UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant
to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
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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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x
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Definitive
Proxy Statement
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Definitive Additional
Materials
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Soliciting Material
under §240.14a-12
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BioHiTech Global, Inc.
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s)
Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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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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(3)
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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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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously
with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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80 Red Schoolhouse Road, Suite 101
Chestnut Ridge, NY 10977
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NOTICE OF
2020 ANNUAL MEETING OF STOCKHOLDERS
April 29, 2020
It is my pleasure
to invite you to attend the 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting”) of BioHiTech Global, Inc.
(the “Company”). The meeting will be held on Wednesday, July 23, 2020, at 10:30 a.m. at the offices of McCarter &
English, LLP., Four Gateway Center, 100 Mulberry Street, Newark, NJ 07102. We intend to hold our annual meeting in person, however,
we are actively monitoring the coronavirus (COVID-19) developments and are sensitive to the public health and travel concerns
our shareholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible
or advisable to hold the 2020 Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly
as practicable, which may include holding the meeting solely by means of remote communication. If we are required to take this
step, we will announce the decision to do so in advance, and details on how to participate will be posted on our website and filed
with the Securities and Exchange Commission as additional proxy materials. In any event, we ask that you please complete, date,
sign and return the proxy mailed to you as promptly as possible in order to ensure your representation at the 2020 Annual Meeting.
You may vote over the Internet, as well as by telephone or by mailing a proxy or voting instruction form. Please review the instructions
on each of your voting options described in these proxy materials. At the 2020 Annual Meeting, you will be asked to:
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Proposal 1:
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Elect
the six (6) director nominees listed in the enclosed Proxy Statement dated April 29,
2020, to serve until the Company’s 2021 Annual Meeting of Shareholders or until
their successors are elected or qualified.
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Proposal 2:
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To
conduct an advisory vote on the compensation of the Company’s Named Executive Officers.
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Proposal 3:
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To
conduct an advisory vote on the frequency of future advisory votes on the compensation
of the Company’s Named Executive Officers.
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Proposal 4:
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Ratify
the appointment of Marcum LLP as the independent registered accounting firm for the fiscal
year ending December 31, 2020.
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Proposal 5:
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Consider
and vote upon such other business as may properly come before the Annual Meeting or any
adjournment or postponement thereof.
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REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING, I URGE YOU TO VOTE BY COMPLETING AND RETURNING YOUR PROXY CARD AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. RETURNING YOUR PROXY CARD WILL ENSURE THAT YOUR VOTE IS COUNTED IF YOU
LATER DECIDE NOT TO ATTEND THE ANNUAL MEETING.
It is important that
your shares be represented at the 2020 Annual Meeting, regardless of the number of shares you may hold. Whether or not you
plan to attend, please vote by following the instructions in our proxy statement. This will not prevent you from voting your
shares in person if you are present.
I look forward to joining you on July 23, 2020.
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Sincerely,
/s/ Frank E. Celli
Frank E. Celli
Chairman of the Board
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If you have any questions,
or need any assistance voting your shares, please contact us at (888) 876-9300.
BIOHITECH GLOBAL,
INC.
80 Red Schoolhouse
Road
Chestnut Ridge,
NY 10977
PROXY STATEMENT
ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON
JULY 23, 2020
INTRODUCTION
Proxy Solicitation and General
Information
This Proxy
Statement and the enclosed form of proxy card (the “Proxy Card”) are being furnished to the holders of common stock,
par value $0.0001 per share, of BioHiTech Global, Inc., a Delaware corporation (which is sometimes referred to in this Proxy Statement
as “BioHiTech,” the “Company,” “we,” “our” or “us”), in connection
with the solicitation of proxies by our Board of Directors for use at the Annual Meeting of Stockholders to be held on July 23,
2020, at 10:30 a.m., Eastern Daylight Savings Time, at the offices of McCarter & English, LLP., Four Gateway Center, 100 Mulberry
Street, Newark, NJ 07102 and at any adjournments or postponements thereof (the “Meeting”). This Proxy Statement and
the Proxy Card are first being sent to stockholders on or about May 15, 2020.
At the Meeting,
stockholders will be asked:
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1.
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To elect
the six nominees named in the accompanying Proxy Statement to serve on the Board of Directors
until the next Annual Meeting of Stockholders and until their successors are duly elected
and qualified (Proposal 1); and
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2.
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To conduct
an advisory vote on the compensation of the Company’s Named Executive Officers.
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3.
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To conduct
an advisory vote on the frequency of future advisory votes on the compensation of the
Company’s Named Executive Officers.
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4.
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To ratify
the appointment of Marcum LLP as the Company’s independent registered public accounting
firm for the year ending December 31, 2020 (Proposal 4); and
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5.
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To transact
such other business as may properly come before the Meeting, including to consider any
procedural matters incident to the conduct of the Meeting, such as the postponement of
the Meeting in order to solicit additional proxies to vote in favor of the matters presented
at the Meeting.
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The Board
of Directors has fixed the close of business on April 29, 2020, as the record date for the determination of stockholders entitled
to notice of and to vote at the Meeting. Each such stockholder will be entitled to one vote for each share of common stock held
on all matters to come before the Meeting and may vote in person or by proxy authorized in writing.
Proxies and Voting
Stockholders
are requested to complete, sign, date and promptly return the enclosed Proxy Card in the enclosed envelope. Proxy Cards which
are not revoked will be voted at the Meeting in accordance with instructions contained therein.
If a Proxy
Card is signed and returned without instructions, the shares will be voted FOR the election of each nominee for
director named in this Proxy Statement (Proposal 1), FOR the ratification of the compensation of our Named Executive Officers
as disclosed in this Proxy Statement, FOR the ratification of the frequency of holding future advisory votes on executive
compensation every three years and FOR the ratification of the appointment of Marcum LLP as the Company’s independent
registered public accounting firm for the fiscal year ending December 31, 2020 (Proposal 2).
Voting
Most beneficial
owners whose stock is held in street name do not receive the Proxy Card. Instead, they receive voting instruction forms or proxy
ballots from their bank, broker or other agent. Beneficial owners should follow the instructions on the voter instruction form
or proxy ballot they receive from their bank, broker or other agent.
Our Board
of Directors has selected Frank E. Celli and Brian C. Essman, and each of them, to serve as “Proxyholders” for the
Meeting. Proxy Cards which are not revoked will be voted at the Meeting in accordance with instructions contained therein.
Revocation of Proxy
A stockholder
who so desires may revoke its previously submitted Proxy Card at any time before it is voted at the Meeting by: (i) delivering
written notice to us at BioHiTech Global, Inc., 80 Red Schoolhouse Road, Suite 101, Chestnut Ridge, NY 10977, c/o Robert Joyce,
Secretary; (ii) duly executing and delivering a Proxy Card bearing a later date; or (iii) casting a ballot at the Meeting. Attendance
at the Meeting will not in and of itself constitute a revocation of a proxy.
Voting on Other Matters
The Board
of Directors knows of no other matters that are to be brought before the Meeting other than as set forth in the Notice of Meeting.
If any other matters properly come before the Meeting, the persons named in the enclosed Proxy Card or their substitutes will
vote in accordance with their best judgment on such matters.
Record Date; Shares Outstanding
and Entitled to Vote
Only stockholders
as of the close of business on April 29, 2020 (the “Record Date”), are entitled to notice of and to vote at the Meeting.
As of the Record Date, there were 17,437,288 shares of our common stock outstanding and entitled to vote, with each share entitled
to one vote. See “Beneficial Ownership of Company Common Stock By Directors, Officers and Principal Stockholders”
for information regarding the beneficial ownership of our common stock by our current directors, executive officers and stockholders
known to us to beneficially own five percent (5%) or more of our common stock.
Quorum; Required Votes
The presence
at the Meeting, in person or by duly authorized proxy, of the holders of a majority of the outstanding shares of common stock
entitled to vote constitutes a quorum for this Meeting.
