington, D.C. Mr. Smith
also serves as an Honorary Battalion Chief of the Fire Department of New York. Mr. Smith was selected to serve as a Director in
part due to his extensive experience with the alcoholic beverage business and other businesses that rely on age verification,
his work in government and public relations, his knowledge of the Company, including as a director of Intelli-Check, Inc. prior
to the merger with Mobilisa and his general business experience.
Russell
T. Embry
was appointed Senior Vice President and Chief Technology Officer in July 2001 and has been Vice President, Information
Technology, since July 1999. From January 1998 to July 1999, Mr. Embry was Lead Software Engineer with RTS Wireless. From April
1995 to January 1998, he served as Principal Engineer at GEC-Marconi Hazeltine Corporation. From August 1994 through April 1995,
he was a staff software engineer at Periphonics Corporation. From September 1989 to August 1994, Mr. Embry served as Senior Software
Engineer at MESC/Nav-Com. From July 1985 through September 1989, he was a software engineer at Grumman Aerospace. Mr. Embry holds
a B.S. in Computer Science from Stony Brook University and an M.S. in Computer Science from Polytechnic University, Farmingdale.
Dr.
William H. Roof
was appointed Chief Executive Officer and President effective October 1, 2014. Dr. Roof previously served
as the Company’s Vice President and Chief Operating Officer from August 11, 2014 to September 30, 2014, as well as the Company’s
Senior Vice President and Chief Scientist from May 2009 to April 2011. Since April 2011, he served as the Chief Technology Officer
of Tech Flow, Inc., a provider of information technology services to the government in business and process analysis, program
management, user interaction design, software development, systems O&M and technology support services.
Bill
White
was named Chief Financial Officer, Treasurer and Secretary on April 1, 2012. Mr. White has more than 30 years of experience
in financial management, operations and business development. Prior to joining Intellicheck Mobilisa, he served 11 years as the
Chief Financial Officer, Secretary and Treasurer of FocusMicro, Inc. (“FM”). As co-founder of FM, Mr. White played
an integral role in growing the business from the company’s inception to over $36 million in annual revenue in a five-year
period. Mr. White has broad domestic and international experience including managing rapid and significant growth, import/export,
implementing tough cost management initiatives, exploiting new growth opportunities, merger and acquisitions, strategic planning,
resource allocation, tax compliance and organization development. Prior to co-founding FM, he served 15 years in various financial
leadership positions in the government sector. Mr. White started his career in Public Accounting. Mr. White holds a Bachelor of
Arts in Business Administration from Washington State University and is a Certified Fraud Examiner.
Directors
generally serve for a one-year term and hold office until the next annual meeting of stockholders following the conclusion of
their term and the election and qualification of their successors. Executive officers are appointed by and serve at the discretion
of the Board of Directors.
Board
Leadership Structure
The
current Chairman of the Board of Directors is Vice Admiral Michael D. Malone, who is an independent director under NYSE MKT listing
standards. The roles of Chairman of the Board and Chief Executive Officer are separate. The Board of Directors believes that the
separation of the offices of the Chairman of the Board and Chief Executive Officer allows the Company’s Chief Executive
Officer to focus primarily on the Company’s business strategy, operations and corporate vision. The Board of Directors consists
of a majority of independent directors, and each of the committees of the Board of Directors is comprised solely of independent
directors. The Company does not have a policy mandating an independent lead director. The independent directors meet at least
annually in executive session without the presence of non-independent directors.
Risk
Oversight
While
management is responsible for assessing and managing risks to the Company, the Board of Directors is responsible for overseeing
management’s efforts to assess and manage risk. Risks are considered in virtually every business decision and as part of
the Company’s overall business strategy. The Board of Directors’ risk oversight areas of focus include, but are not
limited to:
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managing
the Company’s long-term growth;
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strategic
and operational planning, including significant acquisitions and the evaluation of our capital structure; and
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legal
and regulatory compliance.
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While
the Board of Directors has the ultimate oversight responsibility for the Company’s risk management policies and processes,
the committees of the Board of Directors also have responsibility for risk oversight. The Audit Committee oversees risks associated
with our financial statements and financial reporting, mergers and acquisitions, credit and liquidity, and business conduct compliance.
The Compensation Committee considers the risks associated with our compensation policies and practices with respect to both executive
compensation and employee compensation generally. The Corporate Governance and Nominating Committee oversee risks associated with
our overall governance practices and the leadership structure of the Board of Directors. The Board of Directors stays informed
of each committee’s risk oversight and other activities via regular reports of the committee chairs to the full Board of
Directors. The Board of Directors’ role in risk oversight is consistent with our leadership structure, with the Chief Executive
Officer and other members of senior management having responsibility for assessing and managing the Company’s risk exposure,
and the Board of Directors and committees providing oversight in connection with those efforts.
Section
16(a) Beneficial Ownership Reporting Compliance
The
Securities and Exchange Commission has adopted rules relating to the filing of ownership reports under Section 16(a) of the Securities
Exchange Act of 1934. One such rule requires disclosure of filings, which under the Commission’s rules, are not deemed to
be timely. Based upon a review of our filings, Intellicheck Mobilisa is not aware of any untimely filings for fiscal year 2016.
MEETINGS
AND COMMITTEES OF THE BOARD OF DIRECTORS
During
the fiscal year ended December 31, 2016, the Board of Directors held four meetings, the Audit Committee held four meetings, the
Nominating and Corporate Governance Committee held four meetings and the Compensation Committee held four meetings in conjunction
with the regular quarterly board meetings. All the directors attended at least 75% of the aggregate of all Board meetings and
meetings of committees on which they served. The Board of Directors has determined that Messrs. Smith, Malone, Davis, Georges,
and Bedard are each independent directors as defined in Section 803(A) of the NYSE MKT listing standards. The Company does not
have a written policy relating to attendance by members of the Board of Directors at annual shareholder meetings. However, it
is communicated and understood by all directors that they are required to attend barring any unforeseen circumstance. All directors
who were directors at the time of last year’s annual shareholder meeting attended last year’s annual shareholder meeting.
Compensation
Committee
The
Board of Directors established a Compensation Committee, which is currently comprised of Mr. Smith, chairperson, Mr. Bedard, Mr.
Davis and Mr. Malone, each of whom is independent as defined in Section 803(A) of the NYSE MKT listing standards. The Compensation
Committee reviews and recommends to the board the compensation for all officers and directors of the Company and reviews general
policy matters relating to the compensation and benefits of all employees. The Compensation Committee also administers the stock
option plans. The Compensation Committee may not delegate its duties. The Compensation Committee has adopted a written charter,
which is available on the Company’s Web site at
www.intellicheck.com/about/investor-center
. The charter sets forth
responsibilities, authority and specific duties of the Compensation Committee.
Compensation
Committee Report
The
Compensation Committee Report is not to be deemed to be “soliciting material” or to be “filed” with the
SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, except to the extent that the
Company specifically requests that such information be treated as soliciting material or specifically incorporates it by reference
into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
The
Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation
S-K with management. Based on this review and discussion, the Compensation Committee has recommended to the Company’s Board
of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K.
Compensation
Committee:
Guy
L. Smith, Chairman
Emil
R. Bedard, Member
Jack
A. Davis, Member
Michael
D. Malone, Member
Corporate
Governance and Nominating Committee
The
Board of Directors established a Corporate Governance and Nominating Committee, which is comprised of Mr. Bedard, chairperson,
Mr. Davis and Mr. Georges, each of whom is independent as defined in Section 803(A) of the NYSE MKT’s listing standards.
The Corporate Governance and Nominating Committee review our internal policies and procedures and by-laws. With respect to nominating
director candidates, this committee identifies and evaluates potential director candidates and recommends candidates for appointment
or election to the Board. The Nominating and Corporate Governance Committee has adopted a written charter, which is available
on the Company’s Web site at
www.intellicheck.com/about/investor-center
. The charter sets forth responsibilities,
authority and specific duties of the Corporate Governance and Nominating Committee.
The
Corporate Governance and Nominating Committee may consider those factors it deems appropriate in evaluating director nominees,
including judgment, skill, diversity, strength of character, experience with businesses and organizations comparable in size or
scope to the Company, experience and skill relative to other board members, and specialized knowledge or experience. Depending
upon the current needs of our Board of Directors, certain factors may be considered more than others by the Committee in making
its recommendation. In considering candidates for our Board of Directors, the Corporate Governance and Nominating Committee will
evaluate the entirety of each candidate’s credentials and, other than the eligibility requirements established by the Corporate
Governance and Nominating Committee, will not have any specific minimum qualifications that must be met by a nominee. The Corporate
Governance and Nominating Committee will consider candidates for the Board from any reasonable source, including current board
members, stockholders, professional search firms or other persons. The Corporate Governance and Nominating Committee will not
evaluate candidates differently based on who has made the recommendation.
Although
we do not currently have a formal policy or procedure for shareholder recommendations of director candidates, the Board of Directors
welcomes such recommendations and will consider candidates recommended by stockholders. Because we do not prohibit or restrict
such recommendations, we have not implemented a formal policy with respect to shareholder recommendations.
Audit
Committee
The
Board of Directors has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange
Act, which is currently comprised of Vice Admiral Michael D. Malone, chairperson, William P. Georges and Guy L. Smith. The members
of the Audit Committee are independent as defined in Section 803(A) of the NYSE MKT’s listing standards. The Audit Committee
recommends to the Board of Directors the annual engagement of a firm of independent accountants and reviews with the independent
accountants the scope and results of audits, our internal accounting controls and audit practices and professional services rendered
to us by our independent accountants. The Audit Committee has adopted a written charter, which sets forth the responsibilities,
authority and specific duties of the Audit Committee. A copy of the Audit Committee charter is incorporated by reference to Registrant’s
Proxy Statement on Schedule 14A filed April 27, 2007.
The
Board of Directors has determined that it has at least one audit committee financial expert serving on the audit committee. Mr.
Malone has vast corporate experience including his position as President of Skarven Enterprises. He is considered an “audit
committee financial expert” and is the Chairman of the Board of Directors.
Audit
Committee Report
The
following shall not be deemed to be “soliciting material” or to be “filed” with the Commission nor shall
such information be incorporated by reference into any future filing of Intellicheck Mobilisa under the Securities Act of 1933
or the Exchange Act.
With
respect to the audit of the fiscal year ended December 31, 2016, and as required by its written charter which sets forth its responsibilities
and duties, the Audit Committee has reviewed and discussed the Company’s audited financial statements with management.
During
its review, the Audit Committee has discussed with EisnerAmper, LLP, the Company’s Independent Registered Public Accounting
Firm, those matters required to be discussed by Statement on Accounting Standards No. 61, as amended, as adopted by the Public
Company Accounting Oversight Board (“PCAOB”) in Rule 3200T.
The
Audit Committee has received from and discussed with EisnerAmper. LLP, the written disclosures and the letter required by applicable
requirements of the PCAOB regarding the firm’s communications with the Audit Committee concerning independence and has discussed
with EisnerAmper LLP its independence. These disclosures relate to the firm’s independence from the Company.
Based
on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial
statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
|
Audit
Committee:
|
|
|
|
Michael
D. Malone, Chairman
|
|
William
P. Georges, Member
|
|
Guy
L. Smith, Member
|
Process
for Sending Communications to the Board of Directors
Stockholders
that wish to communicate with the Board of Directors are welcomed to put their comments in writing addressed to the Company’s
Investor Relations Representative, Bill White. Such communications may be sent to Mr. White at Intellicheck Mobilisa, Inc., 100
Jericho Quadrangle, Suite 202, Jericho, NY 11753. Upon receipt, Mr. White will distribute the correspondence to the directors.
All communications received will be provided to the directors specified in the communication.
VOTING
SECURITIES AND PRINCIPAL STOCKHOLDERS
The
following table sets forth information with respect to the beneficial ownership of the Company’s Common Stock as of March
6, 2017, by each person who is known by Intellicheck Mobilisa to beneficially own more than 5% of Intellicheck Mobilisa’s
Common Stock, each officer, each director and all officers and directors as a group.
Shares
of Common Stock that an individual or group has a right to acquire within 60 days pursuant to the exercise or conversion of options,
warrants or other similar convertible or derivative securities are deemed to be outstanding for the purpose of computing the percentage
ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership
of any other person shown in the table.
There
are no arrangements known to the Company, including any pledge by any person of securities of the Company, the operation of which
may at a subsequent date result in a change in control of the Company.
The
applicable percentage of ownership is based on 10,730,871 shares outstanding.
Name
|
|
Shares
Beneficially Owned
|
|
|
Percent
|
|
Russell
T. Embry
(1)
|
|
|
89,843
|
|
|
|
*
|
|
William
H. Roof
(2)
|
|
|
391,028
|
|
|
|
3.64
|
|
Bill
White
(3)
|
|
|
263,417
|
|
|
|
2.45
|
|
Emil
R. Bedard
(4)
|
|
|
134,425
|
|
|
|
1.25
|
|
Jack
A. Davis
(4)
|
|
|
90,812
|
|
|
|
*
|
|
William
P. Georges
(4)
|
|
|
72,342
|
|
|
|
*
|
|
Michael
D. Malone
(4)
|
|
|
103,608
|
|
|
|
*
|
|
Guy
L. Smith
(5)
|
|
|
196,652
|
|
|
|
1.83
|
|
All
Executive Officers & Directors as a group (8 persons)
(6)
|
|
|
1,342,126
|
|
|
|
12.51
|
|
5%
Stockholders
|
|
|
|
|
|
|
|
|
AWM
Investment Company, Inc.
(7)
|
|
|
1,985,022
|
|
|
|
18.50
|
|
Marathon
Micro Fund L.P.
(8)
|
|
|
1,145,250
|
|
|
|
10.67
|
|
First
Eagle Investment Management, LLC
(9)
|
|
|
1,050,000
|
|
|
|
9.78
|
|
Clear
Harbor Asset Management, LLC
(10)
|
|
|
621,712
|
|
|
|
5.79
|
|
*
|
Indicates
beneficial ownership of less than one percent of the total outstanding Common Stock.
|
|
|
(1)
|
Includes
89,843 shares issuable upon exercise of stock options exercisable within 60 days.
|
|
|
(2)
|
Includes
366,026 shares issuable upon exercise of stock option exercisable within 60 days.
|
|
|
(3)
|
Includes
262,692 shares issuable upon exercise of stock options exercisable within 60 days.
|
|
|
(4)
|
Includes
50,000 shares issuable upon exercise of stock options exercisable within 60 days.
|
|
|
(5)
|
Includes
101,798 shares issuable upon exercise of stock options exercisable within 60 days.
|
|
|
(6)
|
Includes
1,020,359 shares issuable upon the exercise of stock options exercisable within 60 days.
|
|
|
(7)
|
The
address of AWM Investment Company, Inc. is 527 Madison Avenue, New York, NY 10022
|
|
|
(8)
|
The
address of Marathon Micro Fund L.P. is 4 North Park Drive, Suite 106, Hunt Valley, MD 21030
|
|
|
(9)
|
The
address of First Eagle Investment Management, LLC is 1345 Avenue of the Americas, New York, NY 10105
|
|
|
(10)
|
The
address of Clear Harbor Asset Management, LLC is 420 Lexington Ave., Suite 2006, New York, NY 10170
|
The
address at which our Board of Directors and executive officers can be reached is the address specified in “Process for Sending
Communications to the Board of Directors” above.
EXECUTIVE
COMPENSATION
This
compensation discussion describes the material elements of compensation awarded to, earned by, or paid to each of Intellicheck
Mobilisa’s executive officers who served as named executive officers during the last completed fiscal year. This compensation
discussion focuses on the information contained in the following tables and related footnotes and narrative for primarily the
last completed fiscal year, but also describes compensation actions taken before or after the last completed fiscal year to the
extent it enhances the understanding of Intellicheck Mobilisa’s executive compensation disclosure.
The
Compensation Committee currently oversees the design and administration of Intellicheck Mobilisa’s executive compensation
program and compensation for the Board of Directors.
The
principal elements of Intellicheck Mobilisa’s executive compensation program are base salary, annual cash incentives, long-term
equity incentives in the form of stock options and other benefits. Intellicheck Mobilisa’s other benefits consist of reimbursed
business travel and entertainment expenses, health insurance benefits, vacation and sick pay and a qualified 401(k) savings plan.