Abstentions
and “broker non-votes” are counted as present for purposes of determining whether a quorum exists. A “broker
non-vote” occurs when a nominee such as a bank, broker or other agent holding shares for a beneficial owner does not vote
on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not
received voting instructions from the beneficial owner.
Under the
rules of various national and regional securities exchanges, nominees have such discretion to vote absent instructions with respect
to certain “routine” matters, such as Proposal 4, the ratification of independent auditors, but not with respect to
matters that are considered “non-routine,” such as the election of directors and increases in shares available under
equity incentive plans. Accordingly, without voting instructions from you, your broker will not be able to vote your shares on
Proposals 1, 2 and 3.
Each share
of BioHiTech common stock entitles the holder to one vote on each matter presented for stockholder action. The affirmative vote
of a plurality of the votes cast in person or represented by proxy at the Meeting is necessary for the election of the six (6)
nominees named in this Proxy Statement (Proposal 1). The affirmative vote of a majority of the shares of common stock present
in person or represented by proxy at the Meeting is necessary for the ratification of the appointment of Marcum LLP as the Company’s
independent registered public accounting firm for the year ending December 31, 2020 (Proposal 2). The affirmative vote of a majority
of the shares of common stock present virtually at the 2020 Annual Meeting or represented by proxy at the 2020 Annual Meeting
is necessary to approve the advisory resolutions on executive compensation (Proposals 2 and 3). Because the vote for Proposals
2 and 3 is advisory in nature and is non-binding, the Board of Directors may exercise its discretion in setting executive compensation.
However, the Board of Directors intends to take into account the voting results on this proposal in making its determination.
Since the
affirmative vote of a plurality of votes cast in person or represented by proxy at the Meeting is required for Proposal 1, abstentions
and “broker non-votes” will have no effect on the outcome of such election. Since the affirmative vote of a majority
of the shares of common stock present in person or represented by proxy at the Meeting is necessary for the approval of Proposals
2, 3 and 4, abstentions will have the same effect as a negative vote, but “broker non-votes” will have no effect on
the outcome of the voting for Proposals 2, 3 and 4.
An inspector
of elections appointed by us will tabulate votes at the Meeting.
Proxy Solicitation; Expenses
BioHiTech
will bear the costs of the solicitation of proxies for the Meeting. Our directors, officers and employees may solicit proxies
from stockholders by mail, telephone, telegram, e-mail, personal interview or otherwise. Such directors, officers and employees
will not receive additional compensation but may be reimbursed for out-of-pocket expenses in connection with such solicitation.
Brokers, nominees, fiduciaries and other custodians have been requested to forward soliciting material to the beneficial owners
of our common stock held of record by them and such parties will be reimbursed for their reasonable expenses.
List of Stockholders
In accordance
with the Delaware General Corporation Law (the “DGCL”), a list of stockholders entitled to vote at the Meeting will
be available at the Meeting and for ten days prior to the Meeting, for any purpose germane to the Meeting, between the hours of
10:00 a.m. and 5:00 p.m., local time, at our offices at 80 Red Schoolhouse Road, Suite 101, Chestnut Ridge, NY 10977.
Voting Confidentiality
Proxy Cards,
ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. This information will not be
disclosed to unrelated third parties except as required by law.
Appraisal Rights
Stockholders
will have no rights of appraisal under the DGCL in connection with the proposals to be considered at the Meeting.
IT IS
DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE STOCKHOLDERS’ INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE,
EVEN IF YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD TO ENSURE THAT YOUR STOCK WILL
BE REPRESENTED. IF YOU ARE PRESENT AT THE MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY CARD AND VOTE IN PERSON BY
GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. YOUR PRESENCE AT THE MEETING WILL NOT AUTOMATICALLY REVOKE YOUR PROXY CARD.
PLEASE RETURN YOUR EXECUTED PROXY CARD PROMPTLY.
BENEFICIAL OWNERSHIP OF COMPANY COMMON
STOCK BY
DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS
The following
table sets forth, as of December 31, 2019, certain information regarding the beneficial ownership of the common stock outstanding
by (i) each person known to us to own or control five percent (5%) or more of our common stock, (ii) each of our current directors
and nominees, (iii) each of our current “Named Executive Officers” (as defined in Item 402(a)(3) of Regulation S-K),
set forth in the summary compensation table and (iv) our current Named Executive Officers and directors and nominees as a group.
Unless otherwise indicated, each person named in the table below has sole voting and investment power with respect to the shares
beneficially owned. Unless otherwise indicated, the address of each person named in the table below is c/o BioHiTech Global, Inc.,
80 Red Schoolhouse Road Chestnut Ridge, NY 10977.
Shareholder(a)
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Beneficial
Ownership(b)
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Percentage
of
Class (c)
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Frank E. Celli(1)
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6,108,676
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28.9
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%
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James D. Chambers(2)
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1,213,951
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6.9
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Tony Fuller(3)
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6,666
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*
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Brian C. Essman(4)
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102,500
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*
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Robert A. Graham(5)
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25,416
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*
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Harriet Hentges(6)
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27,416
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*
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Robert A. Joyce(7)
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457,887
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2.6
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Douglas M. VanOort(8)
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976,207
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5.6
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Officers and Directors as a Group (8 persons)(9)
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7,967,928
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36.9
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Other 5% or Greater Shareholders:
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EntsorgaFin S.p.A.
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1,035,905
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6.0
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Conundrum Capital Partners LLC(10)
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950,791
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5.5
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(a)
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The
address for all officers, directors and beneficial owners is 80 Red Schoolhouse Road,
Suite 101, Chestnut Ridge, NY 10977.
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(b)
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The preferred stock beneficially held by holders is convertible
at various amounts that is available to the holders within 60 days of the date of this
table. Warrants, if any, have also been assumed exercised for purposes of this table.
Options and restricted stock units, to the extent that they are vested or will be vested
within 60 days of this table, are also considered exercised.
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(c)
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Based upon 17,408,955 shares of common stock outstanding
as of December 31, 2019, as adjusted for the conversion of preferred stock and the exercise
of warrants, options and restricted stock units, if any, for the individual or entity
identified.
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(1)
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Shares include 2,391,011 shares held directly, 2,277,778
resulting from the conversion of preferred stock and 1,379,887 resulting from the exercise
of warrants, including those held by immediate family members and family trusts and 60,000
restricted stock units.
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(2)
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Shares include 146,834 shares held directly, 25,416 shares
resulting from options and 90,910 resulting from the exercise of warrants. Shares also
include those held by Conundrum Capital Partners LLC (“CCP”) over which Mr.
Chambers holds shared voting and dispositive power, which are comprised of 914,427 shares
held directly and 36,364 resulting from the exercise of warrants.
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(3)
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Shares include 6,666 stock options.
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(4)
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Shares include 102,500 restricted stock units.
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(5)
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Shares include 25,416 stock options.
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(6)
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Shares include 2,000 shares held directly and 25,416 stock
options.
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(7)
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Shares include 340,690 shares held directly and 36,364 resulting
from the exercise of warrants, including those held by immediate family members and family
trusts, and 80,833 restricted stock units.
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(8)
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Shares include 25,416 stock options. Shares also include
those held by Conundrum Capital Partners LLC (“CCP”) over which Mr. Chambers
holds shared voting and dispositive power, which are comprised of 914,427 shares held
directly and 36,364 resulting from the exercise of warrants.
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(9)
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Includes shares and the result of conversions and exercises
in notes (1) to (8), less the impact of CCP which is presented as an element of Mr. Chambers’
and Mr. VanOort’s holdings due to shared voting and dispositive power.
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(10)
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Shares include 914,427 shares held directly and 36,364 resulting
from the exercise of warrants.