Intellicheck Mobilisa’s philosophy is to position the aggregate of these elements at a level that is commensurate with Intellicheck
Mobilisa’s size and performance.
Compensation
Program Objectives and Philosophy
In
General.
The objectives of Intellicheck Mobilisa’s compensation programs are to:
|
●
|
attract,
motivate and retain talented and dedicated executive officers;
|
|
|
|
|
●
|
provide
Intellicheck Mobilisa’s executive officers with both cash and equity incentives to further Intellicheck Mobilisa’s
interests and those of Intellicheck Mobilisa’s stockholders; and
|
|
|
|
|
●
|
provide
employees with long-term incentives so Intellicheck Mobilisa can retain them and provide stability during Intellicheck Mobilisa’s
growth stage.
|
Generally,
the compensation of Intellicheck Mobilisa’s executive officers is composed of a base salary, an annual incentive compensation
award and equity awards in the form of stock options. In setting base salaries, the Compensation Committee generally reviews the
individual contributions of the particular executive. Annual incentive compensation awards for 2015 and 2016 have been paid in
accordance with the Executive Compensation Bonus Plan approved by the Compensation Committee based on expected Company performance.
In addition, stock options are granted to provide the opportunity for long-term compensation based upon the performance of Intellicheck
Mobilisa’s common stock over time.
Intellicheck
Mobilisa generally intends to qualify executive compensation for deductibility without limitation under Section 162(m) of the
Internal Revenue Code. Section 162(m) provides that, for purposes of the regular income tax and the alternative minimum tax, the
otherwise allowable deduction for compensation paid or accrued with respect to a covered employee of a publicly-held corporation
(other than certain exempt performance-based compensation) is limited to no more than $1.0 million per year. The non-exempt compensation
paid to any of our executive officers for fiscal 2016 as calculated for purposes of Section 162(m) did not exceed the $1.0 million
limit.
Competitive
Marketplace for Talent
. Intellicheck Mobilisa defines its competitive marketplace for executive talent and investment
capital to be the technology and business services industries. To date, Intellicheck Mobilisa has not engaged in the benchmarking
of executive compensation but Intellicheck Mobilisa may choose to do so in the future.
Compensation
Process.
For each of Intellicheck Mobilisa’s named executive officers, the Compensation Committee reviews and approves
all elements of compensation, taking into consideration recommendations from Intellicheck Mobilisa’s Chief Executive Officer
(for compensation other than his own), as well as competitive marketplace guidance. Based upon its review, the Compensation Committee
approves salaries for executive officers. The Compensation Committee sets the salary level of each executive officer on a case
by case basis, considering the individual’s level of responsibilities and performance. All executive officer salaries are
reviewed on an annual basis. Salary changes for executives are based primarily on their performance in supporting the strategic
initiatives of the Chief Executive Officer, economic and competitive factors, meeting individual goals and objectives set by the
Chief Executive Officer, and improving the operating efficiency of the company. Also, where applicable, changes in the duties
and responsibilities of each other executive officer may be considered in deciding on changes in annual salary. For 2016, the
aggregate of the compensation paid to Intellicheck Mobilisa’s Chief Executive Officer and other executive officers was $1,239,372.
Executive
Officer Bonuses.
During 2016, bonuses were paid under the Executive Compensation Bonus Plan to the Chief Executive Officer,
Chief Technology Officer, Chief Financial Officer and the Chief Revenue Officer in the amounts of $58,750, $23,500, $47,931 and
$2,625, respectively. During 2015, bonuses were paid under the Executive Compensation Bonus Plan to the Chief Executive Officer
and Chief Revenue Officer in the amounts of $37,500 and $50,250, respectively.
Stock
Option Grants.
The Compensation Committee currently administers Intellicheck Mobilisa’s stock option and equity
incentive plans for executive officers, employees, consultants and outside directors. Under the plans, the Compensation Committee
grants options to purchase Common Stock with an exercise price of no less than the fair market value of the Common Stock on the
date of grant. The Compensation Committee believes that providing stock options to the executive officers, who are responsible
for Intellicheck Mobilisa’s management and growth, gives them an opportunity to own Intellicheck Mobilisa stock and better
aligns their interests with the interests of the stockholders. It also promotes retention of the officers because of the vesting
provisions of the option grants and the potential for stock price appreciation.
For
these reasons, the Compensation Committee considers stock options as an important element of compensation when it reviews executive
officer compensation. At its discretion, the Compensation Committee also grants options based on individual and corporate achievements.
Normally,
the Chief Executive Officer makes a recommendation to the Committee for awards to be made to executive officers other than the
Chief Executive Officer. The Committee approves grants made to the Chief Executive Officer and other executive officers and, in
certain cases, recommends grants for approval by the entire Board. The Compensation Committee determines the number of shares
underlying each stock option grant based upon the executive officer’s and Intellicheck Mobilisa’s performance, the
executive officer’s role and responsibilities at Intellicheck Mobilisa and the executive officer’s base salary.
Chief
Executive Officer Compensation.
Dr. Roof receives an annual base salary of $250,000. Dr. Roof may also receive an annual
bonus based on reasonable objectives established by the Company’s Board of Directors. In addition, Dr. Roof is entitled
to receive benefits in accordance with the Company’s existing benefit policies and is reimbursed for Company expenses in
accordance with the Company’s expense reimbursement policies.
The
determination of the base salary to be paid to the Chief Executive Officer was based on a number of factors including the position’s
historical compensation and the relative compensation in comparison to the other existing senior executives in the Company. In
deciding on future changes in the base salary of the Chief Executive Officer, the Compensation Committee will consider several
performance factors. Among these are operating and administrative efficiency and the maintenance of an appropriately experienced
management team. The Compensation Committee also evaluates the Chief Executive Officer’s performance in the area of finding
and evaluating new business opportunities to establish the most productive strategic direction for Intellicheck Mobilisa.
Chief
Financial Officer.
Effective April 1, 2012, Bill White was appointed Chief Financial Officer of the Company. In connection
with his employment at the Company, Mr. White receives a base salary of $203,963.
Severance
and Change-in-Control Agreements
On
September 30, 2014, the Company entered into a Severance Agreement with Mr. Bill White, the Company’s Chief Financial Officer.
Under the agreement, if Mr. White is terminated for any reason other than cause, the Company would pay Mr. White one (1) year
base salary in accordance with the Company’s regular payroll schedule. Mr. White would also be entitled to a gross amount
equal to any quarterly bonus target applicable during the quarter, accelerated vesting of all outstanding stock options and coverage
of health benefits for a period of up to 12 months. The agreement has a term of three years.
Effective
October 1, 2014, the Company entered into an Executive Employment Agreement with Dr. William Roof, the Company’s Chief Executive
Officer. The agreement provides for an annual base salary of $250,000. Under the agreement, if Dr. Roof is terminated for any
reason other than cause, the Company would pay Dr. Roof the greater of: (a) 12 months if the Separation Date occurs less than
24 months after commencement of Dr. Roof’s employment as Chief Executive Officer, and (b) 24 months if the Separation Date
occurs 24 months or more after the commencement of Dr. Roof’s employment as Chief Executive Officer. Dr. Roof was also granted
an option to purchase 60,000 shares of Company stock, subject to a four year vesting schedule.
Effective
December 15, 2014, the company entered into an Executive Employment Agreement with Mr. Robert Williamsen, the Company’s
Chief Revenue Officer. The agreement provides for an annual base salary of $225,000. Mr. Williamsen was also granted an option
to purchase 100,000 shares of company stock, subject to a four-year vesting schedule. Effective May 19, 2016, Mr. Williamsen separated
from the Company.
Each
of the agreements requires the executive to devote substantially all his time and efforts to our business and contains non-competition
and nondisclosure covenants of the officer for the term of his employment and for a one-year period thereafter. Each agreement
provides that we may terminate the agreement for cause.
INTELLICHECK
MOBILISA SUMMARY COMPENSATION TABLE
The
following table sets forth compensation paid to executive officers whose compensation was more than $100,000 for any of the three
fiscal years ended December 31, 2016. No other executive officers received total salary and bonus compensation more than $100,000
during any of such fiscal years.