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PROPOSAL 1
ELECTION OF DIRECTORS
Our Bylaws
provide that our Board of Directors will consist of not less than one (1) member, with such number to be fixed by the Board of
Directors or the Shareholders. Our Board of Directors has nominated, upon recommendation from the Nominating Committee, the incumbent
directors Frank E. Celli, James D. Chambers, Tony Fuller, Robert A. Graham, Harriet Hentges and Douglas M. VanOort to be elected
by our Stockholders entitled to vote at the Annual Meeting.
Our directors
are elected annually at the Annual Meeting of Stockholders. Their respective terms of office continue until the next Annual Meeting
of Stockholders and until their successors have been duly elected and qualified in accordance with our Bylaws. There are no family
relationships among any of our directors, nominees for director or executive officers.
Except as
otherwise specified or in the case of broker non-votes, each Proxy Card received will be voted for the election of the six nominees
for director named below to serve until the next Annual Meeting of Stockholders and until their successors shall have been duly
elected and qualified. Each of the nominees named below has consented to be named a nominee in this Proxy Statement and to serve
as a director, if elected. Should any nominee become unable or unwilling to accept a nomination for election, the persons named
in the enclosed Proxy Card will vote for the election of a nominee designated by the Board of Directors or will vote for such
lesser number of directors as may be prescribed by the Board of Directors in accordance with our Bylaws.
When considering
whether directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board
of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the
Board of Directors focused primarily on the information discussed in each of the nominee’s individual biographies set forth
below, which contains information regarding the person’s service as a director, business experience and director positions
held currently or at any time during the last five years.
The age and
principal occupation for the past five years of each person nominated as a director is set forth below:
Name
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Age
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Position
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Frank E. Celli
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49
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Chairman and Chief Executive Officer
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James D. Chambers
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63
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Independent Director
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Tony Fuller
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62
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Director and Chief Administrative Officer
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Robert A. Graham
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60
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Independent Director
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Harriet Hentges
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79
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Independent Director
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Douglas M. VanOort
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64
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Independent Director
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The Company’s
executive officers and directors are elected annually and serve until their term expires.
Frank E. Celli, 49, Chief Executive
Officer, Chairman
Mr. Celli
has over 25 years of waste industry experience. Mr. Celli joined BioHiTech America in 2008. Prior thereto and until 2007, Mr.
Celli was co-founder and Chief Executive Officer of Interstate Waste Services, during which time that company achieved growth
of over $150 million in revenue. During his time at Interstate Waste he was responsible for all aspects of the business including
collection, recycling, landfills and emerging technologies. After selling his interests in Interstate Waste, Mr. Celli transitioned
to BioHiTech. He also served as a director and officer of Entsorga West Virginia (“EVA”) prior to its acquisition
by a Company subsidiary in a step transaction during 2017 and 2018, that is currently operating the first Mechanical Biological
Treatment facilities in the United States to utilize HEBiot technology. Mr. Celli was also the chairman of the board of Apple
Valley Waste Services, Inc., an entity acquired in 2018 by the Gold Medal Group, LLC, which also holds a 40% interest in Refuel
America, LLC, a consolidated subsidiary of the Company. Mr. Celli earned a Bachelors of Science from Pace University’s Lubin
School of Business in 1992.
James D. Chambers, 63, Director
Mr. Chambers
has been involved with BioHiTech since 2008 as an investor, advisor and board member. For the past 15 years, Mr. Chambers has
been a private investor and management consultant. Prior thereto and from January 1997 to September 2000, Mr. Chambers served
as President of Business Services, Senior Vice President of Marketing and Business Development, and Vice President of Administration
of Quest Diagnostics, Inc. Prior thereto and from June 1986 to January 1997, Mr. Chambers served in several executive positions
in the US and abroad at Corning Incorporated. Mr. Chambers Earned his BA at Dickinson College in History and Political Science,
and his MBA in Finance at Southern Methodist University, as well as a Masters in International Management from the Thunderbird
School of International Management. Mr. Chambers has more than 35 years’ experience in diverse industries, functions, and
geographic locations.
Tony Fuller, 62, Chief Administrative
Officer, Director
Mr. Fuller
joined BioHiTech as a Director in February 2017 and effective March 1, 2020 became its Chief Administrative Officer. Prior to
joining the Board, Mr. Fuller spent nearly thirty years as an executive of Wal-Mart Stores, Inc. (“Walmart”) most
recently as Senior Vice President where he served until August 2013. For over 20 years, Mr. Fuller led the teams which provided
both property management and maintenance for Walmart’s global portfolio of properties. During that time, Walmart’s
portfolio grew from under 1,000 stores in 20 states in the United States, to over 10,000 stores in all fifty states, and 23 countries
around the world with capital investment reaching $2 billion per year. Mr. Fuller served as the chairman of the real estate transaction
committee and real estate finance committee. Simultaneously therewith and since 2006, Mr. Fuller has been a member of REAP (Real
Estate Associate Program), an organization opening opportunities for minorities in commercial real estate and from 2006 to 2014,
Mr. Fuller served on its Board.
Mr. Fuller
has served as a member of the Board of Advisors of Global Healthcare Capital, LLC, a leading healthcare investor and asset manager
for opportunities in the US, Europe, Asia and Australia. Mr. Fuller received his BS in Agricultural Economics from Arkansas State
University and his JD from the University of Arkansas.
Robert A. Graham, 60, Director
Mr. Graham
joined BioHiTech as a Director in October 2013. Simultaneously therewith and from 2010 to 2019, Mr. Graham served as Managing
Director of the Management Company of Penn Venture Partners, L.P.
Mr. Graham
has over 25 years of operational and financial executive management experience including extensive experience in the acquisitions
and sales of companies. Prior thereto and from 2008 to 2010, Mr. Graham served as President of RG Consulting, a financial and
management consulting company. Prior thereto and from 2001 to 2008, Mr. Graham served eight years as President and Chief Executive
Officer of Dorland Healthcare Information. He also served as the Executive Vice-President and Chief Financial Officer of Broadreach
Consulting from 1998 to 2000 and was Vice President of Finance and Chief Operating Officer of Legal Communications, Ltd. from
1989 to 1998. He started his career in the finance department of Transport International Pool where he held various financial
positions, the final of which was as Assistant Controller before he left in 1988. He received his Masters of Business Administration
with a concentration in Finance from Saint Joseph’s University and a B.A. from LaSalle University.
Harriet Hentges, 79, Director
Ms. Hentges
joined BioHiTech as Director in August 2015. She simultaneously serves as the president of Hentges Associates, an advisory firm
to the consumer goods, retail and tourism industries. Prior to starting Hentges Associates in 2014, she was a principal in Hentges
Kahn & Strauss (HKS) LLC, a consulting practice for food producers, manufactures and grocery retailers aimed at fostering
a more sustainable food system. Ms. Hentges has held key posts in strategy development and implementation at Sears Roebuck, Wal-Mart
and Ahold USA. She was part of the initial sustainability team at Walmart and directed the U.S. sustainability strategy for Ahold
USA, a subsidiary of the Ahold of the Netherlands.+
Ms. Hentges
received a doctorate in International Economics from Johns Hopkins University and is an adjunct professor at Georgetown University,
teaching a graduate course in corporate responsibility and sustainability.
Douglas M. VanOort, 64, Director
Mr. VanOort
joined the Board of Directors of BioHiTech in August 2015. Simultaneously therewith, and since 2009 Mr. VanOort has served as
the Chairman and Chief Executive Officer of NeoGenomics. From 1982 to 1995, Mr. VanOort served in various positions at Corning
Incorporated an ultimately held the position of Executive Vice President and CFO of Corning Life Sciences, Inc. In 1995, Corning
Incorporated spun off Corning Life Sciences, Inc. into two companies, Quest Diagnostics and Covance, Inc. Mr. VanOort serves as
a member of the board of directors of several privately held companies. In addition, since 2000, Mr. VanOort is the Co-Owner of
Vision Ace Hardware, LLC, a retail hardware chain. Mr. VanOort is a graduate of Bentley University.