Name
and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards ($)
(1)
|
|
|
Option
Awards ($)
(1)
|
|
|
All
Other Compensation ($)
(2)
|
|
|
Total
($)
|
|
William
H. Roof
(3)
|
|
|
2016
|
|
|
|
252,000
|
|
|
|
58,750
|
|
|
|
20,287
|
|
|
|
41,127
|
|
|
|
19,025
|
(9)
|
|
|
391,189
|
|
President
& Chief Executive Officer
|
|
|
2015
|
|
|
|
253,200
|
|
|
|
37,500
|
|
|
|
—
|
|
|
|
466,327
|
|
|
|
25,000
|
(10)
|
|
|
782,027
|
|
|
|
|
2014
|
|
|
|
77,803
|
|
|
|
—
|
|
|
|
—
|
|
|
|
271,027
|
|
|
|
3,787
|
|
|
|
352,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell
T. Embry
|
|
|
2016
|
|
|
|
200,000
|
|
|
|
23,500
|
|
|
|
8,115
|
|
|
|
16,451
|
|
|
|
3,000
|
|
|
|
251,066
|
|
Chief
Technology Officer
|
|
|
2015
|
|
|
|
200,102
|
|
|
|
—
|
|
|
|
—
|
|
|
|
97,210
|
|
|
|
3,000
|
(4)
|
|
|
300,312
|
|
|
|
|
2014
|
|
|
|
190,875
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
190,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bill
White
|
|
|
2016
|
|
|
|
203,963
|
|
|
|
47,931
|
|
|
|
16,552
|
|
|
|
33,553
|
|
|
|
3,824
|
|
|
|
305,823
|
|
Chief
Financial Officer
|
|
|
2015
|
|
|
|
200,800
|
|
|
|
—
|
|
|
|
—
|
|
|
|
347,098
|
|
|
|
—
|
|
|
|
547,898
|
|
|
|
|
2014
|
|
|
|
188,469
|
|
|
|
10,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,236
|
|
|
|
199,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
N. Williamsen
(5)
|
|
|
2016
|
|
|
|
230,583
|
|
|
|
2,625
|
|
|
|
18,260
|
|
|
|
37,014
|
|
|
|
2,813
|
|
|
|
291,295
|
|
Chief
Revenue Officer
|
|
|
2015
|
|
|
|
225,053
|
|
|
|
50,250
|
|
|
|
—
|
|
|
|
300,822
|
|
|
|
6,750
|
(4)
|
|
|
582,875
|
|
|
|
|
2014
|
|
|
|
1,705
|
|
|
|
—
|
|
|
|
—
|
|
|
|
216,873
|
|
|
|
—
|
|
|
|
218,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonnie
Ludlow
(6)
|
|
|
2016
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Former
Senior Vice President
|
|
|
2015
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
127,500
|
(8)
|
|
|
127,500
|
|
|
|
|
2014
|
|
|
|
98,958
|
|
|
|
23,510
|
|
|
|
—
|
|
|
|
—
|
|
|
|
65,966
|
(8)
|
|
|
188,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nelson
Ludlow
(6)
|
|
|
2016
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Former
Chief Executive
|
|
|
2015
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
290,000
|
(7)
|
|
|
290,000
|
|
Officer
& President
|
|
|
2014
|
|
|
|
194,750
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
147,083
|
(7)
|
|
|
366,833
|
|
(1)
|
The
amounts reported in the “Option Awards” and “Stock Awards” columns reflect the aggregate grant date
fair value of awards for the years ended December 31, 2016, 2015 and 2014 computed in accordance with FASB ASC Topic 718.
See Note 10 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K, filed in this report, for
information regarding assumptions underlying the valuation of equity awards.
|
|
|
(2)
|
No
other compensation more than $10,000, including perquisites, was paid to any of Intellicheck Mobilisa’s named executive
officers.
|
|
|
(3)
|
Dr.
Roof was named Chief Operating Officer on August 11, 2014 and was appointed Chief Executive Officer on October 1, 2014. Dr.
Roof’s annual salary is $250,000.
|
|
|
(4)
|
Represents
matching contribution under the Company’s 401(K) Plan.
|
|
|
(5)
|
Mr.
Williamsen was named Chief Revenue Officer on December 12, 2014. Mr. Williamsen’s annual salary was $225,000. Mr. Williamsen
separated from the Company effective May 19, 2016.
|
|
|
(6)
|
Both
Dr. and Mrs. Ludlow resigned effective September 30, 2014.
|
|
|
(7)
|
Includes
certain consulting and non-compete payments made to Dr. Ludlow in 2015 and 2014.
|
|
|
|
|
(8)
|
Includes
certain non-compete payments made to Mrs. Ludlow in 2015 and 2014.
|
|
|
(9)
|
Represents
compensation related to a housing and auto allowance made to Dr. Roof in the amount of $14,400 and matching contribution under
the Company’s 401(K) Plan in the amount of $4,625.
|
|
|
(10)
|
Represents
compensation related to a housing and auto allowance made to Dr. Roof in the amount of $17,500 and matching contribution under
the Company’s 401(K) Plan in the amount of $7,500.
|
Stock
Option and Equity Incentive Plans
The
principal purpose of the Stock Option and Equity Incentive Plans is to attract, motivate, reward and retain selected employees,
consultants and directors through the granting of stock-based compensation awards. The Plans provide for a variety of awards,
including non-qualified stock options, incentive stock options (within the meaning of Section 422 of the Code), stock appreciation
rights, restricted stock awards, performance-based awards and other stock-based awards.
The
Company adopted several Stock Option Plans from 1998 through 2015 (and an amendment to the 2004 plan in 2006 pursuant to which
the plan was renamed the “2006 Equity Incentive Plan” and amended to provide for the issuance of other types of equity
incentives such as restricted stock grants) (collectively, the “Plans”) covering up to 2,781,250 of the Company’s
common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive
stock options and nonqualified stock options. The Compensation Committee of the Board of Directors administers the Plans and determines
the terms and conditions of options granted, including the exercise price. The Plans generally provide that all stock options
will expire within ten years of the date of grant. Incentive stock options granted under the Plans must be granted at an exercise
price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than
110% of the fair market value per share at the date of the grant for grants to persons owning more than 10% of the voting stock
of the Company. The Plans also entitle non-employee directors to receive grants of non-qualified stock options as approved by
the Board of Directors.
Administration
.
The Plans are currently administered by the Compensation Committee as designated by the Board of Directors. The Compensation Committee
has the power to interpret the Plans and to adopt rules for the administration, interpretation and application per terms of the
Plans.
Grant
of Awards; Shares Available for Awards
. Certain employees, consultants and directors are eligible to be granted awards
under the Plans. The Compensation Committee will determine who will receive awards under the Plans, as well as the form of the
awards, the number of shares underlying the awards, and the terms and conditions of the awards consistent with the terms of the
Plans.
A
total of 900,013 shares of Intellicheck Mobilisa’s Common Stock are available for issuance or delivery under the existing
Plans. The number of shares of the Company’s Common Stock issued or reserved pursuant to the Plans will be adjusted at the
discretion of the Board of Directors or the Compensation Committee as a result of stock splits, stock dividends and similar changes
in the Company’s Common Stock.
Stock
Options
. The Plans permit the Compensation Committee to grant participants incentive stock options, which qualify for
special tax treatment in the United States, as well as non-qualified stock options. The Compensation Committee will establish
the duration of each option at the time it is granted, with maximum ten-year duration for incentive stock options, and may also
establish vesting and performance requirements that must be met prior to the exercise of options. Stock option grants (other than
incentive stock option grants) also may have exercise prices that are less than, equal to or greater than the fair market value
of the Company’s Common Stock on the date of grant. Incentive stock options must have an exercise price that is at least
equal to the fair market value of the Company’s Common Stock on the date of grant. Stock option grants may include provisions
that permit the option holder to exercise all or part of the holder’s vested options, or to satisfy withholding tax liabilities,
by tendering shares of the Company’s Common Stock already owned by the option holder for at least six months (or another
period consistent with the applicable accounting rules) with a fair market value equal to the exercise price.
Other
Equity-Based Awards
. In addition to stock options, the Compensation Committee may also grant certain employees, consultants
and directors shares of restricted stock, with terms and conditions as the Compensation Committee may, pursuant to the terms of
the 2006 Plan, establish. The 2006 Plan does not allow awards to be made under terms and conditions which would cause such awards
to be treated as deferred compensation subject to the rules of Section 409A of the Code.