The affirmative
vote of a plurality of the votes cast in person or by proxy at the Meeting is necessary for the election as directors of the six
(6) nominees named in this Proxy Statement (assuming a quorum of a majority of the outstanding shares of common stock is present).
THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR
EACH OF THE ABOVE-NAMED
DIRECTOR NOMINEES.
GOVERNANCE OF
THE COMPANY
Corporate Governance
Our Board
of Directors is committed to sound and effective corporate governance practices. The Company maintains formal corporate governance
standards. The Company has reviewed internally and with the Board of Directors the provisions of the Sarbanes-Oxley Act of 2002
(the “Sarbanes-Oxley Act”), the rules of the SEC and the Nasdaq’s corporate governance listing standards regarding
corporate governance policies and processes and is in compliance with such rules and listing standards. The Company has adopted
charters for its Audit Committee, Compensation Committee and Nominating and Policies Committee. You can access all of these documents
on: http://investors.biohitechglobal.com/committee-charters on Company’s website, http://www.biohitech.com,
or by writing to us at BioHiTech Global, Inc., 80 Red Schoolhouse Road, Chestnut Ridge, New York 10977, Attention: Secretary.
The Company’s
management and our Board of Directors reviewed our corporate governance practices in light of the Sarbanes-Oxley Act of 2002.
Based on that review, the Board of Directors maintains codes of ethics and conduct, corporate governance guidelines, committee
charters, complaint procedures for accounting and auditing matters and an Audit Committee pre-approval policy.
During fiscal
2019, the Board of Directors held four (4) meetings and acted by unanimous written consent in lieu of a meeting five (5) times.
During fiscal 2019, four of the directors then in office attended 100% of the total number of meetings of the Board of Directors.
One of the directors then in office each was not in attendance one time and at two other meetings of the Board of Directors one
of the directors then in office was not in attendance. The Company does not have a formal policy as to Board of Directors attendance
at our Annual Meetings of Stockholders.
Board Leadership Structure
The Company
believes that board independence is an important aspect of corporate governance and two members of its Board of Directors are
independent. In addition, our independent directors hold periodically scheduled meetings, at which only independent directors
are present. The Board of Directors believes that this leadership structure is appropriate for our Company, given the size and
scope of our business, the experience and active involvement of our independent directors and our corporate governance practices,
which include regular communication with and interaction between and among the Chairman and Chief Executive Officer, Chief Financial
Officer, and the independent directors.
Board Role in Risk Oversight
Management
is responsible for the day-to-day management of risks the Company faces, while the Board of Directors, as a whole and through
its committees, provides risk oversight. In its risk oversight role, the Board of Directors must satisfy itself that the risk
management processes designed and implemented by management are adequate and functioning as designed, including assessing major
risk factors relating to the Company and its performance, and reviewing measures to address and mitigate risks. While the full
Board of Directors is charged with overseeing risk management, various committees of the Board of Directors and members of management
also have responsibilities with respect to our risk oversight. In particular, the Audit Committee plays a large role in monitoring
and assessing our financial, legal and operational risks, and receives regular reports from the management team regarding comprehensive
organizational risk as well as particular areas of concern.
Director Independence
The Board
of Directors has evaluated each of its directors’ independence from BioHiTech based on the definition of “independence”
established by NASDAQ and has determined that Messrs. Chambers, Graham and VanOort, and Ms. Hentges are independent directors.
Effective with Mr. Fuller’s appointment as Chief Administrative officer on March 1, 2020, Mr. Fuller while an independent
director prior thereto, is no longer an independent director. In its review of each director’s independence from the Company,
the Board of Directors reviewed whether any transactions or relationships currently exist or existed during the past year between
each director and the Company and its subsidiaries, affiliates, equity investors or independent registered public accounting firm.
The Board of Directors also examined whether there were any transactions or relationships between each director and members of
the senior management of the Company or their affiliates.
Stockholder Communications
Stockholders
may send communications to our Board of Directors or any committee thereof by writing to the Board of Directors or any committee
thereof at BioHiTech Global, Inc., Attention: Secretary, 80 Red Schoolhouse Road, Suite 101, Chestnut Ridge, NY 10977. The Secretary
will distribute all stockholder communications to the intended recipients and/or distribute to the entire Board of Directors,
as appropriate.
In addition,
stockholders may also contact the non-management directors as a group or any individual director by writing to the non-management
directors or the individual director, as applicable, at BioHiTech Global, Inc., 80 Red Schoolhouse Road, Suite 101, Chestnut Ridge,
NY 10977.
Complaint Procedures
Complaints
and concerns about accounting, internal accounting controls or auditing or related matters pertaining to the Company may be submitted
by writing to the Chairman of the Audit Committee as follows: BioHiTech Global, Inc., Attention: Chairman of the Audit Committee,
80 Red Schoolhouse Road, Suite 101, Chestnut Ridge, NY 10977. Complaints may be submitted on a confidential and anonymous basis
by sending them in a sealed envelope marked “Confidential.”
Code of Ethics
The Company
has adopted a policy statement entitled Code of Ethics that applies to its chief executive officer and senior financial officers
and staff. In the event that an amendment to, or a waiver from, a provision of the Code of Ethics is made or granted, the Company
has posted such information on its web site, www.biohitech.com.
Audit Committee
The Audit
Committee is responsible for the oversight and evaluation of (i) the qualifications, independence and performance of our independent
auditors; (ii) the performance of our internal audit function; and (iii) the quality and integrity of our financial statements
and the effectiveness of our internal control over financial reporting. In addition, the Audit Committee recommends to the Board
of Directors the appointment of independent auditors and analyzes the reports and recommendations of such auditors. The Audit
Committee also assesses major risk factors relating to the Company and its performance, and reviews measures to address and mitigate
financial, legal and operational risks.
Our Audit
Committee is currently comprised of Messrs. Chambers, Graham and VanOort, with Mr. Graham serving as the Chairman. The Board of
Directors has determined that Mr. Graham qualifies as an audit committee financial expert (as such term is defined under the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated thereunder) and that his simultaneous service on the audit committees of
more than two other public companies does not impair his ability to effectively serve on the Company’s Audit Committee.
All of the members of the committee have been determined by the Board of Directors to be independent of the Company based on NASDAQ’s
definition of “independence”.
During fiscal
2019, the Audit Committee held four meetings.
Compensation Committee
The Compensation
Committee reviews recommendations for executive compensation, including incentive compensation and stock incentive plans and makes
recommendations to the Board of Directors concerning levels of compensation of our executive officers and other key managerial
personnel as well as the adoption of incentive and stock plans.
The Compensation
Committee has the authority to retain or obtain advice from, as well as determine the appropriate compensation of, such compensation
consultants, outside counsel and other advisors as the Compensation Committee, in its sole discretion, may deem appropriate.
Our Compensation
Committee is currently comprised of Messrs. Chambers and Graham and Ms. Hentges, with Ms. Hentges serving as the Chairman. All
of the members of the committee have been determined by the Board of Directors to be independent of the Company based on NASDAQ’s
definition of “independence”. The Compensation Committee does not formally meet on a regular basis, but only as circumstances
require.
During fiscal
2019, the Compensation Committee held acted by unanimous written consent in lieu of a meeting one (1) time.
Nominating and Governance Committee
The Nominating
and Governance Committee, which was established during 2017, reviews and evaluates the size, composition, functions and duties
of the Board and establishes the criteria for the selection of candidates to the Board and its committees and makes recommendations
to the Board for director nominees and appointments to committees. The Nominating and Governance Committee also develops and recommends
to the Board the Corporate Governance Guidelines for the Company and oversees compliance with such Guidelines.
The Nominating
and Governance Committee has the authority to retain or obtain advice from, as well as determine the appropriate compensation
of, such compensation consultants, outside counsel and other advisors as the Nominating and Governance Committee, in its sole
discretion, may deem appropriate.
Our Nominating
and Governance Committee is currently comprised of Messrs. Chambers, and Graham and Ms. Hentges, with Mr. Chambers serving as
the Chairman. All of the members of the committee have been determined by the Board of Directors to be independent of the Company
based on NASDAQ’s definition of “independence”. The Compensation Committee does not formally meet on a regular
basis, but only as circumstances require. During fiscal 2019, the Nominating and Governance Committee held no meetings.
COMPENSATION OF DIRECTORS
At this time,
directors receive no cash remuneration for their services as directors of the Company. The Company reimburses directors for expenses
incurred in their service to the Board of Directors. In June 2018 each director was granted stock based compensation as presented
below.
Compensation of Directors for the Each of the Years in the
Three Year Period Ended December 31, 2019
Name
|
|
|
|
Fees
Earned or
Paid in
Cash
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
Non-Equity
Incentive Plan
Compensation
|
|
All Other
Compensation
|
|
Total
|
|
(a)
|
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
(e)
|
|
(g)
|
|
|
(h)
|
|
Frank E. Celli(1)
|
|
2019
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2018
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2017
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
James D. Chambers(3)
|
|
2019
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2018
|
|
-
|
|
|
$73,600
|
|
|
-
|
|
-
|
|
-
|
|
|
$73,600
|
|
|
|
2017
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
Tony Fuller(2)(3)
|
|
2019
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2018
|
|
-
|
|
|
73,600
|
|
|
-
|
|
-
|
|
-
|
|
|
73,600
|
|
|
|
2017
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
--
|
|
Robert A. Graham(3)
|
|
2019
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2018
|
|
-
|
|
|
73,600
|
|
|
-
|
|
-
|
|
-
|
|
|
73,600
|
|
|
|
2017
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
Harriet Hentges(3)
|
|
2019
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2018
|
|
-
|
|
|
73,600
|
|
|
-
|
|
-
|
|
-
|
|
|
73,600
|
|
|
|
2017
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
Douglas VanOort(3)
|
|
2019
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
|
2018
|
|
-
|
|
|
73,600
|
|
|
-
|
|
-
|
|
-
|
|
|
73,600
|
|
|
|
2017
|
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
(1)
|
Mr. Celli is
also the CEO and receives no compensation as a director.
|
|
(2)
|
Mr. Fuller
became a director on February 6, 2017.
|
|
(3)
|
Each of the
Director Chambers, Fuller, Graham, Hentges and VanOort were granted 20,000 restricted
stock units vesting 1/3rd June 6, 2019, 2020 and 2012. The market price of the underlying
common shares on the date of the grants, June 7, 2018 was $3.68 per share.
|
Summary of Executive Compensation Plans
Key Employee Incentive Compensation
The Company
has an incentive compensation plan for certain key employees. The incentive compensation plan provides for annual bonus payments
based upon achievement of certain corporate objectives as determined by the Company’s Board of Directors. During 2019, 2018
and 2017, the Company did not pay any bonus pursuant to the incentive compensation plan, however in 2018 awarded stock based compensation
to certain employees pursuant to the 2017 Executive Equity Incentive and the 2015 Equity Incentive Plans.
2015 Equity Incentive Plan
On August
3, 2015, the Board and a majority of the Company’s shareholders adopted the BioHiTech Global, Inc. 2015 Equity Incentive
Plan (“2015 Plan”). The Company has reserved 750,000 shares of common stock for issuance under the terms of the Company’s
2015 Incentive Plan. The 2015 Plan is intended to promote the interests of the Company by attracting and retaining employees,
including key employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”),
and enabling such Participants to participate in the long-term growth and financial success of the Company. Under the 2015 Plan,
the Company may grant stock options, which are intended to qualify as “incentive stock options” under Section 422
of the Internal Revenue Code of 1986, as amended (the “Incentive Stock Options”), non-qualified stock options (the
“Nonqualified Stock Options”), stock appreciation rights (“SARs”) restricted stock units (“RSUs”)
and restricted stock awards (the “Restricted Stock Awards”), which are restricted shares of common stock (the Incentive
Stock Options, the Nonqualified Stock Options, the SARs, RSUs and the Restricted Stock Awards are collectively referred to as
“Incentive Awards”). Incentive Awards may be granted pursuant to the 2015 Plan for 10 years from the Effective Date.
2017 Executive Equity Incentive Plan
On January
25, 2017 the Board, subject to future shareholder approval, which was granted on June 7, 2017, adopted the BioHiTech Global 2017
Executive Equity Incentive Plan (“2017 Plan”) to encourage and enable selected, eligible Directors and Executive Officers
of the Company and its Affiliates to acquire or to increase their holdings of Common Stock and other equity-based interests in
the Company in order to promote a closer identification of their interests with those of the Company and its shareholders, and
to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants upon whose judgment,
interest and special effort the successful conduct of its operation largely depends. These purposes may be carried out through
the granting of Awards to selected Participants, including the granting of Options in the form of Incentive Stock Options and/or
Nonqualified Options; SARs in the form of Freestanding SARs and/or Related SARs; Restricted Awards in the form of Restricted Stock
Awards and/or Restricted Stock Units; and/or Other Stock-Based Awards. The 2017 Plan allows for the maximum aggregate number of
shares of common stock that may be issued pursuant to awards granted initially shall not exceed 1,000,000 shares.
Compensation Objectives
We believe
that the compensation programs for the Company’s NEOs should reflect the Company’s performance and the value created
for the Company’s stockholders. In addition, the compensation programs should support the short-term and long-term strategic
goals and values of the Company, and should reward individual contributions to the Company’s success. Our compensation plans
are consequently designed to link individual rewards with Company’s performance by applying objective, quantitative factors
including the Company’s own business performance and general economic factors. We also rely upon subjective, qualitative
factors such as technical expertise, leadership and management skills, when structuring executive compensation in a manner consistent
with our compensation philosophy.
Determination of Compensation
The Company’s
executive compensation program for the named executive officers (NEOs) is administered by the Compensation Committee of the Board
of Directors. The Committee makes independent decisions about all aspects of NEO compensation, and takes into account compensation
data and benchmarks for comparable positions and companies in different applicable geographical areas.
Employment Agreements
Effective
October 4, 2013, the Company and Frank E. Celli, its Chief Executive Officer agreed that Mr. Celli would serve as Chief Executive
Officer at an annual salary of $200,000, increased to $300,000 effective March 1, 2016, and would be eligible for participation
in equity incentive plans, when formed, and a discretionary performance bonus. Mr. Celli will also receive customary benefits
including health, life and disability insurance benefits. The agreement was for an initial three-year period that automatically
renews for additional one-year periods.
Effective
March 1, 2020, the Company and Tony Fuller, a Director, agreed that Mr. Fuller would serve as Chief Administrative Officer at
an annual salary initially starting at $50,000 increasing to $150,000 effective July 1, 2020. Mr. Fuller will be eligible for
participation in equity incentive plans and receive customary benefits including health, life and disability insurance benefits.
Effective
October 4, 2013, the Company and Robert Joyce, its Chief Operating Officer agreed that Mr. Joyce would serve as Chief Operating
Officer at an annual salary of $250,000, increased to $265,000 effective March 1, 2016, would be eligible for participation in
equity incentive plans, when formed, and a discretionary performance bonus. Mr. Joyce will also receive customary benefits including
health, life and disability insurance benefits. The agreement was for an initial two-year period that automatically renews for
an additional one-year periods.