Change-in-Control
Provisions
. In connection with the grant of an award, the Compensation Committee may provide that, in the event of a change
in control, any outstanding awards that are unexercisable or otherwise unvested will become fully vested and immediately exercisable.
Amendment
and Termination
. The Compensation Committee may adopt, amend and rescind rules relating to the administration of the Plans,
and amend, suspend or terminate the Plans, but no amendment will be made that adversely affects in a material manner any rights
of the holder of any award without the holder’s consent, other than amendments that are necessary to permit the granting
of awards in compliance with applicable laws. Intellicheck Mobilisa attempted to structure the Plans so that remuneration attributable
to stock options and other awards will not be subject to a deduction limitation contained in Section 162(m) of the Code.
The
following table summarizes options and restricted stock units granted during the years ended December 31, 2016 and 2015 to the
named executive officers:
GRANTS
OF PLAN-BASED AWARDS TABLE
Name
|
|
Grant
Date
|
|
Approval
Date
|
|
Number
of
Securities
Underlying
Grant
|
|
Exercise
or
Base
Price
of
Option
Awards
($/Sh)
|
|
Fair
Value at
Grant
Date($)
(1)
|
|
Expiration
Date
|
|
Russell
T. Embry
|
|
02/24/16
|
|
02/24/16
|
|
|
22,279
|
|
|
|
1.01
|
|
|
|
16,451
|
|
|
02/24/21
|
|
Russell
T. Embry
|
|
05/19/16
|
|
05/19/16
|
|
|
4,363
|
|
|
|
1.86
|
|
|
|
8,115
|
|
|
|
(4)
|
Russell
T. Embry
|
|
05/20/15
|
|
05/20/15
|
|
|
18,970
|
|
|
|
1.42
|
|
|
|
20,000
|
|
|
05/20/20
|
|
Russell
T. Embry
|
|
08/11/15
|
|
08/11/15
|
|
|
92,500
|
|
|
|
1.15
|
|
|
|
77,210
|
|
|
08/11/20
|
|
Bill
White
|
|
02/24/16
|
|
02/24/16
|
|
|
45,440
|
|
|
|
1.01
|
|
|
|
33,553
|
|
|
02/24/21
|
|
Bill
White
|
|
05/19/16
|
|
05/19/16
|
|
|
8,899
|
|
|
|
1.86
|
|
|
|
16,552
|
|
|
|
(4)
|
Bill
White
|
|
05/20/15
|
|
05/20/15
|
|
|
18,970
|
|
|
|
1.42
|
|
|
|
20,000
|
|
|
05/20/20
|
|
Bill
White
|
|
08/11/15
|
|
08/11/15
|
|
|
391,875
|
|
|
|
1.15
|
|
|
|
327,098
|
|
|
08/11/20
|
|
William
H. Roof
|
|
02/24/16
|
|
02/24/16
|
|
|
55,697
|
|
|
|
1.01
|
|
|
|
41,127
|
|
|
02/24/21
|
|
William
H. Roof
|
|
05/19/16
|
|
05/19/16
|
|
|
10,907
|
|
|
|
1.86
|
|
|
|
20,287
|
|
|
|
(4)
|
William
H. Roof
|
|
06/15/15
|
|
06/15/15
|
|
|
34,391
|
|
|
|
1.47
|
|
|
|
37,500
|
|
|
06/15/20
|
|
William
H. Roof
|
|
08/11/15
|
|
08/11/15
|
|
|
513,750
|
|
|
|
1.15
|
|
|
|
428,827
|
|
|
08/11/20
|
|
Robert
N. Williamsen
|
|
02/24/16
|
|
02/24/16
|
|
|
50,127
|
|
|
|
1.01
|
|
|
|
37,014
|
|
|
02/24/21
|
|
Robert
N. Williamsen
|
|
05/19/16
|
|
05/19/16
|
|
|
9,817
|
|
|
|
1.86
|
|
|
|
18,260
|
|
|
|
(8)
|
Robert
N. Williamsen
|
|
06/15/15
|
|
06/15/15
|
|
|
50,000
|
|
|
|
1.47
|
|
|
|
54,585
|
|
|
06/15/20
|
|
Robert
N. Williamsen
|
|
08/11/15
|
|
08/11/15
|
|
|
295,000
|
|
|
|
1.15
|
|
|
|
246,237
|
|
|
08/11/20
|
|
Emil
R. Bedard
|
|
01/22/15
|
|
01/22/15
|
|
|
5,208
|
|
|
|
1.44
|
|
|
|
7,500
|
|
|
|
(3)
|
Emil
R. Bedard
|
|
03/31/15
|
|
03/31/15
|
|
|
4,808
|
|
|
|
1.56
|
|
|
|
7,500
|
|
|
|
(3)
|
Emil
R. Bedard
|
|
06/30/15
|
|
06/30/15
|
|
|
2,174
|
|
|
|
1.38
|
|
|
|
3,000
|
|
|
|
(3)
|
Emil
R. Bedard
|
|
08/11/15
|
|
08/11/15
|
|
|
50,000
|
|
|
|
1.15
|
|
|
|
41,735
|
|
|
08/11/20
|
(11)
|
Emil
R. Bedard
|
|
09/30/15
|
|
09/30/15
|
|
|
2,222
|
|
|
|
0.90
|
|
|
|
2,000
|
|
|
|
(3)
|
Emil
R. Bedard
|
|
12/31/15
|
|
12/31/15
|
|
|
2,727
|
|
|
|
1.10
|
|
|
|
3,000
|
|
|
|
(5)
|
Jack
A. Davis
|
|
03/31/16
|
|
03/31/16
|
|
|
2,343
|
|
|
|
1.60
|
|
|
|
3,750
|
|
|
|
(12)
|
Jack
A. Davis
|
|
06/30/16
|
|
06/30/16
|
|
|
5,435
|
|
|
|
1.38
|
|
|
|
7,500
|
|
|
|
(13)
|
Jack
A. Davis
|
|
09/30/16
|
|
09/30/16
|
|
|
4,361
|
|
|
|
1.72
|
|
|
|
7,500
|
|
|
|
(14)
|
Jack
A. Davis
|
|
01/22/15
|
|
01/22/15
|
|
|
5,208
|
|
|
|
1.44
|
|
|
|
7,500
|
|
|
|
(2)
|
Jack
A. Davis
|
|
03/31/15
|
|
03/31/15
|
|
|
4,808
|
|
|
|
1.56
|
|
|
|
7,500
|
|
|
|
(6)
|
Jack
A. Davis
|
|
06/30/15
|
|
06/30/15
|
|
|
5,435
|
|
|
|
1.38
|
|
|
|
7,500
|
|
|
|
(7)
|
Jack
A. Davis
|
|
08/11/15
|
|
08/11/15
|
|
|
50,000
|
|
|
|
1.15
|
|
|
|
41,735
|
|
|
08/11/20
|
(11)
|
Jack
A. Davis
|
|
09/30/15
|
|
09/30/15
|
|
|
4,166
|
|
|
|
0.90
|
|
|
|
3,750
|
|
|
|
(9)
|
Jack
A. Davis
|
|
12/31/15
|
|
12/31/15
|
|
|
3,409
|
|
|
|
1.10
|
|
|
|
3,750
|
|
|
|
(10)
|
William
P. Georges
|
|
03/31/16
|
|
03/31/16
|
|
|
1,875
|
|
|
|
1.60
|
|
|
|
3,000
|
|
|
|
(12)
|
William
P. Georges
|
|
09/30/16
|
|
09/30/16
|
|
|
581
|
|
|
|
1.72
|
|
|
|
1,000
|
|
|
|
(14)
|
William
P. Georges
|
|
12/30/16
|
|
12/30/16
|
|
|
364
|
|
|
|
2.75
|
|
|
|
1,000
|
|
|
|
(15)
|
William
P. Georges
|
|
01/22/15
|
|
01/22/15
|
|
|
5,208
|
|
|
|
1.44
|
|
|
|
7,500
|
|
|
|
(2)
|
William
P. Georges
|
|
03/31/15
|
|
03/31/15
|
|
|
4,808
|
|
|
|
1.56
|
|
|
|
7,500
|
|
|
|
(6)
|
William
P. Georges
|
|
06/30/15
|
|
06/30/15
|
|
|
2,174
|
|
|
|
1.38
|
|
|
|
3,000
|
|
|
|
(7)
|
William
P. Georges
|
|
08/11/15
|
|
08/11/15
|
|
|
50,000
|
|
|
|
1.15
|
|
|
|
41,735
|
|
|
08/11/20
|
(11)
|
William
P. Georges
|
|
09/30/15
|
|
09/30/15
|
|
|
3,333
|
|
|
|
0.90
|
|
|
|
3,000
|
|
|
|
(9)
|
William
P. Georges
|
|
12/31/15
|
|
12/31/15
|
|
|
2,727
|
|
|
|
1.10
|
|
|
|
3,000
|
|
|
|
(10)
|
Michael
D. Malone
|
|
09/30/16
|
|
09/30/16
|
|
|
2,907
|
|
|
|
1.72
|
|
|
|
5,000
|
|
|
|
(14)
|
Michael
D. Malone
|
|
01/22/15
|
|
01/22/15
|
|
|
6,944
|
|
|
|
1.44
|
|
|
|
10,000
|
|
|
|
(3)
|
Michael
D. Malone
|
|
03/31/15
|
|
03/31/15
|
|
|
6,410
|
|
|
|
1.56
|
|
|
|
10,000
|
|
|
|
(3)
|
Michael
D. Malone
|
|
06/30/15
|
|
06/30/15
|
|
|
3,623
|
|
|
|
1.38
|
|
|
|
5,000
|
|
|
|
(3)
|
Michael
D. Malone
|
|
08/11/15
|
|
08/11/15
|
|
|
50,000
|
|
|
|
1.15
|
|
|
|
41,735
|
|
|
08/11/20
|
(11)
|
Michael
D. Malone
|
|
09/30/15
|
|
09/30/15
|
|
|
5,555
|
|
|
|
0.90
|
|
|
|
5,000
|
|
|
|
(3)
|
Guy
L. Smith
|
|
03/31/16
|
|
03/31/16
|
|
|
9,375
|
|
|
|
1.60
|
|
|
|
15,000
|
|
|
|
(12)
|
Guy
L. Smith
|
|
06/30/16
|
|
06/30/16
|
|
|
10,869
|
|
|
|
1.38
|
|
|
|
15,000
|
|
|
|
(13)
|
Guy
L. Smith
|
|
09/30/16
|
|
09/30/16
|
|
|
8,721
|
|
|
|
1.72
|
|
|
|
15,000
|
|
|
|
(14)
|
Guy
L. Smith
|
|
12/30/16
|
|
12/30/16
|
|
|
5,454
|
|
|
|
2.75
|
|
|
|
15,000
|
|
|
|
(15)
|
Guy
L. Smith
|
|
06/30/15
|
|
06/30/15
|
|
|
10,870
|
|
|
|
1.38
|
|
|
|
15,000
|
|
|
|
(7)
|
Guy
L. Smith
|
|
01/22/15
|
|
01/22/15
|
|
|
13,788
|
|
|
|
1.44
|
|
|
|
14,753
|
|
|
01/22/20
|
|
Guy
L. Smith
|
|
03/31/15
|
|
03/31/15
|
|
|
10,638
|
|
|
|
1.56
|
|
|
|
12,340
|
|
|
03/31/20
|
|
Guy
L. Smith
|
|
08/11/15
|
|
08/11/15
|
|
|
50,000
|
|
|
|
1.15
|
|
|
|
41,735
|
|
|
08/11/20
|
(11)
|
Guy
L. Smith
|
|
09/30/15
|
|
09/30/15
|
|
|
16,666
|
|
|
|
0.90
|
|
|
|
15,000
|
|
|
|
(9)
|
Guy
L. Smith
|
|
12/31/15
|
|
12/31/15
|
|
|
13,636
|
|
|
|
1.10
|
|
|
|
15,000
|
|
|
|
(10)
|
(1)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718.
|
|
|
(2)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued January 31, 2015.
|
|
|
(3)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued January 31, 2016.
|
|
|
(4)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718.
|
|
|
(5)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares shall vest and shares
of stock shall be issued January 31, 2017.
|
|
|
(6)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued March 31, 2015.
|
|
|
(7)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued June 30, 2015.
|
|
|
(8)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued August 29, 2016.
|
(9)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued September 30, 2015.
|
|
|
(10)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued December 31, 2015.
|
|
|
(11)
|
Options
fully vested August 11, 2016.
|
|
|
(12)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued March 31, 2016.
|
|
|
(13)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued June 30, 2016.
|
|
|
(14)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued September 30, 2016.
|
|
|
(15)
|
The
grant fair value of each equity award has been computed in accordance with ASC 718. Restricted shares vested and shares of
stock were issued December 30, 2016.
|
The
following table summarizes unexercised options as of year-end December 31, 2016 for the named executive officers:
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END TABLE
|
|
No.
of Securities
Underlying
Unexercised
Options/Warrants
|
|
|
Option
Exercise
|
|
|
Option
Expiration
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
($)
|
|
|
Date
|
Russell
T. Embry
|
|
|
2,344
|
|
|
|
781
|
(1)
|
|
|
3.12
|
|
|
03/28/18
|
Russell
T. Embry
|
|
|
18,970
|
|
|
|
—
|
|
|
|
1.42
|
|
|
05/20/20
|
Russell
T. Embry
|
|
|
46,250
|
|
|
|
46,250
|
(2)
|
|
|
1.15
|
|
|
08/11/20
|
Russell
T. Embry
|
|
|
22,279
|
|
|
|
—
|
|
|
|
1.01
|
|
|
02/24/21
|
Bill
White
|
|
|
2,344
|
|
|
|
781
|
(1)
|
|
|
3.12
|
|
|
03/28/18
|
Bill
White
|
|
|
18,970
|
|
|
|
—
|
|
|
|
1.42
|
|
|
05/20/20
|
Bill
White
|
|
|
195,938
|
|
|
|
195,937
|
(2)
|
|
|
1.15
|
|
|
08/11/20
|
Bill
White
|
|
|
45,440
|
|
|
|
—
|
|
|
|
1.01
|
|
|
02/24/21
|
William
H. Roof
|
|
|
8,125
|
|
|
|
8,125
|
(1)
|
|
|
5.68
|
|
|
08/11/19
|
William
H. Roof
|
|
|
30,000
|
|
|
|
30,000
|
(1)
|
|
|
4.04
|
|
|
10/01/19
|
William
H. Roof
|
|
|
34,391
|
|
|
|
—
|
|
|
|
1.47
|
|
|
06/15/20
|
William
H. Roof
|
|
|
256,875
|
|
|
|
256,875
|
(2)
|
|
|
1.15
|
|
|
08/11/20
|
William
H. Roof
|
|
|
55,697
|
|
|
|
—
|
|
|
|
1.01
|
|
|
02/24/21
|
(1)
|
These
shares shall vest at a rate of 25% per year beginning on the first anniversary of the date of grant.
|
|
|
(2)
|
These
shares shall vest at a rate of 25% per year beginning on the date of grant.
|
OPTION
EXERCISES AND STOCK VESTED TABLE
|
|
Stock
Options
|
|
Stock
Awards
|
Name
|
|
No.
of Shares Acquired Upon Exercise (#)
|
|
|
Value
Received Upon Exercise ($)
(1)
|
|
|
No.
of Shares Acquired Upon Vesting (#)
|
|
|
Value
Received Upon Vesting
($)
(2)
|
|
Robert
N. Williamsen
|
|
|
345,127
|
|
|
|
110,556
|
|
|
|
9,817
|
|
|
|
18,260
|
|
(1)
|
Represents
the difference between the market price of the underlying shares of the Company’s
common stock on the date of exercise and the exercise price of the options.
|
(2)
|
Represents
the aggregate market value of shares on the vesting date.
|
No
other officers named in the Summary Compensation Table exercised stock options or received shares from vested or unrestricted
awards during fiscal year 2016.
Equity
Compensation Plan Information
Plan
category
|
|
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 issuance under equity compensation plans (excluding securities reflected in column
(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity
compensation plans approved by security holders
(1)
|
|
|
1,698,134
|
|
|
$
|
1.41
|
|
|
|
900,013
|
|
Equity compensation plans not approved
by security holders
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Total
|
|
|
1,698,134
|
|
|
$
|
1.41
|
|
|
|
900,013
|
|
|
(1)
|
Represents
1,529,872 options and 32,714 restricted stock units under the 2015 Omnibus Incentive Plan, 134,298 options under the 2006
Equity Incentive Plan and 1,250 options under the 2003 Stock Option Plan.
|
Pension
Benefits
The
Company does not sponsor any qualified or non-qualified defined benefit plans.