Effective
November 2, 2015, the Company and Brian C. Essman, its Chief Financial Officer agreed that Mr. Essman would serve as Chief Financial
Officer at an annual salary of $210,000, a grant of 82,500 restricted shares under the BioHiTech Global, Inc. 2015 Equity Incentive
Plan and be eligible for a performance bonus up to 35% of base annual salary. Mr. Essman will also receive customary benefits
including health, life and disability insurance benefits. The agreement was for an initial two-year period that automatically
renews for one-year periods
Effective
October 7, 2013, the Company and William Kratzer, its Chief Technology Officer agreed that Mr. Kratzer would serve as Chief Technology
Officer at an annual salary of $125,000, increased to $150,000 effective March 1, 2016, and would be eligible for participation
in equity incentive plans, when formed, and a discretionary performance bonus. Mr. Kratzer will also receive customary benefits
including health, life and disability insurance benefits. The agreement was for an initial two-year period that automatically
renews for an additional one-year periods. Effective August 15, 2019 Mr. Kratzer resigned as the full time Chief Technology Officer
and agreed to continue, as needed, on a consultant basis.
EXECUTIVE OFFICERS
The following table sets forth the
name, age and position of each of our executive officers as of the date hereof. Our executive officers are appointed by and serve
at the discretion of the Board of Directors of BioHiTech.
Name
|
Age
|
Position
|
|
|
|
|
|
Frank E. Celli
|
49
|
|
Chairman and Chief Executive Officer
|
Tony Fuller
|
62
|
|
Director and Chief Administrative Officer
|
Robert A. Joyce
|
60
|
|
Chief Operating Officer
|
Brian C. Essman
|
61
|
|
Chief Financial Officer
|
|
|
|
|
|
The Company’s
executive officers are elected biannually and serve until their term expires.
Frank E. Celli, 49, Please see
“Director Biographies” above.
Tony Fuller, 62, Please see “Director
Biographies” above.
Robert A. Joyce, 60, Chief Operating Officer
Mr. Joyce
joined BioHiTech in October 2013 as its Chief Operating Officer. Prior thereto and prior to 1998, Mr. Joyce held technical, sales
and management roles at Sun Microsystems and Arthur D. Little, Inc., Mr. Joyce served as the Chief Executive Officer of Perfect
Order, Inc. a software and services company, from 1998 until it was acquired by Versatile Systems in 2005, for whom Mr. Joyce
went on to serve as President.
Brian C. Essman, 60, Chief Financial Officer
Mr. Essman joined BioHiTech in
November 2015 as its Chief Financial Officer. Prior thereto, from 1997 through 2014, Mr. Essman held various senior executive
management positions with Data Communiqué, Inc. a Havas company where he most recently held the position of Chief Executive
Officer. From 2004 to 2007, Mr. Essman was Data Communiqué’s Chief Operating Officer / Chief Financial Officer and
from 1997 to 2004 was the Chief Financial Officer. Prior thereto, Mr. Essman was the Chief Financial Officer at a Fidelity Investments
Private Equity operating company and a Senior Manager and CPA at PricewaterhouseCoopers.
Mr. Essman graduated with a BS
in Accounting with High Honors from Boston College’s School of Management.
The following
table sets forth all of the compensation awarded to, earned by or paid to (i) each individual serving as the Company’s principal
executive officer during the last three completed fiscal years ending December 31, 2019, 2018 and 2017.
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Option
|
|
All Other
|
|
|
|
Name
and Principal Position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
Awards
|
|
|
Awards
|
|
Compensation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank E. Celli(1)
|
|
2019
|
|
$
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
$
|
300,000
|
|
|
|
2018
|
|
|
300,000
|
|
|
—
|
|
$
|
110,400
|
|
|
—
|
|
—
|
|
|
410,400
|
|
|
|
2017
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
300,000
|
|
Robert A. Joyce(1)
|
|
2019
|
|
|
265,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
265,000
|
|
|
|
2018
|
|
|
265,000
|
|
|
—
|
|
|
414,000
|
|
|
—
|
|
—
|
|
|
679,000
|
|
|
|
2017
|
|
|
265,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
265,000
|
|
Brian C. Essman(2)
|
|
2019
|
|
|
210,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
210,000
|
|
|
|
2018
|
|
|
210,000
|
|
|
—
|
|
|
294,400
|
|
|
—
|
|
—
|
|
|
504,400
|
|
|
|
2017
|
|
|
210,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
210,000
|
|
William M. Kratzer(3)
|
|
2019
|
|
|
93,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
189,082
|
|
|
|
2018
|
|
|
150,000
|
|
|
—
|
|
|
128,800
|
|
|
—
|
|
—
|
|
|
278,800
|
|
|
|
2017
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
150,000
|
|
The following
table sets forth for each named executive officer certain information concerning the outstanding equity awards as of December
31, 2019.
|
|
Equity Incentive
Plan Awards
|
|
Name and Principal Position
|
|
Number of Unearned
Shares, Units or Other Rights that Have Not Vested
|
|
|
Market
Value of Shares, Units or Other Rights that Have Not Vested(a)
|
|
Frank E. Celli(1)
|
|
|
80,000
|
|
|
$
|
136,000
|
|
Robert A. Joyce(1)
|
|
|
162,500
|
|
|
|
276,250
|
|
Brian C. Essman(2)
|
|
|
162,500
|
|
|
|
276,500
|
|
William M. Kratzer(3)(4)
|
|
|
—
|
|
|
|
—
|
|
The following
table sets forth for each named executive officer certain information concerning exercised equity awards during the year ended
December 31, 2019.
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name and Principal Position
|
|
Number of Shares
Acquired on Exercise
|
|
|
Value Realized
|
|
|
Number of Shares
Acquired in Vesting
|
|
|
Value
Realized on Vesting(b)
|
|
Frank E. Celli(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Robert A. Joyce(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
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—
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Brian C. Essman(2)
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—
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—
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—
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—
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William M. Kratzer(3)
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—
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—
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54,166
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$
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95,322
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(1)
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Appointed August
6, 2015. Each of Mr. Celli and Joyce were executive officers, Chief Executive Officer
and Chief Operating Officer, respectively, and owners of BioHiTech America, LLC, the
predecessor company to BioHiTech Global, Inc. and continued in their executive roles
with the Company.
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|
(2)
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Appointed Chief
Financial Officer November 2, 2015.
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(3)
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Appointed Chief
Technology Officer August 6, 2015. Resigned effective August 15, 2019.
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(a)
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Market close of
$1.70 per share as of December 31, 2019.
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|
(b)
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Market price of
$1.76 as of transaction date.
|
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
The Company
currently rents its corporate headquarters and, its warehousing space, from BioHitech Realty LLC, a company partially owned by
Frank E. Celli, our Chief Executive Officer and Chairman, and Michael Franco, a stockholder and employee of the Company. The initial
lease expired on October 31, 2014 and was replaced by an office and a warehouse leases that were executed in July 2015 and expires
in 2020. Each lease contains a renewal option for an additional five-year period. Rent expense under these leases for the years
ended December 31, 2019 and 2018 amounted to $137,145 and $98,148, respectively.
The Company
has an Exclusive License and Distribution Agreement (the “License Agreement”) with BioHiTech International (a company
owned by Chun-Il Koh, a Company stockholder) Chun-Il Koh, Joyce Taeya Koh and Bong Soon Hwang. The License Agreement, originally
executed on May 2, 2007 and as amended, most recently on October 17, 2018, provides the Company exclusive rights to sell, lease,
use, distribute and manufacture the Eco-Safe Digester products through December 31, 2023 in the areas that the Company operates
(unless extended by mutual agreement). Acquisition of digesters and parts, as well as expenses under the distribution agreement
amounted to $79,200 and $222,240 for the years ended December 31, 2019 and 2018, respectively.
On January 25,
2018, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) to acquire 9.2%
of the outstanding membership units (the “Units”) of Gold Medal Group, LLC (“GMG”), which is the owner
of a traditional waste management entity. Pursuant to the Purchase Agreement, the Company acquired the Units from two unrelated
parties in consideration $2,250,000 paid through the issuance of 500,000 shares of the Company’s common stock. During 2018,
the Company’s investment in GMG was diluted from 9.2% to 2.9% due to additional GMG acquisitions and investments, including
the CTA with the Company. As a result of the reduction in the ownership level and accordingly, a reduction in influence, effective
December 14, 2018 the Company changed its prospective accounting for GMG from the equity method to the cost method. During
the year ended December 31, 2018, the initial $2,250,000 investment in GMG was reduced by $562,617 in losses recognized prior
to the change to cost basis accounting. As of December 31, 2019, the Company had no investments in unconsolidated investments
as a result of its July 3, 3019 sale of its investment in Gold Medal Group, LLC (“GMG”), which was comprised
of 2,250,000 GMG Investment Preferred Units and 2,250,000 Class A Common Units, to Gold Medal Equity, LLC (“GME”),
the parent entity to GMG for total compensation of $2,250,000. As of July 3, 2019 these investments were carried by the Company
with an adjusted cost of $1,687,383 resulting in a gain of $562,617 on July 3, 2019, which was recorded as gain on sale of
affiliate investment.
During 2019
and 2018, the Company recognized $975,000 and $1,010,152, respectively in management advisory and project fees related to GMH
and its subsidiaries.
BioHiTech
has also entered into various transactions with related parties that are disclosed in the Company’s financial statements
filed with the Securities & Exchange Commission in its 2019 Annual Report on Form 10-K.
PROPOSAL 2
ADVISORY VOTE ON EXECUTIVE
COMPENSATION
Section 14A
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) mandates that we provide our stockholders
with a non-binding advisory vote, referred to commonly as a “say-on-pay,” to approve the compensation of our Named
Executive Officers as disclosed in this Proxy Statement.
Our compensation
program is designed and administered by the Board of Directors which is assisted by the Compensation Committee, which is composed
entirely of independent directors and carefully considers many different factors, as described in the Executive Compensation section,
in order to provide appropriate compensation for our Named Executive Officers (NEOs). As discussed in the Executive Compensation
section of this Proxy Statement, the general philosophy of our executive compensation program is to attract and retain talented
management while ensuring that our executive officers are compensated in a way that advances the interests of our stockholders.
In pursuing
these objectives, the Company believes that:
·
It is critical that a substantial portion of each executive officer’s compensation be contingent upon our overall
performance and the growth of the Company.
·
Our compensation packages should reward individual contributions for our success for outstanding financial performance
and must align management’s interests with the interests of stockholders by linking compensation with performance.
·
Annual bonuses and long-term awards for our executive officers should take into account not only objective financial goals,
but also general economic factors and individual performance goals that reinforce our core values, which include leadership, accountability,
ethics and corporate governance.
Accordingly,
the Board unanimously recommends that stockholders vote in favor of the following resolution:
“Resolved,
that the stockholders approve the compensation of the Company’s Named Executive Officers as disclosed in the Company’s
Proxy Statement for the 2020 Annual Meeting of Stockholders pursuant to the rules of the Securities and Exchange Commission, including
the Compensation Discussion and Analysis, the compensation tables and the related footnotes and narrative disclosures.”
Although this
vote is advisory and is not binding on the Company, the Compensation Committee of the Board will take into account the outcome
of the vote when considering future executive compensation decisions.
THE BOARD OF DIRECTORS RECOMMENDS
YOU VOTE “FOR” THIS PROPOSAL.
PROPOSAL 3
ADVISORY VOTE ON FREQUENCY
OF ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required
by Section 14A of the Exchange Act, the Company is also providing our stockholders with a non-binding advisory vote on how often,
over the next six years, stockholders should be asked to provide a non-binding vote on executive compensation such as the advisory
vote on executive compensation provided for in Proposal 2 above. Stockholders may choose whether such a vote should be presented
at future Annual Meetings of Stockholders every year, every two years, or every three years, or they may abstain from voting.
Six years from now, the stockholders will have the opportunity to revisit this question and again vote on the frequency with which
there should be a say-on-pay vote.
After careful
consideration of this proposal, the Board of Directors has determined that a say-on-pay vote that occurs every three years is
the most appropriate alternative for the Company and stockholders, and therefore the Board recommends that you vote for a three-year
interval for the say-on-pay vote.
The Board
recommends a three-year frequency for the following reasons:
·
A three-year frequency for the say-on-pay vote is consistent with the long-term nature and focus of our executive compensation
program.
·
A three-year frequency will provide the Compensation Committee of the Board with a sufficient period to communicate with
stockholders and respond to the result of the say-on-pay vote.
·
A three-year frequency will provide investors sufficient time to evaluate the effectiveness of our short- and long-term
compensation strategies and the related business outcome of the Company.
The Board
will consider the results of this vote when deciding how often a say-on-pay vote will be requested from the Company’s stockholders
in the future, but because this vote is advisory and not binding on the Company, the Compensation Committee or the Board in any
way, the Compensation Committee or the Board of Directors may decide that it is in the best interest of the stockholders and the
Company to hold an advisory vote an executive compensation more or less frequently than the option approved by the stockholders.
PROPOSAL 4
RATIFICATION OF
INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
FOR 2020 FISCAL YEAR
The Audit
Committee of the Board of Directors has appointed Marcum LLP to continue to serve as our independent registered public accounting
firm for the 2020 fiscal year. Marcum has served as our independent registered public accounting firm since October 26, 2015.
On October
26, 2015, the Company’s Board of Directors engaged Marcum LLP (“Marcum”) as the Company’s new independent
registered public accounting firm to act as the principal accountant to audit the Company’s financial statements. Prior
to Marcum’s appointment, neither the Company, nor anyone acting on its behalf, consulted with Marcum regarding the application
of accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on
the Company’s financial statements, and no written report or oral advice was provided that Marcum concluded was an important
factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue.
Representatives
of Marcum LLP are expected to be available at the Annual Meeting, shall have the opportunity to make a statement if they desire
to do so, and are expected to be available to respond to appropriate questions. Although ratification by stockholders is not required,
the Board of Directors has determined that requesting ratification by stockholders of its selection of Marcum LLP as our independent
registered public accounting firm is a matter of good corporate practice. In the event the stockholders do not ratify the appointment
of Marcum LLP, the appointment will be reconsidered by the Board of Directors. Even if the selection is ratified, the Board of
Directors, in its discretion, may change the appointment at any time during the year if it determines that such a change would
be in the best interest of the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT
OF MARCUM LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2020.
Fees Billed to BioHiTech by
its Independent Registered Public Accounting Firms during Fiscal Year 2019
We were billed
for professional services provided through the end of fiscal years 2019 and 2018 by Marcum LLP in the amounts set forth in the
following tables:
Audit Fees
The aggregate fees for each of the last two years for professional services rendered by the principal accountant for our audits
of our annual financial statements and interim reviews of our financial statements included in our fillings with Securities and
Exchange Commission on Form 10-K and 10-Qs or services that are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those years were approximately:
December 31, 2019
|
|
$
|
232,613
|
|
|
Marcum, LLP
|
December 31, 2018
|
|
$
|
248,357
|
|
|
Marcum, LLP
|
Audit Related Fees
The aggregate fees in each of the last two years for the assurance and related services provided by the principal accountant that
are not reasonably related to the performance of the audit or review of the Company’s financial statements, and are not reported
under the paragraph above were approximately:
December 31, 2019
|
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$
|
-
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|
Marcum, LLP
|
December 31, 2018
|
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$
|
-
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Marcum, LLP
|
Tax Fees
The aggregate fees in each of the last two years for the professional services rendered by the principal accountant for tax
compliance, tax advice and tax planning were approximately:
December 31, 2019
|
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$
|
-
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Marcum, LLP
|
December 31, 2018
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$
|
-
|
|
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Marcum, LLP
|
All Other Fees
The aggregate fees in each of the last two years for the products and services provided by the principal accountant, other than
the services reported under the paragraphs above were approximately:
December 31, 2019
|
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$
|
-
|
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Marcum, LLP
|
December 31, 2018
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|
$
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-
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Marcum, LLP
|
Pre-Approval Policies and Procedures
for Audit and Permitted Non-Audit Services
The Audit
Committee’s policy requires that the Audit Committee pre-approve all auditing services and permitted non-audit services
to be performed by its independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are approved by the Audit Committee
prior to the completion of the audit. Either the Chairman of the Audit Committee acting alone or the other two members acting
jointly may grant preapprovals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant
preapprovals shall be presented to the full Audit Committee or the Board of Directors at its next scheduled meeting.