Non-qualified
Deferred Compensation
Intellicheck
Mobilisa does not maintain any non-qualified defined contribution or deferred compensation plans. The Compensation Committee,
which is comprised solely of “outside directors” as defined for purposes of Section 162(m) of the Code, may elect
to provide Intellicheck Mobilisa’s officers and other employees with non-qualified defined contribution or deferred compensation
benefits if the Compensation Committee determines that doing so is in the company’s best interests. Intellicheck Mobilisa
sponsors a tax qualified defined contribution 401(k) plan in which Mr. Embry, Dr. Roof and Mr. Williamsen participated in during
2016. Intellicheck Mobilisa made a matching contribution to the plan equal to 50% of the first 6% an employee contributes into
the plan.
Compensation
of Directors
The
table below sets forth certain information concerning compensation of Intellicheck Mobilisa’s directors who served in 2016.
Name
and Principal Position
|
|
Fees
Paid in Cash ($)
|
|
|
Option
Awards ($)
(1)
|
|
|
Stock
Awards ($)
(1)
|
|
|
All
Other Compensation ($)
(2)
|
|
|
Total
($)
|
|
Michael
D. Malone, Chairman
|
|
|
75,000
|
|
|
|
—
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
80,000
|
|
General
Emil Bedard, Director
|
|
|
60,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
60,000
|
|
Jack
A. Davis, Director
|
|
|
41,250
|
|
|
|
—
|
|
|
|
18,750
|
|
|
|
—
|
|
|
|
60,000
|
|
William
P, Georges, Director
|
|
|
55,000
|
|
|
|
—
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
60,000
|
|
Guy
L. Smith, Director
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
60,000
|
|
|
|
—
|
|
|
|
60,000
|
|
(1)
|
The
amounts reported in the “Option Awards” and “Stock Awards” columns reflect the aggregate grant date
fair value of awards computed in accordance with FASB ASC Topic 718. See Note 10 of the Notes to Consolidated Financial Statements
in our Annual Report on Form 10-K, filed in this report, for information regarding assumptions underlying the valuation of
equity awards.
|
|
|
(2)
|
No
other compensation, including perquisites more than $10,000, was paid to any of the directors.
|
|
|
(3)
|
As
of December 31, 2016, Mr. Smith had aggregate outstanding options to purchase 101,798 shares of common stock.
|
The
Company reimburses directors for reasonable out-of-pocket expenses incurred in connection with attendance at board meetings.
CERTAIN
RELATED PARTY TRANSACTIONS
The
Corporate Governance and Nominating Committee reviews transactions with firms associated with directors and nominees for director.
Intellicheck Mobilisa’s management also monitors such transactions on an ongoing basis. Executive officers and directors
are governed by Intellicheck Mobilisa’s Code of Business Conduct and Ethics, which provides that waivers may only be granted
by the Board of Directors and must be promptly disclosed to stockholders. No such waivers were granted nor applied for in 2016.
Intellicheck Mobilisa’s Corporate Governance Guidelines require that all directors recuse themselves from any discussion
or decision affecting their personal, business or professional interests.
On
September 30, 2014, the CEO and a Senior Vice President (collectively, the “Executives”), who were also board members,
retired from the Company and simultaneously resigned from the board of directors. In connection with the separation, the Company
entered into a separation/non-compete consulting agreement with the Executives. Included as part of the arrangement, the Company
committed to payments totaling $587,500 to be made over a period of 15 months. In exchange for the consideration, the Executives
agreed not to compete with the Company, solicit any employee, contractor or consultant of the Company to terminate employment
or contractual relationship with the Company, as well refrain from other activities, as defined in the agreement. There is a renewal
option contained in each agreement, which must be mutually agreed to, for an additional nine-month period commencing on January
1, 2016 in exchange for aggregate monthly payments of $27,500. The renewal was not extended by the parties.
The Company’s
subsidiary Mobilisa, Inc. entered into a 10-year lease for the office space ending in 2017. Mobilisa leases office space from
Eagle Coast, LLC, an entity that is wholly-owned by Dr. Nelson Ludlow, our former Chief Executive Officer and former director,
and Mrs. Bonnie Ludlow, our former Senior Vice President and director. On February 24, 2016, the Mobilisa and Eagle Coast entered
into a lease amendment agreement reducing the space under this lease that took effect on March 31, 2016 thereby closing the office
facility and occupied storage space that expired on December 31, 2016. As a result of this amended agreement, we made a $100,000
termination payment to Eagle Coast in full satisfaction of our remaining obligations under the original lease. For the years ended
December 31, 2016 and 2015, total rent payments for this facility was $124,001 (including this termination payment) and $94,783,
respectively.
On
February 24, 2016, the Company, entered into a Stock Repurchase Agreement (the “Agreement”) with Nelson Ludlow and
Bonnie Ludlow. Pursuant to the Agreement, the Company agreed to repurchase 979,114 shares of the common stock of the Company jointly-owned
by Nelson Ludlow and Bonnie Ludlow (“Shares”) at a price of $1.12 per share. The transaction closed on March 4, 2016.
Proposal
No. 2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The
Audit Committee of our board of directors has appointed EisnerAmper LLP to serve as the Company’s independent registered
public accounting firm for the fiscal year ending December 31, 2017.
The
Board of Directors recommends that you vote to ratify such appointment.
Representatives
of EisnerAmper, LLP are expected to be present at the annual meeting of stockholders with the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate questions.
For
the fiscal years ended December 31, 2016 and 2015, Intellicheck Mobilisa’s principal independent auditor was EisnerAmper,
LLP, the services of which were provided in the following categories and amount:
Audit
Fees
The
aggregate fees billed by EisnerAmper, LLP for professional services rendered for the audit of Intellicheck Mobilisa’s annual
financial statements for the fiscal year ended December 31, 2016, and for the reviews of the financial statements included in
the Company’s Quarterly Reports on Form 10-Q for such fiscal year were $155,000.
The
aggregate fees billed by EisnerAmper, LLP for professional services rendered for the audit of Intellicheck Mobilisa’s annual
financial statements for the fiscal year ended December 31, 2015, and for the reviews of the financial statements included in
the Company’s Quarterly Reports on Form 10-Q for such fiscal year were $150,000. Overages related to the 2014 audit, billed
in 2015, amounted to a total of $20,000.
Audit-Related
Fees
Other
than the fees described under the caption “Audit Fees” above, EisnerAmper, LLP did not bill any fees for services
rendered to Intellicheck Mobilisa during the fiscal years ended December 31, 2016 or 2015 for assurance and related services in
connection with the audit or review of the company’s financial statements.
Tax
Fees
EisnerAmper,
LLP billed Intellicheck Mobilisa $20,000 and $55,000, respectively, for tax related services for the fiscal years ended December
31, 2016 and 2015.
All
Other Fees
For
the fiscal year ended December 31, 2016, EisnerAmper, LLP billed $30,000 related to the Company’s filing of its Prospectus
Supplement in June 2016, $2,500 related to the Company’s filing of its Form S-8 in May 2016 and $4,000 related to the Company’s
Shelf Registration in October 2016.
For
the fiscal year ended December 31, 2015, EisnerAmper, LLP billed approximately $37,000 related to the Company’s filing of
its prospectus supplement in January 2015 and $2,000 related to the Company’s filing of its Form S-8 in May 2015.
There
were no other fees billed by EisnerAmper, LLP in 2016 and 2015.
Pre-approval
of Services
The
Audit Committee pre-approves all services, including both audit and non-audit services, provided by Intellicheck Mobilisa’s
independent registered public accounting firm. For audit services, each year the independent auditor provides the Audit Committee
with an engagement letter outlining the scope of proposed audit services to be performed during the year, which must be formally
accepted by the Committee before the audit commences. The independent auditor also submits an audit services fee proposal, which
also must be approved by the Committee before the audit commences.
Proposal
No. 3
CHANGE
OF COMPANY NAME FROM INTELLICHECK MOBILISA, INC.