Consistent
with these policies and procedures, the Audit Committee has approved all of the services rendered by Marcum LLP during fiscal
year 2019, as described above.
OTHER MATTERS
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a)
of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10% of a registered
class of our equity securities, to file reports with the SEC relating to their common stock ownership and changes in such ownership.
During the fiscal year ended December 31, 2019, none of our directors and executive officers, and persons who beneficially own
more than 10% of a registered class of our equity securities who were required to file such reports failed to do during the fiscal
year ended December 31, 2019.
Stockholder Proposals for Inclusion
in the 2021 Proxy Statement
We have not
yet determined when we will hold the 2021 annual meeting of stockholders, but we anticipate issuing a press release announcing
such date when it is determined. Proposals of stockholders intended to be presented at the 2021 annual meeting pursuant to Rule
14a-8 under the Exchange Act must be received by us no later than the close of business on January 15, 2021 in order that they
may be included in the proxy statement and form of proxy relating to that meeting.
In addition,
our bylaws require that we be given advance notice of stockholder nominations for election to our Board and of other business
that stockholders wish to present for action at an annual meeting of stockholders (other than matters included in our proxy statement
in accordance with Rule 14a-8). Our secretary must receive such notice not less than 120 days nor more than 150 days prior to
the first anniversary of the date on which this proxy statement was first mailed to our stockholders. If the date on which the
2020 annual meeting will be held is changed by more than 30 calendar days from the date of the 2020 annual meeting, we must receive
the notice at least 80 days prior to the date on which we intend to distribute the corresponding proxy statement.
The notice
for any stockholder proposal must contain certain information set forth in our bylaws. In addition, stockholder proposals made
under Rule 14a-8 under the Exchange Act are required to contain certain information. Therefore, we strongly encourage stockholders
interested in submitting a proposal to contact legal counsel with regard to the detailed requirements of applicable securities
laws. Copies of our bylaws can be obtained without charge from our corporate secretary.
Submitting
a stockholder proposal does not guarantee that we will include it in our proxy statement.
List of Stockholders Entitled
to Vote at the 2020 Annual Meeting
The names
of stockholders of record entitled to vote at the 2020 Annual Meeting will be available at our corporate office where for a period
of 10 days prior to the 2020 Annual Meeting and continuing through the 2020 Annual Meeting.
Expenses Relating to this Proxy
Solicitation
This proxy
solicitation is being made by BioHiTech and BioHiTech will pay all expenses relating to this proxy solicitation. In addition to
this solicitation by mail, our officers, directors and employees may solicit proxies by telephone, personal call or electronic
transmission without extra compensation for that activity. We also expect to reimburse our transfer agent, banks, brokers and
other persons for reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of our stock and obtaining
the proxies of those owners.
Communication with BioHiTech’s
Board of Directors
Any stockholder
or other interested party who desires to contact any member of the Board of Directors (or our Board of Directors as a group) may
do so in writing to the following address:
|
Corporate
Secretary
BioHiTech Global, Inc.
80 Red Schoolhouse Road
Chestnut Ridge, New York 1097
|
Communications
are distributed to the Board, or to any individual directors as appropriate, depending on the facts and circumstances outlined
in the communication.
Available Information
We maintain
an internet website at www.biohitech.com. Copies of the committee charters, together with certain other corporate governance materials,
including our Business Conduct and Ethics Policy, can be found under the Investors Governance section of our website at www.biohitech.com,
and such information is also available in print to any stockholder who requests it through our Investor Relations department at
the address below.
We will furnish
without charge to each person whose proxy is being solicited, upon request of any such person, a copy of our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC, including the financial statements and schedules
thereto, but not the exhibits. In addition, such report is available, free of charge, through the Investors Governance section
of our internet website at www.biohitech.com. A request for a copy of such report should be directed to BioHiTech Global, Inc.,
80 Red Schoolhouse Road, Chestnut Ridge, NY 10977, Attention: Investor Relations, Telephone: (888) 876-9300. A copy of any exhibit
to our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, will be forwarded following receipt of a written
request with respect thereto addressed to Investor Relations.
“Householding”
of Proxy Materials
We have adopted
a procedure approved by the SEC called “householding.” Under this procedure, stockholders of record who have the same
address and last name will receive only one copy of our Notice, unless one or more of these stockholders notifies us that they
wish to continue receiving individual copies. This procedure will reduce our printing costs and postage fees.
If you are
eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple
copies of the Notice, or if you hold stock in more than one account, and in either case you wish to receive only a single copy
of the Notice for your household, please contact our Corporate Secretary at BioHiTech Global, Inc., 80 Red Schoolhouse Road, Chestnut
Ridge, NY 10977, Telephone: (888) 876-9300.
If you participate in householding and
wish to receive a separate copy of the Notice, or if you do not wish to participate in householding and prefer to receive separate
copies of the Notice in the future, please contact our Corporate Secretary as indicated above. Beneficial owners can request
information about householding from their nominee.
x PLEASE
MARK VOTES
|
REVOCABLE
PROXY FOR
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|
AS
IN THIS EXAMPLE
|
COMMON
STOCK OF
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BIOHITECH
GLOBAL, INC.
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ANNUAL MEETING OF THE STOCKHOLDERS
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For
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Against
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Abstain
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OF
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1.
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Election of
six (6) directors.
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¨
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¨
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¨
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BIOHITECH GLOBAL, INC.
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Director
Nominees
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JULY 23, 2020
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Frank
E. Celli
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James
D. Chambers
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Tony
Fuller
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Robert
A. Graham
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Harriet
Hentges
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Douglas
M. VanOort
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2.
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To provide
a non-binding
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¨
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¨
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¨
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advisory vote on compensation of
named executive officers (“say-on-pay”)
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3.
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To provide
a non-binding
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¨
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¨
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¨
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advisory vote on frequency of future
non-binding advisory votes on the compensation of our named executive officers (“say-on-frequency”)
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4.
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Ratification
and approval of
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¨
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¨
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¨
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the
selection of Marcum LLP
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as the
Company’s
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independent
registered public
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accounting
firm for the 2020
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fiscal
year
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The undersigned hereby acknowledges receipt of the
Notice of
Annual Meeting and Proxy Statement for the Meeting.
Shareholder
|
Number
of Shares Held
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Please
be sure to sign and date
|
|
|
Date
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this Proxy in the
box below.
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Signature
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Signature (Joint Owner)
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Detach above card, sign, date and mail
in postage paid envelope provided.
BIOHITECH GLOBAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Frank
E. Celli and Brian C. Essman as proxy with full power of substitutions, to vote as designated on the reverse side matters properly
brought before the Annual Meeting and on matters incident to the conduct of the Annual Meeting, all of the shares of common stock
of BioHiTech Global, Inc. that the undersigned has the power to vote at the Annual Meeting to be held of July 23, 2020, or any
adjournments thereof.
This Proxy, when properly executed,
will be voted as directed, but if no instructions are specified, this Proxy will be voted FOR the election of the person
listed above as a director of the Company and FOR the ratification and approval of the selection of the Company’s
independent registered public accounting firm. In their discretion, the appointed proxies and agents are authorized to vote upon
such other business as may properly be presented at the Annual Meeting. This Proxy is solicited on behalf of the Board of Directors
and may be revoked prior to its exercise.
Please check here if you plan
to attend the annual meeting on July 23, 2019 at 10:30 a.m. (EDT)
t o be held at the offices of
McCarter & English, LLP., Four Gateway Center,
100 Mulberry Street, Newark,
NJ 07102. ¨
(Continued and
to be signed on the Reverse Side)
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