TO
INTELLICHECK, INC.
The
Board of Directors is seeking approval of an amendment to our certificate of incorporation to change the name of the Company from
“Intellicheck Mobilisa, Inc.” to “Intellicheck, Inc.’. If this proposal is approved by the Stockholders,
the name change will be effected by filing the amendment to the Company’s Certificate of Incorporation with the Secretary
of State of Delaware. Upon effecting the name change, the Company will not change its trading symbol on the NYSE MKT and the Company’s
common stock will continue to trade on the NYSE MKT.
A
copy of the proposed amendment to the Company’s Certificate of Incorporation is attached as Annex A to this Proxy Statement.
The
Board of Directors determined that it would be in the Company’s best interest to change the Company’s name as it has
focused its sales and marketing around the “Intellicheck” name and logo and that several of the historic lines of
business of the Company affiliated with Mobilisa are no longer the Company’s future focus. The Board of Directors together
with management believes that the proposed name change would allow us to better represent our business strategy to the Company’s
customers and the investment community.
Vote
Required.
The affirmative vote of a majority of the votes cast with respect to this proposal by the holders the Company’s
common stock is required to amend the Company’s Certificate of Incorporation to change the name of the Company as described
herein.
The
Board of Directors recommends a vote “FOR” the proposal to authorize the Board of Directors to amend the Company’s
certificate of incorporation to change the name of the Company from “Intellicheck Mobilisa, Inc.” to “Intellicheck,
Inc.”
Proposal
No. 4
SAY ON PAY – ADVISORY VOTE TO APPROVE THE COMPENSATION OF
OUR
NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT
UNDER
“EXECUTIVE COMPENSATION”
The
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) provides stockholders with
the opportunity to vote, on an advisory basis, to approve the compensation of Intellicheck Mobilisa’s compensation policies.
The Board of Directors believes that Intellicheck Mobilisa’s compensation policies and procedures are aligned with the long-term
interests of stockholders. As described in detail under the Executive Compensation discussion section of this proxy statement,
we believe that our compensation program is designed to support our long-term business strategies and creation of stockholder
value by emphasizing long-term alignment with our stockholders and pay-for-performance. You are encouraged to read the Executive
Compensation and analysis discussion section of this proxy statement for additional details on our executive compensation, including
our philosophy and objectives and the 2016 compensation of our named executive officers. This non-binding advisory “say-on-pay”
vote gives you as a stockholder the opportunity to endorse our executive compensation program through the following resolution:
“RESOLVED,
that the compensation paid to the Company’s named executive officers as disclosed pursuant to Item 402 of Regulation S-K,
including the Executive Compensation discussion, compensation tables and narrative discussion is hereby APPROVED.”
As
an advisory vote, this proposal is non-binding. However, the Board of Directors and the Compensation Committee value the opinions
of stockholders and will consider the outcome of the vote when making future compensation decisions for the named executive officers.
Our
Board of Directors recommends a vote “FOR” the advisory approval of the compensation of our named executive officers
as disclosed in this proxy statement under the heading “Executive Compensation.”
Vote
Required
Non-binding,
advisory approval of the advisory proposal on the compensation of our named executive officers as disclosed in this proxy statement
under “Executive Compensation” requires the affirmative vote of a majority of the shares of Intellicheck Mobilisa
common stock present in person or represented by proxy at the annual meeting. Abstentions will have the same effect as votes “AGAINST”
this proposal, whereas “broker non-votes” will not be counted for purposes of determining whether this advisory proposal
has been approved.
OTHER
MATTERS
The
Board of Directors does not know of any matters other than those mentioned above to be presented at the meeting. However, if other
matters properly come before the meeting, the individual named in the accompanying proxy shall vote on such matters in accordance
with his best judgment.
ANNUAL
REPORT
Our
annual report to stockholders concerning our operations during the fiscal year ended December 31, 2016, including audited financial
statements, has been distributed to all record holders as of the record date. The annual report is not incorporated in the proxy
statement and is not to be considered a part of the soliciting material.
UPON
WRITTEN REQUEST, WE WILL PROVIDE, WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 2016, TO EACH SHAREHOLDER OF RECORD OR TO EACH SHAREHOLDER WHO OWNED OUR COMMON STOCK LISTED IN THE NAME OF A BANK OR BROKER,
AS NOMINEE, AT THE CLOSE OF BUSINESS ON MARCH 6, 2017. ANY REQUEST BY A SHAREHOLDER FOR OUR ANNUAL REPORT ON FORM 10-K SHOULD
BE SENT TO INVESTOR RELATIONS AT INTELLICHECK MOBILISA, INC., 100 JERICHO QUADRANGLE, SUITE 202, JERICHO, NY 11753.
REQUIREMENTS
FOR SHAREHOLDER PROPOSALS TO BE BROUGHT BEFORE THE 2018 ANNUAL MEETING OF STOCKHOLDERS
Stockholders’
proposals intended to be presented at next year’s Annual Meeting of Stockholders must be submitted in writing to INVESTOR
RELATIONS at INTELLICHECK MOBILISA, INC., 100 JERICHO QUADRANGLE, SUITE 202, JERICHO, NY 11753, no later than January 5, 2018
for inclusion in the Company’s proxy statement and form of proxy for that meeting. In addition, all proposals will need
to comply with Rule 14a-8 of the Exchange Act, which lists the requirements for the inclusion of shareholder proposals in Company-sponsored
proxy materials.
Notice
of any director nomination or other proposal stockholders intend to present at the 2018 Annual Meeting of Stockholders, but do
not intend to have included in the proxy statement and form of proxy relating to the 2018 Annual Meeting of Stockholders, must
be delivered to the Company’s INVESTOR RELATIONS at INTELLICHECK MOBILISA, INC., 100 JERICHO QUADRANGLE, SUITE 202, JERICHO,
NY 11753 not later than the close of business on March 1, 2018.
The
proxy solicited by the Company for the 2018 Annual Meeting of Stockholders will confer discretionary authority on the Company’s
proxies to vote on any proposal presented by a shareholder at that meeting for which the Company has not been provided with notice
on or prior to March 1, 2018.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and special reports, proxy statements and other information with the SEC. Stockholders may read and copy
any reports, statements or other information that we file at the SEC’s public reference room in Washington, D.C. Please
call the SEC at 1-800-SEC-0330 for further information about the public reference room. Our public filings are also available
from commercial document retrieval services and at the SEC’s website located at
http://www.sec.gov
.
STOCKHOLDERS
SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE THEIR SHARES AT THE
ANNUAL MEETING. NO ONE HAS BEEN AUTHORIZED TO PROVIDE ANY INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT.
THIS PROXY STATEMENT IS DATED APRIL 11, 2017. STOCKHOLDERS SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT
IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE.
|
By
Order of the Board of Directors,
|
|
|
|
/s/
Bill White
|
|
Bill
White
|
|
Chief
Financial Officer, Treasurer and Secretary
|
ANNEX
A
CERTIFICATE
OF AMENDMENT
OF
CERTIFICATE
OF INCORPORATION
OF
INTELLICHECK
MOBILISA, INC.
Intellicheck
Mobilisa, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware does hereby certify:
1. That
at a meeting of the Board of Directors of Intellicheck Mobilisa, Inc. (the “Corporation”) resolutions were duly adopted
setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring the amendment to be advisable
and calling the annual meeting of the stockholders of the Corporation for consideration of the amendment. The resolution setting
forth the proposed amendment is as follows:
RESOLVED:
Article FIRST of the Certificate of Incorporation of the Corporation is amended in its entirety and shall read as follows:
The
name of this corporation (hereinafter called the “corporation”) is Intellicheck, Inc.
2. That
pursuant to a resolution of its Board of Directors, the annual meeting of the stockholders of the Corporation was duly called
and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting
the necessary number of shares as required by statute were in favor of the amendment above.
3. That
the amendment was duly adopted in accordance with provisions of Section 242 of the General Corporation Law of the State of Delaware
IN
WITNESS WHEREOF, the following officer of Intellicheck Mobilisa, Inc. has signed this Certificate of Amendment of Certificate
of Incorporation on _________________, 2017.
|
INTELLICHECK
MOBILISA, INC.
|
|
|
|
|
By:
|
|
|
|
Bill
White, Vice President and Secretary
|
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